REG - Arcontech Group PLC - Final Results for the year ended 30 June 2025
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RNS Number : 6834Y Arcontech Group PLC 10 September 2025
ARCONTECH GROUP PLC
("Arcontech", the "Company" or the "Group")
Final Results for the year ended 30 June 2025
Arcontech (AIM: ARC), the provider of products and services for real-time
financial market data processing and trading, is pleased to announce its final
audited results for the year ended 30 June 2025.
Financial Highlights:
· Turnover was £3,106,991 (2024 £2,910,232)
· Profit before taxation was £987,390 (2024 £1,098,959) down by
£111,569
· Recurring revenues represented 94% of total revenues for the
period (2024: 99%)
· Net cash of £7,395,514 (2024 £7,160,177), an increase of 3.3%
· Final dividend increased 6.7% to 4.00 pence per share (2023: 3.75
pence per share)
Operational Highlights:
· Addition of a new high-end customer
· An increase in consulting income
· Enhancement of product functionality to appeal to a potential
wider customer base
· Enlarged support team to strengthen customer relationships
· Active participation in several RFIs (Request for Information)
with potential new customers
· Number of prospective clients has increased to be the strongest
it has been for many years
Commenting on the results, Geoff Wicks, Chairman and Non-Executive Director of
Arcontech said:
"Our strategy has served us well and the concentration on our core market has
helped to continue to grow and retain our customer base. Our growing sales and
support teams are helping to drive growth with customers and is bringing good
new prospects. Customer retention and product development will continue to
help with further growth in the coming years."
Enquiries:
Arcontech Group plc
020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive
Cavendish Capital Markets Ltd (Nomad &
Broker) 020 7220 0500
Jonny Franklin-Adams/Isaac Hooper (Corporate Finance)
Harriet Ward (Corporate Broking)
To access more information on the Group please visit: www.arcontech.com
(http://www.arcontech.com/)
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR.
Chairman's Statement
In the year to 30 June 2025 Arcontech benefited from its strong sales pipeline
and the Company has continued to grow revenue with a new high-end customer and
the return of consulting revenue. Even though we have seen some downsizing due
to competitive pressure, we have kept our excellent customer base and
continued to improve our position in the market.
The market remains challenging with our two main competitors offering enhanced
packages and many customers having to review costs. We have strengthened
customer relationships with an enlarged support team and also widened the
scope of our sales operation with a larger team. This has been a key part of
improving our prospective customer list. Lead times remain long and we have a
number of new prospects in the throes of testing which gives us confidence for
further growth.
Turnover was £3,106,991 (2024: £2,910,232) up 6.8% on last year. Profit
before taxation (PBT) was £987,390 (2024: £1,098,959) down 10.1% on last
year as a result of higher staffing costs including the annualised cost of a
senior customer services hire made part way through the previous financial
year, and the strengthening of our development team with the hire of an
additional developer. Statutory earnings per share for the year to 30 June
2025 were 7.05p (2024: 7.98p).
The proportion of our recurring revenue remains high at 94%, however one-off
revenue related to specific requirements for customers has helped our growth
during the year. We do not expect this to continue at the same level as we
develop products to include many of these individual requirements. We have
also continued to secure our customers on longer term contracts which helps to
give even greater visibility for the future.
Financing
Cash balances were £7,395,514 (2024: £7,160,177) at the year end, an
increase of 3.3% from prior year. As at the date of signing this report our
cash balance is £8,018,154. This strong balance sheet allows the Company to
continue to invest in organic growth and to continue to look for relevant
acquisitions.
Dividend
I am pleased to announce that subject to approval at the Annual General
Meeting we intend to pay a dividend ahead of market expectations of 4.00p per
share for the year ended 30 June 2025 (2024: 3.75 pence) an increase of 6.7%,
to those shareholders on the register as at the close of business on 3 October
2025 with a dividend payment date of 31 October 2025.
Outlook
Our strategy has served us well and the concentration on our core market has
helped continue to grow and retain our customer base. We see no reason to
change this. At the same time we continue to build out our products and are
more competitive in certain areas of the market than before. We currently have
a number of potential customers close to contract and have an excellent
prospect list. At the same time we expect some churn as the market is
increasingly competitive. Consolidation in the market may provide
opportunities for us to acquire one of our smaller competitors.
Geoff Wicks
Chairman and Non-Executive Director
Chief Executive's Review
The 2024/25 financial year saw further revenue growth of 6.8% as a result of
non-recurring development work to enable future earnings from the deployment
of recurring revenue solutions. Despite the greater focus on development work,
the percentage of recurring revenue remained at over 90%.
Our clients and prospective clients continue to seek alternatives to their
existing market data platform solutions and evidencing that, we have received
and are participating in several RFIs (Request for Information) which are at
various stages. These projects are involved and take time and, although none
have yet been confirmed, we are optimistic of winning several new mandates.
As well as working to maintain our existing client base, this year has seen a
range of engagements and the conclusion of earlier PoCs (Proof of Concept)
that included the continuation of a build out to displace an alternative
solution at a global investment bank in New York; the development of a custom
solution to integrate Arcontech software with an inhouse market data system
for another global investment bank; and the development of a new sophisticated
market data publishing system for a new central bank customer. In addition to
generating non-recurring revenues from this development work, the work will
also contribute to our recurring revenues, solidify our position with those
clients and create more opportunities with other existing and prospective
clients.
The delivery of complex solutions is invariably not without issue and that
Arcontech was able to do so in good time and often with new challenges that
were only presented mid-project, is a testament to our abilities and the
quality of our solutions and staff.
As a counter to our hard work and successes we did see a slight reduction in
desktop user numbers at one client due to competitor action, however, we are
confident the impact has been limited as we renewed a multi-year agreement
with the same client shortly afterwards.
The year also saw positive results from our support team's remit to identify
opportunities for growth with existing clients where we have strengthened our
relationships. Our support team also worked to keep us abreast of client
supplier requirements and I am pleased to say Arcontech is now recognised by
UKAS as being accredited with ISO 27001 and ISO 22301.
This year has been notable in that our number of prospective clients has
increased to be the strongest it has been for many years. Within this the
pipeline for existing products remains strong and we are making good progress
with the development of an extension to our product range which will allow us
to compete more effectively by allowing customers to change their market data
platform completely. This has brought interest both from current customers and
from new prospects.
The past year also saw us formalise our search for potential acquisitions
which yielded some interesting results and for which we continue to evaluate
the opportunities with growth potential and fit as the primary considerations.
Our staff are a key asset to the Company and have continued to provide
exemplary service and support to our clients. I would like to express my
thanks for their continued commitment.
With our increased product range, stronger relationships with clients and
excellent pipeline, we feel optimistic for the year ahead and beyond.
Matthew Jeffs
Chief Executive
Strategic Report
The Directors present the group strategic report for Arcontech Group plc and
its subsidiaries ("the Group") for the year ended 30 June 2025.
Principal activities
The principal activities of the Company and its subsidiaries during the year
were the development and sale of proprietary software and provision of
computer consultancy services.
Review of the business and prospects
A full review of the operations, financial position and prospects of the Group
is given in the Chairman's Statement and Chief Executive's Review on pages 2
to 3.
Key performance indicators (KPIs)
The Directors monitor the business using management reports and information,
reviewed and discussed at monthly Board meetings. Financial and non-financial
KPIs used in this report include:
Financial KPIs:
Revenue £3,106,991 (2024: £2,910,232; 2023:
£2,730,172) Measurement:
Revenue from sales made to all customers (excluding intra-group sales which
eliminate on consolidation)
Performance:
Increase from 2024 with an increase in once-off development work from existing
customers
Adjusted EBITDA £874,083 (2024: £1,030,898; 2023: £1,044,522)
Measurement:
Adjusted EBITDA is EBITDA before the release of accruals for administrative
costs in respect of prior years (as disclosed in the footnote to the Income
Statement), and share-based payments. This measurement is reconciled as
Operating Profit (£778,553), add depreciation (£118,367), subtract accruals
release (£47,611) and add share-based payments (£24,774).
This is an alternative, non-IFRS performance measure, that is considered
relevant as it provides a more accurate reflection of trading performance than
EBITDA. The accruals release for 2023 included a release of £110,000 which
was disclosed separately in the Group Statement of Income.
Performance:
Adjusted EBITDA is down year-on-year, reflective of an increase in staff costs
and professional fees
Adjusted profit £895,819 (2024: £1,043,054; 2023:
£861,716)
Measurement:
Adjusted profit is net profit after tax (£943,430) less the amount of
accruals for administrative costs released (£47,611) as disclosed in the
footnote to the Income Statement. This is an alternative, non-IFRS performance
measure, that is considered relevant as it provides a more accurate reflection
of trading performance than net profit after tax. The accruals release for
2023 included a release of £110,000 which was disclosed separately in the
Group Statement of Income.
Performance:
Adjusted profit is down year-on-year, reflective of an increase in staff costs
and professional fees
Strategic Report (continued)
Cash £7,395,514 (2024: £7,160,177; 2023: £6,411,241) Measurement:
Cash and cash equivalents held at the end of the year
Performance:
The Group continues to maintain healthy cash balances subject to any
exceptional circumstances or acquisition opportunities
Earnings per share (basic) 7.05p (2024: 7.98p; 2023: 7.33p) Measurement: Earnings after tax divided by the weighted average number of
shares
Performance:
Decrease due to staff costs from an increase in headcount
Earnings per share (diluted) 7.02p (2024: 7.96p; 2023: 7.32p) Measurement:
Earnings after tax divided by the fully diluted number of shares
Performance: Decrease due to staff costs from an increase in headcount
Non-financial KPIs:
Staff retention rate (net) 94% (2024: 94%; 2023: 94%) Measurement:
Net retention after adjusting for joiners and leavers during the year
Performance:
Staff morale from our dedicated employees remains strong, reflected in the
stable retention rate
Environmental, Social and Governance
Arcontech Group plc qualified as a low energy user in the year ending 30 June
2025 and accordingly is not required to disclose energy consumption and
Greenhouse Gas emission information in accordance with the Streamline Energy
& Carbon Reporting regulations.
Principal risks and uncertainties
The Group's performance is affected by a number of risks and uncertainties,
which the Board monitor on an ongoing basis in order to identify, manage and
minimise their possible impact. General risks and uncertainties include
changes in economic conditions, interest rate fluctuations and the impact of
competition. The Group's principal risk areas and the action taken to mitigate
their outcome are shown below:
Risk area Nature Mitigation
Competition Loss of business due to existing competition or new entrants into the market Ongoing investment in research and development
responding to the changing needs of clients to remain competitive
Loss of key personnel Inability to execute business plan due to the risk of losing key personnel Employee share option scheme in place
Brexit Business made difficult due to increased regulations between the UK and Europe Arcontech is a global company and as such seeks growth across a geographically
caused by Brexit diverse customer base
Strategic Report (continued)
Relations with shareholders
Section 172(1) Statement - Promotion of the Company for the benefit of the
members as a whole
The Directors believe they have acted in the way most likely to promote the
success of the Group for the benefit of its members as a whole, as required by
s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
· Consider the likely consequences of any decision in the long
term;
· Act fairly between the members of the Company;
· Maintain a reputation for high standards of business conduct;
· Consider the interests of the Company's employees;
· Foster the Company's relationships with suppliers, customers
and others;
· The desirability of the Company maintaining a reputation for
high standards of business conduct; and
· Consider the impact of the Company's operations on the
community and the environment.
Section 172(1) Companies Act 2006
The Board takes decisions with the long term in mind, and collectively and
individually aims to uphold the highest standards of conduct. Similarly, the
Board understands that the Company can only prosper over the long term if it
understands and respects the views and needs of its customers, distributors,
employees, suppliers and the wider community in which it operates.
A firm understanding of investor needs is also vital to the Company's success.
The Directors are fully aware of their responsibilities to promote the success
of the Company in accordance with Section 172(1) of the Companies Act 2006.
The text of Section 172(1) of the Companies Act 2006 has been sent out to each
main Board Director.
The Board ensures that the requirements are met, and the interests of
stakeholders are considered as referred to elsewhere in this report and
through a combination of the following:
· A rolling agenda of matters to be considered by the Board through
the year, which includes an annual strategy review meeting, where the
strategic options for the following year are developed;
· At each board meeting, to receive and discuss a report on
customers, employees and other colleagues, and investors;
· Standing agenda points and papers;
· A review of certain of these topics through the Audit Committee
and the Remuneration Committee agenda items referred to in this report; and
· Detailed consideration is given to of any of these factors
where they are relevant to any major decisions taken by the Board during the
year.
The Group's operation is the development and sale of proprietary software and
provision of computer consultancy services. The Board has identified its key
stakeholders as its customers, shareholders, employees and suppliers. The
Board keeps itself appraised of its key stakeholders' interests through a
combination of both direct and indirect engagement, and the Board has regard
to these interests when discharging its duties.
The application of the s172 requirements can be demonstrated in relation to
some of the key decisions made during the year to 30 June 2025:
· Allocation of the Group's capital in a way which offers
significant returns to shareholders in line with the Company's dividend
policy, while also ensuring that the Group retains flexibility to continue to
deploy capital towards profitable growth;
· Continuation of a hybrid location working format for staff as
working environments have evolved over recent years, while ensuring that the
Group continued to deliver both the high level of service and security that
our customers depend on without compromising the health and safety of
employees.
During the year to 30 June 2025, the Board assessed its current activities
between the Board and its stakeholders, which demonstrated that the Board
actively engages with its stakeholders and takes their various objectives into
consideration when making decisions. Specifically, actions the Board has taken
to engage with its stakeholders over the last twelve months include:
· All Directors attended the 2024 AGM to answer questions and
receive additional feedback from investors;
· The outcome of the AGM is published on the Company's corporate
website;
· The Board receives regular updates on the views of shareholders
through briefings and reports from the executive directors, and the Company's
brokers;
· Arranged meetings with certain stakeholders to provide them with
updates on the Company's operational activities and other general corporate
updates;
· We discussed feedback from investors' and analysts' meetings
following the release of our annual and half-year announcements. We have an
investor relations programme of meetings with existing and potential
shareholders;
· Monitored company culture and engaged with employees on efforts
to continuously improve company culture and morale; and
· A range of corporate information (including all Company
announcements) is also available to shareholders, investors and the public on
the Company's corporate website: www.arcontech.com (http://www.arcontech.com)
.
The Board believes that appropriate steps and considerations have been taken
during the year so that each Director has an understanding of the various key
stakeholders of the Company. The Board recognises its responsibility to
contemplate all such stakeholder needs and concerns as part of its
discussions, decision-making, and in the course of taking actions, and will
continue to make stakeholder engagement a top priority in the coming years.
Approved on behalf of the board on 9 September 2025 by:
Matthew Jeffs
Chief Executive
Board of Directors
Directors - Executive
Matthew Jeffs (Chief Executive Officer)
Matthew was appointed Chief Executive Officer in April 2013. Matthew spent 10
years with Barclays International, 10 years with Dow Jones and then 6 years
with Reuters in a variety of senior roles. In addition to the UK, he has wide
experience in the Asia Pacific region, working in Hong Kong, Japan, Korea
(where he was country manager for Reuters and country representative for Dow
Jones), Thailand and Vietnam. In his most recent role, Matthew was the
Managing Director, ICS International at Broadridge Financial Solutions where
he was responsible for the overall management of the Global Proxy business
with offices in the U.K., U.S., Japan, Australia and India. Matthew has an MBA
from Buckinghamshire Business School.
Directors - Non-Executive
Geoff Wicks (Chairman)
Geoff was appointed Non-Executive Director in July 2020, and Chairman and in
September 2020. Geoff was most recently Chairman of ULS Technology plc (now
Smoove PLC), the provider of online technology platforms for the UK
conveyancing and financial intermediary markets. Prior to this, he was CEO of
Group NBT plc, a specialist in online brand protection and digital asset
management, from 2001 until he led the sale of the business to HGCapital in
2011. He remained part of the Group NBT business, now renamed NetNames, as a
non-executive director until 2013. Geoff spent much of his earlier career at
Reuters, including heading divisions in the UK, France and Nordic regions and
latterly was director of corporate communications. Prior to Reuters, Geoff
worked in the banking and insurance industries.
Raj Nagevadia
Raj was appointed Non-Executive Director in October 2022. Raj is the current
Chief Financial Officer (CFO) of Bfinance, a financial services consultancy,
and holds a wealth of experience in financial managerial roles across the
technology sector, primarily as a CFO. Prior to Bfinance, Raj was CFO of
SecureData Europe, a cyber security management service, where he oversaw a
broad range of acquisitions. Before this, Raj was CFO of NetNames (formerly
Group NBT), the AIM quoted internet services provider, for over 10 years.
Here, Raj managed the company's acquisition strategy as well as aiding in the
sale of the Company to Hg Capital in 2011.
Corporate Governance
Corporate governance report
This Corporate Governance Report forms part of the Directors' Report.
The Directors recognise the importance of, and are committed to, high
standards of corporate governance. Of the two widely recognised formal codes,
the directors have decided to adhere to the Quoted Companies Alliance
Corporate Governance ("QCA Code") code. The Group's compliance with the 2023
version of the code is summarised below and can be found in full on the
Group's website at:
https://www.arcontech.com/wp-content/uploads/2025/02/Arcontech-Corporate-Governance_Feb-25.pdf
The working of the Board and its Committees
At 30 June 2025, the Board comprised two Non-Executive Directors, one of whom
is the Chairman, and one Executive Director. The Board is responsible to the
shareholders for the proper management of the Group. It meets regularly to
review financial and non-financial performance. Matters for review by the
Board are circulated before the Board Meetings.
All of the Directors are subject to election at the first Annual General
Meeting following their appointment and to re-election at least once every
three years.
The Chairman and Non-executive Director have other third-party commitments
including directorships of other companies. The Company is satisfied that
these commitments have no significant impact on their ability to carry out
their responsibilities effectively. All Directors have access to the advice
and services of the Company Secretary, who is responsible to the Board for
ensuring that Board procedures are followed, and that applicable rules and
regulations are complied with. In addition, the Company Secretary will ensure
that the Directors receive appropriate training as necessary. All Directors
are supplied with information in a timely manner in a form, and of a quality,
appropriate to enable them to discharge their duties.
During the year, certain Directors who were not Committee members attended
meetings of the Audit Committee and Remuneration Committee by invitation.
These details have not been included in the table.
Board meeting attendance
Board Audit Remuneration Committee Nomination Committee
Meeting Committee
Executive Directors
Matthew Jeffs 10/10 2/2 N/A N/A
Non-Executive Directors
Geoff Wicks (Independent) 10/10 2/2 1/1 0/0
Raj Nagevadia (Independent) 10/10 2/2 1/1 0/0
Board performance
The Company has a formal process of annual performance evaluation for the
Board, its Committees and individual Directors. The Board and its Committees
are satisfied that they are operating effectively. A performance evaluation of
the Board, its Committees and individual Directors is conducted annually via
an internal peer review between Directors.
Corporate Governance (continued)
Corporate governance report (continued)
The review is based on key areas, to include Board composition, information,
process, internal control, accountability, CEO and top management and
standards of conduct. The areas are scored by all members, reviewed by the
Chairman and Company Secretary and compared against the previous evaluation.
Lower scores are discussed.
The Company has Directors' and officers' liability insurance in place.
Committees
The following committees deal with the Group's affairs:
Audit Committee
Details of the Audit Committee are given in its Report on pages 11-12.
Remuneration Committee
Details of the Remuneration Committee are given in its Report on pages 13-19.
This includes details of the Directors' remuneration, interest in shares,
interest in share options, and service contracts. No Director is involved in
decisions about their own remuneration.
Nomination Committee
The Nomination Committee assists the Board in discharging its responsibilities
relating to the composition and make-up of the Board and any committees of the
Board. It is also responsible for periodically reviewing the Board's structure
and identifying potential candidates to be appointed as Directors or committee
members as the need may arise. The Nomination Committee is responsible for
evaluating the balance of skills, knowledge and experience and the size,
structure and composition of the Board and committees of the Board,
retirements and appointments of additional and replacement Directors and
committee members and will make appropriate recommendations to the Board on
such matters.
The Nomination Committee is chaired by Geoff Wicks. Raj Nagevadia is the other
committee member. The Nomination Committee is mandated to meet not less than
once a year. There was no meeting of the Nominations Committee for the year
under review as the Board made the collective decision that with Non-Executive
Director appointments and retirements in 2022 and 2023 respectively, combined
with the experience and skill-sets of the existing Directors, that the Board
was able to fulfil its duties through to the end of the reporting period with
its existing composition. It is the intention of the Nominations Committee to
meet during the current reporting period.
Geoff Wicks
Chairman and Non-Executive Director
9 September 2025
Corporate Governance (continued)
Audit Committee report
The Audit Committee is responsible for ensuring that the financial position of
the Group is properly monitored. The Audit Committee generally meets twice a
year and the Finance Director of the trading subsidiary, appointed to lead the
finance function, also attends by invitation. The Committee meets with the
Group & Company Independent Auditor ("Auditor") at least twice during the
annual year-end audit and has direct access to the Auditor at any time
throughout the year. At 30 June 2025, the members of the Audit Committee were:
Raj Nagevadia (Chairman)
Geoff Wicks
Matthew Jeffs
Objectives and responsibilities
The role of the Audit Committee is to primarily monitor the Group's financial
statements, the effectiveness of financial controls and systems and to oversee
the relationship with external auditors.
Activities of the Audit Committee during the year
The Audit Committee focuses on financial reporting and the statutory audit,
and the assessment of internal controls. The Committee reviewed the treasury
mandate to ensure achieving a market rate of return on existing cash balances,
and banking relationships to ensure that appropriate day-to-day banking
facilities were in place to support its ability to execute operational
activities.
Financial reporting and statutory audit
The Audit Committee reviews the half year and annual financial statements with
emphasis on:
- the overall truth and fairness of the results and financial
position;
- the transparency and understandability of the accounts for
users;
- the appropriateness of the accounting policies;
- the resolution of management's significant accounting judgements
or of matters raised by the external auditors;
- the quality of the Annual Report as a whole.
The Audit Committee considers that the Annual Report taken as a whole is fair,
balanced and understandable.
Accounting policies, practices and judgements
Issue Action
· Accounting policies The Committee reviewed and discussed the significant accounting policies with
management and the external auditor and reached the conclusion that each
policy was appropriate to the Group.
· Going concern review The Committee considered the ability of the Group to operate as a Going
Concern considering cash flow forecast for the 12 months from the date of
signing this report, and milestone achievements. It was determined by the
Committee that it was reasonable to expect that the Group has or will have
sufficient funds for the next 12 months and that it was appropriate for the
Financial Statements to be prepared on a going concern basis.
Corporate Governance (continued)
Audit Committee report (continued)
Issue Action
· Review of audit and non-audit services and fees The external auditor is not engaged by the Group to carry out any non-audit
work in respect of which it might, in the future, be required to express an
audit opinion. The Committee reviewed the fees charged for the provision of
audit and non-audit services and determined that they were in line with fees
charged to companies of similar size and stage of development.
The Committee considered and was satisfied the external auditor's assessment
of its own independence.
Internal audit
The Group does not have internal auditors as the Audit Committee considers
that it is not yet of a size or complexity to necessitate this.
Raj Nagevadia
Audit Committee Chairman
9 September 2025
Corporate Governance (continued)
Remuneration Committee report
Dear shareholder
I am pleased to introduce the Directors' Remuneration Report for the year
ended 30 June 2025.
The Chairman's Statement on page 2 provides a summary of the progress the
Group has made during the financial year. The Remuneration Committee is
committed to structuring executive remuneration that supports the Group's
strategy and performance and to help it grow profitably. The Remuneration
Committee is appointed by the Board and comprises the two independent
Non-Executive Directors.
Short-term performance is incentivised by an annual bonus scheme based on the
achievement of certain financial performance targets. Long-term performance is
incentivised by the Group's Share Option Scheme.
Directors' Remuneration Policy
This part of the Directors' Remuneration Report sets out the Group's
remuneration policy.
Policy on Executive Remuneration
The Group's remuneration policy is designed to ensure that the Company is able
to attract, motivate and retain executives and senior management to promote
long-term success. The retention of key management and the alignment of
management incentives with the creation of shareholder value are key
objectives of this policy.
The Remuneration Committee seeks to ensure that salaries are market
competitive for similar companies.
Corporate Governance (continued)
Remuneration Committee report (continued)
Key elements of Remuneration (continued)
Corporate Governance (continued)
Remuneration Committee report (continued)
Key elements of Remuneration (continued)
Alignment of Executive Remuneration and the Market
The Remuneration Committee takes advantage of the availability of various
annual AIM Directors' Remuneration reports as well as available data about
similar companies. The Company aims to ensure that Directors' salaries are set
at a level sufficient to ensure there is significant incentive and regard for
better than average long-term results.
Consideration of Employee Pay
The Remuneration Committee takes account of pay and conditions of employees
throughout the Group when setting pay and benefits for Executive Directors.
The Company endeavours to provide competitive remuneration packages for all
employees. Employees may be eligible to participate in the Share Option Scheme
at the discretion of the Remuneration Committee. The Company does not consult
directly with its employees as part of the process for determining Executive
pay.
Policy on recruitment
When appointing new Executive Directors, the Remuneration Committee will
consider their remuneration by reference to the Remuneration Policy set out in
this Report. The Remuneration Committee would not usually expect to pay
sign-on payments or compensate new Directors for any variable remuneration
forfeited from any employment prior to joining the Board other than in
exceptional circumstances, recognising that the Company needs to attract
appropriately skilled and experienced individuals.
Corporate Governance (continued)
Remuneration Committee report (continued)
Policy on recruitment (continued)
Salary and annual bonus will be set so as to be competitive with comparable
companies and also taking into account the experience, seniority and
responsibility of the appointee coming into the new role. New Executive
Directors will receive benefits and pension contributions in line with the
Company's existing policy and to participate in the annual bonus scheme on a
pro-rated basis for the portion of the financial year for which they are in
post.
Policy on Loss of Office
Executive Directors leaving employment from the Group, other than in
circumstances of gross misconduct or incompetence, serious dishonesty or
wilful neglect of duty (in which cases no amount will be payable), will be
entitled to receive salary in accordance with their notice periods and
pro-rated annual bonus to the date of leaving. The notice periods and the
contractual rights on termination of each Director are set out below. The
Company's Employee Share Option Scheme also provides leaver provisions as
follows:
An Executive Director who ceases to be a Director or employee of the Group by
reason of death, retirement, ill-health, injury or disability, redundancy or
the sale of the company for which they work will be a good leaver. As such
they will be permitted to exercise their options. Where the cessation is on
any other grounds the awards will lapse on the date of cessation, unless the
Remuneration Committee determines at its discretion prior to the date of
cessation that the awards shall vest.
Share option awards held by good leavers that are already capable of being
exercised at the date of cessation may, at the discretion of the Remuneration
Committee, be exercised up to 12 months of the leaving date (depending on the
reason for leaving). If the good leaver ceases to be an employee or Director
before the end of the third anniversary of the grant of the award it may, at
the discretion of the Remuneration Committee, be allowed to vest on the normal
vesting date.
External appointments
It is the Board's policy to allow Executive Directors to accept directorships
of other quoted and non-quoted companies provided that they have obtained the
consent of the Chairman of the group. Any such directorships must be formally
notified to the Board.
Policy on Non-Executive Director
Remuneration
The remuneration of the Chairman and the other Non-Executive Director
comprises fees that are paid via the payroll. The Non-Executive Directors no
longer participate in the Company's Share Option Scheme. Fees are reviewed
annually. The Non-Executive Directors are not involved in any decisions about
their own remuneration. No additional fees are payable to the chairmen of the
Audit and Remuneration Committees.
Corporate Governance (continued)
Remuneration Committee report (continued)
Directors' Service Agreements
Non-Executive Directors' Letters of Appointment
The Non-Executive Directors have Letters of Appointment stating that their
appointment is for an initial term up until they are required to retire by
rotation. The Letters of Appointment provide for termination of the
appointment on three months' notice by either party.
The current Non-Executive Directors' appointments commenced on the following
dates:
Geoff Wicks
20 July 2020
Raj Nagevadia
26 October 2022
Annual Report on Remuneration
Introduction
The Annual Report on Remuneration sets out information about the remuneration
of the Directors of the Company for the year ended 30 June 2025.
Remuneration Committee
The Remuneration Committee consisted of the following Directors at 30 June
2025:
Geoff Wicks, Independent Non-Executive Director and Chairman of the Board
Raj Nagevadia (Chairman), Independent Non-Executive Director
Role of the Remuneration Committee
The Remuneration Committee assists the Board in determining the remuneration
and benefits package for the Executive Directors.
Activities of the Remuneration Committee during the year
The Remuneration Committee meets whenever it is appropriate. The committee met
two times in the current year. In addition to agreeing the remuneration report
and reviewing the remuneration of the Executive Directors, the award of share
options to Directors and Employees was approved.
Corporate Governance (continued)
Remuneration Committee report (continued)
Directors' Remuneration
The detailed emoluments of the Executive and Non-Executive Directors are set
out below.
Year ended 30 June 2025
Salary/fees Benefits Bonus Pension Total
Chairman and Non-Executive Directors
Geoff Wicks (Chairman) 32,500 - - - 32,500
Raj Nagevadia 25,000 - - - 25,000
Total Non-Executive 57,500 - - - 57,500
Executive Directors
Matthew Jeffs 198,450 3,406 82,701 5,953 290,510
Total Executives 198,450 3,406 82,701 5,953 290,510
Total Remuneration 255,950 3,406 82,701 5,953 348,010
Analysis of bonuses & pension:
Bonuses Bonuses
Paid
Total
accrued paid as cash as pension
Directors
Matthew
Jeffs
Year ended 30 June
2024
77,930
(77,930)
- -
Year ended 30 June
2025
82,701
- 5,953 88,654
Year ended 30 June 2024
Salary/fees Benefits Bonus Pension Total
Chairman and Non-Executive Directors
Geoff Wicks (Chairman) 32,500 - - - 32,500
Raj Nagevadia 25,000 - - - 25,000
Total Non-Executive 32,500 - - - 32,500
Executive Directors
Matthew Jeffs 183,750 3,185 77,930 5,512 270,377
Total Executives 183,750 3,185 77,930 5,512 270,377
Total Remuneration 241,250 3,185 77,930 5,512 327,877
Corporate Governance (continued)
Remuneration Committee report (continued)
Directors' Remuneration (Continued)
Directors' share interests
The number of ordinary shares of the Company in which the Directors were
beneficially interested at 30 June 2025 was:
Director
30 June 2025 30 June 2024
Geoff
Wicks
- -
Raj
Nagevadia
- -
Matthew
Jeffs
1,013,000 935,000
Directors' share options interests
Director At 1 July 2024
Granted Lapsed At 30 June
2025 Exercise
Normal exercise
price
period
Geoff Wicks
30,000
-
- 30,000 164.50
pence 30 Jun 23 - 2 Oct 30
Matthew Jeffs
100,000
-
- 100,000 110.00
pence 30 Jun 21 - 29 Jun 28
50,000
-
- 50,000 130.50
pence 30 Jun 24 - 11 Oct 31
50,000
-
(50,000)
- 76.50 pence 30 Jun 25 - 21 Oct 32
There are no performance conditions on the exercise of the options granted
prior to 1 July 2018. There were no options granted to directors during the
year to 30 June 2025.
* Fully diluted earnings will be based on: (a) the Company's pre-tax profit
excluding exceptional items and the share option charge and (b) the current UK
corporation tax rate of 19%, such that the fully diluted earnings calculation
takes no account of R&D and deferred tax credits. For the purposes of the
fully diluted earnings calculation, the applied rate of corporation tax will
remain constant at 19% irrespective of any current or future changes to
corporation tax.
Raj Nagevadia
Remuneration Committee Chairman
9 September 2025
Directors' Report
The Directors present their Report and financial statements for the year ended
30 June 2025.
General information
Arcontech Group plc is a public limited company which is listed on the AIM
segment of the London Stock Exchange and is incorporated in the United
Kingdom.
Results and dividends
Details of the results for the year are given on page 28. The Directors
recommend the payment of a final dividend of 4.00 pence per ordinary share
(2024: 3.75 pence per share) to be paid on 31 October 2025 to ordinary
shareholders on the register on 3 October 2025 £534,912 (2024: £501,480).
Directors
The Directors who have held office during the period from 1 July 2024 to the
date of this report are as follows:
Geoff Wicks
Matthew Jeffs
Raj Nagevadia
Refer to page 18 for details of the remuneration paid to each Director for the
years to 30 June 2025 and 2024.
Raj Nagevadia, who retires by rotation under Article 106 of the Company's
articles of association and, who being eligible, offers himself to be
re-elected as a Director of the Company.
Except as disclosed in note 23 to the financial statements none of the
Directors had an interest in any contracts with the Company or its
subsidiaries during the year.
Employees
The Directors recognise the importance of good communication with employees to
ensure a common awareness of factors affecting the Group. They also recognise
their statutory responsibilities. Matters of current concern or interest are
discussed with staff on a regular basis.
Internal control
The Directors acknowledge their responsibilities for the Group's system of
internal control. The Board considers major business and financial risks. All
strategic decisions are referred to the Board, which meets monthly, for
approval. Accepting that no system of control can provide absolute assurance
against material misstatement or loss, the Directors believe that the
established systems of internal control within the Group are appropriate to
the business.
Future developments
Interest in our products is higher than we have seen for some time and we are
optimistic that this will drive future revenue growth over the coming years.
Financial risk management
The Group's financial instruments comprise cash and cash equivalents, and
items such as trade payables and trade receivables, which arise directly from
its operations.
The main risks arising from the Group's financial instruments are interest
rate fluctuations and liquidity risk. Refer to Note 25 for further detail on
the Group's financial instruments and risk exposures. It is the Group's policy
to finance its operations through a mixture of cash and, where appropriate,
external finance and to review the projected cash flow requirements of the
Group with an acceptable level of risk exposure.
Directors' Report (continued)
Going concern
On the basis of current projections and having regard to the Group's existing
cash reserves, the Directors consider that the Group has adequate resources to
continue in operational existence for the foreseeable future. Accordingly, the
Directors have adopted the going concern basis in the preparation of the
financial statements (Refer to Note 1).
Research and Development
The Group continues to make progress in product development, while continuing
to keep control of costs. Research and development expenditure is charged to
the income statement in the year incurred, unless it meets the capitalisation
criteria under IAS 38.
Directors' and Officers' Liability Insurance
Directors' and Officers' liability insurance is in place at the date of this
report. The Board remains satisfied that an appropriate level of cover is in
place and a review of cover takes place annually.
Disclosures to auditors
In the case of each of the persons who are Directors at the time when the
report is approved, the following applies:
- so far as each of the Directors are aware, there is no relevant
audit information of which the Company's auditors are unaware; and
- each of the Directors have taken all the steps that they ought
to have taken as Directors in order to make themselves aware of any relevant
audit information and to establish that the Company's auditors are aware of
that information.
This information is given and should be interpreted in accordance with the
provisions of s418 of the Companies Act 2006.
Independent Auditors
A resolution to re-appoint PKF Littlejohn LLP will be proposed at the annual
general meeting.
On behalf of the Board
Matthew Jeffs
Chief Executive
9 September 2025
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Strategic Report, Directors'
Report and the financial statements in accordance with applicable UK law and
regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the
financial statements in accordance with UK-adopted international accounting
standards (UK IAS) and as regards the Company financial statements, as applied
in accordance with the requirements of the Companies Act 2006. Under company
law the Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Company and of the Group and of the profit or loss of the Group for that
period. In preparing these financial statements, the Directors are required
to:
- select suitable accounting policies and then apply them
consistently;
- make judgments and accounting estimates that are reasonable and
prudent;
- state whether they comply with UK-adopted international
accounting standards, subject to any material departures disclosed and
explained in the financial statements; and
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company
and the Group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for ensuring that they meet their
responsibilities under the AIM rules.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
Independent Auditor's Report to the members of
Arcontech Group PLC
Opinion
We have audited the financial statements of Arcontech Group Plc (the 'parent
company') and its subsidiaries (the 'group') for the year ended 30 June 2025
which comprise the Group Income Statement and Statement of Comprehensive
Income, the Statements of Changes in Equity, the Statements of Financial
Position, the Group and Parent Company Statements of Cash Flows, and notes to
the financial statements, including significant accounting policies. The
financial reporting framework that has been applied in their preparation is
applicable law and UK-adopted international accounting standards and as
regards the parent company financial statements, as applied in accordance with
the provisions of the Companies Act 2006.
In our opinion:
· the financial statements give a true and fair view of the state
of the group's and of the parent company's affairs as at 30 June 2025 and of
the group's profit for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and parent company's ability to continue to adopt
the going concern basis of accounting included a review of: key inputs to the
forecast financial information prepared by management for the period up to 30
September 2026; management's assessment of going concern; and relevant post
year end information such as regulatory news announcements, Board minutes, and
year to date financial information. We have challenged the applicable
assumptions and key estimates and obtained an understanding of the key
assumptions used to prepare this information as follows:
· Agreeing inputs (including contracted and committed expenditures)
to underlying supporting documentation;
· Ensuring the calculations applied in the forecast are
mathematically accurate;
· Comparison of forecasts with recent historical financial
information to consider accuracy of forecasting;
· Comparing forecasts to actual post year-end cash levels through
agreement to bank statements; and
· Stress-testing the forecasts to consider the impact of reasonably
possible changes to key assumptions such as revenue projections and
operational costs.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's or parent company's
ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Independent Auditor's Report to the members of
Arcontech Group PLC (continued)
Our application of materiality
Materiality Performance Materiality Basis for materiality
Group: £47,000 Group: £35,000 1.5% of revenue; performance materiality at 75%
(2024: £58,200) (2024: £43,650)
Company: £22,000 Company: £17,000 2% of total assets (capped at a level below group materiality); performance
materiality at 75%
(2024: £57,600) (2024: £43,200)
We consider revenue to be the most significant determinant of the group's
financial position and performance used by shareholders as this drives
profitability. The going concern of the group is dependent on its ability to
continue to generate profits through revenue growth. We consider assets to be
the key determinant of the parent company's financial position as its
underlying value is derived from the recoverability of its investment in the
main trading subsidiary, Arcontech Limited. An asset basis for the parent
company is considered most appropriate given this entity is not revenue
generating but holds key assets including cash and investments in
subsidiaries.
Whilst materiality for the group financial statements as a whole was set as
£47,000 (2024: £58,200), materiality for the parent company was set at a
level of £22,000 (2024: £57,600) and materiality for the main trading
company, being the only other material component, was set at a level of
£44,000 (2024: £57,600), with performance materiality set at 75% (2024: 75%)
for group and both material components, a threshold considered appropriate for
a group of this size and inherent risk profile. We applied the concept of
materiality both in planning and performing our audit, and in evaluating the
effect of misstatements.
We agreed with the audit committee that we would report to the committee all
audit differences identified during the course of our group and parent company
audits in excess of £2,000 (2024: £2,910) as well as differences below these
thresholds that, in our view, warranted reporting on qualitative grounds, as
well as disclosure matters that we identified when assessing the overall
presentation of the financial statements.
We applied the concept of materiality both in planning and performing our
audit, and in evaluating the effect of misstatement. Materiality is reassessed
throughout the audit. The materiality threshold for both the group and the
parent company has not changed since the audit planning stage.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risk of
material misstatement in the financial statements. In particular, we looked at
areas requiring the directors to make subjective judgements, for example in
respect of assessing the carrying value and recoverability of investments in
subsidiaries (including intragroup receivables) at parent company level and
goodwill at group level, the valuation of share-based payments, recoverability
of deferred tax assets and the consideration of future events that are
inherently uncertain. We also addressed the risk of management override of
internal controls, including evaluating whether there was evidence of bias by
the directors that represented a risk of material misstatement due to fraud.
We considered revenue recognition to be a key audit matter and designed our
audit procedures to address the risk of misstatement of revenue, including
consideration of key contractual terms within customer agreements and whether
recognition is therefore in accordance with IFRS 15 Revenue from Contracts
with Customers.
An audit was performed on the financial information of the group's material
components which, for the year ended 30 June 2025, were located in the United
Kingdom. All work was performed by PKF Littlejohn LLP in London.
We identified what we considered to be key audit matters in the next section
and planned our audit approach accordingly.
Independent Auditor's Report to the members of
Arcontech Group PLC (continued)
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How our scope addressed this matter
Revenue recognition (see Note 1 - Revenue Recognition policy and Note 3)
The group generates sales from the licensing of its proprietary software, Our work in this area included:
which delivers real time market data information tailored to customer
requirements, as well as support and maintenance services. · Updating our documentation of the systems and controls in place
surrounding its material revenue streams, being fees from fixed and floating
Under IFRS 15 Revenue from Contracts with Customers, a key consideration for licences and related support and maintenance services;
the Group is whether the performance obligation/s within their licensing
arrangements are met at a point in time or over time. · Performing walkthrough tests to confirm our understanding of the
internal control environment in operation surrounding revenue;
As certain revenue streams can be recognised at a point in time whilst others
have to be recognised over time, and the identification of the differing · Reviewing the accounting treatment in respect of revenue
contract types and obligations therein is judgemental, there is a risk that recognition in accordance with IFRS 15 by reference to key contractual terms
revenue is materially misstated and the terms of the contracts with customers and concluding as to the appropriateness of the accounting treatment;
including the performance obligations therein have not been appropriately
accounted for in accordance with IFRS 15. · Substantive transactional testing of income recognised in the
financial statements, including testing of deferred and accrued income
Given the audit time spent in this area, and the management judgement required balances;
in the identification of the differing contract types and obligations therein,
revenue recognition is considered to be a key audit matter. · Reviewing post year end receipts to ensure completeness of income
recorded in the accounting period; and
· Review of disclosures surrounding revenue in the financial
statements to ensure compliance with IFRS 15.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Independent Auditor's Report to the members of
Arcontech Group PLC (continued)
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors
are responsible for assessing the group and the parent company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and parent company and
the sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management
and industry experience. We also selected a specific audit team based on
experience with auditing entities within this industry facing similar audit
and business risks.
· We determined the principal laws and regulations relevant to the
group and parent company in this regard to be those arising from:
Independent Auditor's Report to the members of
Arcontech Group PLC (continued)
o Companies Act 2006;
o AIM Rules;
o UK employment law; and
o UK tax laws and regulations.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and parent company with those laws and regulations. These procedures included,
but were not limited to:
o Making enquiries of management regarding potential instances of
non-compliance;
o Reviewing Board minutes during the year and post-year end;
o Reviewing the legal and professional fee ledger accounts; and
o Reviewing Regulatory News Service announcements during the year and
post-year end.
· We also identified the risks of material misstatement of the
financial statements due to fraud. Aside from the non-rebuttable presumption
of a risk of fraud arising from management override of controls, we also
considered there to be a risk of fraud related to revenue recognition. This
has been addressed as described within the Key audit matters section above.
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals, reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Imogen Massey (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
9 September 2025
Group Income Statement and Statement of Comprehensive Income
For the year ended 30 June 2025
Note 2025
2024
£ £
Revenue 3 3,106,991 2,910,232
Administrative costs (2,328,438) (2,040,541)
4 778,553 869,691
Operating profit
5 208,837 229,268
Net finance income
987,390 1,098,959
Profit before taxation
9 (43,960) (31,302)
Taxation
943,430 1,067,657
Profit for the year after tax
943,430 1,067,657
Total comprehensive income for the year
10 7.05p 7.98p
Earnings per share (basic)
10 6.70p 7.80p
Adjusted* Earnings per share (basic)
10 7.02p 7.96p
Earnings per share (diluted)
Adjusted* Earnings per share (diluted) 10 6.67p 7.78p
*Adjusted to exclude the release of accruals for administrative costs relating
to prior years of £47,611 (2024: £24,603). This is a non-IFRS alternative
performance measure that the Board considers to be a more accurate indicator
of underlying trading performance. This measure has been adopted as a KPI and
is disclosed in the Strategic Report on page 4.
All of the results relate to continuing operations.
There was no Other Comprehensive Income other than Profit for the year after
tax for the year under review (2024: nil).
The notes on pages 33 to 59 form part of these financial statements
Statements of Changes in Equity
For the year ended 30 June 2025
Group:
Share Share Share option reserve Retained Total
capital premium earnings equity
£ £ £ £ £
Balance at 30 June 2023 1,671,601 115,761 279,455 5,547,328 7,614,145
- - - 1,067,657 1,067,657
Profit for the year
Total comprehensive income for the year - - - 1,067,657 1,067,657
Dividend paid - - - (468,048) (468,048)
- - 51,291 - 51,291
Share-based payments
Balance at 30 June 2024 1,671,601 115,761 330,746 6,146,937 8,265,045
Profit for the year - - - 943,430 943,430
Total comprehensive income for the year - - - 943,430 943,430
Dividend paid - - - (501,480) (501,480)
Share-based payments - - 24,774 - 24,774
Transfer between reserves - - (31,832) 31,832 -
Balance at 30 June 2025 1,671,601 115,761 323,688 6,620,719 8,731,769
Company:
Share Share Share option reserve Retained Total
capital premium earnings equity
£ £ £ £ £
Balance at 30 June 2023 1,671,601 115,761 279,455 4,312,405 6,379,222
Profit for the year - - - 328,596 328,596
Total comprehensive expense for the year - - - 328,596 328,596
Dividend paid - - - (468,047) (468,047)
- - 51,291 - 51,291
Share-based payments
Balance at 30 June 2024 1,671,601 115,761 330,746 4,172,954 6,291,062
Profit for the year - - - 347,587 347,587
Total comprehensive income for the year - - - 347,587 347,587
Dividend paid - - - (501,480) (501,480)
Share-based payments - - 24,774 - 24,774
Transfer between reserves - - (31,832) 31,832 -
Balance as at 30 June 2025 1,671,601 115,761 323,688 4,050,893 6,161,943
The notes on pages 33 to 59 form part of these financial statements.
Statements of Financial Position
Registered number: 04062416
As at 30 June 2025
Group Group Company Company
2025
2024
2025
2024
£
£
£ £
Note
Non-current assets
Goodwill 11 1,715,153 1,715,153 - -
Property, plant and equipment 12 7,964 5,404 - -
Right of use asset 17 391,369 503,190 - -
Investments in subsidiaries 13 - - 2,017,471 2,017,471
Deferred tax asset 19 336,000 358,000 75,000 71,000
Trade and other receivables 14 141,750 141,750 - -
Total non-current assets 2,592,236 2,723,497 2,092,471 2,088,471
Current assets
Trade and other receivables 14 833,462 677,069 3,947,914 4,069,236
Cash and cash equivalents 15 7,395,514 7,160,177 293,485 287,606
Total current assets 8,228,976 7,837,246 4,241,399 4,356,842
Current liabilities
Trade and other payables 16 (1,592,079) (1,688,025) (171,927) (154,251)
Lease liabilities 17 (119,668) (110,308) - -
Provisions 18 - - - -
Total current liabilities (1,711,747) (1,798,333) (171,927) (154,251)
Non-current liabilities
Lease liabilities 17 (307,696) (427,365) - -
Provisions 18 (70,000) (70,000) - -
Total non-current liabilities (377,696) (497,365) - -
Net current assets 6,517,229 6,038,913 4,069,472 4,202,591
Net assets 8,731,769 8,265,045 6,161,943 6,291,062
Equity
Called up share capital 20 1,671,601 1,671,601 1,671,601 1,671,601
Share premium account 21 115,761 115,761 115,761 115,761
Share option reserve 21 323,688 330,746 323,688 330,746
Retained earnings 21 6,620,719 6,146,937 4,050,893 4,172,954
8,731,769 8,265,045 6,161,943 6,291,062
As permitted by s408 of the Companies Act 2006, the Company has not presented
its own income statement. The Company profit for the year was £347,587 (2024:
£328,596).
The notes on pages 33 to 59 form part of these financial statements.
Approved on behalf of the board on 9 September 2025 by:
Matthew Jeffs
Chief Executive
Group Statement of Cash Flows
For the year ended 30 June 2025
Note 2025 2024
£ £
Cash generated from operations 22 667,719 1,051,177
Tax paid (61,304) (15,586)
Net cash generated from operating activities 606,415 1,035,591
Investing activities
Interest received 5 249,816 247,903
Receipts from the sale of plant and equipment - 417
Purchases of plant and equipment (9,107) (12,055)
240,709 236,265
Net cash generated from investing activities
Financing activities
Dividend paid (501,480) (468,048)
Payment of lease liabilities 17 (110,307) (54,872)
Net cash used in financing activities (611,787) (522,920)
235,337 748,936
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year 7,160,177 6,411,241
15 7,395,514 7,160,177
Cash and cash equivalents at end of year
For the year to 30 June 2025, the Group had no debt, and there were no
material non-cash transactions.
The notes on pages 33 to 59 form part of these financial statements.
Company Statement of Cash Flows
For the year ended 30 June 2025
Note 2025 2024
£ £
22 500,201 227,448
Net cash generated by / (used in) operating activities
Tax paid (2,136) (1,706)
Net cash generated from / (used in) operating activities 498,065 225,742
Investing activities
Interest received 9,294 11,234
Net cash generated from investing activities 9,294 11,234
Financing activities
(501,480) (468,048)
Dividend paid
(501,840) (468,048)
Net cash used in financing activities
5,879 (231,072)
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year 287,606 518,678
15 293,485 287,606
Cash and cash equivalents at end of year
For the year to 30 June 2025, the Company had no debt, and there were no
material non-cash transactions.
The notes on pages 33 to 59 form part of these financial statements.
Notes to the Financial Statements
For the year ended 30 June 2025
1. Accounting policies
The principal accounting policies are summarised below. They have all been
applied consistently throughout the period covered by these financial
statements except where changes have been noted below.
Reporting entity
Arcontech Group plc ("the Company") is a company incorporated in England and
Wales with a registered address at 1(st) floor, 11-21 Paul Street, London,
EC2A 4JU. The consolidated financial statements incorporate the financial
statements of the Company and its subsidiaries (together referred to as "the
Group").
Principal Activity
The principal activities of the Company and its subsidiaries during the year
were the development and sale of proprietary software and provision of
computer consultancy services.
Basis of preparation
These financial statements have been prepared in accordance with UK-adopted
international accounting standards and with the requirements of the Companies
Act 2006.
On the basis of current projections, confidence of future profitability and
cash balances held, the Directors have adopted the going concern basis in the
preparation of the financial statements.
The financial statements have been prepared under the historical cost
convention. As at 30 June 2025 all assets and liabilities are recorded at
amortised cost, and there were no assets or liabilities recorded at fair
value.
Going Concern
On the basis of current projections and having regard to the Group's existing
cash reserves, the Directors consider that the Group has adequate resources to
continue in operational existence for the foreseeable future. In reaching this
conclusion the Directors have projected cash flow out twelve months from the
date of signing this report. Revenue projection has been based on recurring
revenue streams from existing customers and a forecast for new revenue from
additional sales that the Directors feel is achievable. The Group has a highly
stable cost base which has been reviewed to incorporate the impact of
additional costs for revenue generation activities such as industry trade
shows. The Directors have stress tested the cash flow projections assuming no
new revenue generation and an increase in costs of up to 15%, given the
current inflationary environment. Under this scenario given expected cash
generation from operations and existing cash balances, the Group will have
sufficient resources to continue trading for well in excess of the next twelve
months. Accordingly, the Directors have adopted the going concern basis in the
preparation of the financial statements.
Changes in accounting policies and disclosures
a) New and amended Standards and Interpretations adopted by the Group
and Company
The International Accounting Standards Board (IASB) issued various amendments
and revisions to International Financial Reporting Standards and IFRIC
interpretations per the table below. The amendments and revisions were
applicable for the period year 30 June 2025 but did not result in any material
changes to the financial statements of the Group.
Standard Impact on initial application Effective date
IAS 1 (Amendments) Non-current liabilities with covenants 1 January 2024
IFRS 16 (Amendments) Lease liability in a Sale-and-Leaseback 1 January 2024
IAS 7 & IFRS 7 (Amendments) Supplier Finance Arrangements 1 January 2024
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
1. Accounting policies (continued)
b) New and amended Standards and Interpretations issued but not
effective for the financial year beginning 1 July 2024
Standard Impact on initial application Effective date
IAS 21(Amendments) The Effects of Changes in Foreign Exchange Rates - Lack of exchangeability 1 January 2025
IFRS 1 (Amendments) First-time Adoption of International Financial Reporting Standards 1 January 2026
IFRS 7 (Amendments) Financial Instruments: Disclosures and Amendments to Guidance on Implementing 1 January 2026
IFRS 7 Financial Instruments: Disclosures
IFRS 9 (Amendments) Financial Instruments 1 January 2026
IFRS 10 (Amendments) Consolidated Financial Statements 1 January 2026
IAS 7 (Amendments) Statement of Cash Flows 1 January 2026
The impact of new and amended Standards and Interpretations which are in issue
but not yet mandatorily effective is not expected to be material.
Basis of consolidation
The Group financial statements incorporate the financial statements of the
Company and entities controlled by the Company (its subsidiaries) prepared to
30 June 2025. Subsidiaries are entities controlled by the Group. Control is
achieved when the Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Group controls an
investee if, and only if, the Group has:
· Power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the investee).
· Exposure, or rights, to variable returns from its involvement
with the investee
· The ability to use its power over the investee to affect its
returns.
Generally, there is a presumption that a majority of voting rights result in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
· The contractual arrangement with the other vote holders of the
investee.
· Rights arising from other contractual arrangements.
· The Group's voting rights and potential voting rights.
Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated financial statements from
the date the Group gains control until the date the Group ceases to control
the subsidiary. The acquisition method is used to account for the acquisition
of subsidiaries.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Business combinations and goodwill
On acquisition, the assets and liabilities and contingent liabilities of
subsidiaries are measured at their fair value at the date of acquisition. Any
excess of cost of acquisition over the fair values of the identifiable net
assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair values of the identifiable net assets acquired
(i.e. discount on acquisition) is credited to the income statement in the
period of acquisition. Goodwill arising on consolidation is recognised as an
asset and reviewed for impairment at least annually. Any impairment is
recognised immediately in the income statement and is not subsequently
reversed.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
1. Accounting policies (continued)
Revenue recognition
Revenue is recognised in accordance with the transfer of promised services to
customers (i.e. when the customer gains control of the service) and is
measured as the consideration which the group expects to be entitled to in
exchange for those services. Consideration is typically fixed on the agreement
of a contract except for quarterly flexible license contracts. Payment terms
are agreed on a contract by contract basis.
A service is distinct if the customer can benefit from the service on its own
or together with other resources that are readily available to the customer
and the entity's promise to transfer the service to the customer is separately
identifiable from other promises in the contract.
Contracts with customers do not contain a financing component.
Under IFRS 15, revenue earned from contracts with customers is recognised
based on a five-step model which requires the transaction price for each
identified contract to be apportioned to separate performance obligations
arising under the contract and recognised either when the performance
obligation in the contract has been performed (point in time recognition) or
over time as control of the performance obligation is transferred to the
customer.
The group recognises revenue when it satisfies a performance obligation by
transferring a promised service to the customer as follows:
• Revenue from recurring license fees and other license fees is recognised
on an over time basis via a straight line across the period the services are
provided. In reaching this conclusion the group has assessed that ongoing
contractual obligations are not separately identifiable from other promises in
the contract and are not distinct from the licence, and hence are accounted
for as a single performance obligation. As the license is not distinct the
combined performance obligation is recognised over time.
In assessing whether a licence is distinct the Group considered the continuing
requirement to:-
- optimise functionality;
- optimise performance; and
- provide enhancements to ensure user regulatory compliance.
• Revenue from flexible license contracts that include variable
consideration are quarterly contracts assessed at the end of each calendar
quarter and revenue is recognised based on actual usage confirmed for that
quarter at the point of customer acceptance;
• Revenue from project work is recognised on satisfactory completion of each
project, as this is considered to be the point in time the customer gains
control over the results of the project work.
Taxation
The tax charge/(credit) represents the sum of the tax payable/(receivable) and
any movement in deferred tax.
Research and development tax credits are recognised when received.
The tax payable/(receivable) is based on the taxable result for the year. The
taxable result differs from the net result as reported in the income statement
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The Company's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax value of carried forward tax losses that can be
expected to be offset against future profits, recognised as an asset,
calculated using the corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises from
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
1. Accounting policies (continued)
Taxation (continued)
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, except where the Group is able to
control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset realised. Deferred tax is
charged or credited to the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current assets and liabilities
on a net basis.
Share-based payments
The cost of share-based employee compensation arrangements, whereby employees
receive remuneration in the form of shares or share options, is recognised as
an employee benefit expense in the income statement.
The total expense to be apportioned over the vesting period of the benefit is
determined by reference to the fair value (excluding the effect of non
market-based vesting conditions) at the date of grant. Fair value is measured
by the use of the Black-Scholes model. The expected life used in the model has
been adjusted, based on management's best estimate, for the effects of the
non-transferability, exercise restrictions and behavioural considerations. A
cancellation of a share award by the Group or an employee is treated
consistently, resulting in an acceleration of the remaining charge within the
consolidated income statement in the year of cancellation.
Impairment of tangible and intangible assets
The carrying amounts of the Group's and Company's tangible and intangible
assets are reviewed at each year end date to determine whether there is any
indication of impairment. If any such indication exists, the asset's
recoverable amount is estimated.
Expenses incurred on Research & Development are currently expensed through
the income statement as the expenditure is incurred on the maintenance and
enhancement of existing products. The applicability of this treatment is
reviewed regularly by the Company.
For goodwill, the recoverable amount is estimated at each year end date, based
on value in use. The recoverable amount of other assets is the greater of
their fair value less costs to sell, and value in use.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, the
recoverable amount is determined for the cash generating unit to which the
asset belongs.
An impairment loss is recognised in the income statement whenever the carrying
amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to
cash-generating units and then to reduce the carrying amount of the other
assets in the unit on a pro rata basis.
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.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
1. Accounting policies (continued)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any recognised impairment loss.
Depreciation is charged so as to write off the cost of assets, over their
estimated useful lives, on the following bases:
Leasehold property - over the period of the lease
Computer equipment - 33% - 40% on cost
Office furniture and equipment - 20% - 25% on cost or reducing balance
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision for
impairment.
Financial instruments
Financial assets and financial liabilities are recognised in the statement of
financial position when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets
The Group does not hold any investments other than investments in
subsidiaries.
Trade receivables are held in order to collect the contractual cash flows and
are initially measured at the transaction price as defined in IFRS 15, as the
contracts of the Group do not contain significant financing components.
Impairment losses are recognised based on lifetime expected credit losses in
profit or loss.
Other receivables are held in order to collect the contractual cash flows and
accordingly are measured at initial recognition at fair value, which
ordinarily equates to cost and are subsequently measured at cost less
impairment due to their short-term nature. A provision for impairment is
established based on 12-month expected credit losses unless there has been a
significant increase in credit risk when lifetime expected credit losses are
recognised. The amount of any provision is recognised in the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less.
Financial liabilities and equity
Financial liabilities and equity instruments issued by the Group are
classified in accordance with the substance of the contractual arrangements
entered into and the definitions of a financial liability and an equity
instrument. An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its liabilities.
Equity instruments issued by the company are recorded at the proceeds
received, net of direct issue costs.
Effective interest rate method
The effective interest rate method is a method of calculating the amortised
cost of a financial asset or liability and allocating interest income or
expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash flows through the expected life of the
financial asset or liability, or, where appropriate, a shorter period, to the
net carrying amount on initial recognition.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
1. Accounting policies (continued)
Financial instruments (continued)
(a) Classification
The Group classifies its financial assets as applicable in the following
measurement categories:
· those to be measured subsequently at fair value (either through
OCI or through profit or loss); and
· those to be measured at amortised cost.
The classification depends on the Group's business model for managing the
financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded either in
profit or loss or in OCI. For investments in equity instruments that are not
held for trading, this will depend on whether the Group has made an
irrevocable election at the time of initial recognition to account for the
equity investment at fair value through other comprehensive income (FVOCI).
See Note 16 for further details.
(b) Recognition
Purchases and sales of financial assets are recognised on trade date (that is,
the date on which the Group commits to purchase or sell the asset). Financial
assets are derecognised when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
(c) Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets
carried at FVPL are expensed in profit or loss.
Debt instruments
Amortised cost; Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method.
Any gain or loss arising on derecognition is recognised directly in profit or
loss and presented in other gains/(losses) together with foreign exchange
gains and losses. Impairment losses are presented as a separate line item in
the statement of profit or loss.
(d) Impairment
The Group assesses, on a forward-looking basis, the expected credit losses
associated with its debt instruments carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk.
For trade receivables, the Group applies the simplified approach permitted by
IFRS 9, which requires expected lifetime losses to be recognised from initial
recognition of the receivables.
Leases
Leases are recognised as a right-of-use asset and a corresponding lease
liability at the date at which the leased asset is available for use by the
Group.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
1. Accounting policies (continued)
Leases (continued)
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
· Fixed payments (including in-substance fixed payments), less
any lease incentives receivable;
· Variable lease payment that are based on an index or a rate,
initially measured using the index or rate as at the commencement date;
· Amounts expected to be payable by the Group under residual
value guarantees;
· The exercise price of a purchase option if the Group is
reasonably certain to exercise that option; and
· Payments of penalties for terminating the lease, if the lease
term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Group, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to profit or loss over the lease period.
Right-of-use assets are measured at cost which comprises the following:
· The amount of the initial measurement of the lease liability;
· Any lease payments made at or before the commencement date less
any lease incentives received;
· Any initial direct costs; and
· Restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis. If the Group is
reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset's useful life.
Payments associated with short-term leases (term less than 12 months) and all
leases of low-value assets (generally less than £4k) are recognised on a
straight-line basis as an expense in profit or loss.
Provisions
Provisions are recognised when the Group has a present obligation, legal or
constructive, resulting from past events and it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the obligation.
Research and development ("R&D")
Research costs are charged to the income statement in the year incurred.
Development expenditure is capitalised to the extent that it meets all of the
criteria required by IAS 38, otherwise it is charged to the income statement
in the year incurred. In order for development expenditure to meet the
capitalisation criteria of IAS 38, it must be both technically feasible to
complete the work, and there must be the intention to either use or sell the
asset created. R&D currently being undertaken by the Group is on
maintenance and enhancements to its existing products in order to continue to
meet the needs of customers, and not new products capable of being sold
separately, and thus is not possible to attribute any future economic benefit
for work that has been undertaken during the period under review.
Pension costs and other post-retirement benefits
The Group makes payments to occupational and employees' personal pension
schemes. Contributions payable for the year are charged in the income
statement.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
1. Accounting policies (continued)
Foreign currencies
Transactions denominated in foreign currencies are translated into sterling at
the exchange rate ruling when the transaction was entered into. Where
consideration is received in advance of revenue being recognised the date of
the transaction reflects the date the consideration is received. Foreign
currency monetary assets and liabilities are translated into sterling at the
exchange rate ruling at the balance sheet date. Exchange gains or losses are
included in operating profit.
Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker as required by IFRS 8
"Operating Segments". The chief operating decision-maker responsible for
allocating resources and assessing performance of the operating segments has
been identified as the Board of Directors. The accounting policies of the
reportable segments are consistent with the accounting policies of the group
as a whole. Segment profit/(loss) represents the profit/(loss) earned by each
segment without allocation of foreign exchange gains or losses, investment
income, interest payable and tax. This is the measure of profit that is
reported to the Board of Directors for the purpose of resource allocation and
the assessment of segment performance. When assessing segment performance and
considering the allocation of resources, the Board of Directors review
information about segment assets and liabilities. For this purpose, all assets
and liabilities are allocated to reportable segments with the exception of
cash and cash equivalents and current and deferred tax assets and liabilities.
2. Critical accounting judgments and key sources of estimation
uncertainty
The preparation of financial statements in conformity with generally accepted
accounting practice 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 balance sheet date and
the reported amounts of revenues and expenses during the reporting period.
Estimates and judgements are continually evaluated and are based on historic
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Judgements
Determination of performance obligations and satisfaction thereof
For the purposes of recognising revenue, the Directors are required to
identify distinct services in contracts and allocate the transaction price to
the performance obligations. Details of determining performance obligations,
passing of control and amounts recognised as costs incurred to obtain or
fulfil a contract are given in Note 1 - Revenue recognition. There has been no
change in the Group's business model from the previous year and the Directors
are satisfied that the revenue recognition policy remains correct for the year
under review.
Capitalisation of development costs
As described in Note 1, the Group capitalises development costs when certain
criteria are met including the probability of relevant future economic
benefits. The key variable in making judgement of the correct treatment of
development costs is new product development versus modification and
maintenance of existing products. The development work undertaken has been on
maintenance and enhancements to its existing products in order to continue to
meet the needs of customers, and having assessed the likelihood of future
economic benefit, the Directors have judged it appropriate to not capitalise
any development costs as it is not possible to attribute any separate economic
benefit to the work undertaken (2024 - £Nil).
Share based payment transactions
The Company has made awards of options and over its unissued share capital to
certain Directors and employees as part of their remuneration package.
The valuation of these options involves making a number of critical estimates
relating to price volatility, future dividend yields, expected life of the
options and forfeiture rates. These assumptions have been described in more
detail in Note 20.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
2. Critical accounting judgments and key sources of estimation
uncertainty (continued)
Estimates
Impairment of intangible assets and investment in subsidiary
Determining whether non-current assets are impaired requires an estimation of
the value in use of the cash generating units to which non-current assets have
been allocated. The value in use calculation requires the Group to estimate
the future cash flows expected to arise from the cash-generating unit and a
suitable discount rate in order to calculate the present value. The key
variables used in cash flow projections are: a timeline of fourteen years (the
"time period"); the forecast for the next year which is used as the base for
future years; revenue and cost projections for the time period using the
average rate of increase / (decrease) achieved over the preceding ten years.
No provision for impairment was made in the year to the carrying value of
goodwill (see note 11) or investments in subsidiaries (see note 13).
Recognition of deferred tax assets
As described in Note 1, the Group recognises deferred tax assets arising from
unused tax losses when certain criteria are met including the probability that
future relevant taxable profits will be available. The directors have assessed
the likelihood of future taxable profits being available and have judged it
appropriate to recognise deferred tax assets for unused losses. The key
variables used in the calculation of deferred tax assets are: a timeline of
three years out from reporting date; revenue and cost projections on the same
basis as used in the assessment of impairment of goodwill; a cost of capital
of 8.44%. At the year-end a deferred tax asset of £336,000 (2024 - £358,000)
was recognised.
Valuation of share-based payments
Accounting for some equity-settled share-based payment awards requires the use
of valuation models to estimate the future share price performance of the
Company. These models require the Directors to make assumptions regarding the
share price volatility, risk free rate and expected life of awards in order to
determine the fair values of the awards at grant dates.
3. Revenue
An analysis of the Group's revenue is as follows:
2025 2024
£
£
Software development, licence fees and project work 3,106,991 2,910,232
All of the Group's revenue relates to continuing activities.
4. Operating profit for the year is stated after
charging/(crediting):
2025 2024
£
£
Depreciation of plant and equipment (see note 12) 6,546 4,752
Depreciation of leased assets (see note 17) 111,821 129,766
Interest on leased assets (see note 17) 40,891 18,435
Staff costs (see note 8) 1,762,666 1,499,656
Research and development 642,393 521,853
Release of accruals for administrative costs in respect of prior years(1) (47,611) (24,603)
( )
(1 the accruals in respect of prior years are in connection with a former
business premises.)
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
5. Finance income and Finance costs:
2025 2024
£
£
Finance income
Interest on cash and cash equivalents 249,816 247,903
Finance costs
Lease interest expense (40,891) (18,435)
Other interest expense (88) (200)
Net finance income 208,837 229,268
6. Auditor's remuneration:
2025 2024
£
£
Fees payable to the Group's auditor for the audit of the Group's annual 42,875 40,500
accounts
Fees payable to the Group's auditor for other services:
- audit of the Company's subsidiaries 7,000 7,000
49,875 47,500
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
7. Operating segments:
The Group reports internally to the Chief Operating Decision Maker (CODM), who
is considered to be the Board. Intersegment license fees and management
charges are not included in the reports reviewed by the CODM during the year
but are calculated for statutory reporting purposes and therefore are excluded
from the following revenue and operating profit disclosures.
2025 2024
£ £
Revenue by segment
Software development and licence fees 3,106,991 2,910,232
External segment revenue 3,106,991 2,910,232
Operating profit by segment
Software development and licence fees 1,331,560 1,394,367
Unallocated overheads (553,007) (524,676)
Total operating profit 778,553 869,691
Net finance income 208,837 229,268
Total profit before tax as reported in the Group income statement 987,390 1,098,959
2025 2024
£ £
Segment total of assets
Software development and licence fees 10,296,400 10,056,804
Unallocated assets 4,463,398 4,564,942
14,759,798 14,621,746
Less intercompany debtors (3,938,586) (4,061,003)
Total assets 10,821,212 10,560,743
2025 2024
£ £
Segment total of liabilities
Software development and licence fees 5,855,411 6,202,071
Unallocated liabilities 172,618 154,630
6,028,029 6,356,701
Less intercompany creditors (3,938,586) (4,061,003)
Total liabilities 2,089,443 2,295,698
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
7. Operating segments (continued):
2025 2024
£ £
Additions of property, plant and equipment assets by segment
Software development and licence fees 9,107 12,055
Total additions 9,107 12,055
2025 2024
£ £
Depreciation of property, plant and equipment assets recognised in the period
by segment
Software development and licence fees 6,546 4,752
Total depreciation 6,546 4,752
Non-current assets by country 2025 2024
£ £
UK 2,592,236 2,723,497
Total non-current assets 2,592,236 2,723,497
Geographical information - External revenue 2025 2024
£ £
UK 2,108,738 1,958,953
Europe (excluding UK) 535,633 585,263
Africa 45,000 45,000
North America 301,448 287,788
Australasia 96,837 12,604
Asia Pacific 19,335 20,624
3,106,991 2,910,232
During the year there were 4 customers (2024: 5) who accounted for more than
10% of the Group's revenues as follows:
2025 2024
Value of % of Total Value of % of Total
sales
sales
£
£
Customer 1 668,164 22% 668,506 23%
Customer 2 590,442 19% 437,978 15%
Customer 3 505,193 16% 520,990 18%
Customer 4 330,881 10% 337,900 12%
Customer 5 - - 278,186 10%
2,094,680 67% 2,243,560 78%
These revenues are attributable to the software development and licence fees
segment.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
8. Staff costs:
2025 2024
£ £
a) Aggregate staff costs, including Directors' remuneration
Wages and salaries 1,512,743 1,267,472
Social security costs 191,794 152,473
Pension contributions 33,355 28,420
Share-based payments 24,774 51,291
1,762,666 1,499,656
b) The average number of employees (including Directors) was:
Sales and administration 7 7
Development and support 11 10
18 17
£ £
c) Directors' emoluments
Short-term employee benefits 342,057 322,365
Pension contributions 5,953 5,512
Share-based payments 8,268 21,000
356,278 348,877
Social security costs 45,105 40,554
Total Director compensation 401,383 389,431
The average number of employees of the parent company is 3 (2024: 3).
The highest paid Director received remuneration of £290,510 (2024:
£270,377).
The number of Directors that are members of a defined contribution pension
scheme is 1 (2024: 1). Pension contributions paid to a defined contribution
scheme in respect of the highest paid Director amounted to £5,953 (2024:
£5,512).
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
9. Taxation
2025 2024
£ £
Current tax (21,960) (61,302)
Deferred tax (22,000) 30,000
Total tax charge for the year 43,960 31,302
The tax assessed for the year is lower (2024: lower) than the standard rate of
corporation tax in the United Kingdom at 25% (2024: 25%). The differences are
explained below:
2025 2024
£ £
Profit on ordinary activities before tax 987,390 1,098,959
Profit on ordinary activities multiplied by the effective rate of corporation 246,847 274,740
tax in the UK of 25.00% (2024: 25.00%)
Effects of:
Disallowed expenses 68 68
Temporary differences on deferred tax 1,962 1,921
Deferred tax asset movement 22,000 (30,000)
Brought forward losses utilised (226,917) (215,427)
43,960 31,302
Total tax charge for the year
Factors which may affect future tax charges
At 30 June 2025 the Group has tax losses of approximately £6,700,000 (2024:
£7,600,000) to offset against future trading profits.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
10. Earnings per share
2025 2024
£ £
Earnings
Earnings for the purpose of basic and diluted earnings per share being net 943,430 1,067,657
profit attributable to equity shareholders
less: release of accruals relating to prior years(1) (47,611) (24,603)
Adjusted earnings for the purpose of basic and diluted earnings per share 895,819 1,043,054
being net profit attributable to equity shareholders
Earnings per share (basic) 7.05p 7.98p
Adjusted earnings per share (basic) 6.70p 7.80p
Earnings per share (diluted) 7.02p 7.96p
Adjusted earnings per share (diluted) 6.67p 7.78p
(1 the accruals in respect of prior years are in connection with a former
business premises.)
No. No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings 13,372,811 13,372,811
per share
Number of dilutive shares under option 63,570 31,620
Weighted average number of ordinary shares for the purposes of dilutive 13,436,381 13,404,431
earnings per share
The calculation of diluted earnings per share assumes conversion of all
potentially dilutive ordinary shares, all of which arise from share options. A
calculation is done to determine the number of shares that could have been
acquired at fair value, based upon the monetary value of the subscription
rights attached to outstanding share options.
11. Goodwill
2025 2024
£ £
Cost and net book amount
At 1 July 2024 and at 30 June 2025 1,715,153 1,715,153
Goodwill acquired in a business combination is allocated at acquisition, to
the cash generating units (CGUs) that are expected to benefit from that
business combination. The carrying amount of goodwill has been allocated as
follows:
2025 2024
£ £
Arcontech Limited 1,715,153 1,715,153
1,715,153 1,715,153
The CGU used in these calculations is Arcontech Limited. The group tests
goodwill annually for impairment or more frequently if there are indications
that goodwill might be impaired. The recoverable amounts of the CGUs are
determined from value in use calculations. The key assumptions for the value
in use calculations are those regarding the discount rates, growth rates and
expected changes to selling prices and direct costs during the period. The
discount rate is estimated using pre-tax rates that reflect current market
assessments of the time value of money and the risks specific to the CGUs.
Long-term growth rates are based on industry growth forecasts. Changes in
selling prices are based on past practices and expectations of future changes
in the market. Changes in direct costs are based on expected cost of inflation
of 6.0% and 1.8% after year 5.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
11. Goodwill (continued)
Cashflow forecasts are based on the latest financial budgets and extrapolate
the cashflows for the next five years based on an estimated growth in revenue
representing an average rate of 3.3% (2024: 3.3%) per annum, after which the
UK long-term growth rate of 1.8% is applied for a further eight years. The
Directors consider a timeline of fourteen years appropriate given the
historical consistency of revenue to date, and that the rate of 3.3% for the
first five years is appropriate given the current sales pipeline. Fluctuation
in revenue is the most sensitive of assumptions. Should revenue fall by more
than an average of 5% per annum then this could result in the value of
goodwill being impaired.
As the Group does not have any borrowings, the rate used to discount all the
forecast cash flows is 8.8% (2024: 8.8%), which represents the Group's cost of
capital.
Goodwill on the purchase of Arcontech Limited is attributable to the operating
synergies that have arisen as a result of the combination.
12. Property, plant and equipment - Group
Leasehold Office Total
Property
furniture &
equipment
Cost £ £ £
At 1 July 2023 26,199 103,365 129,564
Additions - 4,471 4,471
Disposals (26,199) (795) (26,994)
At 1 July 2024 - 107,041 107,041
Additions - 9,107 9,107
At 30 June 2025 - 116,148 116,148
Depreciation
At 1 July 2023 24,981 98,633 123,614
Charge for the year 1,218 3,534 4,752
Disposals (26,199) (530) (26,729)
At 1 July 2024 - 101,638 101,638
Charge for the year - 6,546 6,546
At 30 June 2025 - 108,184 108,184
- 7,964 7,964
Net book amount at 30 June 2025
- 5,404 5,404
Net book amount at 30 June 2024
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
13. Investment in subsidiaries
2025 2024
Carrying amount £ £
At 1 July 2024 2,017,471 2,017,471
At 30 June 2025 2,017,471 2,017,471
Details of the investments in which the Group and the Company holds 20% or
more of the nominal value of any class of share capital are listed below. The
Goodwill recognised in Note 11 is in connection with investments made in
subsidiaries, and given the value of Goodwill recognised in the Consolidated
Statement of Financial Position the Directors are satisfied that the carrying
amount of the investment in subsidiaries does not require impairment:
Country of Address Nature of business Ordinary
Incorporation
shares
held
Arcontech Solutions Limited England 11-21 Paul Street, London EC2A 4JU Dormant 100%
Cognita Technologies Limited England 11-21 Paul Street, London EC2A 4JU Software development 100%
Arcontech Limited England 11-21 Paul Street, London EC2A 4JU Software development and consultancy 100%
14. Trade and other receivables
Group Group Company Company
2025
2024
2025
2024
£
£
£
£
Due within one year:
Trade and other receivables 659,197 458,227 - -
Amounts owed by group undertakings - - 3,938,487 4,060,905
Prepayments and accrued income 174,265 218,842 9,427 8,331
Other receivables - - - -
833,462 677,069 3,947,914 4,069,236
The Directors have reviewed the amounts owing from Group undertakings and
given the value of Goodwill recognised in the Consolidated Statement of
Financial Position the Directors are satisfied that the carrying value of
amounts owing from Group undertakings does not require impairment other than
as disclosed in note 23.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
14. Trade and other receivables (continued)
Group Group Company Company
2025
2024
2025
2024
£
£
£
£
Due after more than one year:
Other receivables 141,750 141,750 - -
141,750 141,750 - -
Trade receivables, which are the only financial assets at amortised cost, are
non-interest bearing and generally have a 30-90 day term. Due to their short
maturities, the carrying amount of trade and other receivables is a reasonable
approximation of their fair value. A provision for impairment of trade
receivables is established using an expected loss model. Expected loss is
calculated from a provision based on the expected lifetime default rates and
estimates of loss on default.
As at 30 June 2025, trade receivables of £Nil were impaired (2024: £Nil) and
during the year an impairment charge relating to trade receivables of £Nil
(2024: £Nil) was recognised. As at 30 June 2025 trade receivables of £90,070
(2024: £214,142) were past due but not impaired as full recovery is expected.
The ageing analysis of these trade receivables is as follows:
Group Group Company Company
2025
2024
2025
2024
£
£
£
£
Up to 3 months past due 506,714 214,142 - -
3 to 6 months past due - - - -
506,714 214,142 - -
15. Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less. The Directors
consider that the carrying amount of cash and cash equivalents approximates to
their fair value.
16. Trade and other payables
Group Group Company Company
2025
2024
2025
2024
£
£
£
£
Trade payables 64,882 61,328 3,221 3,437
Amounts owed to group undertakings - - 100 100
Other tax and social security payable 75,759 106,899 13,996 12,612
Other payables and accruals 540,921 426,963 154,610 138,102
Deferred income 910,517 1,092,835 - -
1,592,079 1,688,025 171,927 154,251
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value.
Trade payables and other payables and accruals constitute the financial
liabilities within the category "Financial liabilities at amortised cost." The
total value of Financial liabilities at amortised cost is £605,803 (2024:
£488,291) which includes provisions (Refer to note 18).
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
17. Leases
Under IFRS 16, the Group recognises right-of-use assets and lease liabilities
for all leases on its balance sheet. The only lease applicable under IFRS 16
is the Group's office.
The key impacts on the Statement of Comprehensive Income and the Statement of
Financial Position are as follows:
As at 30 June 2025 Lease liability Right of use asset Income statement
£ £ £
Carrying value at 30 June 2024 (537,673) 503,190 -
Depreciation - (111,821) (111,821)
Interest (40,891) - (40,891)
Lease payments 151,200 - -
Carrying value at 30 June 2025 (427,364) 391,369 (152,712)
Reconciliation of lease liabilities Operating cash flow Financing cash flow Non-cash Total
£ £
£ £
As at 1 July 2024 - - - 537,673
Cash flows:
Interest paid (40,891) - - (40,891)
Liability reduction - (110,309) - (110,309)
Non-cash changes:
Interest expense - - 40,891 40,891
As at 30 June 2025 (40,891) (110,309) 40,891 427,364
As at 30 June 2024 Lease liability Right of use asset Income statement
£ £ £
Carrying value at 30 June 2023 (40,324) 73,152 -
Additions (552,221) 559,804 -
Depreciation - (129,766) (129,766)
Interest (18,435) - (18,435)
Lease payments 73,307 - -
Carrying value at 30 June 2024 (537,673) 503,190 (148,201)
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
17. Leases (continued)
Reconciliation of lease liabilities Operating cash flow Financing cash flow Non-cash Total
£ £
£ £
As at 1 July 2023 - - - 40,324
Cash flows:
Interest paid (18,435) - - (18,435)
Liability reduction - (54,872) - (54,872)
Non-cash changes:
New lease - - 552,221 552,221
Interest expense - - 18,435 18,435
As at 30 June 2024 (18,435) (54,872) 570,656 537,673
Contractual maturity analysis of lease liabilities as at 30 June 2025
Less than 3 - 12 1 - 5 Longer than
3 months Months Year 5 years Total
£ £ £ £ £
Lease liabilities 37,800 81,868 307,696 - 427,364
18. Provisions
Group Group Company Company
2025
2024
2025
2024
£
£
£
£
As at 1 July 70,000 70,000 - -
Increase in provision - - - -
As at 30 June 70,000 70,000 - -
Disclosed as:
Current liabilities - - - -
Non-current liabilities 70,000 70,000 - -
Provisions consists of dilapidations for the Office premises of £70,000
(2024: £70,000). Refer to note 1 for the Accounting Policy for Provisions.
The total estimate of dilapidation costs for the Paul Street office is
£50,000 which is disclosed as a non-current liability as at 30 June 2025, as
the lease is due to end beyond twelve months. The £20,000 non-current
dilapidations provision relates to a potential liability in connection with a
previous office. The value of the provisions has not been discounted as the
impact is not material.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
19. Deferred tax
Deferred tax is calculated in full on temporary differences under the
liability method using the tax rate of 24.98% which is the effective tax rate
of the Group. The movement on the deferred tax account is as shown below:
Group Group Company Company
2025
2024
2025
2024
£
£
£
£
At 1 July 358,000 328,000 71,000 68,000
- - - -
Effect of change in tax rate
Effect of movement in temporary differences (22,000) 30,000 4,000 3,000
At 30 June 336,000 358,000 75,000 71,000
The deferred tax asset has been recognised in relation to forecast taxable
profits which are considered probable.
Losses to offset against future trading profits at 30 June 2025 amounted to
approximately £7,200,000 (2024: £7,600,000).
20. Share capital
The Company has authorised share capital of 16,000,000 Ordinary shares of
£0.125 each.
Company Shares Share Capital Share Premium
£
Allotted and fully paid: of 12.5p each £
As at 1 July 2024 13,372,811 1,671,601 115,761
As at 30 June 2025 13,372,811 1,671,601 115,761
Share options
Under the Company's approved 2002 Share Option Scheme, certain Directors and
employees held options at 30 June 2025 for unissued Ordinary Shares of 12.5
pence each as follows:
Share options At 1 July Granted Exercised Lapsed At 30 June Exercise price Normal exercise period
2024
2025
Employees: 100,000 - - - 100,000 64.50 pence 25 Apr 20 - 24 Apr 27
50,000 - - - 50,000 110.00 pence 30 Jun 21 - 29 Jun 28
20,000 - - - 20,000 196.00 pence 30- Jun 22 - 27 Sep 29
43,000 - - - 43,000 164.50 pence 30 Jun 23 - 2 Oct 30
67,500 - - - 67,500 130.50 pence 30 Jun 24 - 11 Oct 31
70,000 - - (20,000) 50,000 76.50 pence 30 Jun 25 - 21 Oct 32
- 30,000 - - 30,000 125.50 pence 30 Jun 28 - 4 Dec 34
Directors:
Geoff Wicks 30,000 - - - 30,000 164.50 pence 30 Jun 23 - 2 Oct 30
- -
Matthew Jeffs 100,000 - - - 100,000 110.00 pence 30 Jun 21 - 29 Jun 28
50,000 - - - 50,000 130.50 pence 30 Jun 24 - 11 Oct 31
50,000 - - (50,000) - 76.50 pence 30 Jun 25 - 21 Oct 32
Total 580,500 30,000 - (70,000) 540,500
Weighted average exercise price 109.2 pence 125.5 pence - 76.50 pence 114.3 pence
The number of options exercisable at 30 June 2025 was 510,500 (at 30 June
2024: 460,500), these had a weighted average exercise price of 113.7 pence
(2024: 117.7 pence).
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
20. Share capital (continued)
The weighted average share price as at the exercise date of the shares
exercised in the year was nil pence (2024: nil pence) and of the shares were
forfeited in the year was nil pence (2024: nil pence).
Options granted under the Company's approved 2002 Share Option Scheme are
forfeited when the Optionholder ceases to be a Director or employee of a
Participating Company. The Directors may before the expiry of 3 months
following cessation of employment permit an Optionholder to exercise their
Option within a period ending no later than 12 months from the cessation of
employment.
The highest price of the Company's shares during the year was 127.0 pence, the
lowest price was 73.0 pence and the price at the year-end was 89.0 pence.
The weighted average remaining contractual life of share options outstanding
at 30 June 2025 was 6 years (2024: 6 years).
Share-based payments
The Group operates an approved Share Option Scheme for the benefit of
Directors and employees. Options are granted to acquire shares at a specified
exercise price at any time following but no later than 10 years after the
grant date. There are no performance conditions on the exercise of the options
granted prior to 1 July 2018. The performance conditions of those granted
after 1 July 2018 which apply to executive directors and certain key staff,
are set out below.
The options issued to certain directors and members of staff in November 2018,
September 2019(2), October 2020(3), October 2021 and in October 2022 will be
exercisable from 30 June 2021, 30 June 2022, 30 June 2023, 30 June 2024 and 30
June 2025 respectively, dependent on the Company's compound annual rate of
growth in fully diluted earnings* for the three financial years ending 30 June
2022, 2023, 2024 and 2025, respectively. There were no performance conditions
attached to the options granted in December 2024.
Options issued date Exercisable from Dependent on the Company's compound annual rate of growth in fully diluted
earnings(1) for the three financial years ending
November 2018 30 June 2021 30 June 2021
September 2019 30 June 2022 30 June 2022
October 2020 30 June 2023 30 June 2023
October 2021 30 June 2024 30 June 2024
October 2022 30 June 2025 30 June 2025
December 2024 30 June 2028 n/a
The Options will vest subject to performance criteria as follows:
- compound annual earnings growth of 10% or more - fully vested (100%);
- compound annual earnings growth between 5%-10% - partial vesting between 0%
and 100% on a sliding scale; and
- compound annual earnings growth of 5% and below - nil.
Any Ordinary Shares arising from the vesting of Options must be held for
a period of two years after vesting.
(1) Fully diluted earnings will be based on: (a) the Company's pre-tax
profit excluding exceptional items and the share option
charge and (b) the current UK corporation tax rate of 19%, such that the
fully diluted earnings calculation takes no account
of R&D and deferred tax credits. For the purposes of the fully
diluted earnings calculation, the applied rate of corporation tax
will remain constant at 19% irrespective of any current or future changes
to corporation tax.
(2) 70,000 options issued in October 2022 lapsed on 30 June 2025 as compound
annual earnings growth targets for the financial years ended 30 June 2023,
2024 and 2025 were not achieved.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
20. Share capital (continued)
The fair value of options is valued using the Black-Scholes pricing model. An
expense of £24,774 (2024: £51,291) has been recognised in the year in
respect of share options granted. The cumulative share option reserve at 30
June 2025 is £323,688 (2024: £330,746).
The inputs into the Black-Scholes pricing model are as follows:
Directors & Employees
Grant date 25 Apr 2017 29 Nov 2018 27 Sep 2019 2 Oct 2020
Exercise price 64.5 pence 110.0 pence 196.0 pence 164.5 pence
Expected life 10 years 10 years 10 years 10 years
Expected volatility 50% 50% 50% 49%
Risk free rate of interest 0.5% 0.75% 0.75% 0.00%
Dividend yield Nil Nil Nil 0.01%
Fair value of option 36.7 pence 57.0 pence 115.0 pence 91.92 pence
Directors & Employees
Grant date 11 Oct 2021 21 Oct 2022 4 Dec 2024
Exercise price 130.5 pence 76.5 pence 125.5 pence
Expected life 10 years 10 years 10 years
Expected volatility 45% 44% 40%
Risk free rate of interest 0.60% 3.69% 4.23%
Dividend yield 0.01% 0.04% Nil
Fair value of option 70.03 pence 45.47 pence 72.79 pence
Volatility has been estimated based on the historic volatility over a period
equal to the expected term from the grant date.
21. Reserves
Details of the movements in reserves are set out in the Statement of Changes
in Equity. A description of each reserve is set out below.
Share capital reserve
This is used to record the aggregate nominal amount of the Company's shares on
issue.
Share premium account
This is used to record the aggregate amount or value of premiums paid when the
Company's shares are issued at a premium, net of issue costs, less amounts
cancelled by court order.
Share option reserve
This relates to the fair value of options granted which has been charged to
the income statement over the vesting period of the options, less amounts
transferred to retained earnings.
Retained earnings
This relates to accumulated profits and losses together with distributable
reserves arising from capital reductions, less amounts distributed to
shareholders.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
22. Net cash generated from operations - Group
2025 2024
£ £
Operating profit and exceptional items before tax 778,554 869,691
Depreciation charge 118,367 134,518
Non cash share option charges 24,774 51,291
Profit on disposal of plant and equipment - (151)
Lease interest paid (40,891) (18,435)
Other interest paid (88) (200)
(Increase) in trade and other receivables (156,394) (318,958)
(Decrease) / increase in trade and other payables (56,603) 333,421
Cash generated from operations 667,719 1,051,177
Net cash generated from operations - Company
2025 2024
£ £
Operating profit 336,059 316,497
Non cash share option charges 8,268 21,000
Decrease / (increase) in trade and other receivables 136,062 (196,644)
Increase in trade and other payables 19,812 86,595
Cash generated from operations 500,201 227,448
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
23. Related party transactions
Group
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are disclosed in this part
of the note.
Key management compensation
Key management are those persons having authority and responsibility for
planning, controlling and directing the activities of the Group. In the
opinion of the Board, the Group's key management are the Directors of
Arcontech Group PLC. Information regarding their compensation is given in
notes 8 and 20 for each of the categories specified in IAS 24 Related Party
Disclosures. All emoluments given in notes 8 and 20 relate to short-term
employee benefits and there are no post-employment or other long-term
benefits.
The financial statements include the following amounts in respect of services
provided to the Group:
Company
Transactions between the Parent Company and its subsidiaries during the year
were as follows:
Management charges payable by subsidiaries £659,803 (2024: £626,698).
The amounts due from/to subsidiaries at the balance sheet date were as
follows:
2025 2024
£
£
Amount due from subsidiaries 7,094,968 7,443,477
Less: Provision for impairment (3,156,382) (3,382,474)
Amount due from subsidiaries - net 3,938,586 4,061,003
During the year a provision of £226,092 was released (2024: £212,047) in
respect of balances due from a subsidiary is not anticipated to have cash
reserves that would be required to make repayment.
24. Dividends
A final dividend of 4.00 pence will be proposed at the Annual General Meeting
but has not been recognised as it requires approval (2024: 3.75 pence).
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
25. Financial instruments
The Group's financial instruments comprise cash and cash equivalents, and
items such as trade payables and trade receivables, which arise directly from
its operations. The main purpose of these financial instruments is to provide
finance for the Group's operations.
The Group's operations expose it to a variety of financial risks including
credit risk, liquidity risk and interest rate risk. Given the size of the
Group, the Directors have not delegated the responsibility of monitoring
financial risk management to a sub-committee of the Board. The policies set by
the Board of Directors are implemented by the Company's finance department.
Credit risk
The Group's credit risk is primarily attributable to its trade receivables.
The Group has implemented policies that require appropriate credit checks on
potential customers before sales are made. The amount of exposure to any
individual counterparty is subject to a limit, which is reassessed annually by
the Board. Trade receivables are considered in default and subject to
additional credit control procedures when they are more than 30 days past due
in line with industry practice. Trade receivables are only written off when
there is no reasonable expectation of recovery due to insolvency of the
debtor.
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date was:
Group Group Company Company
2025
2024
2025
2024
£
£
£
£
Trade receivables 659,197 458,227 - -
Cash and cash equivalents 7,395,514 7,160,177 293,485 287,606
Amounts owed by group undertakings - - 3,949,705 4,069,092
8,054,711 7,618,404 4,243,190 4,356,698
The carrying amount of financial liabilities represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date was:
Group Group Company Company
2025
2024
2025
2024
£
£
£
£
Trade payables 64,882 61,328 3,221 3,437
64,882 61,328 3,221 3,437
Interest rate risk
The Group has interest bearing assets and no interest-bearing liabilities.
Interest bearing assets comprise only cash and cash equivalents, which earn
interest at a variable rate.
The Group has not entered into any derivative transactions during the period
under review.
The Group does not have any borrowings.
The Group's cash and cash equivalents earned interest at variable rates,
between 3.00% below bank base rate and 0.20% below bank base rate. There were
no fixed rate deposits held as at reporting date (2024: variable rates of
between 4.35% below bank base rate and 0.25% below bank base rate and at
fixed/variable rates of of between 1.56% below bank base rate and 0.56%
below).
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
25. Financial instruments (continued)
Liquidity risk
The Group has no short-term debt finance. The Group monitors its levels of
working capital to ensure that it can meet its liabilities as they fall due.
The Group's financial liabilities comprise trade payables and other payables,
provisions and accruals, excluding deferred income, with a carrying value
equal to the gross cash flows payable of £605,803 (2024: £488,291) all of
which are payable within 6 months.
Market risk and sensitivity analysis
Equity price risk
The Directors do not consider themselves exposed to material equity price risk
due to the nature of the Group's operations.
Foreign currency exchange risk
The Directors do not consider themselves exposed to material foreign currency
risk due to the nature of the Group's operations. All invoices are raised in
sterling, receivables maintained in sterling, and all cash balances held in
sterling.
Interest rate risk
The Group is exposed to interest rate risk as a result of positive cash
balances, denominated in sterling, which earn interest at variable and fixed
rates. As at 30 June 2025, if bank base rate had increased by 0.5% with all
other variables held constant, post-tax profit would have been £36,978 (2024
£35,801) higher and equity would have been £36,978 (2024: £35,801) higher.
Conversely, if bank base rate had fallen 0.5% with all other variables held
constant, post-tax profit would have been £36,978 (2024: £35,801) lower and
equity would have been £36,978 (2024: £35,801) lower.
26. Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and maintain an optimal capital structure.
The Group defines capital as being share capital plus reserves. The Board of
Directors continually monitors the level of capital.
The Group is not subject to any externally imposed capital requirements.
27. Ultimate controlling party
There is no ultimate controlling party.
28. Copies of these statements
Copies of this statement are available from the Company Secretary at the
Company's registered office at 1(st) Floor, 11-21 Paul Street, London, EC2A
4JU or from the Company's website at www.arcontech.com
(http://www.arcontech.com) .
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