REG - Cloudcoco Group PLC - Final Results
31/03/2026 17:15
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RNS Number : 9185Y Cloudcoco Group PLC 31 March 2026
The information contained within this announcement is deemed by CloudCoCo to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
31 March 2026
CloudCoCo Group plc
("CloudCoCo", the "Company" or the "Group")
Final Results
CloudCoCo (AIM: CLCO), the Sheffield-based e-commerce and IT procurement group
delivering tailored, next-day IT solutions through its Systems Assurance and
MoreCoCo divisions, is pleased announce its full year results for the year
ended 30 September 2025 ("FY 2025").
Highlights:
· Group revenue of £9.6 million (FY24: £27.5 million), reflecting
the disposal of legacy managed services businesses
· Continuing operations revenue of £8.0 million (FY24: £8.7
million)
· Total comprehensive profit of £2.6 million (FY24: £3.1 million
loss) driven primarily by gain on disposal
· Profit from sale of discontinued operations of £3.1 million
· Trading Group EBITDA(1) (continuing operations) improved to
£0.08 million (FY24: £0.06 million)
· Full repayment of £6.2 million MXC loan notes, leaving the Group
substantially debt-free
· Significant reduction in Plc costs to £0.5 million (FY24: £0.8
million)
· Strong operational progress with annualised revenue run-rate
approaching £10 million exiting the year
· Post year-end fundraise of £275,000 (gross) announced 10 March
to support growth strategy (Project Brightstar)
(1) profit or loss before net finance costs, tax, depreciation, amortisation,
plc costs, exceptional costs and share-based payments
Simon Duckworth, Chairman of CloudCoCo, commented:
"FY2025 has been a transformational year for CloudCoCo. The successful
disposal of our legacy managed services businesses has allowed us to eliminate
debt, strengthen the balance sheet and reposition the Group around a
simplified, scalable e-commerce and IT procurement model.
While revenues reflect the impact of this transition, the underlying trading
business has shown improving momentum, exiting the year with a run-rate
approaching £10 million. With a lean cost base, growing WebStore platform,
and the recent launch of Project Brightstar to accelerate B2B growth, we
believe the Group is now well positioned to scale revenues, improve margin
quality and move towards sustainable profitability."
The Company's Annual Report will be available on the Company's website and
will be posted to shareholders today along with notice of the Annual General
Meeting to be held on 28th April 2026 at 12:30 p.m. Copies of these documents
are available on the Company's website at www.cloudcoco.co.uk.
Contacts:
CloudCoCo Group plc Tel: +44 (0) 114 292 2930
Simon Duckworth (Chairman)
Darron Giddens (CFO)
Peter Nailer (Managing Director
Allenby Capital Limited - (Nominated Adviser & Broker) Tel: +44 (0)20 3328 5656
Jeremy Porter / Vivek Bhardwaj - Corporate Finance
Tony Quirke / Amrit Nahal - Equity Sales
About CloudCoCo
CloudCoCo is a streamlined, growth-focused technology group specialising in
e-commerce and IT procurement business based in Sheffield. Combining expert IT
procurement solutions through Systems Assurance with the scalable e-commerce
capabilities of MoreCoCo (www.morecoco.co.uk (http://www.morecoco.co.uk) ),
helping organisations deliver enhanced efficiency, security, and agility.
Backed by strong vendor partnerships and a team of industry specialists, we
deliver tailored solutions and next-day access to hundreds of thousands of IT
products.
www.cloudcoco.co.uk (http://www.cloudcoco.co.uk)
Chairman's statement
Introduction
I am pleased to present the annual results of CloudCoCo Group plc for the year
ended 30 September 2025. During the year, the Group undertook a transformative
restructuring, including the disposal of its legacy managed services
businesses, resulting in a simplified operating model and a strengthened
balance sheet.
The Group now focuses on two core trading activities: e-commerce through
MoreCoCo and IT procurement and value-added resale through Systems Assurance.
This repositioning provides a clear platform for future growth.
Strategic and Financial Transformation
The most significant event of the year was the sale of the Group's legacy
managed services businesses, CloudCoCo Limited and CloudCoCo Connect Limited,
completed on 31 October 2024. Total cash proceeds of £7.9 million, including
£7.5 million initial consideration for CloudCoCo Limited, subsequently
reduced by £0.385 million following agreement of completion accounts
reflecting working capital movements. Further details are included in Note 13.
This transaction enabled the full repayment of the £6.2 million MXC loan
notes, eliminated long-term debt and avoided a £550,000 extension fee.
As a result, the Group moved from net liabilities of £2.1 million at 30
September 2024 to net assets of approximately £0.5 million and net cash of
approximately £0.6 million at 30 September 2025. Driven primarily by the gain
on disposal, the Group reported a total comprehensive profit for the year of
£2.6 million.
Continuing revenues for the year were £8.0 million, below the restated FY2024
figure, reflecting supplier data-feed disruption in the first quarter and the
residual complexity of the pre-disposal structure. Trading improved steadily
thereafter, and the Group exited the year with an annualised revenue run-rate
approaching £10 million.
This transaction materially strengthened the Group's balance sheet and removed
all long-term debt.
Operational Performance and Cost Discipline
Gross margins improved to approximately 15% before seller fees (around 7%
net), supported by improved pricing, automation and commercial terms. MoreCoCo
remained the principal driver of revenues, with over half of e-commerce orders
now processed without human intervention, enabling growth without a
corresponding increase in headcount.
Plc-level costs were reduced by 46% from £0.8 million in FY2024 to £0.5
million in FY2025, of which approximately £0.3 million relates to ongoing Plc
costs. In addition, Executive Directors elected to take aggregate salary and
associated cost reductions of c.£90,000 per annum from 1 April 2025,
demonstrating the Board's commitment to cost discipline and alignment with the
scale of the business.
Leadership and People
Our people have been central to the progress made during this transitional
year. Despite a lean headcount of 13 employees at the year end, the Group
retains significant experience and capability.
In November 2024, Peter Nailer was appointed Managing Director of the trading
business. Under his leadership, both MoreCoCo and Systems Assurance have
gained momentum, with a renewed focus on execution and growth. The Board
thanks all employees for their commitment and professionalism during a year of
significant change.
Outlook
The Board's strategy is to scale the trading business toward an initial £10
million annual revenue level, which is expected to support consistent positive
monthly cash flow. As revenues increase, the Group anticipates benefiting from
operating leverage across its largely fixed cost base.
The Group is focused on increasing higher-margin direct web sales and
expanding software-led revenue streams, including its white-label WebStore
platforms, which now support approximately 60 business customers. The Board is
encouraged by the current pipeline across both e-commerce and WebStore
solutions.
Post Year-End Developments
Subsequent to the year end, the Company announced a strategic growth
initiative, Project Brightstar, designed to accelerate the Group's expansion
in the B2B technology procurement market and support the scaling of revenues
beyond the Group's initial £10 million target.
On 27 March 2026, shareholders approved a capital reorganisation and a
subscription for new ordinary shares. Following these approvals, the Company
completed a subscription raising £275,000 (gross) through the issue of
229,166,666 new ordinary shares at 0.12 pence per share, with net proceeds of
approximately £260,000. The capital reorganisation reduced the nominal value
of the Company's ordinary shares to facilitate the
fundraising.
The proceeds of the subscription will be used to support the recruitment of an
experienced enterprise sales team and further develop the Group's digital
commerce and IT procurement capabilities. The Board believes this initiative
represents a natural evolution of the Group's strategy, combining its
e-commerce infrastructure with higher-value enterprise procurement services to
drive scalable revenue growth and improved margin quality.
The Board believes the Group is well positioned to accelerate its growth
strategy in FY2026, with Project Brightstar providing a clear platform to
scale revenues, enhance margin quality and deliver sustainable long-term
growth.
Simon Duckworth
Chairman
31 March 2026
Trading Review
Performance Overview
The year ended 30 September 2025 represents the first full reporting period
following the Group's strategic transition to a focused IT procurement and
e-commerce model. Continuing operations generated revenues of £8.0 million
(FY2024 continuing: £8.7 million), with Trading Group EBITDA improving to
£80k (FY2024 continuing: £63k), reflecting the underlying operating leverage
of the streamlined Group and the benefits of a more focused trading strategy.
Performance in the first quarter was impacted by supplier data-feed disruption
and the residual effects of operating within a more complex Group structure
prior to the disposal of the managed services businesses in October 2024.
Trading momentum improved steadily thereafter, with quarterly revenues
increasing from £1.4 million in Q1 to £2.4 million in Q4, as illustrated in
the quarterly revenue chart, equating to an annualised run-rate approaching
£10 million by the year end.
The statutory operating loss from continuing operations was £394k (FY2024:
£540k), after charging amortisation of acquired intangibles of £79k,
share-based payments of £2k and Plc-level costs of £354k.
MoreCoCo - E-Commerce Platform
MoreCoCo remained the principal driver of Group revenues, accounting for the
majority of value-added resale income of £7.8 million. During the year, six
new vendor distribution partners were onboarded, expanding the product
catalogue to over 190,000 items and improving price competitiveness and
product availability, particularly within IT hardware and gaming components.
Operational scalability continued to improve materially. Over 50% of
e-commerce orders are now processed without human intervention, with
automation handling more than 7,000 orders per month. This has reduced
marginal fulfilment costs and provides a scalable platform capable of
supporting significant revenue growth with minimal additional headcount.
Third-party marketplaces, predominantly Amazon, accounted for approximately
91% of e-commerce revenues during the year. While these channels provide
valuable volume, customer reach and supplier pricing leverage, net margins
after marketplace fees average approximately 4%, compared with c.12% on direct
website sales and other lower-fee channels. Management's strategic priority is
therefore to increase the proportion of direct and alternative channel sales
over time, improving blended margins while maintaining overall sales volumes.
Systems Assurance - B2B Procurement and WebStore Growth
Systems Assurance has been repositioned as a specialist IT value-added
reseller and procurement broker, focusing on hardware, licensing and software
rather than managed IT services. Continuing managed IT services revenues
reduced to £246k (FY2024 continuing: £420k), consistent with the Group's
strategy to prioritise scalable, repeatable procurement-led activity over
labour-intensive service contracts.
The business secured 10 new customers in the first half of the year and
continued to build its pipeline in the second half, supported by growing
demand for structured procurement solutions and best-value sourcing. A key
development has been the expansion of the Group's branded WebStore offering,
with approximately 60 WebStore customers onboarded during the year. These
platforms provide business customers with 30-day credit terms, delegated
approval workflows, consolidated invoicing and rapid fulfilment, supporting
repeat purchasing behaviour and improved customer retention, and creating
software-enabled, higher-quality revenue streams.
Trading Performance
For the year ended 30 September 2025, the Group's total performance, including
both continuing and discontinued operations, is as follows:
· Total Revenue: £9.6 million (FY24: £27.5 million)
· Gross Profit: £1.0 million (FY24: £7.6 million)
· Trading Group EBITDA(1): £0.2 million (FY24: £1.6 million)
The financial statements present the discontinued operations separately in
accordance with IFRS 5. The continuing e-commerce business is now the primary
contributor to the Group's revenue and profitability.
Continuing and Discontinued Operations
Following the disposal of CloudCoCo Limited and CloudCoCo Connect Limited, the
Group's discontinued managed services activities are presented separately in
accordance with IFRS 5. The continuing e-commerce and procurement businesses
through MoreCoCo and Systems Assurance are now the sole contributors to the
Group's future revenue and profitability.
Including discontinued operations, the Group generated revenues of £9.6
million in the year (FY2024: £27.5 million), reflecting the disposal of the
majority of the managed services activities. Discontinued operations
contributed £1.6 million of revenue (FY2024: £18.8 million), while
continuing operations delivered £8.0 million (FY2024: £8.7 million), of
which £7.8 million related to value-added resale.
Continuing Operations Performance
Our continuing operations, comprising the e-commerce business through Systems
Assurance and MoreCoCo, delivered solid performance during the year. This
segment focuses on providing IT hardware, components, and related products to
both business and consumer customers through our online platform.
Continuing Continuing
2025
2024
£'000
£'000
More Computers - e-commerce 7,198 7,406
Systems Assurance - B2B Procurement and Managed Services 793 911
Total Revenue 7,991 8,737
Key highlights for the continuing operations include:
· Trading EBITDA(1) growth during the period as a result of better
gross margins and improved cost controls.
· Plc costs were reduced by 21% to £354k and the Group ended the year
debt-free with a cash balance of £635k.
· WebStore developed to increase sales to B2B customers in 2026.
Gross Margin and Cost Base
Gross profit from continuing operations was £0.5 million, representing a
gross margin of approximately 6.5% after seller fees (c.14.5% gross). This
improvement reflects enhanced pricing discipline, improved supplier terms,
increased automation and lower payment processing costs.
Administrative expenses relating to continuing operations reduced to £0.9
million (FY2024 continuing: £1.0 million), reflecting the full-year impact of
operating as a standalone trading group following the disposal of discontinued
operations, including costs previously absorbed elsewhere within the Group.
Plc-level costs were reduced by 25% to £354k (FY2024: £472k). Further cost
alignment was achieved through Executive Directors electing to take aggregate
salary and associated cost reductions of c,£90k per annum from 1 April 2025.
As revenues grow toward the initial £10 million annual target, management
expects the largely fixed central cost base to be leveraged more effectively,
supporting improved profitability.
Cash Flow, Working Capital and Balance Sheet
The Group remained focused on cash discipline throughout the year. Net cash
outflow from operating activities was £0.6 million, reflecting operating
losses, working capital movements and the Group operating below target scale.
This was more than offset by investing inflows of £7.33 million, primarily
from the disposal of CloudCoCo Limited and CloudCoCo Connect Limited.
Financing outflows of £6.34 million largely comprised the full repayment of
the MXC loan notes and accrued interest following the disposal. As a result,
the Group moved from a net debt position of £5.15 million at 30 September
2024 to net cash position of approximately £0.53 million at 30 September
2025. Cash at bank at the year end was £0.64 million (FY2024: £1.04
million), and net assets improved to £0.5 million (FY2024: net liabilities of
£2.1 million).
Technology, Automation and Scalability
The Group continues to invest selectively in technology to enhance efficiency
and customer experience. AI-enabled tools are currently deployed in supplier
invoice processing and web development, with further applications under
evaluation to improve product discovery, customer support and post-sale
services across a catalogue exceeding 300,000 stocked items. The Group
operated with a lean headcount of 13 employees at the year end (FY2024: 82).
Due to the low-touch nature of the e-commerce model, management believes
revenues could be materially increased with limited incremental headcount,
providing strong operational leverage as scale increases.
Strategic Focus and Future Opportunities
Following the disposal of the Managed Services businesses, the Group's
strategic focus is firmly aligned around scaling its remaining operations in a
disciplined and capital-efficient manner. Management's priority is to grow
revenues while improving gross margins and cash generation, leveraging the
inherently scalable nature of the Group's e-commerce and procurement
platforms.
A central element of this strategy is the continued expansion of direct web
sales, which offer materially higher net margins than third-party
marketplaces. While marketplaces such as Amazon continue to provide valuable
volume, customer reach and supplier pricing leverage, the Group is
increasingly focused on migrating repeat and business customers toward its own
digital channels. This approach is expected to improve blended margins over
time while maintaining overall sales volumes.
In parallel, the Group is developing white-label and private WebStore
solutions to serve professional bodies, affinity marketing groups and
multi-site organisations. These platforms allow partners and customers to
offer curated procurement environments supported by the Group's
infrastructure, credit facilities and fulfilment capabilities, creating
scalable, software-enabled revenue streams with attractive repeat-purchase
characteristics.
The Group also continues to strengthen strategic relationships with key
manufacturers and distributors, with a focus on improving product
availability, pricing and fulfilment reliability. As scale increases,
management expects these partnerships to further enhance commercial terms and
reinforce the Group's competitive positioning.
Within Systems Assurance, the strategic emphasis is on expanding higher-value
consultancy, procurement and middleware solutions that support business
customers in managing complex IT purchasing requirements. Rather than
competing directly in the crowded managed IT services market, the Group is
positioning itself as a specialist procurement and integration partner,
enabling customers to source, deploy and manage IT infrastructure more
efficiently.
Market Environment and Principal Risks
Trading during the year took place against a backdrop of ongoing UK
cost-of-living pressures and inflationary impacts on both consumer and
business spending. The Group's focus on essential IT hardware, flexible
procurement models and rapid fulfilment has helped mitigate some of these
pressures, particularly where technology investment remains operationally
necessary for customers.
The principal risks facing the Group remain centred on execution and scale.
These include the need to grow revenues sufficiently to fully absorb Plc-level
costs, exposure to inventory management and potential product obsolescence,
reliance on key suppliers and marketplaces, and the requirement to maintain
robust cyber security across increasingly digital platforms. The Board
actively monitors these risks and continues to strengthen internal controls,
supplier diversification and technology resilience.
While the Board remains mindful of broader economic uncertainty and the
competitive nature of the IT procurement and e-commerce markets, the Group
enters the new financial year with a strengthened balance sheet, minimal debt,
a lean cost base and a clearly defined strategic focus. Management believes
this provides a solid foundation from which to navigate market challenges and
pursue sustainable, long-term growth. Technology, Automation and Scalability
The Group continues to invest selectively in technology to enhance efficiency
and customer experience. AI-enabled tools are currently deployed in supplier
invoice processing and web development, with further applications under
evaluation to improve product discovery, customer support and post-sale
services across a catalogue exceeding 300,000 stocked items.
The Group operated with a lean headcount of 13 employees at the year end
(FY2024: 82). Due to the low-touch nature of the e-commerce model, management
believes revenues could be materially increased with limited incremental
headcount, providing strong operational leverage as scale increases.
Strategic Focus and Market Outlook
Following the disposal of the managed services businesses, the Group's
strategic focus is firmly aligned around scaling its remaining operations in a
disciplined and capital-efficient manner. Management's priority is to grow
revenues while improving gross margins and cash generation, leveraging the
inherently scalable nature of the Group's e-commerce and procurement
platforms.
A central element of this strategy is the continued expansion of direct web
sales, alongside the development of white-label and private WebStore solutions
for professional bodies, affinity groups and multi-site organisations. The
Group also continues to strengthen relationships with key manufacturers and
distributors to improve pricing, availability and fulfilment reliability.
Subsequent to the year end, the Group announced Project Brightstar, a
strategic initiative intended to accelerate the Group's growth in the B2B
technology procurement market by combining its digital commerce platform with
enterprise-focused sales capability. The programme is designed to increase
direct customer engagement, improve margin quality and expand higher-value
procurement and services opportunities.
In March 2026, shareholders approved a capital reorganisation and a
subscription raising £275,000 (gross) to support the initial phase of this
initiative. The Board believes this additional growth capital will enable the
Group to accelerate its revenue scaling strategy while maintaining its
disciplined approach to cost management.
Trading during the year took place against a backdrop of ongoing UK
cost-of-living pressures and inflationary impacts on both consumer and
business spending. The Group's focus on essential IT hardware, flexible
procurement models and rapid fulfilment has helped mitigate some of these
pressures.
The principal risks facing the Group remain centred on execution and scale,
including the need to grow revenues to absorb Plc-level costs, managing
inventory exposure and obsolescence risk, reliance on key suppliers and
marketplaces, and maintaining robust cyber security across digital platforms.
These risks are actively monitored by the Board.
Conclusion
The 2025 financial year marked a decisive reset for CloudCoCo Group plc. While
the disposal of the managed services businesses was necessary to repay legacy
debt, it has also created a simpler, more scalable and more focused trading
group. With a debt-free balance sheet, a disciplined cost base and improving
revenue momentum, the Board believes the Group is now positioned to pursue the
next phase of growth.
With the launch of Project Brightstar and the strengthening of the Group's
commercial capabilities, the Board believes the Company is well positioned to
accelerate revenue growth, improve margin quality and move toward sustainable
positive EBITDA, including the absorption of Plc-level costs, while continuing
to focus on long-term value creation for shareholders.
Darron Giddens
Chief Financial Officer
31 March 2026
Financial review
The financial results for the year reflect a significant transition for the
Group, following the disposal of the Infrastructure division on 31 October
2024. As a result, the Group now reports a substantially simplified business
focused on its continuing operations.
While the disposal has materially reduced the Group's scale, it has also
removed a large operational cost base and balance sheet complexity. The
continuing business therefore ended this financial year with a cleaner balance
sheet, a leaner cost structure and a clearer strategic focus.
The following sections discuss the key movements during the year.
Revenues
Group revenues reduced from £27.5 million in FY-2024 to £9.6 million in
FY-2025, reflecting the sale of the legacy Managed IT Services businesses,
CloudCoCo Limited and CloudCoCo Connect Limited, which completed on 31 October
2024.
Revenues FY 2025 FY 2024
£'000
£'000
Revenues generated by Direct Sales channels 2,440 20,118
Revenues generated by E-Commerce channels 7,198 7,406
Total Revenue 9,638 27,524
Where results are presented as "Continuing Operations", they comprise the
Group's e-commerce and IT procurement activities delivered through More
Computers Limited (trading as MoreCoCo) and Systems Assurance Limited.
Revenues - Continuing Operations
Revenue from continuing operations for the year was £8.0 million (FY-2024:
£8.7 million).
Following the disposal of the Managed IT Services businesses and the
appointment of Peter Nailer as Managing Director of the continuing trading
businesses in November 2024, the Group has made encouraging progress in
stabilising and improving the performance of its remaining operations.
Prior to the disposals, the legacy Managed IT Services businesses were
experiencing a material cash drain, which was partially being supported by the
continuing e-commerce and procurement operations. This created working capital
constraints that negatively impacted the trading performance of these
businesses entering FY-2025.
Following the disposal, the Group was able to replenish working capital and
refocus management attention on the continuing operations. With a strengthened
balance sheet and a leaner operating structure, the Group has been working to
enhance the performance of the business and broaden the range of services
offered.
Revenue in the first half of FY-2025 was £3.4 million, compared with £4.3
million in H1-2024, reflecting the impact of these earlier working capital
constraints and the transitional period immediately following the disposals.
Encouragingly, performance improved during the year. The annualised revenue
run-rate of the continuing trading businesses was approximately £6.0 million
towards the end of 2024, but increased to approximately £9.6 million as the
Group exited FY-2025. This improvement was driven primarily by an expanded
product range and the onboarding of additional distribution partners,
supporting the recovery and growth of the e-commerce platform.
The £9.6 million exit run-rate signifies that after the divestment, the
continuing business is now on a stable growth trajectory, with renewed focus
and a strengthened offering. This momentum provides a solid foundation for
future expansion, allowing us to scale revenues and profitability more
sustainably in FY-2026 and
beyond.
Revenues - Continuing operations Continuing Continuing
2025
2024
£'000
£'000
More Computers - e-commerce 7,198 7,406
Systems Assurance - B2B Procurement and Managed Services 793 911
Total Revenue 7,991 8,737
Revenues in the discontinued operations generated £1.6 million in 2025 and
£18.8 million in 2024 Performance in 2025 relates solely to October 2024 when
the two operations were sold.
Revenues - Discontinued operations 2025 2024
£'000
£'000
Revenues generated by CloudCoCo Limited (Direct Sales) 547 7,479
Revenues generated by CloudCoCo Connect Limited (Direct Sales) 1,100 11,308
Discontinued operations 1,647 18,787
Cost of Sales and Gross Profit
The Group's current trading is dominated by its e-commerce operations,
primarily through MoreCoCo. A significant proportion of revenues are generated
through Amazon and other online marketplaces, and the associated platform
selling fees are reflected within cost of sales.
The Group operates primarily as an online drop-ship partner, meaning that
products are supplied directly to customers by distribution partners rather
than being held in the Group's own warehouse. This model allows the Group to
avoid the capital and operational overheads associated with maintaining
warehouse infrastructure and stock, while still providing customers with
next-day delivery through established distribution networks.
Under this model, the Group effectively acts as a sales and fulfilment
channel, and gross profit reflects the margin earned for facilitating these
transactions. While the initial gross margin on hardware sales is typically
around 16%, this reduces to 6.3% after marketplace fees, selling commissions
and distribution costs are taken into account.
During the year, gross margin showed a modest improvement, rising from 5.3% in
H2-2024 to 6.3% in H2-2025, with a peak of 6.7% in H1-2025, delivering an
average margin of 6.5% for FY-2025, compared with 5.7% in FY-2024.
Although margins remain relatively modest in absolute terms, the improvement
reflects a gradual shift in revenue mix and stronger commercial discipline,
with management focusing on transactions that generate more sustainable
returns.
Sales generated through the Group's direct website (https://morecoco.co.uk)
typically achieve higher margins than those completed through third-party
marketplaces. However, building brand recognition and customer acquisition
through direct channels requires sustained investment in marketing and search
engine optimisation.
At present, the Group is taking a measured approach to this investment,
focusing instead on steady growth through affiliate marketing, gaming
partnerships and targeted promotional campaigns, including discount voucher
programmes. The Group's cost base continues to be dominated by third-party
product procurement, reflecting the nature of the e-commerce and IT hardware
resale model.
For H1 FY-2025, gross profit remained stable at £0.23 million (H1 FY-2024:
£0.23 million) despite lower revenues. This demonstrates improved commercial
efficiency and pricing discipline. Gross margin for the period improved to 6%
(H1 FY2024: 5%), reflecting:
· improved vendor pricing following renegotiations and new supplier
onboarding;
· increased levels of automation within the order fulfilment process;
and
· a continued shift toward higher-volume, low-touch e-commerce
transactions.
Continuing 2025 Continuing 2024 Discontinued 2025 Discontinued 2024
£'000 £'000 £'000 £'000
Revenue 7,991 8,737 1,647 18,787
Cost of sales (7,473) (8,238) (1,125) (11,671)
Gross profit 518 499 522 7,116
Gross margin % 6.5% 5.7% 31.7% 37.9%
While e-commerce transactions typically deliver lower percentage margins than
traditional direct sales, they benefit from significantly lower operational
overheads and greater scalability, supporting the Group's strategy of
prioritising automated, capital light revenue streams.
Administrative Expenses
Administrative expenses for continuing operations fell by 12% to £0.91
million (FY-2024: £1.04 million), reflecting management's continued focus on
controlling operational overheads following the disposal of the legacy Managed
IT Services businesses.
H2 H1 H2 H1 Year to 30 Sept Year to 30 Sept
FY2025
FY2025
FY2024
FY2024
2025
2024
Continuing operations (425) (489) (563) (476) (914) (1,039)
Discontinued operations - (485) (4,451) (4,461) (485) (8,912)
Administrative Expenses (425) (974) (5,014) (4,937) (1,399) (9,951)
The reduction in administrative expenses reflects the simplification of the
Group's operating structure following the disposal, together with a continued
focus on operational efficiency.
Cost reductions during the period were achieved through:
· headcount rationalisation following the disposal of the legacy
businesses;
· reduced professional and advisory costs; and
· lower operational overheads aligned with a simplified trading model.
· The use of automation and third-party applications to reduce manual
labour.
Trading Group EBITDA
Trading Group EBITDA from continuing operations increased to £80k (FY-2024:
£63k).
While EBITDA remains modest in absolute terms, the improvement reflects the
benefits of continued cost discipline and operational focus within the
streamlined business. Performance improved during the latter part of FY-2024,
with EBITDA increasing from £21k in H1-24 to £42k in H2-24, reflecting
operational improvements ahead of the disposal of the Infrastructure division.
In H1 FY-2025, EBITDA from continuing operations was £26k, demonstrating the
ongoing profitability of the simplified business despite the smaller revenue
base.
Operating within relatively low gross margins means that EBITDA generation is
incremental, with trading surpluses typically reinvested into initiatives
designed to improve future performance. These initiatives, which include
supplier onboarding, platform improvements and process automation, often take
several months to translate into revenue growth and margin expansion.
Nevertheless, each project undertaken by the management team is intended to
strengthen the long-term performance and scalability of the Group.
The improvement in continuing EBITDA reflects the combined impact of margin
expansion, administrative cost reductions and increased operational
automation. While Trading Group EBITDA remains modest, management views this
performance as an important milestone in the Group's transition toward
sustainable monthly cash generation.
H2- H1- H2-FY24 H1-FY24 FY25 FY24
FY25
FY25
Continuing operations 54 26 42 21 80 63
Discontinued operations - 134 289 1,205 134 1,494
Trading Group EBITDA 54 160 331 1,226 214 1,557
Discontinued operations generated £134k of EBITDA in FY-2025 prior to
disposal, compared with £1.5m in FY-2024, highlighting the historical
contribution of the Infrastructure division before its sale.
Plc Costs
Plc costs comprise the non-trading expenses associated with maintaining the
Group's AIM listing and corporate governance structure, including Board
remuneration, regulatory compliance and related professional fees.
Following the disposal of the legacy Managed IT Services businesses, plc costs
reduced significantly as the Group began aligning its central cost base with
the scale of the continuing operations.
Plc Costs H2- H1- H2-FY24 H1-FY24 FY25 FY24
FY25
FY25
Continuing operations (155) (199) (251) (221) (354) (472)
Discontinued operations - (97) (204) (164) (97) (368)
Plc Costs (155) (296) (455) (385) (451) (840)
As part of this process, the Directors voluntarily agreed to temporary salary
reductions from April 2025, reflecting their commitment to reducing the
Group's cost burden while management focuses on strengthening the trading
performance of the continuing business.
As a result, plc costs attributable to continuing operations reduced to £354k
in FY-2025, compared with £472k in
FY-2024.
While these costs remain a meaningful component of the Group's overall
expenditure, management continues to review opportunities to further optimise
the corporate cost base while maintaining the governance standards expected of
an AIM-listed company.
The salary reductions implemented during FY-2025 are expected to deliver
additional annualised savings of approximately £0.1 million, further aligning
plc-level costs with the scale and profitability of the continuing operations.
Finance Costs and Exceptional Items
Finance costs from continuing operations reduced significantly to £6k in
FY-2025 (FY-2024: £14k), reflecting the Group's improved capital position
following the disposal of the Infrastructure division and the reduction in
associated borrowing requirements.
In prior periods, finance costs were materially higher due to funding
arrangements connected with the Infrastructure businesses, which are now
reported as discontinued operations.
During FY-2024, the Group recorded exceptional costs of £481k, primarily
relating to strategic review activities and transaction costs associated with
the disposal of the Infrastructure division. No exceptional items were
recorded in FY-2025, reflecting the completion of these restructuring
activities.
Taxation
The Group recorded a tax credit of £20k in FY-2025, consistent with FY-2024.
The credit primarily reflects the utilisation of carried-forward tax losses
together with adjustments relating to prior periods. A small tax credit was
recognised in H1 FY-2025, consistent with the treatment in prior periods and
reflecting timing differences within the Group's tax position.
The Group's effective tax rate continues to be influenced by the availability
of brought-forward tax losses and the profitability profile of the continuing
operations.
Statement of Financial Position and Cash
Following the disposal of the Infrastructure division, the Group generated in
excess of £1 million of cash proceeds. Management took the decision to
utilise these funds to re-capitalise the continuing trading businesses,
restore supplier payment terms and provide the operational liquidity required
to support future growth.
Part of the available cash resources was also used to fund the difference
between Trading Group EBITDA and plc-level costs, reflecting the Group's
transitional phase following the disposal.
Discontinued operations generated a net cash outflow of £214k in FY-2025,
representing the final operating and transaction-related cash movements prior
to completion of the disposal.
Despite these transitional cash movements, the Group maintained a strong
liquidity position, with cash of £818k at 31 March 2025, compared with £606k
at the same point in the prior year. The Group's balance sheet strengthened
significantly following the disposal of the Infrastructure division. At 30
September 2025, the Group reported net assets of £495k, compared with
negative £2.1 million, at 30 September 2024.
Prior to disposal, the Infrastructure division had been classified as assets
held for sale of £15.0m, with associated liabilities of £11.6m. These
balances were removed from the Group's balance sheet following completion of
the transaction.
As a result, the Group enters the new financial year with a simplified balance
sheet, improved liquidity and a stronger financial position, providing a solid
platform from which to pursue future growth opportunities.
Outlook
The Board considers FY-2025 to have been a foundational year following the
Group's strategic transformation and the disposal of the Infrastructure
division. While revenues remain below the level required to fully absorb
plc-level costs, the operational improvements delivered during the year,
including margin enhancement, cost reductions and a strengthened balance
sheet, provide a clearer pathway toward sustainable profitability as revenues
continue to scale.
The Group's recently completed fund raise provides additional working capital
to support the continued development of the trading business, enabling
management to invest selectively in initiatives designed to accelerate revenue
growth and improve operational efficiency.
In parallel, the Group has launched Project Brightstar, an internal programme
focused on enhancing the Group's commercial B2B capability, expanding vendor
relationships and improving the scalability of its e-commerce and procurement
platforms.
Looking ahead, the Group remains focused on growing e-commerce volumes,
strengthening vendor and distribution partnerships, and expanding consultancy
and partnership-led revenue streams. Together with the initiatives being
delivered through Project Brightstar, these actions are expected to support
continued revenue growth and operational leverage, enabling the Group to
progress toward consistent monthly cash generation and improved shareholder
value.
Consolidated income statement
for the year ended 30 September 2025
Note Group Group Continuing Continuing Discontinued Discontinued
2025
2024
2025
2024
2025
2024
£'000
£'000
£'000
£'000
£'000
£'000
Revenue 3 9,638 27,524 7,991 8,737 1,647 18,787
Cost of sales (8,598) (19,909) (7,473) (8,238) (1,125) (11,671)
Gross profit 1,040 7,615 518 499 522 7,116
Administrative expenses (1,399) (9,951) (914) (1,039) (485) (8,912)
Trading Group EBITDA (1) 214 1,557 80 63 134 1,494
Amortisation of intangible assets 9 (79) (861) (79) (105) - (756)
Plc costs(2) (451) (840) (354) (472) (97) (368)
Depreciation of IFRS16 data 10 - (1,392) - (14) - (1,378)
centre right of use assets
Depreciation of tangible assets and other right of use assets 10 (41) (293) (41) (1) - (292)
Exceptional items 4 - (481) - - - (481)
Share-based payments (2) (26) (2) (11) - (15)
Operating loss 5 (359) (2,336) (396) (540) 37 (1,796)
Interest receivable 6 14 1 14 1 - -
Interest payable 6 (141) (1,033) (6) (14) (135) (1,019)
Loss before taxation (486) (3,368) (388) (553) (98) (2,815)
Taxation 7 20 215 20 20 - 195
Loss from operations (466) (3,153) (368) (533) (98) (2,620)
Profit from sale of discontinued operations (net of tax) 13 3,051 - - - 3,051 -
Profit/(loss) and total comprehensive profit/(loss) for the year attributable 2,585 (3,153) (368) (533) 2,953 (2,620)
to owners of the parent
Profit/(loss) per share
Basic and fully diluted 8 0.37p (0.45)p (0.05)p (0.08)p 0.42p (0.37)p
(1) profit or loss before net finance costs, tax, depreciation, amortisation,
plc costs, exceptional items and share-based payments.
(2) Plc costs are non-trading costs relating to the Board of Directors of the
Parent Company, the costs of being listed on the AIM Market of
the London Stock Exchange and associated professional costs.
Consolidated statement of financial position
as at 30 September 2025
September September
2025 2024
£'000 £'000
Non-current assets
Intangible assets 9 720 799
Property, plant and equipment 10 55 85
Right of Use assets 10 11 3
Total non-current assets 786 887
Current assets
Inventories 101 76
Trade and other receivables 581 516
Contract assets 9 -
Cash and cash equivalents 635 1,042
Current assets excluding assets held for sale 1,326 1,634
Assets classified as held for sale - 14,976
Total current assets 1,326 16,610
Total assets 2,112 17,497
Current liabilities
Trade and other payables (1,394) (1,690)
Borrowings (67) (6,085)
Lease liability (11) (3)
Current liabilities excluding those associated with assets held for sale (1,472) (7,778)
Liabilities associated with assets held for sale - (11,575)
Total current liabilities (1,472) (19,353)
Non-current liabilities
Borrowings (29) (100)
Deferred tax liability 12 (116) (136)
Total non-current liabilities (145) (236)
Total liabilities (1,617) (19,589)
Net assets 495 (2,092)
Equity
Share capital 7,062 7,062
Share premium account 17,630 17,630
Capital redemption reserve 6,489 6,489
Merger reserve 1,997 1,997
Other reserve 184 341
Retained earnings (32,867) (35,611)
Total equity (see note 27 for post balance sheet event) 495 (2,092)
Consolidated statement of changes in equity
for the year ended 30 September 2025
Share Share Capital Merger Other Retained Total
capital premium redemption reserve reserve earnings £'000
£'000 £'000 reserve £'000 £'000 £'000
£'000
At 1 October 2023 7,062 17,630 6,489 1,997 370 (32,513) 1,035
Loss and total comprehensive loss for the period - - - - - (3,153) (3,153)
Transactions with owners in their capacity of owners
Share-based payments - - - - 26 - 26
Share options lapsed - - - - (55) 55 -
Total transactions with owners - - - - (29) 55 26
Total movements - - - - (29) (3,098) (3,127)
Equity at 30 September 2024 7,062 17,630 6,489 1,997 341 (35,611) (2,092)
Share Share Capital Merger Other Retained Total
capital premium redemption reserve reserve earnings £'000
£'000 £'000 reserve £'000 £'000 £'000
£'000
At 1 October 2024 7,062 17,630 6,489 1,997 341 (35,611) (2,092)
Loss and total comprehensive profit for the period - - - - - 2,585 2,585
Transactions with owners in their capacity of owners
Share-based payments - - - - 2 - 2
Share options lapsed - - - - (159) 159 -
Total transactions with owners - - - - (157) 159 2
Total movements - - - - (157) 2,744 2,587
Equity at 30 September 2025 7,062 17,630 6,489 1,997 184 (32,867) 495
Consolidated statement of cash flows
for the year ended 30 September 2025
2025 2024
£'000 £'000
Cash flows from operating activities
Loss before taxation (486) (3,368)
Adjustments for:
Depreciation - IFRS data centre right of use assets - 1,392
Depreciation - other right of use assets 11 140
Depreciation - owned assets 30 153
Amortisation 79 861
Share-based payments 2 26
Net finance expense 127 1,032
Movements in provisions - (133)
(Increase) / decrease in trade and other receivables (65) 522
(Increase) / decrease in inventories (25) (20)
(Decrease) / increase in trade payables, accruals and contract liabilities (238) 929
Net cash (outflow) / inflow from operating activities (565) 1,534
Net cash (outflow) / inflow from discontinued operations: (615) 391
Cash flows from investing activities
Sale of subsidiary undertakings 7,067 -
Purchase of property, plant and equipment (note 10) - (57)
Payment of deferred consideration relating to acquisitions (50) (50)
Interest received 14 1
Net cash outflow from investing activities 7,031 (106)
Cash flows from financing activities
Repayment of loan notes (6,187) -
Repayment of COVD-19 bounce-back loan (23) (16)
Payment of lease liabilities (13) (1,504)
Interest paid (35) (51)
Net cash outflow from financing activities (6,258) (1,571)
Net increase / (decrease) in cash (407) 248
Cash at bank and in hand at beginning of period 1,042 794
Cash at bank and in hand at end of period 635 1,042
Comprising:
Cash at bank and in hand - assets held for sale - 855
Cash at bank and in hand - continuing operations 635 187
Cash at bank and in hand at end of period 635 1,042
Notes to the consolidated financial statements
1. General information
CloudCoCo Group plc is a public limited company incorporated and domiciled in
England and Wales under the Companies Act 2006. The address of the registered
office is given on the back cover of this report. The principal activity of
the Group is the provision of IT Services to small and medium-sized
enterprises in the UK. The financial statements are presented in pounds
sterling (rounded to the nearest thousand (£'000)) because that is the
currency of the primary economic environment in which each of the Group's
subsidiaries operates.
1.1 Basis of preparation
The consolidated financial statements have been prepared in accordance with
UK-adopted international accounting standards. The measurement bases and
principal accounting policies of the Group are set out below. These policies
have been consistently applied to all years presented unless otherwise stated.
Going concern
The Group had net assets of £0.5 million at 30 September 2025 (2024: net
liabilities of £2.1 million). As detailed in Note 13, on 31 October 2024 the
Group disposed of CloudCoCo Limited and CloudCoCo Connect Limited for total
consideration of £7.37 million. The proceeds from this transaction
replenished the Group's cash reserves and enabled the full repayment of the
MXC Loan Notes, leaving the Group free from long-term debt and significantly
strengthening its financial position.
Following the disposal, the Group continues to trade through its e-commerce
platform (morecoco.co.uk) and outsourced procurement businesses and has
re-focused its Systems Assurance activities. These continuing operations are
expected to generate a positive contribution towards Plc costs, which have
been reduced following the Group's restructuring.
In assessing the Group's ability to continue as a going concern, the Directors
have reviewed detailed budgets, forecast sales growth and cash flow
projections covering the period to 31 March 2027. This assessment includes
sensitivity analysis on key assumptions, including the impact of reduced sales
volumes and slower cash receipts. The forecasts reflect the Group's reduced
cost base, improved cash cycle and current liquidity position.
The key operational risks faced by the Group include the general UK economic
outlook, inflationary pressures and their potential impact on consumer
spending and investment in IT infrastructure. The Directors have taken
mitigating actions to reduce ongoing operational costs and closely manage
working capital and cash resources.
Based on this assessment, the Directors have a reasonable expectation that the
Group and the Company have adequate resources to continue in operational
existence for a period of at least twelve months from the date of approval of
these financial statements. Accordingly, the financial statements have been
prepared on the going concern basis.
1.2 New standards and interpretations of existing standards that have been
adopted by the Group for the first time
- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
- Classification of Liabilities as Current or Non-Current and Non-current
Liabilities with Covenants
(Amendments to IAS 1)
- Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
The amendments either clarified existing requirements or were not applicable
to the Group's activities during the period. The Group did not enter into any
material sale and leaseback transactions, does not operate material supplier
finance arrangements, and had no borrowings subject to covenant-driven
classification at the reporting date.
1.3 New standards and interpretations of existing standards that are not yet
effective and have not been adopted early by the Group
At the date of approval of these financial statements, the following standards
and amendments had been issued but were not yet effective and had not been
adopted early by the Group:
- IFRS 18 Presentation and Disclosure in Financial Statements
(effective for periods beginning on or after 1 January 2027)
- Amendments to IFRS 9 and IFRS 7 Classification and Measurement of
Financial Instruments (effective for periods beginning on or after 1 January
2026)
The Directors are currently assessing the impact of these standards on the
Group's financial statements. The adoption of these standards is not expected
to have a material impact on the Group's results or financial position,
although IFRS 18 will affect the presentation and disclosure of information in
the financial statements.
2. Principal accounting policies
a) Basis of consolidation
The Group financial statements incorporate the financial statements of the
Company and entities controlled by the Company (its subsidiaries), prepared to
30 September each year. Control exists where the Company is exposed to, or has
rights to, variable returns from its involvement with an investee and has the
ability to affect those returns through its power over the investee. Control
is generally obtained through voting rights.
The results and financial position of subsidiaries are included in the
consolidated financial statements from the date on which control is obtained
and are deconsolidated from the date on which control ceases.
Unrealised gains on transactions between the Group and its subsidiaries are
eliminated in full. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred.
Amounts reported in the financial statements of subsidiaries have been
adjusted where necessary to ensure consistency with the accounting policies
adopted by the Group.
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the fair value of the consideration
transferred at the acquisition date. Identifiable assets acquired and
liabilities assumed, including contingent liabilities that meet the
recognition criteria of IFRS 3, are recognised at their fair values at the
acquisition date.
Goodwill arising on the acquisition of a subsidiary represents the excess of
the consideration transferred over the Group's interest in the fair value of
the identifiable net assets acquired at the acquisition date. Goodwill is
recognised as an asset and is subsequently measured at cost less accumulated
impairment losses.
b) Goodwill
Goodwill representing the excess of the cost of acquisition over the fair
value of the Group's share of the identifiable net assets acquired is
capitalised and reviewed annually for impairment. Goodwill is carried at cost
less accumulated impairment losses. Refer to principal accounting policy (k)
for a description of impairment testing procedures.
c) Revenue and revenue recognition
Revenue arises from the sale of goods and the rendering of services as
performance obligations are satisfied. Revenue is measured at the transaction
price, being the amount of consideration to which the Group expects to be
entitled in exchange for transferring promised goods or services to a
customer, excluding value added tax, rebates, trade discounts and other
sales-related taxes.
The Group enters into contracts for a range of products and services,
including the delivery of hardware, software, support services, managed
services and professional services. At contract inception, the Group assesses
the goods or services promised to the customer and identifies the separately
identifiable performance obligations within the contract. Performance
obligations may comprise distinct goods or services or a series of distinct
goods or services that are substantially the same and transferred to the
customer over time.
Where a contract includes multiple performance obligations, the transaction
price is allocated to each performance obligation based on the relative
stand-alone selling prices of the goods or services promised.
A contract liability is recognised when consideration is received or
receivable from a customer before the Group transfers the related goods or
services. A contract asset is recognised when the Group has transferred goods
or services to a customer but does not yet have an unconditional right to
consideration.
Sale of goods (hardware and software)
Revenue from the sale of goods is recognised at the point in time when control
of the goods transfers to the customer. Revenue from the sale of software with
no significant service or support obligation is recognised on delivery, which
is the point at which the customer is able to use and obtain substantially all
of the benefits from the software.
Rendering of services
The Group generates revenue from managed services, support services and
professional services ("Managed IT Services").
Revenue from managed and support services is recognised over time, as the
customer simultaneously receives and consumes the benefits provided by the
Group's performance. These services are typically provided under contracts of
12 months' duration and revenue is recognised on a straight-line basis over
the contract term, which reflects the pattern of service delivery.
Revenue from professional services is recognised over time as the services are
performed, measured using a time-based input method based on hours incurred.
Contract acquisition and fulfilment costs
Incremental costs of obtaining a contract, such as sales commissions that
would not have been incurred if the contract had not been obtained, are
capitalised as contract assets where the Group expects to recover those costs.
These costs are amortised on a straight-line basis over the period in which
the related goods or services are transferred to the customer.
Certain costs incurred to fulfil contracts, including internal technical
resources utilised in setting up recurring managed services contracts, are
capitalised as contract assets where they relate directly to a contract,
generate or enhance resources that will be used to satisfy performance
obligations in the future, and are expected to be recovered. These costs are
amortised over the period of benefit, typically the contractual term.
d) Foreign currencies
Transactions in foreign currencies are translated into the Group's functional
currency at the exchange rates ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are
translated at the exchange rates ruling at the statement of financial position
date. Exchange differences arising on settlement or translation are recognised
in the Consolidated Income Statement.
e) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and accumulated impairment losses. The depreciation policy is contained in
principal accounting policy (i).
f) Right of use assets
A right-of-use asset is recognised at the commencement date of a lease. The
right-of-use asset is measured at cost, which comprises the initial amount of
the lease liability, adjusted for any lease payments made at or before the
commencement date, less any lease incentives received, and including any
initial direct costs incurred.
Right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease term and the estimated useful life of the underlying asset. Where
the Group expects to obtain ownership of the leased asset at the end of the
lease term, depreciation is charged over the estimated useful life of the
asset. Right-of-use assets are subject to impairment and are adjusted for any
remeasurement of the related lease liabilities.
The Group has elected not to recognise right-of-use assets and corresponding
lease liabilities for short-term leases with a lease term of 12 months or less
and leases of low-value assets. Payments associated with these leases are
recognised as an expense on a straight-line basis over the lease
term.
g) Disposal of assets
The gain or loss arising on the disposal of an asset is determined as the
difference between the disposal proceeds and the carrying amount of the asset
and is recognised in the Consolidated Income Statement in the period in which
the disposal occurs.
h) Exceptional items and Plc costs
Non-recurring items which are material either because of their size or their
nature, are highlighted separately on the face of the Consolidated Income
Statement. The separate reporting of these items helps provide a better
picture of the Group's underlying performance. Items which may be included
within this category include, but are not limited to, acquisition costs, spend
on the integration of significant acquisitions and other major restructuring
or rationalisation programmes, significant goodwill or other asset impairments
and other particularly significant or unusual items.
Exceptional items are excluded from the performance measures used by
management to assess the underlying performance of the Group and are
highlighted separately in the Consolidated Income Statement, as management
believe that separate disclosure is necessary to provide an understanding of
the Group's underlying trading performance. Note 4 contains more detail on
exceptional items.
Plc costs are non-trading costs, relating to the Board of Directors of the
Parent Company, the costs of being listed on the AIM Market of the London
Stock Exchange and its associated professional advisors.
i) Depreciation
Depreciation is calculated on a straight-line basis so as to write off the
cost of an asset, less its estimated residual value, over the useful economic
life of that asset as follows:
IT
equipment
- three to four years
Fixtures, fittings and leasehold improvements
- three to four years
E-commerce platform
- three to four years
Right of use asset
- over the remaining term
of the lease
Material residual value estimates are updated as required, but at least
annually.
j) Intangible assets
Intangible assets mainly comprise the fair value of customer bases and other
identifiable assets acquired which are not included on the balance sheets of
the acquired companies. A fair value calculation is carried out based on
evaluating the net recurring income stream from each type of intangible asset.
Intangible assets are initially recognised at fair value, and are subsequently
carried at this fair value, less accumulated amortisation and impairment. The
following items were identified as part of the acquisitions of entities by the
Group and were still owned at 30 September 2025:
· Billing and website systems amortised over three years;
· customer lists amortised over five to ten years; and
· brands amortised over ten years.
Judgement is used in the allocation of fair values to the tangible assets and
the identification and valuation of intangible assets which affect the
calculation of goodwill recognised in respect of an acquisition. Refer to
principal accounting policy (j).
k) Impairment testing of goodwill, other intangible assets and property, plant
and equipment
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows (cash
generating units). As a result, some assets are tested individually for
impairment and some are tested at cash generating unit ("CGU") level. Goodwill
is allocated to those CGUs that are expected to benefit from the synergies of
the related business combination and represent the lowest level within the
Group at which management monitors the related cash flows.
Impairment reviews are carried out using multi-year cash flow projections from
the approved budgets of the Group. These are discounted using a discount rate
specific to each CGU. Forecast cash flows beyond 5 years assume steady growth
at no more than the long-term average growth rate for the United Kingdom. The
discount rate for each CGU reflects the time value of money and the nature and
risks of the CGU.
An impairment loss is recognised where the carrying amount of an asset or CGU
exceeds its recoverable amount. The recoverable amount is the higher of fair
value less costs of disposal and value in use, determined using discounted
cash flow projections. Impairment losses are recognised in the Consolidated
Income Statement and reduce the carrying amount of the relevant asset. With
the exception of goodwill, assets are reassessed at each reporting date for
indications that an impairment loss previously recognised may no longer
exist.
l) Leases
A lease liability is recognised at the commencement date of a lease and is
initially measured at the present value of the lease payments over the lease
term, discounted using the interest rate implicit in the lease or, where this
cannot be readily determined, the Group's incremental borrowing rate. Lease
payments include fixed payments, variable payments that depend on an index or
rate, amounts expected to be payable under residual value guarantees, and
payments arising from options to purchase or terminate the lease where the
Group is reasonably certain to exercise those options. Variable lease payments
that do not depend on an index or rate are recognised in profit or loss as
incurred.
Lease liabilities are subsequently measured at amortised cost using the
effective interest method and are remeasured when there is a change in future
lease payments, the lease term, or the assessment of purchase or termination
options. Any remeasurement is recognised as an adjustment to the corresponding
right-of-use asset, or in profit or loss where the right-of-use asset has been
fully written down.
m) Inventories and work in progress
Inventories are stated at the lower of cost and net realisable value, after
making due allowance for obsolete and slow moving items. The cost is
calculated using the FIFO basis. Work in progress relates to costs incurred on
part-completed work.
n) Taxation
Current tax is the tax currently payable based on taxable results for the
year. Deferred income taxes are calculated using the liability method on
temporary differences. Deferred tax is generally provided on the difference
between the carrying amounts of assets and liabilities and their tax bases.
However, Deferred tax is not recognised on temporary differences arising from
the initial recognition of goodwill or from the initial recognition of assets
and liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit.
In addition, tax losses available to be carried forward as well as other
income tax credits to the Group are assessed for recognition as deferred tax
assets. Deferred tax liabilities are provided in full, with no discounting.
Deferred tax assets are recognised to the extent that it is probable that the
underlying deductible temporary differences will be able to be offset against
future taxable income. Current and deferred tax assets and liabilities are
calculated at tax rates that are expected to apply to their respective period
of realisation, provided they are enacted or substantively enacted at the
reporting date.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the Consolidated Income Statement, except where they relate to
items that are charged or credited directly to equity, in which case the
related deferred tax is also charged or credited directly to equity.
o) Financial assets
Financial assets comprise of cash and cash equivalents and trade and other
receivables. All financial assets are initially recognised at fair value, plus
transaction costs and subsequently measured at amortised cost.
Trade receivables are held in order to collect the contractual cash flows and
are initially measured at the transaction price as defined in IFRS 15, as the
contracts of the Group do not contain significant financing components.
Impairment losses are recognised based on lifetime expected credit losses in
profit or loss.
The Group reviews the amount of credit loss associated with its trade
receivables based on forward looking estimates, taking into account current
and forecast credit conditions.
All financial assets are recognised when the Group becomes a party to the
contractual provisions of the instrument. Derecognition of financial assets
occurs when the rights to receive cash flows from the instruments expire or
are transferred and substantially all of the risks and rewards of ownership
have been transferred. An assessment for impairment is undertaken, at least,
at each reporting date.
Interest and other cash flows resulting from holding financial assets are
recognised in the Consolidated Income Statement when receivable.
p) Cash and cash equivalents
Cash at bank and in hand comprises cash on hand and demand deposits.
q) Financial liabilities
Financial liabilities comprise trade and other payables, lease liabilities and
borrowings. Financial liabilities are recognised when the Group becomes a
party to the contractual provisions of the instrument. Financial liabilities
are initially recognised at fair value and are subsequently measured at
amortised cost using the effective interest method.
Finance charges, including interest, premiums payable on settlement or
redemption, and directly attributable transaction costs, are recognised as
finance costs in the Consolidated Income Statement using the effective
interest method and are added to the carrying amount of the financial
liability to the extent that they are not settled in the period in which they
arise.
The modification of the terms of a financial liability is accounted for as an
extinguishment of the original liability and the recognition of a new
liability where the modification is substantial. A modification is considered
substantial if the net present value of the cash flows under the modified
terms, including any fees paid or received, differs by at least 10 per cent
from the net present value of the remaining cash flows of the original
liability, both discounted using the original effective interest rate
r) Issued share capital
Ordinary shares are classified as equity. Incremental costs attributable to
the issue of shares or options are recorded in equity as a deduction from
proceeds.
s) Non-current assets held for sale
Non-current assets and disposal groups are classified as held for sale when
they are actively marketed, management is committed to selling, and a sale is
expected within 12 months. These assets are measured at the lower of their
carrying amount and fair value less disposal costs and are not depreciated
once classified. The results of disposed operations are included in the
consolidated statement of comprehensive income up to the disposal date but are
shown separately in order to identify the profit/(loss) associated with the
discontinued operations.
t) Employee benefits
Share-based payment - equity-settled
All material share-based payment arrangements are recognised in the financial
statements. All goods and services received in exchange for the grant of any
share-based remuneration are measured at their fair values. Fair values of
employee services are indirectly determined by reference to the fair value of
the share options awarded, excluding those that have lapsed as a result of
staff leaving the company. Their value is appraised at the grant date and
excludes the impact of non-market vesting conditions (for example,
profitability and sales growth targets).
All share-based remuneration is ultimately recognised as an expense in the
Consolidated Income Statement with a corresponding credit to "other reserve".
If vesting periods or other non-market vesting conditions apply, the expense
is allocated over the vesting period, based on the best available estimate of
the number of share options expected to vest. Estimates are subsequently
revised if there is any indication that the number of share options expected
to vest differs from previous estimates.
Any cumulative adjustment prior to vesting is recognised in the current
period. No adjustment is made to any expense recognised in prior periods if
share options ultimately exercised are different to that estimated on vesting.
Upon exercise of share options, the proceeds received, net of attributable
transaction costs, are credited to share capital and share premium.
Share-based payment - modification, cancellation and issue of replacement
awards.
If equity-settled awards are modified, as a minimum an expense is recognised
as if the modification has not been made. An additional expense is recognised,
over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date of
modification.
u) Pension
The Group makes payments to defined contribution retirement benefit plans that
are charged as an expense as they fall due. Payments are made on the basis of
a percentage of qualifying salary for certain employees to personal pension
schemes.
v) Government Grants
The Group received funding from various Government sources in relation to
COVID-19 in FY22. Government income is recognised in profit or loss (within
other income) on a systematic basis over the periods in which the Group
recognises costs for which the grants are intended to compensate. Where it is
not yet considered highly probable that Government funding will not have to be
repaid, this element is deferred on the balance sheet within other creditors.
w) Critical accounting judgements and key sources of estimation uncertainty
The preparation of the Group's consolidated financial statements requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities at the reporting date. Actual results may differ from these
estimates.
Critical judgements in applying the Group's accounting policies
The following are the critical judgements that management has made in the
process of applying the Group's accounting policies and that have the most
significant effect on the amounts recognised in the consolidated financial
statements.
Business combinations and goodwill allocation
The allocation of fair values to tangible assets and the identification and
valuation of intangible assets acquired in a business combination require
judgement in the selection of appropriate valuation techniques and inputs.
These judgements affect the amount of goodwill recognised and the allocation
of goodwill to cash-generating units ("CGUs"), being the lowest level at which
management monitors goodwill for internal management purposes. Further details
are disclosed in note 9.
Assessment of lease arrangements
Judgement is required in determining whether arrangements for dark fibre
connections contain a lease within the scope of IFRS 16. Management concluded
that, except for any last-mile connections between a supplier's core network
and the Group's customers, the Group does not control the use of specific
identified fibre assets or a significant portion of a supplier's network, and
therefore such arrangements do not give rise to the recognition of a
right-of-use asset and corresponding lease liability.
Judgement is also applied in determining the lease term for data centre lease
arrangements, including the assessment of extension and termination options.
Management has further exercised judgement in assessing whether right-of-use
assets are recoverable or whether any onerous contract provisions are required
in respect of data centre lease arrangements.
Key sources of estimation uncertainty
The key assumptions concerning the future and other sources of estimation
uncertainty at the reporting date that have a significant risk of resulting in
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are set out below.
Impairment of goodwill and intangible assets
Goodwill is tested annually for impairment and other intangible assets are
tested for impairment when there is an indication that their carrying amount
may not be recoverable. The impairment tests require the estimation of future
cash flows attributable to the relevant CGUs or assets and the selection of
appropriate pre-tax discount rates that reflect current market assessments of
the time value of money and the risks specific to the asset or CGU. Changes in
these assumptions could result in a material impairment charge. Further
details of the impairment testing methodology are set out in principal
accounting policy (k) and note 9
Valuation of customer relationships
Customer relationships recognised as intangible assets are valued using
discounted cash flow techniques, which require estimates of future revenue
streams, customer retention rates and appropriate discount rates over the
expected useful economic life of the assets. Retention rates are based on
historical customer behaviour, adjusted where necessary for current and
forecast market conditions. Changes in these assumptions could result in a
material adjustment to the carrying value of customer relationship intangible
assets. Further details are provided in note 9.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, the
Group estimates an incremental borrowing rate to discount future lease
payments when measuring the lease liability at the commencement date of the
lease. The incremental borrowing rate represents the rate that the Group would
have to pay to borrow funds to obtain an asset of a similar value to the
right-of-use asset, over a similar term and with similar security, in a
similar economic environment. An incremental borrowing rate of 10% per annum
was applied in measuring lease liabilities and the corresponding right-of-use
assets. Changes to this rate could have a material impact on the carrying
amounts of lease liabilities and right-of-use assets.
3. Segment reporting
The Chief Operating Decision Maker ("CODM") has been identified as the
executive director of the Company, who review the Group's internal management
reporting in order to assess performance and allocate resources.
The CODM assesses the Group's performance principally using adjusted profit
measures, including Trading Group EBITDA, which are consistent with those
disclosed elsewhere in the Annual Report and Accounts. A reconciliation
between Trading Group EBITDA and the statutory operating loss is presented in
the Consolidated Income Statement.
The Board has determined that the Group operates as a single operating and
reporting segment, being the provision of IT products and services to
customers. This conclusion is based on the fact that the Group's activities
are managed on a consolidated basis, and that the operating costs and
operating asset base used to generate revenues are shared across the business
and are not separately reviewed by the CODM for the purposes of resource
allocation or performance assessment.
For the purposes of internal management reporting, the CODM reviews revenues
and related gross profit by the following revenue categories, which do not
represent separate operating segments:
Managed IT Services - This category comprises the provision of recurring IT services which
either have an ongoing billing and support element or utilise the technical
expertise of our people.
Value added resale - This category comprises the resale of one-time solutions (hardware
and software) from our leading technology partners, including revenues from
the More Computers e-commerce platform.
All revenues are derived from customers within the UK and no customer accounts
for more than 10% of external revenues in both financial years. Inter-category
transactions are accounted for using an arm's length commercial basis.
3.1 Analysis of continuing results
All revenues from continuing operations are derived from customers within the
UK. In order to simplify our reporting of revenue, we condense our reporting
segments into two categories - Managed IT Services and Value Added Resale.
This analysis is consistent with that used internally by the CODM and, in the
opinion of the Board, reflects the nature of the revenue. Trading EBITDA(1) is
reported as a single segment.
3.1.1 Revenue
Continuing Continuing Discontinued Discontinued
2025
2024
2025
2024
£'000
£'000
£'000
£'000
Managed IT Services 246 420 1,306 16,236
Value added resale 7,745 8,317 341 2,551
Total Revenue 7,991 8,737 1,647 18,787
3.1.2
Revenue
Continuing Continuing Discontinued Discontinued
2025
2024
2025
2024
£'000
£'000
£'000
£'000
Recognised over time 246 420 1,277 15,283
Recognised at a point in time 7,745 8,317 370 3,504
Total Revenue 7,991 8,737 1,647 18,787
4. Exceptional Items
Items which are material and non-routine in nature are presented as
exceptional items in the Consolidated Income Statement.
Discontinued Discontinued 2024
2025
£'000
£'000
Costs relating to re-finance of the loan notes - (40)
Run-off costs relating to discontinued data centre services - (353)
Costs relating to onerous contracts settled in the year - (18)
Integration and restructure costs - (70)
Exceptional items - (481)
Integration and restructure costs relate to notice period, redundancy, holiday
pay and severance payments made to staff whose roles were duplicate or whose
employment was terminated during the year as part of the internal
reorganisation. Run-off costs relating to discontinued data centre services
contain unrecoverable operating expenses incurred during the year for data
centre racks that were empty on acquisition. Costs associated with exploring
options relating to the search for re-finance of the loan notes have also been
separately identified as have costs relating to onerous contracts settled
during the year.
5. Operating loss
Continuing Continuing Discontinued 2025 Discontinued 2024
2025
2024
£'000
£'000
£'000
£'000
Operating loss is stated after charging:
Depreciation of owned assets 30 26 - 127
Depreciation of right of use assets 11 13 - 1,519
Short life lease expense: IFRS16 data centre short-life leases - - - 446
Amortisation of intangibles 79 105 - 756
Auditor's remuneration:
- Audit of parent company 40 35 - -
- Audit of subsidiary companies 14 15 - 48
6. Finance income and finance costs
Finance cost includes all interest-related income and expenses. The following
amounts have been included in the Consolidated Income Statement line for the
reporting periods presented:
Continuing Continuing Discontinued Discontinued
2025
2024
2025
2024
£'000 £'000 £'000 £'000
Interest income resulting from short-term bank deposits 14 1 - -
Finance income 14 1 - -
Interest expense resulting from:
Lease liabilities 1 1 3 46
Interest on borrowings 5 13 1 27
Loan note interest - - 131 846
Unwinding of the discount on provisions - - - 100
Finance costs 6 14 135 1,019
The £5.0 million MXC Loan Notes, together with accumulated deferred interest
of £1.18 million, were repaid in full on 31 October 2024 following the
disposal of CloudCoCo Limited and CloudCoCo Connect Limited. As a result, no
further interest accrued on the loan notes after this date. Further details
are provided in Note 11.
7. Income tax 2025 2024
£'000 £'000
Current tax
UK corporation tax for the period at 25% (2024: 25%) - -
Deferred tax
Deferred tax credit on intangible assets 20 215
Total tax credit for the year 20 215
The tax credit recognised in the Consolidated Income Statement can be
reconciled as follows:
2025 2024
£'000 £'000
Loss for the year before tax: (486) (3,310)
Tax rate 25% 25%
Expected tax credit (121) (828)
Adjusted for:
Non-deductible expenses 37 (14)
Prior-year adjustments 5 -
Movement in deferred tax (20) 534
Movement in unprovided deferred tax relating to losses 42 180
Short-term timing differences 37 (87)
Total tax credit for the year (20) (215)
The Group has unrecognised deferred tax assets in respect of tax losses
carried forward totalling £2,286,000 (2024: £4,735,000). The reduction
reflects the disposal of subsidiaries during the year, which held
approximately £10m of tax losses that are no longer available to the Group.
There are no restrictions in the use of tax losses. Deferred tax assets remain
unrecognised until it becomes probable that the underlying deductible
temporary differences will be able to be utilised against future taxable
income.
A substantively enacted tax rate of 25% was applied for the years ending 30
September 2024 and 30 September 2025.
8. Earnings/(Loss) per share 2025 2024
£'000 £'000
Profit/(Loss) attributable to ordinary shareholders 2,585 (3,153)
Weighted average number of Ordinary Shares in issue, basic and diluted 706,215,686 706,215,686
Basic and diluted earnings/(loss) per share 0.37p (0.45)p
The weighted average number of Ordinary Shares used in calculating both the
basic and diluted earnings/(loss) per share is the same. This is because the
Group had outstanding share options were anti-dilutive in both periods. In the
year ended 30 September 2024, the Group reported a loss and the inclusion of
potential ordinary shares would have reduced the loss per share. In the year
ended 30 September 2025, the share options were anti-dilutive as their
inclusion would not have reduced earnings per share.
9. Intangible assets
Intangible assets comprise non-physical assets acquired through business
combinations and internally generated development costs that meet the
recognition criteria of IAS 38. Examples include customer relationships,
software and other identifiable intellectual property.
Development costs are capitalised only when the Group can demonstrate the
technical feasibility of completing the asset, its intention and ability to
use or sell the asset, the probability that the asset will generate future
economic benefits, and the ability to reliably measure the expenditure
attributable to the asset. Research costs are expensed as incurred.
Intangible assets are recognised only where it is probable that future
economic benefits attributable to the asset will flow to the Group and the
cost of the asset can be measured reliably. Amortisation of intangible assets
is recognised within administrative expenses in the Consolidated Income
Statement.
Intangible assets Goodwill IT, billing and Brand Customer Total
£'000 website £'000 lists £'000
systems £'000
£'000
Cost
At 1 October 2023 11,281 361 2,383 11,445 25,470
Re-classified as assets held for sale (11,028) (182) (1,913) (11,304) (24,427)
At 30 September 2024 and 30 September 2025 253 179 470 141 1,043
Accumulated amortisation
At 1 October 2023 - (220) (1,277) (6,813) (8,310)
Charge for the year - (18) (122) (721) (861)
Re-classified as assets held for sale - 183 1,254 7,490 8,927
At 30 September 2024 - (55) (145) (44) (244)
Charge for the year - (18) (46) (15) (79)
At 30 September 2025 - (73) (191) (59) (323)
Impairment
At 1 October 2023 (4,447) - (225) (1,193) (5,865)
Re-classified as assets held for sale 4,447 - 225 1,193 5,865
At 30 September 2024 and 30 September 2025 - - - - -
Carrying amount
At 30 September 2025 253 106 278 83 720
At 30 September 2024 253 124 325 97 799
Average remaining amortisation period 5.9 years for each category of intangible asset
6.9 years
6.9 years
6.9 years
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are independent cash inflows (cash generating units).
Goodwill is allocated to those assets that are expected to benefit from
synergies of the related business combination and represent the lowest level
within the Group at which management monitors the related cash inflows. The
directors concluded that at 30 September 2025, there were two CGUs being
Systems Assurance Limited and More Computers Limited.
Each year, management prepares the resulting cash flow projections using a
value in use approach to compare the recoverable amount of the CGU to the
carrying value of goodwill and allocated assets and liabilities. Any material
variance in this calculation results in an impairment charge to the
Consolidated Income Statement.
The calculations used to compute cash flows for the CGU level are based on the
Group's Board approved budget for the next twelve months, and business plan,
growth rates as below, the weighted average cost of capital ("WACC") and other
known variables. The calculations are sensitive to movements in both WACC and
the revenue growth projections. The impairment calculations were performed
using post-tax cash flows at post-tax WACC of 13.25% (FY24: 13.25%) for each
CGU. The pre-tax discount rate (weighted average cost of capital) was
calculated at 18% per annum (FY24:18%) and the revenue growth rate is 5% per
annum (FY24: 5%) for each CGU for 5 years and a terminal growth rate of 2.3%
(FY24: 2.3%).
Sensitivities have been run on cash flow forecasts for each CGU. Revenue
growth rates are considered to be the most sensitive assumption in determining
future cash flows for each CGU. Management is satisfied that the key
assumptions of revenue growth rates should be achievable and that reasonably
possible changes to those key assumptions would not lead to the carrying
amount exceeding the recoverable amount. Sensitivity analyses have been
performed and the table below summarises the effects of changing certain other
key assumptions and the resultant excess (or shortfall) of discounted cash
flows against the aggregate of goodwill and intangible
assets.
Sensitivity analysis Systems More
£'000
Assurance
Computers
Limited
Limited
Excess of recoverable amount over carrying value:
Base case - headroom 47 3,105
Pre-tax discount rate increased by 1% - resulting headroom 88 2,993
Revenue growth rate reduced in years 2 to 5 by 1% per annum - resulting - 3,036
headroom
Base case calculations highlight that the impairment review in respect of
Systems Assurance Limited is most sensitive to the discount rate and growth
rate.
10. Property, plant and equipment Right of Use Assets IT E-commerce platform Fixtures, fittings and Total
equipment
leasehold
improvements
£'000 £'000 £'000 £'000 £'000
Cost of assets
At 1 October 2023 3,288 400 107 71 3,866
Additions 172 10 45 2 229
Modifications 1,234 - - - 1,234
Disposals (115) (6) - (2) (123)
Re-classified as assets held for sale (4,560) (378) - (59) (4,997)
At 30 September 2024 19 26 152 12 209
Additions - - - - -
Modifications 19 - - - 19
Disposals - - - - -
At 30 September 2025 38 26 152 12 228
Depreciation
At 1 October 2023 1,758 186 41 39 2,024
Charge for the year 1,532 110 26 17 1,685
Disposals (115) (6) - (2) (123)
Re-classified as assets held for sale (3,159) (264) - (42) (3,465)
At 30 September 2024 16 26 67 12 121
Charge for the year 11 - 30 - 41
At 30 September 2025 27 26 97 12 162
Net book value
At 30 September 2025 11 - 55 - 66
At 30 September 2024 3 - 85 - 88
£1,532k of net book value relating to Property, Plant and Equipment held
within discontinued operations at 30 September 2024 are classified as assets
held for sale. The net book value of right of use assets at 30 September 2025
comprised:
Land & Data Centre Motor Total
buildings
Assets
Vehicles
£'000
£'000
£'000 £'000
At 30 September 2025 11 - - 11
At 30 September 2024 3 - - 3
The depreciation charge in respect of right of use assets comprises £1,392k
in respect of data centre assets (FY23: £879k) and £140k in respect of
property and other assets (FY23: £87k).
11. Financial instrument
At 30 September 2025, the Group had no loan notes outstanding (2024: £6.0
million). The loan notes were previously held by MXC Guernsey Limited and were
repayable in October 2024. Following the disposal of CloudCoCo Limited and
CloudCoCo Connect Limited, the loan notes, together with accrued deferred
interest, were repaid in full on 31 October 2024. Accordingly, no amounts in
respect of the loan notes were outstanding at the reporting
date.
12. Deferred tax liabilities
Deferred tax
on acquired
intangibles
£'000
Deferred tax liability at 1 October 2023 951
Credited to income statement - on intangibles (215)
Re-classified as "Assets held-for-sale" (600)
Deferred tax liability at 30 September 2024 136
Credited to income statement - on intangibles (20)
Deferred tax liability at 30 September 2025 116
13. Sale of CloudCoCo Limited and CloudCoCo Connect Limited
Disposal of subsidiaries
On 31 October 2024, the Company disposed of its entire interests in CloudCoCo
Limited and CloudCoCo Connect Limited for total cash proceeds of £7.9
million. Of this amount, £6.2 million was applied immediately to the
repayment of the MXCG loan notes, thereby avoiding further costs associated
with extending the loan note term.
The initial consideration attributable to CloudCoCo Limited was £7.5 million,
which was subsequently reduced by £0.385 million following agreement of the
completion accounts during the period to 30 June 2025, reflecting
unrecoverable balances identified in the original balance
sheet.
The carrying value of the net assets disposed of at the date of disposal was
£2.94 million, resulting in a gain on disposal before costs of £4.42
million. After deducting transaction-related costs of £0.18 million, the gain
on disposal recognised was £4.12 million.The gain on disposal includes the
remaining amortisation of intangible assets and the related deferred tax
credit arising on amortisation.
Dissolution of subsidiaries
Prior to the disposal, the Group had transferred the assets and liabilities of
three wholly owned subsidiaries into CCC as part of an internal
reorganisation. As a result, the dormant subsidiaries Nimoveri Holdings
Limited and CloudCoCo Managed IT Limited were formally dissolved on 15 October
2024 and 29 July 2025 respectively.
As part of the dissolution process, inter-company balances, including
inter-company loans of £0.965 million, were written off. These items reduced
the overall gain recognised by the Group.
Net gain recognised
After taking account of the dissolution of subsidiaries and the related
write-off of inter-company balances, the net gain recognised in the
consolidated income statement was £3.05 million, which has been presented as
an exceptional gain within discontinued operations. Details of the disposals
and the resulting gain recognised are set out below.
CloudCoCo Limited CloudCoCo Connect Limited Total
£'000 £'000 £'000
Total cash proceeds 7,115 250 7,365
Non-current assets
Intangible assets (net) 6,847 2,788 9,635
Other net liabilities (2,187) (3,678) (5,865)
Deferred tax credit on amortisation (201) (399) (600)
Net assets disposed 4,459 (1,289) 3,170
Initial Gain on disposal 2,656 1,539 4,195
Less disposal costs (89) (90) (179)
Gain on disposal before dissolution 2,567 1,449 4,016
Dissolution of subsidiaries (965)
Net gain recognised 3,051
Cash movements CloudCoCo Limited CloudCoCo Connect Limited Total
£'000 £'000 £'000
Total cash proceeds 7,115 250 7,365
Cash Movements
Cash included in other net liabilities above 18 101 118
Disposal costs 89 90 179
14. Post-Balance Sheet Event
Subsequent to the reporting date of 30 September 2025, the Company held a
General Meeting on
27 March 2026 at which shareholders approved a capital reorganisation, a
subscription for new ordinary shares and the adoption of a new employee share
option scheme.
Following approval of the resolutions, the Company implemented a capital
reorganisation whereby each existing ordinary share of 1 penny was subdivided
and reclassified into one new ordinary share of 0.01 pence and one deferred
share of 0.99 pence. The deferred shares carry no voting rights, dividend
rights or rights to attend general meetings and are intended to be cancelled
in due course.
The Company also announced a subscription for 229,166,666 new ordinary shares
at a price of 0.12 pence per share, to raise gross proceeds of £275,000
(approximately £260,000 net of expenses). The new ordinary shares will rank
pari passu with the existing ordinary shares and are expected to be admitted
to trading on AIM on or around 2 April 2026.
The proceeds of the subscription are intended to fund the Group's growth
initiative, Project Brightstar, which is designed to support the expansion of
the Group's B2B technology procurement and services activities.
As these events occurred after the reporting date, they are treated as
non-adjusting events after the end of the reporting period in accordance with
Section 32 of FRS 102, and accordingly no adjustment has been made to the
financial statements for the year ended 30 September
2025.
END
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