VR Education (AIM: VRE; ESM: 6VR), a leading virtual reality ('VR') technology company focused on the education space, today announces its maiden interim results for the six months ended 30 June 2018 (the 'Period').
- Revenue up 30% to €300k (H1 2017: €230k).
- Revenue for the year expected to be heavily weighted towards H2 and the Group remains on track to meet its full year target.
- EBITDA loss of €1.2 million (H1 2017: loss of €0.1 million), in line with management expectations which includes legal and professional costs in relation to the IPO of €0.6m
- Loss before tax of €4.1 million (H1 2017: loss of €0.2 million), in line with management expectations, driven by the inclusion of the following items:
- A non-cash fair value loss arising on derivate financial liabilities of €2.6 million1
- Extinguishment costs of €0.3 million2
- Strong cash position at 30 June 2018 with net cash of €4.9 million.
- Loss per share for the period of €0.02 (H1 2017: €1.15).
1 arising from the conversion of convertible debt and preference shares to ordinary equity in Immersive VR Education Limited ("IVRE") prior to the acquisition of IVRE by the Group.
2 comprising a non-cash element of €0.2 million arising from share warrants issued to debt and preference shareholders in IVRE on conversion and also €0.1 million cash contributions made by IVRE to debt and preference shareholders as part of the commercial agreements entered into on conversion.
- Successful placing to raise £6.0 million before expenses and admission to the AIM market of the London Stock Exchange and to the ESM market of the Irish Stock Exchange on 12 March 2018.
- Apollo 11 VR educational experience selected to be part of the launch collection for Oculus Go, Oculus' new all-in-one VR headset.
- Team strengthened with the appointment of key strategic hires including a new Chief Technology Officer.
- Loren Carpenter, one of the founders of Pixar Animation Studios, appointed as an adviser.
Post Period End Highlights
- Successful launch in August 2018 of Titanic VR, the Group's highly anticipated immersive gaming experience, now available to purchase on PC, Oculus Rift, HTC Vive, and Windows Mixed Reality.
- Apollo 11 HD version to be released on PC, Oculus Rift, HTC Vive, and Windows Mixed Reality in early Q4 2018.
- Successful completion of the "1943: Berlin Blitz" experience in collaboration with BBC and nominated for best Linear Virtual Reality experience at the Venice Film Festival in September 2018.
- The Group has put in place a cliff-edge bonus plan for executive directors with three components:
- Operational Cash Breakeven
- Total Revenue
- Engage Revenue
- These targets have been put in place for the year ended 30 June 2019 and were set by the remuneration committee comprising two Non-Executive Directors.
David Whelan, CEO of VR Education, said: "The Board and I are delighted by the positive response to our successful admission to AIM and the ESM and the Group is pleased to report that further substantial operational progress since admission.
The Group has grown from 20 staff prior to admission to 31 staff at the interim reporting date. This includes a number of key strategic hires including our Chief Technical Officer. The Group is delighted with the dedicated and talented team that it has assembled.
The Group released a major update of ENGAGE Alpha on 30 July 2018 with significantly increased functionality. This introduced the web application, the user account system, a new avatar system among other major updates. This is a significant step towards the Group's first full commercial release in Q4 2018.
The Group has successfully launched the full version of Titanic VR on Oculus, Steam and will soon launch across the US & EU PlayStation Network. This has been very well received and early sales figures look promising.
The Board would like to thank our new and existing shareholders for their support and the Group looks forward to capitalising on significant market opportunities over the coming months."
Investor and Analyst Meeting
A meeting for analysts will be held at 10.45am today at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. A copy of the Interim Results presentation is available at the Company's website, http://www.vreducationholdings.com
An audio webcast of the analysts' meeting will be available after 12pm today:
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
The Group is pleased to report this maiden set of interim results since VR Education was admitted to AIM and to the ESM and dealings in its ordinary shares commenced on 12 March 2018. The Group successfully raised £6.0 million before costs via an oversubscribed placing of 60,000,000 new ordinary shares at a price of 10 pence per share.
During the period, VR Education has successfully delivered on the operational milestones that were clearly set out at the time of the Group's IPO, namely expanding the development and marketing team, completing projects with the BBC and Oxford University and releasing Part 2 of Titanic VR. The stated milestones for H2 2018, including the commercial release of ENGAGE with full payment capabilities, the progression of business development and marketing programmes for ENGAGE Enterprise and ENGAGE Education, and the release of the Group's next VR Experience, are also all progressing to plan.
VR Education has a clear strategy to drive the future growth of the business. The Group's main focus is the development and commercialisation of ENGAGE, its online virtual learning and corporate training platform, which provides an environment for creating, sharing and delivering proprietary and third-party VR content for educational and corporate training purposes.
The Group plans to raise brand awareness by showcasing the ENGAGE platform and its capabilities at high profile tradeshows and conferences around the world, including a number of major education conferences in 2018/2019 including GESS Dubai, one of the largest educational events held annually in the UAE and the Schools and Academies Show in Birmingham, UK.
The Group has already developed a functional test release of the ENGAGE platform and expects to complete the development of the first commercial phase of ENGAGE in 2018. During the Period, the Group has made significant progress in adding additional functionality including the web application, the user account system, and a new avatar system among other major updates.
In June 2018, the Group successfully recorded ten lectures with a range of senior professors from Oxford University. These are currently in production and will be released in Q4 2018 alongside the full commercial release of ENGAGE as a marketing tool to attract additional users to the platform.
In addition to developing ENGAGE, the Group creates showcase experiences not only to generate revenue but to also build up the Group's VR asset base, which can be reused by external educators on the ENGAGE platform whilst improving the Group's reputation and attracting developer talent.
At the end of the Period, the Group had built two downloadable showcase VR experiences, being the award-winning Apollo 11 VR experience and an early access version of the Group's Titanic VR experience.
Apollo 11 VR continued to sell well during the interim period from 1 January 2018 to 30 June 2018 with increased revenue expected in H2 2018 with the upcoming release of Apollo 11 HD VR due for release in early Q4 2018. To 30 June 2018, Apollo 11 VR has been downloaded a total of 130,000 times.
Current trading and outlook
Since the Period end, VR Education has continued to make solid progress.
On 30 July 2018, the Group released a major update of ENGAGE Alpha with significantly increased functionality. This introduced the web application, the user account system, and a new avatar system among other major updates. This is a significant step towards full commercial release in Q4 2018.
The full version of Titanic VR was released on 16 August 2018 on Steam and Oculus and will launch soon on the PlayStation network in Europe and USA.
The Group successfully completed the "1943: Berlin Blitz" experience in collaboration with BBC and was nominated for best Linear Virtual Reality experience at the Venice Film Festival in September 2018.
VR Education's entry to the AIM market and to the ESM is an exciting step as the Group progresses its growth strategy. The Board is focused on continued revenue growth and launching the full version of ENGAGE by the end of 2018, in line with market expectations.
Chief Executive Officer
18 September 2018
Revenue for the half year is up 30% on the prior half year from €230k to €300k, driven by the continued success of the Apollo 11 VR experience, revenue from the early access version of Titanic VR and revenue from the work completed for the BBC, "1943: Berlin Blitz". This is in line with the expectations of the Group.
EBITDA loss was €1.2 million compared to a loss of €0.1 million in the prior year. This includes IPO-related legal and professional costs of €0.6 million.
- Loss before tax, after a non-cash convertible debt conversion fair value loss of €2.6 million and associated conversion costs of €0.3 million, was a loss of €4.1 million, in line with management expectations, compared to a loss in the prior year of €0.1 million.
- Operating cashflows after €0.2 million of capex were a net outflow of €1.3 million for the period. The current run-rate of staff costs and other ongoing costs is approximately €0.3 million per month.
- At 30 June 2018, the Group has a strong cash position with a net cash position of €4.9 million.
Chief Financial Officer
18 September 2018
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2018
30 June 2018
30 June 2017
|Cost of Sales||(95,749)||(110,527)|
|Fair value (loss) / gain arising on derivatives|
|Loss before Income Tax||(4,130,924)||(156,372)|
|Income Tax Credit||-||1,101|
|Loss for the Year from continuing operations||(4,130,924)||(155,271)|
|Loss per share|
|Basic from continuing operations||5||(0.02)||(1.15)|
Consolidated Statement of Financial Position
As at 30 June 2018
30 June 2018
31 December 2017
|Property, Plant & Equipment||68,116||-|
|Trade and other receivables||128,108||18,750|
|Cash and short term deposit||4,932,981||6,250|
|Equity and Liabilities|
|Equity Attributable to Shareholders|
|Issued share capital||193,136||-|
|Share options reserve||4||372,604||-|
|Trade and other payables||243,691||-|
|Total Equity and Liabilities||5,741,626||25,000|
Consolidated Statement of Changes in Equity
At 30 June 2018
|Attributable to Equity Shareholders|
|Balance at 13 October 2017||-||-||-||-||-||-|
|Loss for the year||-||-||-||-||-||-|
|Balance at 31 December 2017||-||-||-||-||-||-|
|Attributable to Equity Shareholders|
|Balance at 1 January 2018||-||-||-||-||-||-|
|Loss for the period||-||-||-||-||(4,130,924)||(4,130,924)|
|Issue of ordinary shares||193,136||21,587,539||-||-||-||21,780,675|
|Acquisition of subsidiary||-||-||(11,106,364)||20,180||(821,844)||(11,908,028)|
|Share option expense||-||-||-||352,424||-||352,424|
|Balance at 30 June 2018||193,136||21,587,539||(11,106,364)||372,604||(5,548,980)||5,497,935|
Consolidated Statement of Cash Flows
For six month period ended 30 June 2018
|Cash Flows from Operating Activities|
|Loss before income tax||(4,130,924)||-|
|Adjustments to reconcile loss before tax to net cash flows:||-|
|Fair value loss arising on derivative financial liabilities||2,638,063||-|
|Non-cash element of advisor warrants||112,381||-|
|Non-cash element of investor warrants||174,651||-|
|Share Option Expense||14,902||-|
|Movement in redeemable shares||25,000||-|
|Movement in Trade & Other Receivables||110,207||(18,750)|
|Movement in Trade & Other Payables||(114,328)||18,750|
|Bank interest & other charges paid||(29,086)||-|
|Net cash used in operating activities||(1,133,427)||-|
|Cash Flows from Investing Activities|
|Purchases of property, plant & equipment||(30,059)||-|
|Payments to develop Intangible Assets||(176,630)||-|
|Cash acquired on acquisition of subsidiary||86,801||-|
|Net cash used in investing activities||(119,888)||-|
|Cash Flows from Financing Activities|
|Proceeds from issuance of ordinary shares||6,180,046||-|
|Proceeds from issuance of redeemable shares||-||6,250|
|Net cash generated from financing activities||6,180,046||6,250|
|Net increase in cash and cash equivalents||4,926,731||6,250|
|Cash and cash equivalents at beginning of period||6,250||-|
|Cash and cash equivalents at the end of period||4,932,981||6,250|
The notes are available in the printable pdf of the results. To download it, please click here.