REG - Norman Broadbent PLC - Q1 2025 Trading Update and Final Results
02/04/2025 07:04
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RNS Number : 2434D Norman Broadbent PLC 02 April 2025
THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR
MAY HAVE QUALIFIED AS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE
MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
2 April 2025
Norman Broadbent plc
("Norman Broadbent", the "Company" or the "Group")
Q1 2025 Trading Update
and
Final Results
Second best year in over a decade in a challenging market
Q1 2025 Company's best ever quarter - NFI up 40% on Q1 2024
Norman Broadbent (AIM: NBB), a leading Executive Search and Interim
Management firm, is pleased to announce a trading update for Q1 2025 and its
audited final results for the year ended 31 December 2024 ("FY 2024").
Q1 2025 Highlights
· Q1 2025 is the Company's best ever quarter, with net fee income ("NFI") up 40%
on Q1 2024 - NFI of £3.0 million (Q1 2024: £2.15m)
· Continuing the strong momentum generated at end of 2024, we enter Q2 having
secured a record £2.43 million in contracted future revenue, 51% higher than
Q2 2024 (Q2 2024: £1.61 million)
FY2024 Financial Highlights
· Revenue of £10.9 million, being down 13% on prior year (2023: £12.3 million)
and up 25% on 2022 (2022: £8.7 million), delivering the Company's second-best
performance in over a decade
· NFI of £9.3 million, being down 11% on prior year (2023: £10.5 million) and
up 19% on 2022 (2022: £7.8 million), reflecting the Company's transformation
and longer-term growth trajectory. Q4 was the Company's strongest quarter of
the year
· Underlying EBITDA(1) of £0.3 million (2023: £0.9 million), up 200% on 2022
(2022: £0.1 million), demonstrating cost discipline while investing for
growth
· Loss before tax of £0.2 million (2023: profit before tax of £0.3 million;
2022: loss before tax of £0.3 million)
· Cash balance of £0.2 million as at 31 December 2024 (31 December 2023: £0.8
million)
FY2024 Operational Highlights
· Grew headcount by 12% while investing in the team to develop capability and
capacity
· Improved processes and support technologies, including the implementation of
Power BI
· Client satisfaction rates in excess of 90%, with 87% of candidates ranking
Norman Broadbent as either 'better' or 'the best' compared to other search
firms
· The Company's values-based culture was recognised by Best Companies with
multiple awards, including 'Outstanding place to work'
Outlook
· Labour market is expected to remain unpredictable for at least H1 2025
· Successful turnaround positions the Company to navigate challenging
conditions, continue to grow and fully capitalise when market conditions do
improve
· Best ever quarter and growing book of contracted revenue provide the platform
for the Company to deliver positive results this year and beyond. The Company
remains committed to its medium-term EBITDA target of £1.25 million
(( 1 )) Excludes share-based payment charges and restructuring costs
Kevin Davidson, CEO of Norman Broadbent, said:
"I am proud of the team's continued dedication in the face of an incredibly
challenging labour market. On the back of a record-breaking FY23, we delivered
a solid performance in FY24, the Company's second best in over ten years.
Our award-winning culture, motivated and growing team of the highest quality
professionals and resurgent brand, underpinned by market leading processes and
technologies, are coming together to form a very strong platform and engine
for future growth, both organic and inorganic.
While the macro uncertainty is set to persist in the near-term, to have
started the year with our strongest ever quarter is encouraging and testament
to the progress we have made. Norman Broadbent is now a far more resilient
business capable of navigating challenging conditions. With strong
foundations, we are well-positioned to take full advantage of a market
recovery when it comes and remain confident in our ability to drive long-term,
sustainable growth."
Investor Presentation:
Kevin Davidson, the Company's CEO, and Mehr Malik, the Company's CFO, will
host a virtual presentation and Q&A session open to all existing and
potential shareholders at 4.00pm today. To register to attend, please use the
following link:
https://www.investormeetcompany.com/norman-broadbent-plc/register-investor
(https://url.avanan.click/v2/___https:/www.investormeetcompany.com/norman-broadbent-plc/register-investor___.YXAxZTpzaG9yZWNhcDphOm86ZTFhYmJkYjUzYWJhMmM5OTA3MTAwODY1NTVkOWQ4YWI6Njo4ZTNkOjQxODM5MGMzOWU5MmU4YjMwYzAzZGU3OTIyNGU0OGI2MjUzMzNhMTQxYzhlNDRlNWI1Y2QzMmJlMzkzYzgzYjY6cDpGOk4)
Copies of this announcement are available on the Company's website,
www.normanbroadbent.com/investor-relations/
(https://url.avanan.click/v2/r02/___http:/www.normanbroadbent.com/investor-relations/___.YXAxZTpzaG9yZWNhcDphOm86ZWZlOWY5ZTU5M2E0ZTIxMjA4Zjc2NDAyNmFlOWQwYWM6NzpjODU3OmQzMDQ4ZTdkZDk4NGU3OWFkOWY1NGVkZmJlZmJjNmIxNWRlYWRhY2MyOGJlNGMyMDdhMzZiZWI2MGQyNGI3ODM6cDpUOk4)
.
Contacts:
Norman Broadbent plc +44 (0)20 7484 0000
Kevin Davidson, CEO
Mehr Malik, CFO
Shore Capital (Nominated Adviser and Broker) +44 (0)20 7408 4090
Tom Griffiths / Tom Knibbs (Corporate Advisory)
Henry Willcocks (Corporate Broking)
Alma (Financial Communications Adviser) +44 (0)20 3405 0205
Rebecca Sanders-Hewett normanbroadbent@almastrategic.com (mailto:normanbroadbent@almastrategic.com)
Kinvara Verdon
David Ison
About Norman Broadbent:
Norman Broadbent (AIM: NBB) is a professional services firm focused on
executive search, senior interim management solutions and bespoke leadership
advisory services working across the UK and internationally.
Established as the first UK-headquartered search firm in 1979, the firm has a
40+ year track record of shaping leadership across industries including
Consumer, Financial Services, Industrials, Life Sciences, Investor and TMT.
www.normanbroadbent.com
(https://url.avanan.click/v2/___http:/www.normanbroadbent.com___.YXAxZTpzaG9yZWNhcDphOm86OTdhMTRmYzIzZWY1YzM5MDNmNTdhN2E3NGVmZjI1OGI6NjpjYTk0OjY2MDg2Zjg4M2UxOTVmMGJiZDJkMTg4MTNhYjhhODAyNGRhZjkyMDIwNWMyZTE0YTRiOTZlNGIzZDNjMjU5N2Y6cDpU)
Chair's Statement
In 2024, the whole industry saw significant headwinds. Despite this, the
Norman Broadbent team recorded their second-best year for over a decade, with
NFI declining only 4% year-on-year in the last quarter or up by 9% compared to
the corresponding period in 2022. In addition, carried forward contracted
revenue from 2024 to 2025 was a record £2.1 million, up 40% year-on-year,
boding well for our medium-term ambition to achieve underlying EBITDA £1.25
million.
2024 saw a continued transformation across the Company with no let-up in the
investment in headcount and systems. The foundations that were built in the
previous three years have served us well. 2024's results are testament to the
hard work put in by the team and again we outperformed our peers and the
market as a whole.
The culture present throughout the Company is one of teamwork, inclusion,
quality and delivery. This has been integral in delivering the results that
have been achieved. It is encouraging to see the levels of commitment and
ambition across every level of the Company. This ambition is driven by the
strong example set from the top.
Throughout 2025, the executive team will continue to invest in headcount,
adding more experienced consultants and researchers.
In common with its peers, we are facing some very challenging conditions, but
our high-quality service has enabled the Company not only to navigate these
challenges but also deliver excellent results with NFI of £9.3 million and,
once again, net positive cash.
The Board's strategy for rapid yet sustainably profitable expansion has been
delivered and will provide the platform for further profitable growth in 2025
and beyond.
I would like to thank the entire Norman Broadbent team for their unwavering
commitment, hard work and for the quality of their execution, our clients for
putting their faith in us as partners and our shareholders for their continued
support.
Peter Searle
Chair
1 April 2025
CEO's Statement
2023 marked a key milestone for the Company as it was successfully returned to
profitability, delivering on the plan set when I joined Norman Broadbent in
late 2021. In 2024, we continued to grow capacity and capability whilst also
delivering healthy underlying EBITDA and the second-best performance the
Company has seen in over ten years.
Despite an 11% drop over 2023, NFI in 2024 was 27% up on 2022 and a full 58%
up on 2021 when we embarked on the turnaround. However, existing market
challenges have stubbornly persisted with the negative sentiment across the
recruitment sector extending into 2025. That said, we were pleased to have
carried record levels of contracted revenues into the new financial year.
Our Team
People and Culture have remained at the heart of everything we do. Retaining,
developing and attracting the highest calibre, and culturally aligned, talent
in the market is the strategic engine of any professional services firm.
Receiving awards and third-party validation in 2024 for the culture we have
created together was incredibly pleasing.
We upgraded a number of our Fee Earners over the year and grew this team by
net 17% over the course of 2024. In addition to this, the number who we
consider 'established,' that is they have worked with us for 18 months or
longer, grew by 66% which creates a much more stable, proven and mature
platform going into 2025.
Our Research and Insight team have continued to grow in capability, capacity,
and tenure. We initiated client and candidate feedback surveys at the
beginning of 2024, and I am delighted to see consistently high scores across
all performance metrics. Notably, 100% of client and candidate respondents in
2024 stated they would work with us again, reinforcing the strength of our
relationships and quality of service.
These surveys extend beyond placed candidates to include all those shortlisted
in our processes-an often-overlooked group in our industry, where timely and
candid feedback can be lacking. Encouragingly, 98% of candidate responses
rated our 'level of support post-shortlist, regardless of outcome,' as 'very
good' or 'excellent.'
The surveys also consistently highlight the quality of materials we produce
for, and on behalf of, our clients. An impressive 97% of candidate responses
and 100% of client responses rated the 'quality of our brief pack' as 'very
good' or 'excellent'- a testament to the collaborative excellence of our
Research and Insight team and their equally talented colleagues in marketing.
Despite the acute and persistent market challenges we have faced over the past
three years, we have, together, materially turned around the Company. This is
both recognised by our clients and demonstrated by the fact that we delivered
the two best years in terms of performance in over a decade in 2023 and 2024.
Our Brand
The Norman Broadbent Brand Heritage also remains a key differentiator which we
are both proud of and increasingly leveraging. Firmly reestablishing and
committing to our board practice in 2024 has enabled that brand heritage to be
reenergised across the boardrooms of the UK and internationally. The board
survey we conducted in collaboration with BDO, cast up some interesting
findings and helped establish us once again as a thought leader amongst the
most senior decision makers across all market verticals.
Our Platform
Our challenge is always balancing growth with short-term profitability,
especially in such a depressed trading environment. We were, of course,
frustrated by the fact 2024 was slightly down on 2023 from an NFI and EBITDA
perspective but we continued to invest and were very pleased to see momentum,
from across our fee earning community, building in the second half of the
year.
We are a fundamentally different, and drastically improved, business from
where we were in 2021 and finishing the year net cash(2) positive (£0.1
million) versus having a net debt position(2) of £1.1 million in 2022 during
the turnaround is a clear indicator of this.
Our continued investment in supporting infrastructure and technologies to both
modernise and prepare the platform for accelerated future expansion
crystalised in 2024 with the implementation of Power BI, allowing data to be
extracted from all relevant sources to deliver real-time management
information. This caps a great deal of focused effort and investment over the
past two years, not only improving productivity and the accuracy of
information but positioning us to be able, more easily, to integrate other
businesses through acquisition should that arise.
Our Focus
During 2024, Norman Broadbent continued to place leaders across the UK,
Europe, the US, Asia and the Middle East covering multiple sectors and
disciplines. Whilst the Company remains well balanced across both resilient
and growth sectors, following some considerable background work, we are
focused on establishing a US footprint as part of our expansion plans.
Our turnaround has been strategically driven by our executive search offering
which represents 88% of our revenue and 88% of our NFI. This will continue to
be at the heart of our growth and the engine for cross-selling to other
service lines such as interim management and broader leadership consulting and
advisory services. Now that we are much more firmly established, once again,
as a leading executive search firm, we are actively exploring options, both
organic and inorganic, to broaden our service offering, always balancing risk
and reward in both the short and long-term.
We will continue to develop our platform this year and beyond as we drive
organic growth domestically and internationally. We have also begun to much
more actively explore opportunities for acquisition.
CURRENT TRADING AND OUTLOOK
The momentum built at the end of FY24 provides a solid foundation for the year
ahead, though we expect market conditions to remain challenging for at least
the first half of FY25. While it is difficult to forecast with any certainty
exactly when labour markets will recover in a meaningful way, the successful
turnaround of the business, and our recent track record of navigating tough
environments reinforces our confidence in our prospects.
Our priorities in the new financial year are to further expand our reach into
attractive segments while continuing to bolster our market position. This
includes a concerted effort to progress internationally while exploring
strategic acquisitions that will accelerate our long-term growth ambitions.
There is clear and recognised scope for industry consolidation, and we believe
we have the right platform to capitalise on it, driving increased scale and
efficiency.
While external factors will influence the pace at which we are able to deliver
our targets, we remain committed to our medium-term EBITDA goal of £1.25
million. The business is in a very healthy position to continue along a
sustainable and accelerating growth trajectory when conditions improve.
Kevin Davidson
Group Chief Executive
1 April 2025
(2) Excludes lease liabilities
( )
Consolidated Income Statement
For the year ended 31 December 2024
2024 2023
Notes £'000 £'000
Revenue 3 10,919 12,306
Cost of sales (1,605) (1,731)
Gross profit 9,314 10,575
Operating expenses (9,416) (10,163)
Operating (loss) / profit (102) 412
Net finance cost 7 (56) (103)
(Loss) / profit before tax 4 (158) 309
Taxation 6 - -
(Loss) / profit for the year (158) 309
Earnings per share
(Loss) / profit per share
- Basic 8 (0.25)p 0.50p
- Diluted (0.20)p 0.39p
Adjusted (loss) / profit per share
- Basic 8 (0.15)p 0.91p
- Diluted (0.12)p 0.71p
Consolidated Statement of Comprehensive Income
2024 2023
Notes £'000 £'000
(Loss) / profit for the year (158) 309
Total comprehensive income for the year (158) 309
Attributable to:
Owners of the Company (158) 309
Consolidated Statement of Financial Position
As at 31 December 2024
2024 2023
Notes £'000 £'000
Non-current assets
Intangible assets 10 1,363 1,363
Property, plant and equipment 11 567 178
Total non-current assets 1,930 1,541
Current assets
Trade and other receivables 13 2,266 2,901
Cash and cash equivalents 14 236 765
Total current assets 2,502 3,666
Current liabilities
Trade and other payables 15 2,535 3,393
Bank overdraft and interest-bearing loans 16 54 207
Lease liabilities 20 387 111
Total current liabilities 2,976 3,711
Net current liabilities (474) (45)
Non-current liabilities
Bank loans 16 59 113
Lease liabilities 20 119 8
Total non-current liabilities 178 121
Total liabilities 3,154 3,832
Total assets less total liabilities 1,278 1,375
Equity
Issued share capital 18 6,396 6,365
Share premium account 18 14,233 14,233
Own shares 18 (26) -
Retained earnings (19,325) (19,223)
Total equity 1,278 1,375
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Share Capital Share Premium Own shares Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2024 6,365 14,233 - (19,223) 1,375
Loss for the year - - - (158) (158)
Total comprehensive income for the year - - - (158) (158)
Credit to equity for share-based payments - - - 61 61
Issue of shares to employee benefit trust 31 - (31) - -
Shares distributed by employee benefit trust - - 5 (5) -
Transactions with owners of the Group 31 - (26) 56 61
Balance at 31 December 2024 6,396 14,233 (26) (19,325) 1,278
Balance at 1 January 2023 6,345 14,110 - (19,785) 670
Profit for the year - - - 309 309
Total comprehensive income for the year - - - 309 309
Credit to equity for share-based payments - - - 253 253
Conversion of convertible loan notes 20 123 - - 143
Transactions with owners of the Group 20 123 - 253 396
Balance at 31 December 2023 6,365 14,233 - (19,223) 1,375
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
2024 2023
Notes £'000 £'000
Cash flows from operating activities
(Loss) / profit before taxation (158) 309
Depreciation / impairment of property, plant and equipment 285 231
Share-based payment charge 61 253
Net finance cost 56 103
Decrease / (increase) in trade and other receivables 635 (579)
(Decrease) / increase in trade and other payables (858) 1,395
Net cash generated from operating activities 21 1,712
Cash flows from investing activities and servicing of finance
Net finance cost (23) (27)
Payments to acquire tangible fixed assets 11 (50) (16)
Net cash used in investing activities (73) (43)
Cash flows from financing activities
Repayments of borrowings (62) (389)
Payment of lease liabilities (256) (241)
Decrease in invoice discounting 16 (159) (324)
Net cash used in financing activities (477) (954)
Net (decrease) / increase in cash and cash equivalents (529) 715
Cash and cash equivalents at beginning of period 765 50
Cash and cash equivalents at end of period 236 765
The accompanying notes form an integral part of these financial statements.
Notes to the Financial Statements
For the year ended 31 December 2024
1. Significant Accounting Policies
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been consistently
applied to both years presented unless otherwise stated.
1.1. Basis of Preparation
The consolidated financial statements of Norman Broadbent plc ("Norman
Broadbent", "the Company" or "the Group") have been prepared in accordance
with International Financial Reporting Standards, International Accounting
Standards and interpretations issued by the International Accounting Standards
Board (IASB), UK adopted International Financial Reporting Standards (adopted
IFRSs) and with those parts of the Companies Act 2006 applicable to those
companies reporting under IFRS. The consolidated financial statements have
been prepared under the historical cost convention. The consolidated financial
statements are presented in pounds and all values are rounded to the nearest
thousand (£'000), except when otherwise indicated.
The preparation of financial statements in compliance with UK adopted IFRS
Accounting Standards requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the
process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements are
disclosed in note 1.19.
Going Concern
The consolidated financial statements of the Group have been prepared under
the assumption the Group operates on a going concern basis, which assumes the
Group will be able to discharge its liabilities as they fall due. In
confirming the validity of the going concern basis of preparation, the Group
has considered the following specific factors:
· The Group reported a loss before tax from continued operations in the year to
31 December 2024 of £0.2m compared with an operating profit of £0.3m in
2023.
· The consolidated statement of financial position shows a net asset position at
31 December 2024 of £1.3m (2023: £1.4m) with cash at bank of £0.2m (2023:
£0.8m).
· At the date that these financial statements were approved the Group had no
overdraft facility, a CBILS loan of £0.1m and its receivable finance facility
which is 100% secured by the Group's trade receivables.
· Management prepares an annual budget and longer-term strategic plan, including
an assessment of cash flow requirements, and continue to monitor actual
performance against budget and plan throughout the reporting period.
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Strategic
Report. Based on these factors, management has a reasonable expectation that
the Group has and will have adequate resources to continue in operational
existence for the foreseeable future.
Changes in Accounting Policy and Disclosures
a. New and amended accounting standards adopted by the Group
The Group adopted the following new and amended relevant IFRS in the year:
• Classification of Liabilities as Current or Non-Current - Amendments
to IAS 1
b. Standards, amendments and interpretations to existing standards
that are not yet effective and have not yet been adopted early by the Group
There are a number of standards, amendments to standards, and interpretations
which have been issued by the International Accounting Standards Board
("IASB") that are effective in future accounting periods that the Group has
decided not to adopt early. Any standards that are not deemed relevant to the
operations of the Group have been excluded:
• Presentation and Disclosure in Financial Statements - IFRS18
The Group is currently assessing the impact of the new accounting standards
and amendments. The Group does not believe that these amendments will have a
significant impact on the financial statements of the Group.
1.2. Basis of Consolidation
The Group's financial statements consolidate those of the parent company and
all of its subsidiaries at 31 December 2024. All subsidiaries have a reporting
date of 31 December. Subsidiaries are consolidated from the date of their
acquisition, being the date on which the Group obtains control, and continue
to be consolidated until the date that such control ceases. Accounting
policies have been applied consistently.
Inter-company transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated.
The Employee Benefit Trust (EBT) is consolidated on the basis that the parent
has control, thus the assets and liabilities of the EBT are included on the
Company balance sheet and shares held by the EBT in the Company are presented
as a deduction from equity in the Own shares reserve.
1.3. Goodwill
Goodwill arising on acquisition of subsidiaries is included in the
consolidated statement of financial position as an asset at cost less
impairment. If the goodwill balance is material, it is tested annually for
impairment and carried at cost less accumulated impairment losses. Any
impairment is recognised immediately in the income statement and is not
subsequently reversed.
1.4. Impairment of Non-Financial Assets
Assets that have an indefinite useful life, for example goodwill, are not
subject to amortisation and are tested annually for impairment. Assets that
are subject to amortisation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset's fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units).
1.5. Financial Assets and Liabilities
Financial assets and liabilities are recognised initially at their fair value
and are subsequently measured at amortised cost. For trade receivables, trade
payables and other short-term financial liabilities this generally equates to
original transaction value.
1.6. Property, Plant and Equipment
The cost of property, plant and equipment is their purchase cost, together
with any incidental costs of acquisition.
Depreciation is recognised on a straight-line basis to write down the cost
less estimated residual value of each asset over its expected useful economic
life at the following rates:
· Office and computer equipment - over three to four years
· Fixtures and fittings - lower of lease term and four years
· Land and buildings leasehold - over three to five years
· Right of use asset - lower of the asset's useful life and the lease
term
1.7. Trade Receivables
Trade receivables are amounts due from customers for services performed in the
ordinary course of business. If collection is expected in one year or less (or
in the normal operating cycle of the business if longer), they are classified
as current assets. If not, they are presented as non-current assets. Trade
receivables are recognised initially at transaction price. They are
subsequently measured at amortised cost using the effective interest method,
less provision for impairment. A provision for the impairment of trade
receivables is established when there is objective evidence that the Group
will not be able to collect all amounts due according to the original terms of
the receivables.
1.8. Cash and Cash Equivalents
Cash and cash equivalents include cash in hand and deposits held at call with
banks. Bank overdrafts are shown within borrowings in current liabilities on
the balance sheet.
1.9. Investments
Investments in subsidiary undertakings are stated at cost less provision for
any impairment in value. Investments are tested annually for impairment and
whenever events or changes in circumstance indicate that the carrying amount
may not be recoverable an impairment loss is recognised immediately for the
amount by which the investment's carrying amount exceeds its recoverable
value.
1.10. Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the income statement over the period of the borrowings
using the effective interest method.
1.11. Invoice Discounting Facility
The terms of this arrangement are judged to be such that the risk and rewards
of ownership of the trade receivables do not pass to the finance provider. As
such the receivables are not derecognised on draw-down of funds against this
facility. This facility is recognised as a liability for the amount drawn.
1.12. Trade Payables
Trade payables are non-interest bearing and are initially recognised at fair
value and then subsequently measured at amortised cost.
1.13. Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ('the functional currency'). The consolidated financial
statements are presented in sterling, which is the functional currency of
Norman Broadbent Plc.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions or
valuation where items are re-measured. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the consolidated income statement, except
when deferred in equity as qualifying cash flow hedges and qualifying net
investment hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash
equivalents are presented in the consolidated income statement within 'net
finance cost'. All other foreign exchange gains and losses are presented in
the income statement within 'operating expenses'.
1.14. Taxation
Taxation currently payable is based on the taxable profit for the year.
Taxable profit differs from net profit as reported in the consolidated income
statement because it excludes items of income and expense that are taxable or
deductible in other years and it further excludes items that are never taxable
or deductible. The Group's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all material taxable timing
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference
arises from an initial recognition of goodwill or from the initial recognition
(other than in the business combination) of other assets and liabilities in
the transaction that affects neither the tax profit nor the accounting profit.
Deferred tax is calculated using the tax rates that have been enacted or
substantively enacted at the balance sheet date. Deferred tax is charged or
credited to the consolidated income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
1.15. Revenue Recognition
Revenue comprises the fair value of the consideration received or receivable
for the sale of goods and services in the ordinary course of the Group's
activities. Revenue is shown net of value-added tax, returns, rebates and
discounts and after eliminating sales within the Group. The Group recognises
revenue when the amount of revenue can be reliably measured, it is probable
that future economic benefits will flow to the entity and when specific
criteria have been met for each of the Group's activities as described below.
Executive search services
Executive Search services are provided on a retained basis and the Group
generally invoices the client at pre-specified milestones agreed in advance at
a specific point in time. Revenue is recognised at three stages; retainer,
shortlist and completion fee. Revenue is recognised based on delivery of
performance obligations at defined stages including resource allocation and
search strategy agreement at retainer stage, delivery of candidate shortlist
and candidate acceptance of placement.
Interim management
Revenue is recognised for interim business over time as services are rendered,
validated by receipt of a client approved timesheet or equivalent. Fixed Term
Contracts or Candidate conversions are recognised on client approval and
invoice date at a specific point in time.
Leadership consulting
Revenue is recognised in line with delivery. Where revenue is generated by
contracts covering a number of sessions then revenue is recognised over the
contract term based on the average number of sessions taken up and is invoiced
at a specific point in time.
Interest income
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that asset's net carrying amount.
1.16. Pensions
The Group operates a number of defined contribution pension schemes for the
benefit of certain employees. The costs of the pension schemes are charged to
the income statement as incurred.
1.17. Leases
The Group makes the use of leasing arrangements principally for the provision
of office space and various office equipment. Rental contracts are typically
made for fixed periods of 3 to 5 years but may have extension options.
Contracts may contain both lease and non-lease components. The Group allocates
the consideration in the contract to the lease and non-lease components based
on their relative standalone prices.
However, for leases of property for which the Group is a lessee and for which
it has major leases, it has elected not to separate lease and non-lease
components and instead accounts for these as a single lease component.
Leases are recognised as a right-of-use asset and a lease liability at the
lease commencement date.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
• Fixed payments (including in-substance fixed payments), less any lease
incentives receivable;
• Variable lease payments that are based on an index or a rate,
initially measured using the index or rate as at the commencement date;
• Amounts expected to be payable by the Group under residual value
guarantees;
• The exercise price of a purchase option if the Group is reasonably
certain to exercise that option; and
• Payments of penalties for terminating the lease, if the lease term
reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability. The lease payments are
discounted using the interest rate implicit in the lease. If that rate cannot
be readily determined, which is generally the case for leases in the Group,
the lessee's incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period.
Right-of-use assets are measured at cost comprising the following:
• The amount of the initial measurement of lease liability;
• Any lease payments made at or before the commencement date less any
lease incentives received; and
• Any initial direct costs.
Right-of-use assets are generally depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis. If the Group is
reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset's useful life. Right-of-use assets are
tested for impairment in accordance with IAS 36 Impairment of assets.
Payments associated with short-term leases of equipment and vehicles and all
leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of
12 months or less. Low-value assets comprise IT equipment and small items of
office furniture.
1.18. Share Option Schemes
For equity-settled share-based payment transactions the Group, in accordance
with IFRS 2, measures their value and the corresponding increase in equity
indirectly, by reference to the fair value of the equity instruments granted.
The fair value of those equity instruments is measured at grant date, the
EBITDA Options and SAYE Options using a Binomial option model and the Share
Price Options using a Monte Carlo simulation model. The expense is apportioned
over the vesting period of the financial instrument and is based on the
numbers which are expected to vest and the fair value of those financial
instruments at the date of grant. If the equity instruments granted vest
immediately, the expense is recognised in full.
1.19. Critical Accounting Judgements and Estimates
a. Impairment of goodwill - determining whether goodwill is impaired requires an
estimation of the value in use of cash-generating units (CGUs) to which
goodwill has been allocated. The value in use calculation requires an
estimation of the future profitability expected to arise from the CGU and a
suitable discount rate in order to calculate present value.
b. Impairment of investments - determining whether investments are impaired
requires an estimation of the value in use of each subsidiary. The value in
use calculation requires an estimation of the future profitability expected to
arise from each subsidiary and a suitable discount rate in order to calculate
present value.
c. Revenue recognition - revenue is recognised based on estimated timing of
delivery of services based on the assignment structure and historical
experience. Were these estimates to change then the amount of revenue
recognised would vary.
d. Share-based payments - the expense recognised for share-based payment schemes
reflects the number of share options granted that will vest and management's
expectations regarding share lapses and non-market performance conditions. All
options are subject to both time vesting and performance conditions.
2. Financial Risk Management
The financial risks that the Group is exposed to through its operations are
interest rate risk, liquidity risk and credit risk. The Group's overall risk
management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the Group's financial
performance.
There have been no substantive changes in the Group's exposure to financial
risks, its objectives, policies and processes for managing those risks or the
methods used to measure them from previous periods, unless otherwise stated in
this note.
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives
and policies to the Group's Executive Committee.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible, without unduly affecting the Group's competitiveness and
flexibility. Further details regarding specific policies are set out below:
2.
2.1. Interest Rate Risk
The Group's interest rate risk arises from borrowings linked to the Bank of
England Base Rate and affects the invoice discounting facility and the CBILS
loan. A combination of small interest rate reductions in 2024 along with lower
level of borrowing by the Group has resulted in a corresponding fall in
interest expense to the Group. The Group's management factors these movements
into cash flow projections (see liquidity risk below) which indicate that the
Group will be able to meet interest expenses under reasonably expected
circumstances.
2.2. Liquidity Risk
Liquidity risk arises from the Group's management of working capital and
finance charges. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due. The Group's policy is to
ensure that it will always have sufficient cash and borrowing facilities to
allow it to meet its liabilities when they become due. The Group has access to
an invoice discounting facility, which provides immediate access to funding
when required and is secured by the Group's trade receivables. The Group took
advantage of a CBILS loan in November 2020 which is repayable over six years
to 2026. The Board receives cash flow projections as well as monthly
information regarding cash balances. At the balance sheet date, these
projections indicated that the Group expected to have sufficient liquid
resources to meet its obligations under reasonably expected circumstances.
2.3. Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations. The Group is mainly exposed to credit risk from credit sales. It
is Group policy to assess the credit risk of new customers before entering
contracts.
Each new customer is analysed individually for creditworthiness before the
Group's standard payment and delivery terms and conditions are offered. The
Board determines concentrations of credit risk by reviewing the trade
receivables' ageing analysis.
The Board monitors the ageing of credit sales regularly and at the reporting
date does not expect any losses from non-performance by the counterparties
other than those specifically provided for (see note 13). The Directors are
confident about the recoverability of receivables based on the blue chip
nature of its customers, their credit ratings and the very low levels of
default in the past.
2.4. Capital Risk Management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
The Group sets the amount of capital it requires in proportion to risk. The
Group manages its capital structure and makes adjustments to it in the light
of changes in economic conditions and the risk characteristics of the
underlying assets. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
3. Revenue
Group revenues are primarily driven from UK operations. When revenue is
derived from overseas business the results are presented to the Board by
geographic region to identify potential areas for growth or those posing
potential risks to the Group.
i. Class of Business:
The analysis by class of business of the Group's turnover is set out below:
2024 2023
£'000 £'000
Revenue - Search 8,107 8,585
Revenue - Interim Management 2,656 3,189
Revenue - Leadership Consulting 111 501
Revenue - Other 45 31
Total 10,919 12,306
ii. Revenue by Geography:
2024 2023
£'000 £'000
United Kingdom 7,616 9,078
Rest of the world 3,303 3,228
Total 10,919 12,306
4. (Loss) / profit on Ordinary Activities before Taxation
2024 2023
£'000 £'000
(Loss) / profit on ordinary activities before taxation is stated after
charging:
Depreciation and impairment of property, plant and equipment 285 231
Employee remuneration (see note 5) 7,414 8,143
Auditors' remuneration:
Audit work 62 58
Non-audit work - -
The Company audit fee for the year was £31,590 (2023: £28,990).
5. Employee Remuneration
The average number of full time equivalent employees (including Directors)
during the year was as follows:
2024 2023
No. No.
Sales and related services 49 44
Administration 9 7
58 51
Expenses recognised for employee benefits are analysed below:
2024 2023
£'000 £'000
Wages and salaries 6,279 6,752
Social security costs 824 921
Defined contribution pension cost 250 217
Share-based payment 61 253
7,414 8,143
The emoluments of the Directors are disclosed as required by the Companies Act
2006 in the Directors' Remuneration Report. The table of Directors' emoluments
has been audited and forms part of these financial statements. This also
includes details of the highest paid Director.
6. Taxation
a. Tax charged in the income statement
2024 2023
£'000 £'000
Current tax:
UK corporation tax - -
Foreign tax - -
Total current tax - -
Deferred tax:
Origination and reversal of temporary differences - -
Tax charge / (credit) - -
b. Reconciliation of the total tax charge
The difference between the current tax shown above and the amount calculated
by applying the standard rate of UK corporation tax to the (loss) / profit
before tax is as follows:
2024 2023
£'000 £'000
(Loss) / profit on ordinary activities before taxation (158) 309
Tax on (loss) / profit on ordinary activities at standard (39) 73
UK corporation tax rate of 25% (2023: 23.5%)
Effects of:
Expenses not deductible 16 6
Share option costs 15 60
Depreciation in excess of capital allowances (309) 11
Pension accrual movement 1 2
Adjustment to losses carried forward 316 (152)
Current tax charge for the year - -
c. Deferred tax
Tax losses Total
£'000 £'000
At 1 January 2024 - -
Charged/(credited) to the income statement in 2024 - -
At 31 December 2024 - -
At 31 December 2024 the Group had capital losses carried forward of
£8,129,000 (2023: £8,129,000) and trading losses carried forward of
£15,496,000 (2023: £14,234,000). A deferred tax asset has not been
recognised as their utilisation in the near future is uncertain.
The analysis of deferred tax in the consolidated balance sheet is as follows:
2024 2023
£'000 £'000
Deferred tax assets: - -
Tax losses carried forward
Total - -
7. Net Finance Cost
2024 2023
£'000 £'000
Interest payable on leases, invoicing facility and other loans 56 103
Total 56 103
8. Earnings Per Share
i. Basic earnings per share
This is calculated by dividing the (loss) / profit attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the period. The weighted average number of shares excludes shares
held by the Employee Benefit Trust (see note 18):
2024 2023
£'000 £'000
(Loss) / profit attributable to owners of the Company (158) 309
000's 000's
Weighted average number of ordinary shares 64,034 62,104
ii. Diluted earnings per share
This is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares.
The Company has one category of dilutive potential ordinary shares in the form
of employee share options (LTIP and SAYE schemes). For these options a
calculation is done to determine the number of shares that could have been
acquired at fair value (determined as the average annual market share price of
the Company's shares) based on the monetary value of the subscription rights
attached to the outstanding options. The number of shares calculated as above
is compared with the number of shares that would have been issued assuming the
exercise of the share options.
2024 2023
£'000 £'000
(Loss) / profit attributable to owners of the Company (158) 309
000's 000's
Weighted average number of ordinary shares 79,946 78,463
iii. Adjusted earnings per share
An adjusted earnings per share has also been calculated in addition to the
basic and diluted earnings per share and is based on earnings adjusted to
eliminate the effects of charges for share-based payments. It has been
calculated to allow shareholders to gain a clearer understanding of the
trading performance of the Group.
2024 2024 2024 2023 2023 2023
£'000 Basic pence per share Diluted pence per share £'000 Basic pence per share Diluted pence per share
Basic earnings
(Loss) / profit after tax (158) (0.25) (0.20) 309 0.50 0.39
Adjustments
Share-based payment charge 61 0.10 0.08 253 0.41 0.32
Adjusted earnings (97) (0.15) (0.12) 562 0.91 0.71
9. Profit of Parent Company
As permitted by Section 408 of the Companies Act 2006, the income statement of
the parent company is not presented as part of these accounts. The parent
company's profit for the year amounted to £0.01 million (2023: £1.4 million
loss).
10. Intangible Assets
Goodwill arising on consolidation
Group £'000
Balance at 1 January 2023 3,690
Balance at 31 December 2023 3,690
Balance at 31 December 2024 3,690
Provision for impairment
Balance at 1 January 2023 2,327
Balance at 31 December 2023 2,327
Balance at 31 December 2024 2,327
Net book value
At 1 January 2023 1,363
At 31 December 2023 1,363
At 31 December 2024 1,363
Goodwill acquired through business combinations is allocated to
cash-generating units (CGUs) and is shown below:
Executive Search Leadership Consulting Total
£'000 £'000 £'000
Balance at 1 January 2023 1,303 60 1,363
Balance at 31 December 2023 1,303 60 1,363
Balance at 31 December 2024 1,303 60 1,363
Goodwill has been subject to an impairment review by the Directors of the
Group. As set out in accounting policy note 1, the Directors test the goodwill
for impairment annually as set out below.
Expected future cash flows for each CGU over a five year period are derived
from the most recent three year financial projections agreed by the board and
an assumed net fee and cost growth rate of 5% in years four and five. Although
the growth rates of 5% exceeds the long-term growth rate for the economy, they
are considered appropriate based on the expected future growth rate of the
business. A discount rate of 12.5% (2023: 12.5%), representing the weighted
average cost of capital for the Group, in line with businesses in the same
sector, is then used to calculate the present value of those cash flows and
then aggregated to give an overall valuation.
3.
4.
5.
6.
7.
8.
9.
10.
11. Property, Plant and Equipment
Land and buildings - leasehold Right-of-use asset Office and computer equipment Fixtures Total
and fittings
£'000 £'000 £'000 £'000 £'000
Group Cost
Balance at 1 January 2023 100 808 368 50 1,326
Additions - - 16 - 16
Disposals (80) - (261) (43) (384)
Balance at 31 December 2023 20 808 123 7 958
Additions - 624 49 1 674
Disposals (20) (675) (14) (7) (716)
Balance at 31 December 2024 - 757 158 1 916
Accumulated depreciation
Balance at 1 January 2023 100 500 274 50 924
Charge for the year - 176 55 - 231
Disposals (80) - (252) (43) (375)
Balance at 31 December 2023 20 676 77 7 780
Charge for the year - 251 34 - 285
Disposals (20) (675) (14) (7) (716)
Balance at 31 December 2024 - 252 97 - 349
Net book value
At 1 January 2023 - 308 94 - 402
At 31 December 2023 - 132 46 - 178
At 31 December 2024 - 505 61 1 567
The Group had no capital commitments as at 31 December 2024 (2023: £nil).
12. Investments
Shares in subsidiary undertakings
£'000
Company Cost
Balance at 1 January 2023 5,935
Balance at 31 December 2023 5,935
Balance at 31 December 2024 5,935
Provision for impairment
Balance at 1 January 2023 4,735
Impairment for the year -
Balance at 31 December 2023 4,735
Impairment for the year -
Balance at 31 December 2024 4,735
Net book value
At 1 January 2023 1,200
At 31 December 2023 1,200
At 31 December 2024 1,200
During the year to 31 December 2024 the Company held the following ownership
interests:
Principal investments: Country of incorporation or registration and operation Principal activities Proportion of shares held by the Company
Norman Broadbent Executive Search Limited England and Wales Executive search 100% ordinary shares
Norman Broadbent Ireland Ltd Republic of Ireland Dormant 100% ordinary shares
The registered office for Norman Broadbent Executive Search Limited is 68 King
William Street, London, EC4N 7HR. The registered office for Norman Broadbent
Ireland Limited is The Merrion Buildings, 18 - 20 Merrion Street, Dublin 2,
Ireland.
13. Trade and Other Receivables
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Trade receivables 1,834 2,714 - -
Less: provision for impairment (38) (178) - -
Trade receivables - net 1,796 2,536 - -
Other debtors 41 43 - -
Prepayments and accrued income 429 322 1 8
Due from Group undertakings - - 125 147
Total 2,266 2,901 126 155
Non-Current - - - -
Current 2,266 2,901 126 155
2,266 2,901 126 155
As at 31 December 2024, Group trade receivables of £0.8m (2023: £1.3m), were
past their due date but not impaired, save as referred to below. They relate
to customers with no default history. The ageing profile of these receivables
is as follows:
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Up to 3 months 740 1,054 - -
3 to 6 months 55 214 - -
6 to 12 months - - - -
Total 795 1,268 - -
The largest amount due from a single trade debtor at 31 December 2024
represents 10% (2023: 12%) of the total trade receivables balance outstanding.
As at 31 December 2024, £46,000 of group trade receivables (2023: £178,000)
were considered impaired. A provision for impairment has been recognised in
the financial statements. Movements on the Group's provision for impairment of
trade receivables are as follows:
2024 2023
£'000 £'000
At 1 January 178 2
Provision for receivable impairment 210 178
Receivables written-off as uncollectable (350) (2)
At 31 December 38 178
There is no material difference between the carrying value and the fair value
of the Group's and the Company's trade and other receivables.
14. Cash and Cash equivalents
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Cash at bank and in hand 236 765 21 14
Total 236 765 21 14
There is no material difference between the carrying value and the fair value
of the Group's and the Company's cash at bank and in hand.
15. Trade and Other Payables
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Trade payables 378 343 2 46
Other taxation and social security 422 407 (6) (8)
Other payables 26 22 - -
Accruals 1,709 2,621 46 52
Total 2,535 3,393 42 90
There is no material difference between the carrying value and the fair value
of the Group's and the Company's trade and other payables.
16. Borrowings
Group Company
2024 2023 2024 2023
Current £'000 £'000 £'000 £'000
Invoice discounting facility (see note (a) below) - 159 - -
Loans (see note (b) below) 54 48 54 48
Non-Current 59 113 59 113
Loans (see note (b) below)
Total 113 320 113 161
The carrying amounts and fair values of the Group's borrowings, which are all
denominated in sterling, are as follows:
Carrying amount Fair value
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Invoice discounting facility - 159 - 159
Loans (see note (b) below) 113 161 113 161
Total 113 320 113 320
a. Invoice discounting facilities:
The Group operates an invoice discounting facility with Metro Bank. All Group
invoices are raised through Norman Broadbent Executive Search Limited and as
such Metro Bank (SME Invoice Finance Ltd) holds an all asset debenture for
Norman Broadbent plc and Norman Broadbent Executive Search Limited. Funds are
available to be drawn down at an advance rate of 88% against trade receivables
of Norman Broadbent Executive Search Limited that are aged less than 120 days
with the facility capped at £2.1 million. At 31 December 2024, the facility
was in credit by £0.02 million (31 December 2023: £0.2 million outstanding)
and is recognised in cash and cash equivalents. The facility was secured by
trade receivables of £1.8 million. Interest is charged on the drawn down
funds at a rate of 2.4% above the bank base rate.
b. Loans
In November 2020 the Group received a CBILS Loan of £250,000 for a term of 6
years. Repayment of capital and interest began in January 2022, and from this
month the loan incurs interest at 4.75% above the Metro Bank UK base rate.
Metro Bank holds an all asset fixed and floating charge over Norman Broadbent
Executive Search Limited linked to this facility.
17. Financial Instruments
Financial assets and financial liabilities are recognised on the balance sheet
when the Group becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised when the rights to receive cash
flows from the asset have expired, or when the Group has transferred those
rights and substantially all the risks and rewards of the asset.
Financial liabilities are derecognised when the obligation specified in the
contract is discharged, cancelled or expired.
The carrying value of each asset and liability is considered to be a
reasonable approximation of the fair value.
The following tables show the carrying amounts of financial assets and
financial liabilities held by the Group.
2024 2023
Group £'000 £'000
Financial assets
Trade and other receivables 1,796 2,536
Other debtors 41 43
1,837 2,579
Financial liabilities
Trade creditors 378 343
Accruals and deferred income 1,709 2,621
Other payables 26 22
Bank loans - Current 54 207
Bank loans - Non-current 59 113
Lease liabilities - Current 387 111
Lease liabilities - Non-current 119 8
2,732 3,425
2024 2023
Company £'000 £'000
Financial assets
Amounts owed by group undertakings 125 147
125 147
Financial liabilities
Trade and other payables 2 46
Accruals and deferred income 46 52
Bank loans - Current 54 48
Bank loans - Non-current 59 113
161 259
In common with other businesses, the Group is exposed to risks that arise from
its use of financial instruments. Details on these risks and the policies set
out by the Board to reduce them can be found in note 2.
18. Share Capital and reserves
Share capital and reserves comprise of the following categories:
· Share capital: the nominal value of shares issued by the Company.
· Share premium: the amount above the nominal value received for shares issued
by the Company, less transaction costs and amounts used to fund bonus share
issues.
· Own shares: the value of shares held by the Employee Benefit Trust.
· Retained earnings: all current and prior period retained profits and losses
after deducting any distributions made to the Company's shareholders and
adding any credits for share-based payments.
2024 2023
£'000 £'000
Allotted and fully paid
Ordinary Shares:
66,902,286 Ordinary shares of 1.0p each 669 638
(2023: 63,865,249)
Deferred Shares:
23,342,400 Deferred A shares of 4.0p each 934 934
(2023: 23,342,400)
907,118,360 Deferred shares of 0.4p each 3,628 3,628
(2023: 907,118,360)
1,043,566 Deferred B shares of 42.0p each 438 438
(2023: 1,043,566)
2,504,610 Deferred C shares of 29.0p each 727 727
(2023: 2,504,610)
Total 6,396 6,365
Deferred A Shares of 4.0p each
The Deferred A Shares carry no right to dividends or distributions or to
receive notice of or attend general meetings of the Company. In the event of a
winding up, the shares carry a right to repayment only after the holders of
Ordinary Shares have received a payment of £10 million per Ordinary Share.
The Company retains the right to cancel the shares without payment to the
holders thereof. The rights attaching to the shares shall not be varied by the
creation or issue of shares ranking pari passu with or in priority to the
Deferred A Shares.
Deferred Shares of 0.4p each
The Deferred Shares carry no right to dividends, distributions or to receive
notice of or attend general meetings of the Company. In the event of a winding
up, the shares carry a right to repayment only after payment of capital paid
up on Ordinary Shares plus a payment of £10,000 per Ordinary Share. The
Company retains the right to transfer or cancel the shares without payment to
the holders thereof.
Deferred B Shares of 42.0p each
The Deferred B Shares carry no right to dividends or distributions or to
receive notice of or attend general meetings of the Company. In the event of a
winding up, the shares carry the right to repayment only after the holders of
Ordinary Shares have received a payment of £10 million per Ordinary Share.
The Company retains the right to cancel the shares without payment to the
holders thereof. The rights attaching to the shares shall not be varied by the
creation or issue of shares ranking pari passu with or in priority to the
Deferred B Shares.
Deferred C Shares of 29.0p each
The Deferred Shares carry no right to dividends or distributions or to receive
notice of or attend general meetings of the Company. In the event of a winding
up, the shares carry the right to repayment only after the holders of Ordinary
Shares have received a payment of £10 million per Ordinary Share. The Company
retains the right to cancel the shares without payment to the holders thereof.
A reconciliation of the movement in share capital and share premium is
presented below:
No. of ordinary shares Ordinary shares Deferred shares Share premium Total
000's £'000 £'000 £'000 £'000
At 1 January 2023 61,817 618 5,727 14,110 20,455
Issued during the year 2,048 20 - 123 143
At 31 December 2023 63,865 638 5,727 14,233 20,598
Issued during the year 3,037 31 - - 31
At 31 December 2024 66,902 669 5,727 14,233 20,629
During the year 3,037,037 Ordinary Shares were issued at a consideration of
1.00 pence per share.
Employee Benefit Trust
During the year the Group set up an Employee Benefit Trust (EBT) to hold
shares which will be used to satisfy the exercise of options granted to
employees under the Group's Long Term Incentive Plan (LTIP). The own shares
reserve represents the cost of Norman Broadbent plc shares held by the EBT.
During the year the Group issued 3,037,037 ordinary shares (2023: nil shares)
at the nominal value of £0.01 which were passed to the EBT. Options over
550,000 ordinary shares (2023: nil shares) were exercised by employees during
the year and transferred to them by the EBT.
At 31 December 2024 the EBT held 2,487, 037 ordinary shares (31 December 2023:
nil shares).
19. Share Based Payments
As at 31 December 2024, the Group maintained two share-based payment schemes
for employee remuneration, the Long Term Incentive Plan (LTIP) and the Save As
You Earn Scheme (SAYE). Both programmes will be settled in equity.
LTIP
The LTIP is part of the remuneration package of the Group's senior management
team. The scheme is an executive Enterprise Management Incentive ("EMI") share
option scheme and 4,148,148 options were granted as part of the scheme on 28
July 2023. All options are subject to both time vesting conditions and
performance conditions. 50% of the Options are subject to market-based share
price performance conditions (the "Share Price Options") and 50% are subject
to certain EBITDA performance conditions (the "EBITDA Options").
SAYE
During the prior year the Company established a tax advantaged SAYE scheme.
The scheme is based on eligible employees being granted options over shares
with an exercise price of £0.05 per share, which represents a 20 per cent
discount to the closing middle market price of a share on 12 June 2023.
Employees agree to opening a sharesave account with the nominated savings
carrier and save monthly over a three year saving period. On vesting,
participants have a 6-month period to exercise their options.
The Company issued 4,500,000 options on 29 June 2023 (the "SAYE Grant Date").
The SAYE options have no performance conditions attached to them.
Share options and weighted average exercise prices are as follows for the
reporting periods presented:
2024 2024 2023 2023
Charge Number of share options Charge Number of share options Vesting period Expiry date Performance metrics
Scheme £'000 000's £'000 000's Years Years
LTIP 40 11,598 243 12,148 3 7 EBITDA and share price
SAYE 21 3,744 10 4,212 3 0.5 after vesting None
Total 61 15,342 253 16,360
LTIP SAYE
Weighted average exercise price Weighted average exercise price
£ 000's £ 000's
At 1 January 2023 - 9,950 - -
Granted - 4,148 0.05 4,500
Forfeited - (1,950) 0.05 (288)
At 31 December 2023 - 12,148 0.05 4,212
Granted - - - -
Forfeited - - 0.05 (468)
Exercised - (550) - -
At 31 December 2024 - 11,598 0.05 3,744
The weighted average remaining contractual life of the options outstanding at
the end of 2024 was 4.7 years for the LTIP and 2.1 years for the SAYE scheme
(2023: 5.7 years for the LTIP and 3.1 years for the SAYE scheme).
The inputs into the valuation models were as follows:
LTIP - EBITDA Options LTIP - Share Price Options SAYE
Option pricing model used Binomial option model Monte Carlo simulation Binomial option model
Weighted average share price at grant date (£) 0.053 0.053 0.055
Exercise price (£) - - 0.05
Expiry date July 2030 July 2030 February 2027
Expected volatility 44.9% 44.9% 43.4%
Expected dividend yield 0.0% 0.0% 0.0%
Risk-free interest rate 4.72% 4.72% 4.72%
20. Leases
All property leases are accounted for by recognising a right-of-use asset and
a lease liability, with depreciation and interest expense being charged to the
consolidated income statement.
Right-of-use assets are recognised at the commencement date of the lease and
they are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. The recognised
right-of-use assets are depreciated on a straight-line basis over the shorter
of their estimated useful life and the lease term. Right-of-use assets are
subject to impairment.
At the commencement date of the lease, lease liabilities are measured at the
present value of lease payments to be made over the lease term. The Group uses
the incremental borrowing rate at the lease commencement date if the interest
rate implicit in the lease is not readily determinable.
Consolidation statement 2024 2023
£'000 £'000
Depreciation expense (251) (176)
Operating Profit (251) (176)
Finance Costs (15) (2)
Profit before Tax (266) (178)
Consolidated statement of financial position Right-of-use assets Lease liabilities
£'000 £'000
As at 1 January 2023 308 (358)
Additions - -
Disposals - -
Depreciation expense (176) -
Interest expense - (2)
Payments - 241
At 31 December 2023 132 (119)
Additions 624 624
Disposals - -
Depreciation expense (251) -
Interest expense - (19)
Payments - 256
At 31 December 2024 505 (506)
Impact on consolidated statement of financial position 2024 2023
£'000 £'000
Right-of-use assets 505 132
Total Assets 505 132
Lease liabilities - less than one year (387) (111)
Lease liabilities - more than one year (119) (8)
Total Liabilities (506) (119)
Equity (1) 13
21. Pension Costs
The Group operates several defined contribution pension schemes for the
business. The assets of the schemes are held separately from those of the
Group in independently administered funds. The pension cost represents
contributions payable by the Group to the funds and amounted to £250,000
(2023: £217,000). At the year-end £26,000 of contributions were outstanding
(2023: £22,000).
22. Related Party Transactions
The following transactions were carried out with related parties:
Key management compensation:
Key management includes Executive and Non-Executive Directors. The
compensation paid or payable to the directors can be found in the Directors'
Remuneration Report.
23. Contingent Liability
The Company is a member of the Norman Broadbent plc Group VAT scheme. As such
it is jointly accountable for the combined VAT liability of the Group. The
total VAT outstanding in the Group at the year end was £213,000 (2023:
£192,000).
24. Liabilities from Financing Activities
A reconciliation of liabilities arising from financing activities is presented
below:
Group Borrowings Lease Liabilities Total
£'000 £'000 £'000
At 1 January 2023 1,101 358 1,459
Cash flows:
Repayments of borrowings (389) - (389)
Payment of lease liabilities - (241) (241)
Decrease in invoice discounting (324) - (324)
Non-cash movements:
Interest accrued 75 2 77
Conversion of loan notes to equity (143) - (143)
At 31 December 2023 320 119 439
Cash flows:
Repayments of borrowings (62) - (62)
Payment of lease liabilities - (256) (256)
Decrease in invoice discounting (159) - (150)
Non-cash movements:
Interest accrued 14 19 33
New lease liabilities - 624 624
At 31 December 2024 113 506 619
Company Borrowings Total
£'000 £'000
At 1 January 2023 618 618
Cash flows:
Repayments of borrowings (389) (389)
Non-cash movements:
Interest accrued 75 77
Conversion of loan notes to equity (143) (143)
At 31 December 2023 161 161
Cash flows:
Repayments of borrowings (62) (62)
Non-cash movements:
Interest accrued 14 33
At 31 December 2024 113 113
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