10 September 2020
VR Education (AIM: VRE; Euronext Growth: 6VR), a leading virtual reality ('VR') technology company in the education, communication and virtual events space, and owner/developer of the ENGAGE platform, today announces its interim results for the six months ended 30 June 2020 (the ‘Period’ or ‘H1 2020’).
|Download the Interim Results Presentation|
- Revenue increased by 37% to €681k (H1 2019: €497k)
- ENGAGE revenue accelerated during H1 2020 and the Group is currently on track to meet FY 2020 expectations
- ENGAGE revenue comprises 33% of total Group revenue in the Period (H1 2019: 18%)
- In line with management expectations, the EBITDA result was unchanged at a loss of €0.9m (H1 2019: loss of €0.9m)
- Result before tax was a loss of €1.1m (H1 2019: loss of €1.2m)
- Commercial agreement with HTC for the resale of ENGAGE services within Greater China and subsequent successful fundraise of €3.0m (€2.93m net of expenses) from HTC – significantly underpins external confidence in the Group
- Net cash as at 30 June 2020 of €3.2m and at 9 September 2020 of €2.9m
- Loss per share for the period of €0.01 (H1 2019: €0.01)
- ENGAGE revenue post period end comprised 68% of total post period end Group revenue showing the significant traction achieved by ENGAGE
- Extremely successful HTC Vive Ecosystem Conference held on the ENGAGE platform in March 2020
- Partnership agreements entered into with content providers in USA and UK for on-boarding content onto the ENGAGE platform
- Multi-year enterprise licence agreement signed with Tokyo Global Gateway for approx. €0.2m
- Significant events contracted to be held in ENGAGE during H2 2020
- Commercial deals entered into with a number of parties on the ENGAGE platform for license agreements and for VR events including Facebook and Victory XR
- Successful launch of ENGAGE Mobile on Android phones and tablet devices
David Whelan, CEO of VR Education, said: “2020 has been a catalyst for increasing interest and uptake of VR to enable companies and employees to continue to interact. Our proprietary ENGAGE platform has benefitted from this and is now being used by significant global organisations, both governmental and corporate. VR Education’s outlook and forecast for the future is brighter than ever and I look forward to updating shareholders on our progress in due course.”
Investor and Analyst Meeting
A meeting for analysts hosted by David Whelan (CEO) and Séamus Larrissey (CFO) will be held at 0930am today via Zoom. Please contact Buchanan at [email protected] if you would like to receive the dial in details
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information, please contact:
|VR Education Holdings plc
David Whelan, CEO
Sandra Whelan, COO
|Tel: +353 87 665 6708
|Cairn Financial Advisers LLP(Nominated Adviser)
James Caithie / Liam Murray / Ludo Lazzaretti
|Tel: +44 (0) 20 7213 0880|
|Shard Capital Partners LLP (Joint Broker)
Damon Heath / Erik Woolgar
|Tel: +44 (0) 20 7186 9952|
|Davy(Joint Broker & Euronext Growth Advisor)
Fergal Meegan / Ronan Veale / Barry Murphy
|Tel: +353 1 679 6363|
|Buchanan(UK Financial PR)
Henry Harrison-Topham / Chris Lane / Tilly Abraham
|Tel: +44 (0)20 7466 5000
Notes to Editors
VR Education, together with its wholly owned subsidiary, is an early stage VR software and technology group based in Waterford, Ireland, dedicated to transforming the delivery methods of education and corporate training by utilising VR technologies to deliver fully immersive virtual learning experiences. The Group's core focus is the development and commercialisation of its online virtual social learning and presentation platform called ENGAGE, which provides a platform for creating, sharing and delivering proprietary and third-party VR content for educational and corporate training purposes.
In addition to the ongoing development of the ENGAGE platform, the Group has also built two downloadable showcase VR experiences, being the award-winning Apollo 11 VR experience and the Titanic VR experience.
On 12 March 2018, VR Education listed on the AIM market of the London Stock Exchange and on the Euronext Growth, a market regulated by Euronext Dublin. For further information, please visit www.vreducationholdings.com.
Chief Executive's Review
2020 has so far been a tough year for many businesses as the uncertainty of how to operate safely and efficiently, both during and following the Covid-19 pandemic, has challenged many of them. VR Education has been well placed to support many companies through its proprietary ENGAGE platform where they can host virtual events, virtual meetings and virtual training, and experience many of the same positive interactions enabled through physical interaction.
Commercial use of the Group’s ENGAGE platform has grown significantly since the pandemic started in Europe and the US with HTC and various other significant international organisations and corporations utilising the platform for virtual conferences and virtual meetings. HTC, a world leader in VR and mobile computing, hosted its 2020 Vive Ecosystem Conference on ENGAGE and was so impressed that it subsequently invested in the Group, becoming a sizable shareholder with a strong vested interest in the continued growth of the Group as a whole.
VR Education has continued to sell Showcase Experiences on various VR platforms which perform well, however, the Group’s ENGAGE platform revenue is beginning to dominate. This shift in the sales mix towards ENGAGE has always been anticipated, however the pandemic has acted as a catalyst in many respects towards the uptake of VR services and the need for companies to start using it. This increased interest and demand for VR can be clearly seen in the Group’s partnership agreement with US-based VictoryXR, a world leader in VR and augmented reality ('AR') content creation for schools and education, for the use of the Group's ENGAGE platform which was announced in April 2020, and the memorandum of understanding with Virtual College Limited, an industry-leading digital learning solutions provider, to provide and deliver technology enhanced learning solutions in the UK and Middle East, which was announced post period end. Post period end, the Group also signed a multi-year enterprise licence agreement with Tokyo Global Gateway, a large-scale experience-oriented English-education facility, for use of the Group's proprietary ENGAGE platform, effective from 1 September 2020.
As part of HTC’s investment, the Group has entered into a commercial agreement with HTC for the resale of ENGAGE services within the Greater China Region. This revenue stream is anticipated to come online in Q4 2020 with significant opportunities available inside China, as it is one of the countries leading the way in the adoption of XR. The Board is confident that having a business development team and the support structure of a company like HTC behind the ENGAGE platform will accelerate the overall adoption of the platform in many areas of training, education and enterprise.
In Q2 2020 the Group released the beta version of ENGAGE on android phone and tablets, opening up its potential market to billions of global users without the need for a headset, with the full release occurring post period end in July 2020. This version is perfect for attending events and conferences and an iOS iPhone/iPadOS version will follow before the end of the year.
With continued Covid-19 outbreaks forecast to happen in the near to medium term and an increasing number of large global technology companies allowing employees to work from home or remotely even after the pandemic is over, the Group expects to see continued accelerated growth of the ENGAGE platform for many years to come. ENGAGE offers a different way to communicate between remote teams and provides a more immersive conference experience than non-VR alternatives. VR Education believes that the virtualisation of such events is becoming more normalised with many areas being explored not just in education but also entertainment. The Board expects this trend to continue in the coming months as the Group continues to on-board large organisations and roll out its services in multiple geographies.
The Group benefits from a healthy order book for its ENGAGE platform in the second half of the current financial year and since 30 June 2020, the Group has run virtual events for Ericsson and XPRIZE and has a number of other virtual events planned in the current quarter. In addition, sales of the ENGAGE platform to date in H2 2020 for training and remote distance learning purposes has led to agreements being signed with a number of organisations including Facebook, The United States Air Force Academy, University of Arizona, Colorado State University, SNCF, Lobaki, Houston Community College and Stanford University.
Revenue generated from the ENGAGE platform since 30 June 2020 comprised 68% of total post period end Group revenue (H1 2020: 33%), illustrating the significant traction achieved by ENGAGE.
The Group’s Shuttle Commander Showcase Experience, which proved highly popular on PlayStation VR (‘PSVR’) will be released on Oculus Quest later this month. Later in Q4 2020, Shuttle Commander will also be released on the Steam network for PC-based VR devices providing users with a HD version of the experience which the Group expects to remain highly popular in the run up to the highly lucrative Christmas period.
Due to Covid-19 restrictions, revenue from the Group’s Showcase Experiences at location-based installations such as museums and VR arcades is lower than anticipated however the Group expects this to recover as restrictions are eased.
VR Education has continued to see good sales of its previously-released titles such as Apollo 11 VR, Titanic VR and Shuttle Commander on PSVR and will bundle these titles at various times throughout the year during subject matter anniversaries or general sales offers by Oculus, Sony or Steam.
This past six months have been transformational for VR Education. The Group’s ENGAGE platform has become a vital tool for many educators, event planners and enterprise clients in their response to Covid-19. The surge in demand for ENGAGE has led to the Group increasing its employees by 25% to keep up with the growing user base and the Board expects this to accelerate well into this coming year with ENGAGE set to be released in China in the near future with the backing of HTC and its business development team.
The Group’s Showcase Experiences continue to generate meaningful revenue and this is expected to continue, however more and more attention is now being spent on the ENGAGE platform as revenues and user numbers continue to grow strongly. VR Education’s outlook and forecast for the future is brighter than ever which is in stark contrast to the difficulties many corporates are experiencing with restrictions and shutdowns happening globally. The Group continues to hire top talent from around the world and has strengthened the Board with two excellent appointments providing a fresh outlook for the Group’s products outside of the education arena. A statement I have heard in the past is ‘Right product, right time’ and I believe that VR Education has that product in ENGAGE and the timing for mass global commercialisation is now.
Chief Executive Officer
10 September 2020
Revenue for the half year is up 37% on the prior half year to €681k (H1 2019: €497k), driven by an acceleration in revenue from the ENGAGE platform and the continued success of the Group’s Showcase Experiences, these being Apollo 11 VR, Titanic VR and Shuttle Commander.
ENGAGE revenue as a percentage of total revenue grew significantly in the period and comprised 33% of total revenue in the period (H1 2019: 18%). Post period-end, ENGAGE revenue continued to accelerate with ENGAGE revenue comprising 68% of total revenue post period end providing evidence of the continuing momentum behind the platform.
EBITDA loss was €0.9m comparable to the prior year period (H1 2019: loss of €0.9m). The primary cost driver for the EBITDA loss is salary and associated costs, currently approximately €0.2m per month.
Loss before tax was €1.1m, in line with management expectations, compared to a loss in the prior year of €1.2m.
The combination of operating cashflows and capital expenditure improved by over 20% in the period from an outflow in H1 2019 of €1.25m to just under €1.0 in H1 2020. The current cash burn rate, net of revenue received, post period end is approximately €0.2m per month but is expected to decline as revenues continue to grow. This is a reduction from earlier in the period when the cash burn rate was €0.25m.
At 30 June 2020, the Group had a strong cash position with net cash of €3.2m. The Group’s cash position as at 9 September 2020 stood at €2.9m. The cash balance was significantly strengthened during the period by a successful €3.0m (€2.93m net of expenses) share subscription by HTC.
Chief Financial Officer
10 September 2020
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2020
30 June 2020
30 June 2019
|Cost of Sales||(202,982)||(217,699)|
|Loss before Income Tax||(1,132,955)||(1,172,567)|
|Income Tax Credit||-||-|
|Loss for the Year from continuing operations||(1,132,955)||(1,172,567)|
|Loss per share|
|Basic from continuing operations||4||(0.005)||(0.006)|
Consolidated Statement of Financial Position
As at 30 June 2020
|Property, Plant & Equipment||84,291||152,174||115,930|
|Trade and other receivables||301,100||289,932||204,904|
|Cash and short-term deposit||3,234,069||2,220,797||1,292,852|
|Equity and Liabilities|
|Equity Attributable to Shareholders|
|Issued share capital||5||241,751||193,136||193,136|
|Operating lease liabilities||18,984||44,522||34,057|
|Trade and other payables||182,754||246,434||192,893|
|Operating lease liabilities||30,146||35,718||32,725|
|Total Equity and Liabilities||4,837,139||3,868,130||3,047,419|
Consolidated Statement of Changes in Equity
At 30 June 2020
|Attributable to Equity Shareholders|
|Balance at 1 January 2019||193,136||21,587,539||(11,314,729)||(5,765,750)||4,700,196|
|Loss for the period||-||-||-||(1,172,567)||(1,172,567)|
|Share option expense||-||-||13,827||-||13,827|
|Balance at 30 June 2019||193,136||21,587,539||(11,300,902)||(6,938,317)||3,541,456|
|Attributable to Equity Shareholders|
|Balance at 1 January 2020||193,136||21,587,539||(11,287,395)||(7,705,536)||2,787,744|
|Loss for the period||-||-||-||(1,132,955)||(1,132,955)|
|Issue of ordinary shares||48,615||2,959,977||-||-||3,008,592|
|Share option expense||-||-||8,431||4,163||12,594|
|Balance at 30 June 2020||241,751||24,547,516||(11,349,684)||(8,834,328)||4,605,255|
Consolidated Statement of Cash Flows
For six month period ended 30 June 2020
|Cash Flows from Operating Activities|
|Loss before income tax||(1,132,955)||(1,172,567)|
|Adjustments to reconcile loss before tax to net cash flows:|
|Share Option Expense||12,596||13,827|
|Movement in Trade & Other Receivables||(96,196)||104,182|
|Movement in Trade & Other Payables||(10,139)||51,239|
|Bank interest & other charges paid||(2,710)||(3,597)|
|Net cash used in operating activities||(922,666)||(732,497)|
|Cash Flows from Investing Activities|
|Purchases of property, plant & equipment||(2,870)||(34,137)|
|Payments to develop Intangible Assets||(53,464)||(480,482)|
|Net cash used in investing activities||(56,334)||(514,619)|
|Cash Flows from Financing Activities|
|Proceeds from issuance of ordinary shares||5||2,937,872||-|
|Payment of operating lease liabilities||(17,655)||(17,273)|
|Net cash generated / (used) from financing activities||2,920,217||(17,273)|
|Net increase / (decrease) in cash and cash equivalents||1,941,217||(1,264,389)|
|Cash and cash equivalents at beginning of period||1,292,852||3,485,186|
|Cash and cash equivalents at the end of period||3,234,069||2,220,797|
Notes to the Interim Report
The notes are available in the printable pdf of the results. To download it, please click here.