REG - Northcoders Group - Final Results
23/04/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250423:nRSW7485Fa&default-theme=true
RNS Number : 7485F Northcoders Group PLC 23 April 2025
23 April 2025
Northcoders Group PLC
('Northcoders', the 'Group' or the 'Company')
Final Results
Record revenue and profitability as Northcoders consolidates reputation as a
leading UK technology training business
Northcoders (AIM: CODE), a market leader in technology training in the UK, is
pleased to announce its Final Results for the year ended 31 December 2024
('FY24' or the 'Period').
FY24 Financial Highlights
· Group revenue increased by 24% to a record £8.8 million, (FY23: £7.1
million) driven by continued success in diversifying revenues and rolling out
new course in high growth areas
· Gross profit increased by 34% to £5.9 million (FY23: £4.4 million)
with a gross profit margin of 67% (FY23: 63%) reflecting a balance between the
efficiencies achieved by NCore and the economic challenges of inflation and
rising operational costs.
· Adjusted EBITDA* increased significantly to £1.0 million (FY23: £0.1
million), in line with market expectations, and returned a positive profit
after tax of £0.4 million (loss after tax FY23: £1.0 million)
· Cash balance as at 31 December 2024 of £1.2 million (FY23: £1.6
million)
· Net assets increased to £5.3 million (FY23: £4.8 million)
FY24 Operational Highlights
· Further increase in number of individuals trained, increased to 3,976
(FY23: 2,852) driven by the constantly evolving offering that brings in new
formats and technical courses (Java and C#)
· Reputation continued to grow as one of the highest quality training
providers in the UK market reflected in the number of hiring partners rising
to 510 (FY23: 465)
· The B2C Training Bootcamp division continued to provide the bridge for
UK consumers to enter the increasingly attractive technology sector
· Counter®, the Group's consultancy brand, continued to gain momentum
with the challenger brand winning five mandates in the Period
· NCore platform continued to drive efficiencies by increasing the
student to tutor ratio, whilst improving excellence in the Group's courses by
increasing the contact time offered
Current Trading and Outlook
· In the latter part of FY24 and into Q1 FY25, there has been a
positive shift in corporate engagement, with more of the Group's hiring
partners taking on junior engineers and encouraging progress in its Counter®
programme
o Post period end three contracts won, two with Skipton Building Society and
one with Manchester Airports Group
· On 5 March 2025 the Group announced that it had successfully secured a
new £1.5m debt finance agreement to support the next stage of growth
· Northcoders launched its new B2C Training Bootcamp course focusing on
AI and Machine Learning which will start in June 2025
· The Group's current Department of Education contract provides
visibility until June 2025 and there is confidence, although not certainty,
that decisions about future structures will have been made by then, with
national extension conversations underway
*Adjusted EBITDA definition - see note 6
Commenting on the Final Results, Chris Hill, CEO of Northcoders, said: "Our
record FY24 results are a testament to Northcoders' growing national
reputation as a leading provider of high-quality technology training. Despite
a challenging hiring market, we are successfully diversifying revenues and
increasing profitability within the Group. Our growing curriculum of
technology training courses, including in high demand areas like AI and
Machine Learning, is supporting the inherent scalability of the Northcoders
business model.
"As the UK looks to address the digital skills gap to drive innovation and
economic recovery, the role Northcoders plays in developing tomorrow's
technology talent has never been more important. By empowering individuals
from all backgrounds to pursue careers in technology, we will more equitably
and rapidly evolve the digital landscape. Looking ahead, FY25 has started
promisingly. Whilst macro-economic challenges remain in the short term, we
continue to be confident that, as the market improves, our quality training
solutions and strategy will drive value for our shareholders."
Analyst meeting & Investor Meet Company Presentation
There will be a presentation for sell-side analysts at Burson Buchanan, 107
Cheapside, London EC2V 6DN, for any enquiries please contact Burson Buchanan
on northcoders@buchanancomms.co.uk . A copy of the Final Results presentation
will be available on the Group's website later today:
investors.northcodersgroup.com (https://investors.northcodersgroup.com/)
Northcoders will also be presenting via the Investor Meet Company platform
today, 23 April 2025 at 12pm (BST). The meeting will be hosted by Chris Hill
(CEO) and Charlotte Prior (CFO), and there will be an opportunity for Q&A
at the end of the session. To sign up for the Northcoders presentation please
click the following link:
https://www.investormeetcompany.com/northcoders-group-plc/register-investor
(https://www.investormeetcompany.com/northcoders-group-plc/register-investor)
.
- Ends -
For further enquiries:
Northcoders Group plc Via Burson Buchanan
Chris Hill, CEO Tel: +44 (0) 20 7466 5000
Charlotte Prior, CFO investors.northcodersgroup.com (https://investors.northcodersgroup.com)
Zeus (Nominated Adviser & Joint Broker) Tel: +44 (0) 20 3829 5000
Mike Coe / Darshan Patel (Investment Banking)
Fraser Marshall (Sales)
Peterhouse Capital Limited (Joint Broker) Tel: +44 (0) 20 7496 0930
Martin Lampshire www.peterhousecap.com (http://www.peterhousecap.com/)
Lucy Williams
Duncan Vasey
Burson Buchanan Tel: +44 (0) 20 7466 5000
Henry Harrison-Topham northcoders@buchanan.uk.com (mailto:northcoders@buchanan.uk.com)
Steph Whitmore www.bursonbuchanan.com (http://www.bursonbuchanan.com/)
Jesse McNab
Peterhouse Capital Limited (Joint Broker) Tel: +44 (0) 20 7496 0930
Martin Lampshire www.peterhousecap.com (http://www.peterhousecap.com/)
Lucy Williams
Duncan Vasey
Burson Buchanan Tel: +44 (0) 20 7466 5000
Henry Harrison-Topham northcoders@buchanan.uk.com (mailto:northcoders@buchanan.uk.com)
Steph Whitmore www.bursonbuchanan.com (http://www.bursonbuchanan.com/)
Jesse McNab
Notes to Editors
Northcoders is a market leading provider of technology training for businesses
and individuals with courses in, Software Engineering, Data Engineering, AI
and Machine Learning, and Platform Engineering. Founded in 2015, the Group's
business model operates a hybrid structure with a flagship site in Manchester
and other sites in Leeds, Birmingham and Newcastle supported by a proven
digital offering to support its students across the UK.
Powered by IP rich technology, Northcoders offers boot camp courses to
individuals from a range of backgrounds, delivered through virtual and
physical learning. The Group also works with blue chip corporates across
multiple sectors to help them to achieve their digital requirements, with
teams as a service and to supply innovative solutions for the upskilling and
reskilling of employees. With a keen focus of inclusivity, diversity and
quality at its core, Northcoders aims to address the digital skills gap in the
UK to meet the increasing demand for digital specialists at all levels, from
businesses and public agencies.
Northcoders was admitted to trading on AIM in July 2021 with the ticker
CODE.L. For additional information please visit
investors.northcodersgroup.com.
Chair's statement
Introduction
FY24 has seen Northcoders once again successfully grow revenue to record
levels, achieve record student applications, and invest into new training
products and platforms despite a period of macroeconomic uncertainty in the
UK. The technology hiring market in particular has remained challenging, with
organisations experiencing headcount reductions and budget constraints as a
result of the wider uncertainty.
Despite these challenges, Northcoders achieved 1,144 student enrolments and
67% have gone into jobs within six months of completing the bootcamp. The
number of our students winning roles post-course demonstrates the quality of
our offering and consolidates our sector-leading reputation. Furthermore, the
Group has increased profitability driven by our focus on efficiency,
maximising the use of the new technology platform and virtual learning, whilst
keeping our core values at the heart of everything we do.
Whilst the hiring market has been challenging, the consumer demand for
training has never been stronger, reflecting the attractions of working in
technology. We have now helped to change the lives of over 4,000 people from
different walks of life and will continue in a sustainable manner, to ensure
that all of our graduates have the chance at gaining employment. We continue
to scale geographically in many UK regions outside of our original Northern
homelands, including new areas such as Scotland.
2024 saw the introduction of two new iterations of the Software Engineering
course, Java and C#. Both enterprise languages, Java is a widely used,
high‑level programming language designed for portability across different
platforms and C# is a modern, object-oriented programming language developed
by Microsoft. The latter is a great choice for people interested in the gaming
industry.
The introduction of these two courses widens job prospects for our graduates
and diversifies roles. Rollout has been supported by our NCore platform which
has enabled us to scale efficiently and provide an excellent learning
experience for all our students.
Our mission to create life-changing opportunities for individuals and help to
close the UK's digital skills gap remains consistent, and our flexible
training solutions ensure we stay the go-to choice for individuals and
businesses, regardless of economic conditions. Backed by a highly capable team
of industry experts and efficient processes, we are set up for continued
success.
We are proud that we are making a genuine difference to individual learners
and to our corporate customers who can grow their own talent, supported by,
and in partnership with, Northcoders. This is where we add significant value
to our corporate customers.
Strategic growth
FY24 was a year of strategic progress and one of the key milestones was
securing a new Department for Education contract in January 2024, providing a
significant funding boost to our core bootcamp training programmes and
reinforcing our position as a trusted provider of high-quality technology
education. This contract not only supported our growth in FY24 but also
strengthens our financial stability moving into H1 2025.
We launched our part-time coding bootcamp in July 2024, enabling more
individuals to train for a career in technology while balancing work and
personal commitments. Designed in direct response to demand for more flexible
learning options, the 20-week virtual programme provides full-stack
development skills without needing to study full-time. This initiative aligns
with Northcoders' mission to drive inclusivity in digital skills training,
ensuring that anyone, regardless of their background or schedule, can pursue a
career in technology. The curriculum and teaching model is being received
well, with students receiving job offers before the end of the course. This
new offering being well received reflects our ability to innovate in response
to market needs.
Alongside our Training Bootcamp growth, our consultancy division, now
operating under the Counter® brand, has expanded its reach. We have
strengthened relationships with corporate clients with contracts successfully
extended, helping them to achieve their technology roadmaps through talented
consultancy teams. Furthermore, in November 2024 we were accepted onto the
G-Cloud 14 framework, the UK Government's public sector digital marketplace.
This significant achievement broadens Counter®'s accessibility and
visibility, simplifying how public sector organisations identify the Group's
industry‑leading expertise and solutions. This diversification of revenue
streams is a critical part of our long-term strategy.
Growth, resilience and quality profitable earnings remain our focus. 2024 has
shown that Northcoders can achieve growth and profitable earnings whilst
diversifying the offering for resilience. Following the investments made in
FY23, we also now have the infrastructure in place to deliver our services at
scale, whilst creating efficiencies within our teaching model and therefore
increasing profitability.
Outlook
FY25 trading has started promisingly. Training Bootcamp applications and
registrations continue strongly, and we are seeing an increase in the
Counter® pipeline. As anticipated, the new UK Government is resulting in some
changes to the timing and structure of funding for our training bootcamps.
Whilst processes will be different, we are confident that funding will
continue. We continue to communicate directly with both regional and national
funding bodies so that the Group can quickly embrace the new structure once
announced. Alongside this, the team continues to take market share in our
Consultancy division, diversifying revenues to ensure our strategic aim of
resilience is achieved. The additional courses in AI and Machine Learning
launched this year further expand the appeal of our services.
I want to take a moment to recognise and thank our employees for their hard
work this year. They have consistently innovated and created exceptional
experiences, learning opportunities and partnerships that our customers value,
while also receiving great feedback. All of this has been accomplished while
navigating constantly evolving economic and market conditions. The Group is on
the front foot and I am confident that as the market returns, as one unified
Northcoders team, we will successfully execute our strategy and plans while
seizing the exciting opportunities that lie ahead.
Angela Williams
Non-Executive Chair
22 April 2025
Chief Executive Officer's review
Introduction
2024 has been a year of growth, challenge and transformation. While the
technology industry has faced uncertainty - with hiring freezes, budget
constraints and shifting employer demands - Northcoders has remained focused
on what we do best: equipping people with the skills to build successful
careers in technology.
This year tested us in new ways, and the agility we have shown has reinforced
our strengths. We adapted quickly to market conditions, diversified our
training programmes and continued to expand our impact. Our record-high
student numbers, strong employer engagement, and strategic investments in
automation and operational efficiency have set us up for long-term success.
Evolving our business for the future
At Northcoders, we are constantly evolving. In 2024, we made key strategic
decisions to ensure we continue delivering high‑quality, outcome-driven
training while future‑proofing our business model. Some of the biggest
developments this year include:
· A more diverse training model: We introduced our part-time coding
bootcamp, opening the door for those who need flexible learning options to
transition into technology careers
· New Software Engineering courses: We expanded our technical course
portfolio to include two new Software Engineering iterations, Java and C#,
complementing our well-established JavaScript and Data Engineering programmes
· Growth in the Consultancy division (now Counter®): We refined our
consultancy offerings, making them more accessible to businesses looking to
achieve internal tech roadmaps and develop their in-house tech talent
· Post period end, the Group launched its new B2C Training Bootcamp
course focusing on AI and Machine Learning which will start in June 2025
Operational review
In FY24 a total of 1,144 Northcoders students embarked on a life-changing
journey through one of our training bootcamps. Our online business model
continued to be the preferred delivery method for learners and remains the
most effective approach for our teaching team to uphold excellence as our
student numbers grow. Applications from prospective students stood at 17,159
(FY23: 13,878).
In January 2024 the Group successfully secured a £10m Department for
Education Skills Bootcamps bid for the 18-month period to June 2025. Further
to the new funding, in February 2024, we received a monitoring visit from
Ofsted, which yielded a positive result, comparable with a 'Good in all areas'
result should Ofsted's recent visit have been a full inspection. The full
report is hosted online and can be found on Ofsted's website, but importantly
this ongoing demonstration of best-in-class education supports Northcoders'
ongoing relationship with private and public funding providers.
Northcoders ended 2024 with a permanent headcount of 129 FTE staff members
compared to the 128 FTE staff members at the start of the year. The Group has
worked hard to create efficiencies within the Training Bootcamps division with
the help of NCore, and future staff increases will be generated from growth of
the Consultancy division.
NCore's main business benefit is the ability to substantially increase our
student‑to‑tutor ratio whilst improving excellence in our courses by
increasing the contact time offered to current and potential bootcamp
students.
In FY24 Northcoders introduced two new technical disciplines to our course
offering: Java and C#; feedback from learners and hiring partners has been
positive. We have also added a part-time version of our JavaScript course. Our
Data Engineering bootcamps division continues to grow, with excellent feedback
from students and hiring partners.
Training Bootcamps
Training Bootcamps have been at the core of Northcoders' business since
inception and continue to form an important part of our operations as we
evolve. Our courses cater to individuals of all ages and backgrounds aspiring
to build careers in the technology sector, delivered full-time over a 13-week
period and part-time over a 20‑week period, ensuring comprehensive skills
development. The training bootcamps are either funded by consumers upfront,
with third-party finance, or through Department for Education funding. For
over three years, Northcoders has been utilising Government Skills Bootcamp
funding to offer scholarships, ensuring that individuals facing financial
constraints can access our transformative training bootcamps and enhance their
career prospects. Whilst there have been some changes brought about by the new
UK Government, we are assured by ministers and the UK press, that Skills
Bootcamps are still high on agendas.
A key focus in the Period has been expanding our network of hiring partners,
with over 510 partners now working with us to offer life-changing
opportunities for Northcoders' graduates (FY23: 465). Despite the more
challenging end market, the average starting salary has been resilient and,
within three years, graduates typically see substantial salary growth as they
move into more senior positions, highlighting the value of our training
programmes.
Northcoders continues its mission to enhance diversity within the technology
industry, with our data showing 30% representation of women and 39% of
students without university degrees in our cohorts. As AI and large language
models (LLMs) become increasingly prevalent, it is more important than ever to
ensure that coding is driven by a diverse group of engineers.
Counter®
Our challenger consultancy brand, Counter®, delivers a corporate consultancy
service by assembling teams of advanced technology engineers from Northcoders'
alumni and the Group's Tech Returners business to support in-house technology
programmes. Upon the completion of the initial contract, while the technology
lead rejoins Northcoders, the associate consultants are offered the
opportunity to transition into permanent roles within the client's business at
no extra cost.
This arrangement provides both immediate and long-term solutions for
businesses, ensuring continuity and retention of expertise beyond the contract
term. In a bid to diversify our service offerings, these teams are available
both as autonomous 'incubated' groups and in collaboration with established
consultancy firms. This strategy aims to enhance the Counter® service range
while reducing dependency on higher-cost consulting services.
FY24 has seen the division build further momentum, as corporations emerge from
hiring freezes, with budget constraints now allowing for the use of
consultants. A number of pilot contracts have been won, including HMRC and
Proven EA, as well as new contracts with Skipton Building Society, one of the
leading UK-based mutual financial services groups, and Manchester Airports
Group, announced post period end. The pipeline for new business continues to
grow despite the challenging backdrop and we believe this growth is partially
attributed to our nearshore pricing model for onshore consultants.
Financial review
FY24 has seen Northcoders deliver record growth with a 24% increase in revenue
to £8.8m from £7.1m in 2023. This marks our highest ever revenue year and
provides further evidence of Northcoders' strong momentum, giving a positive
indicator for future growth.
In addition, the Group has increased gross profit margins to 67%, reflecting a
balance between the efficiencies achieved by NCore and the economic challenges
of inflation and rising operational costs. Revenue for Training Bootcamps
reached £7.9m and Counter® was £0.9m. Gross profit for the year was
£5.9m (2023: £4.4m) with a reported gross profit margin (GPM) of 67% (2023:
63%).
Adjusted EBITDA increased significantly to £1.0m (2023: £0.1m). Our
disciplined financial management and strategic investments in recent years
have positioned us for long-term profitability and the impact of these efforts
is already being seen, with efficiency gains across our delivery model and an
enhanced ability to scale operations effectively when the opportunities
present.
The increase in adjusted EBITDA in 2024 shows a more accurate view of trading
following a year of investments in FY23, although we have continued to
innovate with new courses and platform alterations within that margin.
The profit for the year before tax was £0.4m (2023: £1.2m loss). R&D tax
credits and brought forward losses resulted in a profit for the year after tax
of £0.4m (2023: £1.2m loss). Basic earnings per share was 4.85p per share
(2023: loss 12.62p per share). Net assets as at 31 December 2024 were £5.3m
(2023: £4.8m) of which cash was £1.2m (2023: £1.6m).
The cash balance at the year end of £1.2m will enable the Company to continue
with its growth plans, whilst remaining prudent as appropriate with wider
costs. Cash investment into internal infrastructure is expected to decrease in
the year ahead as NCore investment has come to an end.
Current trading and outlook
In the latter part of FY24 and into Q1 FY25, we have observed a positive shift
in corporate engagement, with more of our hiring partners taking on junior
engineers. Additionally, we have seen encouraging progress in our Counter®
pipeline, signalling an improvement in the tech industry economy. This
momentum boosts our confidence to keep investing in Counter® and expanding
the reach of our offerings.
The Group's current Department for Education contract provides visibility
until June 2025 and there is confidence, although not certainty, that
decisions about future structures will have been made by then, with national
extension conversations underway.
Alongside this, there are a number of local frameworks with open regional bids
which offer funding opportunities for Northcoders and the Group has begun
these bidding processes.
Our growth initiatives within the Training Bootcamp division include the
introduction of additional technical service lines to ensure that we are ahead
of the industry, providing the skills it needs. We have released a Data &
AI course and continue to ensure that our courses are at the leading edge of
what is being used in industry.
Our strategic progress is supported by the successful office move in
Manchester that provides lower costs and more flexibility to the business.
We have started FY25 stronger, more efficient, and with clearer market
positioning. Our Department for Education‑funded Skills Bootcamps, growing
Counter® pipeline and diversified training models give us confidence in
sustained growth. The steps we took in 2024 to streamline operations and
expand our course offerings will enable us to scale effectively while
maintaining the high standards that set us apart.
We know that the tech industry will continue to evolve, and so will we. By
staying agile, innovative and laser-focused on learner outcomes, we will
continue to drive meaningful change in the sector.
Chris Hill
Founder and Chief Executive Officer
22 April 2025
Group statement of comprehensive income
For the year ended 31 December 2024
2024 2023
Notes £ £
Revenue 8,819,083 7,102,319
Cost of sales (2,916,871) (2,658,650)
Gross profit 5,902,212 4,443,669
Other operating income 1,000 -
Expenditure (4,922,462) (4,364,300)
Adjusted EBITDA 980,750 79,369
Depreciation (131,838) (172,582)
Amortisation and impairment (265,716) (234,225)
Share-based payments (138,446) (186,542)
Total administrative expenses (5,458,462) (4,957,649)
Non-recurring - (562,603)
items
Operating 444,750 (1,076,583)
profit/(loss)
Investment 29,957 14,170
revenues
Finance (85,843) (163,260)
costs
Profit/(loss) before taxation 388,864 (1,225,673)
Income tax (9) 218,745
(expense)/income
Profit/(loss) for the year 388,855 (1,006,928)
Other comprehensive income:
Items that will not be reclassified to profit or loss
Tax adjustment on share-based payments (32,746) (3,725)
(32,746) (3,725)
Total items that will not be reclassified to profit or loss
(32,746) (3,725)
Total other comprehensive income for the year 356,109 (1,010,653)
Total comprehensive income for the year
Profit for the financial year is all attributable to the owners of the parent
company.
Total comprehensive income for the year is all attributable to the owners of
the parent company.
Group statement of comprehensive income (Continued)
For the year ended 31 December 2024
Notes 2024 2023
£ £
Earnings per share
Basic 4.85 (12.62)
Diluted 4.85 (12.62)
Adjusted 6.58 (3.23)
Group statement of financial position
As at 31 December 2024
2024 2023
Notes £ £
Non-current assets
Goodwill 1,310,086 1,310,086
Intangible assets 2,054,942 1,747,400
Property, plant and equipment 222,149 316,986
Deferred tax asset 127,807 158,837
3,714,984 3,533,309
Current assets
Contract assets 1,624,485 1,398,018
Trade and other receivables 456,363 671,724
Current tax recoverable 4,900 43,945
Cash and cash equivalents 1,185,780 1,617,172
3,271,528 3,730,859
Current liabilities
Trade and other payables 978,219 1,101,275
Contract liabilities 73,557 206,500
Current tax liabilities - 4,937
Borrowings 258,276 293,355
Lease liabilities 47,583 212,112
1,357,635 1,818,179
Net current assets 1,913,893 1,912,680
Non-current liabilities
Borrowings 216,859 474,300
Lease liabilities 99,844 154,070
316,703 628,370
Net assets 5,312,174 4,817,619
Equity
Called up share capital 80,115 80,115
Share premium account 4,801,444 4,801,444
Share option reserve 371,663 401,714
Merger reserve 500 500
Other reserve 946,774 946,774
Retained earnings (888,322) (1,412,928)
Total equity 5,312,174 4,817,619
Group statement of changes in equity
For the year ended 31 December 2024
Share Share Other Share Merger Retained Total
capital premium account reserves option reserve reserve earnings
Notes £ £ £ £ £ £ £
Balance at 1 January 2023 76,889 4,801,444 (50,000) 228,480 500 (415,583) 4,641,730
Year ended 31 December 2023:
Loss - - - - - (1,006,928) (1,006,928)
Other comprehensive income:
Deferred tax on share-based payment transactions - - - - - (3,725) (3,725)
Total comprehensive income - - -
- - (1,010,653) (1,010,653)
Transactions with owners:
Issue of share capital 3,226 - - - - - 3,226
Share options expense - - - 186,542 - - 186,542
Merger relief - - 996,774 - - - 996,774
Cancellation of share options - - - (13,308) - 13,308 -
Balance at 31 December 2023 80,115 4,801,444 500
946,774 401,714 (1,412,928) 4,817,619
Group statement of changes in equity (continued)
For the year ended 31 December 2024
Share Share Other Share Merger Retained Total
capital premium account reserves option reserve reserve earnings
Notes £ £ £ £ £ £ £
Year ended 31 December 2024:
Loss - - - - - 388,855 388,855
Other comprehensive income:
Deferred tax on share-based payment transactions - - - - - (32,746) (32,746)
Total comprehensive income - - - - 356,109
- 356,109
Transactions with owners:
Share options expense - - - 138,446 - - 138,446
Cancellation of share options - - - (168,497) - 168,497 -
Balance at 31 December 2024 80,115 4,801,444 946,774 500 5,312,174
371,663 (888,322)
Group statement of cash flows
For the year ended 31 December 2024
2024 2023
Notes £ £ £ £
Profit/(loss) for the year after tax 388,855 (1,006,928)
Adjustments for:
Taxation charged/(credited) 9 (218,745)
Finance costs 85,843 163,260
Investment income (29,957) (14,170)
Loss on disposal of property, plant and equipment
(246) (83)
Amortisation of intangible assets 263,842 234,225
Depreciation of property, plant and equipment
131,838 172,582
Equity settled share based payment expense
138,446 186,542
978,630 (483,317)
Movements in working capital:
(Increase)/decrease in contract assets (226,467) 549,904
Decrease in trade and other receivables 215,361 341,517
(Decrease)/increase in contract liabilities (132,943) 201,261
Increase/(decrease) in trade and other payables
109,014 (71,390)
Cash generated from operations
943,595 537,975
Income taxes refunded 32,393 113,461
Net cash inflow from operating activities
975,978 651,436
Investing activities
Purchase of intangible assets (571,384) (751,400)
Purchase of property, plant and equipment (38,411) (86,110)
Proceeds from disposal of property, plant and equipment
1,656 339
Purchase of subsidiaries, net of cash acquired - (173,758)
Payment of deferred consideration (240,902) -
Interest received 29,957 14,170
Net cash used in investing activities (819,084) (996,759)
Financing activities
Repayment of borrowings (292,520) (418,177)
Payment of lease liabilities (218,755) (279,826)
Interest paid (77,011) (116,775)
Net cash used in financing activities (588,286) (814,778)
Group statement of cash flows (continued)
For the year ended 31 December 2024
2024 2023
Notes £ £ £ £
Net decrease in cash and cash equivalents (431,392) (1,160,101)
Cash and cash equivalents at beginning of year 1,617,172 2,777,273
Cash and cash equivalents at end of year
1,185,780 1,617,172
Notes to the Group financial statements
For the year ended 31 December 2024
1 Accounting policies Company information
Northcoders Group Plc is a public company limited by shares incorporated in
England and Wales. The registered office is Bloc, 17 Marble Street,
Manchester, United Kingdom, M2 3AW. The company's principal activities and
nature of its operations are disclosed in the directors' report.
The group consists of Northcoders Group Plc and all of its subsidiaries.
1.1 Accounting convention
The financial statements have been prepared in accordance with UK- adopted
international accounting standards, as adopted for use in the United Kingdom
and with those parts of the Companies Act 2006 applicable to companies
reporting under UK- adopted IAS, except as otherwise stated.
The financial statements are prepared in sterling, which is the functional
currency of the group. Monetary amounts in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost
convention, modified to include the revaluation of certain financial
instruments at fair value. The principal accounting policies are set out
below.
The individual Parent Company meets the definition of a qualifying entity
under FRS 101 Reduced Disclosure Framework. As permitted by FRS 101, the
Company has taken advantage of the following disclosure exemptions from the
requirements of IFRS:
(a) the requirements of IFRS 7 'Financial Instruments: Disclosure';
(b) the requirements within IAS 1 relating to the presentation of certain
comparative information
(c) the requirements of IAS 7 'Statement of Cash Flows' to present a statement
of cash flows;
(d) paragraphs 30 and 31 of IAS 8 'Accounting policies, changes in
accounting estimates and errors' (requirement for the disclosure of
information when an entity has not applied a new IFRS that has been issued but
it not yet effective) and
(e) the requirements of IAS 24 "Related Party Disclosures' to disclose related
party transactions and balances between two or more members of a Group.
As permitted by section 408 of the Companies Act 2006, the Company has not
presented its own statement of comprehensive income. The Company's loss for
the period was £145,201 (2023: £87,306).
1.2 Business combinations
The cost of a business combination is the fair value at the acquisition date
of the assets given, equity instruments issued and liabilities incurred or
assumed, plus costs directly attributable to the business combination. The
excess of the cost of a business combination over the fair value of the
identifiable assets, liabilities and contingent liabilities acquired is
recognised as goodwill.
The cost of the combination includes the estimated amount of contingent
consideration that is probable and can be measured reliably, and is adjusted
for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous
periods are adjusted retrospectively for final fair values determined in the
12 months following the acquisition date.
1 Accounting policies (Continued)
1.3 Basis of consolidation
The consolidated group financial statements consist of the financial
statements of the parent company Northcoders Group Plc together with all
entities controlled by the parent company (its subsidiaries) as detailed in
note 18 of the Report and Accounts and the group's share of its interests in
joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary,
adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used into line with those used by other members of the
group.
All intra-group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of
the asset transferred.
Subsidiaries (as laid out in note 18 of the Report and Accounts) are
consolidated in the group's financial statements from the date that control
commences until the date that control ceases.
The Group applied the principles of merger accounting as part of the historic
acquisition of Northcoders Limited. Northcoders Group PLC was incorporated on
6 May 2021 and attained control of Northcoders Limited by means of a
share-for-share exchange on 24 June 2021. Merger accounting requires that the
results of the Group are presented as if the Group has always been in its
present form, and does not require a re-evaluation of fair values as at the
point of acquisition. Accordingly, as a result of this merger accounting, a
merger reserve is recognised within equity which represents the difference
between the net assets of the Group and the retained profits recognised by the
Group as at 24 June 2021.
During the prior year, 100% of the share capital of Tech Returners Limited was
acquired by Northcoders Limited. Acquisition accounting applies to this
transaction.
1.4 Going concern
In preparing the financial statements, the Directors have considered the
principal risks and uncertainties facing the business, along with the Group's
objectives, policies and processes for managing its exposure to financial
risk. In making this assessment the Directors have prepared cash flow
forecasts for the foreseeable future, being a period of at least eighteen
months from the date of approval of the financial statements.
Forecasts are adjusted for reasonable stress cases that address the principal
risks and uncertainties to which the Group is exposed, thus creating a number
of different scenarios for the Board to challenge. One of these potential
scenarios is the removal of Skills Bootcamp funding from the UK government,
although unlikely as regional funding is being rolled out, this has been
tested, and with mitigation of removal of costs concludes no issues to going
concern.The sensitivities were then also grouped and cashflow was tested to
ensure that, with mitigation, reserves were suitable. Even under the
worst-case scenario identified, the Directors do not believe this to cause a
material uncertainty around going concern.
At the time of approving the financial statements, the Directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Thus, the Directors continue
to adopt the going concern basis of accounting in preparing the financial
statements.
1 Accounting policies (Continued)
1.5 Revenue
Revenue from providing services is recognised in the accounting period in
which the services are rendered. Services are typically provided over short
periods of time, spanning typically a few months at most. However, for
fixed-price contracts that span accounting periods, revenue is recognised
based on the actual service provided to the end of the reporting period as a
proportion of the total services to be provided because the customer receives
and uses the benefits simultaneously. Where the Group has contracts where the
period between the transfer of the promised services to the customer and
payment exceeds one year, the Group adjusts transaction price for the time
value of money.
Revenue is determined and recognised over time as follows:
· For consumer bootcamps, incoming resources received in advance of
the service being provided are recognised on a pro-rata basis across the
course delivery, based on delivery dates for those courses. Any incoming
resource received in advance is recognised as deferred revenue. Apprenticeship
income is a funding mechanism for the consumer revenue stream. The Group
receives lump-sum drawdowns at regular intervals, which typically are billed
in arrears resulting in accrued income where course delivery and/ or
attendance is completed prior to the reporting period end date. In addition,
the Group receives a contingent success fee, payable at the end. The Group
makes an assessment of the probability of success and accrues this on a
percentage of completion basis as the course progresses.
· For the Consultancy division, amounts are invoiced in arrears for
development work performed along with any associated costs, based on the
number of hours spent on each contract at agreed contractual rates for those
delivering the course. Where appropriate, any amounts to be invoiced, based on
the stage of completion of development work in the year are recognised as
accrued revenue, and any amounts invoiced in advance for development work are
recognised as deferred revenue in line with performance obligations per
contracts with customers.
· For consultancy contracts, amounts are recognised on a pro-rata
basis throughout the length of the contract unless a performance obligation
states otherwise, where a performance obligation is determined in accordance
with IFRS 15.
· For conference events, income is recognised once the event has
taken place. Any income received in advance is recognised as a contract
liability until the performance obligation has been satisfied.
· For training funded by StepEx future earnings agreements, income is
recognised when the training takes place at the amount of consideration
expected to be received.
Determining the transaction price
The Group's revenue on over-time sales is generally based on fixed price
contracts but these are subject to more variability as a result of the nature
of the contract. Any variable consideration is constrained in
estimating contract revenue in order that it is highly probable that there
will not be a future reversal in the
amount of revenue recognised when the final amounts of any variations has been
determined.
Allocating amounts to performance obligations
Where the contracts include multiple performance obligations, which are
determined to be separate performance obligations, the transaction price will
be allocated to each performance obligation based on the stand-alone selling
prices. Where these are not directly observable, they are estimated based on
expected cost plus margin.
1.6 Goodwill
Goodwill represents the excess of the cost of acquisition over the fair value
of the net identifiable assets of the acquired subsidiary at the date of
acquisition. Goodwill on acquisition of the subsidiaries is included in
intangible assets. Goodwill is tested annually for impairment and carried at
cost less accumulated impairment losses. Impairment losses on goodwill are not
reversed. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
1 Accounting policies (Continued)
1.7 Intangible assets other than goodwill
The Group's other intangible assets are stated at cost less accumulated
amortisation and impairment losses. Where assets are acquired through business
combinations, the Group uses an appropriate fair value technique in order to
determine cost. Intangible assets are tested annually for impairment or
otherwise when circumstances change. Amortisation begins when an asset is
acquired or becomes available for use and is calculated on a straight-line
basis to allocate the cost of assets over their estimated useful lives as
follows:
Licence 4
years straight line
Technology 5 years
straight line
Development costs 4 - 10 years
straight line
Brand
6 years straight line
Customer relationships 6 years straight line
Customer contracts 6 years straight
line
Development costs includes improvement spend on the Group's website, which
incorporates internal and external spend, as well as internally generated
intangibles representing courses, internally used technologies, and similar
assets. Both variants are amortised on the same basis.
1.8 Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently
measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their
residual values over their useful lives on the following bases:
Leasehold improvements over term of
the lease
Fixtures and
fittings
25% straight line
Computers
33% straight line
Right-of-use
assets
over the term of the lease
The gain or loss arising on the disposal of an asset is determined as the
difference between the sale proceeds and the carrying value of the asset, and
is recognised in the income statement.
1.9 Non-current investments
Interests in subsidiaries, associates and jointly controlled entities are
initially measured at cost and subsequently measured at cost less any
accumulated impairment losses. The investments are assessed for impairment at
each reporting date and any impairment losses or reversals of impairment
losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the parent company. Control is the
power to govern the financial and operating policies of the entity so as to
obtain benefits from its activities.
1.10 Impairment of tangible and intangible assets
At each reporting end date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet
available for use are tested for impairment annually, and whenever there is an
indication that the asset may be impaired.
1 Accounting policies (Continued)
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation increase.
1.11 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term liquid investments with original maturities of three
months or less, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities.
1.12 Financial assets
Financial assets are recognised in the Group's statement of financial position
when the Group becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories, depending on the
nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through
profit and loss are measured at fair value and any transaction costs are
recognised in profit or loss. Financial assets not classified as fair value
through profit and loss are initially measured at fair value plus transaction
costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial
assets is not met, a financial asset is classified as measured at fair value
through profit or loss. Financial assets measured at fair value through profit
or loss are recognised initially at fair value and any transaction costs are
recognised in profit or loss when incurred. A gain or loss on a financial
asset measured at fair value through profit or loss is recognised in profit or
loss, and is included within finance income or finance costs in the statement
of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised
cost where the objective is to hold these assets in order to collect
contractual cash flows, and the contractual cash flows are solely payments of
principal and interest. They arise principally from the provision of goods and
services to customers (eg trade receivables). They are initially recognised at
fair value plus transaction costs directly attributable to their acquisition
or issue, and are subsequently carried at amortised cost using the effective
interest rate method, less provision for impairment where necessary.
1 Accounting policies (Continued)
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value
through other comprehensive income where the financial assets are held within
the Group's business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets, and the contractual terms
of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is
recognised initially at fair value plus transaction costs directly
attributable to the asset. After initial recognition, each asset is measured
at fair value, with changes in fair value included in other comprehensive
income. Accumulated gains or losses recognised through other comprehensive
income are directly transferred to profit or loss when the debt instrument is
derecognised.
The parent company has made an irrevocable election to recognise changes in
fair value of investments in equity instruments through other comprehensive
income, not through profit or loss. A gain or loss from fair value changes
will be shown in other comprehensive income and will not be reclassified
subsequently to profit or loss. Equity instruments measured at fair value
through other comprehensive income are recognised initially at fair value plus
transaction cost directly attributable to the asset. After initial
recognition, each asset is measured at fair value, with changes in fair value
included in other comprehensive income. Accumulated gains or losses recognized
through other comprehensive income are directly transferred to retained
earnings when the equity instrument is derecognised or its fair value
substantially decreased. Dividends are recognised as finance income in profit
or loss.
Impairment of financial assets
Financial assets, other than those measured at fair value through profit or
loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a
result of one or more events that occurred after the initial recognition of
the financial asset, the estimated future cash flows of the investment have
been affected.
The Group recognises lifetime expected credit losses (ECL) for trade
receivables and amounts due on contracts with customers. The expected credit
losses on these financial assets are estimated based on the Group's historical
credit loss experience, adjusted for facts that are specific to the debtors,
general economic conditions and an assessment of both the current as well as
the forecast of conditions at the reporting date, including time value of
money where appropriate. Lifetime ECL represents the expected credit losses
that will result from all possible default events over the expected life of a
financial instrument.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership to another entity.
1.13 Financial liabilities
The Group recognises financial debt when the Group becomes a party to the
contractual provisions of the instruments. Financial liabilities are
classified as either 'financial liabilities at fair value through profit or
loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other
short-term monetary liabilities, are initially measured at fair value net of
transaction costs directly attributable to the issuance of the financial
liability. They are subsequently measured at amortised cost using the
effective interest method. For the purposes of each financial liability,
interest expense includes initial transaction costs and any premium payable on
redemption, as well as any interest or coupon payable while the liability is
outstanding.
1 Accounting policies (Continued)
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Group's
obligations are discharged, cancelled, or they expire.
1.14 Equity instruments
Equity instruments issued by the Parent Company are recorded at the proceeds
received, net of direct issue costs. Dividends payable on equity instruments
are recognised as liabilities once they are no longer payable at the
discretion of the Company.
Share capital represents the nominal value of shares that have been issued.
Share premium represents the excess of the subscription price over the par
value of shares issued.
Share option reserve relates to amounts recognised for the fair value of share
options and warrants granted in accordance with IFRS 2.
Other reserve represents the nominal value of the share-for-share exchange, as
explained further in note 33 of the Report and accounts.
Merger reserve represents the carrying value of the investment in the
subsidiary undertaking at the point of the share-for-share exchange, as
explained further in note 33 of the Report and Accounts.
Retained earnings include all current and prior period retained earnings.
1.15 Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or 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 reporting end date.
Deferred tax
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 taxable temporary
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 goodwill or from the
initial recognition of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the 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. 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.
1 Accounting policies (Continued)
1.16 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an
expense, unless those costs are required to be recognised as part of the cost
of inventories or non-current assets. The cost of any unused holiday
entitlement is recognised in the period in which the employee's services are
received
1.17 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an
expense as they fall due.
1.18 Share-based payments
Equity-settled share-based payments are measured at fair value at the date of
grant by reference to the fair value of the equity instruments granted using
the Black-Scholes model. The fair value determined at the grant date is
expensed on a straight-line basis over the vesting period, based on the
estimate of shares that will eventually vest. A corresponding adjustment is
made to equity.
When the terms and conditions of equity-settled share-based payments at the
time they were granted are subsequently modified, the fair value of the
share-based payment under the original terms and conditions and under the
modified terms and conditions are both determined at the date of the
modification. Any excess of the modified fair value over the original fair
value is recognised over the remaining vesting period in addition to the grant
date fair value of the original share-based payment. The share-based payment
expense is not adjusted if the modified fair value is less than the original
fair value.
Cancellations or settlements (including those resulting from employee
redundancies) are treated as an acceleration of vesting and the amount that
would have been recognised over the remaining vesting period is recognised
immediately where applicable. Where employees forfeit options (for example on
resignation) no further charge is accrued and the amounts recognised in the
share option reserve to date are transferred to retained earnings.
As the obligation to settle the reward is held by the parent company,
Northcoders Group PLC there are no modifications in these company accounts for
employees
leaving during the vesting period.
The cumulative expense over the vesting period is recognised within the Other
Reserve.
1.19 Leases
At inception, the Group assesses whether a contract is, or contains, a lease
within the scope of IFRS 16. A contract is, or contains, a lease if the
contract conveys the right to control and direct use of an identified asset
for a period of time in exchange for consideration. Where a tangible asset is
acquired through a lease, the Group recognises a right-of-use asset and a
lease liability at the lease commencement date. Right-of-use assets are
included within property, plant and equipment, apart from those that meet the
definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date plus any initial direct costs and an estimate
of the cost of obligations to dismantle, remove, refurbish or restore the
underlying asset and the site on which it is located, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same basis as those of
other property, plant and equipment. The right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value of the lease
payments that are unpaid at the commencement date, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate. Lease payments included in
the measurement of the lease liability comprise fixed payments, variable lease
payments that depend on an index or a rate, amounts expected to be payable
under a residual value guarantee, and the cost of any options that the Group
is reasonably certain to exercise, such as the exercise price under a purchase
option, lease payments in an optional renewal period, or penalties for early
termination of a lease. In doing so the Group assesses expectations for the
period of use based on break clauses and intention to retain, based on best
estimates at inception and at each reporting end date.
1 Accounting policies (Continued)
The lease liability is measured at amortised cost using the effective interest
method. It is remeasured when there is a change in: future lease payments
arising from a change in an index or rate; the Group's estimate of the amount
expected to be payable under a residual value guarantee; or the Group's
assessment of whether it will exercise a purchase, extension or termination
option. When the lease liability is remeasured in this way, a corresponding
adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of the right-of-use asset
has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases of machinery that have a lease term of 12
months or less, or for leases of low-value assets including IT equipment. The
payments associated with these leases are recognised in profit or loss on a
straight-line basis over the lease term.
1.20 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the
rates of exchange prevailing at the dates of the transactions. At each
reporting end date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the reporting
end date. Gains and losses arising on translation in the period are included
in profit or loss.
1.21 Non-recurring items
Items which are material either because of their size or nature, and which are
non-recurring, are presented within their relevant consolidated income
statement category, but highlighted through separate disclosure. The separate
reporting of non-recurring items helps provide a better picture of the Group
and Company's underlying performance. Items which are included within the
non-recurring category include (but are not limited to):
• costs incurred in relation to the integration of significant
acquisitions and other major restructuring programmes;
• significant goodwill or other asset impairments relating to specific
market events;
• revenue clawback due to the inability to claim for job outcomes after the
period. The reason for this being the shift in outcomes rate due to the post
covid tech economy crash;
• incorrect estimate of variable consideration in the previous year due to
an in inflation of jobs post pandemic; and
• other particularly significant or unusual items.
2 Adoption of new and revised standards and changes in accounting policies
In the current year, the following new and revised standards and
interpretations have been adopted by the Group but have had no effect on the
current period or a prior period or and are not expected to have an effect on
future periods:
· Supplier Finance Arrangements (Amendments to IAS7 and IFRS7)
· Non-current Liabilities with Covenants (Amendments to IAS1) and
Classification of Liabilities as Current or Non-current (Amendments to IAS1)
· Lease Liability in a Sale and Leaseback (Amendments to IFRS16)
The adoption of these standards has not had any effect on the reported
financial position or results of the Group.
2 Adoption of new and revised standards and changes in accounting policies (Continued)
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following
standards and interpretations, which have not yet been applied in these
financial statements, were in issue but not yet effective (and in some cases
had not yet been adopted by the UK):
· Lack of Exchangeability (Amendments to IAS1) effective 1 January
2025
· Classification and Measurement of Financial Instruments (Amendments
to IFRS 7 and IFRS 9) effective 1 January 2026
· Annual Improvements to IFRS Standards (Amendments to IFRS 1, IFRS
7, IFRS 9, IFRS 10 and IAS 7) effective 1 January 2026.
· Contracts Referencing Nature-Dependent Electricity (Amendments to
IFRS 7 and IFRS 9) effective 1 January 2026
· IFRS18 'Presentation and Disclosure in Financial Statements'
effective 1 January 2027
· IFRS19 'Subsidiaries without Public Accountability: Disclosures'
effective 1 January 2027
The Group is not expecting to change its reported profits or net asset
position as a result of these disclosures, although it is expected to change
the presentation of these results as a consequence of the disclosure
requirements of IFRS 18.
3 Critical accounting estimates and judgements
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised, if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current
and future periods.
The estimates and assumptions which have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities are
outlined below.
Critical judgements
Capitalisation of development costs
The Group recognises as intangible fixed assets development costs that are
considered to meet the relevant capitalisation criteria. The measurement of
such costs and assessment of their eligibility in line with the appropriate
capitalisation criteria requires judgement and estimation around the time
spent by eligible staff on development, expectations around the ability to
generate future economic benefit in excess of cost and the point at which
technical feasibility is established.
3 Critical accounting estimates and judgements (Continued)
Useful lives and impairment of non-current assets (including right-of-use
assets)
Depreciation is provided so as to write down the assets to their residual
values over their estimated useful lives as set out in the Group's accounting
policy. The selection of these estimated lives requires the exercise of
management judgement. Useful lives are regularly reviewed and should
management's assessment of useful lives shorten/increase then depreciation
charges in the financial statements would increase/decrease and carrying
amounts of tangible assets would change accordingly.
The Group also assesses the useful life of intangible development assets based
on experience of past use of those assets, and likely renewal periods to
maintain and replace and renew aspects such as coding. Based on this the
useful life is 10 years, which reflects management's expectation of
consumption of the assets.
The Group is required to consider, on an annual basis, whether indications of
impairment relating to such assets exist and, if so, perform an impairment
test. The recoverable amount is determined based on the higher of value-in-use
calculations or fair value less costs to sell. The use of value-in-use method
requires the estimation of future cash flows and the choice of a discount rate
in order to calculate the present value of the cash flows. The Directors are
satisfied that all recorded assets will be fully recovered from expected
future cash flows. Details of the inputs to this are provided in note 16 of
the Report and Accounts.
Deferred tax
The Group makes provision for anticipated tax consequences based on the
likelihood of whether additional taxes may arise. The Group recognises
deferred tax assets to the extent to which it expects to be able to utilise
the balances against future taxable profits.
Key sources of estimation uncertainty
Incremental borrowing rates applied to calculate lease liabilities
The Group has used the incremental borrowing rate to calculate the value of
the lease liabilities relating to its property lease liabilities recognised
under IFRS 16. The discount rate used reflects the estimated risks associated
with borrowing against similar assets by the Group, incorporating assumptions
for similar terms, security and funds at that time.
The carrying amount of such liabilities are disclosed within note 24 of the
Report and Accounts.
Share-based payments
The determination of the fair values of EMI options and warrants has been made
by reference to the Black- Scholes model; the input with the greatest amount
of estimation being the volatility of the Company's share price which has been
derived via benchmarking against similar companies in the industry. Other key
inputs are set out in note 30 of the Report and Accounts.
Expected credit losses
The amount recognised as a provision is the best estimate of the expected
credit loss that the Group is projected to incur on receivables. Each year end
the Directors assess the risks and uncertainties surrounding receivable
balances and use expected loss rates based on the historical credit losses
experienced by the Group. Further details on the assumptions made are
disclosed in note 21 of the Report and Accounts.
Revenue provision
An estimate of variable consideration is recognised against DFE income due to
the performance based nature of the contract. The measurement of the
consideration requires judgment and estimation around the expectation of what
percentage of students who finish the DFE course go into a relevant job within
the timescales of the contract. Job outcomes are regularly reviewed by
management and the consideration is flexed as necessary. .
StepEx revenue
Estimation of StepEx revenue is entirely contingent on the future earnings of
students over a fixed period of time. It is calculated on a portfolio basis,
looking at expectations of the amounts repayable from all students based on
the stage of completion of the course. Variable revenues are not discounted to
present value, and are not subject to expected credit loss calculations;
instead, the amount is adjusted as each student reaches completion of their
contractual earnings period and the final amounts are known because, it is
assessed that there is no significant financing component involved.
4 Revenue
IFRS 8 'Operating Segments' requires operating segments to be identified on
the basis of internal reports of the Group that are regularly reviewed by the
Group's chief operating decision maker. The chief operating decision maker of
the Group is considered to be the Board of Directors.
The results of the Group are allocated to the single operating segments
consistent with the requirements of IFRS 8. All assets, liabilities and
revenues are located in, or derived from, the United Kingdom.
2024 2023
£ £
Revenue 8,819,083 7,102,319
Cost of sales (2,916,871) (2,658,650)
Gross profit 5,902,212 4,443,669
Operating costs (5,458,462) (4,957,649)
Other operating income 1,000 -
Non-recurring costs - (562,603)
Operating profit 444,750 (1,076,583)
Net finance costs (55,886) (149,090)
Profit/(loss) before taxation 388,864 (1,225,673)
2024 2023
£ £
Revenue analysed by geographical market
United Kingdom 8,819,083 7,102,319
Revenue includes undiscounted EdAid sales of £nil (2023: £7,542) of which
some of these contain a financing element. EdAid sales are governed by a
formal credit agreement facilitated by a third party. An adjustment of £nil
(2023: £nil) has been recognised in finance income to reflect the discounted
element based on expected repayment profiles inherent in the agreement at date
of invoice.
Also included within revenue are StepEx sales of £177,361 (2023: £29,924).
StepEx sales are governed by a formal credit agreement facilitated by a third
party. The revenues are not discounted as the amount receivable represents
variable consideration, with no significant financing component involved,
which is recognised on a portfolio basis using the expectation of a typical
amount received per person.
Revenue from customers who individually accounted for more than 10% of total
Group revenue amounted to
£7,259,267 (2023: £5,778,001) from one customer (2023: one customer).
All revenue is recognised over time as the services are delivered. All revenue
has fixed consideration except for the StepEx sales disclosed above.
4 Revenue (Continued)
Contract assets
2024 2023
£ £
At 1 January 1,398,018 1,947,922
Transfers from contract asset to trade receivables (1,293,905) (1,595,005)
Non-recurring item: irrecoverable amounts written off (104,113) (352,917)
Excess of revenue recognised over cash (or rights to cash) being recognised
during the year
1,624,485 1,398,018
At 31 December 1,624,485 1,398,018
Contract liabilities
2024 2023
£ £
At 1 January 206,500 5,239
Amounts recognised as revenue (206,500) (5,239)
Amounts received in advance of performance 73,557 206,500
73,557 206,500
At 31 December
Contract assets and contract liabilities are both shown on the face of the
statement of financial position. They arise from the Group's contracts because
cumulative payments received from customers at each balance sheet date do not
necessarily equal the amount of revenue recognised on the contracts.
5 Exceptional items
2024 2023
£ £
Expenditure
Irrecoverable amounts - 485,770
Acquisition costs - 57,269
Business restricting costs - 19,564
- 562,603
5 Exceptional items (Continued)
Irrecoverable amounts
Having reviewed the recoverability of contract assets in 2023, management have
assessed that a portion of income accrued during 2022, amounting to £458,770,
is irrecoverable and has therefore been written off as a non- recurring item
in 2023. The Group recognises revenue in accordance with IFRS 15 and the
specific provisions relating to variable consideration. At the time of
recognising the contract asset, the Group had every expectation that the
amounts would be recoverable. The contracts are performance-based and external
factors and conditions arising during 2023, which could not be foreseen, had a
detrimental impact to the recoverability of these contract assets. In
particular, following the Covid-19 pandemic, the number of job opportunities
for course participants diminished, resulting in reduced performance-based
revenue. Such factors and conditions have been taken into account in
recognising revenue in 2023 and 2024.
Acquisition costs
Acquisition costs pertain to legal and professional fees incurred as part of
the acquisition of Tech Returners Limited during the year. Such costs are
non-recurring and hence deemed non-recurring.
Business restructuring costs
Non-recurring restructuring costs in the form of redundancy and severance
payments were incurred by the Group as part of its retreat from the
apprenticeship market.
6 Adjusted EBITDA
The Directors have used an Alternative Performance Measure (APM) in the
preparation of these financial statements. The consolidation income statement
has presented adjusted EBITDA, where EBITDA represents earnings before
interest, tax, depreciation and amortisation. The adjusted element removes
non-recurring items which are not relevant to the underlying performance and
cash generation of the business. Non-recurring items for the prior year are
disclosed in note 5. There are no non-recurring costs for the current year.
The Directors have presented this APM because they feel it most suitably
represents the underlying performance and cash generation of the business, and
allows comparability between the current and comparative period in light of
the rapid changes in the business (most notably its admission to AIM and
associated costs), and will allow an ongoing trend analysis of this
performance based on current plans for the business.
7 Operating profit/(loss)
2024 2023
Operating profit/(loss) for the year is stated after charging/(crediting): £ £
Exchange losses 1,851 896
Depreciation of property, plant and equipment 131,838 172,582
Profit on disposal of property, plant and equipment (246) (83)
Amortisation of intangible assets (included within administrative expenses) 263,842 208,751
Impairment of intangible assets (included within administrative expenses) - 25,474
Share-based payments 138,446 186,542
8 Auditor's remuneration
2024 2023
Fees payable to the Group's auditor and associates: £ £
For audit services
Audit of the financial statements of the Group and Company 60,000 75,000
Audit of the financial statements of the Company's subsidiaries 47,500 40,000
107,500 115,000
9 Employees
The average monthly number of persons (including directors) employed by the
Group during the year was:
2024 2023
Number Number
Executive Directors 3 3
Non-Executive Directors 2 2
Administration and operations 55 44
Client service delivery 69 75
Total 129 124
Their aggregate remuneration comprised:
2024 2023
£ £
Wages and salaries 5,184,932 4,294,730
Social security costs 518,987 441,671
Pension costs 245,703 446,996
5,949,622 5,183,397
In addition to the above, further employee costs have been incurred as part of
the development costs, as disclosed in note 16 of the Report and Accounts. The
total employment costs which have been capitalised as development are
£546,403 (2023: £715,716).
10 Directors' remuneration
2024 2023
£ £
Remuneration for qualifying services 539,268 555,322
Amounts receivable under long term incentive schemes 43,339 43,383
Company pension contributions to defined contribution schemes 35,705 38,489
618,309 637,194
Remuneration disclosed above includes the following amounts paid to the
highest paid director:
2024 2023
£ £
Remuneration for qualifying services 183,313 194,575
Company pension contributions to defined contribution schemes 11,169 12,100
During the year the Directors received remuneration as follows:
Salary Share Benefits in kind Pension Total
options
£ £ £ £ £
Mr A Batra 130,000 - 1,782 10,400 142,182
Mr C D Hill 176,667 - 845 14,133 191,645
Ms C Prior 139,615 43,339 359 11,169 194,482
Mr A N Parker 35,000 - - - 35,000
Mrs A M Williams 55,000 - - - 55,000
536,282 43,339 2,986 35,702 618,309
During the previous year the Directors received remuneration as follows:
Salary Share Benefits in kind Pension Total
options
£ £ £ £ £
Mr A Batra 142,361 - 1,615 11,389 155,365
Mr C D Hill 170,312 - 530 13,625 184,467
Ms C Prior 150,833 43,383 359 12,100 206,675
Mr A N Parker 35,000 - - - 35,000
Mrs A M Williams 54,312 - - 1,375 55,687
552,818 43,383 2,504 38,489 637,194
The Directors of the Group control 28.68% (2023: 30.66%) of the voting shares
of the Group, and hold 175,000 (2023: 175,000) share options. No Directors
exercised share options during the current or comparative year.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR ITMRTMTJTBAARecent news on Northcoders
See all newsREG - Northcoders Group - Notification of Major Holdings
AnnouncementREG - Northcoders Group - DfE contract and regional funding model
AnnouncementREG - Northcoders Group - Final Results
AnnouncementREG - Northcoders Group Caledonian Holdings - Notification of Major Holdings
AnnouncementRCS - Northcoders Group - New Consultancy contract wins
Announcement