REG - itim Group PLC - Full year results and Notice of AGM
12/05/2022 07:00
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RNS Number : 1889L itim Group PLC 12 May 2022
12 May 2022
itim Group plc
("itim" or "the Company" and together with its subsidiaries "the Group")
Full year results for the year ended 31 December 2021 and Notice of AGM
itim Group plc, a SaaS based technology company that
enables store-based retailers to optimise their businesses to improve
financial performance, is pleased to announce its audited results for the
year ended 31 December 2021.
Financial Highlights
· Group revenues increased by 14% to £13.5 million (2020: £11.8 million)
· Annual recurring revenue ("ARR") is £11.1m (2020: £9.6 million)
· Group Adjusted EBITDA* increased by 47% to £2.2 million (2020: £1.5
million)
· Adjusted EBITDA* margin increased by 17% up 4 percentage points ("PPT") (2020:
13%)
· Adjusted Earnings per share** 3.75 pence (2020: 4.10 pence)
· Closing cash balances were £6.2 million at 31 December 2021, up from £2.1
million at 31 December 2020
Operational Highlights
· Completed successful IPO in June 2021 raising £8m before expenses
· Broader product offering to provide a range of services to more than 50 major
retailers including John Lewis, Sainsbury's, JD Sports, WH Smith and Majestic
Wine amongst many others
· New retail advisory committee established including Justin King and Lee
Williams, as well as a number of other high-profile advisors including Beth
Butterwick, CEO of Jigsaw, Simon Forster, former CEO at Selfridges
· Launch of Chameleon 360 is an Omni-channel store-centric solution that
combines full Omni-channel capabilities at POS, with in-store mobile apps,
consumer apps, fully integrated with ecommerce platforms
· Significant new customer wins in the fashion, electronics and pharmaceutical
retail sectors
* EBITDA has been adjusted to exclude share-based payment charges, exceptional
items, along with depreciation, amortisation, interest and tax from the
measure of profit.
** The profit measure has been adjusted to exclude exceptional items and share
option charge
Ali Athar, CEO of itim Group plc, said: "We are very pleased with our
performance in 2021. This was not only our first year as a public company but
also a transformational year for itim, in which we have delivered strong
growth and strategic progress. The opportunities that continue to present
themselves provide us with great confidence that there is considerable demand
for our products.
"Trading so far this year has started well, we have seen new customer wins and
extensions of existing contracts as well as the creation of our new retail
advisory committee, with what we believe are some of the most successful
leaders in retail. I look forward to the remainder of 2022 with optimism and
will updating the market on progress in due course."
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014, which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
Enquiries:
Itim Group plc Ali Athar, CEO 0207 598 7700
Ian Hayes CFO
WH Ireland (NOMAD & Broker) Katy Mitchell 0207 220 1666
Harry Ansell
Darshan Patel
IFC Advisory Graham Herring 020 3934 6630
Florence Chandler
ABOUT ITIM
itim was established in 1993 by its founder, and current Chief Executive
Officer, Ali Athar. itim was initially formed as a consulting business,
helping retailers effect operational improvement. From 1999 the Company began
to expand into the provision of proprietary software solutions and by 2004 the
Company was focused exclusively on digital technology. itim has grown both
organically and through a series of acquisitions of small, legacy retail
software systems and associated applications which itim has redeveloped to
create a fully integrated end to end Omni-channel platform.
CHAIRMAN'S STATEMENT
Against what has been a challenging backdrop for everyone, I am pleased to be
in a position to update shareholders on a momentous year for itim,
characterised by achievement and growth.
Despite the impact of the pandemic on the ability of bricks and mortar retail
stores to trade for long periods of time during the year, the Group delivered
on its strategy in continuing to grow operational profits while investing in
strengthening its platform offering, which led to the Group being quoted on
AIM, a market of the London Stock Exchange in June 2021, raising £8m of new
investment in the process.
Moreover, our Optimisation platform continues to expand geographically with
further international, new customer wins in the USA along with wins in Brazil,
Argentina and Uruguay.
Financial results
Overall, we believe the benefits of the Group's high-quality SaaS business
model can be seen in the robust financial performance in the year. The Group's
high levels of recurring revenue (approx. 77% of revenues), low customer churn
and continuing transition to an ARR model has led to increased revenue
visibility and better-quality earnings which delivered double-digit revenue
growth of 14% to £13.5m (FY20: £11.8m). Careful management of the cost base,
in line with the Group's revenue profile, alongside continued investment in
the product resulted in an increase in adjusted EBITDA for the year of 47% to
£2.2m (FY20: £1.5m) and an increased adjusted EBITDA margin of 17% (FY20:
13%).
People
Despite disruption to normal office operations during Covid-19, we have
continued to deliver product innovation and high levels of service to our
customers with our colleagues working remotely. Whilst we are a
technology-driven company, we are also a people-led business. Our culture of
innovation is driven from personal interaction across the Group and with
customers. Remote working had the potential to present a unique set of
challenges. However, across the organisation, our people tackled each day with
enthusiasm, diligence and a positive outlook. It has been an impressive
response and underlines why our team continues to be our most valuable asset.
I would like to personally thank them all.
Outlook
We enter 2022 in a solid financial position, delivering greater subscription
revenues and good levels of interest in both existing and new client activity.
The Board is excited about the growth opportunities presented by both The
Retail Suite and Profimetrics platforms, the performance of which is being
underpinned by new marketing initiatives for both products and the ongoing
strengthening of the associated delivery teams.
However, we are continually seeing increases in salary levels across the
technology sector and labour shortages but looking to overcome this with
selective overseas outsourcing. There is no doubt with the headcount
increases planned in 2022 it will put short-term pressure on profits as
expected.
But with a strong cash position, no debt and a well-proven business model we
are well positioned to continue to thrive in 2022.
In conclusion, 2021 has been a landmark year for the Group and I would like to
extend my appreciation to everyone in the Company, our partners and our
customers. Our ongoing growth in such a challenging environment, a pipeline of
market-leading innovations and the delivery of a successful IPO are
significant achievements. Without exception, everyone in the business has
contributed to this success and ensured that we are an agile, fast-growing
organisation, with customers that see us as integral to their futures and a
robust balance sheet. Importantly, we now have the vision, technologies and
capabilities we need to achieve our long-term, global ambitions for growth.
Michael Jackson
Chairman
11th May 2022
CHIEF EXECUTIVE'S REVIEW
The year to 31(st) December 2021 was one of excellent progress for itim. We
delivered on our strategic goals for the year, becoming a public company in
June 2021 and delivering a pipeline of innovative products onto our platform
that create further value for our customers whilst dealing with the challenges
of the pandemic as we come to terms with the new ways of conducting business
remotely.
All this was achieved whilst delivering a strong set of results for the year
that met market expectations and positive sales momentum as we move into 2022.
Market opportunity
We believe the Covid-19 pandemic has accelerated market forces that were
already changing the retail market forever, and itim is ideally placed to
leverage these trends and ensure its customers adapt and thrive in this
environment. At its core, it is our view that the retail sector is
restructuring around consumer commerce, where consumer expectations dictate
the business model. The volume and pace with which consumers are moving online
requires a radical response from traditional retailers, who must adapt the
relationship between their physical and digital business models, enhance their
digital capabilities and reinvent their value proposition for this
digital-first world. At the same time, there are growing trends that are
seeing consumers looking to test products before purchasing online; demanding
a seamless process for returns; seeking a wider choice of delivery options and
asking for increased levels of face-to-face contact for customer service.
Whilst the term omni-channel retail has been around for some years, it is
really only now being understood as a fully-integrated approach to commerce,
providing shoppers with a unified experience across all channels or
touchpoints. This encompasses traditional stores, e-commerce and mobile apps.
We believe that retailers with stores who embrace this integrated, end-to-end
omni-channel retail model can offer greater consumer choice, enhanced service
standards, and levels of convenience that outstrip their online-only
competitors.
In the post-pandemic landscape, traditional retailers have the opportunity to
not only compete effectively with pure play online retailers in this new
digital world but leverage significant advantages to win market share. In
order to realise this potential they need to leverage technology systems that
efficiently deliver cross-channel experiences for consumers; whilst continuing
to differentiate from online-only offerings through more diverse delivery
options and a more personalised service.
In essence, omni-channel retailing provides a seamless, personalised shopping
experience, no matter the channel or location across a unified platform
beginning with the supply base. This will enable:
1. Customers to be able to shop online at a local store in addition to the
central warehouse;
2. Customers to see exactly what is in stock at a local store to enable 30-minute
click and collect and provide retailers with the opportunity to upsell whilst
customers are in store;
3. Same day delivery through the growth of local courier networks; and
4. The ability to leverage customer relationships through the store network and
to focus on 'VIP' customers.
5. Curated Orders and subscription revenue streams. As retailers build a database
of customers' individual information, and begin to understand customer
preferences, they have no need to wait for an order. They send what they
believe the consumer needs, whether it is a curated basket from the local
store or from their warehouse in exchange for a monthly subscription fee.
Whilst this sounds relatively simple at a high level, only a minority of
retailers have achieved a true omni-channel solution to date. However, we
believe this has now become an imperative for retailers to achieve in a post
Covid-19 world.
The advent of omni-channel retailing - on-trend and given a boost
In the last six months, following our IPO, we have been pleased to see those
retailers who have been taking omni-channel strategies seriously report strong
market performances. Businesses such as M&S, JD Sport and Next, have
invested significantly in their digital capabilities and positive results have
followed. Although these are the large publicly visible retailers, they are
reflective of a trend across the whole retailing industry.
We understand most retailers are now looking to follow suit.
However, we believe Covid 19, supply chain problems, and inflation have placed
huge pressures on many retailers' balance sheets, reducing the capital
available to make the kind of investments traditionally required to transform
at this pace and scale.
itim's game-changing omni-channel platform enables its customers to reposition
their businesses for today's consumer but without the need for significant
upfront investment or vast internal digital capabilities. We consider itim's
unique solutions to be at the vanguard of efforts to transition retailers to
these new models and with it re-establish store-based organisations at the
cutting-edge of the sector.
Product development and uniqueness
There are 5 areas where we demonstrate competitive advantage which is critical
to the transition to omni-channel excellence.
Unified commerce platform
Unlike other vendors, we provide a single sales platform, across online,
stores and wholesale with a single view of customers, single view of product
and stock and unified marketing engine. This is crucial to our customers as
they transform from product-centric to customer-centric businesses. This
evolution is critical in a digital-first world. Importantly, it allows us to
turn stores into assets in the fight for customer loyalty and spend by
allowing multiple, complex customer journeys, including seamlessly integrating
services such as 30-minute click and collect and 1-hour despatch from store.
Price Optimisation
Competing on price is now a basic requirement for a successful retailer as
price transparency becomes so easy for consumers. Yet it is our view that
genuine price optimisation capabilities remain challenging and elusive in the
sector. Powering retailers' price competitiveness, whilst leveraging gains
from a world class approach to optimisation of promotions and markdowns is
becoming ever more critical to retaining profitability in a digital world and
a key component of the itim armoury.
Stock and Range Optimisation
Omni-channel retailing is opening up huge opportunities for businesses to gain
critical steps towards greater profitability through stock optimisation. Itim
underpins its customers' ability to route an order to where stock is.
Digitally-led retailers do not need to hold all their stock in stores, but can
distribute it intelligently up the supply chain, all the way back to
suppliers. Optimising stock this way means you can have bigger ranges with
smaller stock investments.
Integrated Order Management
At the heart of omni-channel retailing is the concept of sophisticated order
management. This is about being able to route customer orders to
stock/service locations which are convenient to customers and profitable for
retailers. We have pioneered ideas such as shop local, which allows
consumers to shop the stock in their local store in addition to shopping the
stock in the web warehouse.
Supplier Collaboration
To be a profitable omni-channel retailer in the modern world, we believe you
need the help/collaboration of your suppliers. That means you need suppliers
to be tightly digitally-integrated with your business, and you need them to do
more of the work for you. Launching new business models like 'marketplaces'
will only be possible if you can collaborate digitally with your suppliers.
Consignment stock and drop-ship models are becoming more important tools in a
retailers' offering. Ensuring accurate product information and fast product
introductions is now critical to achieving a competitive advantage.
These are the 5 areas in which we continue to make major investments in
R&D.
Outlook
The business has continued to thrive over the last year as evidenced by our
financial and operational performance, proving that our strategy continues to
deliver. Looking ahead, costs will inevitably rise as we face rising levels of
inflation and pressure on recruitment and wages. However, our high-levels of
customer retention, excellent customer references and increasingly positive
mix of recurring revenues positions the Group well.
We also are expanding internationally with international markets now
accounting for 36% of our revenues from territories such as Southern Europe,
South America and North America.
Ali Athar
Chief Executive officer
11(th) May 2022
CHIEF FINANCIAL OFFICER'S REVIEW
Income Statement
Revenue
The Group achieved revenue growth of 14% despite the impact of the global
pandemic on the retail sector with stores being periodically locked down.
Revenue was £13.5m for the year (2020: £11.8m) with the quality of revenue
growth being evidenced by increased Annual Recurring Revenue (ARR) of 16% to
£11.1m at the year-end (2020: £9.6m). These numbers were achieved despite
the impact on our overseas ARR contracts with sterling strengthening against
the currencies in which we trade. (See foreign exchange rates below).
The transition to a subscription revenue model continues at pace with 77%
(2020: 72%) of the Groups revenues in the year derived from recurring
revenues.
Gross profit
The gross margin for the Group was 41% (2020:39.8%). Inevitably as the Group
transitions to a subscription-based revenue model there is a degradation in
margin until the ARR for the year is booked in full, especially when the cost
base has already been geared up to deliver the ARR. Gross margin on booked
recurring revenue is up 3% to 66% (2020: 63%).
Operating expenses
The operating expenditure has increased for two main reasons. Firstly due to
the inclusion of the EDI Plus costs on a full year basis following its
acquisition in June 2020. But secondly due to the extra costs associated with
fulfilling our governance requirements, adding three Non Executives to the
board along with the additional costs of being a listed business which were
not required as a private company.
Despite this and the global uncertainties caused by the COVID-19 pandemic
which continued into 2021, the Group chose to carefully manage its cost base
in line with our existing and forecast revenue profile.
Foreign exchange rates
The table below sets out the percentage of annual contracts in the foreign
currencies we trade in and the impacts of those foreign currencies at the
Balance Sheet date and the average movements over the course of the year for
P&L purposes.
FX Rates 31-Dec-20 31-Dec-21 31-Dec-21 2020 Average 2021 Average 2021
(% of ARR at year end) FX rate FX rate Variance % FX rate FX rate Variance %
£GBP/Euro (ARR 10%) 1.123 1.191 6% 1.125 1.163 3%
£GBP/BRL (ARR 18%) 7.057 7.612 8% 6.607 7.42 12%
£GBP/USD (ARR 7%) 1.366 1.354 -1% 1.283 1.376 7%
Foreign exchange rates have remained volatile during the year with an overall
strengthening of Sterling against a number of currencies throughout the year.
The most significant movement for itim has been the 8% depreciation of the
Brazilian Real against Sterling between December 2020 and December 2021 where
18% of our contracts are in Reals. The Sterling to Euro rate has experienced
similar volatility with Sterling ending the year 6% stronger at 31(st)
December 2021 when compared to 31(st) December 2020 with 10% of our contracts
in Euro's.
Phasing of movements over the current and prior year mean that the weighted
monthly average exchange rate to translate the Euro and Brazilian Real trading
results in some currencies is less volatile. The impact on the weighted
monthly average exchange rate used to translate the Euro reflected only a 3%
depreciation of the Euro based on a weighted monthly average rate of 1.163 for
the year ended 31(st) December 2021 (2020: 1.125). However, the Brazilian Real
depreciated significantly by 12% based on a monthly average rate of 7.42 for
the year ended 31(st) December 2021 (2020: 6.607).
Financing costs
Total net interest costs in the year were £67k (2020:£114k).
The reduction in interest payable on external loans was driven by repayments
of borrowings during the year ended 31(st) December 2021.
Exceptional items
Exceptional costs of £0.7m (2020: nil) were incurred during the year. These
costs related to the initial public offering and admission to AIM which could
not be directly attributed to the raising of new equity and therefore were
expensed through the P&L. IPO costs written off against share premium
amount to £0.5m (2020: nil)
Taxation
The Group continues to take advantage of R&D tax credits as it continues
to innovate its technology offering. The current year tax credit is made of up
of a net current tax credit of £0.26m (2020:£0.45m) and a deferred tax
charge of £0.2m (2020: £0m).
Earnings per share
Basic EPS for the year was 0.88p (2020:3.74p) and the diluted EPS was 0.78p
(2020:3.31p).
On an adjusted profit basis after adjusting for exceptional items and the
share option charge the adjusted earnings basic EPS was 3.75p (2020:4.10p) and
the adjusted earnings diluted EPS was 3.32p (2020:3.63p).
Dividend
The Board does not propose to pay a dividend in respect of the financial year
(2020:£nil).
Group Statement of Financial position
The Group had net assets of £13m at 31(st) December 2021 (2020:£5m) an
increase of £8m which was derived from the new equity raised, along with the
profit for the year.
Cash flow and working capital
The Group ended the year with a cash balance of £6.2m (2020: £2.1m).
Cash generated from operating activities for the year amounted to £2.1m
(2020: £2.1m) with further inflows from the net proceeds of new equity and
exercise of options of £7.7m (2020: nil). Cash expended was on capitalised
new product development of £1.4m (2020: £1.2m) and payment of debt and
interest of £4.3m (2020:£0.2m). Which taken together with our opening cash
balance of £2.1m gives the closing cash balance at the year-end.
A £6.2m cash balance at the year-end provides a strong basis to execute our
strategy in 2022.
IPO and admission to AIM
In June 2021 itim was admitted to AIM, a market of the London Stock Exchange
after a successful initial public offering raising £8m (gross) to support its
growth strategy as it continues to transition to a subscription-based revenue
model.
Equity
On the 28(th) June 2021 the Company issued 5,194,806 new 5p shares at 154p
each raising £8m in new equity.
In May 2021 as part of the listing process, the Company purchased 110,251,743
deferred shares for 1p and subsequently cancelled that class of share whilst
creating a capital redemption reserve of the same value.
Additionally, the Company undertook a capital reduction transferring
£10,468,919 of share premium to retained earnings.
Ian Hayes
Chief Financial Officer
11(th) May 2022
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2021
Total Total
Note 2021 2020
£'000 £'000
Revenue 4,5 13,474 11,820
Cost of sales (7,953) (7,114)
Gross profit 5,521 4,706
Other income - 202
Administrative expenses (3,297) (3,374)
EBITDA 2,224 1,534
Amortisation of intangible assets 13 (746) (515)
Share option charge 24 (151) (91)
Depreciation 14 (38) (45)
Depreciation of right-of-use assets 20 (297) (231)
Profit/(Loss) on disposal of right-of-use assets 20 10 (9)
Profit from operations 1,002 643
Finance costs 10 (67) (114)
Other interest - right of use assets 20 (42) (67)
Exceptional items 6 (667) -
226 462
Profit on ordinary activities before taxation 6
Taxation 11 26 494
Profit for the year 252 956
Other comprehensive income
(119) 63
Exchange differences on retranslation of foreign operations
Total comprehensive income for the year net of tax 133 1,019
Earnings per Share
Basic 12 0.88p 3.74p
Diluted 12 0.78p 3.31p
All comprehensive income for continuing operations is shown above.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Share Capital Foreign
Share Share options redemption exchange Retained
capital premium reserve reserve reserve losses Total
£000 £000 £000 £000 £000 £000 £000
At 1 January 2020 as restated 2,379 10,469 213 - 82 (9,239) 3,904
Comprehensive income for the year - - - - - 956 956
Foreign exchange movement - - - - 63 - 63
Total comprehensive income - - - - 63 956 1,019
Share option charge - - 91 - - - 91
At 31 December 2020 2,379 10,469 304 - 145 (8,283) 5,014
Comprehensive income for the year - - - 252 252
- -
Foreign exchange movement - - - - (119) - (119)
Total comprehensive income - - - - (119) 252 133
Share option charge - - 151 - - - 151
Share buyback of deferred shares (1,103) - - 1,103 - - -
Cancellation of share premium - (10,469) - - - 10,469 -
Shares issued in the period - IPO 260 7,740 - - - - 8,000
Share option conversion 25 156 - - - - 181
IPO expenses - (498) - - - - (498)
At 31 December 2021 1,561 7,398 455 1,103 26 2,438 12,981
Consolidated Statement of Financial Position
As at 31 December 2021
Note
2021 2020
£'000 £'000
Non-current assets
Intangible assets 13 8,733 8,206
Plant and equipment 14 280 53
Right-of-use assets 20 649 897
Deferred tax 11 65 298
Total non-current assets 9,727 9,454
Current assets
Trade and other receivables 16 3,702 3,492
Cash and cash equivalents 6,172 2,127
Total current assets 9,874 5,619
Total assets 19,601 15,073
Current liabilities
Trade and other payables 17 (5,218) (4,570)
Right-of-use liability 20 (290) (248)
Total current liabilities (5,508) (4,818)
Non-current liabilities
Trade and other payables due in more than one year 18 (176) (4,011)
Right-of-use liability 20 (434) (729)
Deferred tax 11 (502) (501)
Total non-current liabilities (1,112) (5,241)
Total liabilities (6,620) (10,059)
Net assets 12,981 5,014
Capital and reserves
Called up share capital 22 1,561 2,379
Share premium account 23 7,398 10,469
Share options reserve 23 455 304
Capital redemption reserve 23 1,103 -
Foreign exchange reserve 23 26 145
Retained profit/(loss) 23 2,438 (8,283)
Shareholders' funds
12,981 5,014
These financial statements were approved and authorised for issue by the Board
of Directors on 11(th) May 2022
Signed on behalf of the Board of Directors
I D Hayes
Director
Company Statement of Financial Position
As at 31 December 2021
Note 2021 2020
£'000 £'000
Non-current assets
Intangible assets 13 - -
Plant and equipment 14 213 -
Investments 15 5,071 5,071
Deferred tax 11 55 -
5,339 5,071
Current assets
Trade and other receivables 16 10,738 9,903
Cash and cash equivalents 3,209 157
13,947 10,060
Total assets 19,286 15,131
Current liabilities
Trade and other payables 17 (498) (90)
Non-current liabilities
Trade and other payables due in more than one year 18 (176) (3,762)
Total liabilities (674) (3,852)
Net assets 18,612 11,279
Equity
Called up share capital 22,25 1,561 2,379
Share premium account 23,25 7,398 10,469
Share options reserve 23,25 455 304
Capital redemption reserve 23,25 1,103 -
Retained profit/(loss) 23,25 8,095 (1,873)
Equity shareholders' funds 18,612 11,279
These financial statements were approved and authorised for issue by the Board
of Directors on 11(th) May 2022.
Signed on behalf of the Board of Directors
I D Hayes
Director itim Group plc
Consolidated Cash Flow Statement
Year ended 31 December 2021
Note 2021 2020
£'000 £'000
Cash flows from operating activities
Profit after taxation 252 956
Adjustments for:
Taxation 11 (26) (494)
Finance costs 10 67 114
Share option charge 24 151 91
Other interest on leases 20 42 67
Exchange gain/(loss) - 49
Amortisation and depreciation 13,14, 20 1,081 791
(Profit)/Loss on disposal of right-of-use assets 20 (10) 9
Cash flows from operations before changes in working capital 1,557 1,583
Movement in trade and other receivables 16 (354) 275
Movement in trade and other payables 17 335 60
Cash generated from operations 1,538 1,918
Finance costs 10 (4) (69)
Corporation tax 543 285
Net cash flows from operating activities 2,077 2,134
Cash flows from investing activities
Capital expenditure on intangible assets 13 (1,361) (1,227)
Purchase of plant and equipment 14 (49) (17)
Cash acquired with subsidiary - 277
Payment to acquire subsidiary - (223)
Proceeds from shares issued - IPO 22 8,000 -
Proceeds from share option conversion 22 181 -
IPO expenses 22 (498) -
Net cash flows from investing activities 6,273 (1,190)
Cash flows from financing activities 19 (3,659) -
Loan repayments
Interest repayments 19 (98) -
Payment of lease liabilities 20 (335) (457)
New bank loan - 250
Loan issued 16 (210) -
Net cash flows from financing activities (4,302) (207)
Net increase in cash and cash equivalents 4,048 737
Cash and cash equivalents at beginning of year 2,127 1,390
Exchange gains/(losses) on cash and cash equivalents 29 (3) -
Cash and cash equivalents at end of year 6,172 2,127
Company Cash Flow Statement
Year ended 31 December 2021
2021 2020
£'000 £'000
Cash flows from operating activities
Profit after taxation (501) 1,189
Adjustments for:
Taxation 11 40 -
Depreciation 14 5 -
Finance costs 10 63 108
Finance income (18) (20)
Share option charge 24 151 91
Cash flows from operations before changes in working capital (260) 1,369
Movement in trade and other receivables 16 (721) (977)
Movement in trade and other payables 17 49 (20)
Cash generated from operations (932) 372
Finance costs 10 - (61)
Finance income 18 20
Net cash flows from operating activities (914) 331
Cash flows from investing activities
Payment to acquire subsidiary - (223)
Proceeds from share capital issued - IPO 22 8,000 -
Proceeds from share option conversion 22 181 -
IPO expenses 22 (498) -
Net cash flows from investing activities 7,683 (223)
Cash flows from financing activities
Loan repayments 19 (3,409) -
Interest paid 19 (98) -
Loan issued 16 (210) -
Net cash flows from financing activities (3,717) -
Net increase in cash and cash equivalents 3,052 108
Cash and cash equivalents at beginning of year 157 49
Cash and cash equivalents at end of year 3,209 157
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
The consolidated financial statements of ITIM Group plc and its subsidiaries
(collectively, the Group) for the year ended 31 December 2021 were authorised
for issue in accordance with a resolution of the directors on 10(th) May 2022.
itim Group plc ("the Company") is a public limited company incorporated and
domiciled in the UK. The nature of the operations and principal activities of
the Company and its subsidiary undertakings (the "Group") are set out in the
Strategic Report on pages 4 to 11 and the Directors' report on pages 23 to 25.
The Company re-registered as a PLC on 13 May 2021.
2. Basis of preparation
The consolidated financial statements of the Group are prepared under IFRS and
International Financial Reporting Interpretations Committee ("IFRIC")
interpretations in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 applicable to
companies reporting under IFRS.
The Company's financial statements have been prepared under IFRS and
International Financial Reporting Interpretations Committee ("IFRIC")
interpretations in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 and as permitted by
section 408 of the Companies Act 2006, no income statement is presented for
the company. The Company made a profit of £501,537 for the year ended 31
December 2021 (2020: £1,189,338)
The financial statements are presented in GBP, which is also the company's
functional currency.
Amounts are rounded to the nearest thousand, unless otherwise stated.
The financial statements have been prepared on the going concern basis.
3. Summary of significant accounting policies
Basis of consolidation
The Group financial statements consolidate the financial statements of the
company and its subsidiary undertakings drawn up to 31 December each year. The
results of subsidiaries acquired or sold are consolidated for the periods from
or to the date on which control passed. Acquisitions are accounted for under
the acquisition method.
Subsidiaries
Subsidiaries are all entities over which the Group has the ability to exercise
control and are accounted for as subsidiaries. The results of subsidiaries are
included in the Group income statement from the date of acquisition until the
date that such control ceases. Intercompany transactions and balances between
Group companies are eliminated upon consolidation.
Revenue recognition
Revenue was recognised to the extent that it was probable that the economic
benefits would flow to the Group and the revenue could be reliably measured.
Revenue represents the amounts (excluding value added tax) derived from the
provision of goods and services to third party customers during the year by
the group. Revenue is derived from the Group's principal activity and excludes
VAT.
The Group derives revenue from two principal sources as noted below:
1. Recurring revenue
Recurring revenue consists of:
· Subscriptions - revenue from subscriptions derive from the Group's hosted
software-as-a-service subscription application, which allows customers to use
hosted software over the contract period without taking possession of the
software. Revenue is recognised over the contract period, commencing on the
date of the service go live which gives the customer the right-to-use and
access the platform.
· Support and maintenance - derive from support services and software upgrades
offered to customers using the Group's software products. Revenue is
recognised over the contract period, commencing on the go-live date of the
implementation which gives the customer the right to access support services
and the right to receive upgrades.
2. One off revenue
One off revenue consists of:
· Licences - the performance obligation for the provision of licences is
considered to be satisfied when the agreement is signed by the customer and
they are given access to the related software intellectual property ("IP")
without any requirement to provide updates. It is recognised in full at the
transaction price and over the period of implementation before the go live
date of the implementation.
· Services - Services revenue relate to design and implementation services for
each customer. Services enhance an asset that the customer controls and the
Group creates specific fit for purpose assets which cannot be used elsewhere.
The transaction price is the amount determined by fixed price contracts or on
a time and materials basis where the Group has a right for consideration for
work performed to date. Under the terms of the contracts, the Group has a
right to invoice at the achievement of various milestones in the contract.
· Services are recognised over time and management consider the time spent as a
proportion of total time expected is the most appropriate basis for
recognition of this revenue stream as staff time is the main input into the
delivery of the service. Any differences to the revenue measured by the above
method and the amounts invoiced are included in the balance sheet. Further
information on the contracts assets or contract liabilities are included in
note 4.
Intangible assets - Goodwill
Goodwill is not amortised but tested for impairment annually and whenever
impairment indicators require. In most cases the Group identified its cash
generating units as one level below that of an operating segment. Cash flows
at this level are substantially independent from other cash flows and this is
the lowest level at which goodwill is monitored. A goodwill impairment loss is
recognised in the Statement of Comprehensive Income whenever and to the extent
that the carrying amount of a cash-generating unit exceeds the unit's
recoverable amount, which is the greater of value in use and fair value less
cost to sell.
Negative goodwill relating to intangible fixed assets requires immediate
recognition in the Statement of Comprehensive Income.
In calculating goodwill, the total consideration, both actual and deferred, is
taken into account. Where the deferred consideration is contingent and
dependent upon future trading performance, an estimate of the present value of
the likely consideration payable is made. This contingent consideration is
re-assessed annually. The difference between the present value and the total
amount payable at a future date gives rise to a finance charge which is
charged to the Statement of Comprehensive Income and credited to the liability
over the period in which the consideration is deferred. The discount used
approximates to market rates.
Intangible assets - research and development expenditure
Research expenditure is written off as incurred. Internally generated
development expenditure is also written off, except where the directors are
satisfied as to the technical, commercial and financial viability of
individual projects. In such cases, the identifiable expenditure is
capitalised and amortised over the period during which the group is expected
to benefit. This period is seven years. Provisions are made for any
impairment.
Intangible assets - other
Other intangible assets recognised in these financial statements consist of
Customer contracts and relationships and Intellectual Property Rights acquired
on the acquisition of EDI Plus Limited.
Amortisation is calculated to write off their cost or valuation less any
residual value over their estimated useful lives as follows:
Customer contracts and relationships - straight line over 10 years
Intellectual Property Rights - straight line over 10 years
The amortisation of intangible fixed assets is shown as a separate line in the
Consolidated Statement of Comprehensive Income.
The carrying values of intangible assets are reviewed for impairment whenever
events or changes in circumstances indicate the carrying value may not be
recoverable.
Impairment non-current assets
For the purposes of impairment testing, goodwill is allocated to each of the
Group's cash-generating units. A cash-generating unit to which goodwill has
been allocated is tested for impairment annually, or more frequently when
there is an indication that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit
pro-rata based on the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised directly in profit or loss. An
impairment loss recognised for goodwill is not reversed in subsequent periods.
Foreign currencies
Transactions denominated in a foreign currency are translated into sterling at
the rate of exchange ruling at the date of the transaction. At the balance
sheet date, monetary assets and liabilities denominated in foreign currency
are translated at the rate ruling at that date. All exchange differences are
dealt with in the Statement of Comprehensive Income.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair
value is determined. The gain or loss arising on translation of non-monetary
measured at fair value is treated in line with the recognition of gain or loss
on change in fair value in the item.
For consolidation purposes, the assets and liabilities of overseas subsidiary
undertakings are translated at the functional currency at the rate of exchange
ruling at the reporting date. Profit and loss accounts of such undertakings
are consolidated at the average rate of exchange during the year. Exchange
differences arising are included in a separate component of equity.
Plant and equipment
Plant and equipment is carried at cost less accumulated depreciation and any
recognised impairment in value. Cost comprises the aggregate amount paid to
acquire asset and includes costs directly attributable to making the asset
capable of operating as intended.
Depreciation of plant and equipment is calculated to write off their cost or
valuation less any residual value over their estimated useful lives as
follows:
Computer equipment - straight line over 3 years
Office equipment - straight line over 3 years
Fixtures and fittings - straight line over 3 years
The assets' residual values, useful lives and methods of depreciation are
reviewed, and adjusted if appropriate on an annual basis. An asset is
de-recognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the income statement in the
period that the asset is derecognised. The carrying values of tangible fixed
assets are reviewed for impairment in periods if events or changes in
circumstances indicate the carrying value may not be recoverable.
Fixed asset investments
Subsidiaries are measured at cost less impairment.
Investments are reviewed for impairment at the end of the first full financial
year following the acquisition and in other periods if events or changes in
circumstances indicate that the carrying value may not be recoverable.
Provision is made for any impairment.
Trade and other receivables
Trade and other receivables are initially stated at their fair value plus
transaction costs, then subsequently at amortised cost using the effective
interest method if applicable, less impairment losses. Provisions against
trade and other receivables are made when there is objective evidence that the
Group will not be able to collect all amounts due to them in accordance with
the original terms of those receivables. The amount of the write down is
determined as the difference between the asset's carrying amount and the
present value of estimated future cash flows.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and short-term deposits with
an original maturity of three months or less. Bank overdrafts that are
repayable on demand and form an integral part of cash management are included
as components of cash and cash equivalents for the purposes of the cash flow
statement.
Trade and other payables
Trade and other payables are recognised at original cost.
Loans and borrowings
Loans and borrowings are recorded at amortised cost using the effective
interest method, with interest-related charges recognised as an expense in
finance cost in the statement of comprehensive income.
Leases - as a lessee
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of fixed
lease payments. The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined, the lessee's
incremental borrowing rate is used, being the rate that the lessee would have
to borrow the funds necessary to obtain an asset of similar value to the
right-of-use asset with similar terms, security and conditions.
Lease payments are allocated between principal and finance costs. The finance
cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period.
Right-of-use assets are measured at cost comprising the initial measurement of
lease liability, any lease payments made at or before the commencement date
less any lease incentives received, and any initial direct costs.
Right-of-use assets are depreciated over the shorter of the asset's useful
life and the lease term on a straight-line basis.
Payments associated with low-value items and leases of a duration less than 1
year are recognised as an expense in profit or loss on a straight-line basis.
Income taxes
Current income tax assets and liabilities for the current period are measured
at the amount expected to be recovered from or paid to the taxation
authorities based on the tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance sheet date.
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date. Deferred tax is calculated
on an undiscounted basis at the tax rates that are expected to apply in the
period when the liability is settled based on the tax rates and tax laws
enacted or substantively enacted by the balance sheet date.
Deferred tax liabilities are recognised for all taxable temporary differences,
except when the deferred tax liability arises from the initial recognition of
goodwill or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences,
carry forward of unused tax credits and unused tax losses, to the extent that
it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused tax credits
and unused tax losses can be utilised except when the deferred tax asset
relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax asset to be recovered.
Finance costs
Finance costs comprise interest payable on loans from directors and third
parties and are recognised on an accruals basis.
Share-based payments
The group issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value (excluding the
effect of non-market-based vesting conditions) at the date of grant. The fair
value determined at the grant date of the equity-settled share-based payments
is expensed on a straight-line basis over the vesting period, based on the
group's estimate of shares that will eventually vest and adjusted for the
effect of non-market-based vesting conditions
Fair value is measured by use of the Black Scholes Model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural
considerations.
Pension contributions
The company operates a defined contribution scheme for its employees.
Contributions are charged to the Statement of Comprehensive Income in the year
they are payable. The assets of the scheme are held separately from those of
the group.
Financial instruments
Financial assets and financial liabilities are recognised when the Group
becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and
substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged,
cancelled or expires.
Government grants
Government grants are recognised where there is reasonable assurance that the
grant will be received and all attached conditions will be complied with. When
the grant relates to an expense item, it is recognised as income on a
systematic basis over the periods that the costs, which it is intended to
compensate, are expensed. The other income included in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income relates entirely to
government support through the furlough scheme.
Where the grant relates to an asset, it is recognised as income in equal
amounts over the expected useful life of the related asset.
Use of assumptions and estimates
The Group makes judgements, estimates and assumptions that effect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The resulting accounting estimates calculated using these
judgements and assumptions will, by definition, seldom equal the related
actual results but are based on historical experience and expectations of
future events. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision effects only that period, or
in the period of revision and future periods if the revision effects both
current and future periods.
The judgements and key sources of estimation uncertainty that have a
significant effect on the amounts recognised in the financial statements are
discussed below.
Useful economic lives of intangible assets
Intangible assets are amortised over their useful lives. Useful lives are
based on management's estimates, which are periodically reviewed for continued
appropriateness. Changes to estimates can result in variations in the carrying
values and amounts charged to the statement of comprehensive income in
specific periods.
Change in accounting policies
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1st January 2021.
(a) New and amended standards adopted by the Company:
There are no new standards which have had a material impact in the annual
financial statements for the year ended 31 December 2021.
(b) New standards, interpretations, and amendments not yet
effective:
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early. These include:
· Annual Improvements to IFRS Standards 2018-2020 Cycle - IFRS 9 Financial
Instruments and IFRS 16 Leases
· Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting
Policies
· Amendments to IAS 8 - Definition of Accounting Estimates
· Amendments to IAS 12 - Deferred Tax related to Assets and Liabilities arising
from a Single Transaction
4. Segmental reporting
The chief operating decision maker ("CODM") for the purpose of IFRS 8 is the
Board. Segments are determined by reference to the internal reports reviewed
by the Board. The group's operations relate to the provision of technology
solutions to help clients drive revenues and profit.
The Group measures the performance of its operating segments through a measure
of segment profit or loss which is referred to as EBITDA. This measure is
reported to the CODM for the purposes of resource allocation and assessment of
performance. The measure is the same as reported in the historic financial
information.
Information about geographic location by key segments
Year ended 31 December 2021
UK Portugal Total
£000 £000 £000
Revenue 9,191 4,283 13,474
Non-current assets 8,219 1,508 9,727
Year ended 31 December 2020
UK Portugal Total
£000 £000 £000
Revenue 7,013 4,807 11,820
Non-current assets 7,701 1,455 9,156
Information about major customers
Transactions with a single customer exceeding 10% of total revenue amounted to
£2,541k in the year (2020: £1,780k) and related to one customer (2020: 1).
5. Revenue
The analysis of the Group's revenue by geographical destination is set out
below.
2021 2020
£'000 £'000
United Kingdom 8,611 6,506
Europe 271 520
Rest of World 4,592 4,794
13,474 11,820
\
A breakdown of revenue by the two revenue streams as detailed in accounting
policies is shown below:
2021 2020
£'000 £'000
Recurring revenue 10,324 8,566
One off revenue 3,150 3,254
13,474 11,820
Revenue is either recognised at a point in time or over the period of the
contract in line with the accounting policy (note 2).
2021 2020
£'000 £'000
Contract assets 418 99
Contract liabilities 2,498 1,809
\
The following table provides information on contract assets and contract
liabilities from contracts with customers:
Contract assets ("accrued income") are recognised where there are excess of
revenues earned over billings.
Contracts are classified assets when only the act of invoice is pending, there
is an unconditional right to receive cash and only the passage of time is
required as per contractual terms.
Contract liabilities ("deferred income") are recognised when there are
billings in excess of revenues. Contracts are classified as liabilities when
there is an obligation to transfer goods or services to a customer for which
the Group has received consideration from the customer (or the payment is due)
but the transfer has not yet completed. These arise based on the billing cycle
of the Group's revenues and all are expected to be reversed in under one year.
6. Profit on operating activities before taxation
Profit on ordinary activities before taxation is stated after charging:
2021 2020
£'000 £'000
Share based payments 151 91
Exceptional items 667 -
Deprecation of tangible fixed assets
- owned 38 45
Depreciation of right-of-use assets 297 231
Amortisation of intangible assets 746 515
(Profit)/Loss on disposal of right-of-use assets (10) 9
Auditors' remuneration (see note 7) 139 27
Exceptional items relate to costs incurred in relation to the initial public
offering and the admission to the AIM Market of the London Stock Exchange.
7. Auditors remuneration
The analysis of auditors' remuneration is as
follows:
2021 2020
£'000
£'000
Fees payable to the company's auditors for the audit of the company's annual 13 2
accounts
Fees payable to the company's auditors and their associates for other services
to the group
- The audit of the company's subsidiaries pursuant to legislation 27 20
- Tax compliance services 3 3
- Other fees 96 2
Total other services 126 25
8. Employee information
Their aggregate emoluments were:
2021 2020
£'000
£'000
Wages and salaries 6,549 6,200
Social security costs 987 923
Other pension costs 210 202
Other benefits 340 286
8,086 7,611
The average monthly number of employees (including directors) during the year
for the group was as follows:
2021 2020
No.
No.
Selling and administration 22 25
Technical 138 132
160 157
9. Directors' emoluments
2021 2020
£'000
£'000
Aggregate emoluments 896 891
Pension contributions (money purchase schemes) 41 49
937 940
Total directors' emoluments disclosed above is equivalent to total key
management personnel compensation in the period.
Directors' emoluments disclosed above include the following payments to the
highest director:
2021 2020
£'000
£'000
Aggregate emoluments 269 232
Pension contributions (money purchase schemes) 13 11
282 243
2021 2020
No.
No.
Number of directors to whom relevant benefits are accruing under:
Money purchase schemes 4 4
The above is equivalent to total key management personnel compensation. There
were no other key management personnel other than the Directors.
Further details of Directors remuneration can be found in the remuneration
report on pages 21 to 22.
Share based compensation
The Group operates an equity-settled share based compensation plan for
Directors and executives. In accordance with IFRS 1, the Group has elected to
implement the measurement requirements of IFRS 2 in respect of only those
equity-settled share options that were granted after 7 November 2002 and that
had not vested as at 1 January 2005. The fair value of the employee services
received in exchange for the grant of options is recognised as an expense over
the vesting period. The total amount to be expensed over the vesting period is
determined by reference to the fair value of the options granted at the grant
date.
At each year end date, the Group revises its estimate of the number of options
that are expected to vest. It recognises the impact of the revision of
original estimates, if any, in the Statement of Consolidated Income, and a
corresponding adjustment to equity over the remaining vesting period. When
share options are cancelled the Group accounts for the cancellation as an
acceleration of vesting and therefore recognises immediately the amount that
otherwise would have been recognised for services received over the remainder
of the vesting period. The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value) and share
premium when the options are exercised. The fair value of share options has
been assessed using the Black Scholes Model.
No share options were granted to Directors in the period (2020 - 2,000,000).
Included on the face of the Statement of Comprehensive Income, is a total
charge for share based payments of £151,000 (2020: £91,000) which arises
wholly from transactions accounted for as equity settled share based payments.
10. Finance costs
2021 2020
£'000 £'000
Other interest and similar charges 67 114
11. Taxation
(a) Taxation charge:
2021 2020
£'000
£'000
Total current income tax credit charged in the income statement
Research and development tax credit (300) (443)
Portugal corporate tax 40 56
Adjustment in respect of prior years - (63)
Total current income tax (260) (450)
Deferred tax (income) / expense
Current year 234 (44)
234 (44)
Total income tax (26) (494)
(b) Taxation reconciliation:
The current income tax credit for the year is explained below:
2021 2020
£'000
£'000
Profit before tax 226 462
Profit at the standard UK income tax rate of 19% (2020: 19%) 43 88
Effects of:
Expenses not deductible for tax purposes 253 17
Capital allowances in excess of depreciation (45) 2
Tax losses utilised as part of research and development tax credit (300) (443)
Unrelieved tax losses and other deductions arising in the year (112) -
B/fwd losses group relieved (72) -
Adjustment in respect of earlier year - (63)
Difference in overseas tax rates and temporary GAAP differences (27) (63)
Recognition of deferred tax asset in respect of losses 92 (116)
Other deferred tax timing differences 142 84
Total income tax credited in the income statement (26) (494)
(c) Deferred tax
Deferred tax balances consist of the following timing differences
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Deferred tax asset
Acceleration capital allowances-UK (466) (326) (40) -
Tax losses available for carry forward - UK 528 621 95 -
Other timing differences-UK 3 3 - -
65 298 55 -
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Deferred tax asset
Acceleration capital allowances-Portugal (292) (266) - -
Arising on business combinations - UK (210) (235) - -
(502) (501) - -
The Group has not recognised all deferred tax assets in respect of tax losses
due to timing uncertainty regarding the recoverability against future profits.
If all tax losses were recognised the deferred tax asset would increase as
below in each year.
2021 2020
£'000 £'000
Deferred tax asset
Acceleration capital allowances-UK (467) (325)
Tax losses available for carry forward - UK 1,817 1,939
Other timing differences-UK 3 3
Deferred tax asset 1,353 1,617
Increase in deferred tax asset if all losses recognised 1,288 1,319
The movement in deferred tax assets during the period are:
Group
Deferred tax assets Accelerated capital allowances on PPE- UK Accelerated capital allowances on Development costs- UK Tax losses available for carry forward- UK Other timing differences- UK Total
At 31 December 2019 (as restated) (1) (253) 433 3 182
Charged to profit and loss account 2 (73) 187 0 116
At 31 December 2020 1 (326) 620 3 298
Charged to profit and loss account (47) (94) (92) 0 (233)
At 31 December 2021 (46) (420) 528 3 65
Company
Deferred tax assets Accelerated capital allowances on PPE- UK Tax losses available for carry forward- UK Total
At 31 December 2020 - - -
Charged to profit and loss account (40) - (40)
Transferred from Itim Ltd 95 95
At 31 December 2021 (40) 95 55
The movement in deferred tax liabilities during the period are:
Accelerated capital allowances on Development costs- Portugal Timing differences on acquired intangible assets- UK Total
Deferred tax liabilities
At 31 December 2019 (as restated) (182) - (182)
Arising on business combination - (247) (247)
Charged to profit and loss account (84) 12 (72)
At 31 December 2020 (266) (235) (501)
Charged to profit and loss account (26) 25 (1)
At 31 December 2021 (292) (210) (502)
12. Earnings per share
Basic and diluted loss per share is calculated by dividing the profit
attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the period. For the avoidance of doubt the
deferred shares have been excluded as they have no rights to profits or
capital. Additionally, the Company's ordinary shares were subject to a share
consolidation where 5 ordinary shares were converted into 1 ordinary share.
The comparative period weighted average number of shares has been adjusted for
this to aid comparison. The Company's share options have a dilutive effect
over the two year period.
2021 2020
£'000 £'000
Profit after tax for the year 252 956
Exceptional items 667 -
Share option charge 151 91
Adjusted Profit after tax for the year 1,070 1,047
Weighted average number of shares:
Basic - 000 28,536 25,534
Potentially dilutive share options - 000 3,668 3,318
Diluted average number of shares - 000 32,204 28,852
Earnings per share:
Basic - pence on continuing operations 0.88 3.74
Diluted - pence on continuing operations 0.78 3.31
Adjusted earnings - Basic - pence on continuing operations 3.75 4.10
Adjusted Diluted - pence on continuing operations 3.32 3.63
13. Intangible assets
Group Acquired intellectual property rights Customer contracts
Development cost Goodwill
Total
£000 £000 £000 £000 £000
Cost
At 1 January 2021 12,185 8,712 300 1,000 22,197
Foreign exchange differences (150) - - - (150)
Additions 1,351 - - - 1,351
At 31 December 2021 13,386 8,712 300 1,000 23,398
Amortisation
At 1 January 2021 9,167 4,759 15 50 13,991
Foreign exchange differences (72) - - - (72)
Charge for the period 616 - 30 100 746
At 31 December 2021 9,711 4,759 45 150 14,665
Net book value
At 31 December 2021 3,675 3,953 255 850 8,733
At 31 December 2020 3,018 3,953 285 950 8,206
Goodwill arising prior to 1 January 2020 relates to acquisition prior to the
date of transition to IFRS of 1 January 2015 and therefore the exemption for
business combinations completed before that date has been applied and the
amounts not restated.
The Board consider that there is only one Cash Generating Unit. In
accordance with the accounting policy, goodwill is tested annually for
impairment, Management have used a fair value less cost of sales methodology
supported by offers for the Group and consider that the value supports the
carrying value of goodwill at each period end.
Company Development costs
Total
£000 £000
Cost
At 1 January 2021 and at 31 December 2021 13 13
Amortisation
At 1 January 2021 and at 31 December 2021 13 13
Net book value
At 31 December 2021 - -
At 31 December 2020 - -
Development costs for The Retail Suite have been capitalised in accordance
with IAS 38 "Intangible assets". Production commenced in 2008, from which date
the related costs were written off over 7 years.
14. Plant and equipment
Group Fixtures and equipment
Total
£000 £000
Cost
At 1 January 2021 987 987
Foreign exchange differences (7) (7)
Additions 266 266
Disposals (11) (11)
At 31 December 2021 1,235 1,235
Depreciation
At 1 January 2021 934 934
Foreign exchange differences (6) (6)
Charge for the period 38 38
Disposals (11) (11)
At 31 December 2021 955 955
Net book value
At 31 December 2021 280 280
At 31 December 2020 53 53
Company Fixtures and equipment
Total
£000 £000
Cost
At 1 January 2021 16 16
Additions 217 217
At 31 December 2021 233 233
Depreciation
At 1 January 2021 15 15
Charge for the period 5 5
At 31 December 2021 20 20
Net book value
At 31 December 2021 213 213
At 31 December 2020 1 1
15. Investments
The principal subsidiaries of itim Group plc, all of which have been included
in these consolidated financial statements, are as follows:
Company Shares in group undertaking Other investments
Total
£000 £000 £000
Cost
At 1 January 2021 and at 31 December 2021 8,005 46 8,051
Provision for impairment
At 1 January 2021 and at 31 December 2021 2,934 46 2,980
Net book value
At 31 December 2021 5,071 - 5,071
At 31 December 2020 5,071 - 5,071
The company holds more than 20% of the share capital of the following
companies:
Class of share Principal activity Profit/ Net assets/
Subsidiary undertakings Country of Percentage holding (loss) (liabilities)
Incorporation £'000 £'000
ITIM Limited England and 100% Ordinary 'A' Software consultancy and supply 198 (6,952)
Wales Ordinary
Deferred
EDI Plus Limited England and 100% Ordinary Data exchange services 377 921
Wales
Profimetrics Software Solutions S.A Portugal 100% Ordinary Development and distribution of software 285 1,579
Preferred
The registered address of ITIM limited and EDI Plus Limited are same as ITIM
Group Plc.
The registered address of Profimetrics Software Solutions S.A. is R. Lionesa
446, Edifício C Loja L, 4465-671 Leça do Balio, Portugal.
16. Trade and other receivables
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Trade receivables 2,133 2,369 - -
Corporation tax 324 596
Amounts owed by group undertakings due within one year - - 8,359 7,995
Amounts owed by group undertakings due in greater than one year - - 1,908 1,908
Other receivables 333 229 235 -
Loan receivables 210 - 210
Prepayments and accrued income 702 298 26 -
3,702 3,492 10,738 9,903
17. Trade and other payables
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Trade payables 687 592 21 1
Corporation tax 40 - - -
Other taxation and social security 650 1,438 55 89
Other payables 96 27 41 -
Loans and borrowings (see note 19 below) 318 - 318 -
Accruals 929 704 63 -
Deferred income 2,498 1,809 - -
5,218 4,570 498 90
18. Trade and other payables due in more than one year
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Other payables 176 - 176 -
Loans and borrowings (see note 19 below) - 4,011 - 3,762
176 4,011 176 3,762
19. Loans and borrowings
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Loans - 3,658 - 3,408
Accrued interest 318 353 318 354
318 4,011 318 3,762
Loans comprise of:
Secured liabilities - Group
2021 2020
£'000
£'000
External investor - 450
Directors - 770
Unsecured liabilities - Group
External investor - -
Bank loan - CBILs scheme - 250
Deferred considerations - 2,088
Directors - 100
- 3,658
The loans from Directors, the external investor and the bank bears interest at
rates between bank base plus and 3% and LIBOR plus 9%. No interest is charged
on the deferred consideration loan in respect of the EDI Plus Limited
acquisition.
Analysis of maturity of loans and borrowings
Group Company
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Amounts payable
Within one year 318 - 318 -
Within two and five years - 4,011 - 3,762
318 4,011 318 3,762
Net obligations under finance leases
are secured by fixed charges on the assets concerned.
20. Leases
The Group leases five units within properties from which it operates and also
leases computer equipment for the hosting centre. Lease payments are fixed
throughout the contract period.
Right-of-use - Property Right-of-use - Equipment
£'000 £'000 Total
£
Cost
At 1 January 2021 1,118 225 1,343
Foreign exchange differences (18) - (18)
Additions 128 9 137
Disposals (50) - (50)
At 31 December 2021 1,178 234 1,412
Depreciation
At 1 January 2021 422 24 446
Foreign exchange differences (7) - (7)
Charge for the year 301 65 366
Disposals (42) - (42)
At 31 December 2021 674 89 763
Net book value
At 31 December 2021 504 145 649
At 31 December 2020 696 201 897
Lease liabilities:
2021 2020
£'000 £'000
At 1 January 977 1,737
Foreign exchange movement (11) -
Interest expense 42 67
Lease payments (335) (457)
Additions 51 204
Disposals - (574)
At 31 December 2021 724 977
Amounts payable are as follows:
2021 2020
£ £
Due within 1 year 290 248
Due 2-5 years 404 681
Due over 5 years 30 48
Total 724 977
The Company's right of use assets consist of the Company's premises, data
centres' and sundry office equipment. The expiry of the leases varies
between 1 and 8 years.
21. Financial instruments
Financial risk factors
The Group's financial assets comprise cash and cash equivalents, trade
receivables and accrued income. These are all measured at amortised cost. The
financial liabilities comprise loans and borrowings, trade payables and
accruals, lease liabilities and deferred consideration payable for
acquisitions of subsidiaries. These are measured at amortised cost.
The majority of the financial instruments arise directly from the operations
with the exception of loans and borrowings and lease liabilities which have
been used to finance the operations.
Fair values of financial instruments
For the following financial assets and liabilities: trade and other payables,
trade and other receivables and cash at bank and in hand, the carrying amount
approximates the fair value of the instrument due to the short-term nature of
the instrument. The Directors consider that there is no material difference
between book value and fair value for any of the financial instruments held.
Financial risk management
The Group's activities expose the Group to a number of risks including capital
management risk, interest rate risk, foreign exchange risk, credit risk and
liquidity risk.
It is the Group's policy that no trading in financial instruments should be
undertaken.
There have been no substantive changes in the Group's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous periods unless
otherwise stated in this note.
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives
and policies to the Group's finance function. The Board receives monthly
reports from the Finance Department through which it reviews the effectiveness
of the processes put in place and the appropriateness of the objectives and
policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's competitiveness and
flexibility. Further details regarding these policies are set out below:
Interest rate risk
The Group's interest rate exposure arises mainly from the interest bearing
borrowings as disclosed in note 19. All the Group's facilities were at
floating rates, which exposed the entity to cash flow risk. However, given the
low level of borrowings this is not considered material.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations.
The Group's largest financial assets are the cash balances held in banks and
it is exposed to credit risk on those balances. It is the Group's policy only
to make deposits with banks with an acceptable credit rating.
The Group is mainly exposed to credit risk from credit sales. It is Group
policy, implemented locally, to assess the credit risk of new customers before
entering contracts. Such credit ratings are taken into account by local
business practices. An ageing analysis of trade receivables is detailed below:
2021 Total Current 30-60 days > 60 days
£'000 £'000 £'000 £'000
Trade and other receivables 2,133 1,642 117 374
Contract assets 418 418 - -
2,551 2,060 117 374
2020 Total Current 30-60 days > 60 days
£'000 £'000 £'000 £'000
Trade and other receivables 2,369 1,512 336 521
Contract assets 99 99 - -
2,468 1,611 336 521
Trade receivables are recognised initially at the transaction price. They are
subsequently measured less any provision for impairment in relation to
expected credit losses. At each reporting date the Group assesses the expected
credit losses and changes in credit risk since initial recognition of the
receivable and a provision for impairment is recognised when considered
necessary. The Group considers the ageing to be reasonable and has no history
of significant bad debts. No provisions have been made in in these financial
statements. The Board do not consider the credit risk to be significant for
the financial assets currently held.
Foreign exchange risk
Foreign exchange risk arises when individual Group entities enter into
transactions denominated in a currency other than their functional currency.
The Group's policy is, where possible, to allow Group entities to settle
liabilities denominated in their functional (currency). Where Group entities
have liabilities denominated in a currency other than their functional
currency (and have insufficient reserves of that currency to settle them),
cash already denominated in that currency will, where possible, be transferred
from elsewhere within the Group.
The Group's main exposure to foreign currency risk is on the trade receivables
in the Portuguese subsidiary which are not held in Euros. The Directors have
considered the balances at year end and based on the level of foreign currency
balances and the expected timing of settlement of those amounts that the
foreign exchange risk is not material.
Liquidity risk
Liquidity risk is the risk that ITIM Group may encounter difficulty in meeting
its obligations associated with the financial liabilities that are settled by
delivering cash or other financial assets. The Group actively maintains a
mixture of long-term and short-term debt finance that is designed to ensure
the Group has sufficient available funds for operations and planned
expansions.
The Group would normally expect that sufficient cash is generated in the
operating cycle to meet the contractual cash flows through effective cash
management. The maturity analysis of the financial liabilities are included
below:
As at 31 December 2021 Carrying amount 1 year or less 1<2 years 2-5years 5 years
£'000
£'000 £'000 £'000 £'000
Trade and other payables 1,888 1,712 176 - -
Right of use liability 724 290 269 135 30
Other loans and borrowings 318 318 - - -
2,930 2.320 445 135 30
As at 31 December 2020 Carrying amount 1 year or less 1<2 years 2-5years 5 years
£'000
£'000 £'000 £'000 £'000
Trade and other payables 1,323 1,323 - - -
Right of use liability 977 248 391 253 85
Other loans and borrowings 4,012 - 3,911 101 -
6,312 1,571 4,302 354 85
Capital management risk
The Group's main objective when managing capital is to protect returns to
shareholders by ensuring the Group will continue to trade for the foreseeable
future. The Group also aims to optimise its capital structure of debt and
equity so as to minimise its cost of capital. The Group in particular reviews
its levels of borrowing and the repayment dates, setting these out against
forecast cash flows and reviewing the level of available funds.
22. Share capital
2021 2020
£'000 £'000
Authorised:
37,949,651 Ordinary shares of 5p each 1,898 -
189,748,257 Ordinary shares of 1p each - 1,898
110,251,743 Deferred shares of 1p each - 1,102
1,898 3,000
Allotted, called up and fully paid:
2021 2020
£'000 £'000
31,210,607 Ordinary shares of 5p each 1,561 -
127,671,264 Ordinary shares of 1p each - 1,277
110,251,743 Deferred shares of 1p each - 1,102
1,561 2,379
In May 2021, the Company bought back 110,251,743 deferred shares of £0.01
each for £0.01 which were then subsequently cancelled. This reduced share
capital by £1,102,517 and created a capital redemption reserve of the same
value. At the same time, the share premium account was reduced by £10,469,000
and this was credited to the Company's profit and loss reserve.
On 18(th) June 2021 250,000 £0.05 Ordinary shares were issued for
consideration of £19,938. The share premium on the issue was £7,438.
On 28(th) June 2021 231,548 £0.05 Ordinary shares were issued for
consideration of £160,000. The share premium on the issue was £148,422.
On 28(th) June 2021 5,194,806 £0.05 Ordinary shares were issued for
consideration of £8,000,001. The share premium on the issue was £7,740,261.
IPO expenses on the new share issue of £497,641 were written off against the
share premium account.
A summary of the rights of the different classes of share is given below:
Voting
All Ordinary shares are entitled to one vote each. The holders of deferred
shares are not entitled to receive notice of, to attend, to speak or to vote
at any general meeting of the Company.
Dividends
The profits of the Company available for distribution shall be used to pay
dividends to the holders of Ordinary Shares a dividend equivalent to such
amounts as the Directors may determine and as is approved by the Ordinary
Shareholders in general meeting.
23. Reserves
Share premium
This reserve records the amount above the nominal value received for shares
sold, less transaction costs.
Share options reserve
The share options reserves represent the fair value of equity-settled share
options granted using the Black Scholes model.
Capital redemption reserve
This reserve arises on the purchase of the company's own shares.
Foreign exchange reserve
This reserve includes any exchange differences arising on the retranslation of
foreign subsidiaries on consolidation.
Retained earnings
This balance represents the cumulative profit and loss made by the Group net
of distributions to owners.
24. Share-based payments
Share options
The Company has a share option scheme for certain employees of the Group.
Options are granted with a fixed exercise price. The vesting period varies
from vesting immediately to vesting over 2 years from the date of grant. If
the options remain unexercised after a period of ten years from the date of
grant the options expire. Options are forfeited if the employee leaves the
Group before the options vest.
Details of equity settled share options outstanding during the year are as
follows:
Year ended 31 December 2021
Grant date Outstanding at 1 January 2021 Granted Exercised Lapsed Outstanding at 31 December 2021 Exercise period
Share Consolidation
Exercise price
08/08/2011 1,250,000 (1,000,000) - (250,000) - - 10 years 1.595p
14/04/2015 750,000 (600,000) - - - 150,000 10 years 1.595p
10/04/2017 13,075,000 (10,460,000) - - - 2,615,000 10 years 3.000p
31/03/2021 2,000,000 (1,600,000) - - - 400,000 10 years 14.000p
19/04/2021 - - 723,589 (231,548) - 492,041 10 years 70.000p
17,075,000 (13,660,000) 723,589 (481,548) - 3,657,041
Year ended 31 December 2020
Grant date Outstanding at 1 January 2020 Granted Exercised Lapsed Outstanding at 31 December 2020 Exercise period
Exercise price
08/08/2011 1,250,000 - - - 1,250,000 10 years 1.595p
14/04/2015 750,000 - - - 750,000 10 years 1.595p
10/04/2017 13,075,000 - - - 13,075,000 10 years 3.000p
31/03/2021 - 2,000,000 - - 2,000,000 10 years 14.000p
15,075,000 2,000,000 - - 17,075,000
Details of the share options and weighted average exercise price (WAEP) during
the years are as follows:
31 December 2021 31 December 2020
Number WAEP Number WAEP
Outstanding at the beginning of the year 17,075,000 4.124p 15,075,000 2.814p
Share consolidation (13,660,000) 0.000p - -
Granted during the year 723,589 70.000p 2,000,000 14.000p
Exercised during the year (481,548) (37.79) - -
Lapsed during the year - - - -
Forfeited during the year - - - -
3,657,041 28.13p 17,075,000 4.124p
The weighted average contractual life of share options outstanding as at 31
December 2021 was 6 years (31 December 2020: 6 years).
ITIM recognises equity settled share-based payment expenses based on the fair
value determined by the Black Scholes model. The model is internationally
recognised as being appropriate to value employee share options schemes. The
inputs into the option issues were as follows:
Year ended Year ended
31 December 2021 31 December 2020
£000 £000
Share price 78p 14p
Exercise price 69p 14p
Expected volatility 25% 25%
Expected life 10 years 10 years
Risk free rate 0.5% 0.5%
Risk-free rate
The risk-free interest rate is based on the lower of the Bank of England's
base rate and 0.5%.
Volatility
The measure of volatility is based management's estimate after considering the
historical volatility of guideline companies operating within the same
industry as ITIM Group, over a 10-year time period.
25. Company statement of changes in equity
Share capital Share premium Share options Capital Retained losses
£'000 £'000 reserve Redemption £'000
£'000 Reserve Total
£'000 £000
At 1 January 2020 2,379 10,469 213 - (3,062) 9,999
Total comprehensive income for the year - - - - 1,189 1,189
Share options exercised - - 91 - - 91
At 1 January 2021 2,379 10,469 304 - (1,873) 11,279
Total comprehensive income for the year - - - - (501) (501)
Share option charge - - 151 - - 151
Share buyback of deferred shares (1,103) - - 1,103 - -
Cancellation of share premium - (10,469) - - 10,469 -
Shares issued in the period - IPO 260 7,740 - - - 8,000
Share option conversion 25 156 - - - 181
IPO expenses - (498) - - - (498)
At 31 December 2021 1,561 7,398 455 1,103 8,095 18,612
The profit for the year dealt with in the financial statements of the parent
company is shown above. As permitted by section 408 of the Companies Act 2006,
no separate income statement is presented in respect of the parent company.
26. Pension commitments
The group makes contributions to individual pension schemes (money
purchase). The amount paid during the year was £209,553 (2020: £186,920).
Outstanding contributions at the balance sheet date amounted to £26,042
(2020: £23,148).
27. Contingent liabilities
itim Group plc and its subsidiary undertakings have given cross guarantees and
been granted rights to set-off in respect of group undertaking overdrafts and
loans.
The Company is party to a cross guarantee for amounts payable to R M Frosell
of £Nil (2020: £350,000) by the Group.
28. Related party transactions
The Group has taken advantage of the exemption available under IAS 2 Related
Party Disclosures not to disclose details of transactions between Group
undertakings which are eliminated on consolidation.
The loans made from the Directors are detailed in note 19.
29. Supporting statement for cash flows
Year ended 31 December 2021 Brought forward Cash Non Carried forward
flow cash
Loans and borrowings (4,011) 3,757 (64) (318)
Leases (977) 355 (102) (724)
(2,861) 8,160 (169) 5,130
Year ended 31 December 2020 Brought forward Cash Non Acquisition New Carried forward
flow cash of sub loans
Loans and borrowings (1,627) - (46) (2,088) (250) (4,011)
Leases (1,737) 457 303 - - (977)
30. Controlling party
There is no single ultimate controlling party.
Notice of Annual General Meeting
Registered number: 03486926
ITIM GROUP PLC
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the annual general meeting of itim Group plc (the
"Company") will be held at the offices of DMH Stallard LLP, 6 New Street
Square, London EC4A 3BF on 20 June 2022 at 10.00 a.m. to consider and, if
thought fit, to pass the following resolutions, of which resolutions 1 to 11
(inclusive) will be proposed as ordinary resolutions and resolutions 12 and 13
will be proposed as special resolutions. Resolutions 12 to 13 (inclusive) are
items of special business.
ORDINARY RESOLUTIONS
1. To receive the Company's annual accounts for the financial year ended 31
December 2021 together with the directors' report, the directors' remuneration
report and the auditors' report on those accounts.
2. To re-appoint RPG Crouch Chapman LLP as auditors of the Company to hold office
until the conclusion of the next annual general meeting of the Company to be
held in 2023 and to authorise the directors to fix their remuneration.
3. To re-elect Sandra Ribeiro who, having been appointed since the Company's last
annual general meeting, retires in accordance with article 77 of the articles
of association of the Company and who, being eligible, offers herself for
re-election as a director.
4. To re-elect Michael Jackson who, having been appointed since the Company's
last annual general meeting, retires in accordance with article 77 of the
articles of association of the Company and who, being eligible, offers himself
for re-election as a director.
5. To re-elect Justin King who, having been appointed since the Company's last
annual general meeting, retires in accordance with article 77 of the articles
of association of the Company and who, being eligible, offers himself for
re-election as a director.
6. To re-elect Lee Williams who, having been appointed since the Company's last
annual general meeting, retires in accordance with article 77 of the articles
of association of the Company and who, being eligible, offers himself for
re-election as a director.
7. To re-elect Frank Lewis who, having been appointed since the Company's last
annual general meeting, retires in accordance with article 77 of the articles
of association of the Company and who, being eligible, offers himself for
re-election as a director.
8. To re-elect Ian Hayes who, having been appointed since the Company's last
annual general meeting, retires in accordance with article 77 of the articles
of association of the Company and who, being eligible, offers himself for
re-election as a director.
9. To re-elect Mahmood Ali Athar who, having been appointed since the Company's
last annual general meeting, retires in accordance with article 77 of the
articles of association of the Company and who, being eligible, offers himself
for re-election as a director.
10. To re-elect Robert Frosell who, having been appointed since the Company's last
annual general meeting, retires in accordance with article 77 of the articles
of association of the Company and who, being eligible, offers himself for
re-election as a director.
11. That, in substitution for any equivalent existing and unexercised authorities
and powers, the directors of the Company be and they are hereby generally and
unconditionally authorised for the purpose of section 551 of the Companies Act
2006 (the "Act") to exercise all or any of the powers of the Company to allot
shares of the Company or to grant rights to subscribe for, or to convert any
security into, shares of the Company up to an aggregate nominal value of
£520,177 to such persons at such times and generally on such terms and
conditions as the directors may determine (subject always to the articles of
association of the Company), provided that this authority shall, unless
previously renewed, varied or revoked by the Company in general meeting,
expire at the conclusion of the next annual general meeting of the Company to
be held in 2023 or, if earlier, 20 September 2023, save that the directors of
the Company may, before the expiry of such period, make an offer or agreement
which would or might require such securities to be allotted after the expiry
of such period and the directors of the Company may allot such securities in
pursuance of such offer or agreement as if the authority conferred hereby had
not expired.
SPECIAL RESOLUTIONS
12. That, subject to and conditional upon the passing of resolution 11 and in
substitution for any equivalent existing and unexercised authorities and
powers, the directors of the Company be and are hereby empowered pursuant to
sections 570 and 573 of the Act to allot equity securities (as defined in
section 560(1) of the Act) for cash pursuant to the authority conferred upon
them by resolution 11 and/or where the allotment constitutes an allotment of
equity securities by virtue of section 560(3) of the Act, as if section 561 of
the Act did not apply to any such allotment provided that this authority and
power shall be limited to the allotment of equity securities up to an
aggregate nominal amount of £78,027 (representing approximately 5 per cent.
of the current issued share capital of the Company) provided that this
authority shall, unless previously renewed, varied or revoked by the Company
in general meeting, expire at the conclusion of the next annual general
meeting of the Company to be held in 2023 or, if earlier, 20 September 2023,
save that the directors of the Company may, before the expiry of such period,
make an offer or agreement which would or might require such securities to be
allotted after the expiry of such period and the directors of the Company may
allot such securities in pursuance of such offer or agreement as if the
authority conferred hereby had not expired.
13. That the Company be and is hereby generally and unconditionally authorised for
the purpose of section 701 of the Act to make market purchases (within the
meaning of section 693(4) of the Act) of ordinary shares in the capital of the
Company ("Ordinary Shares") provided that:
a) the maximum aggregate number of Ordinary Shares which may be purchased is
3,121,060 (representing approximately 10 per cent. of the Company's existing
issued share capital);
b) the minimum price (exclusive of expenses) which may be paid for each Ordinary
Share is £0.05 (being its nominal value);
c) the maximum price (exclusive of expenses) which may be paid for each Ordinary
Share is the higher of: (i) an amount equal to 105 per cent. of the average of
the middle market quotations for an Ordinary Share as derived from the Daily
Official List of the London Stock Exchange plc for the 5 business days
immediately preceding the day on which the Ordinary Share in question is
purchased; and (ii) the value of an Ordinary Share calculated on the basis of
the higher of the price quoted for the last independent trade of an Ordinary
Share and the highest current independent bid for an Ordinary Share as derived
from the London Stock Exchange Trading System;
d) unless previously renewed, revoked or varied, the authority hereby conferred
shall expire at the conclusion of the next annual general meeting of the
Company to be held in 2023 or, if earlier, 20 September 2023; and
e) the Company may make a contract or contracts to purchase Ordinary Shares under
the authority hereby conferred prior to the expiry of such authority which
contract or contracts will or may be executed wholly or partly after the
expiry of such authority, and may make a purchase of Ordinary Shares in
pursuance
BY ORDER OF THE BOARD
Ian Hayes
Secretary
Date: 11(th) May 2022
Registered office: 2(nd) Floor Atlas House, 173 Victoria Street, London, SW1E
5NH
NOTES:
1. Pursuant to the Company's Articles of Association, a member of the Company
entitled to attend and vote at the meeting convened by this notice is entitled
to appoint one or more proxies to exercise any of his rights to attend, speak
and vote at that meeting on his behalf.
2. If a member appoints more than one proxy, each proxy must be entitled to
exercise the rights attached to different shares. If you submit more than one
valid proxy appointment in respect of the same shares, the appointment
received last before the latest time for the receipt of proxies will take
precedence.
3. A proxy may only be appointed using the procedures set out in these notes and
the notes to the form of proxy. To validly appoint a proxy, a member must
complete, sign and date the enclosed form of proxy and deposit it at the
office of the Company's registrars, Neville Registrars, at Neville House,
Steelpark Road, Halesowen, West Midlands B62 8HD, by 10.00 a.m. on 16 June
2022 (or, in the event that the meeting is adjourned, not less than 48 hours,
excluding non-working days, before the time fixed for the holding of the
adjourned meeting). Any power of attorney or any other authority under which
the form of proxy is signed (or a duly certified copy of such power or
authority) must be enclosed with the form of proxy.
4. In order to revoke a proxy appointment, a member must sign and date a notice
clearly stating his intention to revoke his proxy appointment and deposit it
at the office of the Company's registrars, Neville Registrars, at Neville
House, Steelpark Road, Halesowen, West Midlands B62 8HD prior to commencement
of the meeting. If the revocation is received after the time specified, the
original proxy appointment will remain valid unless the member attends the
meeting and votes in person.
5. Pursuant to the Articles of Association, any corporation which is a member of
the Company may authorise one or more persons (who need not be a member of the
Company) to attend, speak and vote at the meeting as the representative of
that corporation. A certified copy of the board resolution of the corporation
appointing the relevant person as the representative of that corporation in
connection with the meeting must be deposited at the office of the Company's
registrars, Neville Registrars, at Neville House, Steelpark Road, Halesowen,
West Midlands B62 8HD prior to the commencement of the meeting. If the
revocation is received after the time specified, the original corporate
representative appointment will remain valid unless the member attends the
meeting and votes in person.
6. In the case of joint holders, where more than one of the joint holders
purports to appoint a proxy in respect of the same shares, only the
appointment submitted by the most senior holder will be accepted. Seniority is
determined by the order in which the names of the joint holders appear in the
Company's register of members in respect of the joint holding (the first named
being the most senior).
7. The right to vote at the meeting shall be determined by reference to the
register of members of the Company. Pursuant to Regulation 41 of the
Uncertificated Securities Regulations 2001 (as amended), only those persons
whose names are entered on the register of members of the Company at 6.00 p.m.
on 16 June 2022 (or, in the event of any adjournment, at 6.00 p.m. on the date
which is two business days prior to the adjourned meeting) shall be entitled
to attend and vote in respect of the number of shares registered in their
names at that time. Changes to entries on the register of members after that
time shall be disregarded in determining the rights of any person to vote at
the meeting.
8. CREST members who wish to appoint a proxy or proxies through the CREST
electronic proxy appointment service may do so for the meeting and any
adjournment(s) thereof by using the procedures described in the CREST Manual
(available via www.euroclear.com (http://www.euroclear.com) ). CREST personal
members or other CREST sponsored members, and those CREST members who have
appointed a voting service provider(s), should refer to their CREST sponsor or
voting service provider(s), who will be able to take the appropriate action on
their behalf.
9. In order for a proxy appointment or instruction made by means of the CREST
service to be valid, the appropriate CREST message (a "CREST Proxy
Instruction") must be properly authenticated in accordance with Euroclear UK
& Ireland Limited's ("Euroclear") specifications and must contain the
information required for such instructions, as described in the CREST Manual.
The message, regardless of whether it constitutes the appointment of a proxy
or is an amendment to the instruction given to a previously appointed proxy
must, in order to be valid, be transmitted so as to be received by the
Company's agent (ID 7RA11) by the latest time for proxy appointments set out
in paragraph 3 above. For this purpose, the time of receipt will be taken to
be the time (as determined by the timestamp applied to the message by the
CREST Applications Host) from which the Company's agent is able to retrieve
the message by enquiry to CREST in the manner prescribed by CREST. After this
time any change of instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
10. CREST members and, where applicable, their CREST sponsors or voting service
providers should note that Euroclear does not make available special
procedures in CREST for any particular messages. Normal system timings and
limitations will therefore, apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take
(or, if the CREST member is a CREST personal member or sponsored member or has
appointed a voting service provider(s), to procure that his CREST sponsor or
voting service provider(s) take(s)) such action as shall be necessary to
ensure that a message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where applicable,
their CREST sponsors or voting service providers are referred, in particular,
to those sections of the CREST Manual concerning practical limitations of the
CREST system and timings. The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001 (as amended).
11. As at 10(th) May 2022, the latest practicable date prior to the date of this
notice, the Company's issued share capital consisted of 31,210,607 ordinary
shares of £0.05 each, carrying one vote each and, therefore, the total number
of voting rights in the Company as at 10(th) May 2022 were 31,210,607.
12. You may not use any electronic address (within the meaning of section 333(4)
of the Companies Act 2006) provided in this notice or in any related documents
(including the form of proxy and the annual report and accounts) to
communicate with the Company for any purposes other than those expressly
stated.
13. Your personal data includes all data provided by you, or on your behalf, which
related to you as a shareholder, including your name and contact details, the
votes you cast and your reference number (as attributed to you by the Company
or its registrars). The Company determines the purposes for which, and the
manner in which, your personal data is to be processed. The Company and any
third party to which it discloses the data (including the Company's
registrars) may process your personal data for the purposes of compiling and
updating the Company's records, fulfilling its legal obligations and
processing the shareholder rights you exercise.
EXPLANATORY NOTES:
Resolutions 1 to 11 (inclusive) are proposed as ordinary resolutions. For each
of these to be passed, more than half of the votes cast must be in favour of
the relevant resolution.
Resolutions 12 and 13 are proposed as special resolutions. For each of these
resolutions to be passed, at least three quarters of the votes cast must be in
favour of the resolution. An explanation of each of the resolutions is set out
below:
Resolution 1 - Annual Report and Accounts
The Directors are required to present to the annual general meeting the
audited accounts and the Directors' and Auditors' Reports for the financial
year ended 31 December 2021.
Resolutions 2 - Auditors
The Company is required to appoint an auditor at every general meeting of the
Company at which accounts are presented to shareholders. The appointment of
RPG Crouch Chapman LLP. Accordingly, this resolution proposes the
re-appointment of RPG Crouch Chapman LLP as the auditors of the Company. It is
normal practice for a company's directors to be authorised to agree how much
the auditors should be paid and Resolution 2 grants this authority to the
directors.
Resolutions 3 to 10 - Re-election of Directors
Article 77 of the Company's articles of association requires any directors who
have been appointed by the Board since the last annual general meeting and any
directors who were not appointed or reappointed at one of the preceding two
annual general meetings to retire from office. Any such director is entitled
to offer himself for re-election.
Resolutions 11 and 12 - Directors' general power to allot relevant securities
Resolution 11 is proposed to renew the directors' power to allot shares.
Resolution 11 seeks to grant the directors authority to allot, pursuant to
section 551 of the Act, shares or grant rights to subscribe for or to convert
any security into shares in the Company up an aggregate nominal value of
£520,177 which is equal to one third of the nominal value of the current
issued ordinary share capital of the Company as at 10(th) May 2022 (being the
latest practicable date prior to the publication of this notice). Unless
previously renewed, revoked or varied, the authorities sought under this
resolution will expire at the conclusion of the next annual general meeting of
the Company next annual general meeting of the Company to be held in 2023 or
20 September 2023 (whichever is the earlier). The Directors have no present
intention of exercising either of the authorities under this resolution, but
the Board wishes to ensure that the Company has maximum flexibility in
managing the financial resources of the Company. As at the date of this
notice, no shares are held by the Company in treasury.
Resolution 12 is to approve the partial disapplication of pre-emption rights
in respect of the allotment of equity securities for cash. The passing of this
resolution (together with resolution 11) would allow the directors to allot
shares for cash and/or sell treasury shares without first having to offer such
shares to existing shareholders in proportion to their existing holdings. The
authority would be limited to allotments or sales up to an aggregate nominal
amount of £78,027 which represents approximately 5 per cent. of the nominal
value of the current issued ordinary share capital of the Company as at 10(th)
May 2022 (being the latest practicable date prior to the publication of this
notice). Unless previously renewed, revoked or varied, the authorities sought
under this resolution will expire at the conclusion of the next annual general
meeting of the Company next annual general meeting of the Company to be held
in 2023 or 20 September 2023 (whichever is the earlier).
Resolution 13 - Authority for the market purchase by the Company of its own
shares
The authority sought by resolution 13 limits the number of shares that could
be purchased to a maximum of 3,121,060 ordinary shares (equivalent to 10 per
cent. of the Company's issued ordinary share capital as at 10(th) May 2022
(being the latest practicable date prior to the publication of this notice))
and sets a minimum and maximum price. Unless previously renewed, revoked or
varied, the authority will expire at the conclusion of the annual general
meeting of the Company to be held in 2023 or 20 September 2023 (whichever is
the earlier). The Directors have no present intention of exercising the
authority to purchase the Company's ordinary shares but will keep the matter
under review, taking into account the financial resources of the Company, the
Company's share price and future funding opportunities. The Directors will
exercise this authority only when to do so would be in the best interests of
the Company and of its shareholders generally, and could be expected to result
in an increase in earnings per share of the Company. Any purchases of ordinary
shares would be by means of market purchase through the London Stock Exchange
plc. Any shares the Company buys under this authority may either be cancelled
or held in treasury. Treasury shares can be re-sold for cash, cancelled or
used for the purposes of employee share schemes. No dividends are paid on
shares whilst held in treasury and no voting rights attach to treasury shares.
The Directors believe that it is desirable for the Company to have this choice
as holding the purchased shares as treasury shares would give the Company the
ability to re-sell or transfer them in the future and so provide the Company
with additional flexibility in the management of its capital base.
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