REG - Cloudcoco Group PLC - Interim Results
30/06/2025 07:00
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RNS Number : 8630O Cloudcoco Group PLC 30 June 2025
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.
30 June 2025
CloudCoCo Group plc
("CloudCoCo", the "Company" or the "Group")
Interim Results
CloudCoCo (AIM: CLCO), an e-commerce and IT procurement business based in
Sheffield, delivering tailored, next-day IT solutions through Systems
Assurance and MoreCoCo, is pleased announce its interim results for the six
months ended 31 March 2025 ("H1 2025").
These accounts reflect the performance of the continuing operations following
the sale of CloudCoCo Limited and CloudCoCo Connect Limited on 31 October
2024.
Financial highlights:
· Revenue of £3.4 million (H1 2024: £4.3 million), with 89% generated from
e-commerce sales (H1 2024: 83%). Q3 2025 has seen a rebound due to product
range expansion.
· Gross profit stable at £228k for the period, with gross margin improving to
7% (H2 2024: 5%) due to better pricing and automation benefits.
· Trading Group EBITDA(1) of £26k (H1 2024: £21k), showing underlying
profitability despite the smaller scale of the continuing business.
· PLC costs(2) reduced by 21% to £198k (H1 2024: £251k), with further savings
of £100k p.a. in H2 2025 following elective Executive Director salary
reductions.
· Administrative expenses reduced by 13% to £489k (H1 2024: £563k), reflecting
ongoing efficiency improvements
· Completed £7.9 million sale of legacy businesses, enabling full repayment of
£6.2 million MXC loan notes and strengthening the balance sheet.
· Cash balance of £818k at 31 March 2025 (FY 2024: £1.04 million), after
repaying legacy debt and investing in core operations.
· Exploring new growth areas, particularly in consultancy and partnerships, to
accelerate the path to sustainable profitability
Operational highlights:
· Added 10 new business customers to Systems Assurance Limited (H1 2024: 1 new
customer), reflecting the success of increased sales and marketing efforts.
· Introduced enhanced automation, enabling faster fulfilment and improved
customer experience - now over 7,000 orders processed monthly, a 20% increase
since January 2025.
· Onboarded six new vendor distribution partners, strengthening the supply chain
and expanding product availability.
· Formed new strategic partnerships with BoxPhish, Claritas, and ITXpress to
enhance the direct Managed IT Services offering.
· Ongoing improvements in customer satisfaction, reflecting operational
efficiencies and enhanced service delivery.
(1) profit or loss before net finance costs, tax, depreciation, amortisation,
plc costs, exceptional costs and share-based payments
(2) PLC costs are non-trading costs relating to the Board of Directors of the
Parent Company, its listing on the AIM Market of the London
Stock Exchange and its associated professional advisors.
Simon Duckworth, Non-Executive Chairman, commented:
"Following the sale of our legacy businesses in late 2024, CloudCoCo is now a
leaner organisation, free from long-term debt and with a clear strategic
focus. Our immediate priority is to scale the trading business rapidly but
sustainably, building consistent revenue streams that support monthly cash
generation. We've laid strong operational foundations in this half-year and
are confident that, with continued discipline and momentum, we can deliver
long-term value for our shareholders"
Contacts:
CloudCoCo Group plc Tel: +44 (0) 330 236 9070
Simon Duckworth (Chairman)
Darron Giddens (CFO)
Peter Nailer (Managing Director)
Allenby Capital Limited - (Nominated Adviser & Broker) Tel: +44 (0)20 3328 5656
Jeremy Porter / Daniel Dearden-Williams - Corporate Finance
Tony Quirke / Amrit Nahal - Equity Sales
About CloudCoCo
CloudCoCo is a streamlined, growth-focused technology business 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
I am pleased to report our interim results for the six months ended 31 March
2025 - a pivotal period in the Group's transformation.
During the period, we completed the sale of CloudCoCo Limited and CloudCoCo
Connect Limited for a final consideration of £7.9 million. This strategic
decision allowed us to fully repay the £6.2 million MXC loan notes, avoid an
associated £550,000 extension fee, and significantly strengthen our balance
sheet. We now enter the second half of the year with minimal debt, a more
focused business model, and the financial flexibility to invest in growth.
Post-sale, CloudCoCo is a leaner, more agile Group, centred around our
e-commerce and IT procurement operations. Under the leadership of Peter
Nailer, our trading businesses - MoreCoCo and Systems Assurance - are gaining
momentum. Despite a slower start in Q1 due to temporary vendor issues, we have
seen revenue rebound in Q3 2025, supported by an expanded product range and
improved automation.
Gross margin has increased to 7%, and over 50% of orders are now processed
without human intervention. At the same time, we have reduced administrative
costs by 13% and achieved a positive Trading Group EBITDA(1) of £26k.
While the current business is not yet large enough to cover plc-level costs,
we have reduced these costs by 21%, and the Executive Directors have further
committed to salary reductions from H2 2025. We remain focused on reaching a
point where the Group generates cash consistently each month.
Our strategy remains clear:
· Drive top-line growth through expanded product offerings and vendor
partnerships;
· Deliver excellent service to retain and grow our customer base;
· Maintain cost discipline and operational efficiency; and
· Explore complementary opportunities in consultancy and partnerships.
I would like to thank our talented team for their continued commitment,
especially during this period of transition. With their support, and that of
our customers and shareholders, we are building a sustainable and resilient
business positioned for long-term value creation.
We are confident that the steps taken to restructure and refocus the Group
will lay the foundations for long-term success. With the right team, a
stronger financial footing, and a scalable trading model, CloudCoCo is well
positioned for the next stage of growth.
Simon Duckworth
Chairman
BUSINESS REVIEW
The chart below shows the quarterly revenues for the trading businesses from
October 2023 to March 2025. We have also included an estimate of the quarter
to June 2025 revenues, which shows that we are starting to see some traction
from the new initiatives that we have been working on.
The revenue performance in Q1-25 financial period, covering the period October
2024 to December 2024, was low and has negatively impacted these
H1 2025 results.
This was as a result of some key issues with a number of vendors in October
2024 and early November 2024 meant that their product data feeds had to be
withdrawn from the site.
While the economic environment remains challenging for many of our customers,
we are seeing encouraging signs of progress - particularly within our
e-commerce business. In the first half of the year, both MoreCoCo and Systems
Assurance have built operational momentum, laying the groundwork for more
consistent and sustainable performance across the Group.
Based on current trends, we believe there is a clear path to growing the
business to £10 million in annual revenues at a 7% gross margin, which would
enable the Group to generate positive cash flow each month.
Unaudited Unaudited Unaudited Audited
6 months to 6 months to 6 months to Year to
31 March 30 September 31 March 30 September
2025
2024
2024
2024
£'000
£'000
£'000
£'000
By revenue type
More Computers (e-commerce) 3,016 3,827 3,579 7,406
Systems Assurance Limited (direct sales) 367 575 756 1,331
Total revenue 3,383 4,402 4,335 8,737
We have ambitious plans for both businesses, but we also recognise that
meaningful growth in e-commerce requires strategic investment - in brand
awareness, marketing, and platform capability. We are therefore focused on
ensuring the right foundations are in place before committing to increased
spend in these areas.
MoreCoCo has continued to perform well, with revenues growing, driven by a
combination of product range expansion and greater operational efficiency.
Each day, the MoreCoCo platform now offers over 190,000 products, and our
investment in automation is delivering clear results - over 50% of orders are
now processed without human intervention. This progress has been supported by
the successful onboarding of six new distribution partners, reinforcing our
supply chain and broadening customer choice.
Within Systems Assurance, we have taken decisive steps to refocus the business
on its core strengths as a specialist IT Value-Added Reseller. As part of this
strategic realignment, we have established partnerships with BoxPhish,
Claritas, and ITXpress - alliances that are already opening up new
opportunities and expanding our service offering. This sharpened market
positioning and proactive engagement strategy have contributed to 10 new
customer wins during the period.
To support long-term growth and scalability, we have also implemented a
programme aimed at strengthening relationships with our vendor and
distribution partners and enhancing operational coordination between the
businesses.
Looking ahead to the second half, our priorities are clear: we remain focused
on improving profitability, growing recurring revenues, and continuing to
identify opportunities to accelerate progress - both organically and through
new customer acquisition.
Organic Growth
On the organic growth front, we are actively exploring the use of new
technologies, including AI, to improve efficiency and enhance the value of the
services we deliver. These innovations are being developed in collaboration
with our strategic partners to ensure they align with real-world customer
needs.
We have been looking for ways to introduce new technology and drive
efficiencies into the services we provide to our customers. We are also
continuing to work with our strategic partners to identify areas where AI can
play an increasing role in improving the way technology services are
delivered.
We believe there are clear synergies between our trading businesses. By
combining our internal web development capabilities with the strength of our
e-commerce platform, we are now offering our expanding IT product range to
businesses in both white-label format and as bespoke internal procurement
applications. These solutions enable organisations to manage IT hardware
procurement across multiple sites, benefit from credit account terms, and
implement internal approval workflows - all while maintaining access to
next-day delivery on a wide range of hardware.
People
At the heart of our business are our people. With a team of 10 experienced
employees, many of whom have been part of the Sheffield business for nearly
two decades, we benefit from deep domain knowledge and a strong commitment to
customer success. Their dedication during this period of transition has been
exceptional, and we thank them for their continued focus on delivering
excellent service and supporting our growth ambitions.
Results
Revenue for H1 FY2025 was £3.4 million, a 21% reduction compared to H1 2024
(£4.3 million). This decline was primarily due to some temporary commercial
constraints with key vendor data feeds in October and November 2024, which
prevented us from offering the full range of products for sale on our
platform.
Our business model is predominantly focused on the procurement and resale of
IT hardware, which accounts for approximately 96% of total sales. These sales
are delivered either via our e-commerce platform, morecoco.co.uk, or directly
through our IT procurement team at Systems Assurance. Over the period, the
proportion of revenue generated via the e-commerce platform increased to 89%
(H1 2024: 83%), reflecting the success of our ongoing shift to digital
channels.
While gross margins on e-commerce transactions are lower than those on direct
sales, they benefit from a significantly lower operational delivery cost. In a
price-sensitive market, we continue to work closely with our vendor partners
to ensure customers benefit from live stock inventory feeds, competitive
pricing, and next-day delivery from leading UK suppliers. As a result of these
efforts, and improved terms with our payment processing partners, gross profit
margins increased to 7% (H1 2024: 6%).
Despite the lower revenue, gross profit remained stable at £228k (H2 2024:
£233k), demonstrating improved commercial efficiency.
We also continued to implement cost-saving initiatives across the business.
Administrative expenses fell by 13% to £489k (H1 2024: £563k), contributing
to an improvement in Trading Group EBITDA(1) to £26k (H1 2024: £21k). We
remain focused on balancing cost control with targeted investment to support
future sustainable growth.
The Group incurred a net cash outflow during the period of £0.2 million (H1
2024: £0.2 million), compared to the balance reported at 30 September 2024.
The main components being:
· Net cash outflow of £224k during the period (H1 2024: £188k
outflow), reflecting a transitional phase following the business sale;
· Net £7.4 million of cash inflow (after costs) from the sale of
CloudCoCo Limited and CloudCoCo Connect Limited;
· £6.2 million repayment of MXC loan notes, eliminating a significant
debt burden and associated interest costs;
· Administrative and operating cash outflows of £0.9 million, driven
by trading activity and working capital movements and £0.5 million cash
outflows from discontinued operations; and
· Cash balance of £818k at 31 March 2025 (30 Sept 2024: £1.04
million), with no material debt other than residual deferred consideration and
minor COVID-related loans.
Outlook
Following the successful sale of a significant portion of our legacy
operations in late 2024, CloudCoCo enters the new financial year with a
strengthened balance sheet, a streamlined business model, and a renewed focus
on long-term value creation. The divestment not only enabled the repayment of
the long-term loan notes but also allowed the Group to concentrate fully on
its core strengths in e-commerce and IT procurement.
Under the leadership of Peter Nailer, our trading business is gaining
momentum. However, we recognise that the business must scale quickly to cover
plc-level costs and avoid future cash burn. Our immediate priority is
therefore to drive sustainable and consistent revenue growth, supported by
operational efficiency and a disciplined approach to investment. To help
support this objective, the Executive Directors have elected to temporarily
reduce salaries and additional costs by £100,000 per annum from 1 April 2025
onwards.
To accelerate this progress, we are actively exploring opportunities to
broaden our revenue base - particularly in consultancy and partnerships,
value-added services, and adjacent markets that align with our capabilities.
At the same time, we remain focused on deepening customer relationships,
enhancing service delivery, and expanding our vendor network to improve
margins and resilience.
Despite wider economic headwinds, we are confident in our ability to execute
our strategy and build a cash-generative business capable of supporting its
long-term ambitions. During the period, we made meaningful progress in sales
acceleration, customer service improvements, and cost efficiencies -
initiatives that are already delivering positive impact.
We will continue to build on this foundation in the second half of the year,
and on behalf of the Board, I would like to thank our shareholders, customers,
and employees for their continued support as we pursue our growth strategy
with focus and discipline.
Darron Giddens
29 June 2025
Consolidated income statement
for the six-month period ended 31 March 2024
Unaudited 6 months to 31 March Unaudited 6 months to 30 September Unaudited 6 months to 31 March Audited
Year to
30 September
Note 2025 2024 2024 2024
£'000 £'000 £'000 £'000
Continuing operations
Revenue 3 3,383 4,402 4,335 8,737
Cost of sales (3,155) (4,168) (4,069) (8,238)
Gross profit 228 233 266 499
GP% 7% 5% 6% 6%
Administrative expenses (489) (476) (563) (1,039)
Trading Group EBITDA(1) 26 42 21 63
Amortisation of intangible assets 6 (40) (52) (53) (105)
Plc costs(2) (198) (221) (251) (472)
Depreciation of tangible assets and other right of use assets (34) (7) (8) (15)
Share-based payments (15) (5) (6) (11)
Operating loss (261) (243) (297) (540)
Interest receivable 5 - 1 1
Interest payable (63) (7) (7) (14)
Profit/(loss) before taxation (319) (250) (303) (553)
Taxation 10 10 10 20
Profit/(loss) from continuing operations (309) (240) (293) (533)
Gain on disposal of subsidiaries 4 3,553 - - -
Loss from discontinued operations (479) (1,832) (788) (2,620)
(net of tax)
Profit / (loss) and total comprehensive profit/ (loss) for the year 2,765 (2,072) (1,081) (3,153)
attributable to owners of the parent
Profit(loss) per share
Basic and fully diluted 5 0.39p (0.30)p (0.15)p (0.45)p
In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations, the comparative figures have been restated to reflect continuing
operations. The revenue, expenses, and post-tax loss associated with the
discontinued operations are presented as a single amount on the face of the
income statement.
(
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, its listing on the AIM Market of the London
Stock Exchange and its associated professional advisors.
Consolidated statement of financial position
as at 31 March 2024
Unaudited Unaudited Audited
31 March 2025 31 March 30 September 2024
2024
Note £'000 £'000 £'000
Non-current assets
Intangible assets 6 760 10,865 799
Property, plant and equipment 69 259 85
Right of Use assets 9 1,429 3
Total non-current assets 838 12,553 887
Current assets
Inventories 64 153 76
Trade and other receivables 7 738 4,280 516
Cash and cash equivalents 818 606 1,042
Current assets excluding assets held for sale 1,620 5,589 1,634
Assets classified as held for sale - - 14,976
Total current assets 1,620 5,589 16,610
Total assets 2,458 18,142 17,497
Current liabilities
Trade and other payables 8 (1,515) (7,518) (1,690)
Borrowings 9 (69) (69) (6,085)
Lease liability (9) (1,082) (3)
Current liabilities excluding those associated with assets held for sale (1,593) (10,233) (7,778)
Liabilities associated with assets held for sale - - (11,575)
Total current liabilities (1,593) (10,233) (19,353)
Non-current liabilities
Borrowings 9 (50) (5,629) (100)
Deferred tax liability (127) (844) (136)
Total non-current liabilities (177) (7,879) (236)
Total liabilities (1,770) (18,112) (19,589)
Net assets 688 30 (2,092)
Equity
Share capital 7,062 7,062 7,062
Share premium account 17,630 17,630 17,630
Capital redemption reserve 6,489 6,489 6,489
Merger reserve 1,997 1,997 1,997
Other reserve 290 446 341
Retained earnings (32,860) (33,594) (35,611)
Total equity 688 30 (2,092)
Consolidated statement of changes in equity
for the six-month period ended 31 March 2024
Share Share Capital redemption reserve Merger Other Retained Total
capital
premium
reserve
reserve
earnings
£'000 £'000 £'000 £'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 - - - - - (1,081) (1,081)
Share-based payments - - - - 76 - 76
Total movements - - - - 76 (1,081) (1,005)
Equity at 31 March 2024 7,062 17,630 6,489 1,997 446 (33,594) 30
Share Share Capital redemption reserve Merger Other Retained Total
capital
premium
reserve
reserve
earnings
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2024 7,062 17,630 6,489 1,997 446 (33,594) 30
Loss and total comprehensive loss for the period - - - - - (2,072) (2,072)
Share-based payments (adjusted) - - - - (50) - (50)
Share options lapsed - - - - (55) 55 -
Total movements - - - - (105) (2,017) (2,122)
Equity at 30 September 2024 7,062 17,630 6,489 1,997 341 (35,611) (2,092)
Share Share Capital redemption reserve Merger Other Retained Total
capital
premium
reserve
reserve
earnings
£'000 £'000 £'000 £'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 loss for the period - - - - - 2,765 2,765
Share-based payments - - - - 15 - 15
Share options lapsed - - - - (66) 66 -
Total movements - - - - (51) 2,831 2,780
Equity at 31 March 2025 7,062 17,630 6,489 1,997 290 (32,780) 688
Consolidated statement of cash flows
for the six-month period ended 31 March 2024
Unaudited Unaudited Unaudited Audited
6 months to 31 March 2025
6 months to 30 September 2024
6 months to 31 March 2024
Year to
30 September
2024
£'000 £'000 £'000 £'000
Cash flows from operating activities
Loss before taxation 2,684 (2,180) (1,188) (3,368)
Adjustments for:
Gain on disposal of subsidiaries (3,553) - - -
Depreciation - IFRS16 data centre right of use assets - 742 650 1,392
Depreciation - other right of use assets 9 63 77 140
Depreciation - owned assets 25 74 79 153
Amortisation 40 431 430 861
Share-based payments 15 (50) 76 26
Net finance expense 100 544 488 1,032
Movements in provisions - 2 (135) (133)
Decrease / (increase) in trade and other receivables (222) 359 163 522
Decrease / (increase) in inventories 32 57 (77) (20)
(Decrease) / increase in trade payables, accruals and contract liabilities (91) 798 131 929
Net cash inflow from operating activities (891) 840 694 1,534
Net cash inflow from discontinued operations (479) 391 - 391
Cash flows from investing activities
Proceeds from disposal of subsidiaries 7,365 - - -
(net of expenses and cash disposed)
Purchase of property, plant and equipment - (30) (27) (57)
Payment of deferred consideration relating to acquisitions (25) (25) (25) (50)
Interest received 5 - 1 1
Net cash (outflow) / inflow from investing activities 7,345 (55) (51) (106)
Cash flows from financing activities
Repayment of MXC Loan Notes (6,089) - - -
Repayment of COVID-19 bounce-back loan (10) (6) (10) (16)
Payment of lease liabilities - (691) (813) (1,504)
Interest paid (100) (43) (8) (51)
Net cash outflow from financing activities (6,199) (740) (831) (1,571)
Net (decrease) / increase in cash (224) 436 (188) 248
Cash at bank and in hand at beginning of period 1,042 606 794 794
Cash at bank and in hand at end of period 818 1,042 606 1,042
Comprising:
Cash at bank and in hand - assets held for sale - 855 - 855
Cash at bank and in hand - continuing operations 818 187 - 187
Cash at bank and in hand at end of period 818 1,042 606 1,042
Notes to the consolidated interim financial statements
1. General information
CloudCoCo Group plc (the "Group") is a public limited company incorporated in
England and Wales under the Companies Act 2006. The address of the registered
office is 5 Fleet Place, London, EC4M 7RD. 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 because that is
the currency of the primary economic environment in which each of the Group's
subsidiaries operates.
2. Basis of Preparation
2.1 Accounting Policies
The accounting policies used in the presentation of the unaudited consolidated
interim financial statements for the six months ended 31 March 2025 are in
accordance with applicable International Financial Reporting Standards (IFRSs)
as applied in accordance with provisions of the Companies Act 2006. The
principal accounting policies of the Group have been consistently applied to
all periods presented unless otherwise stated.
2.2 Going concern
The Directors have prepared the financial statements on a going concern basis
which assumes that the Group will continue to meet liabilities as they fall
due.
The Directors have reviewed the forecast sales growth, budgets and cash
projections for the period to 30 June 2026, including sensitivity analysis on
the key assumptions such as the potential impact of reduced sales or slower
cash receipts for the next twelve months and the Directors have reasonable
expectations that the Group and the Company have adequate resources to
continue operations for the period of at least one year from the date of
approval of these unaudited interim financial statements.
The Directors have not identified any material uncertainties that may cast
doubt over the ability of the Group and Company to continue as a going concern
and the Directors continue to adopt the going concern basis in preparing these
unaudited interim financial statements.
3. Segment reporting
The executive directors of the Company and its subsidiaries review internal
reporting to assess performance and allocate resources. Profit performance is
primarily evaluated using adjusted profit measures consistent with those
disclosed in the Annual Report and Accounts.
The Board considers the Group to operate as a single reporting segment: the
provision of IT managed services to customers. While the Directors review
revenue and gross profit across two distinct categories-Managed IT Services
and Value-Added Resale-the underlying operating costs and asset base
supporting these activities are shared, and are not separately allocated in
internal reporting.
Accordingly, the segmental analysis below is presented at the revenue level
only, reflecting the internal reporting structure and the Group's two
reportable operating categories:
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 MoreCoCo
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 have taken the decision
to condense our reporting segments into two new 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 Group EBITDA(1) is reported as a single
segment.
3.1.1 Revenue Unaudited Unaudited Unaudited Audited
6 months to 6 months to 6 months to Year to
31 March 30 September 31 March 30 September
2025
2024
2024
2024
£'000
£'000
£'000
£'000
By operating segment
Managed IT Services 142 215 205 420
Value Added Resale 3,241 4,187 4,130 8,317
Total revenue 3,383 4,402 4,335 8,737
3.1.2 Revenue
Unaudited Unaudited Unaudited Audited
6 months to 6 months to 6 months to Year to
31 March 30 September 31 March 30 September
2025
2024
2024
2024
£'000
£'000
£'000
£'000
By revenue type
More Computers (e-commerce) 3,016 3,827 3,579 7,406
Systems Assurance Limited (direct sales) 367 575 756 1,331
Total revenue 3,383 4,402 4,335 8,737
4. Gain on disposal of subsidiaries
On 31 October 2024, the Company sold its interest in CloudCoCo Limited and
CloudCoCo Connect Limited, ultimately raising £7.9 million of cash of which
£6.2 million was immediately used to repay the MXCG loan notes in order to
avoid further costs for extending the loan note term. Details of the disposals
are set out below, including post completion receipts and payments, based on
unaudited completion accounts.
CloudCoCo Limited CloudCoCo Connect Limited Total
£'000 £'000 £'000
Non-current assets
Intangible assets 6,847 2,788 9,635
Property, plant and equipment 124 18 142
Right of Use assets 112 1,278 1,390
Total non-current assets 7,083 4,084 11,167
Current assets
Inventories 37 - 37
Trade and other receivables 1,920 1,847 3,767
Contract assets 407 18 425
Cash and cash equivalents 16 102 118
Total current assets 2,380 1,967 4,347
Total assets 9,463 6,051 15,514
Liabilities
Trade and other payables (3,789) (2,797) (6,586)
Contract liabilities (1,141) (610) (1,751)
Provision for onerous contracts - (790) (790)
Lease liability (152) (1,278) (1,430)
Deferred tax liability (365) (399) (764)
Total Liabilities (5,447) (5,874) (11,321)
Net assets at book value 4,016 177 4,193
Initial consideration 7,500 250 7,750
Post completion (payments) / receipts (385) 558 173
Proceeds from Sale 7,115 808 7,923
Gain/(loss) on disposal of subsidiary before fees 3,099 631 3,730
Fees associated with the disposal (177)
Gain/(loss) on disposal of subsidiary 3,553
5. Profit/(loss) per share
Unaudited Unaudited Unaudited Audited
6 months to
6 months to
6 months to
Year to
31 March 2025
30 September 2024
31 March
30 September 2024
2024
£'000 £'000 £'000 £'000
Profit/(loss) attributable to ordinary shareholders 2,765 (2,072) (1,081) (3,153)
Number Number Number Number
Weighted average number of Ordinary Shares in 706,215,686 706,215,686 706,215,686 706,215,686
issue, basic and diluted
Basic and diluted profit/(loss) per share 0.39p (0.30)p (0.15)p (0.45)p
6. Intangible assets
Intangible assets are non-physical assets which have been obtained as part of
an acquisition or research and development activities, such as innovations,
introduction and improvement of products and procedures to improve existing or
new products. All intangible assets have an identifiable future economic
benefit to the Group at the point the costs are incurred. The amortisation
expense is recorded in administrative expenses in the Consolidated Income
Statement
Goodwill IT, billing and website systems Brand Customer lists Total
Intangible assets £'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2023 and 31 March 2024 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 31 March 2025 253 179 470 141 1,043
Accumulated amortisation
At 1 October 2023 - (220) (1,277) (6,813) (8,310)
Charge for the period - (9) (61) (360) (430)
At 31 March 2024 - (229) (1,338) (7,173) (8,740)
Charge for the period - (9) (61) (361) (431)
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 period - (9) (24) (7) (40)
At 31 March 2025 - (64) (169) (51) (284)
Impairment
At 1 October 2023 and 31 March 2024 (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 31 March 2025 - - - - -
Carrying amount
At 31 March 2025 253 115 301 90 759
At 30 September 2024 253 124 325 97 799
At 31 March 2024 6,834 132 820 3,079 10,865
Average remaining amortisation period 6.3 years for each category of intangible asset
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 31 March 2025, there were two CGUs being Systems
Assurance Limited and More Computers Limited following the sale of CloudCoCo
Limited and CloudCoCo Connect 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% (FY23: 13.25%) for each
CGU. The pre-tax discount rate (weighted average cost of capital) was
calculated at 18% per annum (FY23:18%) and the revenue growth rate is 5% per
annum (FY23: 5%) for each CGU for 5 years and a terminal growth rate of 2.3%
(FY23: 2.0%).
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 176 259
Pre-tax discount rate increased by 1% - resulting headroom 158 233
Revenue growth rate reduced in years 2 to 5 by 1% per annum - resulting 126 162
headroom
Base case calculations highlight that the impairment review in respect of More
Computers Limited is most sensitive to the discount rate and growth rate.
7. Trade and other receivables
Unaudited Unaudited Audited 30 September 2024
31 March 2025 31 March 2024 £'000
£'000 £'000
Trade receivables 632 2,581 482
Other debtors - 105 -
Prepayments 106 1,594 34
Trade and other receivables 738 4,280 516
The Group reviews the amount of expected credit loss associated with its trade
receivables and contract assets under IFRS 9 based on forward looking
estimates that take into account current and forecast credit conditions as
opposed to relying on past historical default rates. In adopting IFRS 9 the
Group applied the Simplified Approach applying a provision matrix based on
number of days past due to measure lifetime expected credit losses and after
taking into account customers with different credit risk profiles and current
and forecast trading conditions.
8. Trade and other payables
Unaudited Unaudited Audited 30 September 2023
31 March 2024 31 March 2023 £'000
£'000 £'000
Trade payables 6,047 5,325 1,466
Accruals 636 1,424 155
Other taxes and social security costs 835 657 69
Trade and other payables 1,515 7,518 1,690
9. Borrowings
9.1 Current
Unaudited Unaudited Audited 30 September 2024
31 March 2025 31 March 2024 £'000
£'000 £'000
Loan notes repayable in August 2026 (repaid 31 October 2024) - - 6,016
COVID-19 Bounce-back loan repayable - short-term element 19 19 19
Deferred consideration relating to the acquisition of CloudCoCo Connect 50 50 50
Limited - short term element at Fair Value
69 69 6,085
9.2 Non-current Unaudited Unaudited Audited 30 September 2024
31 March 2025 31 March 2024 £'000
£'000 £'000
Loan notes repayable in August 2026 (repaid 31 October 2024) - 5,498 -
COVID-19 Business Bounce-back loan repayable - long-term element 9 35 25
Deferred consideration relating to the acquisition of CloudCoCo Connect 41 96 75
Limited - long term element at Fair Value
50 5,629 100
On 29 April 2024, MXC Guernsey Limited ("MXCG") agreed to extend the
redemption date of the loan notes from 21 October 2024 to 31 August 2026. As
consideration for the extension, a fee of £550,000 would have become payable
from 22 October 2024. Had the extension been taken up, MXCG would also have
secured the right to appoint a consultant to, or an Executive Director of, the
Company's Board, and to increase its loan security to a full debenture over
all Group Companies. The loan notes would have continued to accrue interest at
the existing rate, with all amounts due on redemption.
However, the loan notes were fully repaid on 31 October 2024, and as a result,
the £550,000 extension fee was not incurred. All obligations under the loan
notes, including interest and security arrangements, were discharged in full
upon repayment.
On 10 May 2020, the Company borrowed £50,000 from HSBC Bank UK Plc, under the
COVID-19 Business Bounce-back loan scheme. In accordance with the UK
Government's Business Interruption Payment scheme, the interest on the loan
for the first 12 months is covered by the UK Government and the Company will
repay the loan in 59 equal monthly instalments, commencing June 2021.
As part of the acquisition of More Computers Limited on 6 September 2021, the
Company inherited a COVID-19 Business Bounce-back loan of £50,000 between
More Computers Limited and NatWest Bank Plc. In accordance with the UK
Government's Business Interruption Payment scheme, the interest on the loan
for the first 12 months is covered by the UK Government and the Company will
repay the loan in 59 equal monthly instalments, commencing March 2022.
9.3 Net debt - net debt comprises: 31 March Cash Other 31 March
2025
movements
movements
2024
£'000
£'000 £'000 £'000
Loan notes - (6,186) 688 5,498
COVID-19 Bounce-back loans 35 (19) - 54
Deferred consideration relating to the acquisition of CloudCoCo Connect 96 (50) - 146
Limited (formerly IDE Group Connect Limited) - Fair Value
Lease liabilities 9 (1,498) 15 1,492
Cash and cash equivalents (818) (212) - (606)
Total (678) (7,965) 703 6,584
END
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