REG - Gattaca PLC - Interim Results
02/04/2025 07:00
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RNS Number : 2324D Gattaca PLC 02 April 2025
2 April 2025
Gattaca plc
("Gattaca" or "the Group")
Interim Results for the six months ended 31 January 2025
"Robust performance, full year expected to be in line with market
expectations"
Gattaca plc, the specialist staffing business, announces its financial results
for the six months ended 31 January 2025 ("2025 H1").
Financial Highlights
Continuing operations 2025 H1 2024 H1 Variance
(restated(2))
Revenue (£m) 193.5 187.6 +3%
Net Fee Income (NFI)(1) (£m) 18.9 19.4 -3%
Operating profit (£m) 0.5 0.5 -
Underlying profit before tax(3) (£m) 1.0 1.2 -15%
Profit before tax (£m) 0.8 1.0 -22%
Profit after tax (£m) 0.5 0.8 -34%
Profit/(loss) after tax from discontinued operations 0.1 (0.5) -
Group profit after tax 0.6 0.2 +181%
Basic earnings per share (pence) 2.0 0.7 +182%
Net cash (£m) 16.8 22.3 -19%
Interim dividend (pence) 1.0 nil
Highlights
· Group NFI of £18.9 million, a decrease of 3% year-on-year ("YoY")
o UK NFI down 2% at £18.7 million (2024 H1(2): £19.1 million).
o Energy team performed strongly with 17% YoY growth reflecting our strategic
investment into headcount focused on the sector which we continue to make.
o Infrastructure teams grew by 8%, with particularly strong growth within the
Water sector as the UK focuses on improving water infrastructure quality.
o Contract vs Statement of Work ("SoW") vs Permanent & Other Fee split 74% /
6% / 20% of Group NFI (2024 H1(2): 71% / 6% / 23%).
o Contract NFI up 1% YoY, exiting 2025 H1 with a growing contract book.
o Permanent & Other Fees NFI down 14% YoY, due to continued challenging
market conditions. 2025 H1 was up 6% on 2024 H2, reflecting sequential growth.
o Gattaca Projects SoW NFI was flat YoY, as new client acquisitions offset
delays, with a shift to shorter term programmes linked to the public sector
spending review.
· Group continuing underlying profit before tax of £1.0m (2024 H1(2): £1.2m).
· Total sales headcount of 273 at the end of the period down 4% versus 31 July
2024 and 11% down versus 31 January 2024; rebalancing in our Energy and
Business Development teams whilst managing headcount in slower growth sectors
has resulted in NFI per head up 13% YoY.
· Net cash of £16.8 million (31 January 2024: £22.3 million) due to reduction
in trade creditors as a result of contractor payroll timings, and the 2024
final dividend paid in the period.
· Reintroduction of Interim dividend of 1.0 pence per share (2024 H1: £nil
pence).
Strategic update
Continued emphasis on developing the four identified strategic priorities for
sustainable profitable growth:
External Focus
· Maturing of our investment in Energy team headcount during 2025 H1 resulted in
YoY NFI growth of 17%.
· New Director of Marketing in place, providing a new approach and perspective.
Focus on enhancing the Group's CRM strategy, improving the contractor journey
and experience.
· Retained a major Solutions accounts in the period which were out to market.
Growing business development pipeline.
· Client feedback rating of 9.3 in 2025 H1, increased from 8.8 in FY24.
Candidate feedback rating at 8.8 in 2025 H1 reduced from 9.0 for FY24.
Culture
· People engagement remains stable at 8.3 for 2025 H1 (FY24: 8.1) and attrition
maintained at 30% at 31 January 2025, demonstrating our focus on culture is
fully embedded in the business.
· Winner of the 2024 REC (Recruitment and Employment Confederation)
"Sustainability Initiative of the Year" award, and highly commended for EDI
work in 2024 Business Culture Awards.
· Launched the Materna Fund, providing financial support to students studying
Engineering at Portsmouth University.
Operational Performance
· Average NFI per sales head has increased by 9%, and by 13% per total head YoY.
· Successfully launched a series of customer focused automations, which will
result in streamlined processes on the back of our digital transformation.
Cost Rebalancing
· Improved our ratio of sales to support staff by 2% pts to 71:29 (2024 H1:
69:31).
· Multi-year extensions confirmed with key platform providers resulting in
reduced annual fees.
· 3% reduction in underlying administrative cost YoY.
Outlook
The persistent macroeconomic headwinds impacting the broader recruitment
sector have demonstrably affected both client demand and candidate sentiment,
reducing volume and extending recruitment timelines. This has acted as a
headwind on our recent performance. Specifically, permanent recruitment
remains subdued, and we anticipate this trend to continue in the medium term.
In response, our strategic focus remains on expanding our contractor base,
which has shown greater resilience, investing in core markets where we see
growth opportunity, alongside rigorous proactive cost management.
Group guidance for FY25 continuing underlying profit before tax remains at £3
million.
Commenting, Matthew Wragg, Chief Executive Officer of Gattaca said:
"We are pleased to report a robust 2025 H1 performance, achieved through
proactive management of the market challenges, with a great team who are
starting to see the tangible results of our strategic investments. We have
retained our customer base, further improved our performance per head,
continued to grow our contractor book, are seeing the results of our strategic
investments and are confident in achieving our full year PBT expectations.
We will drive continued growth in our core markets throughout the second
half, aiming for a strong year-end. We are confident in our ability to
navigate market conditions through operational efficiency, cost discipline,
and a focus on productivity whilst maintaining high engagement."
The following footnotes apply, unless where otherwise indicated, throughout
these Interim Results:
1. NFI is calculated as revenue less contractor payroll costs.
2. 2024 H1 results have been restated for the treatment of the US-based
operations as discontinued.
3. Continuing underlying results exclude the NFI and profit/(loss) before
taxation of discontinued operations (2025 H1: £0.1m, 2024 H1(2): £(0.5)m),
non-underlying items within administrative expenses primarily related to
restructuring costs (2025 H1: £0.3m, 2024 H1(2): £0.3m), amortisation of
acquired intangibles (2025 H1: £0.0m, 2024 H1: £0.0m), and exchange gains
from revaluation of foreign assets and liabilities (2025 H1: £0.1m, 2024
H1(2): £0.1m).
For further information, please contact:
Gattaca plc +44 (0) 1489 898989
Matthew Wragg, Chief Executive Officer
Oliver Whittaker, Chief Financial Officer
Panmure Liberum Limited (Nomad and Broker) +44 (0) 20 3100 2000
Richard Lindley
Edward Mansfield
Will King
IFC Advisory (Financial PR and IR) +44 (0) 203 934 6630
Tim Metcalfe
Graham Herring
Florence Staton
Operational Performance
Net Fee Income (NFI) £m 2025 H1 2024 H1 Change
(restated(2))
Infrastructure 7.0 6.5 +8%
Defence 3.2 3.8 -16%
Mobility 1.8 2.1 -14%
Energy 2.7 2.3 +17%
Technology, Media & Telecoms 1.6 1.9 -16%
Gattaca Projects 1.1 1.1 0%
Professional Skills (previously 'Other') 1.3 1.4 -7%
Total UK 18.7 19.1 -2%
International 0.2 0.3 -33%
Continuing Total Group NFI 18.9 19.4 -3%
Infrastructure
Infrastructure NFI grew by 8% year-on-year, with significant growth in our
Water sub-sector, with steady increases in Highways and Rail as well. We are
well established in Infrastructure, supporting regional and national projects
across our sub-sectors. These subsectors are vital for both the economy and
people's quality of life and continue to require substantial long-term
investment to improve their assets underpinned by a government focus on
investment in infrastructure.
Contract demand, especially in skilled trades, stayed high across 2025 H1 for
the Water sector, continuing the trend we saw through FY24. Utilities
companies continue maintenance spend whilst starting to invest in improving
the ageing UK water infrastructure, as AMP7 ends and AMP8 commences in April
2025. Contract demand in Highways and Rail was flat, reflecting supply chain
uncertainty after changes to UK Government spending plans for projects in
those areas. There was inconsistent performance in the permanent market and
demand for candidates was low in Water, in line with wider permanent market
trends. However, we saw an increase in professionally skilled contractors
taking permanent roles within clients across Highways and Rail, as candidates
sought out stability.
Defence
Defence NFI reduced by 16% year-on-year, coming off a strong 2024 H1. Defence
companies await the outcome of the UK Defence Spending Review in 2025; whilst
the UK Government is committed to growing defence spending in line with
previous plans, the industry is awaiting clarity on how it will allocate the
defence budget and this has contributed to inertia across the sector resulting
in slow hiring. Contract demand reduced as clients slowed or halted projects
but the biggest impact on our NFI was from a substantial drop-off in permanent
hiring across the sector, continuing the slowdown seen towards the end of
FY24.
Gattaca's access to the major UK market remains strong, serving over half of
the UK MoD's top 100 suppliers. The increased geopolitical uncertainty in
recent years has led the UK and other governments to commit to markedly
increased defence spending and that is expected to continue, contributing to
significant export orders for UK defence companies, and therefore strong
demand for skilled talent. Our strong market coverage across land, sea, air
and cyber means we will be able to serve client needs in whichever areas the
Government chooses to invest.
Recognising that the defence sector continues to face a major skills shortage,
we bedded in our new programme with a key client to develop systems
engineering talent, which is in particular demand in the sector, and are
looking to grow that offering over 2025 H2.
Mobility
Mobility saw it's NFI reduce by 14% year-on-year in 2025 H1. The division is
heavily impacted by the hiring patterns of some of our largest Solutions
clients, and hiring freezes at those clients contributed to much lower
permanent recruitment demand across the period. Additionally, contract NFI in
our Maritime sub-sector was impacted by the insolvency of Harland & Wolff,
and unexpected furlough for contractors over the Christmas period at another
large client.
Our Mobility team is well positioned and diversified, with large clients
across the Automotive, Aerospace and Maritime subsectors. In the Automotive
market, there continues to be considerable interest in decarbonising transport
systems, driving demand for talent to develop battery, fuel cell and
propulsion technologies, as well as manufacturing skills for low or
no-emissions vehicles. In Aerospace, we saw reduced activity and some hiring
freezes but prospects remain positive, however, with growth in the airframe
order book and continued need for quality, manufacturing and production
skills. In Maritime, we continue to build our ship building capabilities.
Energy
Energy NFI was up 17% for 2025 H1, year-on-year. The significant investment
made in sales headcount in early FY24 has resulted in a cohort of strong
recruiters who have started to deliver consistent results in a strong market.
We support clients in energy generation, transmission and distribution, across
the oil and gas, nuclear and renewables industries.
Contract has been stable across the period in our sub-sectors of oil &
gas, transmission & distribution and nuclear. However, our growth has been
driven by increasing demand for permanent candidates in offshore wind; the UK
Government's aim to quadruple offshore wind production by 2030 has resulted in
a record number of new projects. Hiring demand has risen quickly over the
period and our team have been well positioned to deliver strong candidates.
Technology, Media & Telecoms (TMT)
TMT NFI has decreased by 16% year-on-year, in tough conditions for technology
skills. Data, AI and machine learning skills are in high demand as well as
software development and ERP systems; we also have strong positions in cyber
security and providing senior leaders for projects and programmes. However,
similar to other sectors, permanent hiring has been very challenging; as they
look for cost savings, companies are implementing lengthy interview processes,
under-offering for skilled candidates and cancelling vacancies late in the
recruitment process, resulting in a reduction to CV-to-start conversion
ratios. Conversely, the contract market for technology skills has been
growing; contract NFI performance was stable year-on-year and we are entering
2025 H2 with a growing contract pipeline in TMT.
In a difficult market, we have focused on contractor growth, and our
considerable investment in previous periods in people development and creating
a high-performing culture in TMT, has been crucial to maintaining resilience
in our sales team during this time. Our increased brand recognition across the
sector has helped us retain experienced people in our team and our partnership
with Tech Nation, the UK's largest tech accelerator programme, allows us to
support start-up members in executing their workforce strategies.
Additionally, we continue to run a range of successful events such as
Limitless in Tech, for women in the industry, to build skilled candidate pools
for the long-term.
Gattaca Projects
Our Gattaca Projects Statement of Work NFI was flat year-on-year. In 2025 H1,
there has been a client-driven shift towards shorter term smaller projects
whilst larger future long term projects are progressing through public sector
procurement processes. We continue to focus on engineering project supply
chain management services primarily in our Energy and Defence sectors. We work
with a small but increasing number of clients, building our brand in the
market and leverage our specialised sector knowledge to attract highly
skilled, in-demand candidates to deliver our projects.
Professional Skills (previously 'Other')
Our 'Other' category of smaller divisions previously comprised of our
Professional Skills brand Barclay Meade and our Public Sector and Smart
Manufacturing divisions. At the start of 2025 H1, due to changes in the
Group's operational structure, our Public Sector and Smart Manufacturing
divisions were absorbed into our Defence, TMT and Energy sectors, as we
focussed on critical mass in our core sectors.
Our Commercial Services capability, which is primarily permanent recruitment
focussed, is now reported on a stand alone basis, and NFI decreased by 7%
year-on-year. Barclay Meade recruits across Procurement, Sales, HR, Finance,
Administrative and Training skill sets; market headwinds over the past six
months have kept UK demand for permanent talent in these capabilities low.
Clients are reviewing their workforce strategies in light of upcoming
increased employment tax burdens and a slow UK economic outlook, and these
roles traditionally sit within support functions where cost saving initiatives
tend to be more heavily focussed. However, demand for resource still exists
and naturally, this has led to a slight uptick in the contracting market as
permanent candidates search for work. Our sales team continue to ensure their
candidate pools are strong and adaptable to shorter term or more agile roles
as client needs change.
International
International NFI, comprising of our businesses in Canada and Spain, was down
33% year-on-year, primarily driven by poor permanent recruitment performance
in our Canadian business. We are increasing our focus on the Infrastructure
and Energy contract sector in Canada, working closely with our team in the UK.
Group contractor and permanent fee mix
Contract fees accounted for 74% of the continuing underlying NFI in 2025 H1
(2024 H1 restated: 71%, FY24: 74%). During the period our contractor base was
broadly flat. Permanent fees accounted for 20% of continuing underlying NFI in
2025 H1 (2024 H1 restated: 23%, FY24: 19%). Demand within the permanent market
remained weak, as weaker client confidence around the economic outlook and
rising payroll costs had led firms to pause or cut back on hiring demand,
compounded by an increase in available candidates.
Statement of Work NFI, from Gattaca Projects, was 6% of continuing underlying
NFI in 2025 H1 (2024 H1 restated: 6%. FY24: 7%). Whilst stable year on year,
Gattaca Projects saw delays in some projects as a result of the government
spending review on defence; as a result, they looked to diversify and
increased the number of clients that they work with and took some shorter term
lower margin opportunities.
People
As at 31 January 2025 Gattaca's headcount was 386, marking a reduction of 60
employees (-13%) compared to 31 January 2024. This decrease was due to
performance management actions undertaken in the sales teams, and investment
in embedded back-office systems enabling a leaner support function. The ratio
of sales to support staff was 71:29 at 31 January 2025 (31 January 2024:
69:31). The Group is committed to growing sales staff above 75% of overall
employees.
Financial Overview
Revenue for the period was £193.5 million (2024 H1 restated: £187.6 million,
FY24: £389.5 million), up 3.1% year-on-year. NFI of £18.9 million (2024 H1
restated: £19.4 million, FY24: £40.1 million) represented a 2.6%
year-on-year decrease. Contract NFI margin of 7.6% (2024 H1 restated: 7.7%,
FY24: 8.0%) was down compared with the same period in the prior year; due to
pricing pressure on contract renewals. Gattaca Projects SoW margin was 19.9%
(2024 H1: 26.5%, FY24: 24.8%), down against the same period in the prior year
due to a shift in the mix of projects to time and materials based work vs
fixed price in the prior year.
Continuing underlying profit before tax for the period amounted to £1.0
million (2024 H1 restated: £1.2 million, FY24: £2.9 million). On a
continuing underlying basis, the effective tax rate was 34% (2024 H1 restated:
26%). The Group's continuing underlying effective tax rate reported at 31 July
2024 was 35%.
Basic and diluted earnings per share from continuing operations were 1.6 pence
and 1.5 pence (2024 H1 restated: both 2.4 pence) and underlying basic and
diluted earnings per share from continuing operations were 2.2 pence and 2.1
pence (2024 H1 restated: basic 2.9 pence, diluted 2.8 pence).
Administrative costs
Underlying administrative costs of £18.1 million (2024 H1: £18.6 million,
FY24: £37.8 million) represented a decrease of 2.8% during the period,
largely due to reduced staff costs and lower property costs following a
reduction in the UK property portfolio in FY24.
A breakdown of the decrease in administrative costs is shown below:
£m
2024 H1 continuing underlying administrative costs 18.6
Sales staff costs (0.4)
Support & management staff costs (0.3)
Commissions, bonuses, and incentives 0.2
Trade receivables and accrued income: expected credit loss provision release 0.8
Establishment costs (0.3)
Other costs (0.5)
2025 H1 continuing underlying administrative costs 18.1
Non-underlying costs and discontinued operations
The continuing non-underlying costs of £0.3 million (2024 H1 restated: £0.3
million, FY24: £1.1 million), relates predominantly to Group restructuring
costs and ongoing closures costs of Group operations.
In 2025 H1, the profit before tax from discontinued operations of £0.1m (2024
H1 restated loss : £(0.5)m, FY24: £(0.6)m) resulted from exchange gains on
balances held in the balance sheet. In the prior period, the trading losses
from discontinued operations were in connection with the Group's recruitment
operations in the USA which were closed in March 2024.
Financing costs
Net finance income of £0.3 million (2024 H1 restated: £0.6 million, FY24:
£0.6 million) reflected the lower average cash balance during the period as
we reduced our use of the non-recourse invoice discounting facility, combined
with the reductions in interest rates during the period.
Debtors, cash flow, net cash and financing
Net cash at 31 January 2025 was £16.8 million (31 July 2024: £20.7 million;
31 January 2024: £22.3 million). The average daily net cash balance
throughout the period was £13.2 million.
The Group's trade and other receivables balance was £48.9 million at 31
January 2025 (31 July 2024: £53.0 million), of which debtor and accrued
income balances were £46.7 million (31 July 2024: £51.1 million), a £4.4
million reduction over the 6-month period from 31 July 2024. The Group's days
sales outstanding ("DSO") over this period (on a weekly based countback
method) increased by 7 days to 50 days at 31 January 2025 (31 January 2024: 53
days, 31 July 2024: 43 days). Whilst DSO position at 31 July 24 is considered
to have been near optimal levels, there is consistently a seasonal increase in
DSO following the Christmas and New Year period.
Capital expenditure in the period amounted to £0.0 million (2024 H1: £0.1
million, FY24: £0.2 million).
As at 31 January 2025, the Group had a working capital facility of £50
million (31 July 2024: £50m, 31 January 2024: £50m). This facility includes
both recourse and non-recourse elements. Under the terms of the non-recourse
facility, the trade receivables are assigned to and owned by HSBC and so are
not recognised in the Group's statement of financial position. In addition,
the non-recourse working capital facility does not meet the definition of
loans and borrowings under IFRS. The utilisation of this facility at 31
January 2025 was £0.3 million in credit on the recourse facility and £(2.1)
million borrowing on the non-recourse facility. Following the period end the
Group has removed the non-recourse element of the facility with HSBC and
reduced the total facility value to £40 million, recognising the relatively
infrequent and low utilisation of the facility.
Dividend
The Board has today declared an interim dividend of 1.00 pence per share (2024
H1: £nil) to be paid on 14 May 2025 to shareholders on the register at 10
April 2025.
Risks
The Board considers strategic, financial, and operational risks and identifies
actions to mitigate those risks. Key risks and their mitigations were
disclosed on pages 41 to 44 of the Annual Report for the year ended 31 July
2024.
We continue to manage several potential risks and uncertainties including
contingent liabilities as noted in the interim accounts - many of which are
common to other similar businesses - which could have a material impact on our
longer-term performance.
Condensed Consolidated Income Statement
For the period ended 31 January 2025
6 months to 31/01/2025 Restated(1) 12 months to 31/07/2024
unaudited 6 months
to 31/01/2024
unaudited
Note £'000 £'000 £'000
Continuing operations
Revenue 2 193,466 187,643 389,533
Cost of sales (174,545) (168,214) (349,454)
Gross profit 2 18,921 19,429 40,079
Administrative expenses(2) (18,427) (18,972) (38,999)
Operating profit from continuing operations 4 494 457 1,080
Finance income 366 606 784
Finance cost (51) (26) (180)
Profit before taxation 809 1,037 1,684
Taxation 5 (307) (280) (916)
Profit after taxation from continuing operations 502 757 768
Discontinued operations
Profit/(loss) for the period from discontinued operations (attributable to 6 137 (530) (582)
equity holders of the Company)
Profit for the period 639 227 186
(1) HY24 results have been restated for the presentation of discontinued
operations as explained in Note 6.
(2) Administrative expenses from continuing operations includes net impairment
releases on trade receivables and accrued income of £4,000 (period ending 31
January 2024: £843,000, year ending 31 July 2024: £320,000).
Profits for the periods to 31 January 2025, 31 January 2024 and the year to 31
July 2024 are wholly attributable to equity holders of the parent.
6 months 12 months
to 31/01/2025 6 months to 31/07/2024
unaudited to 31/01/2024
unaudited
Earnings per ordinary share Note pence pence pence
Basic earnings per share 7 2.0 0.7 0.6
Diluted earnings per share 7 2.0 0.7 0.6
Reconciliation to adjusted profit measure
Underlying profit is the Group's key adjusted profit measure; profit from
continuing operations is adjusted to exclude non-underlying income and
expenditure as defined in the Group's accounting policy, amortisation and
impairment of goodwill and acquired intangibles, impairment of leased
right-of-use assets and net foreign exchange gains or losses.
6 months Restated(1)
to 31/01/2025 6 months 12 months
unaudited to 31/01/2024 to 31/07/2024
unaudited
Note £'000 £'000 £'000
Operating profit from continuing operations 494 457 1,080
Add:
Non-underlying items included within administrative expenses 4 280 336 1,092
Reversal of impairment of leased right-of-use assets 4 - (42) (42)
Amortisation of acquired intangibles 4 31 32 69
Depreciation of property, plant and equipment, leased right-of-use assets and 4 674 766 1,533
amortisation of software and software licences
Underlying EBITDA 1,479 1,549 3,732
Less:
Depreciation of property, plant and equipment, leased right-of-use assets and (674) (766) (1,533)
amortisation of software and software licences
Net finance income excluding foreign exchange gains and losses 238 443 719
Underlying profit before taxation 1,043 1,226 2,918
Underlying taxation (355) (313) (1,026)
Underlying profit after taxation from continuing operations 688 913 1,892
(1) HY24 results have been restated for the presentation of discontinued
operations as explained in Note 6.
Condensed Consolidated Statement of Comprehensive Income
For the period ended 31 January 2025
6 months 6 months 12 months
to 31/01/2025 to 31/01/2024 to 31/07/2024
unaudited unaudited
£'000 £'000 £'000
Profit for the period 639 227 186
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (119) (23) 174
Reclassification adjustment on disposal of foreign operations (Note 6) - - (713)
Other comprehensive loss for the period (119) (23) (539)
Total comprehensive income/(loss) for the period attributable to equity 520 204 (353)
holders of the parent
Restated(1)
6 months 6 months 12 months
to 31/01/2025 to 31/01/2024 to 31/07/2024
unaudited unaudited
£'000 £'000 £'000
Attributable to:
Continuing operations 480 752 925
Discontinued operations 40 (548) (1,278)
Total comprehensive income/(loss) for the period attributable to equity 520 204 (353)
holders of the parent
(1) HY24 results have been restated for the presentation of discontinued
operations as explained in Note 6.
Condensed Consolidated Statement of Financial Position
As at 31 January 2025
31/01/2025 31/01/2024 31/07/2024
unaudited unaudited
Note £'000 £'000 £'000
Non-current assets
Goodwill(1) 1,712 1,712 1,712
Intangible assets 70 185 120
Property, plant and equipment 575 848 702
Right-of-use assets 1,832 1,732 2,128
Deferred tax assets 305 410 342
Total non-current assets 4,494 4,887 5,004
Current assets
Trade and other receivables 8 48,924 46,758 53,016
Corporation tax receivables 346 132 379
Cash and cash equivalents 18,573 23,893 22,817
Total current assets 67,843 70,783 76,212
Total assets 72,337 75,670 81,216
Non-current liabilities
Deferred tax liabilities (4) (19) (12)
Provisions 9 (338) (389) (396)
Lease liabilities (842) (930) (1,217)
Total non-current liabilities (1,184) (1,338) (1,625)
Current liabilities
Trade and other payables (40,952) (43,504) (49,323)
Provisions 9 (491) (816) (425)
Current tax liabilities (719) (388) (686)
Lease liabilities (946) (689) (853)
Total current liabilities (43,108) (45,397) (51,287)
Total liabilities (44,292) (46,735) (52,912)
Net assets 28,045 28,935 28,304
Equity
Share capital 10 315 316 315
Share premium 8,706 8,706 8,706
Capital redemption reserve 8 8 8
Merger reserve 224 224 224
Share-based payment reserve 388 204 265
Translation reserve 56 673 157
Treasury shares reserve (724) (479) (601)
Retained earnings 19,072 19,283 19,230
Total equity 28,045 28,935 28,304
(1) Goodwill and intangibles assets for HY24 have been adjusted to report
these separately, where they were previously presented combined.
The accompanying notes form part of these interim financial statements.
Condensed Consolidated Statement of Changes in Equity
For the period ended 31 January 2025
Restated(1)
Share capital Share premium Capital redemption reserve Merger reserve Share-based payment reserve Translation reserve Treasury shares reserve
Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 August 2023 319 8,706 4 224 334 696 (331) 20,865 30,817
Profit for the period - - - - - - - 227 227
Other comprehensive loss - - - - - (23) - - (23)
Total comprehensive income - - - - - (23) - 227 204
Share-based payments charge - - - - 80 - - - 80
Share-based payments reserve transfer - - - - (210) - - 210 -
Deferred tax movement in respect of share options - - - - - - - 50 50
Shares issued on exercise of LTIP share options 1 - - - - - - - 1
Purchase of treasury shares - - - - - - (148) - (148)
Purchase and cancellation of own shares(1) (4) - 4 - - - - (503) (503)
Dividends paid - - - - - - - (1,566) (1,566)
Transactions with owners (3) - 4 - (130) - (148) (1,809) (2,086)
Total equity at 31 January 2024 (unaudited) 316 8,706 8 224 204 673 (479) 19,283 28,935
At 1 August 2023 319 8,706 4 224 334 696 (331) 20,865 30,817
Profit for the year - - - - - - - 186 186
Other comprehensive loss - - - - - (539) - - (539)
Total comprehensive loss - - - - - (539) - 186 (353)
Share-based payments charge - - - - 201 - - - 201
Share-based payments reserve transfer - - - - (270) - - 201 (69)
Deferred tax movement in respect of share options - - - - - - - 46 46
Treasury shares issued to employees on exercise of LTIP share options - - - - - - 69 - 69
Purchase of treasury shares - - - - - - (339) - (339)
Purchase and cancellation of own shares(1) (4) - 4 - - - - (502) (502)
Dividends paid - - - - - - - (1,566) (1,566)
Transactions with owners (4) - 4 - (69) - (270) (1,821) (2,160)
Total equity at 31 July 2024 315 8,706 8 224 265 157 (601) 19,230 28,304
Total equity at 1 August 2024 315 8,706 8 224 265 157 (601) 19,230 28,304
Profit for the period - - - - - - - 639 639
Other comprehensive loss - - - - - (119) - - (119)
Total comprehensive income - - - - - (119) - 639 520
Share-based payments charge - - - - 130 - - - 130
Share-based payments transfer - - - - (7) - - 7 -
Deferred tax movement in respect of share options - - - - - - - (27) (27)
Purchase of treasury shares - - - - - - (123) - (123)
Translation reserve movements on disposal of foreign operations - - - - - 18 - - 18
Dividend paid - - - - - - - (777) (777)
Transactions with owners - - - - 123 18 (123) (797) (779)
Total equity at 31 January 2025 (unaudited) 315 8,706 8 224 388 56 (724) 19,072 28,045
(1) During the period ended 31 January 2024 and 31 July 2024, Gattaca plc
undertook a public share buyback and a capital redemption reserve was created
as a result of the subsequent cancellation of these shares, as discussed in
Note 10.
Condensed Consolidated Cash Flow Statement
For the period ended 31 January 2025
6 months Restated Restated
to 31/01/23 6 months ⁽¹⁾ ⁽²⁾ 12 months ⁽¹⁾
unaudited to 31/01/22 to 31/07/22
unaudited
6 months 12 months
to 31/01/2025 6 months to 31/07/2024
unaudited to 31/01/2024
unaudited
£'000 £'000 £'000
Note
Cash flows from operating activities
Profit after taxation 639 227 186
Adjustments for:
Depreciation of property, plant and equipment and amortisation of 206 322 588
intangible assets, software and software licences
Depreciation of leased right-of-use assets 499 476 1,030
Loss on disposal of property, plant and equipment - 5 24
Reversal of impairment on right-of-use assets - (42) (42)
Impairment of cash and cash equivalents - - 408
Profit on reassessment of dilapidation asset 18 - -
Interest income (290) (469) (784)
Interest costs 51 26 65
Taxation expense recognised in the Income Statement 311 280 880
Decrease/(increase) in trade and other receivables 4,068 5,377 (940)
(Decrease)/increase in trade and other payables (8,371) (3,391) 2,428
Increase/(decrease) in provisions 7 (207) (616)
Share-based payment charge 130 80 201
Foreign exchange losses (96) (56) (420)
Cash (used)/generated from operations (2,828) 2,628 3,008
Interest paid (2) (1) (2)
Interest on lease liabilities (48) (25) (63)
Interest received 290 469 784
Income taxes received(1) 11 207 789
Income taxes paid(1) (240) (19) (1,117)
Cash (used)/generated from operating activities (2,817) 3,259 3,399
Cash flows from investing activities
Purchase of property, plant and equipment (28) (87) (162)
Sublease rent receipts 23 76 131
Cash used in investing activities (5) (11) (31)
Cash flows from financing activities
Lease liability principal repayment (553) (557) (1,084)
Purchase of treasury shares (123) (148) (339)
Purchase of own shares for cancellation - (503) (502)
Dividends paid (777) (1,566) (1,566)
Cash used in financing activities (1,453) (2,774) (3,491)
Non-cash movements
Effects of exchange rates on cash and cash equivalents 31 44 (27)
Impairment of cash and cash equivalents - - (408)
Total non-cash movements 31 44 (435)
(Decrease)/Increase in cash and cash equivalents (4,244) 518 (558)
Cash and cash equivalents at beginning of the period 22,817 23,375 23,375
Cash and cash equivalents at end of the 18,573 23,893 22,817
period
11
Net increase in cash and cash equivalents from discontinued operations was
£123,000 (6 months to 31 January 2024 restated: decrease of £551,000, year
to 31 July 2024: decrease of £849,000).
(1) Income taxes repaid as at 31 January 2024 previously showed a net of
income taxes received and paid. This has now been split out in line with
presentation in the cash flow in the 2024 Annual Report and Accounts.
NOTES
Forming part of the condensed consolidated interim financial statements
1 Basis of preparation and significant accounting policies
1.1 General information
Gattaca plc ('the Company') and its subsidiaries (together 'the Group') is a
human capital resources business providing contract and permanent recruitment
services in the private and public sectors across the UK, Europe and North
America regions. The Company is a public limited company, which is listed on
the Alternative Investment Market (AIM) and is incorporated and domiciled in
England, United Kingdom. The Company's registered office address is 1450
Parkway, Solent Business Park Whiteley, Fareham, Hampshire, PO15 7AF. The
Company's registration number is 04426322.
1.2 Basis of preparation
These unaudited condensed consolidated interim financial statements are for
the six months ended 31 January 2025 and do not constitute statutory accounts
as defined by section 435 of the Companies Act 2006. The interim financial
statements have been prepared in accordance with the AIM rules and IAS 34,
'Interim Financial Reporting'. Whilst the financial information included in
the interim financial statements has been prepared in accordance with
UK-adopted International Accounting Standards, the interim financial
statements do not include all of the information required for full annual
financial statements, and should be read in conjunction with the consolidated
financial statements for the year ended 31 July 2024 which have been filed
with the Registrar of Companies and are available from the Group's website,
www.gattacaplc.com/investors. The statutory financial statements for the year
ended 31 July 2024 received an unqualified report from the auditors and did
not contain a statement under section 498 of the Companies Act 2006.
The accounting policies applied in the interim financial statements are
consistent with those used in the preparation of the Group's consolidated
financial statements for the year ended 31 July 2024, as described in the
latest Annual Report and Accounts. No alterations have been made to the
Group's accounting policies as a result of adopting new standards, amendments
and interpretations which became effective in the period, as these were either
not material or not relevant to the Group.
1.3 Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Strategic
Report of the Group's Annual Report and Accounts for the year ended 31 July
2024. The financial position of the Group, its cash flows and liquidity are
described in the Chief Financial Officer's Report of the 2024 Annual Report.
At the half year the Group reported a strong balance sheet with statutory net
cash of £16.8m. The Group ensures the availability of working capital through
close management of customer payment terms. There is sufficient headroom on
our working capital facilities to absorb a level of customer payment term
extensions, but we would also manage supply to the customer if payment within
an appropriate period was not being made. Whilst there is no evidence that it
would occur, a significant deterioration in average payment terms has the
potential to impact the Group's liquidity.
The Directors have prepared detailed cash flow forecasts, covering a period of
at least 12 months from the date of approval of these interim financial
statements. This base case is prepared with appropriate regard for the current
macroeconomic headwinds and particular circumstances in which the Group
operates, including demand and candidate sentiment across the recruitment
sector and the economic outlook for STEM markets in the UK in which our
customers operate. The base case assumes sustained growth in NFI and cost
rebalancing aligned with the Group's strategic priorities.
We continue to see permanent recruitment remaining subdued, in line with our
peers, and our focus remains on contractor growth, which takes longer to
reflect in NFI. Strong contract pipelines in Defence and Infrastructure
sectors, combined with increasing customer demand for Statement of Work
contracts, underpin the Group's Net Fee Income expectations for the second
half of FY25 and beyond.
The output of the base case forecasting process has been used to perform
sensitivity analysis on the Group's cash flows to the potential effects should
principal risks actually occur. The sensitivity analysis modelled a severe but
plausible scenario including:
- Nil NFI growth from August 2025 onwards;
- Operating cost inflation of 1% per annum; and
- Customer payment terms extended by five days.
The effects of commercial mitigating actions that the Directors would
implement in response to adverse changes in the Group's profitability and
liquidity were excluded.
Given the nature of the temporary and contract recruitment business,
significant working capital inflows typically arise in periods of severe
downturn, thus protecting short-term liquidity. The sensitised forecasts
illustrate that the Group's liquidity is resilient to adverse changes in
profitability and customer payment terms. The sensitised forecasts show no
reduction in forecast net cash of £13.9m at 31 July 2025, and a 50% reduction
in forecast net cash at 31 July 2026, to £7.4m.
A key assumption in preparing the cash flow forecasts is the continued
availability of the Group's invoice financing facility from HSBC throughout
the forecast period. The unutilised facility headroom at 31 January 2025 was
£25.3m (31 January 2024: £22.9m). The current £40m (31 January 2025 and 31
July 2024: £50m) facility has no contractual renewal date; the Directors
remain confident that the facility will remain available.
After making appropriate enquiries and considering key judgements and
assumptions described above, the Directors have a reasonable expectation at
the time of approving these interim financial statements that the Group and
the Company have adequate resources to continue in operational existence for
the foreseeable future. Following careful consideration, the Directors do not
consider there to be a material uncertainty with regards to going concern and
consider it is appropriate to adopt the going concern basis in preparing these
financial statements.
1.4 Accounting estimates and judgements
Preparation of the interim financial statements requires the Directors to make
assumptions and estimates that affect the application of accounting policies.
The critical accounting judgements and key assumptions and sources of
estimation uncertainty identified by the Directors were consistent with those
identified in the Group's Annual Report and Accounts for the year ended 31
July 2024.
2 Segmental Information
An operating segment, as defined by IFRS 8 'Operating segments', is a
component of the Group that engages in business activities from which it may
earn revenues and incur expenses. The Gattaca plc group defines its operating
segments by reference to the sectors in which it operates. Segmentation of the
Group's activities by sector is consistent with the segmentation of
information provided internally to the chief operating decision maker, being
the Board of Directors of Gattaca plc. Reportable segments are identified by
reference to quantitative and qualitative thresholds prescribed in IFRS 8.
There were no operating segments that met the criteria for aggregation with
other operating segments.
6 months to 31 January 2025 unaudited
All amounts in £'000 Mobility Energy Defence Technology, Media & Telecoms Infra- structure Gattaca Inter- national(3) Other Continuing underlying operations
Projects
Revenue (Note 3) 11,694 25,979 47,265 20,268 74,901 5,852 1,093 6,414 193,466
Gross profit 1,799 2,726 3,166 1,591 6,990 1,165 219 1,265 18,921
Operating contribution 636 1,212 1,659 413 3,298 641 (257) 262 7,864
Depreciation and amortisation (41) (90) (165) (71) (261) (20) (4) (22) (674)
Central overheads (816) (675) (1,046) (717) (1,955) (292) (258) (626) (6,385)
Operating profit/(loss) (221) 447 448 (375) 1,082 329 (519) (386) 805
Finance income, net 238
Profit before tax 1,043
All amounts in £'000 Continuing underlying operations Non-recurring items, amortisation of acquired intangibles & foreign Discontinued Total Group
exchange gains/losses
Revenue (Note 3) 193,466 - 16 193,482
Gross profit 18,921 - 15 18,936
Operating contribution 7,864 - 31 7,895
Depreciation and amortisation (674) (31) - (705)
Central overheads (6,385) (280) - (6,665)
Operating profit/(loss) 805 (311) 31 525
Finance income, net 238 77 110 425
Profit before tax 1,043 (234) 141 950
6 months to 31 January 2024 ( )unaudited restated(1,2)
All amounts in £'000 Mobility Energy Defence Technology, Media & Telecoms Infra- structure Gattaca Inter- national(3) Continuing underlying operations(1)
Projects Other
Revenue (Note 3) 16,404 22,399 46,579 18,193 72,868 4,386 1,842 4,972 187,643
Gross profit 2,122 2,323 3,775 1,840 6,520 1,164 318 1,367 19,429
Operating contribution 852 1,206 2,056 462 2,920 757 66 247 8,566
Depreciation and amortisation (67) (91) (190) (74) (298) (18) (8) (20) (766)
Central overheads (916) (696) (1,130) (841) (2,021) (214) (606) (594) (7,018)
Operating profit/(loss) (131) 419 736 (453) 601 525 (548) (367) 782
Finance income, net 443
Profit before tax 1,225
All amounts in £'000 Continuing underlying operations(1) Non-recurring items, amortisation of acquired intangibles & foreign Total Group
exchange gains/losses
Discontinued(1)
Revenue (Note 3) 187,643 - 800 188,443
Gross profit 19,429 - 234 19,663
Operating contribution 8,566 - (408) 8,158
Depreciation and amortisation (766) (32) - (798)
Central overheads (7,018) (293) (187) (7,498)
Operating profit/(loss) 782 (325) (595) (138)
Finance income, net 443 137 65 645
Profit before tax 1,225 (188) (530) 507
12 months to 31 July 2024 restated(2)
All amounts in £'000 Mobility Energy Defence Technology, Media & Telecoms Infra- structure Inter- national(3) Continuing underlying operations
Gattaca Other
Projects
Revenue (Note 3) 33,416 46,956 96,090 37,689 149,247 11,359 3,277 11,499 389,533
Gross profit 4,609 4,687 7,433 3,435 13,913 2,818 632 2,552 40,079
Operating contribution 2,031 2,266 4,072 812 6,320 1,869 (330) 717 17,757
Depreciation and amortisation (132) (185) (378) (148) (587) (45) (13) (45) (1,533)
Impairments (Net) - - - - - - - - -
Central overheads (1,836) (1,517) (2,288) (1,631) (4,131) (463) (995) (1,164) (14,025)
Operating profit/(loss) 63 564 1,406 (967) 1,602 1,361 (1,338) (492) 2,199
Finance income, net 719
Profit before tax 2,918
All amounts in £'000 Continuing underlying operations Non-recurring items, amortisation of acquired intangibles & foreign Discontinued Total Group
exchange gains/losses
Revenue (Note 3) 389,533 - 1,209 390,742
Gross profit 40,079 - 347 40,426
Operating contribution 17,757 - (709) 17,048
Depreciation and amortisation (1,533) (69) (16) (1,618)
Impairments (net) - 42 (408) (366)
Central overheads (14,025) (1,092) (278) (15,395)
Operating profit/(loss) 2,199 (1,119) (1,411) (331)
Finance income /(costs), net 719 (115) 793 1,397
Profit before tax 2,918 (1,234) (618) 1,066
A segmental analysis of total assets has not been included as this information
is not used by the Board; the majority of assets are centrally held and are
not allocated across the reportable segments.
(1) HY24 results have been restated for the presentation of discontinued
operations as explained in Note 6.
(2) During the period to 31 January 2025, as a result of changes in the
Group's operational structure and strategic focus, certain smaller divisions
that were previously reported within the Other aggregated segment have been
absorbed into the Energy, Defence and Technology, Media & Telecoms
sectors. As a result, the Group's reported segmental analysis for HY24 and
FY24 has been restated to ensure comparability with this.
(3) International segment revenue and gross profit is generated from the
location of the commission-earning sales consultant, as opposed to the
domicile of the respective subsidiary by which they are employed.
Geographical information
Total Group revenue Non-current assets
All amounts in £'000 6 months to 31/01/2025 12 months to 31/07/2024 6 months to 31/01/2025
unaudited 6 months to 31/01/2024 unaudited 6 months to 31/01/2024 12 months to 31/07/2024
Unaudited Unaudited
UK 191,820 184,660 384,233 4,484 4,808 4,963
Rest of Europe 346 369 801 1 2 1
Middle East and Africa - - - 2 16 9
Americas 1,316 3,414 5,708 7 61 31
Total 193,482 188,443 390,742 4,494 4,887 5,004
Revenue and non-current assets are allocated to the geographic market based on
the domicile of the respective subsidiary.
3 Revenue from Contracts with
Customers
Revenue from contracts with customers is disaggregated by major service line
and operating segment, as well as timing of revenue recognition as follows:
Major service lines - continuing underlying operations
6 months to Mobility Energy Defence Technology, Media & Telecoms Infra- structure Inter- national Other Continuing underlying operations
31 January 2025 unaudited £'000 £'000 £'000 £'000 £'000 Gattaca £'000 £'000 £'000
Projects
£'000
Temporary placements 10,977 25,472 46,825 19,880 74,086 - 950 5,564 183,754
Permanent placements 717 507 440 388 815 - 143 850 3,860
Other - - - - - 5,852 - - 5,852
Total 11,694 25,979 47,265 20,268 74,901 5,852 1,093 6,414 193,466
6 months to Mobility Energy Defence Technology, Media & Telecoms Infra- structure Restated(1) Other Restated(1)
31 January 2024 unaudited £'000 £'000 £'000 £'000 £'000 Gattaca Inter- national £'000 Continuing underlying operations
Projects £'000 £'000
£'000
Temporary placements (as restated(3)) 15,383 22,189 45,759 17,615 72,140 - 1,666 3,992 178,744
Permanent placements (as restated(3)) 961 168 588 578 700 - 135 979 4,109
Other (as restated(3)) 60 42 232 - 28 4,386 42 - 4,790
Total 16,404 22,399 46,579 18,193 72,868 4,386 1,843 4,971 187,643
Year to 31 July 2024 Mobility Energy Defence Technology, Media & Telecoms Infra- structure Inter- national Other Continuing underlying operations
£'000 £'000 £'000 £'000 £'000 Gattaca £'000 £'000 £'000
Projects
£'000
Temporary placements (as restated(3)) 31,515 46,496 95,036 36,617 147,721 - 2,878 9,767 370,030
Permanent placements (as restated(3)) 1,824 411 860 1,072 1,520 - 270 1,732 7,689
Other 77 49 194 - 6 11,359 129 - 11,814
Total 33,416 46,956 96,090 37,689 149,247 11,359 3,277 11,499 389,533
Timing of revenue recognition - continuing underlying operations(2)
6 months to Mobility Energy Defence Technology, Media & Telecoms Infra- structure Gattaca Inter- national Other Continuing underlying operations
31 January 2025 unaudited £'000 £'000 £'000 £'000 £'000 Projects £'000 £'000 £'000
£'000
Point in time 717 507 440 388 815 - 143 850 3,860
Over time 10,977 25,472 46,825 19,880 74,086 5,852 950 5,564 189,606
Total 11,694 25,979 47,265 20,268 74,901 5,852 1,093 6,414 193,466
6 months to Mobility Energy Defence Technology, Media & Telecoms Infra- structure Restated(1) Other Restated(1)
31 January 2024 unaudited £'000 £'000 £'000 £'000 £'000 Gattaca Inter- national £'000 Continuing underlying operations
Projects £'000 £'000
£'000
Point in time (as restated(2,3)) 961 168 588 578 700 - 135 979 4,109
Over time (as restated(2,3)) 15,443 22,231 45,991 17,615 72,168 4,386 1,708 3,992 183,534
Total 16,404 22,399 46,579 18,193 72,868 4,386 1,843 4,971 187,643
Year to 31 July 2024 Mobility Energy Defence Technology, Media & Telecoms Infra- structure Inter- national Other Continuing underlying operations
£'000 £'000 £'000 £'000 £'000 Gattaca £'000 £'000 £'000
Projects
£'000
Point in time (as restated(2,3)) 1,824 411 860 1,072 1,520 - 270 1,732 7,689
Over time (as restated(2,3)) 31,592 46,545 95,230 36,617 147,727 11,359 3,007 9,767 381,844
Total 33,416 46,956 96,090 37,689 149,247 11,359 3,277 11,499 389,533
No single customer contributed more than 10% of the Group's revenues (6 months
to 31 January 2024 and year ended 31 July 2024: none).
Revenue recognised over time is recognised based on costs incurred to date as
a proportion of total forecast costs.
(1) HY24 results have been restated for the presentation of discontinued
operations as explained in Note 6.
(2) During the year ended 31 July 2024, the Group has revised its revenue
accounting policy upon timing of recognition of revenue from temporary
placements to address an inconsistency with IFRS 15. Previously recognised at
a point in time upon receipt of a client-approved timesheet, revenue from
temporary placements is now recognised over time, in line with when the
temporary worker provides services. The Group considers that this more
accurately reflects the Group's satisfaction of its contractual performance
obligations under IFRS 15. The change is applied retrospectively in accordance
with IAS 8 and so HY24 comparative information has been restated. Revenue
reported in the Consolidated Income Statement and contract assets and
liabilities reported in the Consolidated Statement of Financial Position are
unaffected.
(3) During the period to 31 January 2025, as a result of changes in the
Group's operational structure and strategic focus, certain smaller divisions
that were previously reported within the Other aggregated segment have been
absorbed into Energy, Defence and Technology, Media & Telecoms sectors. As
a result, the Group's reported segment analysis for HY24 and FY24 has been
restated to ensure comparability with this.
4 Profit/(loss) from Total Operations
6 months to 31/01/2025 6 months to 31/01/2024 12 months to 31/07/2024
unaudited unaudited
£'000 £'000 £'000
Profit/(loss) from total operations is stated after charging/(crediting):
Depreciation of property, plant and equipment 156 257 458
Depreciation of right-of-use leased assets 499 476 1,030
Amortisation of acquired intangibles 31 32 69
Amortisation of software and software licences 19 33 61
Reversal of impairment of right-of-use leased assets - (42) (42)
Impairment of cash and cash equivalent - - 408
Release of sales ledger credits(1) (200) (31) (117)
Loss on disposal of property, plant and equipment - 5 24
Plant and machinery rental expenses for leases out-of-scope of IFRS 16 19 40 104
Non-recourse working capital bank facility charges 85 293 451
Share-based payment charges 130 86 201
Gain on release of provisions (note 9) (32) (340) (486)
(1)The Group holds unclaimed aged sales ledger credits on the balance sheet
that arise in the course of normal trading operations due to the high volume
of timesheet invoices and customer receipts. The Group releases any unclaimed
sales ledger credits to the Income Statement after all reasonable steps have
been taken to return funds to the customer and two years have elapsed since
receipt of the funds.
Non-underlying items included within administrative expenses were as follows:
6 months to 31/01/2025 Restated(1) 12 months to 31/07/2024
unaudited 6 months to 31/01/2024
unaudited
Continuing operations £'000 £'000 £'000
Restructuring costs(1) 152 266 467
Net costs associated with exiting properties(2) - 16 16
Reversal of impairment of right-of-use leased assets(3) - (42) (42)
Cost relating to ongoing closure of group undertakings(4) 128 54 609
Non-underlying items included in profit from continuing operations 280 294 1,050
Discontinuing operations £'000 £'000 £'000
Restructuring costs(1) - 186 278
Impairment of cash and cash equivalents(5) - - 408
Release of provision for foreign employment taxes(6) (31)
Non-underlying items included in loss from discontinued operations (31) 186 686
Total non-underlying items 249 480 1,736
(1) Restructuring costs of £152,000 (31 January 2024: £452,000; 31 July
2024: £745,000) were recognised as a result of strategic personnel
re-organisations that included senior management.
(2) During the prior period costs were recognised in relation to the exit of a
number of UK office buildings that are no longer in use by the business. No
property exit costs were incurred during the current period.
(3) During the prior period an impairment recorded in FY22 was partially
reversed upon sub-letting of an office property to a third party.
(4) Ongoing costs relating to closure of entities affected by the cessation of
the contract telecoms infrastructure business in 2018 as well as the ongoing
closure costs of the Group's operations in Russia, Germany, Mexico, Qatar,
Malaysia and Singapore. Included in losses from discontinued operations until
two years has passed since operations have terminated, the Group then presents
these ongoing closure costs as continuing in the current period, as discussed
further in Note 6.
(5) Cash on deposit in Russia was impaired due to the increased credit risk
associated with the financial and regulatory sanctions imposed on and by
Russia.
(6) Release of provision for employment taxes associated with the closure of
USA-based operations.
5 Taxation
22
6 months Restated(1) 12 months
to 31/01/2025 6 months to 31/07/2024
unaudited to 31/01/2024
unaudited
Analysis of tax charge in the period £'000 £'000 £'000
Profit before tax from continuing operations 809 1,037 1,684
Profit before tax multiplied by the standard rate of corporation tax in the UK 202 259 421
of 25.0% (31 January 2024 and 31 July 2024: 25.0%)
Expenses not deductible for tax purposes 97 75 467
Income not taxable (16) (8) (209)
Effect of share-based payments - (1) (23)
Irrecoverable withholding tax - - 3
Overseas losses not recognised as deferred tax assets 175 (39) 84
Difference between UK and overseas tax rates (10) 11 (4)
Adjustment to tax charge in respect of prior periods (157) - 177
Overseas losses utilised 16 (10)
Changes in tax rate - (7) -
Total taxation charge for the period for continuing operations 307 280 916
Total taxation (credit)/charge for the period for discontinued operations 4 - (36)
The forecast average annual tax rate for continuing operations for the year to
31 July 2025 used to estimate the tax charge for the period to 31 January 2025
is 36.3% (period to 31 January 2024: forecast average annual tax rate of
41.0%, year to 31 July 2024: actual tax rate of 82%). The decrease in the
effective tax rate for the period to 31 January 2025 is primarily driven by
the decrease in overseas losses not provided for.
(1) HY24 results have been restated for the presentation of discontinued
operations as explained in Note 6.
6 Discontinued Operations
During the previous year, the Group announced the decision to restructure its
USA operations and by 31 July 2024 US-based trading had ceased, support
operations had been transferred to the UK and all US-based sales and support
staff exited. The Group continues to operate in the USA market in established
sectors serviced by its UK-based sales consultants. The Group's closed
US-based operations are now classified as a discontinued operation in
accordance with IFRS 5, Non-current Assets Held for Sale and Discontinued
Operations. Comparative information at 31 January 2024 has been restated.
The Group has also incurred ongoing closure costs associated with previously
discontinued trading businesses, including its contract telecom infrastructure
business (closed in 2018) and operations in Malaysia, Singapore and the Middle
East (closed in 2018), China (closed in 2020), and Mexico closure and South
African sub-group sale (closed in 2021). No trading activities remain for
these businesses and all trading activities ceased over 24 months ago, however
the Group continues to incur professional fees and other corporate costs
associated with closure of the subsidiary statutory entities. The Group has
considered the nature and amount of these costs in the current year and has
classified these ongoing closure costs as continuing operations, as part of
the ongoing costs of corporate closures.
Costs associated with closure of discontinued businesses are reported within
non-underlying items in line with the Group's accounting policy.
Financial performance
( )
6 months Restated(1) 12 months to 31/07/24
to 31/01/2025 6 months
unaudited to 31/01/2024
unaudited
£'000 £'000 £'000
Revenue 16 800 1,209
Cost of sales (1) (566) (862)
Gross profit 15 234 347
Administrative expenses(2) 16 (829) (1,758)
Profit/(loss) from discontinued operations 31 (595) (1,411)
Finance costs (1) - -
Exchange gains 111 65 793
Profit/(loss) before taxation from discontinued operations 141 (530) (618)
Taxation (4) - 36
Profit/(loss) for the period after taxation from discontinued operations 137 (530) (582)
Exchange differences on translation of discontinued operations (97) (18) 17
Reclassification adjustment on disposal of foreign operations - - (713)
Total comprehensive profit/(loss) from discontinued operations 40 (548) (1,278)
(1) HY24 results have been restated for the presentation of trading arising
from US-based operations discontinued operations as explained above.
(2) Included in administrative expenses are £(31,000) (31 January 2024
restated: £186,000; 31 July 2024: £686,000) of non-underlying items, as
detailed in Note 4.
Cash flows from discontinued operations
( )
6 months Restated(1) 12 months to 31/07/24
to 31/01/2025 6 months
unaudited to 31/01/2024
unaudited
£'000 £'000 £'000
Net cash outflow from operating activities 120 (572) (850)
Net cash outflow from investing activities - - -
Net cash outflow from financing activities - - -
Effect of exchange rates on cash and cash equivalents 3 21 1
Net cash used by discontinued operations 123 (551) (849)
7 Earnings Per Share
Earnings per share (EPS) has been calculated by dividing the consolidated
profit or loss after taxation attributable to ordinary shareholders by the
weighted average number of ordinary shares in issue during the period.
Diluted earnings per share has been calculated on the same basis as above,
except that the weighted average number of ordinary shares that would be
issued on the conversion of all the dilutive potential ordinary shares into
ordinary shares has been added to the denominator. The Group's potential
ordinary shares, being the Long Term Incentive Plan Options, are deemed
outstanding and included in the dilution assessment when, at the reporting
date, they would be issuable had the performance period ended at that date.
The effect of potential ordinary shares is reflected in diluted EPS only when
they are dilutive. Potential ordinary shares are considered to be dilutive
when the monetary value of the subscription rights attached to the outstanding
share options is less than the average market share price of the Company's
shares during the period. Furthermore, potential ordinary shares are only
considered dilutive when their inclusion in the calculation would decrease
earnings per share, or increase loss per share, in accordance with IAS 33.
There are no changes to the profit numerator as a result of the dilution
calculation.
The earnings per share information has been calculated as follows:
6 months to 31/01/2025
unaudited 12 months to 31/07/2024
6 months to 31/01/2024
unaudited
Total earnings £'000 £'000 £'000
Total profit attributable to ordinary shareholders 639 227 186
Number of shares 000's 000's 000's
Basic weighted average number of ordinary shares in issue 31,533 31,649 31,587
Dilutive potential ordinary shares 850 565 660
Diluted weighted average number of shares 32,383 32,214 32,247
Total earnings per share Pence Pence Pence
Earnings per ordinary share - Basic 2.0 0.7 0.6
- Diluted 2.0 0.7 0.6
Restated(1)
Earnings from continuing operations £'000 £'000 £'000
Total profit for the period from continuing operations 502 757 768
Restated(1)
Total earnings per share for continuing operations pence pence pence
Earnings per ordinary share from continuing operations - Basic 1.6 2.4 2.4
- Diluted 1.5 2.4 2.4
Restated(1)
Earnings from discontinued operations £'000 £'000 £'000
Total profit/(loss) for the period from discontinued operations 137 (530) (582)
Restated(1)
Total earnings/(loss) per share for discontinued operations Pence Pence Pence
Profit/(loss) per ordinary share from discontinued operations - Basic 0.4 (1.7) (1.8)
- Diluted 0.4 (1.6) (1.8)
Restated(1)
Earnings from continuing underlying operations £'000 £'000 £'000
Total profit for the period from continuing underlying operations 688 913 1,892
Restated(1)
Total earnings per share from continuing underlying operations Pence Pence Pence
Earnings per ordinary share from continuing underlying operations - Basic 2.2 2.9 6.0
- Diluted 2.1 2.8 5.9
(1) HY24 results have been restated for the presentation of discontinued
operations as explained in Note 6.
8 Trade and Other Receivables
31/07/2024
31/01/2025 31/01/2024
unaudited unaudited
£'000 £'000 £'000
Trade receivables from contracts with customers, net of loss allowance 31,049 27,442 34,320
Other receivables 1,004 1,196 935
Finance lease receivables - 113 -
Prepayments 1,238 1,392 1,004
Accrued income 15,633 16,615 16,757
Total 48,924 46,758 53,016
The Directors consider that the carrying amount of trade and other receivables
approximates to their fair value.
Other receivables include retentions of £322,000 (31 January 2024: £494,000,
31 July 2024: £273,000) on trade receivable balances assigned to HSBC under
the non-recourse invoice financing facility.
Accrued income relates to the Group's right to consideration for temporary and
permanent placement made but not billed at the period end. These transfer to
trade receivables once billing occurs.
Impairment of trade receivables from contracts with
customers
31/01/2025 31/01/2024 31/07/2024
unaudited unaudited
£'000 £'000 £'000
Trade receivables from contracts with customers, gross amounts 32,389 28,315 35,600
Loss allowance (1,340) (873) (1,280)
Trade receivables from contracts with customers, net of loss allowance 31,049 27,442 34,320
Trade receivables are amounts due from customers for services performed in the
ordinary course of business. They are generally settled within 30-60 days and
are therefore all classified as current.
The Group uses a third-party credit scoring system to assess the
creditworthiness of potential new customers before accepting them. Credit
limits are defined by customer based on this information. All customer
accounts are subject to review on a regular basis by senior management and
actions are taken to address debt ageing issues.
Trade receivables are subject to the expected credit loss model. The Group
applies the IFRS 9 simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped
based on shared credit risk characteristics by geographical region or customer
industry.
The expected loss rates are based on the payment profiles of sales over a
period of 36 months before the relevant period end and the corresponding
historical credit losses experienced within this period. The historic loss
rates are adjusted to reflect any relevant current and forward-looking
information expected to affect the ability of customers to settle the
receivables. Additionally, external economic forecasts along with other
macroeconomic factors have been taken into account when assessing the credit
risk profiles for specific industries and geographies.
The loss allowance for trade receivables was determined as follows:
31 January 2025 unaudited Current More than 30 days past due More than 60 days past due More than 90 days due Total
Weighted expected loss rate (%) 2.0% 2.0% 2.1% 9.4%
Gross carrying amount - trade receivables (£'000) 21,847 857 380 9,305 32,389
Loss allowance (£'000) 436 17 8 879 1,340
31 January 2024 unaudited Current More than 30 days past due More than 60 days past due More than 90 days due Total
Weighted expected loss rate (%) 2.0% 3.1% 6.9% 94.7%
Gross carrying amount - trade receivables (£'000) 27,555 350 87 323 28,315
Loss allowance (£'000) 550 11 6 306 873
31 July 2024 Current More than 30 days past due More than 60 days past due More than 90 days due Total
Weighted expected loss rate (%) 2.6% 7.8% 53.2% 96.1%
Gross carrying amount - trade receivables (£'000) 34,312 914 122 252 35,600
Loss allowance (£'000) 902 71 65 242 1,280
The loss allowance for trade receivables at the period end reconciles to the
opening loss allowance as follows:
6 months 6 months 12 months to 31/07/2024
to 31/01/2025 to 31/01/2024
unaudited unaudited
£'000 £'000 £'000
Opening loss allowance 1,280 1,633 1,633
Increase/(Decrease) in loss allowance recognised in profit and loss during the 38 (680) (166)
period
Receivables recovered/(written off as uncollectable) during the period 22 (80) (187)
Closing loss allowance 1,340 873 1,280
Impairment of accrued income
31/01/2025 31/07/2024
unaudited 31/01/2024
unaudited
£'000 £'000 £'000
Gross accrued income 15,941 16,956 17,107
Loss allowance (308) (341) (350)
Accrued income, net of loss allowance 15,633 16,615 16,757
The loss allowance for accrued income was determined as follows:
31 January 2025 unaudited Current More than 30 days past due More than 60 days past due More than 90 days due Total
Weighted expected loss rate (%) 1.9% 2.0% 2.0% 0.0%
Gross carrying amount - accrued income (£'000) 15,851 45 45 - 15,941
Loss allowance (£'000) 306 1 1 - 308
31 January 2024 unaudited Current More than 30 days past due More than 60 days past due More than 90 days due Total
Weighted expected loss rate (%) 1.9% 1.7% 0.0% 58.6%
Gross carrying amount - accrued income (£'000) 16,803 115 9 29 16,956
Loss allowance (£'000) 322 2 - 17 341
31 July 2024 Current More than 30 days past due More than 60 days past due More than 90 days due Total
Weighted expected loss rate (%) 2.0% 2.0% 2.0% 9.5%
Gross carrying amount - accrued income (£'000) 16,349 561 88 109 17,107
Loss allowance (£'000) 327 11 2 10 350
The loss allowance for accrued income at the period end reconciles to the
opening loss allowance as follows:
6 months 6 months 12 months
to 31/01/2025 to 31/01/2024 to 31/07/2024
unaudited unaudited
£'000 £'000 £'000
Opening loss allowance 350 504 504
Decrease in loss allowance recognised in profit and loss during the period (42) (163) (154)
Closing loss allowance 308 341 350
9 Provisions
Dilapidations Other Provisions Total
6 months to 31 January 2025 unaudited £'000 £'000 £'000
Balance at the start of the period 362 459 821
Provisions made in the period - 39 39
Provisions utilised - - -
Provisions released - (32) (32)
Effect of movements in exchange rates - 1 1
Balance at the end of the period 362 467 829
Dilapidations Other Provisions Total
As at 31 January 2025 unaudited £'000 £'000 £'000
Non-current 321 17 338
Current 41 450 491
Total 362 467 829
Dilapidations Other Provisions Total
6 months to 31 January 2024 unaudited £'000 £'000 £'000
Balance at the start of the period 677 735 1,412
Provisions made in the period 5 281 286
Provisions utilised (55) (98) (153)
Provisions released - (340) (340)
Effect of movements in exchange rates - - -
Balance at the end of the period 627 578 1,205
Dilapidations Other Provisions Total
As at 31 January 2024 unaudited £'000 £'000 £'000
Non-current 352 37 389
Current 275 541 816
Total 627 578 1,205
Dilapidations Other Provisions Total
12 months to 31 July 2024 £'000 £'000 £'000
Balance at the start of the period 677 735 1,412
Provisions made in the period 15 378 393
Provisions utilised (220) (288) (508)
Provisions released (110) (376) (486)
Effect of movements in exchange rates - 10 10
Balance at the end of the period 362 459 821
Dilapidations Other Provisions Total
As at 31 July 2024 £'000 £'000 £'000
Non-current 362 34 396
Current - 425 425
Total 362 459 821
Dilapidation provisions are held in respect of the Group's office properties
where lease obligations include contractual obligations to return the property
to its original condition at the end of the lease term, ranging between one
and three years.
Other provisions held as at 31 January 2025 relate to claims for certain legal
and tax matters. Other provisions made during HY24 and FY24 relate primarily
to restructuring activities for both UK and US operations, as discussed
further in Note
4.
10 Share capital
31/01/2024 31/07/2024
unaudited 31/01/2024
Unaudited
Authorised share capital £'000 £'000 £'000
40,000,000 Ordinary shares of £0.01 each 400 400 400
31/01/2024 31/01/2024 31/07/2024
unaudited Unaudited
Allotted, called up, and fully paid £'000 £'000 £'000
31,532,686 Ordinary shares of £0.01 each 315 316 315
(31 January 2024: 31,525,525, 31 July 2024: 31,532,686)
The movement in the number of shares in issue is shown below:
31/01/2024 31/01/2024 31/07/2024
unaudited unaudited
'000 '000 '000
In issue at the start of the period 31,533 31,857 31,857
Exercise of LTIP share options - 91 99
Shares cancelled - (423) (423)
In issue at the end of the 31,533
period
31,533 31,525
The Company has one class of ordinary shares. Each share is entitled to one
vote in the event of a poll at a general meeting of the Company. Each share is
entitled to participate in dividend distributions.
Share buyback and cancellation
During the period, there were no share buy-back transactions undertaken.
Share options
During the period the Group granted share options under the Long-Term
Incentive Plan ("LTIP") for Executive Directors and senior management.
1,147,431 share options with an exercise price of £0.01 each were granted on
11 December 2024 to members of staff to be held over a three-year vesting
period and are subject to various performance conditions. All share options
have a life of 10 years from grant date and are equity settled on exercise.
11 Net Cash
Net cash is the total amount of cash and cash equivalents less
interest-bearing loans and borrowings, including lease liabilities.
Net cash flows include the net drawdown of loans and borrowings and cash
interest paid relating to loans and borrowings.
01/08/2024 Net cash flows Non-cash movements 31/01/2025
31 January 2025 unaudited £'000 £'000 £'000 £'000
Cash and cash equivalents 22,817 (4,275) 31 18,573
Lease liabilities (2,070) 553 (270) (1,787)
Total net cash 20,747 (3,722) (239) 16,786
01/08/2023 Net cash flows Non-cash movements 31/01/2024
31 January 2024 unaudited £'000 £'000 £'000 £'000
Cash and cash equivalents 23,375 474 44 23,893
Lease liabilities (1,821) 557 (355) (1,619)
Total net cash 21,554 1,031 (311) 22,274
01/08/2023 Net cash flows Non-cash movements 31/07/2024
31 July 2024 £'000 £'000 £'000 £'000
Cash and cash equivalents 23,375 (123) (435) 22,817
Lease liabilities (1,821) 1,147 (1,396) (2,070)
Total net cash 21,554 1,024 (1,831) 20,747
Restricted cash
Included in cash and cash equivalents is the following restricted cash which
meets the definition of cash and cash equivalents but is not available for use
by the Group:
31/01/2025 31/01/2024 31/07/2024
unaudited unaudited
£'000 £'000 £'000
Balances arising from the Group's non-recourse working capital arrangements 13 196 16
Cash on deposit in accounts controlled by the Group but not available for 720 1,103 706
immediate drawdown
Total restricted cash 733 1,299 722
Included within restricted cash is £nil (31 January 2024: £382,000, 31 July
2024: £nil) held on deposit in a Russian bank account, to which the Group
currently has no access. During FY24, the Group impaired its cash on deposit
in Russia due to the increased credit risk associated with the financial and
regulatory sanctions imposed on and by Russia.
12 Transactions with Related Parties
There were no related party transactions during the period with entities
outside of the Group (6 months to 31 January 2024 and year ended 31 July 2024:
none) and no related party balances at 31 January 2025 (31 January 2024 and 31
July 2024: none).
13 Contingent Liabilities
We continue our cooperation with the United States Department of Justice and
in the 6 month period to 31 January 2025 no costs were incurred (6 months to
31 January 2024: £nil, and year to 31 July 2024: £nil) in advisory fees on
this matter. The Group is not currently in a position to know what the outcome
of these enquiries may be and therefore we are unable to quantify the likely
outcome for the Group.
The Directors are aware of other potential claims against the Group from a
client which may result in a future liability. The Group considers that at the
date of approval of these financial statements, the likelihood of a future
material economic outflow is not probable and an estimate of any future
economic outflow cannot be measured reliably, therefore no provision is being
made.
14 Dividends
12 months
6 months 6 months 31/07/2024
31/01/2025 31/01/2024
unaudited unaudited
£'000 £'000 £'000
Equity dividends proposed at 1.0 pence per share (6 months to 31 January 2024: 315 - 778
nil pence, 12 months to 31 July 2024: 2.5 pence per share)
Dividends paid in the 6 month period ending 31 January 2025 totalled
£777,000, consisting of the final (2.5 pence per share) dividend for FY24
announced in October 2024. On 2 April 2025, the Board announced its intentions
to recommend an interim dividend of 1.00 pence per share which is expected to
be paid on 14 May 2025.
15 Statement of Directors' Responsibilities
The Directors' confirm that these condensed interim financial statements have
been prepared in accordance with UK-adopted International Accounting Standard
34, 'Interim Financial Reporting' and that the interim management report
includes a fair view of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
• an indication of important events that have occurred during
the first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
• material related-party transactions in the first six months
and any material changes in the related-party transactions described in the
last Annual Report.
On behalf of the Board:
M Wragg O Whittaker
Chief Executive Officer Chief Financial Officer
Date: 2 April 2025 Date: 2 April 2025
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