Cordel Group Regulatory News (CRDL)

31 January 2023

Cordel Group PLC

("Cordel" or the "Company" or the "Group")

Interim Results

Cordel Group PLC (AIM: CRDL), the Artificial Intelligence platform for transport corridor analytics, announces unaudited results for the six months ending 31 December 2022.

*Constant currency reflects the results had the underlying transactional currencies, (i.e. USD, AUD and GBP) remained constant across the full financial year.

Highlights:

● Total revenue increased by 50.3% in reported currency and 47.5% at constant currency. 

● Cost of sales decreased by 18.5% (21.0% constant currency) due to reduced labour and easing component costs in COGS for hardware sales.

● Total expenses decreased by 2.6% (7.7% at constant currency) as the Company continued to manage its discretionary costs.

● As at 31 December 2022, cash balance was £433,945 compared with £339,665 at 30 June 2022. Total assets as at 31 December 2022 were £2,572,399 whilst net assets were £1,826,295 compared with £2,735,272 as at 30 June 2022.

● UK achievements during the period include a 5-year contract with Angel Trains to install fully-automated hardware onto passenger trains and a new partnership with Ricardo PLC to identify and pursue opportunities in railway inspection and asset management.

● USA achievements include increasing sales engagements in the Class 1 Railroad market and continuing progress with key partners.

● Contracted revenue will be carried into the second half, with a satisfactory full year cash position expected.

Ian Buddery, Chairman, Cordel, said: "The interim results show a return to growth compared to the corresponding period last year, as we benefit from long term contracts secured earlier. We are pleased by the market's recognition of our technology advantages and confident we will add new contracts as 2023 progresses. We are managing the business to balance the requirements of growth opportunities while maintaining adequate cash reserves." 

Enquiries:

About Cordel

Cordel offers a patented cloud-based platform for master data management and business analytics, together with specialist hardware and software for capturing, analysing and reporting on large datasets within the transport sector, employing sophisticated artificial intelligence algorithms.

Further information on the Company is available at: www.cordel.ai

Cordel Group PLC

Review of operations by the Chief Executive Officer

31 December 2022

Cordel Group Plc ("the Group") the Artificial Intelligence platform for transport corridor analytics offers a patented cloud-based platform for master data management and business analytics. Together with specialist hardware and software for capturing, analysing and reporting on large datasets within the transport and infrastructure sectors, employing sophisticated artificial intelligence algorithms.

Overview of results

During the half year ended 31 December 2022, the Company secured a significant new contract with Angel Trains, further strengthening our position in the UK rail market. The Company's engagement with USA railroads continues to improve, particularly following the release of our Automated Intelligent Clearance solution on 22 November 2022. Railways worldwide are seeking to replace dangerous human track inspections and reduce the carbon footprint of traditional clearance measurement methods, which include heavy and slow inspection trains.

The Company has simplified its operating structure by consolidating its Airsight Australia and Nextcore activities into Cordel operations. The primary investment focus is continuing the development of the Cordel Artificial Intelligence analytics platform.

Revenue for the half year is summarised as follows:

Underlying EBITDA for the period was a loss of £0.789 million.

Ongoing operations

The Company operates from offices in London, UK and Newcastle, Australia with staff in these locations and in the USA. The Company has customers in Australia, UK, Japan and the USA. As of 31 December 2022, the Company had cash and receivables totalling £0.673 million.

Outlook

The Company continues to be awarded new contracts following competitive bid processes. This results in steady growth of the total mileage of railway track under long-term data management and, combined with new analytic services released in 2022 and planned for 2023, is expected to produce further growth in recurring revenue. 

Nicholas Smith

Chief Executive Officer

31 January 2023

Cordel Group PLC

Review of operations by the Chief Financial Officer

31 December 2022

A summary of the Group's results are as follows:

The above consolidated statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

Revenue

Total revenue for the period increased by 50.3% to £0.945 million. 

Operating expenses

Overall operating expenses decreased by £0.041 million compared to the corresponding period and staff expenses increased £0.081 million to £1.162 million. due to salary increase pressures. 

Other costs reduced by £0.075 million due to the lower requirement for outsourced research work in the current period. The reallocation of processing costs from overheads to COGS increased processing COGS from £0.011 million to £0.075 million.

As at 31 December 2022, Cordel employed 25 full time equivalent staff across Australia, the UK and USA.

Underlying EBITDA for the period was a loss of £0.789 million compared to a loss of £1.264 million for the corresponding period ended December 2021.

Finance and other non-operating expenditure were £0.006 million for the period relating to the interest expenses.

The loss after tax for the period was £0.855 million, an improvement of 36.6% compared to loss of £1.349 million in the corresponding period ended December 2021.

Balance sheet, cash and working capital

The Group balance sheet shows cash resources of £0.434 million and receivables of £0.239 million as at 31 December 2022. Cash inflow from operating activities was £0.020 million.

Underlying basis of EBITDA

The Group manages its operations by looking at the underlying EBITDA which excludes the impact of a number of one-off and non-cash items as this, in the Board's opinion, provides a more representative measure of the Group's performance. A reconciliation between the reported loss before tax and underlying EBITDA is included at note 6 to the financial statements.

Robert Lojszczyk

Chief Financial Officer

31 January 2023

Cordel Group PLC

Consolidated statements of profit and loss and other comprehensive income

For the period ended 31 December 2022

The above consolidated statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

Cordel Group PLC

Consolidated Balance Sheet as at 31 December 2022

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

The interim financial statements of Cordel Group plc (company number 1109701 (England and Wales)) were approved by the Board of Directors and authorised for issue on 31 January 2023. They were signed on its behalf by:

Ian Buddery Jonathan Macleod

Chairman Director

31 January 2023 31 January 2023

Cordel Group PLC

Consolidated statements of changes in equity

For the period ended 31 December 2022

The share premium account is used to recognise the difference between the issued share capital at nominal value and the share capital received, net of transaction costs.

Cordel Group PLC

Consolidated statements of changes in equity (cont'd)

For the period ended 31 December 2022

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

Cordel Group PLC

Consolidated statements of cash flows

For the period ended 31 December 2022

Included in the decrease of trade and other payables during the year ended 30 June 2022 were lease payments of £50,732 (2021: £37,093).

The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.

Cordel Group PLC

Notes to the consolidated financial statements

For the period ended 31 December 2022

Note 1. General information

The financial statements cover Cordel Group PLC ('Company') as a consolidated entity consisting of Cordel Group plc and the entities it controlled at the end of, or during, the period (referred to as the 'Group'). The financial statements are presented in Pounds Sterling, which is Cordel Group plc's functional and presentation currency.

The Company was incorporated on 6 December 2017 as a private company, Maestrano Group Limited. On 11 May 2018, the Company converted to a public company, Maestrano Group plc and on 30 May 2018 was admitted onto the Alternative Investment Market ('AIM'). On 19 April 2018, as part of a group reorganisation, the Company acquired 100% of the ordinary shares of Maestrano Pty Ltd from the existing shareholders and became the immediate and ultimate parent of the Group. On 31 October 2019, Maestrano Group plc acquired 100% of the shares in Airsight Holdings Pty Limited, an Australian based company.

On the 18 November 2021, Maestrano Group plc changed its name to Cordel Group plc.

Cordel Group plc is a listed public company limited by shares, incorporated and domiciled in England and Wales. Its registered office and principal place of business are:

Registered office Principal place of business

10 John Street 2/2 Frost Drive

London WC1N 2EB Mayfield West NSW 2304

United Kingdom Australia

A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 31 January 2023. The directors have the power to amend and reissue the financial statements.

Note 2. Significant accounting policies

These financial statements for the interim half-year reporting period ended 31 December 2022 have been prepared in accordance with International Accounting Standards IAS 34 'Interim Financial Reporting'.

These interim financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2022 and any public announcements made by the Company during the interim reporting period.

New or amended Accounting Standards and Interpretations adopted

The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the International Accounting Standards Board that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Going concern

The financial statements have been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future. In assessing whether the going concern assumption is appropriate, the directors have considered the Group's existing working capital and are of the opinion that the Group has adequate resources to undertake its planned program of activities for the 12 months from the date of approval of these financial statements. Further details of the directors' considerations in relation to going concern are included in the directors' report.

Note 3. Operating segments

Identification of reportable operating segments

The Group operates in one segment being provision of data integration and analytic services. This operating segment is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.

The operating segment information is the same information as provided throughout the consolidated financial statements and are therefore not duplicated.

Note 4. Revenue from contracts with customers

Note 11. Equity - dividends

There were no dividends paid, recommended or declared during the current or previous financial period.

Note 12. Fair value measurement

The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due to their short-term nature.

The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial liabilities.

Note 13. Related party transactions

Parent entity

The parent entity and ultimate parent entity is Cordel Group plc. There is no ultimate controlling party.

Transactions with related parties

Ian Buddery was remunerated through his personal service company during the period.

Receivable from and payable to related parties

There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

Loans to/from related parties

There were no loans to or from related parties at the current and previous reporting date.

Note 17. Events after the reporting period

No matter or circumstance has arisen since 31 December 2022 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years.