REG - Shearwater Group PLC - Final Results
05/09/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230905:nRSE4020La&default-theme=true
RNS Number : 4020L Shearwater Group PLC 05 September 2023
This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 (as amended), which forms part of domestic UK law
pursuant to the European Union (Withdrawal) Act 2018. Upon publication of this
announcement via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
5 September 2023
SHEARWATER GROUP PLC
("Shearwater", or the "Group")
Final Results
Improving prospects, well-placed to capture significant market opportunity
Shearwater Group plc (AIM: SWG), the cybersecurity, advisory and managed
security services group, announces its final results for the year ended 31
March 2023.
Highlights:
· Group revenue of £26.7m (FY22: £35.9m) primarily impacted by
contract delays in Q4
· Adjusted EBITDA(1) of £(0.2)m (FY22: £4.4m), reflecting effect
of lower revenues
· Adjusted loss before tax(2) of £1.3m (FY22: profit before tax of
£3.0m)
· Strong financial position with net cash as at 31 March 2023 of
£4.0m (FY22: £5.6m)
Operational Highlights:
· Q4 characterised by order delays, materially impacting revenue
and profitability
· Decisive action taken during the period to streamline and
optimise operations, ensuring the business emerges leaner and more productive
· Although performance reflects the cautious approach to customer
decisions, engagement levels remained high with 113 additional net new clients
onboarded during the year
· The Group continues to benefit from its strong customer base of
blue-chip organisations across a range of sectors
· The Group won five awards during the period including the title
of 'Security Company of the Year 2022' from the Computing Security Awards for
the second consecutive year
Board update
· Paul McFadden, CFO has informed Board of his decision to step
down from the Board, and will remain in place until a successor is appointed
Outlook:
· Strong prospects in light of improving market conditions, with an
increasing number of post-period green shoots and opportunities
· Q1 trading is in line with management's expectations, with
customer engagement efforts proving successful in bolstering a growing
pipeline, showing year-on-year growth, and delayed orders from the previous
year now being fulfilled
· Shearwater's solutions continue to be relevant to the increasing
security demands in today's environment
· The business continues to maintain a healthy balance sheet which
will be further strengthened through forecast cash generation in FY24
(1) Adjusted EBITDA is defined as profit before tax, before one off
exceptional items, share based payment charges, finance charges, impairment of
intangible assets, fair value adjustments to deferred consideration, other
income, depreciation and amortisation.
(2) Adjusted Profit Before Tax defined as net profit before tax, exceptional
items, share based payments, other income, fair value adjustment for deferred
consideration and amortisation of acquired goodwill.
Phil Higgins, CEO of Shearwater Group, commented:
"While it is frustrating that FY23 performance was impacted by external
factors beyond our control, we have emerged a more agile, specialised business
and better-placed to capitalise on the opportunities ahead. With the threat of
cybersecurity ever-increasing for organisations, our best-in-class reputation
and all-encompassing offering, combined with the operational enhancements
initiated during FY23, provide the Board with unwavering confidence in the
medium and long-term prospects of the Group.
"We continue to be bolstered by an experienced Board, leadership team and
industry thought leaders, and we look forward to delivering solid,
sustainable revenues and profit growth in the years ahead".
Investor Presentation
Shearwater Group's CEO, Phil Higgins and CFO, Paul McFadden, will provide a
live investor presentation relating to the results, via the Investor Meet
Company platform on Friday 8 September 2023 at 12:00.
Investors can sign up to Investor Meet Company for free and add to meet
Shearwater Group via
https://www.investormeetcompany.com/shearwater-group-plc/register-investor
(https://www.investormeetcompany.com/shearwater-group-plc/register-investor) .
Enquiries:
Shearwater Group plc www.shearwatergroup.com
David Williams, Chairman c/o Alma PR
Phil Higgins, CEO
Cenkos Securities plc - NOMAD +44 (0) 20 7397 8900
Adrian Hadden / Ben Jeynes- Corporate Finance
Henry Nicol / Dale Bellis / Michael Johnson - Sales
Alma PR shearwater@almapr.co.uk
Justine James / Joe Pederzolli +44 (0) 20 3405 0205
About Shearwater Group plc
Shearwater Group plc is an award-winning group providing cyber security,
managed security and professional advisory solutions to create a safer online
environment for organisations and their end users.
The Group's differentiated full service offering spans identity and access
management and data security, cybersecurity solutions and managed security
services, and security governance, risk and compliance. Its growth strategy is
focused on building a scalable group that caters to the entire spectrum of
cyber security and managed security needs, through a focused buy and build
approach.
The Group is headquartered in the UK, serving customers globally across a
broad spectrum of industries.
Shearwater shares are listed on the London Stock Exchange's AIM under the
ticker "SWG". For more information, please visit www.shearwatergroup.com
(http://www.shearwatergroup.com) .
Chairman's statement
Following several years of consistent growth, it is disappointing to have to
report poor results for FY23. These were impacted by the delay in a number of
contracts in Q4 where, traditionally, large contracts are awarded as a result
of the procurement cycle of several of our large customers. It is worth
noting that two of the four delayed contracts have now been secured and we
anticipate being successful with the remaining contracts in the coming months.
Crucially, our Company remains robust, with hard-working staff, loyal
customers and a reputation for delivering excellent service. This is backed up
by a strong balance sheet with significant net cash. Our Group companies
have been operating in this market for upwards of two decades and thus draw on
a wealth of experience in providing ever-evolving solutions for our customers.
Further investment in both technology and people means that we continue to
benefit from the ongoing streamlining of our businesses. Phil, in his Chief
Executive's review, sets this out in more detail as well as outlining the
potential we have going forward. We are fortunate to be in a sector which has
plenty of opportunities to grow and our staff have been working hard on a
number of initiatives that are starting to show good potential.
I want to thank our staff, our Non-executive Directors and our Advisory Panel
for their efforts and sincerely believe that all the hard work and investment
is reflected in much improved trading in the current year.
Finally, after five years with our company, Paul McFadden, our CFO, has
decided to leave us but he will remain in place until a successor is appointed
and settled into the role. We thank Paul for his efforts during his time with
us and wish him well with his new career opportunity.
David Williams
Chairman
4 September 2023
Chief Executive's review
The year to 31 March 2023 was challenging across the cyber security industry
and Shearwater was not immune to this. Whilst we entered the second half of
the year with stronger momentum, macroeconomic challenges impacted customers'
investment decisions heavily in the fourth quarter, resulting in customers
deferring contract start dates, and in some cases, needing to implement
spending freezes.
As announced at the end of March 2023, our financial performance for the year
ended 31 March 2023 was impacted by these well-documented market headwinds in
addition to a number of exceptional, one-off trading expenses. It is
important to note that whilst it is disappointing these impacts have affected
the Group's performance in the period under review, we consistently won new
business from existing clients, as well as securing new clients.
In respect to FY23, Group revenue for the period was £26.7 million (FY22:
£35.9 million). Adjusted EBITDA(1) was (£0.2 million) (FY22: £4.4 million)
which was also impacted by the weaker Sterling / US dollar in H1 FY23,
primarily relating to a £0.8 million unrealised FX charge related to future
US dollar liabilities. This was a one-off and the appropriate hedging is now
in place to mitigate future FX exposure. Loss before tax of £9.6 million
(2022: profit £0.9 million) includes a £6.0 million impairment charge
relating to the write down of goodwill. Further details on this can be found
in the finance review.
Our balance sheet remains strong with a net cash position as at 31 March 2023
of £4.0 million (2022: £5.5 million). While our FY23 results reflect the
more cautious approach to decisions taken by our customers, engagement levels
remained reassuringly high during the period and post period end we are
starting to see budgets reopen once again and present opportunities for the
Group which would have otherwise fallen in FY23.
Group operational review
In the period, we successfully onboarded 113 additional net new clients and
have continued to pursue cross-selling opportunities. Over the past three
years we have recognised c.£1.3 million in cross-sell, with 39 additional
clients having gained advantages across multiple companies within our Group.
We now look forward with more confidence, bolstered by a robust balance sheet,
improved visibility with a growing pipeline of opportunities. We continue to
work with a number of blue-chip organisations, with a breadth of clients
across a range of sectors. We are witnessing a growing preference among
clients for Software as a Service (SaaS) and managed service offerings, as
this helps drive enhanced efficiencies and significant cost savings. The
transition to this model will aid in smoothing our revenues and achieving
greater revenue visibility for the future.
Notwithstanding the market challenges, Shearwater achieved recognition and
success during the year, earning five prestigious awards, including the title
of 'Security Company of the Year 2022' from the Computing Security Awards for
the second consecutive year. These awards serve as a testament to the value we
continue to deliver to our clients and the high regard we hold within the
industry.
In response to the challenges faced in FY23, Shearwater took decisive action
to streamline and optimise its operations. It was important to review certain
aspects of the Group, and the decisions taken during the year ensure that we
will emerge a leaner, more unified business. Whilst we remain committed to our
primary objective of long-term, profitable growth, in response to the
challenges faced we have focused on reconfiguring the Group, maximising
internal efficiencies to ensure we are rightsized to deal with opportunities
moving forwards.
We aim to further enhance our internal efficiencies by merging GeoLang with
SecurEnvoy to form a unified software company, which will be referred to as
SecurEnvoy Data Discovery. Furthermore, we are merging the client-facing
activities of Xcina IS and Xcina Consulting into Brookcourt Solutions. This
integration will result in improved efficiencies, reduced complexity, and a
simplified message for the Group.
Services
The majority of the Group's revenues come from its Services division, which
contributed 89% of total revenues in the period. Revenue is generated through
contract wins and renewals amongst a large and growing customer base of
blue-chip organisations.
Despite the backdrop, we were pleased to successfully secure significant
contract wins during the period, including securing a £6.3 million contract
to deliver a solution to secure a leading global bank's email platform,
swiftly followed by an additional £1m to secure their applications database.
Additionally, we successfully secured a £1.3 million Penetration Testing
contract for a leading global software company, won a £1.0 million project to
deliver a data security solution for a prominent global media company, and
expanded a previously reported multi-million pound forensic monitoring
solution for a leading Telco by an additional £0.7 million. Furthermore, we
secured renewals to continue providing secure printing solutions to a
world-leading retail group and a cloud-based security solution to help prevent
distributed denial of service (DDoS) attacks for a renowned pharmaceutical and
chemist. These are just a few examples of the diverse range of deals we won
during this period.
We are seeing an emerging preference for one-year contracts compared to the
more typical three-year contracts. While our well-established clients continue
to strengthen their defences through multi-year contracts, our newer and
smaller customers find greater flexibility in annual contracts, enabling them
to explore diverse security options.
We have strengthened the Group's Services offering: Xcina Consulting now
offers a new third-party risk management service which has already started to
attract new clients since its launch, and Pentest now provides 'secure coding
workshop training' for developers, to protect their applications, and their
organisations, through secure coding. Brookcourt has introduced various AI and
Deep Learning managed services to address the needs of the medium-size client
marketplace. To meet the increasing demand, we expanded our team of
revenue-generating and service-deployment personnel while also utilising
contractors to address short-term workload peaks. Moreover, we bolstered our
sales team at Brookcourt with additional talent in sales and sales management,
fuelling our expectations for future growth.
2023 2022
£m £m %
Revenue 23.8 32.5 (27%)
Gross profit 4.7 8.6 (44%)
Gross margin % 20% 26%
Overheads 4.6 3.9
Adjusted EBITDA(1) 0.1 4.7 (94%)
Adjusted EBITDA margin % 1% 14%
The steps taken to integrate our businesses have strengthened the team's
position to seize future opportunities. As the year unfolds, we will explore
further strategies to continue maximising efficiencies.
Software
The Group has made more tangible operational progress in Software in FY23.
Whilst the proportion of revenue generated from our Software division during
the period was 11%, notably, the increased spend on R&D over the past two
years has now strengthened our position in the market. This is typified by our
latest products, including the introduction of a fully functional
enterprise-ready software developed by GeoLang, which is being used by a
leading UK bank and attracting interest from our existing client base and
prospects; and SecurEnvoy's newly released Access management as a Service
platform ('Release 3') of our updated SecurEnvoy software, which helps
organisations manage and control access to their systems and software. With
SecurEnvoy's solution, organisations can enhance their security measures,
ensure regulatory compliance, reduce supply chain risk and simplify the
management of users accessing corporate systems via a single sign-on.
2023 2022
£m £m %
Revenue 2.9 3.3 (12%)
Gross profit 1.8 2.2 (18%)
Gross margin % 63% 67%
Overheads 0.8 0.7
Adjusted EBITDA(1) 1.0 1.5 (33%)
Adjusted EBITDA margin % 34% 46%
We are excited by the impacts the integration of GeoLang and SecurEnvoy will
have, creating a more cohesive software company going forward. This union aims
to enhance operational performance and achieve cost-effectiveness. Leveraging
SecurEnvoy's extensive network of global resellers, we can now offer an
expanded software portfolio worldwide, integrating the newly developed GeoLang
Sensitive Data Discovery solution under the esteemed SecurEnvoy brand.
Growth strategy
Our vision remains steadfast in becoming the preferred provider of choice,
delivering next generation cyber technology, professional advisory and
advanced cyber security services and solutions. Whilst the market conditions
led to a focus on strengthening organic growth, M&A remains part of our
future strategy, however, the focus in the shorter term needs to be on
building organic revenue as we see a significant opportunity in the medium
term in the sectors we serve.
Within our Services division, we aim to be the preferred partner of choice
delivering managed security solutions, penetration testing and advisory
consulting services; providing an end-to-end offering. Within our Software
division, we aim to build a 'must have' next-generation converged access
management and data discovery platform utilising our zero trust access
solution protecting users, devices and data, wherever the location.
Our strategic focus over the medium term is a return to delivering solid,
sustainable revenues and profit growth in the years ahead, which we are
confident of achieving.
Market opportunity
Shearwater Group's solutions cater to the increasing security demands in
today's environment and align with evolving regulations for corporate clients.
We operate in high-growth markets and, as projected by Gartner, the global
market revenue for information security and risk spending is estimated to
exceed $267 billion by 2026.
The well-publicised corporate cyber-attacks have drawn significant attention
to the alarming trend of AI being weaponised, and it is of utmost importance
to proactively mitigate risk and fortify their cyber security measures.
Organisations are under growing pressure to ensure adherence to stringent
regulatory frameworks and protect sensitive data from breaches and we have a
clear strategy in place to exploit the considerable market opportunity ahead
across both our Services and Software divisions.
Shearwater Group offers access to a differentiated full-service cyber security
offering in a rapidly expanding market. Further to supportive market trends,
our robust growth strategy, strong financial position, prestigious customer
base, industry recognition, and talented team, we are poised to capitalise on
opportunities and deliver substantial returns on investment.
Current trading and outlook
We are starting to see more green shoots and opportunities following a
challenging year, with the wider macroeconomic backdrop starting to improve,
the Board is encouraged about the forward-looking prospects for the business.
Cyber security remains integral to organisations, and we believe we are well
placed to capture the strong market opportunity ahead. While Shearwater is not
alone in dealing with industry-wide challenges, the underlying growth drivers
across the cyber security sector undoubtedly remain and we are well configured
as a business following the decisive action taken in FY23. Although we are
disappointed not to be updating shareholders with the FY23 financial
performance we had been hoping for, we now have a more solid foundation on
which to return to a growth trajectory. As we enter FY24, we do so with
cautious optimism despite potential wider economic headwinds and their impact
on our clients' budgets.
Q1 trading results are meeting our management's expectations, and our customer
engagement efforts are proving successful in bolstering our growing pipeline,
showing year-on-year growth. We have experienced a positive development as
some delayed orders from the previous year have been fulfilled, and we've
acquired new clients, with the remaining delayed orders expected to be
fulfilled later this year. Our cross-selling initiatives have seen a promising
start, with numerous new engagements underway.
Furthermore, we are delighted to observe that our professional advisory and
penetration testing consultancy utilisation rates have improved significantly,
with robust projects extending into Q3 and beyond. This progress is
particularly encouraging as it enhances visibility and confidence in this
segment of our business.
In the market, our position remains strong, which has been further reinforced
after the successful launch of our latest software developments. These
advancements have led to an increase in renewals, and our newly introduced
managed cyber-service offerings have already gained interest from customers,
especially among untapped SME clients, with several proof of concepts (POC)
already initiated. Moreover, our new Secure Code Training programme has
attracted new students, with additional project opportunities on the horizon.
An exciting highlight has been witnessing numerous substantial international
cyber solution wins originating from our existing corporate client base. Our
relationships with leading global corporate clients continue to present
promising opportunities.
On the financial front, we are pleased to report that our balance sheet
remains robust, and we are experiencing good cash flow.
Looking ahead, the evolving landscape of AI and machine learning technologies
presents us with even greater opportunities. We are well positioned to provide
technology refresh and consulting services to our larger, well-established
clients, helping them stay ahead of their adversaries.
Overall, the current outlook is positive, and we are confident in our ability
to leverage emerging trends and sustain our growth trajectory in the cyber
security market.
Philip Higgins
Chief Executive Officer
4 September 2023
Financial review
Overview
The Group's financial performance in the year to 31 March 2023 was
significantly impacted by strong market headwinds and delays in entering into
a number of material contracts in the period in the Group's Services division.
As a result, revenue was down 26% to £26.7 million. The Group's Software
division continued to retain a large proportion of its long-standing customer
base, however slower than expected new business sales also impacted revenue in
the year. The lower revenues resulted in reduced EBITDA year on year at
£(0.2) million which also includes the impact of additional costs relating to
an unrealised foreign exchange charge for revaluing US dollar liabilities in
the period as well as one-off fees relating to establishment of overseas
operations.
A non-cash impairment of £6.0 million has been recorded in the current year
reflecting a write down of goodwill held for the Group's SecurEnvoy and Xcina
assets.
However, the Group retains a healthy balance sheet with no debt and a net cash
position of £4.0 million (2022: £5.6 million) at 31 March 2023. During the
year the Group generated positive operating cash flows and increased its
investment in the development of new software offerings within its Software
division which it expects to successfully monetise in future years.
Following a review of the Group in early 2023, a re-organisation commenced
which is expected to deliver a £1.0 million reduction in the Group's fixed
cost base.
Details of the Group's summarised financial performance for the year are
detailed below:
2023 2022
£m £m
Revenue 26.7 35.9
Gross profit 6.4 10.8
Administrative expenses (underlying)(1) (6.6) (6.4)
Adjusted EBITDA (0.2) 4.4
Adjusted EBITDA margin -% 12%
Finance charge (0.1) (0.1)
Depreciation (0.2) (0.3)
Amortisation of intangible assets - computer software (0.8) (1.0)
Adjusted (loss)/profit before tax (1.3) 3.0
Amortisation of acquired intangible assets (2.1) (2.1)
Impairment of intangible assets (6.0) -
Share-based payments (0.1) (0.1)
Exceptional items (0.1) (0.1)
Other operating income - 0.1
(Loss)/profit before tax (9.6) 0.9
Taxation credit/(charge) 1.5 (1.2)
(Loss) after tax (8.2) (0.3)
(1 Administrative expenses (underlying) excludes items that are not included
within Adjusted EBITDA such as finance charges, depreciation, amortisation,
impairment, share-based payment charges, exceptional items and other operating
income.)
Revenue
Revenue for the year ended 31 March 2023 of £26.7 million was 26% down on the
prior year (2022: £35.9 million).
The table below provides a breakdown of revenues for the current year:
2023 2022
£m £m
Services
Managed services and warranties 11.2 16.4
Security solutions 6.1 10.6
Advisory and engineering 6.5 5.6
Software
Software licences 2.9 3.3
Total revenue 26.7 35.9
Within Services, whilst the number of customers receiving managed services
& warranties remained broadly the same, revenues in the period were
impacted by the timing of a number of projects, with a few larger clients that
were expected to complete in the period but were delayed. It is expected that
the majority of these delayed projects will fall into FY24.
Advisory revenues grew by 18% on a year-on-year basis with increased demand
for Brookcourt's engineering and Pentest's consulting services fuelling this
growth. Additional investment in revenue-generating consultants was made in
the period to service demand for these services in FY24.
Software licences revenue was impacted by lower than expected new business
sales of the legacy 'On Premise' multi-factor authentication software. Renewal
rates with existing customers have remained at c.80%, demonstrating the
reliance and value many long-standing clients place on this product.
Investment into developing the next generation software as a cloud-based
platform provides an opportunity to drive additional incremental revenues in
the future.
Adjusted EBITDA
The Group delivered adjusted EBITDA of £(0.2) million in the year (2022:
£4.4 million), which was primarily impacted by the revenue shortfalls in the
period, despite lower central costs. Delayed sales and reduced new business
sales from our Software division impacted gross margins by 6% to 24% for the
year (2022: 30%).
The table below provides a breakdown of the Group's adjusted EBITDA:
2023 2022
£m £m
Services and Software 1.1 6.2
Central administrative expenses (1.3) (1.8)
Adjusted EBITDA (0.2) 4.4
Adjusted EBITDA margin % - 12%
We expect to re-establish higher gross profitability in the coming year by:
§ Increasing utilisation of advisory resource, we have good forward
visibility of confirmed sales for H1 which will enhance utilisation.
§ Driving new business sales from newly released software products.
§ Completing delayed contracts from the FY23 year.
Central administrative expenses decreased by £0.5 million in the year to
£1.3 million reflecting a reduction in corporate and professional costs.
Finance charges
Net finance charges of £0.1 million are in line with prior year (2022: £0.1
million). The Group settled its remaining loan liabilities in the previous
year.
Depreciation
Depreciation of £0.2 million (2022: £0.3 million) is slightly reduced from
the prior year and incorporates £0.2 million of depreciation of right of use
assets which is reduced from the prior year.
Amortisation of intangible assets - computer software
Amortisation of computer software has reduced by £0.2 million to £0.8
million (2022: £1.0 million) and includes increased amortisation of GeoLang
data discoveries product development expenditure in addition to increased
amortisation in SecurEnvoy. This is offset by savings for projects that were
fully amortised in the prior year.
Adjusted (loss)/profit before tax
The Group delivered adjusted loss before tax for the year of £1.3 million
(2022: £3.0 million profit), the reduction in profitability is impacted by
the reduced EBITDA in the current year (detailed above) less a small
year-on-year reduction in internally developed software amortisation.
Amortisation of acquired intangible assets
Amortisation of acquired intangible assets of £2.1 million (2022: £2.1
million) is in line with the previous year.
Impairment of intangible assets
A non-cash impairment charge of £6.0 million has been made in the current
year against goodwill values held for the Group's SecurEnvoy, Xcina Consulting
and Xcina IS assets. Further details can be found in note 9 of the
consolidated Group financial statements.
Share-based payments
Share-based payment charges of £0.1 million (2022: £0.1 million) incorporate
a full year's charge for the Group's Company Share Options Plan (CSOP), in
addition to charges for the Group's Save As You Earn scheme (SAYE), Employee
Share Options Plan (ESOP) and a reduced year-on-year charge for the Group's
share incentive scheme which lapsed in the current year.
Exceptional items
Exceptional items of £0.1 million include one-off expenses relating to a
review of the operations and the subsequent re-organisation costs incurred in
the year.
Other operating income
Other operating income includes early repayment discounts recognised on the
repayment of loan liabilities of £0.1 million which were settled in the
previous year.
Reported (loss)/profit before tax
Reported loss before tax for the year of £9.6 million (2022: £0.9 million
profit) reflects the reduced trading detailed within adjusted profit before
tax, in addition to one-off impairment charges and exceptional items detailed
above.
Taxation
A taxation credit in the period of £1.5 million includes a £0.7 million
credit for the current year, £0.4 million adjustments in respect of previous
years' tax provision plus £0.3 million movements in deferred taxation.
Earnings/(loss) per share
Adjusted basic loss per share of £0.00 (2022: adjusted earnings per share
£0.11 basic and £0.10 diluted) represents a year-on-year reduction
reflecting the weaker trading results in the year. The average number of
shares remained broadly the same year-on-year. Reported basic loss per share
of £0.34 (diluted £0.33) compares against a basic and diluted loss per
share of £0.01 in the prior year.
Statement of financial position
Intangible assets
Intangible assets decreased in the year by £7.7 million to £44.9 million at
31 March 2023 (2022: £52.6 million). This movement incorporates £1.3
million of investment into continued development of the Group's software
assets (2022: £1.1 million), less £2.9 million amortisation, of which £2.1
million relates to amortisation of acquired intangibles and £0.8 million
amortisation of developed computer software. In addition to this there is a
£6.0 million impairment charge relating to the write down of goodwill for the
Group's SecurEnvoy and Xcina businesses.
Property, plant and equipment
Property, plant and equipment increased in the year by £0.1 million to
£0.4 million at 31 March 2023 (2022: £0.3 million). Additions of £0.4
million include £0.3 million for the extension of an existing office lease
which has been recognised as a right of use asset. Other movements in the
period include depreciation in the year of £0.3 million.
Trade and other receivables
Trade and other receivables have decreased by £0.5 million in the year from
£20.2 million to £19.6 million at 31 March 2023. Significant movements
include an £8.7 million decrease in accrued income following the invoicing of
a large contract billed in early April 2022, some of which has contributed to
an increase in trade receivables, which increased £8.2 million year-on-year.
Trade and other payables
Trade and other payables have decreased by £2.2 million in the year from
£14.5 million to £12.3 million at 31 March 2023. Material movements include
a £1.3 million decrease in trade payables, £0.4 million reduction in
corporation tax liabilities and £0.3 million reduction in deferred income.
Creditors: amounts falling due after more than one year
Creditor amounts falling due after more than one year have increased in the
year by £1.3 million from £7.9 million to £9.2 million at 31 March 2023. A
£1.5 million increase in accruals and other payables relates to a number of
long-term contracts with long-standing clients and a £0.2 million increase in
lease liabilities relates to an existing office lease that was extended during
the year for a further five years. A £0.3 million reduction to deferred tax
balances includes a reduction of £0.4 million relating to deferred tax held
for acquired intangible assets less deferred tax balances created on new
software projects.
Statement of cash flows
Continued investment has been made in the Group's Software division, with over
£1.0 million invested into internally developed software, the latest of
which, SecurEnvoy's Access Management v.3 went live in May 2023. Despite
challenging trading, as detailed later in this report, the Group generated
£0.4 million of adjusted operational cash flow in the period with H2
delivering strong operating cash inflows. The Group continued to collect cash
effectively, with minimal bad debt.
The table below provides a summary of cash flows in the year:
2023 2022
£m £m
Adjusted EBITDA (0.2) 4.4
Movements in working capital 0.5 (4.7)
Cash generated/(used) from operations 0.3 (0.3)
Adjusted cash generated/(used) from operations 0.4 (0.3)
Exceptional items (0.1) -
Cash generated/(used) from operations 0.3 (0.3)
Capital expenditure (net of disposal proceeds) (1.3) (1.1)
Tax paid (0.3) (0.1)
Finance costs paid (0.1) (0.1)
Payments of lease liabilities (0.2) (0.2)
Loan repayments - (0.7)
FX and other - 0.1
Movement in cash (1.6) (2.4)
Opening cash and cash equivalents 5.6 8.0
Closing cash and cash equivalents 4.0 5.6
Loans - -
Net cash 4.0 5.6
(In addition to the statutory presentation of cash flow, the Directors also
review a summarised presentation of cash flow which highlights the key
components of the Group's cash flow. )
Capital expenditure
Capital expenditure of £1.3 million (2022: £1.1 million) in the year
includes primarily external and internal capitalisation of software costs for
developing our software businesses' product sets. Expenditure of property,
plant and machinery remains minimal.
Financing activities
Financing activities of £0.2 million (2022: £1.0 million) for repayment of
lease liabilities is in line with the previous year. In the prior year the
Group repaid £0.7 million of remaining loan balances.
Key performance indicators
The Board believes that revenue and adjusted EBITDA are key metrics to
monitor the performance of the Group, as they provide a good basis to judge
underlying performance and are recognised by the Group's shareholders.
Adjusted profit before tax is another measure we are using to track the
underlying performance of the Group. These metrics are presented within the
financial KPIs section of the Annual Report..
Alternative performance measures
The Group uses alternative performance measures alongside statutory measures
to manage the performance of the business. In the opinion of the Directors,
alternative performance measures can provide additional relevant information
on past and future performance to the reader in assessing the underlying
performance of the business.
The table within note 2 details definitions of adjusted EBITDA and adjusted
(loss)/profit before tax measures. Note 8 details definition of adjusted EPS.
Paul McFadden
Chief Financial Officer
4 September 2023
Consolidated statement of comprehensive income
for the year ended 31 March 2023
2023 2022
Note £'000 £'000
Revenue 3 26,686 35,876
Cost of sales (20,236) (25,053)
Gross profit 6,450 10,823
Administrative expenses (12,875) (6,435)
Depreciation and amortisation (3,131) (3,412)
Other operating income - 70
Total operating costs (16,006) (9,777)
Operating (loss)/profit (9,556) 1,046
Adjusted EBITDA (201) 4,398
Depreciation and amortisation (3,131) (3,412)
Impairment of intangible assets (6,014) -
Exceptional items 4 (125) -
Share-based payments (85) (10)
Other operating income - 70
Operating (loss)/profit (9,556) 1,046
Finance cost 6 (77) (110)
(Loss)/profit before taxation (9,633) 936
Income tax credit/(charge) 7 1,458 (1,228)
Loss for the year and attributable to equity holders of the Company (8,175) (292)
Other comprehensive income
Items that may be reclassified to profit and loss:
Write off of FVTOCI reserve - 14
Exchange differences on translation of foreign operations 7 (1)
Total comprehensive (loss)/income for the year (8,168) (279)
Earnings per ordinary share attributable to the owners of the parent
Basic (£ per share) 8 (0.34) (0.01)
Diluted (£ per share) 8 (0.33) (0.01)
Adjusted basic (£ per share) 8 (0.00) 0.11
Adjusted diluted (£ per share) 8 (0.00) 0.10
Adjusted EBITDA is a non-GAAP Group-specific measure which is considered to be
a key performance indicator of the Group's financial performance. Please see
note 2 for a definition of Adjusted EBITDA.
The results above are derived from continuing operations.
Consolidated statement of financial position
As at 31 March 2023
2023 2022
(restated)
Note £'000 £'000
Assets
Non-current assets
Intangible assets 9 44,939 52,564
Property, plant and equipment 10 433 315
Deferred tax asset 14 742 -
Trade and other receivables 11 7,280 9,777
Total non-current assets 53,394 62,656
Current assets
Trade and other receivables 11 12,346 10,378
Cash and cash equivalents 3,964 5,575
Total current assets 16,310 15,953
Total assets 69,704 78,609
Liabilities
Current liabilities
Trade and other payables 12 12,348 14,519
Total current liabilities 12,348 14,519
Non-current liabilities
Creditors: amounts falling due after more than one year 13 9,233 7,884
Total non-current liabilities 9,233 7,884
Total liabilities 21,581 22,403
Net assets 48,123 56,206
Capital and reserves
Share capital 16 22,278 22,278
Share premium 34,581 34,581
FVTOCI reserve - -
Other reserves 23,442 24,386
Translation reserve 30 23
Accumulated losses (32,208) (25,062)
Equity attributable to owners of the Company 48,123 56,206
Total equity and liabilities 69,704 78,609
The financial statements were approved and authorised for issue by the Board
and signed on their behalf on 4 September 2023.
Philip Higgins
Chief Executive Officer
Registered number: 05059457
Consolidated statement of changes in equity
for the year ended 31 March 2023
Group Share Share FVTOCI Other Translation Accumulated Total
capital premium reserve reserve reserve losses equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2021 22,277 34,581 14 24,376 24 (24,784) 56,488
Loss for the year - - - - - (292) (292)
Other comprehensive loss for the year - - (14) - (1) 14 (1)
Total comprehensive loss for the year - - (14) - (1) (278) (293)
Contributions by and distributions to owners
Issue of share capital 1 - - - - - 1
Share-based payments - - - 10 - - 10
At 31 March 2022 22,278 34,581 - 24,386 23 (25,062) 56,206
Loss for the year - - - - - (8,175) (8,175)
Other comprehensive income for the year - - - - 7 - 7
Expiry of share options - - - (1,029) - 1,029 -
Total comprehensive loss for the year - - - (1,029) 7 (7,146) (8,168)
Contributions by and
distributions to owners
Issue of share capital - - - - - - -
Share-based payments - - - 85 - - 85
At 31 March 2023 22,278 34,581 - 23,442 30 (32,208) 48,123
Consolidated cash flow statement
for the year ended 31 March 2023
Note 2023 2022
£'000 £'000
Cash flows from operating activities
Loss for the year (8,175) (292)
Adjustments for:
Amortisation of intangible assets 4 2,891 3,149
Depreciation of right of use assets 4 184 207
Depreciation of property, plant and equipment 4 56 56
Share-based payment charge 4 85 10
Other income 4 - (70)
Impairment of intangible assets 4 6,014 -
Exceptional items 4 125 -
Finance cost 77 110
Income tax (1,458) 1,228
Cash flow from operating activities before changes in working capital (201) 4,398
Decrease/(increase) in trade and other receivables 813 (10,040)
(Decrease)/increase in trade and other payables (248) 5,384
Cash generated by/(used in) operations 364 (258)
Net foreign exchange movements 10 5
Finance cost paid (83) (50)
Tax paid (285) (62)
Net cash generated/(used) from operating activities before exceptional items 6 (365)
Net cash flows on exceptional items (80) -
Net cash used in operating activities (74) (365)
Investing activities
Purchase of property, plant and machinery 10 (57) (49)
Purchase of intangibles 9 (1,280) (1,097)
Net cash used in investing activities (1,337) (1,146)
Financing activities
Interest paid - (91)
Repayment of loan liabilities - principal amount - (652)
Repayment of lease liabilities 21 (200) (220)
Net cash used in financing activities (200) (963)
Net decrease in cash and cash equivalents (1,611) (2,474)
Foreign exchange movement on cash and cash equivalents - -
Cash and cash equivalents at the beginning of the period 5,575 8,049
Cash and cash equivalents at the end of the period 3,964 5,575
Notes to the consolidated financial statements
for the year ended 31 March 2023
These Consolidated Financial Statements have been prepared in accordance with
UK adopted International Accounting Standards and are in conformity with the
requirements of the Companies Act 2006. They do not include all of the
information required for full annual statements and should be read in
conjunction with the 2023 Annual Report.
The comparative figures for the financial year 31 March 2022 have been
extracted from the Group's statutory accounts for that financial year. The
statutory accounts for the year ended 31 March 2022 have been filed with the
registrar of Companies. The auditor reported on those accounts: their report
was (i) unqualified, (ii) did not include references to any matters to which
the auditor drew attention by way of emphasis without qualifying the reports
and (iii) did not contain statements under section 498(2) or (3) of the
Companies Act 2006.
The statutory accounts for the year ended 31 March 2023 were approved by the
Board of Directors on 4 September 2023 and will be delivered to the Registrar
of Companies following the Company's Annual General Meeting on 29 September
2023.
The financial information contained in this announcement does not constitute
statutory accounts for the year ended 31 March 2023 or 2022 as defined by
Section 434 of the Companies Act 2006.
Going concern
Having made enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for at least
twelve months from the date of signing these financial statements.
Accordingly, they continue to adopt the going concern basis in preparing these
consolidated financial statements.
The Directors continue to regularly review the Group's going concern position,
considering the impact of potential future trading downturns should there be
another global event or further economic challenges. Over the past year the
Group has experienced challenging trading conditions which has resulted in
delays to projects, which impacted the business's performance in the current
year.
At 31 March 2023, the Group has been able to report a robust financial
position and is well capitalised with a net cash position of £4.0 million
(2022: £5.6 million) and an untouched three‑year £4.0 million Group
revolving credit facility with Barclays Bank plc in place until
23 March 2024.
The Directors have reviewed detailed budget cash flow forecasts for the period
to 30 September 2024 and have challenged the assumptions used to create these
budgets. The budget figures are carefully monitored against actual outcomes
each month and variances are highlighted and discussed at Board level on a
quarterly basis as a minimum.
The Board is pleased to report that current trading is tracking ahead of the
prior year, with trading for the first quarter ended 30 June 2023 in line with
managements expectations. Furthermore, a reorganisation of some of the Group's
companies has resulted in c.£1.0 million of annualised cost savings made to
date.
The Directors have reviewed and challenged a reverse stress test scenario on
the Group up to September 2024. The purpose of the reverse stress test for the
Group is to test the impact on the Group's cash if the assumptions in the
budget are altered.
The reverse stress test assumes significant adjustments to the Group's budget
which include the scaling back of services revenues to include just contracted
and firm revenues, upcoming support renewals and existing managed services
revenues plus a materially reduced assumption from September 2023 onwards for
professional advisory budgeted revenues which have been adjusted by between
30%-50%. Software revenues have been reduced with all new business lines
removed with the exception of the Access Management product new business
revenues which have been reduced by 60%.
Costs have been scaled back prudently in line with the reduction in revenues.
The resulting outcome of the stress-test forecasts that the Group would have
sufficient cash resources to service its liabilities during the periods
reviewed. This assumes that the revolving credit facility would not be
utilised.
In the event that the performance of the Group is not in line with the
projections, action will be taken by management to address any potential cash
shortfall for the foreseeable future. The actions that could be taken by the
Directors include both a review and restructuring of employment‑related
costs. Additionally, the Directors could also negotiate access to other
sources of finance from our lenders.
Overall, the sensitised cash flow forecast demonstrates that the Group will be
able to pay its debts as they fall due for the period to at least 30 September
2024 and therefore the Directors are satisfied there are no material
uncertainties to disclose regarding going concern. The Directors are therefore
satisfied that the financial statements should be prepared on the going
concern basis.
Critical accounting judgements, estimates and assumptions
The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the amounts reported for
income and expenses during the year and that affect the amounts reported for
assets and liabilities at the reporting date.
Revenue recognition of material contract
Management make judgements, estimates and assumptions in determining the
revenue recognition of material contracts sold by the Group's Services
division. The Group works with large enterprise clients, providing services
and solutions to support the clients' needs. In many cases a third-parties
products or services will be provided as part of a solution. Management will
consider the implications around timing of recognition, with factors such as
determining the point control passes to the client and the subsequent
fulfilment of the Group's performance obligations. In addition to this,
management will consider if it is acting as agent or principal. Further
details of how the Group determines revenue recognition and if it is acting as
agent or principal can be found within the relevant notes within this section.
Business combinations
Management make judgements, estimates and assumptions in assessing the fair
value of the net assets acquired on a business combination, in identifying and
measuring intangible assets arising on a business combination,
and in determining the fair value of the consideration.
If the consideration includes an element of contingent consideration, the
final amount of which is dependent on the future performance of the business,
management assess the fair value of that contingent consideration based on
their reasonable expectations of future performance. In determining the fair
value of intangible assets acquired, key assumptions used include expected
future cash flows, growth rates, and the weighted average cost of capital.
Impairment of goodwill, intangible assets and investment in subsidiaries
Management make judgements, estimates and assumptions in supporting the fair
value of goodwill, intangible assets and investments in subsidiaries. The
Group carries out annual impairment reviews to support the fair value of these
assets. In doing so, management will estimate future growth rates, weighted
average cost of capital and terminal values. Further information can be found
on note 9.
Leases
Management make judgements, estimates and assumptions regarding the life of
leases. Management continues to review all existing leases, which all relate
to office space, and will look to reduce the number of offices across the
Group if they are not sufficiently utilised. For this reason, management have
assumed that the life of leases does not extend past the current contracted
expiry date. A judgement has been taken with regard to the incremental
borrowing rate based upon the rate at which the Group can borrow money.
Basis of consolidation
The Group's consolidated financial statements incorporate the results and net
assets of Shearwater Group plc and all its subsidiary undertakings made up to
31 March each year. Subsidiaries are all entities over which the Group has
control (see note 2 of the Company financial statements). The Group controls
an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases. Where necessary, adjustments
are made to the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the Group. All inter-group
transactions, balances, income and expenses are eliminated on consolidation.
Business combinations and goodwill
Business combinations are accounted for using the acquisition accounting
method. This involves recognising identifiable assets (including previously
unrecognised intangible assets) and liabilities of the acquired business
at fair value. Any excess of the cost of the business combination over the
Group's interest in the net fair value of the identifiable assets and
liabilities is recognised in the consolidated statement of financial position
as goodwill and is not amortised. To the extent that the net fair value of the
acquired entity's identifiable assets and liabilities is greater than the cost
of the investment, a gain is recognised immediately in the consolidated
statement of comprehensive income.
After initial recognition, goodwill is stated at cost less any accumulated
impairment losses, with the carrying value being reviewed for impairment at
least annually and whenever events or changes in circumstances indicate that
the carrying value may be impaired. Goodwill assets considered significant in
comparison to the Group's total carrying amount of such assets have been
allocated to cash-generating units or groups of cash-generating units. Where
the recoverable amount of the cash-generating unit is less than its carrying
amount including goodwill, an impairment loss is recognised in the
consolidated statement of comprehensive income.
Acquisition costs are recognised in the consolidated statement of
comprehensive income as incurred.
Revenue
The Group recognises revenue in accordance with IFRS 15: Revenue from
Contracts with Customers. Revenue with customers is evaluated based on the
five-step model under IFRS 15: Revenue from Contracts with Customers:
(1) identify the contract with the customer; (2) identify the performance
obligations in the contract; (3) determine the transaction price; (4)
allocate the transaction price to separate performance obligations; and (5)
recognise revenues when (or as) each performance obligation is satisfied.
Revenue recognised in the statement of comprehensive income but not yet
invoiced is held on the statement of financial position within accrued income.
Revenue invoiced but not yet recognised in the statement of comprehensive
income is held on the statement of financial position within deferred revenue.
The Group's revenues are comprised of a number of different products and
services across our two divisions, details of which are provided below:
Software
· Software licences whereby the customer buys software that it sets
up and maintains on its premises is recognised fully at the point the licence
key/access has been granted to the client. The Group sells the majority of its
services through channels and distributors who are responsible for providing
first and second line support to the client.
· Software licences for the new 'Authentication as a Services'
product whereby the customer accesses the product via a cloud environment
maintained by the Company is recognised in two parts, whereby part of the
subscription is recognised at the point that the licence key is provided to
the customer, with the remaining part recognised evenly over the length of
the contract. This deferred proportion represents the obligation
to maintain and support the platform that the software runs on.
Services
· Sale of third-party hardware, software, warranties and internal
support:
a) where the contract entails only one performance obligation to
provide software or hardware, revenue is recognised in full at a point in time
upon delivery of the product to the end client. This delivery will either be
in the form of the physical delivery of a product or the emailing of access
codes to the client for them to access third‑party software or warranties;
and
b) where a contract to supply external hardware, software and/or
warranties also includes an element of ongoing internal support, multiple
performance obligations are identified, and an allocation of the
total contract value is allocated to each performance obligation based on the
standalone costs of each performance obligation. The respective costs of each
performance obligation are traceable to supplier invoice and applying the
fixed margins, standalone selling prices are determined. Internal support is
recognised equally over the period of time detailed in the contract.
· Sales of consultancy services are usually based on a number of
consultancy days that make up the contracted consideration. Consultancy days
generally comprise of field work and (where required) report writing and
delivery which are considered to be of equal value to the client. Revenue is
recognised over time based on the number of consultancy days provided within
the period compared to the total in the contract.
Principal versus agent considerations
In instances where the Group is involving another party in providing goods or
services to a customer the Group considers whether the nature of its promise
is a performance obligation to provide the specified goods or services itself
or to arrange for those goods or services to be provided by the other party to
determine whether it is a principal or an agent. The business will firstly
identify the specific goods and/or services to be supplied to the customer.
In determining whether the business is acting as agent or principal the
business assesses whether it controls each specified good or service before
that good is transferred to the customer. It will consider:
· Who is responsible for fulfilling the promise to provide
the specific product or service.
· If the business is carrying a liability risk for the specific good
or service prior to it being supplied to the customer.
· If the business has discretion over pricing.
In addition to the points noted above, the business also considers the
following unique selling points:
· Pre-sales process;
In some cases, the business invests heavily in working with the customer to
understand their requirements, before designing/recommending a solution that
integrates various third-party products or services to meet the customers'
requirements.
· Levels of ongoing services;
In some cases, whilst not always contracted, the business will continue to
support the customer as needed to ensure that their solution is working.
This may include co-ordination of the maintenance and support with third
parties and provision of engineers to remove and send back faulty product.
Where the Group is a principal, revenues are recognised on a gross basis in
the statement of comprehensive income while when an agent revenues are
recognised on a net basis in the statement of comprehensive income.
Segmental reporting
For internal reporting and management purposes, the Group is organised into
two reportable segments based on the types of products and services from which
each segment derives its revenue - Software and Services. The Group's
operating segments are identified on the basis of internal reports that are
regularly reviewed by the chief operating decision maker in order to allocate
resources to the segment and to assess its performance.
Current and deferred income tax
The charge for taxation is based on the profit or loss for the year and takes
into account deferred tax. Deferred tax is the tax expected to be payable or
recoverable on temporary differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax based in
the computation of taxable profit or loss and is accounted for using the
balance sheet method.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the balance sheet date in the countries
where the Group's subsidiaries operate and generate taxable income. Management
periodically evaluate positions taken in tax returns with respect to
situations where applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts expected to
be paid to the tax authorities.
Deferred tax assets are only recognised to the extent that it is probable that
future taxable profit will be available in the foreseeable future against
which the temporary differences can be utilised.
Deferred income tax assets and liabilities are measured at the rates that are
expected to apply when the related asset is realised, or liability settled,
based on tax rates and laws enacted or substantively enacted at the reporting
date.
Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
accumulated impairment losses. Intangible assets acquired as part of a
business combination are recognised outside goodwill if the assets are
separable or arise from contractual or other legal rights and their fair value
can be measured reliably. Material expenditure on internally developed
intangible assets is taken to the consolidated statement of financial position
if it satisfies the six‑step criteria required under IAS 38.
Intangible assets with a finite life have no residual value and are amortised
over their expected useful lives as follows:
Computer software (including in-house developed software) 2-5
years straight-line basis
Customer
relationships
1-15 years straight-line basis
Software
10 years straight-line basis
Trade
names
10 years straight-line basis
The amortisation expense on intangible assets with finite lives is recognised
in the statement of comprehensive income within administrative expenses. The
amortisation period and the amortisation method for intangible assets with
finite useful lives are reviewed at least annually.
The carrying value of intangible assets is reviewed for impairment whenever
events or changes in circumstances indicate the carrying value may not be
recoverable.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated
depreciation. Cost includes the original purchase price of the asset plus any
costs of bringing the asset to its working condition for its intended use.
Depreciation is provided at the following annual rates, on a straight-line
basis, in order to write down each asset to its residual value over its
estimated useful life.
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
Office equipment 25% - 33% per annum
Right of use assets Shorter of useful life of the asset or lease
term
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised, as adjusted items if significant,
within the statement of comprehensive income.
Financial instruments
Shearwater's financial assets and financial liabilities are recognised in the
Group's balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets
Trade and other receivables are measured at amortised cost less a provision
for doubtful debts, determined as set out below in 'impairment of financial
assets'. Any write‑down of these assets is expensed to the statement of
comprehensive income.
Equity investments not qualifying as subsidiaries, associates or jointly
controlled entities are measured at fair value through other comprehensive
income (FVTOCI), with fair value changes recognised in other comprehensive
income (OCI) and dividends recognised in profit or loss.
The Group has introduced a policy to use derivatives where there is a material
surplus or deficit of non-sterling receipts and payments. Forward contracts
are measured at each balance sheet based on the prevailing closing exchange
rates with exchange gains/(losses) recognised in the statement of
comprehensive income.
Impairment of financial assets
The impairment model under IFRS 9 reflects expected credit losses, as opposed
to only incurred credit losses under IAS 39. Under the impairment approach in
IFRS 9, it is not necessary for a credit event to have occurred before
credit losses are recognised. Instead, the Group always accounts for expected
credit losses and changes in those expected credit losses. The amount of
expected credit losses are updated at each reporting date.
The impairment model only applies to the Group's financial assets that are
debt instruments measured at amortised costs or FVTOCI as well as the Group's
contract assets and issued financial guarantee contracts. The Group
has applied the simplified approach to recognise lifetime expected credit
losses for its trade receivables and contracts assets as required or permitted
by IFRS 9.
Expected credit losses are calculated with reference to average loss rates
incurred in the three most recent reporting periods then adjusted taking into
account forward-looking information that may either increase or decrease the
current rate. The Group's average combined loss rate is 0.24% (2022: 0.9%).
This percentage rate is then applied to current receivable balances using a
probability risk spread as follows:
· 80% of debt not yet due (i.e. the Group's average combined loss
rate of 0.24% is discounted by 20%, meaning a 0.19% provision would be made to
debt not yet due);
· 85% of debt that is <30 days overdue;
· 90% of debt that is 30-60 days overdue;
· 95% of debt that is 60-90 days overdue; and
· 100% of debt that is >90 days overdue.
Management have performed the calculation to ascertain the expected credit
loss, which works out to £29,864 (2022: £41,069). This movement has been
recognised in the statement of comprehensive income. To date, the Group has a
record of minimal bad debts, with less than £0.04 million being written off
in the past three years.
The Group derecognises a financial asset 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 of the asset to
another entity. On derecognition of a financial asset measured at amortised
cost, the difference between the asset's carrying amount and the sum of the
consideration received and receivable is recognised in the statement
of comprehensive income.
Financial liabilities
Trade and other payables
Financial liabilities within trade and other payables are initially
recognised at fair value, which is usually the invoiced amount. They are
subsequently carried at amortised cost using the effective interest method
(if the time value of money is significant).
Loans are initially recognised at fair value, which is the amount stated in
the loan agreement. Subsequently, loan balances are restated to include any
interest that has become payable.
Lease liabilities have been recognised at fair value in line with the
requirements of IFRS 16. Details of lease disclosures are included in note 15.
Deferred consideration which relates to the future issue of ordinary shares
has been initially recognised at fair value based on the closing share price
at the reporting date. Deferred consideration is revalued and recognised at
fair value based on the closing share price for all future reporting dates.
Movements in fair value between periods are reported in the statement of
comprehensive income.
The Group derecognises financial liabilities when, and only when, the Group's
obligations are discharged, cancelled or they expire. The difference between
the carrying amount of the financial liability derecognised and the
consideration paid and payable, including any non-cash assets transferred or
liabilities assumed, is recognised in the statement of comprehensive income.
Forward contracts
Foreign exchange risk arises when individual group operations enter into
transactions denominated in a currency other than their functional currency.
During the year the Group introduced the use of forward contracts within its
foreign exchange policy. Where the risk to the Group is considered to be
significant, the Group will enter into a forward foreign exchange contract.
Further details can be found in note 18.
Leases
IFRS 16: Leases which supersedes IAS 17: Leases and IFRIC 4: Determining
whether an arrangement contains a lease sets out the principles for
recognition, measurement, presentation and disclosures of leases and requires
lessees to account for most leases under a single on‑balance sheet model.
Right of use assets
In determining if a lease exists, management considers if a contract conveys
the right to control the use of an identified asset for a period of time in
return for a consideration. When assessing whether a contract states a right
to control the use of an identified asset, management considers:
· if a contract involves the use of an identified asset, this could
be specified explicitly or implicitly and should be physically distinct;
· if the Group has obtained the right to gain substantially all of
the economic benefit from the use of the asset throughout the period of use;
and
· if the Group has the right to direct the use of the asset.
Identified 'right of use assets' since 1 April 2019 are valued at the
commencement date of the lease (this is usually the date the underlying asset
is available for use). For leases that began prior to 1 April 2019, a right of
use asset has been created at 1 April 2019 when the Group adopted IFRS 16.
Right of use assets are depreciated on a straight-line basis from the
commencement date (this is usually the date the underlying asset is available
for use, or 1 April 2019 if the lease commenced before this date) to the
earlier of the end of useful life of the right of use asset or the end of the
lease term. The right of use asset may be subject to impairment following
certain remeasurement of lease liabilities.
Details of the Group's right of use assets are contained in note 10 of the
consolidated financial statements.
Lease liability
At the commencement date of a lease (or 1 April 2019 for leases which
commenced before this date) the Group recognises lease liabilities, measuring
them at the present value of lease payments at commencement of the lease (or 1
April 2019 for leases which commenced before this date) discounted at the
determined incremental borrowing rate.
The lease liability is measured at the amortised cost using the effective
interest method. Should there be a change in expected future lease payments
arising from a lease modification or if the Group changes its assessment of
whether it will exercise an extension or termination option, the lease
liability would be remeasured.
Remeasurement of a lease liability will give rise to a corresponding
adjustment being made to the carrying value of the right of use asset.
Lease liabilities are detailed in notes 12, 13 and 15 of the consolidated
financial statements.
Practical expedients
IFRS 16 provides for certain optional practical expedients, including those
related to the initial adoption of the standard. The Group applies the
following practical expedients when applying IFRS 16 to leases previously
classified as operating leasing under IAS 17:
· applied a single discount rate to all leases with similar
characteristics;
· applied the exemption not to recognise right of use assets and
liabilities for leases with less than twelve months of the lease term
remaining as at the date of initial application; and
· applied the exemption for low-value assets whereby leases with a
value under £5,000 (usually IT equipment) have been classed as short-term
leases and not recognised on the statement of financial position even if the
initial term of the lease from the lease commencement date may be more than
twelve months.
Incremental borrowing rate
IFRS 16 states that all components of a lease liability are required to be
discounted to reflect the present value of the payments. Where a lease (or
group of leases) does not state an implicit rate, an incremental borrowing
rate should be used.
The incremental borrowing rate should represent what the lessee would have to
pay to borrow over a similar term and with similar security, the funds
necessary to obtain an asset of similar value to the right of use asset in a
similar economic environment.
The Group has applied an incremental borrowing rate which it uses to discount
all identified leases across the Group. The Group has one type of right of use
assets, all of which are located in the United Kingdom.
Share-based payments
In order to calculate the charge for share-based payments as required by IFRS
2, the Group makes estimates principally relating to assumptions used in
its option-pricing model as set out in note 17.
The cost of equity-settled transactions with employees, and transactions with
suppliers where fair value cannot be estimated reliably, is measured with
reference to the fair value of the equity instrument. The fair value of
equity‑settled instruments is determined at the date of grant, taking into
account market-based vesting conditions. The fair value is determined using an
option pricing model.
No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is conditional upon a market condition, which are treated
as vesting irrespective of whether or not the market condition is satisfied,
provided that all other performance conditions are satisfied.
At each reporting date before vesting, the cumulative expense is calculated,
representing the extent to which the vesting period has expired and
management's best estimate of the achievement or otherwise of non-market
conditions, the number of equity instruments that will likely vest, or in the
case of an instrument subject to market condition, be treated as vesting as
described above. The movement in cumulative expense since the previous
reporting date is recognised in the statement of comprehensive income, with
the corresponding entry in equity.
Pensions
The Group operates a defined contribution personal pension scheme. The assets
of this scheme are held separately from those of the Company in an
independently administered fund. The pension charge represents contributions
payable by the Company to the fund.
Uncertainty over income tax treatments
IFRIC 23 provides guidance on the accounting for current and deferred tax
liabilities and assets in circumstances in which there is uncertainty over
income tax treatments. The interpretation requires:
· the Group to determine whether uncertain tax treatments should be
considered separately, or together as a Group, based on which approach
provides better predictions of the resolution;
· the Group to determine if it is probable that the tax authorities
will accept the uncertain tax treatment; and
· if it is not probable that the uncertain tax treatment will be
accepted, measure the tax uncertainty based on the most likely amount or
expected value, depending on whichever method better predicts the resolution
of the uncertainty. This measurement is required to be based on the assumption
that each of the tax authorities will examine amounts they have a right to
examine and have full knowledge of all related information when making those
examinations.
New standards and interpretations applied
There were no new standards or amendments or interpretations to existing
standards that became effective during the year that were material to the
Group.
No new standards, amendments or interpretations to existing standards having
an impact on the financial statements that have been published and that are
mandatory for the Group's accounting periods beginning on or before 1 April
2022, or later periods, have been adopted early.
New standards and interpretations not applied
The following new standards, amendments and interpretations have not been
adopted in the current year.
International Financial Reporting Standard (IFRS/IAS) Effective date To be adopted by the Group
IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 1 January 2023 1 April 2023
(Amendment - Disclosure of Accounting Policies)
IAS 8 Accounting policies, Changes in Accounting Estimates and Errors 1 January 2023 1 April 2023
(Amendment - Definition of Accounting Estimates)
IAS 12 Incomes Taxes (Amendment - Deferred Tax related to Assets and 1 January 2023 1 April 2023
Liabilities arising from a Single Transaction)
2. Measure of profit
To provide shareholders with a better understanding of the trading performance
of the Group, additional alternative performance measures ('APMs') are
included; Adjusted EBITDA and Adjusted (loss)/profit before tax have been
calculated as (loss)/profit before tax after adding back the following items,
which can distort the underlying performance of the Group:
Adjusted (loss)/profit before tax
· Amortisation of acquired intangibles.
· Share-based payments.
· Impairment of intangible assets.
· Fair value adjustment to deferred consideration.
· Other operating income.
· Exceptional items
Adjusted EBITDA
In addition to the adjusting items highlighted above in the adjusted
(loss)/profit before tax:
· Finance costs.
· Finance income.
· Depreciation (including amortisation of right of use assets).
· Amortisation of intangible assets - computer software (including
in-house software development).
Adjusted EBITDA and adjusted (loss)/profit before tax reconciles to
(loss)/profit before tax as follows:
2023 2022
£'000 £'000
(Loss)/profit before tax (9,633) 936
Amortisation of acquired intangibles 2,099 2,099
Impairment of intangible assets 6,014 -
Exceptional items 125 -
Share-based payments 85 10
Other income - (70)
Adjusted (loss)/profit before tax (1,310) 2,975
Finance costs 77 110
Depreciation 240 263
Amortisation of intangible assets - computer software (including in-house 792 1,050
software development)
Adjusted EBITDA (201) 4,398
3. Segmental information
In accordance with IFRS 8, the Group's operating segments are based on the
operating results reviewed by the Board, which represents the chief operating
decision maker.
The Group is organised into two reportable segments based on the types of
products and services from which each segment derives its revenue - Software
and Services.
Segment information for the twelve months ended 31 March 2023 is presented
below. The Group's assets and liabilities are not presented by segment as the
Directors do not review assets and liabilities on a segmental basis.
Revenue Profit Revenue Profit
Year ended
Year ended
Year ended
Year ended
31 March 2023
31 March 2023
31 March 2022
31 March 2022
£'000
£'000
£'000
£'000
Services(1) 23,830 149 32,540 4,663
Software(1) 2,856 977 3,336 1,535
Group trading EBITDA(1) 26,686 1,126 35,876 6,198
Group costs(1) (1,327) (1,800)
Adjusted EBITDA (201) 4,398
Amortisation of intangibles (2,891) (3,149)
Impairment of intangible assets (6,014) -
Depreciation (240) (263)
Exceptional items (125) -
Share-based payments (85) (10)
Other income - 70
Finance cost (77) (110)
(Loss)/profit before tax (9,633) 936
(1 Figures disclosed in the profit column for Services and Software
profitability is adjusted EBITDA.)
Segmental information by geography
The Group is domiciled in the United Kingdom and currently the majority of its
revenues come from external customers that are transacted in the United
Kingdom. A number of transactions which are transacted from the United Kingdom
represent global framework agreements, meaning our services, whilst transacted
in the United Kingdom, are delivered globally. The geographical analysis of
revenue detailed below is on the basis of country of origin in which the
master agreement is held with the customer (where the sale is transacted).
2023 2022
£'000 £'000
United Kingdom 18,585 29,531
Europe (excluding the UK)(1) 6,043 4,508
North America 1,620 1,470
Rest of the world 438 367
26,686 35,876
(1. Includes sales of £3,935,680 (2022: £2,444,899) and
£682,853 (2022: £775,835) to Netherlands and Germany respectively.)
All of the Group's non-current assets are held within the United Kingdom.
One customer within the Group makes up more than 10% of the Group's revenue.
This customer contributed £8.0 million to the Group's Services division. In
the prior year, two customers made up more than 10% of the Group's revenue,
contributing £16.2 million and £5.2 million respectively to the Group's
Services division.
4. Expenses and auditor's remuneration
Operating (loss)/profit is stated after charging:
2023 2022
£'000 £'000
Depreciation of fixed assets 240 263
Amortisation of intangibles 2,891 3,149
External auditor's remuneration:
- Audit fee for annual audit of the Group and Company financial statements 103 45
- Audit fee for annual audit of the subsidiary financial statements 179 165
Share-based payments 85 10
Impairment of intangible assets 6,014 -
Exceptional items 125 -
Unrealised loss on forward contract 407 -
Other operating income - (70)
Exceptional items include costs incurred for strategic review of the business
and subsequent reorganisation which commenced at the end of the financial
year.
5. Staff costs
Total staff costs within the Group comprise of all Directors' and employee
costs for the financial year.
2023 2022
£'000 £'000
Wages and salaries 6,864 6,428
Social security costs 835 743
Pension costs 207 202
Share-based payments 85 10
7,991 7,383
The weighted average monthly number of employees, including Directors,
employed by the Group and Company during the year was:
2023 2022
Administration 20 19
Production 53 43
Sales and marketing 26 26
99 88
Details of Directors' remuneration can be found within the annual report on
remuneration.
6. Interest costs
2023 2022
£'000 £'000
Interest payable on revolving credit facility 56 66
Interest payable on lease liabilities 15 12
Other interest payments 6 13
Interest payable on loan balances - 19
77 110
7. Taxation
2023 2022
£'000
£'000
Current tax:
UK corporation tax at current rates on UK (loss)/profit for the year - 442
Over provision in respect of prior year (442) -
(442) 442
Foreign tax 2 13
Total current tax charge (440) 455
Deferred tax movement in the period (1,018) 773
Income tax (credit)/charge (1,458) 1,228
Reconciliation of taxation:
(Loss)/profit before tax (9,633) 936
Profit multiplied by the average rate of corporation tax in the year of 19% (1,830) 178
(2022: 19%)
Tax effects of:
Expenses not deductible for tax purposes 1,532 411
Adjustments for previous periods (442) -
Foreign tax rate differences (1) (1)
Increase to deferred tax asset owing to changing tax rate from 1 April 2023 (136) -
Enhanced R&D relief (130) (94)
Other items (277) 786
Brought forward losses (174) (52)
Income tax (credit)/charge (1,458) 1,228
(Other items include movements in deferred tax which includes an adjustment
made in the prior year to revalue deferred tax liabilities from 19% to 25%.)
In the March 2021 Budget it was announced that legislation will be introduced
in the Finance Bill 2021 to increase the main rate of UK corporation tax from
19% to 25%, effective 1 April 2023. As substantive enactment was prior to the
post balance sheet date, the deferred tax balances at 31 March 2023 and 31
March 2022 are measured at 25%.
8. Earnings per share
Adjusted earnings per share has been calculated using adjusted earnings
calculated as profit after taxation but before:
· Amortisation of acquired intangibles after tax.
· Share-based payments.
· Impairment of intangible assets.
· Exceptional items after tax.
· Fair value adjustment to deferred consideration.
· Other operating income.
Basic profit per share is calculated by dividing the profit attributable to
the ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
For diluted earnings per share, the weighted average number of shares in issue
is adjusted to assume conversion of all the potential dilutive ordinary
shares. The potential dilutive shares are anti-dilutive for the twelve months
ended 31 March 2023 and for the twelve months ended 31 March 2022. Adjusted
earnings per share is potentially dilutive in the year to 31 March 2022.
Please see notes 16 and 17 of the consolidated financial statements for more
details.
The calculation of the basic and diluted profit/loss per ordinary share from
total operations attributable to shareholders is based on the following data:
2023 2022
£'000
£'000
Net profit from total operations
Loss for the purposes of basic and diluted earnings per share being net profit (8,175) (292)
attributable to shareholders
Add/(remove):
Amortisation of acquired intangibles 1,878 1,878
Impairment of intangible assets 6,014 -
Exceptional items 101 -
Share-based payments 85 10
Adjustment to deferred tax liability relating to acquired intangibles(1) - 1,014
Other income - (70)
Adjusted (loss)/earnings for the purposes of adjusted earnings per share (97) 2,540
Number Number
Number of shares
Weighted average number of ordinary shares for the purpose of basic and 23,818,674 23,809,807
adjusted earnings per share
Weighted average number of ordinary shares for the purpose of diluted and 24,549,536 24,723,962
adjusted diluted earnings per share
£ £
Basic earnings per share (0.34) (0.01)
Diluted earnings per share (0.33) (0.01)
Adjusted basic earnings per share (0.00) 0.11
Adjusted diluted earnings per share (0.00) 0.10
1. Adjustment to deferred tax liability relating to acquired intangibles
represents the impact of the rate change to 25% which was announced in the
March 2021 Budget which has increased the deferred tax liability for acquired
intangibles.
9. Intangible assets
Goodwill Customer Software Tradenames Gold Total
£'000 relationships £'000 £'000 exploration £'000
£'000 £'000
Cost
At 1 April 2021 36,660 10,838 7,543 6,826 1,005 62,872
Additions - - 1,097 - - 1,097
At 31 March 2022 36,660 10,838 8,640 6,826 1,005 63,969
Additions - - 1,280 - - 1,280
At 31 March 2023 36,660 10,838 9,920 6,826 1,005 65,249
Accumulated amortisation
At 1 April 2021 - 2,689 2,885 1,677 1,005 8,256
Amortisation for the year - 934 1,532 683 - 3,149
At 31 March 2022 - 3,623 4,417 2,360 1,005 11,405
Amortisation for the year - 934 1,274 683 - 2,891
Impairment 6,014 - - - - 6,014
At 31 March 2023 6,014 4,557 5,691 3,043 1,005 20,310
Net book amount
At 31 March 2023 30,646 6,281 4,229 3,783 - 44,939
At 31 March 2022 36,660 7,215 4,223 4,466 - 52,564
At 31 March 2021 36,660 8,149 4,658 5,149 - 54,616
Software intangible assets comprise acquired software assets plus software
assets developed both in-house and externally. The amortisation charge for the
year includes £2.1 million amortisation on acquired intangible assets and
£0.8 million amortisation of internally developed software assets.
The Group tests goodwill annually for impairment. The recoverable amount of
goodwill is determined as the higher of the value-in-use calculation or fair
value less cost of disposal for each cash‑generating unit (CGU). The
value-in-use calculations use pre-tax cash flow projections based on financial
budgets and forecasts approved by the Board covering a three-year period.
These pre-tax cash flows beyond the three-year period are extrapolated using
estimated long-term growth rates. The Group has five separate cash-generating
units. For all five cash‑generating units a weighted average cost of capital
of 12.6% and a terminal value, based on a long-term growth rate of 2%
calculated on year five cash flow has been used when testing goodwill.
The following key assumptions around revenue growth are summarised in the
table below.
Cash-generating units
SecurEnvoy GeoLang Brookcourt Xcina Pentest
Solutions Consulting
Year 1 (10)% 1,869% 47% 22% 34%
Year 2 16% (24)% 7% (6)% 6%
Year 3 12% 41% 13% 5% 6%
Year 4 23% 10% 6% 5% 6%
Year 5 23% 10% 6% 5% 6%
4 year CAGR(1) 18% 7% 8% 2% 6%
4 year CAGR represents the average growth rate per year between FY24 and FY28.
An impairment charge of £6.0 million has been recorded in the current year,
writing down the goodwill balance held for the Group's SecurEnvoy, Xcina
Consulting and Xcina IS businesses.
Sensitivity analysis has been performed on each of the Group's cash-generating
units ('CGUs') which incorporates changes in assumed revenue growth rates and
profit margin growth in addition to terminal value revenue growth rate and
weighted cost of capital (WACC). Outcomes of the following sensitivities are
detailed below:
· Reducing the terminal value by 1% from 2% to 1% would flag
insufficient headroom in one of the Group's five CGUs (SecurEnvoy) resulting
in a further impairment of £0.8 million.
· Increasing the weighted average cost of capital by 1% from 12.6% to
13.6% would flag insufficient headroom in one of the Group's five CGUs
(SecurEnvoy) resulting in a further impairment of £1.1 million.
· A 10% reduction in the assumed annual revenue growth rates for each
CGU from FY25 (maintaining forecast gross profit margin % and adjusting
administrative expenses in line with the % revenue reduction) would, subject
to no other changes, flag insufficient headroom in two of the Group's five
CGUs (SecurEnvoy and Pentest) resulting in a further potential impairment of
£6.8 million.
· A 15% reduction in the assumed annual revenue growth rates for each
CGU from FY25 (maintaining forecast gross profit margin % and adjusting
administrative expenses in line with the % revenue reduction) would, subject
to no other changes, flag insufficient headroom in four of the Group's five
CGUs (SecurEnvoy, GeoLang, Brookcourt and Pentest) resulting in a further
potential impairment of £10.9 million.
Gold exploration assets date back to before 2017 when the Group was known as
Aurum Mining plc whose principal activity was mining and exploration.
10. Property, plant and equipment
Right of use Office Total
assets equipment £'000
£'000 £'000
Cost
At 1 April 2021 541 365 906
Additions 125 49 174
Disposals (90) - (90)
At 31 March 2022 576 414 990
Additions 301 57 358
Disposals - (43) (43)
At 31 March 2023 877 428 1,305
Accumulated depreciation
At 1 April 2021 258 243 501
Charge for the period 207 57 264
Disposals (90) - (90)
At 31 March 2022 375 300 675
Charge for the period 185 55 240
Disposals - (43) (43)
At 31 March 2023 560 312 872
Net book amount
At 31 March 2023 317 116 433
At 31 March 2022 201 114 315
At 31 March 2021 283 122 405
Depreciation of property, plant and equipment is charged to depreciation and
amortisation expenses within the statement of comprehensive income.
11. Trade and other receivables
Non-current 2023 2022
(restated)
£'000 £'000
Trade receivables 5,226 -
Accrued income 2,054 9,777
7,280 9,777
Current 2023 2022
(restated)
£'000 £'000
Trade receivables 7,475 4,538
Accrued income 4,081 5,070
Prepayments and other receivables 499 770
Corporation tax asset 291 -
12,346 10,378
The movement for the provision in expected credit losses is stated below:
2023 2022
£'000 £'000
At 1 April 41 27
Movement in expected credit loss provision (11) 14
At 31 March 30 41
12. Trade and other payables
2023 2022
£'000 £'000
Trade payables 3,265 4,573
Accruals and other payables 8,031 8,289
Other taxation and social security 518 599
Forward contract 275 -
Deferred income 147 456
Corporation tax 7 444
Lease liabilities 105 158
12,348 14,519
13. Creditors: amounts falling due after more than one year
2023 2022
£'000 £'000
Accruals and other payables 5,284 3,958
Deferred tax 3,602 3,878
Lease liabilities 216 48
Forward contract 131 -
9,233 7,884
14. Deferred tax
2023 2022
£'000 £'000
Non-current liabilities
Liability at 1 April 3,878 3,105
Deferred tax charge/(credit) in the statement of comprehensive income (276) 773
Total deferred tax 3,602 3,878
Deferred tax balance at 31 March 2023 includes a £3.0 million (2022: £3.4
million) deferred tax liability for acquired intangible assets including
software and trademarks.
2023 2022
£'000 £'000
Non-current assets
At 1 April - -
Credit to statement of comprehensive income 742 -
Total deferred tax asset 742 -
The Group has tax losses of £3.0 million (2022: £0.7 million) across its
Parent Company Shearwater Group plc and four subsidiaries that are available
for offset against future taxable profits of the entity. A deferred tax asset
has been recognised in respect of tax losses brought forward and in the
current year which will be used to offset future taxable profits.
15. Lease liabilities
Lease liabilities at 31 March 2023, which include the extension of some
existing office leases, are detailed below:
Lease liabilities Property
£'000
At 1 April 2021 289
Additions 125
Interest expense 12
Payments to lease creditors (220)
At 31 March 2022 206
Additions 301
Interest expense 15
Payments to lease creditors (200)
At 31 March 2023 321
The maturity analysis of lease liabilities is detailed below:
Lease liabilities - (contractual undiscounted cash flows) 2023 2022
£'000 £'000
Less than one year 118 177
One to five years 233 51
Total undiscounted lease liabilities at 31 March 351 228
There are no leases with a term of more than five years.
Lease liabilities included in the statement of financial position at 31 March 2023 2022
£'000 £'000
Current 105 158
Non-current 216 48
Amounts recognised in the statement of comprehensive income 2023 2022
£'000 £'000
Interest on lease liabilities 15 12
Expenses related to short‑term leases - -
Expenses related to low-value assets - -
Depreciation of right of use assets (note 10) 185 207
Amounts recognised in the statement of cash flows 2023 2022
£'000 £'000
Payment of principal 200 220
Payment of interest 15 12
Total cash outflows 215 232
16. Share capital
The table below details movements within the year:
Ordinary shares
In thousands of shares 2023 2022
In issue at 1 April 23,818 23,810
Options exercised during the year 8 8
Number of shares 23,826 23,818
2023 2022
£'000 £'000
Allotted, called up and fully paid
Ordinary shares of £0.10 each (2022: £0.10 each) 2,382 2,382
Deferred shares of £0.90 each (2022: £0.90 each) 19,896 19,896
Total 22,278 22,278
In September 2019, a reorganisation of the Company's capital which resulted in
the consolidation of shares where every 100 shares were consolidated into one
ordinary share of £1. In addition to this, immediately following
consolidation, each consolidated share was sub-divided into one ordinary share
of £0.10 ('ordinary share') and one deferred share of £0.90 ('deferred
share').
Deferred shares for all practical purposes are valueless and it is the Board's
intention to repurchase, cancel or seek to surrender these deferred shares
using lawful means as the Board may at such time in the future decide.
The following issues of shares were undertaken in the twelve-month period
ended 31 March 2023:
On 28 February 2023, 8,320 options were exercised by a professional adviser to
the Group.
Other reserves included:
Share premium
This comprises of the amount subscribed for share capital in excess of the
nominal value less any transaction costs incurred in raising equity.
Other reserves
These comprise of amounts expensed in relation to the share options, share
incentive scheme (see note 17) and merger relief from shares issued as
consideration to acquisitions and equity placings (net of costs).
Movements in the year ended 31 March 2023 include the following transactions
which have been recognised in the other reserve:
A reallocation to retained earnings from capital and share-based payments
reserves of £1,029,953 relating to the share incentive scheme and other of
lapsed share options was made in the year.
Accumulated loss reserve
Accumulated loss reserves for the Group are made up of cumulative profits and
losses net of dividends and other adjustments.
17. Share-based payments
2023 2022
£'000 £'000
Subsidiary incentive scheme 36 72
Save As You Earn (SAYE) 12 13
Share options - (CSOP) 38 13
Share options - (ESOP) (1) (88)
85 10
Share options - (CSOP)
The following options over ordinary shares remained outstanding at 31 March
2023:
Options at Options Options Options Options at Exercise Date of First date Final date
1 April issued lapsed exercised 31 March price grant of exercise of exercise
2022 during during during 2023
the year the year the year
Directors:
P McFadden 25,000 - - - 25,000 £0.95 10/02/2022 10/02/2025 10/02/2027
Employees:
Employees 89,998 - 2,778 - 87,220 £0.95 10/02/2022 10/02/2023 10/02/2027
Employees 11,112 - - - 11,112 £0.95 10/02/2022 30/09/2023 10/02/2027
Employees 514,064 - 82,000 - 432,064 £0.95 10/02/2022 10/02/2025 10/02/2027
Total 640,174 - 84,778 - 555,396
The following options over ordinary shares remained outstanding at 31 March
2022:
Options at Options Options Options Options at Exercise Date of First date Final date
1 April issued lapsed exercised 31 March price grant of exercise of exercise
2021 during during during 2022
the year the year the year
Directors:
P McFadden - 25,000 - - 25,000 £0.95 10/02/2022 10/02/2025 10/02/2027
Employees:
Employees - 89,998 - - 89,998 £0.95 10/02/2022 10/02/2023 10/02/2027
Employees - 11,112 - - 11,112 £0.95 10/02/2022 30/09/2023 10/02/2027
Employees(1) - 514,064 - - 514,064 £0.95 10/02/2022 10/02/2025 10/02/2027
Total - 640,174 - - 640,174
(1) An adjustment to the number of share options issued in the prior year has
been made. The number originally reported was 542,000 and included 27,936
share options issued and presented under the company's ESOP.
The following illustrates the number and weighted average exercise price
(WAEP) of, and movements in, share options during the year.
2023 2022
Number WAEP Number WAEP
£ £
Outstanding at the beginning of the year 640,174 0.95 - -
Issued - - 640,174 0.95
Lapsed during the year 84,778 0.95 - -
Exercised during the year ended 31 March - - - -
Outstanding at 31 March 555,396 0.95 640,174 0.95
Exercisable at 31 March 87,220 0.95 - -
The share-based payment charge for options granted to employees and Directors
has been calculated using the Black‑Scholes model and using the following
parameters:
Share price at grant date £0.95
Exercise price £0.95
Expected option life (year) 5 years
Expected volatility (%) 43.4%
Expected dividends 0%
Risk-free interest rate (%) 1.54%
Option fair value £0.38
The calculation includes an estimated leaver provision of 55% (2022: 29%).
The weighted average remaining contractual life of options outstanding at the
end of the year was three years and eleven months.
Share options - (ESOP)
The following options over ordinary shares remained outstanding at 31 March
2023:
Options at Options Options Options Options at Exercise Date of First date Final date
1 April issued lapsed exercised 31 March price grant of exercise of exercise
2022 during during during 2023
the year the year the year
Directors:
P McFadden 7,875 - - - 7,875 £4.0 07/05/2018 07/05/2019 30/09/2023
Employees:
Employees 39,500 - 39,500 - - £4.0 09/05/2017 09/05/2018 08/05/2022
Employees 9,390 - 4,140 - 5,250 £4.0 13/11/2017 13/11/2018 30/09/2023
Employees 1,023 - 569 - 454 £4.0 01/03/2018 01/03/2019 28/02/2023
Employees 5,625 - 312 - 5,313 £4.0 04/04/2018 04/04/2019 03/04/2023
Employees 911 - 387 - 524 £1.6 01/03/2019 01/03/2020 01/07/2024
Employees 3,000 - - - 3,000 £4.0 01/06/2019 01/06/2020 30/09/2023
Employees 10,000 - 2,500 - 7,500 £2.0 01/10/2019 01/10/2020 30/09/2023
Employees 27,936 - - - 27,936 £0.95 10/02/2022 10/02/2025 10/02/2027
Non-employees:
Other 8,320 - - 8,320 - £0.1 27/02/2020 27/02/2021 31/03/2023
Total 113,580 - 47,408 8,320 57,852
The following options over ordinary shares remained outstanding at 31 March
2022:
Options at Options Options Options Options at Exercise Date of First date Final date
1 April issued lapsed exercised 31 March price grant of exercise of exercise
2021 during during during 2022
the year the year the year
Directors:
P McFadden 7,875 - - - 7,875 £4.0 07/05/2018 07/05/2019 30/09/2023
Employees:
Employees 41,581 - 2,081 - 39,500 £4.0 09/05/2017 09/05/2018 08/05/2022
Employees 26,076 - 16,686 - 9,390 £4.0 13/11/2017 13/11/2018 30/09/2023
Employees 364 - 364 - - £4.0 08/01/2018 08/01/2019 07/01/2023
Employees 1,780 - 757 - 1,023 £4.0 01/03/2018 01/03/2019 28/02/2023
Employees 21,559 - 15,934 - 5,625 £4.0 04/04/2018 04/04/2019 03/04/2023
Employees 67,222 - 67,222 - - £3.6 17/10/2018 31/03/2019 30/09/2021
Employees 33,409 - 33,409 - - £3.6 17/10/2018 31/03/2019 30/04/2024
Employees 1,493 - 582 - 911 £1.6 01/03/2019 01/03/2020 01/07/2024
Employees 12,500 - 12,500 - - £2.0 24/04/2019 24/04/2020 30/09/2021
Employees 6,000 - 3,000 - 3,000 £4.0 01/06/2019 01/06/2020 30/09/2023
Employees 12,500 - 2,500 - 10,000 £2.0 01/10/2019 01/10/2020 30/09/2023
Employees - 27,936 - - 27,936 £0.95 10/02/2022 10/02/2025 10/02/2027
Non-employees:
Other 20,000 - 20,000 - - £1.0 03/10/2016 03/10/2016 03/10/2021
Other 16,640 - - 8,320 8,320 £0.1 27/02/2020 27/02/2021 31/03/2023
Total 268,999 27,936 175,035 8,320 113,580
The following illustrates the number and weighted average exercise price
(WAEP) of, and movements in, share options during the year.
2023 2022
Number WAEP Number WAEP
£ £
Outstanding at the beginning of the year 113,580 2.8 268,999 3.3
Issued - - 27,936 0.95
Lapsed during the year 47,408 3.9 175,036 3.2
Exercised during the year ended 31 March 8,320 0.1 8,320 0.1
Outstanding at 31 March 57,852 2.2 113,580 2.8
Exercisable at 31 March 21,229 3.7 50,276 3.9
The weighted average share price of options exercised during the year was
£0.89 (2022: £1.18).
The share-based payment charge for options granted to employees and Directors
has been calculated using the Black‑Scholes model and using the following
parameters:
Share price at grant date £0.95 to £4.30
Exercise price £0.10 to £4.00
Expected option life (year) 1 year to 6 years
Expected volatility (%) 10.6% to 80.0%
Expected dividends 0%
Risk-free interest rate (%) 0.60% to 1.54%
Option fair value £0.04 to £2.87
The calculation includes an estimated leaver provision of 31% (2022: 29%).
The weighted average remaining contractual life of options outstanding at the
end of the year was two years and two months (2022: one year and ten months).
Share options - (SAYE)
The following options over ordinary shares remained outstanding at 31 March
2023:
Options at Options Options Options Options at Exercise Date of First date Final date
1 April issued lapsed exercised 31 March price grant of exercise of exercise
2022 during during during 2023
the year the year the year
Employees:
Employees 132,465 - 14,851 - 117,614 £1.515 25/01/2021 01/03/2024 30/09/2024
Total 132,465 - 14,851 - 117,614
The following options over ordinary shares remained outstanding at 31 March
2022:
Options at Options Options Options Options at Exercise Date of First date Final date
1 April issued lapsed exercised 31 March price grant of exercise of exercise
2021 during during during 2022
the year the year the year
Employees:
Employees 150,285 - 17,820 - 132,465 £1.515 25/01/2021 01/03/2024 30/09/2024
Total 150,285 - 17,820 - 132,465
The following illustrates the number and weighted average exercise price
(WAEP) of, and movements in, share options during the year.
2023 2022
Number WAEP Number WAEP
£ £
Outstanding at the beginning of the year 132,465 1.515 150,285 1.515
Issued - - - -
Lapsed during the year 14,851 1.515 17,820 1.515
Exercised during the year ended 31 March - - - -
Outstanding at 31 March 117,614 1.515 132,465 1.515
Exercisable at 31 March - - - -
The share-based payment charge for options granted to employees and Directors
has been calculated using the Black‑Scholes model and using the following
parameters:
Share price at grant date 1.420
Exercise price 1.515
Expected option life (year) 3 years 7 months
Expected volatility (%) 40.0%
Expected dividends 0%
Risk-free interest rate (%) 0.13%
Option fair value £0.394
The calculation includes an estimated leaver provision of 33% (2022: 29%).
Options held by Directors are disclosed in the Annual Report.
The market price of shares as at 31 March 2023 was £0.50 (31 March 2022:
£1.05). The range during the financial year was £0.50 to £1.39. At the date
of signing the financial statements the share price was £0.485.
The weighted average remaining contractual life of options outstanding at the
end of the year was one year and six months (2022: two years and six months).
Subsidiary incentive scheme
On 29 September 2016, the Group established a share incentive scheme for
certain Directors and consultants to the Group, via the Group's subsidiary,
Shearwater Subco Limited (the 'subsidiary'), in order to align the interests
of the scheme participants directly with those of shareholders.
Pursuant to the subsidiary incentive scheme, the subsidiary issued 160,000 'B'
ordinary shares of £0.000001 in the capital of the subsidiary ('incentive
shares') on 18 January 2017 at a price of £0.032 per share. Subject to the
growth and vesting conditions both being satisfied, participants may elect to
sell their respective B shares to the Parent Company and the Parent Company
shall acquire those B shares in consideration for cash or by the issue of new
ordinary shares at the Group's discretion. The Group's intention is to settle
these through the issue of new ordinary shares in the Group.
The value of the incentive shares is discussed below. The subsidiary incentive
scheme vesting period expired on 29 September 2022. Whilst the vesting
condition of being employed were satisfied, the growth conditions were not met
and subsequently no exercises were made. The Company will look to exercise a
call option to reclaim those B shares from the current holders.
Directors' incentive shares
The incentive shares issued to Directors are shown in the table below:
Issue Nominal Number of Number of Number of Share-based
Participation price value incentive incentive Shearwater payment
in increase of incentive shares shares Group plc charge
in shareholder shares 1 April 31 March shares
value 2022 2023 issued
D Williams 6.5% £0.032 £0.000001 65,000 65,000 - £14,533
P Higgins 7.5% £0.032 £0.000001 75,000 75,000 - £16,768
Valuation of incentive shares
The share-based payment charge for the incentive shares has been calculated
using a binomial valuation model at the grant date. The fair value amounted
to £937,623 based on an initial expiry date of 29 September 2019. An option
to amend the expiry date was exercised on 17 April 2020 to extend this expiry
date to 29 September 2022, which has increased the fair value by £18,349.
Following this extension, £955,972 will be recognised over the life of the
scheme which expired on 29 September 2022. In the current year £35,773
(2022: £71,742) has been recognised as an expense in the statement
of comprehensive income in respect of incentive shares. All 160,000 incentive
scheme shares were subscribed for by participants at unrestricted market
value.
18. Financial instruments
The Group uses financial instruments, other than derivatives, comprising cash
at bank and various items such as trade and other receivables and trade and
other payables that arise directly from its operations. The main purpose of
these financial instruments is to raise finance for the Group's operations.
The Group's financial assets and liabilities at 31 March 2023, as defined
under IFRS 9, are as follows. The fair values of financial assets and
liabilities recorded at amortised cost are considered to approximate their
book value.
Amortised cost Fair value through other
(loans and receivables) comprehensive income
(available for sales)
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Financial assets
Cash and cash equivalents 3,964 5,575 - -
Trade and other receivables 18,836 19,426 - -
Total financial assets 22,800 25,001 - -
2023 2022
£'000 £'000
Trade and other receivables
Trade receivables 12,701 4,579
Accrued income 6,135 14,847
18,836 19,426
Amortised cost Fair value through profit or loss (FVPL)
(payables)
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Financial liabilities
Trade and other payables 16,580 16,821 - -
Lease liabilities 320 205 - -
Forward contracts - - 407 -
Total financial assets 16,900 17,026 407 -
2023 2022
£'000 £'000
Trade and other payables
Trade payables 3,265 4,573
Accruals 13,302 12,120
Other creditors 13 128
16,580 16,821
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives
and policies to the Group's Finance function.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's competitiveness and
flexibility.
The Group is exposed to financial risks in respect of:
· capital risk;
· foreign currency;
· interest rates;
· credit risk; and
· liquidity risk.
A description of each risk, together with the policy for managing risk, is
given below.
Capital risk
The Group manages its capital to ensure that the Group and its subsidiaries
will be able to continue as going concerns while maximising the return to
stakeholders through the optimisation of equity and debt balances.
The capital structure of the Group consists of cash and cash equivalents,
borrowings, equity, comprising issued capital, reserves and accumulated losses
as disclosed in the consolidated statement of changes in equity in the Annual
Report.
The Board of Directors reviews the capital structure on a regular basis. As
part of this review, the Board considers the cost of capital and the risks
associated with each class of capital, against the purpose for which it is
intended.
The Group has a three-year £4.0 million revolving credit facility which is in
place to fund further growth and short‑term working capital requirements.
This facility was not utilised during the current year. The current facility
is in place until 23 March 2024.
Market risk
Market risk arises from the Group's use of interest‑bearing, tradable and
foreign currency financial instruments. It is the risk that the fair value or
future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates (currency risk), interest rates (interest rate
risk), or other market factors (other price risk).
Foreign currency risk
The Group is exposed to foreign currency risk on sales and purchases which are
denominated in a currency other than sterling. Exposures to exchange rates are
predominantly denominated in US dollars and euros. The Group seeks to reduce
foreign exchange exposures arising from transactions in various currencies
through a policy of matching, as far as possible, receipts and payments across
the Group in each individual currency. The Group has introduced a policy to
use derivatives where there is a material surplus or deficit of non-sterling
receipts and payments.
The following forward contracts were entered into in order to mitigate the
risk of further weakening of sterling against US dollar.
Currency Amount (000) Maturity date Foreign exchange rate
US dollar 4,100 10 November 2023 1.138
US dollar 2,000 10 May 2024 1.140
The above derivatives are remeasured at fair value at each reporting date.
This gives rise to a gain or loss, the entire amount of which is recognised in
the statement of comprehensive income within administrative expenses.
As of 31 March the Group's net exposure to foreign exchange risk was as
follows:
USD EUR
Net foreign currency financial assets/(liabilities) 2023 2022 2023 2022
£'000 £'000 £'000 £'000
Trade receivables 228 202 148 735
Other receivables 1,390 - 4 -
Trade payables (2,537) (3,389) (43) (18)
Other payables (9,605) (9,364) (192) -
Cash and cash equivalents 1,929 1,431 551 651
Total net exposure before excluding forward contracts (8,595) (11,120) 468 1,368
Forward contracts 6,100 - - -
Total net exposure (2,495) (11,120) 468 1,368
The effect of a 10% strengthening of the US dollar against sterling at the
reporting date on the US dollar-denominated trade and other receivables, trade
and other payables, forward contracts and cash and cash equivalents carried at
that date would, all other variables held constant, have resulted in a
decrease of the pre-tax profit in the year and a decrease in net assets of
£0.2 million. A 10% weakening in the exchange rate would, on the same basis,
have increased the pre-tax profit in the year and increased net assets by
£0.2 million.
The effect of a 10% strengthening of the euro against sterling at the
reporting date on the euro-denominated trade receivables, payables and cash
and cash equivalents carried at that date would, all other variables held
constant, have resulted in an increase of the pre-tax profit in the year and
an increase in net assets of £0.05 million. A 10% weakening in the exchange
rate would, on the same basis, have decreased the pre-tax profit in the year
and decreased net assets by £0.04 million.
Interest rate risk
The Group has minimal cash flow interest rate risk as it has no external
borrowings at variable interest rates.
Liquidity risk
The Group manages liquidity risk by maintaining adequate cash reserves and
credit facilities, by continuously monitoring forecast and actual cash flows,
and by matching the maturity profiles of financial assets and liabilities
wherever possible. In addition to this, the Group has a £4.0 million
revolving credit facility (RCF) which provides further contingency against
short-term working capital movements. At 31 March 2023 this facility had not
been utilised. The current revolving credit facility (RCF) is in place until
23 March 2024. There has been no change to the Group's exposure to liquidity
risks or the manner in which these risks are managed and measured during the
year. Further details are provided in the strategic report.
The liquidity risk of each Group entity is managed centrally by the Group's
Finance function. Each entity has a predefined facility based on the budget
which is set and approved by the Board in advance, which provides detail of
each entity's cash requirements. Any additional expenditure over budget
requires sign off by the Board. A quarterly reforecast which includes a cash
flow forecast is reviewed by management and approved by the Board.
The Group has a three-year £4.0 million revolving credit facility (RCF) with
its bank and £0.2 million of credit on corporate credit cards which are
settled in full on a monthly basis.
The maturity profile of the financial assets and liabilities is summarised
below. The table has been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the Group can be
required to pay.
Financial assets Up to Between Between Between Over 5 years
3 months 3 and 12 months 1 and 2 years 2 and 5 years £'000
£'000 £'000 £'000 £'000
As at 31 March 2023
Trade and other receivables 6,515 5,041 7,280 - -
Total 6,515 5,041 7,280 - -
Financial assets Up to Between Between Between Over 5 years
3 months 3 and 12 months 1 and 2 years 2 and 5 years £'000
£'000 £'000 £'000 £'000
As at 31 March 2022
Trade and other receivables 7,064 2,584 5,143 4,634 -
Total 7,064 2,584 5,143 4,634 -
Financial liabilities Up to Between Between Between Over 5 years
3 months 3 and 12 months 1 and 2 years 2 and 5 years £'000
£'000 £'000 £'000 £'000
As at 31 March 2023
Trade and other payables 4,953 6,342 5,284 - -
Forward contracts - 275 131 - -
Lease liabilities 30 75 59 157 -
Total 4,983 6,692 5,474 157 -
Financial liabilities Up to Between Between Between Over 5 years
3 months 3 and 12 months 1 and 2 years 2 and 5 years £'000
£'000 £'000 £'000 £'000
As at 31 March 2022
Trade and other payables 8,609 4,253 3,959 - -
Lease liabilities 51 107 48 - -
Total 8,660 4,360 4,007 - -
Credit risk
The Group's principal financial assets are trade receivables and bank
balances. The Group is consequently exposed to the risk that its customers
cannot meet their obligations as they fall due. The Group's policy is that the
lines of business assess the creditworthiness and financial strength of
customers at inception and on an ongoing basis. The Group also reviews the
credit rating of its banks and financial institutions.
Ongoing review of the financial condition of trade and other receivables is
performed. Further details are in note 11. The carrying amount of financial
assets recorded in the financial statements represents the Group's maximum
exposure to credit risk. Whilst the Group's exposure to credit risk has
increased as the Group has grown, to date this has not materially increased
the Group's actual bad debt, which is partially due to the type of clients it
contracts with as well as effective due diligence when issuing credit to its
clients.
19. Related party transactions
The Directors of the Group and their immediate relatives have an interest of
19% (2022: 18%) of the voting shares of the Group. The shareholdings of
Directors and changes during the year are shown in the Directors' report.
No dividends were made to the Company in either years by subsidiary
undertakings.
There were no other related party transactions for the Group during the
period.
20. Bank loans
At 31 March 2023 the Group had not utilised the £4.0 million credit facility
it has in place with Barclays Bank plc. The facility was extended on 24 March
2021 for a further three years to 23 March 2024. A charge has been registered
on Shearwater Group plc and a number of its subsidiaries as security for the
facility.
21. Notes to support cash flow
Cash and cash equivalents comprise:
2023 2022
£'000 £'000
Cash available on demand 3,964 5,575
Net cash (decrease)/increase in cash and cash equivalents (1,611) (2,474)
Cash and cash equivalents at the beginning of the year 5,575 8,049
Cash and cash equivalents at the end of the year 3,964 5,575
Cash and cash equivalents are held in the following currencies:
2023 2022
£'000 £'000
Sterling 1,914 3,494
US dollar 1,566 1,431
Euro 484 650
3,964 5,575
Reconciliation of liabilities from financing activities:
Non-cash changes
2022 Cash Loan Right of use 2023
£'000 outflows interest asset £'000
£'000 £'000 additions
£'000
Other loans - - - - -
Revolving credit facility interest payable 20 (76) 56 - -
Other interest - (7) 6 - -
Payment of principal on lease liabilities 206 (200) 15 301 321
Total 226 (283) 77 301 321
Non-cash changes
2021 Cash Interest Loan Right of use Early 2022
£'000 outflows savings interest asset repayment £'000
£'000 on early £'000 additions discount
repayment £'000 on loan
of loans liabilities
£'000 £'000
Other loans 775 (724) - 19 - (70) -
Revolving credit facility interest payable - (46) - 66 - - 20
Other interest - paid - (23) 10 13 - - -
Other interest - not paid 1 (1) - - - - -
Payment of principal on lease liabilities 289 (220) - 12 125 - 206
Total 1,065 (1,014) 10 110 125 (70) 226
22. Prior year restatement
In the prior year, the trade and other receivables included amounts that were
not due for payment until after twelve months so should have been classified
as non-current assets.
The prior year consolidated statement of financial position has been restated
to correctly reclassify previously reported trade and other receivables of
£9,777,398 from current assets to non-current as at 31 March 2022.
The restatement has no impact on the opening consolidated statement of
financial position at 1 April 2021 or the consolidated statement of
comprehensive income for the year ended 31 March 2022.
23. Events after the reporting period
After the year end, Brookcourt Solutions Limited, one of the Group's
subsidiaries, entered into two forward contracts totalling $1.3 million at an
average rate of $1.2412/£ to offset foreign exchange supplier exposure on a
recently completed contract. The two contracts dated 5 April 2023 and 6 April
2023 have a maturity date for both contracts of 14 July 2023. Both contracts
were settled on 3 July 2023.
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 SSFSLIEDSEDURecent news on Shearwater
See all newsREG - Shearwater Group PLC - Contract Renewal
AnnouncementREG - Shearwater Group PLC - Director dealing
AnnouncementREG - Shearwater Group PLC - Director/PDMR Shareholding
AnnouncementREG - Ormonde Mining PLC Shearwater Group PLC - Update re Spanish Gold Licences
AnnouncementREG - Shearwater Group PLC - Change of Year End and Grant of LTIP options
Announcement