REG - GRC Intnl.Group PLC - Final results for the year ended 31 March 2023
05/09/2023 07:00
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RNS Number : 3344L GRC International Group PLC 05 September 2023
05 September 2023
GRC International Group Plc
("GRC" or the "Group")
Final results for the year ended 31 March 2023
FY23 revenue growth and positive EBITDA
Trading remains robust and in-line with expectations for FY24
GRC International Group PLC (AIM: GRC), an integrated cyber security and
privacy solutions business, announces its audited year end results for 12
months to 31 March 2023 (FY23).
Financial highlights
· Revenue up 6% to £14.7m (FY22: £13.9m).
· International revenue up 3% to £3.1m (FY22: £3.0m).
· SaaS revenue up 11% - the Group's highest gross margin generating
division.
· ARR (Annualised Recurring Revenue) at period end up 31% to
£10.9m (FY22: 8.3m).
· Recurring and contracted revenue up 30% to £10.7m (FY22:
£8.2m).
· 73% (FY22: 59%) of revenue generated from recurring and
contracted revenue contracts.
· Gross margin of 61% (FY22: 59%) - continued improvement reflects
operational gearing from subscription services and internal efficiencies from
automation projects.
· Adjusted EBITDA1 of £0.3m (FY22: £1.0m).
· Loss before tax of £1.6m (FY22: £1.0m.) Investment in capital
expenditure to fuel future growth of £1.6m (FY22: £1.3m).
· Cash balances at period end of £0.1m (FY22: £2.1m). Borrowings
(excluding lease obligations) of £1.3m (FY22 £1.1m).
Operational highlights
· Increased the value of SaaS subscriptions customers - at period
end we had over 3,000 SaaS customers with an average value of £1.2k, a 5%
year-on-year increase.
· Increased the number of delegates attending training courses
across the year, with Q4 showing a 17% increase in delegate numbers on Q4
FY22.
· In our training business, significantly expanded the course
portfolio, deployed digital badging for successful delegates, and added
additional accreditations.
· Started delivering completely revamped ISO/IEC 27001 product
portfolio to support client transitions from ISO/IEC 27001:2013 to ISO/IEC
27001:2022.
· Increased investment in overhead led to an increase in Group NPS
(net promoter score) to 48 (FY22: 37). Scores over 50 indicate customer
service rating of 'Excellent'.
· Acquired initial customers for accredited SWIFT consultancy and
CREST-accredited Cyber Incident Response services.
1 EBITDA is defined within the Financial Review of this announcement.
Alan Calder, Chief Executive Officer, said:
"Following the 2019 collapse in the GDPR market, we set ourselves four medium
term objectives: to re-build revenue growth around an offering that combined
cyber security and privacy, to recover our gross margins to in excess of 60%,
to make contracted and recurring revenue more than 70% of our total revenue
and, through automation and process improvement, control overheads so that we
would consistently generate positive EBITDA.
We have now achieved all four of those objectives.
At the end of Q1 FY24, the Group's revenue was up on the same quarter a year
ago. We also turned negative EBITDA in the first quarter a year ago into a
positive EBITDA in the first quarter of FY24. We are particularly pleased with
30% Q1 billings2 growth in our CyberComply business. At the end of August,
the Group's cumulative billings2 for the financial year were also ahead
compared with the prior year.
Although economic and geo-political headwinds persist, we expect their effects
to continue being counter-balanced by the impact on GRC requirements of
rapidly increasing cyber and privacy regulation and enforcement (GDPR, DORA,
SEC Regulations) in the UK, the EU, the US and elsewhere."
2 Billings equate to the total value (net of VAT) of invoices raised and cash
sales through the Group's websites. Billings is considered by the Board to be
a key metric for managing the business due to billings' direct relationship
with cashflow. Cash receipts are driven by billings achieved each month rather
than revenue recognised in accordance with IFRS.
Enquiries:
GRC International Group plc +44 (0) 330 999 0222
Alan Calder, Chief Executive Officer
Christopher Hartshorne, Finance Director
Singer Capital Markets (Nominated Adviser and Joint Broker)
+44 (0)20 7496 3000
Phil Davies, James Fischer
Dowgate Capital Limited (Joint
Broker)
+44 (0) 20 3903 7715
James Serjeant, Russell Cook, Nicholas Chambers
About GRC International Group PLC ("GRC" or "the Group")
GRC is an international governance, risk management and compliance company
whose main business is cyber defence-in-depth.
A technology business, its proprietary premier brands including the market
leader, IT Governance, offer 'Our expertise, your peace of mind' for GRC's
wide range of domestic and international corporate customers across all
industrial sectors.
GRC's three operating divisions - Software as a Service (SaaS), E-Commerce and
Services - offer a wide range of products and services encompassing: IT
governance, risk management, compliance with data protection and cyber
security regulations, online and in-person training and staff awareness,
consultancy, online publishing and distribution, as well as software. The
Group's capabilities also include products and services to enable corporates
to address wider governance issues, such as money laundering and bribery.
In addition to its UK business, GRC has operations in the EU, US and
Asia-Pacific regions.
Chief Executive Review
Overview
GRC International Group made significant progress last year in its post-GDPR
turnaround. Encouragingly, in spite of geo-political and economic headwinds,
it was our second year in a row of positive EBITDA. It was our third year in a
row of revenue growth and revenue in the year was higher than we achieved in
2020, the year preceding the onset of the Covid pandemic. It was our third
year in a row of increasing gross margin and our FY23 gross margin now matches
what we achieved in the GDPR rocket fuelled FY18. It was also the third year
in a row of improvement in our NPS (Net Promoter Score) service quality
results. Finally, it was our sixth straight year in a row of improving the
recurring and contracted percentage of our total revenue.
Strategy
Cyber security has three domains: people, process and technology. Most cyber
security vendors focus on selling technology solutions to technology teams in
their corporate clients. Technology, though, is not the answer. The strategic
cyber vulnerabilities for most organisations are in the areas of under skilled
people and inadequate processes. The GRC International Group provides
integrated compliance-linked solutions that enable our corporate clients to
build cyber resilience and cyber defence-in-depth by deploying effective
governance, risk management and compliance (GRC) across the people and process
domains.
The market is increasingly competitive, with a proliferation of new entrants,
both small start-ups and larger investor-backed growth businesses. In this
environment, our experience and expertise are as important in winning and
retaining customers as the breadth of our international accreditations and the
proven quality of our service.
As we have said before, we see significant international growth opportunities
in the digitally transformed, Cloud based, increasingly vulnerable, hybrid
working environment as a result of:
· Corporates, large and small, domestic and multinational,
having to deal with a growing number of increasingly complex regulations and
enforcement in the Group's three primary geographic markets of the UK, EU and
US.
· All clients facing escalating nation-state and criminal
(serious organised crime) cyber-attacks.
· Significant and deep-seated national and international cyber
and compliance skills deficits.
In this environment, our strategy is to offer an integrated suite of sensibly
priced, high-quality GRC products and services on an increasingly longer-term
contracted basis. The proliferation of legal requirements (both cyber and
privacy and customer-mandated security practices) is driving organisations to
start looking for compliance platforms that can systematically, and cost
effectively support their risk management strategies. Our ongoing investment
in our CyberComply platform, in our other software-as-a-service offerings, and
in our e-commerce websites are all elements of what we see as the development
of a cyber regulation technology ('cyber reg tech') market. This is a market
that we aspire to lead.
In the longer term, we plan to accelerate growth nationally and
internationally, organically and by acquisition. Today's fragmented and
rapidly growing international cyber markets offer significant organic and
consolidation opportunities. We believe that the Group's proven resilience and
agility will enable it to exploit those opportunities in the years ahead. The
Group's medium-term objective is to build annual revenue, both organically and
through acquisition, to in excess of £50m, with gross margins and EBITDA
margins in the order of 65% and 25% respectively.
Current trading and outlook
The strong FY23 Q4 sales momentum, billings, numbers of new business leads and
cash generation has continued into the current financial year. Importantly, we
ended FY23 with £2.3m (£2.2m at end FY22) of FY24 revenue already invoiced.
Our overall growth is driven by client acquisition through our e-commerce
division, the continued deployment of expertise through our services division
to solve client problems and create opportunities for SaaS deployment.
The SaaS division underpins our Cyber Resilience and Cyber Defence-in-Depth
offering and should support double-digit organic divisional billings growth in
the current financial year.
The publication of regulations such as DORA (the Digital Operational
Resilience Act) in the EU, the EU's EuroPrivacy GDPR compliance certification,
new SEC regulations in the US in respect of Cyber Security governance, risk
management and compliance, and proposed changes to the UK's privacy and cyber
security regulatory framework, all play into our broad product and service
offering. We see our CyberComply platform, which is essentially a regulatory
technology compliance platform, as having a key role to play in supporting
clients implement and maintain compliance frameworks in this changing
environment. We are continuing to invest in our e-commerce and SaaS
infrastructure in order to extend our cost-effective automated fulfilment and
customer support. We are on the point of rolling out significantly improved
functionality to our EU and USA websites, as well as significantly improving
our automated support for our SaaS business. The use of Artificial
Intelligence (AI) is a key strand of our current development activity, as we
look at ways in which we can both reduce costs and increase speed and agility
through its effective use.
Major development work in our CyberComply platform is seeing significant
functionality enhancements released every quarter and we are planning an
October 2023 soft launch of an exciting CyberComply development roadmap and
pricing model that we expect to drive significant medium and long-term
increases in revenue and margins.
AI and ML (Machine Learning) obviously have an important contribution to make
to improving our gross margins, reducing overheads and accelerating software
development - while also improving our software product - and we will report
in due course on how our work in that field is driving improvements in the
business.
After a strong final quarter to FY23, momentum has continued into Q1 of the
new financial year. Trading remains robust and in line with expectations. The
substantial progress made last year and our ongoing investment in
infrastructure should support the Group's longer-term growth aspirations.
FY23 Performance Review
Following the 2019 collapse in the GDPR market, we set ourselves four medium
term objectives: to re-build revenue growth around an offering that combined
cyber security and privacy, to recover our gross margins to in excess of 60%,
to make contracted and recurring revenue more than 70% of our total revenue
and, though automation and process improvement, control overheads so that we
would consistently generate positive EBITDA.
We have now achieved all four of those objectives.
Our cyber resilience, cyber defence-in depth offering recognises that cyber
security and privacy are different sides of the same coin and our value
statement ('Our expertise, your peace of mind') reflects that value to our
customers. In spite of the significant disruption during our Q3, in which the
UK dealt with the death of the monarch, the chaos surrounding the end of the
Johnson premiership and the short-lived Truss administration, all on top of
the geo-political headwinds triggered by the Russian invasion of Ukraine, we
achieved a 6% year-on-year revenue increase. Strong performances in the US as
well as in our smaller UK subsidiaries all helped counterbalance the temporary
Q3 decline in our main UK business. While the Q3 disruption effectively halted
our billings growth in Q3, we did recover momentum from the start of Q4 and
our Q4 performance virtually matched the prior year.
Our gross margin in FY23 increased to 61% from 59% the prior year. This was
achieved through a combination of improving sales mix toward higher margin
SaaS offerings and successfully pushing price rises through our professional
services and e-commerce businesses.
Recurring and contracted revenue increased by a substantial 30% (£2.4m) to
£10.7m, which was 73% of group revenue. In the prior year it was only 59%
and, considering that the equivalent figure in FY18 was only 2.5% of revenue,
is a key indicator of the transformation in the Group. In the context also of
the economic and political headwinds last year, and considering the growth in
competition in our markets, this is a significant improvement. It reflects our
focus through the year in growing predictability and stability in revenue.
At the start of the financial year, we set ourselves the additional objective
of significantly improving the quality of our products and services. We
believe that quality will, in an increasingly competitive marketplace, be a
key differentiator. Our primary chosen measure for service quality is NPS (Net
Promoter Score). Our average score in FY22 was 37 (good, but not excellent).
We recognised that we would have to make sustained investments in developing
and retaining our people and improving our infrastructure in order to move the
NPS dial meaningfully. We increased overhead spend during FY23 by £1.3m in
order to do this. That investment shows through in significant ongoing
improvements in product and service quality. The Group increased its NPS score
to 48 (50+ is 'excellent') from 37 the previous year, and our initial steps
into encouraging customers to rate our e-commerce services on TrustPilot
achieved an average score of 4.5 (out of 5) in Q4, which is rated as
'excellent'.
In spite of the overhead investment to drive up performance quality, and in
spite of the macro-headwinds, we delivered a second year of positive EBITDA.
We expect, in FY24, to make further improvements in all those areas.
Divisional performance
Performance in our three revenue divisions reflected the overall performance.
Services
Our services division helps corporate and public organisations meet compliance
and cyber risk management objectives. This division offers:
· ISO/IEC 27001 (and related standards) implementation, audit
and support services
· A wide range of cyber security management systems and control
implementations
· Penetration testing
· PCI DSS & Cloud compliance
· Legal, GDPR Data Protection Office (DPO) and Privacy by
Design services
We saw 6% revenue growth in the services division, and we successfully
increased prices during the year as well as improving the level of longer-term
contracted revenue. Gross margin in the division improved from 60% to 63% and
demonstrates that clients value the quality of our advice and support in their
security and privacy endeavours.
e-Commerce
Our e-commerce division works with both individuals and business and includes:
· Eight B2B e-commerce websites
· ITGP, our publishing business, offers a wide range of books
and standards, covering GRC, cyber security, GDPR, privacy/data protection,
risk & compliance.
· 'Learn from Anywhere' training delivery, with accredited
training for a wide range of cyber security and privacy qualifications.
We continue to make good progress with developing self-paced versions of the
instructor-led courses in our training portfolio. This enables us to target
markets and time zones for which our instructor-led offering is either
difficult to attend or unaffordable. We are also making good progress in
producing audio versions of our ITGP titles and expect that, in the course of
this year, ITGP will transition completely to electronic delivery only across
the entire product range.
Revenue growth in our c-commerce division was largely flat across the year
but, again, we were able to improve gross margins from 64% to 68%, through a
combination of price increases and better attendance at in-person (largely
online) training courses.
Software as a Service
This division is focused on delivering cyber security and privacy subscription
solutions from a growing range of cloud-based platforms. These include:
· CyberComply GRC 'reg tech' platform
· Cyber Essentials certification
· Vulnerability Scanning
· GRC e-learning (staff awareness training)
· Privacy as a Service
· Document Kits templates
We continued to expand the range of cyber security and privacy standards and
frameworks that can be addressed though the CyberComply platform. At the same
time, we also continued expanding the staff awareness e-learning portfolio
outside the core cyber security and privacy product range to include the other
GRC subjects (such as business continuity, quality management, anti-bribery
and anti- money laundering) that clients expect to see on GRC staff awareness
platforms.
Half of the Group's FY23 revenue growth was in the Software-as-a-Service
division. Revenues in the division grew 11% across the year, with the growth
primarily spread across e-Learning staff awareness, the CyberComply GRC
management platform and the DQM Seeding System. Gross margin in the SaaS
division decreased slightly from 87% to 84%, reflecting higher input prices
from IASME which, combined with their pricing restrictions, squeeze margins.
We do, however, see opportunities for improving the margins here.
International and Channel performance
Our businesses in the EU and the US continued to grow. Although their offering
is currently more limited than that available in the UK, both businesses saw
growth across the year. The US business, in particular, achieved 54% growth in
revenue, demonstrating the benefit of being completely divorced from the
turmoil in the UK economy during Q3.
Our channel sales business, which helps MSPs (Managed Service Providers)
deliver to their customers a range of IT Governance-branded cyber security and
privacy services, had another year of strong growth. The channel team's
primary market last year was in the UK in which they achieved 18% revenue
growth.
Quality and accreditations
Externally audited certifications are one of the ways that we demonstrate the
quality of our offerings to our customers. Our business management system
continues to be accredited to ISO/IEC 27001, ISO/IEC 27701 and ISO 9001. These
certifications are supported by those from professional bodies such as CREST,
the UK's National Cyber Security
Centre (NCSC), the Payment Card Industry Security Standards Council (PCI SSC),
and IASME for Cyber Essentials Plus as well as by those from exam and
personnel certification bodies, such as IBITGQ, ISC2, APMG and Microsoft.
Additionally, we have been accredited to deliver consultancy services against
the SWIFT cyber security requirements, the US Department of Defence CMMC
(Cybersecurity Maturity Model Certification) and the EU's EuroPrivacy
standards.
We are currently preparing for certification to ISO 22301 of our Business
Continuity Management System.
Security and compliance
As should be expected of all organisations, we successfully navigated the
year's cyber security and regulatory compliance challenges. There were no
reportable cyber security incidents and no breaches of applicable cyber
security or data security legislation.
Alan Calder
Chief Executive Officer
Financial Review
Billings
Billings were up 1% to £14.9m (FY22: £14.8m). Billings equate to the total
value of invoices (excluding VAT) raised as cash sales through the Group's
websites. The figure does not take account of accrued or deferred income
adjustments that are required to comply with accounting standards for revenue
recognition. The Board considers billings to be a key performance indicator
because it has a much closer relationship than accounting revenue to cash
receipts from customers. It also provides good forward visibility of future
accounting revenue since much of the Group's invoicing takes place ahead of
delivery.
Revenue
Revenue for the year ended 31 March 2023 was up 6% to £14.7m (FY22: £13.9m).
Despite the uncertainty of the current economic climate, with high inflation,
high interest rates and low levels of overall economic growth, our H2 revenue
was still marginally up on H1. In Q3 the Group saw a notable slowdown in the
decision making of clients leading to a lengthening of the sales cycle, but Q4
delivered excellent results.
Recurring and contracted revenue was up 30% to £10.7m (FY22: £8.2m). This
accounted for 73% of total revenue (FY22: 59%).
The most significant revenue growth was in the Software as a Service (SaaS)
division. The growth reflects the Group's focus on and investment in
developing its high margin and highly scalable recurring revenue. The growth
in the Services division is driven by the increase in retainer type contracts
both from new customers and from the renewals of existing contracts, improving
the Group's forward visibility of revenue.
£'m Services Software as a Service (SaaS) E-Commerce Total
FY FY22 7.0 4.1 3.6 14.7
FY FY22 6.6 3.7 3.6 13.9
Period-on-period % Services Software as a Service (SaaS) E-Commerce Total
FY23 vs FY22 6% 11% -% 6%
International
International revenue was up 3% to £3.1m (FY22: £3.0m), representing 21%
(FY22: 22%) of total Group revenue.
The Group services the majority of its US based clients through its IT
Governance USA business and most of its European clients through its IT
Governance EU business. Invoicing in USD and EUR respectively. The use of
local staff and suppliers in those territories means cost is incurred in local
currency providing a natural partial hedge against foreign exchange risk.
The Group saw growth in both its US and European revenues. These are
considered to be important future growth markets for the Group, and year on
year growth demonstrates an increased international footprint.
Gross profit
Gross profit was up 9% to £8.9m (FY22: £8.2m), with gross margin also up by
200 basis points to 61% (FY22: 59%).
The majority of the Group's direct cost base relates to headcount for
consultants and client delivery staff. The Group's focus on higher-margin
subscription services has driven the overall improvement in margin. In
particular, the growth in retainer type arrangements for some services
contracts has driven margin improvement in the Services division. Margin in
the Services division also benefited from the positive impact of several
operational projects designed to improve efficiency, while investment in
website infrastructure has delivered margin improvement in the e-Commerce
division.
Notably, the Group's fastest-growing revenue division, SaaS, has the highest
gross margin:
Segment FY22 Revenue change FY23
Revenue Margin % Revenue Margin
£ £ % £ £ %
Services 6.6 2.7 41% 6% 7.0 3.0 43%
SaaS 3.7 3.3 89% 11% 4.1 3.5 85%
E-Commerce 3.6 3.6 61% -% 3.6 2.4 67%
Total 13.9 8.2 59% 6% 14.7 8.9 61%
Administrative expenses
Administrative expenses increased by £1.3m (14%) to £10.4m (FY22: £9.1m),
compared with revenue increasing by 6%.
During the year the Group invested in people, marketing and IT spend designed
to fuel the next phase of revenue growth. The temporary drop in revenue in Q3
meant that overheads were, for a brief period, out of alignment with revenue,
but the Q4 performance meant that the position had corrected itself prior to
the year end as return on that investment began to be delivered and is
expected to continue to be delivered through FY24 and beyond.
EBITDA
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization,
adjusted to remove exceptional administrative costs) is considered by the
Board to be an important key performance indicator. It is a more accurate
measure of underlying business performance as it removes the impact of
non-cash accounting adjustments.
Adjusted EBITDA was £0.3m (FY22: £1.0m).
£'M FY22 FY23
Revenue 13.9 14.7
Operating loss (0.7) (1.4)
Depreciation 0.3 0.1
Amortisation 1.4 1.5
Exceptional administrative costs 0.0 0.1
Adjusted EBITDA 1.0 0.3
Adjusted EBITDA as % Revenue 7% 2%
Finance expense
The net finance expense of £0.2m (FY22: £0.3m) relates to interest on the
Group's borrowings and leases accounted for under IFRS 16.
Loss before tax
Loss before tax was £1.6m (FY22: loss £1.0m).
Taxation
No provision for tax has been made in the period (FY22: £Nil). The tax credit
mostly relates to the recognition of Research & Development Tax Credits
agreed with and received from HM Revenue & Customs.
Earnings per share
Loss per share was 1.16 pence (FY22: loss per share 0.98 pence).
Dividend
The Group is not paying a dividend.
Cash flow and cash/debt
The Group's closing cash position net of a bank overdraft was £0.1m (31 March 2022: £2.1m).
Borrowings (excluding lease obligations) at period end were £1.3m (31 March 2022: £1.1m).
The Group has banking facilities to provide adequate headroom for unforeseen working capital requirements by way of an invoice discounting facility that was inherited as part of the acquisition in 2019.
In addition, the unsecured loan facility provided by Andrew Brode for the amount of £700,000 at an interest rate of 5% above the Bank of England base rate to provide additional working capital is available to the Company until at least 31 December 2023 and shall automatically renew for a further 12 months unless terminated by either party. As at the period end and the date of this report, £350,000 remained available to be drawn down.
Further information on Going Concern is provided in the Financial Statements 'Nature of operations and general information' section (Principal accounting policies) of the Annual Report.
Statement of financial position
Net assets were £7.4m (31 March 2022: £8.7m).
Net current liabilities at period end were up by £1.4m to £4.6m (31 March
2022: £3.2m).
In January 2022, GRC International completed a successful £3m oversubscribed
share placing. This has enabled the Group to continue its product investment
and business automation programmes, including the development of new features
and functionality across all units in the SaaS division, at the same time as
making agreed repayments (under the 'time to pay' arrangements) against the
deferred HMRC tax liabilities that arose through the pandemic.
The main factor in the overall increase in net current liabilities of £1.4m
was the decrease in cash balance as the proceeds from the January 2022 share
placing were deployed as planned, with the development activity being
capitalised as within intangible fixed assets and the reduction in HMRC
liabilities reflected within trade and other payables.
The trade and other payables balance includes a deferred income balance of
£2.0m (31 March 2022: £1.8m), relating to training and consultancy projects
due to be delivered after the statement of financial position date. The 11%
increase in this balance signifies improving revenue trends and provides some
visibility of income to be recognised in FY24.
Intangible assets
The Group's accounting policy is that only directly attributable staff costs of the technical teams developing the assets are capitalised. No management time is capitalised, and neither is any proportion of overheads or borrowing costs.
Additions of £1.5m (FY22: £1.2m) relate to software, website development and the development of courseware.
Amortisation of intangible fixed assets was £1.5m (FY22: £1.4m).
Goodwill arising from business combinations has been allocated to the Group's DQM cash-generating unit ('CGU').
Goodwill was £6.8m (31 March 2022: £6.8m).
Goodwill is tested at least annually for impairment and whenever there are indications that goodwill might be impaired.
Further information is provided in Note 6.
Capital structure
The issued share capital at 31 March 2023 was 107,826,246 (31 March 2022: 107,826,246) ordinary shares of £0.001 each.
There were 100,000 share options granted in the period to 31 March 2023.
Risks and uncertainties
The Board continually assesses and monitors the key risks of the business. The
key risks that could affect the Group's
performance, and the factors that mitigate these risks, are set out on pages
24 to 25 of the Annual Report.
Chris Hartshorne
Finance Director
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH
2023 2022
Notes £'000 £'000
Revenue 14,660 13,902
4,5
Cost of sales (5,783) (5,698)
Gross profit 8,877 8,204
Administrative (10,423) (9,141)
expenses
Other operating income 121 240
Operating (1,425) (697)
loss
Net finance (190) (304)
costs
Share of post-tax loss of equity-accounted joint ventures - (2)
Loss before taxation (1,615) (1,003)
Taxation 365 6
3
Loss for the financial year (1,250) (997)
Loss for the financial year attributable to:
Equity shareholders of the parent (1,250) (997)
Basic loss per share (pence) (1.16) (0.98)
11
Diluted loss per share (pence) (1.16) (0.98)
11
All of the Group's loss relates to continuing operations.
The accompanying accounting policies and notes form an integral part of these
financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH
2023 2022
£'000 £'000
Loss for the year (1,250) (997)
Other comprehensive loss - items that may subsequently be reclassified to
profit/loss:
Exchange differences on translation of foreign operations (21) (1)
Other comprehensive loss for the financial year (21) (1)
Total comprehensive loss for the financial year (1,271) (998)
Total comprehensive loss attributable to equity shareholders of the parent (1,271) (998)
The accompanying accounting policies and notes form an integral part of these
financial statements.
CONSOLIDATED BALANCE SHEET
FOR THE YEAR ENDED 31 MARCH
2023 2022
£'000 £'000
Assets
Non-current assets
Goodwill 6,804 6,804
6
Intangible assets 5,616 5,630
7
Property, plant and 248 325
equipment
Investments in equity-accounted joint ventures 17 17
12,685 12,776
Current assets
Trade and other receivables 1,611 1,612
8
Current tax 37 -
Cash at 139 2,099
bank
1,787 3,711
Current liabilities
Trade and other payables (5,291) (5,935)
9
Borrowings (1,074) (722)
10
Lease (58) (117)
liabilities
Current tax - (127)
3
(6,423) (6,901)
Net current liabilities (4,636) (3,190)
Non-current liabilities
Trade and other payables (8) (73)
9
Borrowings (215) (329)
10
Lease (95) (145)
liabilities
Deferred tax liability (301) (338)
3
(619) (885)
Net assets 7,430 8,701
Equity
Share 108 108
capital
Share 16,012 16,012
premium
Merger reserve 4,276 4,276
Share-based payment reserve 126 126
Translation reserve (30) (9)
Accumulated deficit (13,062) (11,812)
Total equity 7,430 8,701
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH
For the year ended 31 March 2023
Share-based
Share capital Share premium Merger reserve payment reserve Retained deficit Translation
£'000 £'000 £'000 £'000 £'000 reserve Total
£'000 £'000
Balance at 1 April 2022 108 16,012 4,276 126 (11,812) (9) 8,701
Loss for the year - - - - (1,250) - (1,250)
Foreign exchange difference on consolidation - - - - - (21) (21)
Total comprehensive loss for the year - - - - (1,250) (21) (1,271)
Shares issued - - - - - - -
Cost of share issue - - - - - - -
Transactions with owners - - - - - - -
At 31 March 2023 108 16,012 4,276 126 (13,062) (30) 7,430
For the year ended 31 March 2022
Share-based
Share Share Merger payment Retained Translation
Capital premium reserve reserve Deficit reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2021 100 13,227 4,276 126 (10,815) (8) 6,906
Loss for the year - - - - (997) - (997)
Foreign exchange difference on consolidation - - - - - (1) (1)
Total comprehensive loss for the year - - - - (997) (1) (998)
Shares issued 8 2,992 - - - - 3,000
Cost of share issue - (207) - - - - (207)
Transactions with owners 8 2,785 - - - - 2,793
At 31 March 2022 108 16,012 4,276 126 (11,812) (9) 8,701
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH
Cash flows from operating activities
Loss for the year (1,250) (997)
Adjustments for:
Depreciation of plant and equipment 37 91
Amortisation of right of use assets 95 143
Amortisation of intangible fixed assets 1,523 1,367
Loss on disposal of fixed assets - 50
Foreign exchange loss 2 18
Share of post-tax loss of equity-accounted joint ventures - 2
Finance expenses 190 304
Income tax credit (365) (6)
232 972
Decrease in inventories - 33
Decrease in trade and other receivables 9 83
(Decrease)/increase in trade and other payables (750) 28
(509) 1,116
Income tax refund 163 5
Net cash (outflow)/inflow from operating activities (346) 1,121
Investing activities
Purchase of intangible assets (1,506) (1,231)
7
Purchase of plant and equipment (50) (47)
Acquisition of joint venture investment - (13)
Net cash outflow from investing activities (1,556) (1,291)
Financing activities
Proceeds from issue of shares - 3,000
Costs of share issue - (207)
Proceeds from borrowings 875 546
10
Repayment of borrowings (658) (836)
10
Interest paid (155) (245)
Interest on lease liability on right-of-use assets (14) (69)
Payments of lease liabilities on right-of-use assets (109) (155)
Net cash (outflow)/inflow from financing activities (61) 2,034
Net (decrease)/increase in cash and cash equivalents (1,963) 1,864
Cash and cash equivalents at beginning of financial year 2,099 233
Effects of exchange rate changes on cash and cash equivalents 3 2
Cash and cash equivalents at end of financial year 139 2,099
Comprising 139 2,099
Cash at bank
1. Nature of operations and general information
GRC International Group plc (GRC International Group or 'the Company') is a
public limited company limited by shares, incorporated and domiciled in
England and Wales. The registered company number is 11036180 and the
registered office is Unit 3 Clive Court, Bartholemew's Walk, Cambridgeshire
Business Park, Ely, Cambridgeshire, CB7 4EA.
The principal activities of GRC International Group plc and its subsidiary
companies (together, the "Group") are those of a one-stop shop for IT
Governance including books, tools, learning and consultancy services.
The financial information for the year ended 31 March 2023 and the year ended
31 March 2022 does not constitute the company's statutory accounts for those
years. Statutory accounts for the year ended 31 March 2022 have been delivered
to the Registrar of Companies. The statutory accounts for the year ended 31
March 2023 will be delivered to the Registrar of Companies in due course.
The auditors' report on the accounts for 31 March 2023 and 31 March 2022
respectively was unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of the
Companies Act 2006.
2. Principal Accounting Policies
Basis of preparation
The consolidated financial statements of GRC International Group plc and
entities controlled by the Company (its subsidiaries) for the years presented
has been prepared in accordance with UK-adopted international accounting
standards
Basis of consolidation
The results for the year ended 31 March 2023
and 31 March 2022 include the results of GRC International Group plc
and its subsidiaries.
A subsidiary is a company controlled directly by the Group. Control is
achieved where the Group has the power over the investee, rights to variable
returns and the ability to use the power to affect the investee's returns.
Income and expenses of subsidiaries acquired during the year are included
in the Consolidated Income Statement from the effective date of
control. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies into
line with those used by the Group.
All intra-Group transactions, balances, income and expenses are eliminated in
full on consolidation.
The principal accounting policies adopted are set out in the Annual Report and
Financial Statements.
These accounting policies comply with each IFRS that is mandatory for accounting periods ending on 31 March 2023.
Going concern
The financial statements have been prepared on a going concern basis.
The Group has recorded a loss for the year of £1.3m (2022: £1.0m) and as at 31 March 2023 its current liabilities exceeded its current assets by £4.8m (2022: £3.2m).
The Group has been through a transitionary period, pivoting the business from a predominantly consulting and training business to a more comprehensive cyber security 'defence in depth' business, still incorporating consultancy and training products but increasingly focused on platform-based technology services sold on subscription or retainer style contracts. This transition was significantly impacted by the COVID-19 pandemic in FY21 and, to a much lesser extent, by the macro-economic and political uncertainty through the current year Q3 (calendar Q4 of 2022), with positive momentum and revenue growth returning in Q4. The Group has now delivered two consecutive EBITDA positive trading years, being FY22 and FY23, and the positive momentum seen through Q4 FY23 has continued into FY24.
During the COVID-19 pandemic the Group accumulated PAYE and VAT arrears of £1.7m as part of its response to the unprecedented trading environment, in respect of which it has formally agreed repayment plans with HMRC and £1.4m had been repaid at the balance sheet date, with the remaining £0.3m to be paid through FY24.
The Directors have prepared an integrated income statement, balance sheet and cash flow forecast by month which runs to 31 March 2025. For the purposes of Management's assessment of going concern a shortened period to 12 months from approval of the Group financial statements to 30 September 2024 has been used by Management for their assessment ("the going concern review period"). Additionally, the Directors have prepared a sensitised forecast with lower than expected revenues and appropriate cost reduction measures. The revenues in the sensitised forecast are 15% lower than the Group's base case forecast in FY24 and 22% lower in FY25, representing a 2% reduction in FY24 against the current year revenue achieved and only 3% year on year growth to FY25. Both the forecast and the sensitised forecast show the Group operating within facilities already available to the Group through the going concern review period to 30 September 2024 and include the Group's fixed commitments in terms of settlement of HMRC liabilities, borrowings, and lease liabilities. The Directors note that the Group has good forward visibility of revenue, with 73% of FY23 revenue coming from recurring revenue products, and consultancy projects typically scheduled 1 to 3 months in advance giving Management clear visibility to structure an affordable cost base and programme for capital expenditure through the going concern review period. Further comfort is drawn from the Group's track record of trading successfully through volatile and uncertain trading conditions, demonstrating the ability to adjust the cost base appropriately and manage cash.
The Directors have reviewed the Group's going concern forecasts and projections to 30 September 2024 which, taking account
of reasonably possible changes in trading performance, show that the Group is able to generate sufficient liquidity to continue in operational existence for the foreseeable future. Specifically, the forecasts include estimates for the impact of inflation. To the extent that these estimates turn out to be insufficient in the current climate the Directors are confident that there is sufficient flexibility in discretional or uncommitted capital spend to absorb unexpected cost increases or cash outflows resulting from the current macro-economic climate. On this basis the Directors believe that the Group will be able to generate sufficient cash through its normal business trading and there is sufficient flexibility in its ongoing cost base and capital expenditure spend to enable it to continue to meet its liabilities as they fall due during the going concern review period. In making this assessment the Directors have assessed the maturity of the Group's liabilities, which at 31 March 2023 were comprised of the amounts set out in note 16. Consideration has also been given to the aging and recoverability of the Group's receivables, the continuance through the going concern review period of facilities provided by Mr Andrew Brode (refer to note 24) and the access to additional liquidity via undrawn available facilities in excess of £0.5m comprising; undrawn and committed facilities from Mr Andrew Brode (refer to note 24) and available invoice discounting facilities within DQM. For this reason, the Directors continue to adopt the going concern basis in the preparation of its financial statements.
3. Taxation
Analysis of credit in the year:
2023 2022
£'000 £'000
Current tax - current period - -
Current tax - adjustment in respect of prior period (328) (4)
Deferred tax - current period movement (36) (40)
Deferred tax - adjustment in respect of prior period (1) 38
Total tax credit (365) (6)
2023 2022
£'000 £'000
Loss before taxation (1,615) (1,003)
Loss by rate of tax (2023: 19%; 2022: 19%) (307) (191)
Expenses not deductible for tax purposes 10 47
Income not taxable for tax purposes (7) -
Deferred tax asset not recognized 304 144
Deferred tax - current period movement (36) (40)
Adjustments to deferred tax in respect of prior period (1) 38
Other adjustments to current tax in respect of prior period - (4)
Adjustment in respect of prior period: research and development tax credit (328) -
Total tax credit (365) (6)
An increase to the UK Corporation tax rate to 25% with effect from 1 April
2023 was enacted by the Finance Act 2021 on 14 May 2021.
As a result deferred tax balances as at 31 March 2023 are measured at 25%.
At the balance sheet date, the Group has the following unused tax losses:
2023 2022
£'000 £'000
Trading losses (UK) 6,485 6,249
Trading losses (Ireland) 1,842 1,781
Trading losses (USA) 922 483
Non-trading loan relationship debits 214 198
At the balance sheet date, a deferred tax asset has not been recognised for
these amounts on the basis that at the present time the Group has not recorded
a recent taxable profit.
The Group records tax credits for research and development tax credits in the
financial statements when the claims have been quantified. No amount has been
quantified at the current time in relation to the year ended 31 March 2023. As
explained in note 15, as and when credits are claimed and credited to the tax
accounts of the Group, the amounts are expected to reduce the Group's
outstanding balances payable to HMRC.
Tax credits of £164,000 and £164,000 were claimed in relation to the year
ended 31 March 2021 and 31 March 2022 respectively and were recorded in the
year ended 31 March 2023.
DEFERRED TAX
The following are the major deferred tax liabilities and assets recognised by
the Group and movements thereon during the current and prior reporting period.
Deferred tax assets and liabilities are offset where the Group has a legally
enforceable right to do so.
Fixed asset Retirement Short-term
timing differences benefit Share-based obligations payments timing differences Tax losses (Ireland) Tax losses Intangibles Total
(UK)
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2021 - (2) (1) - - - 343 340
(Credit)/charge to profit or loss - (2) - - - - (38) (40)
Prior year adjustment - - 1 - - - 37 38
Deferred tax (asset)/ liability at 31 March 2022
- (4) - - - - 342 338
(Credit)/charge to profit or loss - 5 - - - - (41) (36)
Prior year adjustment - (1) - - - - - (1)
Deferred tax at 31 March 2023
Liability - - - - - - 301 301
Deferred tax at 31 March 2022
Liability - (4) - - - - 342 338
4. Segmental Reporting
OPERATING SEGMENTS
For the purposes of segmental reporting, the Group's Chief Operating Decision Maker ('CODM') is considered to be the Board of Executive Directors of the Company. The Board receives information on a consolidated basis. Given the extent and nature of central services provided in support of the Group's different revenue streams, the Board considers that the Group has only one operating segment.
REVENUE BY GEOGRAPHIC DESTINATION
Revenue across all operating segments is generated from the UK but includes overseas sales:
2023 2022
£'000 £'000
UK 11,576 10,880
Non-UK 3,084 3,022
14,660 13,902
2023 Non-UK revenue includes United States of America £1,581,000 (2022: £1,150,000), Ireland £484,000 (2022: £442,000), Italy £75,000 (2022: £141,000), Rest of Europe £582,000 (2022: £461,000), Australia £44,000 (2022: £121,000) and Rest of the World £318,000 (2022: £707,000).
2023 Non-UK non-current assets includes Ireland £19,000 (2022: £29,000) and Germany £15,000 (2022: £17,000).
INFORMATION ABOUT MAJOR CUSTOMERS
No customers contributed 10% or more to the Group's revenue in any period presented.
5. Revenue
Revenue is all derived from continuing operations.
Notwithstanding that the Group's revenues are often interdependent, the Group
has disaggregated revenue into various categories in the following tables
which is intended to depict how the nature, amount, timing and uncertainty of
revenue and cash flows are affected by economic date:
2023 2022
£'000 £'000
Consultancy 9,350 8,882
Publishing and Distribution 794 838
Software 1,760 1,481
Training 2,756 2,701
Total revenue 14,660 13,902
6. Goodwill
Cost and Net book value 2023 2022
£'000 £'000
At 1 April 6,804 6,804
At 31 March 6,804 6,804
Goodwill arising from business combinations has been allocated to the Group's
DQM cash-generating unit ('CGU'). Goodwill is tested at least annually for
impairment and whenever there are indications that goodwill might be impaired.
For the DQM CGU, the carrying amount of goodwill has been assessed for
impairment by comparing the carrying amount of the CGU in which it is included
to the recoverable amount based on value in use of the CGU. The value in use
calculation for the cash-generating unit uses: estimated future cash flows,
for which the key assumptions are forecast revenue and EBITDA over the next
five years, based on management's estimates; the terminal growth rate for
revenues and EBITDA beyond that period, which reflects a cautious approach for
the purpose of measuring a value in use; and a pre-tax discount rate, which is
based on management's assessment of risk inherent in the estimated future cash
flows.
The pre-tax cash flows for the forecast period are derived from the DQM
element of the Group's 5-year business plan. The plan incorporates the Group's
approved FY24 granular budget model and 4 further years forecast in marginally
less detail. The figures have been reviewed and approved by the Board and
include input from divisional managers around the business. The figures have
not been prepared specifically for the impairment review but are used for
wider business planning, setting management objectives, and informing market
guidance. The forecast includes revenue growth averaging approximately 15% per
year across the 5-year period and EBITDA growth in line with the revenue
growth, assuming that EBITDA remains a consistent percentage of revenue. It is
noted that whilst the FY24 budget includes revenue up only 12% on the FY23
result the EBITDA is forecast to improve from 33% of revenue to 51% of
revenue. The improvement comes from a range of operational efficiencies that
management expect to be the result of investment taking place to grow higher
margin revenue lines and internal projects designed to integrate DQM more
fully with the rest of the Group, making better use of central resources.
As of 31 March 2023, the value in use of the CGU was greater by £3,160k than
its carrying amount. The key assumptions used were the revenue and EBITDA
growth assumptions as explained above, the terminal growth rate of 2%, and the
pre-tax discount rate of 12.53%. Management's methodology includes a 4% small
company premium derived from independent third-party data, as would be
expected for a Company the size of DQM. Management also notes the inherent
uncertainty of results expected to be delivered through the planned
operational efficiencies and takes comfort from the fact that a specific risk
premium of up to 3% could be added to the WACC to allow for this without
triggering an impairment. A 3% specific risk premium added to the WACC would
result in the value of the CGU being greater by £230k than its carrying
amount. Management also notes the fact that current year WACC rates have been
pushed up because of high interest rates designed to tackle inflation, and
that official Bank of England forecasts show inflation (and therefore interest
rates) should reduce again within the forecast period. The growth in cash
flows and the selection of the discount rate are judgements that management
has made which may have a bearing on the identification of impairment losses.
The changes in key assumptions that would individually give rise to a material
impairment loss are as follows:
a) The discount rate would have to increase by
3.4%;
b) Either operating costs would have to rise, or
future revenue increases would need to be less than forecast (assuming margins
remained the same) such that EBITDA was more than 25% less than forecast, all
other variables remaining constant.; or
c) EBITDA margin would have to fall to less than
38% on the forecast revenue numbers.
7. Intangibles Assets
Consultancy products and Software and
Marketing Publishing website Customer
tools products courseware costs Trademarks relationships Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 April 2021 63 400 1,036 6,177 466 1,843 9,985
Additions 3 51 182 995 - - 1,231
At 31 March 2022 66 451 1,218 7,172 466 1,843 11,216
Additions - 83 374 1,049 - - 1,506
Foreign exchange movement - - 3 - - - 3
At 31 March 2023 66 534 1,595 8,221 466 1,843 12,725
Accumulated depreciation
At 1 April 2021 63 266 414 3,057 100 320 4,220
Charge for year - 51 112 1,003 47 153 1,366
At 31 March 2022 63 317 526 4,060 147 473 5,586
Charge for year 1 55 119 1,148 46 154 1,523
At 31 March 2023 64 372 645 5,208 193 627 7,109
Net book value
At 31 March 2023 2 162 950 3,013 273 1,216 5,616
At 31 March 2022 3 134 692 3,112 319 1,370 5,630
At 1 April 2021 - 134 622 3,120 366 1,523 5,765
Amortisation is included within administrative expenses.
Intangible assets includes capitalised related party costs incurred as further
explained in note 25.
All intangible assets have been developed internally with the exception of
those arising on the business acquisition in 2019. For CGUs requiring
impairment testing under IAS 36 Impairment of Assets, the method used to
determine recoverable amount is value-in-use.
8. Trade and Other Receivables
2023 2022
£'000 £'000
Trade receivables 1,036 1,284
Less: provision for impairment of trade receivables - (124)
Net trade receivables 1,036 1,160
Other receivables 38 32
Prepayments 537 420
1,611 1,612
None of the Company's trade and other receivables are secured by collateral or
credit enhancements.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses on a collective basis. To measure expected credit losses on a
collective basis, trade receivables and contract assets are grouped based on a
similar credit risk and ageing.
The Group's policy for monitoring default risk over receivables is based on
the ongoing evaluation of the collectability and ageing analysis of trade and
other receivables. Considerable judgement is required in assessing the
ultimate realisation of these receivables, including reviewing the potential
likelihood of default, the past collection history of each customer and the
current economic conditions.
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.
To determine the level of expected credit loss provision required, historical
loss rates are adjusted for current and forward-looking information on
macroeconomic factors affecting the Group's customers. The Group has
identified gross domestic product growth rates, employment rates and inflation
rates as the key macroeconomic factors in the countries in which the Group
operates. The rates applied vary from 10% to 100% depending on the above
factors and the age of the debt.
The Group has not previously recorded any credit loss provision on the grounds
of materiality.
The Directors consider that the carrying amount of trade and other receivables
approximates to the fair value. Included in the Group's trade receivable
balance as at the year end were customer balances with a carrying amount of
£197,000 (2022: £396,000) which
are past due at the reporting date for which the Group has not recorded a
provision, however the Directors still believe the amounts to be recoverable
in full.
The maturity profile of trade and other receivables is set out in the table
below:
2023 2022
£'000 £'000
In one year or less, or on demand 1,611 1,612
The analysis of trade and other receivables by foreign currency is set out in
the table below:
2023 2022
£'000 £'000
UK pound 1,406 1,476
US dollar 92 83
Euro 113 51
Australian dollar - 2
1,611 1,612
The Group's foreign currency receivables are denominated in the functional
currency of the subsidiaries in which they arise. There is no impact on the
loss for the year from foreign exchange rate movements on such financial
instruments.
9. Trade and other payables
Amounts falling due within one year:
2023 2022
£'000 £'000
Trade payables 1,422 1,018
Other taxation and social security 1,137 2,273
Other payables 424 436
Deferred income 1,961 1,847
Accruals 347 361
5,291 5,935
Amounts falling due after one year:
2023 2022
£'000 £'000
Other taxation and social security 8 73
8 73
Amounts falling due after one year relate to the non-current element of the
other tax and social security arrangements agreed with HMRC on the basis of
time to pay arrangements (see Note 18). The balance payable will reduce as
cash payments are made and is also expected to reduce as R&D tax credits
are claimed from HMRC as and when quantified in respect of year ended 31 March
2023.
10. Borrowings
2023 2022
Non-current Non-current
Current £'000 Total Current £'000 Total
£'000 £'000 £'000 £'000
Secured
Other loans (i) 309 - 309 205 - 205
Total secured borrowings 309 - 309 205 - 205
Unsecured
Bank loans 41 142 183 40 193 233
Other loans 317 73 390 91 136 227
Loans from related parties 407 - 407 386 - 386
Total unsecured borrowings 765 215 980 517 329 846
Total borrowings 1,074 215 1,289 722 329 1,051
(I) SECURED LIABILITIES AND ASSETS PLEDGED AS SECURITY
Of the loans, £77,000 (2022: £82,000) is secured against receipts from
sales. The remaining secured loans are secured against assets of the business.
As at 1 April 2022 Cash proceeds from borrowings Repayments of capital Repayments of Interest Interest accruing As at 31 March 2023
£'000 £000 £'000 £'000 £'000
Secured loans 205 608 (490) (55) 55 323
Unsecured loans 460 267 (168) (53) 53 559
Loans from related parties 386 - - - 21 407
Total 1,051 875 (658) (108) 129 1,289
As at 1 April 2021 Cash proceeds from borrowings Repayments of capital Repayments of Interest Interest accruing As at 31 March 2022
£'000 £000 £'000 £'000 £'000
Secured loans 266 546 (607) (87) 87 205
Unsecured loans 689 - (229) (60) 60 460
Loans from related parties 368 - - - 18 386
Total 1,323 546 (836) (147) 165 1,051
The Group has a number of loans in the period presented, and they are
summarised as follows:
Security pledged Term Expiry/maturity date Effective interest rate
Bank
Lloyds Bank - CBILS Loan Unsecured 72 months October 2026 2.45%
Other
Wesleyan Parent company guarantee 60 months September 2024 14.32%
Portman Asset Finance Director's Guarantee 36 months August 2023 10.16%
Bute Capital Secured against assets of business 12 months November 2023 11.52%
You Lend Director's Guarantee 12 months October 2023 26.63%
Paypal Secured against receipts from sales 12 months April 2023 4.26% -10.49%
Stripe Secured against receipts from sales 17 months May 2024 12.87%
Fleximize Director's Guarantee 24 months December 2024 29.4%
My Cashline Director's Guarantee 24 months January 2025 3%
Federal capital Director's Guarantee 12 months January 2024 46.74%
Loans from related parties
Unsecured loan facility provided by Andrew Brode Unsecured Available to the Group until at least 31 December 2024 December 2023 5% above the Bank of England base rate
and will automatically renew for a further
12 months unless terminated by either party
In addition, the Group has access to an invoicing discounting facility.
11. Earnings per Share
Basic earnings per share is based on the loss after tax for the year and the
weighted average number of shares in issue during each year.
2023 2022
£'000 £'000
Loss attributable to equity holders of the Group (£) (1,250) (997)
Weighted average number of shares in issue 107,826 101,510
Basic loss per share (pence) (1.16) (0.98)
Diluted earnings per share is calculated by adjusting the average number of
shares in issue during the year to assume conversion of all dilutive potential
ordinary shares.
Taking the Group's share options into consideration in respect of the Group's
weighted average number of ordinary shares for the purposes of diluted
earnings per share, is as follows:
2023 2022
Number of shares 107,826,246 101,510,456
Dilutive (potential dilutive) effect of share options - -
Weighted average number of ordinary shares for the purposes of diluted 107,826,246 101,510,456
earnings per share
Diluted loss per share (pence) (1.16) (0.98)
Due to the losses incurred during the year, a diluted loss per share has not
been calculated as this would serve to reduce the basic loss per share. There
were 526,760 (2022: 426,760) share options outstanding at the end of the year
that could potentially dilute basic earnings per share in the future.
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