REG - Petards Group PLC - Final results for the year ended 31 December 2024
23/06/2025 07:00
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RNS Number : 8628N Petards Group PLC 23 June 2025
23 June 2025
Petards Group plc
("Petards", "the Group" or "the Company")
Final results for the year ended 31 December 2024
Petards Group plc (AIM: PEG), the AIM quoted developer of advanced security,
communication and surveillance systems, is pleased to report its audited final
results for the year ended 31 December 2024.
Key Highlights:
· Operational
o Completed £2.85 million acquisition of Affini Technology on 13 June 2024,
a UK-based systems integrator specialising in critical communications and
wireless technologies
§ £2.52 million in cash and £0.33 million in Petards consideration shares
§ Strengthened Group, by diversifying earnings and expanding blue chip
customer base
§ Annual recurring revenues typically represent circa 50% of total annual
revenues
o Continued growth of Traffic ANPR related revenues supported by sales of
the new QRO Harrier AI camera system, and strengthened our sales team to
target overseas markets
o Petards' eyeTrain and Defence markets remained challenging with orders
delayed
o Group revenues from service and engineering support, spares, repairs and
managed services exceed 50% of total revenue
o Order book at 31 December 2024: £7.1 million (31 Dec 2023: £2.4 million)
§ over 80% of which is for delivery in 2025
§ 2025 will also benefit from a full year's revenue from Affini (2024: 6½
months)
o New products developed included the QRO Harrier Mini ANPR camera system
for mobile and fixed roadside applications, launched in early 2025 for which
initial orders have been received
· Financial
o Total revenues £12.0 million (2023: £9.4 million)
o Gross profit margin 45.3% (2023: 50.5%)
§ Margins excluding Affini, were similar year-on-year
§ Affini's integrator model attracts good margins, but lower than Petards'
existing OEM solutions
o Adjusted EBITDA¹ £410,000 (2023: £340,000)
o Operating loss before exceptional items £774,000 (2023: £529,000 loss)
o Incurred exceptional acquisition and reorganisation costs of £491,000
(2023: £656,000)
o Loss after tax £1,127,000 (2023: £1,050,000 loss)
o Basic and diluted loss per share 1.91p (2023: basic and diluted loss per
share 1.86p)
o Net cash inflow from operating activities pre-exceptionals £685,000
(2023: £660,000)
o At 31 December 2024, after payment of Affini cash consideration and
acquisition costs, net debt totalled £1,535,000 (31 Dec 2023: net funds
£1,241,000)²
¹ Adjusted EBITDA comprises operating profit adjusted to remove the impact of
depreciation, amortisation, exceptional items and acquisition costs. A
reconciliation of adjusted EBITDA to operating profit is included on the face
of the consolidated income statement.
² Total net funds/(debt) comprise cash and cash equivalents less interest
bearing loans and borrowings.
Commenting on the current outlook, Raschid Abdullah, Chairman, said:
"2025 has started positively with trading in the first five months of the year
in line with budget and we expect trading for the first half of the year to be
well ahead of that reported in the first half of 2024.
The Group's current pipeline of new business remains strong, although in Rail
and Defence markets we are still experiencing later than expected placement of
orders by customers. Those delays are not presently expected to impact the
overall trading performance for 2025 as a whole.
With an opening order book of £7.1 million (31 December 2023: £2.4 million),
together with the orders received in the first five months of 2025, revenue
cover for 2025 has increased to around 75%.
In view of the Group's significantly improved opening order book and a full
year's contribution from Affini, the Board is confident in the enlarged
Group's prospects and anticipates an improved trading performance for 2025."
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.
Contacts:
Petards Group plc www.petards.com (http://www.petards.com)
Raschid Abdullah, Chairman Mb: 07768 905004
Zeus, Nominated Adviser and Joint Broker
Mike Coe / Darshan Patel (Investment Banking) Tel: 020 3829 5000
Hybridan LLP, Joint Broker www.hybridan.com (http://www.hybridan.com)
Claire Louise Noyce Tel: 020 3764 2341
claire.noyce@hybridan.com (mailto:claire.noyce@hybridan.com)
Chairman's statement
Introduction
I am pleased to report that 2024 was a year of progress for the Group, the
highlights of which were the acquisition of Affini Technology ("Affini") in
June 2024, which has bedded in well, and strong revenues for our QRO ANPR
solutions.
The second half of the year saw an improved overall performance for the Group,
benefiting from six months contribution from Affini, and some improvement in
trading at the Group's existing operations.
Revenues for the full year ended 31 December 2024 were £12.02 million (2023:
£9.42 million), giving an adjusted EBITDA of £0.41 million (2023: £0.34
million).
Our QRO ANPR solutions for the Traffic sector continue to be the leading
contributor to Group profitability with their profit contribution up ten per
cent. on the prior year. Throughout the year we continued to develop new
products to enhance our market position, and in Q4 we laid the foundations for
future growth in other geographic markets by appointing an experienced ANPR
international business development manager. Since then we have exhibited at
ANPR exhibitions in Dubai, Seville and Mexico City and will be exhibiting at
Highways KSA in Riyadh in October. We look forward to seeing the results of
these initiatives beginning to come through later in 2025.
Petards eyeTrain rail solutions continued to operate in a difficult market
with a particular slowness in the placement of orders by customers. The
strength of our considerable installed base of passenger rail vehicles
continued to provide a strong ongoing flow of service, spares and repairs
business as well as opportunities for system upgrades.
Although overall revenues were lower than the prior year, we made good
progress in closing out past contracts and releasing cash retentions of £0.45
million, of which £0.26 million was received in the year. We also continued
to advance both our core eyeTrain technology extending its functionality, and
our eyeBOS back office software, designed to assist train operators manage
their fleets more efficiently by harmonising all data sets into a user
friendly portal.
The transition of the Railways from private to public ownership under GB Rail
has been a source of uncertainty for UK rail industry suppliers for some
considerable time. During 2025 a further three train operating companies
("TOCs") are to be nationalised increasing the number in public ownership to
seven. We hope that the removal of the uncertainty arising when TOCs are
nearing the end of their franchises will provide them with greater certainty
when making investment decisions concerning rolling stock upgrades.
Revenues from Petards' defence services were also down on 2023, while making a
positive contribution. During the second half of the year we saw increased
engagement with the Ministry of Defence ("MOD") and its prime contractors on
new projects for certain systems, for which Petards is an existing supplier.
Post year end we have received initial orders relating to one of these
projects, giving us some encouragement that orders for the more substantial
aspects will be placed later this year.
The business has also started getting traction on its efforts to win work in
related sectors that utilise its facilities and capabilities in electronic
engineering for repair and test. We anticipate that some benefits of this will
be forthcoming in the second half of 2025.
Our specialist RTS software focused on rail asset management, logistics,
planning, and business process applications continued to be a steady performer
and we believe there is the potential for those applications to have broader
penetration within the sub-sector. During 2024 its contribution increased on
slightly lower revenues as we saw the benefits of a lower cost base coming
through, following the reorganisation undertaken in the latter part of 2023.
Environmental Social Governance (ESG)
The Board continues to implement ESG ideals and objectives in a manner which
is appropriate to the Group's size and scale. As Petards develops, the Board
will continue to assess and adapt its approach and, where appropriate, make
changes in a proportionate and commercial manner.
Personnel
Every business depends upon the quality of its management and their respective
teams, and the Board believes that across the Group, its current management
and personnel demonstrate the required skills, experience, enthusiasm and
commitment at all levels to drive the Group forward.
Petards' pool of skill and experience was enhanced with the acquisition of
Affini, and we are very pleased to welcome Ian Carr, Affini's CEO, and his
team to the Petards Group and look forward to working together to develop
Affini to its full potential.
On behalf of the Board, I would like to express our thanks to all Petards'
management and employees for their contributions and loyalty, and for their
support during what proved to be a challenging year.
The Board
Following the year end, after serving as a director for ten years, Paul Negus
stepped down from the Board and we thank him for his contribution to the
business during his tenure and wish him every success in his future
endeavours.
Acquisitions
In the year we made excellent progress towards delivering on the Group's
acquisition strategy and were pleased to have acquired Affini on 13 June 2024.
We will continue to pursue other complementary cash generative businesses
which would be earnings enhancing and increase the scale of the Group.
Since April 2016 the Group has made three acquisitions, QRO, RTS and Affini,
as well as the rights to NASBox ANPR which has made a good contribution to the
growth of our Traffic revenues. All these acquisitions continue to make
positive contributions to the Group's results.
Each has been funded from the Group's own cash and debt resources, except for
Affini, where the vendors elected to receive 6.8 per cent. of Petards'
enlarged issued equity valued at £326,000 out of the total consideration of
£2.85 million, with the balance being paid in cash from a combination of the
Group's cash resources and bank debt.
Outlook
2025 has started positively with trading in the first five months of the year
in line with budget and we expect trading for the first half of the year to be
well ahead of that reported in the first half of 2024.
The Group's current pipeline of new business remains strong, although in Rail
and Defence markets we are still experiencing later than expected placement of
orders by customers. Those delays are not presently expected to impact the
overall trading performance for 2025 as a whole.
With an opening order book of £7.1 million (31 December 2023: £2.4 million),
together with the orders received in the first five months of 2025, revenue
cover for 2025 has increased to around 75%.
In view of the Group's significantly improved opening order book and a full
year's contribution from Affini, the Board is confident in the enlarged
Group's prospects and anticipates an improved trading performance for 2025.
Raschid Abdullah
Chairman
Strategic report
Business review
Following its acquisition during 2024 of Affini, Petards' operations are now
focused upon the development, supply and maintenance of technologies used in
advanced security, communications, surveillance and ruggedised electronic
applications, the principal markets for which are:
● Rail - software driven video and other sensing systems for on-train
applications sold under the eyeTrain brand to global train builders,
integrators and rail operators; and web-based real-time safety critical
integrated software applications supporting the UK rail network infrastructure
under the RTS brand;
● Traffic - Automatic Number Plate Recognition ("ANPR") systems for
lane and speed enforcement and other applications; and UK Home Office approved
mobile speed enforcement systems, sold under the QRO and ProVida brands to UK
and overseas law enforcement agencies and commercial customers;
● Defence - engineering services relating to electronic control
systems, threat simulation systems, radio systems, and other defence related
equipment sold predominantly to the UK Ministry of Defence ("MOD") both
directly and via its prime defence contractors; and
● Communications - critical communications and wireless technologies
systems integrator serving the transport, blue light, energy, central
government and construction sectors, offering an end-to-end service from
initial strategy and design, through to equipment supply, providing ongoing
maintenance and managed services.
Our objective is to develop and grow our business on a sustainable basis
through increasing profitability and free cash flow predominantly for
re-investment throughout the Group and through the fair treatment, ingenuity
and efforts of our primary asset, our people, working ethically and in close
partnership with our customers, suppliers and stakeholders with the objective
of delivering above average returns for our investors.
Operating review
While difficult trading for the Group's eyeTrain and Defence services affected
the Group's profitability, one of the highlights of the year was the
completion of the acquisition of Affini, and the Group benefited from its
contribution during the second half year.
Affini is a UK-based systems integrator specialising in critical
communications and wireless technologies, providing a comprehensive range of
solutions and services, spanning initial strategy and design, to equipment
supply and provision of ongoing maintenance and managed services. Its core
services revolve around delivering robust and reliable communication
infrastructures in sectors including airports, rail, bus, nuclear energy,
defence, construction and central government, providing:
· Radio and wireless solutions encompassing professional mobile radio
(PMR), ground-to-air communications, distributed antenna systems (DAS),
microwave backhaul, Wi-Fi, 4G LTE, and 5G.
· Mission critical communications ensuring high reliability and
performance in demanding environments.
· End-to-end managed service solutions for radio, telematics, and
wireless communications, such as full infrastructure and device management.
· Consultancy services to help customers identify, test, and
implement improvements in their communication systems and business
performance.
· Maintenance services supported by a nationwide team of engineers to
ensure communication infrastructures and end-user devices remain available
24/7.
· Technology solutions including the telematics platform, Afftel, for
monitoring vehicle/asset data, the Radius platform supporting voice mission
critical voice communications over cellular networks, as well as bodycams and
lone worker solutions.
Affini's acquisition has a clear fit with the Group's strategy and represents
a further step in building the Group's target markets, adding new capabilities
and services to the Group's product portfolio. It also provides a strong
recurring revenue stream with circa 50 per cent. of its revenues relating to
recurring maintenance and managed services. It made a good contribution to
the Group's results in the second half of the year.
One of the areas of management focus has been on increasing the Group's
recurring revenues, and we were pleased that, in 2024 income from service and
engineering support, spares, repairs and managed services comprised in excess
of 50 per cent. of total revenues.
We were also delighted with both the sales of our QRO solutions, which yielded
revenues and margin ahead of the previous year, and of customers' reception to
our Harrier AI ANPR camera system launched in December 2023, with over 280
systems being delivered during 2024. Following on from the success of
Harrier AI, we developed the QRO Harrier Mini, an AI-powered ANPR camera
system for mobile and fixed roadside applications and, following its launch,
first orders have been received in 2025.
While we have made some export sales in the past, those have related to our
ProVida in-car speed enforcement systems rather than our QRO ANPR camera
systems. With the launches of Harrier AI and Harrier Mini, we are now well
placed to target selected overseas markets and in November we appointed an
experienced ANPR international business development manager. During 2025 we
are targeting international ANPR exhibitions, and have some ongoing overseas
customer trials. We look forward to seeing some results of these initiatives
coming through later in 2025.
Markets for the Group's Rail and Defence services and systems remained
challenging although second half year revenues and contribution from these
were a little ahead of those achieved in the first half year.
Petards Rail's eyeTrain order prospects pipeline during 2024 included
opportunities for which customers had confirmed that the projects are to
proceed and that Petards systems are specified. However, converting these
into confirmed purchase orders was frustratingly slow. Modest progress was
made during the second half of 2024 with orders being awarded to Petards for a
small number of these projects. While at this stage the others remain to be
placed, we understand additional awards are to be made soon.
Revenues generated from eyeTrain related services, spares and repairs for the
year continued to make a strong contribution and were similar to those for the
prior year. However, the delays in receiving customer orders for eyeTrain
systems saw revenues for those reduce year-on-year.
Revenues for Defence products and services were similarly affected and
substantially comprised those for specialist engineering services, support and
repairs.
The announcement of the outcome of the UK Government's Defence Review included
some elements that may well be helpful to Petards Defence's business, and last
month the MOD confirmed that it was taking steps to increase the rate of
Challenger 3 main battle tank deliveries. Challenger 3 is a programme for
which we believe Petards is well placed to provide systems and support, being
the incumbent supplier of engine management systems and related support on the
Challenger 2 platform.
The benefits of the reorganisation of the RTS team undertaken just before the
start of the year showed through in the 2024 results. We also successfully
secured the renewal of all existing RTS software licence and maintenance
contracts that came up for renewal in the year. Following internal software
development, the RTS SaaS product portfolio was enhanced with the successful
launch of mobile versions of our Ops Suite and Asset Management Services
software.
Financial review
Operating performance
Group revenues increased to £12,016,000 (2023: £9,424,000) and reflect
Affini's revenues for the period since its acquisition in mid-June 2024.
Revenues for our QRO ANPR systems grew by over 7 per cent. year-on-year but
challenging market conditions saw lower revenues for the Group's Rail and
Defence products and services.
Gross profit margin was 45 per cent. (2023: 50 per cent.). Margins excluding
Affini were similar year-on-year, and while Affini's integrator model attracts
good margins, those are lower than for Petards' existing OEM solutions.
Overheads before exceptional costs of £491,000 (2023: £656,000), were
£6,215,000 (2023: £5,284,000) with the increase year on year relating almost
entirely to Affini's overheads incurred since its acquisition.
Earnings before interest, tax, depreciation, amortisation, exceptional items,
acquisition costs and share based payment charges ("adjusted EBITDA"),
increased to £410,000 (2023: £340,000).
Net financial expenses increased to £171,000 (2023: £13,000), reflecting the
borrowings incurred in the year to part fund the acquisition of Affini.
The tax credit of £309,000 (2023: £148,000 credit) comprised a current tax
credit of £120,000, and a net deferred tax credit of £189,000. The current
tax credit predominantly relates to the surrender of previously unrecognised
enhanced tax deductions for R&D tax credits in respect of 2023, that were
recognised in 2024 and are shown as a receivable at 31 December 2024. Claims
for 2024 R&D activities are expected to be made and recognised in 2025.
The main elements of the deferred tax credit arose from the origination of
in-year timing differences of £140,000, and a net £97,000 arising from the
partial recognition of 2024 tax losses and net derecognition of prior year
losses.
The overall result for the Group for the year was a loss after tax of
£1,127,000 (2023: loss of £1,050,000), representing a diluted and
undiluted loss per share of 1.91p (2023: loss per share 1.86p).
Research and development
The Group continued to invest in its internally developed software and
hardware solutions. That investment totalled £341,000 in 2024 (2023:
£373,000), of which £304,000 was capitalised (2023: £349,000). Around 85
per cent. of the capitalised development costs related to our ANPR camera
products and related software, with the balance relating to the ongoing
development of the Group's rail products.
Cash, cash flow and net debt
The Group again recorded a cash generative operating performance with net cash
inflows from operating activities before exceptional costs of £685,000 (2023:
£660,000).
Net cash flows from investing activities were £2,508,000 (2023: £485,000) of
which £1,987,000 related to the cash element of the consideration for the
Affini acquisition (net of cash acquired). Other investing activities included
capitalised development costs of £304,000 and the acquisition of specialist
ANPR service support vehicles for £124,000.
Net financing outflows were £462,000 (2023: £294,000) which included
£345,000 of repayments of principal and interest on lease liabilities, and
£80,000 in respect of interest relating to the funding of the Affini
acquisition.
The Group's net debt at 31 December 2024 was £1,535,000 (2023: net funds
£1,241,000) before deducting IFRS 16 lease liabilities of £855,000 (2023:
£732,000).
The Group continues to maintain its £2.5 million overdraft facility on an
"evergreen" basis, that may be utilised for both the Group's working capital
purposes, and any other purpose which its bankers agree.
Osman Abdullah
Group Chief Executive
Consolidated income statement
for the year ended 31 December 2024
Note 2024 2023
£000 £000
Revenue 2 12,016 9,424
Cost of sales (6,575) (4,669)
Gross profit 5,441 4,755
Administrative expenses (6,706) (5,940)
Adjusted EBITDA* 410 340
Amortisation of intangibles (609) (523)
Depreciation of property, plant and equipment (334) (161)
Depreciation of right of use assets (241) (185)
Exceptional acquisition costs 3 (416) (579)
Exceptional reorganisation costs 3 (75) (77)
Operating loss (1,265) (1,185)
Finance income 4 13 33
Finance expenses 4 (184) (46)
Loss before tax (1,436) (1,198)
Income tax 5 309 148
Loss for the year attributable to equity shareholders
of the parent (1,127) (1,050)
Other comprehensive income - -
Total comprehensive loss for the year (1,127) (1,050)
Loss per ordinary share (pence)
Basic 6 (1.91) (1.86)
Diluted 6 (1.91) (1.86)
* Earnings before financial income and expenses, tax, depreciation,
amortisation, exceptional items and acquisition costs. See Alternative
Performance Measures Glossary at the end of this announcement.
Statements of changes in equity
for year ended 31 December 2024
Treasury Equity
Share Share shares reserve Retained Total
capital premium earnings equity
£000 £000 £000 £000 £000 £000
At 1 January 2023 575 1,624 (103) 14 6,137 8,247
Loss for the year - - - - (1,050) (1,050)
Total comprehensive income for the year - - - - (1,050) (1,050)
At 31 December 2023 575 1,624 (103) 14 5,087 7,197
At 1 January 2024 575 1,624 (103) 14 5,087 7,197
Loss for the year - - - - (1,127) (1,127)
Total comprehensive loss for the year - - - - (1,127) (1,127)
Shares issued in the year 42 284 - - - 326
Lapse of share options - - - (14) 14 -
At 31 December 2024 617 1,908 (103) - 3,974 6,396
Consolidated balance sheet
at 31 December 2024
Note
2024 2023
£000 £000
ASSETS
Non-current assets
Property, plant and equipment 1,181 655
Right of use assets 836 691
Intangible assets 4,977 3,605
Investments in subsidiary undertakings - 5
Deferred tax assets 8 768 470
7,762 5,426
Current assets
Inventories 1,799 1,735
Trade and other receivables 3,519 2,323
Cash and cash equivalents 168 1,241
5,486 5,299
Total assets 13,248 10,725
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 10 617 575
Share premium 1,908 1,624
Treasury shares (103) (103)
Equity reserve - 14
Retained earnings 3,974 5,087
Total equity 6,396 7,197
Non-current liabilities
Interest-bearing loans and borrowings 9 552 511
Current liabilities
Interest-bearing loans and borrowings 9 2,006 221
Provisions for liabilities and charges 106 113
Trade and other payables 4,188 2,683
6,300 3,017
Total liabilities 6,852 3,528
Total equity and liabilities 13,248 10,725
Consolidated statement of cash flows
for year ended 31 December 2024
Note
2024 2023
£000 £000
Cash flows from operating activities
Profit/(loss) for the year (1,127) (1,050)
Adjustments for:
Depreciation of property, plant and equipment 334 161
Amortisation of right of use assets 241 185
Amortisation of intangible assets 609 523
Profit on disposal of property, plant and equipment (1) (4)
Profit on disposal of right of use assets (15) -
Financial income 4 (13) (33)
Financial expenses 4 184 46
Investment disposal 5 -
Income tax (credit)/charge 5 (309) (148)
Operating cash flows before movement in
working capital (92) (320)
Change in inventories (64) 106
Change in trade and other receivables 413 -
Change in trade and other payables (63) (159)
Cash generated from operations 194 (373)
Tax received - 377
Net cash from operating activities 194 4
Cash flows from investing activities
Acquisition of property, plant and equipment (243) (154)
Acquisition of intangible assets (11) (30)
Sale of property plant and equipment 9 15
Sale of right of use assets 15 -
Interest received 13 33
Acquisition of investments (2,449) -
Cash with acquired business 462 -
Capitalised development expenditure (304) (349)
Net cash outflow from investing activities (2,508) (485)
Cash flows from financing activities
Bank loan repaid 9 - (125)
Interest paid on loans and borrowings 9 (80) (3)
Principal paid on lease liabilities 9 (278) (123)
Interest paid on lease liabilities 9 (67) (32)
Other interest and foreign exchange 4 (37) (11)
Net cash outflow from financing activities (462) (294)
Net decrease in cash and cash equivalents (2,776) (775)
Total movement in cash and cash equivalents in the year (2,776) (775)
Cash and cash equivalents at 1 January 1,241 2,016
Net cash and cash equivalents/(overdraft) at 31 December (1,535) 1,241
Notes
1 Basis of preparation
The financial information set out in this statement has been prepared in
accordance with the recognition and measurement principles of UK adopted
International Financial Reporting Standards ("IFRSs"), IFRIC interpretations
and the Companies Act 2006 applicable to companies reporting under IFRS. It
does not include all the information required for full annual accounts.
The financial information does not constitute the Company's statutory accounts
for the years ended 31 December 2024 or 31 December 2023 but is derived from
those accounts. Statutory accounts for 2023 have been delivered to the
Registrar of Companies and those for 2024 will be delivered in due course. The
Auditor has reported on those accounts; his reports (i) were unqualified,
(ii) did not include a reference to any matters to which the Auditor drew
attention by way of emphasis without qualifying his report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies Act 2006.
Going concern
Petards is a critical supplier to many of its customers supporting the UK's
police and armed forces as well as the safe running of transport networks and
energy infrastructure. The main risks to the Group's cash flows identified
are firstly, that customers may delay or re-schedule deliveries for orders
already in the Group's order book and secondly that, in the short term,
contract awards that the Group was expecting to secure for revenue in 2025 may
be delayed. By their nature these risks are difficult for the Group to
directly influence or control, but by keeping in close contact with our
customers we are seeking to ensure that we are well-informed about their plans
and be prepared to secure contracts awards as and when the opportunities
arise. The Group is fortunate that its customer base comprises blue chip
companies, the UK Government and its agencies and its exposure to credit risk
is low.
The Group currently meets its day to day working capital requirements through
its own cash resources and its available banking facilities. The Group has a
£2.5 million overdraft facility that may be utilised for the Group's working
capital purposes, and any other purpose which its bankers may approve, on an
"evergreen" basis.
The Group has prepared working capital forecasts based on its 2025 budget
updated for material known changes since it was prepared. The time period
reviewed is to 30 June 2026. The forecasts also consider the potential impact
of contract awards that the Group is expecting to secure for revenue during
the period that may be delayed or cancelled.
The Board has concluded, after reviewing the work performed and detailed
above, that there is a reasonable expectation that the Group has adequate
resources to continue in operation until at least 30 June 2026. Accordingly,
they have adopted the going concern basis in preparing these financial
statements.
2 Segmental information
The analysis by geographic segment below is presented in accordance with IFRS
8 on the basis of those segments whose operating results are regularly
reviewed by the Board of Directors (the Chief Operating Decision Maker as
defined by IFRS 8) to make strategic decisions, to monitor performance and
allocate resources.
The Board regularly reviews the Group's performance and balance sheet position
for its entire operations as a whole. The Board receives financial
information, assesses performance and makes resource allocation decisions for
its UK based business as a whole, therefore the directors consider the Group
to have only one segment in terms of products and services, being the
development, supply and maintenance of technologies used in advanced security,
surveillance and ruggedized electronic applications.
As the Board of Directors receives revenue, adjusted EBITDA and operating
profit on the same basis as set out in the consolidated income statement and
given the Group's products, services and customers demonstrate similar
characteristics, no further reconciliation or disclosure is considered
necessary.
Revenue by geographical destination can be analysed as follows:
2024 2023
£000 £000
United Kingdom 11,872 9,187
Continental Europe 57 114
Rest of World 87 123
12,016 9,424
The timing of revenue recognition can be analysed as follows:
2024 2023
£000 £000
Products and services transferred at a point in time 8,812 7,950
Products and services transferred over time 3,204 1,474
12,016 9,424
3 Exceptional costs
During the year, exceptional costs totalling £491,000 were incurred (2023:
£656,000) in respect of corporate activity and reorganisation costs. Those
comprised legal and professional costs of £416,000 and integration costs of
£55,000 in connection with the acquisition of Affini Technology, and other
Group reorganisation costs of £20,000.
4 Finance income and expenses
2024 2023
£000 £000
Recognised in profit or loss
Interest on bank deposits 13 20
Other interest - 13
Finance income 13 33
2024 2023
£000 £000
Interest expense on financial liabilities at amortised cost - 3
Interest expense on lease liabilities 67 32
Interest paid on loans and borrowing 80 -
Other interest payable 28 -
Other exchange loss 9 11
Finance expenses 184 46
5 Taxation
Recognised in the income statement
2024 2024 2023 2023
£000 £000 £000 £000
Current tax (credit)/expense
Current tax charge 4 29
Adjustments in respect of prior years (see note below) (124) (312)
Total current tax (120) (283)
Deferred tax (credit)/expense
Origination and reversal of temporary differences (140) (7)
Recognition of current year losses (181) -
Derecognition of previously recognised losses - 20
Recognition of previously unrecognised tax assets (75) (57)
Utilisation of recognised tax losses 34 51
Adjustment in respect of prior years 173 128
Total deferred tax (189) 135
Total tax credit in income statement (309) (148)
The £124,000 credit to current tax in respect of prior years predominantly
relates to the surrender of previously unrecognised enhanced tax deductions
for R&D tax credits. These claims are recognised when receipt is
determined to be probable.
Reconciliation of effective tax rate
2024 2023
£000 £000
Loss before tax (1,436) (1,198)
Tax using the UK corporation tax rate of 25% (2023: 23.5%) (359) (282)
Items not deductible for tax purposes 66 136
Recognition of previously unrecognised tax assets (75) -
Utilisation of previously unrecognised tax assets (77) (63)
Adjustments in respect of prior years 49 (185)
Effect of differential tax rate for deferred tax - 5
Effect of tax losses generated in the year not recognised 113 224
De-recognition of previously recognised losses - 20
Change in unrecognised temporary differences (26) (3)
Total tax credit (309) (148)
Factors that may affect future current and total tax charges
There are no factors that may affect future current and total tax charges.
Recognised tax losses are presented in note 8.
6 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) for the
year attributable to the shareholders by the weighted average number of shares
in issue.
2024 2023
Earnings
Loss for the year (£000) (1,127) (1,050)
Number of shares
Weighted average number of ordinary shares ('000) 58,817 56,528
Basic and diluted loss per share (pence) (1.91) (1.86)
As the diluted loss per share would be anti-dilutive, the diluted loss per
share is the same as the basic loss per share.
7 Acquisition of Affini Technology Group Limited
On 13 June 2024, the Group completed the acquisition of 100% of the share
capital of Affini Technology Group Limited ("ATGL") and therefore indirectly
its wholly owned subsidiary, Affini Technology Limited ("Affini") (together
"Affini Group") for total consideration of £2,853,000. The consideration was
made up of £2,449,000 of cash, £326,000 equity issued and £78,000 of
contingent consideration. Affini Group is a UK based critical communications
solutions provider to the transport, blue light, energy, defence and
construction sectors.
The principal reason for the acquisition was to further diversify the Group's
presence in key markets, particularly in aviation and the energy markets,
introducing new capabilities and services and to strengthen the Group's
recurring revenue base.
The following table summarises the fair value of assets acquired, and
liabilities assumed at the acquisition date:
Fair value
£000
Intangible assets - customer relationships 224
Property, plant and equipment 625
Right of use assets 289
Deferred tax asset 165
Trade and other receivables 1,489
Cash 462
Trade and other payables (1,483)
Lease liabilities (304)
Deferred tax liability (56)
Total fair value 1,411
Consideration 2,853
Goodwill 1,442
8 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net
2024 2023 2024 2023 2024 2023
£000 £000 £000 £000 £000 £000
Property, plant and equipment - - (7) (114) (7) (114)
Provisions 4 6 - - 4 6
Tax value of loss carry-forwards 1,034 964 - - 1,034 964
Intangible fixed assets - - (263) (386) (263) (386)
Tax assets/(liabilities) 1,038 970 (270) (500) 768 470
Offset of tax (270) (500) 270 500 - -
Net deferred tax assets 768 470 - - 768 470
Unrecognised deferred tax assets are attributable to the following:
2024 2023
£000 £000
Property, plant and equipment 153 272
Provisions 4 -
Tax value of loss carry-forwards 3,061 2,009
Unrecognised deferred tax assets 3,218 2,281
There is no expiry date on the above unrecognised deferred tax assets.
Movement in deferred tax during the year
1 January Acquisition of Business Recognised 31 December
2024 in income 2024
£000 £000 £000 £000
Property, plant and equipment (114) 18 89 (7)
Provisions 6 - (2) 4
Tax value of loss carry-forwards 964 - 70 1,034
Intangible fixed assets (386) 91 32 (263)
470 109 189 768
Movement in deferred tax during the prior year
1 January Recognised 31 December
2023 in income 2023
£000 £000 £000
Property, plant and equipment (66) (48) (114)
Provisions 7 (1) 6
Tax value of loss carry-forwards 931 33 964
Intangible fixed assets (353) (33) (386)
519 (49) 470
9 Interest-bearing loans and borrowings
The Group's interest-bearing loans and borrowings are measured at amortised
cost.
2024 2023
£000 £000
Non-current liabilities
Lease liabilities 552 511
Current liabilities
Overdraft 1,703 -
Lease liabilities 303 221
2,558 732
During the year and at 31 December 2024 the Group had available rolling
overdraft facilities of £2.5 million with no fixed termination date..
Changes in liabilities from financing activities
Current
loans and borrowings Lease
liabilities
£000 £000
Balance at 1 January 2024 - 732
Cash items:
Payment of lease liabilities - (345)
Non-cash items:
New lease liabilities - 97
Acquisition of business - 304
Use of overdraft facility 1,703 -
Interest expense - 67
Balance at 31 December 2024 1,703 855
Current
loans and borrowings Lease
liabilities
£000 £000
Balance at 1 January 2023 125 214
Cash items:
Repayment of bank loan and interest (128) -
Payment of lease liabilities - (155)
Non-cash items:
New lease liabilities - 641
Interest expense 3 32
Balance at 31 December 2023 - 732
10 Share capital
At 31 At 31
December December
2023
2024
Number
Number
Number of shares in issue - allotted, called up and fully paid
Ordinary shares of 1p each 61,705,039 57,528,229
£000 £000
Value of shares in issue - allotted, called up and fully paid
Ordinary shares of 1p each 617 575
The Company issued 4,176,810 ordinary shares of 1p each to the shareholders of
Affini in connection its acquisition on 13 June 2024 at an issue price of
7.8p.
The Company's issued share capital comprises 61,705,039 ordinary shares of 1p
each of which 1,000,000 are held in treasury. Therefore, the total number of
voting rights in the Company is 60,705,039.
11 Annual Report and Accounts
The Annual Report and Accounts will be sent to shareholders shortly and will
be available to download on the Company's website www.petards.com
(http://www.petards.com) .
Alternative Performance Measures Glossary
This report provides alternative performance measures ("APMs"), which are not
defined or specified under the requirements of International Financial
Reporting Standards..
Adjusted EBITDA
Adjusted EBITDA is earnings before financial income and expenses, tax,
depreciation, amortisation, exceptional items and acquisition costs. Adjusted
EBITDA is considered useful by the Board since by removing exceptional items
and acquisition costs, the year-on-year operational performance comparison is
more comparable.
Order intake
The value of contractual orders received from customers during any period for
the delivery of performance obligations. This allows management to monitor the
performance of the business.
Order book
The value of contractual orders received from customers yet to be recognised
as revenue. This allows management to monitor the performance of the business
and provides forward visibility of potential earnings.
Net funds/(debt)
Total net funds/(debt) comprise cash and cash equivalents less interest
bearing loans and borrowings. This allows management to monitor the
indebtedness of the Group.
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