Half-year Results
H1-24 revenue £0.17m (down on prior year including disposed Sport in Schools); sales pipeline quadrupled to £2.5m+.
- Revenue £165,780 (prior £882,478)
- Operating loss £1.4m (prior £1.8m)
- Adjusted EBITDA loss £0.4m (prior £0.4m)
- Cash and cash equivalents £0.2m (prior £0.7m)
- Sales pipeline £2.5m+
- Loss for the period £1.7m (prior £1.8m)
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Insig AI plc (AIM:INSG), the data science and machine learning solutions company serving the asset management industry, is pleased to announce its unaudited interim results for the six months ended 30 September 2024 ("H1-24") and to provide an update on the Company's progress post the half year end.
Highlights
- Adjusted EBITDA loss of £0.4 million in H1-24 (H1-23: £0.4 million, which benefitted from the contribution of the now disposed Sport in Schools business)
- Quadrupling of pipeline of new sales prospects in the last six weeks, to in excess of £2.5 million
- Progressing discussions with potential strategic partners
- Increasing visibility of regulatory tailwinds: Corporate Sustainability Reporting Directive effective from January 2025
- Cash of £0.2 million (30 September 2023: £0.7 million) but £0.3 million R&D tax refund received post period end (whilst £0.5 million refund received pre-period end in H1-23)
Richard Bernstein, CEO commented: "I am pleased to report that since the period end, we have seen year on year revenue growth, a dramatic increase in our sales pipeline, broadening engagement with regulators and incoming requests for proposals to meet business needs as a result of a strategic business development shift. Alongside structural tailwinds within the markets we address, we can look forward to 2025 with confidence."
Dear Shareholders, it is now a little over six months since I became Chief Executive. In September, I set out the corrective actions that I had started to put in place. I am pleased to report on early indicators of meaningful progress. Whist I have previously referred to sales cycles in emerging technologies taking up to 18 months, over the last six weeks, our pipeline of new sales prospects has quadrupled to in excess of £2.5 million, due to a newly implemented business development strategy and a clearly defined value proposition. This is not only a function of providing focussed offerings where there are clear business requirements but a transformation in how we are accessing and engaging with these potential customers. This augurs well for 2025.
Financial headlines
In summary, the operating loss we are reporting of £1.4 million is before adjusting for depreciation and amortisation of £1 million. This compares with an operating loss of £1.8 million for the corresponding period to September 2023, when depreciation and amortisation comprised £1.4 million. Whilst the consolidated income statement shows a decline in revenue, this is entirely due to the corresponding period including sales from Sport in Schools, a business which was sold in November 2023. Revenues from the machine learning and data science business were unchanged at £0.2 million. Cash and cash equivalents at the period end were £0.2 million, as against cash and cash equivalents for the corresponding period of £0.7 million, which included the receipt of an R&D tax refund of £0.5 million. Last month, post period end, the Company received an R&D tax refund of £0.3 million.
Equity funding
In April and May 2024, I subscribed to the Company for 1,250,000 shares at 20p. In June 2024, the Company successfully raised £0.8 million at 12.5p per share.
The markets we serve
As I set out in September, there are two clearly defined parts of the business.
AI Ready ESG Data
First, a vast repository of corporate reports that enables regulators, corporates, asset managers and all market participants to access, interrogate and compare disclosures within and between companies. We believe that our database uses the best of machine learning and AI tools in this area. It is our automated traceability back to source corporate disclosures that separates us from our competition. Recently, we have significantly increased our engagement with regulators, as well as with corporates and substantial consulting practices.
Data Engineering for Asset Managers
Second, our ability to provide accessible AI-ready data engineering solutions to asset managers. This enables them to gain insights into their holdings, manage risk and increase alpha. We are able to structure and centralise data, making it secure, whilst increasing the efficiency and productivity. A recent survey from PwC's Asset & Wealth Management Report, which surveyed 264 asset managers and 257 institutional investors, found that 80% of those who took part believed that AI and other new technologies will improve revenues going forward. The report highlighted a skills and investment gap when it comes to AI, with revenue growth expected from internal changes rather than direct services to clients, with 84% of respondents arguing it would improve operational efficiency.
Board changes
In May 2024, the Company announced that I was appointed Chief Executive and John Wilson was appointed as Independent Non-Executive Chairman. John is a globally experienced Chairman and Chief Executive, with a strong background in the technology sector. The Company also announced that Warren Pearson, Chief Technical Officer was stepping down from the Board and staying within the business as a full-time employee, allowing Warren to focus time on product development and deployment of Insig's machine learning solutions.
Prospects
I am pleased to report that since the period end, and as a result of our revised strategy, revenue is now ahead of the corresponding period last year. Importantly, in recent weeks, engagement with potential new customers has increased significantly. Next month, the Corporate Sustainability Reporting Directive will come into effect. Our curated repository of corporate reports provides the ideal foundation for automating the myriad of over 1,000 new data points that will require reporting on. We believe that as these new reporting requirements come into force, corporates will need to collate data in a way that is well suited to our solutions. This nascent market looks set to spring into life, as manual data collection and analysis will become relatively costly, cumbersome and ultimately obsolete. On the data engineering side, asset managers now require automated, accurate and accessible data. We continue to progress discussions both with regulators and with potential large scale strategic partners.
As Insig AI's largest shareholder and someone who has invested several million pounds on the same terms as and alongside institutional and retail investors, I am as keen as any for the business to convert its potential into long-term sustainable and substantial revenues.
Of late, we have broadened engagement with international regulators and have recently been invited to be fast tracked onto the preferred vendor list of an overseas regulator. Discussions with accounting practices and management consultancy firms are ongoing. Last month, we announced a new business win from an asset manager with assets under management of more than £100 billion. We now expect additional work from this client in the coming months.
It is encouraging that the team has responded very well to my initial actions of refocusing the business. This has already resulted in incoming requests for proposals, as well as a quadrupling in the quantum of new business engagements. Initially this was concentrated within the data engineering side of the business but in the last fortnight, a number of new prospects for the ESG data division have emerged. In the coming months, our sales pipeline is expected to continue to build. As 2025 progresses, we plan to convert this into consistent new business wins, as our investments in new technology, sales and marketing deliver substantial payback. I am excited about prospects for 2025 and beyond.
Richard Bernstein
Chief Executive Officer
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| Notes | 6 months to 30 September 2024 Unaudited £ | 6 months to 30 September 2023 Unaudited £ | ||
|---|---|---|---|---|
| Continuing operations | ||||
| Revenue | 165,780 | 882,478 | ||
| Cost of sales | - | (384,916) | ||
| Gross profit | 165,780 | 497,562 | ||
| Administration expenses | (1,525,803) | (2,175,056) | ||
| Other gains/(losses) | (299) | 59,470 | ||
| Other income | - | 877 | ||
| Operating loss | (1,360,322) | (1,617,147) | ||
| Finance income | 299 | 147 | ||
| Finance costs | (73,250) | (64,841) | ||
| Loss before income tax | (1,433,273) | (1,681,841) | ||
| Deferred tax | (253,805) | (129,255) | ||
| Loss for the period after income tax from continued operations | (1,687,078) | (1,811,096) | ||
| Discontinued operations | ||||
| Profit/(loss) for the period from discontinued operations | 8 | - | - | |
| Group loss for the period | (1,687,078) | (1,811,096) | ||
| Total comprehensive loss attributable to owners of the Parent | (1,687,078) | (1,810,660) | ||
| Total comprehensive profit/(loss) attributable to non-controlling interests | - | (436) | ||
| Basic and diluted earnings per share | 5 | (1.56)p | (1.74)p | |
| CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||
| Notes | As at 30 September 2024 Unaudited £ | As at 31 March 2024 Audited £ | As at 30 September 2023 Unaudited £ | |
| Non-Current Assets | ||||
| Property, plant and equipment | 3,640 | 5,652 | 14,759 | |
| Right of Use Assets | - | - | 23,127 | |
| Available for sale investments | 123,750 | - | - | |
| Intangible assets | 7 | 3,796,971 | 4,404,000 | 19,464,501 |
| 3,924,361 | 4,409,652 | 19,502,387 | ||
| Current Assets | ||||
| Trade and other receivables | 67,654 | 104,740 | 161,812 | |
| Cash and cash equivalents | 226,376 | 37,847 | 659,670 | |
| 294,030 | 142,587 | 821,482 | ||
| Total Assets | 4,218,391 | 4,552,239 | 20,323,869 | |
| Non-Current Liabilities | ||||
| Lease liabilities | - | - | 11,971 | |
| Deferred tax liabilities | 1,354,805 | 1,101,000 | 2,715,350 | |
| 1,354,805 | 1,101,000 | 2,727,321 | ||
| Current Liabilities | ||||
| Trade and other payables | 173,526 | 338,238 | 611,515 | |
| Lease liabilities | - | - | 10,386 | |
| Convertible loans | 9 | 1,609,324 | 1,544,324 | 2,318,173 |
| 1,782,850 | 1,882,562 | 2,940,074 | ||
| Total Liabilities | 3,137,655 | 2,983,562 | 5,667,395 | |
| Net Assets | 1,080,736 | 1,568,677 | 14,656,474 | |
Capital and Reserves Attributable to Equity Holders of the Company
| Notes | 6 months to 30 September 2024 Unaudited £ | 6 months to 30 September 2023 Unaudited £ | ||||||
|---|---|---|---|---|---|---|---|---|
| Share capital | 3,230,499 | 3,149,058 | 3,109,804 | |||||
| Share premium | 41,915,534 | 40,810,725 | 39,977,403 | |||||
| Other reserves | 516,015 | 516,015 | 377,381 | |||||
| Share based payments reserve | 15,372 | 2,485 | 18,845 | |||||
| Retained losses | (44,567,944) | (42,880,866) | (28,775,506) | |||||
| Equity attributable to shareholders of the parent | 1,109,476 | 1,597,417 | 14,707,927 | |||||
| Non-controlling interests | (28,740) | (28,740) | (51,453) | |||||
| Total Equity | 1,080,736 | 1,568,677 | 14,656,474 | |||||
| CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | ||||||||
| Note | Share capital £ | Share premium £ | Share based payment reserve £ | Other reserves £ | Retained losses £ | Total equity £ | Non-Controlling Interest £ | Total equity £ |
| Balance as at 1 April 2023 | 3,109,804 | 39,077,403 | 18,845 | 377,381 | (26,964,846) | 15,618,587 | (51,017) | 15,567,570 |
| Loss for the period | - | - | - | - | (1,810,660) | (1,810,660) | (436) | (1,811,096) |
| Total comprehensive loss for the period | - | - | - | - | (1,810,660) | (1,810,660) | (436) | (1,811,096) |
| Sale of treasury shares | - | 900,000 | - | - | - | 900,000 | - | 900,000 |
| Total transactions with owners, recognised in equity | - | 900,000 | - | - | - | 900,000 | - | 900,000 |
| Balance as at 30 September 2023 | 3,109,804 | 39,977,403 | 18,845 | 377,381 | (28,775,506) | 14,707,927 | (51,453) | 14,656,474 |
| Balance as at 1 April 2024 | 3,149,058 | 40,810,725 | 2,485 | 516,015 | (42,880,866) | 1,597,417 | (28,740) | 1,568,677 |
| Loss for the period | - | - | - | - | (1,687,078) | (1,687,078) | - | (1,687,078) |
| Total comprehensive loss for the period | - | - | - | - | (1,687,078) | (1,687,078) | - | (1,687,078) |
| Issue of shares | 81,441 | 1,104,809 | - | - | - | 1,186,250 | - | 1,186,250 |
| Share based payment | - | - | 12,887 | - | - | 12,887 | - | 12,887 |
| Total transactions with owners, recognised in equity | 81,441 | 1,104,809 | 12,887 | - | - | 1,199,137 | - | 1,199,137 |
| Balance as at 30 September 2024 | 3,230,499 | 41,915,534 | 15,372 | 516,015 | (44,567,944) | 1,109,476 | (28,740) | 1,080,736 |
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
| Notes | 6 months to 30 September 2024 Unaudited £ | 6 months to 30 September 2023 Unaudited £ | ||||||
| Cash flows from operating activities | ||||||||
| Loss before taxation | (1,687,078) | (1,810,660) | ||||||
| Adjustments for: | ||||||||
| Depreciation and amortisation | 1,025,865 | 1,382,456 | ||||||
| Increase in deferred tax provision | 253,805 | 129,255 | ||||||
| Minority interest | - | (436) | ||||||
| Disposal of Property Pant and Equipment | - | 4,803 | ||||||
| Finance expense | 73,250 | (4,898) | ||||||
| Share options expense | 12,887 | - | ||||||
| Cash received for R&D refund | - | 542,000 | ||||||
| Increase/(decrease) in trade and other receivables | 37,086 | 19,146 | ||||||
| Increase/(decrease) in trade and other payables | (172,962) | (265,008) | ||||||
| Net cash used in operations | (457,147) | (3,342) | ||||||
| Cash flows from investing activities | ||||||||
| Purchase of property, plant and equipment | - | (595) | ||||||
| Disposal of Property Pant and Equipment | - | 3,160 | ||||||
| Development expenditure | 7 | (416,824) | (517,018) | |||||
| Net cash used in investing activities | (416,824) | (514,453) | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from share allotments | 1,062,500 | - | ||||||
| Funds from sale of treasury shares | - | 900,000 | ||||||
| Repayment of leasing liabilities and bank borrowings | - | (3,119) | ||||||
| Net cash generated from financing activities | 1,062,500 | 896,881 | ||||||
| Net decrease in cash and cash equivalents | 188,529 | 379,086 | ||||||
| Cash and cash equivalents at beginning of period | 37,847 | 280,584 | ||||||
| Cash and cash equivalents at end of period | 226,376 | 659,670 | ||||||
NOTES TO THE INTERIM FINANCIAL STATEMENTS
General Information
Insig AI plc is a data science and machine learning company listed on the AIM Market of the London Stock Exchange.
The Company is domiciled in the United Kingdom and incorporated and registered in England and Wales, with registration number 03882621. The Company's registered office is 6 Heddon Street, London, W1B 4BT.
Basis of Preparation
The condensed consolidated interim financial statements have been prepared in accordance with the requirements of the AIM Rules for Companies. As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2024, which have been prepared in accordance with UK adopted international accounting standards.
Statutory financial statements for the year ended 31 March 2024 were approved by the Board of Directors on 5 September 2024 and delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified with a material uncertainty in relation to the Company's ability to continue as a going concern. The condensed interim financial statements are unaudited and have not been reviewed by the Company's auditor.
Going concern
These financial statements have been prepared on the going concern basis. Given the Group's current cash position and its demonstrated ability to raise capital, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting preparing the condensed interim financial statements for the period ended 30 September 2024.
The factors that were extant at 31 March 2024 are still relevant to this report and as such reference should be made to the going concern note and disclosures in the 2024 Annual Report and Financial Statements ("2024 Annual Report").
Risks and uncertainties
The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Company's medium term performance and the factors that mitigate those risks have not substantially changed from those set out in the Company's 2024 Annual Report and Financial Statements, a copy of which is available on the Company's website: www.insgai.com. The key financial risks are liquidity risk, credit risk, interest rate risk and fair value estimation.
Critical accounting estimates
Accounting Policies
Except as described below, the same accounting policies, presentation and methods of computation have been followed in these condensed interim financial statements as were applied in the preparation of the Company's annual financial statements for the period ended 31 March 2024.
3.1 Changes in accounting policy and disclosures
| Standard | Impact on initial application | Effective date |
| IAS 1 (Amendments) and IFRS Practice Statement 2 | Disclosure of Accounting Policies | 1 January 2023 |
| IAS 8 (Amendments) | Definition of Accounting Estimate | 1 January 2023 |
| IAS 12 Income Taxes (Amendments) | Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction | 1 January 2023 |
The adoption of these amendments had no material impact on the financial statements.
At the date of approval of these financial statements, the following amendments to IFRS which have not been applied in these financial statements were in issue, but not yet effective, until annual periods beginning on 1 January 2024:
| Standard | Impact on initial application | Effective date |
| IAS 7 (Amendments) and IFRS 7 | Supplier Finance Arrangements | 1 January 2024 |
| IAS 1 (Amendments) | Classification of Liabilities as Current or Non-Current | 1 January 2024 |
| IFRS 16 (Amendments) | Lease Liability in a Sale and Leaseback | 1 January 2024 |
| IAS 1 (Amendments) | Presentation of Financial Statements | 1 January 2024 |
| IAS 1 (Amendments) | Non-Current Liabilities with Covenants | 1 January 2024 |
| IAS 21 (Amendments) | Lack of Exchangeability | 1 January 2024 |
None are expected to have a material effect on the Group or Company Financial Statements.
- Dividends
- Loss per Share
The calculation of earnings per share is based on a retained loss of £1,687,078 for the six months ended 30 September 2024 (six months ended 30 September 2023: £1,810,660) and the weighted average number of shares in issue in the period ended 30 September 2024 of 108,059,330 (six months ended 30 September 2023: 103,566,056).
No diluted earnings per share is presented for the six months ended 30 September 2024 or six months ended 30 September 2023 as the effect on the exercise of share options would be to decrease the loss per share.
Business segment analysis
6 months to 30 September 2024 Unaudited
| Machine learning and Data services £ | Total £ | |
|---|---|---|
| Revenue | 165,780 | 165,780 |
| Costs of sales | - | - |
| Administrative expenses | (1,525,803) | (1,525,803) |
| Other gains/(losses) | (299) | (299) |
| Other income | - | - |
| Finance Income | 299 | 299 |
| Finance costs | (73,250) | (73,250) |
| Profit/(Loss) before tax per reportable segment | (1,433,273) | (1,433,273) |
*After the disposal of Sport in Schools Ltd and The Elms Group in November 2023, all the ongoing activity in the Group is related to machine learning and Data services.
6 months to 30 September 2023 Unaudited
| Machine learning and Data services £ | Sport in Schools £ | Total £ | |
|---|---|---|---|
| Revenue | 182,797 | 699,681 | 882,478 |
| Costs of sales | - | (384,916) | (384,916) |
| Administrative expenses | (1,874,622) | (300,434) | (2,175,056) |
| Other gains/(losses) | 59,677 | (207) | 59,470 |
| Other income | 490 | 387 | 877 |
| Finance Income | 147 | - | 147 |
| Finance costs | (64,654) | (187) | (64,841) |
| Profit/(Loss) before tax per reportable segment | (1,696,165) | 14,324 | (1,681,841) |
Intangible assets
The movement in capitalised intangible costs during the period was as follows:
| Cost and Net Book Value | Goodwill £ | Development Costs £ | Technology assets £ | Customer relationships £ | Total £ |
|---|---|---|---|---|---|
| Balance as at 1 April 2024 | - | 988,929 | 3,095,296 | 319,775 | 4,404,000 |
| Additions | - | 416,824 | - | - | 416,824 |
| Amortisation | - | (8,633) | (978,143) | (37,077) | (1,023,853) |
| As at 30 September 2024 | - | 1,397,120 | 2,117,153 | 282,698 | 3,796,971 |
Discontinued Operations
On 16 July 2024, Ultimate Player Ltd, a subsidiary of Insig AI Plc, was dissolved after discussions within management.
Convertible loan notes
| CLN 1 | CLN 2 | CLN 3 | 30 September 2024 | |
|---|---|---|---|---|
| £ | £ | £ | £ | |
| Convertible loan note | 1,000,000 | 500,000 | 750,000 | 2,250,000 |
| Interest | ||||
| Accrued interest | 130,057 | 75,643 | 35,076 | 240,776 |
| Conversion | - | - | (785,076) | (785,076) |
| Modification of convertible loan note | (65,021) | (31,355) | - | (96,376) |
| Total | 1,030,036 | 514,288 | - | 1,609,324 |
| Equity | ||||
| Amount classified as equity | 86,025 | 52,618 | - | 138,643 |
| Total | 86,025 | 52,618 | - | 138,643 |
On the 4 May 2022, the Company entered into a formal agreement for a £1.0m convertible loan note to be provided by Richard Bernstein, Non-Executive Chairman of the Company.
On 17 June 2022, the Company entered into a convertible loan facility agreement with David Kyte, a long-term shareholder in the Company for £500,000.
On the 12 September 2022, the Company entered into a formal agreement for a £750,000 convertible loan note to be provided by Richard Bernstein, Non-Executive Chairman of the Company.
On 22 December 2022, the Company agreed revised terms for both the convertible loan note (CLN) agreements with Richard Bernstein and David Kyte for £1m and £0.5m respectively.
The revisions for the year ended 31 March 2024 are as follows:
On 14 December 2023, it was agreed that the terms of the CLN with Richard Bernstein will be extended by six months to 30 June 2024. All other terms of the agreement remained the same.
On 15 November 2023, the Company received notice from Richard Bernstein to convert the balance of the agreement entered on 12 September 2022 to 3,925,380 ordinary shares at a conversion price of 20 pence per share. The total amount converted, including interest, was £785,076.
The revisions for the period ended 30 September 2024 are as follows:
On 2 July 2024, the Company agreed revised terms for the convertible loan note agreements with Richard and David, extending the redemption dates to 30 September 2025 and adjusting the interest rates to 6% for Richard's CLN, and 12% for David's.
Events after the balance sheet date
On 18 October 2024, an application was submitted to Companies House to dissolve Pantheon Leisure Plc, a subsidiary of Insig AI Plc.
- Approval of interim financial statements
- Availability of this announcement
Copies of this announcement are available from Insig AI website at www.insg.ai.
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