Final Results

VR Education (AIM: VRE; Euronext Growth: 6VR), a leading virtual reality ('VR') technology company focused on the education space, today announces its maiden audited final results for the year ended 31 December 2018 (the 'Period').

Financial Highlights

  • Revenue up 15% to €716k (FY 2017: €624k)
  • EBITDA €1.5 million loss (FY 2017: loss of €0.5 million), in line with management expectations
  • Result before tax of €4.9 million loss (FY 2017: loss of €0.6 million), in line with management expectations, which includes:
    • A non-cash fair value loss arising on derivative financial liabilities of €2.6 millioni
    • Extinguishment costs of €0.3 millionii
  • Net cash position at 31 December 2018 of €3.5 million
  • Loss per share for the period of €0.03 (2017:  N/A)

i 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.
ii comprising a non-cash element of €0.2 million arising from share warrants issued to debt and preference shareholders in IVRE on conversion and €0.1 million cash contributions made by IVRE to debt and preference shareholders as part of the commercial agreements entered into on conversion.

Operational Highlights

  • Placing to raise £6.0 million gross (£5.1 million net) and admission to the AIM market of the London Stock Exchange and to the Enterprise Securities Market (now called Euronext Growth), a market regulated by Euronext Dublin, on 12 March 2018
  • Full commercial release of ENGAGE, including ENGAGE Education and ENGAGE Enterprise, in December 2018 with first commercial and educational customers signed up
  • Apollo 11 VR educational experience selected to be part of the launch collection for Oculus Go, Oculus' all-in-one VR headset
  • Apollo 11 HD version released on PC, Oculus Rift, HTC Vive, and Windows Mixed Reality
  • Launch of Titanic VR, the Group's highly anticipated immersive gaming experience, in August 2018; now available to purchase on PlayStation, PC, Oculus Rift, HTC Vive, and Windows Mixed Reality
  • Completion of the "1943: Berlin Blitz" experience in collaboration with the BBC - nominated for best Linear Virtual Reality experience at the Venice Film Festival in September 2018
  • 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

  • Commercial launch of ENGAGE at the BETT conference in London in January 2019 and GESS Dubai event in February 2019
  • "Raid on the Ruhr", a Dambusters experience, announced as the Group's next showcase experience to be launched in H1 2019

Richard Cooper, Chairman of VR Education, said: "The successful IPO and fundraise has been followed by a series of significant product launches, and so, a year on from the listing, the Group has both launched its ENGAGE platform in commercial form and has broadened its retail experiences beyond Apollo 11 VR into Titanic VR and 1943: Berlin Blitz. The Group is therefore well placed to capitalise on these in 2019 and beyond."

David Whelan, CEO of VR Education, said: "The Group has continued to make substantial operational progress since its admission to AIM, in line with the strategy outlined at the time of our IPO.

The first commercial version of ENGAGE was released on 13 December 2018 with significantly increased functionality. This introduced the ability for users to record and publish their own content, purchase Pro ENGAGE accounts to access enhanced editing and publishing tools and also the ability to create avatars based on 'selfie' images using our machine learning system, among other major updates. These new features ensure that the ENGAGE virtual reality platform stands above the competition, providing key production tools to its users.

The full version of Titanic VR was released on the US and EU PlayStation Network in November 2018, following release in August 2018 on the Oculus and Steam stores. This has been well received and early sales figures are promising, with December 2018 being the highest individual month of revenue the Group has ever generated.

The Board would like to thank our new and existing shareholders for their support and we look forward to capitalising on significant market opportunities during the course of 2019 and beyond."

Investor and Analyst Meeting

A meeting for analysts will be held at 11am today, 6 March 2019, at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. A copy of the Final 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:
http://webcasting.buchanan.uk.com/broadcast/5c65270ee6e1d92d38f4df4b

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

 

Chief Executive's Review

2018 was an important year for VR Education and one in which it successfully delivered on the operational milestones that were clearly set out at the time of the Group's IPO. During the period the Group was admitted to AIM and to the Enterprise Securities Market (now called Euronext Growth), released various new showcase experiences and also completed the full commercial release of ENGAGE, its online virtual learning and corporate training platform, with full payment capabilities. The Group has also expanded the development and marketing team, completed projects with the BBC and Oxford University and released Part 2 of Titanic VR.

The Group continues to execute on its strategy of focusing on the commercialisation of ENGAGE whilst launching further showcase experiences to drive awareness, add content to the ENGAGE platform and deliver incremental revenue.

VR Education has already started to raise brand awareness by showcasing the ENGAGE platform and its capabilities at high profile tradeshows and conferences around the world.  The Group has recently attended the BETT Conference in London in January 2019 and GESS Dubai in February 2019, one of the largest educational events, held annually in the UAE, and will be attending a number of major education conferences in 2019.

ENGAGE

The Group successfully released the ENGAGE platform on 13 December 2018 via the Steam network and its own website www.engagevr.io. ENGAGE now supports Oculus Rift, HTC Vive, HTC Vive Pro, Windows Mixed Reality and standard PC display devices. With the launch of ENGAGE the Group also released new content provided by Oxford University and additional features such as enhanced web-based media streaming, desktop streaming, selfie avatar generations, Pro and Free licensing, cloud file sharing and a full web-based management system for creating events, quizzes, content and enhanced account management.

2019 is a pivotal year for ENGAGE with the majority of business development and marketing focused on the platform.

Showcase experiences

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. These can be reused by external educators on the ENGAGE platform, whilst also improving the Group's reputation and attracting developer talent.

At the end of the Period, the Group had built two paid-for downloadable showcase VR experiences, being the award-winning Apollo 11 VR experience and the Titanic VR experience.

Apollo 11 VR continued to sell well during the year. As at 31 December 2018, Apollo 11 VR had been downloaded a total of 160,000 times. Titanic VR has been very well received since its full launch in August 2018. As at 31 December 2018, Titanic VR had been downloaded a total of 20,000 times with the majority of downloads coming from its PlayStation version which was released towards the end of November 2018.

Current trading and outlook

2019 is going to be a busy year for the Group with continued focus on the promotion of ENGAGE and generation of sales on the platform, together with the release of two new showcase experiences. The first experience to be released in 2019 is titled "Raid on the Ruhr" and is based on the Dambusters mission from World War II, to be released in H1 2019.  The second experience, a larger space-related project, is scheduled for release in H2 2019.

In summary, 2018 has been a solid year for VR Education with the team growing from 20 to 34 employees and the successful release of three new products. The focus for 2019 is the ENGAGE platform and with the release of second-generation VR hardware, such as the Oculus Quest, VR Education is well positioned to remain the leader of next generation educational content and tools.

I would like to thank our new and existing shareholders for their support and the Group looks forward to capitalising on significant market opportunities during the course of 2019 and beyond.

 

David Whelan
Chief Executive Officer

6 March 2019

 

Financial Review

Revenue for the year was up 15% on the prior year from €624k to €716k, driven by the continued success of the Apollo 11 VR experience, the release of the full version of Titanic VR [for Oxford University] and the completion of "1943: Berlin Blitz" for the BBC.

EBITDA loss was €1.5 million compared to a loss of €0.5 million in the prior year, in line with management expectations.

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 €4.9 million, in line with management expectations, compared to a loss in the prior year of €0.6 million.

Operating cashflows were a net outflow of €2.1 million for the period.  The current run-rate of staff costs and other ongoing costs is approximately €250k per month.

The Group's cash position at 31 December 2018 was €3.5 million with no debt.

 

Séamus Larrissey
Chief Financial Officer

6 March 2019

 

Consolidated Statement of Total Comprehensive Income
for the Year Ended 31 December 2018

  Note 2018   2017
Continuing Operations    
         
Revenue 3 716,345   624,487
Cost of Sales 6 (239,701)   (300,143)
Gross Profit   476,644   324,344
         
Administrative Expenses 6 (2,247,337)   (876,858)
Other Income 5 -   60,333
Operating Loss   (1,770,693)   (492,181)
         
Fair value (loss)/gain arising on derivative financial liabilities 11 (2,638,063)   125,764
Extinguishment Costs 9 (267,971)   -
IPO Transaction Costs 10 (237,202)   (202,940)
Finance Costs 11 (29,977)   (54,342)
Loss before Income Tax   (4,943,906)   (623,699)
         
Income Tax Credit 12 -   -
Total comprehensive loss for the year   (4,943,906)   (623,699)
         
Earnings per Share (EPS)        
Basic from continuing operations 13 (0.026)   -

 

Consolidated Statement of Financial Position
at 31 December 2018

  Note 2018   2017
     
Non-Current Assets        
Property, Plant & Equipment 14 59,541   57,300
Intangible Assets 15 956,550   435,791
    1,016,091   493,091
Current Assets        
Trade and other receivables 17 394,113   238,315
Cash and short term deposits 18 3,485,186   103,577
    3,879,299   341,892
Total Assets   4,895,391   834,983
         
Equity and Liabilities        
         
Equity Attributable to Shareholders        
Issued share capital 19 193,136   -
Share premium 19 21,587,539   -
Other reserves 20 (11,314,729)   157,280
Retained earnings 21 (5,765,750)   (821,844)
Total Equity   4,700,196   (664,564)
Non-Current Liabilities        
Interest bearing loans and borrowings 24 -   907,180
Derivative financial liabilities 24 -   209,348
    -   1,116,528
Current Liabilities        
Trade and other payables 23 195,195   383,019
    195,195   383,019
Total Liabilities   195,195   1,499,547
Total Equity and Liabilities   4,895,391   834,983

 

Company Statement of Financial Position
at 31 December 2018

  Note 2018   2017
     
Non-Current Assets        
Investment in subsidiaries 16 15,028,809   -
    15,028,809   -
Current Assets        
Trade and other receivables 17 5,136,849   18,750
Cash and short term deposits 18 753,090   6,250
    5,889,939   25,000
Total Assets   20,918,748   25,000
         
Equity and Liabilities        
         
Equity Attributable to Shareholders        
Issued share capital 19 193,136   -
Share premium 19 21,587,539   -
Other reserves 20 (212,363)   -
Retained earnings 21 (687,587)   -
Total Equity   20,880,725   -
Current Liabilities        
Redeemable shares   -   25,000
Trade and other payables 23 38,023   -
Total Liabilities   38,023   25,000
Total Equity and Liabilities   20,918,748   25,000

 

Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2018

  Share
Capital
Share
Premium
Other
Reserves
Retained
Earnings
Total
 
Balance at 1 January 2017 - - 104,915 (198,145) (93,230)
Total comprehensive income          
Loss for the year - - - (623,699) (623,699)
Total comprehensive income - - - (623,699) (623,699)
Transactions with owners
recognised directly in equity
         
Transfer to derivative liabilities - - (104,915) - (104,915)
Transfer to other reserves arising from accounting treatment of acquisition of subsidiary - - 137,100 - 137,100
Share option expense - - 20,180 - 20,180
Balance at 31 December 2017 - - 157,280 (821,844) (664,564)
           
  Share
Capital
Share
Premium
Other
Reserves
Retained
Earnings
Total
 
Balance at 1 January 2018 - - 157,280 (821,844) (664,564)
Total comprehensive income          
Loss for the year - - - (4,943,906) (4,943,906)
Total comprehensive income - - - (4,943,906) (4,943,906)
Transactions with owners
recognised directly in equity
         
Issue of ordinary shares 193,136 21,587,539 - - 21,780,675
Share Issue Costs - - (596,212) - (596,212)
Acquisition of a subsidiary - - (11,263,644) - (11,243,464)
Share option expense - - 387,847 - 367,667
Balance at 31 December 2018 193,136 21,587,539 (11,314,729) (5,765,750) 4,700,196

 

Company Statement of Changes in Equity
for the Year Ended 31 December 2018

  Share
Capital
Share
Premium
Other
Reserves
Retained
Earnings
Total
 
Balance at 13 October 2017 - - - - -
Total comprehensive income          
Loss for the year - - - - -
Balance at 31 December 2017 - - - - -
           
  Share
Capital
Share
Premium
Other
Reserves
Retained
Earnings
Total
 
Balance at 1 January 2018 - - - - -
Total comprehensive income          
Loss for the year - - - (687,587) (687,587)
Total comprehensive income       (687,587) (687,587)
Transactions with owners
recognised directly in equity
         
Issue of ordinary shares 193,136 21,587,539 - - 21,780,675
Share Issue Costs - - (596,212) - (596,212)
Share option expense - - 383,849 - 383,849
Balance at 31 December 2018 193,136 21,587,539 (212,363) (687,587) 20,880,725

 

Consolidated Statement of Cash Flows
for the Year Ended 31 December 2018

  Note 2018   2017
Continuing Operations    
         
Loss before income tax   (4,943,906)   (623,699)
Adjustments to reconcile loss before tax to net cash flows:        
Depreciation of fixed assets 6 49,984   36,621
Amortisation of intangible assets 6 175,300   -
Fair value loss/(gain) arising on derivative financial liabilities 11 2,638,063   (125,764)
Non-cash element of extinguishment costs   174,651   -
Non-cash element of advisor warrants   112,381   -
Other non-cash items   1,944   -
Finance Costs 11 29,977   54,342
Share Option Expense   30,145   20,180
Movement in trade & other receivables   (155,798)   (201,710)
Movement in trade & other payables   (187,824)   351,339
    (2,075,083)   (488,691)
Bank interest & other charges paid   (29,977)   (264)
Net Cash used in Operating Activities   (2,105,060)   (488,955)
         
Cash Flows from Investing Activities        
Purchases of property, plant & equipment 14 (52,225)   (56,326)
Payments to develop Intangible Assets 15 (696,059)   (370,514)
Net cash used in investing activities   (748,284)   (426,840)
         
Cash Flows from Financing Activities        
Proceeds from issuance of ordinary shares   6,234,953   12,000
Proceeds from issuance of preference shares   -   250,000
Proceeds from issuance of convertible loans   -   688,000
Net cash generated from financing activities   6,234,953   950,000
         
Net increase in cash and cash equivalents   3,381,609   34,205
Cash and cash equivalents at beginning of year 18 103,577   69,372
Cash and cash equivalents at end of year 18 3,485,186   103,577

The non-cash element of extinguishment costs and non-cash element of advisor warrants reflect the fact that the group issued warrants to loan note holders, cumulative redeemable preference shareholders and advisors as part of the acquisition of Immersive VR Education Limited and the subsequent IPO transaction.

 

Company Statement of Cash Flows
for the Year Ended 31 December 2018

  Note 2018   2017
Continuing Operations    
         
Loss before income tax   (687,587)   -
Adjustments to reconcile loss before tax to net cash flows:        
Non-cash element of extinguishment costs   174,651   -
Non-cash element of advisor warrants   112,381   -
Non-cash element of redemption of redeemable shares   (18,750)   -
Finance Costs   276   -
Share Option Expense   17,518   -
Movement in trade & other receivables   (5,118,099)   -
Movement in trade & other payables   38,023   -
    (5,481,587)   -
Bank interest & other charges paid   (276)   -
Net Cash used in Operating Activities   (5,481,863)   -
         
Cash Flows from Investing Activities   -   -
         
Cash Flows from Financing Activities        
Proceeds from issuance of redeemable shares   -   6,250
Redemption of redeemable shares   (6,250)   -
Proceeds from issuance of ordinary shares   6,234,953   -
Net cash generated from financing activities   6,228,703   6,250
         
Net increase in cash and cash equivalents   746,840   6,250
         
Cash and cash equivalents at beginning of year 18 6,250   -
         
Cash and cash equivalents at end of year 18 753,090   6,250

The non-cash element of extinguishment costs and non-cash element of advisor warrants reflect the fact that the group issued warrants to loan note holders, cumulative redeemable preference shareholders and advisors as part of the acquisition of Immersive VR Education Limited and the subsequent IPO transaction.

The non-cash element of redemption of redeemable shares relates to the accounting treatment for the cancellation of unpaid redeemable shares during the year.

 

Notes

The notes are available in the printable pdf of the results. To download it, please click here.