REG - Pulsar Group PLC - FINAL RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2023
24/05/2024 07:00
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RNS Number : 8144P Pulsar Group PLC 24 May 2024
24 May 2024
PULSAR GROUP PLC
("Pulsar Group", the "Company" or the "Group")
FINAL RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2023
Pulsar Group Plc (AIM: PULS), the market leading audience intelligence
business delivering Software-as-a-Service ("SaaS") solutions for the global
marketing and communications industries, announces its final results for the
year ended 30 November 2023.
Highlights
· During 2023, Pulsar Group focussed its efforts in two key areas: the
continued advancement of its market leading products including the release of
the Group's next generation platform into the APAC region; and further
refinement of the Group's operating model to improve EBITDA margins and free
cash flow conversion.
· Annualised Recurring Revenue ("ARR") increased by £2.7m(1) in the
period, demonstrating clear progress in growth momentum across the Group when
compared to flat year on year ARR(1) in 2022. This growth was underpinned by
both improved renewal rates and new business win performance year on year.
· A strong turnaround in ARR performance has been delivered in the APAC
region resulting in the first period of ARR growth since the acquisition of
Isentia. APAC ARR growth of £1.6m for the year represents a £4.1m(1)
improvement compared to the prior year where ARR declined by £2.5m(1). In the
EMEA & NA region, ARR growth for the year was £1.1m.
· Revenue for the year was £62.4 million (2022: £65.7 million), with
recurring revenue comprising 95% of total revenue (2022: 93%) as the Group has
focussed on winning and delivering profitable, long-term customer contracts.
· The Group delivered Adjusted EBITDA for the year of £7.3 million
(2022: £2.3 million). A key focus over the last two years has been to ensure
that the Group has a stable and profitable core business as the platform from
which to grow. As part of the global integration of the Group over the past
two years Pulsar Group headcount has reduced from 1,110 FTE in November 2022
to 940 FTE in March 2024, alongside the delivery of improved renewal rates and
growing ARR. Across all regions, management remains focussed on improving
margin and cash generation as a priority during 2024.
· New client wins in the EMEA & North America region during the
year include Carnival, Colt Technology, the Delegation of the European Union
to the United Kingdom, Dentsu, the English Football League, Essar Group,
Financial Conduct Authority, GB Railfreight, Guardian Life, Havas, Kraft
Heinz, Marie Curie, McCann, National Grid, The National Trust, Ofgem, Save The
Children, Tesco, and UK Infrastructure Bank.
· In the APAC region, new features and functionality from the global
Pulsar proposition have resulted in a series of win-backs from key
competitors. Client wins include Amazon, Hyundai, Mazda, National University
of Singapore, Network 10, Uluru Dialogues, Red Cherry, Senate of the
Philippines, World Health Organisation and several multi-year contracts across
all levels of Government in the region.
· At 30 November 2023, the Group's cash balance was £2.2 million
(2022: £4.9 million). Since the period end, the Group has put in place a
£3,000,000 debt facility and a £3,000,000 overdraft facility. At 31 March
2024, the Group's net debt position was £1,252,000.
Christopher Satterthwaite, Non-Executive Chairman of Pulsar, commented:
"Pulsar Group's comprehensive audience intelligence solution is at the
forefront of innovation in marketing and communications. It has been embraced
by leading global agencies who forge strategies for the world's largest brands
and organisations.
The growing demand for audience intelligence is undeniable as governments,
corporations, brands, and individuals adapt to the pressures of today's
communication landscape. Pulsar's technology equips organisations with the
insight and engagement strategies they need to effectively navigate these
challenges, which have only been heightened by the widespread adoption of
Artificial Intelligence in media and social channels.
In 2023, the resonance of the Group's offering has helped to achieve a
significant acceleration in ARR growth and improved Adjusted EBITDA margins,
overcoming the challenges of a difficult macro-economic environment. The
turnaround in the APAC region has been particularly impressive, driven by
strong reception of our market-leading products and services among existing,
former, and new customers.
The Board is pleased with the progress achieved in 2023 in advancing the
Group's product offering and in generating profitable, global ARR growth. We
remain confident in the Group's ability to deliver growth, improved margins
and cash flow in 2024 and beyond.
1 On a constant currency basis.
For further information:
Pulsar Group Plc 020 3426 4070
Joanna Arnold (CEO)
Mark Fautley (CFO)
Cavendish Capital Markets Limited (Nominated Adviser and Broker) 020 7220 0500
Corporate Finance:
Marc Milmo / Fergus Sullivan
Corporate Broking:
Sunila de Silva
Forward looking statements
This announcement contains forward-looking statements.
These statements appear in a number of places in this announcement and include
statements regarding our intentions, beliefs or current expectations
concerning, among other things, our results of operations, revenue, financial
condition, liquidity, prospects, growth, strategies, new products, the level
of product launches and the markets in which we operate.
Readers are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those in the forward-looking
statements as a result of various factors.
These factors include any adverse change in regulations, unforeseen
operational or technical problems, the nature of the competition that we will
encounter, wider economic conditions including economic downturns and changes
in financial and equity markets. We undertake no obligation publicly to update
or revise any forward-looking statements, except as may be required by law.
This announcement contains an extract from the Pulsar Group Plc Annual Report
2023.
Chairman's statement
A volatile geopolitical and macroeconomic climate has been a challenge for the
marketing and communications industry in 2023. Marketing and communications
professionals have faced an additional challenge with the proliferation of
Chat GPT and generative AI, which has impacted national, corporate, brand and
individual narratives not least through misinformation and disinformation.
Between navigating the volume of content online and new challenges in
detecting the difference between fact and fiction, there has seldom been a
more challenging time to be a marcomms professional. Consumers expect both
personalisation and authenticity. Without the support of audience insights and
an innovative technology toolkit, marketers and communicators can miss the
mark in all forms of messaging and content creation. The risk they face is
losing connection with the communities they interact with unless they fully
understand them.
This time of challenge also presents a major opportunity for brands to stand
out in the crowd with authenticity and relevance. Audience intelligence is
critical to how marketers and communicators credibly connect with their
constituencies. The Pulsar brand has long been highly regarded as the leading
technology offering in the growing audience intelligence market, which has
driven the rebrand of Access Intelligence to Pulsar Group (the Group).
Pulsar Group continues to support a diverse client base with a wide range of
products and services, helping our clients navigate these challenging times.
For Government agencies and regulated organisations around the globe,
omnichannel audience intelligence is used to identify misinformation and
support the rollout of targeted messaging. Major masthead agencies in the US
leverage these insights to deliver strategic creative campaigns.
The APAC region has had a particularly strong year, and the Board has been
heartened to see how strongly the audience intelligence proposition resonates
across Asia, Australia and New Zealand. In this region, we've benefitted from
the continued delivery of the product roadmap and an extensive suite of new
functionality in Pulsar aimed at the PR and comms practitioner. As a result,
we've seen a marked turnaround in constant currency Annualised Recurring
Revenue (ARR) performance in APAC from a decline of £2.5m during FY22 to
growth of £1.6m in FY23. ARR growth in the region has continued through the
first quarter of FY24 and has been underpinned by increasing new customer wins
and win-backs alongside higher renewal rates.
ARR is a key metric used by the business and is calculated as the change in
the annual value of new business won, plus upsells into our existing customer
base, less any customer losses.
In Asia and Australia, new features and functionality from the global Pulsar
proposition have resulted in a series of win-backs from key competitors.
Client wins include Amazon, Hyundai, Mazda, National University of Singapore,
Network 10, Uluru Dialogues, Red Cherry, Senate of the Philippines, World
Health Organisation and several multi-year contracts across all levels of
Government in the region.
Investment in our broadcast monitoring capabilities across the APAC region has
paid off, with several win-backs commenting on superior performance from our
AI-driven innovation as one of the reasons for their return. Our award-winning
broadcast monitoring capabilities have now been fully replicated across
South-East Asia, and integrated into our product offering for greater global
consistency and customer satisfaction.
Whilst the ubiquity of generative AI makes the audience intelligence value
proposition more essential, the global economic headwinds have impacted
non-recurring campaign revenue during the year. We've seen pressure on
marketing budgets for small and midsize businesses, and in agencies in certain
territories. While we still consider this to be a valuable market segment
longer term, in the current economic climate we have focused investment on the
territories and activities that promise the certainty of long-term ARR
contracts over short- term non-recurring revenue.
The EMEA and North America region has continued to deliver growth with ARR
increasing by £1.1m during the year alongside an improvement in margins.
Performance in Europe has remained on track whilst the previously reported
slowdown in decision making at the enterprise level in North America
continued. Nonetheless we
have developed a healthy pipeline of opportunities and leading global agencies
including Havas and McCann have now adopted our combined audience intelligence
proposition. We've also seen an acceleration in ARR growth in the region
during the first quarter of FY24 with a number of opportunities from the North
America pipeline closing.
Across EMEA and North America significant client wins include Carnival, Colt
Technology, the Delegation of the European Union to the United Kingdom,
Dentsu, the English Football League, Essar Group, Financial Conduct Authority,
GB Railfreight, Guardian Life, Havas, Kraft Heinz, Marie Curie, McCann,
National Grid, The National Trust, Ofgem, Save The Children, Tesco, and UK
Infrastructure Bank.
Increasing capabilities through global efficiencies
Business transformation has moved at a rapid pace this year, with the Group
now benefitting from the completion of multiple strategic initiatives to
integrate global teams and support more efficient ways of working. In some
territories, we have been able to leverage our global teams to provide
in-house client services, whilst continuing to automate data aggregation and
enrichment globally.
Successful transformation projects such as integrating the APAC region onto
the Group's CRM and finance systems, the migration of EMEA team members to
Google Workspace and the launch of a new HRIS system globally have provided
strong foundations for employees across the globe to work cohesively together.
The strong progress made in integrating systems and processes has given us the
right benchmarks to drive continuous performance improvement and encourage our
teams to innovate at pace.
A key focus over the last two years has been to ensure that the Group has a
stable and profitable core business as the platform from which to grow. As
part of the global integration of the Group over the past two years we have
reduced headcount from 1,110 FTE in November 2022 to 940 FTE by March 2024
alongside the delivery of improved renewal rates and growing ARR. Whilst the
FTE reduction has resulted in significant restructuring and non-recurring
costs during the year, it has supported an improvement in Adjusted EBITDA from
£2.3m in FY22 to £7.3m in FY23.
Product development at pace
We have made significant progress on our strategic product objectives with the
introduction of Pulsar 3.0 in Q3. Pulsar is now a fully integrated media,
social and audience intelligence platform offering universal access to all
forms of data about public opinion globally. We have made particular progress
in APAC with the integration of proprietary data streams from TV, radio,
podcasts and print news, as well as introducing new global social data
partnerships.
We have introduced multiple comms-specific solutions to the platform,
including a global media contacts database and distribution product (Pulsar
CONTACTS), a global instant search product (Pulsar SEARCH) as well as a mobile
app, advanced coverage reports, syndication detection, smart instant alerts
and the ability to customise AI data enrichment around client's specific use
case and industries.
As access to data broadens, we are introducing AI solutions to help users
tackle complex questions across hundreds of languages, multiple media formats
and audiences. AI Summarisation helps detect key narratives and provide
context for any data point in the product. AI Co-pilot helps customers create
complex queries in seconds. AI Lenses automatically benchmarks a brand or an
influential voice against a set of values or attributes to assess brand
affinity. AI Voice provides a much-needed view into how Large Language Models
(LLMs) are portraying a brand or an issue of public opinion.
We continue to invest in generative AI as we see the potential of LLMs to
reinvent media, social, and audience intelligence products. LLMs enable the
creation of conversational interfaces that push data in the background and
will help us broaden the adoption of our intelligence products to
non-technical and dataliterate teams in any organisation.
At the same time, we continue to leverage our expertise in advanced machine
learning for natural language processing, image analysis and speech-to-text,
which is increasingly seen as complementary to generative AI and positions the
Group at the forefront of the business intelligence space.
The new and ongoing innovation efforts at Pulsar support our Audience
Intelligence strategy by providing a deep understanding of the context behind
public conversations. Our proprietary Media Graph maps the relationships
between voices, outlets and topics within the news space and already powers
our media database solution. A further layer of insight is added with our
Audience Graph which shows how the general public engages with journalists,
outlets and public opinion.
A good example of this dynamic is our new Pulsar NARRATIVES product which is
an AI solution designed to detect narratives in media and social conversation
and map their evolution over time. NARRATIVES uses NLP-based clustering for
precision and generative AI for summarisation and contextual enrichment
providing an instant search experience similar to the simplicity and speed of
a web search.
We believe these innovations are going to be transformative for both the PR
and marketing industries because in an environment where any individual or
group, friendly or malign can have a voice and build an audience, being
relevant and distinctive have become survival strategies, not just
best-practices. Knowing your audience is the only way to stay secure and
relevant.
Supporting our clients to navigate a fragmented world
We help our clients make data-driven decisions on how best to reach audiences,
with messages that matter
to them. We provide our clients with the voices of the communities that are
actively shaping the narrative in which they seek or are forced to
participate.
As the online marketplace becomes fragmented, our focus is to understand
audiences by the interests, opinions and behaviours they openly share in an
increasing number of public spaces and communities. Our insights are linked to
audience data that is aggregated and anonymised, with recommendations that
speak to audiences at scale.
Our research and insights services help our clients understand public opinions
across issues including energy transition, trust in government institutions,
perceptions on the impact industry regulators have on public services and the
prevalence of misleading health information online. Our clients include public
service providers such as NHS England and ministerial departments such as DCMS
and MoJ who use our insights to inform policy decision making and guide
communications.
Diversity and inclusion sit at the very heart of the audience intelligence
proposition provided to clients and industry partners to deepen their
understanding of their audiences. This approach is exemplified by the work we
completed this year in identifying prominent misinformation narratives and
media bias ahead of The Voice referendum in Australia.
Across the Group, we have an impressive track record in demonstrating the
real-world impact that media representation has on diverse communities. This
year, we've continued our landmark public research partnership with Sport New
Zealand into women's participation in sports, and we've begun a similar
project with the Victorian Government, creating benchmarks that are proven to
change social behaviour.
We have built a considerable body of work in media representation research,
including work with Women in Media and Media Diversity Australia to highlight
gender and ethnic diversity in the Australian media landscape. This year,
we're also working with the Stella Prize literary award on their audit of
media for the space given to women and non-binary authors.
Current trading
ARR growth has accelerated during the first four months of FY24 with growth in
excess of £1.3m for the period compared to £0.7m for the comparative period
in FY23. Both the APAC and the EMEA and North America regions have delivered
increased ARR growth to support this acceleration. Group renewal rates have
significantly improved year on year in addition to a number of blue-chip
global customer wins and win- backs during the period.
A particular highlight year to date has been a major international advertising
agency network not only renewing their contract early but also putting in
place a multi-year contract to expand the service they take from their North
American and UK offices, to all of their global regions, increasing the ARR of
their contract by over 200%.
New clients during the first four months for FY24 include Alpine Racing,
Ambulance Victoria, Coty, Electronic Arts, Insurance Council of Australia,
Medicines New Zealand, Next, Reckitt Benckiser, Securities Commission
Malaysia, Unilever and Universities Australia.
Overall, we are pleased with the growth delivered during the first four months
and continue to trade in line with the Board's expectations.
In summary
The Group's results for 2023 highlight the continued progress that has been
made with the integration and transformation of Isentia. The ongoing delivery
of the Group's product roadmap has supported a significant turnaround in ARR
performance in the APAC region year on year whilst the completion of several
global integration and transformation projects has enabled the Group to
establish a stable and profitable core business from which to grow in all
serviced regions.
There is no doubt that demand for audience intelligence is growing as
governments, corporations, brands and individuals adapt to the constant
pressure of today's communication environment. The Pulsar platform provides
our clients with insight and engagement strategies to help navigate these
challenges heightened by the widescale adoption of AI in media and social
channels. Geo-political and macro-economic trends in 2023 have been a
challenge in the marketing and communication industries. However, with the
level of innovation and personal commitment of our teams, the Board is
encouraged by the progress being made in 2023 and the start of 2024.
Christopher Satterthwaite CBE
Chairman
Strategic report (Extract)
Results
During 2023, Pulsar Group focussed its efforts in two key areas: the continued
advancement of its market leading products including the release of the
Group's next generation platform into the APAC region; and further refinement
of the Group's operating model to improve EBITDA margins and free cash flow
conversion.
One of the key financial metrics monitored by the Board is the change in the
Group's Annualised Recurring Revenue ('ARR') base year-on-year. The change in
ARR base reflects the annual value of new business won, plus upsells into our
existing customer base, less any customer losses. It is an important metric
for the Group as it is a leading indicator of future revenue. The Group's
constant currency ARR increased by £2.7m in the period, demonstrating clear
progress in growth momentum across the Group when compared to flat year on
year ARR in 2022. This growth was underpinned by both improved renewal rates
and new business win performance year on year.
Each region within the Group contributed to the ARR growth, with a strong
turnaround being delivered in APAC where the first ARR growth has been
delivered since the acquisition of Isentia. The APAC ARR growth of £1.6m for
the year represents a £4.1m improvement in performance compared to the prior
year where APAC ARR declined by £2.5m.
Performance in Europe continues to remain on track with ARR and margin both
increasing year on year. The previously reported slowdown in decision making
at the enterprise level in North America has continued albeit a healthy
pipeline of opportunities continues to be developed in this market and a
number of leading global agencies have adopted our combined audience
intelligence proposition during the year. Overall ARR growth in the EMEA &
NA region for the year was £1.1m.
ARR FY21 FY22 Change FY22 FY23 Change FY23
EMEA & North America (Constant Currency) £26.9m +£2.5m £29.4m +£1.1m £30.5m
EMEA & North America (Reported) £26.9m +£2.5m £29.4m +£1.1m £30.5m
APAC (Constant Currency) £31.7m -£2.5m £29.2m +1.6m £30.8m
APAC (Reported) £32.0m -£1.4m £30.6m +0.2m £30.8m
Group (Constant Currency) £58.6m +£0.0m £58.6m +£2.7m £61.3m
Group (Reported) £58.9m +1.10m £60.0m +£1.3m £61.3m
The Group's audience intelligence proposition is resonating well where the
combination of global media monitoring and world class social listening has
secured major new wins. In addition the Group has seen a number of very
encouraging winbacks from competitors in the period as customers that had left
Isentia prior to its acquisition by Pulsar Group have now returned to benefit
from the Group's market-leading technology and services.
Revenue in the year was £62,402,000 (2022: £65,710,000). Recurring revenue
comprised 95% of the total (2022: 93%), with sales teams incentivised to focus
on high contribution SaaS products. The Group had an adjusted profit before
interest, tax, depreciation and amortisation (Adjusted EBITDA) for the year of
£7,263,000 (2022: £2,327,000).
The Directors believe that the disclosure of Adjusted EBITDA provides
additional useful information on the core operational performance of the Group
and its ongoing cost base to shareholders, and review the results of the Group
on an adjusted basis internally. It is an important metric as it provides
clear guidance on the on going long-term cost base and profitability of the
Group. The term 'adjusted' is not a defined term under IFRS and may not
therefore be comparable with similarly titled profit measurements reported by
other companies. It is not intended to be a substitute for, or superior to,
IFRS measurements of profit.
Adjustments are made in respect of the Group's:
· Non-recurring administrative expenses;
· Share of profit or loss of associates; and
· Share-based payment charges.
Adjusted EBITDA excludes non-recurring administrative expenses of £8,988,000
(2022: £1,215,000), a share of loss of associate of £198,000 (2022:
£254,000), and a share-based payments charge of £915,000 (2022:
£1,121,000).
Non-recurring administrative expenses include costs incurred in relation to
the migration and integration of Isentia and associated restructuring costs.
Between November 2022 and March 2024, Group FTE reduced from 1,110 to 940 as a
result of the global integration and restructuring of the business.
Non-recurring salary costs for the year were £7,231,000 (2022: £3,715,000)
which includes the year to date costs and redundancy costs of roles that
either exited during 2023 or which were identified to exit during 2024,
primarily during the first quarter. Non-recurring salary costs also includes
the cost of specific roles hired to deliver the global integration of the
business and which are not considered to be required longer term. In addition
to non-recurring salary costs, the Group incurred £1,888,000 (2022: £Nil) of
duplicated technology costs as it built out key functionality across multiple
platforms which is expected to scale back down during 2025. Non-recurring
copyright related expense for the year was £528,000 (2022: income
£2,703,000). The Group also had other non-recurring expenses of £320,000
(2022: £203,000) and the release of a business rates overprovision generated
a non-recurring income of £980,000 (2022: £Nil).
The Group's earnings before interest, tax, depreciation and amortisation
(EBITDA) loss for the year was £2,838,000 (2022: loss of £263,000). EBITDA
is an important metric as it provides guidance on the financial performance of
the Group including non-recurring costs incurred. Loss before taxation was
£10,833,000 (2022: £7,488,000). In arriving at the loss before taxation, the
Group has incurred £241,000 of net financial expense (2022: £281,000) and
charged £7,754,000 in depreciation and amortisation (2022: £6,944,000).
£2,065,000 of this charge related to the amortisation of intangible assets
arising on acquisition (2022: £2,312,000).
Loss per share
The basic loss per share was 9.09p (2022: 1.38p).
Cash
Cash at the year end stood at £2,248,000 (2022: £4,922,000). The Group had
Nil debt at the year end (2022: £Nil). The total decrease in cash and cash
equivalents during the year was £2,674,000 (2022: increase of £8,534,000).
The net cash inflow from operations during the year was £8,557,000 (2022:
inflow of £2,467,000).
The net cash outflow from investing activities for the year was £9,072,000
(2022: outflow of £8,538,000), reflecting the increased investment in the
Group's products and in the prior year the acquisition of Isentia and a
further investment in an associate entity.
The net cash outflow from financing activities for the year was £2,041,000
(2022: outflow of £2,632,000), reflecting investment in sales and marketing,
plus interest and lease liability repayments in respect of the Group's head
office.
At the year end the Group had no bank borrowings or overdrafts. Since the
period end, the Group has put in place a £3,000,000 overdraft facility and a
£3,000,000 loan facility. At 31 March 2024, the Group's net debt position was
£1,252,000.
Key performance indicators
Management accounts are prepared on a monthly basis and provide performance
indicators covering revenue, gross margins, EBITDA, result before tax, result
after tax, cash balances and recurring revenue. Recurring revenue is the
proportion of Group revenue which is expected to continue in the future. The
key performance indicators for the year are:
£'m 2023 2022
Annual Contract Value base 61.3 60.0
Revenue 62.4 65.7
Gross margin (%) 74% 76%
Adjusted EBITDA 7.3 2.3
EBITDA loss (2.8) (0.3)
Loss before taxation (10.8) (7.5)
Loss after taxation (7.9) (4.2)
Cash 2.2 4.9
Recurring revenue 59.5 61.0
These performance indicators are measured against both an approved budget and
the previous year's actual results. Further analysis of the Group's
performance is provided earlier in this Strategic Report.
Each month the Board assesses the performance of the Group based on key
performance indicators. These are used in conjunction with the controls
described in the corporate governance statement and relate to a wide variety
of aspects of the business, including: new business and renewal sales
performance; marketing, development and research activity; year to date
financial performance, profitability forecasting and cash flow forecasting.
Consolidated Statement of Comprehensive Income
Year ended 30 November 2023
2023 2022
Note £'000 £'000
Revenue 3 62,402 65,710
Cost of sales (16,340) (15,915)
Gross profit 46,062 49,795
Recurring administrative expenses (38,799) (47,468)
Adjusted EBITDA 7,263 2,327
Non-recurring administrative expenses 5 (8,988) (1,215)
Share of loss of associate 11 (198) (254)
Share-based payments 21 (915) (1,121)
EBITDA (2,838) (263)
Depreciation of tangible fixed assets 12 (524) (747)
Depreciation of right-of-use assets 15 (1,526) (2,140)
Amortisation of intangible assets - internally generated 10 (3,639) (1,745)
Amortisation of intangible assets - acquisition related 10 (2,065) (2,312)
Operating loss 5 (10,592) (7,207)
Financial income 12 14
Financial expense 7 (253) (295)
Loss before taxation (10,833) (7,488)
Taxation credit 8 2,931 3,295
Loss for the year (7,902) (4,193)
Other comprehensive (loss)/income
Exchange (losses)/gains arising on translation of foreign operations (3,701) 2,427
Total comprehensive loss for the period attributable to the owners of the (11,603) (1,766)
Parent Company
Earnings per share 2023 2022
Basic loss per share 9 (9.09p) (1.38)p
Diluted loss per share 9 (9.09p) (1.38)p
Consolidated Statement of Financial Position 2023 Restated
At 30 November 2023 2022
Note £'000 £'000
Non-current assets
Intangible assets 10 68,621 69,269
Investment in associate 11 264 462
Right-of-use assets 15 2,190 1,896
Property, plant and equipment 12 793 861
Deferred tax asset 19 6,808 4,345
Total non-current assets 78,676 76,833
Current assets
Trade and other receivables 13,26 9,765 10,896
Current tax receivables - 1,025
Cash and cash equivalents 22 2,248 4,922
Total current assets 12,013 16,843
Total assets 90,689 93,676
Current liabilities
Trade and other payables 14 13,533 8,945
Accruals 4,311 4,946
Contract liabilities 16,26 15,031 11,019
Current tax liabilities 148 -
Provisions 23 217 -
Lease liabilities 15 1,300 1,610
Total current liabilities 34,540 26,520
Non-current liabilities
Provisions 23 173 471
Lease liabilities 15 1,233 907
Deferred tax liabilities 19 5,057 5,404
Total non-current liabilities 6,463 6,782
Total liabilities 41,003 33,302
49,686 60,374
Net assets
Equity
Share capital 20 6,526 6,526
Treasury shares (141) (141)
Share premium account 74,424 74,424
Capital redemption reserve 395 395
Share option reserve 2,937 2,022
Foreign exchange reserve (965) 2,736
Other reserve 502 502
Retained earnings (33,992) (26,090)
Total equity attributable to the equity holders of the Parent Company 49,686 60,374
Deferred income and trade debtors have been restated see Note 26 of the
financial statements.
Consolidated Statement of Changes in Equity
Year ended 30 November 2023
Group Share capital Treasury shares £'000 Share premium account £'000 Capital redemption reserve £'000 Share option reserve £'000 Foreign exchange reserve £'000 Other reserve £'000 Retained earnings £'000 Total £'000
£'000
At 30 November 2021 6,528 (148) 74,419 395 901 309 502 (21,897) 61,009
Loss for the year - - - - - - - (4,193) (4,193)
Other comprehensive income for the year - - - - - 2,427 - - 2,427
Issue of Share Capital (2) 7 5 - - - - - 10
Share-based payments - - - - 1,121 - - 1,121
At 30 November 2022 6,526 (141) 74,424 395 2,022 2,736 502 (26,090) 60,374
Loss for the year - - - - - - - (7,902) (7,902)
Other comprehensive income for the year - - - - - (3,701) - - (3,701)
Issue of Share Capital - - - - - - - - -
Share-based payments - - - - 915 - - 915
At 30 November 2023 6,526 (141) 74,424 395 2,937 (965) 502 (33,992) 49,686
Share capital and share premium account
When shares are issued, the nominal value of the shares is credited to the
share capital reserve. Any premium paid above the nominal value is taken to
the share premium account. Pulsar Group plc shares have a nominal value of 5p
per share. Directly attributable transaction costs associated with the issue
of equity investments are accounted for as a reduction from the share premium
account.
Treasury shares
The returned shares are held in treasury and attract no voting rights. The
return of shares has been accounted for in accordance with IAS 32 'Financial
instruments: Presentation' such that the instruments have been deducted from
equity with no gain or loss recognised in profit or loss. The balance on this
reserve represents the cost to the Group of the treasury shares held.
Share option reserve
This reserve arises as a result of amounts being recognised in the
consolidated statement of comprehensive income relating to share-based payment
transactions granted under the Group's share option scheme. The reserve will
fall as share options vest and are exercised over the life of the options.
Capital redemption reserve
This reserve arises as a result of keeping with the doctrine of capital
maintenance when the Company purchases and redeems its own shares. The amounts
transferred into/out from this reserve from a purchase/ redemption is equal to
the amount by which share capital has been reduced/increased, when the
purchase/ redemption has been financed wholly out of distributable profits,
and is the amount by which the nominal value exceeds the proceeds of any new
issue of share capital, when the purchase/redemption has been financed partly
out of distributable profits.
Foreign exchange reserve
This reserve comprises of gains and losses arising on retranslating the net
assets of overseas operations into sterling.
Other reserve
This reserve arises as a result of the difference between the fair value and
the nominal value of consideration shares issued on acquisition for which
merger relief is taken under S612 of the Companies Act 2006.
Retained earnings
The retained earnings reserve records the accumulated profits and losses of
the Group since inception of the business. Where subsidiary undertakings are
acquired, only profits and losses arising from the date of acquisition are
included.
Consolidated statement of cash flow
Year ended 30 November 2023
Note 2023 Restated
£'000 2022
£'000
Loss for the year (7,902) (4,193)
Adjusted for:
Taxation 8 (2,931) (3,295)
Financial expense 7 253 295
Financial income (12) (14)
Depreciation and amortisation 10,12,15 7,753 6,943
Share based payments 915 1,121
Share of loss of associate 11 198 254
Operating cash (outflow)/ inflow before changes in working capital (1,726) 1,111
Increase in trade and other receivables 1,131 2,799
Increase in trade and other payables 4,584 1,351
Decrease in accruals (635) (1,942)
Increase/(decrease) in contract liabilities 4,012 (1,125)
Decrease in provisions (81) (438)
Net cash inflow from operations before taxation 7,285 1,756
Taxation received 1,272 711
Net cash inflow from operations 8,557 2,467
Cash flows from investing
Interest received 12 14
Acquisition of property, plant and equipment 12 (509) (506)
Acquisition of intangible assets 10 (8,575) (8,046)
Net cash outflow from investing (9,072) (8,538)
Cash flows from financing
Interest paid (241) (286)
Lease liabilities paid 20 (1,800) (2,356)
Issue of shares - 10
Net cash outflow from financing (2,041) (2,632)
Net decrease in cash and cash equivalents (2,556) (8,703)
Opening cash and cash equivalents 22 4,922 13,456
Exchange (losses)/gains on cash and cash equivalents (118) 169
Closing cash and cash equivalents 22 2,248 4,922
Deferred income and trade debtors have been restated see Note 26 of the
financial statements.
Notes to the Consolidated Financial Statements
1. General Information
Pulsar Group Plc ('the Company') (formerly Access Intelligence PLC) and its
subsidiaries (together the 'Group') provides advanced tools and human insight
to give brands, agencies and organisations the power to anticipate, react and
adapt.
The Company is a public limited company under the Companies Act 2006 and is
listed on the AIM market of the London Stock Exchange and is incorporated and
domiciled in the UK. The address of the Company's registered office is
provided in the Directors and Advisers page of this Annual Report.
In May 2024 the Group rebranded from Access Intelligence Plc to Pulsar Group
Plc. The Pulsar brand has long been highly regarded as the leading technology
offering in the growing audience intelligence market, which has driven the
rebrand.
The financial information set out in this document does not constitute the
Group's statutory accounts for the years ended 30 November 2022 or 2023.
Statutory accounts for the years ended 30 November 2022 and 30 November 2023,
which were approved by the Directors on 23 May 2024, have been reported on by
the Independent Auditors. The Independent Auditor's Reports on the Annual
Report and Financial Statements for each of 2022 and 2023 were unqualified,
did not draw attention to any matters by way of emphasis, and did not contain
a statement under 498(2) or 498(3) of the Companies Act 2006.
Statutory accounts for the year ended 30 November 2022 have been filed with
the Registrar of Companies. The statutory accounts for the year ended 30
November 2023 will be delivered to the Registrar of Companies in due course
and will be posted to shareholders shortly, and thereafter will be available
from the Company's registered office at The Johnson Building, 79 Hatton
Garden, London EC1N 8AW and from the Company's website: www.pulsargroup.com
The financial information set out in these results has been prepared using the
recognition and measurement principles of International Accounting Standards,
International Financial Reporting Standards and Interpretations in conformity
with the requirements of the Companies Act 2006. The accounting policies
adopted in these results have been consistently applied to all the years
presented and are consistent with the policies used in the preparation of the
financial statements for the year ended 30 November 2023, except for those
that relate to new standards and interpretations effective for the first time
for periods beginning on (or after) 1 December 2021. There are deemed to be
no new standards, amendments and interpretations to existing standards, which
have been adopted by the Group, that have had a material impact on the
financial statements.
2. Accounting policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been applied
consistently to all the years presented, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act
2006. The consolidated financial statements have been prepared under the
historical cost convention and on a going concern basis.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies.
Going concern
The Strategic Report and opening pages to the annual report discuss Pulsar
Group's business activities and headline results, together with the financial
statements and notes which detail the results for the year, net current
liability position and cash flows for the year ended 30 November 2023.
The Board has further considered three year financial forecasts, which
included detailed, sensitised, 19-month cash flow forecasts from the date of
signing the accounts. The sensitised forecasts contained adverse assumptions
around new business and upsell being reduced by 15% and renewal rates also
decreasing by 3 percentage points compared to expected levels, whilst
additional cost reduction initiatives were not assumed. These adverse
assumptions have been modelled and, if they were to crystallise, the forecasts
confirm that the Group would still be able to continue to operate for at least
12 months from the date of this report. The Board considers the assumptions
and plausible downside scenarios that have been modelled to test going concern
to be reasonable and reflective of the long-term 'software as a service'
contracts and contracted recurring revenue.
The Group meets its day to day working capital requirements through its cash
balance which was £2,248,000 at 30 November 2023. It did not have a debt
facility or bank overdraft at the year end but during 2024 has entered into a
£3,000,000 overdraft facility and a £3,000,000 loan facility which are both
in place at the date of signing the accounts. The £3,000,000 debt facility is
in place for a period of 18 months whilst the overdraft is repayable on
demand.
As at the date of this report, the directors have a reasonable expectation
that the Company and the Group have 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 financial
statements.
Significant judgements in applying the Group's accounting policies
The areas where the Board has made critical judgements in applying the Group's
accounting policies (apart from those involving estimations which are dealt
with separately below) are:
A) Recognition of deferred tax assets
Judgement is applied in the assessment of deferred tax assets in relation to
losses to be recognised in the financial statements. As the Board has
forecasted a taxable profit in APAC in the next two years, a deferred tax
asset in excess of deferred tax liabilities has been recognised in respect of
this region. No deferred tax asset in excess of deferred tax liabilities has
been recognised in respect of the EMEA region. At 30 November 2023, the Group
recognised a deferred tax asset of £6,808,000 (2022: £4,345,000) and a
deferred tax liability of £5,057,000 (2022: £5,404,000). See Note 19 for
further detail.
B) Capitalisation of development costs
Management applies judgement when determining the value of development costs
to be capitalised as an intangible asset in respect of its product development
programme. Judgements include the technical feasibility, intention and
availability of resources to complete the intangible asset so that the asset
will be available for use or sale and assessment of likely future economic
benefits. During the year, the Group capitalised £8,498,000 (2022:
£7,986,000) of development costs. See Note 10 for further detail.
C) Identification of cash generating units for goodwill impairment testing
Judgement is applied in the identification of cash-generating units ("CGUs").
The Directors have judged that the primary CGUs used for impairment testing
should be: EMEA & NA, comprising AIMediaData Limited, Access Intelligence
Media and Communications Limited, ResponseSource Ltd, Vuelio Australia Pty
Limited, Fenix Media Limited and Face US Inc; and APAC, comprising the
acquired Isentia entities. See Note 10 for further detail.
D) Non-recurring administrative expenses
Due to the Group's activity in recent years, there are a number of items which
require judgement to be applied in determining whether they are non-recurring
in nature. In the current year these relate largely to: restructuring costs,
duplicate software costs and non-recurring business rates. See Note 5 for
further detail.
E) Control of associates
The Group holds a 21.4% stake in Track Record Holdings Limited. Management has
applied judgement in assessing that the Group has significant influence over
this Company and it is therefore appropriate to treat Track Record Holdings
Limited as an associate. On the basis that the Group has appointed a director
to the board of Track Record Holdings Limited, it has been assessed that the
Group has significant influence but not control over the Company and therefore
it is appropriate to treat Track Record Holdings Limited as an associate.
Significant estimates in applying the Group's accounting policies
The areas where the Board has made significant estimates and assumptions in
applying the Group's accounting policies which could have a material impact on
the financial statements are:
A) Carrying value of goodwill
The Group uses forecast cash flow information and estimates of future growth
to assess whether goodwill is impaired. Key assumptions include the EBITDA
margin allocated to each CGU, the growth rate to perpetuity and the discount
rate. If the results of an operation in future years are adverse to the
estimates used for impairment testing, impairment may be triggered at that
point. Further details, including sensitivity testing, are included within
Note 10.
B) Time spent on capitalisable activities
The determination of the value of capitalised development costs associated
with employee salaries and related expenses is based on an estimation of the
time allocated by employees to activities that fulfil the criteria specified
in IAS 38.
New standards and interpretations
The adoption of the following mentioned amendments in the current year have
not had a material impact on the Group's/Company's financial statements.
· Amendments to IFRS 3 : Reference to the Conceptual Framework (1
January 2022)
· Amendments to IAS 16 : Proceeds before Intended Use (1 January 2022)
· Amendments to IAS 37 : Onerous Contracts - Cost of Fulfilling a
Contract (1 January 2022)
· Annual Improvements to IFRS Standards 20182020 (1 January 2022)
· IFRS 17 Insurance Contracts (Amendment): Initial Application of IFRS
17 and IFRS 9 - Comparative Information
· IFRS 17 Insurance Contracts and Amendments to IFRS 17
· Amendments to IAS 1 and IFRS Practice Statement 2 : Disclosure of
Accounting Policies (1 January 2023)
· Amendments to IAS 8 : Definition of Accounting Estimates (1 January
2023)
· Amendments to IAS 12 : Deferred Tax related to Assets and Liabilities
arising from a Single Transaction (1 January 2023)
New standards, amendments and interpretations issued but not yet effective
At the date of authorisation of the financial statements, the Company has not
early adopted the following amendments to Standards and Interpretations that
have been issued but are not yet effective:
· Amendments to IAS 1 : Classification of liabilities as current or
non-current (1 January 2024)
· Amendments to IFRS 16 : Lease Liability in a Sale and Leaseback (1
January 2024)
· Amendments to IAS 1 : Non-current Liabilities with Covenants (1
January 2024)
These Standards and amendments are effective from accounting periods beginning
on or after the dates shown above. The directors do not expect any material
impact as a result of adopting the standards and amendments listed above in
the financial year they become effective.
Basis of consolidation
The Group financial statements comprise the financial statements of the
Company and all of its subsidiary undertakings made up to the financial year
end. Subsidiaries are entities that are controlled by the Group. The Company
controls an investee if all three of the following elements are present: power
over the investee, exposure to variable returns from the investee, and the
ability of the investor to use its power to affect those variable returns.
Control is reassessed whenever facts and circumstances indicate that there may
be a change in any of these elements of control. The financial statements of
subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
The results of subsidiary undertakings acquired or disposed of in the year are
included in the Group statement of comprehensive income from the effective
date of acquisition or to the effective date of disposal. Accounting policies
are consistently applied throughout the Group. Inter-company balances and
transactions have been eliminated. Material profits from intercompany sales,
to the extent that they are not yet realised outside the Group, have also been
eliminated.
Where the Group has the power to participate in (but not control) the
financial and operating policy decisions of another entity, it is classified
as an associate. Investments in associates are accounted for using the equity
method of accounting after initially being recognised at cost.
Under the equity method of accounting, the Group's investments in associates
are initially recognised at cost and adjusted thereafter to recognise the
Group's share of post-acquisition profits and losses and other comprehensive
income in the consolidated statement of profit and loss and other
comprehensive income.
Dividends received or receivable from associates are recognised as a reduction
in the carrying amount of the investment.
When the Group's share of losses in an equity-accounted investment equals or
exceeds its interest in the entity, including any other unsecured long-term
receivables, the Group does not recognise further losses unless it has
incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates are
eliminated to the extent of the Group's interest in these entities. Unrealised
losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
Accounting policies of equity accounted investees have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Foreign currency translation
The individual financial statements of each Group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency).
In preparing the financial statements of the individual companies,
transactions in currencies other than the entity's functional currency
(foreign currencies) are recorded at the rates of exchange prevailing on the
dates of the transactions.
At each reporting date, monetary assets and liabilities that are denominated
in foreign currencies are retranslated at the rates prevailing at that date.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are not retranslated.
On consolidation, the results of overseas operations are translated into
Sterling at rates approximating to those ruling when the transactions took
place. All assets and liabilities of overseas operations, including goodwill
arising on the acquisition of those operations, are translated at the rate
ruling at the reporting date.
Exchange differences arising on translating the opening net assets at opening
rate and the results of over-
seas operations at actual rate are recognised in other comprehensive income
and accumulated in the foreign exchange reserve.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are charged to the consolidated statement of
comprehensive income.
Business combinations
In accordance with IFRS 3 "Business Combinations", the fair value of
consideration paid for a business combination is measured as the aggregate of
the fair values at the date of exchange of assets given and liabilities
incurred or assumed in exchange for control.
The assets, liabilities and contingent liabilities of the acquired entity are
measured at fair value as at the acquisition date. When the initial accounting
for a business combination is determined, it is done so on a provisional basis
with any adjustments to these provisional values made within 12 months of the
acquisition date and are effective as at the acquisition date.
Where a business combination agreement provides for an adjustment to the cost
of a business acquired contingent on future events, the Group accrues the fair
value of the additional consideration payable as a liability at acquisition
date. This amount is reassessed at each subsequent reporting date with any
adjustments recognised in the consolidated statement of comprehensive income.
Transaction costs are expensed to the statement of comprehensive income as
incurred. Acquisition-related employment costs are accrued over the period in
which the related services are received and are recorded as exceptional costs.
Revenue
Revenue represents the amounts derived from the provision of services, stated
net of Value Added Tax. The methodology applied to income recognition is
dependent upon the services being supplied.
In respect of income relating to annual or multi-year service contracts and/or
hosted services which are invoiced in advance, it is the Group's policy to
recognise revenue on a straight-line basis over the period of the contract.
This is considered a faithful depiction of the transfer of services to the
customer because they are provided access to the Group's software for the
duration of the contract period. The full value of each sale is credited to
contract liabilities when invoiced to be released to the statement of
comprehensive income in equal instalments over the contract period.
During the course of a customer's relationship with the Group, their system
may be upgraded. These upgrades can be separated into two distinct types:
· Specific upgrades, i.e. moving from an old legacy system to one of
the Group's latest products. This would require the migration of the
customer's data from the old system and the set-up of their new system; and
· Non-specific upgrades, i.e. enhancements to customers' systems as a
result of internal development effort to improve the stability or
functionality of the platform for all customers.
Customers do not have a contractual right to non-specific upgrades and
therefore, the provision of these non-specific upgrades are accounted for as
part of the related service contract as explained above.
For specific upgrades, customers are required to purchase these separately
through signing a new contract which sets out the one-off professional service
fee for the upgrade to cover migration costs and any increase in their annual
subscription fee. The provision of this specific upgrade is therefore,
accounted for as a separate service contract as explained above.
The Group does not have any further obligations that it would have to provide
for under the subscription arrangements.
In respect of income derived from the provision of research and insights
projects, which are based on fixed price contracts with specified performance
obligations and for which customers are invoiced based on a payment schedule
over the term of the contract, it is the Group's policy to recognise revenue
to reflect the benefit received by the customer. The proportion of revenue
recognised is based on the output method using milestones completed, such as
the delivery of insight reports to a customer.
The Group does not have any further obligations that it would have to provide
for under its arrangements for
provision of research and insights projects.
Cost of sales
Cost of sales comprises third party costs directly related to the provision of
services to customers.
Non-IFRS Key performance indicators
The Group uses EBITDA and Adjusted EBITDA as the Directors believe the
disclosure provides additional information on the core operational performance
of the Group. For more information and definition, please the Strategic Report
within the annual report.
Leases
All leases are now considered under IFRS 16. A right of use asset and lease
liability are recognised in the
Consolidated Statement of Financial Position. The right of use asset is
amortised on a straight-line basis to the consolidated statement of
comprehensive income. Lease liabilities increase as a result of interest
charged at a constant rate on the balance outstanding and are reduced for
lease payments made. The interest expense is recognised in the consolidated
statement of comprehensive income. Where leases are modified the right of use
asset and lease liability are remeasured at the date of modification to
account for the modification.
Finance income and finance expenses
Finance income and finance expenses are recognised in profit or loss as they
accrue, using the effective interest method. Finance income relates to
interest income on the Group's bank account balances.
Interest payable comprises interest payable or finance charges on loans
classified as liabilities.
Dividend distributions
Dividend distributions are recognised as transactions with owners on payment
when liability to pay is established.
Intangible assets - Goodwill
Goodwill represents amounts arising on acquisition of subsidiaries. Goodwill
represents the difference between the cost of the acquisition and the fair
value of the net identifiable assets and contingent liabilities
acquired. Identifiable intangible assets are those which can be sold
separately or which arise from legal rights regardless of whether those rights
are separable.
Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill is allocated to cash generating units and is not amortised but is
tested annually for impairment.
If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Group re-assesses whether it has correctly
identified all of the assets acquired and all of the liabilities assumed and
reviews the procedures used to measure the amounts to be recognised at the
acquisition date. If the reassessment still results in an excess of the fair
value of net assets acquired over the aggregate consideration transferred,
then the gain is recognised in profit or loss.
Intangible assets - research and development expenditure
Research costs are expensed as incurred. Development expenditures on an
individual project are recognised as an intangible asset when the Group can
demonstrate:
· the technical feasibility of completing the intangible asset so that
the asset will be available for use or sale;
· its intention to complete and its ability and intention to use or
sell the asset;
· how the asset will generate future economic benefits;
· the availability of resources to complete the asset; and
· the ability to measure reliably the expenditure during development.
Following initial recognition of the development expenditure as an asset, the
asset is carried at cost less any accumulated amortisation and accumulated
impairment losses.
Amortisation of the asset begins from the date development is complete and the
asset is available for use, which may be before first sale. It is amortised
over the period of expected future benefit. Amortisation
is charged to the consolidated statement of comprehensive income. During the
period of development, the asset is tested for impairment annually.
In 2023 there were twenty-three (2022: Thirty-one) capitalised development
projects. The projects undertaken in the current and prior year relate to the
development of new functionality within the Vuelio and Pulsar platforms. The
directors assessed the capitalisation criteria of its internally generated
material intangible assets through a review of the output of the work
performed, the specific costs proposed for capitalisation, the likely
completion of the work and the likely future benefits to be generated from the
work. The directors assess the useful life of the completed capitalised
development projects to be five years from the date of the first sale or when
benefits begin to be realised and amortisation will begin at that time.
Intangible assets - database
On acquisition of businesses in prior years, a fair value was calculated in
respect of the PR and media contacts databases acquired. Subsequent
expenditure on maintaining this database is expensed as incurred.
Amortisation is calculated on a straight-line basis over the estimated useful
economic life of the database. It is the directors' view that this useful
economic life is three years based on the level of ongoing investment required
to maintain the quality of data in the database.
Intangible assets - customer relationships
On acquisition of businesses in the current and prior years, a fair value was
calculated in respect of the customer relationships acquired. Amortisation is
calculated on a straight-line basis over the estimated useful economic life of
the customer relationships. It is the directors' view that this useful
economic life is up to 14 years, based on known and forecast customer
retention rates.
Intangible assets - brand value
Acquired brands, which are controlled through custody or legal rights and
could be sold separately from the rest of the Group's businesses, are
capitalised where fair value can be reliably measured. The Group applies a
straight-line amortisation policy on all brand values.
The conclusion is that a realistic life for the brand equity would be up to a
'generation' or 20 years. Where there is an indication of impairment, the
directors will perform an impairment review by analysing the future discounted
cash flows over the remaining life of the brand asset to determine whether
impairment is required.
Software licences
Software licences include software that is not integral to a related item of
hardware. These items are stated at cost less accumulated amortisation and any
impairment. Amortisation is calculated on a straight-line basis over the
estimated useful economic life. Although perpetual licences are maintained
under support and maintenance agreements, a useful economic life of five years
has been determined.
Impairment of non-financial assets
An impairment loss is recognised whenever the carrying amount of an asset or
its cash-generating unit exceeds its recoverable amount. Impairment losses are
recognised in the profit or loss within non-recurring admin expenses.
Impairment losses recognised in respect of cash-generating units are allocated
first to the carrying amount of the goodwill allocated to that cash-generating
unit and then to the carrying amount of the other assets in the unit on a pro
rata basis, applied in priority to non-current assets ahead of more liquid
items. A cash-generating unit is the smallest identifiable group of assets
that generates cash inflows that are largely independent of the cash inflows
from other assets or groups of assets.
Financial instruments
Financial assets
Financial assets are measured at amortised cost, fair value through other
comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL).
The measurement basis is determined by reference to both the business model
for managing the financial asset and the contractual cash flow characteristics
of the financial asset. The Group's financial assets comprise of trade and
other receivables and cash and cash equivalents.
Trade receivables
Trade receivables are measured at amortised cost and are carried at the
original invoice amount less allowances for expected credit losses.
Expected credit losses are calculated in accordance with the simplified
approach permitted by IFRS 9, using a provision matrix applying lifetime
historical credit loss experience to the trade receivables.
The expected credit loss rate varies depending on whether, and the extent to
which, settlement of the trade receivables is overdue and it is also adjusted
as appropriate to reflect current economic conditions and estimates of future
conditions. For the purpose of determining credit loss rates, customers are
classified into groupings that have similar loss patterns. The key drivers of
the loss rate are the aging of the debtor, the geographic location and the
Company sector (public vs private). When a trade receivable is determined to
have no reasonable expectation of recovery it is written off, firstly against
any expected credit loss allowance available and then to the statement of
comprehensive income. Subsequent recoveries of amounts previously provided for
or written off are credited to the statement of comprehensive income.
Long-term receivables are discounted where the effect is material.
Cash and cash equivalents
Cash held in deposit accounts is measured at amortised cost.
Financial liabilities
The Group's financial liabilities consist of trade payables, loans and
borrowings, and other financial liabilities. Trade payables are non-interest
bearing. Trade payables initially recognised at their fair value and
subsequently measured at amortized cost. Loans and borrowings and other
financial liabilities, which include the liability component of convertible
redeemable loan notes, are initially measured at fair value, net of
transaction costs, and are subsequently measured at amortised cost using the
effective interest rate method. Interest expense is measured on an effective
interest rate basis and recognised in the statement of comprehensive income
over the relevant period.
Provisions
Provisions are recognised when there is a present obligation (legal or
constructive) as a result of a past event, it is probable that the obligation
will be required to be settled, and a reliable estimate can be made of the
amount of the obligation. The amount recognised as a provision is the best
estimate of the consideration required to settle the present obligation at the
end of the reporting period, taking into account the risks and uncertainties
surrounding the obligation. Provisions are discounted when the time value of
money is material.
Deferred income
The Group's customer contracts include a diverse range of payment schedules
dependent upon the nature and type of services being provided. The Group often
agrees payment schedules at the inception of long-term contracts under which
it receives payments throughout the term of contracts. These payment schedules
may include progress payments as well as regular monthly or quarterly payments
for ongoing service delivery. Payments for transactional services may be at
delivery date, in arrears or in advance.
A contract liability is the obligation to transfer goods or services to a
customer for which the Group has received consideration (or an amount of
consideration is due) from the customer. If a customer pays consideration
before the Group transfers goods or services to the customer, a contract
liability is recognised when the payment is made or the payment is due
(whichever is earlier). Contract liabilities are recognised as revenue when
the Group performs under the contract. The aggregate amount is disclosed in
Note 16.
Current and deferred income tax
The tax expense for the year comprises current and deferred tax. Tax is
recognised in the consolidated statement of comprehensive income except to the
extent that it relates to items recognised directly in equity, in which case
it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the reporting date, and
any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of goodwill; the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit other
than in a business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the
reporting date.
The recognition of deferred tax assets is based upon whether it is more likely
than not that sufficient and suitable taxable profits will be available in the
future, against which the reversal of temporary differences can be deducted.
Recognition, therefore, involves judgement regarding the future financial
performance of the particular legal entity or tax group in which the deferred
tax asset has been recognised. Historical differences between forecast and
actual taxable profits have not resulted in material adjustments to the
recognition of deferred tax assets.
Share-based payments
The Group issues equity-settled share-based payments to certain employees.
These equity-settled share-based payments are measured at fair-value at the
date of the grant. The fair value as determined at the grant date is expensed
on a straight-line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest. Fair value is measured by use of
the Monte Carlo method. The charges to profit or loss are recognised in the
subsidiary employing the individual concerned.
Employee benefits
Individual subsidiaries of the Group operate defined contribution pension
schemes for their employees. The assets of the schemes are not managed by the
Group and are held separately from those of the Group. The annual
contributions payable are charged to the statement of comprehensive income
when they fall due for payment.
3. Revenue
The Group's revenue is primarily derived from the rendering of services. The
Group's revenue was generated from the following territories:
2023 2022
£'000 £'000
United Kingdom 22,353 20,659
North America 2,875 2,586
Europe excluding UK 2,129 1,844
Australia and New Zealand 26,530 30,876
Asia 8,010 8,797
Rest of the world 505 948
TOTAL 62,402 65,710
4. Segment reporting
Segment information is presented in respect of the Group's operating segments
which are based upon the Group's management and internal business reporting.
Segment results, assets and liabilities include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly head office expenses.
No single customer generates more than 10% of the Group's revenue. The Group
operating segments have been decided upon according to the geographic markets
in which they operate being the information provided to the Chief Executive
Officer and the Board, given both regions provide the same products and
services
EMEA & NA covers the United Kingdom, Europe and North America. APAC covers
Australia, New Zealand and Southeast Asia.
The segment information for the year ended 30 November 2023, is as follows:
EMEA & NA APAC Total
2023 £'000 £'000 £'000
External revenue 28,193 34,209 62,402
Adjusted EBITDA 471 6,792 7,263
Non-recurring costs (2,692) (6,296) (8,988)
Share of loss of associate (198) - (198)
Share-based payments (764) (151) (915)
Depreciation and amortisation (3,916) (3,838) (7,754)
Financial income 10 2 12
Financial expense 784 (1,037) (253)
Taxation 238 2,693 2,931
(Loss) After Tax (6,067) (1,835) (7,902)
Reportable segment assets 46,032 44,657 90,689
Reportable segment liabilities 22,634 18,369 41,003
Other information: Additions to intangible assets 5,309 3,266 8,575
Other information: Additions to property, plant and equipment 76 433 509
Other information: Investment in associate - equity method 264 - 264
The segment information for the year ended 30 November 2022, is as follows:
EMEA & NA APAC Total
2022 £'000 £'000 £'000
External revenue 26,462 39,248 65,710
Adjusted EBITDA (113) 2,440 2,327
Non-recurring costs (1,920) 705 (1,215)
Share of loss of associate (254) - (254)
Share-based payments (925) (196) (1,121)
Depreciation and amortisation (3,281) (3,663) (6,944)
Financial income 10 4 14
Financial expense 731 (1,026) (295)
Taxation 685 2,610 3,295
(Loss)/profit After Tax (5,067) 874 (4,193)
Reportable segment assets (restated) 47,209 46,467 93,676
Reportable segment liabilities (restated) 19,015 14,287 33,302
Other information: Additions to intangible assets 4,191 3,855 8,046
Other information: Additions to property, plant and equipment 116 390 506
Other information: Investment in associate - equity method 462 - 462
Deferred income and trade debtors have been restated see Note 26 of the
financial statements
5. Operating loss
Operating loss is stated after charging: 2023 2022
£'000 £'000
Employee benefit expenses before capitalised costs 34,344 38,801
Depreciation of property, plant and equipment 524 746
Depreciation charge 1,526 2,140
Amortisation of development costs 3,573 1,687
Amortisation of acquired software platforms 1,013 1,213
Amortisation of brand values 212 217
Amortisation of software licences 66 58
Amortisation of database - 5
Amortisation of customer list 840 878
Loss on disposal of property, plant and equipment 20 -
(Profit) /Loss on foreign currency translation 89 (106)
Non-recurring items (see below) 8,988 1,215
Auditor's remuneration (see below) 589 549
Research and development and other technical 646 2,289
expenditure (a further £8,498,000 (2022: £7,986,000) was capitalised)
Increase/(decrease) in expected credit loss provision 120 (190)
Non-recurring items
The non-recurring costs are made up of the following:
Non-recurring salary costs - integration and restructuring 7,231 3,715
Non-recurring duplicated technology costs 1,888 -
Non-recurring copyright related expense/(income) 528 (2,703)
Non-recurring expense - other 321 203
Non-recurring income - business rates overprovision (980) -
TOTAL 8,988 1,215
Auditor's remuneration is further analysed as:
Fees payable to the Company's auditor for the audit of the Company's annual 241 287
accounts
The audit of the Company's subsidiaries, pursuant to legislation 348 262
TOTAL 589 549
6. Particulars of employees
The average number of persons (including directors) employed by the Group
during the year was:
2023 2022
Technical and support 168 263
Commercial 777 757
Finance and administration 83 81
1,028 1,101
The average number of persons (including directors) employed by the Group
during the year was:
Costs incurred in respect of these employees were:
2023 2022
£'000 £'000
Wages and salaries costs 27,994 32,126
Social security costs 1,656 2,361
Pension costs 1,978 1,608
Health insurance 219 196
Employee benefits 1,575 2,486
Compensation for loss of office 926 24
34,348 38,801
The compensation for loss of office charge of £926,000 (2022: £24,000)
relates to 66 employees (2022: 4) who were made redundant during the year.
The reportable key management personnel are considered to be comprised of the
Company directors, the remuneration for whose services during the year is
detailed below.
Salaries Fees 2023 2022
Directors' remuneration £ £ £ £
Executive Directors
J Arnold 400,000 - 400,000 360,876
M Fautley 250,000 - 250,000 250,000
Non-Executive Directors
C Satterthwaite - 80,000 80,000 80,000
C Pilling - 40,000 40,000 40,000
K Puris - 16,667 16,667 40,000
L Gilbert - 40,000 40,000 40,000
S Vawda - 50,625 50,625 47,500
M Jackson - - - 18,205
TOTAL 650,000 227,292 877,292 876,581
K Puris resigned on the 03 March 2023.
J Arnold received payments into a personal retirement money purchase pension
scheme during the year of £40,000 (2022: £42,348).
M Fautley received health insurance benefits during the year of £992 (2022:
£788). M Fautley received payments into a personal retirement money purchase
pension scheme during the year of £18,750 (2022: £25,000) and pension
allowance of £5,490 (2022: £Nil). No other directors received any other
benefits other than those detailed above.
The directors who have served during the year and details of their interests,
including family interests, in the Company's ordinary 5p shares at 30 November
2023 are disclosed below:
30 Nov 23 Share options 30 Nov 23 30 Nov 22 Share options 30 Nov 22
Beneficial No. granted Options No. Beneficial No. granted Options No.
J Arnold 754,281 - 1,600,000 754,281 - 1,600,000
M Fautley 94,596 - 39,603 94,596 - 39,603
C Satterthwaite 79,811 - 400,000 79,811 - 400,000
C Pilling 50,000 - 19,801 50,000 - 19,801
K Puris - - - - - 19,801
L Gilbert - - 19,801 - - 19,801
S Vawda** 16,666 - 19,801 16,666 - 19,801
TOTAL 995,354 - 2,099,006 995,354 - 2,118,807
7. Financial expense
2023 2022
£'000 £'000
Interest charge in respect of lease liabilities 229 278
Other interest 24 17
Total financial expense 253 295
8. Taxation 2023 2022
£'000 £'000
Current income tax
UK corporation tax credit for the year 92 -
Adjustment in respect of prior year 5 (583)
Double Taxation Relief (92) -
Foreign taxation 150 181
Adjustment in respect of prior periods (foreign tax) 22 -
Total current income tax credit 177 (402)
Deferred tax (Note 21)
Origination and reversal of temporary differences (3,110) (2,833)
Adjustments in respect of prior periods 2 (60)
Total deferred tax (3,108) (2,893)
Total tax credit (2,931) (3,295)
As shown below the tax assessed on the loss on ordinary activities for the
year is lower than (2022: lower than) the standard rate of corporation tax in
the UK of 23% (2022: 19%).
The differences are explained as follows: 2023 2022
Factors affecting tax credit £'000 £'000
Loss on ordinary activities before tax (10,833) (7,488)
Loss on ordinary activities multiplied by effective rate of tax (2,492) (1,423)
Items not deductible for tax purposes 767 (976)
Adjustment in respect of prior years (1,086) (476)
Additional R&D claim CTA 2009 (149) (240)
Deferred tax not recognised 29 (180)
Total tax credit (2,931) (3,295)
Factors that may affect future tax expenses The corporation tax rate was
increased from 19% to 25% on 1 April 2023. The corporation tax rate of 25%
remains the same from 1 April 2024.Notes to the consolidated financial
statements
9. Earnings per share
In 2023 and 2022 potential ordinary shares from the share option schemes have
an anti-dilutive effect due to the Group being in a loss making position. As a
result, dilutive loss per share is disclosed as the same value as basic loss
per share. This has been computed as follows:
Numerator 2023 2022
£'000 £'000
Loss for the year and earnings used in basic EPS (11,603) (1,766)
Earnings used in diluted EPS (11,603) (1,766)
Denominator
Weighted average number of shares used in basic EPS ('000) 127,699 127,643
Effects of:
Dilutive effect of options N/A N/A
Dilutive effect of loan note conversion N/A N/A
Weighted average number of shares used in diluted EPS ('000) 127,699 127,643
Basic loss per share (pence) (9.09) (1.38)
Diluted loss per share for the year (pence) (9.09) (1.38)
The total number of options or warrants granted at 30 November 2023 of
6,893,987 (2022: 7,037,524), would generate £3,757,862 (2022: £3,849,181) in
cash if exercised. At 30 November 2023, 1,806,045 options (2022: 294,130) were
priced above the mid-market closing price of 57p per share (2022: 87.5p per
share) and 5,087,942 (2022: 6,743,394) were below. Of the 6,893,987 options
and warrants at 30 November 2023, 3,578,654 (2022: 3,600,654) staff options
and 1,390,481 (2022: 1,390,481) warrants were eligible for exercising. The
warrants are priced at 27.5p per share held by Elderstreet VCT plc and other
individuals consequent to an initial investment in the Company in October
2008.
10. Intangible fixed assets
Brand value Goodwill Development Software Licenses Database Customer relationships Total
costs and
acquired
software platforms
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 30 November 2021 2,945 37,897 18,712 509 1,290 12,007 73,360
Capitalised during the year - - 7,986 60 - - 8,046
Foreign exchange movement 34 1,319 266 - - 440 2,059
At 30 November 2022 2,979 39,216 26,964 569 1,290 12,447 83,465
Capitalised during the year - - 8,498 77 - - 8,575
Foreign exchange movement (55) (2,122) (712) (9) - (724) (3,622)
At 30 November 2023 2,924 37,094 34,750 637 1,290 11,723 88,418
Amortisation and impairment
At 30 November 2021 957 6,090 402 1,285 1,392 10,126
Charge for the year 217 - 2,901 57 5 878 4,058
Foreign exchange movement 1 - 5 - - 6 12
At 30 November 2022 1,175 8,996 459 1,290 2,276 14,196
Charge for the year 212 - 4,586 66 - 840 5,704
Foreign exchange movement (13) - 13 (10) - (93) (103)
At 30 November 2023 1,374 - 13,595 515 1,290 3,023 19,797
-
Net Book Value
At 30 November 2023 1,550 37,094 21,156 121 - 8,700 68,621
At 30 November 2022 1,804 39,216 17,968 110 - 10,171 69,269
Acquisition related intangibles Brand value, Goodwill, Database, Customer
relation- ships and acquired software platforms are acquisition related
intangibles. Of the £4,586,000 (2022: £2,901,000) amortisation charge on
Development costs and acquired software platforms, £1,013,000 (2022:
£1,213,000) relates to acquired software platforms, bringing the total
amortisation on acquisition related intangibles to £2,065,000 (2022:
£2,313,000). Amortisation on internally generated intangibles totals
£3,639,000 (2022: £1,745,000).
The carrying value and remaining amortisation period of individually material
intangible assets are as follows:
Carrying amount Remaining amortisation period
Brand 2023 2022 2023 2022
£'000 £'000 Years £
Access Intelligence Media and Communications 420 480 7 8
ResponseSource 228 243 15 16
Pulsar 383 407 17 17
Isentia 520 640 5 6
Development costs and acquired software platforms
AIMediaData - Vuelio Platform Development 4,976 4,348 3 3
ResponseSource - Platform Development - 401 - 1
Pulsar - Platform Development 5,415 3,299 4 3
Isentia - Platform Development 10,765 9,920 6 7
Customer relationships
ResponseSource - Acquired Customer Relationships 490 614 4 5
Isentia - Acquired Customer Relationships 8,210 9,558 6 7
For the purposes of impairment testing, goodwill is allocated to the Group's
CGUs which are the lowest level within the Group at which goodwill is
monitored.
The carrying value of goodwill allocated to CGUs within the Group is:
2023 2022
Goodwill £'000 £'000
EMEA & NA 7,740 7,740
APAC 29,354 31,476
At the reporting date, impairment tests were undertaken by comparing the
carrying values of CGUs with their recoverable amounts. The recoverable
amounts of the CGUs are based on value-in-use calculations. These calculations
use pre-tax cash flow projections covering a five-year period based on
approved budgets and forecasts in the first three years, followed by applying
specific growth rates for which the key assumptions in respect of annual
revenue growth rates of 7.5% in years 3 to 5 and 2.5% thereafter.
The key assumptions used for value-in-use calculations are those regarding
revenue growth rates and discount rates over the forecast period. Growth rates
are based on past experience, the anticipated impact of the CGUs significant
investment in research and development, and expectations of future changes in
the market.
The pre-tax discount rates used for both the EMEA & NA and APAC CGUs was
14%, based on an assessment of the Group's cost of capital and on comparison
with other listed technology companies.
The terminal growth rate used for the purposes of goodwill impairment
assessments was 2.5%. The Board considered that no impairment to goodwill is
necessary based on the value-in-use reviews of EMEA & NA or APAC as the
value-in-use calculations exceeded the carrying values of goodwill relating to
those companies. Sensitivity analysis has been performed on reasonably
possible changes in assumptions upon which recoverable amounts have been
estimated. Based on the sensitivity analysis, a reduction of 54.5% in EBITDA
delivered by EMEA & NA would result in the carrying value of its CGU being
equal to the recoverable amount. For APAC, a 18.2% reduction in EBITDA would
result in the carrying value of its CGU being equal to the recoverable amount.
For EMEA & NA, a 36.2% percentage point increase in the discount rate
would result in the carrying value of its CGU being equal to the recoverable
amount. For APAC, a 3.1% percentage point increase in the discount rate would
result in the carrying value of its CGU being equal to the recoverable amount.
Other impairments
Other intangible assets are tested for impairment if indicators of an
impairment exist. Such indicators include performance falling short of
expectation.
The directors considered that there were no indicators of impairment relating
to the intangible fixed assets at 30 November 2023.
11. Investment in associate
2023 2022
£'000 £'000
Cost
At 1 December 1,872 1,872
Additions - -
At 30 November 1,872 1,872
Share of loss of associate and impairment
At 1 December 1,410 1,156
Share of loss of associate 198 254
At 30 November 1,608 1,410
Net Book Value
At 1 December 462 716
At 30 November 264 462
As part of the consideration for the disposal of AITrack Record Limited, the
Group received a 20% shareholding in TrackRecord Holdings Limited, a company
registered in England and Wales. The fair value of this shareholding based on
the funding raised by TrackRecord Holdings Limited was £625,000.
In the prior year, the Group invested a further £887,000 in TrackRecord
Holdings Limited, as part of a £3,000,000 fundraising round. This increased
the Group's overall shareholding in TrackRecord Holdings Limited to 21.4%.
The shareholding in TrackRecord Holdings Limited is treated as an investment
in associate as the Group is not able to exercise control over the Company,
but is able to exercise significant influence over the Company by way of its
21.4% shareholding and through J Arnold being the Group's representative on
the board of Track- Record Holdings Limited.
During the year, the Group's share of the loss of TrackRecord Holdings Limited
was £198,000 (2022: £254,000). As the Group applies the equity method of
accounting for its investment in TrackRecord Holdings Limited, the carrying
value of investments in associates is reduced by this share of loss at the
year end.
During the year ended 30 November 2019, the Group made available a loan
facility of £100,000 to Track- Record Holdings Limited on an unsecured basis.
The final repayment date of the facility is November 2029 and interest is
payable at a rate of 10% on any amount drawn down. The full £100,000 of this
loan facility was drawn down in 2020. The loan has been treated as an addition
to the Group's investment in TrackRecord Holdings Limited.
As part of the agreement, TrackRecord Holdings Limited paid the Group a
commitment fee of £2,000 in November 2019. The total value drawn down by
Track-Record Holdings Limited at 30 November 2023 was £100,000 (2022:
£100,000).
An impairment assessment has been carried out in accordance with IAS 28
paragraphs 41A - 41C to deter- mine whether there is any objective evidence
that the net investment in the associate is impaired. Based on two year
forecasts, we have assessed revenue growth, recurring revenue and increases in
costs of sales, using an appropriate discount rate, and performed sensitivity
analysis on these forecasts based on past performance against prior year
forecasts. Under these sensitised forecasts, we have determined that the
business's discounted cash flow exceeds both the Group's and Company's
investment carrying values at 30 November 2023, and therefore no impairment is
required, although this will be reviewed again at 30 November 2024.
Summarised financial information for associate
The tables below provide summarised financial information for TrackRecord
Holdings Limited, an associate which is considered material to the Group. The
information disclosed reflects the amounts presented in the financial
statements of TrackRecord Holdings Limited and not Pulsar Groups Plc's
(formerly Access Intelligence PLC) share of those amounts.
TrackRecord Holdings Limited TrackRecord Holdings Limited
2023 2022
£'000 £'000
Total current assets 807 1,417
Total non-current assets 762 778
Total current liabilities (1,980) (1,681)
Net assets (411) 514
Pulsar Group Plc share of net assets (21.4%) (88) 110
TrackRecord Holdings Limited TrackRecord Holdings Limited
2023 2
0
2
2
Reconciliation to carrying amounts £'000 £'000
Opening net assets on 1 December 514 1,701
Loss for the period (925) (1,187)
Issue of new share capital - -
Net assets (411) 514
2023 2022
Summarised statement of comprehensive income £'000 £'000
Revenue 2,581 2,238
Loss for the period (925) (1,187)
Other comprehensive income - -
Total comprehensive income (925) (1,187)
12. Property, plant and equipment
Fixtures, fitting and equipment Leasehold improvements
Total
£'000 £'000 £'
00
0
Cost
At 1 December 2021 1,334 787 2,121
Additions 348 158 506
Disposals (364) (220) (584)
Foreign exchange movement 125 37 162
At 30 November 2022 1,443 762 2,205
Additions 186 323 509
Disposals - (628) (628)
Foreign exchange movement (22) (82) (104)
At 30 November 2023 1,607 375 1,982
Depreciation and impairment
At 1 December 2021 587 454 1,041
Charge for the year 433 314 747
Disposals (364) (220) (584)
Foreign exchange movement 111 29 140
At 30 November 2022 767 577 1,344
Charge for the year 363 161 524
Disposals - (608) (608)
Foreign exchange movement (1) (70) (71)
At 30 November 2023 1,129 60 1,189
Net Book Value
At 30 November 2023 478 315 793
At 30 November 2022 676 185 861
13. Trade and other receivables
Restated
2023 2022
£'000 £'000
Current assets
Trade receivables 5,318 6,280
Less: provision for impairment of trade receivables (265) (304)
Trade receivables - net 5,053 5,976
Prepayments 2,256 2,999
Commission prepayments 1,700 1,280
Other receivables 756 641
9,765 10,896
Deferred income and trade debtors have been restated see Note 26 of the
financial statements.
All trade receivables are reviewed by management and are considered
collectable. The ageing of trade receivables which are past due and not
impaired is as follows:
2023 2022
£'000 £'000
Days outstanding
31-60 days 868 330
61-90 days 409 138
91-180 days 564 357
1,841 825
Movements on the Group provision for impairment of trade receivables are as
follows:
2023 2022
£'000 £'000
At 1 December 304 637
Increase/(decrease) in provision 120 (190)
Write-offs in year (159) (143)
At 30 November 265 304
As in the prior year, the Group applies the IFRS 9 simplified approach to
measuring expected credit losses using a lifetime expected credit loss
provision to reflect the risk of default on trade receivables. Default is
defined as a situation in which a customer does not pay amounts that it owes
to the Group and may occur due to a number of reasons, including the financial
health of the customer or where the customer disputes the amount owed and it
is not considered to be economical to recover the amount through a legal
process.
To calculate the credit loss provision, trade receivables have been split into
different categories along three lines: region, aging and public/private
sector. The expected loss rates applied to these categories are as follows;
· Region - 0.7% to 8.5%
· Aging - 0.5% to 10%
· Public/Private - 0.8%/1.8%
The expected loss rates are based on the Group's historical credit losses
experienced over the three year period prior to the period end. The historical
loss rates are then adjusted for current and forward-looking information on
macroeconomic factors affecting the Group's customers.
The creation and release of a provision for impaired receivables has been
included in 'administrative expenses' are generally written off, where there
is no expectation of recovering additional cash.
The other asset classes within trade and other receivables do not contain
impaired assets.
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of receivable mentioned above together with our cash
deposits totalling £2,248,000 (2022: £4,922,000). The Group does not hold
any collateral as security.
Credit risk is a judgement made by management based on sector and necessary
allowances are made when needed by assessing changes in our customers' credit
profiles and credit ratings.
14. Trade and other payables
2023 2022
Due within one year £'000 £'000
Trade and other payables 10,304 8,079
Other taxes and social security costs 1,496 537
VAT payable 1,733 329
13,533 8,945
15. Leases
Group as a lessee
The Group leases a number of properties in the jurisdictions from which it
operates.
Set out below are the carrying amounts of right-of-use assets recognised and
the movements during the period:
Right-of-use assets Land & buildings
£'000s
At 1 December 2021 3,538
Additions 65
Depreciation charge (2,140)
Disposals (16)
Effect of modification to lease terms 377
Foreign exchange movements 72
At 30 November 2022 1,896
Additions 1,899
Depreciation charge (1,526)
Foreign exchange movements (79)
At 30 November 2023 2,190
Set out below are the carrying amounts of lease liabilities and the movements
during the period:
Land & buildings
Lease liabilities £'000s
At 1 December 2021 4,371
Accretion of interest 286
Effect of modification to lease terms 377
Additions 64
Reversal of lease liabilities (17)
Lease payments (2,642)
Foreign exchange movements 78
At 30 November 2022 2,517
Accretion of interest 229
Additions 1,899
Lease payments (2,029)
Foreign exchange movements (83)
At 30 November 2023 2,533
Lease liability maturity analysis - undiscounted contractual cash flows 2023 2022
£'000 £'000
Less than one year 1,388 1,718
Between one and five years 1,370 976
More than five years - -
2,578 2,694
The following are the amounts to be recognised in profit or loss:
2023 2022
£'000 £'000
Depreciation charge 1,526 2,140
Interest expense on lease liabilities 229 286
Total amount recognised in profit or loss 1,755 2,426
The Group had total cash outflows for leases of £2,029,000 in 2023 (2022:
£2,642,000). The Group also had non-cash additions to right-of-use assets of
£308,000 (2022: £65,000) and lease liabilities of £308,000 in 2023 (2022:
£64,000).
There are no leases that have not yet commenced to be disclosed. There were no
short-term leases or low value leases taken out in the year.
16. Contract Liabilities
Restated
2023 2022
£'000 £'000
At 1 December 11,019 12,144
Invoiced during the year 66,414 64,585
Revenue recognised during the year (62,402) (65,710)
At 30 November 15,031 11,019
All Contract liabilities are expected to be recognised within one year.
17. Financial instruments
The Group's treasury activities are designed to provide suitable, flexible
funding arrangements to satisfy the Group's requirements. The Group uses
financial instruments comprising borrowings, cash, liquid resources and items
such as trade receivables and payables that arise directly from its
operations. The main risks arising from the Group financial instruments relate
to the maintaining of liquidity across the Group's entities and debt
collection. The Board reviews policies for managing each of these risks and
they are summarised below. The Group finances its operations through a
combination of cash resources, loan notes and equity. Short term flexibility
is provided by moving resources between the individual subsidiaries.
Exposure to interest rate fluctuations is minimal as all borrowings are at
fixed rates of interest. The Group also has various deposit facilities on
which 0.01% - 2.40% interest was being earned throughout 2023 (2022: 0.01% -
2.4%) and will be optimising the use of these accounts going forward. The
Group's exposure to interest rate risk is not significant and therefore no
sensitivity analysis has been performed. 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.
At 30 November 2023 the Group had £Nil borrowings (2022 £Nil).
There is no material difference between the fair values and book values of the
Group's financial instruments. Short term trade receivables and payables have
been excluded from the above disclosures.
The objectives of the Group's treasury activities are to manage financial
risk, secure cost-effective funding where necessary and minimise the adverse
effects of fluctuations in the financial markets on the value of the Group's
financial assets and liabilities, on reported profitability and on the cash
flow of the Group. Interest income is sought wherever possible and in 2023
produced £12,000 (2022: £14,000) of income.
The Group's principal financial instruments for fundraising are through share
issues.
Financial instruments by category
Restated
2023 2022
£'000 £'000
Financial assets
Trade and other receivables excluding prepayments 5,809 6,617
Cash and cash equivalents 2,248 4,922
8,057 11,539
Financial assets
Trade and other payables 10,304 8,079
Lease liabilities 2,533 2,517
12,837 10,596
Undiscounted contractual maturity of financial liabilities
Amounts due within one year 11,692 9,797
Amounts due between one and five years 1,370 976
13,062 10,773
Less: future interest charges (225) (177)
Financial liabilities carrying value 12,837 10,596
The liquidity risk relating to the contractual liabilities listed above is
managed on a local basis through their day to day cash management. The Group
is liquid with £2,248,000 (2022: £4,922,000) available cash resources
against a liability payable within the next 12 months of £11,692,000 (2022:
£9,797,000). Management monitor cash balances weekly. However, should any
subsidiary, or the Company, find that it does not have the liquidity to pay a
debt as it becomes due an inter-company cash transfer will be made available
by another member of the Group.
Foreign exchange risk is managed by assessing the value of non-sterling
revenue against the value of non-sterling costs in each currency. Currently no
hedging is considered necessary due to the natural offset of revenues and
costs in each currency.
18. Financial and operational risk management
The Group's activities expose it to a variety of financial risks which are
managed by the Group and subsidiary management teams as part of their
day-to-day responsibilities. The Group's overall risk management policy
concentrates on those areas of exposure most relevant to its operations. These
fall into six categories:
Economic or political disruption risk - that disruption may affect demand for
our products and services or our ability to maintain operations or on the cost
of our delivery of services; Competitive risk - that our products are no
longer competitive or relevant to our customers; Treasury and liquidity risk -
that we run out of the cash required to run the business; Information security
risk - the impacts that could occur due to threats and vulnerabilities
associated with the operation and use of information systems and the
environments in which those systems operate; Key personnel risk - that we
cannot attract and retain talented people; and Capital risk - that we do not
have an optimal structure to allow for future acquisition and growth.
19. Deferred tax assets and liabilities
The following are the major deferred tax assets and liabilities recognised by
the Group and the movements thereon during the current year and the prior
year:
Tax losses Fixed asset timing differences IFRS 16 ROU asset IFRS 16 lease liability FV of intangible assets Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 December 2021 (restated) (2,052) 727 385 (437) 5,386 4,009
Charge to profit or loss (2,200) (72) (144) 146 (623) (2,893)
Arising on business combination (57) - - - - (57)
At 1 November 2022 (restated) (4,309) 655 241 (291) 4,763 1,059
Charge to profit or loss (3,020) 93 (145) 187 (223) (3,108)
Change due to FX 298 - - - - 298
At 1 November 2023 (7,031) 748 96 (104) 4,540 (1,751)
The prior year numbers have been restated within each category
At the reporting date the Group had unused tax losses of approximately
£19,680,000 (2022: £15,420,000) available for offset against future profits.
The tax losses do not have any expiry date.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred tax assets and liabilities relate to income taxes levied
by the same taxation authority on either the taxable entity or different
taxable entities where there is an intention to settle the balances on a net
basis.
£1,751,000 (2022: £nil) of deferred tax losses are recognised in excess of
the associated deferred tax liabilities in Australia where future forecasted
profits are considered sufficient to utilise the excess losses. Deferred tax
assets totalling £4,920,000 (2022: £3,855,000) arising in respect of losses
have not been included in the statement of financial position due to
uncertainties in regard to their recoverability.
The aggregate amounts of deferred tax balances in each Group entity, after
allowable offset, for financial reporting purposes are:
2022 2021
£'000 £'000
Deferred tax assets 6,808 4,345
Deferred tax liabilities (5,057) (5,404)
Total 1,751 (1,059)
20. Share Capital
Equity: Ordinary shares of 5p each 2023 2022
£'000
£'000
Allotted, issued and fully paid 130,524,386 ordinary shares of 5p each (2021: 6,526 6,528
130,524,386 ordinary shares of 5p each)
2023 2022
Number of shares at 1 December 130,524,386 75,146,515
Share options exercised in year - 55,377,871
Number of shares at 30 November 130,524,386 130,524,386
At 1 December 2021, the Company had 2,927,315 5p shares held in treasury.
During 2021, 101,669 of these shares were allotted, with the number of shares
held in treasury at the year end being 2,825,646. The shares held in treasury
have no voting rights, or rights to dividends and so total issued share
capital for voting and dividend purposes at the year end was 127,698,740
(2022: 127,698,740).
On 14 June 2022, 53,351 shares were allotted out of treasury at a price of
56.0p per share due to an exercise of employee share options. Gross proceeds
were £30,000.
On 14 July 2022, 48,318 shares were allotted out of treasury at a price of
56.0p per share due to an exercise of employee share options. Gross proceeds
were £27,000. In November 2022 and November 2023, the Company's total share
capital was 130,524,386 and the total issued share capital for voting and
dividend purposes, excluding shares held in treasury, was 127,698,740.
Transaction costs associated with share issues in the year amounted to £Nil
(2022: £47,237). Transaction costs are accounted for as a reduction from the
share premium account.
21. Equity-settled share-based payments
Date of grant Exercise price No of shares Exercisable between
23 October 2008 27.5p 1,390,481 No time limit
18 February 2019 56.0p 3,233,682 Feb 2022-Feb 2029
24 October 2019 54.5p 366,972 Oct 2022-Oct 2029
31 July 2020 65.0p 1,633,452 Jul 2023-Jul 2030
19 May 2021 134.0p 294,130 May 2024-May 2031
01 October 2021 0.05p 118,807 Oct 2024-Oct 2031
7,037,524
Details of the movements in the weighted average exercise price ("WAEP") and
number of share options during the current and prior year are as follows:
At start of year Granted Exercised Forfeited At end of year
WAEP 2022 (p) 55.0 - 56.0 64.2 54.7
WAEP 2023 (p) 54.7 - - 63.6 54.5
Options 2022 7,329,687 - (101,669) (190,494) 7,037,524
Options 2023 7,037,524 - - (143,537) 6,893,987
The range of prices at which options and warrants can be exercised is 27.5p to
134.0p.
During 2023, no options were granted.
The total charge arising on issue of the options was £Nil, with the 2022
charge being £Nil. 143,537 options were cancelled in the year (2021:
190,494).
During the year, Nil share options were exercised. Further details of share
options exercisable at the year end are provided in Note 21.
There are no market, non-market or service conditions as part of the share
option scheme. The only condition existing is that employees must still be in
employment with the Company at the point they exercise the options.
Long Term Value Creation Plan ("LTVCP")
On 2 October 2021 the Board approved the LTVCP which is intended to assist
with the retention and motivation of key employees of the Company with the aim
of incentivising and rewarding exceptional levels of performance over a four
year period. The LTVCP will provide the potential for rewards only if
shareholders benefit from sustained growth in shareholder value over a
four-year period.
The details of the awards for the initial LTVCP participants are set out
below:
Under the LTVCP, the Board has granted certain eligible employees a right
("Participation Right") to receive a proportion of the shareholder value
created above a hurdle ("Hurdle Rate"). The Hurdle Rate has been set at a 12.5
per cent. compound annual growth rate.
For the purposes of the LTVCP, shareholder value created is defined as the
growth in the Company's market capitalisation including net equity cashflows
to shareholders and adjusting for any share issues during the Performance
Period.
Awards under the LTVCP comprise three equal tranches, with measurement dates
on the second, third and fourth anniversaries of the performance start date
(each a "Performance Period").
The shareholder value created at each measurement date will be calculated with
reference to the average market capitalisation of the Company over the three
months immediately preceding and ending on each anniversary.
Where value is created above the Hurdle Rate, initial LTVCP participants will
share 10 per cent. of the shareholder value created above the hurdle ("LTVCP
Pool").
Should the aggregate nominal value of Shares to be issued or then capable of
being issued in respect of each Performance Period exceed 7 per cent. of the
nominal value of the ordinary share capital in issue of the Company at that
time, the LTVCP Pool will be scaled back as required so that the 7 per cent.
threshold is not exceeded.
To the extent that performance does not exceed the hurdle over each
Performance Period, the relevant tranche will lapse in full.
For the initial participants, the performance start date to measure each
Performance Period has been determined as the date of the announcement of the
Isentia acquisition, being 15 June 2021. The base value for the purposes of
the calculation of growth in shareholder value has been set at c.£153.1
million (being calculated by reference to the total number of Ordinary Shares
with voting rights following completion of the Isentia acquisition and the
placing price of 120p for the equity raise announced on 15 June 2021).
At the end of each Performance Period, the Participation Right will convert
into an award in the form of an option to acquire Ordinary Shares at a price
per Ordinary Share equal to the nominal value of an Ordinary Share, being
5 pence per Ordinary Share ("Award"). The number of Ordinary Shares to be
issued pursuant to each Award will be calculated by reference to the Company's
share price at the relevant time.
Awards are subject to a Holding Period ending on the first anniversary of the
end of each Performance Period in respect of which the relevant Award was
granted, unless the Board determines that another period shall be specified in
relation to any Award.
The Board has discretion to vary the outcome applying to a Participation Right
where it considers that the level at which it would convert into an Award:
does not reflect the Board's assessment of overall performance during the
Performance Period; is not appropriate in the context of circumstances that
were unexpected or unforeseen at the grant date; or any other appropriate
reason.
Joanna Arnold and Mark Fautley have each been granted Participation Rights
under the LTVCP. Joanna Arnold's Participation Percentage has been set at 22%
and Mark Fautley's Participation Percentage has been set at 11%. In aggregate,
initial LTVCP participants Participation Percentages equate to a total of 73%
of the available Participation Rights. The unallocated Participation Rights
have been set aside to provide the Company the flexibility to award further
Participation Rights to eligible employees during the performance period. No
further awards will be granted to Joanna Arnold and Mark Fautley under the
LTVCP prior to the end of the four-year performance under the initial award.
The option movements detailed above resulted in a share-based payment charge
for the Group of £915,000 (2022: £1,121,000).
22. Cash and cash equivalents
The Group monitors its exposure to liquidity risk based on the net cash flows
that are available. The following provides an analysis of the changes in net
funds:
As at 30 As at 30
November 2022 Cash outflow November 2023
£'000 £'000 £'000
Cash and cash equivalents 4,922 (2,674) 2,248
As at 30 As at 30
November 2021 Cash outflow November 2022
£'000 £'000 £'000
Cash and cash equivalents 13,456 (8,534) 4,922
23. Capital commitments, provisions and contingent liabilities
Capital commitments
The Group had no capital commitments at the end of the financial year or prior
year.
Provisions and contingent liabilities Long Service Leave Provision Leasehold dilapidations
Total
£'000 £'000 £'000
At 1 December 2022 61 410 471
Additions - 13 13
Released in the year (6) (75) (81)
Foreign exchange movement - (13) (13)
At 30 November 2023 55 335 390
Due within one year - 217 217
Due after more than one year 55 118 173
Leasehold dilapidations relate to the estimated cost of returning a leasehold
property to its original state at the end of the lease in accordance with the
lease terms. The main uncertainty relates to estimating the cost that will be
incurred at the end of the lease.
The earliest point at which it is considered that this amount may become
payable is July 2024 for the Group's leasehold property.
Employees in Australia are entitled to two months of long service leave upon
the completion of 10 years service under The Long Service Leave Act 1955. The
Long service leave provision relates to the expected cost of this leave.
24. Related party transactions
Two (2022: two) of the directors have received a proportion of their
remuneration through their individual service companies during the year. The
payments represent short term employee benefits. In all cases the directors
are responsible for their own taxation and national insurance liabilities.
The amounts involved are as follows and relate to activities within their
responsibilities as directors:
2023 2022
£'000 £'000
LGilbert 40,000 40,000
KPuris 16,667 40,000
On the 03 March 2023 Katie Puris resigned as a director. Previously they
received their remuneration, £16,667 (2022: £40,000) through a service
company. At the year end, an amount of £3,333 (2022: £3,333) was due to Lisa
Gilbert.
During the year, the Group recognised a share-based payment charge of
£147,836 (2022: £150,657) in respect of key management personnel.
During the year ended 30 November 2019, the Group made available a loan
facility of £100,000 to Track Record Holdings Limited on an unsecured basis.
The final repayment date of the facility is November 2029 and interest is
payable at a rate of 10% on any amount drawn down from the facility. A
non-utilisation fee of 1% of any amount of the facility not drawn down is also
payable. See note 12 for further details.
25. Pension commitments
Individual subsidiaries of the Group operate defined contribution pension
schemes for their employees. The assets of the schemes are held separately
from those of the Group.
The annual contributions payable are charged to the consolidated statement of
comprehensive income when they fall due for payment.
During the year £1,978,000 (2022: £1,608,000) was contributed by the Group
to individual pension schemes. At 30 November 2023 £Nil pension contributions
were outstanding (2022: £Nil).
Breakdown of Pension Scheme Amounts FY23 FY22
£ £
Pulsar Group PLC 2 12
AIMediaData Limited 365 339
Fenix Media Limited 115 96
Face US 22 26
ResponseSource Limited 6 17
Isentia Pty (Aus) 939 1,101
Isentia Ltd (NZ) 37 40
Isentia Library (MY) 146 -
Isentia Brandtology 131 -
Isentia Jakarta (ID) 14 7
Isentia Manila (PH) 136 (30)
Isentia Vietnam (VN) 60 -
Isentia Bangkok (TH) 8 -
Total 1,981 1,608
26. Restatement in respect of deferred income
Following the change in auditor in the current year it was identified that
where advance billing of customers was not due at the year end and no services
had commenced the requirements to recognise the contract asset and the
corresponding deferred revenue under IFRS 15 had not been adequately
satisfied. As a result, both accounts had been overstated by £2,799,000 and
hence have been restated. The resulting adjustment of these accounts has had
no impact on the statement of comprehensive income or the net current assets
of the Group.
In respect of the opening position for 1 December 2021 the adjustment to
reduce accounts receivable and deferred income would have been £2,539,000.
Whilst material, the Group have not considered it necessary to produce a full
third balance sheet as the Directors consider this would not be qualitatively
necessary to assist the users of the financial statements.
27. Events after the reporting date
In January 2024, the Company entered into an authorised £3,000,000 overdraft
facility with its bankers. The overdraft is available until 30 November 2024
or such later date as may be advised by the bank, who have the right to
terminate the overdraft facility at any time.
In May 2024, the Company entered into a £3,000,000 debt facility agreement.
The debt facility has been made available to the Company for a period of 18
months from the date of signing the agreement.
There are no covenants applicable to either the overdraft or debt facility.
28. Availability of Annual Report
Copies of the Report and Accounts will be posted to shareholders where
requested and the document will be available from the Company's website
(www.pulsargroup.com) later today.
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