REG - 4GLOBAL PLC - Final Results for the Year Ended 31 March 2023
27/07/2023 07:15
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RNS Number : 3239H 4GLOBAL PLC 27 July 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
27 July 2023
4GLOBAL PLC
("4GLOBAL" or the "Company")
Final Results
4GLOBAL, a UK-based data, services and software company focused on major
sporting events and the promotion and measurement of physical activity, is
pleased to announce its audited final results for the year ended 31 March
2023.
Headline results for the year to 31 March 2023
Audited Audited Change
2023 2022
£'000 £'000
Revenue 5,586 3,640 +53%
Gross profit 4,136 2,616 +58%
Adjusted profit before taxation 1,230 573 +115%
Statutory profit / (loss) before tax 519 (1,889)
Earnings per share 2.4p (7.1)p
Net cash 1,138 3,051
Financial highlights
• Revenue increased to £5.6m (2022: £3.6m) up 53%
• Consultancy services revenue £2.3m and data (ARR) revenue £3.3m, up 114%
• Significant revenue (£2.5m) carried over into new financial year, providing
good forward visibility
•
Significantly improved operating profit at £1.2m (2022: £573k) up 115%
Profit before tax of £520k against a loss for the prior year of £1.9m
• Earnings per share of 2.4p compared to a loss of (7.1)p in 2022
Post period highlights
• Strategic partnership to exploit a multi-million US dollar opportunity with
Jonas Fitness Inc, part of Jonas Software, a worldwide Constellation Software
company
• Strategic partnership agreement for a multi-million-pound opportunity
with the fitness equipment and digital health provider Technogym to work with
their existing and mutual clients to enhance their data insight solutions
Continued strong financial performance in first quarter of new financial year,
with confidence in continued strong financial performance. The Company remains
• focused on continuing to grow its data and insight products revenue, due to
revenue visibility and higher margin profile.
Eloy Mazon, Chief Executive Officer of 4GLOBAL commented:
"We completed our first full year as an AIM quoted company and are in a strong
financial position - profitable and with a sound balance sheet - the business
has an excellent foundation on which to build in the current financial year
and the future.
"Demand for our data and insight products continues to grow. The many
significant challenges faced in our sector due to the uncertain global
economic outlook, will, we believe, drive our customers to seek ever more
business-critical insight and this is the very strong message we are getting
from our customers.
"We are encouraged by the prospects for the rest of the financial year and
beyond as we seek to increase our penetration in the European and North
American markets and develop new revenue streams associated with our data."
For further information please contact:
4GLOBAL c/o IFC Advisory
Eloy Mazon (CEO)
Spark Advisory Partners - Nominated Adviser 0203 368 3554
Neil Baldwin
Canaccord Genuity Limited - Broker 020 7523 8000
Bobbie Hilliam
IFC Advisory 0203 934 6630
Graham Herring / Zach Cohen
A copy of these results is available on the Company's website www.4global.com
(http://www.4global.com/) . In addition, the Report & Accounts will be
available on the Company's website and sent to shareholders by, at which point
a further notification will be made.
CHAIRMAN'S STATEMENT
I am very pleased to announce our results for the year ended 31 March 2023. We
have built on the foundations of the previous year and have established deep
long-term partnerships with key clients that have resulted in the robust
performance being announced today. Clients are seeing the benefits of our data
and the provision of insights that our data provides which allows them to
make, and continue to make, insightful business decisions.
Results
The financial results for the year ended 31 March 2023 reflect the hard work
by Eloy Mazon (CEO) and his team. Revenue for the year ended 31 March 2023 was
£5.6m, up 53% on the previous year. As per our strategy, we continue to grow
our data products and platforms and increasingly our other services rely on
our unique data sets as part of the offering, we will identify our revenues as
being generated from our unique data set. We have shown in our segmental
analysis the split between Consultancy and Data. Moving forward, we will
migrate our clients to new contracts that will reflect the fact that we supply
services in a data rich environment. The result of which will be higher ARR
and forward visibility.
Our alternative reporting results for the year ended 31 March 2023 was an
adjusted earnings before interest tax depreciation and amortisation of £1.23m
(2022: £0.573m) an increase of 115%.
Board and People
I would like to thank my fellow Board members for their continued support and
contribution to the Group. I would also like to thank Roger Taylor who stepped
down from the Board in October 2022 after assisting in guiding us through the
IPO process and wish him well for the future.
I must thank our colleagues within the business for their continued hard work
and professionalism and their vital support in delivering these results. We
are a dynamic business and our colleagues have produced exceptional work for
and on behalf of clients.
Annual General Meeting
The Annual General Meeting will be held on 27 September 2023 at the Company's
offices, 5th Floor, Building 7 Chiswick Park, 566 Chiswick High Road,
Chiswick, London, W4 5YG.
Outlook
We have established partnerships with our client base that are deep rooted and
will continue to supply data products and platforms that our clients use in
their everyday business decision making and insights. The Board is confident
about the Group's current prospects.
Ian James
Chairman
26 July 2023
CHIEF EXECUTIVE'S STATEMENT
In our first full year as a quoted company, we continue to build a reputation
with all our stakeholders for delivering great products and platforms from our
unique data set and for delivering strong financial results for the business.
Our revenue for the financial year ended 31 March 2023 showed a year-on-year
growth of 53% up from £3.6m to £5.6m. We produced a statutory profit before
tax of £0.5m (2022: Loss (£1.9m)) and an adjusted EBTIDA of £1.23m against
£0.573 m for the previous year, a 115% increase.
This achievement was made possible thanks to the enormous efforts of everyone
at 4GLOBAL over the years during which we have established an incredible
reputation in our sector worldwide and developed a unique data set and insight
products that are recognised as having transformed our customers businesses.
A key priority for us over the years has been to ensure that 4GLOBAL was built
on a robust foundation with solid business principles around revenue,
profitability and sustainable growth. This has allowed us to successfully
navigate the turbulent macro-economic climate of the past year, continuing to
deliver strong growth and a solid financial position.
Our growth strategy is underpinned by four pillars; international expansion,
"land & expand" clients, acquisition strategy and data commercialisation.
The reporting year to 31 March 2023 was the second year in our five-year
strategic cycle and we continually review and measure the performance we have
made against each of our strategic pillars.
• International expansion - we have seen strong demand from international
markets especially the middle east where our partnership model is developing
business opportunities. Our initial expansion into the North American and
European markets is going well and we have signed commercial partnerships with
key players in these markets such as Jonas, Technogym and IHRSA from which we
will develop revenue generating opportunities in the near future.
• "Land and expand" clients - we continue to land new clients, 17.6% of revenue
was generated from new client relationships in the financial year. We were
also able to expand relationships with existing clients. The current need for
data and insight to navigate complex strategic, operational and investment
challenges has generated strong demand for our data and insight products and
services and this has been reflected in the recurring revenue growth compared
to last year.
• Acquisition strategy - we are constantly evaluating opportunities for
acquisition. Our focus is to ensure that any company we acquire is aligned to
our core business values and financial criteria of profitability, cash
generation and annual recurring revenues so that they are accretive to the
overall value of 4GLOBAL. Reviewing the market for potential acquisitions
continues to be an opportunity for our growth strategy.
• Data commercialisation - we have built one of the biggest and unique databases
of how individuals consume sport. We believe that our strength is a data
company and not a software company, therefore we believe in providing our
customers with the option of using our data - under the same data user
agreements signed with the data controllers - irrespective of the software
platform they might want to use to draw the unique insights that only our data
provides. This allows us to open up new customer types who have other software
products embedded in their organisation but that without our data would not
deliver the sort of insights we can provide.
Overall, excellent progress has been made in executing our strategy and we are
pleased with the results it is generating.
During the financial year we released updated editions of CitiHub 2.0; Social
Value Calculator ("SVC") 3.0; SVC Canada 1.0; Demand Modelling Tool 1.0 and
European DataHub 1.0.
CitiHub integrates physical activity and participation programmes with
additional data to provide insight and activity trends and assists in the
planning of interventions to address physical inactivity and related health
issues.
SVC was designed to give leisure operators a way of measuring and providing
evidence for the Social Value created from investment in sport and physical
activity.
Our Demand Modelling Tool provides a clear set of demand projections in terms
of unique users and weekly participation for a range of facility types, as
well as benchmarking this against sector averages, understanding membership
numbers and how much social value that could be generated.
The tool allows users to model a range of investment scenarios and identify
the optimal facility mix should investment be made, whether this is through
the development of new sites or redevelopment at existing facilities.
This gives the ability to measure the potential impact and outputs can be used
to drive the commercial model for investment into a site.
We are taking our DataHub into Europe where we have established a partnership
with the trade association, EuropeActive, with the intention of developing a
central database for physical activity participation data across Europe.
Our data asset grew significantly in this period, currently we have 3.5
billion data points and processing significant amounts of data on a daily
basis; in England alone we are processing in excess of 1million data points
per day. This growth in our data assets solidifies our position in the market,
increases entry barriers and allows us to provide even more valuable and
unique insights.
By integrating data analytics capabilities, technology implementation, and
strategic consulting we offer our clients end-to-end solutions. With our data
asset as the foundation, our unique data-driven decision-making approach
enables us to empower clients with intelligence and actionable insights
aligned to their strategic objectives and business priorities, giving us a
distinctive edge in the market.
Summary and Outlook
We completed our first full year as an AIM quoted company and are in a strong
financial position - profitable and with a sound balance sheet - the business
has an excellent foundation on which to build in the current financial year
and the future.
Demand for our data and insight products continues to grow. The many
significant challenges faced in our sector due to the uncertain global
economic outlook, will, we believe, drive our customers to seek ever more
business-critical insight and this is the very strong message we are getting
from our customers.
We are encouraged by the prospects for the rest of the financial year and
beyond as we seek to increase our penetration in the European and North
American markets and develop new revenue streams associated with our data.
As predicted, the line between service and technology revenue is becoming
harder to differentiate as the majority of our relationships with customers
are annual recurring or repeatable ("ARR") type of relationships. It is for
this reason that in the financial year ending 31 March 2024 we plan to start
the migration of all existing customers and new customers to this type of
contracting, accelerating this way the transition that began some years ago
from a service revenue business to a data and technology revenue business.
We believe this change in approach to our contractual relationship with our
customers will better represent the nature of the business and its value, at
the same time that it will drive a number of operational efficiencies.
I would like to thank all our staff for their efforts in 2022/23 to realise
the true potential of 4GLOBAL and growth capabilities.
Eloy Mazon
Chief Executive Officer
26 July 2023
FINANCIAL REVIEW
The Group has shown significant growth in the last financial year with
revenues and profits up year on year. The Group uses a number of key
indicators to monitor the Group's performance. The statutory results for the
year ended 31 March 2023 with the comparatives for the previous year are
presented in the following table. Together with a reconciliation to the
presentation of the Headline Results.
To arrive at a Headline profit before tax the Directors feel it appropriate to
make the financial numbers comparable at earnings before interest, tax,
depreciation and amortisation, share based payment expense and exceptional
items.
At the time of the IPO a new share option scheme was implemented: a total of
1,755,072 options were issued at 91p and 550,800 options were issued at 35.6p.
A net charge of £338,455 (2022: £169,550) has been taken to the share-based
payment reserve on the balance sheet. 275,400 options that were issued at
35.6p lapsed during the year.
Reconciliation of statutory to Headline profit before taxation:
Year ended 31 March 2023 Year ended 31 March 2022
£ £
Statutory profit/(loss) before taxation 496,921 (1,888,693)
Separately disclosed items:
Depreciation and amortisation 372,717 196,756
Share based payment expense 338,455 169,550
Exceptional items - 2,071,781
Finance cost (net) 22,271 23,905
Headline profit before taxation 1,230,364 573,299
Group revenue, for the year ended 31 March 2023, has increased by 53% to
£5.6m from £3.6m. Gross profit has increased from £2.6m to £4.1m, up 58%.
The Group analyses revenue into two streams of consultancy and Data revenues.
Consultancy revenues constitute services provided to clients for major
sporting events and Data revenues is made of two elements; one is fees from
setting up a client on a product platform, Project Set Up ("PSU") fees. The
second is a licence fee for the use of the platform and any advice fees for
analysis requested by the client. In the future, as our consultancy services
increasingly rely on the data and data platforms, we will migrate our
consultancy clients to contracts that identify revenues as being derived from
data engagement. Therefore, the directors expect the majority of our future
revenue to be recurring in nature as they are derived from our data set and
platforms. Where there is a pure consultancy service we will continue to
identify that revenue separately.
Analysis of revenue by category Year ended 31 March Year ended 31 March 2022
2023
£ % £ %
Consultancy 2,264,844 40% 2,087,249 57%
Data platforms 3,320,903 60% 1,552,681 43%
5,585,747 3,639,930
Revenues increased by 53% from £3.6m to £5.6m. The mix of revenue was
weighted to the use of data and data dashboards we sell on our platforms. The
growth in data revenue reflects execution of the Company's strategy to focus
on higher margin, recurring revenue.
During the current financial year no costs were identified as exceptional
items. The table below discloses the exceptional items incurred in the year
ended 31 March 2022 and included:
Year ended Year ended
31 March 2023 31 March 2022
£ £
IPO costs 874,650
Cash settlement of historic option contracts - 1,114,080
Legal settlement of contract dispute - 70,000
Pension contributions for prior years - 13,051
Total exceptional items - 2,071,781
Exceptional items includes the IPO costs incurred at the time of the Group's
IPO on 7 December 2021 and shown in the financial year ended 31 March 2022
£0.9m.
The Group had issued share options to individuals during 2020. The options
represented 38% of the then issued share capital of 4GLOBAL Consulting Ltd and
were to reward these individuals for the work and development of that company
that they had made over previous years. The potential overhang and dilutive
effect of these options on the issued share capital, after taking advice, was
seen as detrimental to the company's prospects of completing a successful IPO.
The individuals agreed to waive their options for a cash settlement of £1.0m
in addition a provision was made for employers' National Insurance
contributions.
The directors had identified two amounts as exceptional because of their
nature and relating to events in previous periods. One was a legal dispute
with a client which was settled post the year end and the other was a
provision for adjustments to pension contribution that have an impact on the
previous year's results. This has affected the opening reserves for the 1
April 2020 and a charge being made in the accounts for the year ended 31 March
2022 and a charge in the year ended 31 March 2021. The total provision for the
three years is £41,509. A provision of £13,052 has been made in this current
reporting year and prior year adjustment of £12,272 made in the year ended 31
March 2021. The opening reserves for the year ended 31 March 2021 have been
adjusted by the prior adjustment by £16,184.
The Headline Adjusted Profit from Operations is £1.2 m (2022: £0.6 m), an
increase of 115%.
Tax
The Group has historic losses which have been calculated and offset against
any potential charge for corporation tax. The Group, also, benefits from
research and development expenditure for which the Group can claim enhanced
relief of 230% of the expenditure incurred.
Earnings per share
The statutory earnings per share for the year ended 31 March 2023 was 2.4
pence (2022: loss per share of 7.1 pence), and a diluted profit per share of
2.2 pence, as the Group made a loss in the previous year there was no dilution
(2022: 7.1 pence).
Cash Flow
The Group utilised £1.9m (2022: £1.1m) from operations in the year. The
utilisation for the year ended 31 March 2023 is a factor of the increased
working capital within both accounts receivable and contract assets. These,
over time, should be converted into cash. The utilisation in the year ended 31
March 2022 was due to the settlement of exceptional items which included IPO
costs of £0.9m and the cash settlement of share options £1.1m.
As at 31 March 2023 the Group held cash and cash equivalents of £1.1m (2022:
£3.1m).
Statement of financial position
The Group's statement of financial position shows net assets totalled £4.5m
(2022: £3.5m). Most of the statement of financial position is made up of
liquid assets of trade and other receivables and cash and cash equivalents.
Working capital was £3.8m (2022: £3.1m). Our trade and other receivables
increased from £1.8m to £4.2m. This increase is due to the second half year
performance in revenues where we generated £4.2m in revenues in the second
six months of the year ended 31 March 2023 which represented 75% of the annual
turnover. The trade and other receivables have increased from £0.7m to £1.4m
and contract assets increased from £0.5m to £2.1m. Since year end we have
collected £0.9m.
The total gross assets of the Group increased from £5.2m to £6.3m reflecting
the positive performance for the year ended 31 March 2023.
The strategic report on was approved by the Board of Directors on 26 July 2023
and was signed on its behalf by:
Keith Sadler
Chief Financial Officer
26 July 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2023
Note Year ended 31 March 2023 Year ended 31 March 2022
£ £
Revenue 6 5,585,747 3,639,930
Cost of sales (1,449,008) (1,024,175)
Gross profit 4,136,739 2,615,755
Administrative expenses (2,919,874) (2,043,103)
Other operating income 7 14,000 647
Analysed as:
Adjusted profit from operations(1) 1,230,365 573,299
Depreciation and amortisation (372,717) (196,756)
Share based payment expense (338,456) (169,550)
Exceptional items 8 - (2,071,782)
Profit/(loss) from operations 8 519,192 (1,864,789)
Finance income 1,772 73
Finance cost 11 (24,043) (23,977)
Profit/(loss) before tax 3 496,921 (1,888,693)
Tax credit 12 145,133 242,581
Profit/(loss) for the year 642,054 (1,646,112)
Other comprehensive income
Exchange differences on translation of foreign operations (3,053) (11,058)
Other comprehensive income for the year (3,053) (11,058)
Total comprehensive income/(loss) for the year 639,001 (1,657,170)
Total comprehensive income/(loss) attributable to:
Owners of the Parent Company 639,001 (1,657,170)
Basic profit/(loss) per share 13 2.4p (7.1) p
Diluted profit/(loss) per share 13 2.2p (7.1) p
Note 1. Adjusted profit from operations is calculated as earnings before
interest, taxation, depreciation, amortisation of intangible assets and right
of use charge, any impairment costs relating to non-current assets, share
based payments and exceptional items.
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note As at As at
31 March 2023 31 March 2022
£ £
Assets
Non-current assets
Property, plant and equipment 14 34,401 28,870
Right-of-use assets 14 595,601 382,490
Intangible assets 15 392,180 -
Deffered Tax 190,647 43,386
1,212,829 454,746
Current assets
Trade and other receivables 16 3,977,947 1,721,096
Cash and cash equivalents 17 1,138,093 3,050,948
5,116,040 4,772,044
Total assets 6,328,869 5,226,790
Equity and Liabilities
Equity
Share capital 18 263,451 263,451
Share premium 20 3,390,330 3,390,330
Merger reserve 676,310 676,310
Share option reserve 19,20 388,245 139,080
Share warrant reserve 188,266 188,266
Currency translation reserve (35,376) (32,323)
Retained earnings 20 (389,980) (1,121,325)
Total equity 4,481,246 3,503,789
Non-current liabilities
Borrowings 22 108,832 158,823
Lease liability 23 194,060 -
302,892 158,823
Current liabilities
Borrowings 22 50,000 121,814
Trade and other payables 21 1,122,746 1,088,553
Lease liability 23 371,985 353,811
Total current liabilities 1,544,731 1,564,178
Total liabilities 1,847,623 1,723,001
Total equity and liabilities 6,328,869 5,226,790
The notes form an integral part of the financial statements.
The financial statements were approved by the Board of Directors on 26 July
2023 and were signed on its behalf by
Keith Sadler
Chief Financial Officer
Registered number 13523846
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital Currency
Share redemption Share Merger Share option Share warrant translation Retained Total
capital reserve premium reserve reserve reserve reserve earnings equity
£ £ £ £ £ £ £ £ £
As at 31 March 2021 1,097 105 894,491 - 31,773 - (21,264) 485,205 1,391,407
Loss for the year - - - - - - - (1,646,112) (1,646,112)
Other comprehensive income - translation differences
- - - - - - (11,058) - (11,058)
Total comprehensive income for the year
- - - - - - (11,058) (1,646,112) (1,657,170)
Transactions with owners:
Issue of shares, net of costs 262,354 (105) 2,684,105 676,310 - - - - 3,622,664
Deferred tax on share options 1,259 1,259
Share-based expense - - - - 169,550 - - - 169,550
Share options cancelled fair value adjustment
- - - - - - - (23,921) (23,921)
Share options waived - - - - (62,243) - - 62,243 -
Issue of warrants - - (188,266) - - 188,266 - - -
262,354 (105) 2,495,839 - 107,307 188,266 - (39,851) 3,769,552
As at 31 March 2022 263,451 - 3,390,330 676,310 139,080 188,266 (32,323) (1,121,325) 3,503,789
Profit for the year - - - - - - - 642,054 642,054
Other comprehensive charges - translation differences
- - - - - - (3,053) - (3,053)
Total comprehensive income for the year
- - - - - - (3,053) 642,054 639,001
Transactions with owners:
Movement on lapsed share options - - - - (89,291) - - 89,291 -
Share based expense - - - - 338,456 - - - 338,456
- - - 249,165 - - 89,291 338,456
As at 31 March 2023 263,451 - 3,390,330 676,310 388,245 188,266 (35,376) (389,980) 4,481,246
CONSOLIDATED STATEMENT OF CASH FLOWS
Note Year ended 31 March 2023 Year ended 31 March 2022
£ £
Cash flows from operating activities
Profit/(loss) before income tax for year 496,921 (1,888,693)
Adjustments to reconcile (loss)/profit before tax to net cash flows:
Depreciation of tangible assets 14 366,461 196,723
Amortisation 15 6,256 -
Loss/(profit) on disposal of fixed assets 1,077 (9,894)
Finance income (1,772) -
Finance cost 11 24,043 23,977
Equity-settled share-based expense/warrants 8 338,456 169,550
(Increase)/decrease in trade and other receivables (2,256,890) 390,838
(Decrease)/increase in trade and other payables 36,093 63,587
Tax received (3,989) -
Net cash flows - operating activities (993,344) (1,053,912)
Cash flows from investing activities
Purchase of tangible assets 14 (22,768) (23,773)
Development costs capitalised 14 (398,436) -
Interest received 1,772 73
Net cash - investing activities (419,432) (23,700)
Cash flows from financing activities
Issue of ordinary share capital - 3,612,662
Repayment of shareholder loan - principal (50,400) -
Repayment of shareholder loan - interest (22,194) -
Repayment of borrowings (50,000) (41,168)
Lease liability principal payment 23 (351,642) (186,470)
Interest elements of lease payments (8,958) (10,780)
Interest paid (15,521) (9,445)
Net cash flows - financing activities (498,715) 3,364,799
Net (decrease)/increase in cash (1,911,491) 2,287,187
Effects of exchange rate changes on cash (1,364) (11,581)
Cash at beginning of year 3,050,948 775,342
Cash at the end of year 17 1,138,093 3,050,948
Comprising:
Cash and cash equivalents 1,138,093 3,050,948
Cash at end of year 16 1,138,093 3,050,948
NOTES TO THE FINANCIAL STATEMENTS
1. Corporate information
4Global PLC is a public limited company incorporated and domiciled in England
and Wales. The registered office address and principal place of business is
located at 5th Floor, Building 7 Chiswick Park, 566 Chiswick High Road,
London, W4 5YG.
The 4GLOBAL Group's principal activity is the provision of advisory services
in the sporting sector at a local, national and international level.
2. Basis of preparation
The financial statements have been prepared in accordance with the
requirements of the AIM Rules for Companies, UK Adopted International
Accounting Standards.
The financial statements have been prepared on the historical cost basis,
unless accounting standards require an alternative measurement basis. Where
there are assets and liabilities calculated on a different basis, this fact is
disclosed in either the relevant accounting policy or in the notes to the
financial information.
The preparation of the financial statements in compliance with UK Adopted
International Accounting Standards requires the use of certain critical
accounting estimates and judgements. It also requires management to exercise
judgement of the most appropriate application in applying the 4GLOBAL Group's
accounting policies. The areas where significant judgements and estimates have
been made in preparing the financial information and their effect are
disclosed in Note 4.
3. Going concern
The financial statements have been prepared on the going concern basis. The
Group made a profit for the year to 31 March 2023. The Group has cash
resources of £1.1m. The cash flow for the group fluctuates based on monthly
revenue collections and this is managed within the cash and overdraft
facilities which the group has. The group has a £100,000 agreed overdraft
facility and a further £100,000 informal facility. The Directors have
reviewed the 4GLOBAL Group's overall position and outlook and are of the
opinion that the 4GLOBAL Group is sufficiently well funded to be able to
operate as a going concern for at least the next twelve months from the date
of approval of these financial statements.
4. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with UK Adopted
International Financial Reporting Standards requires management to make
estimates and judgements that affect the reported amounts of assets and
liabilities as well as the disclosure of contingent assets and liabilities at
the year-end date and the reported amounts of revenues and expenses during the
reporting year.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The significant judgements
made by management in applying the 4GLOBAL Group's accounting policies and the
key sources of estimation uncertainty were:
4.1 Consultancy revenue
For contracts spanning the year end the 4GLOBAL Group uses judgement
determining the amount of revenue to recognise in each period. This requires
estimation of the stage of completion of the project, taking into account time
spent during the period and the likely time required to complete the project.
4.2 Bad debts
The group currently calculates a "bad debt" provision on trade receivables and
contract assets which are past due date and are not specifically provided for.
Under IFRS 9 this assessment is required to be calculated based on a
forward-looking expected credit loss ('ECL') model, for which a simplified
approach will be applied. The method uses historic customer data, alongside
future economic conditions to calculate expected loss on receivables. See Note
15.
4.3 Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the combined statement of financial position
differs from its tax base.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
4.4 Share options and warrants
Where equity settled share options are awarded to employees, the fair value of
the options at the date of grant is charged to the consolidated statement of
comprehensive income over the vesting period as an employment expense.
The fair value of the options is measured at the grant date and spread over
the vesting period. The fair value is measured based on an option pricing
model taking into account the terms and conditions upon which the instruments
were granted.
4.5 Development costs
The Group develops a number of products and platforms for its portfolio of
offerings to clients. These are internally generated from the technical,
staff, and external resources. The products and platforms are identified
separately and the staff time is allocated to the programmes for development.
Only direct costs are allocated to these products and platforms as required by
IAS 38. The economic performance of the product and platforms is assessed to
ensure they can be carried on the balance sheet. Once the product or platform
is commercially ready for market it is amortised over the anticipated life.
The initial products have been allocated a 36 month amortisation life span. At
the end of each year the products are reviewed for impairment.
5. Summary of significant accounting policies
5.1 Basis of consolidation
The financial statements incorporate the financial information of the 4GLOBAL
Group. Control is achieved when a company is exposed, or has rights, to
variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. Where necessary,
adjustments are made to the financial information of subsidiaries to bring the
accounting policies used into line with those used by other members of the
4GLOBAL Group. All significant inter-company transactions and balances between
4GLOBAL Group entities are eliminated on consolidation.
Subsidiary companies
4GLOBAL PLC's subsidiaries are as follows:
Proportion of
Country of Nature of voting rights and
Name of company incorporation business Interest shares held
4GLOBAL Consulting Ltd ("4GLOBAL Consulting") England and Wales Provision of data and consultancy services to the sports participation market 100% 100%
4GLOBAL Inc USA Provision of data and consultancy services to the sports participation market 100% 100%
4Global Danismanlik Ve Yazilim Hiz. LTD.STI ("4Global Turkey") Turkey Provision of services on behalf of parent 100% 100%
The registered office address and principal place of business of 4GLOBAL
Consulting is 5th Floor, Building 7, Chiswick Business Park, 566 Chiswick High
Road, London, W4 5YG.
4GLOBAL Inc. It is anticipated to begin trading in the early part of the
financial year ending 31 March 2024. The principal place of business is
Venture X, Downtown Doral, 8350 NW 52nd Terrace Suite 301, Miami, FL 33166,
United States.
The registered office address and principal place of business of 4Global
Turkey is Istasyon Yolu Sok. No: 3 Altintepe, Maltepe, Istanbul.
The Company's subsidiary in Turkey has a year end of 31 December which was set
when the company was set up and is a normal year end for Turkish companies.
The preparation of the financial information for the Group accounts has
therefore been based on the management accounts for that company to 31 March.
The Group is liaising with local advisers to attempt to amend the year end to
31 March.
In applying merger accounting when preparing these Consolidated Financial
Statements, to the extent the carrying value of the assets and liabilities
acquired under merger accounting is different to the cost of investment, the
difference is recorded in equity within the merger reserve. Under merger
accounting the results of the Group entities are combined from the beginning
of the comparative period before the merger occurred. Comparatives are
restated on a combined basis and adjustments made as necessary to achieve
consistency of accounting principles.
5.2 Revenue
Consultancy services
Consultancy services are provided under fixed-price contracts and contracts
specifying an hourly fee. Revenue from providing services is recognised based
on the actual service provided to the end of the reporting period as a
proportion of the total services to be provided because the customer receives
and uses the benefits simultaneously. This is determined based on the actual
hours spent relative to the total expected hours.
In the case of fixed-price contracts, the customer pays the fixed amount based
on a payment schedule. If the services rendered exceed the payment, a contract
asset is recognised. If the payments exceed the services provided then a
contract liability is recognised.
If the contract includes an hourly fee, revenue is recognised in the amount to
which the 4GLOBAL Group has a right to invoice. Customers are invoiced on a
monthly basis and consideration is payable when invoiced.
Subscriptions
Subscriptions for access to the Datahub are provided under fixed-price
contracts. Customers pay in advance on a monthly, quarterly or annual basis
and consideration is payable when invoiced. Where access to the Datahub has
been invoiced but not paid at the end of the reporting period a trade
receivable is created. Where services have been provided but not invoiced a
contract asset is created. A contract liability is recognised in respect of
the services not yet provided. Revenue is recognised on a straight-line basis
over the term of the subscription.
5.3 Research expenditure
The Group undertakes research into future development of products and
platforms utilising the data sources that the Group curates. This is
separately identified and recorded. The Group makes a claim for enhanced tax
relief on this expenditure through HMRC. The expenditure is separately
identified in the income statement notes.
5.4 Foreign currency translation
Functional and presentational currency
Items included in the financial statements of each of the 4GLOBAL Group's
entities are measured using the currency of the primary economic environment
in which the entity operates ('the functional currency'). The financial
statements are presented in pounds sterling, which is 4Global Group's
functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the spot exchange rates at the dates of the transactions.
At each year end foreign currency monetary items are translated using the
closing rate. Non monetary items measured at historical cost are translated
using the exchange rate at the date of the transaction and non monetary items
measured at fair value are measured using the exchange rate when fair value
was determined.
Foreign exchange gains and losses resulting from the settlement of
transactions and from the translation at year end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the
statement of comprehensive income.
Foreign exchange gains and losses that relate to borrowings and cash and cash
equivalents are presented in the statement of comprehensive income within
'administrative expenses'. All other foreign exchange gains and losses are
presented in the statement of comprehensive income under the heading to which
they relate.
4GLOBAL Group Companies
The results and financial position of foreign operations (none of which has
the currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
• assets and liabilities for each balance sheet presented are translated at
the closing rate at the date of that balance sheet
• income and expenses for each statement of profit or loss and statement of
comprehensive income are translated at monthly exchange rates throughout the
period, and
• all resulting exchange differences are recognised in other comprehensive
income.
Taxation
Taxation expense for the year comprises current and deferred tax recognised in
the reporting year. Tax is recognised in the statement of comprehensive
income.
Current tax
Current tax is the amount of tax payable in respect of the taxable profit for
the year or prior years. Tax is calculated on the basis of tax rates and laws
that have been enacted or substantively enacted by the year end.
Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit or loss.
Deferred tax assets are recognised for deductible temporary differences that
exist only where it is probable that taxable profits will be generated against
which the carrying value of the deferred tax asset can be recovered.
Deferred tax liabilities are recognised for all taxable temporary differences
except in respect of taxable temporary differences associated with investments
in subsidiaries, associates and interests in joint operations where the timing
of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable
future.
A deferred tax asset or liability is not recognised if a temporary difference
arises on initial recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.
5.5 Warrants
The 4GLOBAL Group issued warrant certificate to advisers at the time of the
IPO and measures the fair value of the equity settled transactions with the
advisers at the grant date of the warrant instruments. The fair value is
calculated using an appropriate valuation model and requires assumptions
regarding dividend yields, risk-free interest rates, share price volatility
and expected life of the warrant. The resulting amount is charged to the share
premium account and credited to the share warrant reserve.
5.6 Property plant and equipment
Property, plant and equipment is recorded at cost less accumulated
depreciation and accumulated impairment losses. The initial cost of an asset
comprises its purchase price and any costs attributable to bringing the asset
into the location and condition necessary for it to be capable of operating in
the manner intended by management. Expenditures for routine maintenance and
repairs are expensed as incurred, while additions and improvements are
capitalised. A right-of-use asset is recognised at the commencement date of
the lease. The right-of-use asset is measured at cost, which comprises the
initial amount of the lease liability, adjusted for, as applicable, any lease
payments made at or before the commencement date, any initial direct costs
incurred and an estimate of costs expected to be incurred for restoring the
site or asset.
Property, plant and equipment is depreciated using the straight-line method
over the estimated useful lives or, in the case of certain leased right-of-use
assets, the shorter of the expected lease term and estimated useful life:
- Office equipment - 4 years
- Right of use - over the term of the lease
An item of property, plant and equipment is derecognised upon disposal or when
no further economic benefits are expected to arise from the use of that asset.
Any gain or loss arising on de-recognition of the asset is included in the
statement of comprehensive income when the asset is derecognised.
5.7 Intangible assets
The intangible assets are the internally developed products and platforms that
the group has generated. The assets are separately identifiable and are
capitalised costs of direct resources used to develop the products and
platforms, which comprises any external purchase costs and the costs of
individuals costs attributable to bringing the asset into the location and
condition necessary for it to be capable of operating in the manner intended
by management.
Once the product or platform is ready for commercial use it is then amortised
using the straight-line method over the estimated useful lives which the
management have identified as 36 months.
An intangible asset is derecognised upon disposal or when no further economic
benefits are expected to arise from the use of that asset. Any gain or loss
arising on de-recognition of the asset is included in the statement of
comprehensive income when the asset is derecognised.
5.8 Leasing
The 4GLOBAL Group applies a single recognition and measurement approach for
all leases except for short-term leases and leases of low-value assets. At
commencement of a lease, the 4GLOBAL Group as lessee recognises a liability to
make lease payments and an asset representing the right to use the underlying
asset during the lease term. The amount of the lease liability recognised is
on a discounted basis. The discount rates used on transition were incremental
borrowing rates as appropriate for each lease based on factors such as the
lease term and payment terms. Where the rate implicit in the lease cannot
readily be determined the 4GLOBAL Group used the 4GLOBAL Group's incremental
borrowing rate. The 4GLOBAL Group does not have any leases where the 4GLOBAL
Group is a lessor.
The 4GLOBAL Group takes advantage of the practical expedient which allows an
exemption from recognition for leases with terms of 12 months or less and low
value leases.
Lease liabilities are recognised at the present value of future lease payments
and subsequently carried at amortised cost using the effective interest
method.
5.9 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with
banks and other short-term highly liquid investments in debt securities with
original maturities of three months or less.
5.10 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial instruments are classified into one of the categories discussed
below in accordance with IFRS 9, with reference to the business model for that
instrument and the contractual cash flow characteristics.
Financial assets and liabilities are offset and the net amount reported in the
financial statements if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to settle on a net basis, or
to realise the assets and settle the liabilities simultaneously.
The accounting policy for each category is as follows:
Financial assets
Financial assets comprise cash and cash equivalents and receivables.
Receivables primarily consist of trade and other receivables. These assets are
non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. These assets are initially recognised at
transaction price plus transaction costs that are directly attributable to
their acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, adjusted for change in expected
credit losses.
Impairment of financial assets
The IFRS 9 impairment model requires the recognition of 'expected credit
losses'. Therefore, it is not necessary for a credit event to have occurred
before credit losses are recognised. The impairment model applies to the
4GLOBAL Group's financial assets.
For trade receivables the 4GLOBAL Group has applied the simplified approach
permitted by IFRS 9 in calculating expected credit losses. This approach
requires expected lifetime losses to be recognised from initial recognition of
the receivables.
Financial liabilities
Financial liabilities include trade and other payables, borrowings and lease
liabilities.
Trade and other payables
Trade and other payables are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest method.
Borrowings
Borrowings are initially recognised at fair value and subsequently carried at
amortised cost using the effective interest method.
Derecognition
A financial liability is derecognised when the obligation under the liability
is discharged or cancelled, or expires. When an existing financial liability
is replaced by another from the same lender on substantially different terms
or the terms of an existing liability are substantially modified, such an
exchange is treated as the de-recognition of the original liability and the
recognition of a new liability. When the modification is not substantial the
difference between the carrying amount of the liability before the
modification and the present value of the cash flows after modification is
recognised in profit or loss.
Classification of financial instruments issued by the 4GLOBAL Group
Financial instruments issued by the 4GLOBAL Group are treated as equity only
to the extent that they meet the following two conditions:
• they include no contractual obligations upon the 4GLOBAL Group to deliver
cash or other financial assets or to exchange financial assets or financial
liabilities with another party under conditions that are potentially
unfavourable to the Group; and
• where the instrument will or may be settled in the 4GLOBAL Group's own
equity instruments, it is either a non-derivative that includes no obligation
to deliver a variable number of the 4GLOBAL Group's own equity instruments or
is a derivative that will be settled by the 4GLOBAL Group exchanging a fixed
amount of cash or other financial assets for a fixed number of its own equity
instruments.
5.11 Related party transactions
The 4GLOBAL Group discloses transactions with related parties which are not
wholly owned within the same group. It does not disclose transactions with
members of the same group that are wholly owned. Transactions of a similar
nature are aggregated unless, in the opinion of the Directors separate
disclosure is necessary to understand the effect of the transactions on the
financial statements.
Mr Mazon, through a controlled company, EMH Limited, invoiced the Group during
the year ended 31 March 2023 £nil for professional and consultancy services
(2022: £137,940). £nil was outstanding at 31 March 2023 (2022: £4,840). Mrs
E Mazon, trading as Family Paws, invoiced the Group for secretarial and
coaching services during the year £30,000 (2022: £15,000). £Nil was
outstanding at 31 March 2023 (2022: £Nil).
A loan of £50,400 was made by Mr Eloy Mazon. The loan was drawn down between
December 2013 and September 2014 and bore interest at 5% plus the Bank of
England base rate, which had been accrued with the loan. The loan was repaid
in June 2022 and the balance outstanding at 31 March 2023 was £nil (2022:
£70,805).
Mr James, through a controlled company, Fluency Media Limited, invoiced the
Group during the year ended 31 March 2023 £nil including VAT (2022:
£168,000). £nil was outstanding at 31 March 2023 (2022: £nil).
5.12 Standards, amendments and interpretations to existing standards that are
not yet effective and have not been early adopted by the 4GLOBAL Group
The following standards and interpretations relevant to the Group are in issue
but are not yet effective and have not been applied in the financial
statements.
• Amendments to IAS 1: Presentation of Financial Statements.
• Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates
and Errors.
• Amendments to IAS 12: Income taxes - Deferred Tax related to Assets and
Liabilities arising from a single transaction.
The above standards are not expected to materially impact the Group.
5.13 Segment information
The chief operation decision-maker ("CODM") is considered to be the Board of
Directors of the Group. The CODM allocates resources and assesses the
performance of the business and other activities at the operating segment
level.
The CODM has determined that the 4GLOBAL Group has one operating segment, the
provision of advisory services to the sporting industry at a local, national
and international level.
6. Analysis of revenue
Analysis of revenue by category Year ended 31 March 2023 Year ended 31 March 2022
£ £
Consultancy 2,264,844 2,087,249
Data 3,320,903 1,552,681
5,585,747 3,639,930
Analysis of revenue by geography Year ended 31 March 2023 Year ended 31 March 2022
£ £
Europe 3,218,496 2,351,970
Americas 447,207 890,608
Middle East 1,828,108 362,383
Other 91,936 34,969
5,585,747 3,639,930
During the year ended 2023, the 4GLOBAL Group had one (2022: two) customer
whose revenues accounted for more than 10%, making up 30.2% (2022: 14.7% and
14.2% respectively).
The 4GLOBAL Group has determined that the 4GLOBAL Group has one operating
segment and therefore all revenue above is attributable to that segment.
Outstanding balances at year end are unsecured, interest free and settlement
occurs in cash.
Included within trade and other receivables are contract assets as follows:
As at 31 March 2023 2022
£ £
Contract assets 2,136,404 463,696
Contract assets are included within "Trade and other receivables" on the face
of the statement of financial position. They arise when the Group has
performed services in accordance with the agreement with the relevant client
and has obtained right to consideration for these services but such income has
not been invoiced at the balance sheet date. Significant changes in contract
assets have arisen due to timing differences in the issue of invoices between
periods.
Included within trade and other payables are contract liabilities as follows:
As at 31 March 2023 2022
£ £
Contract liabilities (167,544) (226,696)
All contract liabilities are recognised as revenue in the subsequent reporting
period.
7. Other operating income
Other operating income comprises:
2023 2022
£ £
Training grant 14,000 -
Business Interruption receipt - 647
14,000 647
Additionally, the 4GLOBAL Group took a loan under the Coronavirus Business
Interruption Loan Scheme ("CBILS") (see note 21). Under the scheme, the
government made a Business Interruption Payment ("BIP") to cover the interest
charge for the first 12 months of the loan term.
8. Profit from operations and auditor's remuneration
Profit from operations is stated after charging/(crediting):
31 March 2023 2022
£ £
Fees payable to the company's auditors:
- Audit fees 57,000 47,500
- Other services - reporting accountant services at the IPO
- 125,500
Depreciation of property, plant and equipment 14,471 5,833
Depreciation of right-of-use assets 351,990 190,890
Amortisation of intangible assets 6,256 -
Research expenditure 793,658 640,342
Equity settled share-based expense 338,455 169,550
Net loss on foreign currency translation 3,053 11,581
Short-term lease expense 34,016 -
The Alternative Performance Measures used by management are shown below:
31 March 2023 2022
£ £
Profit/(loss) from operations 519,192 (1,864,789)
Depreciation and amortisation expense 372,717 196,756
Share based option charge 338,455 169,550
Exceptional items - 2,071,782
Adjusted EBITDA 1,230,364 573,299
Exceptional items which have been identified because of their size or the
nature of the expense being one-off in nature are as follows:
31 March 2023 2022
£ £
IPO costs - 874,650
Cash settlement of historic option contracts - 1,114,080
Legal settlement of contract dispute - 70,000
Provision for adjustment to pension contributions - 13,052
Total exceptional items - 2,071,782
9. Employees
Staff costs, including Directors' remuneration, were as follows:
31 March 2023 2022
£ £
Wages and salaries 1,708,588 1,401,895
Social security costs 214,900 275,425
Pension costs 47,166 35,501
Share based payment expense 338,455 169,550
Cash settlement of share options - 1,000,000
Employee benefits 3,878 23,604
2,312,987 2,905,975
The average number of employees, including the Directors, during the year was
as follows:
31 March 2023 2022
Number Number
Directors 6 3
Administrative staff 2 2
Technical staff 22 23
30 28
10. Directors' remuneration
The Directors' aggregate remuneration in respect of qualifying services were:
Salary Pension Benefits Bonus Total Remuneration 2023 Total Remuneration 2022
£ £
E Mazon 225,000 6,750 - - 231,750 155,379
K Sadler 120,000 3,300 - - 123,300 112,067
I James 60,000 1,700 - - 61,700 42,423
S Clarke 40,000 1,600 - - 41,600 28,104
A Orlando 40,000 - - - 40,000 19,122
R Taylor 30,642 600 - - 31,242 20,400
31 March 2023 2022
£ £
Invoices in year 30,000 260,800
Outstanding at year end - 4,840
The remuneration of the highest paid Director was as follows:
31 March 2023 2022
£ £
Wages and salaries 225,000 28,748
Bonus - 12,500
Social security costs 31,370 87,784
Cash settlement of share options - 620,000
Pension costs 6,750 1,175
Share-based payments charges - 43,155
263,120 793,362
Key management who comprise the senior management team; the chief operating
officer; chief product officer, chief customer officer and global head of
services received compensation is shown in the table below, which includes the
directors.
31 March 2023 2022
£ £
Wages and salaries 1,024,403 544,102
Social security costs 131,270 206,440
Cash settlement of share options - 1,000,000
Pension costs 28,530 15,055
Benefits - 20,698
Bonus - 25,000
Fees - 85,241
1,184,203 1,896,536
11. Finance income and costs
31 March 2023 2022
£ £
Lease liability interest 6,789 10,780
Interest on Shareholder loan 789 2,512
Interest on CBILS loan 7,330 7,153
Interest on Grant - 647
Other interest 9,135 2,885
Finance cost recognised in the income statement recognised 24,043 23,977
12. Taxation
31 March 2023 2022
£ £
Current tax charge
UK Corporation tax (193,004)
Adjustments in respect of prior periods (43,459)
Foreign tax on income for the year 2,128 5,445
Total current tax (2,128) (231,018)
Adjustments in respect of prior period (228,846)
Movement on temporary differences 81,585 (11,563)
Income tax credit (145,133) (242,581)
Factors affecting tax credit for the year
The tax credit for the year can be reconciled to the loss per the statement of
comprehensive income as follows:
31 March 2023 2022
£ £
Profit/(loss) before tax 496,921 (1,888,693)
Profit/(loss) before tax multiplied by the
UK corporate tax rate of 19% 94,415 (358,852)
Effects of:
Amounts not taxable/deductible for tax purposes 69,230 72,112
Depreciation - plant and machinery super-deduction - (1,357)
Enhanced research and development relief (98,414) (98,804)
Higher rate taxes on overseas earnings 304 1,247
Losses carried forward 8,379 178,956
Deferred tax on share options - 3,568
Deferred tax on right of use asset - 7,170
Deferred tax at higher rate 9,798 (3,162)
Adjustments in respect of prior periods (228,846) (43,459)
Income tax credit (145,133) (242,581)
Factors affecting future tax charges
An increase in the UK corporation tax rate from 19% to 25% for the financial
year beginning 1 April 2023 was substantively enacted on 24 May 2021. As IFRS
requires deferred tax to be measured at tax rates that have been subsequently
enacted at the reporting date, the Group's deferred tax balances have been
re-measured accordingly and the impact has been reflected within the
consolidated financial statements.
The following deferred tax assets have been recognised:
31 March 2023 2022
£ £
At beginning of period 43,386 30,564
Movement on temporary timing differences 147,261 12,822
At end of period 190,647 43,386
The above deferred tax assets comprise temporary differences on the following
items:
31 March 2023 2022
£ £
Staff costs - 30,564
Share based payments 7,803 15,199
Right of use asset - (7,170)
Pensions deductible as paid 13,627 7,887
Interest on shareholder loan - 4,067
Losses carried forward - from prior year 228,846 -
Losses carried forward - from current year 45,766 -
Capitalised development costs (98,045)
Accelerated capital allowances (7,350) (7,161)
Deferred tax asset 190,647 43,386
13. Earnings per share
31 March 2023 2022
Net profit/(loss) attributable to ordinary shareholders (£) 642,054 (1,646,112)
Basic weighted average number of shares in issue (Number) 26,344,994 23,314,706
Basic profit/(loss) per share (pence per share) 2.4p (7.1)p
As at 31 March 2023 2022
Net profit/(loss) attributable to ordinary shareholders (£) 642,054 (1,646,112)
Diluted weighted average number of shares in issue (Number) 28,895,722 24,165,128
Diluted profit/(loss) per share (pence per share) 2.2p (7.1)p
To prepare the Company for its listing a 200:1 share split took place during
the year ended 31 March 2022 which increased the number of shares in issue
from 109,692 shares as at 1 April 2021 to 21,938,400 at the time of the share
split. The Company listed on the AIM market on 7 December 2021 and a further
4,406,594 shares were issued.
Shares in issue 2023 2022
Shares in issue at 1 April 2021 - 109,692
Share for share exchange 200:1 - 21,938,400
Shares issued - 4,406,594
Shares in issue 31 March 26,344,994 26,344,994
Weighted average number of shares used as the denominator
Share for share exchange 200:1 - 21,938,400
Weighted number of shares issued in the year - 1,376,306
The weighted average number of shares used as the denominator in basic 26,344,994 23,314,706
earnings per share
Adjustments for calculation of diluted earnings per share:
Options 2,133,752 720,190
Warrants 416,971 130,232
28,895,717 24,165,128
IAS 33 contains a requirement to restate the average number of shares in issue
in prior periods for events that change the number of shares without a
corresponding change in resources. For this purpose, it has been assumed that
the share split from £1.00 per share to £0.01 per share took place prior to
1 April 2020.
14. Property, plant and equipment
Right of Use Asset Office equipment Total
Cost £ £ £
At 1 April 2021 411,571 49,475 461,046
Disposal of lease (411,571) - (411,571)
Additions in year 470,487 23,773 494,260
Exchange differences - (710) (710)
As at 31 March 2022 470,487 72,538 543,025
Disposals (439,987) (1,077) (441,064)
Additions in year 565,101 22,768 587,869
Exchange differences - (1,459) (1,459)
As at 31 March 2023 595,601 92,770 688,371
Depreciation
As at 1 April 2021 137,190 38,786 175,976
Charge for year 190,890 5,833 196,723
Disposals (240,083) - (240,083)
Exchange differences - (951) (951)
As at 31 March 2022 87,997 43,668 131,665
Charge for year 351,990 14,471 366,461
Disposals (439,987) - (439,987)
Exchange differences - 230 230
As at 31 March 2023 - 58,369 58,369
Net book value
As at 31 March 2022 382,490 28,870 411,360
Net book value
As at 31 March 2023 595,601 34,401 630,002
Right of use assets included in the above comprise all land and buildings
assets.
15. Intangible assets
Database platforms
Cost £
At 1 April 2021 and 31 March 2022 -
Capitalised costs in the year for internally generated platforms 398,436
As at 31 March 2023 398,436
Amortisation £
As at 1 April 2021 and 31 March 2022 -
Amortisation charge in the year 6,256
6,256
Net Book Value
As at 31 March 2022 -
As at 31 March 2023 392,180
16. Trade and other receivables
As at the year ended 31 March 2023 2022
£ £
Current
Trade receivables 1,436,966 753,245
Contract assets 2,136,404 459,086
Other receivables 214,957 259,475
Current tax receivables 189,620 249,290
3,977,947 1,721,096
Trade receivables and contract assets do not contain a significant financing
component. These financial assets have been reviewed at each year end the
following provision for expected credit losses is considered necessary:
As at the year ended 31 March 2023 2022
£ £
Gross carrying amount - trade receivables 3,609,741 766,186
Loss allowance (36,371) (12,941)
3,573,370 753,245
The loss allowances for trade receivables as at 31 March reconcile to the
opening loss allowances as follows:
2023 2022
£ £
Opening loss allowance at 1 April 12,941 2,712
Increase in loss allowance recognised in profit or loss 23,430 10,229
Closing loss allowance at 31 March 36,371 12,941
Other receivables include amounts due for sales taxes, prepayments and
security deposits held for leases.
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of receivable mentioned above. The 4GLOBAL Group does not
hold any collateral as security.
17. Cash and cash equivalents
As at the year ended 31 March 2023 2022
£ £
Cash at bank and on hand 1,121,147 3,050,948
Credit card account 16,946 -
Total Cash and cash equivalents 1,138,093 3,050,948
Cash at bank and on hand does not earn interest.
18. Issued share capital
2023 2023 2022
No. £ No.
£0.01 Ordinary shares
As at 1 April 26,344,994 263,451 109,692
Share transfer on PLC incorporation - - 21,828,708
Issued on IPO - - 4,406,594
As at 31 March 26,344,994 263,451 26,344,994
Fully paid ordinary shares carry one vote per share and the right to dividends
and to distributions on winding up.
The issued share capital as at 1 April 2021 was the share capital for 4GLOBAL
Consulting Limited which was exchanged for shares in the 4GLOBAL PLC on 11
November 2021.
The Company undertook an IPO on 7 December 2021 and issued 4,406,594 shares to
shareholders.
19. Equity share-based payments
The 4GLOBAL Group bears the expense of equity settled share options granted to
employees and consultants of the 4GLOBAL Group. Share options were awarded
over the shares in 4GLOBAL Consulting Limited to Ian James and Utku
Toprakseven. Ian James was appointed a director of 4GLOBAL Consulting Limited
on 11 February 2021 and Utku Toprakseven on 1 April 2015.
The movements of share options during the year were as follows:
Number of Share options Weighted average share price
4GLOBAL PLC
Outstanding as at 31 March 2022 2,305,872 78p
Granted during the year - -
Lapsed during the year (275,400) 36p
Outstanding as at 31 March 2023 2,030,472 83p
Options outstanding at 31 March 2023 had an exercise price of 35.6p - 91.0p.
The outstanding options vest upon certain conditions including a change in
ownership of 4GLOBAL PLC.
The number of options exercisable as at 31 March 2023 is 1,755,072.
The vesting period ranges from 7 December 2021 to 7 December 2023.
The fair value of share options was estimated using the Black-Scholes
option-pricing model. The estimated fair values of options granted are based
on the following weighted average assumptions:
As at the year ended 31 March 2023 2022
Weighted average fair value (£ per option) £0.39 £0.42
Weighted average remaining contractual life - years 8.8 9.7
The estimated fair values of options granted are based on the following
weighted average assumptions:
As at 31 March 2023 2022
Weighted average share price at date of grant 78p 78p
Weighted average exercise price 83p 78p
Expected life (years) 5 5
Expected volatility (%) 44.0 44.0
Risk free interest rate (%) 0.76 0.76
The volatility assumption, measured at the standard deviation of expected
share price returns, is based on the volatility of a comparable listed
company. The charge for equity-settled share-based payments in the relevant
years is shown in Note 8.
20. Reserves
Share premium
Share premium records the amount above the nominal value received for shares
sold, less transaction costs.
Share option reserve
The share-based payment reserve arises on share options issued by the 4GLOBAL
Group to employees of the 4GLOBAL Group.
Merger reserve
The merger reserve arose on the group reconstruction when a share for share
reconstruction took place and is the difference between the issue price and
the nominal value of shares issued as consideration for the acquisition of
subsidiary undertaking.
Warrant reserve
The warrant reserve arises on the warrants issued by the 4GLOBAL Group to
certain advisers of the 4GLOBAL Group.
Capital redemption reserve
The capital redemption reserve arises on the repurchase of shares.
Currency translation reserve
The currency translation reserve arises on the currency translation of
subsidiaries where the functional currency differs from the functional
currency of the 4GLOBAL Group.
Retained earnings
The retained earnings reserve represents gains and losses recognised in the
consolidated statement of comprehensive income.
21. Trade and other payables
As at 31 March 2023 2022
£ £
Current
Trade payables 148,331 204,113
Contract liabilities 365,772 216,696
Payroll taxes, pension & social security 344,504 268,398
Other payables 264,139 399,347
1,122,746 1,088,554
The carrying values of the trade and other payables approximate to their fair
value as at the year-end date. Other payables include accruals for general
expenses incurred in the normal course of business that are expected to be
settled within 12 months.
22. Borrowings
As at 31 March 2023 2022
£ £
Non-current
Borrowings 108,832 158,823
Current
Borrowings 50,000 121,814
Borrowings includes a loan obtained in May 2020 under the Coronavirus Business
Interruption Loan Scheme ("CBILS") of £250,000. The loan is repayable in
monthly instalments by April 2026. The rate of interest applicable to the loan
is 3.05% plus the Bank of England base rate. Under the scheme, the government
has given a grant of the amounts of interest that would arise on the loan for
the first 12 months (see note 7). This amount has been recognised in Other
Operating Income. The Company has granted a fixed and floating charge over its
assets in respect of this loan. A partial guarantee has been provided by the
government.
In the year ended 31 March 2022 borrowings included a loan of £50,400 from
Eloy Mazon, a director and shareholder of the Company. The loan was drawn down
between December 2013 and September 2014 and bore interest at 5% plus the Bank
of England base rate, which has been accrued with the loan. Interest was
charged on the capital and outstanding interest. The balance outstanding at 31
March 2023 was £nil (2022: £69,293). The loan was repaid in June 2022.
The carrying value of borrowings approximates to their fair value as at the
year-end date.
23. Lease liabilities
2023 2022
£ £
As at 1 April 353,811 281,676
Additions 566,045 439,987
Interest expense 6,782 10,780
Payment of interest (8,951) (10,780)
Payment of principal (351,642) (186,470)
Disposal - (181,382)
As at 31 March 566,045 353,811
The 4GLOBAL Group has lease contracts for land and buildings. The 4GLOBAL
Group does not have any leases where the 4GLOBAL Group is a lessor. The
weighted average remaining term of all leases is disclosed below. The lease
agreements do not impose any covenants other than the security interests in
the leased assets that are held by the lessor. Leased assets may not be used
as security for borrowing purposes. The Right of Use leases have been
discounted at the 4GLOBAL Group's incremental borrowing rate of 6.2%.
The 4GLOBAL Group has identified four leases with lease terms of 12 months or
less. The 4GLOBAL Group applies the short-term lease recognition exemption for
these leases. The expense recognised in respect of these leases is disclosed
in Note 8.
2023 2022
£ £
Maturity analysis of leases
Current 371,985 353,811
1 to 2 years 194,060 -
566,045 353,811
As at As at
31 March 2023 31 March 2022
Years years
Weighted average remaining term 1 1
24. Financial instruments
The 4GLOBAL Group's treasury policy is to avoid transactions of a speculative
nature. In the course of trade the 4GLOBAL Group is exposed to a number of
financial risks that can be categorised as market, credit and liquidity risks.
The Board has identified the risks within each category and considers the
impact on the activities of the 4GLOBAL Group as part of their regular meeting
routine.
Principal financial instruments
The principal financial instruments used by the 4GLOBAL Group, from which
financial instrument risk arises, are as follows:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Borrowings
Lease liabilities
A summary of the financial instruments held by category is provided below:
As at As at
31 March 2023 31 March 2022
£ £
Financial assets at amortised cost
Cash and cash equivalents 1,138,093 3,050,948
Trade and other receivables 3,787,215 1,012,720
Total financial assets 4,925,308 4,063,668
The fair value of short-term deposits and other financial assets approximates
to the carrying amount.
2023 2022
Financial liabilities at amortised cost
Borrowings 158,832 280,637
Trade and other payables 412,470 588,535
Lease liabilities 566,045 353,811
1,137,347 1,222,983
The Directors consider that the carrying amounts of all financial assets and
financial liabilities recognised in the financial information approximate
their fair values (due to their nature and short times to maturity).
Currency risk
The 4GLOBAL Group's financial risk management objective is broadly to seek to
make neither profit nor loss from exposure to currency or interest rate risks.
The 4GLOBAL Group is exposed to transactional foreign exchange risk and takes
profits and losses as they arise, as in the opinion of the Directors, the cost
of hedging against fluctuations would be greater than the related benefit from
doing so.
The 4GLOBAL Group has no trade and other payables denominated in the
currencies other than pounds sterling.
The trade and other receivables balances held by the 4GLOBAL Group in
currencies other than pounds sterling are as follows:
As at As at
31 March 2023 31 March 2022
£ £
Euro 106,871 1,241
New Zealand Dollar 2,931 11,425
Saudi Arabian Riyal 1,102 -
United States Dollar 143,257 70,653
254,161 83,319
The cash balances held by the 4GLOBAL Group in currencies other than pounds
sterling are as follows:
As at As at
31 March 2023 31 March 2022
£ £
Saudi Arabian Riyal 21 10,655
Euro 48,079 14,182
US Dollar 84,737 3,339
Turkish Lira 27,961 18,974
160,798 47,150
Foreign currency sensitivity analysis
A 10% movement in the relevant foreign currency exchange rates would
increase/(decrease) net assets as shown below. This analysis assumes that all
other variables, in particular interest rates, remain constant.
TRY USD EUR SAR
As at 31 March 2022 £ £ £ £
Effect on net assets:
GBP strengthened by 10% (1,725) (295) (1,321) (975)
GBP weakened by 10% 2,108 381 1,537 1,176
NZD TRY USD EUR SAR
As at 31 March 2023 £ £ £ £ £
Effect on net assets:
GBP strengthened by 10% (266) (2,542) (20,727) (14,086) (102)
GBP weakened by 10% 326 3,107 25,333 17,217 125
Credit risk
Credit risk is the risk that a customer or counterparty to a financial
instrument will fail to perform or fail to pay amounts due causing financial
loss to the 4GLOBAL Group. Credit risk within the 4GLOBAL Group arises from
cash and cash equivalents, and trade and other receivables. The maximum
exposure to credit risk is the carrying amount of these financial instruments.
The 4GLOBAL Group is subject to concentrations of credit risk from cash
deposits in excess of insured limits. The 4GLOBAL Group places its cash in
financial institutions which are considered high quality financial
institutions by management. At times, such cash deposits may be in excess of
insured limits. The 4GLOBAL Group does not enter into any derivatives to
manage credit risk.
The 4GLOBAL Group calculates expected loss allowances based on the maximum
contractual year over which the 4GLOBAL Group is exposed to credit risk.
Financial assets are considered to be credit-impaired when there is reasonable
and supportable evidence that one or more events that have a detrimental
impact on the estimated future cash flows of the financial asset have
occurred. The 4GLOBAL Group also applies a rebuttable presumption that an
asset is credit-impaired when contractual payments are more than 30 days past
due. The 4GLOBAL Group has made an assessment of whether trade receivables are
credit-impaired as each of the years in question. The 4GLOBAL Group has taken
into account the current financial position of counterparties and expected
future cash flows together with actual and forecast financial information, in
order to estimate the probability of default of each of these financial assets
as well as the loss upon default. No provision for expected credit losses has
been made.
The contractual cash flows on these financial assets have not been modified or
renegotiated in the current or prior year.
If there is evidence that there is no reasonable expectation of recovery and
the counterparty is in severe financial difficulties, the financial asset will
be written off.
The following table provides an analysis of trade receivables and contract
assets that were due, but not impaired, at each financial year end. The Group
believes that the balances are ultimately recoverable based on a review of
past impairment history and the current financial status of customers.
As at As at
31 March 2023 31 March 2022
£ £
Current 1 - 30 days 1,772,340 412,666
30 - 60 days 661,793 162,935
61 - 90 days 400,825 110,483
91 + days 774,783 80,102
Provision for impairment of trade receivables (36,371) (12,941)
Total trade receivables and contract assets - net 3,573,370 753,245
The Directors are unaware of any factors affecting the recoverability of
outstanding balances at 31 March 2023 and, consequently, no further provisions
have been made for bad and doubtful debts.
The allowance for bad debts has been calculated using a 12-month lifetime
expected credit loss model, as set out below, in accordance with IFRS 9.
As at As at
31 March 2023 31 March 2022
£ % £ £ % £
Current 1 - 30 days 1,772,340 0% - 412,666 0% -
31 - 60 days 661,793 0% - 162,935 0% -
61 - 90 days 400,825 0% - 110,483 0% -
91 - 120 days 203,210 0% - 74,423 0% -
121+ days 535,202 2% 10,704 5,679 0% -
Credit Quality of Financial Assets
As at As at
31 March 2023 31 March 2022
Past due not impaired £ £
Current 1,772,340 412,666
31 - 90 days 1,062,618 273,418
Over 91 days - no impairment 738,412 67,161
Total past due not impaired 3,573,370 753,245
Liquidity risk
The 4GLOBAL Group is exposed to liquidity risk as part of its normal trading
cycle. The 4GLOBAL Group's policies ensure sufficient liquidity is available
to meet foreseeable needs through the preparation of short and long-term
forecasts. The 4GLOBAL Group's requirements are constant throughout the year
and relate largely to working capital which is managed through the use of
surplus cash.
The table below summarises the maturity profile of the 4GLOBAL Group's
financial liabilities, based on contractual, undiscounted payments:
Less than 1 year More than 5 years
2 to 5 years Total
Year ended 31 March 2022 £ £ £ £
Borrowings 121,814 158,823 - 280,637
Trade and other payables 588,535 - - 588,535
Lease liabilities 353,811 - - 353,811
1,064,160 158,823 - 1,222,983
Less than 1 year More than 5 years
2 to 5 years Total
Year ended 31 March 2023 £ £ £ £
Borrowings 50,000 108,832 - 158,832
Trade and other payables 412,470 - - 412,470
Lease liabilities 371,985 194,060 - 566,045
834,455 302,892 - 1,137,347
Capital risk
The Directors define capital as the total equity of the company. The
Directors' objectives when managing capital are to safeguard the 4GLOBAL
Group's ability to continue as a going concern in order to provide returns for
stockholders and benefits for other stakeholders and to maintain an optimal
structure to reduce the cost of capital. In order to maintain an optimal
capital structure, the Directors may adjust the amount of dividends paid to
shareholders, return capital to shareholders and issue new shares to reduce
debt.
Net funds reconciliation
As at As at
31 March 2023 31 March 2022
£ £
Cash and cash equivalents 1,138,093 3,050,948
Borrowings - repayable within one year 50,000 121,814
Borrowings - repayable after one year 108,832 158,823
Net funds 1,296,925 3,331,585
Cash and liquid investments 1,138,093 3,050,948
Gross debt - variable interest rates 158,832 280,637
Net funds 1,296,925 3,331,585
Commitments
The 4GLOBAL Group has identified a lease contract, which begins on 1 April
2023 that has been accounted for in the Consolidated Statement of Financial
Position as a right of use asset and relates to the offices the company
occupies in Chiswick, London. No other lease contracts have been identified
and not yet commenced as at the end of each year. Consequently, the 4GLOBAL
Group has not identified any other material commitments.
Ultimate controlling party
As at 31 March 2023, the ultimate controlling party of the 4GLOBAL Group is
Eloy Mazon by virtue of his 50.5% shareholding in 4GLOBAL PLC.
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