REG - itim Group PLC - Full Year Results and Notice of AGM
13/05/2024 07:00
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RNS Number : 0537O itim Group PLC 13 May 2024
13 May 2024
itim Group plc
("itim" or "the Company" and together with its subsidiaries "the Group")
Full year results for the year ended 31 December 2023 and Notice of AGM
itim Group plc, a SaaS based technology company that
enables store-based retailers to optimise their businesses to improve
financial performance, is pleased to announce its audited results for the
year ended 31 December 2023.
Financial Highlights
· Group revenues increased by 15 % to £16.1 million (2022: £14.0 million)
· Annual recurring revenue ("ARR") is £13.2 million (2022: £13.2 million)
· Group Adjusted EBITDA* £0.7 million (2022: £0.2 million)
· Adjusted EBITDA* margin increased by 2 percentage points ("PPT") to 4% (2022:
2%)
· Adjusted Earnings per share** -2.86 pence (2022: -2.01 pence)
· Closing cash balances were £1.9 million at 31 December 2023, down from £3.9
million at 31 December 2022
* EBITDA has been adjusted to exclude share-based payment charges, exceptional
items, along with depreciation, amortisation, interest and tax from the
measure of profit.
** The profit measure has been adjusted to exclude exceptional items and share
option charge
Ali Athar, Chief Executive, commented: "I am pleased to report itim's full
year results which saw a strong increase in revenue fuelled by a 54% rise in
services revenues and an 8% uptick in booked subscriptions. Our strategic
investments have fortified our position and enhanced our products, paving the
way for sustained success in the dynamic retail landscape.
"Our commitment to excellence is evident in significant product improvements
and the creation of 'UNIFY,' our unified retailing platform. As we navigate
the evolving business environment, we are strategically realigning our focus
to enhance financial performance and deliver tangible retail value. Looking
ahead to 2024, itim's strategic focus on margin enhancement and operational
efficiency provides the Board with cautious optimism and positions us well for
continued success. I look forward to updating the market in due course."
Copies of the Annual Report and Accounts for FY2023 with the notice of annual
general meeting have been posted to shareholders today and are available on
the Company's website www.itim.com. The Company intends to hold its annual
general meeting at the offices of the Company, 2nd Floor, Atlas House, 173
Victoria Street, London SW1E 5NA on 14th June 2024 at 10.30 a.m.
Enquiries:
Itim Group plc Ali Athar, CEO 0207 598 7700
Ian Hayes CFO
WH Ireland (NOMAD & Broker) Katy Mitchell 0207 220 1666
Harry Ansell
Darshan Patel
IFC Advisory Graham Herring 0207 3934 6630
Florence Chandler
ABOUT ITIM
itim was established in 1993 by its founder, and current Chief Executive
Officer, Ali Athar. itim was initially formed as a consulting business,
helping retailers effect operational improvement. From 1999 the Company began
to expand into the provision of proprietary software solutions and by 2004 the
Company was focused exclusively on digital technology. itim has grown both
organically and through a series of acquisitions of small, legacy retail
software systems and associated applications which itim has redeveloped to
create a fully integrated end to end Omni-channel platform.
CHAIRMAN'S STATEMENT
In this year's annual report, I am pleased to reflect on our journey,
achievements, and the path forward for the Company.
I am proud to report that our financial performance has remained robust,
showcasing the strength of our business model and team dedication. The past
year has been a testament to our resilience and adaptability in the face of
unprecedented challenges. Despite the persistent global uncertainties, the
business has performed well and we have sustained growth, a testament to our
prudent management and strategic foresight. We have remained steadfast in our
commitment to delivering value to our shareholders, customers, employees, and
communities. Our focus on innovation, operational excellence, and
customer-centricity has driven us forward even in these turbulent times. We
have continued to invest in research and development, to enhance our products,
which we believe has kept us ahead of evolving market trends.
The strength of our existing client base is testament to the quality of our
product offering and business as a whole. Our products demonstrate
considerable worth and value to well renowned companies within the retail
industry who continue to show trust and belief in the itim product suite.
Demand for our offering remains high as we continue our long standing
relationships and sign new business.
Furthermore, our commitment to sustainability and corporate responsibility
remains strong. We prioritise
the importance of environmental stewardship, social impact, and ethical
governance in today's interconnected world. We continue to promote diversity
and inclusion, and foster a culture of integrity and transparency across our
operations.
Looking ahead, we remain cautiously optimistic about the future. While
uncertainties persist, we are confident in our ability to navigate challenges
and seize opportunities. Innovation, agility, and resilience remain priorities
to ensure we remain at the forefront of our industry and create sustainable
value for all stakeholders.
I would like to express my sincere gratitude to our shareholders for their
continued trust and support, to our customers for their loyalty and
partnership, to our employees for their dedication and passion, and to our
communities for their resilience and collaboration. Together, we will continue
to build a brighter future for the Company.
Michael Jackson
Chairman
10th May 2024
CHIEF EXECUTIVE'S REVIEW
I am pleased to present our Annual Report for 2023.
Our total revenue for the year reached £16.1 million in 2023, marking a 15%
increase from the previous year's £14 million. This growth was driven by a
robust 54% increase in services revenues and an 8% increase in booked
subscription revenues, resulting in an uplift in EBITDA of over 200%.
As we approach the culmination of our two-year investment programme, the funds
raised at IPO have not only fortified our financial position but have also
played a pivotal role in enhancing our products and positioning us for
sustained success in the dynamic retail landscape.
Our commitment to excellence is evident in the significant improvements across
our product offerings. The inclusion of fashion into our core Retail Suite,
catalysed by the Quiz Clothing contract win, marks a strategic milestone.
Furthermore, investments in our Profimetrics platform, Chameleon store
systems, Tradeledger for supplier collaboration, and e-commerce have
collectively elevated the capabilities of our offerings.
This transformative journey has led to the creation of a unified platform,
named 'UNIFY.' The rebranding not only consolidates our products, but also
better communicates the essence of our Unified Retailing platform. The
positive feedback from our customers underscores the tangible impact these
improvements have made, reinforcing our confidence in our 'go-to-market'
strategy.
As we confront the challenges of an ever-changing business environment, our
commitment to sustaining and elevating our financial performance remains
steadfast, underpinned by a solid recurring revenue base. Mindful of the
current economic climate, we are currently in the process of "right sizing"
our business, alongside a strategic pivot away from 'free' implementation
services towards a continual focus on increasing services revenues and EBITDA.
Additionally, our consulting division continues to demonstrate the real
'benefits' of our solutions, underscoring our commitment to delivering
tangible retail value to the retail community.
Looking ahead to 2024, itim's strategic focus centres on further enhancing
margins and profitability, emphasising fine-tuning operational efficiency and
ensuring sustainable returns on investments. Notably, the Company is now
reallocating resources by reducing development spending and increasing efforts
in sales and marketing.
The decision to pare back development spending is a strategic move, aimed at
consolidating the gains made in product innovation, while actively shifting
the spotlight to revenue generation. I believe this balanced approach
positions itim for continued success and growth in the competitive business
landscape.
As we navigate the challenges and opportunities of 2024, itim remains vigilant
in monitoring market trends and consumer preferences. The Company's commitment
to customer acquisition and retention, coupled with a strategic blend of
innovation and revenue-focused initiatives, underpins our vision for sustained
growth and prosperity in the years ahead.
In conclusion, I want to express my gratitude for your continued trust and
support. As we stand at the threshold of a new chapter, poised for sustained
growth.
Ali Athar
Chief Executive officer
10(th) May 2024
CHIEF FINANCIAL OFFICER'S REVIEW
Income Statement
Overview
In 2023, Itim embarked on a strategic realignment, shifting its business focus
from subscription growth to prioritising EBITDA and cash flow through driving
services revenues. This shift reflected a proactive response to the current
global uncertainties, and to adapt to the prevailing market conditions.
The early indicators of this strategic shift are encouraging, with EBITDA
increasing to £0.7m, marking a significant increase from the £0.2m reported
in 2022. Although the transition will take time, I am pleased that we are
already seeing an upward shift in profitability.
Revenue
Revenues for the year were £16.1 up from £14m in 2022, an increase of 15%.
This was largely due to an increase of services revenues of 54% along with an
increase in booked subscription revenues of 8%.
With the shift in business focus, Annual Recurring Revenue (ARR) remained
static at £13.2m at the year-end (2022: £13.2m). Despite the shift towards
driving services revenues, the quality and certainty of recurring revenues as
a percentage of total turnover remained high at 79% (2022: 84%).
Gross profit
The gross profit margin remained flat in 2023 as our development capability
was fully engaged in delivering the fashion product into the platform for the
February 2024 release. While this intensive effort did not drive substantial
services revenues in the year, we view this effort as an additional pillar for
future success.
Furthermore we currently have excess capacity in our hosting environment that
will be utilised as new subscription revenues are on boarded to the hosting
infrastructure which will contribute to improving margins without incurring
additional costs for the Company.
Additionally in response to the prevailing economic environment, we recognise
the importance of aligning our resources with market conditions. Therefore, we
are proactively undertaking a rightsizing strategy for the business. This
initiative aims to ensure that our headcount is optimised for efficiency and
to navigate the current economic landscape.
With the initiatives outlined above we anticipate that the gross margin
percentage will improve over time.
Administrative expenses
The administrative cost base increased by a marginal 1.7% over 2022. As a
percentage of sales, administrative expenses have decreased from 31% in 2022
to 27% in 2023 and we only anticipate large fluctuations in overhead costs due
to increased marketing spend.
Foreign exchange rates
With 33% of 2023 revenues denominated in foreign currencies, the table below
sets out the percentage of annual contracts in the foreign currencies we trade
in and the impacts of those foreign currencies at the Balance Sheet date and
the average movements over the course of the year for P&L purpose.
FX Rates 31-Dec-22 31-Dec-23 2023 2022 Average 2023 Average 2023
(% of ARR at year end) FX rate FX rate Variance % FX rate FX rate Variance %
£GBP/Euro (ARR 7%) 1.129 1.153 2% 1.15 1.149 0%
£GBP/BRL (ARR 18%) 6.386 6.180 -3% 6.389 6.209 -3%
£GBP/USD (ARR 8%) 1.209 1.273 5% 1.238 1.243 0%
Foreign exchange rates have remained relatively static during the year with
minimal volatility of Sterling against all our functional currencies
throughout the year and at the year end.
Taxation
The Group continues to take advantage of R&D tax credits as it continues
to innovate its technology offering. The current year tax credit is made of up
of a net current tax credit of £0.34m (2022: £0.62m) and a deferred tax
charge of £0.13m (2022: £0.03m).
Earnings/(Loss) per share
Basic EPS for the year was -2.86p (2022: -2.2p) and the diluted EPS was -2.86p
(2022: -2.2p).
On an adjusted profit basis after adjusting for exceptional items and the
share option charge the adjusted earnings basic EPS was -2.86p (2022: -2.01p)
and the adjusted earnings diluted EPS was -2.86p (2022: -2.01p).
Dividend
The Board does not propose to pay a dividend in respect of the financial year
(2022: £nil).
Group Statement of Financial position
The Group had net assets of £11.5m at 31st December 2023 (2022: £12.5m) a
decrease of £1m attributable to the loss for the year.
Cash flow and working capital
The Group ended the year with a cash balance of £1.9m (2022: £3.9m).
Cash generated from operating activities for the year amounted to £0.53m
(2022: £0.48m). There were no further inflows from investing activities
during the year (2022: £nil). Cash expended on capitalised product
development was £1.9m (2022: £2.1m) payment of interest, lease liabilities
and equipment amounted to £0.6m (2022: £0.5m). No loans were made in the
year (2022: £0.1m). Which taken together with our opening cash balance of
£3.9m gives the closing cash balance at the year-end.
Equity
There were no changes in equity during the year.
Ian Hayes
Chief Financial Officer
10th May 2024
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2023
Total Total
Note 2023 2022
£'000 £'000
Revenue 4,5 16,130 14,034
Cost of sales (11,090) (9,538)
Gross profit 5,040 4,496
Administrative expenses (4,356) (4,285)
EBITDA 684 211
Amortisation of intangible assets 12 (1,146) (889)
Share option charge 23 - (58)
Depreciation 13 (49) (42)
Depreciation of right-of-use/HP assets 19,13 (545) (452)
Loss from operations (1,056) (1,230)
Other interest (41) (45)
Loss on ordinary activities before taxation 6 (1,097) (1,275)
Taxation 10 205 589
Loss for the year (892) (686)
Other comprehensive income
Exchange differences on retranslation of foreign operations (56) 124
Total comprehensive loss for the year net of tax (948) (562)
Loss per Share
Basic 11 (2.86)p (2.20)p
Diluted 11 (2.86)p (2.20)p
All comprehensive income for continuing operations is shown above.
The notes form part of these financial statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Share Capital Foreign Retained
Share Share options redemption exchange profits/
capital premium reserve reserve reserve (losses) Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2022 1,561 7,398 455 1,103 26 2,438 12,981
Comprehensive income for the year - - - - - (686) (686)
Foreign exchange movement - - - - 124 - 124
Total comprehensive income - - - - 124 (686) (562)
Share option charge - - 58 - - - 58
At 31 December 2022 1,561 7,398 513 1,103 150 1,752 12,477
Comprehensive income for the year - - - - - (892) (892)
Foreign exchange movement - - - - (56) - (56)
Total comprehensive income - - - - (56) (892) (948)
At 31 December 2023 1,561 7,398 513 1,103 94 860 11,529
The notes form part of these financial statements.
Consolidated Statement of Financial Position
As at 31 December 2023
Note 2023 2022
£'000 £'000
Non-current assets
Intangible assets 12 11,109 10,069
Plant and equipment 13 476 721
Right-of-use assets 19 1,058 442
Deferred tax 10 13 164
Total non-current assets 12,656 11,396
Current assets
Trade and other receivables 15 5,385 4,603
Cash and cash equivalents 1,930 3,922
Total current assets 7,315 8,525
Total assets 19,971 19,921
Current liabilities
Trade and other payables 16 (6,398) (5,776)
Right-of-use liability 19 (287) (297)
Total current liabilities (6,685) (6,073)
Non-current liabilities
Trade and other payables due in more than one year 17 (347) (540)
Right-of-use liability 19 (795) (201)
Deferred tax 10 (615) (630)
Total non-current liabilities (1,757) (1,371)
Total liabilities (8,442) (7,444)
Net assets 11,529 12,477
Capital and reserves
Called up share capital 21 1,561 1,561
Share premium account 22 7,398 7,398
Share options reserve 22 513 513
Capital redemption reserve 22 1,103 1,103
Foreign exchange reserve 22 94 150
Retained profit 22 860 1,752
Shareholders' funds 11,529 12,477
These financial statements were approved and authorised for issue by the Board
of Directors on 10th May 2024.
Signed on behalf of the Board of Directors
I D Hayes
Director
The notes form part of these financial statements.
Company Statement of Financial Position
As at 31 December 2023
Note 2023 2022
£'000 £'000
Non-current assets
Intangible assets 12 350 -
Plant and equipment 13 374 647
Investments 14 5,071 5,071
Right-of-use assets 19 551 -
Total non-current assets 6,346 5,718
Current assets
Trade and other receivables 15 15,491 13,774
Cash and cash equivalents 140 1,041
Total current assets 15,631 14,815
Total assets 21,977 20,533
Current liabilities
Trade and other payables 16 (827) (647)
Deferred tax 10 (72) (84)
Right-of-use liability 19 (131) -
Total current liabilities (1,030) (731)
Non-current liabilities
Trade and other payables due in more than one year 17 (347) (540)
Right-of-use liability 19 (414) -
Total non-current liabilities (761) (540)
Total liabilities (1,791) (1,271)
Net assets 20,186 19,262
Capital and reserves
Called up share capital 21,24 1,561 1,561
Share premium account 22,24 7,398 7,398
Share options reserve 22,24 513 513
Capital redemption reserve 22,24 1,103 1,103
Retained profit 22,24 9,611 8,687
Shareholders' funds 20,186 19,262
These financial statements were approved and authorised for issue by the Board
of Directors on 10th May 2024.
Signed on behalf of the Board of Directors
I D Hayes
Director
The notes form part of these financial statements.
Consolidated Cash Flow Statement
Year ended 31 December 2023
Note 2023 2022
£'000 £'000
Cash flows from operating activities
Loss after taxation (892) (686)
Adjustments for:
Taxation 10 (205) (589)
Share option charge 23 - 58
Other interest on leases 19 41 45
Amortisation and depreciation 12,13,19 1,740 1,383
Cash flows from operations before changes in working capital 684 211
Movement in trade and other receivables 15 (1,297) (384)
Movement in trade and other payables 16 678 371
Cash generated from operations 65 198
Corporation tax 462 280
Net cash flows from operating activities 527 478
Cash flows from investing activities
Capital expenditure on intangible assets 12 (1,870) (2,140)
Purchase of plant and equipment 13 (77) (49)
Stamp duty on ROU lease renewal (6) -
Net cash flows from investing activities (1,953) (2,189)
Interest repayments 18 (16) -
Payment of lease liabilities 19 (528) (438)
Loan issued 15 - (140)
Net cash flows from financing activities (544) (578)
Net decrease in cash and cash equivalents (1,970) (2,289)
Cash and cash equivalents at beginning of year 3,922 6,172
Exchange (losses)/gains on cash and cash equivalents 28 (22) 39
Cash and cash equivalents at end of year 1,930 3,922
The notes form part of these financial statements.
Company Cash Flow Statement
Year ended 31 December 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Profit after taxation 924 592
Adjustments for:
Taxation 10 (12) 139
Depreciation 13 273 170
Finance costs 18 15
Finance income (49) (25)
Share option charge 23 - 58
Cash flows from operations before changes in working capital 1,154 949
Movement in trade and other receivables 15 (2,016) (2,895)
Movement in trade and other payables 16 190 -
Cash generated from operations (672) (1,946)
Finance income - 25
Net cash flows from operating activities (672) (1,921)
Cash flows from investing activities
Stamp duty on ROU lease renewal (6) -
Net cash flows from investing activities (6) -
Cash flows from financing activities
Interest paid 18 (16) -
Payment of lease liability (207) (107)
Loan issued 15 - (140)
Net cash flows from financing activities (223) (247)
Net decrease increase in cash and cash equivalents (901) (2,168)
Cash and cash equivalents at beginning of year 1,041 3,209
Cash and cash equivalents at end of year 140 1,041
The notes form part of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
The consolidated financial statements of ITIM Group plc and its subsidiaries
(collectively, the Group) for the year ended 31 December 2023 were authorised
for issue in accordance with a resolution of the directors on 10th May 2024.
itim Group plc ("the Company") is a public limited company incorporated and
domiciled in the UK. The nature of the operations and principal activities of
the Company and its subsidiary undertakings (the "Group") are set out in the
Strategic Report on pages 5 to 11 and the Directors' report on pages 25 to 28.
2. Basis of preparation
The consolidated financial statements of the Group are prepared under IFRS and
International Financial Reporting Interpretations Committee ("IFRIC")
interpretations in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 applicable to
companies reporting under IFRS.
The Company's financial statements have been prepared under IFRS and
International Financial Reporting Interpretations Committee ("IFRIC")
interpretations in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 and as permitted by
section 408 of the Companies Act 2006, no income statement is presented for
the company. The Company made a profit of £923,983 for the year ended 31
December 2023 (2022: £591,650)
The financial statements are presented in GBP, which is also the company's
functional currency.
Amounts are rounded to the nearest thousand, unless otherwise stated.
The financial statements have been prepared on the going concern basis.
3. Summary of significant accounting policies
Basis of consolidation
The Group financial statements consolidate the financial statements of the
company and its subsidiary undertakings drawn up to 31 December each year. The
results of subsidiaries acquired or sold are consolidated for the periods from
or to the date on which control passed. Acquisitions are accounted for under
the acquisition method.
Subsidiaries
Subsidiaries are all entities over which the Group has the ability to exercise
control and are accounted for as subsidiaries. The results of subsidiaries are
included in the Group income statement from the date of acquisition until the
date that such control ceases. Intercompany transactions and balances between
Group companies are eliminated upon consolidation.
Revenue recognition
Revenue was recognised to the extent that it was probable that the economic
benefits would flow to the Group and the revenue could be reliably measured.
Revenue represents the amounts (excluding value added tax) derived from the
provision of goods and services to third party customers during the year by
the group. Revenue is derived from the Group's principal activity and excludes
VAT.
The Group derives revenue from two principal sources as noted below:
Recurring revenue
1. Recurring revenue consists of:
· Subscriptions - revenue from subscriptions derive from the
Group's hosted software-as-a-service subscription application, which allows
customers to use hosted software over the contract period without taking
possession of the software. Revenue is recognised over the contract period,
commencing on the date of the service go live which gives the customer the
right-to-use and access the platform.
· Support and maintenance - derive from support services and
software upgrades offered to customers using the Group's software products.
Revenue is recognised over the contract period, commencing on the go-live date
of the implementation which gives the customer the right to access support
services and the right to receive upgrades.
2. One off revenue
One off revenue consists of:
· Licences - the performance obligation for the provision of
licences is considered to be satisfied when the agreement is signed by the
customer and they are given access to the related software intellectual
property ("IP") without any requirement to provide updates. It is recognised
in full at the transaction price and over the period of implementation before
the go live date of the implementation.
· Services - Services revenue relate to design and implementation
services for each customer. Services enhance an asset that the customer
controls and the Group creates specific fit for purpose assets which cannot be
used elsewhere. The transaction price is the amount determined by fixed price
contracts or on a time and materials basis where the Group has a right for
consideration for work performed to date. Under the terms of the contracts,
the Group has a right to invoice at the achievement of various milestones in
the contract.
· Services are recognised over time and management consider the
time spent as a proportion of total time expected is the most appropriate
basis for recognition of this revenue stream as staff time is the main input
into the delivery of the service. Any differences to the revenue measured by
the above method and the amounts invoiced are included in the balance sheet.
Further information on the contracts assets or contract liabilities are
included in note 4.
Intangible assets - Goodwill
Goodwill is not amortised but tested for impairment annually and whenever
impairment indicators require. In most cases the Group identified its cash
generating units as one level below that of an operating segment. Cash flows
at this level are substantially independent from other cash flows and this is
the lowest level at which goodwill is monitored. A goodwill impairment loss is
recognised in the Statement of Comprehensive Income whenever and to the extent
that the carrying amount of a cash-generating unit exceeds the unit's
recoverable amount, which is the greater of value in use and fair value less
cost to sell.
Negative goodwill relating to intangible fixed assets requires immediate
recognition in the Statement of Comprehensive Income.
In calculating goodwill, the total consideration, both actual and deferred, is
taken into account. Where the deferred consideration is contingent and
dependent upon future trading performance, an estimate of the present value of
the likely consideration payable is made. This contingent consideration is
re-assessed annually. The difference between the present value and the total
amount payable at a future date gives rise to a finance charge which is
charged to the Statement of Comprehensive Income and credited to the liability
over the period in which the consideration is deferred. The discount used
approximates to market rates.
Intangible assets - research and development expenditure
Research expenditure is written off as incurred. Internally generated
development expenditure is also written off, except where the directors are
satisfied as to the technical, commercial and financial viability of
individual projects. In such cases, the identifiable expenditure is
capitalised and amortised over the period during which the group is expected
to benefit. This period is seven years. Provisions are made for any
impairment.
Intangible assets - other
Other intangible assets recognised in these financial statements consist of
Customer contracts and relationships and Intellectual Property Rights acquired
on the acquisition of EDI Plus Limited along with the purchase of the
intellectual property rights of software.
Amortisation is calculated to write off their cost or valuation less any
residual value over their estimated useful lives as follows:
Customer contracts and relationships - straight line over 10 years
Intellectual Property Rights - straight line over 10 years
Intellectual property rights of software - straight line over 7 years
The amortisation of intangible fixed assets is shown as a separate line in the
Consolidated Statement of Comprehensive Income.
The carrying values of intangible assets are reviewed for impairment whenever
events or changes in circumstances indicate the carrying value may not be
recoverable.
Impairment non-current assets
For the purposes of impairment testing, goodwill is allocated to each of the
Group's cash-generating units. A cash-generating unit to which goodwill has
been allocated is tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit
pro-rata based on the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised directly in profit or loss. An
impairment loss recognised for goodwill is not reversed in subsequent periods.
Foreign currencies
Transactions denominated in a foreign currency are translated into sterling at
the rate of exchange ruling at the date of the transaction. At the balance
sheet date, monetary assets and liabilities denominated in foreign currency
are translated at the rate ruling at that date. All exchange differences are
dealt with in the Statement of Comprehensive Income.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair
value is determined. The gain or loss arising on translation of non-monetary
measured at fair value is treated in line with the recognition of gain or loss
on change in fair value in the item.
For consolidation purposes, the assets and liabilities of overseas subsidiary
undertakings are translated at the functional currency at the rate of exchange
ruling at the reporting date. Profit and loss accounts of such undertakings
are consolidated at the average rate of exchange during the year. Exchange
differences arising are included in a separate component of equity.
Plant and equipment
Plant and equipment is carried at cost less accumulated depreciation and any
recognised impairment in value. Cost comprises the aggregate amount paid to
acquire asset and includes costs directly attributable to making the asset
capable of operating as intended.
Depreciation of plant and equipment is calculated to write off their cost or
valuation less any residual value over their estimated useful lives as
follows:
Computer equipment - straight line over 3 years
Office equipment - straight line over 3 years
Fixtures and fittings - straight line over 3 years
The assets' residual values, useful lives and methods of depreciation are
reviewed, and adjusted if appropriate on an annual basis. An asset is
de-recognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the income statement in the
period that the asset is derecognised. The carrying values of tangible fixed
assets are reviewed for impairment in periods if events or changes in
circumstances indicate the carrying value may not be recoverable.
Fixed asset investments
Subsidiaries are measured at cost less impairment.
Investments are reviewed for impairment at the end of the first full financial
year following the acquisition and in other periods if events or changes in
circumstances indicate that the carrying value may not be recoverable.
Provision is made for any impairment.
Trade and other receivables
Trade and other receivables are initially stated at their fair value plus
transaction costs, then subsequently at amortised cost using the effective
interest method if applicable, less impairment losses. Provisions against
trade and other receivables are made when there is objective evidence that the
Group will not be able to collect all amounts due to them in accordance with
the original terms of those receivables. The amount of the write down is
determined as the difference between the asset's carrying amount and the
present value of estimated future cash flows.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and short-term deposits with
an original maturity of three months or less. Bank overdrafts that are
repayable on demand and form an integral part of cash management are included
as components of cash and cash equivalents for the purposes of the cash flow
statement.
Trade and other payables
Trade and other payables are recognised at original cost.
Loans and borrowings
Loans and borrowings are recorded at amortised cost using the effective
interest method, with interest-related charges recognised as an expense in
finance cost in the statement of comprehensive income.
Leases - as a lessee
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of fixed
lease payments. The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined, the lessee's
incremental borrowing rate is used, being the rate that the lessee would have
to borrow the funds necessary to obtain an asset of similar value to the
right-of-use asset with similar terms, security and conditions.
Lease payments are allocated between principal and finance costs. The finance
cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period.
Right-of-use assets are measured at cost comprising the initial measurement of
lease liability, any lease payments made at or before the commencement date
less any lease incentives received, and any initial direct costs.
Right-of-use assets are depreciated over the shorter of the asset's useful
life and the lease term on a straight-line basis.
Payments associated with low-value items and leases of a duration less than 1
year are recognised as an expense in profit or loss on a straight-line basis.
Income taxes
Current income tax assets and liabilities for the current period are measured
at the amount expected to be recovered from or paid to the taxation
authorities based on the tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance sheet date.
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date. Deferred tax is calculated
on an undiscounted basis at the tax rates that are expected to apply in the
period when the liability is settled based on the tax rates and tax laws
enacted or substantively enacted by the balance sheet date.
Deferred tax liabilities are recognised for all taxable temporary differences,
except when the deferred tax liability arises from the initial recognition of
goodwill or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences,
carry forward of unused tax credits and unused tax losses, to the extent that
it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised except when the deferred tax asset
relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax asset to be recovered.
Finance costs
Finance costs comprise interest payable on loans from directors and third
parties and are recognised on an accruals basis.
Share-based payments
The group issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value (excluding the
effect of non-market-based vesting conditions) at the date of grant. The fair
value determined at the grant date of the equity-settled share-based payments
is expensed on a straight-line basis over the vesting period, based on the
group's estimate of shares that will eventually vest and adjusted for the
effect of non-market-based vesting conditions
Fair value is measured by use of the Black Scholes Model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural
considerations.
Pension contributions
The company operates a defined contribution scheme for its employees.
Contributions are charged to the Statement of Comprehensive Income in the year
they are payable. The assets of the scheme are held separately from those of
the group.
Financial instruments
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged,
cancelled or expires.
Government grants
Government grants are recognised where there is reasonable assurance that the
grant will be received and all attached conditions will be complied with. When
the grant relates to an expense item, it is recognised as income on a
systematic basis over the periods that the costs, which it is intended to
compensate, are expensed. The other income included in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income relates entirely to
government support through the furlough scheme.
Where the grant relates to an asset, it is recognised as income in equal
amounts over the expected useful life of the related asset.
Use of assumptions and estimates
The Group makes judgements, estimates and assumptions that effect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The resulting accounting estimates calculated using these
judgements and assumptions will, by definition, seldom equal the related
actual results but are based on historical experience and expectations of
future events. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision effects only that period, or
in the period of revision and future periods if the revision effects both
current and future periods.
The judgements and key sources of estimation uncertainty that have a
significant effect on the amounts recognised in the financial statements are
discussed below.
Useful economic lives of intangible assets
Intangible assets are amortised over their useful lives. Useful lives are
based on management's estimates, which are periodically reviewed for continued
appropriateness. Changes to estimates can result in variations in the carrying
values and amounts charged to the statement of comprehensive income in
specific periods.
Change in accounting policies
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1st January 2023.
(a) New and amended standards adopted by the Company:
There are a number of new standards which have had a material impact in the
annual financial statements for the year ended 31 December 2023. These
include:
· Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of
Accounting Policies
· Amendments to IAS 12 - Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
· Amendments to IAS 8 - Definition of Accounting Estimates
(b) New standards, interpretations, and amendments not yet effective:
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
These include:
· Classification of Liabilities as Current or Noncurrent and
Non-current Liabilities with Covenants - Amendments to IAS 1
· Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
· Disclosures: Supplier Finance Arrangements - Amendments to IAS 7
and IFRS 7
4. Segmental reporting
The chief operating decision maker ("CODM") for the purpose of IFRS 8 is the
Board. Segments are determined by reference to the internal reports reviewed
by the Board. The group's operations relate to the provision of technology
solutions to help clients drive revenues and profit.
The Group measures the performance of its operating segments through a measure
of segment profit or loss which is referred to as EBITDA. This measure is
reported to the CODM for the purposes of resource allocation and assessment of
performance. The measure is the same as reported in the historic financial
information.
Information about geographic location by key segments
Year ended 31 December 2023
UK Portugal Total
£'000 £'000 £'000
Revenue 11,650 4,480 16,130
Non-current assets 10,608 2,094 12,702
Year ended 31 December 2022
UK Portugal Total
£'000 £'000 £'000
Revenue 9,191 4,843 14,034
Non-current assets 9,614 1,783 11,397
Information about major customers
Transactions with a single customer exceeding 10% of total revenue amounted to
£5,381K in the year (2022: £2,656K) and related to 2 customers (2022: 1).
5. Revenue
The analysis of the Group's revenue by geographical destination is set out
below.
2023 2022
£'000 £'000
United Kingdom 11,179 8,670
Europe 385 456
Rest of World 4,566 4,908
16,130 14,034
A breakdown of revenue by the two revenue streams as detailed in accounting
policies is shown below:
2023 2022
£'000 £'000
Recurring revenue 12,732 11,824
One off revenue 3,398 2,210
16,130 14,034
Revenue is either recognised at a point in time or over the period of the
contract in line with the accounting policy (note 2).
The following table provides information on contract assets and contract
liabilities from contracts with customers:
2023 2022
£'000 £'000
Contract assets 287 90
Contract liabilities 3,031 2,605
Contract assets ("accrued income") are recognised where there are excess of
revenues earned over billings. Contracts are classified assets when only the
act of invoice is pending, there is an unconditional right to receive cash and
only the passage of time is required as per contractual terms.
Contract liabilities ("deferred income") are recognised when there are
billings in excess of revenues. Contracts are classified as liabilities when
there is an obligation to transfer goods or services to a customer
for which the Group has received consideration from the customer (or the
payment is due) but the transfer has not yet completed. These arise based on
the billing cycle of the Group's revenues and all are expected to be reversed
in under one year.
6. Loss on operating activities before taxation
Loss on ordinary activities before taxation is stated after charging:
2023 2022
£'000 £'000
Share based payments - 58
Deprecation of owned tangible fixed assets 49 42
Depreciation of leased assets 545 452
Amortisation of intangible assets 1,146 889
Auditors' remuneration (see note 7) 70 60
7. Auditors' remuneration
The analysis of auditors' remuneration is as follows:
2023 2022
£'000
£'000
Fees payable to the company's auditors for the audit of the company's annual 37 31
accounts
Fees payable to the company's auditors and their associates for other services
to the group
• The audit of the company's subsidiaries pursuant to legislation 28 24
• Tax compliance services 5 5
Total other services 70 60
8. Employee information
Their aggregate emoluments were:
2023 2022
£'000
£'000
Wages and salaries 8,701 7,965
Social security costs 1,263 1,194
Other pension costs 307 270
Other benefits 338 370
10,609 9,799
The average monthly number of employees (including directors) during the year
for the group was as follows:
2023 2022
No.
No.
Selling and administration 29 27
Technical 144 147
173 174
9. Directors' emoluments
2023 2022
£'000
£'000
Aggregate emoluments 970 925
Pension contributions (money purchase schemes) 39 38
1,009 963
Directors' emoluments disclosed above include the following payments to the
highest director:
2023 2022
£'000
£'000
Aggregate emoluments 347 332
Pension contributions (money purchase schemes) 17 16
364 348
2023 2022
No.
No.
Number of directors to whom relevant benefits are accruing under:
Money purchase schemes 2 2
The above is equivalent to total key management personnel compensation. There
were no other key management personnel other than the Directors.
Further details of Directors remuneration can be found in the remuneration
report on pages 23 to 24.
Share based compensation
The Group operates an equity-settled share based compensation plan for
Directors and executives. In accordance with IFRS 1, the Group has elected to
implement the measurement requirements of IFRS 2 in respect of only those
equity-settled share options that were granted after 7 November 2002 and that
had not vested as at 1 January 2005. The fair value of the employee services
received in exchange for the grant of options is recognised as an expense over
the vesting period. The total amount to be expensed over the vesting period is
determined by reference to the fair value of the options granted at the grant
date.
At each year end date, the Group revises its estimate of the number of options
that are expected to vest. It recognises the impact of the revision of
original estimates, if any, in the Statement of Consolidated Income, and a
corresponding adjustment to equity over the remaining vesting period. When
share options are cancelled the Group accounts for the cancellation as an
acceleration of vesting and therefore recognises immediately the amount that
otherwise would have been recognised for services received over the remainder
of the vesting period. The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value) and share
premium when the options are exercised. The fair value of share options has
been assessed using the Black Scholes Model.
No share options were granted to Directors in the period (2022 - Nil).
Included on the face of the Statement of Comprehensive Income, is a total
charge for share based payments of £Nil (2022: £58,341) which arises wholly
from transactions accounted for as equity settled share based payments.
10. Taxation
(a) Taxation charge:
2023 2022
£'000
£'000
Total current income tax credit charged in the income statement
Research and development tax credit (400) (600)
Portugal corporate tax 19 22
Adjustment in respect of prior years 40 (40)
Total current income tax (341) (618)
Deferred tax expense
Current year 136 29
136 29
Total income tax (205) (589)
(b) Taxation reconciliation:
The current income tax credit for the year is explained below:
2023 2022
£'000
£'000
Loss before tax (1,097) (1,275)
Loss at the standard UK income tax rate of 19% (2022: 19%) (208) (242)
Effects of:
Expenses not deductible for tax purposes 153 130
Capital allowances in excess of depreciation 44 (123)
Tax losses utilised as part of research and development tax credit (400) (600)
Unrelieved tax losses and other deductions arising in the year 98 383
B/fwd losses relieved (96) (36)
Adjustment in respect of earlier year 40 (40)
Difference in overseas tax rates and temporary GAAP differences 28 (90)
Recognition of deferred tax asset in respect of losses - (15)
Other deferred tax timing differences 136 44
Total income tax credited in the income statement (205) (589)
(c) Deferred tax
Deferred tax balances consist of the following timing differences
Group:
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Deferred tax asset
Acceleration capital allowances - UK (749) (603) - -
Tax losses available for carry forward - UK 760 760 - -
Other timing differences - UK 2 7 - -
At 31 December 13 164 - -
The Group has not recognised all deferred tax assets in respect of tax losses
due to timing uncertainty regarding the recoverability against future profits.
If all tax losses were recognised the deferred tax asset would increase as
below in each year.
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Deferred tax asset
Acceleration capital allowances - UK (749) (603) - -
Tax losses available for carry forward - UK 2,063 2,049 - -
Other timing differences - UK 2 7 - -
At 31 December 1,316 1,453 - -
Increase in deferred tax asset if all losses recognised 1,303 1,289 - -
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Deferred tax liability
Acceleration capital allowances - UK (71) (123) (71) (123)
Tax losses available for carry forward - UK - 39 - 39
Other timing differences - UK (1) - (1) -
Acceleration capital allowances - Portugal (382) (361) - -
Arising on business combinations - UK (161) (185) - -
At 31 December (615) (630) (72) (84)
The movement in deferred tax assets during the period are:
Group
Accelerated capital allowances on PPE- UK Accelerated capital allowances Development costs- UK Tax losses available for carry forward- UK Other timing differences- UK Total
£'000 £'000 £'000 £'000 £'000
Deferred tax assets
At 31 December 2021 (46) (420) 528 3 65
Charged to profit and loss account (86) (174) 271 4 15
Transfer to liability 123 - (39) - 84
At 31 December 2022 (9) (594) 760 7 164
Charged to profit and loss account (8) (138) - (5) (151)
At 31 December 2023 (17) (732) 760 2 13
The movement in deferred tax liabilities during the period are:
Group
Accelerated capital allowances on PPE- UK Tax losses available for carry forward- UK Accelerated capital allowances on Development costs- Portugal Timing differences on acquired intangible assets- UK Total
£'000 £'000 £'000 Other Timing differences £'000 £'000
£'000
Deferred tax liabilities
At 31 December 2021 - - (292) - (210) (502)
Charged to profit and loss account - - (69) 25
- (44)
Transfer from asset (123) 39 - - - (84)
At 31 December 2022 (123) 39 (361) - (185) (630)
Charged to profit and loss account 52 (39) (21) 24
(1) 15
At 31 December 2023 (71) - (382) (1) (161) (615)
Company
Accelerated capital allowances on PPE- UK Tax losses available Total
for carry
£'000
forward- UK £'000
£'000 Other Timing differences
£'000
Deferred tax liabilities
At 31 December 2021 - - - -
Transferred from asset (123) 39 - (84)
At 31 December 2022 (123) 39 - (84)
Charged to profit and loss account 52 (39) (1) 12
At 31 December 2023 (71) - (1) (72)
11. Loss per share
Basic and diluted loss per share is calculated by dividing the profit
attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the period. For the avoidance of doubt the
deferred shares have been excluded as they have no rights to profits or
capital. Additionally, the Company's ordinary shares were subject to a share
consolidation where 5 ordinary shares were converted into 1 ordinary share.
The comparative period weighted average number of shares has been adjusted for
this to aid comparison. The Company's share options have a dilutive effect
over the two year period.
2023 2022
£'000 £'000
Loss after tax for the year (892) (686)
Share option charge - 58
Adjusted loss after tax for the year (892) (628)
Weighted average number of shares:
Basic - 000 31,211 31,211
Potentially dilutive share options - 000 3,657 3,657
Diluted average number of shares - 000 34,868 34,868
Loss per share:
Basic - pence on continuing operations (2.86) (2.20)
Diluted - pence on continuing operations (2.86) (2.20)
Adjusted earnings/(loss) - Basic - pence on continuing operations (2.86) (2.01)
Adjusted Diluted - pence on continuing operations (2.86) (2.01)
12. Intangible assets
Group
Purchase of software Acquired intellectual property rights Customer contracts
Development cost Goodwill Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2023 - 15,684 8,712 300 1,000 25,696
Foreign exchange differences - (66) - - - (66)
Additions 350 1,870 - - - 2,220
At 31 December 2023 350 17,488 8,712 300 1,000 27,850
Amortisation
At 1 January 2023 - 10,543 4,759 75 250 15,627
Foreign exchange differences - (32) - - - (32)
Charge for the period - 1,016 - 30 100 1,146
At 31 December 2023 - 11,527 4,759 105 350 16,741
Net book value
At 31 December 2023 350 5,961 3,953 195 650 11,109
At 31 December 2022 - 5,141 3,953 225 750 10,069
Goodwill arising prior to 1 January 2020 relates to acquisition prior to the
date of transition to IFRS of 1 January 2015 and therefore the exemption for
business combinations completed before that date has been applied and the
amounts not restated.
The Board consider that there is only one Cash Generating Unit. In
accordance with the accounting policy, goodwill is tested annually for
impairment, Management have used a fair value less cost of sales methodology
supported by offers for the Group and consider that the value supports the
carrying value of goodwill at each period end.
Company
Purchase of software Development
costs
Total
£'000 £'000 £'000
Cost
At 1 January 2023 - 13 13
Additions 350 - 350
At 31 December 2023 350 13 363
Amortisation
At 1 January 2023 - 13 13
Charge for the period - - -
At 31 December 2023 - 13 13
Net book value
At 31 December 2023 350 - 350
At 31 December 2022 - - -
13. Plant and equipment
Group
Fixtures and equipment
Total
£'000 £'000
Cost
At 1 January 2023 1,862 1,862
Foreign exchange differences (2) (2)
Additions 77 77
At 31 December 2023 1,937 1,937
Depreciation
At 1 January 2023 1,141 1,141
Foreign exchange differences (2) (2)
Charge for the period owned assets 49 49
Charge for the period leased assets 273 273
At 31 December 2023 1,461 1,461
Net book value
At 31 December 2023 476 476
At 31 December 2022 721 721
Company
Fixtures and equipment Total
£'000 £'000
Cost
At 1 January 2023 837 837
Additions - -
At 31 December 2023 837 837
Depreciation
At 1 January 2023 190 190
Charge for the period 273 273
At 31 December 2023 463 463
Net book value
At 31 December 2023 374 374
At 31 December 2022 647 647
14. Investments
The principal subsidiaries of itim Group plc, all of which have been included
in these consolidated financial statements, are as follows:
Company
Shares in group undertaking Other investments Total
£'000 £'000 £'000
Cost
At 1 January 2023 and at 31 December 2023 8,005 46 8,051
Provision for impairment
At 1 January 2023 and at 31 December 2023 2,934 46 2,980
Net book value
At 31 December 2023 5,071 - 5,071
At 31 December 2022 5,071 - 5,071
The company holds more than 20% of the share capital of the following
companies:
Subsidiary undertakings Country of Percentage holding Class of share Principal activity Profit/ Net assets/
Incorporation
(loss)
(liabilities)
£'000 £'000
ITIM Limited England and Wales 100% Ordinary 'A' Software consultancy and supply (1,793) (10,506)
Ordinary
Deferred
EDI Plus Limited England and 100% Ordinary Data exchange services 167 1,179
Wales
Profimetrics Software Solutions S.A Portugal 100% Ordinary Development and distribution of software (86) 2,060
Preferred
The registered address of ITIM limited and EDI Plus Limited are same as ITIM
Group Plc.
The registered address of Profimetrics Software Solutions S.A. is R. Lionesa
446, Edifício C Loja L, 4465-671 Leça do Balio, Portugal.
15. Trade and other receivables
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Trade receivables 4,075 2,925 - -
Corporation tax 502 648 - -
Amounts owed by group undertakings due within one year - - 13,537 11,485
Amounts owed by group undertakings due in greater than one year - - 1,842 1,881
Other receivables due within one year 12 134 - -
Other receivables due in greater than one year 46 - 46 -
Loan receivables - 350 - 350
Prepayments and accrued income 750 546 66 58
5,385 4,603 15,491 13,774
16. Trade and other payables
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Trade payables 1,189 818 199 32
Corporation tax - 23 - -
Amounts owed by group undertakings due within one year - - 101 -
Other taxation and social security 870 796 4 68
Other payables 232 225 195 188
Loans and borrowings (see note 19 below) 302 318 302 318
Accruals 774 991 26 41
Deferred income 3,031 2,605 - -
6,398 5,776 827 647
17. Trade and other payables due in more than one year
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Other payables 347 540 347 540
347 540 347 540
Net obligations under finance leases are secured by fixed charges on the
assets concerned.
18. Loans and borrowings
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Accrued interest 302 318 302 318
302 318 302 318
Analysis of maturity of loans and borrowings
Group Company
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Amounts payable
Within one year 302 318 302 318
302 318 302 318
Accrued interest relates to interest due on fully repaid Director loans.
19. Leases
The Group leases five units within properties from which it operates and also
leases computer equipment for the hosting centre. Lease payments are fixed
throughout the contract period.
Group
Right-of-use - Property Right-of-use - Equipment
£'000 £'000 Total
£'000
Cost
At 1 January 2023 1,197 234 1,431
Foreign exchange differences (6) - (6)
Additions 898 - 898
Disposals (947) (31) (978)
At 31 December 2023 1,142 203 1,345
Depreciation
At 1 January 2023 853 136 989
Foreign exchange differences 5 - 5
Charge for the year 231 40 271
Disposals (947) (31) (978)
At 31 December 2023 142 145 287
Net book value
At 31 December 2023 1,000 58 1,058
At 31 December 2022 344 98 442
Lease liabilities:
2023 2022
£'000 £'000
At 1 January 498 724
Foreign exchange movement (10) 4
Interest expense 23 30
Lease payments (321) (331)
Additions 892 71
At 31 December 1,082 498
Amounts payable are as follows:
2023 2022
£'000 £'000
Due within 1 year 287 297
Due 2-5 years 785 171
Due over 5 years 10 30
Total 1,082 498
The Group's right of use assets consist of the Company's premises, data
centres' and sundry office equipment. The expiry of the leases varies
between 1 and 6 years.
Company
Right-of-use -
Property
Total
£'000
£'000
Cost
At 1 January 2023 - -
Additions 551 551
At 31 December 2023 551 551
Depreciation
At 1 January 2023 - -
Charge for the year - -
At 31 December 2023 - -
Net book value
At 31 December 2023 551 551
At 31 December 2022 - -
Lease liabilities:
2023 2022
£'000 £'000
At 1 January - -
Additions 545 -
At 31 December 545 -
Amounts payable are as follows:
2023 2022
£'000 £'000
Due within 1 year 131 -
Due 2-5 years 414 -
Due over 5 years - -
Total 545 -
20. Financial instruments
Financial risk factors
The Group's financial assets comprise cash and cash equivalents, trade
receivables and accrued income. These are all measured at amortised cost. The
financial liabilities comprise loans and borrowings, trade payables and
accruals, lease liabilities and deferred consideration payable for
acquisitions of subsidiaries. These are measured at amortised cost.
The majority of the financial instruments arise directly from the operations
with the exception of loans and borrowings and lease liabilities which have
been used to finance the operations.
Fair values of financial instruments
For the following financial assets and liabilities: trade and other payables,
trade and other receivables and cash at bank and in hand, the carrying amount
approximates the fair value of the instrument due to the short-term nature of
the instrument. The Directors consider that there is no material difference
between book value and fair value for any of the financial instruments held.
Financial risk management
The Group's activities expose the Group to a number of risks including capital
management risk, interest rate risk, foreign exchange risk, credit risk and
liquidity risk.
It is the Group's policy that no trading in financial instruments should be
undertaken.
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.
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 Board receives monthly
reports from the Finance Department through which it reviews the effectiveness
of the processes put in place and the appropriateness of the objectives and
policies it sets.
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:
Interest rate risk
There is no interest rate risk as there are no borrowings in the Group.
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's largest financial assets are the cash balances held in banks and
it is exposed to credit risk on those balances. It is the Group's policy only
to make deposits with banks with an acceptable credit rating.
The Group is mainly exposed to credit risk from credit sales. It is Group
policy, implemented locally, to assess the credit risk of new customers before
entering contracts. Such credit ratings are taken into account by local
business practices. An ageing analysis of trade receivables is detailed below:
Total Current 30-60 days > 60 days
2023 £'000 £'000 £'000 £'000
Trade and other receivables 4,075 1,898 1,629 548
Contract assets 287 287 - -
4,362 2,185 1,629 548
2022 Total Current 30-60 days > 60 days
£'000 £'000 £'000 £'000
Trade and other receivables 2,925 1,299 967 659
Contract assets 90 90 - -
3,015 1,389 967 659
Trade receivables are recognised initially at the transaction price. They are
subsequently measured less any provision for impairment in relation to
expected credit losses. At each reporting date the Group assesses the expected
credit losses and changes in credit risk since initial recognition of the
receivable and a provision for impairment is recognised when considered
necessary. The Group considers the ageing to be reasonable and has no history
of significant bad debts. No provisions have been made in in these financial
statements. The Board do not consider the credit risk to be significant for
the financial assets currently held.
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). 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.
The Group's main exposure to foreign currency risk is on the trade receivables
in the Portuguese subsidiary which are not held in Euros. The Directors have
considered the balances at year end and based on the level of foreign currency
balances and the expected timing of settlement of those amounts that the
foreign exchange risk is not material.
Liquidity risk
Liquidity risk is the risk that ITIM Group may encounter difficulty in meeting
its obligations associated with the financial liabilities that are settled by
delivering cash or other financial assets. The Group actively maintains a
mixture of long-term and short-term debt finance that is designed to ensure
the Group has sufficient available funds for operations and planned
expansions.
The Group would normally expect that sufficient cash is generated in the
operating cycle to meet the contractual cash flows through effective cash
management. The maturity analysis of the financial liabilities are included
below:
Carrying amount 1 year or less 1<2 years 2-5years 5 years
As at 31 December 2023 £'000 £'000
£'000 £'000 £'000
Trade and other payables 2,541 2,194 347 - -
Right of use liability 1,082 287 271 514 10
Other loans and borrowings 302 302 - - -
3,925 2,783 618 514 10
Carrying amount 1 year or less 1<2 years 2-5years 5 years
As at 31 December 2022 £'000 £'000
£'000 £'000 £'000
Trade and other payables 2,574 2,034 540 - -
Right of use liability 498 297 85 86 30
Other loans and borrowings 318 318 - - -
3,390 2,649 625 86 30
Capital management risk
The Group's main objective when managing capital is to protect returns to
shareholders by ensuring the Group will continue to trade for the foreseeable
future. The Group also aims to optimise its capital structure of debt and
equity so as to minimise its cost of capital. The Group in particular reviews
its levels of borrowing and the repayment dates, setting these out against
forecast cash flows and reviewing the level of available funds.
21. Share capital
2023 2022
£'000 £'000
Authorised:
37,949,651 Ordinary shares of 5p each 1,898 1,898
1,898 1,898
2023 2022
£'000 £'000
Allotted, called up and fully paid:
31,210,607 Ordinary shares of 5p each 1,561 1,561
1,561 1,561
A summary of the rights of the different classes of share is given below:
Voting
All Ordinary shares are entitled to one vote each. The holders of deferred
shares are not entitled to receive notice of, to attend, to speak or to vote
at any general meeting of the Company.
Dividends
The profits of the Company available for distribution shall be used to pay
dividends to the holders of Ordinary Shares a dividend equivalent to such
amounts as the Directors may determine and as is approved by the Ordinary
Shareholders in general meeting.
22. Reserves
Share premium
This reserve records the amount above the nominal value received for shares
sold, less transaction costs.
Share options reserve
The share options reserves represent the fair value of equity-settled share
options granted using the Black Scholes model.
Capital redemption reserve
This reserve arises on the purchase of the company's own shares.
Foreign exchange reserve
This reserve includes any exchange differences arising on the retranslation of
foreign subsidiaries on consolidation.
Retained earnings
This balance represents the cumulative profit and loss made by the Group net
of distributions to owners.
23. Share-based payments
Share options
The Company has a share option scheme for certain employees of the Group.
Options are granted with a fixed exercise price. The vesting period varies
from vesting immediately to vesting over 2 years from the date of grant. If
the options remain unexercised after a period of ten years from the date of
grant the options expire. Options are forfeited if the employee leaves the
Group before the options vest.
Details of equity settled share options outstanding during the year are as
follows:
Year ended 31 December 2023
Grant date Outstanding at 1 January 2023 Granted Exercised Lapsed Outstanding at 31 December 2023 Exercise period Exercise price
14/04/2015 150,000 - - - 150,000 10 years 7.975p
10/04/2017 2,615,000 - - - 2,615,000 10 years 15.000p
31/03/2021 400,000 - - - 400,000 10 years 70.000p
19/04/2021 492,041 - - - 492,041 10 years 70.000p
3,657,041 - - - 3,657,041
Year ended 31 December 2022
Grant date Outstanding at 1 January 2022 Granted Exercised Lapsed Outstanding at 31 December 2022 Exercise period Exercise price
14/04/2015 150,000 - - - 150,000 10 years 7.975p
10/04/2017 2,615,000 - - - 2,615,000 10 years 15.000p
31/03/2021 400,000 - - - 400,000 10 years 70.000p
19/04/2021 492,041 - - - 492,041 10 years 70.000p
3,657,041 - - - 3,657,041
Details of the share options and weighted average exercise price (WAEP) during
the years are as follows:
31 December 2023 31 December 2022
Number WAEP Number WAEP
Outstanding at the beginning of the year 3,657,041 28.13p 3,657,041 28.13p
Share consolidation - - - -
Granted during the year - - - -
Exercised during the year - -
Lapsed during the year - - - -
Forfeited during the year - - - -
3,657,041 28.13p 3,657,041 28.13p
The weighted average contractual life of share options outstanding as at 31
December 2023 was 4 years (31 December 2022: 5 years).
ITIM recognises equity settled share-based payment expenses based on the fair
value determined by the Black Scholes model. The model is internationally
recognised as being appropriate to value employee share options schemes. The
inputs into the option issues were as follows:
Year ended Year ended
31 December 2023
31 December 2022
£'000 £'000
Share price 78p 78p
Exercise price 69p 69p
Expected volatility 25% 25%
Expected life 10 years 10 years
Risk free rate 0.5% 0.5%
Risk-free rate
The risk-free interest rate is based on the Bank of England's base rate.
Volatility
The measure of volatility is based management's estimate after considering the
historical volatility of guideline companies operating within the same
industry as ITIM Group, over a 10-year time period.
24. Company statement of changes in equity
Share capital Share premium Share options Capital Retained losses
£'000 £'000 reserve Redemption £'000
£'000 Reserve Total
£'000 £'000
At 1 January 2022 1,561 7,398 455 1,103 8,095 18,612
Total comprehensive income for the year - - - - 592 592
Share option charge - - 58 - - 58
At 1 January 2023 1,561 7,398 513 1,103 8,687 19,262
Total comprehensive income for the year - - - - 924 924
At 31 December 2023 1,561 7,398 513 1,103 9,611 20,186
The profit for the year dealt with in the financial statements of the parent
company is shown above. As permitted by section 408 of the Companies Act 2006,
no separate income statement is presented in respect of the parent company.
25. Pension commitments
The group makes contributions to individual pension schemes (money
purchase). The amount paid during the year was £307,243 (2022: £269,779).
Outstanding contributions at the balance sheet date amounted to £37,846
(2022: £36,042).
26. Contingent liabilities
itim Group plc and its subsidiary undertakings have given cross guarantees and
been granted rights to set-off in respect of group undertaking overdrafts and
loans.
27. Related party transactions
The Group has taken advantage of the exemption available under IAS 2 Related
Party Disclosures not to disclose details of transactions between Group
undertakings which are eliminated on consolidation.
28. Supporting statement for cash flows
Year ended 31 December 2023 Brought forward Cash Non Carried forward
Flow
Cash
£'000
£'000
£'000 £'000
Loans and borrowings (318) 16 - (302)
Leases (498) 321 (905) (1,082)
Year ended 31 December 2022 Brought forward Cash Non Carried forward
Flow
Cash
£'000
£'000
£'000 £'000
Loans and borrowings (318) - - (318)
Leases (724) 331 (105) (498)
29. Controlling party
There is no single ultimate controlling party.
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the annual general meeting of itim Group plc (the
"Company") will be held at the offices of the Company, 2nd Floor, Atlas House,
173 Victoria Street, London SW1E 5NA on 14(th) June 2024 at 10.30 a.m. to
consider and, if thought fit, to pass the following resolutions, of which
resolutions 1 to 10 (inclusive) will be proposed as ordinary resolutions and
resolutions 11 and 12 will be proposed as special resolutions. Resolutions 11
to 12 (inclusive) are items of special business.
ORDINARY RESOLUTIONS
1. To receive the Company's annual accounts for the financial year ended 31
December 2023 together with the directors' report, the directors' remuneration
report and the auditors' report on those accounts.
2. To re-appoint RPG Crouch Chapman LLP as auditors of the Company to hold office
until the conclusion of the next annual general meeting of the Company to be
held in 2025 and to authorise the directors to fix their remuneration.
3. To re-elect Sandra Ribeiro as a director.
4. To re-elect Michael Jackson as a director.
5. To re-elect Justin King as a director.
6. To re-elect Lee Williams as a director.
7. To re-elect Ian Hayes as a director.
8. To re-elect Mahmood Ali Athar as a director.
9. To re-elect Robert Frosell as a director.
10. That, in substitution for any equivalent existing and unexercised authorities
and powers, the directors of the Company be and they are hereby generally and
unconditionally authorised for the purpose of section 551 of the Companies Act
2006 (the "Act") to exercise all or any of the powers of the Company to allot
shares of the Company or to grant rights to subscribe for, or to convert any
security into, shares of the Company up to an aggregate nominal value of
£520,177 to such persons at such times and generally on such terms and
conditions as the directors may determine (subject always to the articles of
association of the Company), provided that this authority shall, unless
previously renewed, varied or revoked by the Company in general meeting,
expire at the conclusion of the next annual general meeting of the Company to
be held in 2025 or, if earlier, 14 September 2025, save that the directors of
the Company may, before the expiry of such period, make an offer or agreement
which would or might require such securities to be allotted after the expiry
of such period and the directors of the Company may allot such securities in
pursuance of such offer or agreement as if the authority conferred hereby had
not expired.
SPECIAL RESOLUTIONS
1. That, subject to and conditional upon the passing of resolution 10 and in
substitution for any equivalent existing and unexercised authorities and
powers, the directors of the Company be and are hereby empowered pursuant to
sections 570 and 573 of the Act to allot equity securities (as defined in
section 560(1) of the Act) for cash pursuant to the authority conferred upon
them by resolution 10 and/or where the allotment constitutes an allotment of
equity securities by virtue of section 560(3) of the Act, as if section 561 of
the Act did not apply to any such allotment provided that this authority and
power shall be limited to the allotment of equity securities up to an
aggregate nominal amount of £78,027 (representing approximately 5 per cent.
of the current issued share capital of the Company) provided that this
authority shall, unless previously renewed, varied or revoked by the Company
in general meeting, expire at the conclusion of the next annual general
meeting of the Company to be held in 2025 or, if earlier, 14 September 2025,
save that the directors of the Company may, before the expiry of such period,
make an offer or agreement which would or might require such securities to be
allotted after the expiry of such period and the directors of the Company may
allot such securities in pursuance of such offer or agreement as if the
authority conferred hereby had not expired.
2. That the Company be and is hereby generally and unconditionally authorised for
the purpose of section 701 of the Act to make market purchases (within the
meaning of section 693(4) of the Act) of ordinary shares in the capital of the
Company ("Ordinary Shares") provided that:
a. the maximum aggregate number of Ordinary Shares which may be purchased is
3,121,060 (representing approximately 10 per cent. of the Company's existing
issued share capital);
b. the minimum price (exclusive of expenses) which may be paid for each Ordinary
Share is £0.05 (being its nominal value);
c. the maximum price (exclusive of expenses) which may be paid for each Ordinary
Share is the higher of: (i) an amount equal to 105 per cent. of the average of
the middle market quotations for an Ordinary Share as derived from the Daily
Official List of the London Stock Exchange plc for the 5 business days
immediately preceding the day on which the Ordinary Share in question is
purchased; and (ii) the value of an Ordinary Share calculated on the basis of
the higher of the price quoted for the last independent trade of an Ordinary
Share and the highest current independent bid for an Ordinary Share as derived
from the London Stock Exchange Trading System;
d. unless previously renewed, revoked or varied, the authority hereby conferred
shall expire at the conclusion of the next annual general meeting of the
Company to be held in 2025 or, if earlier, 14 September 2025; and
e. the Company may make a contract or contracts to purchase Ordinary Shares under
the authority hereby conferred prior to the expiry of such authority which
contract or contracts will or may be executed wholly or partly after the
expiry of such authority, and may make a purchase of Ordinary Shares in
pursuance
BY ORDER OF THE BOARD
Ian Hayes
Secretary
Date: 10(th) May 2024
Registered office: 2(nd) Floor Atlas House, 173 Victoria Street, London, SW1E
5NH
NOTES:
1. Pursuant to the Company's Articles of Association, a member of the Company
entitled to attend and vote at the meeting convened by this notice is entitled
to appoint one or more proxies to exercise any of his rights to attend, speak
and vote at that meeting on his behalf.
2. If a member appoints more than one proxy, each proxy must be entitled to
exercise the rights attached to different shares. If you submit more than one
valid proxy appointment in respect of the same shares, the appointment
received last before the latest time for the receipt of proxies will take
precedence.
3. A proxy may only be appointed using the procedures set out in these notes and
the notes to the form of proxy. To validly appoint a proxy, a member must
complete, sign and date the enclosed form of proxy and deposit it at the
office of the Company's registrars, Neville Registrars, at Neville House,
Steelpark Road, Halesowen, West Midlands B62 8HD, by 10.30 a.m. on 12 June
2024 (or, in the event that the meeting is adjourned, not less than 48 hours,
excluding non-working days, before the time fixed for the holding of the
adjourned meeting). Any power of attorney or any other authority under which
the form of proxy is signed (or a duly certified copy of such power or
authority) must be enclosed with the form of proxy.
4. In order to revoke a proxy appointment, a member must sign and date a notice
clearly stating his intention to revoke his proxy appointment and deposit it
at the office of the Company's registrars, Neville Registrars, at Neville
House, Steelpark Road, Halesowen, West Midlands B62 8HD prior to commencement
of the meeting. If the revocation is received after the time specified, the
original proxy appointment will remain valid unless the member attends the
meeting and votes in person.
5. Pursuant to the Articles of Association, any corporation which is a member of
the Company may authorise one or more persons (who need not be a member of the
Company) to attend, speak and vote at the meeting as the representative of
that corporation. A certified copy of the board resolution of the corporation
appointing the relevant person as the representative of that corporation in
connection with the meeting must be deposited at the office of the Company's
registrars, Neville Registrars, at Neville House, Steelpark Road, Halesowen,
West Midlands B62 8HD prior to the commencement of the meeting. If the
revocation is received after the time specified, the original corporate
representative appointment will remain valid unless the member attends the
meeting and votes in person.
6. In the case of joint holders, where more than one of the joint holders
purports to appoint a proxy in respect of the same shares, only the
appointment submitted by the most senior holder will be accepted. Seniority is
determined by the order in which the names of the joint holders appear in the
Company's register of members in respect of the joint holding (the first named
being the most senior).
7. The right to vote at the meeting shall be determined by reference to the
register of members of the Company. Pursuant to Regulation 41 of the
Uncertificated Securities Regulations 2001 (as amended), only those persons
whose names are entered on the register of members of the Company at 6.00 p.m.
on 12 June 2024 (or, in the event of any adjournment, at 6.00 p.m. on the date
which is two business days prior to the adjourned meeting) shall be entitled
to attend and vote in respect of the number of shares registered in their
names at that time. Changes to entries on the register of members after that
time shall be disregarded in determining the rights of any person to vote at
the meeting.
8. CREST members who wish to appoint a proxy or proxies through the CREST
electronic proxy appointment service may do so for the meeting and any
adjournment(s) thereof by using the procedures described in the CREST Manual
(available via www.euroclear.com (http://www.euroclear.com) ). CREST personal
members or other CREST sponsored members, and those CREST members who have
appointed a voting service provider(s), should refer to their CREST sponsor or
voting service provider(s), who will be able to take the appropriate action on
their behalf.
9. In order for a proxy appointment or instruction made by means of the CREST
service to be valid, the appropriate CREST message (a "CREST Proxy
Instruction") must be properly authenticated in accordance with Euroclear UK
& International Limited's ("Euroclear") specifications and must contain
the information required for such instructions, as described in the CREST
Manual. The message, regardless of whether it constitutes the appointment of a
proxy or is an amendment to the instruction given to a previously appointed
proxy must, in order to be valid, be transmitted so as to be received by the
Company's agent (ID 7RA11) by the latest time for proxy appointments set out
in paragraph 3 above. For this purpose, the time of receipt will be taken to
be the time (as determined by the timestamp applied to the message by the
CREST Applications Host) from which the Company's agent is able to retrieve
the message by enquiry to CREST in the manner prescribed by CREST. After this
time any change of instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
10. CREST members and, where applicable, their CREST sponsors or voting service
providers should note that Euroclear does not make available special
procedures in CREST for any particular messages. Normal system timings and
limitations will therefore, apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take
(or, if the CREST member is a CREST personal member or sponsored member or has
appointed a voting service provider(s), to procure that his CREST sponsor or
voting service provider(s) take(s)) such action as shall be necessary to
ensure that a message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where applicable,
their CREST sponsors or voting service providers are referred, in particular,
to those sections of the CREST Manual concerning practical limitations of the
CREST system and timings. The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001 (as amended).
11. As at 9(th) May 2024, the latest practicable date prior to the date of this
notice, the Company's issued share capital consisted of 31,210,607 ordinary
shares of £0.05 each, carrying one vote each and, therefore, the total number
of voting rights in the Company as at 9(th) May 2024 were 31,210,607.
12. You may not use any electronic address (within the meaning of section 333(4)
of the Companies Act 2006) provided in this notice or in any related documents
(including the form of proxy and the annual report and accounts) to
communicate with the Company for any purposes other than those expressly
stated.
13. Your personal data includes all data provided by you, or on your behalf, which
related to you as a shareholder, including your name and contact details, the
votes you cast and your reference number (as attributed to you by the Company
or its registrars). The Company determines the purposes for which, and the
manner in which, your personal data is to be processed. The Company and any
third party to which it discloses the data (including the Company's
registrars) may process your personal data for the purposes of compiling and
updating the Company's records, fulfilling its legal obligations and
processing the shareholder rights you exercise.
EXPLANATORY NOTES:
Resolutions 1 to 10 (inclusive) are proposed as ordinary resolutions. For each
of these to be passed, more than half of the votes cast must be in favour of
the relevant resolution.
Resolutions 11 and 12 are proposed as special resolutions. For each of these
resolutions to be passed, at least three quarters of the votes cast must be in
favour of the resolution. An explanation of each of the resolutions is set out
below:
Resolution 1 - Annual Report and Accounts
The Directors are required to present to the annual general meeting the
audited accounts and the Directors' and Auditors' Reports for the financial
year ended 31 December 2023.
Resolution 2 - Auditors
The Company is required to appoint an auditor at every general meeting of the
Company at which accounts are presented to shareholders. The appointment of
RPG Crouch Chapman LLP. Accordingly, this resolution proposes the
re-appointment of RPG Crouch Chapman LLP as the auditors of the Company. It is
normal practice for a company's directors to be authorised to agree how much
the auditors should be paid and Resolution 2 grants this authority to the
directors.
Resolutions 3 to 9 - Re-election of Directors
Article 77 of the Company's articles of association requires any directors who
have been appointed by the Board since the last annual general meeting and any
directors who were not appointed or reappointed at one of the preceding two
annual general meetings to retire from office. Any such director is entitled
to offer himself for re-election.
Resolutions 10 and 11 - Directors' general power to allot relevant securities
Resolution 10 is proposed to renew the directors' power to allot shares.
Resolution 10 seeks to grant the directors authority to allot, pursuant to
section 551 of the Act, shares or grant rights to subscribe for or to convert
any security into shares in the Company up an aggregate nominal value of
£520,177 which is equal to one third of the nominal value of the current
issued ordinary share capital of the Company as at 10 May 2024 (being the
latest practicable date prior to the publication of this notice). Unless
previously renewed, revoked or varied, the authorities sought under this
resolution will expire at the conclusion of the next annual general meeting of
the Company next annual general meeting of the Company to be held in 2025 or
14 September 2025 (whichever is the earlier). The Directors have no present
intention of exercising either of the authorities under this resolution, but
the Board wishes to ensure that the Company has maximum flexibility in
managing the financial resources of the Company. As at the date of this
notice, no shares are held by the Company in treasury.
Resolution 11 is to approve the partial disapplication of pre-emption rights
in respect of the allotment of equity securities for cash. The passing of this
resolution (together with resolution 10) would allow the directors to allot
shares for cash and/or sell treasury shares without first having to offer such
shares to existing shareholders in proportion to their existing holdings. The
authority would be limited to allotments or sales up to an aggregate nominal
amount of £78,027 which represents approximately 5 per cent. of the nominal
value of the current issued ordinary share capital of the Company as at 10 May
2024 (being the latest practicable date prior to the publication of this
notice). Unless previously renewed, revoked or varied, the authorities sought
under this resolution will expire at the conclusion of the next annual general
meeting of the Company next annual general meeting of the Company to be held
in 2025 or 14 September 2025 (whichever is the earlier).
Resolution 12 - Authority for the market purchase by the Company of its own
shares
The authority sought by resolution 12 limits the number of shares that could
be purchased to a maximum of 3,121,060 ordinary shares (equivalent to 10 per
cent. of the Company's issued ordinary share capital as at 10 May 2024 (being
the latest practicable date prior to the publication of this notice)) and sets
a minimum and maximum price. Unless previously renewed, revoked or varied, the
authority will expire at the conclusion of the annual general meeting of the
Company to be held in 2025 or 14 September 2025 (whichever is the earlier).
The Directors have no present intention of exercising the authority to
purchase the Company's ordinary shares but will keep the matter under review,
taking into account the financial resources of the Company, the Company's
share price and future funding opportunities. The Directors will exercise this
authority only when to do so would be in the best interests of the Company and
of its shareholders generally, and could be expected to result in an increase
in earnings per share of the Company. Any purchases of ordinary shares would
be by means of market purchase through the London Stock Exchange plc. Any
shares the Company buys under this authority may either be cancelled or held
in treasury. Treasury shares can be re-sold for cash, cancelled or used for
the purposes of employee share schemes. No dividends are paid on shares whilst
held in treasury and no voting rights attach to treasury shares. The Directors
believe that it is desirable for the Company to have this choice as holding
the purchased shares as treasury shares would give the Company the ability to
re-sell or transfer them in the future and so provide the Company with
additional flexibility in the management of its capital base.
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