REG - Maintel Holdings PLC - 2024 Annual Audited Results
06/05/2025 07:00
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RNS Number : 3288H Maintel Holdings PLC 06 May 2025
6 May 2025
Maintel Holdings Plc
("Maintel" or the "Company")
Annual audited results for the year ended 31 December 2024
Significantly improved profitability and underlying organic growth,
delivered through continued transformation progress and strategy execution
results
Maintel Holdings Plc, a leading provider of cloud and managed communications
services, announces its audited results for the 12-month period to 31 December
2024.
Key Financials
Annual results for the year to 31 December: 2024 2023 % change
Group revenue (£'m) 97.9 101.3 (3.4%)
Gross profit (£'m) 30.6 31.2 (1.9%)
Adjusted EBITDA( 1 ) (£'m) 10.5 9.1 15.4%
Profit/(loss) before tax (£'m) 0.4 (6.8) 105.9%
Adjusted profit before tax ( 2 ) (£'m) 7.3 5.5 32.7%
Basic earnings / (loss) per share (p) 3.6 (37.3) 109.7%
Adjusted earnings per share ( 3 ) (p) 28.2 23.6 19.5%
Net debt( 4 ) (£'m) (16.6) (18.1) 8.3%
Highlights
· The revenue performance represented underlying growth of 8.2%. Group revenue
was £97.9m (2023: £101.3m). While this represented a reported decrease of
3.4%, revenue in 2023 was flattered by the late delivery of £10.8m in sales
orders secured in 2021 and 2022 but delayed due to supply chain shortages
during the pandemic.
· Recurring revenue represented 75% of total revenue (2023: 74%).
· The Group continued to successfully execute its strategic pivot away from a
communications generalist to a specialist, focused on three key strategic
pillars; Unified Communications & Collaboration, Customer Experience and
Security & Connectivity.
· As announced during the year, the Group won multi-year, multi-million pound
contracts with a leading housing and care provider, one of Europe's leading
credit management companies, one of the UK's largest insurance companies, one
of the UK's leading providers of affordable dental care, a global IT and
business consulting services company, and the Leeds Teaching Hospital NHS
Trust, one of the largest and busiest acute hospital trusts.
· Gross profit was £30.6m (2023: £31.2m), a decrease in line with the revenue
performance. However, gross margin expanded to 31.3% (2023: 30.9%) driven by
price, active cost control and revenue mix.
· Adjusted EBITDA increased by 15.4% to £10.5m (2023: £9.1m), which reflected
the margin expansion, compounded by the full run-rate of the benefits from the
restructuring programme completed in 2023 and ongoing cost control activities.
Adjusted EBITDA margin increased to 10.7% (2023: 9.0%).
· Basic earnings per share at 3.6p (2023: loss per share at 37.3p) flows from
improved profitability of operations, the reduction in restructuring costs,
the reduction in amortisation of intangibles, and a lower interest charge in
line with the evolution of the Bank of England base rates.
· Net debt( 4 ) substantially decreased to £16.6m, down 8.3% (2023: £18.1m)
due to higher cashflow generated from operations of £8.5m (2023: £5.0m)
supported by improved profitability and well managed working capital.
Operational Highlights
· The Group's performance benefited from the consolidation of operational
savings derived from the organisational and strategic restructure in 2023.
· Key growth areas of Cloud Communications, particularly customer experience,
data connectivity and security.
· Total Contract Value in new business from existing and new customers was over
£45 million, with 79% of new sales bookings within the three strategic
pillars.
· Cloud recurring revenues grew by 7.9% to £17.3 million (2023: £16.0
million), with the majority of growth coming from cloud contact centre
services, reflecting the Group's intentional move towards quality of earnings
over high seat count, lower margin contracts.
· Data connectivity and security recurring revenues grew by 8.1% to £19.9
million (2023: £18.4 million), driven by continued success in the Software
Defined Wide Area Networking (SD-WAN) space, including the largest contract
win in the company's history.
· Maintel Application Platform launched providing a consistent, secure, and
rapid way to develop, deploy and manage the Group's proprietary software based
Intellectual Property, and used to enhance, differentiate, integrate and
complement the core platforms and services provided by their strategic
software partners.
· Enhanced new Security & Connectivity services launched, powered by
Fortinet & Zscaler, and a new Cyber Incident Response service which
further enhances this strategic pillar offering.
· Relaunched Maintel brand to reflect strategic pivot from a generalist Managed
Services Provider to a highly skilled specialist across three high-growth
technology segments.
· Maintel nominated for Managed Service Provider of the Year at the Comms
Business Awards and the CRN Awards.
· Changes to the Board composition included the appointment of two Non-Executive
Directors and the continuation of the search for an experienced independent
Non-Executive Chairman. A permanent Chief Executive Officer was appointed
after the end of the reporting period.
Notes
1 Adjusted EBITDA is EBITDA of £8.2m (2023: £2.0m), adjusted for
exceptional items (note 12) and share based payments (note 27).
2 Adjusted profit before tax of £7.3m (2023: £5.5m) is basic profit/(loss)
before tax adjusted for amortisation of intangibles, exceptional items and
share based payments.
3 Adjusted earnings/(loss) per share is basic earnings per share of 3.6p
(2023: loss per share of 37.3p), adjusted for amortisation of acquired
intangibles, exceptional items, share based payments and deferred tax items
related to fixed assets acquired in prior years (note 10). The weighted
average number of shares in the period was 14.4m (2023: 14.4m).
4 Interest bearing debt (including issue costs of debt and excluding lease
liabilities) minus cash. Current year net debt includes £20.0m RCF and £0.8m
Term loan.
Commenting on the Group's results, Dan Davies, Chief Executive Officer, said:
"It is an exciting time for Maintel as we progress our business transformation
plan, pivoting the Group from a generalist to a highly skilled specialist
operating across three high-growth technology segments and we are pleased to
report significantly improved profitability and underlying organic growth in
2024, delivered through continued transformation progress and execution of our
strategy.
"While, like many, Maintel faces widely publicised macroeconomic headwinds in
the coming year, we continue to show resilience in a difficult market due to
the mission critical nature of the communications services we provide,
alongside our high levels of customer loyalty and contracted recurring
revenue. The Board remains confident that it can build on the encouraging
progress made across all aspects of the business during 2024 and meet market
expectations for 2025 but is again expecting the performance to be weighted
towards the second half of the year. The journey from a generalist Managed
Service Provider to a highly skilled specialist continues to well-position
Maintel for the future."
Publication of annual report/posting and Notice of Annual General Meeting
The Company's 2025 Annual General Meeting will be held at 10.30 am on 3 June
2025 at the offices of Hudson Sandler, 25 Charterhouse Square, London EC1M
6AE.
The 2024 Annual Report and Notice of AGM, together with a form of proxy, will
be posted to the Company's shareholders no later than 9 May 2025 and will be
available on the Company's website, www.maintel.co.uk/investors
(http://www.maintel.co.uk/investors) .
For further information, please contact:
Maintel Holdings PLC Tel: 0344 871 1122
Dan Davies, Interim Chief Executive Officer
Gab Pirona, Chief Financial Officer
Cavendish (Nomad and Broker) Tel: 020 7220 0500
Jonny Franklin-Adams / Hamish Waller (Corporate Finance)
Sunila de Silva (Corporate Broking)
Hudson Sandler (Financial PR) Tel: 020 7796 4133
Wendy Baker / Nick Moore m (mailto:maintel@hudsonsandler.com) aintel@hudsonsandler.com
(mailto:maintel@hudsonsandler.com)
Notes to editors
Maintel Holdings Plc ("Maintel") is a leading provider of cloud
communications, security and connectivity managed communications services to
the UK public and private sectors. Its services aim to help its clients create
customer experiences, services and workplaces that inspire and empower people,
with a focus across three strategic pillars of technology:
· Unified Communications and Collaboration - Making customers' people
more effective, efficient, and collaborative with UC&C technology. The
core focus of this pillar is the high growth Unified Communications as a
Service (UCaaS) market segment.
· Customer Experience - Helping customers to acquire, delight and
retain their customers using customer experience technology. The core focus of
this pillar is the high growth Contact Centre as a Service (CCaaS) market
segment.
· Security & Connectivity - Securely connecting customers'
people, partners and guests to their cloud platforms, applications, and data
with secure connectivity, and protecting their business from cyber threat. The
core focus of this pillar is the high growth Software Defined Wide Area
Networking (SD-WAN) and Security Service Edge (SSE) segments.
Maintel combines technology from its strategic, global technology vendor and
carrier partners, with its own Intellectual Property, deployed from and
managed by its own platforms, to provide seamless solutions that its customers
can consume without the need for the internal skillset required to design,
deploy and manage the technology themselves.
Maintel serves the whole market, with a particular focus on key verticals of
Financial Services, Retail, Public Healthcare, Local Government, Higher
Education, Social Housing and Utilities. Its core market constitutes
organisations with between 250 and 10,000 employees in the private, public and
not-for-profit sectors with headquarters in the UK.
The Company was founded in 1991 and it listed on London's AIM market in 2004
(AIM: MAI).
CHIEF EXECUTIVE OFFICER'S STATEMENT
Introduction
It is an exciting time for Maintel as we progress our business transformation
plan, pivoting the Group from a generalist to a highly skilled specialist
operating across three high-growth technology segments. This refocused
strategy was underpinned by the relaunch of the Maintel brand in November
2024, which successfully framed the strategy for the Company's people,
customers and prospects.
The Group is pleased to report significantly improved profitability and
underlying organic growth in 2024, delivered through continued transformation
progress and execution of our strategy. We made good progress in evolving both
our market positioning and offering which, I believe, puts us in an even
stronger position to support our customers with their managed service and
vital communications needs.
Strategic priorities and growth
Our growth strategy is focused on further establishing Maintel as the
best-in-class specialist Managed Service Provider across our three strategic
pillars and technology segments of Unified Communications & Collaboration,
Customer Experience and Security & Connectivity. In the UK, the market
size for these pillars is between £400 million and £1.2 billion and each is
forecast to have double-digit compound annual growth rates. These focus
pillars sit within wider technology segments that represent around a £7.6
billion opportunity in the UK (market size and CAGR 2022-2026 - Source: Altman
Solon 2023).
Our sales and marketing activities are focused on promoting our expertise in
these growth technology segments across the Financial Services, Public Sector,
Retail and Utilities vertical markets, all of which offer the Group
significant growth potential.
Our strong relationships with strategic technology vendor partners and
carriers, which form the core of the services we offer our customers, have
been complemented by growing Maintel's consultancy and advisory capabilities
and proprietary technologies.
In 2024, our first year following the completion of the business review and
organisation restructuring, the Group demonstrated its ability to expand
revenue streams across our strategic pillars, enhance product offerings,
improve the quality and predictability of earnings, drive recurring revenues,
enhance adjusted EBITDA margin and lower debt.
In November 2024, we relaunched the Maintel brand to better reflect our
strategic focus and evolved market positioning. It brings our strategy to life
for our people, our customers, and our prospects. We are laser-focused on our
new purpose which is to use technology to create customer experiences,
services and workplaces that empower and inspire people, and to continue
delivering Solid Solutions for a Dynamic World.
2024 financial performance
In line with guidance at the half year, the Group's financial performance was
weighted towards the second half due to a number of high-value new contract
wins closing later in H1 2024 than initially anticipated. The benefits of
these multi-year contracts were realised from the end of the first half year,
through the second half of the year. The 2024 top line performance also
suffered from the slowdown in the sales momentum and pipeline generation
following the necessary organisational restructure in 2023.
Total revenue was £97.9 million (2023: £101.3 million). While lower than in
2023 this represents year-on-year underlying organic growth of 8.2%, due to
the revenue performance in 2023 being flattered by the unwinding of the order
book built up during the period impacted by global semiconductor shortages.
Adjusted EBITDA increased by 15.3% to £10.5 million. This significant
improvement was driven by significant new contract wins, which combined
amounted to more than £45 million in Total Contract Value (TCV), annualised
benefits from the organisational restructuring completed in 2023 and price
increases.
Our focus on the quality of earnings, combined with the organisational
streamlining and continued tight cost controls, provides the Group with the
foundations for sustainable future profitability. As a result, the adjusted
EBITDA margin improved to 10.8% (2023: 9.0%).
Our commitment to deleveraging remained a focus during the year. Net Debt
(excluding IFRS16 lease liabilities) at 31 December 2024 improved by 8.3% to
£16.6 million (2023: £18.1 million), which reflected strong cash generation,
with our rigorous working capital management process supporting strong cash
conversion, balanced with transformation and investment requirements.
Further details are set out below in the Business Review.
Operational progress
In 2024 the Company maximised the benefits of the organisational
transformation work we executed in 2023, whilst building on this with the next
phase of our transformation - focussing on building our talent pool, our
positioning, brand awareness, operational modernisation and completing the
build-out of our renewed marketing and business development engine.
The continued execution of our generalist to specialist strategic pivot has
been extremely encouraging, evidenced by key leading indicators such as a high
percentage of pipeline and new wins in both our strategic segments and our
target industry verticals, the increased quality of those new wins in both
technology and margin terms, and increased customer experience scores.
New business wins
It's extremely pleasing to see that our strategic high-growth technology
pillars, and the identified target industry verticals where we believe they
resonate the strongest, are proving to be a success, with strong wins across
each pillar and each vertical. In 2024, significant contracts were secured
from both existing and new customers, with 79% of all new sales bookings
within our pillars of Unified Communications & Collaboration, Customer
Experience and Security & Connectivity, and these wins have contract
lengths of two to five years, building our recurring revenues.
New contract wins include a leading housing and care provider, one of Europe's
leading credit management companies, one of the UK's largest insurance
companies, one of the UK's leading providers of affordable dental care, a
global IT and business consulting services company, and the Leeds Teaching
Hospital NHS Trust, one of the largest and busiest acute hospital trusts.
Proprietary intellectual property
As we deepen our consultancy and advisory capabilities, we continue to develop
our own intellectual property (IP), focused on enhancing the solutions we can
offer customers, improving the customer experience and supporting Maintel's
operational efficiency.
We launched our innovative Maintel Application Platform in March 2024, which
provides a consistent, secure, and rapid platform to develop, deploy and
manage the Group's software-based IP. This IP is deployed alongside Vendor
Alliance & Carrier Partners services, enhancing the offer from our key
technology partners, which differentiates and benefits Maintel and our
partners, and it delivers a transformational capability for all Cloud
Communications customers. Audiosafe, our first fully productised app delivered
through the Maintel Application Platform, provides a centralised call
recording archive, legacy migration and playback service, supporting multiple
cloud communication platforms and legacy call recording applications. This
allows customers to automatically export, archive, search and filter all their
call recordings, and retain them for as long as needed.
We launched a new and enriched digital customer portal, Maintel Portal
(formerly ICON Portal) in August. This digital customer engagement platform
provides customers with a single point for all support and in-life management
including monitoring status, support ticketing, analytics and insights,
providing a seamless and integrated user experience. The updated version
included significant upgrades and enhancements to improve the experience for
our customers and streamline our services, including a sleek, modern look and
feel, user-friendly layout, focused navigation and the ability to discover new
services.
New managed service products
During the year, new Security & Connectivity services powered by Fortinet
& Zscaler, and a new Cyber Incident Response service, were launched. Both
these broaden the service offering to customers across this strategic pillar
and allow us to take a more independent, consultative approach by broadening
the partners we work with in this space.
Research and Development
Our R&D capability represents one of our most tangible differentiators. In
2024, we invested £1.6 million (2023: £1.6 million) in research and
development activities.
We invest each year to enhance and complement the technologies we utilise from
our global software and hardware strategic vendor partners, to create the
services we deliver. As a direct benefit for our clients, taking a service
based on a particular vendor technology from Maintel will be both different
and superior compared to a more standard solution delivered by another
provider using same vendor's technology. These innovations include both Apps
that enhance our solutions and deliver unique outcomes for our customers, and
integrations that tie our solutions tightly into our customers application
ecosystems and business workflows. This not only enhances the service we
deliver but also encourages customers to stay with Maintel for longer, in
order to enjoy the unique benefits that they can only receive by taking their
vital digital communications services from us.
The Board
I was pleased to be appointed Chief Executive Officer in February 2025,
following a year as Interim Chief Executive Officer, and having previously
been Chief Technology Officer and an Executive Director since 2020.
There were a number of Board changes during the year, with Carol Thompson
(Executive Chair) and John Booth (Deputy Chair) leaving the Board, and we
welcomed both Bob Beveridge and Angus McCaffery to the Board in July 2024.
Also, during the year, Clare Bates was appointed as Senior Independent
Director.
Our Board now consists of three Non-Executive Directors (two of whom are
independent) and two Executive Directors. Together we have an excellent
range of skills and experience that will support the future development and
growth of the Company, which will be further complemented by the addition of
an experienced independent non-executive Chair.
Sustainability approach
Our sustainability strategy is not only about compliance but also about
creating long-term value for the business, stakeholders, and society. Our
well-structured approach drives innovation, enhances reputation, fosters trust
with our stakeholders, and contributes to sustainable development. We are
committed to integrating environmental sustainability, social responsibility
and strong governance into our operations and culture. Through continuous
improvement and transparent reporting, we aim to drive positive change in both
our business and the world around us, creating long-term value for our
stakeholders and the planet.
Our People
Our people are what have made our achievements this year possible. Our
customer-centric approach is fundamental to our strategy, and our people have
embraced this ethos and are focused on providing innovative solutions and
best-in-class client service which supports organisations to run more
efficiently and securely.
Our people inspire me every day. On behalf of the Board, I would like to thank
them for their unwavering support and dedication to Maintel and our customers
throughout 2024.
Current Trading and Outlook
The focus in the first quarter of the year has been around the planning and
initial execution of the next phase of our transformation, which concentrates
on continued pipeline growth across our focus technology pillars, internal
process and system efficiency, spend optimisation and operational gearing.
Notably, our progress in pipeline growth and sales target coverage are already
delivering tangible results.
While, like many, Maintel faces widely publicised macroeconomic headwinds in
the coming year, we continue to show resilience in a difficult market due to
the mission critical nature of the communications services we provide,
alongside our high levels of customer loyalty and contracted recurring
revenue. The Board remains confident that it can build on the encouraging
progress made across all aspects of the business during 2024 and meet market
expectations for 2025 but is again expecting the performance to be weighted
towards the second half of the year. The journey from a generalist Managed
Service Provider to a highly skilled specialist continues to well-position
Maintel for the future.
Dan Davies
Chief Executive Officer
OUR REDEFINED VALUE PROPOSITION
The need to redefine our value proposition
Maintel initiated a full strategic review of the business at the end of 2022
as part of a broader and comprehensive transformation plan. While acquisitions
made in previous years, notably Azzurri Communications and Intrinsic
Technology, positioned the Group as a generalist Managed Services Provider,
this presented several challenges for the Group. The market in which the Group
operated continued to evolve, particularly the Group's market offering
cut-through and rising competition from larger generalists and more
specialised market players.
The thorough strategic review, undertaken with the support of a third-party
consultancy in the first quarter of 2023, provided a full analysis of the
Group's market opportunity and competitive landscape, and identified strategic
options.
Transformation Overview
Area Objective Some of our achievements in FY24
Brand Develop a powerful brand, supported by top quartile accreditations and · Brand refresh launched.
recognised by awards
· New customer collateral suite launched.
· New, innovative website launched.
· Nominated for "MSP of the Year" at both Comms Business and CRN
awards.
Customers, Go to Market & pipeline Delight our customers, increase retention rates, expand into the whitespace · New logo sales team embedded, developing pipeline and closing
within existing customers, attract new customers and build pipeline coverage initial deals.
· New retention manager role created, identified customers needing
additional support and created initial retention strategy.
· Sales and Pre-Sales enablement for whitespace opportunity
identification.
· New sales methodology implemented.
· Refocused Marketing and Sales Development teams on lead/revenue
generation.
Product offering To build out new products and services within our focus pillars, and develop · Launched new Maintel Application Platform.
our own intellectual property that complements and enhances them.
· Developed and launched Audiosafe call recording archive &
migration App.
· Launched Fortinet based SD-WAN and Zscaler based Security Service
Edge managed services.
· Launched new 8-step consultancy led engagement model
· Launched new Cyber Incident Response service.
People, Systems & Processes Build a highly skilled, future-focused and engaged team, empowered though the · Significant progress in infrastructure modernisation and
digital transformation of our systems and processes strengthening of our security posture
· Completed first phase of our operational modernisation programme
· High talent recruits at senior level
· New internal comms strategy implemented
Our Value Proposition explained
The comprehensive strategic review concluded in early 2023. The Group began to
implement the subsequent and ongoing transformation plan, which included a
significant organisational restructure and cost reduction programme in
2023/24.
Today, Maintel is a leaner and more focused organisation repositioned from a
Managed Services Provider generalist to a highly skilled and focused
specialist, positioning it for greater market cut-through. The Group provides
mission critical services to our customers, which fundamentally underpin their
ability to thrive in a dynamic hybrid working and multi-cloud world. Our
strategic pillars are:
· Unified Communications & Collaboration
· Customer Experience
· Security & Connectivity
BUSINESS REVIEW
2024 Results
Following the rebranding of Maintel and the renaming of our products and
service lines, the terminology applied for our reporting has aligned with the
new branding and provides greater clarity.
In the table, the old names are mapped to the new names:
Old Name New Name
Division Product Line Division Product Line Revenue type
Managed Services & Technology Division Technology Project and on-premise managed Services Project Revenue Non-recurring
Managed Services & Technology Division Managed Services Project and on-premise managed Services On-premise managed services Recurring
Network Services Division Call traffic & Line Rental Network Services Division Voice Network Services Recurring
Network Services Division Data Connectivity Services Network Services Division Security and Connectivity Services Recurring
Network Services Division Cloud Network Services Division Cloud Communication Services Recurring
Mobile Division Mobile Mobile Division Mobile Recurring
Revenues decreased by 3.4% to £97.9m (2023: £101.3m) and adjusted EBITDA
increased by 15.4% to £10.5m (2023: £9.1m). Recurring revenue as a
percentage of total revenue (being all revenue excluding one-off projects)
amounted to £73.3m (2023: £75.0m), representing 75% of total revenues (2023:
74%).
Beyond the variance in reported revenue, the Group generated actual underlying
growth of 8.2%, taking into account £10.8m of revenue reported in 2023 and
deriving from orders originated in 2021 and 2022, delayed due to supply chain
shortages during the pandemic. The underlying growth in recurring revenue
represented 1.2%, whilst the underlying growth in project revenue amounted to
36.0%.
The growth in recurring revenue was driven by the strong performance in Cloud
Communications Services, and a +25.9% increase in the underlying growth in
Security and Connectivity Services, supported by new contracts and price
increases.
The underlying growth in project revenue of 36.0% resulted from the strong
growth in professional services and technology following the new project wins
particularly in the Secure Connectivity pillar.
While gross profit for the Group reduced by 1.9% to £30.6m (2023: £31.2m),
gross margin improved to 31.3% (2023: 30.9%).
The Group delivered an adjusted profit before tax of £7.3m (2023: £5.5m).
Adjusted earnings per share (EPS)((a)) increased to 28.2p per share (2023:
earnings per share of 23.6p) based on a weighted average number of shares in
the period of 14.4m (2023: 14.4m).
On an unadjusted basis, the Group generated a profit before tax of £0.4m
(2023: loss of £6.8m) and basic profit per share of 3.6p (2023: basic loss
per share of 37.3p). This includes £2.2m of net exceptional costs (2023: net
exceptional costs of £7.0m) (refer note 12) and amortisation of acquired
intangibles of £4.6m (2023: £5.1m).
( )
2024 2023 Increase / (decrease)
£000
£000
Revenue 97,862 101,262 (3.4)%
Profit/(loss) before taxation 374 (6,780) 105.5%
Add back intangibles amortisation 4,567 5,111 (10.6)%
Exceptional items 2,223 6,979 (68.1)%
Share based remuneration 126 189 (33.3)%
Adjusted profit before tax 7,290 5,499 32.6%
Adjusted EBITDA((a)) 10,540 9,139 15.3%
Basic Profit/(loss) per share 3.6p (37.3p) 109.7%
Diluted 3.5p (37.3p) 109.4%
Adjusted Earnings/(loss) per share((b)) 28.2p 23.6p 19.5%
Diluted 27.8p 23.5p 18.3%
(a) Adjusted EBITDA is EBITDA of £8.2m (2023: £2.0m) adjusted for
exceptional items and share based remuneration (note 11)
(b) Adjusted profit after tax divided by weighted average number of shares
(note 10)
Cash performance
The Group generated net cash flows from operating activities of £8.5m (2023:
£5.0m), resulting in a cash conversion ((c)) of 102% for the full year (2023:
97%).
(c) calculated as operating cash flow (being adjusted EBITDA plus working
capital) to adjusted EBITDA
Review of operations
Maintel's transition to a specialist Managed Services Provider and focus on
Unified Communications & Collaboration, Customer Experience and Security
& Connectivity, differentiates us amongst our peers and enables us to meet
the demands from customers for tailored managed services delivered through
both Maintel's own platforms and its established technology partnerships.
We use technology to create customer experiences, services and workplaces that
inspire and empower people.
We consult on the design, deploy and manage solid technology solutions. Our
services deliver mission critical infrastructure, platforms and applications
that ensure our clients' businesses run efficiently and securely, achieving
their ambitions, while always being ready to adapt. We become trusted insiders
within our clients' organisations and an embedded partner working in close
collaboration to deliver their workplace, service and customer experience
strategies.
Elements of cloud services revenues are accounted for in both the managed
services and technology division (under the Project Revenue line) and the
network services division.
The following table shows the performance of the three operating segments of
the Group.
Revenue analysis 2024 2023 Increase /
£000 £000 (decrease)
Project and on-premise managed services 46,850 52,097 (10.1)%
Network services division 47,622 45,317 5.1%
Mobile division 3,390 3,848 (11.9%)
Total Group Revenue 97,862 101,262 (3.4%)
Project and on-premise managed services
The project and on-premise managed services segment contains two distinct
revenue lines:
· Project revenue: all non-recurring revenues from hardware,
software, professional and consultancy services and other non-recurring sales.
· On-premise managed services: all support and managed service
recurring revenues for hardware and software located on customer premises.
This combines both legacy telephone system (PBX) and Contact Centre systems,
which are in a managed decline across the sector as organisations migrate to
more effective and efficient cloud solutions, with areas of technology such as
Local Area Networking (LAN), WIFI and security, which are still very much
current and developing technology areas and therefore enduring sources of
revenue.
Services are predominantly provided across the UK, with some customers also
having international footprints. The division also supplies and installs
project-based technology, professional and consultancy services to our direct
clients and through our partner relationships.
2024 2023 Decrease
£000 £000
On-premise managed services 22,248 25,807 (13.8)%
Project revenue((d)) 24,602 26,290 (6.4)%
Total division revenue 46,850 52,097 (10.1)%
Division gross profit 12,168 12,285 (1.0)%
Gross margin (%) 26% 24%
(d) Project Revenue includes revenues from hardware, software, professional
services and other non-recurring sales
Project and on-premise managed services revenue was 10.1% lower at £46.9m.
This was mainly due to a 13.8% reduction in revenue from our legacy on-premise
managed service business to £22.2m, in line with the expected market decline
in this space. However, the reduction in on-premise managed services is
partially counteracted by new additions within the Group's other higher growth
strategic pillars, reflecting the ongoing migration from on-premises solutions
to cloud based solutions.
Although the reported Project revenue was 6.4% lower at £24.6m, the
underlying growth of this revenue stream was 36.0%, as revenue in 2023 was
boosted by £8.2m due to the unwinding of orders delayed from 2021 and 2022. A
large proportion of the solid growth in Project Revenue derived from a 55%
underlying growth in higher margin professional services, which reflected the
newly won contracts to implement large SD-WAN infrastructures and associated
managed services.
Division gross profit decreased at a lower rate than total division revenue
(-1.0%), due to the positive revenue mix weighted towards the higher margin
technology revenue streams, and particularly thanks to the strong weighting
towards professional services. The revenue mix also translated into the
expansion of the average gross margin of the division to 26% (2023: 24%).
Network Services division
The Network Services division is made up of three strategic revenue lines:
· Cloud communication services - subscription and managed service
revenues from cloud contracts.
· Security and connectivity services - subscription, circuit, co-location
and managed service revenues from Wide Area Network (WAN), SD-WAN, internet
access and managed security service contracts.
· Voice network services - recurring revenues from legacy PSTN, modern
SIP Trunking and inbound calling contracts.
2024 2023 Increase /
£000 £000 (decrease)
Call traffic 2,948 3,408 (13.5)%
Line rental 7,368 7,234 1.9%
Security and connectivity services 19,906 18,415 8.1%
Cloud communication services 17,270 16,000 7.9%
Other 130 260 (50.0)%
5.1%
Total division 47,622 45,317
Division gross profit 17,154 17,386 (1.3)%
Gross margin (%) 36% 38%
Network Services revenue grew by 5.1% and gross profit reduced by 1.3% to
£17.1m, representing a gross margin contraction from 38% to 36%. The division
benefited from an 8.1% growth in the Security and Connectivity services and a
7.9% increase in the Cloud Communication services, while the revenues from
Voice Network services reduced by -4.2% in the period. The successful growth
in the public cloud seats adversely impacted the mix, from higher margin
private cloud.
Line rental revenue increased by 2.1%, driven by a slowdown in migration away
from the legacy BT based PSTN services, with the deadline for the end of this
service having been extended by 13 months to January 2027, and the continued
growth of the Group's SIP Trunking and PSTN replacement services. However,
Call traffic revenue was £0.5m lower at £2.9m, as a result of the reduction
in legacy PSTN calls as customers migrate to new technologies, partly
compensated by an increase in SIP Trunking call traffic and line rental
revenue.
The reported growth in Security and connectivity services revenue of 8.1%
represented underlying growth of 25.9% (the 2023 revenues were boosted by
£2.6m of revenue from the 2021-2022 delayed order book). In 2024, Maintel
initiated the delivery of an SD-WAN enhanced infrastructure supported by a
multi-year managed support contract to one of the largest UK housing
associations. The trend is set to continue as we continue to win new
contracts.
Cloud Communications revenues grew by 7.9% which reflected continued delivery
of the orderbook and further new contract wins, particularly in the Customer
Experience space. Overall, 80% (2023: 75%) of the overall cloud seats
contracted in 2024 were public cloud based, highlighting the expected growing
trend of a preference for public cloud services in many industry verticals.
However, the highest value Cloud Communications win in the period was still a
private cloud service for an outbound contract centre solution.
Our flagship UC Private+ (formerly ICON Communicate) cloud service sales also
continued to perform. Demand for the Virtual Private Cloud service that our
Maintel Infrastructure Platform (formerly ICON Platform) offers continues to
remain high across the sectors with complex requirements or where an absolute
minimum of downtime is required, such as Finance, Insurance, Healthcare and
Housing verticals in particular. With the platform providing very high
(99.999%) core service availability levels, including hybrid local
survivability, guaranteed UK data sovereignty, security ringfenced customer
instances, license and handset investment protection and the ability to allow
customers to manage platform evolution at their own pace. Increasingly,
customers are looking to enjoy these benefits of a private cloud, and overlay
it with the advanced collaboration, meeting and customer experience
capabilities of the public cloud, in a hybrid deployment. This plays perfectly
to Maintel's platforms and integration capabilities.
Our cloud communications and data connectivity services pipeline remain
strong, with key wins expected to close in 2025. As previously stated, having
long surpassed the inflection point where economies of scale are realised, our
focus has now turned to quality of earnings over volume for our cloud
communications business.
Mobile division
The Mobile division generates revenue from mobile services and primarily from
commissions received as part of its dealer agreement with O2 which scales in
line with growth in partner revenues, in addition to value-added services sold
alongside mobile such as mobile fleet management and mobile device management.
Increase / (Decrease)
2024 2023
£000 £000
Revenue 3,390 3,848 (11.9)%
Gross profit 1,307 1,568 (16.6)%
Gross margin (%) 38.6% 40.7%
Number of customers 446 511 (12.7)%
Number of connections 26,831 28,445 (5.7)%
Mobile division revenue decreased by 11.9% to £3.4m (2023: £3.8m) and gross
profits declined by 16.6% to £1.3m.
Since our strategic pivot in 2023, Maintel has been focusing business
development towards our focus revenue streams. Recognising these market
challenges, Maintel has been proactively resourcing the mobile sales team to
focus on customer retention as opposed to new business. Therefore, although
customer churn remained low in the period, the lack of new business compounded
by downward price pressure on contract renewals drove the negative revenue
progression.
The slight contraction of the gross margin to 38.6% from 40.7% resulted from
the expected decrease in new customer sign-on bonuses, due to the re-focused
business development approach.
Maintel's mobile proposition continues to be multi-faceted and network
agnostic and ensuring we can provide competitive and complete coverage for the
UK. This enables us to be in a position to cater for our customers'
requirements. Our mobile go to market proposition remains focused on the
mid-market enterprise space (100 - 2,000 connections).
Other operating income
Other operating income increased by 60% to £0.8m (2023: £0.5m). This relates
primarily to research and development credits of £0.4m and supplier
commissions, promotions and bonus payments of £0.3m (2023: relates primarily
to research and development credits of £0.3m).
Other administrative expenses
2024 2023 Decrease
£000 £000 £000
Other administrative expenses 22,121 24,123 (8.3)%
Other administrative expenses for the Group decreased by 8.3% to £22.1m
(2023: £24.1m).
Administrative expenses mainly comprise costs related to the sales and
marketing teams, the support functions and the managerial positions, as well
as the associated growth-generating investments and general costs. The net
£2.0m reduction mainly reflects the savings from organisational optimisation
initiatives and the reduction in variable remuneration.
The overall average headcount in 2024 reduced by 7.7% and now stands at 445
(2023: 482). At 31 December 2024, the overall headcount was 432 compared to
445 at 31 December 2023 as a result of the Group's regular right-sizing of its
organisation.
Exceptional items
Exceptional costs of £2.2m (2023: exceptional costs £7.0m) were
substantially driven by the business transformation project.
In 2024, business transformation costs of £1.1m (2023: £5.0m) included
third-party specialists engaged to support the transformation of support
function processes.
£1.0m (2023: £1.5m) of costs relating to staff restructuring were incurred
in the period, which principally consisted of redundancy costs.
£50,000 was incurred in relation to the tail end of the Call Media
termination; in 2023, a £2.3m impairment charge was expensed in relation to
Callmedia.
A minor charge (£2,000) was expensed in relation to the extension of the
financing facility; in 2023, fees of £0.4m had been incurred to negotiate
with HSBC Bank plc ("HSBC") temporary terms in place during the phase of
transformation of the business.
A minor credit (£25,000) was accounted for as part of exceptional costs in
relation to onerous leases; in 2023, a £1.3m exceptional charge had been
incurred in relation to the downsizing of the property footprint of the Group.
A full breakdown is shown in note 12.
Interest
The Group's net interest charge was £2.0m in the year (2023: £2.2m).
Taxation
The tax credit in the period of £0.1m is driven by an increase in deferred
tax in relation to fixed assets (£0.9m), offset by a charge to deferred tax
in relation to tax losses (£0.6m), other temporary taxable timing differences
(£0.1m) and a £0.1m adjustment to prior period deferred tax for temporary
timing differences.
The prior year tax credit of £1.4m was driven by an increase in deferred tax
in relation to tax losses of (£0.6m), fixed assets (£0.6m) and other
temporary taxable timing differences (£0.2m).
Dividends and earnings per share
The Board continues to take a prudent approach to the Company's dividend
policy. Throughout 2024 the Board has been focused on de-leveraging of the
Company and investing in the future growth of the Group's operations.
Consequently, it has made the decision not to propose a final dividend for the
full year 2024 (2023: nil pence per share). It remains the Board's intention
to review returns to shareholders when economic conditions improve and
financial performance permits.
Adjusted profit per share is 28.2p, increasing from the adjusted profit per
share of 23.6p in 2023. On an unadjusted basis, basic profit per share is at
3.6p (2023: basic loss per share at 37.3p).
Consolidated statement of financial position
Net assets increased by £0.6m in the year to £14.8m at 31 December 2024
(2023: £14.2m) with the key movements explained below.
Trade and other receivables decreased by £0.7m to £24.7m (2023: £25.4m),
driven by a decrease in trade receivables, reflecting the consistent
strengthening of credit control and collection activities and the timing of
billings. Prepayments and accrued income increased to £13.1m (2023: £12.8m),
and within this, accrued income increased by £0.7m, due to the timing of
billing milestones; prepayments decreased by £0.4m, as the result of a
pro-active reduction in upfront payments to suppliers.
Trade and other payables decreased by £1.0m to £43.4m (2023: £44.4m),
mainly as a result of the decrease in deferred income by £2.5m following
changes in customer contracts. Other payables and accruals increased by £1.5m
driven principally by the timing of payments.
Intangible assets decreased by £0.7m as the amortisation charge for the year
amounting to £4.6m exceeded the £3.8m of new assets activated in the year.
Inventories reduced by £0.9m in the period to £0.8m (2023: £1.7m) driven by
the timing of the delivery of project work accelerated in December 2024.
Borrowings of £20.7m (2023: £22.9m) represent the Group's drawn down debt,
consisting of £20.0m Rolling Credit Facility and £0.8m Term loan, net of
costs of issue of £0.1m.
Cash flow
As at 31 December 2024, the Group had net debt of £16.6m (2023: £18.1m),
equating to a net debt to Adjusted EBITDA ratio of 1.6x (2023: 2.0x). The
£1.5m decrease in net debt, is explained below.
2024 2023
£000 £000
Cash generated from operating activities 8,460 4,972
Capital expenditure (4,371) (3,472)
Issue costs of debt (35) -
Interest paid (1,550) (1,894)
Free cash flow 2,504 (394)
Proceeds from borrowings - 2,500
Repayments of borrowings (2,200) (2,400)
Lease liability payments (1,009) (975)
Decrease in cash and cash equivalents (705) (1,269)
Cash and cash equivalents at start of period 4,846 6,136
Exchange differences (14) (21)
Cash and cash equivalents at end of period 4,127 4,846
Bank borrowings (20,744) (22,901)
Net debt excluding IFRS 16 liabilities (16,617) (18,055)
The Group generated £8.5m (2023: £5.0m) of cash from operating activities
and operating cashflow before changes in working capital of £8.3m (2023:
£5.3m).
Cash conversion((a)) in 2024 was 102% (2023: 97%).
Capital expenditure of £4.4m (2023: £3.5m) was mainly incurred in relation
to customer projects delivery and to a lesser extent resulting from the
ongoing investment in the Maintel Infrastructure Platform and investment in
the IT infrastructure.
A more detailed explanation of the working capital movements is included in
the analysis of the consolidated statement of financial position. Further
details of the Group's revolving credit facilities are given in note 21.
The repayment of borrowings in 2024 was slightly lower than in 2023, as HSBC
debited the December 2024 instalment in early January 2025 due to the timing
of funds collection by the bank.
(a) calculated as operating cash flow (being adjusted EBITDA plus working
capital) to adjusted EBITDA
Risk management
The Board has overall responsibility for setting the risk appetite for the
business and for ensuring that the Group's ongoing risk profile aligns with
this. The Board is also responsible for identifying the business risks and
uncertainties faced by the Group that could have a material adverse effect on
the business, most of which are beyond its control, and for determining the
appropriate course of action to manage these. It reviews a dynamic risk report
quarterly, the process behind which is monitored by the Audit and Risk
Committee. The most significant current risks and uncertainties are described
below; the extent of the impact of each would naturally depend on the precise
nature and duration of the event. This list is not exhaustive and there may be
risks and uncertainties of which we are currently unaware, or which we
currently believe are immaterial, that could have an adverse effect on the
business.
Nature of risk How do we mitigate the risk? Post mitigation trend
Disruptive technology changes the landscape of the market, and the Group may Maintel has a dedicated product function to ensure that the Group's product Risk unchanged from last year
not keep pace with product and service innovation. and service portfolio remains competitive. We have also re-structured the
business to ensure focus on accelerating developments, including those of the
ICON platform.
A catastrophic event - for example a power outage or pandemic - means that the All employees can work remotely, and the Group's operational and Risk unchanged from last year
Group is unable to service its customers. administrative servers are located and managed such that damage from an outage
is minimised. A business continuity plan is in place which is reviewed
regularly and enhanced from the results of testing. The Group is also
increasingly moving to cloud based systems which are more readily available
for a response to a catastrophic event. ISO22301- Business Continuity is
maintained and externally audited on an annual basis.
Cyber-attacks on Maintel, customer or supplier systems rendering them unusable The Group has an outsourced Security Operations Centre (SOC) and compliments Risk unchanged from last year
temporarily or permanently. this with in-house systems and tools to ensure Maintel and its customer
systems are secured. Customer networks and data are completely segregated from
the Group's and data and systems are replicated in more than one location.
Maintel holds several security accreditations including Cyber Essentials, ISO
27001 Information Security Cyber Security and Privacy, ISO22301-Business
Continuity and limited scope PCI DSS, all of which entail extensive internal
and external auditing of the Group's systems and processes. Maintel is also
covered by cyber threat insurance.
Loss of key supplier through its business failure or termination of The Group has a multi-vendor strategy to reduce this risk and has defined Risk reduced compared with last year
relationship with Maintel. product managers who work closely with each supplier to maintain constructive
relationships and promptly identify potential issues, formalised by monthly
internal review meetings. Due to the unprecedented semi-conductor shortage, we
are monitoring our key suppliers more closely for adverse impacts and have
raised the risk level accordingly.
Loss of major customer through its business failure or termination of The impact of this risk is partly mitigated by the fact that no customer Risk unchanged from last year
relationship with Maintel or Maintel's partners. provides more than 10% of the Group's revenue. We have developed various
initiatives to manage this risk including executive sponsorship and improved
account management and engagement. We are actively monitoring customer churn
and continue to develop our customer offering and service delivery.
The Group's approach to financial risk management is further explained in note
23 to the financial statements.
FINANCIAL STATEMENTS
Consolidated statement of comprehensive income
for the year-ended 31 December 2024
2024 2023
Note £000 £000
Continuing operations:
Revenue 4 97,862 101,262
Cost of sales (67,233) (70,022)
Gross profit 30,629 31,240
Other operating income 7 800 550
Intangibles amortisation 13 (4,567) (5,111)
Exceptional items 12 (2,223) (6,979)
Share-based payments 27 (126) (189)
Other administrative expenses 7 (22,121) (24,123)
Administrative expenses (29,037) (36,402)
Operating profit/(loss) 7 2,392 (4,612)
Financing costs 8 (2,018) (2,168)
Profit/(loss) before taxation 374 (6,780)
Taxation credit 9 138 1,429
Profit/(loss) for the year 512 (5,351)
Other comprehensive expense for the year
Items that maybe reclassified to profit or loss: - (16)
Exchange differences on translation of foreign operations
Total comprehensive income/(expense) for the year 512 (5,367)
Earnings/(loss) per share (pence)
Basic 10 3.6p (37.3)p
Diluted 10 3.5p (37.3)p
The notes form part of these consolidated financial statements.
Consolidated statement of financial position
at 31 December 2024
31 December 31 December 31 December 31 December
2024 2024 2023 2023
Note £000 £000 £000 £000
Non-current assets
Intangible assets 13 47,896 48,644
Right of use assets 16 832 1,036
Property, plant and equipment 15 946 1,109
Deferred tax 20 609 471
50,283 51,260
Current assets
Inventories 17 790 1,677
Trade and other receivables 18 24,708 25,408
Cash and cash equivalents 4,127 4,846
Total current assets 29,625 31,931
Total assets 79,908 83,191
Current liabilities
Trade and other payables 19 41,668 43,938
Lease liabilities 22 417 909
Borrowings 21 744 2,322
Total current liabilities 42,829 47,169
Non-current liabilities
Other payables 19 1,747 502
Lease liabilities 22 484 731
Borrowings 21 20,000 20,579
Total non-current liabilities 22,231 21,812
Total liabilities 65,060 68,981
Total net assets 14,848 14,210
Equity
Issued share capital 24 144 144
Share premium 25 24,588 24,588
Other reserves 25 64 64
Retained losses 25 (9,948) (10,586)
Total equity 14,848 14,210
The notes form part of these consolidated financial statements.
Consolidated statement of changes in equity
for the year-ended 31 December 2024
Share capital
Other reserves Retained losses
Share premium
Total
£000 £000 £000 £000 £000
Balance at 1 January 2023 144 24,588 80 (5,424) 19,388
Loss for the year - - - (5,351) (5,351)
Other comprehensive expense:
Foreign currency translation differences - - (16) - (16)
Total comprehensive expense - - (16) (5,351) (5,367)
for the year
Transactions with owners in their capacity as owners:
Share-based payments - - - 189 189
At 31 December 2023 144 24,588 64 (10,586) 14,210
Profit for the year - - - 512 512
Total comprehensive income - - - 512 512
for the year
Transactions with owners in their capacity as owners:
Share-based payments - - - 126 126
At 31 December 2024 144 24,588 64 (9,948) 14,848
The notes form part of these consolidated financial statements.
Consolidated statement of cash flows
for the year-ended 31 December 2024
2024 2023
£000 £000
Operating activities
Profit/(loss) before taxation 374 (6,780)
Adjustments for:
Amortisation of intangible fixed asset 4,567 5,111
Share-based payments 126 189
Depreciation of plant and equipment 715 637
Depreciation of right of use assets 517 835
Impairment of property, plant and equipment - 53
Impairment of right of use assets 259 761
Impairment of intangible fixed assets - 2,288
Interest payable 2,018 2,168
Remeasurement of lease liability (284) -
Operating cash flows before changes in working capital 8,292 5,262
Decrease in inventories 887 917
Decrease in trade and other receivables 700 2,058
Decrease in trade and other payables (1,419) (3,265)
Net cash inflows from operating activities 8,460 4,972
Investing activities
Purchase of plant and equipment (552) (418)
Purchase of intangible assets (3,092) (2,424)
Investment in internally generated development expenditure (727) (630)
Net cash outflows from investing activities (4,371) (3,472)
Financing activities
Proceeds from borrowings - 2,500
Repayment of borrowings (2,200) (2,400)
Lease liability repayments (1,009) (975)
Interest paid (1,550) (1,894)
Issue costs of debt (35) -
Net cash outflows from financing activities (4,794) (2,769)
Net decrease in cash and cash equivalents (705) (1,269)
Cash and cash equivalents at start of year 4,846 6,136
Exchange differences (14) (21)
Cash and cash equivalents at end of year 4,127 4,846
Consolidated statement of cash flows
for the year-ended 31 December 2024 (continued)
The following cash and non-cash movements have occurred during the year in
relation to financing activities from non-current liabilities:
Reconciliation of liabilities from financing activities
Borrowings (Note 21)
2024 2023
£000 £000
At 1 January 22,901 22,726
Proceeds from borrowings - 2,500
Repayment of borrowings (2,200) (2,400)
Payments of interest on bank borrowings (1,372) (1,821)
Interest expense on bank borrowings (non-cash movement) 1,762 2,009
Movement on interest accrual (balance held within accruals - non-cash (390) (188)
movement)
Issue costs of debt (35) -
Amortisation of issue costs (non-cash movement) 78 75
At 31 December 20,744 22,901
Current 744 2,322
Non-current 20,000 20,579
Lease liabilities (Note 22)
2024 2023
£000 £000
At 1 January 1,640 2,272
Capital lease repayments (1,009) (975)
Interest repayments (69) (73)
Interest expense (non-cash movement) 69 73
New leases (non-cash movement) 554 343
Remeasurement of lease liability (non-cash movement) (284) -
At 31 December 901 1,640
Current 417 909
Non-current 484 731
The notes form part of these consolidated financial statements.
Notes forming part of the consolidated financial statements
for the year-ended 31 December 2024
1 General information
Maintel Holdings Plc is a public limited company incorporated and domiciled in
the UK, whose shares are publicly traded on AIM. Its registered office and
principal place of business is 5th Floor, 69 Leadenhall Street, London, EC3A
2BG.
2 Accounting policies
The principal policies adopted in the preparation of the consolidated
financial statements are as follows:
(a) Basis of preparation
The consolidated financial statements have been prepared in accordance with
UK-adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006.
(b) Basis of consolidation
The consolidated financial statements present the results of the Company and
its subsidiaries ("the Group") as if they formed a single entity. Intercompany
transactions and balances between Group companies are therefore eliminated in
full.
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the consolidated statement of
financial position, the acquiree's identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair values at the
acquisition date. The acquisition related costs are included in the
consolidated statement of comprehensive income on an accruals basis. The
results of acquired operations are included in the consolidated statement of
comprehensive income from the date on which control is obtained.
(c) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded
to the nearest thousand unless otherwise stated.
(d) Going concern
The Group has a sound financial record, including strong operating cash flows
derived from a substantial level of recurring revenue across a range of
sectors.
At 31 December 2024, the Group benefited from a financing facility in place
with HSBC consisting of an RCF of £20m with a £6m term loan on a reducing
basis. Repayments of the term loan started in October 2022. At 31 December
2024, £0.8m remained outstanding, which was fully repaid by 24 March 2025 in
line with the term of the initial term loan. The key covenants included net
leverage ratio and interest cover tests, assessed on a quarterly basis. In
December 2024, the facility was extended to 1 January 2026 from the initial
term ending on 30 September 2025.
On 28 March 2025, the Group entered into a new financing facility with HSBC,
consisting of an RCF of £12m and an £8m term loan repayable over 60 months
from 1 May 2025. The facility has been set with a July 2028 initial term, with
an optional extension to July 2029. Together with the main financing
facility, an authorised overdraft facility of £2m is renewable annually.
As highlighted in the risk management section the Board has put robust
business continuity plans in place to ensure continuity of trading and
operations. Management believes the pipeline will enable Maintel to deliver
upside from the planned revenue, whilst focusing on cost efficiency and margin
enhancement.
The Group's forecasts and projection models have been built on a prudent
basis, taking into account uncertainty around the impact of supply chain
issues with regard to both project delivery and timing of pipeline conversion,
which allows for actual performance to exceed management forecasts in terms of
revenue expectations. The Board has reviewed the model in detail, taking
account of reasonably possible changes in trading performance, including
sensitivities in pipeline conversion and renewal risk, together with further
mitigating actions it could take such as overhead savings. As a result, the
Board believes that the Group has sufficient headroom in its agreed funding
arrangements to withstand a greater negative impact on its cash flow than it
currently expects.
On this basis, the Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for
the foreseeable future. Accordingly, they continue to adopt the going concern
basis in preparing the financial statements.
(e) Revenue
Revenue is recognised in accordance with IFRS 15 and represents amounts
invoiced to customers less value added tax. For each contract, the Group
identifies a performance obligation for each of the distinct goods and
services the Group has promised to provide to the customer. The consideration
is apportioned to each performance obligation based on their relative
standalone selling prices, and is recognised as the obligations are satisfied.
The Group has multiple revenue lines across its three divisions. The policies
for individual service lines and their performance obligations are outlined
below. The Group does not have any material obligations in respect of
returns, warranties or refunds.
Project and on-premise managed services
(renamed in FY24 from its previous name of "managed service and technology
sales")
This includes the following revenue lines:
On-premise managed services: all support and managed service recurring
revenues for hardware and software located on customer premises.
Project revenues: all non-recurring revenues from hardware, software,
professional and consultancy services and other non-recurring sales.
Infrastructure and managed services: a combination of the provision of
hardware and the ongoing monitoring and maintenance of the hardware and
network services to which it is connected.
On-premise managed services
On-premise managed services revenues are recognised over time, over the
relevant contract term, on the basis that the customer simultaneously receives
and consumes the benefits provided by the Group's performance of the services
over the contract term.
Revenue is recognised over time on an output basis. In calculating the revenue
to recognise at the reporting date, Management review available output
information for each contract, which may include the number of contracted
support days completed or services delivered to date, relevant third-party
usage or service provision data, customer milestones reached or contract time
elapsed.
The consideration for the provision of ongoing support and managed services is
payable by the customer over the duration of the contract.
Project revenues
Project revenues for contracts with customers, which include both supply of
technology goods and installation services, represent in substance one
performance obligation and result in revenue recognition at a point in time,
when the Group has fulfilled its performance obligations under the relevant
customer contract.
Under these contracts, the Group performs a significant integration service
which results in the technology goods and the integration service being one
performance obligation. Over the course of the contract, the technology
goods, which comprise both hardware and software components, are customised
through the integration services to such an extent that the final customised
technology goods installed on completion are substantially different to their
form prior to the integration service.
Revenue is recognised when the integrated technology equipment and software
has been installed and accepted by the customer.
Consideration is payable by the customer when the integrated technology
equipment and software has been installed at the customer premises.
Infrastructure and managed services
The Group provides a service to customers of the provision of hardware and the
ongoing monitoring and maintenance of the hardware and network services to
which it is connected.
Management considers this to be two performance obligations, being the supply
of hardware and the provision of ongoing monitoring and maintenance services.
The total transaction price is allocated over those two performance
obligations on the basis of their relative stand-alone selling prices,
applying an expected cost plus a margin approach, which Management assess on
the basis of other customer contracts.
The revenue from the sale of hardware is recognised at a point in time when
the hardware goods are delivered to the customer, and the customer has control
of the assets.
The revenue from the provision of ongoing and maintenance services is
recognised over time on an output basis. In calculating the revenue to
recognise at the reporting date, Management review available output
information for each contract, which may include the number of contracted
support days completed or services delivered to date, relevant third-party
usage or service provision data, customer milestones reached or contract time
elapsed.
The consideration for the sale of hardware is payable by the customer in line
with the agreed contract terms, and may be invoiced upfront or on delivery.
The consideration for the provision of ongoing monitoring and maintenance
services is payable by the customer over the duration of the contract.
Network services
This includes the following four revenue lines, which may all make up
component parts of the same contract with a customer and are deemed to be
separate performance obligations:
· Data connectivity services: subscription, circuit, co-location and
managed service revenues from Wide Area Network (WAN), SD-WAN, internet access
and managed security service contracts.
· Call traffic: recurring revenues from both legacy voice and modern
SIP Trunking contracts.
· Line rental: the recurring revenues billed to maintain the
connections for the above contracts.
· Cloud services: subscription and managed service revenues from
cloud contracts.
Initial connection services are not distinct performance obligations and are
therefore combined with the associated service performance obligation.
The total transaction price of a network services customer contract is
allocated over the relevant performance obligations (up to four) on the basis
of their relative stand-alone selling prices, applying an expected cost plus a
margin approach, which Management assess on the basis of other customer
contracts.
Revenues are recognised over time, for services provided up to the reporting
date, on the basis that the customer simultaneously receives and consumes the
benefits provided by the Group's performance of the services over the contract
term.
Revenues are recognised over time on an output basis. In calculating the
revenue to recognise at the reporting date, Management review available output
information for each contract, which may include the number of contracted
support days completed or services delivered to date, the available
third-party call traffic data, customer milestones reached or contract time
elapsed.
Consideration is payable by the customer over the duration of the contract.
Mobile
The Mobile division generates revenue primarily from revenue share received as
part of its dealer agreements with mobile network operators which scale in
line with growth in partner revenues, in addition to value added services sold
alongside mobile such as mobile fleet management and mobile device management.
Where the Group acts as an agent in a transaction, revenue represents the
revenue share receivable from mobile network operators.
Connection revenue share received from the mobile network operators on fixed
line revenues, are allocated primarily to two separate performance
obligations, being:
· The obligation to provide a hardware fund to end users for the
supply of handsets and other hardware kit: revenues are recognised under
these contracts at a point in time when the hardware goods are delivered to
the customer, and the customer has control of the assets; and
· Ongoing service obligations to the customer: revenues are
recognised over time on an output basis, being straight-line over the duration
of the contract.
The total transaction price of a contract relating to the connection revenue
share is allocated over these two performance obligations on the basis of
their relative stand-alone selling prices, applying an expected cost plus a
margin approach, which Management assess on the basis of other customer
contracts.
The consideration for the sale of hardware kit is payable by the customer in
line with the agreed contract terms, and may be invoiced upfront or on
delivery.
The consideration for the provision of ongoing service obligations is
payable by the customer over the duration of the contract. Customers are
invoiced directly by the mobile network operators monthly, and the Group
receives the related revenue share on the same basis.
Customer rebates are recognised as a reduction in revenue. These are
recognised monthly at a point in time when a customer has earnt the right to
said rebate in line with the terms of their mobile contract, based on the
available third-party usage data. These are also payable by the network
operators on a monthly basis.
Accrued and deferred revenue
Where a performance obligation is completed before the consideration is
received, accrued income is recognised.
Where the consideration is received before the completion of a performance
obligation, deferred income is recognised.
(f) Other operating income
Other operating income relates primarily to research and development credits
and supplier commissions, promotions and bonus payments.
Other operating income is recognised when the Group's right to recognise the
income has been established, it is probable that the related economic benefits
will flow to the Group, and the related amounts can be measured reliably.
(g) Leased assets
When the Group enters into a lease, a lease liability and a right of use asset
is created.
A lease liability shall be recognised at the commencement date of the lease
term and will be measured at the present value of the remaining lease
payments, discounted using the Groups' incremental borrowing rate. In
determining the lease term, hindsight is applied in respect of leases which
contain an option to extend or terminate the lease. The lease term is
reassessed for such an extension or termination option, or other such
significant events, if the option is within the control of the Group and the
Group is reasonably certain to exercise the option.
The lease liability is subsequently increased for a constant periodic rate of
interest on the remaining balance of the lease liability and reduced for lease
payments. Interest on the lease liability is recognised in the income
statement.
A right of use asset shall be recognised at the commencement date of the lease
term. The right of use asset will be measured at an amount equal to the lease
liability. The right of use asset will subsequently be measured at cost less
accumulated depreciation and any accumulated impairment losses.
Depreciation for leased property (disclosed as 'Land and buildings' in Note
16), motor vehicles and office and computer equipment is charged to the
statement of comprehensive income on a straight-line basis over the shorter of
the lease term and the useful economic life of the asset. The useful economic
life of a right of use asset is based on that assigned to equivalent owned
assets, as disclosed in the 'Property, plant and equipment' policy (o).
Where leases are 12 months or less or of low value, payments made are expensed
evenly over the period of the lease.
Rentals receivable under operating leases are credited to the consolidated
statement of comprehensive income on a straight-line basis over the term of
the lease. The aggregate cost of lease incentives offered is recognised as a
reduction of the rental income over the lease term on a straight-line basis.
In addition, the carrying amount of the right-of-use assets and lease
liabilities are remeasured if there is a modification, a change in the lease
term or a change in the fixed lease payments. The remeasured lease liability
(and corresponding right-of-use asset) is calculated using a revised discount
rate, based upon a revised incremental borrowing rate at the time of the
change.
(h) Employee benefits
The Group contributes to a number of defined contribution pension schemes in
respect of certain of its employees, including those established under
auto-enrolment legislation. The amount charged in the consolidated statement
of comprehensive income represents the employer contributions payable to the
schemes in respect of the financial period. The assets of the schemes are held
separately from those of the Group in independently administered funds.
The cost of all short-term employee benefits is recognised during the period
the employee service is rendered.
Holiday pay is expensed in the period in which it accrues.
(i) Exceptional items
Exceptional items are significant items of non-recurring income or expenditure
that have been separately presented by virtue of their nature to enable a
better understanding of the Group's financial performance. Non-recurring
exceptional items are presented separately in the consolidated statement of
comprehensive income.
(j) Interest
Interest income and expense is recognised using the effective interest rate
basis.
(k) Taxation
Current tax is the expected tax payable on the taxable income for the year,
together with any adjustments to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing
for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation
purposes, except for differences arising on:
· The initial recognition of goodwill
· The initial recognition of an asset or liability in a transaction
which is not a business combination and at the time of the transaction affects
neither accounting nor taxable profit; and
· Investments in subsidiaries where the Group is able to control the
timing of the reversal of the difference and it is probable that the
difference will not reverse in the foreseeable future.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits and taxable temporary differences will be available
against which the asset can be utilised.
Management judgement is used in determining the amount of deferred tax asset
that can be recognised, based upon the likely timing and level of future
taxable profits together with future tax planning strategies.
The amount of the deferred tax asset or liability is measured on an
undiscounted basis and is determined using tax rates that have been enacted or
substantively enacted by the date of the consolidated statement of financial
position and are expected to apply when the deferred tax assets/liabilities
are recovered/settled.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities, and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· The same taxable Group company; or
· Different Group entities which intend either to settle current tax
assets and liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts
of deferred tax assets or liabilities are expected to be settled or recovered.
(l) Dividends
Dividends unpaid at the reporting date are only recognised as a liability at
that date to the extent that they are appropriately authorised and are no
longer at the discretion of the Company.
Proposed but unpaid dividends that do not meet these criteria are disclosed in
the notes to the consolidated financial statements.
(m) Intangible assets
Goodwill
Goodwill represents the excess of the fair value of the consideration of a
business combination over the acquisition date fair value of the identifiable
assets, liabilities and contingent liabilities acquired; the fair value of the
consideration comprises the fair value of assets given. Direct costs of
acquisition are recognised immediately as an expense. Goodwill is capitalised
as an intangible asset and carried at cost with any impairment in carrying
value being charged to the consolidated statement of comprehensive income.
Customer relationships
Customer relationships are stated at fair value where acquired through a
business combination, less accumulated amortisation. Customer relationships
are amortised over their estimated useful lives of six years to eight years,
based on the expected length of the Group's provision of goods and services to
the related customer base.
Brands
Brands are stated at fair value where acquired through a business combination
less accumulated amortisation. Brands are amortised over their estimated
useful lives, being eight years in respect of the ICON brand, based on the
expected time the Group will utilise the brand in its sales and marketing
materials. All brands acquired through historic business combinations are no
longer used by the Group as of 31 December 2024 and therefore have been
disposed of during the year.
Product platform
The product platform is stated at cost less accumulated amortisation. Where
these have been acquired through a business combination, the cost is the fair
value allocated less accumulated amortisation. The product platform is
amortised over its estimated useful life of eight years, based on the expected
time the Group will utilise the product platform in its operations.
Software (including Microsoft licences and Callmedia)
Software is stated at cost less accumulated amortisation. Where these assets
have been acquired through a business combination, the cost is the fair value
allocated in the acquisition accounting. Software is amortised over its
estimated useful life of three years in respect of the Microsoft licences,
based on the expected time the Group will utilise the licenses in its
operations.
The net book value of the Callmedia capitalised systems, software and
development costs was impaired in the prior year in line with the decision
made in 2023 to exit the Callmedia business in 2024. See Note 13 for further
information.
Please see Note 3 for further information on capitalised internally generated
development costs, which are included within software intangible assets in
Note 13.
Licences (third-party subscription licences)
Third-party subscription licences are stated at cost less accumulated
amortisation. Where these assets have been acquired through a business
combination, the cost is the fair value allocated in the acquisition
accounting. Licences are amortised over their estimated useful lives of three
years, based on the expected time the Group will utilise the licences in its
operations.
Other
Other intangible assets include stock management platforms which is managed by
third parties. Other intangibles are amortised over their estimated useful
lives, being 5 years, based on the expected time the Group will utilise the
stock management platform in its operations.
(n) Impairment of non-current assets
Impairment tests on goodwill are undertaken annually on 31 December. Customer
relationships and other assets are subject to impairment tests whenever events
or changes in circumstances indicate the carrying amount may not be
recoverable. Where the carrying value of an asset exceeds its recoverable
amount (being the higher of value in use and fair value less costs to sell),
the asset is written down accordingly in the administrative expenses line in
the consolidated statement of comprehensive income and, in respect of goodwill
impairments, the impairment is never reversed.
Where it is not possible to estimate the recoverable amount of an individual
asset, the impairment test is carried out on the asset's cash-generating unit
(being the lowest Group of assets in which the asset belongs for which there
are separately identifiable cash flows). Goodwill is allocated on initial
recognition to each of the Group's cash-generating units that are expected to
benefit from the synergies of the combination giving rise to goodwill.
(o) Property, plant and equipment
Property, plant and equipment is stated at cost, less accumulated depreciation
and any impairment in value. Depreciation is provided to write off the cost,
less estimated residual values, of all tangible fixed assets, other than
freehold land, over their expected useful economic lives, at the following
rates:
Office and computer equipment - 25% straight line
Motor vehicles - 25% straight line
Leasehold improvements - over the remaining period of the lease
Property, plant and equipment acquired in a business combination is initially
recognised at its fair value.
(p) Inventories
Inventories comprise (i) maintenance stock, being replacement parts held to
service customers' telecommunications systems, and (ii) stock held for resale,
being stock purchased for customer orders which has not been installed at the
end of the financial period. Inventories are valued at the lower of cost and
net realisable value.
(q) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and short-term deposits with
an original maturity of three months or less, held for meeting short term
commitments.
(r) Financial assets and liabilities
The Group's financial assets and liabilities mainly comprise cash, borrowings,
trade and other receivables, trade and other payables, lease liabilities and
derivative financial instruments.
Trade and other receivables are not interest bearing and are stated at their
amortised cost as reduced by appropriate allowances for irrecoverable amounts
or additional costs required to effect recovery.
The Group reviews the amount of credit loss associated with its trade
receivables based on forward looking estimates that take into account current
and forecast credit conditions. The Group has applied the Simplified Approach
applying a provision matrix based on number of days past due to measure
lifetime expected credit losses and after taking into account customer sectors
with different credit risk profiles and current and forecast trading
conditions.
Trade and other payables are not interest bearing and are stated at their
amortised cost.
(s) Borrowings
Interest bearing bank borrowings and overdrafts are initially recorded at the
value of the amount received, net of attributable transaction costs. Interest
bearing borrowings are subsequently stated at amortised cost with any
difference between cost and redemption value being recognised in the
consolidated statement of comprehensive income over the period of the
borrowing using the effective interest method.
(t) Foreign currency
The presentation currency of the Group is Pound Sterling. All Group companies
at 31 December 2024 have a functional currency of Pound Sterling, consistent
with the presentation currency of the Group's consolidated financial
statements. Transactions in currencies other than Pound Sterling are recorded
at the rates of exchange prevailing on the dates of the transactions.
As at 31 December 2024, the Group, did not hold any interest in foreign
subsidiaries. In the prior year, the control of Maintel International Limited
("MIL") was transferred to the liquidators of MIL.
On consolidation the results of MIL, which were included in the consolidated
statement of comprehensive income up to the transfer of the entity to the
liquidators, were translated into Pound Sterling, at rates approximating those
ruling when the transactions took place. The monetary assets and liabilities
of MIL were translated at the rate ruling at the reporting date.
Non-monetary items that were measured at historical cost were translated
using rates approximating those ruling at the dates of the initial
transactions.
Exchange differences on retranslation of the foreign subsidiary are recognised
in other comprehensive income and accumulated in a translation reserve.
(u) Share-based payments
The Group uses the Black-Scholes Model to calculate the appropriate fair value
at the date the options are granted to the employee.
Where employees are rewarded using equity settled share-based payments, the
fair values of employees' services are determined indirectly by reference to
the fair value of the instrument granted to the employee. This fair value is
appraised at the grant date.
All equity-settled share-based payments are ultimately recognised as an
expense in the income statement with a corresponding credit to reserves.
If vesting periods apply, the expense is allocated over the vesting periods,
based on the best available estimate of the number of share options expected
to vest. Estimates are revised subsequently if there is any indication that
the number of share options expected to vest differs from previous estimates.
Any cumulative adjustment prior to vesting is recognised in the current
year. No adjustment is made to any expense recognised in prior years if share
options that have vested are not exercised.
(v) Accounting standards issued
The following amendments to standards were issued and adopted in the year,
with no material impact on the financial statements (all effective for annual
periods beginning on or after 1 January 2024):
· Amendment to IFRS 16 Leases - Leases on sale and leaseback
· Amendment to IAS 1 Presentation of Financial Statements -
Non-current liabilities with covenants
· Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial
Instruments: Disclosures - Supplier finance
There were no other new accounting standards issued that have been adopted in
the year.
(w) Standards in issue but not yet effective
At the date of authorisation of these financial statements there were
amendments to standards which were in issue, but which were not yet effective,
and which have not been applied. The principal ones are detailed below:
The Directors do not expect the adoption of these standards or amendments to
standards to have a material impact on the financial statements, with the
exception of presentational changes as a result of IFRS 18 Presentation and
Disclosure in Financial Statements. Given that IFRS 18 is not effective until
the period beginning 1 January 2027, the impact assessment of this standard is
ongoing and will be considered further in the coming years.
Effective for annual periods beginning on or after 1 January 2025
· Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates - Lack of exchangeability
Effective for annual periods beginning on or after 1 January 2026
· Amendments to IFRS 7 and IFRS 9 Financial Instruments - The
classification and measurement of financial instruments
· Annual improvements to IFRS Accounting Standards - Volume 11
(including minor amendments to IFRS 1 First-time Adoption of International
Financial Reporting Standards, IFRS 7, IFRS 9, IFRS 10 Consolidated Financial
Statements, and IAS 7)
Effective for annual periods beginning on or after 1 January 2027
· IFRS 18 Presentation and Disclosure in Financial Statements
· IFRS 19 Subsidiaries without Public Accountability: Disclosures
3 Accounting estimates and judgements
In the process of applying the Group's accounting policies, management has
made various estimates, assumptions and judgements, with those likely to
contain the greatest degree of uncertainty being summarised below.
Management has reviewed these critical accounting estimates and significant
judgements, along with the related disclosures, with the Audit Committee.
Critical accounting estimates
Impairment of non-current assets
The Group is required to test, on an annual basis, whether goodwill has
suffered any impairment. The Group is also required to test other finite life
intangible and tangible assets for impairment where impairment indicators are
present.
In line with IAS 36 Impairment of Assets, the recoverable amount of assets
subject to impairment reviews is calculated as being the higher of their value
in use and fair value less cost to sell.
In determining their value in use, the recoverability of the assets is
assessed based on whether the carrying value of assets can be supported by the
net present value of future cash flows derived from such assets, using cash
flow projections which have been discounted at an appropriate rate. In
calculating the net present value of the future cash flows, certain
assumptions are required to be made in respect of uncertain matters.
In particular, Management exercises estimation in determining assumptions for
revenue growth rates and gross margins for future periods which are important
components of future cash flows, and also in determining the appropriate
discount rates which are used across the Group's cash generating units.
See Note 13 for the carrying amount of goodwill and other intangible assets at
the end of the reporting period and for details on the assumptions used to
calculate the recoverable amount.
Research and development costs
Management reviews expenditure incurred on research and development
activities, including wages and benefits for employees, and applies judgement
in assessing whether the expenditure meets the capitalisation criteria set out
in IAS 38 Intangible Assets. Development costs are capitalised and recognised
as software intangible assets when Management have determined the following
criteria have been met:
· It is technically feasible to complete the software so that it will
be available for use;
· The Group intends to complete the software and use or sell it to
its customers;
· There is an ability to use or sell the software;
· It can be demonstrated how the software will generate probable
future economic benefits for the Group;
· Adequate technical, financial and other resources to complete the
development and to use or sell the software are available; and
· The expenditure attributable to the software during its development
can be reliably measured.
Any research and development costs that do not meet these criteria are
expensed to the income statement in the period in which they are incurred.
Management estimates the useful economic life of capitalised development costs
by assessing the expected time the Group will utilise and receive economic
benefits from the related software developments. In most cases, Management
have determined 3 years to be a reasonable estimate based on this assessment.
See Note 13 for details of internally generated development costs that were
capitalised in the current and prior year.
Significant judgements
Timing of service revenue recognition
For ongoing support and managed services provided across the Group's
divisions, revenue is recognised over time on an output basis.
Determining the revenue to recognise at a reporting date can require
judgement. In calculating the revenue to recognise, Management review
available output information for each contract, which may include the number
of contracted support days completed or services delivered to date, relevant
third-party usage or service provision data, customer milestones reached or
contract time elapsed.
The allocation of the transaction price against the performance obligations
The transaction price of a customer contract is allocated to the relevant
performance obligations on a relative stand-alone selling price basis at
contract inception. Determining the standalone selling price can require
judgement. Management determines the transaction price from a cost-plus
derived price, with reference to the observable price of similar goods and
services when sold on a standalone basis by Maintel or a competitor. Discounts
are not considered as they are only given in rare circumstances.
Recoverability of the deferred tax asset
The net deferred tax asset mainly arises on the recognition of tax timing
differences on property, plant and equipment, as well as prior and current
year taxable losses which are expected to be utilised against future year
taxable profits. Other items include timing differences in relation to
provisions. This is partially offset by a deferred tax liability in relation
to tax timing differences on intangible assets.
Management exercises their judgement in recognising the deferred tax asset in
relation to prior and current year taxable losses on the basis that it can be
measured reliably, and it is probable that it will result in future economic
benefits for the Group.
The Board has reviewed the Group forecasts and projection models covering five
years from the year end, taking into account reasonably possible changes in
trading performance. As a result, the Board determined that the Group will
make sufficient profits in the future against which the losses can be
utilised. In the current year, the trading subsidiary utilised a significant
portion of the prior years' losses, which further supports this assessment.
There are no time restrictions on when these taxable losses can be utilised.
The deferred tax asset relating to tax losses has therefore been recognised on
this basis.
See Note 20 for the deferred tax movements in the year and balance at the year
end.
Exceptional items
Exceptional items are significant items of non-recurring income or expenditure
that have been separately presented by virtue of their nature to enable a
better understanding of the Group's underlying financial performance.
These items may include one-off projects, such as the Group's transformation
project, which span over several years and are therefore not contained to a
single reporting period but are nevertheless not expected to be recurring
events.
Management exercises their judgement in determining the items that are not
considered to be part of the Group's recurring income or expenditure incurred
as part of carrying out its principal activities.
See Note 12 for details of exceptional items incurred in the current and prior
year.
4 Segment information
Year-ended 31 December 2024
For management reporting purposes and operationally, the Group consists of
three business segments: (i) project and on-premise managed services (renamed
in FY24 from its previous name of "managed service and technology sales"),
(ii) network services, and (iii) mobile services.
Revenue from on-premise managed services, network services and mobile is
recognised over time and project revenue is recognised at a point in time.
Each segment applies its respective resources across inter-related revenue
streams, which are reviewed by management collectively under these headings.
The businesses of each segment and a further analysis of revenue are described
under their respective headings in the Strategic Report.
The chief operating decision maker has been identified as the Board, which
assesses the performance of the operating segments based on revenue and gross
profit.
The Board does not regularly review the aggregate assets and liabilities of
its segments and accordingly an analysis of these is not provided.
Project and on-premise managed services
Network services
Mobile Total
Central
£000 £000 £000 £000 £000
Revenue 46,850 47,622 3,390 - 97,862
Gross profit 12,168 17,154 1,307 - 30,629
Other operating income - - 242 558 800
Other administrative expenses - - - (22,121) (22,121)
Share-based payments - - - (126) (126)
Intangibles amortisation - - - (4,567) (4,567)
Exceptional items (216) (39) - (1,968) (2,223)
Operating profit 2,392
Financing costs (2,018)
Profit before taxation 374
Taxation 138
Profit after taxation 512
Revenue is wholly attributable to the principal activities of the Group in the
current and prior year.
Analysis of revenue by geographical location: 2024 2023
£000 £000
United Kingdom 97,162 99,526
European Union 524 1,655
Rest of the world 176 81
97,862 101,262
In 2024 the Group had no customer (2023: None) which accounted for more than
10% of its revenue.
Analysis of revenue by timing of recognition: 2024 2023
£000 £000
Revenue recognised at a point in time 24,602 26,290
Revenue recognised over time 73,260 74,972
97,862 101,262
Analysis of movements in deferred income: 2024 2023
£000 £000
Deferred income - opening balance (21,866) (20,135)
Revenue recognised in the year 19,488 17,676
New revenue deferrals in the year (16,953) (19,407)
________ ________
Deferred income - closing balance (19,331) (21,866)
Of the closing deferred income balance of £19,331,000, £17,700,000 is
expected to be recognised as revenue in FY25, £1,121,000 in FY26 and
£510,000 in FY27 or later.
Of the closing accrued income balance of £1,991,000 (see Note 18), £690,000
relates to revenues where the Group's right to invoicing is conditional upon
billing milestones having been met.
Analysis of other expenses: Project and on premise managed services Central
Network services
Mobile Total
£000 £000 £000 £000 £000
Other expenses
Intangibles amortisation - - - (4,567) (4,567)
Depreciation - - - (1,232) (1,232)
Exceptional items (216) (39) - (1,968) (2,223)
Year-ended 31 December 2023
Project and on-premise managed services
Network services
Mobile Total
Central
£000 £000 £000 £000 £000
Revenue 52,097 45,317 3,848 - 101,262
Gross profit 12,285 17,387 1,568 - 31,240
Other operating income - - - 550 550
Other administrative expenses - - - (24,123) (24,123)
Share-based payments - - - (189) (189)
Intangibles amortisation - - - (5,111) (5,111)
Exceptional items (1,104) (1,516) - (4,359) (6,979)
Operating loss (4,612)
Financing costs (2,168)
Loss before taxation (6,780)
Taxation 1,429
Loss after taxation (5,351)
Analysis of other expenses: Project and on-premise managed services Central
Network services
Mobile Total
£000 £000 £000 £000 £000
Other expenses
Intangibles amortisation - - - (5,111) (5,111)
Depreciation - - - (1,472) (1,472)
Exceptional items (1,104) (1,516) - (4,359) (6,979)
Exceptional items attributed to Project and on-premise managed services in the
year to 31 December 2023 relate to transformation costs incurred. Please see
Note 12 for further details.
5 Employees
2024 2023
The average number of employees, including Directors, during the year was: Number Number
Corporate and administration 97 98
Sales and customer service 152 162
Technical and engineering 196 222
Total employees 445 482
Staff costs, including Directors, consist of: £000 £000
Wages and salaries 25,381 26,167
Social security costs 2,991 2,859
Pension costs 722 709
Share-based payments 126 189
Total staff costs 29,220 29,924
The Group makes contributions to defined contribution personal pension schemes
for employees and Directors. The assets of the schemes are separate from those
of the Group.
Pension contributions totalling £159,000 (2023: £166,000) were payable to
the schemes at the year-end and are included in other payables.
6 Directors' remuneration
The remuneration of the Company Directors was as follows:
2024 2023
£000 £000
Directors' emoluments 953 1,383
Pension contributions 21 36
Total Directors' remuneration 974 1,419
Included in the above is the remuneration of the highest paid Director as
follows:
2024 2023
£000 £000
Director's emoluments 310 492
Pension contributions 8 12
Total remuneration of the highest paid Director 318 504
The Group paid contributions into defined contribution personal pension
schemes in respect of four Directors during the year, one of whom was
auto-enrolled at minimal contribution levels, three were on defined
contributions and zero on both auto-enrolment and defined contribution schemes
(2023: six, two auto-enrolled, three defined contribution, one both auto
enrolled and defined contribution).
Further details of Director remuneration are shown in the Remuneration
Committee report on pages 65-71 of the Annual Report & Accounts 2024.
7 Operating profit/(loss)
2024 2023
£000 £000
This has been arrived at after charging/(crediting):
Depreciation of property, plant and equipment 715 637
Depreciation of right of use assets 517 835
Amortisation of intangible fixed assets 4,567 5,111
Impairment of property, plant and equipment( 1 ) - 53
Impairment of right of use assets( 1 ) 259 761
Impairment of intangible fixed assets( 1 ) - 2,288
Foreign exchange movement (2) (36)
Research and development expenditure 859 973
Fees payable to the Company's auditor for the audit of the parent and 65 59
consolidated accounts
Fees payable to the Company's auditor for other services:
- Audit of the Company's subsidiaries pursuant to legislation 134 122
- Audit-related assurance services 27 22
( 1 ) All impairment charges have been recognised in exceptional items. Please
see Note 12 for further details.
Other income in the year relates primarily to research and development credits
of £375,000 and supplier commissions, promotions and bonus payments of
£305,000 (2023: relates primarily to research and development credits of
£331,000).
8. Financing costs
2024 2023
£000 £000
Interest payable on bank borrowings 1,840 2,084
Interest expense on leases 69 73
Other interest payable 109 11
Total financing costs 2,018 2,168
Interest payable on bank borrowings includes £78,000 (2023: £75,000)
amortisation of issue costs.
9. Taxation
2024 2023
£000 £000
UK corporation tax
Corporation tax on UK profit/(loss) for the year - -
Total current taxation on profit/(loss) on ordinary activities - -
Deferred tax (Note 20)
Current year (191) (1,383)
Adjustments relating to prior years 53 (46)
Total deferred taxation (138) (1,429)
Total taxation credit on profit/(loss) on ordinary activities (138) (1,429)
The standard rate of corporation tax in the UK for the year was 25.00% (2023:
23.52%), and therefore the Group's UK subsidiaries are taxed at that rate. The
differences between the total tax shown above and the amount calculated by
applying the standard rate of UK corporation tax to the profit/(loss) before
tax are as follows:
2024 2023
£000 £000
Profit/(loss) before tax 374 (6,780)
Profit/(loss) at the standard rate of corporation tax in the UK of 25.00% 94 (1,595)
(2023: 23.52%)
Effect of:
Net expense not deductible 175 213
Net income not taxable (94) -
Adjustments relating to prior years 53 (46)
Effects of changes in tax rates - (25)
Capital allowances less than depreciation 22 21
Timing differences on acquired intangible assets (388) -
Other timing differences - 3
Total taxation credit on profit/(loss) on ordinary activities (138) (1,429)
Factors that may affect future tax charges/credits:
There are no future factors at the reporting date that are expected to impact
the Group's future tax charge. The Group is not within the scope of the OECD
Pillar Two model rules.
10 Earnings per share
Earnings per share is calculated by dividing the profit/(loss) after tax for
the year by the weighted average number of shares in issue for the year, these
figures being as follows:
2024 2023
£000 £000
Profit/(loss) after tax 512 (5,351)
Adjustments:
Intangibles amortisation (net of non-acquired element) 2,225 3,724
Exceptional items (Note 12) 2,223 6,979
Tax relating to above adjustments (1,033) (2,176)
Share-based payments 126 189
Tax adjustments relating to prior years - 30
Adjusted earnings used in adjusted EPS 4,053 3,395
Adjustment for intangibles amortisation is in relation to intangible assets
acquired via business combinations.
2024 2023
Number Number
(000s) (000s)
Weighted average number of ordinary shares of 1p each used as the denominator 14,362 14,362
in calculating basic EPS (2023: basic and diluted EPS)
Potentially dilutive shares 214 76
Weighted average number of ordinary shares of 1p each used as the denominator 14,576 14,438
in calculating diluted EPS (2023: Adjusted diluted EPS)
Earnings/(loss) per share
Basic 3.6p (37.3)p
Diluted 3.5p (37.3)p
Adjusted - basic 28.2p 23.6p
Adjusted - diluted 27.8p 23.5p
The adjustments to losses have been made in order to provide a clearer picture
of the trading performance of the Group after removing amortisation and
non-recurring expenses. In calculating diluted earnings per share, the
weighted average number of ordinary shares in issue is adjusted to assume
conversion of all dilutive potential ordinary shares.
The Group has one category of potentially dilutive ordinary shares, being
those share options granted to employees where the exercise price is less than
the average price of the Company's ordinary shares during the period.
Potentially dilutive shares have not been included in the diluted EPS for the
prior year on the basis that they are anti-dilutive.
11 Adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA)
Note 2024 2023
£000 £000
Profit/(loss) before taxation 374 (6,780)
Financing costs 8 2,018 2,168
Depreciation of property, plant and equipment 15 715 637
Depreciation of right of use assets 16 517 835
Amortisation of intangible fixed assets 13 4,567 5,111
EBITDA 8,191 1,971
Share-based payments 27 126 189
Exceptional items 12 2,223 6,979
Adjusted EBITDA 10,540 9,139
12 Exceptional items
The costs analysed below have been shown as exceptional items in the income
statement as they are not considered to be part of the Group's recurring
income or expenses:
2024 2023
£000 £000
Transformation costs 1,175 5,051
Staff restructuring and other employee related costs 1,046 1,548
Fees relating to revised credit facilities agreement 2 380
Total exceptional items 2,223 6,979
Transformation costs of £1,175,000 (2023: £5,051,000) incurred in the year
include the following items relating to the ongoing strategic review of the
business which began in the prior year:
'Callmedia' development costs, net of associated revenues, of £46,000 (2023:
£333,000), resultant to the decision made during the prior year to
discontinue the development of our own "Callmedia" Contact Centre product
line, including the CX Now public cloud CCaaS variant.
In the prior year, impairment charges amounting to £2,288,000 relating to
previously capitalised 'Callmedia' software development were recognised. Refer
to Note 13 Intangible assets.
A net credit of £25,000 in relation to onerous leases, consisting of
£259,000 relating to the impairment of the right of use asset in relation to
the Cannock office lease, netted against £284,000 credit relating to the
remeasurement of the lease liability. In addition, exceptional service charges
of £9,000 were incurred in the year also relating to the termination of the
Cannock office lease.
In the prior year, onerous lease costs of £1,342,000 include £761,000
relating to the impairment of the right of use asset in relation to the
Blackfriars Road London office lease, £53,000 relating to the impairment of
leasehold improvements and other onerous operating lease costs of £528,000.
In addition, exceptional service charges of £237,000 were incurred in the
prior year also relating to the downsizing of the London office space.
Other transformation costs in the year of £1,145,000 (2023: £851,000)
include professional fees from third party specialists engaged by the company
to perform a strategic and product review of the business and costs associated
with the implementation of the results of the strategic and full product
review.
Staff restructuring and other employee related costs of £1,046,000 (2023:
£1,548,000) principally include redundancy costs and related professional
fees paid to external third parties.
Fees relating to the credit facilities agreement of £2,000 included the
professional fees associated with the negotiating of the extension of the
facility. In the prior year, fees of £380,000 include associated professional
fees incurred to negotiate the temporary terms in place during the phase of
transformation of the Company.
13 Intangible assets
Goodwill Customer relationships Brands Product platform Software and licences Total
Other
£000 £000 £000 £000 £000 £000 £000
Cost
At 1 January 2023 40,516 43,721 3,480 2,638 10,666 250 101,271
Additions - - - 220 2,834 - 3,054
_______ _______ ______ _______ _______ ______ ______
At 31 December 2023 40,516 43,721 3,480 2,858 13,500 250 104,325
Additions - - - 18 3,801 - 3,819
Disposals - - (3,480) - - - (3,480)
_______ _______ ______ _______ _______ ______ ______
At 31 December 2024 40,516 43,721 - 2,876 17,301 250 104,664
_______ _______ ______ _______ _______ ______ ______
Amortisation and Impairment
At 1 January 2023 317 36,898 2,934 1,616 6,425 92 48,282
Amortisation in the year - 3,062 410 352 1,237 50 5,111
Impairment in the year - - - - 2,288 - 2,288
_______ _______ ______ _______ _______ ______ ______
At 31 December 2023 317 39,960 3,344 1,968 9,950 142 55,681
Amortisation in the year - 2,039 136 269 2,073 50 4,567
Eliminated on disposals - - (3,480) - - - (3,480)
_______ _______ ______ _______ _______ ______ ______
At 31 December 2024 317 41,999 - 2,237 12,023 192 56,768
_______ _______ ______ _______ _______ ______ ______
Net book value
At 31 December 2024 40,199 1,722 - 639 5,278 58 47,896
_______ _______ ______ _______ _______ ______ ______
At 31 December 2023 40,199 3,761 136 890 3,550 108 48,644
_______ _______ ______ _______ _______ ______ ______
Amortisation charges for the year have been charged through administrative
expenses in the statement of comprehensive income.
Included within the amortisation charge for the year ended 31 December 2024 is
£2,342,000 (2023: £1,387,000) relating to amortisation from non-acquired
intangible assets (here meaning assets not acquired as part of a business
combination).
Impairment charges for the year of £Nil (2023: £2,288,000) relate to
Callmedia and have been recognised within exceptional items (Note 12).
The software and licenses and product platform additions include capitalised
development costs, being internally generated assets totalling £727,000
(2023: £630,000). Other intangible assets include stock management platforms
which are managed by third parties.
Goodwill
The carrying value of goodwill is allocated to the cash generating units as
follows:
2024 2023
£000 £000
Network services division 21,134 21,134
Project and on-premise managed services division 15,758 15,758
Mobile division 3,307 3,307
________ ________
Total carrying value of goodwill 40,199 40,199
________ ________
For the purposes of the impairment review of goodwill, the net present value
of the projected future cash flows of the relevant cash generating unit are
compared with the carrying value of the assets for that unit; where the
recoverable amount of the cash generating unit is less than the carrying
amount of the assets, an impairment loss is recognised.
Projected cash flows are based on a five-year horizon which use the approved
plan and a pre-tax discount rate of 15.84% (2023: 14.92%) is applied to the
resultant projected cash flows of each CGU.
Key assumptions used to calculate the cash flows include annual revenue growth
rates and gross margin, which are based on the Group's past performance,
current industry trends, and known contracted future revenues and costs.
Terminal growth rates are informed by the Group's past performance and
external industry and business growth trends.
The key assumptions used in the impairment testing were as follows:
Network services division: average annual revenue growth rate 10.4% (2023:
15.9%), terminal growth rate 2.4% (2023: 3.0%), average gross margin 37.8%
(2023: 41.7%).
Project and on-premise managed services division: average annual revenue
growth rate -1.4% (2023: 1.4%), terminal growth rate 2.4% (2023: terminal
growth rate 3.0%), average gross margin 25.9% (2023: 25.7%).
Mobile division: average annual revenue growth rate -1.7% (2023: 1.1%),
terminal growth rate 0.0% (2023: 0.0%), average gross margin 47.2% (2023:
47.9%).
The Group's impairment assessment at 31 December 2024 indicates that there is
sufficient headroom for each unit.
If the pre-tax discount rate applied to the cash flow projections increased by
3% (18.84% instead of 15.84%), the Group would have had to recognise an
impairment in goodwill related to the Mobile division.
The discount rate is based on conventional capital asset pricing model inputs
and varies to reflect the relative risk profiles of the relevant cash
generating units. Sensitivity analysis using reasonable variations in growth
rate assumptions shows no indication of impairment.
14 Subsidiaries
The Company has a 100% investment in Maintel Europe Limited. The registered
address of Maintel Europe Limited is the same as that of the parent.
Maintel Europe Limited provides goods and services in the managed services and
technology and network services sectors. Maintel Europe Limited is the sole
provider of the Group's mobile services.
During the year, the following subsidiaries were dissolved:
Maintel International Limited Datapoint Global Services Limited
Maintel Voice and Data Limited Maintel Network Solutions Limited
Maintel Finance Limited Datapoint Customer Solutions Limited
District Holdings Limited Maintel Mobile Limited
Intrinsic Technology Limited Azzurri Communications Limited
Warden Holdco Limited Warden Midco Limited
15 Property, plant and equipment
Leasehold improvements Office and computer equipment Total
£000 £000 £000
Cost
At 1 January 2023 513 2,113 2,626
Additions - 418 418
________ ________ ________
At 31 December 2023 513 2,531 3,044
Additions - 552 552
________ ________ ________
At 31 December 2024 513 3,083 3,596
________ ________ ________
Depreciation and impairment
At 1 January 2023 325 920 1,245
Depreciation in the year 57 580 637
Impairment in the year 53 - 53
________ ________ ________
At 31 December 2023 435 1,500 1,935
Depreciation in the year 53 662 715
________ ________ ________
At 31 December 2024 488 2,162 2,650
________ ________ ________
Net book value
At 31 December 2024 25 921 946
________ ________ ________
At 31 December 2023 78 1,031 1,109
________ ________ ________
Impairment charges for the year of £Nil (2023: £53,000) relate to onerous
lease costs and have been recognised within exceptional items (Note 12).
16 Right of use assets
Land and buildings Office and computer equipment Total
£000 £000 £000
Cost
At 1 January 2023 5,308 391 5,699
Additions 26 343 369
________ ________ ________
At 31 December 2023 5,334 734 6,068
Additions 18 554 572
________ ________ ________
At 31 December 2024 5,352 1,288 6,640
________ ________ ________
Depreciation and impairment
At 1 January 2023 3,220 216 3,436
Depreciation charge for the year 525 310 835
Impairment charge for the year 761 - 761
________ ________ ________
At 31 December 2023 4,506 526 5,032
Depreciation charge for the year 234 283 517
Impairment charge for the year 259 - 259
________ ________ ________
At 31 December 2024 4,999 809 5,808
________ ________ ________
Net book value
At 31 December 2024 353 479 832
________ ________ ________
At 31 December 2023 828 208 1,036
________ ________ ________
Impairment charges for the year of £259,000 (2023: £761,000) relate to
onerous lease costs and have been recognised within exceptional items (Note
12).
17 Inventories
2024 2023
£000 £000
Stock held for resale 790 1,677
________ ________
Total inventories 790 1,677
________ ________
Cost of inventories recognised as an expense 10,236 13,831
________ ________
No provisions were made against stock held for resale in 2024 or 2023 as this
balance represents new hardware awaiting installation at customer sites.
18 Trade and other receivables
2024 2023
Current trade and other receivables £000 £000
Trade receivables 10,507 12,336
Other receivables 1,071 315
Prepayments 11,139 11,450
Accrued income 1,991 1,307
________ ________
Total current trade and other receivables 24,708 25,408
________ ________
All amounts shown above fall due for payment within one year.
In applying IFRS 9, the Group reviews the amount of credit loss associated
with its trade receivables and accrued income based on forward looking
estimates that take into account current and forecast credit conditions as
opposed to relying on past historical default rates. The Group has applied the
Simplified Approach applying a provision matrix based on number of days past
due to measure lifetime expected credit losses, after taking into account
customer sectors with different credit risk profiles, and current and forecast
trading conditions.
Movements in contract assets and liabilities were as follows:
- Accrued income increased from £1.3m in 2023 to £2.0m at the
reporting date;
- Prepayments decreased from £11.5m in 2023 to £11.1m at the reporting
date;
- Deferred income decreased from £21.9m in 2023 to £19.3m at the
reporting date; and
- Deferred costs net of accrued costs decreased from £9.3m in 2023 to
£8.0m at the reporting date.
The corresponding adjustments for these movements represent revenues and costs
recognised in the income statement in the year, driven by a decrease in
revenues and fewer billing milestones reached, combined with the timing of
payments to suppliers. A further analysis of revenue movements in the year is
described within the Business review in the Strategic Report.
Other receivables increased from £0.3m to £1.1m largely due research and
development credits and supplier bonus payments that were appropriately
recognised in 2024 and then settled after the year end.
19 Trade and other payables
2024 2023
Current trade and other payables £000 £000
Trade payables 12,875 12,761
Other tax and social security 3,838 2,351
Other payables 3,397 3,521
Accruals 3,858 3,439
Deferred income 17,700 21,866
________ ________
Total current trade and other payables 41,668 43,938
________ ________
2024 2023
Non-current other payables £000 £000
Deferred income 1,631 -
Intangible licences and other payables - 298
Advanced mobile commissions 20 61
Other payables 96 143
________ ________
Total non-current trade and other payables 1,747 502
________ ________
20 Deferred taxation
Property,
plant and Intangible Tax
equipment assets losses Other Total
£000 £000 £000 £000 £000
Net (asset)/liability at 1 January 2023 (931) 2,641 (675) (77) 958
Charge/(credit) to consolidated statement of comprehensive income 169 (787) (587) (178) (1,383)
Adjustment to prior year to consolidated statement of comprehensive income - - (33) (13) (46)
________ ________ ________ ________ ________
Net (asset)/liability at 31 December 2023 (762) 1,854 (1,295) (268) (471)
Charge/(credit) to consolidated statement of comprehensive income 158 (1,060) 616 95 (191)
Adjustment to prior year to consolidated statement of comprehensive income - (238) 191 100 53
________ ________ ________ ________ ________
Net (asset)/liability at 31 December 2024 (604) 556 (488) (73) (609)
________ ________ ________ ________ ________
The net deferred tax asset mainly arises on the recognition of tax timing
differences on property, plant and equipment, as well as prior and current
year taxable losses which are expected to be utilised against future year
taxable profits. Other items include timing differences in relation to
provisions. This is partially offset by a deferred tax liability in relation
to tax timing differences on intangible assets.
The Board has reviewed the Group forecasts and projection models covering five
years from the year end, taking into account reasonably possible changes in
trading performance. As a result, the Board determined that the Group will
make sufficient profits in the future against which the losses can be
utilised. There are no time restrictions on when these taxable losses can be
utilised. The deferred tax asset relating to tax losses has therefore been
recognised on this basis.
The net deferred tax asset balance at 31 December 2024 has been calculated on
the basis that the associated assets and liabilities will unwind at 25% (2023:
25%).
21 Borrowings
2024 2023
£000 £000
Current bank loan - secured 744 2,322
Non-current bank loan - secured 20,000 20,579
________ ________
Total borrowings 20,744 22,901
________ ________
The facility with HSBC consisting of an RCF of £20m with a £6m term loan on
a reducing basis, remained in place during the year and was extended to 1
January 2026 in December 2024.
The term loan is being repaid in equal monthly instalments, starting in
October 2022.
The year-end principal balance of the term loan was £0.8m (2023: £3.0m) and
of the RCF was £20.0m (2023: £20.0m).
The key covenants include net leverage ratio and interest cover tests,
assessed on a quarterly basis. During 2023, the Company successfully met the
temporary milestones and HSBC being satisfied that the recovery phase had been
successfully completed, the initial covenants of the loan were reinstated in
early 2024.
Interest on the borrowings is the aggregate of the applicable margin and SONIA
for Pound Sterling / SOFR for US Dollar / EURIBOR for Euros.
The current bank borrowings above are stated net of unamortised issue costs of
debt of £0.1m (2023: £0.1m).
The facilities are secured by a fixed and floating charge over the assets of
the Company and its subsidiaries. Interest is payable on amounts drawn on the
revolving credit facility and loan facility at a covenant-depending tiered
rate of 2.60% to 3.70% per annum over SONIA, with a reduced rate payable on
the undrawn facility.
The Directors consider that there is no material difference between the book
value and fair value of the loan.
On 28 March 2025, the Group signed a new 5 year banking arrangement with HSBC
to replace its current bank facilities with HSBC. Please see Note 29 for
further details.
22 Lease liabilities
2024 2023
£000 £000
Maturity analysis - contractual undiscounted cash flows
In one year or less 453 958
Between one and five years 520 698
In five years or more - 74
________ ________
Total undiscounted lease liabilities at 31 December 2024 973 1,730
________ ________
Discounted lease liabilities included in the statement of
financial position
Current 417 909
Non-current 484 731
________ ________
Total lease liabilities included in the statement of financial position 901 1,640
________ ________
Amounts recognised in the comprehensive income statement
Interest expense on lease liabilities 69 73
Expenses relating to short term leases 1 1
________ ________
Amounts recognised in the statement of cash flows
Total cash outflow (including payments relating to short term leases) 1,079 1,049
________ ________
Lease liabilities predominantly relate to the Company office premises in
London and Blackburn and office and computer equipment.
During the years ended 31 December 2024 and 31 December 2023 there were no
variable lease payments to be included in the measurement of lease liabilities
and there were no sale and leaseback transactions. Income from subleasing
right of use assets in the year was £Nil (2023: £Nil).
23 Financial instruments
The Group's financial assets and liabilities mainly comprise cash, borrowings,
trade and other receivables, trade and other payables and lease liabilities.
The carrying value of all financial assets and liabilities equals fair value
given their short-term nature.
Financial assets measured at amortised cost
2024 2023
£000 £000
Current financial assets
Trade receivables 10,507 12,336
Accrued income 1,991 1,307
Other receivables 1,034 315
________ ________
Total 13,532 13,958
________ ________
Financial liabilities measured at amortised cost
2024 2023
£000 £000
Non-current financial liabilities
Other payables 116 502
Lease liabilities 484 731
Borrowings 20,000 20,579
________ ________
Total 20,600 21,812
________ ________
Current financial liabilities
Trade payables 12,875 12,761
Borrowings 744 2,322
Other payables 3,397 3,521
Accruals 3,858 3,439
Lease liabilities 417 909
________ ________
Total 21,291 22,952
________ ________
The Group held the following foreign currency denominated financial assets and
financial liabilities:
Assets Liabilities
2024 2023 2024 2023
£000 £000 £000 £000
US Dollars 80 210 106 71
Euros 383 350 155 122
________ ________ ________ ________
Total 463 560 261 193
________ ________ ________ ________
The maximum credit risk for each of the above is the carrying value stated
above. The main risks arising from the Group's operations are credit risk,
currency risk and interest rate risk, however other risks are also considered
below.
Credit risk
Management has a credit policy in place and the exposure to credit risk is
monitored on an ongoing basis. Credit evaluations are performed on customers
as deemed necessary based on, inter alia, the nature of the prospect and size
of order. The Group does not require collateral in respect of financial
assets.
At the reporting date, the largest exposure was represented by the carrying
value of trade and other receivables, against which £136,000 is provided at
31 December 2024 (2023: £194,000). The provision represents an estimate of
potential bad debt in respect of the year-end trade receivables, a review
having been undertaken of each such year-end receivable. The largest
individual receivable included in trade and other receivables at 31 December
2024 owed to the Group was £0.8m including VAT (2023: £1.0m). The Group's
customers are spread across a broad range of sectors and consequently it is
not otherwise exposed to significant concentrations of credit risk on its
trade receivables.
The movement on the provision for trade receivables is as follows:
2024 2023
£000 £000
Provision at start of year 194 389
Provision created 35 43
Provision reversed (93) (238)
________ ________
Provision at end of year 136 194
________ ________
A debt is considered to be bad when it is deemed irrecoverable, for example
when the debtor goes into liquidation, or when a credit or partial credit is
issued to the customer for goodwill or commercial reasons. The Group has
applied the Simplified Approach applying a provision matrix based on number of
days past due to measure lifetime expected credit losses and after taking into
account customer sectors with different credit risk profiles and current and
forecast trading conditions. The Group's provision matrix is as follows:
Current < 30 days 31-60 days > 60 days Total
31 December 2024
Expected credit loss % range 0%-1% 2%-5% 3%-10% 10%-100%
Gross debtors (£'000) 10,015 119 81 428 10,643
Expected credit loss rate (£'000) (39) (25) (2) (70) (136)
Accrued income 1,991 - - - 1,991
12,498
Current < 30 days 31-60 days > 60 days Total
31 December 2023
Expected credit loss % range 0%-1% 2%-5% 3%-10% 10%-100%
Gross debtors (£'000) 10,630 691 800 409 12,530
Expected credit loss rate (£'000) (37) (19) (26) (112) (194)
Accrued income 1,307 - - - 1,307
13,643
Receivables are grouped based on the credit terms offered. The probability of
default is determined at the year-end based on the aging of the receivables
and historical data about default rates on the same basis. That data is
adjusted if the Group determines that historical data is not reflective of
expected future conditions due to changes in the nature of its customers and
how they are affected by external factors such as economic and market
conditions.
Foreign currency risk
The functional currency of all Group companies at 31 December 2024 is Pound
Sterling.
In addition, some Group companies transact with certain customers and
suppliers in Euros or US Dollars. Those transactions are affected by exchange
rate movements during the year. Such transactions in Euros are not deemed
material in a Group context and sensitivity to Euro exchange rate movements is
considered to be immaterial.
Interest rate risk
The Group had total borrowings of £20.7m at 31 December 2024 (2023: £22.9m).
The interest rate charged is related to SONIA and bank rate respectively and
will therefore change as those rates change. If interest rates had been 0.5%
higher/lower during the year, and all other variables were held constant, the
Group's profit (2023: loss) for the year would have been £109,000 (2023:
£121,000) higher/lower due to the variable interest element on the loan.
Liquidity risk
Liquidity risk represents the risk that the Group will not be able to meet its
financial obligations as they fall due. This risk is managed by balancing the
Group's cash balances, banking facilities and reserve borrowing facilities in
the light of projected operational and strategic requirements.
The following table details the contractual maturity of financial liabilities
based on the dates the liabilities are due to be settled:
Financial liabilities:
0 to 6 months 6 to 12 months 2 to 5 Years More than 5 years Total
£000 £000 £000 £000 £000
Trade payables 12,875 - - - 12,875
Other payables 2,836 561 116 - 3,513
Lease liabilities 212 241 520 - 973
Accruals 3,858 - - - 3,858
Borrowings (including future interest) 1,604 795 20,000 22,399
-
______ ______ ______ ______ ______
At 31 December 2024 21,385 1,597 20,636 - 43,618
______ _______ _______ ______ _______
0 to 6 months 6 to 12 months 2 to 5 Years More than 5 years Total
£000 £000 £000 £000 £000
Trade payables 12,761 - - - 12,761
Other payables 2,319 1,202 502 - 4,023
Lease liabilities 511 447 772 - 1,730
Accruals 3,439 - - - 3,439
Borrowings (including future interest) 2,218 2,144 21,853 26,215
-
______ ______ ______ ______ ______
At 31 December 2023 21,248 3,793 23,127 - 48,168
______ _______ _______ ______ _______
Market risk
As noted above, the interest payable on borrowings is dependent on the
prevailing rates of interest from time to time.
Capital risk management
The Group's objective when managing capital is to safeguard its ability to
continue as a going concern in order to provide returns to shareholders.
Capital comprises all components of equity, including share capital, capital
redemption reserve, share premium, translation reserve and retained losses.
Typically returns to shareholders will be funded from retained profits,
however in order to take advantage of the opportunities available to it from
time to time, the Group will consider the appropriateness of issuing shares,
repurchasing shares, amending its dividend policy and borrowing, as is deemed
appropriate in the light of such opportunities and changing economic
circumstances.
24 Share capital
Allotted, called up and fully paid
2024 2023 2024 2023
Number Number £000 £000
Ordinary shares of 1p each 14,361,492 14,361,492 144 144
_________ _________ _________ _________
The Company adopted new Articles on 27 April 2016, which dispensed with the
need for the Company to have an authorised share capital. The Company has one
class of ordinary shares which carry no right to fixed income. All of the
Company's shares in issue are fully paid and each share carries the right to
vote at general meetings.
No shares were issued in the year (2023: Nil).
No shares were repurchased during the year (2023: Nil).
25 Reserves
Share premium, translation reserve, and retained losses represent balances
conventionally attributed to those descriptions. Other reserves include a
capital redemption reserve of £31,000 (2023: £31,000) and a translation
reserve of £33,000 (2023: £33,000).
The capital redemption reserve represents the nominal value of ordinary shares
repurchased and cancelled by the Company and is non-distributable in normal
circumstances.
The Group has no regulatory capital or similar requirements, its primary
capital management focus is on maximising earnings per share and therefore
shareholder return.
The Directors have proposed that there will be no final dividend in respect of
2024 (2023: £Nil).
26 Share Incentive Plan
The Company established the Maintel Holdings Plc Share Incentive Plan ("SIP")
in 2006, which was updated in 2016. The SIP is open to all employees and
Executive Directors with at least six months' continuous service with a Group
company and allows them to subscribe for existing shares in the Company out of
their gross salary. The shares are bought by the SIP on the open market. The
employees and Directors own the shares from the date of purchase but must
continue to be employed by a Group company and hold their shares within the
SIP for five years to benefit from the full tax benefits of the plan.
27 Share-based payments
The Remuneration Committee's report on pages 65-71 of the Annual Report &
Accounts 2024 describes the options granted over the Company's ordinary shares
to the Directors.
In aggregate, options are outstanding over 4.6% (2023: 5.8%) of the current
issued share capital. The number of shares under option and the vesting and
exercise prices may be adjusted at the discretion of the Remuneration
Committee in the event of a variation in the issued share capital of the
Company.
2024 2024 2023 2023
Number of Options Weighted Number of Options Weighted
Average Average
Exercise Exercise
Price Price
Outstanding at 1 January 827,034 185.21p 947,279 348.61p
Granted during the year 50,000 245.00p 575,000 120.22p
Lapsed during the year (222,504) 136.75p (695,245) 354.08p
_______ _______ _______ _______
Outstanding at 31 December 654,530 206.26p 827,034 185.21p
_______ _______ _______ _______
Exercisable at year-end - - - -
The weighted average contractual life of the outstanding options was 8 years
(2023: 8 years), exercisable in the range 115p to 375p (2023: 115p to 375p).
No share options were exercised in the year by way of issue of new shares
(2023: none).
Outstanding share options by exercisable price range 2024 2023
Number of Number of
Share options Share options
Exercisable Price range
115p to 175p 375,000 575,000
221p to 274p 50,000 -
330p to 375p 229,530 252,034
_______ _______
Total share options outstanding 654,530 827,034
_______ _______
The Group recognised £126,000 of expenditure related to equity-settled
share-based payments in the year (2023: £189,000).
The fair value of options granted during the year is determined by applying
the Black-Scholes model.
The expense is apportioned over the vesting period of the option and is based
on the number which are expected to vest and the fair value of these options
at the date of grant.
The inputs into the Black-Scholes model in respect of options granted in the
period are as follows:
Date of grant 3 July 2024
Number of options granted 50,000
Share price at date of grant 245.00p
Exercise price 245.00p
Option life in years 10
Expiry date 3 July 2034
Vesting period 3 years
Risk-free rate 4.17%
Expected volatility 40.36%
Expected dividend yield 0%
Fair value of options 120.51p
Expected volatility was determined by calculating the historical volatility of
the Group's share price for the five-year period prior to the date of grant of
the share option. The expected life used in the model is based on management's
best estimate. The Group did not enter into any share-based payment
transactions with parties other than employees during the current or previous
period.
28 Related party transactions
Transactions with key management personnel
Key management personnel comprise the Directors and executive officers. The
remuneration of the individual Directors is disclosed in the Remuneration
Committee report. The remuneration of the Directors and other key members of
management during the year was as follows:
2024 2023
£000 £000
Short term employment benefits 1,613 1,952
Social security costs 197 241
Contributions to defined contribution pension schemes 36 49
________ ________
1,846 2,242
________ ________
Other transactions - Group
During the year, the Group paid fees of £45,000 (2023: £Nil) to Rouncil
Services Limited, a company of which Clare Bates is a shareholder and
Director, in respect of professional services provided to the Group. The
outstanding balance at 31 December 2024 was £16,000 (2023: £Nil).
During the year, the Group paid fees of £28,000 (2023: £Nil) to John Spens,
a significant shareholder of the Group, in respect of consultancy services
provided to the Group. No amounts were outstanding at 31 December 2024 (2023:
£Nil).
29 Post balance sheet events
On 28 March 2025, the Group signed a new 5-year banking arrangement with HSBC
to replace its current bank facilities with HSBC. The new facility with HSBC
consists of an RCF of £12m in committed funds, an £8m term loan on a
reducing basis and a £2m arranged overdraft facility. Interest terms on the
RCF and term loan are linked to SONIA plus a fixed margin. Interest terms on
the arranged overdraft are the Bank of England Base Rate plus 0.5%.
On 17 April 2025, the Group changed its registered office address from 160
Blackfriars Road, London, SE1 8EZ to 5th Floor, 69 Leadenhall Street, London,
EC3A 2BG.
There are no other events subsequent to the reporting date which would have a
material impact on the financial statements.
30 Contingent liabilities
As security on the Group's loan and overdraft facilities, the Company has
entered into a cross guarantee with its subsidiary undertaking, Maintel Europe
Limited, in favour of HSBC Bank plc. At 31 December 2024 the subsidiary had a
positive cash balance.
The Company has entered into an agreement with Maintel Europe Limited,
guaranteeing the performance by Maintel Europe Limited of its obligations
under the lease on its London premises. The Board deem that the likelihood of
any material financial liability arising for the Company as a result of this
guarantee is remote, given the past ability of the subsidiary to meet its
obligations and the post-year end termination of this lease (see Note 29 for
details of new registered office)
A former employee commenced legal action against the Group in the year in
respect of an employee tribunal matter. The related costs incurred in the year
have been included within 'Exceptional items' under 'Staff restructuring and
other employee related costs' (see Note 12 of the consolidated financial
statements).
The legal action is ongoing, and no provision has been recognised in these
financial statements in respect of any potential obligation to settle this
matter after the reporting date. The Board deem that any potential obligation
does not meet the definition of a provision under IAS 37. Furthermore, the
disclosure as a contingent liability of detail relating to the matter would be
seriously prejudicial to an ongoing legal case.
Glossary
Artificial Intelligence (AI) The theory and development of computer systems capable of performing tasks
that historically required human intelligence, such as recognising speech,
making decisions, and identifying patterns.
Contact Centre as a Service (CCaaS) The implementation of a contact centre platform without the need to install
any on-premise equipment or purchase technology up-front. CCaaS is typically
provided on a "per user, per month" basis, alongside alternate pricing models
such as paying per transaction or perpetual licencing.
Communication Platform as a Service (CPaaS) A public cloud-based API toolkit for communications. Making communications
capabilities such as SMS, voice and social messaging readily available to the
software development community via standardised API frameworks.
Customer Experience (CX) The practice of using the experiences of customers as a competitive
differentiator. Maintel's CX practice is primarily concerned with the design,
implementation and support of technology to facilitate customer interactions
via the contact centre or digital channels.
Digital Transformation (DX) The use of digital technologies to optimise and automate internal systems and
process, and to digitally engage with customers, partners and/or citizens.
Hybrid Cloud The use of more than one cloud environment (normally two) to deliver a single
IT application or infrastructure. For example, a unified communications
application that's delivered from a private cloud, but with elements deployed
on customer premise to provide resilience in the event of a loss of
communication to the private cloud.
Infrastructure as a Service (IaaS) The delivery of an infrastructure platform, where the provider is responsible
for everything up to the physical servers and virtualisation layer and the
customer is responsible for the rest. Often these providers offer many
value-add services too. For example, Amazon Web Services, Microsoft Azure and
Google Cloud Platform.
Internet of Things (IoT) The use of the Internet for Machine to Machine (M2M) communication. The use
cases are many and varied, from sensors of all variety reporting back central
cloud data analytics and/or alerting platforms, to the connectivity of
everyday objects such as fridges and televisions.
Multicloud The use of more than one cloud environment by a single organisation, to
deliver disparate IT applications and infrastructure. This can include both
public and private cloud and SaaS, PaaS and IaaS based services. For example,
using a particular IaaS provider for delivery of an ERP platform and a
separate cloud SaaS provider to deliver a CRM application.
On-premise Any equipment or software deployed within a customer's own office, branch or
datacentre.
PBX "Private Branch Exchange". The use of a locally deployed telephony system to
act as an aggregation point for local users and external trunks.
Platform as a Service (PaaS) The delivery of a platform capability from the cloud, where the provider is
responsible for the layers of the platform up to and including the Operating
System and API layer, and the customer is responsible for the application that
consumes its service. For example, CPaaS providers such as Twilio and Amazon
Connect.
Private Cloud A cloud computing environment where either all hardware/software resources, or
just the virtual server and application layers, are dedicated exclusively to a
single customer, providing enhanced security, control, and customisation.
Public Cloud A cloud computing model where IT infrastructure like servers, networking, and
storage resources are offered as virtual resources accessible over the
internet and managed by a third-party provider.
Public Switched Telephone Network (PSTN) The legacy analogue BT telephony network, which is being switched off in 2025
with exchange stop-sells occurring across the country each month between now
and the forecast end date of this program.
Secure Access Service Edge (SASE) An architecture that combines network connectivity and network security into a
common fabric, including technologies such as SD-WAN and Security Service
Edge.
Security Service Edge A cloud-based service that secures access to the web, cloud services, and
private applications by consolidating security functions into a robust and
centralised platform.
Session Initiation Protocol (SIP) Trunking SIP Trunking is the IP based digital replacement for all multi-line use cases
of the legacy Public Switched Telephone Network.
Software as a Service (SaaS) The delivery of an application from the cloud, where the provider is
responsible for all layers of the platform and the customer simply consumes
the application. For example, Salesforce.
Software Defined Wide Area Network (SD-WAN) The latest generation of wide area networking technology which enables
centralised and simple configuration and connection irrespective of the
underlying circuit or wireless technology, plus a range of business-oriented
networking services.
Unified Communications (UC) Unified communications is a suite of tools to allow team members to
collaborate, including instant messaging (IM), presence, screen and document
collaboration and both audio and video conferencing.
Unified Communications as a Services (UCaaS) The implementation of unified communications tools without the need for an
organisation to install hardware or software on their premises or in their
data centres. UCaaS is typically provided on a "pay as you go" basis with
minimal up-front costs and sometimes with the ability to flex the capacity of
the service up and down during the term of the agreement.
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