REG - Northcoders Group - Interim Results
17/09/2024 07:00
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RNS Number : 4222E Northcoders Group PLC 17 September 2024
17 September 2024
Northcoders Group PLC
('Northcoders' or the 'Group' or 'Company')
Interim Results
Northcoders returns to profitability amid record demand, including momentum
for new Corporate Solutions division, with tech investments driving
efficiencies
Northcoders (AIM:CODE), a UK market leading technology training business, is
pleased to announce its results for the six months ended 30 June 2024 ('H1
2024' or the 'Period').
Chris Hill, Chief Executive Officer of Northcoders, said: "We are delighted to
report that Northcoders has continued to build on its reputation as one of the
UK's leading technology training providers as we return to profitability. This
highlights not only the momentum of our Training Bootcamps, reaching record
registrations for yet another year, but also that the investments made in FY
2023 have successfully led to efficiencies throughout the business. The
strength of Northcoders brand across the UK continues to grow, and as the
breadth of our technology training continues to expand, such as our new Java
and C# courses, we are confident in our ability to sustain this expansion.
These courses are the languages usually adopted by large enterprises and are
currently underserved or not serviced at all in our sector.
"I am really pleased to see the rebrand and relaunch of the Corporate
Solutions division has started to bear fruit as we win our first pilot
contracts, and the pipeline of Counter™ contracts is building well. I am
deeply grateful for the hard work and dedication of all the Northcoders team
to enable this significant progress to be made.
"As we move into the second half of the year, particularly as our revenue base
begins to diversify, we are confident that we have built a solid platform to
support further growth in the years ahead as we create life changing
opportunities for individuals, help to close the UK's digital skills gap and
deliver for our shareholders."
Financial Highlights
· Revenue grew to £4.4 million (H1 2023: £3.5 million), an
increase of 26%, slightly ahead of management expectations
· Gross margin increased to 67% (H1 2023: 62%) following release
of the NCore technology platform
· Tenfold increase in underlying adjusted EBITDA of £0.4 million
(H1 2023: £0.04 million) as the Group leverages the efficiencies of
investments made in FY 2023
· Return to profitability with adjusted EPS increasing to 2.58p
(H1 2023: 2.07 loss)
· Strong balance sheet with cash of £1.3 million (H1 2023: £2.0
million) following technology platform investments, delivering enhanced
margins
Operating Highlights
· Growth in demand with record Training Bootcamp
registrations, reaching 4,703 in the Period (H1 2023: 3,590)
· Q3 2024 has again seen record applications, with 3,313
registrations
· Record visibility and profit per seat following successful
Department for Education Skills Bootcamps bid for £10 million covering
18-month period to June 2025
· Geographic expansion continues with over 62% of learners now
based outside of Manchester and Leeds, and 34% based in London
· Corporate Solutions division rebranded as Counter™ in May
2024 appointing Tom Walton as strategic advisor and starting three pilot
contracts in the Period
· Successfully selected a new Manchester office, negotiated at
a significantly lower rent to the current premises, with a move in date during
Q1 2025. Based in the centre of the city's business district it will provide
access to multiple new potential customers and hiring partners
· New technology training courses continue to expand with
Java and C# courses successfully added to learning suite
Current trading and outlook
· The second half of FY 2024 started well and the Group is pleased
to report trading has been slightly ahead of management expectations. As brand
awareness and national expansion increases, Northcoders will look to provide
remote learners outside of Manchester with more in-person networking
opportunities and strengthening the Group's regional hiring partner base
· Focus remains upon investing into new technology disciplines,
expanding our Corporate Solutions division, Counter™, increasing brand
awareness and leveraging the efficiencies of NCore, whilst delivering
increased profitability
· Looking ahead, the Board is confident in Northcoders' ability
to deliver FY 2024 revenue and profits in line with market expectations.
Analyst meeting and Investor Meet Company presentation
There will be an in-person briefing for sell-side analysts at 9.30am (BST)
today. Please contact Buchanan via northcoders@buchanan.uk.com if you wish
to join the meeting.
Northcoders will be also be presenting via the Investor Meet Company platform
today at 6.00 p.m. (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. Questions can be submitted pre-event via the Investor Meet
Company dashboard up until 9.00 a.m. the day before the meeting or at any time
during the live presentation. To sign up to the Northcoders Group
presentation via Investor Meet Company please click the following link:
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This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
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 / Sarah Mather (Investment Banking)
Fraser Marshall / George Krokos (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 (Financial Communications) 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 (Financial Communications) 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 and
Platform Engineering. Founded in 2015, the Group's business model operates a
hybrid structure with a flagship site in Manchester and another site in Leeds,
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 (https://investors.northcodersgroup.com) .
Introduction
The Board is pleased to present the Group's results for the six months ended
30 June 2024 ('H1 2024'). First and foremost, it is pleasing to report a
return to profitability driven by an increase in demand for the Training
Bootcamp courses and efficiencies enabled by our core learning platform,
NCore. The number of registrations increased to 4,703 and 566 students were
able to move through application pathways to commence courses. This growth
further underscores Northcoders' reputation for delivering high-quality
technology education whilst the strengthening of internal learning platforms
enables the Group to do this with less staff cost.
The Group continues to benefit from the financial support delivered by the
Government's technology Skills Bootcamps initiative. This is exemplified by
its success in securing a new funding bid with the Department for Education
worth £10 million to deliver into 2025. It is another demonstration of
Northcoders' reputation as a top tier training provider and outcomes on the
programme remain excellent with 99% of the students completing the course,
receiving an interview with a future employer. Communication is strong between
Northcoders and the UK Government and we are currently awaiting news on the
next stage of bidding following the recent change of government. The Labour
Party has already pledged to establish 'Skills England' to strengthen Further
Education, and we see this as a positive step. Whilst we are confident in the
future provision of funding to bridge the significant digital skills gap,
particularly with the advent of AI and Smart Technologies, it has been part of
our strategy to diversify the Group's revenues since IPO, for example through
our Corporate Solutions, and this strategy is proceeding well.
Operational review
Northcoders' strategy of geographical expansion beyond Manchester and Leeds
has yielded significant results through increased marketing spend and brand
awareness. Over 62% of Training Bootcamp learners now reside outside of
these cities, with 34% studying in London and the surrounding areas. This
expansion signifies Northcoders' growing national presence and capabilities of
its remote learning platform.
Since IPO, and following investment made into the Group's learning platform,
it has become clear that virtual learning is a far more scalable, profitable
model, which generates equally high quality outcomes for students as
demonstrated by feedback from employers and repeat hiring from corporates. As
a result, the Group has closed two of its hubs in Birmingham and Newcastle and
moved its HQ in Manchester to a smaller space. The new office in Manchester is
located at the heart of the business district, and it is anticipated that
Northcoders will not only benefit from the reduced rental terms, but also
Northcoders' course catalogue is being well-utilised across the suite of
training programmes, with JavaScript (the original software development
course) and Data Engineering, operating at full efficient capacity. Cloud
Engineering, Java and the newest course C# are developing well with positive
feedback from students and employers.
Northcoders remains confident in its commitment to a thoughtful, strategic
approach to product development and in the Training Bootcamp division this has
paid off. This high standard training programs continue to earn the
strongest reputation amongst corporate hiring partners. The Group is
utilising this reputation to replicate its success in the Corporate technology
consultancy market with its Counter™ brand poised to become a recognised
name in the field.
The Counter™ business is gaining momentum with great feedback on the teams
we have currently on pilot contracts. The Group is providing blended teams of
Northcoders trained individuals (junior and senior) to corporate partners. The
teams are provided as consultants on day rates and contracts have spanned six
months at this early stage. Going forwards Northcoders is looking to build on
this with contracts of 9 to12 months, with larger blended teams.
As previously announced, Counter™ was contracted to three pilot schemes in
the Period; a UK high street building society, a UK investment administrator
listed on the Main Market of the London Stock Exchange, as well as a global
banking firm. These contracts are small but on successful completion could
provide larger renewals and positive testimonials for the brand. The Group
is now in the final stages of negotiating a larger, full contract and a
contract renewal for one of the pilots. The Group is working with these
customers to develop marketing materials on the back of their contracts to
further grow the reputation of the brand and therefore the sales pipeline. The
pipeline for contracts starting in FY 2025 is strong and more material revenue
is anticipated in the medium term.
Financial Review
Northcoders delivered a strong performance in the Period, generating adjusted
EBITDA of £0.4 million in H1 2024 (H1 2023: £0.04 million), a tenfold
increase on H1 2023 and a 464% increase on FY 2023 as the Group leverages the
efficiencies of investments made into the core learning platform NCore in FY
2023.
Revenue for the Period was £4.4 million (H1 2023: £3.5 million), up 26% on
the equivalent period last year. Training division again grew revenues driven
by increased brand awareness and entry into new technology disciplines.
Gross profit for the Period was £2.5 million (H1 2023: £2.2 million) at a
gross margin of 67%. EBITDA, adjusted for share based payments, was £0.4
million (H1 2023: £0.04 million) and profit after tax was £0.1 million (H1
2023: loss of £0.3 million). Profits for the year are anticipated to be H2
weighted following further investment in H1 2024.
Basic earnings per share was +1.35 pence per share (H1 2023: loss of 3.16
pence). Basic adjusted earnings per share was +2.58 pence per share (H1
2023: loss of 2.07 pence). Net assets at the Period end were £5.0 million
(H1 2023: £5.5 million) of which cash was £1.3 million (H1 2023: £2.0
million).
Outlook
After a more challenging year in 2023, the Group is pleased with the
efficiencies and profitability of the core business achieved in the first half
of the year. The hiring landscape is progressing, and we are ensuring that
we remain the best placed for Corporates to recruit junior technology
specialists.
The recently piloted flexi course remains a strong potential growth driver for
us as we test and learn from the first cohort which is now in progress, we
will ensure that we retain our thoughtful strategic approach with this new
learning style and are looking forwards to this growing in 2025.
Counter™ growth and investment remains a focus and we are pleased to be able
to continue this whilst returning profits as a Group, as contracts progress
and pipeline is converted into 2025, we hope to see profits from this area of
the business come through.
With a strong balance sheet and cash position, the board remains confident in
Northcoders' ability to deliver growth, whilst investing in key areas, and
delivering value for its shareholders. Improving the UK's technology skills
gap, whilst creating life changing opportunities for individuals remains
Northcoders' priority.
Chris Hill
Chief Executive Officer
17 September 2024
Group Statement of Comprehensive Income
For the period ended 30 June 2024
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
Notes UNAUDITED UNAUDITED AUDITED
£ £ £
Revenue 4,353,628 3,450,579 7,102,319
Cost of sales (1,442,751) (1,269,645) (2,658,650)
Gross profit 2,910,877 2,180,934 4,443,669
Expenditure (2,463,001) (2,141,561) (4,364,300)
Adjusted EBITDA 447,876 39,373 79,369
Depreciation (69,700) (83,115) (172,582)
Amortisation & impairment (125,405) (91,674) (234,225)
Share based payment expense (98,055) (86,852) (186,542)
Total administrative expenditure (2,756,161) (2,403,202) (4,957,649)
Non-recurring items - - (562,603)
Operating profit/(loss) 154,716 (222,268) (1,076,583)
Investment revenues 16,255 5,159 14,170
Finance costs (52,834) (89,799) (163,260)
Profit/(loss) before tax 118,137 (306,908) (1,225,673)
Taxation (9,730) 55,975 218,745
Net profit/(loss) after tax 108,407 (250,933) (1,006,928)
Other comprehensive income:
Tax relating to items not reclassified (5,019) 21,713 (3,725)
Total comprehensive income/loss for the year attributable to equity 103,388 (229,220) (1,010,653)
shareholders of the parent
Earnings per share
Basic (pence per share) 3 1.35 (3.16) (12.62)
Diluted (pence per share) 3 1.34 (3.16) (12.62)
Adjusted (pence per share) 3 2.58 (2.07) (3.23)
Group Statement of Financial Position
As at 30 June 2024
Notes 30 June 2024 30 June 2023 31 December 2023
UNAUDITED UNAUDITED AUDITED
£ £ £
Non-current assets
Goodwill 1,310,086 1,270,725 1,310,086
Intangible assets 4 1,907,123 1,444,440 1,747,400
Property, plant and equipment 267,534 447,244 316,986
Deferred tax assets 123,415 379,892 158,837
3,608,158 3,542,301 3,533,309
Current assets
Contract assets 1,488,995 2,005,302 1,398,018
Trade and other receivables 673,932 725,875 671,724
Current tax receivable 64,617 109,832 43,945
Cash and cash equivalents 1,308,379 2,044,849 1,617,172
3,535,923 4,885,858 3,730,859
Current liabilities
Trade and other payables 1,174,443 978,145 1,101,275
Borrowings 259,749 369,767 293,355
Current tax liabilities - 4,900 4,937
Lease liabilities 114,509 230,315 212,112
Contract liabilities 112,969 53,306 206,500
1,661,670 1,636,433 1,818,179
Net current assets 1,874,253 3,249,425 1,912,680
Non-current liabilities
Borrowings 341,932 601,775 474,300
Lease liabilities 121,417 336,654 154,070
Deferred tax provision - 353,937 -
463,349 1,292,366 628,370
Net assets 5,019,062 5,499,360 4,817,619
EQUITY
Share capital 80,115 80,115 80,115
Share premium 4,801,444 4,801,444 4,801,444
Merger reserve 500 500 500
Share option reserve 499,769 315,332 401,714
Other reserve 946,774 946,772 946,774
Retained earnings (1,309,540) (644,803) (1,412,928)
Total equity 5,019,062 5,499,360 4,817,619
Share Share Share option reserve Merger reserve Other reserve Retained earnings Total equity attributable to owners of the parent
Group Statement of Changes in Equity capital premium
For the period ended 30 June 2024
£ £ £ £ £ £ £
At 1 January 2023 (audited) 76,889 4,801,444 228,480 500 (50,000) (415,583) 4,641,730
Loss for the period - - - - - (250,933) (250,933)
Other comprehensive income:
Tax adjustments on share based payments - - - - - 21,713 21,713
Total comprehensive income - - - - - (229,200) (229,220)
Share option expense - - 86,852 - - - 86,852
Issue of share capital 3,226 - - - 996,772 - 999,998
At 30 June 2023 (unaudited) 80,115 4,801,444 315,332 500 946,772 (644,803) 5,499,360
Loss for the period - - - - - (755,995) (755,995)
Other comprehensive loss:
Tax adjustments on share based payments - - - - - (25,438) (25,438)
Total comprehensive income - - - - - (781,433) (781,433)
Adjustment to share capital issue - - - - 2 - 2
Share option and warrants expense - - - - - - -
Cancellation of share options - - (13,308) - - 13,308 -
Share option expense - - 99,690 - - - 99,690
Issue of share capital - - - - - - -
Costs of share issues set against premium - - - - - - -
At 31 December 2023 (audited) 80,115 4,801,444 401,714 500 946,774 (1,412,928) 4,817,619
Profit for the period - - - - - 108,407 108,407
Other comprehensive income:
Tax adjustments on share based payments - - - - - (5,019) (5,019)
Total comprehensive income - - - - - 103,388 103,388
Share option expense - - 98,055 - - - 98,055
Issue of share capital - - - - - - -
At 30 June 2024 (unaudited) 80,115 4,801,444 499,769 500 946,774 (1,309,540) 5,019,062
Group statement of Cash flows for the period ending 30 June 2024 Notes 6 months ended 6 months ended Year ended 31 December 2023
30 June 2024 30 June 2023 AUDITED
UNAUDITED UNAUDITED
£ £ £
Cash flows from operating activities:
Profit/(loss) for the year 108,407 (250,933) (1,006,928)
Adjustments for:
Tax (credit)/charge 9,730 (55,975) (218,745)
Finance costs 52,834 89,799 163,260
Investment revenues (16,255) (5,159) (14,170)
Gain on disposal of PPE - - (83)
Share based payment expense 98,055 86,852 186,542
Amortisation of intangible assets 125,405 91,674 208,751
Depreciation of tangible assets 69,700 83,115 172,582
Impairment of intangible assets - - 25,474
447,876 39,373 (483,317)
Changes in working capital:
(Increase)/decrease in contract assets and trade & other receivables (93,185) 244,532 891,421
Increase/(decrease) in trade & other payables 59,508 (183,937) 129,871
Cash from operations 414,199 99,968 537,975
Income taxes received - 82,483 113,461
Net cash inflow from operating activities 414,199 182,451 651,436
Cash flows from investing activities
Capitalised development costs (285,128) (305,890) (751,400)
Purchase of property, plant and equipment (20,248) (64,320) (86,110)
Proceeds of disposal of property, plant and equipment - - 339
Payment of deferred consideration (85,905) - -
Purchase of subsidiaries - (173,758) (173,758)
Investment revenues received 16,255 5,140 14,170
Net cash (used in) investing activities (375,026) (538,828) (996,759)
Cash flow from financing activities
Repayments of bank loans and borrowings (171,985) (166,665) (418,177)
Payment of lease obligations (137,714) (141,363) (279,826)
Interest paid (38,267) (68,019) (116,775)
Net cash (used in) financing activities (347,966) (376,047) (814,778)
Net (decrease) in cash and cash equivalents (308,793) (732,424) (1,160,101)
Cash and cash equivalents at beginning of the period 1,617,172 2,777,273 2,777,273
Cash and cash equivalents at end of the period 1,308,379 2,044,849 1,617,172
1. General information
Northcoders Group Plc is a public company limited by shares incorporated in
England and Wales. The registered address of the Company is Manchester
Technology Centre, Oxford Road, Manchester, M1 7ED. The consolidated
financial statements (or 'financial statements') incorporate the financial
statements of the Company and entities (its subsidiaries) controlled by the
Company (collectively comprising the 'Group').
The principal activity of the Group is the provision of digital training
courses.
2. Accounting policies
2.1. Basis of preparation
The financial information set out in these interim consolidated financial
statements for the six months ended 30 June 2024 is unaudited. The financial
information presented are not statutory accounts prepared in accordance with
the Companies Act 2006 and are prepared only to comply with AIM requirements
for interim reporting. Statutory accounts for the year ended 31 December
2023, on which the auditors gave an audit report which was unqualified and did
not contain a statement under Section 498(2) or (3) of the Companies Act 2006,
have been filed with the Registrar of Companies.
These financial statements have been prepared in accordance with international
accounting standards ('IFRS') as adopted by the United Kingdom ('UK') insofar
as these apply to interim financial statements.
The interim consolidated financial statements have been prepared using
consistent accounting policies as those adopted in the financial statements
for the year ended 31 December 2023.
The interim consolidated financial statements are prepared in sterling, which
is the functional currency of the group. Monetary amounts in these interim
consolidated financial statements are rounded to the nearest £1.
The financial statements have been prepared on the historical cost basis,
modified to include the revaluation of certain financial instruments at fair
value.
2.2. Basis of consolidation
The Group financial statements consolidate those of the parent company and the
subsidiaries of which the parent has control. Control is established when
the parent is exposed, or has rights, to variable returns from its involvement
with the subsidiary and has the ability to affect those returns through its
power over the subsidiary.
Where a subsidiary undertaking is acquired/disposed of during the year, the
consolidated profits or losses are recognised from/until the effective date of
the acquisition/disposal, being the date on which control is obtained or lost.
All inter-company balances and transactions between group companies have been
eliminated on consolidation.
Where necessary, adjustments are made to the financial information of
subsidiaries to bring the accounting policies used into line with those used
by the Group.
The Group applies the acquisition method of accounting for business
combinations enacted after the date of creation of the Group, as detailed
further below. The consideration transferred by the Group to obtain control
of a subsidiary is calculated as the sum of the acquisition-date fair value of
assets transferred by the Group, liabilities incurred by the Group to the
former owners of the acquiree and the equity interest issued by the Group.
Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a
business combination regardless of whether they have been previously
recognised in the acquired subsidiary's financial information prior to the
acquisition. Assets acquired and liabilities assumed are measured at their
acquisition-date fair values.
2.3. Going concern
As at 30 June 2024 the Group had net assets of £5,019,062 including cash and
cash equivalents of £1,308,379.
In preparing the interim 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
flows for the foreseeable future, being a period of at least 12 months from
the expected date of approval of the interim financial statements.
Forecasts are adjusted for reasonable sensitivities 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 including 'stress' case
scenarios. Overall, the directors do not believe that the outcomes of such
testing gives rise to a material uncertainty around going concern.
At the time of approving the interim 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
interim financial statements.
2.4 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 as follows:
· For consumer training bootcamps, income is received in advance of
the service being provided and is recognised on a pro-rata basis across the
course delivery, based on delivery dates for those courses. 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. In addition, the Group receives a
contingent success fee, payable at the end. The Group make an assessment of
the probability of success and accrues this on a percentage of completion
basis as the course progresses.
· For Business Solutions, 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 are
recognised as accrued revenue, and any amounts invoiced in advance 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.
· 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.
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.
2.5 Development assets
Expenditure on research activities, undertaken with the prospect of gaining
new scientific or technical knowledge and understanding, is recognised in the
income statement as an expense as incurred. Development costs incurred are
capitalised after the point at which the commercial and technical feasibility
of the product have been proven, and the decision to complete the development
has been taken and resources made available. The expenditure capitalised is
solely the cost of direct labour. Capitalised development expenditure is
stated at cost less accumulated amortisation and impairment losses.
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 10 years straight line
Brand 6 years straight line
Customer relationships 6 years straight line
Customer contracts 6 years straight line
3. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings 6 months 6 months Year ended
ended ended 31 December 2023
30 June 2024 30 June 2023 AUDITED
UNAUDITED UNAUDITED
£ £ £
Earnings for the purpose of basic earnings per share being net profit 108,407 (250,933) (1,006,928)
attributable to owners of the parent
Earnings for the purposes of diluted earnings per share 108,407 (250,933) (1,006,928)
Number of shares 6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
UNAUDITED UNAUDITED AUDITED
£ £ £
Weighted average number of ordinary shares for the purposes of basic earnings 8,011,469 7,941,963 7,977,002
per share
Effects of dilutive potential ordinary shares 58,484 88,976 34,692
Weighted average number of ordinary shares for the purposes of diluted 8,069,953 8,030,939 8,011,694
earnings per share
Earnings per share
Earnings 6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
UNAUDITED UNAUDITED AUDITED
Pence per weighted average shares 1.35p (3.16)p (12.62)p
Pence per weighted average diluted shares 1.34p (3.16)p (12.62)p
The Directors use adjusted earnings before exceptional costs and share based
payment expenses. This creates an alternative performance measure which the
Directors believe reflects a fair estimate of ongoing profitability and
performance. The calculated Adjusted Earnings for the current period of
accounts is as follows:
Adjusted Earnings per Share 6 months 6 months Year ended
ended ended 31
30 June 2024 30 June 2023 December
UNAUDITED UNAUDITED 2023
AUDITED
£ £ £
Profit/(loss) after taxation 108,407 (250,933) (1,006,928)
Adjusted for:
Share-based payment expense 98,055 86,852 186,542
Non-recurring costs - - 562,605
Adjusted Earnings 206,462 (164,081) (257,781)
Pence per weighted average shares 2.58p (2.07)p (3.23)p
Pence per weighted average diluted shares 2.56p (2.07)p (3.23)p
4. Intangible fixed assets
Development Customer relationships and contracts Total
costs £ £
Technology £ Licence Brand
£ £ £
Cost
At 1 January 2024 164,706 1,806,931 101,899 140,160 53,513 2,267,209
Additions - 285,128 - - - 285,128
Disposals - - (101,899) - - (101,899)
At 30 June 2024 164,706 2,092,059 - 140,160 53,513 2,450,438
Amortisation and impairment
At 1 January 2024 30,196 358,125 101,899 21,413 8,176 519,809
Amortisation charged for the period 92,796 125,405
16,470 - 11,680 4,459
Eliminated on disposals - (101,899)
- (101,899) - -
At 30 June 2024 46,666 450,921 - 33,093 12,635 543,315
Carrying amount
At 30 June 2024 118,040 1,641,138 - 107,067 40,878 1,907,123
At 31 December 2023 1,448,806 1,747,400
134,510 - 118,747 45,337
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