Blue Prism Group plc
Annual Report and Financial Statements
Year ended 31 October 2016
Delivering the world’s most
successful digital workforce.
blueprism.com
Blue Prism Group plc
Contents
About Blue Prism.......................................................................................................................................................
3
Chairman’s Statement ..............................................................................................................................................
Strategic Report .......................................................................................................................................................
4
6
The Board and Corporate Governance Report...........................................................................................................
17
Directors’ Report ......................................................................................................................................................
22
Statement of Directors’ responsibilities in respect of the Annual Report and the Financial Statements .......................
27
Independent Auditor’s Report to the members of Blue Prism Group plc ...................................................................
28
Consolidated statement of comprehensive income ...................................................................................................
32
Consolidated statement of financial position ............................................................................................................
33
Consolidated statement cash flows ..........................................................................................................................
35
Consolidated statement of changes in equity ...........................................................................................................
36
Notes to the consolidated financial statements .........................................................................................................
37
Company statement of financial position ..................................................................................................................
57
Company cash flow statement .................................................................................................................................
58
Company statement of changes in equity ................................................................................................................
59
Notes to the Company financial statements ..............................................................................................................
60
Five Year Record........................................................................................................................................................
64
Company Information ..............................................................................................................................................
66
02
Blue Prism Group plc Annual Report 2016
Annual Report and financial statements Year ended 31 October 2016
About Blue Prism Group plc
Blue Prism is a leader in Robotic Process Automation (“RPA”), enabling blue-chip organisations to create a digital
workforce powered by Blue Prism’s software robots that are trained to automate routine back-office clerical tasks. The
Group’s enterprise-grade software enables the automation of manual, rules-based, administrative processes to create
a more agile, cost effective and accurate back-office.
Blue Prism’s Robotic Process Automation (RPA) software delivers the world’s most successful digital workforce, which
has executed over 1 billion transactions in our customers’ datacenters. The Group is trusted by a diverse range of highly
successful organisations to operate in some of the most demanding administrative environments. Blue Prism provides
a scalable and robust execution platform for best of breed Artificial Intelligence (AI) and cognitive technologies and has
emerged as the trusted and proven RPA platform for the digital enterprise. Customers include Aegon, BNY Mellon,
Commerzbank, IBM, ING, Maersk, Nokia, Nordea, Procter & Gamble, Siemens, Westpac and Zurich.
Blue Prism Group plc is a UK registered company quoted on the AIM market of the London Stock Exchange and
primarily sells software term licenses, typically over three years and supported during the life of the contract by world
class customer services and product maintenance from our experienced global support team. Blue Prism operates an
indirect route to market with sales and implementation typically completed for customers by our global network of
channel partners who we support with training, collateral and professional services to help them deliver best practice
implementations. As at 31 October 2016 Blue Prism had 86 employees based out of offices in Manchester and
London (UK) and Miami, Chicago, New York and San Francisco (US).
San Francisco
Chicago
Newton-le-Willows
London
New York
Miami
Austin
Sydney
Blue Prism Group plc
Chairman’s Statement
Chairman’s Statement
I am very pleased to present the full year report on the results of Blue Prism Group plc (“Blue Prism” or the “Group”)
for the year ended 31 October 2016, the first following its IPO on AIM on 18th March 2016.
This was a successful financial year for Blue Prism as businesses worldwide increasingly recognised the many benefits
of Robotic Process Automation (“RPA”) technology and the transformative advantages provided by Blue Prism’s RPA
software.
In headline terms, total contracted revenue increased over 200% and recognised revenue increased 59%. Underlying
this, we brought forward our investment programmes during the year to match the growth of the RPA market
primarily through the growth of our US sales team and wider sales and marketing teams. We have doubled staff
numbers from 43 to 86 and continued to expand Blue Prism’s global partner network. Channel partners were
responsible for over 90% of new business within the year and have been operating on an increasingly global basis.
We are also pleased to note that more than 40% of our 189 license deals in the financial year were to existing
customers, which is an important validation of the business model and quality of the product offering.
Looking forward, we will continue to invest alongside market developments, further scaling our sales and delivery
channels as appropriate. In particular, we will focus on the accreditation of our partners and their employees in order
to maintain skills and quality of delivery as the market scales. We will continue to invest in the core technology in
order to maintain our position as the leading global RPA technology provider and build on our emerging position as
the scalable and robust execution platform for third party Artificial Intelligence and cognitive technologies.
We added strength and depth to the board and I would like to welcome Charmaine Eggberry and Ken Lever as Non-
Executive Directors. I would also like to thank our staff and management team, without whose dedication, hard work
and energy none of our success during 2016 could have been possible.
Our strong positioning in an emerging and exciting global market sets the scene for another positive year.
Jason Kingdon
Non-Executive Chairman
Blue Prism Group plc Annual Report 2016
05
Blue Prism Group plc
Strategic Report
Strategic Report
Overview
The last financial year was billed as a year of expansion and we are pleased to have successfully delivered against the
targets we set out at the time of our IPO in March 2016. Since becoming a public company, our corporate profile has
increased considerably and we have seen a growing and positive recognition of Blue Prism and a strengthening pipeline.
In FY2016, we focused our investments primarily in sales and marketing and in expanding our geographic presence.
This will remain a theme of 2017 as we continue to leverage our indirect channels to address a growing global
demand for RPA software.
Total contracted revenue for the year ended 31 October 2016 increased by 205% to £35.2m (FY2015: £11.5m) and
reported revenue increased by 59% to £9.6m (FY2015: £6.1m). This gives us excellent forward revenue visibility,
underlining the term license nature of the business. The exit run rate stood at £946k per month at 31 October 2016,
demonstrating continued strong momentum, rising 143% in the year (31 October 2015: £390k per month).
Market review
The RPA market continues to demonstrate encouraging signs of rapid growth with organisations increasingly aware of this
new technology category and Blue Prism is building on its position as the premium, enterprise-strength product in the market.
Geographically the Group saw strong demand across North America and Europe and interest emerging in new
geographies such as South Africa, Australasia, India, Japan and the Middle East.
RPA market progression has naturally attracted increased competition over the past year which helps to further validate
the RPA market that Blue Prism was instrumental in creating. Blue Prism’s software continues to be differentiated in the
market by its ability to deploy securely, and at scale, in enterprise-sized organisations. The core elements of the product
that deliver this value are its security, governance, data integrity, scalability, regulatory compliance and full audit and
change management capabilities. Blue Prism has spent many years industrialising its product to this enterprise class level
and has invested much resource in educating the market with regard to its differentiation.
Our premium software offering, combined with our global distribution capabilities; significant business momentum;
robust balance sheet; and high profile, which in part results from our public listing, puts us in a strong position to
capitalise on a market increasingly entering into rapid growth.
Operational review
The Group experienced significant customer momentum in the year, primarily through our channel partner ecosystem.
In line with our strategic goals set out at the time of our IPO, we have invested in expanding our sales force and
Blue Prism Group plc Annual Report 2016
07
Blue Prism Group plc
building a scalable channel partner ecosystem. We were pleased that this has resulted in strong growth in licence
deals with 189 closed during the financial year, up from 40 in 2015.
s
l
a
e
d
f
o
.
o
N
190
180
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
Licence deals
New customers
Renewals (i)
Upsells (ii)
(i) Renewals are defined as new or extended
contracts, initiated after the original
contract has expired
(ii) Upsells occur when a customer
purchases additional software robots
post the initial purchase, before expiry of
the initial contract.
FY2015
FY2016
Deals with or through our channel partners accounted for over 90% of new customers, demonstrating the
considerable success of our indirect sales model. This success is further supported by the resources being allocated
to Blue Prism sales by global strategic partners and specialist resellers such as Accenture, Alsbridge, Deloitte, Digital
Workforce, EY, Hewlett Packard Enterprise, IBM, id. Management, NEOOPS, Reveal Group, Symphony Ventures, The
Burnie Group and Thoughtonomy. We are also developing technical partnerships with third party Artifical Intelligence
and cognitive products to position Blue Prism as the execution platform at the centre of a smart new digital workforce
for the enterprise.
81 of our licence deals signed during the year were upsells across 47 customers providing evidence that customers are
augmenting their initial adoption of robots, rolling them out across increasingly strategic and transformational projects.
The Group enjoyed a 100% renewal rate in the period, including renewing the licences of 2 of our largest customers.
Total customer numbers increased from 57 to 153 across a number of industries such as banking and finance, insurance,
healthcare, outsourcing, and government. Notably, many of these customers are in highly regulated industries, validating
the robust and secure nature of our enterprise level software.
Professional Services is now largely focussed on partner delivery enablement and certification, quality assurance and the
continued development of best practice methodologies and operating models.
The US is a strategic focus for the Group as the world’s leading technology economy and has been a key focus of
investment. This has resulted in substantial growth during the period with 27% of the Group’s revenue coming from
North America, growing from £0.6m in FY2015 to £2.6m for this financial year. Whilst the RPA market in the US is at
a more nascent stage than Europe, particularly in the channel partner ecosystem, we see evidence of larger upfront
commitments to licence adoption amongst customers. The Group won 18 new customers in North America of which 2
were direct and 16 indirect; and 19 upsells in the year.
08
Blue Prism Group plc Annual Report 2016
Strategic Report
Through our global partner network we are seeing demand in new geographies and they have already delivered sales in
South Africa, Australasia and the Far East, for example. We will seek to strategically invest to support our partners and
drive new sales in new regions.
To provide class leading customer service to our growing and increasingly global customer base we have increased the
number of support staff and made preparations to roll out global 24/7 support by adding new centres in Austin, Texas
and Sydney, Australia alongside our existing UK customer service operation.
In May 2016, we launched version 5.0 of the Blue Prism software platform which included, for example, the ability to
allocate and dynamically reallocate work to robot teams across multiple data centres, geographies and the cloud as
well as improved new encryption functionality to improve data security and a renewed user interface and technology
platform to support new technologies and future versions of the platform. The multi-language capability provided
by version 5.0 has allowed us to expand beyond English speaking countries further enabling us to support the global
demand for RPA technology.
Employees
During the year staff numbers doubled from 43 to 86. We primarily invested in our global sales and marketing team in
order to serve the substantial opportunities presented by the fast growing market in which we operate. As a result of this
investment the US became our largest single sales force during the financial year.
At the time of the IPO, we implemented an equity ownership scheme for all employees and this policy continues to allow
us to attract and retain high quality people in these fast moving market conditions. In this year of rapid expansion and
considerable growth, we would like to welcome all our new joiners and thank all Blue Prism employees, new and old, for
their considerable dedication, hard work and enthusiasm in growing the business.
Executing our strategy
We made substantial progress during the year in the four elements of our strategic focus, communicated at the time
of the IPO:
Building a scalable sales and delivery channel
The Group’s channel partner model continues to develop well and now accounts for the vast majority of our new
business. Our partners provide us with a global, scalable sales and delivery presence as well as domain expertise in
industry sectors and geographies, many based on existing and trusted relationships.
We intend to continue to build this partner network further, with the aim of increasing our coverage of different
industries and geographies.
As our customer base grows we are seeing a shortage of Blue Prism skills within the wider market. To help address
this, we are developing individual accreditation programmes, providing formal qualifications for the development
of specific Blue Prism skills. We are also rolling out autonomous training kits to enable partners and customers to
set up their own internal operations.
To ensure our customers receive consistent levels of delivery support we are rolling out a partner certification programme
in the coming financial year to provide visible partner capability intelligence and quality assurance to our customers.
Blue Prism Group plc Annual Report 2016
09
Blue Prism Group plc
Increasing business with the Group’s customers
The Group’s initial investment in account management resources is showing signs of success with 81 upsells across
47 customers in the period. We also saw evidence that new customers signed through or with alliance partners are
beginning to take larger average initial licence deals.
To help drive continued growth in licences to existing customers we will invest further in account management for our
indirect model.
Executing on the Group’s US market strategy
The Group has made good progress in the US having secured important direct and indirect reference sites. We have
also seen our investment in building out our sales team already reflected in the strong revenue progress in FY2016. We
continue to view the US as a strategic priority and are investing in sales, marketing and support with a particular focus
on developing the indirect channel partner model in the region.
Reinforcing the Group’s market leadership to take advantage of RPA market adoption
The Group continued to maintain its premium product and thought-leadership with the launch of version 5.0 in May
2016. This was further validated by the annual AIconics Awards where Blue Prism was named Best Enterprise Application
of Artificial Intelligence.
To ensure that our software remains at the forefront of the industry and that we retain our strong market positioning we
will continue our policy of aiming to invest approximately 10% of the Group’s revenues in product development targeted
primarily at further reinforcement of the enterprise strength and scale of the software and to build on its emerging
position as the scalable and robust execution platform for third party Artificial Intelligence and cognitive technologies
which will form part of the future digital enterprise.
Summary and outlook
We are delighted with Blue Prism’s performance for the year ended 31 October 2016, our first as a publicly listed
company. The Group outperformed its targets for the period across all areas of the business, both operationally and
financially. Our strategy to move to a wholly indirect sales model has been very successful with our partner network
delivering over 90% of new business in a year in which customer numbers increased by 96 from 57 to 153.
The RPA market continues to grow, and whilst this is generating increased competition, we believe Blue Prism is well
positioned and sufficiently differentiated to take advantage of this growth through continued product innovation and
marketing. To drive continued growth in our indirect sales model, our primary investment focus remains on building our
global sales team which also manages the partner relationships.
Taking into consideration the FY2016 exit monthly run rate and assuming the ongoing momentum in new customer
wins and upsells continues, we expect revenue for the current financial year to be comfortably ahead of existing
market expectations.
10
Blue Prism Group plc Annual Report 2016
Strategic Report
Financial Review
Introduction
We are pleased to present our maiden full year results as a public company. This has been a successful year for the
Group with good progress against our financial expectations.
Billings and future contracted revenue
The Group saw billings, defined as invoices raised in the period, and future contracted revenues, defined as the future
value of the contract which has not yet been invoiced to the customer, grow substantially during the period.
£40m
£35m
£30m
£25m
£20m
£15m
£10m
£5m
£0m
Total Contracted
Revenue Analysis
Future contracted revenue
Billings
FY2015
FY2016
(i) Billings represent the invoices raised during the period on credit terms of up to 90 days, with revenues being
subsequently recognised over the life of the contract.
(ii) Future contracted revenue represents contracts entered into with customers yet to be invoiced
Billings increased 133% to £16.7m against the comparative year (FY2015: £7.2m). This increase has largely been
driven by new customer wins, which accounted for 35% of total billings. Billings were enhanced by £2.2m as a result
of two customer prepayments in the year.
Future contracted revenue increased 325% to £18.5m (FY2015: £4.3m) providing the Group with strong revenue visibility.
Total contracted revenue, being the total of billings and future contracted revenue, increased 205% to £35.2m in the
year (FY2015: £11.5m).
Blue Prism Group plc Annual Report 2016
11
Blue Prism Group plc
Revenue
Recognised revenue for the year increased 59% to £9.6m (FY2015: £6.1m). As such, over £25.6m of the £35.2m of
total contracted revenue during the year is still to be recognised in the income statement.
Recurring licence revenue accounted for 85% of recognised revenues at £8.2m (FY2015: 62%). Non-recurring
revenue fell to £0.2m (FY2015: £1.0m) reflecting our focus on building a predominantly recurring revenue business.
Professional Services revenues also reduced slightly to £1.3m (FY2015: £1.4m) reflecting our continued transition to
an indirect delivery model.
The monthly exit run rate, which illustrates the momentum of recognised recurring licence revenue, stood at £946k
for October 2016. This has grown 143% in the year from £390k per month for October 2015. The exit run rate is the
recurring licence revenue released to the profit and loss account in the month of October.
Revenue from UK operations grew 25% to £7.0m (FY2015: £5.5m), representing 73% of total revenues. Revenue
from US operations grew to £2.6m (FY2015: £0.6m), representing 27% of total revenues.
Loss from operations
Losses from operations were £5.3m, which includes share-based payments of £362k and IPO costs of £502k,
(FY2015: loss: £0.8m), as the Group brought forward investments initially scheduled for 2017 to better meet the
substantial market opportunity. Investments in growing our US sales, and wider sales & marketing teams were the
core focus during the year.
Adjusted losses from operations were also impacted by the growth in total contracted revenue which resulted
in increased sales commissions since the Group policy is to expense sales commissions on the whole contract
immediately upon payment of the first invoice.
Foreign exchange gains
The entity generated foreign exchange gains during the period of £322k (FY2015: £13k). The gains generated during
the period have arisen as a result of the increased value of billings during the period in USD. This increase in billings in
USD has coincided with a steady fall in the value of the GBP against USD across the period, resulting in a significant
movement in the exchange rate when a significant value of billings in USD remained outstanding within the 30-90
day credit terms offered.
Statement of financial position
Deferred income, which is the value invoiced less the recognised revenue in the year, grew 206% to £10.4m (FY2015:
£3.4m), as a result of strong growth in new business and the prepayment of £2.2m from 2 customers. Of the £10.4m at
31 October 2016, £9.1m (87%) will be released in 2017 and the balance over the remaining period of the prepayment.
Trade and other receivables increased to £5.6m (FY2015: £1.5m) as the Group enjoyed a strong end to the financial
year. There are no intangibles on the balance sheet and research and development costs have been fully expensed as
incurred as none of these met the criteria for capitalisation.
12
Blue Prism Group plc Annual Report 2016
Strategic Report
Cash flows
Cash and cash equivalents at 31 October 2016 were £11.8m (31 October 2015: £2.4m). Net cash for the year
increased as a result of £8.8m (net of expenses) raised at the IPO and advanced payments from customers of £2.2m.
Strong contract payment term negotiations have enabled us to fund operating losses organically and bring forward
investments from 2017 without the need to use any of the funds raised at the IPO. We continue to focus on being
cash-generative in the medium term.
Additionally, the Group has a £2.0m Revolving Credit Facility which is currently unutilised.
Key Performance Indicators (KPIs)
The Group tracks a number of KPIs to identify trends in the trading performance and to benchmark progress of key objectives.
Financial KPIs
Total Billings in the year ended 31 October 2016
Future contracted revenue
2016
£’000
£16,748
£18,479
2015
£’000
£7,186
£4,343
Total contracted revenue
£35,227
£11,529
Recognised Revenue
Monthly Run rate
Operating loss
Share based payments
IPO costs
Foreign exchange gains
Adjusted losses from operations (excludes share-based payments,
IPO costs, and foreign exchange gains)
Cash
Cash generated from operations (£’000)
Loss per share
Non-Financial KPIs
Number of customers
Total Number of staff
£9,644
£6,062
£946
(£5,274)
£362
£502
(£322)
£390
(£753)
£26
-
(£13)
(£4,732)
(£740)
£11,788
£2,351
93
433
(10.53p)
(2.56p)
153
86
57
43
Blue Prism Group plc Annual Report 2016
13
Blue Prism Group plc
Principal risks and uncertainties
The Group is exposed to a number of potential risks which may have a material effect on the reputation, financial or
operational performance.
It is not possible to identify or anticipate every risk that may affect the Group, or the materiality of that risk, however,
the principal risks and uncertainties faced by the Group are set out below.
The Board has overall responsibility for risk management and internal controls and is fully supported by the Audit Committee.
Operational risks
Key areas for on-going risk management are:
Failing to successfully implement its growth strategies
The Company intends to carry out certain growth and expansion strategies. The Group’s growth and future success
will be dependent to some extent on the successful completion of such growth and expansion strategies currently
or proposed to be undertaken by the Group and the sufficiency of demand for the Group’s software. The execution
of the Group’s growth and expansion strategies may also place strain on its managerial, operational and financial
reserves and the failure to implement such a strategy may adversely affect the Group’s reputation, business, prospects,
results of operation and financial condition.
Dependence on Channel Partners
The Group is increasingly selling its software robots through Channel Partners and is increasingly focussing on this
route to market including establishing a Channel Partner sales academy and Rainbow University. There can be no
guarantee that these Channel Partners sell the Group’s software robots to their end-customers. The loss of certain key
Channel Partners (and the resulting loss of indirect customers contracted via those Channel Partners) could have a
material adverse effect on the Group’s business and financial condition.
Failure of the market to accept the Group’s operating model of a fully automated digital workforce
A large proportion of the Group’s target market still uses traditional systems relying on human driven activities for the
major part of their operations. The Directors believe the market needs further education on the virtues of its software
machine driven technology, and on how to integrate it into its current operations. Potential customers may however
favour more traditional methodologies and/or be cautious about investing in the Group’s software due to lack of
education as to how it operates. Failure by the Group to bring about a change in the market’s readiness to accept a
new technology will lead to slower than projected growth in the Group’s revenues and profits.
Undetected defects in the software provided by the Group
The Group’s business involves providing customers with reliable software. If the software contains undetected defects
when first introduced or when upgraded or enhanced, the Group may fail to meet its customers’ performance
requirements or otherwise satisfy contract specifications. As a result, it may lose customers and/or become liable to its
customers for damages and this may, amongst other things, damage the Group’s reputation and financial condition.
The Group endeavours to negotiate limitations on its liability in its customer contracts, however, defects in either the
software developed on behalf of customers or developed and sold by the Group could result in the loss of a customer,
14
Blue Prism Group plc Annual Report 2016
Strategic Report
a reduction in business from any particular customer, negative publicity, reduced prospects and/or a distraction to its
management team. A successful claim by a customer to recover such losses could have a material adverse effect on
the Group’s reputation, business, prospects, results of operation and financial condition.
The Group’s software may not perform as expected and the Group could be at risk of defects which
adversely affect its customers
There is no guarantee that the Group’s software will perform as intended. Costs spent on developing the software
may therefore not be recouped and this may result in reduced profitability for the Group. As the Group’s software is
complex, they may contain defects or vulnerabilities which may not be detected until after their deployment to end
customers. These could result in the Group’s customers being vulnerable to security attacks or adverse performance.
The Group moreover may not always be able to identify the cause of performance problems in its software. The
Group’s business would be harmed if any of the events described above caused its end customers or potential end
customers to believe the Group’s software is not reliable or secure.
Security breaches of the Group’s or customer’s systems
The Group is often required and authorised by its customers to work with confidential information in the deployment
of the Group’s software and services. Although the Group employs security and testing measures for the software it
deploys, these may not protect against all possible security breaches that could harm the Group’s or its customers’
business. Any compromise of the Group’s security could harm its reputation or financial condition and, therefore, its
business. In addition, a party who is able to circumvent the Group’s security measures could, among other things,
misappropriate proprietary information, interrupt the Group’s operations or expose customers to computer viruses
or other disruptions. Actual or perceived vulnerabilities may lead to claims against the Group. Whilst the Group will,
where possible, seek to ensure that its customer agreements contain provisions that limit the Group’s liability, the
Group may need to enforce these provisions to enjoy the benefit of them, with the associated risk and expense.
The Group’s software may be at risk from cyber-attacks
The Group relies on information technology systems to conduct its operations. Because of this, the Group and its
software are at risk from cyber-attacks. Cyber-attacks can result from deliberate attacks or unintentional events
and may include (but are not limited to) third parties gaining unauthorised access to the Group’s software for the
purpose of misappropriating financial assets, intellectual property or sensitive information, corrupting data, or causing
operational disruption. If the Group suffers from a cyber-attack, whether by a third party or insider, it may incur
significant costs and suffer other negative consequences, such as remediation costs (including liability for stolen assets
or information) and repairing any damage caused to the Group’s network infrastructure and systems. The Group may
also suffer reputational damage and loss of investor confidence. If the Group suffers a cyber-attack, this could expose
the Group to potential financial and reputational harm.
The Group may be adversely affected by technological change in the Artificial Intelligence industry
The Group expects that new artificial intelligence technology will continue to emerge and develop, therefore it is
possible that this technology may be superior to, or render obsolete or unmarketable, the technology that the Group
currently offers. Any failure of the Group to ensure that its software remains up to date with the latest technology
may have a material impact on the Group’s competitiveness and financial performance. The Group plans to
continue to develop innovative solutions for its customers but there can be no assurance that the Group will be able
successfully to develop new products and expand its business as planned or that these new products will be successful
or profitable. The company’s success will depend, in part, on its ability to develop and adapt to these technological
changes and industry trends.
Blue Prism Group plc Annual Report 2016
15
Blue Prism Group plc
The Group faces strong competition in a rapidly evolving market
Although the Directors believe that significant barriers to entry exist in the markets in which the Group operates,
including for example the technical skill and expertise required to develop its technology, the Group may face an
increasing amount of competition. Competitors may seek to develop software which more successfully compete
with the Group’s current product range and they may also adopt more aggressive pricing policies or undertake
more extensive marketing and advertising campaigns. This may have a negative impact on sales volumes or profit
margins achieved by the Group in the future. The Group would also face an increase in competition if its competitors
adopted but further developed the Group’s software or if there were new entrants to the market with comparable or
competitively superior technology.
Growth management
The Directors believe that further expansion, either organically or through acquisition, may be required to capitalise
on the market opportunities available to the Group. Such expansion is expected to place further demands on
management, support functions, sales and marketing functions and other resources of the Group. In order to manage
the further expansion of the Group’s business and the growth of its operations and personnel, the Group may be
required to expand and enhance its infrastructure and technology and enhance its operational and financial systems
and procedures and controls from time to time in order to match that expansion. This could have a material cost
to the Group. Historically, the Group has invested in its people, infrastructure, processes and policies to enable and
support continued revenue growth but its future success will depend, in part, on its ability to continue to manage this
anticipated expansion.
There can be no assurance that the Group’s current and planned staff, infrastructure, systems, procedures and
controls will be adequate to support its expanding operations in the future. If the Group fails to manage its expansion
effectively, its business, prospects and results of operations may be materially and adversely affected.
This report was approved by the Board and signed by the Board:
Alastair Bathgate
Chief Executive Officer
23 January 2017
16
Blue Prism Group plc Annual Report 2016
The Board and Corporate Governance Report
The Board and Corporate
Governance Report for the
year ended 31 October 2016
Blue Prism Group plc
At 31 October 2016 the Board comprised the Chairman, two Executive Directors and three NEDs whose Board and
Committee responsibilities are set out below.
Board
Audit
Committee
Remuneration
Committee
Jason Kingdon
Chairman
Chairman
CEO
CFO
Member
Member
-
-
-
-
-
-
Alastair Bathgate
Gary Johnson
Chris Batterham
Senior
Independent NED
Member
Member
Member
Ken Lever
Independent NED
Member
Chairman
Member
Charmaine Eggberry
Independent NED
Member
Member
Chairman
The Board meets formally on a regular basis to monitor operating issues, risk and trading performance, to review
forecasts, strategy and policy, to consider key projects and to oversee shareholder reporting. The Board is responsible
for corporate governance and delegates operational control to the Executive Directors.
The Chairman and NEDs have held meetings throughout the year with the various senior managers to improve insight
into the business operations and the marketplace.
There is a formal schedule of matters reserved for the decision of the Board that covers the key areas of the Group’s
affairs. The schedule includes approval of the Annual Report and any other financial statements, the adoption of the
budgets and business plans, material financial commitments, and the release of inside information.
The Board considers its overall size and composition to be appropriate, having regard to the experience and skills
which the Board members bring together. The Board confirmed that Chris Batterham, Ken Lever and Charmaine
Eggberry are independent in character and judgement. The Chairman, Jason Kingdon is not independent, however
the Board considers that Jason Kingdon’s long experience as Chairman of the Board of Blue Prism Limited (which
until the IPO was the parent of the Group) will be of benefit to the Board in providing continuity of knowledge and
additional industry expertise to the Group.
Directors
Dr. Conrad Jason Kingdon (54) (Non–Independent, Non-Executive Chairman)
Jason has been commercialising AI for over 25 years. He has a PhD from University College London and was co-
founder of UCL’s Intelligent Systems Lab. He co-founded and was CEO of Searchspace, a company which pioneered
big data analytics introducing intelligent transaction monitoring for Anti Money Laundering for many of the world’s
top tier banks. The company was multi award winning for both technology and revenue growth and was also
endorsed by the American Banking Association as the preferred technology for AML detection. Jason led a highly
successful exit in 2005 and has since been a member of UCL Enterprise Board, has set-up his own private AI research
lab and became an early backer to Blue Prism. He’s an EY entrepreneur of the year, author and editor of AI books,
papers and patents.
18
Blue Prism Group plc Annual Report 2016
The Board and Corporate Governance Report
Alastair Douglas Bathgate (52) (Chief Executive Officer & Co-Founder)
Alastair has over 30 years’ experience in enterprise software, manufacturing, retailing and banking. He co-founded
the Group in 2001 alongside David Moss, having previously spent eight years in process improvement at Bradford &
Bingley Building Society and four years delivering enterprise software solutions to major customers such as Barclays
Bank at Lynx Financial Systems.
Alastair has an MBA with distinction from Leeds University Business School.
Gary Michael Johnson (61) (Finance Director)
Gary has over 20 years’ experience in senior finance roles across the technology sector. He joined the Group in
February 2015 and was most recently finance director of Testronic Laboratories, a digital testing company covering
digital TV, video games and movies. His previous experience includes roles as chief operating officer at Sony Psygnosis
and finance director of Acorn Computers plc and Rage plc.
Gary is a member of the Institute of Chartered Accountants in England & Wales.
Christopher Michael Batterham (61) (Senior Independent Non-Executive Director)
Chris qualified as an accountant with Arthur Anderson and has significant experience in senior finance roles across
the technology sector. He joined the board of the Group in September 2012 and was previously finance director of
Unipalm plc, the first internet company to IPO in the UK, until 2001 and chief financial officer of SearchSpace Limited
until 2005. Chris currently serves as non-executive chairman of Eckoh plc and Non-Executive Director of SDL plc, NCC
Group plc and Toumaz Group plc.
Chris has an MA from Cambridge University and is a Fellow of the Institute of Chartered Accountants in England & Wales
Kenneth (Ken) Lever (63) (independent Non-Executive Director)
Ken is an ex-partner of Arthur Andersen and has held senior executive director roles in many listed companies including
Alfred McAlpine plc, Albright & Wilson plc and Tomkins plc. Ken was Chief Financial Officer of Numonyx in Switzerland
from April 2008 to September 2010, and was Chief Executive Officer of Xchanging between 2011 and 2015.
Ken currently is a Group Chairman of RPS group plc, Non-Executive Director of Vertu Motors plc, Gresham House
Strategic plc, SVBM Ltd, Biffa plc and F.M. Insurance Company Limited.
From 2007 to 2013 Ken was a member of the Accounting Council (formerly the UK Accounting Standards Board) of
the Financial Reporting Council. Ken is a Fellow of the Institute of Chartered Accountants in England & Wales.
Charmaine Bridgette Eggberry (46) (Independent Non-Executive Director)
Charmaine was global senior vice-president at Nokia. Between 2002 and 2008 Charmaine was managing director and
vice president, EMEA at Research in Motion (Blackberry). She also led Wayra, the digital accelerator and was a non-
executive director of Wayra UnLtd, a joint venture between the UK Government and Telefónica.
Charmaine currently is a Non-Executive Director of Avanti Communications Group plc and GB Group plc and
chairperson of Buzzmove and a partner with the Boston Consulting Group.
Blue Prism Group plc Annual Report 2016
19
Blue Prism Group plc
Brochure title in here
Directors’ Indemnities
At the date of this Directors’ and Corporate Governance Report, indemnities are in force for both the directors and
the Company Secretary, to the extent permitted by law and by Blue Prism Group plc’s Articles of Association, in
respect of losses arising in their capacity as officer of any member of the Blue Prism Group. In addition, Blue Prism
has purchased and maintained throughout the year directors’ and officers’ liability insurance in respect of itself and its
directors and officers.
Board committees
Audit Committee
The Audit Committee comprises Ken Lever (Chairman), Chris Batterham and Charmaine Eggberry. The committee
meets at least twice per year and more frequently if required. The Committee is responsible for monitoring the
integrity of the Company’s Financial statements, monitoring the quality of the internal controls, reviewing significant
financial reporting issues, overseeing the relationship with the external auditors (including advising on their
appointment, agreeing the scope of the audit and reviewing the audit findings). Executive Directors or other members
of the management team may be invited to attend meetings.
Remuneration Committee
The remuneration committee comprises Charmaine Eggberry (Chairman), Ken Lever and Chris Batterham. The
committee meets at least twice per year and more frequently if required. The Committee is responsible for
determining and agreeing with the Board the framework for the remuneration of the executive directors and other
designated senior management and determining the total remuneration packages including where appropriate
bonuses, incentive payments, share option awards and other share awards. The remuneration of the Non-Executive
Directors will be determined by the Chairman and the Executive members of the Board. No director will be involved in
any decision as to his or her own remuneration.
Internal control
The Board has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. The
processes to identify and manage the key risks of the Group are an integral part of the internal control environment.
Such processes, which are regularly reviewed and improved as necessary, include strategic planning, approval
of annual budgets, regular monitoring of performance against budget (including full investigation of significant
variances), control of capital expenditure, ensuring proper accounting records are maintained, the appointment of
senior management and the setting of high standards for health, safety and environmental performance.
The effectiveness of the internal control system and procedures is monitored regularly through a combination of
review by management, the results of which are reported to and considered by the Audit Committee. The system
of internal control comprises those controls established to provide assurance that the assets of the Group are
safeguarded against unauthorised use and to ensure the maintenance of proper accounting records and the reliability
of financial information used within the business or for publication. Any system of internal control can only provide
reasonable, but not absolute, assurance against material misstatement or loss, as it is designed to manage rather than
eliminate the risk of failing to achieve the business objectives of the Group.
20
Blue Prism Group plc Annual Report 2016
The Board and Corporate Governance Report
Relations with shareholders
The company is committed to open communications with all its shareholders. Communication is primarily through
the Company’s website and the Annual General Meeting. All shareholders will receive a copy of the Annual Report
(electronic or hard copy depending on shareholder preference) and an interim report at the half year will be available
on the Company’s website.
Blue Prism Group plc Annual Report 2016
21
Blue Prism Group plc
Brochure title in here
Directors’ Report
for the year ended
31 October 2016
16
Directors’ Report
Business Review and future developments
A review of the Group’s operations and future developments is covered in the Strategic Report section of the Annual
Report and Accounts on pages 6 to 16.
Dividend
The Directors do not recommend the payment of a dividend.
Going Concern
After making enquiries, the Directors have confidence that the Group has adequate resources to continue in
operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in
preparing the Annual Report and Accounts.
Directors
The Directors who served on the Board and on Board committees during the year are set out on pages 18 and 20.
Information on Directors’ remuneration and share option rights is given in the Directors’ Remuneration section below.
Significant shareholders
The Company is informed that at 31 October 2016, individual registered shareholdings of more than 3% of the
Company’s issued share capital were as follows:
Number of shares
% of issued ordinary share capital
Enterprise Ventures
Alastair Bathgate
Jason Kingdon
Schroders Investment Management
David Moss
Hargreave Hale
9,561,549
6,308,462
6,229,822
5,728,832
4,016,872
3,425,483
15.4%
10.1%
10.0%
9.2%
6.5%
5.5%
Blue Prism Group plc Annual Report 2016
23
Blue Prism Group plc
Brochure title in here
Directors’ Share Interests
The directors who held office during the year had the following interests in the ordinary shares of Blue Prism Group
plc according to the register of Directors’ interests:
As at 31 October 2016
Number of 1p ordinary shares
% of issued ordinary share capital
Alastair Bathgate
Jason Kingdon
Gary Johnson
Chris Batterham
Ken Lever
Charmaine Eggberry
6,308,462
6,229,822
99,820
200,000
32,051
320,512
10.1%
10.0 %
0.2%
0.3%
<0.1%
0.5%
Also as at 31 October 2016 the following options over the company’s ordinary shares had been granted to the
following directors, pursuant to the Share Plans:
As at 31 October 2016
Number of Options
Exercise Period
Exercise Price
Alastair Bathgate
Gary Johnson
497,436
402,564
18th March 2019 to
14th March 2026
18th March 2019 to 14th
March 2026
78p
78p
None of the Directors had any interest in the share capital of any subsidiary company.
24
Blue Prism Group plc Annual Report 2016
Directors’ Report
Directors’ Remuneration
The emoluments of the Directors were as follows (audited):
Salary
Bonus /
Commission
Pension
Other
benefits
Total
2016
Gains on
exercise
of share
options
Emolu-
ments year
ended 31
October
2015
£
£
£
£
£
£
£
122,027
19,419
10,045
6,204
157,695
3,234,000
150,304
Alastair
Bathgate
Gary
Johnson
Jason
Kingdon
107,840
17,887
54,119
9,710
Chris
Batterham
41,333
Ken Lever
30,208
Charmaine
Eggberry
30,208
-
-
-
-
-
-
-
-
7,420
133,147
66,773
72,900
-
-
-
-
63,829
-
65,124
41,333
18,420
30,208
30,208
-
-
-
-
-
Totals
385,735
47,016
10,045
13,624
456,420
3,319,193
288,328
Alastair Bathgate, as highest paid Director exercised 4,200,000 share options during the period on 18 March 2016 at
an exercise price of £0.01.
Research & Development
Investment in the development of its product and the protection of the intellectual property of such development
work is considered key to the further improvement of Blue Prism’s competitive position. Further details can be found
in the Principal risks and uncertainties section on pages 14 to 16.
Political Donations
The Group made no political donations.
Blue Prism Group plc Annual Report 2016
25
Blue Prism Group plc
Brochure title in here
Provision of information to the auditors
Each of the Directors at the time when this Report of the Directors is approved has confirmed that:
• So far as that Director is aware, there is no relevant audit information of which the Company’s and the Group’s
auditors are unaware; and
• Each director has taken all the steps that ought to have been taken as a Director in order to be aware of any
information needed by the Company and the Group’s auditors in connection with preparing their report and to
establish that the Company and the Group’s auditors are aware of that information.
AGM Notice
The notice covering the AGM to be held on 21st March 2017, together with an explanation of the resolutions to be
proposed at the meeting, is contained in a separate circular to shareholders.
Independent Auditors
The auditors, BDO LLP, have expressed their willingness to continue in office and a resolution to re-appoint them will
be proposed at the AGM.
This report was approved by the Board and signed by the Board:
Gary Johnson
Chief Financial Officer
23 January 2017
26
Blue Prism Group plc Annual Report 2016
Directors’ responsibilities
Directors’ responsibilities
The directors are responsible for preparing the Annual Report and financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have elected to prepare the Group and company financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not
approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs
of the Group and company and of the profit or loss of the Group for that period. The directors are also required
to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading
securities on the Alternative Investment Market.
In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any
material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company
will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the company
and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006.
They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
The directors are responsible for ensuring the Annual Report and the financial statements are made available on a
website. Financial statements are published on the company’s website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in
other jurisdictions. The maintenance and integrity of the company’s website is the responsibility of the directors.
The directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.
Blue Prism Group plc Annual Report 2016
27
Blue Prism Group plc
Independent Auditor’s
Report to the members
of Blue Prism Group plc
Independent Auditor’s Report
We have audited the financial statements of Blue Prism Group plc for the period from 2 September 2015 to 31
October 2016 which comprise the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement
of changes in equity, the company statement of financial position, the company statement of cash flows, the
company statement of changes in equity and the related notes. The financial reporting framework that has been
applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
the European Union and, as regards the parent company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an Auditor’s Report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting
Council’s (FRC’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the FRC’s website at
www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and the parent company’s affairs as
at 31 October 2016 and of the Group’s loss for the period then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
• the parent company’s financial statements have been properly prepared in accordance with IFRSs as adopted by
the European Union and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Blue Prism Group plc Annual Report 2016
29
Blue Prism Group plc
Brochure title in here
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial period for which
the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report
to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Nicole Martin (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
London, 23 January 2017
30
Blue Prism Group plc Annual Report 2016
Consolidated Financial Statements for the Year Ended 31 October 2016
Consolidated Financial
Statements for the Year
Ended 31 October 2016
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
Consolidated statement of profit or loss and other comprehensive
income for the year ended 31 October 2016
Revenue
Cost of sales
Gross profit
Operating expense
Operating expenses before share based payments, IPO
expenses and foreign exchange gains
Share-based payments
IPO expenses
Foreign exchange gains
Operating expenses
Operating loss
Interest received on bank deposits
Loss before tax
Tax expense
Loss and total comprehensive income for the year
Basic and diluted loss per share attributable to shareholders (p)
Note
4
5
6
8
9
2016
£’000
9,644
(67)
2015
£’000
6,062
(74)
9,577
5,988
(14,851)
(6,741)
(14,309)
(362)
(502)
322
(14,851)
(5,274)
25
(5,249)
(69)
(6,728)
(26)
-
13
(6,741)
(753)
10
(743)
(53)
(5,318)
(796)
(10.53)
(2.56)
The notes on pages 37 to 55 form part of these financial statements.
32
Blue Prism Group plc Annual Report 2016
Consolidated Financial Statements for the Year Ended 31 October 2016
Consolidated statement of financial position at 31 October 2016
Non-current assets
Property, plant and equipment
Deferred tax assets
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Deferred revenue
Corporation tax payable
Total current liabilities
Non-current liabilities
Deferred revenue
Total non-current liabilities
Total liabilities
Net assets/(liabilities)
Equity attributable to shareholders
Called up share capital
Share premium
Merger reserve
Share based payment reserve
Accumulated losses
Note
10
14
12
21
13
15
2016
£’000
158
-
158
5,585
11,788
2015
£’000
43
69
112
1,464
2,351
17,373
3,815
17,531
3,927
3,224
9,079
-
1,149
3,425
2
12,303
4,576
1,358
1,358
-
-
13,661
4,576
3,870
(649)
1,674
9,194
356
287
(7,641)
1,393
356
-
104
(2,502)
3,870
(649)
The notes on pages 37 to 55 form part of these financial statements.
Blue Prism Group plc Annual Report 2016
33
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
The financial statements on pages 32 to 65 were approved and authorised for issue by the Board of Directors on 23
January 2017 and were signed on its behalf by:
G Johnson
Director
34
Blue Prism Group plc Annual Report 2016
Consolidated Financial Statements for the Year Ended 31 October 2016
Brochure title in here
Consolidated statement of cash flows for the year ended
31 October 2016
Cash flows from operating activities
Loss for the year
Adjustments for:
Depreciation of property, plant and equipment
Finance income
Share-based payment expense
Income tax expense
Increase in trade and other receivables
Increase in trade and other payables
Cash generated from operations
Income taxes paid
Net cash flows from operating activities
Investing activities
Purchases of property, plant and equipment
Interest received
Net cash used in investing activities
Financing activities
Issue of ordinary shares net of issue costs
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Note
2016
£’000
2015
£’000
(5,318)
(796)
10
16
8
10
39
(25)
362
69
(4,873)
(4,119)
9,085
93
(2)
91
(154)
25
(129)
9,475
9,475
9,437
2,351
15
(10)
26
53
(712)
(248)
1,393
433
(6)
427
(37)
10
(27)
-
-
400
1,951
Cash and cash equivalents at end of year
21
11,788
2,351
The notes on pages 37 to 55 form part of these financial statements.
Blue Prism Group plc Annual Report 2016
35
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
Consolidated statement of changes in equity for the year ended
31 October 2016
Share
capital
£’000
Share
premium
£’000
1,393
356
-
-
-
-
Share
based
payment
reserve
£’000
78
-
26
31 October 2014
Loss and total comprehensive
income for the year
Share based payment
Equity as at 31 October 2015
1,393
356
104
Loss and total comprehensive
income for the year
Transfer on IPO
Exercise of options
Issue of shares at IPO
Share based payments
Cost of issuing new shares
Transfer on exercise / forfeiture
of options
-
-
153
128
-
-
-
-
(356)
5
9,872
-
(683)
-
-
-
-
287
-
Merger
reserve
£’000
Accum-
ulated
losses
£’000
Total
equity
£’000
-
-
-
-
-
356
-
-
-
-
(1,706)
121
(796)
(796)
-
26
(2,502)
(649)
(5,318)
-
-
-
75
-
(5,318)
-
158
10,000
362
(683)
-
(104)
-
104
-
Equity as at 31 October 2016
1,674
9,194
287
356
(7,641)
3,870
The notes on pages 37 to 55 form part of these financial statements.
36
Blue Prism Group plc Annual Report 2016
Notes forming part of the financial statements for the year ended 31 October 2016
Notes forming part of the
financial statements for the
year ended 31 October 2016
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
1. Accounting policies
Basis of preparation
The principal accounting policies adopted in the preparation of the consolidated financial statements are set out
below. The policies have been consistently applied to all the years presented, unless otherwise stated.
The financial statements of the Group have been prepared on a going concern basis and in accordance with
International Financial Reporting Standards (‘IFRS’) and their interpretations which have been issued by the
International Accounting Standards Board (‘IASB’), as adopted by the European Union. They have also been prepared
with those parts of the 2006 Companies Act applicable to companies reporting under IFRS.
The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting
estimates. It also requires Group management to exercise judgment in applying the Group’s accounting policies. The
areas where significant judgements and estimates have been made in preparing the financial statements and their
effect are disclosed in note 2.
Changes in accounting policies
a) New standards, interpretations and amendments effective from 1 November 2015
There were no new standards or interpretations effective for the first time for periods beginning on or after 1
November 2015. None of the amendments to Standards that are effective from that date had a significant effect on
the Group’s financial statements.
b) New standards, interpretations and amendments not yet effective
The following new standards, interpretations and amendments, which are not yet effective and have not been
adopted early in these financial statements which have been issued by the IASB but are not yet effective, may have a
material impact on these financial statements:
IFRS 15 Revenues from Contracts with Customers, effective for periods commencing on or after I January 2018. The
directors have begun to assess the potential effects of this standard on the business, and in particular if it will have
any impact on the way revenue is recognised. A study will be carried out on this impact in 2017.
IFRS 9 Financial Instruments, effective for periods commencing on or after 1 July 2018. The impact of this standard is
being considered by the directors and any impact, especially around the value of debtors is yet to be fully investigated.
IFRS 16 Leases, effective for periods commencing on or after 1 January 2019. The directors are assessing the impact of
this standard and the possible impact of any leases being capitalised on the balance sheet. A full review is yet to take
place.
Basis of consolidation
The consolidated financial statements present the results of the company and its subsidiaries (“the Group”) as if they
formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
38
Blue Prism Group plc Annual Report 2016
Notes forming part of the financial statements for the year ended 31 October 2016
Brochure title in here
1. Accounting policies (continued)
Group reorganisation and IPO
During the year the Group was subject to restructuring prior to the IPO. Blue Prism Group plc was positioned at the
top of the Group as the new parent company, with the former parent, Blue Prism Limited, becoming a wholly owned
direct subsidiary of Blue Prism Group plc through a share-for-share exchange. Such group reorganisations are outside
of IFRS3 as the Company does not meet the definition of a business and as such has been accounted for as a group
reorganisation rather than a reverse acquisition.
The Group reconstruction has been accounted for using merger accounting principles. Therefore, the consolidated
financial statements of Blue Prism Group plc are presented as if Blue Prism Group plc and Blue Prism Limited had
always been part of the same Group. Accordingly, the results of Blue Prism Limited for the entire year ended 31
October 2016 are shown in the consolidated statement of comprehensive income and the comparative figures for the
years ended 31 October 2015 are also prepared on this basis.
Transaction costs that relate directly to the issue of new equity instruments have been accounted for as a deduction from
equity. Where IPO transaction costs relate to both the listing of pre-existing and newly issued shares, those costs have
been allocated proportionally between profit or loss and equity on the basis of the proportion of the new shares issued.
Revenue recognition
The Group recognises revenue depending on the substance and legal form of the contracts with its customers.
Revenue is recognised once a legally binding contract between the Group and its customers has been established
and the delivery of the service has commenced. Service delivery is triggered by the providing of a ‘software key’ to
the customer. Revenues are accrued or deferred based on the length of time through the contract, and this policy is
consistently applied across all customers and contracts.
Provided the amount of revenue can be measured reliably and it is probable that the Group will receive consideration,
revenue from the provision of a license and follow up services is recognised from the commencement and over the
period in which the services are rendered, as adjusted for the stage of completion of individual contracts.
Licence fee revenues and maintenance revenues are bundled together as the two revenue streams cannot be
separated due to both being intertwined and maintenance is incurred throughout the licence term on an ongoing
basis. Revenue for these are recognised on an accruals basis; when invoiced in advance, the income is deferred
in the statement of financial position and recognised in the income statement over the length of the licence and
maintenance period. The fee for maintenance is included in the licence fee due to the practicality of assessing the fair
value of the maintenance portion.
Professional services revenues are recognised when the service has been delivered. If billed in advance, the income
related to consultancy days not yet delivered at the end of the period is deferred and recognised in the income
statement when the service takes place.
Training revenues are recognised when Blue Prism is notified that the online training course has been completed.
Sales commission
Sales commission is recognised in the profit and loss in wages and salaries at the point at which the contract is signed
and the initial invoice has been collected. This is recognised up front as opposed to deferring this cost over the period
of the contract as it is deemed an introductory fee, and is not affected by the future performance of a contract.
Blue Prism Group plc Annual Report 2016
39
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
1. Accounting policies (continued)
Foreign currency
Transactions entered into by Group entities in a currency other than the currency of the primary economic
environment in which they operate (their “functional currency”) are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange
differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit
or loss.
Trade receivables
Trade receivables are amounts due from customers for services provided in the ordinary course of business and are
stated net of any provision for impairment. Impairment provisions are recognised when there is objective evidence
(such as significant financial difficulties on the part of the counterparty or default, or significant delay in payment)
that the Blue Prism Group will be unable to collect all of the amounts due. The amount of such a provision is the
difference between the net carrying amount and the present value of the future expected cash flows associated with
the impaired receivable.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term highly liquid
investments with original maturities of three months or less.
Financial assets
The only financial assets held by Blue Prism Group plc are trade receivables and other cash and cash equivalents. Due
to their short term nature, the carrying value of cash and cash equivalents, trade and other receivables approximate
their fair value.
Financial liabilities
Financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument.
All financial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently
measured at amortised cost using the effective interest method other than those categorised as fair value through the
income statement.
Share capital
Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the
definition of a financial liability or financial asset.
The Group’s ordinary shares are classified as equity instruments.
Defined contribution pension schemes
Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive
income in the year to which they relate.
40
Blue Prism Group plc Annual Report 2016
Notes forming part of the financial statements for the year ended 31 October 2016
1. Accounting policies (continued)
Share-based payments
Where equity settled share options are awarded to employees, the fair value of the options at the date of grant
is charged to the consolidated statement of comprehensive income over the vesting period. Non-market vesting
conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting
date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options
that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the
options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the
market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting
condition or where a non-vesting condition is not satisfied.
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the
options, measured immediately before and after the modification, is also charged to the consolidated statement of
comprehensive income over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the consolidated statement of comprehensive
income is charged with the fair value of goods and services received.
Leased assets
Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an
“operating lease”), the total rentals payable under the lease are charged to the consolidated statement of
comprehensive income on a straight-line basis over the lease term. The aggregate benefit of lease incentives is
recognised as a reduction of the rental expense over the lease term on a straight-line basis.
Deferred taxation
Deferred tax is recognised in respect of relevant temporary differences that have originated but not reversed at the
balance sheet date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits
will be available against which temporary differences can be utilised. The deferred tax assets and liabilities are not
discounted.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. The
cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is
directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in
the manner intended by management.
Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their
estimated useful lives. The principal annual rates used for this purpose are:-
Computer equipment - straight line over 3 years
Research and development expenditure
Research expenditure is recognised as an expense when it is incurred.
Blue Prism Group plc Annual Report 2016
41
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
1. Accounting policies (continued)
Development expenditure is capitalised if, and only if, the Group can demonstrate all of the following:
(i) the ability to measure reliably the expenditure attributable to the asset under development;
(ii) the product or process is technically and commercially feasible; its future economic benefits are probable;
(iii) the ability to use or sell the developed asset; and
(iv) the availability of adequate technical, financial and other resources to complete the asset under development.
Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any.
Development expenditure that does not meet the criteria is expensed as incurred.
Capitalised development expenditure is amortised on a straight-line method when the services are ready for sale
or use. In the event that it is no longer probable that the expected future economic benefits will be recovered, the
development expenditure is written down to its recoverable amount.
2. Key accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually
evaluated based on historical experience and other factors, including expectations of future events that are believed
to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and
assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below.
• Revenue recognition - Licence fee and maintenance revenue is recognised on an accruals basis; when invoiced in
advance, the income is deferred in the statement of financial position and recognised in the income statement over
the length of the licence. The key judgements are that the two are bundled together due to the fact the two parts
are intertwined and also due to the difficulty in being able to assess the fair value of maintenance over the licence
period, with maintenance being incurred on an ongoing basis throughout the licence period.
• Research and development costs - Internally generated technology is capitalised in accordance with IAS 38.
Assumptions and judgements are made with regard to assessing the expected future economic benefits, the economic
useful life and the level of completion of the databases. The key judgement here is defining the cut-off point between
when research ending and development starting and an assessment is made when looking at the costs incurred and
criteria for development costs, including the commercial and technical viability of the costs being assured. At the point
where activities no longer relate to development but to maintenance, capitalisation is discontinued.
3. Financial instruments - Risk management
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This
note describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure
them. Further quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies
and processes for managing those risks or the methods used to measure them from previous periods unless otherwise
stated in this note.
42
Blue Prism Group plc Annual Report 2016
Notes forming part of the financial statements for the year ended 31 October 2016
3. Financial instruments - Risk management (continued)
Capital risk management
The Group manages its capital to ensure that all Group entities will be able to continue on a going concern basis
while maximising its long term return to shareholders. The capital structure of the Group consists of Company equity
only, comprising issued capital, share premium, reserves and retained earnings. The Group is not exposed to any
externally imposed capital requirements and has no borrowings.
Financial Assets
Trade receivables
Cash and cash equivalents
2016
£’000
4,931
11,788
2015
£’000
1,253
2,351
Total Financial Assets
16,719
3,604
Financial Liabilities
Trade and other payables
Accruals
2016
£’000
1,193
2,031
2015
£’000
683
466
Total Financial Liabilities
3,224
1,149
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and,
whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes
that ensure the effective implementation of the objectives and policies to the Group’s finance function.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting
the Group’s competitiveness and flexibility. Further details regarding these policies are set out below:
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy to
assess the credit risk of new customers before entering contracts.
The Board has established a credit policy under which each new customer is analysed individually for
creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s
review includes external ratings, when available.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks
and financial institutions, only independently rated parties with minimum rating “A” are accepted.
Blue Prism Group plc Annual Report 2016
43
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
3. Financial instruments - Risk management (continued)
Further disclosures regarding trade and other receivables, which are neither past due nor impaired, are provided in note 12.
Cash at bank and short-term deposits
The Group’s cash is held on deposit with the Group’s principal bankers.
Foreign exchange risk
Foreign exchange risk arises when individual Group entities enter into transactions denominated in a currency
other than their functional currency. The Group’s policy is, where possible, to allow group entities to settle
liabilities denominated in their functional currency with the cash generated from their own operations in that
currency. Where group entities have liabilities denominated in a currency other than their functional currency (and
have insufficient reserves of that currency to settle them), cash already denominated in that currency will, where
possible, be transferred from elsewhere within the Group.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall due.
The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when
they become due. To achieve this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected
requirements for a period of at least 90 days.
The Board receives rolling 12-month cash flow projections on a monthly basis as well as information regarding cash
balances. At the end of the financial year, these projections indicated that the Group expected to have sufficient
liquid resources to meet its obligations under all reasonably expected circumstances for at least 12 months from the
date of signing these financial statements.
4. Segmental Analysis
The Group has one operating segment being the licensing of Robotic Process Automation (RPA) software used to
automate routine, rules-based back office processes.
The Group operates in two main geographical areas: UK and USA. The Board of Directors only monitors revenue on
this basis. Business performance is otherwise monitored by reference to total results against budget. Revenue for each
of the geographical areas is as follows:
Revenue from UK operations
Revenue from US operations
Total
44
Blue Prism Group plc Annual Report 2016
2016
£’000
6,946
2,698
9,644
2015
£’000
5,479
583
6,062
Notes forming part of the financial statements for the year ended 31 October 2016
4. Segmental Analysis (continued)
Revenue
The Group currently has two key sources of revenue:
• Licencing – for the provision of software licences, where the agreement is established of a legally binding contract
between the Group and its customers. Standard maintenance and support services are included in the Licence fee.
• Professional Services and training – where the customer requires consultancy or training on a project by project basis.
Licences
Professional services and training
Total
2016
£’000
8,304
1,340
9,644
2015
£’000
4,605
1,457
6,062
In the prior year the Group had three customers who each contributed to more than 10% of the Group’s revenues
being £1.2m, £0.9m, and £0.7m respectively.
Assets, liabilities and sources of revenue are not analysed by geography as the business performance measure utilised
by the chief operating decision maker, the Board of Directors, is the total business result.
5. Cost of sales
Recharged costs
6. Operating loss
Operating loss is after charging / (crediting):
Fees payable to the companies auditor for the audit of the
company’s annual accounts
Fees payable to the company’s auditor for other services:
Audit of the accounts of subsidiaries
Audit-related assurance services
Tax compliance services
Corporate finance services
Depreciation of property, plant and equipment
Staff costs (note 7)
Operating lease expense: Other
2016
£’000
67
2015
£’000
74
2016
£’000
2015
£’000
6
36
19
4
140
39
10,549
175
30
-
5
6
-
15
4,159
131
Blue Prism Group plc Annual Report 2016
45
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
7. Staff costs
Staff costs (including directors emoluments) comprise:
Wages and salaries
Social security contributions and similar taxes
Share-based payment expense
Pension costs
Other staff costs
2016
£’000
8,708
834
362
96
549
2015
£’000
3,611
417
26
105
-
Total staff costs
10,549
4,159
Staff costs includes Sales commissions in the amount of £3,582k (2015: £865k).
Average monthly number of employees (including directors) during the period.
Directors*
Staff
Administration
Sales and marketing
Technical services
2016
Number
2015
Number
5
4
29
26
64
8
1
13
17
39
*For 2016 Directors denotes the average number of Blue Prism Group plc directors including 3 non-executive
directors. In 2015 this was the number of Directors of Blue Prism Limited.
The remuneration of the highest paid director is shown in the Directors’ Report.
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the Group, including the directors of the company listed on page 18, and the Directors of Blue Prism Limited.
Salary
Bonuses
Commission
Pension contributions
Employers NI contributions
Car allowances
46
Blue Prism Group plc Annual Report 2016
2016
£’000
809
105
202
40
133
38
2015
£’000
650
124
141
36
115
40
1,327
1,106
Notes forming part of the financial statements for the year ended 31 October 2016
The fair value of the share options issued to the key management personnel is £552,256, with one third charged to
the profit and loss each year. The profit and loss charge for the year ended 31 October is £114,990.
8. Tax expense
Current tax expense
Current tax on loss for the year
Foreign tax on loss for the year
Total current tax
Deferred tax expense
Current period tax expense
Release of deferred tax assets in respect of prior periods
Total deferred tax
Total tax expense
2016
£’000
2015
£’000
-
-
-
-
69
69
69
2
3
5
80
(32)
48
53
No deferred tax asset has been recognised in the year ended 31 October 2016 in relation to trading losses available
due to the uncertainty of their utilisation in the near future (2015:£53k).
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in
the United Kingdom applied to losses for the year are as follows:
Loss before tax
Tax at domestic rate (2016:20%, 2015:20%)
Effects of:
Expenses not deductible for tax purposes
Tax on share options exercised in the period
Differences on foreign tax rates
Share options exercised in the period
Deferred tax not recognised
Adjust deferred tax to average rate
Deferred tax asset released during the period
2016
£’000
5,249
(1,050)
318
-
-
(1,856)
2,593
(5)
69
2015
£’000
(743)
(148)
2
-
(226)
-
425
-
-
Total tax expense
69
53
The Blue Prism Group has tax losses of approximately £16,945k (31 October 2015: £2,653k) to carry forward against
future profits. The tax value of such losses amounted to £3,756k (31 October 2015: £777k). The UK tax losses have
no expiry date. US tax losses expire after 20 years if not utilised.
Blue Prism Group plc Annual Report 2016
47
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against
which temporary differences can be utilised. On the basis there is insufficient evidence that future taxable profits will
be available to utilise the tax losses, the deferred tax asset (Note 14) has been released during the period, and no
deferred tax asset has been recognised in respect of the trading losses carried forward.
9. Basic and diluted loss per share
Numerator
Loss for the year and earnings used in basic EPS
Denominator
Weighted average number of shares used in basic EPS
Weighted losses per share (pence)
Denominator
2016
£’000
(5,318)
‘000
50,487
(10.53)
‘000
2015
£’000
(796)
‘000
31,093
(2.56)
‘000
Potential diluted average number of shares
59,432
31,093
10. Property, plant and equipment
Cost
At 1 November 2014
Additions
At 31 October 2015
At 1 November 2015
Additions
At 31 October 2016
Accumulated depreciation and impairment
At 1 November 2014
Depreciation
At 31 October 2015
At 1 November 2015
Depreciation
At 31 October 2016
Net book value
At 1 November 2014
At 31 October 2015
At 31 October 2016
48
Blue Prism Group plc Annual Report 2016
Plant,
machinery
£’000
98
37
135
135
154
289
£’000
77
15
92
92
39
131
21
43
158
Notes forming part of the financial statements for the year ended 31 October 2016
11. Subsidiaries
The principal subsidiaries of Blue Prism Group plc, all of which have been included in these consolidated financial
statements, are as follows:
Name
Country of
incorporation
and principal
place of business
Blue Prism Limited
Blue Prism Software Inc*
United Kingdom
United States
* Indirectly held through Blue Prism Limited
12. Trade and other receivables
Trade receivables
Less: provision for impairment of trade receivables
Trade receivables - net
Prepayments
Other receivables
Proportion of ownership
interest at 31 October
2016
2015
100%
100%
100%
100%
2016
£’000
5,251
(320)
4,931
654
-
2015
£’000
1,488
(235)
1,253
198
13
Total trade and other receivables
5,585
1,464
The increase in the provision for impairment is due to the foreign exchange movement on the trade receivable
valuation only.
As at 31 October 2016 trade receivables of £1,795k (2015 - £280k) were past due but not impaired. They relate to
customers with no default history. The ageing analysis of these receivables is as follows:
Current
Up to 30 days overdue
30 to 60 days overdue
90 days or more and overdue
2016
£’000
3,136
601
300
894
2015
£’000
973
146
71
63
4,931
1,253
Blue Prism Group plc Annual Report 2016
49
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
13. Trade and other payables
Trade payables
Other payables
Accruals
2016
£’000
574
619
2,031
2015
£’000
188
495
466
Total trade and other payables
3,224
1,149
14. Deferred tax assets
The movement on the deferred tax account is as shown below:
At 1 November
Deferred tax credit on share options exercised
Deferred tax in respect of trading losses
Capital allowances in excess of depreciation
Deferred tax asset released during the period
At 31 October
2016
£’000
69
(21)
36
(15)
(69)
-
2015
£’000
117
5
(49)
(4)
-
69
The deferred tax balances relate to temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial information as summarised below.
Deferred tax credit on share options in issue
Deferred tax in respect of trading losses
Capital allowances in excess of depreciation
2016
£’000
2015
£’000
-
-
-
-
21
55
(7)
69
50
Blue Prism Group plc Annual Report 2016
Notes forming part of the financial statements for the year ended 31 October 2016
15. Share capital
Allotted and fully paid up
Ordinary share capital
Class B preference shares
8% redeemable preference shares
Deferred shares
2016
£’000
622
-
-
1,052
2015
£’000
310
307
776
-
Total
1,674
1,393
At 31 October 2014
Issues of new shares for cash during the year
At 31 October 2015
Issue of new shares prior to IPO
Issue of shares immediately prior to IPO
(exercise of all options vested)
Number
310,162
440
310,602
1,000
152,355
Total ordinary shares prior to IPO
Upon IPO:
Share split: 100 ordinary shares for every £1.00 ordinary share
Transfer on IPO
Ordinary £0.01 shares issued for preference and
B preference shares
New ordinary £0.01 shares issued at IPO
Cost of issuing new ordinary shares
463,957
46,395,700
-
2,994,755
12,820,513
-
Total ordinary shares at 31 October 2016
62,210,968
Ordinary shares are classed as Equity
Issued and fully paid
Share capital
£’000
Share
premium
£’000
310
1
311
1
152
464
464
-
30
128
-
622
356
-
356
-
5
361
361
(356)
-
9,872
(683)
9,194
As part of the Group restructure, the preference shares of £1.00 each and the B preference shares of £1.00 held by
shareholders were converted into Ordinary Shares and deferred shares of £0.01. The conversion resulted in those shares
converting into 2,994,755 Ordinary Shares and 105,269,845 deferred shares of £0.01 as follows:
Deferred shares
Number of
deferred
shares
Nominal
value
105,269,845
1,052,698
Blue Prism Group plc Annual Report 2016
51
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
15. Share capital (continued)
The deferred shares carry no voting rights, no rights to income and the right to a return of a maximum of £0.001 on a
winding up of the Company.
16. Share options
The Company introduced a Share Option Plan (SOP) in August 2008, whereby the Board of Directors is entitled to
grant options to staff, which are convertible into ordinary shares. Options have been granted with a fixed exercise
price of £1.00 and £1.25. The contractual life of an option is 10 years. All staff are eligible for awards under the
current SOP. There are no reload features. The company has made annual grants each year since 21 September 2008.
Options granted under the SOP vest over a three-year period, one third of the options per annum from the date of
grant. Exercise of an option is subject to continued employment and SOP members may not transfer or sell their
shares except as permitted or required to do under articles subject to the Articles of Association of the Company.
Options were valued using the Black-Scholes option-pricing model. There are no performance conditions.
All the above options were exercised immediately prior to the IPO as follows:
Number of share options exercised
Cash raised by the exercise for prices between £1.00 and £1.25:
Weighted average exercise price
152,355
£158,319
£1.039
In February 2016 the Company established an Employee Share Plan and a Non-Employee Share Plan (together the
“Share Plans”). The Employee Share Plan is administered by the remuneration committee of the Board and the
Non-Employee Share Plan is administered by the Board. Awards under the Share Plans take the form of options to
acquire Ordinary Shares with an exercise price equal to the market value of an Ordinary Share on the date of grant.
All employees of the Group may be granted awards under the Employee Share Plan. Non-Executive directors and
consultants of the Group may be granted awards under the Non-Employee Share Plan. All options under the Share
Plans are ten year options. The Employee Share Plan options for staff vest over a three year period, one third each
year. Directors options under the Employee Share Plan vest at the end of the three year period. Options awarded
under the Non-Employee Share Plan vest over three years, one third each year.
Under these Share Plans, 4,861,859 share options were issued to directors, staff and non-employees at the IPO price
of £0.78. Under the Black-Scholes option-pricing model the cost of these options was £500,244 in the first year. Of
this £312,481 has been charged to the profit and loss this year.
During the year a further net 574,994 share options have been granted. The cost of these options in the first year under
the Black-Scholes option-pricing model was £232,079. Of this £49,600 has been charged to the profit and loss this year.
The exercise price of options outstanding at 31 October 2016 ranged between 78p and 308.5p.
52
Blue Prism Group plc Annual Report 2016
Notes forming part of the financial statements for the year ended 31 October 2016
16. Share options (continued)
Share options movement since IPO.
Share options on £1 ord. shs outstanding at 1 November 2015
Share Options on £1 ord. shs exercised on 21/12/15
£1 Ordinary share options cancelled on 01/12/15
Share options on £1 ordinary shares exercised on IPO
Balance of share options outstanding at IPO
Share options on 1p ord shs granted at IPO on 18/3/16
Share options on 1p ord shs granted on 9/8/16
Share options on 1p ord shs granted on 5/10/16
Share options on 1p ord shs granted on 27/10/16
Total granted in the period
Number of
options
Weighted
average
option price (£)
1.03
1.00
1.25
1.03
0.78
2.236
3.085
3.07
154,155
(1,000)
(800)
(152,355)
Nil
4,861,859
567,947
25,352
24,430
5,479,588
Share options forfeited in the period
(42,735)
0.78
Share options outstanding at 31 October 2016
5,436,853
A share split of 100 1p shares for every £1 ordinary share was implemented immediately before the IPO on 18th
March 2016.
Of the 5,436,853 share options outstanding at 31 October 2016, none had vested and were exercisable.
Fair Value
The fair value of share options issued in the year has been measured using the Black-Scholes model. In the absence of
historic volatility data, expected volatility has been estimated using the volatility of comparable companies.
Grant Date
18/3/2016
9/8/2016
5/10/2016
27/10/2016
Share price at date of grant (£)
Exercise price (£)
Weighted average exercise price
Shares under option
Risk-free rate
Time to expiration (years)
Expected volatility
Dividend yield
Fair value per option (£)
0.78
0.78
0.78
4,861,859
0.85%
5
30%
0%
0.22
2.27
2.27-2.215
2.236
567,948
0.14%
5
30%
0%
0.60-0.62
3.085
3.085
3.085
25,352
0.29%
5
30%
0%
0.83
3.07
3.07
3.07
24,430
0.65%
5
30%
0%
0.84
Blue Prism Group plc Annual Report 2016
53
Blue Prism Group plc
Blue Prism Group Plc
Brochure title in here
17. Reserves
The following describes the nature and purpose of each reserve within equity:
Reserves
Description and purpose
Share premium
Amount subscribed for share capital in excess of nominal value.
Share based payment reserve
Merger reserve
Retained earnings
The share based payment reserve represents equity settled share based employee
remuneration until such share options are exercised.
Amounts arising on share for share exchange.
All other net gains and losses and transactions with owners (e.g. dividends) not
recognised elsewhere.
18. Leases
Operating leases - lessee
The Group maintains a number of short-leased properties.
The total future value of minimum lease payments is due as follows:
Not later than one year
Later than one year and not later than five years
19. Related party transactions
The key management compensation is disclosed in note 7.
There were no other related party transactions.
20. Post balance sheet event
2016
£’000
209
117
326
2015
£’000
21
-
21
Throughout the periods presented, the functional currency of Blue Prism Software Inc, a wholly owned subsidiary
within the Blue Prism Group, has been determined to be GBP. This is on the basis of the significant Sterling
denominated expenses it incurs and the historically low sales achieved in this development stage subsidiary.
During the year, sales volumes have increased and expenses have become increasingly US Dollar denominated. In
consequence, with effective 1 November 2016, the Board has made the decision to change the functional currency to
US Dollars.
54
Blue Prism Group plc Annual Report 2016
Notes forming part of the financial statements for the year ended 31 October 2016
21. Notes supporting statement of cash flows
Cash and cash equivalents for purposes of the statement of cash flows comprises:
Cash at bank available on demand
Short-term deposits
2016
£’000
2,772
9,016
11,788
2015
£’000
2,351
-
2,351
Blue Prism Group plc Annual Report 2016
55
Blue Prism Group plc
Brochure title in here
Company Financial
Statements for the year
ended 31 October 2016
Company financial statements for the year ended 31 October 2016
Company statement of financial position as at 31 October 2016
Non-current assets
Property, plant and equipment
Investment in subsidiary
Total non-current assets
Current assets
Prepayments
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables falling due within one year
Total current liabilities
Net current assets
Net assets
Equity attributable to shareholders
Called up share capital
Share premium
Merger reserve
Share based payment reserve
Retained losses
Note
4
5
2016
£’000
4
287
291
15
9,267
9,282
9,573
987
987
8,295
8,586
1,674
9,194
(1,393)
287
(1,176)
8,586
The financial statements of Blue Prism Group plc were approved and authorised for issue by the Board of Directors on
23 January 2017 and were signed on its behalf by:
G Johnson
Director
The notes on pages 60 to 63 form part of these financial statements.
Blue Prism Group plc Annual Report 2016
57
Blue Prism Group plc
Company statement of cash flows for the period ended 31 October 2016
Company statement of cash flows for the period ended
31 October 2016
2016
£’000
(1,251)
(16)
75
(1,192)
(15)
987
(220)
-
(220)
(4)
16
12
9,475
9,475
9,267
-
9,267
Cash flows from operating activities
Loss for the year
Adjustments for:
Finance income
Share-based payment expense
Increase in trade and other receivables
Increase in trade and other payables
Cash generated from operations
Income taxes paid
Net cash flows from operating activities
Investing activities
Purchases of property, plant and equipment
Interest received
Net cash flow from investing activities
Financing activities
Issue of ordinary shares net of issue costs
Net cash from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The notes on pages 60 to 63 form part of these financial statements.
58
Blue Prism Group plc Annual Report 2016
Company statement of changes in equity for the year ended 31 October 2016
Company financial statements for the year ended 31 October 2016
Company statement of changes in equity for the year ended
31 October 2016
Share
capital
£’000
Share
premium
£’000
Share
based
payment
reserve
£’000
Incorporation at 2 September 2015
Loss and total comprehensive income
for the period to 31 October 2016
Group restructure
Nominal value of shares issued on
acquisition of Blue Prism Limited
Exercise of Options
Issue of shares at IPO
Cost of issue of shares
Share based payment
-
-
-
1,393
153
128
-
-
-
-
-
-
5
9,872
(683)
-
-
-
-
-
-
-
-
287
Merger
reserve
£’000
Accum-
ulated
losses
£’000
Total
£’000
-
-
-
-
(1,393)
(1,251)
-
-
-
-
-
-
-
-
-
-
75
(1,251)
(1,393)
1,393
158
10,000
(683)
362
Equity as at 31 October 2016
1,674
9,194
287
(1,393)
(1,176)
8,586
The notes on pages 60 to 63 form part of these financial statements.
Blue Prism Group plc Annual Report 2016
59
Blue Prism Group plc
Brochure title in here
Notes forming part of the
Company Financial Statements
at 31 October 2016
Notes forming part of the Company Financial Statements at 31 October 2016
1. Accounting policies
The Company has applied the Group accounting polices consistently during the period.
Basis of preparation
The financial statements are for the period ended 31 October 2016. The financial statements of the Group have been
prepared on a going concern basis and in accordance with International Financial Reporting Standards (‘IFRS’) and
their interpretations which have been issued by the International Accounting Standards Board (‘IASB’), as adopted
by the European Union. They have also been prepared with those parts of the 2006 Companies Act applicable to
companies reporting under IFRS.
The accounting policies set out in Note 1 of the consolidated financial statements have been applied in the
preparation of these financial statements.
Investments
The initial investment arising on the share for share exchange is recognised at £nil in accordance with IAS 27.13 as
Blue Prism Limited had net liabilities at the date of acquisition. Subsequent investments in subsidiary undertakings are
stated at cost less any adjustments for impairment.
2. Loss for the year
As permitted by section 408 of the Companies Act 2006, the parent company has elected not to present its own
profit and loss account for the year. The parent company reported a loss for the period from incorporation of 2
September 2015 to 31 October 2016 of £1.25m.
The auditor’s remuneration for audit and other services is disclosed in note 6 to the consolidated financial statements.
3. Financial instruments - Risk Management
The use of financial instruments and capital is managed by the board to reduce the financial risks being faced, which
primarily relate to credit and liquidity.
Credit risk
Financial instruments which potentially expose Blue Prism to credit risk consist primarily of cash equivalents. The
maximum exposure to credit risk is represented by the carrying amount of each financial asset. Cash equivalents are
deposited only with independent major financial institutions with minimum rating credit of “A”.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will encounter
difficulty in meeting its financial obligations, including balances due to wholly owned subsidiaries, as they fall due.
Blue Prism Group plc Annual Report 2016
61
Blue Prism Group plc
3. Financial instruments - Risk Management (continued)
Financial instruments by category
Financial Assets
Cash and cash equivalents
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
Capital risk management
2016
£’000
9,267
9,267
2016
£’000
184
184
The company manages its capital to ensure that it will be able to continue on a going concern basis while maximising
its long term return to shareholders. The company is not exposed to any externally imposed capital requirements and
has no borrowings.
4. Investment in subsidiary
Cost
Share based payments during period for employees of subsidiaries
At 31 October 2016
£’000
-
287
287
Details of the Group’s subsidiaries at 31 October 2016 are included in note 11 of the consolidated financial statements.
62
Blue Prism Group plc Annual Report 2016
Notes forming part of the Company Financial Statements at 31 October 2016
5. Trade and other payables
Amounts owed to Group undertakings
Trade creditors and accruals
Other creditors
£’000
803
154
30
987
Amounts payable to Group undertakings are repayable on demand and unsecured.
6. Related party transactions
Blue Prism Group plc has a related party relationship with its subsidiaries and with its directors and members of key
management. There are no transactions with related parties who are not members of the Blue Prism Group. The
remuneration paid to members of key management is disclosed within note 7 of the consolidated financial statements
and remuneration of individual directors is disclosed within the Directors Report.
The following balances are due to wholly owned subsidiaries at the period end:
Amounts owed to Group undertakings
Blue Prism Limited
Blue Prism Software Inc
£’000
801
2
803
All related party transactions between the company and wholly owned subsidiaries have arisen as a result of
subsidiaries meeting the costs of the IPO and reorganisation process.
Blue Prism Group plc Annual Report 2016
63
Blue Prism Group plc
Five Year Record
Five Year Record
2016
2015
2014
2013
2012
IFRSs
£’000
IFRSs
£’000
IFRSs
£’000
UK GAAP
£’000
UK GAAP
£’000
Revenue
9,644
6,062
4,488
2,949
2,532
(Loss)/profit from operations
(5,274)
(753)
(233)
(258)
(Loss)/profit before tax
(5,249)
(743)
(225)
(251)
(Loss)/profit after tax
(5,318)
(796)
(122)
(247)
155
164
162
Blue Prism Group plc Annual Report 2016
65
Blue Prism Group plc
Company information
Company information
Directors
1) Jason Kingdon (Chairman)
2) Alastair Bathgate (CEO & Founder)
3) Gary Johnson (CFO)
4) Ken Lever (Non-Executive Director)
5) Chris Batterham (Non-Executive Director)
6) Charmaine Eggberry (Non-Executive Director)
7) Olswang Directors 2 Limited (Resigned 17 February 2016)
8) Olswang Directors 1 Limited (Resigned 17 February 2016)
9) Christopher Mackie (Resigned 17 February 2016)
Company Secretary
John Warrick
Registered office
Centrix House,
Crow Lane East
Newton-le-Willows
WA12 9UY
Company number
9759493
Nominated advisor
and broker
Investec plc
2 Gresham Street
London
EC2V 7QP
Financial PR
Newgate Communications
Skylight Tower
50 Basinghall Street
London
EC2V 5DE
Registrars
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Auditors
BDO LLP
55 Baker Street
London
W1U 7EU
1) Appointed 17 February 2016
2) Appointed 17 February 2016
3) Appointed 17 February 2016
4) Appointed 22 February 2016
5) Appointed 22 February 2016
6) Appointed 22 February 2016
7) Appointed 2 September 2015 and resigned 17 February 2016
8) Appointed 2 September 2015 and resigned 17 February 2016
9) Appointed 2 September 2015 and resigned 17 February 2016
Blue Prism Group plc Annual Report 2016
67
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