REG - Cordel Group PLC - Annual Report and Notice of AGM
05/11/2024 07:00
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RNS Number : 8747K Cordel Group PLC 05 November 2024
5 November 2024
Cordel Group PLC
("Cordel", the "Company" or the "Group")
Results for the year ended 30 June 2024
Publication of Annual Report and Accounts and Notice of Annual General Meeting
Cordel Group PLC (AIM: CRDL), the Artificial Intelligence platform for
transport corridor analytics, is pleased to announce its audited results for
the twelve months ended 30 June 2024 ("FY24").
Financial Highlights
GBP 000's Twelve months to 30 June 2024 Twelve months to 30 June 2023 % Change % Change constant currency
Total Revenue 4,439 3,046 46% 46%
Cost of sales (1,616) (791) 104% 102%
Other expenses (4,557) (3,129) 46% 48%
Grant income 519 372 40% 47%
Other income 19 36 -47% -38%
Loss before Income tax (1,196) (466) 157% 158%
*Constant currency reflects the results had the underlying transactional
currencies been constant in both periods reported.
Operational and Financial Highlights for the Period
· Four significant new customer contracts signed in USA, Mexico, the
Middle East and APAC.
o New major USA customer, Genesee & Wyoming Inc, an American short line
railroad holding company, that owns or maintains an interest in 122 railroads.
o First Latin America customer, Tren Maya in Mexico, with the contract won
in October 2023 then expanded in June 2024.
o First Middle East customer for automated track gauging and clearances over
a 1,700km national network.
o New Asia Pacific customer for clearances and vegetation management over a
national network, plus a key research grant won in Australia for Level
Crossing safety.
· Continuing success in our Amtrak (USA) delivery, with all milestones
achieved.
· Continuing delivery success with Network Rail and Angel Trains in the
UK and ARTC in Australia.
· Achieved certification under Network Rail's 3204 standard, validating
our technology worldwide.
· Total revenue up 46% in reported currency and up 46% in constant
currency.
· Total expenses increased by 46% (48% in constant currency), with
investment in sales and technical staff.
· Australian R&D tax offset refundable increased reflecting greater
R&D activity.
· Cash balance and trade receivables as at 30 June 2024 was
£1,533,621.
Post Period End Highlights
· Extension of relationship with Amtrak announced in August 2024 to
serve a new part of their network, Amtrak's Metro-North corridor.
· Appointment of Natasha Dinneen as CFO, Director and Company Secretary
in September 2024 with Thouraya Walker returning from sabbatical to a
non-executive director position on the Board.
· Successful placing of 15,384,616 new Ordinary Shares at 6.5 pence per
share on 1 October 2024 raising proceeds of £1.0 million to accelerate the
Company's development of its 3D object recognition capabilities through its AI
platform.
· Certification from the Network Rail Technical Authority for the
measurement of Overhead Line Equipment ("OLE") using LiDAR data captured from
ordinary passenger trains, operated in normal service at line speeds of 140
km/h, announced 23 October 2024.
John Davis, CEO of Cordel, commented:
"We are proud of the results achieved in FY24 and our strengthening position
in the international rail market. It has also been an excellent year of
technology and product development. We have seen the release, and market
uptake, of the Cordel Rugged sensor and we have achieved the vital 3204
approval with Network Rail. We have engaged new sales, sales support and
delivery engineers in the USA, new sales support and delivery resources in the
UK and new development engineers and delivery staff in Australia. We plan to
continue to invest in the Group over the next 12 months with further modest
headcount increases planned in the year. We have the operating model in place
to allow us to maintain our revenue growth trajectory in FY25."
Annual Report
The Annual Report and Accounts are being posted to shareholders today and will
be made available on the Group's website www.cordel.ai (http://www.cordel.ai/)
Key extracts from the report and accounts are presented below.
The Company also announces that the annual general meeting of the Company is
to be held at the offices of Cordel Group plc, Salisbury House, London Wall,
EC2M 5SQ, United Kingdom at 9.00 am on Tuesday 3 December 2024. A notice of
Annual General Meeting has been posted to shareholders today.
Enquiries:
Cordel Group PLC c/o Cavendish
Ian Buddery, Chairman
John Davis, Chief Executive Officer
Cavendish Capital Markets Limited, Broker +44 (0)20 3829 5000
Marc Milmo / Rory Sale (Corporate Finance)
/Sunila de Silva (Corporate Broking)
Strand Hanson Limited, Nominated Adviser +44 (0)20 7409 3494
Richard Johnson / James Bellman
About Cordel
Cordel produces specialist hardware and software for capturing, analysing and
reporting on large datasets within the transport sector, employing
sophisticated artificial intelligence algorithms.
Further information on the Company is available at: www.cordel.ai
(http://www.cordel.ai/)
STRATEGIC REPORT
The Directors present their strategic report on the consolidated entity
(referred to hereafter as the 'Group') consisting of Cordel Group plc
(referred to hereafter as 'Cordel', 'the Company' or ' the parent entity') and
the entities it controlled at the end of, or during, the year ended 30 June
2024.
The strategic report includes the following sections:
1. Company overview
2. Chairman's statement
3. Review of operations by the Chief Executive Officer
4. s.172 statement
5. Principal risks and uncertainties
6. People
7. Environmental, social and governance
Cautionary statement regarding forward-looking statements
This document contains certain forward-looking statements. These
forward-looking statements include references to matters that are not
historical facts or are statements regarding the Company's intentions, beliefs
or current expectations concerning, among other things, the Group's results of
operations, financial condition, liquidity, prospects, growth, strategies, and
the industries in which the Group operates. Forward-looking statements are
based on the information available to the Directors at the time of preparation
of this document and will not be updated subsequent to the issue of this
document. The Directors can give no assurance that these expectations will
prove to be correct. Due to inherent uncertainties, including both economic
and business risk factors underlying such forward-looking information, actual
results may differ materially from those expressed or implied by these
forward-looking statements.
Principal activities
Cordel is a United Kingdom ('UK') incorporated software company with
operations in Australia (main country of operation), USA and the UK. Cordel
produces specialist software and hardware for capturing, analysing and
reporting on large datasets within the transport sector, employing
sophisticated artificial intelligence algorithms.
1. COMPANY OVERVIEW
Cordel's specialist hardware and cloud-based platforms, used primarily in the rail infrastructure industry, capture data and turn it into actionable insights to help manage vital assets and to improve safety, efficiency and sustainability for our customers.
The Cordel Group operates subsidiaries in the UK, Australia and the USA,
delivering products and services for rail asset management. Cordel designs and
manufactures LiDAR (Light Detection And Ranging) sensors optimised and
ruggedised for train and other vehicle data capture applications.
The Group is a leader in infrastructure monitoring through automation and
machine learning. The flagship Cordel solution is focused on the rail industry
predicting and identifying its maintenance needs including issues with
vegetation, overhead lines and track ballast. The solution utilises LiDAR
sensors and high-resolution video cameras, attached to trains and track
maintenance vehicles, to automate the collection of infrastructure data at
survey-grade accuracy. It then employs Artificial Intelligence to analyse the
huge datasets, confirming correct geometry, providing insights and
recommending actions in near real time. Rail staff can then inspect their
network via Cordel's cloud-based viewing software, which is as easy to use as
popular map/navigation applications, but much more powerful.
Cordel is seeking to establish a strong business in rail before expanding into
road and energy infrastructure. The Group has key 'anchor' customers in Amtrak
and Genesee & Wyoming in the USA, Network Rail and Angel Trains in the UK,
Tren Maya in Mexico, and the Australian Rail Track Corporation (ARTC) in
Australia.
The Market
The markets for Cordel's solutions are large in size and global in extent and
include the UK, USA, Europe, Middle East and Australia.
Managing infrastructure assets is a major component of the overall railway
management system market, which is projected to grow strongly. Global Market
Insights Inc, in their report published September 2023 said, "Railway
Management System Market size was valued at USD 37.4 billion in 2022 and is
estimated to register a CAGR over 11.5% between 2023 and 2032. The
increasing adoption & integration of AI technology & cloud-based
services is enhancing predictive maintenance, optimising rail operations, and
reducing downtime. Cloud-based solutions facilitate real-time access,
enabling efficient decision-making across the railway network. This synergy
empowers operators to enhance safety, improve efficiency, and provide superior
passenger experiences. As the industry recognizes the transformative
potential of AI & cloud technologies, their implementation is expected to
drive innovations, streamline operations, and elevate the overall efficiency
& competitiveness of the market."
The Cordel offering is becoming established in this growth environment and is
taking market share away from older, less effective approaches to asset
infrastructure monitoring. In addition, Cordel is taking advantage of new
budgets being allocated, as innovation-oriented spend grows as part of the
ongoing market expansion.
Cordel is strongly positioned within its markets with a highly differentiated
offering. It provides a wider range of analytic outputs than competitive
services and can monitor and analyse infrastructure faster, more often and at
lower cost, due in no small part to the high levels of automation inherent in
its design.
2. CHAIRMAN'S STATEMENT
The Company has achieved excellent growth in the 2024 fiscal year, in
particular in the USA where our advanced capabilities have gained widespread
recognition and market engagement is strong. Our software is delivering
industry-leading accuracy and processing speed in the application of
Artificial Intelligence to railway infrastructure management. Our
train-mounted sensors are capturing data around the clock and we lead the
world in track miles scanned and processed. The investment phase now
transitions to a target of profitable growth and a continuing focus on new
customer acquisition in FY25.
We are proud of the dedication to customer service and achieving delivery
targets that pervades the Company. Our CEO, John Davis, has built a culture
of excellence, respect and commitment that is reflected in our unblemished
delivery record and the enthusiasm of all our employees.
We continue to carefully manage expenditures, operating at or above cashflow
breakeven before expansion strategy costs. In FY24, investment continued in
product development, developing new sensor hardware and adding new software
functionality, to further improve our competitive position. We regularly
review our structure and cost base to ensure that our core mission of data
capture and machine learning analysis is foremost.
The additional funds raised post year end in October 2024 will enable
accelerated development of 3D object recognition capabilities in our AI
platform. We believe this will broaden the application of our technology
across rail networks and enhance long term revenue growth.
As always, the Board is grateful for the dedication and hard work of our
people in the UK, United States and Australia. We have a great team who are
committed to customers and the Company.
Our purpose is to build a strong and resilient business, growing shareholder
value through the consistent achievement of business plan targets and the
expansion of our recurring revenue customer base. We have confidence in the
long-term outlook and we thank our shareholders for their continuing support.
Ian Buddery
Chairman
28 October 2024
3. REVIEW OF OPERATIONS BY THE CHIEF EXECUTIVE OFFICER
I am delighted to report on another year of significant growth and burgeoning
maturity at Cordel. Building on the foundations laid in FY23, we have
delivered on our target of doubling the number of key customer contracts and
achieved another year of substantial revenue growth, whilst investing in key
areas.
We are particularly proud of our progress in the US market where we now have
two marquee customers in Amtrak and Genesee & Wyoming and a very strong
pipeline of activity across multiple Class I and Class II railroads across
North America. In addition, we have broken into the Latin American market with
Tren Maya in Mexico and see considerable opportunity across Latin and South
America. Almost 50% of our income in FY24 has come from the Americas and we
expect that percentage to grow in FY25.
We remain optimistic about opportunities in the UK with Network Rail now into
Control Period 7, and were delighted to announce (post period end) the
Certificate of Approval for Cordel's AI-powered outputs for Electrified lines
from the Network Rail Technical Authority.
We have also been able to add to our customer list in APAC to complement our
existing strong relationship with ARTC and have also started to progress
opportunities in other territories including our first Middle East contract
with a national rail operator.
Whilst we continue to view the rail industry as conservative and relatively
slow-moving, we are nevertheless finding ways to rapidly grow our business.
Based on a 46% revenue growth in FY24, a high level of contracted income in
our next financial year and a very strong deal pipeline heading into FY25, we
remain very optimistic about Cordel's future.
Overview of results
GBP 000's Twelve months to 30 June 2024 Twelve months to 30 June 2023 % Change % Change constant currency
Total Revenue 4,439 3,046 46% 46%
Cost of sales (1,616) (791) 104% 102%
Other expenses (4,557) (3,129) 46% 48%
Grant income 519 372 40% 47%
Other income 19 36 -47% -38%
Loss before Income tax (1,196) (466) 157% 158%
Gross margin reduced to 64% in the twelve months to 30 June 2024 (74% in FY23)
due to an increased proportion of hardware vs software and services in new
contracts during the year.
Strategy
In FY24, we set out to double our customer contracts from four to eight -
across our core markets of the UK, United States and Australia. With the
support of funds from our capital raise in March 2023, we invested in our
sales and business development capabilities, our engineering and delivery
resource and the maturity and quality of products. We were therefore delighted
to achieve our customer win target with new names in the US, Middle East,
Mexico and APAC.
Looking into FY25, we continue to see considerable opportunity in the United
States and the Americas more broadly. With the benefit of more customer wins,
we feel increasingly confident of our price per mile structure for different
rail specific use cases and on the demand that exists for scanning and
analysing new and existing data for railroads globally. With the increased
maturity and technology readiness levels (TRLs) of our solutions, we believe
that we are extremely well placed to 'sell the truck' across the next twenty
four months and build towards a £10m revenue business. We also see a
significant opportunity to deepen partnerships in FY25. This includes
developing existing relationships with D/Gauge and TUV Rheinland globally; and
with Holland Rail in the US.
FY24 has been a foundational year for the Artificial Intelligence (AI) and
Machine Learning (ML) that we use in our analysis of rail corridor data. Our
AI engineers have made significant breakthroughs in training our software to
identify rail assets and other items near the track - both large and very
small. We have also focused on and vastly improved our ability to deliver for
customers by analysing and outputting insights from huge amounts of customer
data. We are now extremely well set up to deliver at pace on the contracts we
have won and to scale up rapidly as we win more business in the US.
The nature of our AI / ML approach means our offering is in a state of
constant self-improvement, a virtuous circle in which the datasets added from
each new customer and application refine our solution's knowledge base and the
insights we are able to generate.
Ongoing operations
As of 30 June 2024, the Group had cash of £1,022,180 and trade receivables of
£511,441. Post period end, in October 2024, the Group completed a successful
placing raising £1m.
Our vision remains to 'Create safer, more efficient and sustainable railways
around the world'. We have moved to a new, larger and more centrally based
office in Newcastle, Australia which has given us both better working space
and increased staff satisfaction. We have a modest office in Moorgate, London
in the UK and our team in the USA continues to work from home offices but to
get together regularly at events, conferences and customer meetings. We plan
to make a small number of key hires as we progress through FY25 but headcount
does not need to grow at anywhere near the same rate as in FY24 meaning that
we plan to increase operating expenses by less than 10%.
Our core values are unity, humility, integrity, curiosity, excellence and
ambition. We have been delighted to recruit individuals who are completely
aligned with our attitude to and ways of working. As the business has matured
across this year, we have worked to professionalise a broad range of processes
and systems within Cordel and will continue to do that as our growth continues
in FY25.
Outlook
We are very confident that we can continue our recent growth trend in FY25 by
acquiring more new customers across the globe and by broadening the services
we offer to our existing customer base. We continue to be ruthlessly focused
on maximising shareholder value and remain very confident that Cordel can
deliver considerable revenue growth in the coming years.
John Davis
Chief Executive Officer
28 October 2024
4. S.172 STATEMENT
The Directors of Cordel Group Plc are responsible for promoting the success of
the Company for the benefit of its shareholders, while having due regard to
the following factors as set out in Section 172(1) of the Companies Act 2006:
a) Long-term Consequences of Decisions
The Board consistently takes into account the long-term impact of its
decisions. In FY24, we made significant investments in sales and technical
teams to enhance our long-term growth prospects. This decision aligns with our
strategy to become a leader in innovation and create safer, more efficient and
sustainable railways around the world.
b) Interests of Employees
Our employees are a key asset of the Company, and their engagement,
development, and well-being are critical to our success. During the year, we
moved offices in Newcastle, Australia to larger premises better suited to our
team's needs. Across all locations, we encourage skills development through
training and mentorship, and team building inside and outside of the
workplace. We strive to be regarded as a great employer and measure this by
the quality people we attract and retain.
c) Fostering Business Relationships with Suppliers, Customers, and Others
The Company values its relationships with key stakeholders, including
suppliers and customers. We have continued to collaborate closely with
suppliers to ensure ethical sourcing and improved efficiency across the supply
chain. In FY24, we achieved certification from Network Rail's 3204 standard,
becoming the first company to achieve this approval for capturing and
processing data from trains running at full speed in passenger service.
Network Rail has the most stringent infrastructure monitoring standards in the
world and this certification has confirmed our status as the most advanced
supplier of AI-driven rail infrastructure insights globally.
d) Impact on the Community and the Environment
Cordel Group plc is committed to minimising its environmental footprint and
contributing positively to the communities in which we operate. Our technology
helps railways reduce their environmental footprint by reducing the need for
inspection locomotives and we are driven by a conviction that rail transport
is a social good.
e) Maintaining a Reputation for High Standards of Business Conduct
We are dedicated to maintaining the highest standards of corporate governance
and ethical behaviour. This year, the Company has appointed new brokers,
Cavendish Capital Markets Limited, with a view to further developing our
governance and compliance.
f) Acting Fairly Between Members of the Company
The Board is mindful of its responsibilities to treat all shareholders fairly
and equitably. We have maintained regular communication with shareholders and
ensured transparency in our decision-making process, particularly regarding
our commercial progress and long term growth plans.
The Board recognises that its decisions impact a broad range of stakeholders
and is committed to ensuring that these interests are appropriately balanced
with the Company's strategic objectives.
5. PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the Group's growth
strategies are subject to a number of risks which could adversely affect the
Group's future development. The following is not an exhaustive list or
explanation of all risks and uncertainties associated with the Group but those
considered by management to be the principal risks:
Risks relating to the Group and the industry in which it operates:
Dependence on major clients
The Group's future growth relies on new sales to rail network owners in
multiple countries. These owners typically have complex procurement
arrangements which include product trials and competitive tenders. This risk
is mitigated by increasing sales and business development teams in order to
broaden the pool of opportunities and entering into partnership agreements
with a range of rail-focused firms, such as Holland LLP in the USA.
Business strategy
Although the Group has a clearly defined strategy, there can be no guarantee
that its objectives will be achieved or that the Group will achieve the level
of success that the Company's Directors expect. Therefore, the Group may
decide to change aspects of its strategy as needed. The Group's ability to
implement its business strategy successfully may be adversely impacted by
factors that the Group cannot currently foresee, such as unanticipated market
forces, costs and expenses or technological factors. Should it be unsuccessful
in implementing its strategy or should it take longer than expected to
implement, the future financial results of the Group could be negatively
impacted. This risk is mitigated by the continual review of the business
performance to its plan and that changes are made to ensure the Group has
sufficient liquidity to pursue its current plan.
Technological changes
Generally, product markets are exposed to rapid technological change, changes
in use, changes to customer requirements and preferences; and services
employing new technologies and the emergence of new industry standards and
practices. The Group operates in a market with such changes which have the
potential to render the Group's existing technology and products competitively
impaired.
To successfully remain competitive, the Group will ensure continued product
improvement and the development of new markets and capabilities to maintain a
pace congruent with changing technology. This added strain may stretch the
Group's capital resources which may adversely impact the revenues and
profitability of the Group. The Group's success is dependent on the ability to
effectively respond and adapt to technological changes and changes to customer
preferences. There can be no assurance that the Group will be able to
effectively anticipate future technological changes or changes in customer
preferences. Furthermore, there is also no assurance that the Group will have
sufficient financial resources to effectively respond in a timely manner if
such a change is anticipated.
Competition
There is no guarantee against new entrants or current competitors providing
superior technologies, products or services to the market. There is no
certainty that new entrants or current competitors will not provide equivalent
products for a lower price. The Group may be forced to make changes to one or
more of its products or to its pricing strategy to effectively respond to
changes in customer preferences in order to remain competitive. This may
impact negatively on the Group's financial performance. The Group will
continue to review its competitive position and adjust its business plan to
maintain relevance to its customers' requirements.
Inability to contract with customers on the most favourable terms to the Group
The Group contracts with a wide variety of companies and partners, many of
which are in strong negotiating positions and have greater financial resources
than the Group. The Group may in the future have limited scope for negotiation
of the price or contract terms with some of its major clients.
The Group's software may not perform as expected and the Group could be at
risk of defects which adversely affect its customers
There is no guarantee that the Group's software will perform as intended.
Costs spent on developing the software may therefore not be recouped and this
may result in reduced profitability for the Group. As the software is complex,
it may contain defects or vulnerabilities which may not be detected until
after deployment to major customers. To mitigate this risk the Group has
implemented applicable internal code review and testing processes. The
software is then subject to customer acceptance testing and an ongoing high
level of technical support.
Data security and data privacy
The Group is subject to data and privacy regulations, particularly General
Data Protection Regulation ('GDPR') and its equivalents in the US and other
markets in which we intend to operate. Failure to comply with legal or
regulatory requirements relating to data security or data privacy in the
course of the Group business activities, could result in reputational damage,
fines or other adverse consequences, including criminal penalties and
consequential litigation, adverse impact on the Group's financial results or
unfavourable effects on the Group's ability to do business. To mitigate this
risk the Group has implemented policies and processes to ensure data is held
securely and privacy is maintained. The Group also holds ISO27001: Information
Security Management Systems certification.
Dependence on key executives and personnel
The Group is dependent on a small number of key executives. In addition, the
future performance of the Group will, to some extent, be dependent on its
ability to retain the services and personal connections or contacts of key
executives and to attract, recruit, motivate and retain other suitably
skilled, qualified and industry experienced personnel to form a high calibre
management team. Such key executives are expected to play an important role in
the development and growth of the Group in particular, by maintaining good
business relationships with customers, regulatory and governmental departments
and essential partners, contractors and suppliers. The failure to appoint or
retain such people could adversely affect the Group.
Ability to recruit and retain skilled personnel
The Group believes that it has the appropriate incentive structures to attract
and retain the calibre of employees necessary to ensure the efficient
management and development of the Group. However, any difficulties encountered
in hiring appropriate employees and the failure to do so, or a change in
market conditions that renders current incentive structures ineffective, may
have a detrimental effect upon the trading performance of the Group. The
ability to attract new employees with the appropriate expertise and skills
cannot be guaranteed.
Financial controls and internal reporting procedures
The Group's future growth and prospects will depend on its ability to manage
growth and to continue to maintain, expand and improve operational, financial
and management information systems on a timely basis, whilst at the same time
maintaining effective cost controls. Any damage to, failure of or inability to
maintain, expand and upgrade effective operational, financial and management
information systems and internal controls in line with the Group's growth,
could have a material adverse effect on the Group's business, financial
condition and results of operations. The Group mitigates this through the
implementation of internal controls as well as the review of monthly financial
performance by the Board.
Economic uncertainty
Any economic downturn either globally or locally in any area in which the
Group operates may have an adverse effect on demand for the Group's products.
A more prolonged downturn may lead to an overall decline in sales. Economic
uncertainty might have an adverse impact on the Group's operations and
business results. To mitigate this risk the Group will monitor both the
Group's performance and general market conditions on a monthly basis. The
Group will also maintain adequate liquidity to sustain short term fluctuations
in market conditions.
6. PEOPLE
Equal opportunity
The Group is committed to an active equal opportunities policy. It is the
Group's policy to promote an environment free from discrimination, harassment
and victimisation, where everyone receives equal treatment regardless of
gender, colour, ethnic or national origin, disability, age, marital status,
sexual orientation or religion. Employment practices are applied which are
fair, equitable and consistent with the skills and abilities of the employees
and the needs of the Group.
Disabled employees
Applications for employment by disabled persons are always fully considered,
bearing in mind the aptitudes of the applicant concerned. In the event of
members of staff becoming disabled, every effort will be made to ensure that
their employment with the Group continues and that appropriate re-training is
arranged. It is the policy of the Group that the training, career development
and promotion of disabled persons should, as far as possible, be identical
with that of other employees.
7. ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Cordel's vision is to create safer, more efficient and sustainable railways
around the world. Our environmental credentials are at the heart of our
business. As part of the Board's continued focus on this area, we recently
went through an independent assessment (carried out by Addidat) of our ESG
maturity across six key dimensions: Net Zero, Employee Engagement &
Welfare, Diversity Equity & Inclusion (DEI), Supply Chain, Corporate
Governance and ESG Business Integration. We were reassured by the findings
which showed that we are relatively well positioned against comparable AIM
listed companies (in terms of employee numbers and turnover). The Board is
using this report to identify the areas where we need greater focus and will
continue to develop Cordel's ESG credentials as the Company grows and matures.
This report is made in accordance with a resolution of Directors.
On behalf of the Directors
Ian Buddery
Chairman
28 October 2024
CORPORATE GOVERNANCE
The Directors acknowledge the importance of high standards of corporate
governance and intend, given the Group's size and the constitution of the
Board, to comply with the principles set out in the QCA Corporate Governance
Code published by the Quoted Companies Alliance in April 2019 (the 'QCA Code')
and, where it does not comply with any of its recommendations, to explain the
reasons therefor.
In the Board's opinion, the Group currently complies with the ten principles
of the QCA Code which, together, are designed to deliver growth, maintain a
dynamic management framework and build trust. As the Group expands, the Board
will review its corporate governance framework and will consider adoption of
additional principles and practices including from the UK Corporate Governance
Code 2018 published by the Financial Reporting Council (the 'UK Corporate
Governance Code').
Read more in our Corporate Governance Statement of Compliance with the QCA
Corporate Governance Code at the following website link:
https://cordel.ai/wp-content/uploads/2024/04/Cordel-Statement-of-QCA-compliance-2023-1.pdf
(https://cordel.ai/wp-content/uploads/2024/04/Cordel-Statement-of-QCA-compliance-2023-1.pdf)
On behalf of the Directors
Ian Buddery
Chairman
28 October 2024
DIRECTORS' REPORT
The Directors present their report, together with the financial statements, on
the consolidated entity (referred to hereafter as the 'Group') consisting of
Cordel Group plc (referred to hereafter as the 'Company' or 'parent entity')
and the entities it controlled during the year ended 30 June 2024.
Directors
The following persons were Directors of Cordel Group plc up to the date of
this report, unless otherwise stated:
Ian Buddery Non-Executive Chairman
John Davis Executive Director and CEO
Jonathan Macleod Independent Non-Executive Director
Nicholas McInnes Independent Non-Executive Director
Aaron Hoye Executive Director and Chief
Technology Officer
Thouraya Walker Executive Director, Company Secretary,
and Chief Financial Officer (appointed 3 May 2023, until sabbatical from March
- September 2024). Non-Executive Director (appointed 16 September 2024)
Robert Lojszczyk Executive Director, Company Secretary and
Chief Financial Officer (resigned 31 July 2023)
Natasha Dinneen Interim CFO (appointed 11 March 2024).
Appointed Executive Director, Company Secretary and Chief Financial Officer on
16 September 2024
Ian Buddery, aged 67 - Non-Executive Chairman
Ian has extensive public company experience and a long background in the
telecommunications and financial services industries in both international and
local markets. Ian has founded multiple companies; obtained venture capital
and angel funding, performed two IPOs, six acquisitions and two significant
trade sales. Ian was the founder, CEO and Executive Chair of eServGlobal,
founded in 1991 and listed on the Australian Securities Exchange ('ASX') in
2000 and the AIM in 2004. (LSE: ESG).
Ian was appointed a Director of Cordel Group plc Ltd on 6 December 2017.
John Davis, aged 54 - Executive Director and Chief Executive Officer
John has been working with banks and SMBs for more than 20 years. Based in
London, John was the Marketing and Product Director for Barclays Business from
2005-2010 before setting out on an entrepreneurial career as the co-owner and
Managing Director of Business Centric Services Group Limited, an award
winning, high growth business, helping banks and telecommunication companies
to enhance their digital engagement with and propositions for small and medium
sized businesses. He also
acted as Chair and co-owner of two other London based FinTech start-ups. John
completed the sales of all three of these companies during 2016 and 2018.
John was appointed a Director of Cordel Group plc on 4 May 2018 and CEO on 1
March 2023.
Jonathan Macleod, aged 67 - Independent Non-Executive Director
Jonathan is a practicing Chartered Accountant and Financial Adviser with over
30 years of experience in the Financial Services and Software industries in
both NZ and Australia. He has held senior executive positions within the
National Bank of NZ and Rabobank Australia/NZ. Jonathan was the Chief
Financial Officer of ASX listed company eServGlobal from 2008 to 2010.
Jonathan was appointed a Director of Cordel Group plc on 4 May 2018.
Nicholas McInnes, aged 69 - Independent Non-Executive Director
Nick McInnes has been a United Kingdom diplomat through much of his career,
focusing on international trade and investment in such key positions as the
British Consul General, Sydney and Director General
Trade & Investment for Australia and New Zealand; and Director Trade &
Investment USA and Deputy Consul General New York.
Nicholas was appointed a Director of Cordel Group plc on 13 March 2020.
Aaron Hoye, aged 42 - Executive Director, Chief Technology Officer
Aaron co-founded Cordel in 2012 and has extensive technology experience of
both hardware and software across a range of settings, covering remote sensor
technologies, including LiDAR and photogrammetry, data fusion & data
processing, machine learning and UI design. He has a degree in Computer
Science and Mathematics from the University of Newcastle, New South Wales.
Aaron was appointed a Director of Cordel Group plc on 14 April 2022.
Thouraya Walker, aged 45 - Non-Executive Director
Thouraya's background includes roles at Mazars LLP, Standard Chartered Bank
and Oliver Wyman Limited. She is a Fellow of the Association of Chartered
Certified Accountants and holds a degree in Mathematics from the University
of York.
Thouraya was appointed as Chief Financial Officer on 1 April 2023 and a
Director on 3 May 2023. After sabbatical from March to September 2024,
Thouraya returned to Cordel as Non-Executive Director.
Robert Lojszczyk, aged 65 - Executive Director, Chief Financial Officer and
Company Secretary (resigned 31 July 2023)
Robert is a widely experienced senior finance executive with a blue chip
organisational and commercial background.
Robert retired and as a result resigned as a Director on 31 July 2023.
Natasha Dinneen, aged 34 - Executive Director, Chief Financial Officer and
Company Secretary (appointed 16 September 2024)
Natasha is a former KPMG auditor and has held senior finance roles with
early-stage technology companies in the UK. She is a member of the Institute
of Chartered Accountants England and Wales.
Natasha was appointed to the Board as permanent Chief Financial Officer,
Director and Company Secretary in September 2024, after 6 months as interim
Chief Financial Officer.
Principal activities
Information on the Group's principal activities is disclosed in the strategic
report.
Results and dividends
The loss for the Group after providing for income tax and non-controlling
interest amounted to £1,299,111 (30 June 2023: £598,150).
No dividend has been paid during the financial year and the Directors do not
recommend a final dividend in respect of the year ended 30 June 2024 (30 June
2023: £Nil).
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and financial position are given in the
strategic review and this Directors' report. In addition, the notes to the
financial statements include details on the Group's borrowing facilities and
its objectives, policies and processes for managing its capital; its financial
risk management objectives; and its exposures to credit risk and liquidity
risk.
The Group has considerable financial resources together with a member base
split across different geographic areas. The Group's forecasts and
projections, taking into account reasonably possible changes in trading
performance and the newly acquired business, show that the Group should be
able to operate for the foreseeable future with the current working capital.
As a consequence, the Directors believe that the Group is well placed to
manage its business risks successfully.
The Directors have, at the time of approving the financial statements, a
reasonable expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future. Thus, they
continue to adopt the going concern basis of accounting in preparing the
financial statements.
Likely future developments
Information on likely future developments of the Group is disclosed in the
strategic report.
Financial instruments
Information on the Group's financial instruments is disclosed in the strategic
report and note 20 to the financial statements.
Charitable and political donations
No charitable or political donations were made during the financial year.
Disabled employees
Due to the size of the Group, no formal policy for the employment of disabled
persons has been established. However, the Group gives full consideration to
employment applications from disabled persons where the candidate's particular
aptitudes and abilities are consistent with adequately meeting the
requirements of the job.
Indemnity of Directors
The Company has indemnified the Directors of the Company for costs incurred,
in their capacity as Directors, for which they may be held personally
liable, except where there is a lack of good faith.
Substantial shareholdings
The substantial shareholders in the Company as at 30 June 2024 were as
follows:
Nicholas Smith 12.83%
Aaron Hoye 12.83%
Disclosure of information to the auditors
So far as each person who was a Director at the date of approving this report
is aware, there is no relevant audit information, being information needed by
the auditor in connection with preparing its report, of which the auditor is
unaware. Having made enquiries of fellow Directors and the Group's auditor,
each Director has taken all the steps that they are obliged to take as a
Director in order to make themselves aware of any relevant audit information
and to establish that the auditor is aware of that information.
Auditor
Oury Clark was appointed in an earlier financial year and pursuant to section
487 of the Companies Act 2006 will be deemed to be re-appointed and therefore
continue in office.
Ian Buddery
Chairman
28 October 2024
DIRECTORS' RESPONSIBILITIES STATEMENT
The Directors are responsible for preparing the strategic report, Directors'
report and the financial statements in accordance with applicable law and
regulation.
UK company law requires the directors to prepare financial statements for each
financial year. Under that law the directors have elected to prepare the Group
financial statements in accordance with applicable law and International
Financial Reporting Standards ('IFRS') as adopted by the United Kingdom and
the parent company financial statements in accordance with applicable law and
United Kingdom Accounting Standards, including Financial Reporting Standard
101 "Reduced Disclosure Framework" (United Kingdom Generally Accepted
Accounting Practice). Under company law the directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and the profit or loss
of the Group for that year.
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether applicable IFRS as adopted by the United Kingdom
and applicable United Kingdom Accounting Standards have been followed for the
Group and the Company respectively, subject to any material departures
disclosed and explained in the financial statements; and
· prepare the financial statements on a going concern basis unless
it is inappropriate to presume that the Group and Company will continue in
business.
The Directors confirm they have complied with all the above requirements in
preparing the financial statements.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and Company's transactions and
disclose with reasonable accuracy at any time, the financial position of the
Group and Company and enable them to ensure that the financial statements
comply with the Companies Act 2006 and, as regards the Group financial
statements, Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
Ian Buddery
Chairman
28 October 2024
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CORDEL GROUP PLC
Opinion
We have audited the financial statements of Cordel Group Plc (the 'parent
company') and its subsidiaries (the 'group') for the year ended 30 June 2024
which comprise the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, the Consolidated Balance Sheet, the Company Balance
Sheet, the Consolidated Statement of Changes in Equity, the Company Statement
of Changes in Equity, the Consolidated Statement of Cash Flows, and Notes to
the Consolidated Statement of Cash Flows, Notes to the Consolidated Financial
Statements, including a summary of significant accounting policies, and Notes
to the Company Financial Statements, including a summary of significant
accounting policies. The financial reporting framework that has been applied
in the preparation of the group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the UK. The
financial reporting framework that has been applied in the preparation of the
parent company financial statements is applicable law and United Kingdom
Accounting Standards, including Financial Reporting Standard 101 "Reduced
Disclosure Framework" (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
- the financial statements give a true and fair view of the state of the group's
and of the parent company's affairs as at 30 June 2024 and of the group's
profit for the year then ended;
- the group financial statements have been properly prepared in accordance with
IFRSs as adopted by the UK;
- the parent company financial statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting Practice; and
- the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditors' responsibilities for the
audit of the financial statements section of our report. We are independent
of the group and parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that individually or
collectively, may cast significant doubt on the group's and the parent
company's ability to continue as a going concern for a period of at least 12
months and 1 day from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant section of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters
included those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of
the financial statements, as a whole, and in our opinion thereon, and we do
not provide a separate opinion on these matters.
Overview of our audit approach (for the Group)
Key audit matters
1. Goodwill valuation
2. Revenue recognition
3. Inventory valuation
4. Management override
Audit scope
1. We performed an audit of the consolidated group.
2. We undertook audit work in relation to elements that were material to
the group, utilising local expertise where needed.
Materiality
Overall group materiality was £87,500. This represents 2% of the group's
turnover for the year.
Key audit matters
Goodwill valuation
Risk
1. The group recorded losses in the year and the subsidiaries also
continued to generate losses.
2. There is a risk that the Goodwill stated in the group financial
statements is overstated if the subsidiaries no longer provide this level of
value.
Our response to the risk
1. We reviewed management's assessment and challenged the assumptions
provided through discussions.
2. We reviewed management's strategic and operational plans for the
future, including projected cash flows, growth forecasts, and expected market
conditions.
3. We assessed whether the original value arising on acquisition is still
appropriate.
Key observations communicated to the audit committee
We concluded that the Goodwill arising on initial acquisition is still
appropriate and that no impairment was required.
Revenue recognition
Risk
1. The group has a number of large value contracts with different terms.
2. There is a risk that revenue is not recognised in line with the
contract terms and deliverables, which could result in overstatement or
understatement of revenue. We consider the overstatement risk to be more
significant given the potential desire to inflate revenue figures.
Our response to the risk
1. We obtained a sample of contracts for customers in the year and
reviewed invoicing schedules alongside evidence of stage of completion at the
year end.
2. We reviewed the sales pipeline for new revenue as part of our going
concern review without noting any contracts omitted from revenue in the year.
Key observations communicated to the audit committee
We concluded that revenue has been appropriately recognised in the period.
Inventory valuation
Risk
1. The group holds inventory at the year-end in relation to hardware
sales.
2. There is a risk that this inventory value is not recoverable.
Our response to the risk
1. We obtained an inventory listing detailing all inventory items at the
year end.
2. It was noted that various components would be used in order to make a
small number of finished products.
3. We reviewed after date sales evidence in respect of a sample of these
finished products to confirm the inventory value was less than the future
selling price.
4. We discussed with management possible provisions and reasonableness of
these in respect of slow moving or obsolete items at the year end.
Key observations communicated to the audit committee
We concluded that the inventory value was not materially overstated.
Management override
Risk
1. In accordance with the ISAs (UK), management override is considered to
be a significant risk.
2. There is a risk that management make inappropriate entries into the
financial ledgers in order to gain a benefit for either themselves or the
company.
Our response to the risk
1. We obtained nominal ledger detail for the transactions of the group in
the year.
2. We reviewed these for reasonableness and evidence of any management
override, including but not limited to, a review of journals.
Key observations communicated to the audit committee
We did not note any management override in the period.
An overview of the scope of our audit
Our assessment of audit risk, our evaluation of materiality and our allocation
of performance materiality determine our audit scope for each entity within
the group. Taken together, this enables us to form an opinion on the
consolidated financial statements. We take into account size, risk profile,
the organisation of the group and effectiveness of group-wide controls,
changes in the business environment and other factors such as recent internal
audit results when assessing the level of work to be performed at each entity.
In assessing the risk of material misstatement to the group financial
statements, and to ensure we had adequate quantitative coverage of significant
accounts in the financial statements, we selected all components covering
entities within Australia, America, and the UK, which represent the principal
business units within the Group.
Of all the components selected, we performed an audit of the complete
financial information of the UK parent entity. We performed audit testing on
the material elements of the Australian, American, and UK subsidiaries,
utilising experts where needed.
The reporting components where we performed audit procedures accounted for
100% of the Group's loss before tax, 100% of the Group's revenue and 100% of
the Group's total assets.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in
evaluating the effect of identified misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in
aggregate, could reasonably be expected to influence the economic decisions of
the users of the financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the Group to be £87,500 (2023: £61,000) which
is 2% of the turnover for the year (2023: 2% of the turnover for the year). We
believe that turnover is the most appropriate basis for materiality as the
group has matured and revenue has grown.
Performance materiality
The application of materiality at the individual account or balance level. It
is set at an amount to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds
materiality.
On the basis of our risk assessments, together with our assessment of the
Group's overall control environment, our judgement was that performance
materiality was 85% (2023: 75%) of our final materiality, being £74,500
(2023: £45,750). We have set performance materiality at this level as we
consider this to be commensurate with the overall control environment and the
assessed audit risk.
Reporting threshold
The amount below which identified misstatements are considered as being
clearly trivial.
It was decided that we would report all audit differences in excess of £1,000
(2023: £1.000), which is set as less than 5% of materiality, as well as
differences below that threshold that, in our view, warranted reporting on
qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative
measures of materiality discussed above and in light of other relevant
qualitative considerations in forming our opinion.
Overview of our audit approach (for the Parent company)
Key audit matters
Management override
Investment valuation
Recoverability of intercompany balances
Audit scope
We performed an audit of the parent company.
Materiality
Parent company materiality was £78,750. This represents 2% of the group's
turnover for the year adjusted to reflect aggregation risk. Ordinarily we
would have assessed the individual entity based on 5% net assets but
restricted this to group materiality adjusted to reflect aggregation risk.
Key audit matters
Management override
Risk
1. In accordance with the ISAs (UK), management override is considered to
be a significant risk.
2. There is a risk that management make inappropriate entries into the
financial ledgers in order to gain a benefit for either themselves or the
company.
Our response to the risk
1. We obtained nominal ledger detail for the transactions of the company
in the year.
2. We reviewed these for reasonableness and evidence of any management
override, including but not limited to, a review of journals.
Key observations communicated to the audit committee
We did not note any management override in the period.
Investment valuation
Risk
1. The group recorded losses in the year and the subsidiaries also
continued to generate losses.
2. There is a risk that the investment in subsidiaries stated in the
parent company financial statements is overstated if the subsidiaries no
longer provide this level of value.
Our response to the risk
1. We reviewed management's assessment and challenged the assumptions
provided through discussions.
2. We reviewed plans going forwards and worked to understand the status of
the subsidiaries in light of operational changes within the group.
3. We assessed whether the original value paid when acquiring from a third
party on acquisition is still an expected minimum market value.
Key observations communicated to the audit committee
We concluded that the Investment value is still appropriate and that no
impairment was required.
Recoverability of intercompany balances
Risk
1. There is a risk that intercompany balances due from subsidiaries are
not recoverable.
Our response to the risk
1. We reviewed any intercompany debtor balances and considered the
entities' ability to repay.
Key observations communicated to the audit committee
In one instance we concluded the balance did not appear to be recoverable. We
discussed with management who made an adjustment to provide for this debt.
An overview of the scope of our audit
Our assessment of audit risk, our evaluation of materiality and our allocation
of performance materiality determine our audit scope. We take into account
size, risk profile, the organisation of the entity and effectiveness of
controls, changes in the business environment and other factors such as recent
internal audit results when assessing the level of work to be performed.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in
evaluating the effect of identified misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the
aggregate, could reasonably be expected to influence the economic decisions of
the users of the financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the parent company to be £78,750 (2023:
£61,000) which is 2% of the group turnover for the year adjusted to reflect
aggregation risk (2023: 2% of the group turnover for the year). Ordinarily we
would have assessed the individual entity based on 5% net assets but
restricted this to group materiality adjusted to reflect aggregation risk.
Performance materiality
The application of materiality at the individual account or balance level. It
is set at an amount to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds
materiality.
On the basis of our risk assessments, together with our assessment of the
company's overall control environment, our judgement was that performance
materiality was 85% (2023: 75%) of our final materiality, being £67,050
(2023: £47,750). We have set performance materiality at this level as we
consider this to be commensurate with the overall control environment and the
assessed audit risk.
Reporting threshold
The amount below which identified misstatements are considered as being
clearly trivial.
It was decided that we would report all audit differences in excess of £1,000
(2023: £1,000), which is set as less than 5% of materiality, as well as
differences below that threshold that, in our view, warranted reporting on
qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative
measures of materiality discussed above and in light of other relevant
qualitative considerations in forming our opinion.
Other information
The Directors are responsible for the other information. The other information
comprises the information in the Group Strategic Report and the Report of the
Directors but does not include the financial statements and our Report of the
Auditors thereon.
Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be misstated. If we identify
such inconsistencies or apparent misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is
a misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Group Strategic Report and
the Report of the Directors for the financial year for which the group and
parent company financial statements are prepared is consistent with the group
and parent company financial statements; and
- the Group Strategic Report and the Report of the
Directors have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent
company and its environment obtained in the course of the audit, we have not
identified any matters in the Group Strategic Report or the Report of the
Directors that are inconsistent with our overall view of the financial
statements.
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the
group and the parent company, or returns
adequate for our audit have not been received from branches not visited by us;
or
- the group and the parent company financial statements
are not in agreement with the accounting
records and returns; or
- certain disclosures of Directors' remuneration specified
by law are not made; or
- we have not received all the information and
explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors' Responsibilities set
out on page 18, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for
assessing the group's and the parent company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to
liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue a Report of the Auditors that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
Identifying and assessing potential irregularities, including fraud
In identifying and assessing risks of material misstatement in respect of
irregularities, including fraud and non-compliance with laws and regulations,
our procedures included the following:
- Considering the nature of the industry, sector, control environment and
current business activities, including possible performance targets and
subsequent remuneration
- Enquiring of management concerning policies and procedures relating to:
1. Complying with laws and regulations and whether there were
any instances of non-compliance
2. Mitigating, detecting and responding to fraud risk and
whether there has been any actual or possible instances of fraud
- Discussing within the engagement team and internal specialists where
necessary, regarding how and where fraud may occur in the financial statements
along with the possible indicators of fraud. We identified the following areas
most likely to be susceptible to fraud:
1. Revenue recognition (at a group level only)
2. Management override
- Discussing within the engagement team and internal specialists where
necessary, the legal and regulatory framework in which the group operates and
in particular those which would have an impact on the financial statements.
The key laws and regulations considered were the Companies Act 2006, tax
legislation, employment law and AIM rules.
Audit response to the risks identified
As noted above, we identified revenue recognition and management override as
matters that would most likely be susceptible to fraud. Our procedures to
respond to these risks included the following:
- Review of contracts and stage of completion to confirm revenue not
recognised too early;
- Review of journals posted in the year and the nominal ledger to ensure there
was no evidence of management override.
Further, we also identified compliance with the Companies Act 2006, tax
legislation, employment law
and AIM Rules for Companies as key areas where there may be possible
non-compliance. Our
procedures to respond to these risks included the following:
- Review the financial statement disclosures and testing to supporting
documentation to assess
compliance with the Companies Act 2006;
- Review of tax work completed by another firm of Accountants;
- Review of a sample of right-to-work compliance checks and review of legal
fees for any indications
of material issues arising from non-compliance with employment law;
- Review of correspondence between the entity and the AIM;
- Review of AIM rules in light of knowledge of the company.
The above matters and identified laws and regulations and potential fraud
risks were communicated to all engagement team members and internal
specialists where necessary, in order to enable the team to have the ability
to identify such risks. The whole team remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above and the
risk of not detecting a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error, as fraud may involve
deliberate concealment.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Report of the Auditors.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in a Report of the Auditors and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Rachel Lockwood (Senior Statutory Auditor)
for and on behalf of Oury Clark Chartered Accountants
Statutory Auditors
Herschel House
58 Herschel Street
Slough
Berkshire
SL1 1PG
Date: 31 October 2024
Notes:
1. The maintenance and integrity of the Cordel Group PLC website is the
responsibility of the Directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website.
2. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR
THE YEAR ENDED 30 JUNE 2024
Note
2024 2023
£ £
Revenue from contracts with customers 3 4,439,441 3,046,496
Other income 4 538,014 408,756
Interest revenue calculated using the effective interest method 372 46
Expenses
Hosting fees and other direct costs (1,615,732) (791,668)
Employee benefits expense 5 (3,306,707) (2,367,385)
Occupancy expense (51,498) (34,411)
Depreciation and amortisation expense (123,234) (117,302)
Other expenses (1,062,109) (593,297)
Finance costs (14,434) (16,819)
Loss before income tax expense (1,195,886) (465,584)
Income tax expense 7 (103,225) (132,566)
Loss after income tax expense for the year (1,299,111) (598,150)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Share option reserve 33,617 54,601
Foreign currency translation (14,037) (17,257)
Other comprehensive income for the year, net of tax 19,580 37,344
Total comprehensive income for the year (1,279,531) (560,806)
Loss for the year is attributable to:
Owners of Cordel Group plc (1,299,111) (598,150)
(1,299,111) (598,150)
Total comprehensive income for the year is attributable to:
Owners of Cordel Group plc (1,279,531) (560,806)
(1,279,531) (560,806)
Pence Pence
Basic earnings per share 9 (0.65) (0.30)
Diluted earnings per share 9 (0.60) (0.28)
The above consolidated statement of profit or loss and other comprehensive
income should be read in conjunction with the accompanying notes
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2024
Note 2024 2023
£ £
Non-current assets
Goodwill 10 1,223,403 1,223,403
Right of use asset 11 203,640 28,858
Property, plant and equipment 12 131,031 73,872
Deferred tax asset - 84,069
Total non-current assets 1,558,074 1,410,202
Current assets
Inventories 14 127,762 143,781
Trade and other receivables 15 1,429,053 1,985,957
Cash and cash equivalents 1,022,180 1,283,463
Total current assets 2,578,995 3,413,201
Non-current liabilities
Lease Liabilities 21 148,780 -
Deferred tax 552 2,031
Total non-current liabilities 149,332 2,031
Current liabilities
Trade and other payables 16 1,045,636 662,160
Employee benefits 271,507 194,146
Unearned Income 45,911 133,290
Lease Liabilities 21 105,138 32,700
Total current liabilities 1,468,192 1,022,296
Net current assets 1,110,803 2,390,905
Total assets less current liabilities 2,668,877 3,801,107
Net assets 2,519,545 3,799,076
Equity
Share capital 17 1,994,886 1,994,886
Share premium account 10,856,854 10,856,854
Other reserves 18 566,848 2,437,108
Accumulated losses (10,899,043) (11,489,772)
Total equity 2,519,545 3,799,076
The above consolidated balance sheet should be read in conjunction with
accompanying notes
The financial statements of Cordel Group plc (company number 11098701 (England
and Wales)) were approved by the Board of Directors and authorised for issue
on 28 October 2024.
They were signed on its behalf by:
Ian
Buddery
John Davis
Chairman
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Share Share premium Other Accumulated Total equity
capital account reserves losses
£ £ £ £ £
Balance at 1 July 2022 1,704,272 9,525,617 2,399,764 (10,894,381) 2,735,272
Loss after income tax expense for the year - - - (598,150) (598,150)
Other comprehensive income for the year, net of tax - - 37,344 2,759 40,103
Total comprehensive income for the year fully attributable to owners of the - - 37,344 (595,391) (558,047)
parent
Share issue 290,614 1,331,237 - - 1,621,851
1,994,886 10,856,854 2,437,108 (11,489,772) 3,799,076
Balance at 30 June 2023
v The share premium account is used to recognise the difference between the
issued share capital at nominal value and the capital received, net of
transaction costs.
Share Share premium Other Accumulated Total equity
capital account reserves losses
£ £ £ £ £
Balance at 1 July 2023 1,994,886 10,856,854 2,437,108 (11,489,772) 3,799,076
Loss after income tax expense for the year - - - (1,299,111) (1,299,111)
Other comprehensive income for the year, net of tax - - 19,580 - 19,580
Total comprehensive income for the year fully attributable to owners of the - - 19,580 (1,299,111) (1,99,111)
parent
Return of capital on wind down of Maestrano Pty Ltd - - (1,889,840) 1,889,840 -
Balance at 30 June 2024 1,994,886 10,856,854 566,848 (10,899,043) 2,519,545
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes
CONSOLIDATED STATEMENT OF CASH
FLOW
FOR THE YEAR ENDED 30 JUNE 2024
Note 2024 2023
£ £
Cash flows from operating activities
Loss before income tax expense for the year (1,195,886) (465,584)
Adjustments for:
Depreciation and amortisation 123,234 117,302
Loss/(Gain) on disposal of equipment (1,761) (36,423)
Unwinding of lease liability incentive (8,777) -
Foreign exchange differences (1,327) 15,136
Share option reserve 33,617 57,360
Interest received (372) (46)
Interest and other finance costs 14,434 16,819
(1,036,838) (295,436)
Change in operating assets and liabilities:
Decrease/(increase) in inventories 16,019 103,159
Decrease/(increase) in trade and other receivables 227,879 (1,223,778)
(Decrease)/increase in trade and other payables 383,476 81,920
(Decrease)/increase in other liabilities (10,016) 169,852
(419,481) (1,164,283)
Interest received 372 46
Interest and other finance costs paid (4,571) (12,133)
R&D tax credit received 329,025 547,217
Net cash used in operating activities (94,654) (629,153)
Cash flows from investing activities
Proceeds from disposal of fixed asset 8,655 69,422
Payments for plant and equipment (145,172) (60,809)
Net cash used in investing activities (136,517) 8,613
Cash flows from financing activities
Proceeds from issue of shares - 1,725,066
Lease liability incentive received 52,660 -
Cash payments for leases (58,384) (37,650)
Interest on lease payments (9,863) (4,685)
Transaction costs on issue of shares - (103,214)
Net cash from financing activities (15,587) 1,579,517
Net (decrease)/increase in cash and cash equivalents (246,758) 958,977
Cash and cash equivalents at the beginning of the financial year 1,283,463 339,665
Effects of exchange rate changes on cash and cash equivalents (14,525) (15,179)
Cash and cash equivalents at the end of the financial year 1,022,180 1,283,463
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. GENERAL INFORMATION
Cordel Group plc is a public company, registered in England and Wales and
listed on the Alternative Investment Market ('AIM'). The company's registered
number and registered office can be found on the General Information page.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of Cordel Group plc have been prepared in accordance
with UK adopted International Accounting Standards and with requirements of
the Companies Act 2006 as applicable to companies reporting under those
standards. The financial statements have been prepared under the historical
cost convention, with the exception of financial instruments as set out below,
and are presented in pounds Sterling, which is also the company's functional
currency.
The following principal accounting policies have been applied consistently in
dealing with items which are considered material in relation to the financial
statements. These policies have been consistently applied to all the years
presented, unless otherwise stated.
The preparation of the consolidated financial statements requires the use of
certain critical accounting estimates. It also requires management to exercise
its judgement in the process of applying the Group's and Company's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Going concern
The financial statements have been prepared assuming the Group will continue
as a going concern. Under the going concern assumption, an entity is
ordinarily viewed as continuing in business for the foreseeable future.
The Directors have considered the Group's existing working capital, contracted
revenue and pipeline of opportunities and are of the opinion that the Group
has adequate resources to undertake its planned programme of activities for at
least 12 months and 1 day from the date of approval of these financial
statements.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities
of all subsidiaries of Cordel Group plc as at the balance sheet dates
presented and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions
between entities in the Group are eliminated. Unrealised losses are also
eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
The acquisition of common control subsidiaries is accounted for at book value.
The acquisition of other subsidiaries is accounted for using the acquisition
method of accounting. A change in ownership interest, without the loss of
control, is accounted for as an equity transaction, where the difference
between the
consideration transferred and the book value of the share of the
non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets
including goodwill, liabilities and non-controlling interest in the subsidiary
together with any cumulative translation differences recognised in equity. The
Group recognises the fair value of the consideration received and the fair
value of any investment retained together with any gain or loss in profit or
loss.
Operating segments
Operating segments are presented using the 'management approach', where the
information presented is on the same basis as the internal reports provided to
the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The consolidated financial statements are presented in Pounds Sterling, which
is Cordel Group plc's functional currency.
Foreign currency transactions
Foreign currency transactions are translated into Pounds Sterling using the
exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit or
loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Pounds
Sterling using the exchange rates at the reporting date. The revenues and
expenses of foreign operations are translated into Pounds Sterling
using the average exchange rates, which approximate the rates at the dates of
the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency
reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign
operation or net investment is disposed of.
Revenue recognition
Revenue is measured as the fair value of consideration received or receivable
in satisfying performance obligations contained in contracts with customers,
excluding discounts or any applicable sales taxes. For each contract with a
customer, the Group: identifies the contract with a customer; identifies the
performance obligations in the contract; determines the transaction price
which takes into account estimates of variable consideration and the time
value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each
distinct good or service to be delivered; and recognises revenue when or as
each performance obligation is satisfied in a manner that depicts the transfer
to the customer of the goods or services promised.
The Group derives revenue from the sale of hardware, services including data
capture, processing and analytics, engineering design and configuration, as
well as software licencing and customer support and maintenance.
Where contracts include multiple performance obligations, the transaction
price is allocated to each performance obligation based on its stand-alone
selling price.
Revenue is recognised when the performance obligation in the contract has been
performed (either at a "point in time" or "over time" as control is
transferred to the customer).
Grants from government
Grants from government are recognised at their fair value where there is a
reasonable assurance that the grant will be received and the Group will comply
with all attached conditions. Government grants which
represent compensation for expenses or losses already incurred are included in
other income in the profit or loss statement in the year in which the expenses
or losses were incurred.
Interest income
Interest income is recognised as interest accrues using the effective interest
method. This is a method of calculating the amortised cost of a financial
asset and allocating the interest income over the relevant period using the
effective interest rate, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other income
Other income is recognised when it is received or when the right to receive
payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that
period's taxable income based on the applicable income tax rate for each
jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment
recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences
at the tax rates expected to be applied when the assets are recovered or
liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
· When the deferred income tax asset or liability arises from the
initial recognition of goodwill or an asset or liability in a transaction that
is not a business combination and that, at the time of the transaction,
affects neither the accounting nor taxable profits; or
· When the taxable temporary difference is associated with
interests in subsidiaries, associates or joint ventures, and the timing of the
reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and
unused tax losses only if it is probable that future taxable amounts will be
available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets is
reviewed at each reporting date. Deferred tax assets recognised are reduced to
the extent that it is no longer probable that future taxable profits will be
available for the carrying amount to be recovered. Previously unrecognised
deferred
tax assets are recognised to the extent that it is probable that there are
future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally
enforceable right to offset current tax assets against current tax liabilities
and deferred tax assets against deferred tax liabilities; and they
relate to the same taxable authority on either the same taxable entity or
different taxable entities which
intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the balance sheet based on current and
non-current classification.
An asset is classified as current when: it is either expected to be realised
or intended to be sold or consumed in the Group's normal operating cycle; it
is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash
equivalent unless restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting period. All other assets
are classified as non-current.
A liability is classified as current when: it is either expected to be settled
in the Group's normal operating cycle; it is held primarily for the purpose of
trading; it is due to be settled within 12 months after the reporting
period; or there is no unconditional right to defer the settlement of the
liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of
changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method, less any
provision for impairment. Trade receivables are generally due for settlement
within 30 days.
The Group has applied the simplified approach to measuring expected credit
losses, which uses a lifetime expected loss allowance. To measure the expected
credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for
expected credit losses.
Contract assets
Contract assets are recognised when the Group has transferred goods or
services to the customer but where the Group is yet to establish an
unconditional right to consideration. Contract assets are treated as financial
assets for impairment purposes.
Plant and equipment
Equipment is stated at historical cost less accumulated depreciation and
impairment. Historical cost includes expenditure that is directly attributable
to the acquisition of the items.
Depreciation is calculated on a straight-line/diminishing value basis to write
off the depreciable amount of each item of equipment over their expected
useful lives as follows:
Office
equipment
2-10 years straight line
Furniture and
fixtures
10 years straight line
Leasehold
improvements
3-4 years straight line
Flight
equipment
2 years straight line
Motor
vehicles
8 years diminishing value
Computer
equipment
2 years straight line
R&D
assets
2 years straight line
The residual values, useful lives and depreciation methods are reviewed, and
adjusted if appropriate, at each reporting date.
Equipment under leases are depreciated over the unexpired period of the lease
or the estimated useful life of the assets, whichever is shorter.
An item of equipment is derecognised upon disposal or when there is no future
economic benefit to the Group. Gains and losses between the carrying amount
and the disposal proceeds are taken to profit or loss.
Inventories
Inventories are measured at the lower of cost and net realisable value. The
cost of manufactured products includes direct part costs. Net realisable value
is estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale.
Intangible assets
Intangible assets acquired as part of a business combination, are initially
measured at their fair value at the date of the acquisition. Intangible assets
acquired separately are initially recognised at cost. Finite life intangible
assets are subsequently measured at cost less amortisation and any impairment.
The gains or losses recognised in profit or loss arising from the
derecognition of intangible assets are measured as the difference between net
disposal proceeds and the carrying amount of the intangible asset. The
amortisation method and useful lives of finite life intangible assets are
reviewed annually. Changes in the expected pattern of consumption or useful
life are accounted for prospectively by changing the amortisation method or
period.
In line with IAS36, an annual impairment review is conducted to assess whether
the goodwill recognised in respect of acquisition accounting is in need of
impairment. The Directors have reviewed and endorsed a 5 year free cashflow
forecast prepared by the Management Team to assess the net present value and
net carrying value of the goodwill. The Directors also believe that there is
one Cash Generating Unit (CGU) for the group. It is believed that the Corridor
Holdings Group entities do not generate independent cash flows and instead
exist to service the group and develop the business. Key assumptions used in
management's assessment include financial information, growth rates and
discount rates. Management have also assessed the sensitivities around the
reasonableness of the assumptions that would cause the recoverable amount of
the CGU to fall below the carrying amount, for example assessing various
revenue flexes to see if there is sufficient headroom available. Based on
those assumptions and forecasts, the Directors believe that there is no
indication of impairment. All research, development and delivery are conducted
in the Corridor Holdings Group entities (previously Airsight Holdings at
acquisition) and continued growth of Cordel Group Plc is supported by
investment in Corridor Holdings Group.
Software
Significant costs associated with purchased software are deferred and
amortised on a reducing balance basis over the period of their expected
benefit, being their finite useful life of two years.
Research and development
Research costs are expensed in the period in which they are incurred.
Development costs are capitalised when it is probable that the project will be
a success considering its commercial and technical feasibility; the Group is
able to use or sell the asset; the Group has sufficient resources; and intent
to complete the development and its costs can be measured reliably.
Capitalised development costs are amortised on a straight-line basis over the
period of their expected benefit. Amortisation commences when the asset is
available for use, i.e. when it is in the location and condition necessary for
it to be capable of operating in the manner intended by management.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised at the amount by which the asset's carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of
disposal and value-in-use. The value-in-use is the present value of the
estimated future cash flows relating to the asset using a pre-tax discount
rate specific to the asset or cash-generating unit to which the asset belongs.
Assets that do not have independent cash flows are grouped together to form a
cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the
Group prior to the end of the financial year and which are unpaid. Due to
their short-term nature, they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of
recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to transfer goods or
services to a customer and are recognised when a customer pays consideration,
or when the Group recognises a receivable to reflect its unconditional right
to consideration (whichever is earlier) before the Group has transferred the
goods or services to the customer.
Employee benefits
Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions
payable to the company's pension scheme are charged to profit or loss in the
period to which they relate.
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual
leave and long service leave expected to be settled wholly within 12 months of
the reporting date are measured at the amounts expected to be paid when the
liabilities are settled.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that
are provided to employees in exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant
date. Fair value is independently determined using the Black-Scholes option
pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend yield and the
risk free interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the Group receives the services that
entitle the employees to receive payment. No account is taken of any other
vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a
corresponding increase in equity over the vesting period. The cumulative
charge to profit or loss is calculated based on the grant date fair value of
the award, the best estimate of the number of awards that are likely to be
exercised after allowing for forfeiture rates, and the expired portion of the
vesting period. The amount recognised in profit or loss for the period is the
cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
Market conditions are taken into consideration in determining fair value.
Therefore, any awards subject to market conditions are considered to vest
irrespective of whether or not that market condition has been met, provided
all other conditions are satisfied.
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.
If the non-vesting condition is within the control of the Group or employee,
the failure to satisfy the condition is treated as a cancellation. If the
condition is not within the control of the Group or employee and is not
satisfied during the vesting period, any remaining expense for the award is
recognised over the remaining vesting period, unless the award is forfeited.
If an equity-settled award is cancelled, it is treated as if it has vested on
the date of cancellation, and any remaining expense is recognised immediately.
If a new replacement award is substituted for the cancelled award, the
cancelled and new award are treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair
value for recognition or disclosure purposes, the fair value is based on the
price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the
measurement date; and assumes that the transaction will take place either: in
the principal market; or in the absence of a principal market, in the most
advantageous market.
Fair value is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming they act in their economic
best interests. For non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, are used, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three
levels, using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. Classifications are reviewed at each
reporting date and transfers between levels are determined based on a
reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may
be used when internal expertise is either not available or when the valuation
is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of
an asset or liability from one period to another, an analysis is undertaken,
which includes a verification of the major inputs applied in the latest
valuation and a comparison, where applicable, with external sources of data.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown
in equity as a deduction, net of tax, from the proceeds.
Dividends
Dividends are recognised when declared during the financial year.
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
the owners of Cordel Group plc, excluding any costs of servicing equity other
than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary
shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account the after income tax effect of
interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued
for no consideration in relation to dilutive potential ordinary shares.
Value-Added Tax/Goods and Services Tax and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated
sales tax, unless the sales tax incurred is not recoverable from the tax
authority. In this case it is recognised as part of the cost of the
acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of sales tax
receivable or payable. The net amount of sales tax recoverable from, or
payable to, the tax authority is included in other receivables or other
payables in the balance sheet.
Cash flows are presented on a gross basis. The sales tax components of cash
flows arising from investing or financing activities which are recoverable
from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of sales tax
recoverable from, or payable to, the tax authority.
Leases
The Group assesses at contract inception whether a contract is, or contains, a
lease, that is if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all
leases, except for short-term leases and leases of low-value assets. The Group
recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commitment date of the lease
(i.e. the date the underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any measurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease term and estimated useful life of the assets, as follows:
Property 3
years
If ownership of the leased asset transfers to the Group at the end of the
lease term or the cost reflects the exercise of a purchased option,
depreciation is calculated using the estimated useful life of the asset.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the Group and payments
of penalties for terminating the lease, if the lease term reflects the Group
exercising the option to terminate. Variable lease payments that do not depend
on an index or a rate are recognised as expenses (unless they are incurred to
produce inventories) in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the
interest rate implicit in the lease. After the commencement date, the amount
of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease
term, a change in the lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to determine such lease
payments) or a change in the assessment of an option to purchase the
underlying asset.
The Group's lease liabilities are presented separately in the statement of
financial position.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term
leases of machinery and equipment (i.e., those leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase
option). It also applies the lease of low-value assets recognition exemption
to leases of office equipment that are considered to be of low value. Lease
payments on short-term leases and leases of low-value assets are recognised as
an expense on a straight-line basis over the lease term.
A depreciation charge for the leased asset and an interest expense on the
lease liability is recognised in the profit and loss in accordance with IFRS
16. For classification within the statement of cash flows, the lease payments
are separated into both a principal (financing activities) and interest
(either operating or financing activities) component.
Cashflow statement
The cash flow statement is prepared under the indirect method.
Critical accounting estimates and judgements
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts in the
financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements, estimates and assumptions on
historical experience and on various other factors, including expectations of
future events, management believe to be reasonable under the circumstances.
The resulting accounting judgements and estimates will seldom equal the
related actual results.
The accounting judgements, estimates and assumptions that have a significant
risk of causing an adjustment to the carrying amounts of assets and
liabilities (refer to the respective notes) within the next financial year are
discussed below.
a) Revenue recognition where contracts are in progress
In accordance with the revenue recognition policy detailed in note 2, in
measuring revenue relating to fixed agreements the Group measures the stage of
completion with reference to costs incurred and the total costs estimated for
each contract. The total estimated costs for each contract are reviewed
monthly to ascertain the current stage of completion and requires reasonable
judgments to be made. Judgement includes allocating transaction prices to each
of the performance obligations.
b) Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which
they are granted. The fair value is determined by using the Black-Scholes
model taking into account the terms and conditions upon which the instruments
were granted. The accounting estimates and assumptions relating to
equity-settled share-based payments would have no impact on the carrying
amounts of assets and liabilities within the next annual reporting period but
may impact profit or loss and equity.
c) Cost of sales and allocation of overhead costs
The calculation of cost of sales involves several significant judgements and
estimates by management. These include an apportionment of overhead costs,
valuation of inventory and accrued costs on contracts. Adjustments to the
overhead allocation methodology were made in the year to better align with
actual costs incurred for each contract. The methodology and internal controls
over accurate measurement of these costs is improving overtime. Management
continues to review these estimates and assumptions regularly.
NOTE 3. REVENUE
Segmental analysis
Identification of reportable operating segments
The Group operates in one segment being provision of data capture and analytic
services. This operating segment is based on the internal reports that are
reviewed and used by the Board of Directors (who are identified as the Chief
Operating Decision Makers ('CODM')) in assessing performance and in
determining the allocation of resources.
The operating segment information is the same information as provided
throughout the consolidated financial statements and is therefore not
duplicated.
Major customers
In the year, three customers contributed more than 10% of the company's
external revenue, with contributions of £1,197,092, £951,550 and £936,227
(2023: three customers contributed £1,123,449, £968,782 and £576,671
respectively).
Revenue by geographical area
Revenue from the principal activities of the Group is attributable to the
following geographical areas:
2024 2023
£ £
United Kingdom 2,084,132 1,545,453
Australia/New Zealand 327,976 318,412
The Americas 2,027,333 1,182,631
3,046,496
4,439,441
Contract revenue by product
2024 2023
£ £
Nextcore 3,145 117,867
Cordel 4,436,296 2,928,629
4,439,441 3,046,496
NOTE 4. OTHER INCOME
2024 2023
£ £
Government grants and rebates 519,145 372,172
Other income 18,869 36,584
538,014 408,756
NOTE 5. STAFF COSTS AND KEY MANAGEMENT PERSONNEL
Total staff costs were as follows:
2024 2023
£ £
Wages 2,893,050 2,098,081
Social security costs 194,639 68,477
Other pension costs 185,400 143,468
Share-based payments 33,618 57,359
3,306,707 2,367,385
Included in other creditors at the period end there were unpaid pension costs
of £28,842 (2023: £9,465).
The average number of employees during the year was as follows:
2024 2023
Sales and marketing 7 4
Technical 23 17
Finance and administration 6 6
Average number of employees 36 27
Details of Directors' remuneration is set out below:
The total remuneration in respect of the year ended 30 June 2024 and paid to
each Director who held office during the year as follows:
Salary and fees Share option charge Bonus Pension contribu-tions 2024 2023
£ £ £ £ £ £
Non-Executive Directors:
Ian Buddery 78,357 - - - 78,357 67,039
Jonathan Macleod 36,252 - - 3,980 40,232 37,158
Nicholas McInnes 44,000 - - 220 44,220 35,750
Executive Directors:
Aaron Hoye 137,068 - 4,980 15,077 157,125 98,553
Nicholas Smith (resigned 01/03/2023) - - - - - 67,415
John Davis 140,226 7,090 28,310 333 175,959 60,408
Robert Lojszczyk (resigned 31/07/2023) - - - - - 62,901
Thouraya Walker 75,000 1,380 3,253 3,975 83,608 24,022
Total Directors' remuneration 510,903 8,470 36,543 23,585 579,501 453,246
Number of Directors accruing benefits under money purchase schemes in respect
of qualifying services were four (2023: four).
No Directors exercised share options in the year ended 30 June 2024 (2023:
Nil).
Details of Directors' remuneration is set out below:
The total remuneration in respect of the year ended 30 June 2024 and paid to
each Director who held office during the year as follows:
Salary and fees
Share option charge
Bonus
Pension contribu-tions
2024
2023
£
£
£
£
£
£
Non-Executive Directors:
Ian Buddery
78,357
-
-
-
78,357
67,039
Jonathan Macleod
36,252
-
-
3,980
40,232
37,158
Nicholas McInnes
44,000
-
-
220
44,220
35,750
Executive Directors:
Aaron Hoye
137,068
-
4,980
15,077
157,125
98,553
Nicholas Smith (resigned 01/03/2023)
-
-
-
-
-
67,415
John Davis
140,226
7,090
28,310
333
175,959
60,408
Robert Lojszczyk (resigned 31/07/2023)
-
-
-
-
-
62,901
Thouraya Walker
75,000
1,380
3,253
3,975
83,608
24,022
Total Directors' remuneration
510,903
8,470
36,543
23,585
579,501
453,246
Number of Directors accruing benefits under money purchase schemes in respect
of qualifying services were four (2023: four).
No Directors exercised share options in the year ended 30 June 2024 (2023:
Nil).
NOTE 6. PROFIT/(LOSS) BEFORE TAX
Profit/(loss) before income tax stated after charging/(crediting):
2024 2023
£ £
Depreciation - owned assets 59,232 84,824
Depreciation - right of use assets 64,003 32,478
(Profit)/loss on disposal of property, plant and equipment (1,761) (36,423)
Fees attributable to the auditors of the parent company
- audit of the group 115,000 72,000
- other services 814 1,819
NOTE 7. INCOME TAX
2024 2023
£ £
Income tax expense
Adjustment recognised for prior periods - -
Aggregate income tax expense 103,225 132,566
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit/(loss) before income tax expense (1,195,887) (465,584)
Tax at the statutory tax rate of 25% (2023: 23%) (302,517) (86,161)
Tax effect amounts which are not deductible/(taxable) in calculating taxable
income:
Research and development expenditure, net of tax credits 140,705 115,025
Capital allowances in excess of depreciation 2,472 (2,533)
Other items 15,686 8,209
Current year tax losses not recognised 244,305 98,026
Temporary differences not recognised 2,574 -
Income tax expense 103,225 132,566
Tax at the statutory tax rate represents the effective rate of income tax
across the jurisdictions in which each of the Group entities are domiciled.
The tax rates of the main jurisdictions are Australia 25% (2023: 25%), United
Kingdom 25% (2023: 19%), United States of America 21% (2023: 21%).
2024 2023
£ £
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised 3,988,164 3,013,644
997,041 572,592
Potential deferred tax asset at domestic tax rates applicable in the countries
concerned
The above potential tax benefit for tax losses has not been recognised in the
balance sheet due to a lack of certainty as to when the losses will reverse.
Deferred tax asset recognised on losses which are expected to reverse - 101,148
There are no other deferred tax assets/liabilities other than losses mentioned
above.
NOTE 8. DIVIDENDS
There were no dividends paid, recommended or declared during the current or
prior financial years.
NOTE 9. EARNINGS PER SHARE
2024 2023
£ £
Loss after income tax (1,299,111) (598,150)
Non-controlling interest - -
Loss after income tax attributable to the owners of Cordel Group plc (1,299,111) (598,150)
Number Number
Weighted average number of ordinary shares used in calculating basic earnings 199,488,614 199,488,614
per share
Weighted average number of ordinary shares used in calculating diluted 217,155,558 214,488,892
earnings per share
Pence Pence
Basic earnings per share (0.65) (0.30)
Diluted earnings per share (0.60) (0.28)
NOTE 10. GOODWILL
2024 2023
£ £
Goodwill on consolidation 1,223,403 1,223,403
1,223,403 1,223,403
The goodwill on consolidation was recognised in the year ended 30 June 2020
and no impairments have been recognised to date.
NOTE 11. RIGHT-OF-USE ASSETS
£
Balance as at 30 June 2023 28,858
Additions 253,577
Disposals (154,074)
Exchange differences 147
Depreciation disposed 139,135
Depreciation expense (64,003)
Balance as at 30 June 2024 203,640
The balance as at 30 June 2023 of £28,858 is represented by costs brought
forward of £168,937, accumulated depreciation brought forward of £132,771
and an exchange rate difference of £7,308.
Right-of-use assets related to leased properties that do not meet the
definition of investment property are presented as property, plant and
equipment.
The Group leases premises with a lease term of 3 years ending 31 December
2026. There is no option to purchase and there are no variable payments.
NOTE 12. PROPERTY, PLANT AND EQUIPMENT
Leasehold Office Furniture and Motor Flight R&D
improvements equipment fixtures Vehicles equipment assets Total
£ £ £ £ £ £ £
Balance at 30 June 2023 6,736 13,778 13,881 3,248 29,497 6,732 73,872
Additions 95,973 42,043 - 7,157 - - 145,172
Disposals (22,602) (14,394) (32,463) (21,779) (91,310) - (182,548)
Exchange differences 581 28 (1,696) 240 1,264 24 441
Depreciation disposed 18,132 12,461 28,124 18,624 75,984 - 153,325
Depreciation expense (18,570) (14,357) (6,099) (866) (15,085) (4,254) (59,231)
Balance at 30 June 2024 80,249 39,559 1,747 6,624 350 2,502 131,031
Non-current assets by geographical location
All property plant and equipment, including the Right-of-use assets, is
located in Australia other than computer equipment with a net book value of
£2,265 which is located in the United Kingdom and office equipment with a net
book value of £2,243 which is located in the United States of America.
NOTE 13. INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and
results of the following subsidiaries held by the Company or by its
subsidiaries in accordance with the accounting policy described in note 2:
Name Address and country of incorporation Holding %
Cordel Limited 10 John Street, London WC 1N 2EB United Kingdom 100%
Cordel Technology Inc 1734 E. Boston Street, Suite 103, Gilbert AZ 85295, United States of America 100%
Corridor Holdings Pty Ltd Level 4, 745 Hunter Street, Newcastle West NSW 2302, Australia 100%
Cordel Pty Ltd Level 4, 745 Hunter Street, Newcastle West NSW 2302, Australia 100%
Airsight Australia Pty Ltd Level 4, 745 Hunter Street, Newcastle West NSW 2302, Australia 100%
Maestrano Pty Ltd Level 4, 745 Hunter Street, Newcastle West NSW 2302, Australia 100%
Airsight IP Pty Ltd Level 4, 745 Hunter Street, Newcastle West NSW 2302, Australia 100%
Cordel Pty Ltd, Airsight Australia Pty Ltd and Airsight IP Pty Ltd are 100%
subsidiaries of Corridor Holdings Pty Ltd.
NOTE 14. INVENTORIES
2024 2023
£ £
Inventories 127,762 143,781
127,762 143,781
The amount of inventories expensed during the period was £308,107 (2023:
£284,524), inclusive of a write off of Nextcore inventory during the period.
NOTE 15. TRADE AND OTHER RECEIVABLES
2024 2023
£ £
Trade receivables 511,441 1,389,987
R&D tax offset refundable 439,852 332,021
Prepayments 211,305 242,250
Other receivables 266,455 21,699
1,429,053 1,985,957
Allowance for expected credit losses
The Group has recognised a loss of £Nil (2023: £Nil) in profit or loss in
respect of the expected credit losses for the year ended 30 June 2024. The
ageing of the receivables and allowance for expected credit losses provided
for above are as follows:
Expected credit loss rate Carrying amount Allowance for expected credit losses
2024 2023 2024 2023 2024 2023
% % £ £ £ £
Not overdue - - 511,441 1,314,566 - -
0 to 3 months overdue - - - 75,421 - -
3 to 6 months overdue - - - - - -
Over 6 months overdue - - - - - -
511,441 1,389,987 - -
The Company has virtually no experience of bad debts and credit losses and the
Directors do not expect any future credit losses to arise as contracts come to
termination and as a result no expected credit loss provision was recorded.
NOTE 16. TRADE AND OTHER PAYABLES
2024 2023
£ £
Trade payables 457,861 240,697
Accrued expenses 454,015 314,960
Other payables 133,760 106,503
1,045,636 662,160
Refer to note 20 for further information on financial instruments.
The carrying amounts of trade and other receivables and trade and other
payables approximate their fair values due to their short-term nature.
Capital risk management
The Group's objectives when managing capital are to safeguard its ability to
continue as a going concern, so that it can provide returns for shareholders
and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the balance sheet, plus
net debt. Net debt is calculated as total borrowings less cash and cash
equivalents. If net debt is negative, then the net debt adjustment is limited
to zero.
In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a
business or company is seen as value adding relative to the current Company's
share price at the time of the investment. The Group is not actively pursuing
additional investments in the short term as it continues to integrate and grow
its existing businesses in order to maximise synergies.
The Group is not subject to any financing arrangement covenants and there have
been no events of default on the financing arrangements during the financial
year.
The capital risk management policy remains unchanged throughout the periods
presented.
NOTE 17. CALLED UP SHARE CAPITAL
2024 2023 2024 2023
Shares Shares £ £
Ordinary shares of £0.01 each - issued and fully paid 199,488,614 199,488,614 1,994,886 1,994,886
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the
proceeds on the winding up of the Company in proportion to the number of and
amounts paid on the shares held. The Company does not have a limited amount of
authorised capital.
On a show of hands every member present at a meeting in person or by proxy
shall have one vote and upon a poll each share shall have one vote.
NOTE 18. RESERVES
Accumulated losses represent the total losses incurred by the group to date.
Share premium is the premium paid on shares purchased in the company.
Other reserves in the balance sheet comprise the following:
2024 2023
£ £
Foreign currency reserve 347,433 361,471
Share option reserve 219,415 185,797
Capital reorganisation reserve - 1,889,840
566,848 2,437,108
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the
translation of the financial statements of foreign operations to Pound
sterling.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to
employees and Directors as part of their remuneration.
Capital reorganisation reserve
The Group is a continuation of the original Maestrano Pty Limited group.
Historically, Cordel Group plc recorded the net assets of Maestrano Pty
Limited group at their historic carrying value at the date of acquisition as a
capital reorganisation. The reserve was used to recognise the difference
between the shares issued to affect the transaction (£200,000) and the share
capital acquired (£2,089,840). During the year, the Maestrano Pty Limited
standalone entity was wound down, resulting in dividend and return of capital
to Cordel Group Plc. Therefore the balance remaining in the capital
reorganisation reserve was reduced to £Nil.
NOTE 19. SHARE-BASED PAYMENTS
A share option plan has been established by the Group and approved by
shareholders at a general meeting, whereby the Group may, at the discretion of
the Board of Directors, grant options over equity settled ordinary shares in
the Company to certain key management personnel of the Group. The options are
issued for £Nil consideration and are granted in accordance with performance
guidelines established by the Board of Directors.
All options vest over a period no longer than five years and may have other
vesting conditions. Options expire when an employee ceases to be employed or
contracted by a Group company unless the Board in its discretion allows the
employee to retain all or some of their options. Options do not have a fixed
expiry date.
The share-based payment expense for the financial year was recorded as
£33,618 (2023: £57,359).
The fair value of the options granted in the year were calculated using the
Black-Scholes Model with the below inputs:
Date granted Fair value Weighted average share price Exercise price Expected volatility Risk-free interest rate Vesting period
£ £ £ years
20/11/2023 0.01083 0.01 0.047 26% 4.0% 3
06/02/2024 0.0074 0.01 0.043 24% 4.0% 2
07/02/2024 0.0094 0.01 0.043 24% 4.0% 3
07/02/2024 0.0074 0.01 0.043 24% 4.0% 2
10/04/2024 0.0092 0.01 0.041 25% 4.0% 3
The volatility was calculated using the entity's share price over the previous
12 months and the valuations were undertaken by an independent organisation.
The following table summarises the movements in share options during the year:
2024 2023
No. of options Weighted average exercise price No. of options Weighted average exercise price
Outstanding at beginning of year 15,000,278 0.035 11,703,611 0.041
Granted 3,450,000 0.045 4,120,000 0.077
Exercised - - (490,000) 0.018
Forfeited (783,333) 0.054 (333,333) 0.010
Outstanding at end of year 17,666,945 0.036 15,000,278 0.035
Exercisable at end of year 12,955,550 0.027 11,202,539 0.021
The weighted average exercise price at the end of the financial year was
£0.036 (2023: £0.035), with the exercise prices ranging between £0.01 and
£0.128.
The weighted average remaining contractual life of options outstanding at the
end of the financial year was 2.0 years (2023: 2.3 years).
There is no agreement in place between the Company and its employees for the
Company to pay taxes on behalf of its employees. The Company will be liable
for employer's National Insurance contributions.
NOTE 20. FINANCIAL INSTRUMENTS
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk
(including foreign currency risk, price risk and interest rate risk), credit
risk and liquidity risk. The Group's overall risk management program focuses
on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Group. The Group uses
different methods to measure different types of risk to which it is exposed.
These methods include sensitivity analysis in the case of interest rate and
foreign exchange risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under
policies approved by the Board of Directors ('the Board'). These policies
include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. Finance identifies and
evaluates financial risks within the Group's operating units. Finance reports
to the Board on a regular basis.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and
is exposed to foreign currency risk through foreign exchange rate
fluctuations.
Foreign exchange risk arises from future commercial transactions and
recognised financial assets and financial liabilities denominated in a
currency that is not the entity's functional currency. The risk is measured
using sensitivity analysis and cash flow forecasting.
The Group had net assets denominated in foreign currencies of £1,034,866 as
at 30 June 2024 (2023: £1,271,982). Based on this exposure, had the Pound
sterling weakened by 10% / strengthened by 10% against these foreign
currencies with all other variables held constant, the Group's equity for the
year would have been £103,487 higher / £103,487 lower (2023: £127,198
higher / £127,198 lower). The actual foreign exchange gain for the year ended
30 June 2024 was £1,327 (2023: loss of £15,136).
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group is not exposed to any significant interest rate risk. Cash and cash
equivalents are held in banks in the UK, the USA and Australia, where the
current interest rates range between 4% and 5%. The group continues to monitor
fluctuations in interest rates.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The Group
has a strict code of credit and setting appropriate credit limits. The maximum
exposure to credit risk at the reporting date to recognised financial assets
is the gross carrying amount, as disclosed in the balance sheet and notes to
the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating
expected credit losses to trade receivables through the use of a provisions
matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the Group based on recent
sales experience, historical collection rates and forward-looking information
that is available.
Generally, trade receivables are written off when there is no reasonable
expectation of recovery. Indicators of this include the failure of a debtor to
engage in a repayment plan, no active enforcement activity and a failure to
make contractual payments for a period greater than 1 year.
Except for cash and cash equivalents, the Group has no other concentration of
credit risk exposure as at 30 June 2024. No expected credit loss is recorded
for cash and cash equivalents as the Group and Company only deal with at least
"A" rated financial institutions.
Liquidity risk
Vigilant liquidity risk management requires the company to maintain sufficient
liquid assets (mainly cash and cash equivalents) to be able to pay debts as
and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves by
continuously monitoring actual and forecast cash flows and matching the
maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its
financial instrument liabilities. The tables have been drawn up based on the
undiscounted cash flows of financial liabilities based on the earliest date on
which the financial liabilities are required to be paid. The tables include
both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in
the balance sheet.
1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years Remaining contractual maturities
2024 £ £ £ £ £
Non-derivatives
Non-interest bearing
Trade payables 457,861 - - - 457,861
Other payables 133,760 - - - 133,760
Total non-derivatives 591,621 - - - 591,621
1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years Remaining contractual maturities
2023 £ £ £ £ £
Non-derivatives
Non-interest bearing
Trade payables 240,697 - - - 240,697
Other payables 106,503 - - - 106,503
Total non-derivatives 347,200 - - - 347,200
The cash flows in the maturity analysis above are not expected to occur
significantly earlier than contractually disclosed above. The Group has more
than adequate cash reserves to meet the remaining contractual maturities.
The fair value of financial liabilities is estimated by discounting the
remaining contractual maturities at the current market interest rate that is
available for similar financial liabilities.
NOTE 21. LEASES
Lease liabilities
The following non-cancellable lease commitments existed at the period end:
2024 2023
£ £
0-1 Year 105,138 32,700
1-5 Years 148,780 -
253,918 32,700
As at 30 June 2024 the Group had not committed to any further lease
liabilities that had not yet commenced.
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short-term leases
(leases of expected term of 12 months or less) or for leases of low value
assets. Payments made under such leases are expensed on a straight-line basis.
The total cash outflow in respect of leases in the year was £68,248 (2023:
£37,650) and the interest expense for leasing arrangements was £9,863 (2023:
£4,685).
NOTE 22. RELATED PARTY TRANSACTIONS
Ultimate controlling party
There is no ultimate controlling party.
Key management personnel
Disclosures relating to key management personnel are set out in note 5.
Transactions with related parties
Ian Buddery was remunerated through his personal service company during the
year. Total amounts paid during the year ended 30 June 2024 were £78,357
(2023: £67,039) and these amounts are included within the Directors'
remuneration shown in note 5.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at
the current and previous reporting dates.
Loans to/from related parties
There were no loans to or from related parties at the current and previous
reporting dates.
NOTE 23. EVENTS AFTER THE REPORTING PERIOD
On 3 October 2024, Cordel Group Plc announced a placing of 15,384,616 new
Ordinary shares at 6.5 pence per share with an existing institutional
investor, raising proceeds of £1.0 million to accelerate the development of
AI capabilities.
Other than the above no matter of circumstance has arisen since 30 June 2024
that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs
in future financial years.
COMPANY BALANCE SHEET
AS AT 30 JUNE 2024
Note 2024 2023
£ £
Non-current assets
Investments 2 1,070,698 1,058,993
Total non-current assets 1,070,698 1,058,993
Current assets
Trade and other receivables 3 2,190,426 2,513,599
Cash and cash equivalents 65,314 1,116,178
Total current assets 2,255,740 3,629,777
Current liabilities
Trade and other payables 4 332,233 2,154,892
Total current liabilities 332,233 2,154,892
Net current assets 1,923,507 1,474,885
Total assets less current liabilities 2,994,205 2,533,878
Net assets 2,994,205 2,533,878
Equity
Share capital 5 1,994,886 1,994,886
Share premium account 6 10,856,854 10,856,854
Other reserves 6 274,828 241,209
Accumulated losses 6 (10,132,363) (10,559,071)
Total equity 2,994,205 2,533,878
The Company has taken advantage of the exemption under Section 408 of the
Companies Act from presenting its own profit and loss account. The profit for
the year to 30 June 2024 amounted to £426,708 due to the return of capital on
the wind down of Maestrano Pty Ltd (2023: £2,971,495 loss). The taxable loss
for the year to 30 June 2024 amounted to £323,701 (2023: £513,288 loss).
The financial statements of Cordel Group plc (company number 11098701 (England
and Wales)) were approved by the Board of Directors and authorised for issue
on 28 October 2024.
They were signed on its behalf by:
Ian
Buddery
John Davis
Chairman
Director
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Share Share premium Other Accumulated Total equity
capital account reserves losses
£ £ £ £ £
Balance at 1 July 2022 1,704,272 9,525,617 229,760 (7,590,335) 3,869,314
Loss after income tax expense for the year - - - (2,971,495) (2,971,495)
Foreign currency translation - - (43,151) - (43,151)
Share option charge - - 57,359 - 57,359
Share option exercise - - (2,759) 2,759 -
Total comprehensive income for the year - - 11,449 (2,968,736) (2,957,287)
Share issue 290,614 1,331,237 - - 1,621,851
1,994,886 10,856,854 241,209 (10,559,071) 2,533,878
Balance at 30 June 2023
Share Share premium Other Accumulated Total equity
capital account reserves losses
£ £ £ £ £
Balance at 1 July 2023 1,994,886 10,856,854 241,209 (10,559,071) 2,533,878
Profit after income tax expense for the year - - - 426,708 426,708
Foreign currency translation - - - - -
Share option charge - - 33,619 - 33,619
Total comprehensive income for the year - - 33,619 426,708 460,327
1,994,886 10,856,854 274,828 (10,132,363) 2,994,205
Balance at 30 June 2024
NOTES TO THE COMPANY FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
The parent company financial statements of Cordel Group plc have been prepared
in accordance with the Financial Report Standard 101 'Reduced Disclosure
Framework' (FRS 101) and the Companies Act 2006.
FRS 101 enables the financial statements of the Parent Company to be prepared
in accordance with IFRS but with certain disclosure exemptions. As permitted
by FRS 101, the Company has taken advantage of all of the disclosure
exemptions available to it, including (where applicable): statement of cash
flows, new Accounting Standards not yet mandatory, presentation of comparative
information for certain assets, impairment of assets, capital risk management,
financial instruments, fair value measurement, key management personnel,
related party transactions, business combinations and share-based payments.
The accounting policies adopted for the parent company are otherwise
consistent with those used for the group which are set out on pages 33 to 42.
NOTE 2. INVESTMENT IN SUBSIDIARY
Investment in subsidiary
Investment in subsidiary is shown at initial cost plus any subsequent
contributions, less accumulated impairment.
In a Group reorganisation, initial cost is measured at the carrying amount of
the Company's share of the equity items shown in the separate financial
statements of the original parent at the date of the reorganisation. If the
original parent has net liabilities, the initial cost is recognised as £Nil.
The difference between the capital contributed to effect the transaction and
the initial cost recognised as the investment in subsidiary is reflected as an
adjustment directly to the capital reorganisation reserve in equity.
2024 2023
£ £
Investment in Corridor Holdings Pty Ltd - 100% of issued capital held 1,002,360 1,001,249
Investment in Cordel Ltd - 100% of issued capital held 13,748 5,570
Investment in Cordel Technology Inc. - 100% of issued capital held 54,590 52,174
1,070,698 1,058,993
The increase in the value of the investment in the year is due to the share
option charge granted to the employees within the subsidiaries.
A full list of the subsidiaries controlled by the Company is disclosed in note
13 to the consolidated financial statements.
NOTE 3. TRADE AND OTHER RECEIVABLES
2024 2023
£ £
Receivable from controlled entities 2,144,225 2,453,772
Prepayments 33,617 47,773
Other receivables - representing sales tax 12,584 12,054
2,190,426 2,513,599
The receivables from controlled entities are repayable on demand. A receivable
balance of £1,182,700 was provided for in the current year owing from
Corridor Holdings Pty Ltd (2023: £2,462,581). Corridor Holdings Pty Ltd
remains operationally essential to the ongoing growth of the Group as a whole
but is not expected to be significantly cash generating in its own right in
the medium term. No expected credit loss provision is recorded on the
remaining receivable from the controlled entities as Directors believe the
receivable from controlled entities will be fully recovered from cash
generated from revenue and operations.
NOTE 4. TRADE AND OTHER PAYABLES
2024 2023
£ £
Trade payables 67,450 63,096
Payable to controlled entities - 1,972,281
Accrued expenses 240,620 119,515
Other payables 24,163 -
332,233 2,154,892
NOTE 5. SHARE CAPITAL
2024 2023 2024 2023
Shares Shares £ £
Ordinary shares of £0.01 each - issued and fully paid 199,488,614 199,488,614 1,994,886 1,994,886
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the
proceeds on the winding up of the Company in proportion to the number of and
amounts paid on the shares held. The Company does not have a limited amount of
authorised capital.
On a show of hands every member present at a meeting in person or by proxy
shall have one vote and upon a poll each share shall have one vote.
NOTE 6. OTHER RESERVES
Accumulated losses represent the total losses incurred by the company to date
since its incorporation.
Share premium is the premium paid on shares purchased in the company.
Other reserves in the balance sheet comprise the following:
2024 2023
£ £
Foreign currency reserve 55,413 55,413
Share option reserve 219,415 185,796
274,828 241,209
NOTE 7. RELATED PARTY TRANSACTIONS
The following balances are outstanding at the reporting date in relation to
loans with related parties:
2024 2023
£ £
Current receivables:
Loans to a commonly controlled entity 5,789,506 4,916,353
Amounts provided for in prior years (2,462,581) -
Amounts provided for in the year (1,182,700) (2,462,581)
2,144,225 2,453,772
Current payables:
Loans from a commonly controlled entity - 1,972,281
The receivables from controlled entities are repayable on demand. Details of
related party transactions are provided in note 22 to the consolidated
financial statements.
A payable balance of £1,953,819 due to Maestrano Pty was reduced to £Nil in
the year as a result of a return of capital on the cessation of the company's
operations.
A receivable balance of £1,182,700 due from Corridor Holdings Pty Ltd was
provided for in the year (2023: £2,462,581). Corridor Holdings Pty Ltd
remains operationally essential to the ongoing growth of the Group as a whole
but is not expected to be significantly cash generating in its own right in
the medium term.
Ian Buddery was remunerated through his personal service company during the
year. Total amounts paid were £78,357 (2023: £67,039) and these amounts are
included within the Directors remuneration shown in note 5 to the consolidated
financial statements.
NOTE 8. SHARE-BASED PAYMENTS
A share option plan has been established by the Group and approved by
shareholders at a general meeting, whereby the Group may, at the discretion of
the Board of Directors, grant options over equity settled ordinary shares in
the Company to certain key management personnel of the Group. The options are
issued for £Nil consideration and are granted in accordance with performance
guidelines established by the Board of Directors.
All options vest over a period no longer than five years and may have other
vesting conditions. Options expire when an employee ceases to be employed or
contracted by a Group company unless the Board in its discretion allows the
employee to retain all or some of their options. Options do not have a fixed
expiry date.
The share-based payment expense for the financial year was recorded as
£19,698 (2023: £34,274).
NOTE 9. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party.
NOTE 10. EVENTS AFTER THE REPORTING PERIOD
On 3 October 2024, Cordel Group Plc announced a placing of 15,384,616 new
Ordinary shares at 6.5 pence per share with an existing institutional
investor, raising proceeds of £1.0 million to accelerate the development of
AI capabilities.
Other than the above no matter of circumstance has arisen since 30 June 2024
that has significantly affected, or may significantly affect the Company's
operations, the results of those operations, or the Company's state of affairs
in future financial years.
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