REG - Built Cybernetics - Final Results and Notice of AGM
24/03/2025 07:00
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RNS Number : 8326B Built Cybernetics PLC 24 March 2025
24 March 2025
Built Cybernetics plc
("Built Cybernetics", the "Company", or, together with its subsidiaries, the
"Group")
Audited results for the year ended 30 September 2024
Notice of Annual General Meeting ("AGM")
Built Cybernetics (AIM: BUC), the smart buildings group, announces its audited
results for the year ended 30 September 2024 and Notice of AGM.
Highlights:
Financial
· Revenue less sub consultant costs (from continuing operations) up
38% to £19.5 million (2023: £14.1 million)
· Smart buildings revenues exceed architecture revenues for the
first time
· Gross profit up 24% to £14.3 million (2023: £11.5 million)
· Trading recovery in the second half, with full year losses
contained within the first half of the year
· Trading loss before tax (from continuing operations) of £536,000
(2023: profit £28,000)
· £1.24 million of exceptional items (2023: £0.38 million)
· Post tax loss £1.71 million (2023: profit £92,000)
· Loss per share 0.54p (2023: profit per share 0.04p)
· Net debt down 88% to £253,000 (2023: £2.14 million)
Operational
· First sale of Smart Core Enterprise Licence for a six-figure sum,
with ongoing support revenues
· Acquisition of ecoDriver business whose proprietary software
identifies waste energy in commercial buildings
· Acquisition of the Vanti assets accompanied by a £0.425 million
equity fundraise
· Launch of employee share purchase schemes - staff (excluding
directors/PDMRs) now own around 8% of the company, up from 1% two years ago,
primarily through continuing on-market purchases
Post period end
· Performance in the first half of the current financial year is
materially better than in the year under review
· Launch of EDDIE, ecoDriver's Retrieval Augmented Generative (RAG)
AI chatbot which links to users' own building energy usage data for highly
tailored support on saving energy
· Company name changed to reflect the growth strategy as a PropTech
group drawing on our deep architectural expertise and contacts
· Launch of new website designed for prospective and existing
investors
· Attendance at Master Investor Show planned for 29 March 2025 to
raise profile with investors
Clive Carver, Chairman, commented:
"This was a transformational year. The evolution from a pure architecture
business to a business lead by smart buildings drawing on our strong
architecture heritage quickened significantly, with smart building revenues
exceeding architecture revenues for the first time. We believe there is
significant opportunity for growth within the smart buildings sector and look
forward to the future with excitement and optimism."
Nick Clark, Chief Executive, commented:
"We are building a next-generation property technology group, combining smart
buildings expertise with unparalleled contacts and influence from our
architecture businesses.
Our recent progress demonstrates the potential of our model, and we see
significant opportunities ahead, whether through strategic or opportunistic
acquisitions, from organic growth in each business, and increasingly from
cross-selling opportunities. As the smart buildings sector evolves, we intend
to lead the way, leveraging our architectural heritage and AI capabilities to
create a group which delivers an intelligent, efficient, and sustainable built
environment."
The 2024 audited accounts and Notice of AGM will be available today on the
Company's website (www.builtcybernetics.com (http://www.builtcybernetics.com)
), as well as a summary video where the executive team discusses the results.
The accounts and notice of AGM are being posted in the coming week to those
shareholders who have elected to receive a printed version. The AGM will be
held at the Company's registered office, 10 Bonhill Street, London EC2A 4PE,
on Thursday 26 June 2025 at 10am.
For further information, please contact:
Investor Enquiries https://builtcybernetics.com/link/0y5O6r
(https://builtcybernetics.com/link/0y5O6r)
We encourage all investors to share questions
on this announcement via our investor hub
Built Cybernetics plc
Clive Carver, Chairman +44 (0) 20 7843 3001
Nick Clark, Chief Executive
Strand Hanson Limited, Financial and Nominated Advisor
Richard Johnson, James Bellman +44 (0) 20 7409 3494
Zeus Capital Limited, Broker
Simon Johnson, Louisa Waddell +44 (0) 20 3829 5000
About Built Cybernetics plc
Built Cybernetics is a London-quoted PropTech group delivering Smart Buildings
and related services. The Group is uniquely positioned to ensure the technical
systems that run modern premises are designed as an integral part of the
structure, from the outset. By cross-selling smart buildings services
alongside our renowned architecture projects, the Group's strategy positions
Built Cybernetics plc to build beyond one-off project fees and generate
scalable and recurring revenues for our investors.
Subscribe to our news alert service: https://builtcybernetics.com/auth/signup
(https://builtcybernetics.com/auth/signup)
Chairman's statement
Introduction
We are pleased to present the financial statements for the year ended 30
September 2024.
Overview
While we made encouraging progress towards achieving our strategic objectives
our financial performance was disappointing. Despite increasing turnover by
38% and gross profit by 24% the Group lost approximately £0.5 million from
trading. The Group also lost a further approximately £1.2 million from a
combination of the write down of a freehold property; the impairment of
investments; acquisition costs; the accounting loss on the disposal of a
subsidiary; and a supplementary call required by our UK Architecture's
professional indemnity insurer to meet a regulatory requirement to strengthen
its capital base.
Encouragingly, the Group's performance in the second half of the financial
year was, as expected, significantly better than in the first six months, with
the property sale at the end of the financial year also greatly reducing our
debts.
Strategy
We are coming to the end of the second year in the Group's transition from
pure architecture to one where the provision of smart buildings services forms
the core of the Group's activities. As set out more fully in the Chief
Executive's report we remain convinced that this is the best way to maximise
shareholder value.
The additional burden from the last UK budget, which we estimate will add at
least £0.25 million to our annual cost base from April 2025 through the
increase in employer's national insurance, has highlighted the need to press
on with our plans to become a leading property technology focused business. In
that regard, and as more fully set out in the Chief Executive's Report, the
Group's name has changed to Built Cybernetics plc.
Maximising the benefits of our public listing
The costs associated with being a public company seem to grow each year with
little or no obvious additional benefit for shareholders. Additional
regulation inevitably results in additional costs, most acutely seen with our
prior year audit costs reaching £0.3 million, charged by our previous
auditor. We have taken steps to significantly reduce our regulatory costs but
we are fully aware there is a level below which they cannot fall.
However, unlike many other smaller companies we have no plans to delist but
rather to make our public listing work for the benefit of shareholders. This
requires that we become a much larger entity which, as set out more fully in
the Chief Executive's Report, we intend to achieve through a combination of
organic growth and growth by further targeted acquisitions, in the smart
building space and more generally as opportunities arise.
Outlook
Trading in the first half of the current financial year has started much
better than the year under review and we look forward to the future with
confidence.
Clive Carver
Chairman
21 March 2025
Chief Executive's Report
Introduction
I am pleased to present this review of the year ended 30 September 2024 and to
set out our plans for the future. While the financial result is disappointing
we made important progress towards achieving our strategic goals and I am
excited by the opportunity ahead of us.
Trading review
The financial year under review includes 12 months' trading from most of the
Group's businesses but we had the benefit of the Vanti assets for only the
final six months of the period.
The Group was active across a wider range of activities than in recent years
with revenue increasing to £19.7 million, of which architectural services
accounted for £9.6 million or 48% of the total; the first time in the Group's
history that the majority of revenue has not come from architectural services.
However, profitability suffered from the investment required to build up our
smart buildings capabilities, from delays to the start of a number of projects
and other challenges.
Performance in the two halves of the year was very different. The Group made a
profit from its architecture businesses in the first half, but losses in the
rest of the Group plus increased central costs pushed us to a loss overall.
In the second half as expected both the smart buildings and architecture
divisions reported trading profits at a level sufficient collectively to more
than cover central costs. Despite the write down of the goodwill associated
with the acquisition of Anders + Kern the Group achieved a small trading
profit overall in the second half, which reduced the pre-tax loss for the year
as a whole.
Smart Buildings
The vision
We plan to create significant shareholder value by building a technology led
property services group drawing on our strong architecture heritage.
As a reminder, smart buildings integrate advanced technologies, data
analytics, and automation to create vibrant ecosystems. They optimise energy
consumption, streamline operations, and personalise experiences for occupants.
By leveraging the Internet of Things (IoT) and artificial intelligence (AI),
smart buildings offer real-time monitoring, energy savings, improved comfort,
proactive maintenance, and cost reduction.
The business model
In comparison with pure architecture a smart buildings business model has two
fundamental advantages essential to create shareholder value, namely
scalability and longevity.
· Selling property related software and services not constrained by
the need to take on ever increasing numbers of staff provides an ability to
scale revenues disproportionally to costs, which does not exist where income
is principally the function of hours charged.
· Architects also typically primarily get paid during a building's
planning and construction phases whereas with smart buildings a greater degree
of income can be generated throughout the entire life of the building.
The Group's unique advantage is its ability to draw on its architecture
heritage to help generate and convert smart buildings leads at an earlier
stage than a business solely operating in the smart buildings space.
Smart buildings businesses
The Group's smart buildings businesses reported a trading profit, before
property write downs and central management charges of approximately £86,000
on revenues of £10.2 million.
Vanti
Vanti is the focus of the Group's smart buildings activities. It has been
created by rebranding Torpedo Factory Ltd, the master systems integrator we
acquired in March 2023 as part of the Torpedo Factory Group purchase and which
was the subsidiary we used to acquire the Vanti assets in March 2024.
The expanded Vanti business leads our principal smart buildings activities. As
master systems integrators, Vanti transform buildings into intelligent
environments where people want to work, play, and learn. Their proprietary
software is used in sites with over 2 million square feet of floorspace, in
locations from Santa Monica to Singapore, from Birmingham to Bahrain.
Vanti reported a particularly strong second half, including the first sale of
the Enterprise edition of Smart Core, Vanti's open source Building Operating
System, to the owners of a notable skyscraper in the City of London.
Stage Technology
The TFG Stage Technology business delivers technology system integration for
theatres and other performance venues.
Stage Technology had a disappointing year after the completion in September
2023 of its largest ever project, suffering from the lack of a similar-sized
project to replace it. The Stage Technology business is typically seasonal
with the summer months usually accounting for a good proportion of annual
sales. However, in the year under review and for a variety of reasons that
summer boost was delayed, with the expected upturn not starting until
September 2024.
ecoDriver
ecoDriver provides energy monitoring software, energy efficiency consulting
services and the provision of sensors and other hardware to monitor energy
usage.
Revenues grew strongly, albeit from a low base, but were not quite sufficient
to generate a profit as costs increased at a faster rate reflecting the
Group's continued investment principally to build out the sales team.
ecoDriver's in house developers created an Artificial Intelligence application
during the year to overcome a barrier to the rate at which the business can
scale. Once ecoDriver's software is monitoring a site, the client generally
needs help evaluating how best to act on the data. ecoDriver's sustainability
engineers are on hand to help them through this process. However, one of the
challenges is that the client needs educating in this field and this can take
up engineering time. To combat this the team developed EDDIE, the ecoDriver
Data Intelligence Engine, an AI chatbot which connects to a specific site's
data, and can provide helpful insights into the way energy is used. This frees
up the company's sustainability engineers meaning the number of sites that one
engineer can cover is significantly higher.
Anders + Kern
Anders + Kern is a distributor of hardware and software for the installation
of room and desk booking systems and other workplace technology.
Anders + Kern's clients are generally system integrators many of whom need
help taking advantage of the opportunities offered by smart buildings. The
company had a difficult year, the principal cause of which was the impact of
manufacturers of two of its largest product lines changing ownership, with
both new owners having existing alternative routes to market.
We responded by substantially reducing overheads in order to sharply reduce
losses. The longer term strategy is to use the Anders + Kern client base to
distribute the software that the group develops, to increase the speed of
deployment.
Architecture
The Group has two established UK architecture businesses, Veretec, which
offers executive architecture services - often in partnership with pure design
architects - and Aukett Swanke Limited, which offers a full design service.
Additionally the Group owns 25% of Aukett + Heese, a leading Berlin based
architecture practice and 50% of Aukett + Heese Frankfurt, an architecture and
general planning practice serving businesses in the Frankfurt area.
In addition to their cash contributions from their core activities these
businesses are also tasked to help facilitate the growth in smart buildings
revenues.
Veretec
Veretec provides executive architecture services in partnership with other
design architects and now employs over 65 full time equivalent fee earning
staff. The business has grown steadily in recent years as executive
architecture becomes a more established part of the wider architecture scene,
particularly in London. Veretec is a true leader in this part of the market
and is showing strong growth.
Veretec met its revenue target during the year, with sales of £5.9m
representing growth of 11.2% on the prior year.
In the current financial year Veretec has secured a number of sizeable
projects, particularly in the West End of London, including a luxury hotel in
Mayfair. Veretec is also expanding its successful work monitoring projects,
and following the legislative changes that have emerged from the Grenfell
tragedy has trained up staff to fulfil the important Principal Designer role
created by the Building Safety Act.
Aukett Swanke Limited
Aukett Swanke Limited (ASL) provides a full architectural and interior design
service and now employs approximately 23 full time equivalent fee earning
staff. By its very nature ASL's business is lumpy, typically with a small
number of relatively large contracts. A major hotel project in Midtown London
for which ASL was appointed repeatedly missed deadlines for securing project
finance and was subsequently sold to new developers.
Since the end of the financial year under review ASL has begun to see movement
on larger projects. One such project was the hotel in Midtown London mentioned
above, where we are delivering the project despite the change in ownership.
Converting one or more additional larger projects would provide a sufficient
pipeline to underpin the studio's current cost base for several years.
A key attribute of the ASL business is its ability to open up smart buildings
opportunities for other parts of the Group, and progress on this has been
pleasing. As such pure profitability is not the only basis on which we assess
ASL's contribution.
German investments
The Berlin business employs approximately 121 full time equivalent architects
and generated a solid performance, with profits of approximately €1.2
million before management charges and local tax on gross revenue of €18.3
million and with cash balances of approximately €2.4 million at 30 September
2024.
Frankfurt is a smaller business, serving a smaller metropolitan area and
employs 11 full time equivalent architects. It broadly broke even on revenues
of €1.4 million.
Both German businesses are accounted for as associated undertakings, which
means we do not include their results in the consolidated revenue and
operating profit numbers.
In total the Group received approximately £0.3 million in management charges
and dividends from our German investments. As under German accounting rules
dividends can only be paid after a contract has been completed, regardless of
any income received during the life of such a contract and with contracts
sometimes lasting for several years, there is an inevitable delay in receiving
dividend payments that under UK accounting rules could be made years earlier.
While the accounting carrying value of our German investments is £1.0 million
we regard their true commercial value as being much greater.
Central costs
The Group's central costs, being the costs of the central management team and
all the costs associated with being a publicly listed company, are too much
for a Group of our size. We are seeking to reduce these costs where we can -
in particular we have already made significant savings from the change of
auditor.
We recognise there is little point being a public company with a market
capitalisation much below £50 million and more realistically £100 million.
Our plan is therefore to grow rapidly and in so doing the central costs will
be absorbed over a wider base.
Funding
The losses recorded in the first half of the financial year created pressure
on the Group's working capital, which improved during the remainder of the
financial year as the result of better trading, asset sales and cost cutting.
In September 2024 we completed the sale of the freehold building acquired at
the time of the TFG acquisition for a cash consideration of £2.5 million plus
VAT, with the proceeds of the sale being used to pay down Group debt.
Additionally, during the year under review we completed an exercise intended
to reduce annual costs by £2 million, with the principal savings being
freehold property finance and operating costs, general regulatory and
administrative costs and by removing 12 full time equivalent positions in
Aukett Swanke Ltd, 9 in Vanti/TFG Stage Technology, and 4 in Anders + Kern.
Current trading
Performance in the first half of the current financial year is materially
better than in the year under review.
We are particularly encouraged by progress across most of our smart buildings
businesses. Vanti and TFG Stage Technology have a large pipeline of work and a
number of exciting prospects, and ecoDriver is growing strongly. We are
merging the Vanti and TFG Stage Technology entities in one company to create
operating efficiencies and to reduce costs further. Anders + Kern is building
its way back to profitability following the loss of the two major supplier
relationships through circumstances outside its control.
At our architecture businesses, trading at Veretec remains strong with
headcount continuing to increase to support a growing workload and increasing
revenues, with record profitability targeted. At Aukett Swanke Limited trading
remains dependent on the progress of a relatively small number of high value
projects.
Our German investments look set to have an improved performance this year off
the back of some notable contract wins. Berlin looks set to deliver another
reliable performance and Frankfurt has secured sizeable contracts with two EU
agencies so should have a strong year.
The costs reduction actions referred to above have also led to lower central
costs.
Future plans
Our focus is on building a profitable smart buildings core for the Group aided
by the contacts and extensive property market expertise in our architecture
businesses.
As has been widely reported, there are difficulties in obtaining expansion
funding for businesses of the size of interest to us. This presents
opportunities, as this shortage of investment capital is leading to otherwise
viable projects and companies becoming distressed assets, with only limited
competition to take them forward. In short it is a buyers' market.
In the first 12 months under the new strategy we completed four acquisitions
and have used the time since to focus on their integration. We now wish to
move forward with the next set of acquisitions, based principally around
building out our smart buildings activities.
We have divided these acquisition opportunities into three categories. The
first covers growth businesses which have run out of funding and which can be
acquired at a low cost, such as Vanti, where for a minimal outlay we have
acquired something potentially worth a great deal. The second category
covers more established businesses, which we believe would justify an element
of dilution for the commercial benefits they would bring. A third category
covers opportunistic acquisitions where there is a clear commercial rationale
either to provide funding for the Group as a whole or to add sustainable
earnings or assets.
I would like to thank our employees for their support and fortitude in a
challenging year, particularly those who continue to purchase our shares each
month, showing their confidence in our vision. We are excited by the
opportunity ahead and I look forward to sharing news of our progress.
Running an AIM company is a privilege offered to few entrepreneurs and I
intend to take full advantage of the quote to show how a valuable PropTech
group can be built.
Current and prospective shareholders are encouraged to visit our
investor-focused website at www.builtcybernetics.com
(http://www.builtcybernetics.com) and sign up to receive updates and engage
with the business.
Nick Clark
Chief Executive
21 March 2025
Financial review
The headline financial results of the Group were:
2024 2023
£'000 £'000
Continuing operations
Revenue 19,716 14,335
Revenue less sub consultant costs(1) 19,451 14,103
Cost of sales (5,198) (2,627)
Net operating expenses (14,997) (11,869)
Other operating income 500 326
Net finance costs (448) (246)
Share of results of associate and joint ventures 156 341
Trading (loss)/profit from continuing operations (536) 28
Acquisition costs (41) (379)
Revaluation of freehold property (585) -
Loss on disposal of subsidiary (88) -
Goodwill impairment (260) -
Supplementary call levy to mutual insurer (264)
Loss before tax from continuing operations (1,774) (351)
Tax credit 94 433
(Loss)/profit from continuing operations (1,680) 82
(Loss)/profit from discontinued operations (27) 10
(Loss)/profit for the year (1,707) 92
(1)Alternative performance measure, refer to page 16 for definition
The result for the year is split between continuing operations and the
discontinued Middle East operations.
Segmental analysis from continuing operations
Year ended 30 September 2024 Smart Buildings Architecture Group costs* Total
£'000 £'000 £'000 £'000
Revenue (excluding sub consultants costs) 10,152 9,299 - 19,451
Gross profit 4,954 9,299 - 14,253
Trading (loss)/profit (289) 405 (652) (536)
Non-trading costs (859) (352) (27) (1,238)
(Loss)/profit before tax (1,148) 53 (679) (1,774)
Year ended 30 September 2023 Smart Buildings Architecture Group costs* Total
£'000 £'000 £'000 £'000
Revenue (excluding sub consultants costs) 5,283 8,820 - 14,103
Gross profit 2,656 8,820 - 11,476
Trading profit/(loss) 607 183 (762) 28
Non-trading costs (144) - (235) (379)
(Loss)/profit before tax 463 183 (997) (351)
*Group costs are shown net of management charges to subsidiaries, and the
German associate and joint venture. Group costs excluding income from
management charges are disclosed in Note 4.
Overview
The Group reported a trading loss of £536k (2023: profit £28k) principally
as the result of the continuing investment in our smart buildings activities
and the high central cost burden for a Group of our size.
Group revenues
Revenues for the year from continuing operations were £19.72m, an increase of
37.5% on the previous year (2023: £14.34m). Revenues less sub consultants
increased by 37.9% to £19.45m (2023: £14.10m), with subconsultant costs
increasing by 31.0% to £0.30m (2023: £0.23m).
This significant increase in revenue is due to the full year of consolidated
revenue from the Torpedo Factory Group (comprising Vanti Ltd and TFG Stage
Technology Ltd) and Anders + Kern operations following their acquisitions
during the prior year, as well as revenue following the ecoDriver acquisition
in the year together with a six month's contribution from the Vanti assets
acquired in March 2024.
Smart Buildings businesses
Torpedo Factory Group (including Vanti and TFG Stage Technology)
2024 2023
£'000 £'000
Revenue 8,592 4,816
Gross Profit 4,200 2,503
FTE technical staff(1) 24 14
Net revenue per FTE technical staff(1) 358 344
(Loss) / profit before tax (excluding Group management charges)(1) (373) 467
(Loss) / profit before tax (including Group management charges) (625) 401
(1)Alternative performance measures, refer to page 16 for definition
Basis of inclusion
The results shown above for the prior year related only to the performance
from the date of acquisition of Torpedo Factory Group Limited on 20 March
2023, when its results were consolidated into the Group, and therefore
represented just over 6 months' trade for the year ended 30 September 2023.
Much of the year on year increase in revenue and gross profit is therefore due
to a full year of consolidated trade in the reporting year.
Results
The loss before tax includes a one-off £585k cost of revaluation of The Old
Torpedo Factory freehold property sold during the year, and £14k relating to
RTS Technology Solutions Limited ("Vanti") assets acquisition costs.
Excluding this exceptional cost gives a more comparable year on year
indication of the trading performance of these operations, which would show a
profit before tax (excluding Group management charges) of £226k.
TFG was behind expectations at the half-way stage in its performance in what
was a year of significant change. This included the purchase of certain assets
of RTS Technology Solutions Ltd on 20 March 2024 in its Torpedo Factory Ltd
subsidiary (renamed Vanti Ltd on 9 October 2024) and the sale of the freehold
of its main operational hub The Old Torpedo Factory on 17 September 2024. This
raised working capital for the wider group and reduced costs from an
underutilised premises. Encouragingly, TFG returned to profitability in the
second half of the financial year.
The subsidiary Vanti Ltd contributed the majority of the TFG profit with a
strong performance in its projects department off the back of its expedited
move to master systems integration work from the acquisition of the Vanti
assets. Software revenue increased recurring revenue within the service
department, making the company less reliant on new project wins.
TFG Stage Technology Ltd performed poorly after a record breaking previous
financial year. Much of this was due to the lack of a comparable replacement
for its largest ever project in 2022/23. TFG Stage Technology's pipeline and
work in progress significantly increased towards the end of the financial year
under review providing greater stability to future revenue streams.
The property sale in September 2024 will also result in a significantly
reduced overhead for Vanti as a result of being able to move its operational
hub to Birmingham where a large proportion of its staff are based.
Anders + Kern
2024 2023
£'000 £'000
Revenue 1,083 467
Gross Profit 347 153
FTE technical staff(1) 1 1
Net revenue per FTE technical staff(1) 1,083 467
(Loss) / profit before tax (excluding Group management charges)(1) (162) 62
(Loss) / profit before tax (including Group management charges) (215) 62
(1)Alternative performance measures, refer to page 16 for definition
The results shown above for the prior year related only to the performance
from the date of acquisition on 14 July 2023, when its results were
consolidated into the Group, and therefore represented just over 2 & 1/2
months' trade for the year ended 30 September 2023.
Anders + Kern U.K. Ltd performed significantly behind expectations. The
company lost key distribution rights and is now transitioning to be more
focussed on SaaS and smart building revenue streams. The company's cost base
has been realigned to match its level of activities in the current financial
year.
ecoDriver
2024 2023
£'000 £'000
Revenue 477 -
Gross Profit 407 -
FTE technical staff(1) 2 -
Net revenue per FTE technical staff(1) 239 -
Loss before tax (excluding Group management charges)(1) (5) -
Loss before tax (including Group management charges) (48) -
(1)Alternative performance measures, refer to page 16 for definition
The results shown above for the current year related only to the performance
from the date of acquisition on 17 October 2023, when its results were
consolidated into the Group, and therefore represented just under 11 & 1/2
months' trade for the year ended 30 September 2024.
ecoDriver grew strongly in its first year of ownership by the Group, with
revenue of £477k with second half revenue 21% higher than the first half. The
segment recorded a small loss excluding group management charges, with £110k
of software development costs being capitalised. Approximately 30% of
ecoDriver's revenue is recurring, under long term contracts for software
licence fees and advisory services.
Architecture businesses
United Kingdom Architecture
2024 2023
£'000 £'000
Revenue 9,525 8.858
Revenue less sub consultant costs(1) 9,260 8,692
FTE technical staff(1) 92 85
Net revenue per FTE technical staff(1) 101 102
Profit before tax (excluding Group management charges)(1) 250 202
Loss before tax (including Group management charges) (20) (94)
(1)Alternative performance measures, refer to page 16 for definition
( )
The UK's architecture revenue increased 7.5%, and stripping out pass through
subconsultant costs revenue increased 6.5% year on year.
With net revenue per full time equivalent technical staff remaining broadly
constant with the previous year the increase in revenues together with the
cost cutting actions referred to in the Chief Executive's report fed through
to an increase in the contribution of the UK architecture businesses both
before and after central management charges.
The loss before tax includes a provision of £264,000 relating to a call from
The Wren, a mutual insurance organisation of which the Group's UK Architecture
businesses are members and through which they obtain their professional
indemnity insurance, to meet a regulatory requirement to strengthen its
capital base.
Improvements in the market in the final quarter of the year saw significant
new enquiries and success, Veretec in particular converting the enquiries into
confirmed work. As a result, Veretec started the year commencing 1 October
2024 with a much stronger order book and has been undertaking significant
levels of recruitment.
Continental Europe
The principal components of the Continental Europe hub are the two German
investments, for which under the prevailing accounting rules we do not show
revenue and costs but only report our share of profits.
2024 2023
£'000 £'000
Revenue 39 194
Revenue less sub consultant costs(1) 39 128
FTE technical staff(1) 2 6
Net revenue per FTE technical staff(1) 20 21
Profit before tax (excluding Group management charges)(1) 204 423
Profit before tax (including Group management charges) 73 277
Including 100% of associate & joint ventures
Total revenues under management 16,862 18,317
Revenue less sub consultant costs(1) 11,487 12,491
FTE technical staff(1) 117 121
Net revenue per FTE technical staff(1) 98 103
(1)Alternative performance measures, refer to page 16 for definition
The hub result before tax (including Group management charges), including the
joint venture and associate in Germany, was a profit of £73k (2023: £277k).
Continental Europe's result is materially dominated by the associate in Berlin
and joint venture in Frankfurt. The year to 30 September 2024 represented
another profitable year, albeit down on the prior year, as the operations
experienced a significant slowdown in the local market, primarily in the
residential sector. However, they together still contributed £157k (2023:
£341k) profit (including Group management charges) to the Continental Europe
result.
Reported revenues comprise the Turkish subsidiary for the 3 months up to the
sale of the operation in December 2023. Revenues therefore decreased to £39k
(2023: £194k), with revenue less subconsultant costs of £39k (2023: £128k).
The operation made a £4k profit before tax across those months, however the
segment result includes a charge of £88k being the accounting loss on
disposal.
Total revenues under management decreased 7.9%, whilst revenue less sub
consultant costs decreased 8.0%. Staff numbers decreased to 117 FTEs (2023:
121), due to the sale of the Turkish subsidiary. Lower efficiency in Germany
due to market driven project pauses and delays led to a decrease in net
revenue per FTE technical staff to £98k (2023: £103k) and with it the
reduction in profitability.
Middle East - discontinued operation
2024 2023
£'000 £'000
Revenue - 2
Revenue less sub consultant costs(1) - -
FTE technical staff(1) - -
Net revenue per FTE technical staff(1) N/A N/A
(Loss)/profit before tax (excluding Group management charges)(1) (27) 10
(Loss)/profit before tax (including Group management charges) (27) 10
(1)Alternative performance measures, refer to page 16 for definition
Following the disposal of John R Harris & Partners (JRHP) in April 2022,
and management's decision to take on no new projects and transition to cease
activities in the region, costs were nominal in the year.
The Middle East hub continues to be treated as a discontinued operation.
Financing
The year under review and subsequently has seen a marked improvement in the
Group's cash position.
The net deficit (see note 25) at the year-end was significantly lower than the
prior year as a result of the cash generated from the sale of The Old Torpedo
Factory freehold property sale, from which the mortgage on the freehold was
fully repaid, along with a partial prepayment against the Coronavirus Business
Interruption Loan Scheme ("CBILS") loan TFG has with NatWest.
The year-end deficit was £253k (2023: £2,140k), comprising cash of £353k
(2023: £522k), cash included in assets held for sale (see note 28) of £nil
(2023: £30k), a net overdraft of £164k (2023: £122k), the balance of the
Coutts CBILS loan fully paid off in the year £nil (2023: £167k), the NatWest
CBILS loan reduced to £417k (2023: £992k), and the mortgage paid off £nil
(2023: £1,411k). When TRCS (renamed ecoDriver) was acquired in Oct-23 it had
a Lloyds Banking Group loan facility guaranteed by the Bounce Back Loan Scheme
(BBLS), the balance as at 30 September 24 was £25k.
The Group's £250k overdraft facility from its bankers Coutts & Co was
renewed in September 2024 for 6 months to 31 March 2025, continuing to provide
working capital flexibility and to support the UK Architecture businesses.
Coutts have indicated they intend to extend an overdraft for a longer period
and will review the amount at the renewal date. This is discussed further in
note 1.
The Coutts CBILS loan set out in note 24 was arranged with Coutts & Co in
response to the challenges impacting trade incurring losses during the COVID
pandemic. The loan was repayable over 3 years with a 12 month payment holiday,
and the first instalment made in June 2022, to be paid back in 24 monthly
instalments through to May 2024. The final payment on the loan was made as
scheduled during the year.
Vanti Ltd and TFG Stage Technology Ltd have a combined Invoice Finance
Agreement with Bibby Factors, amounts due in respect of this facility are
disclosed under other creditors. The companies can use these facilities to
draw down a percentage of the value of certain sales invoices and
applications. This is limited to a maximum draw down of £540k across both
companies with a year-end balance drawn of £535k, this is secured by way of
debenture.
Going Concern
Overview
As set out more fully in the Chief Executive's report the Group's two
divisions are trading well, with strong order books, circumstances which, in
the Directors' opinion, are sufficient to allow the Group's debts to be
discharged as they fall due.
In the event trading deteriorates the Group has a number of actions it could
take to mitigate funding pressure, including an existing undrawn financial
facility of £920k.
Basis of the board's opinion
The Board has produced cash flow forecasts for a period of 18 months from the
approval of these financial statements, which comprise detailed income
statements, statements of the financial position and cash flow statements for
each of the Group's operations. The Board has also considered the risks and
uncertainties associated with the principal operations and the funding
position in general, including the consideration of a number of differing
scenarios based on varying trading performance across the Group.
The Group's forecasts are prepared using information on secure contracted work
and potential work which is deemed to have a greater than 50% chance of being
undertaken, with the income figures suitably discounted, and on new work based
on historical experience.
Acquisitions
The Board's stated intention is to achieve a leading presence in the provision
of smart buildings services through a combination of organic growth and
targeted acquisitions. To date, the Group has made four Smart Building related
acquisitions and plans to make others in the coming months and years.
Inevitably this requires an element of cash, as part of the purchase
consideration and for the associated professional fees.
However, in connection with this assessment of going concern the Directors
note that each such acquisition is a discretionary event, as is the proportion
of any consideration paid in cash. The Board's intention is to avoid placing
undue stress on the Group's cashflows from expanding at a pace faster than can
be sensibly funded.
Bank debt
As at 30 September 2024 total borrowings were significantly lower than the
prior year at £606k (2023: £2,692k), as the Group paid off the final balance
of the Coutts CBILS loan, repaid the balance of the mortgage on completion of
the sale of the freehold property and made significant payments on the NatWest
CBILS loan. Of this balance, current borrowings were £522k (2023: £2,050k).
The Coutts overdraft is due for renewal from 31 March 2025. Based on
discussions to date the board expects a facility to be offered on an
acceptable basis.
Mitigating action
Should either the cash generation from the Group's existing business units
decline or the push for growth in the smart buildings arena lead to a
prolonged shortfall in cash the Board has the following funding or mitigating
options beyond the typical cost cutting in the face of declining activities:
· Vanti Ltd has received a time limited fully approved offer for a
£920k loan which can be drawn down if needed.
· The Board also believes that the existing invoice discounting
facility may be extended to a larger limit.
· The Group is currently paying off its liability in respect of
state-backed funding provided during the Covid pandemic. The CBILS loan drawn
by TFG will be fully repaid by July 2026. By replacing this debt with a new
facility repayable over a longer period the annual cash costs associated with
this debt would fall.
· The Board believes the commercial value of a number of its
businesses and investments is substantial in relation to the Group as a whole
and if necessary could be realised at values which are in excess of book
value.
· As a company with shares quoted on the London Stock Exchange
there is the option to seek additional equity investment from the issue of new
shares, as was demonstrated by the share subscription in connection with the
Vanti transaction.
· The Group has outstanding warrants entitling holders to subscribe
£375,000 of cash for new shares. The exercise price is 1 penny per share,
which is a significant discount to the current market price, and it is
therefore reasonable to expect the warrants will be exercised prior to their
expiry in April 2027.
Other funding and mitigating options available to the board are also discussed
in note 1.
Based on forecasts prepared and reviewed for the period to 30 September 2026,
the Directors have a reasonable expectation that the Group will have adequate
resources to continue in operational existence for the foreseeable future. For
this reason, the Board considers it appropriate to prepare the financial
statements on a going concern basis.
The going concern statement in the Directors' report and corresponding section
in note 1 provide a summary of the assessments made by the directors to
establish the financial risk to the Group over the next 12 months. This is
further supplemented by the principal risks and uncertainties section in the
Strategic Report.
Key Performance Indicators ("KPIs")
The key performance indicators used within the Group for assessing financial
performance are:
· Revenue less sub consultant costs which reflects the revenue generated
by our own technical staff but excludes the revenue attributable to sub
consultants, which are mainly passed through at cost. This is the key driver
of profitability for our business, and is discussed by segment on pages 9 to
14;
· Revenue less sub consultant costs being generated per full time
equivalent (FTE) technical member of staff ('net revenue per FTE technical
staff'). This KPI is only analysed on a segmental basis and calculations for
each segment can be found on pages 10 to 14;
· Result before taxation (excluding Group management charges), and
result before taxation (including Group management charges), which are further
assessed on pages 10 to 14;
· Cash at bank and in hand and net funds / (debt), which is assessed
further on page 2.
· Full time equivalent technical members of staff are given for each
hub on pages 10 to 14.
Antony Barkwith
Group Finance Director
21 March 2025
Strategic report
The Directors present their Strategic Report for the Group for the year ended
30 September 2024.
Strategy
We aim to create shareholder value over the medium and longer terms through
the provision of smart building services to the property sector drawing on our
extensive architecture heritage. At the same time we aim to provide an
attractive and rewarding working environment for our staff.
On 27 February 2025, in recognition of the progression of the Group's
strategy, the Group's name was changed to Built Cybernetics plc.
Business Model
Smart Buildings
We intend to establish a leading presence in the delivery of smart buildings
services, which entails acquiring and developing our own smart buildings
software and the provision of support services.
We have completed four related acquisitions and for the first time in the
Group's history income from non-architecture activities exceeds income from
architecture.
As this side of the Group's activities continues to develop and as we further
develop our own systems the proportion of income represented by software
licencing and related services is expected to increase. In so doing this
element of the Group's business will be far more scalable than the traditional
architecture model, where growth generally requires the recruitment of
additional staff and once a project is completed there is no further revenue.
Architecture
Our architecture and interior design businesses operate in the UK and Germany.
Our operation in Turkey was sold to local management in December 2023, and
along with other locations will continue to operate through licence based
arrangements where the responsibility for profit rests with local management
and owners.
The United Kingdom hub comprises two principal service offers: an executive
architectural delivery service operating under the Veretec brand, and a
comprehensive architectural design including master planning, interior design
and fit-out capability under the Aukett Swanke brand.
Additionally, we have equity interest in leading architecture practices in
Berlin and Frankfurt and brand licence arrangements in the UAE and Turkey.
Our architecture business model is to charge on a time or project basis for
the work of our professional staff.
Principal Risks and Uncertainties
The directors consider the principal risks and uncertainties facing the
business are as follows:
Geo-political factors
Political events and decisions, or the lack thereof, can seriously affect the
markets and economies in which the Group operates, leading to a lack of
decisions by government bodies and also by clients. More specifically
anything that creates or adds to economic uncertainty has the possibility of
delaying long term property related investment decisions. In turn this
directly impacts workload and can even delay committed projects.
Levels of property development activity
Changes in development activity levels have a direct impact on the number of
projects that are available. These changes can be identified by rises and
falls in overall GDP, construction output, planning application submissions,
construction tenders and starts, investment in the property sector and numbers
of new clients.
In addressing this risk, the Group considers which markets and which clients
to focus upon based on the strength of their financial covenant so that there
is clear ability to provide both project seed capital and geared funding to
complete the delivery process.
Share price volatility
A strong share price and higher market capitalisation attract new investors
and provide the Group with greater flexibility when considering M&A
activity. Conversely a weaker share price affords the Group less flexibility.
The widely reported issues with AIM, which in 2024 lost 9% of its companies
remains a concern, but one outside the Company's control.
Technical Risk
There can be no guarantee that the Group's current competitors or new entrants
to the markets in which the Group's businesses operate will not bring superior
technologies, software, products or services to the market which, in
consequence, make the Group's current offerings obsolete. The Group therefore
needs to enhance and develop these offerings and will need to anticipate or
respond promptly and successfully to technological change. If the Group is
unable to do this sufficiently well, or at all, it may be at a significant
disadvantage to the competition. The Group seeks to mitigate this risk
through, inter alia, a well structured development programme and ongoing
investment in its software and by staying abreast of market trends.
Operational gearing and funding
As a small but acquisitive Group we have a relatively high level of
operational gearing, through staffing, IT and property costs, which makes it
difficult to reduce costs sufficiently quickly to immediately avoid losses and
associated cash outflows when faced with sharp and unpredicted falls in
revenue.
Nevertheless in 2024 we instigated a £2.0 million cost savings programme
which, together with the disposal of a freehold property for £2.5 million in
September 2024, improved the position.
The Directors seek to ensure that the Group retains appropriate funding
arrangements and regularly and stringently monitor expected future
requirements through the Group's annual budgeting, monthly forecasting and
cash flow, and weekly and daily cash reporting processes in order to react
immediately to a required change with maximum flexibility.
Staff skills and retention
Our business model relies upon a certain standard and number of skilled
individuals based on qualifications and project track record. Failure to
retain such skills makes the strategies of the Group difficult to achieve.
The Group aims to ensure that knowledge is shared and that particular skills
are not unique to just one individual.
The Group conducts external surveys to ensure that salaries and benefits are
appropriate and comparable to market levels and endeavours to provide an
attractive working environment for staff.
Staff training programmes, career appraisals and education assistance are
provided, including helping our professionally qualified staff comply with
their continuing professional development obligations. Training programmes
take various forms including external courses and external speakers.
Quality of technical delivery
In common with other firms providing professional services, the Group is
subject to the risk of claims of professional negligence from clients.
The Group seeks to minimise these risks by retaining skilled professionals at
all levels and operating quality assurance systems which have many facets.
These systems include identifying specific individuals whose roles include
focusing on maintaining quality assurance standards and spreading best
practice.
The Group's UK architecture operation is registered under ISO 9001 which
reflects the quality of the internal systems under which we work. As part of
these registrations an external assessor undertakes regular compliance
reviews. In addition, as part of its service to members, the Mutual, which
provides professional indemnity insurance to the UK, undertakes annual quality
control assessments.
The Group's UK architecture businesses maintain professional indemnity
insurance in respect of professional negligence claims but are exposed to the
cost of excess deductibles on any successful claims. This insurance cover is
provided by The Wren, which is an industry body formed to provide such
insurance, and of which the Group's UK architecture businesses are members.
The Wren is a mutual organisation owned and funded by its members and
accordingly, the Group's UK architecture businesses can be subject to cash
calls alongside other members in the event The Wren's reserves fall to a level
where its capital ratios are below the level required by its regulator.
Contract pricing
Fee proposals to clients are prepared by experienced practice directors who
will be responsible for the delivery of the projects. Fee proposals are based
on appropriate due diligence regarding the scope and nature of the project,
knowledge of similar projects previously undertaken by the Group and estimates
of the resources necessary to deliver the project. Fee proposals for larger
projects are subject to review and approval by senior Group management and
caveats are included where appropriate.
Under performing acquisitions
The acquisition of businesses for too high a price or which do not trade as
expected can have a material negative impact on the Group, affecting results
and cash, as well as absorbing excessive management time.
The Group invests senior management time and Group resources into both pre-
and post-acquisition work. Pre-acquisition there is a due diligence process
and price modelling based on several criteria. Agreements entered into are
subject to commercial technical and legal review. Post-acquisition there is
structured implementation planning and ongoing monitoring and review.
Cybersecurity Risk
An unauthorised intrusion, phishing infiltration, denial of service or some
similar act by a malevolent party could disrupt the integrity, continuity,
security and trust of the Group's systems, including those licenced to
customers. Although the Group has protections and backup systems in place,
should these protections fail or be breached in a cyber attack, this could
impact the day to day operations of the Group and result in costly litigation,
significant financial liability and a loss in confidence in the Group's
ability to serve its clients securely, which could have a material adverse
impact on the Group's business. In addition, due to the ever-evolving nature
of these threats, the Group is required to continue to invest resources to
enhance the Group's security systems. The Group has technical and physical
controls in place to mitigate unauthorised access to client data, but may not
be able to prevent a material event in the future.
The Strategic Report was approved by the Board on 21 March 2025 and signed on
its behalf by
Nick Clark
Chief Executive
Board of Directors
Clive Carver (Non-Executive Chairman)
FCA FCT Aged 64
Clive became Chairman in December 2022 having joined the board in May 2019 as
a non-executive director.
He has been the Chairman of AIM listed Caspian Sunrise PLC since 2006, and
over the past decade has served on the boards of 8 companies listed on the
London Stock Exchange, often in the role of Chairman.
He spent 15 years as a Qualified Executive with a number of City broking firms
and was until 2011 Head of Corporate Finance at finnCap. He qualified as a
Chartered Accountant with Coopers & Lybrand and has worked in the
corporate finance departments of Kleinwort Benson, Price Waterhouse, Williams
de Broe and Seymour Pierce. He is also a qualified Corporate Treasurer.
Clive chairs the Audit committee and the Governance & Regulatory Committee
and is a member of the Remuneration and Risk Committees.
Robert Fry (Deputy Chairman)
BA(Hons) DipArch MA RIBA Aged 68
Robert was appointed interim CEO of the Group in January 2023 having joined
the Board in March 2018 as Executive Director and Managing Director -
International.
Following Nick Clark's appointment as Group Chief Executive in April 2023
Robert became a part time executive director and Deputy Chairman with
responsibly for the Group's UK architecture and international operations.
Robert became a non-executive director in April 2024.
Following his graduation from Sheffield University he spent his formative
years at Milton Keynes Development Corporation. In 1987 Robert became a
founding member of Swanke Hayden Connell's London office, joining its Board in
2002 and becoming Managing Director of the UK and Europe group in 2005.
Robert is Chairman of the board's Risk committee and a member of the Audit,
Remuneration, and Governance & Regulatory Committees.
Nick Clark (Chief Executive)
BSc (Hons), MPhil Aged 50
Nick was appointed as an executive director of the Group in March 2023
following the acquisition of TFG and became Chief Executive in April 2023.
He founded the TFG business in 1997 and has grown it through a combination of
acquisitions and organic growth. Nick is also a non-executive director at
Acuity RM Group plc, the AIM-quoted provider of risk management software.
Prior to starting TFG Nick studied physics at Imperial College, followed by an
MPhil in Microelectronic Engineering and Semiconductor Physics at the
University of Cambridge.
Nick is a member of the Remuneration and Governance & Regulatory
Committees.
Antony Barkwith (Group Finance Director)
FCA MPhys (Hons) Aged 44
Tony is the Group Finance Director of Built Cybernetics plc. He joined the
Group in November 2018 as Group Financial Controller, was promoted to Group
Finance Director (non-Board) in April 2019 and was subsequently appointed to
the Board in July 2019.
Tony is a Chartered Accountant, having qualified with BDO LLP, and has a
master's degree from the University of Warwick. He was previously Group
Financial Controller for Advanced Power, an international power generation
developer, owner and asset manager, working there from 2010 until 2018.
Freddie Jenner (Group Chief Operating Officer)
FCCA BSc (Hons) Aged 41
Freddie was appointed to the Board in June 2023 as Chief Operating Officer.
Freddie joined the finance team at what is now Vanti Ltd in 2007, becoming
Finance Director of the parent company Torpedo Factory Group Limited when he
qualified as a chartered certified accountant in 2012. He was instrumental in
driving growth in value of TFG through acquisitions and upgrading systems and
processes over the following decade, prior to the acquisition of TFG by the
Group in March 2023.
Freddie is a member of the Risk Committee.
Tandeep Minhas (Non-executive director)
LLB (Hons), LPC, CF Aged 53
Tandeep was appointed to the board as a non-executive director in April 2023.
Tandeep is a partner in international law firm Taylor Wessing LLP, where she
heads the Corporate Finance practice. She advises on all aspects of corporate
finance M&A work, including public takeovers, fundraisings and IPOs,
company and business acquisitions and disposals, joint ventures and
reorganisations.
She has specialist knowledge of the public markets in the UK and has advised
on numerous flotations and secondary fundraisings on both the Main Market and
AIM, acting for both companies and corporate finance/broking houses, nomads
and sponsors.
She has particular experience in advising international companies across a
wide variety of sectors and is lead corporate partner in Taylor Wessing's
India Business Group. She also sits on the Board of the Corporate Finance
Faculty of the Institute of Chartered Accountants in England & Wales.
Tandeep chairs the Remuneration Committee and is a member of the Audit,
Governance & Regulatory and Risk Committees.
Board committees
The board has the following committees
· Audit Committee
· Remuneration Committee
· Governance & Regulatory Committee
· Risk Committee
Remuneration Committee Report
Remuneration Committee
The Remuneration Committee comprises Tandeep Minhas, Clive Carver, Robert Fry
and Nick Clark, and is chaired by Tandeep Minhas.
The Remuneration Committee determines the contract term, basic salary, and
other remuneration for the members of the Board and the senior management
team. No director participates in any decisions regarding their own
remuneration.
Remuneration policy
The remuneration policy is to provide terms of employment that will attract,
retain and motivate the Group's Directors and senior management. This consists
of a basic salary, pension, ancillary benefits and other performance-related
remuneration appropriate to their individual responsibilities and having
regard to the remuneration levels of comparable posts.
Service contracts
Details of the current Directors' service contracts are as follows:
Director Date of appointment Date of latest service contract / appointment letter Date of last re-election
Executive
Nick Clark 20 March 2023 20 March 2023 21 April 2023
Antony Barkwith 9 July 2019 10 March 2022 21 April 2023
Freddie Jenner 26 June 2023 1 November 2023 26 April 2024
Non-executive
Clive Carver 10 May 2019 15 February 2023 21 April 2023
Robert Fry 29 March 2018 26 April 2024 21 April 2023
Tandeep Minhas 24 April 2023 26 January 2024 26 April 2024
The Company's policy is to offer service agreements to Executive Directors
with notice periods of not more than twelve months. Antony Barkwith, Nick
Clark and Freddie Jenner have rolling service contracts with the Company which
are subject to six months' notice of termination by either party.
The remuneration packages of Executive Directors comprise basic salary,
contributions to defined contribution pension arrangements, discretionary
annual bonus, discretionary share options and benefits in kind such as medical
expenses insurance.
Non-Executive Directors do not have service contracts with the Company, but
the appointment of each is recorded in writing. Non-Executive Directors do not
receive any benefits in kind and are not eligible for bonuses or participation
in either the share option schemes or pension arrangements.
Basic salary, pension, and benefits
The basic salaries, pensions, and benefits of the Directors who served during
the financial year are established by reference to their responsibilities and
individual performance, and are disclosed in note 9.
On 26 April 2024 Robert Fry transitioned from an executive director and became
a non-executive director.
Bonus schemes
All Executive Directors are eligible for consideration of participation in the
Company bonus scheme. However, no bonuses are payable in respect of the year
ended 30 September 2024 (2023: nil).
Long term incentives
Share options
The current interests as at 30 September 2024 (which is unchanged as at the
date of approval of these accounts) of the current Directors in share options
agreements are as follows:
Directors Number of Shared under option Granted Exercise price (p) Expiry Date
Nick Clark 2,000,000 22 December 2023 1.0p 22 December 2033
Freddie Jenner 4,700,000 22 December 2023 1.0p 22 December 2033
Antony Barkwith 1,000,000 22 December 2023 1.6p 22 December 2033
Antony Barkwith 1,000,000 22 December 2023 1.0p 22 December 2033
All of the above options were granted under the Company Share Option Plan
("CSOP"). This was introduced on 22 December 2023 and replaced the Company's
previous Enterprise Management Incentive ("EMI") scheme. All outstanding
options under the EMI scheme were surrendered and the CSOP is the Group's only
outstanding option scheme.
There were no options exercised in the year to 30 September 2024.
The total number of options at 30 September 2024 and at the date of this
report is 29,716,666, representing approximately 8.71% of the total number of
shares currently in issue.
On behalf of the Directors of Built Cybernetics plc,
Tandeep Minhas
Chair of Remuneration Committee
Directors' report
The Directors present their report for the year ended 30 September 2024.
Corporate governance
The Company is pleased to be an early adopter of the QCA Corporate Governance
Code (2023) published by the Quoted Companies Alliance, which comprises 10
Principles.
We set out our compliance with these Principles below. This information can
also be found on our website here:
https://builtcybernetics.com/corporate-documents-and-circulars
(https://builtcybernetics.com/corporate-documents-and-circulars)
PRINCIPLE 1: Establish a purpose, strategy, and business model which promotes
long-term value for shareholders
The strategy and business model for the Group is set out in the Strategic
Report on page 17.
During the period under review and subsequently the Group's strategy has
evolved so that its principal purpose is to create shareholder value through
the development of smart building services to the property sector drawing on
its extensive architectural heritage.
We aim to create this shareholder value over the medium and longer terms by
increasing profits and at the same time provide an attractive and rewarding
working environment for our staff.
On 27 February 2025 in recognition of the progression in the Group's strategy
the Group's name was changed to Built Cybernetics plc.
We operate throughout the United Kingdom from sites in London, Birmingham, and
Manchester; Continental Europe with significant investments in Berlin and
Frankfurt; along with a Licensee operation in Istanbul and a Marketing
Agreement with a Middle East operation in Dubai.
Our Smart Buildings activities are centered on the Vanti operations, which
incorporates the Torpedo Factory Audio Visual and Stage Technology businesses
acquired in March 2023. Additionally we operate in the energy efficiency
sector under the ecoDriver brand and distribute sensors and other workplace
technology under the Anders+Kern UK brand.
The UK Architecture hub comprises two principal service offerings: an
executive architectural delivery service operating under the 'Veretec' brand
and a comprehensive architectural design including master planning, interior
design and fit-out capability under the 'Aukett Swanke' brand.
Our Continental European Architecture operations provide services offered that
are consistent with those of the UK Architecture operation.
Our Licencee Agreement is marketed under the 'Aukett Swanke' brand. The
service offered within the regions they operate within include architectural
and interior design, post contract delivery services including architect of
record and project execution stage services.
PRINCIPLE 2: Promote a corporate culture that is based on ethical values and
behaviours
The About Us section of the Company's website sets out our vision and explains
how we engage with our clients and other stakeholders. This also provides
separate website details of each entity within the Group.
Our employees recognise that the professional services we offer have a
significant impact on not just our direct clients but also on the public
realm, society and the environment as a whole.
Client and stakeholder engagement and feedback are an integral and iterative
part of the design process undertaken on projects.
Alongside the contribution made to our clientele and others through the
execution of our services we actively participate as thought and practice
leaders in initiatives and events in the property and PropTech industries.
We also undertake voluntary and charitable endeavours that are featured on the
Company and subsidiaries' websites, internal Intranet sites and social media
platforms.
PRINCIPLE 3: Seek to understand and meet shareholder needs and expectations
Information about the Company's shares, listing information, significant
shareholders, Directors' shareholdings and share donations are set out within
the AIM Securities information section of the Company's website and in the
annual report.
The Executive Directors understand the importance of shareholder dialogue and
regularly engage with shareholders at the time of results announcements, at
the AGM or as requested. A dedicated mailbox is available at
investors@builtcybernetics.com
Following the recent name change, the Company has a new website at
www.builtcybernetics.com (http://www.builtcybernetics.com) which is
investor-focused and where shareholders can register to receive notifications
of RNS announcements, and can ask questions of the Company and its management.
The primary contact for investors is Nick Clark, Chief Executive.
PRINCIPLE 4: Take into account wider stakeholder interests, including social
and environmental responsibilities
The Group is committed to delivering smart building solutions and
architectural services that create long-term value for all stakeholders,
including clients, employees, investors, and wider society. Our approach
integrates environmental sustainability, social impact, and ethical business
practices into our decision making.
Sustainability & Environmental Responsibility
· We incorporate sustainable design principles, energy efficiency
strategies, and circular economy practices into our projects.
· Our architecture and smart building solutions support BREEAM, LEED,
and WELL standards, ensuring high-performance, low-carbon buildings that
improve occupant well-being.
· Our ecoDriver brand helps clients optimise energy consumption, reducing
environmental impact across real estate portfolios.
· We actively seek to minimise our own operational footprint, with
initiatives focused on reducing energy use, material waste, and carbon
emissions.
Engagement with Clients, Tenants & Building Users
· As an industry leader in smart buildings, we prioritise user
experience, integrating technologies that enhance workplace productivity,
comfort, and efficiency.
· We engage clients and end-users in the design process, ensuring
our solutions meet both functional and sustainability goals.
· Our Vanti operations specialise in workplace technology that
supports hybrid working models and enhances real estate flexibility.
Industry Engagement
· We actively participate in PropTech and real estate industry
forums, collaborating with policymakers, developers, and technology partners
to shape the future of smart buildings.
· Our teams contribute to thought leadership initiatives, speaking
at events and sharing insights on best practices in architectural design and
PropTech innovation.
Through these initiatives, we align our business activities with the interests
of our stakeholders, creating long-term value while making a positive
environmental and social impact.
PRINCIPLE 5: Embed effective risk management, internal controls, and assurance
activities
The Group's risk management objective is to identify, document, and monitor
factors that represent risks to the Group in fulfilling its strategic
objectives and to manage those risks consistent with agreed risk tolerances.
The Risk Committee is the principal tool by which the Group carries out this
process, allowing the Board to assess business risks in the context of best
practices consistent with corporate governance codes.
Key risks and uncertainties are set out on pages 18 to 20 of this annual
report, and corporate governance statements relating to the company and its
operations are set out within the Corporate Documents section of the Company's
website.
A data privacy notice outlines our policy and procedures covering how
information is collected and used, whether via our website or by visiting our
sites, along with individuals' rights and reporting measures for any breaches.
The Company's intranet site provides details of our internal management
structure, policies, and compliance procedures, including sustainability,
health & safety, data privacy, anti-corruption & bribery, share
dealing, social media, whistleblowing, equality & diversity, and modern
slavery policies.
PRINCIPLE 6: Establish and maintain the board as a well-functioning, balanced
team led by the chair
The Board comprises three Non-Executive Directors (NED's) and three Executive
directors. The Board believes that this is an optimal structure for a Group of
our size balancing oversight, governance, strategic development, and
operational performance. Two of the NEDs are independent and the third is a
former executive director and qualified architect.
The Board meets formally on a bi-monthly basis.
The ultimate management of the Group is by the Board and its committees. The
role, remits and reports of the committees are set out in the Directors'
report. Implicit within all remits is the obligation of the Board under the
Companies Act 2006 to promote the success of the Company.
Day to day and operational management is delegated to the Chief Executive,
Group Finance Director, Chief Operating Officer, Chief Technical Officer and
the subsidiary directors. Each business in the group has its own management
team and its own board. At least two of the Chief Executive, COO, CTO and GFD
are represented on all trading subsidiary boards.
Delegated responsibility is defined at each level and there are authority
matrices which set out limits of responsibility at specific levels and for
specific actions and activities. Each individual board meets formally at least
quarterly, and informally more frequently.
The attendance record for the year is included in the Directors' Report on
page 32.
Board committees and their remits are set out in the Directors' Report.
PRINCIPLE 7: Maintain appropriate governance structures and ensure directors
have up-to-date experience and skills
Biographies of each board member are on pages 21-22 of the annual report and
on the AIM Rule 26 section of our website.
Board members are encouraged to take on external roles that do not conflict
with their directorship. Several directors hold external positions that
contribute to their professional development and the company's strategic
insights. Where the Board lacks appropriate skills it approaches relevant
experts within the Group or externally as required.
The Directors have access to the Company's nominated adviser, lawyers and
auditors as and when required and can obtain advice from other external bodies
when necessary. If required, the Directors are entitled to take independent
legal advice.
The instances where external advice was sought in 2024 were in relation to
compliance with the AIM Rules and various legal matters.
The Board believes that the current balance of skills reflects a broad range
of personal, commercial and professional skills and a range of financial and
managerial skills. The Chairman maintains ongoing communications and updates
with the Non-Executives between formal Board meetings.
The Directors and senior members of staff review, mentor and develop
colleagues on an ongoing basis in a coaching and advisory capacity.
All members of the Board endeavour to keep up-to-date and attend seminars and
training courses as appropriate. Directors are required to complete CPD in
accordance with their professional qualification where relevant.
PRINCIPLE 8: Evaluate board performance based on clear objectives
Following the recommendations of the new QCA Code the board has undertaken a
formal review of its effectiveness.
The review considered among other things
· Board composition
· Board skills & experience
· Compliance with best practice governance standards
· Board meetings (before, during and after)
· Board committees
· Decision making
· Strategy
· Executive management assessment
· Non-executive directors assessment
· Training needs
· Value for money
The general assessment was good with clarity on the strategic direction and
how best to achieve it. However, as a result of the review improvements are
being made to
· the board packs distributed before the meetings
· ensure board discussions focus more on strategic rather than
operational matters
· the delineation on the roles of the executive directors
· provide a clearer focus on the board's approach to risk
management
· add a formal review of compliance with the regulations
appropriate to an AIM company to the remit of the renamed Governance and
Regulatory Committee
PRINCIPLE 9: Establish a remuneration policy supportive of long-term value
creation
The Remuneration Committee is responsible for assessing and managing Board
performance and rewards. More information about this committee is provided
on page 31 of the annual report and on the PLC Board section of the Company's
website. The Remuneration Committee's report, which includes the Remuneration
Policy, is set out on pages 23 and 24 of the annual report.
In line with the new QCA Code the Company is putting the Remuneration Policy
and the Remuneration Report to advisory votes at the forthcoming AGM.
PRINCIPLE 10: Communicate how the company is governed and is performing
The following documents are held on the Company's website:
· Annual Report and Accounts
· Interim Announcements
· General Meeting notices
· Trading updates
· Memorandum and Articles of Association
· Most recent Admission Document
Board of Directors
The Group is headed by a Board of Directors which leads and controls the
Group, and which is accountable to shareholders for the corporate governance
of the Group.
The Board currently comprises three Executive Directors and three
Non-Executive Directors who bring a wide range of experience and skills to the
Company.
The Board considers Clive Carver and Tandeep Minhas to be independent
Non-Executive Directors. Robert Fry, who became a non-executive director at
the closing of the 2024 AGM, is not under QCA rules considered to be
independent in view of his longstanding previous role as an Executive
Director.
The Board meets regularly six times a year and additionally as required to
determine the policy and business strategy of the Group and to take or approve
significant decisions. The Board has delegated certain authorities to Board
committees, each with formal terms of reference.
At each board meeting where relevant the Committee Chairs report to the board
on matters discussed at the committee meetings.
Audit Committee
The Audit Committee is responsible for overseeing the relationship with the
external auditor, which includes considering its selection, independence,
terms of engagement, remuneration and performance.
It meets at least twice a year with the external auditor to discuss audit
planning and the audit findings, with certain executive directors attending by
invitation. If appropriate, the external auditor attends part of each
committee meeting without the presence of any executive directors.
The Audit Committee currently comprises Clive Carver as Chairman, who for the
past 34 years has been a Fellow of the Institute of Chartered Accountants in
England & Wales (ICAEW), Robert Fry, and Tandeep Minhas, who is a board
member of the ICAEW's corporate finance faculty.
During the year the Committee met on 3 occasions, and in November 2024
approved the appointment of MAH, Chartered Accountants as the new Group
auditors.
Remuneration Committee
The Remuneration Committee convenes not less than twice a year, ordinarily on
a six monthly basis, and during the year it met on 1 occasion. The Committee
currently comprises Tandeep Minhas as Chair, with Clive Carver, Robert Fry and
Nick Clark as members.
It is responsible for determining remuneration policy and all aspects of the
Directors' remuneration and incentive packages including pension arrangements,
bonus provisions, discretionary share options, relevant performance targets
and the broader terms and conditions of their service contracts. No director
participates in discussions relating to their own remuneration.
Governance & Regulatory Committee
Since the year end the Governance & Regulatory Committee has been
re-constituted to deal with the burden of compliance with seemingly
ever-increasing layers of regulation.
The committee now comprises Clive Carver as Chair, with Tandeep Minhas and
Nick Clark as members. In a previous life Clive Carver spent 15 years as a
Qualified Executive under the AIM Rules and led the corporate finance
departments of three of the more active Nominated Adviser firms.
Additionally, Tandeep Minhas has 30 years' experience in advising public
companies on compliance with the regulations applicable to UK public
companies. Nick Clark's presence on the Committee provides a link between the
non-executive members and the management teams across the Group,
Risk Committee
The Risk Committee is responsible for setting the Group's policy to the
identification and mitigation of risk. It is not however, responsible for the
day-to-day identification and mitigation of risk which is very much an
executive function.
The Risk Committee currently comprises Robert Fry, as Chairman and was for
several decades a leading architect, Freddie Jenner, Clive Carver and Tandeep
Minhas.
Directors
Antony Barkwith, Clive Carver, Nick Clark, Robert Fry, Freddie Jenner and
Tandeep Minhas all served as Directors of the Company throughout the year
ended 30 September 2024.
Biographical details of the Directors are set out on pages 21 and 22.
The Company maintains directors' and officers' liability insurance.
Attendance at board meetings by members of the Board were as follows:
Number of meetings while in office Number of meetings attended
Executive Directors
Robert Fry (as executive) 6 6
Antony Barkwith 9 9
Nick Clark 9 9
Freddie Jenner 9 9
Non-executive Directors
Clive Carver 9 9
Robert Fry (as non-executive) 3 3
Tandeep Minhas 9 9
Directors' interests
Directors' interests in the shares of the Company were as follows:
Number of ordinary shares 30 September 30 September
2024 2023
Nick Clark 42,531,539 40,531,539
Freddie Jenner 8,564,817 6,064,817
Tandeep Minhas - -
Clive Carver - -
Antony Barkwith 5,000,000 -
Robert Fry 4,150,000 2,150,000
Substantial shareholdings
At 21 March 2025 the Company had been informed of the following notifiable
interests of three per cent or more in its share capital:
Shareholder Notes Number of ordinary shares Percentage of ordinary shares
* Nick Clark Director of the Company 42,531,539 12.47%
* Keith McCullagh Former chairman of TFG 41,339,142 12.12%
Philip J Milton & Company Plc Institutional Investor 27,928,541 8.19%
Nicholas Thompson Former Director of the Company 21,129,111 6.19%
Braveheart Investment Group Plc Institutional Investor 20,000,351 5.87%
John-David Papworth Former Director of TFG 16,274,624 4.77%
Jim Mellon Institutional Investor 13,500,000 3.96%
Jeremy Blake Former employee of the Group 13,030,638 3.82%
* Nick Clark and Keith McCullagh's shares are included within a Concert Party
holding a total of 96,159,484 shares representing 28.19% of the number of
ordinary shares.
Share price
The mid-market closing price of the shares of the Company at 30 September 2024
was 1.675 pence and the range of mid-market closing prices of the shares
during the year was between 0.85 pence and 1.775 pence.
Streamlined energy and carbon reporting ("SECR")
Under the Companies Act 2006 (Strategic Report and Directors' Report)
Regulations 2013 ('the 2013 Regulations') and the Companies (Directors'
Report) and Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018 ('the 2018 Regulations'), quoted companies and large unquoted
companies are required under part 13 of the companies Act 2006 to disclose
information relating to their energy usage and Greenhouse Gas ("GHG")
emissions.
For these purposes, quoted companies defined as those whose equity share
capital is officially listed on the main market of the London Stock Exchange
("LSE"); or is officially listed in an European Economic Area State; or is
admitted to dealing on either the New York Stock Exchange or NASDAQ.
The Company is not large, and whilst the Company's shares are traded on AIM,
the Company is not listed or traded on the main market of the LSE. The company
is therefore not required to disclose energy and carbon information.
Statement by the Directors in performance of their statutory duties in
accordance with s172 (1) Companies Act 2006
The Board is mindful of the duties of directors under S.172 of the Companies
Act 2006 to have regard to the following six factors:
a) the likely consequences of any decisions in the long-term;
b) the interests of the Group's employees;
c) the need to foster the Group's business relationships with suppliers,
customers and others;
d) the impact of the Group's operations on the community and environment;
e) the desirability of the Group maintaining a reputation for high
standards of business conduct; and
f) the need to act fairly as between shareholders of the Group.
Directors act in a way they consider, in good faith, to be most likely to
promote the success of the Group for the benefit of its shareholders. In doing
so, they each have regard to a range of matters when making decisions for the
long term success of the Group.
Our culture is that of treating everyone fairly and with respect and this
extends to all our principal stakeholders. Through engaging formally and
informally with our key stakeholders, we have been able to develop an
understanding of their needs, assess their perspectives and monitor their
impact on our strategic ambition.
As part of the Board's decision-making process, the Board and its Committees
consider the potential impact of decisions on relevant stakeholders whilst
also having regard to a number of broader factors, including the impact of the
Group's operations on the community and environment, responsible business
practices and the likely consequences of decisions on the long term.
Our objective is to act in a way that meets the long term needs of all our
main stakeholder groups. However, in so doing we pay particular regard to the
longer term needs of shareholders.
We engage with investors on our financial performance, strategy and business
model. Our Annual General Meeting provided an opportunity for investors to
meet and engage with members of the Board.
The Board continues to encourage senior management to engage with staff,
suppliers, customers and the community in order to assist the Board in
discharging its obligations.
Further details of how the Directors have had regard to the issues, factors
and stakeholders considered relevant in complying with s172 (1) (a)-(f), the
methods used to engage with stakeholders and the effect on the Group's
decisions during the year can be found throughout this report and in
particular in the Chairman's statement on page 3 (in relation to
decision-making), in the Strategic Report on pages 17-20 (where the Group's
strategy, objectives and business model are addressed), the following
Employees statement (in relation to employees), and the following
Environmental Policy (in relation to social and environmental matters).
We seek to attract and retain staff by acting as a responsible employer. The
health and safety of our employees is important to the Company and is a
standing item at all Group board meetings.
We continue to provide support to communities and governments through the
provision of employment, and high quality sustainable design.
We have established long-term partnerships that complement our in-house
expertise and have built a network of specialised partners within the industry
and beyond.
Environmental policy
The Group promotes wherever possible an ecologically sound policy in all its
work, but always takes into account the considerable pressures of budget,
commercial constraints and client preferences. Sustainability is essential to
our design philosophy and studio ethos. It is an attitude of mind that is
embedded within our thinking from the start of any project. We design
innovative solutions and focus on:
· incorporating passive design principles that mitigate solar gain
and heat loss from the outset;
· reducing energy demand through active and passive renewable
energy sources;
· the use of energy and resource efficient materials, methods and
forms;
· the re-use of existing buildings and materials and flexibility
for future change;
· and importantly the careful consideration of the experience and
wellbeing of the end user in our buildings.
Employees
The Group's ability to achieve its commercial objectives and to service the
needs of its clients in a profitable and effective manner depends upon the
contribution of its employees. The Group seeks to keep its employees informed
on all material aspects of the business affecting them through the operation
of a structured management system, staff presentations and an intranet site.
The Group's employment policies do not discriminate between employees, or
potential employees, on the grounds of age, gender, sexual orientation, ethnic
origin or religious belief. The sole criterion for selection or promotion is
the suitability of any applicant for the job.
It is the policy of the Group to encourage and facilitate the continuing
professional development of our employees to ensure that they are equipped to
undertake the tasks for which they are employed, and to provide the
opportunity for career development equally and without discrimination.
Training and development is provided and is available to all levels and
categories of staff.
It is the Group's policy to give fair consideration to application for
employment for disabled persons wherever practicable and, where existing
employees become disabled, efforts are made to find suitable positions for
them.
Health and safety
The Group seeks to promote all aspects of health and safety at work throughout
its operations in the interests of employees and visitors.
The Group has a Health and Safety Steering Committee, chaired by Freddie
Jenner, to guide the Group's health and safety policies and activities. Health
and safety is included on the agenda of each board meeting.
Group policies on health and safety are regularly reviewed and revised and are
made available on the intranet site. Appropriate training for employees is
provided on a periodic basis.
Disclosure of information to auditor
Each of the Directors who were in office at the date of approval of these
financial statements has confirmed that:
· so far as they are aware, there is no relevant audit information
of which the auditor is unaware; and
· they have taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit information
and to establish that the Company's auditor is aware of that information.
Independent Auditors
The auditors, MAH, Chartered Accountants were appointed in the year and have
indicated their willingness to continue in office and a resolution concerning
their re-appointment will be proposed at the Annual General Meeting.
Financial instruments
Information concerning the use of financial instruments by the Group is given
in notes 32 to 36 of the financial statements.
Post balance sheet events
Information concerning post balance sheet events is given in note 39.
Research and development
During the year the Group was involved in the research and development of
software as disclosed in note 14.
Dividends
The Board does not intend to pay a dividend in the forthcoming year.
Going Concern
Overview
As set out more fully in the Chief Executive's report the Group's two
divisions are trading well, with strong order books, circumstances which in
the Directors' opinion, are sufficient to allow the Group's debts to be
discharged as they fall due.
In the event trading deteriorates the Group has a number of actions it could
take to mitigate funding pressure, including an existing undrawn financial
facility of £920k.
Basis of the board's opinion
The Board has produced cash flow forecasts for a period of 18 months from the
approval of these financial statements, which comprise detailed income
statements, statements of the financial position and cash flow statements for
each of the Group's operations. The Board has also considered the risks and
uncertainties associated with the principal operations and the funding
position in general, including the consideration of a number of differing
scenarios based on varying trading performance across the Group.
The Group's forecasts are prepared using information on secure contracted work
and potential work which is deemed to have a greater than 50% chance of being
undertaken, with the income figures suitably discounted, and on new work based
on historical experience.
Acquisitions
The Board's stated intention is to achieve a leading presence in the provision
of smart buildings services through a combination of organic growth and
targeted acquisitions. To date, the Group has made four Smart Building related
acquisitions and plans to make others in the coming months and years.
Inevitably this requires an element of cash, as part of the purchase
consideration and for the associated professional fees.
However, in connection with this assessment of going concern the Directors
note that each such acquisition is a discretionary event, as is the proportion
of any consideration paid in cash. The Board's intention is to avoid placing
undue stress on the Group's cashflows from expanding at a pace faster than can
be sensibly funded.
Bank debt
As at 30 September 2024 total borrowings were significantly lower than the
prior year at £606k (2023: £2,692k), as the Group paid off the final balance
of the Coutts CBILS loan, repaid the balance of the mortgage on completion of
the sale of the freehold property and made significant payments on the NatWest
CBILS loan. Of this balance, current borrowings were £522k (2023: £2,050k).
The Coutts overdraft is due for renewal from 31 March 2025. Based on
discussions to date the board would expect a facility to be offered on an
acceptable basis.
Mitigating action
Should either the cash generation from the Group's existing business units
decline or the push for growth in the smart buildings arena lead to a
prolonged shortfall in cash the Board has the following funding or mitigating
options beyond the typical cost cutting in the face of declining activities:
· Vanti Ltd has received a time limited fully approved offer for a
£920k loan which can be drawn down if needed.
· The Board also believes that the existing invoice discounting
facility may be extended to a larger limit.
· The Group is currently paying off its liability in respect of
state-backed funding provided during the Covid pandemic. The CBILS loan drawn
by TFG will be fully repaid by July 2026. By replacing this debt with a new
facility repayable over a longer period the annual cash costs associated with
this debt would fall.
· The Board believes the commercial value of a number of its
businesses and investments is substantial in relation to the Group as a whole
and if necessary could be realised at values which are in excess of book
value.
· As a company with shares quoted on the London Stock Exchange
there is the option to seek additional equity investment from the issue of new
shares, as was demonstrated by the recent share subscription in connection
with the Vanti transaction.
· The Group has outstanding warrants entitling holders to subscribe
£375,000 of cash for new shares. The exercise price is 1 penny per share,
which is a significant discount to the current market price, and it is
therefore reasonable to expect the warrants will be exercised prior to their
expiry in April 2027.
Other funding and mitigating options available to the board are also discussed
in note 1.
Based on forecasts prepared and reviewed for the period to 30 September 2026,
the Directors have a reasonable expectation that the Group will have adequate
resources to continue in operational existence for the foreseeable future. For
this reason, the Board considers it appropriate to prepare the financial
statements on a going concern basis.
The going concern statement in the Directors' report and corresponding section
in note 1 provide a summary of the assessments made by the directors to
establish the financial risk to the Group over the next 12 months. This is
further supplemented by the principal risks and uncertainties section in the
Strategic Report.
Annual General Meeting
Notice of the annual general meeting, which is expected to be held on 26 June
2025, will be issued alongside this report and accounts and posted to
shareholders contemporaneously.
The Directors' report was approved by the Board on 21 March 2025 and signed on
its behalf by
Antony Barkwith
Company Secretary
Built Cybernetics plc
Registered number 02155571
Statement of directors' responsibilities
Directors' responsibilities
The Directors are responsible for preparing the annual report and financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the
Group and Company financial statements in accordance with UK adopted
international accounting standards in conformity 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 Group and Company and of the profit or
loss of the Group for that period. The Directors are also required to prepare
financial statements in accordance with the rules of the London Stock Exchange
for companies trading securities on AIM.
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 have been prepared in accordance with UK
adopted international accounting standards in conformity with the requirements
of the Companies Act 2006, subject to any material departures disclosed and
explained in the financial statements;
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
Group and enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are published
on the Company's website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and integrity of
the Company's website is the responsibility of the directors. The Directors'
responsibility also extends to the ongoing integrity of the financial
statements contained therein.
Independent auditor's report to the members of Built Cybernetics
plc
Opinion
We have audited the financial statements of Built Cybernetics plc (formerly
Aukett Swanke Group Plc) (the 'parent Company' and its subsidiaries (the
'Group') for the year ended 30 September 2024 which comprise the Consolidated
Income Statement, the Consolidated Statement of Comprehensive Income, the
Consolidated and Company Statements of Financial Position, the Consolidated
and Company Statements of Changes in Cash Flows, the Consolidated and Company
Statements of Changes in Equity and notes to the financial statements,
including significant accounting policies. The financial reporting framework
that has been applied in the preparation of the Group and parent Company
financial statements 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 of 30 September 2024 and
of the Group's loss 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 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 related 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 and the parent
Company's ability to continue to adopt the going concern basis of accounting
has been highlighted as a key audit matter based on our assessment of the
significance of the risk and the effect on our audit strategy.
Our evaluation of the Directors' assessment of the Group and the parent
Company's ability to adopt the going concern basis of accounting and our
response to the key audit matter include:
· A critical assessment of the detailed cash flow projections
prepared by the Directors, which are based on future revenue pipelines and
newly won contracts, we also evaluated the sensitivities that the Directors
performed against this forecast.
· We evaluated and challenged the key assumptions in the forecast,
which were consistent with our knowledge of the business and considered
whether these were supported by the evidence we obtained. We have analysed the
risks affecting the ability of the Group and parent Company to continue to
trade and meet its liabilities as they fall due for at least twelve months
from the date of approval of the Group and parent Company financial
statements.
· We have enquired about revenue pipeline, and status of
outstanding bids. We have agreed submitted proposal documents and newly won
contracts where appropriate.
· We have examined current year actual results against the budget
for the year to determine the accuracy of the budgeting and forecasting by
management.
· We have reviewed the funding and mitigating options available to
the Board should either the cash generation from the Group's existing business
units decline or the push for growth in the smart buildings arena lead to a
prolonged shortfall in cash and considered whether they are reasonable.
· We examined the disclosures relating to the going concern basis
of preparation and found that these provided an explanation of the Directors'
assessment that was consistent with the evidence we obtained.
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 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.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
The components of the Group were evaluated by the Group audit team based on a
measure of materiality, considering each component as a percentage of the
Group's net assets, gross revenue and results before tax, which allowed the
Group audit team to assess the significance of each component and determine
the planned audit response. We determined there to be six significant
components to the Group, which were Built Cybernetics plc, Aukett Swanke
Limited, Veretec Limited, Torpedo Factory Group Limited, Vanti Limited and TFG
Stage Technology Limited. They were all subjected to full scope audits.
Also, we have performed full scope audits on Shankland Cox Limited, Aukett
Fitzroy Robinson International Limited, Swanke Hayden Connell International
Limited, Swanke Hayden Connell Europe Limited, Anders + Kern Limited and
ecoDriver Limited for the purpose of coverage and to cover specific identified
risk. All full-scope audits were conducted by the group audit engagement team.
We also performed specified audit review procedures over Aukett + Heese
Frankfurt GmbH (50% owned joint venture) and Aukett + Heese GmbH (25% owned
associate) as these were material components but not deemed to be significant.
For significant components requiring a full scope approach, we evaluated
controls by performing walkthroughs over the financial reporting systems
identified as part of our risk assessment, reviewed the accounts production
process, and addressed critical accounting matters. We then undertook
substantive testing on significant transactions and material account balances.
We have overall coverage of 100% of group profit before tax, 100% of Group
revenue and 100% of Group total assets.
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 for 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, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. This is not a complete list of all risks
identified by our audit.
In addition to the matter described in the material uncertainty related to
going concern section, we have determined the matters described below to be
the key audit matters to be communicated in our audit report.
Key Audit Matters How our scope addressed this matter
Going Concern
The Group has recognised a loss before tax of £1.8 Million (2023: £0.3 Our audit work and conclusion in respect of going concern has been detailed in
Million) and had cash of £0.4 Million (2023: £0.5 Million) at the year end. the 'Conclusions related to going concern' section of our audit report.
Given the performance in the year and the low cash balance at the year end,
going concern was considered to be a key audit matter.
Revenue recognition, including valuation and cut-off of contract assets and Our audit work included, but was not restricted to the following procedures:
liabilities:
We evaluated the operating effectiveness of certain key controls identified in
Most of the Group's revenue relates to the value of services performed for relation to revenue.
customers under construction type contracts. These contracts are generally
fixed price and take place over a long term basis.
We evaluated the Group's accounting policy in respect of revenue recognition
to ensure it is compliant with IFRS 15.
This includes revenue from both architectural and smart buildings projects.
The revenue is determined by reference to the stage of completion of those
contracts at the Statement of Financial Position date.
We selected a sample of contracts and the substantive testing procedures
included the following:
As the above measurement requires Directors to assess the final costs expected
on a contract to determine the stage of completion, there is inherent
estimation uncertainty. The significant judgement arising in the formulation · Confirming revenue from the revenue recognition model to the
of these estimates could vary materially over time and is dependent on underlying contract and where relevant, contract variations were agreed
customer activity. We therefore considered this to be a key audit matter. between the Group and its customers.
As at 30 September 2024 the group has recognised contract assets of £1.8 · Comparing historical margins achieved on projects against the
Million (2023: £0.8 Million) and contract liabilities of £2.6 Million (2023: estimated margins expected on comparable on-going projects to confirm the
£1.4 Million). accuracy of management's estimation of total project costs. Also discussed
with management if there were material variances in this estimate. Further,
subsequent invoices raised post the Statement of Financial Position date and
collections were tested to compare the estimated margins to actuals.
· Verifying the costs incurred to date for the selected projects. A
sample of individual cost reports were agreed through to supporting timecards
and charge rate agreed to group's charge rates to test the accuracy of the
recorded time.
· Confirming a sample of invoices recorded in the accounting system
to the supporting contract, a copy of physical sales invoice raised, and cash
received.
· Assessed and challenged the key stage of completion judgments
made by the Directors. This involved testing the basis of future costs
expected to be incurred on the project and obtaining a detailed understanding
of the project from management and the project director.
· Reviewing material credit notes, invoices and receipts post
year end.
Key observations:
Based on the procedures performed, we consider that the assumptions made by
management in recognising revenue on part completed contracts with customers
at the Statement of Financial Position date to be appropriate and did not
identify any material misstatements in revenue recognition.
Annual impairment review of goodwill
Our audit work included, but was not restricted to the following procedures:
In the financial statements goodwill is valued at £1.8 Million. There were
£0.6 Million acquisitions in the year, mainly relating to the ecoDriver
Limited Cash Generating Unit (CGU) in October 2023. The Anders + Kern UK · Obtained management's assessment of the Group CGU's and
Limited (CGU) goodwill brought forward of £0.26 Million was fully impaired critically assessed Value In Use (VIU) model for each CGU to test compliance
during the year. with the requirement of applicable accounting standards and mathematical
accuracy of the model.
The process for assessing whether impairment exists under International
Accounting Standard IAS 36 'Impairment of Assets' is complex. The process of · The weighted average cost of capital (WACC) of the models was
determining the value in use, through forecasting cash flows and the re-computed with reference to external data to test the accuracy of
determination of the appropriate discount rate and other assumptions to be computation.
applied, is highly judgemental and can significantly impact the results of the
impairment review.
· Challenging the revenue cash flows within the model. Future
revenue was checked to secure pipeline via contract verification. Potential
There is significant management judgement and estimation uncertainty involved wins were assessed for progress in bids by verification of correspondence.
in the preparation of value in use models under applicable accounting Future earnings were assessed by verification of historic conversion of new
standards for the group and as a result we consider this to be a key audit work.
matter.
· Critically assessed the cost base for potential omissions or
unrealistic targets based on actual and potential future changes in the
business. We challenged management where this fell outside our expectation and
checked that these were accurately stated, reasonable and achievable in the
light of the economic environment and future pipeline of work.
· Obtaining the sensitivity analysis performed by management to
assess the impact of the movement in key variables in the model which would
lead to an impairment. We tested this sensitivity analysis and concluded on
whether such scenarios were likely to occur.
Key observation:
Based on the procedures performed and considering the assumptions and
methodology used by management in preparing the VIU model, the calculations
are appropriate.
Our application of materiality
The scope and focus of our audit were influenced by our assessment and
application of materiality. We define materiality as the magnitude of
misstatement that could reasonably be expected to influence the readers and
the economic decisions of the users of the financial statements. We use
materiality to determine the scope of our audit and the nature, timing, and
extent of our audit procedures and to evaluate the effect of misstatements,
both individually and on the financial statements as a whole. We apply the
concept of materiality both in planning and performing our audit, and in
evaluating the effect of misstatements.
Based on our professional judgement we determined materiality for the 2024
financial statements as a whole and performance materiality as follows:
Group financial statements Parent company financial statements
Materiality £296,000 £120,000
Basis for determining materiality 1.5% of gross revenue 2% of net assets before adjusting for intercompany balances.
Rationale for the benchmark applied The gross revenue has been used as a primary measure of performance which is a Due to the nature of the parent company, we considered net assets to be the
measure of demand for its services and the different sectors in which it focus for the readers of the financial statements, accordingly this
operates. The "sub-consultants" i.e., the specialists' costs are agreed in the consideration influenced our judgement of materiality.
bid and included as part of the fees that is marked up to the client as
Group's revenue. The professional indemnity insurance covers the gross fees
chargeable to the customers which includes the subconsultants costs. The Group
is responsible for the entire contract with their customer. Based on the above
factors the Gross revenue i.e., including sub-consultant costs are to be
considered as most relevant benchmark to check the performance of the company
rather than Net Revenue.
Performance materiality £148,000 £60,000
Basis for determining performance materiality 50% of Group materiality 50% of Parent company materiality
Performance materiality:
The performance materiality benchmark has been selected based of the following
considerations:
· cumulative identification of errors noted in the previous years
that has been posted by management
· our risk assessment, together with our assessment of the overall
control environment
Component materiality:
We set materiality for each component of the Group based on a percentage of
Group materiality dependent on the size and our assessment of risk of material
misstatements of that component. Component materiality, other than the parent
Company's, ranged from approximately £134,000 to £7,000. In the audit of
each component, we further applied performance materiality levels of 50% of
the component materiality to our testing to ensure that the risk of errors
exceeding component materiality was appropriately mitigated.
Trivial:
We agreed with the Audit Committee that we would report to them all individual
audit differences in excess of £15,000 for the Group and £6,000 for the
parent Company. We also agreed to report differences below this threshold
that, in our view, warranted reporting on qualitative grounds. We also
reported to the Audit Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.
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 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 there is 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.
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 where the
Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent Company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of Directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, 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 financial statements, the directors are responsible for
assessing the group's 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 aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
A further description of our responsibilities is available on the FRC's
website at
https://wwww.frc.org.uk/auditors/auditor-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor's-responsibilities-for
(https://www.frc.org.uk/auditors/audit-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/description-of-the-auditor%E2%80%99s-responsibilities-for)
This description forms part of our auditor's report.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess
the risks of material misstatement of the financial statements due to fraud;
to obtain sufficient appropriate audit evidence regarding the assessed risks
of material misstatement due to fraud, through designing and implementing
appropriate responses to those assessed risks; and to respond appropriately to
instances of fraud or suspected fraud identified during the audit. However,
the primary responsibility for the prevention and detection of fraud rests
with both management and those charged with governance of the company.
· We obtained an understanding of the legal and regulatory
requirements applicable to the company and considered that the most
significant are the Companies Act 2006, UK adopted international accounting
standards, the rules of the Alternative Investment Market, and UK taxation
legislation.
· We obtained an understanding of how the Group and parent Company
complies with these requirements by discussions with management and those
charged with governance.
· We assessed the risk of material misstatement of the financial
statements, including the risk of material misstatement due to fraud and how
it might occur, by holding discussions with management and those charged with
governance and by considering the internal controls in place to mitigate risks
of fraud and non-compliance with laws and regulations.
· We inquired of management and those charged with governance as to
any known instances of non-compliance or suspected non-compliance with laws
and regulations as well as actual, suspected and alleged fraud.
· Based on this understanding, we designed specific appropriate
audit procedures to identify instances of non-compliance with laws and
regulations or irregularities. This included making enquiries of management
and those charged with governance, obtaining additional corroborative evidence
as required, reading the minutes of meetings of those charged with governance
and reviewing correspondence.
To address the risk of fraud through management bias and override of controls,
we:
· performed analytical procedures to identify any unusual or
unexpected relationships;
· tested journal entries to identify unusual transactions;
· assessed whether judgements and assumptions made in determining
the accounting estimates set out in note 2 of the Group financial statements
were indicative of potential bias;
· investigated the rationale behind significant or unusual
transactions.
There are inherent limitations in the audit procedures described above. We are
less likely to become aware of instances of non-compliance with laws and
regulations that are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
Auditing standards also limit the audit procedures required to identify
non-compliance with laws and regulations to enquiry of the directors and other
management and the inspection of regulatory and legal correspondence, if any.
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 for no purpose other than to draw to the attention of the company's
members those matters which we are required to include in an auditor's report
addressed to them. To the fullest extent permitted by law, we do not accept or
assume responsibility to any party other than the company and company's
members as a body, for our work, for this report, or for the opinions we have
formed.
Mohammed Haque (Senior Statutory Auditor)
for and on behalf of MAH, Chartered Accountants
Statutory
Auditor
2(nd) Floor
154 Bishopsgate
London
EC2M 4LN
21 March 2025
Consolidated income statement
For the year ended 30 September 2024
Note 2024 2023
£'000 £'000
Continuing operations
Revenue 4 19,716 14,335
Sub consultant costs (265) (232)
Revenue less sub consultant costs 4 19,451 14,103
Cost of sales (5,198) (2,627)
Gross profit 14,253 11,476
Personnel related costs (11,520) (9,031)
Property related costs (1,599) (1,322)
Other operating expenses (1,645) (1,375)
Distribution costs (233) (141)
Other operating income 5 500 326
Operating loss (244) (67)
Finance income 13 9
Finance costs 6 (461) (255)
Loss after finance costs (692) (313)
Share of results of associate and joint ventures 156 341
Trading profit/(loss) from continuing operations (536) 28
Acquisition costs (41) (379)
Revaluation of freehold property (585) -
Loss on disposal of subsidiary (88) -
Goodwill impairment 13 (260) -
Supplementary call levy to mutual insurer (264) -
Loss before tax from continuing operations (1,774) (351)
Tax credit 10 94 433
Profit/(loss) from continuing operations (1,680) 82
(Loss)/profit from discontinued operations 12 (27) 10
(Loss)/profit for the year (1,707) 92
Profit/(loss) attributable to:
Owners of Built Cybernetics plc (1,707) 92
Earnings per share for profit/(loss) from continuing operations attributable
to the ordinary equity holders of the Company:
Basic earnings per share 11 (0.53p) 0.04p
Diluted earnings per share 11 (0.49p) 0.04p
Earnings per share for profit/(loss) attributable to the ordinary equity
holders of the Company:
Basic earnings per share 11 (0.54p) 0.04p
Diluted earnings per share 11 (0.50p) 0.04p
Consolidated statement of comprehensive income
For the year ended 30 September 2024
2024 2023
£'000 £'000
Profit/(loss) for the year (1,707) 92
Revaluation of freehold property (60) 60
Deferred tax movement on revaluation 15 (15)
Goodwill impairment on fair value adjustment of share options (note 13) - (222)
Currency translation differences (4) 26
Currency translation differences on disposal recycled to gain on disposal of - -
discontinued operation (note 12)
Currency translation differences on translation of discontinued operations - -
(note 12)
Other comprehensive loss for the year (49) (151)
Total comprehensive loss for the year (1,756) (59)
Total comprehensive loss for the year is attributable to:
Owners of Built Cybernetics plc (1,756) (59)
Non-controlling interests - -
Total comprehensive loss for the year (1,756) (59)
Total comprehensive profit/(loss) attributable to the owners of Built
Cybernetics plc arises from:
Continuing operations (1,729) (69)
Discontinued operations (27) 10
(1,756) (59)
Consolidated statement of financial position
At 30 September 2024 2024 2023
Note £'000 £'000
Non current assets
Goodwill 13 1,814 1,502
Other intangible assets 14 573 404
Property, plant and equipment 15 176 238
Right-of-use assets 16 1,713 2,132
Investment in associate 18 732 786
Investments in joint ventures 19 263 285
Loans and other financial assets 20 7 89
Trade and other receivables 22 61 100
Deferred tax 26 596 625
Total non current assets 5,935 6,161
Current assets
Inventories 21 393 372
Trade and other receivables 22 5,026 3,847
Contract assets 4 1,750 790
Cash at bank and in hand 353 522
7,522 5,531
Assets in disposal groups classified as held for 28 - 3,208
sale
Total current assets 7,522 8,739
Total assets 13,457 14,900
Current liabilities
Trade and other payables 23 (5,483) (4,589)
Contract liabilities 4 (2,585) (1,398)
Borrowings 24 (522) (2,050)
Lease liabilities 16 (528) (492)
Provisions 27 (120) -
(9,238) (8,529)
Liabilities directly associated with assets in 28 - (148)
disposal groups classified as held for sale
Total current liabilities (9,238) (8,677)
Non current liabilities
Trade and other payables 23 (86) (87)
Borrowings 24 (84) (642)
Lease liabilities 16 (1,279) (1,750)
Deferred tax 26 (23) (161)
Provisions 27 (354) (210)
Total non current liabilities (1,826) (2,850)
Total liabilities (11,064) (11,527)
Net assets 2,393 3,373
Capital and reserves
Share capital 29 3,411 2,754
Merger reserve 2,979 2,883
Revaluation reserve - 45
Foreign currency translation reserve (535) (531)
Retained earnings (4,956) (3,272)
Other distributable reserve 1,494 1,494
Total equity attributable to 2,393 3,373
equity holders of the Company
The financial statements on pages 49 to 121 were approved and authorised for
issue by the Board of Directors on 21 March 2025 and were signed on its behalf
by:
Nick Clark Antony Barkwith
Chief Executive Group Financial Director
Company statement of financial position
At 30 September 2024
Note 2024 2023
£'000 £'000
Non current assets
Property, plant and equipment 15 - 1
Investments 17 5,245 5,406
Deferred tax 26 355 203
Trade and other receivables 22 61 100
Total non current assets 5,661 5,710
Current assets
Trade and other receivables 22 316 168
Cash at bank and in hand - 1
Total current assets 316 169
Total assets 5,977 5,879
Current liabilities
Trade and other payables 23 (3,029) (2,556)
Borrowings 24 (1) (167)
Total current liabilities (3,030) (2,723)
Non current liabilities
Trade and other payables 23 (86) (87)
Borrowings 24 - -
Total non current liabilities (86) (87)
Total liabilities (3,116) (2,810)
Net assets 2,861 3,069
Capital and reserves
Share capital 29 3,411 2,754
Retained earnings (5,023) (4,062)
Merger reserve 2,979 2,883
Other distributable reserve 1,494 1,494
Total equity attributable to 2,861 3,069
equity holders of the Company
The result for the year contained within the parent company's income statement
is a loss of £984k (2023: loss £671k).
The financial statements on pages 49 to 121 were approved and authorised for
issue by the Board of Directors on 21 March 2025 and were signed on its behalf
by:
Nick Clark Antony Barkwith
Chief Executive Group Financial Director
Consolidated statement of cash flows
For the year ended 30 September 2024
Note 2024 2023
£'000 £'000
Cash flows from operating activities
Cash generated from operations 31 89 1,013
Income taxes received - 196
Net cash inflow from operating activities 89 1,209
Cash flows from investing activities
Purchase of property, plant and equipment (169) (154)
Sale of property, plant and equipment 2,453 -
Payments of software development costs (221) -
Sale of investments (52) 33
Sale of loans and other financial assets 59 -
Net cash (paid)/received on acquisition of subsidiaries (51) 367
Dividends received from associates & joint ventures 192 262
Net cash received in investing activities 2,211 508
Net cash inflow before financing activities 2,300 1,717
Cash flows from financing activities
Issue of shares 482 -
Principal paid on lease liabilities (514) (496)
Interest paid on lease liabilities (68) (72)
Lease liability additions 79 -
Repayment of bank loans (2,167) (459)
Interest received 13
Interest paid (370) (93)
Net cash outflow from financing activities (2,545) (1,120)
Net change in cash and cash equivalents (245) 597
Cash and cash equivalents at start of year 430 (204)
Currency translation differences 4 37
Cash and cash equivalents at end of year 25 189 430
Cash and cash equivalents are comprised of:
Cash at bank and in hand 353 522
Net cash included in assets held for sale - 30
Secured bank overdrafts (164) (122)
Cash and cash equivalents at end of year 189 430
Company statement of cash flows
For the year ended 30 September 2024
Note 2024 2023
£'000 £'000
Cash flows from operating activities
Cash (expended by)/generated from operations 31 (480) 52
Interest paid (8) (24)
Net cash (outflow)/inflow from operating activities (488) 28
Cash flows from investing activities
Purchase of investments (45) (515)
Sale of investments 33 33
Dividends received from associates & joint ventures 183 248
Net cash generated from/(expended by) investing activities 171 (234)
Net cash outflow before financing activities (317) (206)
Cash flows from financing activities
Issue of shares 482 -
Repayment of bank loans (167) (250)
Net cash inflow/(outflow) from financing activities 315 (250)
Net change in cash and cash equivalents (2) (456)
Cash and cash equivalents at start of year 1 457
Cash and cash equivalents at end of year (1) 1
Cash and cash equivalents are comprised of:
Cash at bank and in hand - 1
Secured bank overdrafts (1) -
Cash and cash equivalents at end of year (1) 1
Consolidated statement of changes in equity
For the year ended 30 September 2024
Share capital Foreign Retained Other Merger reserve Revaluation reserve Total
currency earnings distributable equity
translation reserve £'000
£'000 reserve £'000
£'000 £'000 £'000 £'000
At 1 October 2022 1,652 (557) (3,364) 1,494 1,176 - 401
Profit for the year - - 92 - - - 92
Other comprehensive income - 26 - - (222) 45 (151)
Total comprehensive income - 26 92 - (222) 45 (59)
Issue of ordinary shares in relation to business combination 1,102 - - - 1,707 - 2,809
Employee share schemes - Value issued in relation to business combination - - - - 222 - 222
At 30 September 2023 2,754 (531) (3,272) 1,494 2,883 45 3,373
Loss for the year - - (1,707) - - - (1,707)
Other comprehensive income - (4) - - - (45) (49)
Total comprehensive income - (4) (1,707) - - (45) (1,756)
Issue of ordinary shares in relation to business combination 178 - - - 93 - 271
Share Subscription 479 - - - 3 - 482
Share based payment value of employee services - - 23 - - - 23
At 30 September 2024 3,411 (535) (4,956) 1,494 2,979 - 2,393
The other distributable reserve was created in September 2007 during a court
and shareholder approved process to reduce the capital of the Company.
The merger reserve was created through a business combination in December 2013
representing the issue of 19,594,959 new ordinary shares at a price of 7.00
pence per share.
This was then increased through a business combination in March 2023
representing the issue of 110,142,286 new ordinary shares at a price of 2.55
pence per share.
This was then further increased through a business combination in October 2023
representing the issue of 17,800,000 new ordinary shares at a price of 1.525
pence per share.
In May 2024 the Company issued 416,162 new ordinary shares of 1p to the
trustees of the Company's All-Employee Share Option Scheme ("AESOP") at 1.7p
per share.
Company statement of changes in equity
For the year ended 30 September 2024
Share capital Retained Other Merger reserve Total Equity
earnings distributable
£'000 reserve £'000 £'000
£'000 £'000
At 1 October 2022 1,652 (3,391) 1,494 1,176 931
Loss for the year - (671) - - (671)
Other comprehensive income - - - (222) (222)
Total comprehensive income - (671) - (222) (893)
Issue of ordinary shares in relation to business combination 1,102 - - 1,707 2,809
Employee share schemes - Value issued in relation to business combination - - - 222 222
At 30 September 2023 2,754 (4,062) 1,494 2,883 3,069
Loss for the year - (984) - - (984)
Other comprehensive income - - - - -
Total comprehensive income - (984) - - (984)
Issue of ordinary shares in relation to business combination 178 - - 93 271
Share Subscription 479 - - 3 482
Share based payment value of employee services - 23 - - 23
At 30 September 2024 3,411 (5,023) 1,494 2,979 2,861
The other distributable reserve was created in September 2007 during a court
and shareholder approved process to reduce the capital of the Company.
The merger reserve was created through a business combination in December 2013
representing the issue of 19,594,959 new ordinary shares at a price of 7.00
pence per share.
This was then increased through a business combination in March 2023
representing the issue of 110,142,286 new ordinary shares at a price of 2.55
pence per share.
This was then further increased through a business combination in October 2023
representing the issue of 17,800,000 new ordinary shares at a price of 1.525
pence per share.
In May 2024 the Company issued 416,162 new ordinary shares of 1p to the
trustees of the Company's All-Employee Share Option Scheme ("AESOP") at 1.7p
per share.
Notes to the financial statements
1 Significant accounting policies
The principal accounting policies applied in the preparation of these
financial statements are set out below.
Basis of preparation
The financial statements for the Group and parent Company have been prepared
in accordance with UK adopted international accounting standards in conformity
with the requirements of the Companies Act 2006.
New accounting standards, amendments and interpretations applied
For the year ended 30 September 2024, the Group has applied the following
standards and amendments for the first time:
(i) IFRS 17 Insurance Contracts
(ii) Definition of Accounting Estimates - amendments to IAS 8
(iii) International Tax Reform - Pillar Two Model Rules - amendments to IAS,
and
(iv) Amendments to IAS 1 - Classification of Liabilities as Current or
Non-current and Amendments to IAS 1 - Non-current Liabilities with Covenants.
The amendments listed above did not have any impact on the amounts recognised
in prior periods and are not expected to significantly affect the current or
future periods.
New accounting standards, amendments and interpretations not yet applied
Certain amendments to accounting standards have been published that are not
mandatory for 30 September 2024 reporting periods and have not been early
adopted by the Group. These amendments are not expected to have a material
impact on the entity in the current or future reporting periods and on
foreseeable future transactions.
Going concern
The Group's business activities, the principal risks and uncertainties facing
the Group, and the financial position of the Group are described in the
Strategic Report. The liquidity risks faced by the Group are further described
in note 36. These factors are all considered when assessing the Group's
ability to operate as a going concern.
The Group currently meets its day to day working capital requirements through
its cash balances. It maintains an overdraft facility for additional financial
flexibility.
During the year, the Group raised £482,000 through the issue of new equity,
and two subsidiaries implemented an invoice discounting facility with the
ability to draw up to the lower of 50% of eligible debtors or £600,000.
The Group £250k Coutts overdraft facility was due for renewal on 30 September
2024 and has been extended to 31 March 2025. Based on discussions to date the
board would expect a facility to be offered on an acceptable basis.
The £500k CBILS drawn in May 2021 had a duration of three years with interest
at 4.05% over the Coutts base rate in years two and three. As at 30 September
2023 the balance on the loan was £167k. The final instalment was paid in May
2024.
TFG has a CBILS loan with NatWest which was drawn in 2021 at £1.75m.
Following a prepayment during the year in addition to the regular monthly
payments, the 30 September 2024 balance was £0.42m (2023: £0.99m). The loan
attracts a fixed rate of interest of 3.66%pa and capital is being repaid at
£19k per month.
The mortgage secured against TFG's freehold property in London, was fully paid
off in September 2024 on completion of the sale of this property.
Forecasts for the Group have been prepared for a period of at least 12 months
following the approval of the financial statements, which comprise detailed
income statements, statements of financial position and cash flow statements
for each of the Group's operations.
The Group forecasts on the basis of earnings and billings from i) secure
contractual work, ii) known potential work which is deemed to have a greater
than 50% chance of being undertaken and is predominantly follow on stages of
currently instructed work, to which a weighting is applied; and iii) new work
from known sources such as competitive tenders and submitted fee proposals, or
new work to be achieved based on historical experience of market activity and
timescales in which work can be converted from an enquiry to an active project
which varies by territory and the service each office in the Group provides.
The risk of rising energy prices and inflation globally appear materially
lower than 12 months ago, and lower interest rates should help clients to be
more confident to make decisions. This has resulted in significant new
instructions across the segments of the Group and stronger order books.
The Group's forecasts, indicate that if it is generating sufficient new work
to trade profitably then The Group will have sufficient funds to continue to
meet its obligations as they fall due, however given the generation of
turnover is dependent on clients decision making and is therefore not within
the control of the Group, a significant deterioration in trading could lead to
a shortfall of cash within the next 12 months.
Should either the cash generation from the Group's existing business units
decline or the push for growth in the smart buildings arena lead to a
prolonged shortfall in cash the Board has the following funding or mitigating
options beyond the typical cost cutting in the face of declining activities:
· Vanti Ltd has received a time limited fully approved offer for a
£920k loan which can be drawn down if needed.
· The Board also believes that the invoice discounting facility may
be extended to a larger limit.
· The Group is currently paying off its liabilities in respect of
state-backed funding provided during the Covid pandemic. The CBILS loan drawn
by TFG will be fully repaid by July 2026. By replacing this debt with a new
facility repayable over a longer period the annual cash costs associated with
this debt would fall.
· The Board believes the commercial value of a number of its
businesses and investments is substantial in relation to the Group as a whole
and if necessary could be realised at values which are in excess of book
value.
· As a company with shares quoted on the London Stock Exchange
there is the option to seek additional equity investment from the issue of new
shares, as was demonstrated by the share subscription in connection with the
Vanti transaction.
· The Group has outstanding warrants entitling holders to subscribe
£375,000 of cash for new shares. The exercise price is 1 penny per share,
which is a significant discount to the current market price, and it is
therefore reasonable to expect the warrants will be exercised prior to their
expiry in April 2027.
Based on forecasts prepared and reviewed for the period to 30 September 2026,
the Directors have a reasonable expectation that the Group will have adequate
resources to continue in operational existence for the foreseeable future.
For this reason, the Board considers it appropriate to prepare the financial
statements on a going concern basis.
Basis of consolidation and equity accounting
The consolidated financial statements incorporate those of the Company and its
subsidiaries. Subsidiaries are all entities over which the Group has
control. The Group controls an entity when it is exposed to variable returns
from the investee, in addition to the ability to direct the investee and
affect those returns through exercising its power. Intra group transactions,
balances and any unrealised gains and losses on transactions between Group
companies are eliminated on consolidation.
Non-controlling interests in the results and equity of subsidiaries are shown
separately in the consolidated income statement, statement of comprehensive
income, statement of changes in equity and statement of financial position
respectively.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given and equity instruments issued. Identifiable assets
acquired and liabilities assumed in an acquisition are measured initially at
their fair values at the acquisition date, irrespective of any non-controlling
interest. The excess of the cost of acquisition over the fair value of the
Group's share of the identifiable net assets acquired is recorded as goodwill.
The consolidated financial statements also include the Group's share of the
results and reserves of its associate and joint venture.
Associate
The associate in Berlin is an entity for which the Group has significant
influence but not control or joint control. This is presumed to be the case
where the Group holds between 20% and 50% of the voting rights, but
consideration is given to the substance of the contractual governance
agreements in place. Investments in associates are accounted for under the
equity method.
Joint venture
The Group has a joint venture in Frankfurt where ownership is contractual and
the agreements require unanimous consent from all parties for relevant
activities. The entity is considered a joint venture.
Joint ventures are accounted for under the equity method.
Borrowings
Borrowings are initially recognised at fair value, net of any transaction
costs incurred. Borrowings are subsequently stated at amortised cost. Any
difference between the proceeds (net of any transaction costs) and the
redemption value is recognised in the income statement over the period of the
borrowings using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, bank current accounts held at
call, bank deposits with very short maturity terms and bank overdrafts where
these form an integral part of the group's cash management process, for the
purposes of the statement of cash flows.
Company income statement
The Company has taken advantage of the exemption provided by section 408 of
the Companies Act 2006 not to present its income statement for the year. The
Company's result is disclosed at the foot of the Company's statement of
financial position.
Current Taxation
Current taxes are based on the results shown in the financial statements and
are calculated according to local tax rules, using tax rates enacted or
substantially enacted by the statement of financial position date.
Deferred taxation
Deferred income tax is provided in full, using the statement of financial
position liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amount in the financial
statements, and measured at an undiscounted basis.
Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantively enacted by the date of the statement of financial
position and are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable
that future taxable profits will be generated against which the temporary
differences can be utilised.
Dividends
Dividend payments are recognised as liabilities once they are no longer at the
discretion of the Company.
Dividend income from investments is recognised in the income statement when
the shareholders' rights to receive payment have been established.
Equity instruments
Equity instruments issued by the Company are recorded as the proceeds
received, net of direct issue costs.
Foreign currency
Transactions in currencies other than the functional currency of each
operation are recorded at the rates of exchange prevailing on the dates of the
transactions. At the date of each statement of financial position, monetary
assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing at the date of the statement of financial
position. Gains and losses arising on retranslation are included in the
consolidated income statement for the year.
On consolidation, the assets and liabilities of the Group's overseas
operations are translated from their functional currencies at exchange rates
prevailing at the date of the statement of financial position. Income and
expense items are translated from their functional currencies at the average
exchange rates for the year, which are materially consistent with the spot
rates observed in the year for those entities. Exchange differences arising
are recognised directly in equity and transferred to the Group's foreign
currency translation reserve. If an overseas operation is disposed of then the
cumulative translation differences are recognised as realised income or an
expense in the year disposal occurs.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing exchange rate. The Group has elected to treat
goodwill and fair value adjustments arising on acquisitions before the date of
transition to IFRS as sterling denominated assets and liabilities.
Government Grants
Government grants are recognised when there is reasonable assurance that the
entity will comply with grant conditions and that the grant will be received.
Goodwill
Goodwill arising on acquisitions represents the excess of the fair value of
the consideration given over the fair value of the identifiable assets and
liabilities acquired. Where the net fair value of the identifiable assets and
liabilities of the acquiree is in excess of the consideration paid, negative
goodwill is recognised immediately in the income statement.
Goodwill is tested annually for impairment and an impairment loss would be
recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Impairment
At the date of each statement of financial position, a review of property,
plant and equipment and intangible assets (excluding goodwill) is carried out
to determine whether there is any indication that those assets have suffered
any impairment. If any such indications exist, the recoverable amount of the
asset is assessed as the higher of fair value less costs to sell and value in
use, in order to determine the extent of any impairment.
Where the asset does not generate cash flows that are independent from other
assets, the recoverable amount of the cash generating unit to which the asset
belongs is estimated.
The recoverable amount of a cash generating unit is determined based on value
in use calculations. These calculations use pre-tax cash flow projections
based on financial budgets and forecasts covering a five year period. Cash
flows beyond the five year period are extrapolated using long term average
growth rates.
Other intangible assets
Intangible assets acquired in a business combination are recognised at fair
value at the acquisition date. Subsequently the intangible assets are carried
at cost less accumulated amortisation and accumulated impairment. Amortisation
is charged on a straight line basis with the useful economic lives attributed
as follows:
Trade name - 25 years
Trade licence - 10 years
Customer relationships - 7 to 10 years
Software development - 5 years
Order book - Over the life of the contracts
Amortisation is charged to other operating expenses within the consolidated
income statement.
Inventories
Inventories as designated at the lower of cost and net realisable value, after
making due allowance for obsolete and slow moving items.
Freehold property
In the prior year, the directors considered the fair value of the freehold
property of The Old Torpedo Factory, taking into account current rental yields
and the market value of similar properties in the area they considered that
the fair value was materially different to the depreciated historical cost of
the property. As a result of this they adopted the accounting policy to value
freehold property at the fair value. The freehold property was sold in the
year to September 2024.
Investments
Investments in subsidiaries, associates and joint ventures are held in the
statement of financial position of the Company at historical cost less any
allowance for impairment.
The listed investments are traded in an active market, therefore the
unadjusted quoted prices as at the period end date are used to determine the
fair value of the investments.
Unlisted investments are carried at cost, as an approximation of the fair
value, unless any indications exist to suggest a material difference in the
value of the investments as at the reporting date.
Leases and asset finance arrangements
The majority of the Group's accounting policies for leases are set out in note
16.
Identifying Leases
The Group accounts for a contract, or a portion of a contract, as a lease when
it conveys the right to use an asset for a period of time in exchange for
consideration. Leases are those contracts that satisfy all of the following
criteria:
(a) There is an identified asset;
(b) The Group obtains substantially all the economic benefits from use of the
asset; and
(c) The Group has the right to direct use of the asset.
The Group considers whether the supplier has substantive substitution rights.
If the supplier does have those rights, the contract is not identified as
giving rise to a lease.
In determining whether the Group obtains substantially all the economic
benefits from use of the asset, the Group considers only the economic benefits
that arise from use of the asset, not those incidental to legal ownership or
other potential benefits.
In determining whether the Group has the right to direct use of the asset, the
Group considers whether it directs how and for what purpose the asset is used
throughout the period of use. If there are no significant decisions to be made
because they are pre-determined due to the nature of the asset, the Group
considers whether it was involved in the design of the asset in a way that
pre-determines how and for what purpose the asset will be used throughout the
period of use. If the contract or portion of a contract does not satisfy these
criteria, the Group applies other applicable IFRSs rather than IFRS 16.
Operating segments
The Group's reportable operating segments have previously been based on the
geographical areas in which its studios are located, as each reportable
operating segment provided the same type of service to clients, namely
integrated professional design services for the built environment. Internally
the Group prepares discrete financial information for each of its geographical
professional design service segments.
With the acquisitions of TFG and A+K in the prior year, and ecoDriver in the
current year, the Group now further divides its business by types of service,
with reporting segments expanded as professional design service regions, TFG,
A+K and ecoDriver.
Other operating expenses
Other operating expenses include legal and professional costs, professional
indemnity insurance premiums, marketing expenses and other general expenses.
Property, plant and equipment
All property, plant and equipment is stated at historical cost of acquisition
less depreciation and any impairment provisions. Historical cost of
acquisition includes expenditure that is directly attributable to the
acquisition of the items.
Depreciation of property, plant and equipment is calculated to write off the
cost of acquisition over the expected useful economic lives using either the
straight line method or on a reducing balance and over the following number of
years:
Leasehold improvements - Unexpired term of
lease straight line method
Office furniture 4
years
straight line method
Office equipment 2-4
years
straight line method
Computer equipment 2-4
years
straight line method
Motor Vehicles 25%
reducing balance method
Provisions
Provisions are recognised when a present obligation has arisen as a result of
a past event which is probable will result in an outflow of economic benefits
that can be reliably estimated.
Where the effect of the time value of money is material, the provision is
based on the present value of future outflows, discounted at the pre-tax
discount rate that reflects the risks specific to the liability.
Employee benefits
In those geographies where it is a legal requirement, provision is also made
for end of service benefit ('EOSB'), being amounts payable to employees when
their contract with the Group ends (see note 27).
The charge to the income statement comprises the service cost and the interest
on the liability and is included in personnel related expenses. The obligation
has been measured at the reporting date using the projected unit credit method
in accordance with IAS 19 and is funded from working capital.
Post retirement benefits
Costs in respect of defined contribution pension arrangements are charged to
the income statement on an accruals basis in line with the amounts payable in
respect of the accounting period. The Group has no defined benefit pension
arrangements.
Rental Income
Rental income from sublet property is credited to the consolidated income
statement in the year in which it accrues.
Revenue recognition
Architectural Contracts
Revenue represents the value of services performed for customers under
contracts (excluding value added taxes). Revenue from contracts is assessed on
an individual basis with revenue earned being ascertained based on the stage
of completion of the contract which is estimated using each performance
obligation within the contract and the proportion of total time expected to be
required to undertake each performance obligation which had been or is being
performed.
Step 1) Identification of the contract
Contracts with clients are mostly on a fixed basis with the consideration
generally being stipulated based on a percentage of the build cost.
Contract variations are treated as variations to a specific performance
obligation, with any additional fees associated with that variation, and the
time and cost required to fulfil the variations, included within the overall
assessment of the time required to complete the overall performance
obligation. This is on the basis that those variations are normally not
distinct in themselves (modifications to existing elements of the obligations)
and therefore are repriced as if they were part of the original contract.
Step 2) Identification of performance obligations
Whilst the nature of performance obligations may vary from project to project,
they are generally split by identification of Royal Institute of British
Architects ('RIBA') work stages (delivered as either an individual work stage
or a group of work stages depending on the exact nature of the contract),
which constitute individual and distinctive promises within the contract.
These are capable of being delivered independently. Local equivalents of RIBA
apply depending on the jurisdiction of the contract, and may be identified.
Step 3) Identify the consideration
Consideration is generally fixed and agreed within the contract for services
between the Group and the client, subject to modifications as noted above in
step 1.
Step 4) Allocate the transaction price
The performance obligations within the contract are billed on the basis of a
fee allocated to each element of the project, however revenue is allocated to
the performance obligations based on the total expected time cost and contract
cost expected to be required to undertake each performance obligation within
the contract. This leads to recognition of revenue being reallocated between
work stages where Management assess that the billing milestones associated to
specific stages as stated in the contract do not fairly reflect the total time
and cost required to complete those tasks.
Estimates of the total time expected to be required to undertake the contracts
are made on a regular basis and subject to management review. These estimates
may differ from the actual results due to a variety of factors such as
efficiency of working, accuracy of assessment of progress to date and client
decision making.
Step 5) Recognition of revenue
For all contracts undertaken by Management, the measurement of revenues
follows an "over time" pattern.
The basis on which this is the case is that the work performed by the Group
has no alternative use and the contracts contain provisions by which
consideration can be recovered for part-performance of obligations in the
event that a contract is terminated. The revenue recoverable in such an
instance would approximate to compensating the Group for the selling price of
the services rendered to date.
The amount by which revenue exceeds progress billings is classified as
contract assets. To the extent progress billings exceed relevant revenue, the
excess is classified as contract liabilities.
Master systems integration
Revenue is recognised when the goods or services are provided, subject to the
Group's specific revenue recognition policy for services rendered detailed
below.
Maintenance contracts, consultancy and revenue arising from contracts for the
design, supply and installation of master systems to which there is a
contractual commitment at the balance sheet date are treated as long term
contracts. Profit on these contracts is taken as the work is carried out if
the final outcome can be assessed with reasonable certainty. The profit
included is calculated on a prudent basis to reflect the proportion of the
work carried out at the year end, by recording turnover and related costs as
contract activity progresses. Revenue is calculated as that proportion of
total contract value which costs incurred to date bear to total expected costs
for that contract. Revenues derived from variations on contracts are
recognised only when they have been accepted by the customer. Full provision
is made for losses on all contracts in the year in which they are first
foreseen.
Distribution and Installation of Workplace Technology
The Group derives revenue from the transfer of goods and services over time
and at a point in time. Revenues from external customers come from the sale of
hardware and systems integration. The Group has a number of different types of
contractual arrangements and consequently applies a variety of methods of
revenue recognition. The revenue and profit in any period are based on the
delivery of performance obligations and an assessment of when control is
transferred to the customer. In determining the amount of revenue and profits
to record and related balance sheet items (such as trade receivables, accrued
income and deferred income) to recognise in the period, management is required
to form a number of judgements and assumptions. Revenue is recognised when the
performance obligation in a contract has been performed (so 'point in time'
recognition) or over time as the performance obligation is transferred to the
customer.
The transaction price, being the amount to which the Group expects to be
entitled and has rights to under the contract, is allocated to the identified
performance obligations. For each performance obligation, the Group determines
if revenue will be recognised over time or at a point in time. Where the Group
recognises revenue over time for long-term contracts, this is in general due
to the Group performing and the customer simultaneously receiving and
consuming the benefits provided over the life of the contract. For each
performance obligation to be recognised over time, the Company applies a
revenue recognition method that faithfully depicts the Company's performance
in transferring control of the goods or services to the customer. This
decision requires assessment of the real nature of the goods or services that
the Group has promised to transfer to the customer. The Group applies the
relevant output or input method consistently to similar performance
obligations in other contracts. If performance obligations in a contract do
not meet the over time criteria, the Group recognises revenue at a point in
time.
Share based payments
The Group has issued share options to certain employees, in return for which
the Group receives services from those employees. The fair value of the
employee services received in exchange for the grant of the options is
recognised as an expense other than where management perceive the fair value
to be immaterial.
The total amount to be expensed is determined by reference to the fair value
of the options granted including any market performance conditions (for
example the Company's share price) but excluding the impact of any service or
non market performance vesting conditions (for example the requirement of the
grantee to remain an employee of the Group).
The fair value of the options granted is estimated by management by utilising
a Black-Scholes option pricing model with reference to expected volatility,
vesting period, exercise price, and market share price at the time of grant.
Non market vesting conditions are included in the assumptions regarding the
number of options that are expected to vest. The total expense is recognised
over the vesting period. At the end of each period the Group revises its
estimates of the number of options expected to vest based on the non market
vesting conditions. It recognises the impact of any revision in the income
statement with a corresponding adjustment to equity.
Trade receivables
Trade receivables are amounts due from clients for services provided in the
ordinary course of business and are stated net of any provision for
impairment.
Following the adoption of IFRS 9, the Group followed the simplified approach
and so makes an expected credit loss allowance using lifetime expected credit
losses for all trade receivables and contract assets. The estimates and
judgements applied are detailed further in note 22.
The Group endeavours to undertake work only for clients who have the financial
strength to complete projects but even so, much property development is
financed by funds not unconditionally committed at the commencement of the
project. Problems with financing can on occasion unfortunately lead to clients
being unable to pay their debts either on a temporary or more permanent basis.
The Group monitors receipts from clients closely and undertakes a range of
actions if there are indications a client is experiencing funding problems.
The Group makes further loss allowances if it is considered that there is a
significant risk of non-payment. The factors assessed when considering a loss
allowance include the ownership of the development site, the general financial
strength and financial difficulties of the client, likely use / demand for the
completed project, and the length of time likely to be necessary to resolve
the funding problems.
The Group strives to maintain good relations with clients, but on occasions
disputes do arise with clients requiring litigation to recover outstanding
monies. In such circumstances, the directors carefully consider the individual
facts relating to each case (such as strength of the legal arguments and
financial strength of the client) when deciding the level of any further
impairment allowance.
2 Accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Accounting estimates
In preparing the financial statements, the directors make estimates and
assumptions concerning the future. The resulting accounting estimates, by
definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year
are considered to be:
Impairment of trade receivables
The Group provides architectural design services, master systems integration
and stage technology, smart workplace systems, energy management software and
related services to a wide variety of clients including property developers,
owner occupiers and governmental organisations, both in the United Kingdom and
overseas.
An increase of 5% (2023: 5%) as a percentage of total trade receivables would
lead to a material bad debt exposure. Based on the combination of credit loss
allowances and specifically identified further provisions, there is a £0.21m,
(2023: £0.17m) trade receivables provision primarily against historic Middle
East trade receivables. Given the nature of these, there remains the potential
to collect these in future years. Further quantitative information concerning
trade receivables is shown in notes 22 and 34.
Impairment of goodwill and other intangible assets
Details of the impairment reviews undertaken in respect of the carrying value
of goodwill and other intangible assets are given in note 17.
Impairment of investments in subsidiaries, associate and joint ventures
The company's investment in subsidiaries, associate and joint ventures is
reviewed annually for impairment. The recoverable amount is determined based
on value in use calculations. These calculations use pre-tax cash flow
projections based on financial budgets and forecasts covering a five year
period. Cash flows beyond the five year period are extrapolated using long
term average growth rates.
The key assumptions made in these projections are the same as those given in
relation to impairment of goodwill in note 17.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost
comprises direct materials and where applicable direct labour costs. When an
inventory check is carried out obsolete inventories identified are written off
to cost of sales. The carrying value of inventories at the year end was £393k
(2023: £372k). No provision for inventories has been included in the year end
accounts as it was deemed that all inventories will realise in excess of its
carrying value.
Freehold property
Freehold property is stated at fair value, on periodic valuations by external
independent valuers, taking into account current rental yields and the market
value of similar properties in the area.
Useful lives of other intangible assets
The useful economic life of customer relationships acquired in the TFG
business combination is estimated to be at least 7 years based on analysis of
the retention rate of recurring maintenance contracts in recent years.
Capitalisation of development costs
It is the Group's policy to capitalise development expenditure only if the
Directors are satisfied as to the technical, commercial and financial
viability of individual projects and if the asset recognition criteria under
IAS 38 are met.
The assessment of directly attributable costs to projects involve a
significant degree of estimation of staff costs. The assessment of future
economic benefits generated by these intangible assets and the determination
of their amortisation profile involve a significant degree of judgement based
on the estimation of future potential revenue and profit and the useful life
of the assets.
Further information is provided in note 14.
Critical accounting judgements
Critical judgements represent key decisions made by management in the
application of the Group's accounting policies. Where a significant risk of
materially different outcomes exists due to management assumptions, this will
represent a critical accounting judgement. Accounting judgements are
continually reviewed in light of new information and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The judgements which have
a significant risk of causing a material adjustment to the carrying amount of
assets and liabilities are considered to be:
Recognition of fee claim revenue
The nature of the project work undertaken by the Group means sometimes the
scale and scope of a project increases after work has commenced. Subsequent
changes to the scale and scope of the work may require negotiation with the
clients for variations.
Advance agreement of the quantum of variation fees is not always possible, in
particular when the timescale for project completion is changing or where the
cost of variations cannot be determined until the work has been undertaken.
The Group have limited numbers of situations where we are entitled to a fee
claim, on which estimation of the amount we would be entitled to in such a
claim is considered on a case by case basis, and only recognised when it is
highly probable that there will not be a subsequent reversal of the estimated
revenues of a probable outcome under the requirements of IFRS 15 for variable
consideration.
In the current year no material fee claim revenue has been recognised at 30
September 2024.
IFRS 16 Right-of-use asset and Lease liability
The lease of its London studio includes an upward rent review after 5 years in
May 2023, does not contain any break clauses, and expires in May 2028.
The lease includes provision for an additional 4 month rent free period on
condition that the Group undertakes specific property improvements to the
Landlord's reasonable satisfaction. The Group estimates that the cost of
installation of these improvements would be equivalent or higher in cost than
the value of the 4 months' rent free saving. As the Group would have to pay
for a comfort cooling system to gain the rent free saving, the 4 month rent
free period is not included within the IFRS 16 calculation for the
right-of-use asset and associated lease liability.
The lease of Vanti Ltd's Farnham premises, includes a tenant's break clause in
July 2025, and expires on 1 July 2027. The lease includes a penalty of £5k
equivalent to 3 months' rent if the break clause is exercised.
3 Business combinations
Acquisition of ecoDriver
On 17 October 2023 the Group acquired 100% of the voting equity instruments in
TR Control Solutions Limited ("TRCS"), a developer of energy management
software and provider of energy efficiency services. Immediately after
completing the acquisition management changed the name of the company to
ecoDriver Ltd ("ecoDriver").
The acquisition is a further step in the Group's strategy to become a leading
provider of Smart Building technology.
The operating results and assets and liabilities of the acquired company have
been consolidated from 17 October 2023.
Consideration for the acquisition comprised:
i) 17,800,000 Ordinary Shares in Built Cybernetics plc at an
issue price of 1.525p based on the closing price of Built Cybernetics plc
shares on 17 October 2023; and
ii) £89,000 in cash. Half the cash consideration was paid
on completion, with the remaining £44,500 paid on the first anniversary of
completion in October 2024.
£'000
Shares in Built Cybernetics plc 271
Cash 89
Total acquisition cost 360
17 Oct-23
£'000
Goodwill (note 13) 527
Trade and other receivables 52
Assets 579
Trade and other payables 149
Contract liabilities 24
Net overdraft 7
Interest bearing loans and borrowings 39
Liabilities 219
Total net assets 360
Acquisition related costs of £27k are disclosed as acquisition costs in the
consolidated income statement.
Acquisition of assets from RTS Technology Solutions Limited
On 20 March 2024 Vanti Ltd (formerly Torpedo Factory Ltd), a wholly owned
subsidiary of the Group, acquired certain assets from the liquidator of RTS
Technology Solutions Limited which formerly traded as Vanti ("RTS"). RTS was a
master systems integrator, and a developer of Smart Core building operating
system software and Kahu workplace technology software and hardware.
The acquisition is an important step in the Group's strategy to become a
leading provider of Smart Building technology, and in particular to develop
Torpedo Factory Group as a Master Systems Integrator, and for the Group to
expand its range of smart building software.
The financial effects of this transaction affecting the assets, liabilities,
and financial performance of Vanti Ltd have been consolidated from 20 March
2024.
Consideration for the acquisition comprises £37,003 in cash which was payable
on completion, and contingent deferred consideration in cash payable over a
period of up to 18 months. The deferred consideration was capped at £50,000,
and the amount actually payable is expected to be £40,000 payable between
April and September 2025.
£'000
Cash 37
Deferred consideration 40
Total expected acquisition cost 77
20 Mar-24
£'000
Property, plant and equipment 20
Goodwill (note 13) 45
Other intangible assets (note 14) 11
Inventories 1
Assets 77
Total net assets 77
Acquisition related costs of £14k are disclosed as acquisition costs in the
consolidated income statement.
4 Operating segments
The Group's reportable operating segments have previously been based on the
geographical areas in which its studios are located (together with a Group
costs segment), as each reportable operating segment provided the same type of
service to clients, namely integrated professional design services for the
built environment. Internally the Group prepares discrete financial
information for each of its geographical professional design service segments.
With the acquisitions of TFG and A+K in the prior year, and ecoDriver in the
current year, the Group now further divides its business by types of service,
with reporting segments expanded as professional design service regions, TFG,
A+K and ecoDriver.
The Group's professional service design regions consist of the United Kingdom,
the Middle East and Continental Europe. Turkey is included within Continental
Europe together with Germany.
As set out in note 28, the board concluded the sale of the Turkey subsidiary
Aukett Swanke Mimarlik AS on 27 December 2023, and classified the assets and
liabilities of that subsidiary as assets held for sale for the prior year as
at 30 September 2023. The Group identifies geographical areas of operation
aligned to its geographical segments. The Group retains its significant
investments in its joint venture and associate in Germany and considers the
subsidiary sold to have represented a small proportion of the geographical
segment. Accordingly, Aukett Swanke Mimarlik AS was not re-presented as a
discontinued operation.
The Middle East segment has been re-presented as a discontinued operation and
is set out in note 12.
With the acquisition of ecoDriver during the period, ecoDriver's operation has
been disclosed as an additional separate business segment.
Income statement segment information
Segment revenue 2024 2023
£'000 £'000
United Kingdom Architecture 9,525 8,858
Torpedo Factory Group 8,592 4,816
Anders+Kern 1,083 467
ecoDriver 477 -
Continental Europe 39 194
Revenue from continuing operations 19,716 14,335
Discontinued operations - 2
Total revenue 19,716 14,337
Segment revenue recognised over time 2024 2023
£'000 £'000
United Kingdom Architecture 9,525 8,858
Torpedo Factory Group 8,058 4,523
Anders+Kern 438 384
ecoDriver 477 -
Continental Europe 39 194
Revenue from continuing operations 18,537 13,959
Discontinued operations - 2
Revenue recognised over time 18,537 13,961
Segment revenue recognised at a point in time 2024 2023
£'000 £'000
United Kingdom Architecture - -
Torpedo Factory Group 534 293
Anders+Kern 645 83
ecoDriver - -
Continental Europe - -
Revenue from continuing operations 1,179 376
Discontinued operations - -
Revenue recognised at a point in time 1,179 376
Total revenue 19,716 14,337
Most of the Group's revenue relates to the value of services performed for
customers under construction type contracts. These contracts are generally
fixed price and take place over a long term basis.
Revenue is recognised over time for these services where control is
transferred continuously as the Group fulfils its performance obligations.
Revenue is recognised at a point in time for distinct goods or services where
control transfers to the customer upon delivery, acceptance, or another
specific event
Segment revenue less sub consultant costs 2024 2023
£'000 £'000
United Kingdom Architecture 9,260 8,692
Torpedo Factory Group 8,592 4,816
Anders+Kern 1,083 467
ecoDriver 477 -
Continental Europe 39 128
Revenue less sub consultant costs from continuing operations 19,451 14,103
Discontinued operations - -
Revenue less sub consultant costs 19,451 14,103
All impairment losses recognised in note 22 are in respect of the Group's
contracts with customers.
Segment net finance expense
2024 2023
Continuing operations £'000 £'000
United Kingdom Architecture (178) (77)
Torpedo Factory Group (258) (145)
Anders+Kern (3) -
ecoDriver (1) -
Continental Europe - -
Group costs (8) (24)
Net finance expense (448) (246)
Segment depreciation 2024 2023
£'000 £'000
United Kingdom Architecture 74 60
Torpedo Factory Group 53 24
Anders+Kern 5 1
ecoDriver 1 -
Continental Europe - 2
Group costs 1 5
Depreciation from continuing operations 134 92
Discontinued operations - -
Depreciation 134 92
Segment amortisation 2024 2023
£'000 £'000
United Kingdom Architecture 412 403
Torpedo Factory Group 137 63
Anders+Kern - -
ecoDriver 12 -
Continental Europe - -
Amortisation from continuing operations 561 466
Discontinued operations - -
Amortisation 561 466
Segment result before tax 2024 2023
£'000 £'000
United Kingdom Architecture (E) (20) (94)
Torpedo Factory Group (B D G H) (625) 401
Anders+Kern (215) 62
ecoDriver (48) -
Continental Europe (A) 73 277
Group costs (C F G) (679) (997)
Goodwill impairment (260) -
Loss before tax from continuing operations (1,774) (351)
Profit from discontinued operations (27) 10
Total loss before tax (1,801) (341)
Segment result before tax 2024 2023
(before reallocation of group management charges) £'000 £'000
United Kingdom Architecture (E) 250 202
Torpedo Factory Group (B D G H) (373) 467
Anders+Kern (162) 62
Continental Europe (A) 204 423
ecoDriver (5) -
Group costs (C F G) (1,428) (1,505)
Goodwill impairment (260) -
Loss before tax from continuing operations (1,774) (351)
Profit from discontinued operations (27) 10
Total loss before tax (1,801) (341)
( )
(A) Sep-24 segmental results before tax includes the £88k loss on disposal of
the Turkish subsidiary Aukett Swanke Mimarlik AS.
( )
(B) Sep-24 segmental results before tax includes the £585k loss on
revaluation of The Old Torpedo Factory freehold property asset sale allocated
within Torpedo Factory Group.
( )
(C) Sep-24 segmental results before tax includes £27k of exceptional costs
being transactional costs for the acquisition of TRCS (ecoDriver) allocated
within Group costs.
(D) Sep-24 segmental results before tax includes £14k of exceptional costs
being transactional costs for the acquisition of certain assets from the
liquidator of RTS Technology Solutions Limited which formerly traded as Vanti
("RTS") allocated within Torpedo Factory Group.
( )
(E) Sep-24 United Kingdom Architecture result before tax includes a provision
of £264k relating to a levy by The Wren, the Group's UK architecture
businesses professional indemnity insurer. The Wren is an industry led mutual
insurance organisation of which the Group's UK architecture businesses are
members. The levy was triggered by The Wren's reassessment of cladding-related
claims, which reduced its solvency ratio below its regulatory requirements,
necessitating additional member contributions.
( )
(F) Sep-23 segmental results before tax include £25k of exceptional costs
being transactional costs for the acquisition of Anders + Kern allocated
within Group costs.
(G) Sep-23 segmental results before tax include £260k of exceptional costs
being transactional costs for the acquisitions of Torpedo Factory Group and
Anders + Kern allocated as £210k within Group costs, and £50k within Torpedo
Factory Group.
(H) Sep-23 TFG segmental result before tax includes £94k of one-off costs
relating to the settlement of TFG employees company share option costs and the
loss on assets disposed of as part of the Live Events disposal.
The Group's share of results from associate and joint ventures included within
the Continental Europe segment result are shown in notes 18 and 19.
Revenue from contracts with customers
Assets and liabilities related to contracts with customers
The Group has recognised the following assets and liabilities related to
contracts with customers:
2024 2023
£'000 £'000
Current contract assets relating to professional services contracts 1,750 790
Loss allowance - -
Total contract assets 1,750 790
Contract liabilities relating to professional services contracts 2,585 1,398
Total contract liabilities 2,585 1,398
Significant changes in contract asset and liabilities
Contract assets have increased as the Group provided higher amounts of
services ahead of invoicing. Contract assets derived from the smart building
businesses combined to £817k (September 2023: £614k). This is primarily
driven by the Vanti acquisition which has promoted an uptick in overall
business resulting in contract assets moving in line. For UK Architecture, the
balance of contract assets also increased significantly to £933k (September
2023: £176k). The increase is primarily due to 2 projects in Veretec with
combined work in progress of £323k, and 1 in ASL with work in progress of
£183k, for which finalisation of the September monthly invoices was delayed
with the respective clients meaning they had to be sent in October, and
differences in billings schedules vs revenue recognition which will net down
as the project continues.
Contract liabilities have increased as the Group has invoiced for higher
amounts ahead of providing services. The increase primarily stems from the
smart building businesses which contributed £1,681k towards the contract
liabilities as at 30 September 2024. This side of the business regularly
invoices 40% up front resulting in large contract liability positions. The
Vanti acquisition has been a big driver in overall business resulting in the
contract liability position to grow. The remaining balance of contract
liabilities derive primarily from contracts in the UK architecture operating
segment.
Revenue recognised in relation to contract liabilities
The following table shows how much of the revenue recognised in the current
reporting period relates to carried-forward contract liabilities and how much
relates to performance obligations that were satisfied in a prior year:
£'000
Total contract liabilities as at 1 October 2023 (1,398)
Revenue recognised that was included in the contract liability balance at the 1,039
beginning of the period
Credits issued relating to the contract liability balance at the beginning of 64
the year, previously invoiced but not recognised as revenue.
Cash received in advance of performance and not recognised as revenue in the (2,290)
period
Total contract liabilities as at 30 September 2024 (2,585)
Statement of financial position segment information
Segment assets 2024 2023
£'000 £'000
United Kingdom Architecture 3,044 1,790
Torpedo Factory Group 2,345 1,444
Anders+Kern 57 339
ecoDriver 89 -
Middle East - 5
Continental Europe - 50
Trade receivables and contract assets 5,535 3,628
Other current assets 1,987 5,111
Non current assets* 5,935 6,161
Total assets 13,457 14,900
*Non current assets include investments in associate and joint ventures.
Segment liabilities 2024 2023
£'000 £'000
United Kingdom Architecture 2,634 2,637
Torpedo Factory Group 2,797 1,602
Anders+Kern 298 346
Middle East 133 198
ecoDriver 171
Continental Europe - 72
Trade payables, contract liabilities and accruals 6,033 4,855
Other current liabilities 3,205 3,822
Non current liabilities 1,826 2,850
Total liabilities 11,064 11,527
Contract segment information
Contract assets 2024 2023
£'000 £'000
United Kingdom Architecture 933 176
Torpedo Factory Group 707 473
Anders+Kern 60 141
ecoDriver 50 -
Middle East - -
Continental Europe - 33
Total contract assets 1,750 823
Contract liabilities 2024 2023
£'000 £'000
United Kingdom Architecture 904 1,098
Torpedo Factory Group 1,571 249
Anders+Kern 17 50
ecoDriver 93 -
Middle East - -
Continental Europe - 32
Total contract assets 2,585 1,429
Geographical areas
Revenue 2024 2023
£'000 £'000
United Kingdom 19,677 14,141
Country of domicile 19,677 14,141
Turkey 39 194
United Arab Emirates - 2
Foreign countries 39 196
Revenue 19,716 14,337
Non current assets 2024 2023
£'000 £'000
United Kingdom 4,344 4,465
Country of domicile 4,344 4,465
Germany 995 1,071
Foreign countries 995 1,071
Non current assets excluding deferred tax 5,339 5,536
Deferred tax 596 625
Non current assets 5,935 6,161
Major clients
During the year ended 30 September 2024, the Group did not derive 10% or more
of its revenues from any major clients (2023: one client).
2024 2023
£'000 £'000
Largest client revenues 1,271 1,636
The largest client revenues for 2024 relate to the Torpedo Factory Group
operating segment (2023: United Kingdom Architecture operating segment).
Revenue by project site
The geographical split of revenue based on the location of project sites was:
2024 2023
£'000 £'000
United Kingdom 19,677 13,831
Middle East - 2
Continental Europe 39 479
Rest of the world - 25
Revenue 19,716 14,337
5 Other operating income
2024 2023
£'000 £'000
Property rental income 139 163
Management charges to joint ventures and associates 131 134
Government grant 128 -
Other sundry income 102 29
Total other operating income from continuing operations 500 326
Discontinued operations - -
Total other operating income 500 326
6 Finance costs
Continuing operations 2024 2023
£'000 £'000
Fair value movement on investments 23 80
Payable on bank loans and overdrafts 170 89
Finance lease interest payable 68 74
Other interest payable 200 12
Total finance costs 461 255
7 Auditor remuneration
During the year the Group incurred the following costs in relation to the
Company's auditor and associates of the Company's auditor, and to the
Company's previous auditor:
2024 2023
£'000 £'000
Fees payable to the Company's auditor for the audit of the Company's annual 34 135
accounts for the year ended September 2024
Additional fees paid to the Company's previous auditor for the audit of the 50 -
Company's annual accounts for the year ended September 2023
Fees payable to the Company's auditor and its associates
for other services
Audit of the Company's subsidiaries pursuant to legislation 66 124
The figures presented above are for Built Cybernetics plc and its subsidiaries
as if they were a single entity. Built Cybernetics plc has taken the exemption
permitted by United Kingdom Statutory Instrument 2008/489 to omit information
about its individual accounts.
8 Employee information
The average number of persons including directors employed by the Group and
Company during the year was as follows:
Group Company
2024 2023 2024 2023
Number Number Number Number
Technical 115 97 - -
Administrative 65 35 8 6
Total 180 132 8 6
In addition to the number of staff disclosed above, the Group's associate and
joint ventures employed an average of 152 persons (2023: 153 persons).
The costs of the persons employed by the Group and Company during the year
were:
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Wages and salaries 9,078 6,471 763 550
Social security costs 942 703 89 67
Contributions to defined contribution pension arrangements 536 331 118 47
Total 10,556 7,505 970 664
The Group contributes to defined contribution pension arrangements for its
employees in the UK. The assets of these arrangements are held by financial
institutions entirely separately from those of the Group.
The Group's Turkish subsidiary, which was sold during the year, is required to
pay termination benefits to each employee who completes one year of service
and whose employment is terminated upon causes that qualify the employee to
receive termination indemnity payments.
9 Directors' emoluments
2024 Basic Pay Benefits in kind Aggregate Pension Total
£'000 emoluments contributions
£'000 £'000 £'000 £'000
Robert Fry 55 6 61 9 70
Clive Carver 60 - 60 - 60
Tandeep Minhas 33 - 33 - 33
Nick Clark 150 2 152 20 172
Freddie Jenner 135 1 136 17 153
Antony Barkwith 135 3 138 17 155
Total 568 12 580 63 643
2023 Basic Pay Benefits in kind Aggregate Pension Total
£'000 emoluments contributions
£'000 £'000 £'000 £'000
Nicholas Thompson 37 2 39 3 42
Robert Fry 83 7 90 15 105
Clive Carver 77 - 77 - 77
Raúl Curiel 20 - 20 - 20
Tandeep Minhas 14 - 14 - 14
Nick Clark 73 - 73 9 82
Freddie Jenner 34 - 34 4 38
Antony Barkwith 135 3 138 17 155
Total 473 12 485 48 533
Benefits were accruing to four Directors (2023: five Directors) under defined
contribution pension arrangements.
The aggregate emoluments of the highest paid Director were £152,000 (2023:
£138,000) together with pension contributions of £20,000 (2023: £17,000).
10 Tax charge
2024 2023
£'000 £'000
Current tax - -
Adjustment in respect of previous years - (196)
Total current tax - (196)
Origination and reversal of temporary differences (97) (79)
Adjustment in respect of previous years 3 (56)
Changes in tax rates - (102)
Total deferred tax (note 26) (94) (237)
Total tax credit (94) (433)
The standard rate of corporation tax in the United Kingdom that is applicable
for the financial year was 25% (2023: 22%).
The tax assessed for the year differs from the United Kingdom standard rate as
explained below:
2024 2023
£'000 £'000
Loss before tax (1,801) (341)
Loss before tax multiplied by the standard (450) (75)
rate of corporation tax in the United
Kingdom of 25% (2023: 22%)
Effects of:
Other non tax deductible expenses 119 66
Associate and joint ventures reported net of tax (39) (75)
Tax losses not recognised 208 9
Impact on deferred tax of change in UK tax rate - (102)
Current tax adjustment in respect of previous years - (196)
Deferred tax adjustment in respect of previous years 3 (56)
(Losses)/Income not taxable 65 (4)
Total tax credit (94) (433)
11 Earnings per share
The calculations of basic and diluted earnings per share are based on the
following data:
Earnings 2024 2023
£'000 £'000
Continuing operations (1,680) 82
Discontinued operations (27) 10
(loss)/profit for the year (1,707) 92
Number of shares 2024 2023
Number Number
Weighted average of ordinary shares in issue 315,833,254 223,915,859
Adjustments for calculation of diluted earnings per share:
- Effect of dilutive warrants 19,356,164 -
- Effect of dilutive options 6,399,419 -
Diluted weighted average of ordinary shares in issue 341,588,837 223,915,859
As explained in note 30 the Company has granted options over 29,716,666 of its
ordinary shares. These have been included in the calculation of diluted
earnings per share apart from 1,000,000 options granted in the year which are
considered to be anti-dilutive. The amount of the dilution is based on the
average market price of ordinary shares during the period minus the exercise
price.
As explained in note 29, during the year the Company issued 42,500,000
warrants exercisable for 3 years at a price of 1 penny per share. As 5,000,000
were exercised during the year the effect of dilutive warrants includes the
effect of the remaining 37,500,000 un-exercised warrants.
12 Discontinued operations
12 (a) Description
In April 2022, the Group sold assets, as part of the Group's disposal of JRHP
constituting its John R Harris & Partners Limited (Cyprus) subsidiary and
John R Harris & Partners (Dubai) entity, for a cash consideration of AED
5,000,000, comprising AED 4,250,000 cash up front and a further AED 750,000
deferred consideration paid over a 5 year period. This marked the sale of the
main trading operations in the Group's Middle East segment. With closure costs
incurred in the period relating to the planned termination of a number of
trading licenses in the Middle East operations, the Middle East segment is
presented as a discontinued operation in the current and comparative period.
Deferred cash consideration received in the year was £31k (2023: £33k).
12 (b) Financial performance and cash flow information
Result of discontinued operations
2024 2023
£'000 £'000
Revenue - 2
Sub consultant costs - (2)
Revenue less sub consultant costs - -
Property related costs - (2)
Expenses (27) 12
(Loss)/profit before tax (27) 10
Tax credit / (charge) - -
(Loss)/profit from discontinued operations (27) 10
Exchange differences on translation of discontinued operation - -
Other comprehensive (loss)/profit from discontinued operations (27) 10
Earnings per share from discontinued operations
2024 2023
£'000 £'000
Basic (loss)/profit per share (0.01p) 0.00p
Diluted (loss)/profit per share (0.01p) 0.00p
Statement of cash flows
The statement of cash flows includes the following amounts relating to
discontinued operations:
2024 2023
£'000 £'000
Net cash outflow from operating activities - -
Net cash inflow from investing activities - -
Foreign exchange movements - -
Net cash from discontinued operations - -
13 Goodwill
Group
£'000
Cost
At 1 October 2022 1,752
Additions 1,724
Disposal -
Exchange differences -
At 30 September 2023 3,476
Additions 572
Disposal -
Exchange differences -
At 30 September 2024 4,048
Impairment
At 1 October 2022 1,752
Impairment 222
Disposal -
Exchange differences -
At 30 September 2023 1,974
Impairment 260
Disposal -
Exchange differences -
At 30 September 2024 2,234
Net book value
At 30 September 2024 1,814
At 30 September 2023 1,502
At 1 October 2022 -
Goodwill from the United Kingdom Architecture operation arose as £1,244k from
the April 2005 acquisition of Fitzroy Robinson Limited and £496k from the
December 2013 acquisition of Swanke Hayden Connell Europe Limited. In the
years that have passed the UK operations have been merged into the Aukett
Swanke Limited and Veretec Limited companies. Swanke Hayden Connell Europe
Limited serves as a holding company for Swanke Hayden Connell International
Limited which no longer employs staff or engages in architectural work and
acted as a holding company for the Turkey subsidiary which was sold in the
year. Management took the decision to write off the full £1,740k balance of
Goodwill for the United Kingdom Architecture operations in the prior year.
Additions in the prior year comprised the acquisition of TFG in March 2023
giving rise to Goodwill of £1,464k, and the acquisition of Anders + Kern in
July 2023 giving rise to Goodwill of £260k.
Prior year impairments:
- £92k of the TFG goodwill relates to additional consideration
shares, which were not exercised and expired on 20 September 2023. Management
made an impairment to goodwill in the prior year matching this amount.
- £130k of the TFG goodwill relates to the fair value of share
options issued as part of the acquisition consideration of the business
combination. Management took the decision in the prior year to impair the
goodwill associated with the fair value acquisition cost represented by these
share options.
Additions in the current year comprised the acquisition of TR Control
Solutions Limited (renamed ecoDriver) in October 2024 giving rise to Goodwill
of £527k, and the acquisition of certain assets of RTS Technology Solutions
Limited in March 2024 giving rise to Goodwill of £45k as detailed in note 3.
A full provision for impairment of £260k (2023: £nil) was made during the
year to reduce the Anders + Kern goodwill to zero. As discussed further in
note 17, the CGU has struggled to retain previous distribution and reseller
agreements in certain product sets and is transitioning to be more focussed on
SaaS and Smart Building revenue streams. Cost savings have been initiated to
streamline the team and reduce running costs following the year end. However,
value in use calculations modelled do not support the full value of goodwill,
and whilst the company is in a transition period with uncertainty on forecast
revenue this makes the value in use calculation highly sensitive to small
changes. Management therefore took the decision to make a full provision
against the Anders + Kern goodwill.
The net book value of goodwill is allocated to the Group's cash generating
units ("CGU") as follows:
Torpedo Factory Group Anders + Kern United Kingdom Total
Architecture
ecoDriver
£'000 £'000 £'000 £'000 £'000
At 1 October 2022 - - - - -
Additions 1,464 260 - - 1,724
Disposal - - - - -
Impairment (222) - - - (222)
Exchange differences - - - - -
At 30 September 2023 1,242 260 - - 1,502
Additions 45 - 527 - 572
Disposal - - - - -
Impairment - (260) - - (260)
Exchange differences - - - - -
At 30 September 2024 1,287 - 527 - 1,814
An annual impairment test is performed over the cash generating units ('CGUs')
of the Group where goodwill and intangible assets are allocable to those CGUs.
The net book values are supported by the value in use calculations detailed
further in note 17.
14 Other intangible assets
Group Trade name Customer IT assets Development costs Total
relationships
£'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2022 690 160 - - 850
Acquired through business combinations - 152 75 - 227
Exchange differences (36) (12) - - (48)
At 30 September 2023 654 300 75 - 1,029
Acquired through business combinations - - 11 - 11
Additions - - - 221 221
Exchange differences (31) (7) - - (38)
At 30 September 2024 623 293 86 221 1,223
Amortisation
At 1 October 2022 480 160 - - 640
Charge 13 11 7 - 31
Exchange differences (34) (12) - - (46)
At 30 September 2023 459 159 7 - 625
Disposal - - - - -
Impairment - - - - -
Charge 13 22 13 14 62
Exchange differences (30) (7) - - (37)
At 30 September 2024 442 174 20 14 650
Net book value
At 30 September 2024 181 119 66 207 573
At 30 September 2023 195 141 68 - 404
At 1 October 2022 210 - - - 210
Amortisation is included in other operating expenses in the consolidated
income statement.
Impairment
An annual impairment test is performed over the cash generating units ('CGUs')
of the Group where goodwill and intangible assets are allocable to those CGUs.
The net book values are supported by the value in use calculations detailed
further in note 17.
Trade name
The trade name was acquired as part of the acquisition of Swanke Hayden
Connell Europe Limited ("SHC") in December 2013 and also on the acquisition of
Shankland Cox Limited ("SCL") in February 2016. The SHC trade name reflects
the inclusion of the Swanke name in the enlarged Group. Trade names are
amortised on a straight line basis over a 25 year period from the acquisition.
The SHC trade name has a remaining amortisation period of 15 years.
Customer relationships
Customer relationships were acquired as part of the acquisition of SHC in
December 2013 This represents the value attributed to clients who provided
repeat business to the Group on the strength of these relationships. Customer
relationships are amortised on a straight line basis over a 7-10 year period
from the acquisition dates. The customer relationships acquired in December
2013 were amortised over a 7 year period which ended in December 2020.
In the prior year to 30 September 2023, the assets acquired were part of the
acquisition of Torpedo Factory Group in March 2023. This represents the value
attributed to clients who provided repeat business to the Group on the
strength of these relationships. The fair value was ascertained by analysing
the net present value of recurring maintenance contracts adjusted for
retention rates based on historical customer retention data. The customer
relationships are being amortised on a straight line basis over a 7 year
period from the acquisition date.
IT assets
The IT assets were acquired as part of the acquisition of Torpedo Factory
Group in March 2023 and consist of domain names, computer software and website
development costs.
In the year to 30 September 2024, the IT assets acquired were part of the
Asset Purchase Agreement (APA) resulting from the liquidation of
RTS Technology Solutions Ltd in March 2024 (note 3). This represents various
software applications that were purchased as part of this agreement that are
outlined below:
- Kahu Software, £5,000. This is a suite of technology products that
help create a flexible, modern workplace.
- Smart Core Software, £5,000. Smart Core is a building operating
system that enables developers and landlords seamless integration of smart
building technology requirements.
- StageMaster Software, £1,000. A complete solution for school and
theatre halls relating to integration of light, sound and image technology.
These assets will be impaired on a yearly basis. It should be noted that there
is additional consideration that may be paid for the Kahu and Smart Core
software which could total £25k in each instance collectively totalling an
additional £40k of cost. This is based on certain revenue targets that need
to be hit as part of the APA.
Development Costs
Development costs in the year relating to our internal IP has been capitalised
under IAS 38. These costs have been scoped under the relevant criteria
including the Technology Readiness Level (TRL) measurement system. Separation
between research and development has been applied with prudent percentages
then being utilised for relevant product development across Vanti Ltd and
ecoDriver Ltd. Amortisation profiles for this capitalisation has been set at a
5-year period which is appropriate for the software IP that is being
developed.
15 Property, plant & equipment
Group Freehold Leasehold Furniture & Motor vehicles Total
Property improvements equipment £'000
£'000 £'000 £'000 £'000
Cost
At 1 October 2022 - 6 532 - 538
Acquired through business combinations 3,020 41 110 60 3,231
Additions - - 102 - 102
Disposals - (5) (60) (8) (73)
Revaluation 60 - - - 60
Assets classified as held for sale (3,080) - - - (3,080)
Exchange differences - - (9) - (9)
At 30 September 2023 - 42 675 52 769
Acquired through business combinations - - 20 - 20
Additions - - 56 - 56
Disposals - - (13) (8) (21)
Exchange differences - - (3) - (3)
At 30 September 2024 - 42 735 44 821
Depreciation
At 1 October 2022 - 6 463 - 469
Charge - 3 80 9 92
Disposals - (5) (9) (7) (21)
Exchange differences - (1) (8) - (9)
At 30 September 2023 - 3 526 2 531
Charge - 6 116 12 134
Disposals - - (12) (7) (19)
Exchange differences - - (1) - (1)
At 30 September 2024 - 9 629 7 645
Net book value
At 30 September 2024 - 33 106 37 176
At 30 September 2023 - 39 149 50 238
At 1 October 2022 - - 69 - 69
Company Furniture & Total
equipment
£'000 £'000
Cost
At 1 October 2022 17 17
Disposals (10) (10)
At 30 September 2023 and 7 7
at 30 September 2024
Depreciation
At 1 October 2022 10 10
Charge 5 5
Disposals (9) (9)
At 30 September 2023 6 6
Charge 1 1
At 30 September 2024 7 7
Net book value
At 30 September 2024 - -
At 30 September 2023 1 1
At 1 October 2022 7 7
16 Leases
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
- Leases of low value assets; and
- Leases with a duration of 12 months or less.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
Group's incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
- amounts expected to be payable under any residual value guarantee;
- the exercise price of any purchase option granted in favour of the
Group if it is reasonably certain to assess that option;
- any penalties payable for terminating the lease, if the term of the
lease has been estimated on the basis of termination option being exercised.
Right of use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
- lease payments made at or before commencement of the lease;
- initial direct costs incurred; and
- the amount of any provision recognised where the Group is
contractually required to dismantle, remove or restore the leased asset
(typically leasehold dilapidations - see note 27).
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining economic life
of the asset if, rarely, this is judged to be shorter than the lease term.
When the Group revises its estimate of the term of any lease (because, for
example, it re-assesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to make over the revised term, which are discounted
using a revised discount rate. The carrying value of lease liabilities is
similarly revised when the variable element of future lease payments dependent
on a rate or index is revised, except the discount rate remains unchanged. In
both cases an equivalent adjustment is made to the carrying value of the
right-of-use asset, with the revised carrying amount being amortised over the
remaining (revised) lease term. If the carrying amount of the right-of-use
asset is adjusted to zero, any further reduction is recognised in profit or
loss.
When the Group renegotiates the contractual terms of a lease with the lessor,
the accounting depends on the nature of the modification:
- if the renegotiation results in one or more additional assets being
leased for an amount commensurate with the standalone price for the additional
rights-of-use obtained, the modification is accounted for as a separate lease
in accordance with the above policy;
- in all other cases where the renegotiated increases the scope of the
lease (whether that is an extension to the lease term, or one or more
additional assets being leased), the lease liability is remeasured using the
discount rate applicable on the modification date, with the right-of-use asset
being adjusted by the same amount;
- if the renegotiation results in a decrease in the scope of the
lease, both the carrying amount of the lease liability and right-of-use asset
are reduced by the same proportion to reflect the partial of full termination
of the lease with any difference recognised in profit or loss. The lease
liability is then further adjusted to ensure its carrying amount reflects the
amount of the renegotiated payments over the renegotiated term, with the
modified lease payments discounted at the rate applicable on the modification
date. The right-of-use asset is adjusted by the same amount.
For contracts that both convey a right to the Group to use an identified asset
and require services to be provided to the Group by the lessor, the Group has
elected to account for the entire contract as a lease, i.e. it does allocate
any amount of the contractual payments to, and account separately for, any
services provided by the supplier as part of the contract.
Nature of leasing activities (in the capacity as lessee)
The Group leases a number of properties in the jurisdictions from which it
operates. In some
jurisdictions it is customary for lease contracts to provide for payments to
increase each year by inflation or and in others to be reset periodically to
market rental rates. In some jurisdictions' property leases the periodic rent
is fixed over the lease term.
The Group also leases certain items of plant and equipment. Leases of plant
and equipment comprise only fixed payments over the lease terms.
The lease liability recognised by the Group on land and buildings relates to
the lease on the London premises. Rent on the premises is fixed, subject to a
market value rent review in 2023. The Group has not received any subsequent
notification of rent adjustment.
The payments on leasehold improvements are all fixed payments for the length
of the leases.
The Group sometimes negotiates break clauses in its property leases. On a
case-by-case basis, the Group will consider whether the absence of a break
clause would expose the Group to excessive risk. Typically factors considered
in deciding to negotiate a break clause include:
- the length of the lease term;
- the economic stability of the environment in which the property is
located; and
- whether the location represents a new area of operations for the
Group.
At 30 September 2024, the lease of Vanti Ltd's Farnham premises includes a
tenant's break clause on 1 July 2025, and expires on 1 July 2027. The lease
includes a penalty of £5k equivalent to 3 months' rent if the break clause is
exercised.
Right-of-use Assets
Land and buildings Restoration costs Leasehold Motor vehicles Total
£'000 £'000 improvements £'000
£'000 £'000
At 1 October 2022 1,830 122 232 - 2,184
Acquired through business combinations 214 - - 117 331
Additions - - 52 - 52
Amortisation (351) (22) (44) (18) (435)
At 30 September 2023 1,693 100 240 99 2,132
Acquired through business combinations - - - - -
Additions 77 - 16 - 93
Disposals - - - (13) (13)
Amortisation (394) (21) (53) (31) (499)
At 30 September 2024 1,376 79 203 55 1,713
Lease liabilities
Land and buildings Leasehold Motor vehicles Total
£'000 improvements £'000
£'000 £'000
55 2,419
At 1 October 2022 2,364 -
Acquired through business combinations 213 - 106 319
Additions - - - -
Interest expense 67 1 4 72
Lease payments (494) (55) (19) (568)
At 30 September 2023 2,150 1 91 2,242
Acquired through business combinations - - - -
Additions 79 - - 79
Disposals - - (13) (13)
Interest expense 63 - 5 68
Lease payments (539) (1) (29) (569)
At 30 September 2024 1,753 - 54 1,807
£'000
5
Short-term lease expense
Low value lease expense 2
Expense relating to variable lease payments not included in -
the measurement of lease liabilities
Aggregate undiscounted commitments for short-term leases 2
The maturity analysis of lease liabilities of the Group at each reporting date
are as follows:
Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years
Lease liabilities
£'000 £'000 £'000 £'000 £'000
At 30 September 2024 130 398 542 737 -
At 30 September 2023 122 370 508 1,242 -
The Group acts as a lessor through the sub-let of part of the third floor at
its Bonhill Street studio and the entirety of its Farnham premises. The
following is the aggregate minimum future receivables under these leases.
2024 2023
£'000 £'000
Not later than one year 46 71
Later than one year and not later than five years - 16
Later than five years - -
Total 46 87
17 Investments
Company Subsidiaries Joint Associate Total
ventures
£'000 £'000 £'000 £'000
Cost
At 1 October 2022 9,179 21 12 9,212
Additions 3,546 - - 3,546
At 30 September 2023 12,725 21 12 12,758
Additions 360 - - 360
At 30 September 2024 13,085 21 12 13,118
Provisions
At 1 October 2022 7,123 - - 7,123
Charge 229 - - 229
At 30 September 2023 7,352 - - 7,352
Charge 521 - - 521
At 30 September 2024 7,873 - - 7,873
Net book value
At 1 October 2022 2,056 21 12 2,089
At 30 September 2023 5,373 21 12 5,406
At 30 September 2024 5,212 21 12 5,245
The increase in cost of £360k during the year related to the acquisition of
ecoDriver Limited, see note 3.
In the prior year, a provision for impairment of £222k was made to reduce the
value of the Company's investment in Torpedo Factory Group Limited. As
explained in note 3, £92k of the TFG investment related to additional
consideration shares, which were not exercised and expired on 20 September
2023. In the prior year, Management made an impairment to investments matching
this amount. £130k of the TFG investment relates to the fair value of share
options issued as part of the acquisition consideration of the business
combination. As the closing share price of Built Cybernetics plc reduced after
the acquisition to 30 September 2023, Management took the decision to impair
the investment associated with the fair value acquisition cost represented by
these share options.
A provision for impairment of £6k (2023: £7k) was made during the year to
reduce the Company's investment in Swanke Hayden Connell Europe Limited down
to the net book value of its balance sheet.
A provision for impairment of £515k (2023: £nil) was made during the year to
reduce the Company's investment in Anders + Kern down to zero, as discussed
with regard to the value in use projections below.
The current net book values of the investments in subsidiaries is £5,212k
(2023: £5,373k) after charges made in the current year, which is larger than
the net assets of the consolidated statement of financial position of £2,657k
(2023: £3,373k). This is primarily due to the Company's cost of investment in
the UK operations (Aukett Swanke Limited and Veretec Limited) being higher
than the Group's carrying value of Goodwill and other intangible assets in
these entities.
The net book values are supported by the value in use calculations.
An annual impairment test is performed over cash generating units ('CGUs') of
the Group. The UK architectural operations (Aukett Swanke Limited and Veretec
Limited) are considered to be one CGU. Torpedo Factory Group Limited along
with its subsidiaries Vanti Ltd and TFG Stage Technology Ltd are considered to
be one CGU.
The recoverable amount of a CGU is determined based on value in use
calculations. These calculations use pre-tax cash flow projections based on
financial budgets and forecasts covering a five year period. Cash flows beyond
the five year period are extrapolated using long term average growth rates.
The key assumptions in the discounted cash flow projections for the United
Kingdom architectural operation are:
· the future level of revenue, set at a compound growth rate of
5.15% (2023: 8.12%) over the next five years - which is based on two years of
budgeted revenue targets, with following years assuming annualised inflation
of earnings (and costs) using a CPI assumption of 3.50% based on the Dec-24
annualise UK CPI index.
· long term growth rate - which has been assumed to be 1.6% (2023:
1.7%) per annum based on the average historical growth in gross domestic
product in the United Kingdom over the past fifty years; and
· the discount rate - which is the UK Architecture segment's
pre-tax weighted average cost of capital and has been assessed at 18.82%
(2023: 18.13%).
Based on the discounted cash flow projections, the recoverable amount of the
UK CGU is estimated to exceed carrying values by £3,840k (220%). A 7.1% fall
in all future forecast revenues (applied as a smooth reduction to the compound
growth rate noted above) without a corresponding reduction in costs in the UK
CGU, or an increase in the discount rate to over 81%, would result in carrying
amounts exceeding their recoverable amount. A decrease in the effective
compound growth rate of revenue to 3.62% instead of the 5.15% noted above,
without a corresponding reduction in costs in the UK CGU, would result in
carrying amounts exceeding their recoverable amount. Management believes that
the carrying value of the investment remains recoverable despite this
sensitivity given the conservative nature of the underlying forecasts
prepared.
The same assumptions on CPI, the long term growth rate and the discount rate
were also applied for the reviews of the TFG and A+K operations.
· For Anders + Kern the future level of revenue, set at a compound
growth rate of 1.55% (2023: 9.49%) over the next five years - is based on two
years of budgeted revenue targets, with following years assuming annualised
inflation of earnings (and costs) using a CPI assumption of 3.50% based on the
Dec-24 annualised UK CPI index.
The CGU has struggled to retain previous distribution and reseller agreements
in certain product sets and is transitioning to be much more focussed on SaaS
and Smart Building revenue streams. Cost savings have been initiated to
streamline the team and reduce running costs following the year end. Based on
the discounted cash flow projections, the recoverable amount of the A+K CGU is
estimated to be below carrying values by £270k (52.5%).
However as the CGU is in a transitional period with uncertainty on the
forecast revenue projections, and the value in use calculation highly
sensitive to small changes, a full provision for impairment of £515k (2023:
£nil) has made to reduce the Company's investment in Anders + Kern to zero.
· For Torpedo Factory Group the future level of revenue, set at a
compound growth rate of 9.15% (2023: 4.51%) over the next five years - is
based on two years of budgeted revenue targets, assuming an increase in
revenue of 30.8% in 24/25 including a full year of trading of the Vanti
business assets acquired and revenue stream built up, with following years
assuming annualised inflation of earnings (and costs) using a CPI assumption
of 3.50% based on the Dec-24 annualised UK CPI index.
Based on the discounted cash flow projections, the recoverable amount of the
TFG CGU is estimated to exceed carrying values by £2,251k (80%). A 8.9% fall
in all future forecast revenues (applied as a smooth reduction to the compound
growth rate noted above) without a corresponding reduction in costs in the TFG
CGU, or an increase in the discount rate to over 31%, would result in carrying
amounts exceeding their recoverable amount. A decrease in the effective
compound growth rate of revenue to 7.21% instead of the 9.15% noted above,
without a corresponding reduction in costs in the TFG CGU, would result in
carrying amounts exceeding their recoverable amount. Management believes that
the carrying value of the investment remains recoverable despite this
sensitivity given the conservative nature of the underlying forecasts
prepared.
· For ecoDriver the future level of revenue, set at a compound
growth rate of 36.08% (2023: N/A) over the next five years - is based on two
years of budgeted revenue targets, assuming an increase in revenue of 55.4% in
24/25, 53.8% in 25/26, with following years assuming annualised inflation of
earnings (and costs) of 25%. Forecast increases in revenue are set
significantly higher than the other CGU's as ecoDriver is growing from a small
base, with spend on developing the energy monitoring software, which should
lead to higher levels of long term contracts for software licences and
advisory services.
Based on the discounted cash flow projections, the recoverable amount of the
ecoDriver CGU is estimated to exceed carrying values by £640k (178%). An 8.3%
fall in all future forecast revenues (applied as a smooth reduction to the
compound growth rate noted above) without a corresponding reduction in costs
in the ecoDriver CGU, or an increase in the discount rate to over 38%, would
result in carrying amounts exceeding their recoverable amount. A decrease in
the effective compound growth rate of revenue to 33.75% instead of the 36.08%
noted above, without a corresponding reduction in costs in the ecoDriver CGU,
would result in carrying amounts exceeding their recoverable amount.
Management believes that the carrying value of the investment remains
recoverable despite this sensitivity given the forecast increase in cost base
is forecast increase at 25%, which would be significantly reduced if lower
growth in revenue was realised.
Subsidiary operations
The following are the subsidiary undertakings at 30 September 2024:
Name Country of Proportion Nature of business
incorporation and registered office address of ordinary equity held
(see table below)
2024 2023
Subsidiaries
Aukett Swanke Limited (A) 100% 100% Architecture & design
Aukett Fitzroy Robinson International Limited (A) 100% 100% Architecture & design
Veretec Limited (A) 100% 100% Architecture & design
Swanke Hayden Connell International Limited (A) 100% 100% Architecture & design
Aukett Swanke Mimarlik AS (formerly Swanke Hayden Connell Mimarlik AS) (B) 0% 100% Architecture & design
Shankland Cox Limited (A) 100% 100% Architecture & Engineering
Aukett Swanke Architectural Design Limited (A) 100% 100% Architecture & design
Anders + Kern U.K. Limited (A) 100% 100% Distribution and installation of workplace technology
Torpedo Factory Group Limited (A) 100% 100% Holding company
Vanti Ltd (formerly Torpedo Factory Ltd) (A) 100% 100% Smart Building and AV System Integration, and Software Development
TFG Stage Technology Ltd (C) 100% 100% Design, supply and installation of stage technology, stage engineering and
associated master systems
ecoDriver Ltd (A) 100% 0% Software and systems for monitoring energy use in buildings
Swanke Hayden Connell Europe Limited (A) 100% 100% Non-trading
Fitzroy Robinson Limited (A) 100% 100% Dormant
Aukett Swanke Group Limited (A) 100% 100% Dormant
Aukett Fitzroy Robinson Limited (A) 100% 100% Dormant
Thomas Nugent Architects Limited (A) 100% 100% Dormant
Aukett Fitzroy Robinson Europe Limited (A) 100% 100% Dormant
Aukett Limited (A) 100% 100% Dormant
Aukett (UK) Limited (A) 100% 100% Dormant
Aukett Group Limited (A) 100% 100% Dormant
Fitzroy Robinson West & Midlands Limited (A) 100% 100% Dormant
Foresight Audio Visual Limited (A) 100% 0% Dormant
Pinnerton Video Systems Limited (A) 100% 0% Dormant
Orion Audio Visual Limited (A) 100% 0% Dormant
Aukett Fitzroy Robinson International Limited is incorporated in England &
Wales. The entity operated principally through its Middle East branch which
was registered in the Abu Dhabi emirate of the United Arab Emirates. The
branch licence expired and was cancelled in July 2020, with new work engaged
through Aukett Swanke Architectural Design Limited.
Aukett Swanke Architectural Design Limited is incorporated in England &
Wales, but operated principally in the United Arab Emirates. The trade licence
expired in March 2021 and the operation is no longer undertaking new work.
Shankland Cox Limited is incorporated in England & Wales, but operated
principally through its Middle East branches registered in emirates of the
United Arab Emirates including Abu Dhabi, Dubai, and Al Ain. These licenses
expired in January and April 2022, with ongoing projects being reassigned to
JRHP prior to the sale of JRHP.
The UAE domiciled branches are consolidated into the Group principally based
on profit sharing agreements in place.
Interest in associate and joint ventures
Set out below are the associate and joint ventures of the Group as at 30
September 2024. The entities listed below have share capital consisting solely
of ordinary shares, held directly by the Group. The country of incorporation
is also their principal place of business, and the proportion of ownership
interest is the same as the proportion of voting rights held.
Name of entity Country of Proportion Nature of relationship Measure-ment method
incorporation and registered office address of ordinary equity held
(see below)
2024 2023
Aukett + Heese Frankfurt GmbH (D) 50% 50% Joint venture Equity
Aukett + Heese GmbH (E) 25% 25% Associate Equity
All joint venture and associate entities provide architectural and design
services. There are no contingent liabilities or commitments in relation to
the joint ventures or associates.
Country of incorporation and registered office addresses
Ref Country of Incorporation Registered office address
(A) England & Wales 10 Bonhill Street, London, EC2A 4PE, United Kingdom
(B) Turkey Alkaranfil Sk. No:8 Levent, 34330, Istanbul, Turkey
(C) England & Wales Trent Industrial Estate, Duchess Street, Shaw, Oldham, England, OL2 7UT
(D) Germany Gutleutstrasse 163, 60327 Frankfurt am Main, Germany
(E) Germany Budapester Strasse 43, 10787 Berlin, Germany
18 Investment in associate
As disclosed in note 17, the Group owns 25% of Aukett + Heese GmbH which is
based in Berlin, Germany. The table below provides summarised financial
information for Aukett + Heese GmbH as it is material to the Group. The
information disclosed reflects Aukett + Heese GmbH's relevant financial
statements and not the Group's share of those amounts.
Summarised balance sheet 2024 2023
£'000 £'000
Assets
Non current assets 135 213
Current assets 6,870 7,883
Total assets 7,005 8,096
Liabilities
Current liabilities (4,075) (4,953)
Total liabilities (4,075) (4,953)
Net assets 2,930 3,143
Reconciliation to carrying amounts:
2024 2023
£'000 £'000
Opening net assets at 1 October 3,143 3,041
Profit for the period 588 1,194
Other comprehensive income (118) (46)
Dividends paid (683) (1,046)
Closing net assets 2,930 3,143
Group's share in % 25% 25%
Group's share in £'000 732 786
Carrying amount 732 786
Summarised statement of comprehensive income 2024 2023
£'000 £'000
Revenue 15,592 16,460
Sub consultant costs (4,934) (5,216)
Revenue less sub consultant costs 10,658 11,244
Operating costs (9,810) (9,521)
Profit before tax 848 1,723
Taxation (260) (529)
Profit for the period from continuing operations 588 1,194
Other comprehensive income (118) (46)
Total comprehensive income 470 1,148
The Group received dividends of £163,000 after deduction of German
withholding taxes (2023: £248,000) from Aukett + Heese GmbH. The principal
risks and uncertainties associated with Aukett + Heese GmbH are the same as
those detailed within the Group's Strategic Report.
19 Investments in joint ventures
Frankfurt
As disclosed in note 17, the Group owns 50% of Aukett + Heese Frankfurt GmbH
which is based in Frankfurt, Germany.
£'000
At 1 October 2022 247
Share of profits 42
Dividends paid -
Exchange differences (4)
At 30 September 2023 285
Share of profits 10
Dividends paid (21)
Exchange differences (11)
At 30 September 2024 263
The Group received dividends of £20k after deduction of German withholding
taxes (2023: £nil) from Aukett + Heese Frankfurt GmbH. The following amounts
represent the Group's 50% share of the assets and liabilities, and revenue and
expenses of Aukett + Heese Frankfurt GmbH.
2024 2023
£'000 £'000
Assets
Non current assets 3 4
Current assets 323 371
Total assets 326 375
Liabilities
Current liabilities (63) (90)
Total liabilities (63) (90)
Net assets 263 285
2024 2023
£'000 £'000
Revenue 616 832
Sub consultant costs (127) (272)
Revenue less sub consultant costs 489 560
Operating costs (475) (498)
Profit before tax 14 62
Taxation (4) (20)
Profit after tax 10 42
The principal risks and uncertainties associated with Aukett + Heese Frankfurt
GmbH are the same as those detailed within the Group's Strategic Report.
20 Loans and other financial assets
Group
Listed investments Unlisted investments
£'000 £'000 Total
£'000
Cost or valuation
At 1 October 2022 - - -
Acquisition of subsidiary (note 3) 119 50 169
Revaluations (30) (50) (80)
At 30 September 2023 89 - 89
Acquisition of subsidiary (note 3) - - -
Additions - - -
Disposals (59) - (59)
Revaluations (23) - (23)
At 30 September 2024 7 - 7
21 Inventories
Group 2024 2023
£'000 £'000
393 372
Goods for resale
The cost of inventories recognised as an expense within cost of sales amounted
to £nil (2023: £nil) in relation to obsolete stock.
The cost of inventories recognised as an expense during the year in respect of
continuing operations was £3,931,000 (2023: 1,817,000)
22 Trade and other receivables
Group 2024 2023
£'000 £'000
Amounts due after more than one year
Other financial assets at amortised cost 61 100
Total amounts due after more than one year 61 100
Amounts due within one year
Gross trade receivables 3,991 3,053
Impairment allowances (208) (167)
Net trade receivables 3,783 2,886
Other financial assets at amortised cost 402 289
Amounts owed by associates and joint ventures - -
Corporate tax receivable - -
Other current assets 841 672
Total amounts due within one year 5,026 3,847
Total 5,087 3,947
Company 2024 2023
£'000 £'000
Amounts due after more than one year
Other financial assets at amortised cost 61 100
Total amounts due after more than one year 61 100
Amounts due within one year
Trade receivables 3 11
Amounts owed by subsidiaries 264 111
Amounts owed by associate and joint ventures - -
Other financial assets at amortised cost 30 34
Other current assets 19 12
Total amounts due within one year 316 168
Total 377 268
The amounts owed by subsidiaries were secured in January 2013 by debentures
over all the assets of the relevant subsidiaries. These debentures rank after
the debentures securing the Coutts overdraft.
During the year, the Company reduced provisions totalling £85k (2023: made
provisions of £13k) against amounts owed by subsidiaries. These are amounts
owed by Aukett Fitzroy Robinson International Limited, Aukett Swanke
Architectural Design Limited and Shankland Cox Limited. Following the Group's
decision to restructure the UAE business either freezing or allowing trade
licenses in these companies to expire, management took the decision to make a
provision against amounts owed by these companies to the Group.
Impairment allowances
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowance for all trade receivables
and contract assets.
To measure the expected credit losses, trade receivables and contract assets
have been grouped based on shared credit risk characteristics and the days
past due. The contract assets relate to unbilled work in progress and project
retentions, and have substantially the same risk characteristics as the trade
receivables for the same types of contracts. The Group has therefore concluded
that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for the contract assets.
The Group engages with clients who are creditworthy, liquid developers.
Management identified that the loss allowances should be calculated and
applied separately based on geographic segments of the Group, and more
specifically to each country in which the Group has operations. Whilst the
specific terms each contract the Group engages in may be different, certain
common characteristics can be applied.
Provisions on bad and doubtful debts in UK architecture have been immaterial
in the historical period reviewed in order to establish the expected loss rate
at 30 September 2024. In the UK the Group generally builds up advances for
contract work recognised as a credit to the balance sheet which reduces the
impact of potential bad debts. Amounts due for contract work not yet billed
are generally not material. No loss allowance provision has been made for
trade receivables and contracts assets owed to Group entities operating in
these countries.
For Torpedo Factory Ltd, TFG Stage Technology Ltd, A+K and ecoDriver,
provisions on bad and doubtful debts have been immaterial in the period post
acquisition, and in the historical pre-acquisition period reviewed. Standard
payment terms for all companies are 30 days for smaller works completed. It is
usual on larger projects to agree in advance with the client at the start of
the project a monthly billing schedule which generally leads to relatively low
levels of contracts assets (and consequentially higher levels of contract
liabilities). These larger projects tend to be 30 days although certain JCT
contracts may extend to 60 day terms. Service Contracts as standard are billed
annually in advance for a 12 month period. No loss allowance provision has
been made for trade receivables and contracts assets owed to these Group
entities.
Amounts due for contract work in the Middle East segment have been material in
prior years, with contracts in the Middle East often billed in arrears.
However, the Middle East operations of the Group are currently not undertaking
new work and are not expected to trade in the future. No loss allowance has
been made as at 30 September 2024.
The total impairment allowance is up £41k compared to the prior year, but
against a significantly higher year end closing debtor balance. Impairment
allowances as a percentage of gross trade receivables has therefore increased
marginally to 5.2% (2023: 5.0%).
A further allowance for impairment of trade receivables and contract assets is
established on a case-by-case basis amounting to £208k at 30 September 2024
and £167k at 30 September 2023 when there are indicators suggesting that the
specific debtor balance in question has experienced a significant
deterioration in credit worthiness. Known significant financial difficulties
of the client and lengthy delinquency in receipt of payments are considered
indicators that a trade receivable may be impaired. Where a trade receivable
or contract asset is considered impaired the carrying amount is reduced using
an allowance and the amount of the loss is recognised in the income statement
within other operating expenses.
The movement on impairment allowances for trade receivables was as follows:
£'000
At 1 October 2022 199
Loss allowance provision (4)
Charged to the income statement based on additional case by case provisions 14
Allowance utilised (29)
Exchange differences (13)
At 30 September 2023 167
Loss allowance provision -
Charged to the income statement based on additional case by case provisions 54
Allowance written-off -
Exchange differences (13)
At 30 September 2024 208
23 Trade and other payables
Group 2024 2023
£'000 £'000
Amounts due after more than one year
Amounts owed to associate and joint venture 86 87
Total amounts due after more than one year 86 87
Amounts due within one year
Trade payables 2,525 1,808
Other taxation and social security 1,269 1,086
Other payables 766 118
Accruals 923 1,577
Total amounts due within one year 5,483 4,589
Total 5,569 4,676
Company 2024 2023
£'000 £'000
Amounts due after more than one year
Amounts owed to associate and joint venture 86 87
Total amounts due after more than one year 86 87
Amounts due within one year
Trade payables 134 117
Amounts owed to subsidiaries 2,658 2,082
Other taxation and social security 33 45
Other payables 60 19
Accruals 144 293
Total amounts due within one year 3,029 2,556
Total 3,115 2,643
See note 38 for further details of the amounts due to subsidiaries.
24 Borrowings
Group 2024 2023
£'000 £'000
Secured bank overdrafts 164 122
Mortgage - 1,411
Secured bank loan (Lloyds) 25 -
Secured bank loan (NatWest) 417 992
Secured bank loan (Coutts) - 167
Total borrowings 606 2,692
Amounts due for settlement within 12 months 522 2,050
Current liability 522 2,050
Amounts due for settlement between one and two years 84 350
Amounts due for settlement between two and five years - 292
Non current liability 84 642
Total borrowings 606 2,692
Company 2024 2023
£'000 £'000
Secured bank overdrafts 1 -
Secured bank loan - 167
Total borrowings 1 167
Instalments due within 12 months 1 167
Current liability 1 167
Instalments due between one and two years - -
Instalments due between two and five years - -
Non current liability - -
Total borrowings 1 167
The Coutts overdraft £142k (2023: £122k) is secured by debentures over all
the assets of the Company and certain of its United Kingdom subsidiaries. The
overdraft carries interest at 3% above the Coutts Base rate for the relevant
currency. The Coutts bank loan was fully repaid in the year. The remaining
overdraft £22k (2023: £nil) with Lloyds Bank Plc was a facility in place on
the acquisition of the subsidiary in the year, this overdraft facility was
subsequently closed in January 2025.
The NatWest bank loan is a CBILS-backed loan secured by a debenture and cross
guarantee from Torpedo Factory Group Limited, Vanti Ltd (formerly Torpedo
Factory Ltd) and TFG Stage Technology Ltd. The bank loan initially drawn at
£1.75m was being repaid at £29k per month. Following the sale of the
freehold property a prepayment was made against the CBILS loan. Whilst the
term of the loan remains unchanged, monthly repayments have reduced to £19k
per month. The loan is at a fixed rate of interest of 3.66%pa.
The mortgage was fully repaid in the year on completion of the sale of The Old
Torpedo Factory freehold property in September 2024.
25 Analysis of net deficit
Group 2024 2023
£'000 £'000
Cash at bank and in hand 353 522
Secured bank overdrafts (note 24) (164) (122)
Net cash included in assets held for sale (note 28) - 30
Cash and cash equivalents 189 430
Mortgage (note 24) - (1,411)
Secured bank loan (note 24) (25) -
Secured bank loan (note 24) (417) (992)
Secured bank loan (note 24) - (167)
Net deficit (253) (2,140)
26 Deferred tax
Group Freehold property revaluation Tax depreciation Other
on plant and equipment Trading temporary
£'000 losses differences Total
£'000 £'000 £'000
At 1 October 2022 - 38 273 (63) 248
Acquired through business combinations (157) (10) 144 18 (5)
Income statement - 6 198 33 237
Revaluation reserve (15) - - - (15)
Exchange differences - - - (1) (1)
At 30 September 2023 (172) 34 615 (13) 464
Acquired through business combinations - - - - -
Income statement 157 9 (61) (11) 94
Revaluation reserve 15 - - - 15
Exchange differences - - - - -
At 30 September 2024 - 43 554 (24) 573
Company Tax depreciation Other
on plant and equipment Trading temporary
£'000 losses differences Total
£'000 £'000 £'000
At 1 October 2022 (1) - - (1)
Income statement - 204 - 204
At 30 September 2023 (1) 204 - 203
Income statement 1 151 - 152
At 30 September 2024 - 355 - 355
Group 2024 2023
£'000 £'000
Deferred tax assets 596 625
Deferred tax liabilities (23) (161)
Net deferred tax balance 573 464
Company 2024 2023
£'000 £'000
Deferred tax assets 355 203
Deferred tax liabilities - -
Net deferred tax balance 355 203
Deferred income tax assets are recognised for tax losses carried forward to
the extent that the realisation of the related tax benefit through future
taxable profits is probable.
The Group also did not recognise deferred income tax in respect of taxable
losses carried forward against future taxable income of certain of its
subsidiaries which are incorporated in the UK but operate wholly through
permanent establishments in the Middle East and future profits are therefore
anticipated to be non-taxable.
27 Provisions
Group Supplementary call levy to mutual insurer Property lease Employee benefit
£'000 provision obligations
£'000 £'000 Total
£'000
At 1 October 2022 - 210 39 249
Utilised - - (12) (12)
Charged to the income statement - - 2 2
Reclassified as Liabilities directly associated with assets in disposal groups - - (17) (17)
classified as held for sale
Exchange differences - - (12) (12)
At 30 September 2023 - 210 - 210
Charged to the income statement 264 - - 264
At 30 September 2024 264 210 - 474
Amounts due within one year 120 - - 120
Amounts due after more than one year 144 210 - 354
Total at 30 September 2024 264 210 - 474
Supplementary call levy to mutual insurer
The Group has recognised a provision of £264,000 in relation to its
obligation as a member of The Wren, a mutual insurer to the Group's UK
architecture businesses. Following a reassessment of cladding-related claims,
The Wren issued a supplementary call to recapitalise its capital position.
The provision represents the Group's best estimate of its obligation, based on
The Wren's assessment of the required recapitalisation amount. Based on
indications provide by The Wren, it is estimated that £120,000 of the
supplemental levy would become due for payment in less than one year, and the
balance of £144,000 would be due for payment in one to two years. The charge
has been classified as an exceptional cost in the consolidated income
statement.
Property lease provision
The provision arose from lease obligations in respect of the Company's leased
London premises.
There are uncertainties around the provision due to the fact that costs may
increase over the period to maturity and the eventual outturn will be
dependent on the level of negotiation over settlement of proposals with the
Company's landlord.
The provision payable in four years reflects the future estimated cost of work
to be performed.
The effect of time value of money is not considered material, having been
assessed by management as a risk free rate of 10 year UK government bonds.
Employee benefit obligations
The Group's Turkish former subsidiary is required to pay termination
indemnities to each employee who completes one year of service and whose
employment is terminated upon causes that qualify the employee to receive
termination indemnity. The liability in prior years was measured in line with
IAS 19 and was funded from working capital. In the prior year the liability
was reclassified as liabilities directly associated with assets in disposal
groups classified as held for sale. In the current year the liability was
disposed of on sale of the Turkey subsidiary in December 2023.
28 Assets and liabilities classified as held for sale
2024 2023
£'000 £'000
Non-current assets held for sale (i) - 3,080
Current assets held for sale (ii) - 128
Liabilities held for sale (ii) - (148)
Total assets held for sale - 3,060
(i) Freehold Property
During the prior year, the board decided to market the freehold property of
The Old Torpedo Factory in west London as the property was larger than was
needed for the Group. Commercial property agents were instructed in October
2023, the property having been valued in July 2023 by a third party firm of
surveyors at £3.08m. The freehold property sale was completed in September
2024 at a price of £2.50m (plus VAT).
(ii) Aukett Swanke Mimarlik AS (formerly Swanke Hayden Connell Mimarlik AS)
During the prior year, the board began discussions with the directors of
Aukett Swanke Mimarlik AS regarding a sale of the subsidiary to local
management. The sale was concluded on 27 December 2023 for a nominal sum.
The following major classes of assets and liabilities relating to Aukett
Swanke Mimarlik AS were classified as held for sale in the consolidated
statement of financial position as at 30 September 2023:
2023
£'000
Trade and other receivables 65
Contract assets 33
Net cash 30
Assets held for sale 128
Trade and other payables (100)
Contract liabilities (31)
Provisions (17)
Liabilities held for sale (148)
Total net liabilities (20)
29 Share capital
Group and Company 2024 2023
£'000 £'000
Allocated, called up and fully paid
341,072,100 (2023: 275,355,938) ordinary shares of 1p each 3,411 2,754
Number
At 1 October 2022 165,213,652
Issue for acquisition of subsidiary 110,142,286
At 30 September 2023 275,355,938
Issue for acquisition of subsidiary (note 3) 17,800,000
Share subscription 42,500,000
Issue of shares to AESOP 416,162
Warrant exercise 5,000,000
At 30 September 2024 341,072,100
The Company's issued ordinary share capital comprises a single class of
ordinary share. Each share carries the right to one vote at general meetings
of the Company.
The objectives, policies and processes for managing capital are outlined in
the strategic report.
In October 2023, the acquisition of TR Control Solutions Limited resulted in
an increase in the share capital of 17,800,000 new ordinary shares of 1p, as
disclosed in note 3.
In March 2024, the Group announced a share subscription raising an aggregate
up to £425,000 through the issue and allotment of a total of up to 42,500,000
new ordinary shares of 1p. £275,000 was raised by way of direct subscriptions
of 27,500,000 new ordinary shares by certain existing and institutional
investors (the "Investors"). £150,000 was raised by way of direct
subscriptions of 15,000,000 new ordinary shares by certain directors and
managers of the Group on the same terms as the Investors (the
"Subscription"). This subscription was completed in April 2024.
In aggregate the Subscription resulted in the issue and allotment of a total
of up to 42,500,000 new ordinary shares of 1 penny each in the Company (the
"Subscription Shares") at an issue price of 1 penny. Subscribers received
warrants, exercisable for 3 years, to be issued (subject to certain
conditions) on the basis of one warrant for every one Subscription Share with
an exercise price of 1 penny. The Subscription Shares were issued under the
Company's existing share authorities; the warrants required a specific
authority to be sought which was approved at the annual general meeting in
April 2024.
On 29 May 2024 the Company issued 416,162 new ordinary shares of 1p to the
trustees of the Company's All-Employee Share Option Scheme ("AESOP") to
satisfy monthly allocations under the AESOP for the month of May 2024. The new
Ordinary Shares were issued at 1.7p per share, being the midmarket closing
price on the trading day prior to the date of the purchase.
On 28 June 2024 the Company received a warrant exercise notice to subscribe
for 5,000,000 new ordinary shares of 1p and received proceeds of £50,000.
30 Employee Share Plans and Share Options
The Company has implemented two share plans and one share option plan.
The Company has granted options over its Ordinary Shares to Group employees as
follows:
At 1 October At 30
2023 September 2024 Exercise Earliest Latest
Granted Surrendered price exercisable exercisable
Granted Number Number Number Number Pence date date
24 Aug 2020 1,000,000 - (1,000,000) - 3.60 24 Aug 2022 24 Aug 2026
29 Jun 2021 1,000,000 - (1,000,000) - 1.60 29 Jun 2023 29 Jun 2027
20 Mar 2023 8,400,000 - (8,400,000) - 1.00 20 Mar 2025 20 Mar 2029
22 Dec 2023 - 24,591,666 - 24,591,666 1.00 22 Dec 2026 22 Dec 2033
22 Dec 2023 - 1,000,000 - 1,000,000 1.60 22 Dec 2026 22 Dec 2033
08 Apr 2024 - 4,125,000 - 4,125,000 1.25p 08 Apr 2027 08 Apr 2033
Total 10,400,000 29,716,666 (10,400,000) 29,716,666
The weighted average remaining contractual life of share options outstanding
as at 30 September 2024 was 9.3 years.
The fair value of these share options has been estimated at £23,000 using the
Black-Scholes option pricing models model with the following inputs:
Value 1 Value 2 Value 3
Input 22 Dec 2023 22 Dec 2023 08 Apr 2024
Share price at date of grant 0.85 pence 0.85 pence 1.25 pence
Exercise price 1.00 pence 1.60 pence 1.25 pence
Expected option life 5 years 5 years 5 years
Expected volatility 50% 50% 50%
Expected dividends Nil Nil Nil
Risk free interest rate 4.24% 4.24% 4.24%
The expected volatility was estimated based on the historical volatility over
the three years prior to grant.
All Employee Share Ownership Plan
In November 2023 the Company implemented an All Employee Share Ownership Plan
("AESOP"). The AESOP is a Share Incentive Plan which entitles all eligible
employees to invest between £10 and £150 per month in purchasing shares in
the Group from their pre-tax salary. The Group matches this contribution
pound-for-pound on the first £50 per month by purchasing matching shares for
the relevant employee as a staff retention tool. These are ordinarily forfeit
if the relevant employee leaves within 3 years.
Management Share Ownership Plan
In December 2023 the Company created a Management Share Ownership Plan
("MSOP"). The Company recognised that the management of the Group's businesses
wished to build an ownership stake in excess of the limits the Government
imposes on the AESOP scheme. Therefore, 34 members of the senior management of
the Company and UK subsidiaries were invited to commit to purchasing shares.
32 of the 34 agreed and made a contractual commitment to spend an amount
typically equivalent to either 2.5% or 5% of their gross annual salary on the
purchase of Company shares, until such time as each of them own a minimum of
either 0.25% or 0.5% of the Company's issued share capital - though they are
free to acquire larger stakes if they wish. The shares are generally purchased
on the open market.
MSOP members have made purchases within their pension plans from their
Employer pension contributions, as their investments are intended to build
long term stakes in the business.
Company Share Option Plan and surrender of existing EMI options
In December 2023 the Company created a Company Share Option Plan ("CSOP").
Pursuant to the CSOP, an aggregate 25,591,666 options were granted to members
of the senior management team of the company and UK subsidiaries who made
commitments under the MSOP. The CSOP options are exercisable at 1.0p, being
the nominal value of each share and a 17.6% premium to the closing mid-market
price on 22 December 2023 (save for 1,000,000 CSOP replacement options granted
to Antony Barkwith, Director, as detailed below). A further 4,125,000 options
were granted to additional joiners of the MSOP scheme in April 2024 with an
exercise at 1.25p, being the closing mid-market price on the day prior to the
date of grant.
Additionally, the Company agreed with option holders in the Company's
pre-existing EMI option scheme for the surrender of their options, comprising
in aggregate 10.4m EMI options. The replacement options are included within
the CSOP grants detailed above.
A total of 8.4m CSOP options were granted at an exercise price of 1.0p per
share to Freddie Jenner (Group COO) and Jason Brameld (Group CTO, a non-board
PDMR) to replace 8.4m EMI options that were issued on the purchase of Torpedo
Factory Group Limited ("TFG"). The EMI options surrendered had an exercise
price of 1.0p.
Antony Barkwith (Group Finance Director) surrendered 1,000,000 EMI options
with an exercise price of 1.6p which were replaced with 1,000,000 CSOP options
with an exercise price of 1.6p. He also surrendered 1,000,000 EMI options with
an exercise price of 3.6p which were not replaced.
Nick Clark, Freddie Jenner, Jason Brameld and Antony Barkwith also each
received CSOP options in their capacity as parties who made the MSOP
commitment.
CSOP Options granted to Directors/PDMRs were as follows:
Name Number of
Exercise Price Notes
CSOP options
Nick Clark 2,000,000
1.0p
Freddie Jenner 4,700,000
1.0p
Of which 3.7m replace EMI
Jason Brameld (PDMR) 5,700,000 1.0p
Of which 4.7m replace EMI
Antony Barkwith 1,000,000
1.0p
1,000,000 1.6p
Replacing EMI
All CSOP options vest between the third and tenth anniversary of grant. The
total 29,716,666 CSOP options now outstanding represent 8.71% of the shares
currently in issue. There are no EMI options outstanding and the company's EMI
scheme will be closed.
Further details of transactions with related parties can be found in note 38.
31 Cash generated from operations
Group 2024 2023
£'000 £'000
Loss before tax (1,801) (341)
Share based payment value of employee services 23 -
Finance income (13) (9)
Finance costs 461 255
Share of results of associate and joint ventures (156) (341)
Intangible amortisation 62 31
Intangible impairment - -
Depreciation 134 92
Goodwill impairment 260 -
Amortisation of right-of-use assets 499 435
(Profit)/loss on disposal of property, plant & equipment (3) 52
Loss on revaluation of freehold property 585 -
(Increase)/decrease in trade and other receivables (1,981) 1,405
(Increase)/decrease in inventories (21) 61
Increase/(decrease) in trade and other payables 1,776 (617)
Change in provisions 264 (10)
Unrealised foreign exchange differences - -
Net cash generated from operations 89 1,013
Company 2024 2023
£'000 £'000
Loss before income tax (1,136) (876)
Share based payment value of employee services 23 -
Dividends receivable (183) (248)
Finance costs 8 24
Depreciation 1 5
Provision on investments 521 7
Loss on disposal of fixed assets - 1
(Increase)/decrease in trade and other receivables (142) 134
Increase in trade and other payables 428 1,005
Unrealised foreign exchange differences - -
Net cash (expended by)/generated from operations (480) 52
Changes in liabilities arising from financing activities including changes
arising from cash flows and non-cash changes
Group Non- current loans and borrowings Current loans and borrowings Total
£'000 £'000 £'000
At 1 October 2022 2,129 939 3,068
Cash flows
- Repayment of borrowings - (583) (583)
- Payment of interest - (161) (161)
- Receipt of bank overdraft - - -
- Payment of lease liabilities - (496) (496)
Non-cash flows
- Amounts recognised on business combinations 1,044 1,901 2,945
- Effects of foreign exchange - - -
- Loans and borrowings classified as non-current at 30 September 2023 (781) 781 -
- Interest accrued in period - 161 161
At 30 September 2023 2,392 2,542 4,934
Cash flows
- Repayment of borrowings (232) (1,900) (2,132)
- Payment of interest - (238) (238)
- Receipt of bank overdraft - - -
- Payment of lease liabilities - (514) (514)
Non-cash flows
- Amounts recognised on business combinations 31 15 46
- Lease liability additions - 79 79
- Effects of foreign exchange - - -
- Loans and borrowings classified as non-current at 30 September 2024 (843) 843 -
- Interest accrued in period - 238 238
At 30 September 2024 1,348 1,065 2,413
Company Non- current loans and borrowings Current loans and borrowings Total
£'000 £'000 £'000
At 1 October 2022 167 250 417
Cash flows
- Repayment of borrowings - (250) (250)
- Payment of interest - (24) (24)
Non-cash flows
- Effects of foreign exchange - - -
- Loans and borrowings classified as non-current at 30 September 2023 (167) 167 -
- Interest accrued in period - 24 24
At 30 September 2023 - 167 167
Cash flows
- Repayment of borrowings - (167) (167)
- Payment of interest - (8) (8)
Non-cash flows
- Effects of foreign exchange - - -
- Loans and borrowings classified as non-current at 30 September 2024 - - -
- Interest accrued in period - 8 8
At 30 September 2024 - - -
32 Financial instruments
Risk management
The Company and the Group hold financial instruments principally to finance
their operations or as a direct consequence of their business activities. The
principal risks considered to arise from financial instruments are foreign
currency risk and interest rate risk (market risks), counterparty risk (credit
risk) and liquidity risk. Neither the Company nor the Group trade in financial
instruments.
Categories of financial assets and liabilities
Group 2024 2023
£'000 £'000
Net trade receivables 3,783 2,886
Contract assets 1,750 790
Other financial assets at amortised cost 463 389
Accrued income - -
Inventories 393 372
Cash at bank and in hand 353 522
Loans and receivables measured at amortised cost 6,742 4,959
Trade payables (2,525) (1,808)
Amount owed to associate and joint ventures (86) (87)
Other payables (766) (118)
Accruals (923) (1,577)
Lease liabilities (1,807) (2,242)
Secured bank loans and overdrafts (606) (2,692)
Financial liabilities measured at amortised cost (6,713) (8,524)
Net financial instruments 29 (3,565)
Company 2024 2023
£'000 £'000
Net trade receivables 3 11
Amounts owed by subsidiaries 264 111
Accrued income - -
Other financial assets at amortised cost 91 134
Cash at bank and in hand - 1
Loans and receivables measured at amortised cost 358 257
Trade payables (134) (117)
Amounts owed to subsidiaries (2,658) (2,082)
Amount owed to associate and joint ventures (86) (87)
Other payables (60) (19)
Accruals (144) (293)
Secured bank overdrafts (1) -
Secured bank loan - (167)
Financial liabilities measured at amortised cost (3,083) (2,765)
Net financial instruments (2,725) (2,508)
The Directors consider that there were no material differences between the
carrying values and the fair values of all the Company's and all the Group's
financial assets and financial liabilities at each year end based on the
expected future cash flows.
Collateral
As disclosed in note 24 the Coutts bank overdraft £142k (2023: £122k) is
secured by a debenture over all the present and future assets of the Company
and certain of its United Kingdom subsidiaries. The carrying amount of the
financial assets covered by this debenture were:
2024 2023
£'000 £'000
Group 2,670 1,900
Company 216 128
Other receivables in the consolidated statement of financial position include
a £251k rent security deposit (2023: £244k) in respect of the Group's London
studio premises. The rent deposit redeems a cash sum of £279k at the end of
the term of the lease in May 2028.
33 Foreign currency risk
The Group's operations seek to contract with customers and suppliers in their
own functional currencies to minimise exposure to foreign currency risk,
however, for commercial reasons contracts are occasionally entered into in
foreign currencies.
Where contracts are denominated in other currencies the Group usually seeks to
minimise net foreign currency exposure from recognised project related assets
and liabilities by using foreign currency denominated overdrafts.
The Group does not hedge future revenues from contracts denominated in other
currencies due to the rights of clients to suspend or cancel projects. The
Board has taken a decision not to hedge the net assets of the Group's overseas
operations.
Financial instruments which are denominated in a currency other than the
functional currency of the entity by which they are held are as follows:
Group 2024 2023
£'000 £'000
EU Euro (105) (155)
US Dollar 117 51
Net financial instruments held in foreign currencies 12 (104)
Company 2024 2023
£'000 £'000
EU Euro (85) (86)
US Dollar - 1
Net financial instruments held in foreign currencies (85) (85)
A 10% weakening of UK Sterling against all currencies at 30 September would
have increased / (decreased) equity by the amounts shown below. This analysis
is applied currency by currency in isolation (i.e. ignoring the impact of
currency correlation and assumes that all other variables, in particular
interest rates, remain consistent). A 10% strengthening of UK Sterling against
all currencies would have an equal but opposite effect.
2024 2023
Profit Equity Profit Equity
£'000 £'000 £'000 £'000
Group 1 (61) (10) (64)
Company (8) - (8) -
The following foreign exchange gains / (losses) arising from financial assets
and financial liabilities have been recognised in the income statement:
2024 2023
£'000 £'000
Group (55) (57)
Company (33) (46)
34 Counterparty risk
Group
No collateral is held in respect of any financial assets and therefore the
maximum exposure to credit risk at the date of the statement of financial
position is the carrying value of financial assets shown in note 32.
Counterparty risk is only considered significant in relation to trade
receivables, amounts due from customers for contract work, other receivables
and cash and cash equivalents.
The ageing of trade receivables against which an IFRS 9 impairment loss
allowance has been made, as the directors consider their recovery is probable,
was:
Receivables loss Receivables post-allowance
pre-allowance allowance 2024
2024 £'000 £'000
£'000
Not overdue 1,755 - 1,755
Between 0 and 30 days overdue 1,150 - 1,150
Between 30 and 60 days overdue 805 - 805
Greater than 60 days overdue 73 - 73
Total 3,783 - 3,783
Receivables loss Receivables post-allowance
pre-allowance allowance 2023
2023 £'000 £'000
£'000
Not overdue 2,065 - 2,065
Between 0 and 30 days overdue 373 - 373
Between 30 and 60 days overdue 371 - 371
Greater than 60 days overdue 77 - 77
Total 2,886 - 2,886
The processes undertaken when considering whether a trade receivable may be
impaired are set out in notes 2 and 22.
All amounts overdue have been individually considered for any indications of
impairment and specific provision for impairment made where considered
appropriate. All of the trade receivables specifically considered to be
impaired were greater than 90 days overdue.
An additional expected loss allowance provision has then been applied to the
residual trade receivables as detailed in note 22.
The concentration of counterparty risk within the £5,533k (2023: £3,947k) of
trade receivables and amounts due from customers for contract work is
illustrated in the table below showing the three largest exposures to
individual clients at 30 September.
2024 2023
£'000 £'000
Largest exposure 516 540
Second largest exposure 449 191
Third largest exposure 433 163
The Group's principal banker is Coutts & Co, a member of NatWest Group.
At 30 September 2024 the largest exposure to a single financial institution of
the Group's cash and cash equivalents held by various Group entities was
represented by £183k held with Santander (2023: the largest exposure to a
single financial institution represented by £372k held with NatWest).
Company
The Company only has £3k trade receivables (2023: £11k) and no amounts due
from customers for contract work.
The amounts owed by United Kingdom subsidiaries were secured in January 2013
by debentures over all the assets of the relevant subsidiaries. These
debentures rank after the debentures securing the bank overdraft. Prior to
this all amounts owed by United Kingdom subsidiaries and by associate and
joint ventures were unsecured. The amounts owed by associate and joint
ventures remain unsecured.
All of the Company's cash and cash equivalents are held by Coutts & Co.
The Company is exposed to counterparty risk though the guarantees set out in
note 37.
35 Interest rate risk
Group 2024 2023
£'000 £'000
Rent deposit 278 278
Mortgage - (1,411)
Secured bank loan (Lloyds) (25) -
Secured bank loan (NatWest) (417) (992)
Secured bank loan (Coutts) - (167)
Secured bank overdrafts (164) (122)
Interest bearing financial instruments (328) (2,414)
Company 2024 2023
£'000 £'000
Secured bank loans - (167)
Secured bank overdrafts (1) -
Interest bearing financial instruments (1) (167)
The property rent deposit earns variable rates of interest based on short-term
interbank lending rates.
Cash and cash equivalents are generally held in instant access current
accounts and in practice currently not interest bearing, and therefore have
not been included in interest bearing financial instruments disclosures.
The Coutts bank overdraft carries interest at 3%pa above the Coutts Base rate
for the relevant currency. The NatWest bank loan carries interest at a fixed
rate of interest at 3.66%pa.
A 1% rise in interest rates would have the following impact on profit,
assuming that all other variables, in particular the interest bearing balance,
remain constant. A 1% fall in interest rates would have an equal but opposite
effect.
2024 2023
£'000 £'000
Group 1 (14)
Company - (2)
36 Liquidity risk
The Group's cash balances are held at call or in deposits with very short
maturity terms.
At 30 September 2024 the Group had £850,000 (2023: £850,000) of gross
borrowing facility and £250,000 net borrowing facility (2023: £250,000)
under its United Kingdom bank overdraft facility with Coutts & Co. In
October 2024 Coutts & Co renewed the overdraft facility maintaining the
net overdraft facility at £250,000. It is now next due for review in April
2025.
The maturity analysis of financial liabilities, including expected future
charges through the Income Statement is as shown below.
Group Borrowings Lease liabilities Other financial liabilities Total
£'000
£'000
Timing of cashflows £'000 £'000
Within one year 2,119 556 3,503 6,178
Between one and two years 368 556 87 1,011
Between two and five years 297 1,289 - 1,586
Greater than five years - - - -
2,784 2,401 3,590 8,775
Expected future charges through the income statement (92) (159) - (251)
Financial liabilities at 30 September 2023 2,692 2,242 3,590 8,524
Timing of cashflows
Within one year 532 581 4,214 5,327
Between one and two years 84 575 86 745
Between two and five years - 753 - 753
Greater than five years - - - -
616 1,909 4,300 6,825
Expected future charges through the income statement (10) (102) - (112)
Financial liabilities at 30 September 2024 606 1,807 4,300 6,713
Lease liabilities includes the finance lease on leasehold improvements and the
land and buildings office lease (see note 16).
Company Borrowings Other financial liabilities Total
£'000
Timing of cashflows £'000 £'000
Within one year 172 2,511 2,683
Between one and two years - 87 87
Between two and five years - - -
172 2,598 2,770
Expected future charges through the income statement (5) - (5)
Financial liabilities at 30 September 2023 167 2,598 2,765
Borrowings Other financial liabilities Total
£'000
Timing of cashflows £'000 £'000
Within one year 1 2,996 2,997
Between one and two years - 86 86
Between two and five years - - -
1 3,082 3,083
Expected future charges through the income statement - - -
Financial liabilities at 30 September 2024 1 3,082 3,083
37 Guarantees, contingent liabilities and other commitments
A cross guarantee and offset agreement is in place between the Company and
certain of its United Kingdom subsidiaries in respect of the United Kingdom
bank overdraft facility. Details of the UK bank loan are disclosed in note 24.
At 30 September 2024 the overdrafts of its United Kingdom subsidiaries
guaranteed by the Company totalled £151,000 (2023: £124,000).
The Company and certain of its United Kingdom subsidiaries are members of a
group for Value Added Tax (VAT) purposes. At 30 September 2024 the net VAT
payable balance of those subsidiaries was £388,000 (2023: £406,000).
At the year end, one of the Group's Middle East subsidiaries had outstanding
letters of guarantee totalling £62,000 (2023: £74,000). These guarantees are
secured by matching cash on deposit. The cash on deposit was included within
trade and other receivables, but a full provision was made on this amount in
prior years to offset any risk against recovering this amount.
In common with other firms providing professional services, the Group is
subject to the risk of claims of professional negligence from clients. The
Group maintains professional indemnity insurance in respect of these risks but
is exposed to the cost of excess deductibles on any successful claims. The
directors assess each claim and make accruals for excess deductibles where, on
the basis of professional advice received, it is considered that a liability
is probable.
This insurance cover is provided by The Wren, which is an industry body formed
to provide such insurance, and of which the Group's UK architecture businesses
are members. The Wren is a mutual organisation owned and funded by its
members and accordingly, the Group's UK architecture businesses can be subject
to cash calls alongside other members in the event The Wren's reserves fall to
a level where its capital ratios are below the level required by its
regulator.
Torpedo Factory Group Limited has provided an unlimited cross guarantee and
debenture to National Westminster Bank plc, for liabilities arising in Torpedo
Factory Limited and TFG Stage Technology Limited. The contingent liability at
30 September 2024 was £Nil (2023: £Nil).
Prior to acquisition, Torpedo Factory Group Limited received a grant of
£137,000 to assist in expanding its operations into the 'smart building
infrastructure' sector. As at the year end we believe all of the grant
conditions had been satisfied and as such £129,000 of the grant has been
recognised in income (£8,000 in the previous year). No provision has been
made in the accounts as the directors consider that the grant conditions have
been satisfied.
38 Related party transactions
Key management personnel compensation
The key management personnel of the Group comprises the Directors of the
Company together with those individuals that hold group wide roles.
In prior periods, the Group's disclosure of Key Management Personnel (KMP)
included subsidiary directors. Following a reassessment of the definition of
KMP under IAS 24 Related Party Disclosures, the Group has concluded that
subsidiary directors (who do not hold dual roles at the parent/group level) do
not meet the criteria for classification as KMP of the Group. This is because
KMP, as defined by IAS 24, comprises individuals with authority and
responsibility for planning, directing, or controlling the activities of
the Group as a whole.
The comparative amounts for 2023 have not been restated, as the impact of this
change is immaterial to the financial statements as a whole
Group 2024 2023
£'000 £'000
Short term employee benefits 792 1,611
Post employment benefits 80 158
Total 872 1,769
The key management personnel of the Company comprises its Directors.
Company 2024 2023
£'000 £'000
Short term employee benefits 647 543
Post employment benefits 63 49
Total 710 592
Transactions and balances with associate and joint ventures
The Group makes management charges to Aukett + Heese Frankfurt GmbH. The
amount charged during the year in respect of these services amounted to
£46,000 (2023: £47,000). Dividends of £20,000 (2023: £nil) were received
from Aukett + Heese Frankfurt GmbH during the year. The amount owed to the
Group by Aukett + Heese Frankfurt GmbH at the balance sheet date was £nil
(2023: £nil).
The Group makes management charges to Aukett + Heese GmbH. The amount charged
by the Group during the year in respect of these services amounted to £85,000
(2023: £87,000). Dividends of £163,000 (2023: £248,000) were received from
Aukett + Heese GmbH during the year. The Group received a loan from Aukett +
Heese GmbH amounting to £nil (2023: £43,000). The amount owed by the Group
to Aukett + Heese GmbH at 30 September 2024 was £86,000 (2023: £87,000).
As disclosed in note 17, the Group owns 50% of Aukett + Heese Frankfurt GmbH
and 25% of Aukett + Heese GmbH. The remaining 50% of Aukett + Heese Frankfurt
GmbH and 75% of Aukett + Heese GmbH are owned by Lutz Heese, a former director
of the Company.
None of the balances with the associate or joint ventures are secured.
Transactions and balances with subsidiaries
The names of the Company's subsidiaries are set out in note 17.
The Company made management charges to its subsidiaries for management
services of £618,000 (2023: £373,000) and paid charges to its subsidiaries
for office accommodation and other related services of £96,000 (2023:
£96,000).
At 30 September 2024 the Company was owed £264,000 (2023: £111,000) by its
subsidiaries and owed £2,658,000 (2023: £2,082,000) to its subsidiaries.
These balances arose through various past transactions including working
capital advances, treasury management and management charges. The amounts owed
at the year-end are non interest bearing and repayable on demand.
Under IFRS 9, the Company has recorded no allowance for expected credit
losses, as all subsidiaries owing funds to the Company are in a position to
repay the amounts owed in line with the payment terms stipulated by the
Company.
The amounts owed by United Kingdom Architecture subsidiaries were secured in
January 2013 by debentures over all the assets of the relevant subsidiaries.
These debentures rank after the debentures securing the bank loan and
overdraft. Prior to this all amounts owed by subsidiaries were unsecured.
39 Post balance sheet events
On 27 February 2025 the Company changed its name to Built Cybernetics plc.
40 Corporate information
General corporate information regarding the Company is shown on page 2. The
addresses of the Group's principal operations are shown on page 123. A
description of the Group's operations and principal activities is given within
the Strategic Report.
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