REG - Skillcast Group PLC - Final Results
30/04/2025 07:00
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RNS Number : 7149G Skillcast Group PLC 30 April 2025
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
30 April 2025
Skillcast Group PLC
("Skillcast", the "Group" or the "Company")
Results for the twelve months ended 31 December 2024. Strong growth in
recurring revenues, return to profitability, dividend increased.
Skillcast (AIM: SKL), the Governance, Risk and Compliance ("GRC") software and
e-learning provider, is pleased to announce its audited results for the twelve
months ended 31 December 2024.
Highlights
2024 2023 Change (2024 v 2023 )
Total Revenue £13.2m £11.3m +17%
Subscription revenue £11.0m £8.6m +29%
Gross margin (%) 73.6% 69.7% +3.9pps
Annualised recurring revenue (ARR)* £11.6m £9.3m +25%
Overheads £9.5m £8.8m +9%
EBITDA* £0.5m -£0.6m n/a
Basic EPS 0.572p -0.733p n/a
Total dividend per share 0.517p 0.447p +16%
Cash in bank £9.1m £7.2m +26%
Free cash flow* £2.0m -£0.3m n/a
· Total revenues up 17% at £13.2 million (2023: £11.3 million)
o Revenue increase was all driven by strong growth in recurring subscription
revenues, up 29% at £11.0 million (2023: £8.6 million).
o Annualised recurring revenue (ARR)* up 25% to £11.6 million (December
2023: £9.3 million) predominantly from new client acquisitions.
o Subscription revenues +110% in the three years since IPO in December 2021
and ARR has doubled.
o Recurring subscriptions contributed to 83% of total revenues (2023: 76%).
o Non-strategic professional services revenues declined 18% to £2.3 million
(2023: £2.8 million).
· Gross margin increased by 3.9 ppts to 73.6% (2023: 69.7%).
· EBITDA of £0.5 million (2023: -£0.6 million)
o Overhead growth rate continues to reduce, increasing by £0.7m/9% on the
prior year (2023: £1.3 million/18%).
o Headcount increased by 2% to 120 (2023: 118) at 31 December 2024.
o Research and development is fully expensed.
· Strong net cash position at 31 December 2024: £9.1 million (31
December 2023: £7.2 million), representing c. 10 pence per ordinary share in
the Company.
o Up-front payments on increased subscription revenues and higher creditors.
o Free cash flow* of £2.0 million (2023: -£0.3 million).
· Basic EPS 0.572 pence per share (2023: LPS -0.733 pence).
· Total dividend of 0.517 pence per share (2023: 0.447 pence).
o Final dividend proposed: 0.349 pence (2023: 0.279 pence).
o Interim dividend paid: 0.168 pence (2023: 0.168 pence).
· Operational highlights
o Total client numbers grew 11% to 1,331 (2023: 1,249).
o Net retention of 101% supported by price rises and two new subscription
plans.
§ Premium offer representing 6% of ARR at December 2024.
§ Core compliance e-commerce self-serve offer, representing 1 % of ARR at
December 2024.
o Churn of 11% (2023: 7%).
o AI digital assistant (Aida) developed in house for launch in 2025.
o Recruited Head of Marketing to drive marketing activity, rebrand and new
website launched March 2025, Advisory Board launched.
o Maintained excellent customer service records (Feefo Platinum Service
Award 4.9/5.0).
o Enhanced trust and security with SOC Type 2 and Cyber Essentials Plus
accreditation achieved and Trustcentre launched.
o Professional services team reduced to reflect lower demand.
o Rolled out new standard terms of service incorporating auto-renewal.
Current trading and outlook
We have had a solid start to the new financial year and have continued to
trade in line with expectations. Our ARR is up more than 20% year on year,
rising above £12m by March 2025. Non-strategic Professional Services revenues
have started well though continue to have limited visibility.
We continue to drive brand awareness and innovation. Our Annual Summit in
January aimed at L&D managers and Compliance Officers was a sell-out. The
event included a demonstration of our AI-powered compliance assistant trialled
by 87 customers and due to be launched this year.
The market demand for our GRC content and software is resilient and growing,
and we have not experienced any impact of the recent political and global
economic events on demand for our services. We remain confident in our ability
to continue to grow and enhance margins.
Vivek Dodd, Chief Executive Officer of Skillcast, said:
"We are delighted with the continued growth in ARR to £11.6m at the end of FY
2024, +25% up on the prior year and double the pre-IPO level three years ago.
This has led to higher subscription revenues of £11.0m, in line with the
guidance given at IPO, and a return to profitability as expected.
"I am particularly pleased with the growth of our all-inclusive Premium plan,
which reached 6% of total ARR within the first year of launch, and the take-up
of CoreCompliance, our pre-configured, self-serve offering for small
businesses. We are excited about the performance of Aida - our AI-powered
compliance assistant launching this year, and how it has been received by
clients and prospects. We expect it to support the sales of both Premium plan
and CoreCompliance in the coming years.
"We are confident that our product and exceptional customer service will allow
us to continue scaling up our ARR and revenues, and our operational gearing
will allow us to continue improving our EBITDA margin."
*Further details on the calculation of adjusted EBITDA, ARR and free cash flow
are set out in the Financial Review below
Enquiries:
Skillcast Group plc +44 (0)20 7929 5000
Richard Amos, Chairman
Vivek Dodd, Chief Executive Officer
Richard Steele, Chief Financial Officer
Allenby Capital Limited (Nominated Adviser & Broker) +44 (0)20 3328 5656
James Reeve, Piers Shimwell (Corporate Finance)
Jos Pinnington, Tony Quirke (Sales and broking)
Chairman's Statement
Introduction
This statement reports on the third full year of trading since Skillcast
floated on the Stock Exchange in December 2021. I am pleased to report that
not only is the Group reporting a strong set of results from the last twelve
months, but when combined with the two previous years, it has delivered
consistently on the plan that was set out to shareholders at the time of the
IPO. The Board remains excited about the next stage in Skillcast's
development, which we enter with an innovative GRC product portfolio, a proven
business model and a talented and highly motivated team.
Results and Dividend
The business achieved a strong set of results for the year ended 31 December
2024, with progress made in key strategic areas. Most importantly, after two
years of investment following the IPO, in 2024 the business returned to
profitability, with adjusted EBITDA of £0.5 million (2023: loss of £0.6
million). This was achieved primarily through a growth in recurring
subscription revenues of 29%. The results are a demonstration of the
strength of our business model, as with a net retention of 101% of prior year
subscriptions, a gross margin of around 75% and a relatively stable cost base
following the expansion of 2022 and 2023, a very significant proportion of new
sales revenue is now dropping straight through to the bottom line.
The Group retains a robust balance sheet, with net cash at 31 December 2024 of
£9.1 million (2023: £7.2 million). Given this and the return to
profitability, the Board has, as indicated previously, reviewed the dividend
policy. We see dividends as an important financial discipline for a business
with repeatable revenues that provide strong cash generation. Accordingly,
at the AGM on 24 June 2025, the Board will propose a final dividend per share
of 0.349p per share, up 25% on the 0.279p paid as the final dividend for
2023. Taken in combination with an interim dividend per share of 0.168p that
was paid in October 2024, this will result in a full year dividend per share
of 0.517p (2023: 0.447p) an increase of 16%. The Board's policy for the
foreseeable future will be to increase dividends broadly in line with future
increases in subscription revenue levels.
Strategy
Skillcast's overall strategy remains unchanged. Our purpose is to enable
companies to build ethical and resilient workplaces and our vision is to be
the leading provider of digital training and technology for workplace
compliance. We are undertaking this against a market backdrop that is
broadly helpful, with generally increasing regulation albeit macro-economic
conditions are of course challenging and the attractions of our core market
mean that it is increasingly competitive. Strategically we are focussed on the
organic growth of our recurring subscription revenue stream and in ensuring
that this delivers attractive margins and returns for shareholders.
Whilst we can reflect positively on the achievements against these goals over
the last three years, the Board is very much aware of the challenges that face
us moving forward and are adapting the strategy accordingly. As we grow
bigger so maintaining the same percentage growth rate becomes an increasing
challenge. Medium term, we are seeking to maintain growth rates of
subscription revenues in the 20% range whilst driving margins to a similar
level and hence achieve the "Rule of 40" (as explained in further detail
below) by which world class SaaS businesses are measured. As set out in
Vivek Dodd's CEO Report, we aim to achieve this through a mixture of on-going
product innovations and efficiency initiatives and through targeting our
marketing activities to areas and businesses where the simplicity of our offer
and its ability to be customised to suit medium sized operations will most
likely resonate.
Given the growth in our cash reserves, we continue to view bolt-on
acquisitions as an important potential accelerator of growth and strategy.
We seek content-based acquisitions where we can leverage our existing
technology stack to offer the wider content to our existing customers and
conversely offer our technology and existing content to the acquired
customers. In this regard, progress in 2024 has been challenging. We have
found, unsurprisingly, that price expectations amongst private companies are
considerably in excess of those we are experiencing in the public markets.
We are mindful of our growing cash balance and will continue to seek ways to
deploy the capital, albeit will only do so when we are comfortable with the
returns it will offer to our shareholders.
Shareholder Engagement
I would like to thank investors for their support over the last twelve months.
The fact that the business has doubled in size since we came to Market but
that our valuation remains the same is a matter of frustration for both the
Board and, we know, our shareholders. The Board recognises that this
frustration is not confined to Skillcast but reflects challenges generally
with the small cap London market. We continue to follow shareholders' advice
to focus on running the business although we plan to be more proactive in the
coming year with investor relations activity.
We have enjoyed meeting with investors over the last twelve months at both
formal meetings and investor conferences and events and have had wide ranging
discussions on product development, M&A plans and dividend policy. We
welcome the opportunity to speak with existing and prospective investors and
look forward to welcoming shareholders to our AGM on 24 June.
People and Organisation
During the year, James Saralis joined us an independent NED and Chair of the
Remuneration Committee. We are delighted to have him on board and are
benefiting from his counsel as an incumbent CEO of another listed business.
In line with our previously set out plans, headcount growth over the last
twelve months has slowed, as we essentially completed the expansion investment
in 2023. However, it is worth noting that headcount is now around 50% higher
than it was when we floated. But importantly, despite that growth, the
culture of the organisation has not changed, and it is to the credit of the
senior team that they have managed to maintain that during the period of
expansion. The results that have been delivered over the last twelve months
are testament to the efforts of the whole staff and I want to express the
thanks of the Board for their achievements in this regard.
Current Trading and Outlook
We have had a solid start to the new financial year and have continued to
trade in line with expectations. Our ARR is up more than 20% year on year,
rising above £12m by March 2025. Non-strategic Professional Services revenues
have started well though continue to have limited visibility.
We continue to drive brand awareness and innovation. Our Annual Summit in
January aimed at L&D managers and Compliance Officers was a sell-out. The
event included a demonstration of our AI-powered compliance assistant trialled
by 87 customers and due to be launched this year.
The market demand for our GRC content and software is resilient and growing,
and we have not experienced any impact of the recent political and global
economic events on demand for our services. We remain confident in our ability
to continue to grow and enhance margins.
Richard Amos
Non-Executive Chairman
29 April 2025
CEO's Review
I am pleased to report another successful year for Skillcast in 2024. This
year, we can see the results of a disciplined programme of investment in our
talent, product and marketing we undertook following our IPO in December 2021.
Our subscription revenues have more than doubled over three years since the
IPO, and we've returned to profitability. The ARR at the end of the year was
£11.6 million, +25% up on the year. Total revenue grew 18% and overheads by
9%, generating £0.5m of EBITDA, a £1.1 million improvement over 2023. Our
EBITDA margin should continue to grow further in the coming periods due to our
operational gearing.
However, the financials only tell a part of our story. Even more encouraging
are the teams we've built at all levels in the Company, the robust procedures
we've put in place for performance, financial control and governance, and the
product and service improvements we've made for our customers. All of these
should support our goal to sustain our ARR and revenue growth in the future.
Purpose and vision
Skillcast has supported businesses in the UK and beyond to build ethical and
resilient workplaces and make compliance simple. Our comprehensive GRC
solutions equip companies with the tools to strengthen their team and protect
their reputation.
We are a leading provider of corporate compliance portals and digital
courseware in the UK. This gives us access to a growing market with resilient
demand. Our critical mass of over 1,300 clients gives us insights into
compliance challenges and emerging needs that feed into our product
development. Our experienced workforce and passion for customer service result
in long-lasting relationships with clients, enabling us to innovate and drive
down their compliance costs.
Our values and culture
We prioritise developing and promoting our existing talent to build knowledge
and experience within our organisation. In 2024, we revisited our four values
and strive to achieve our purpose by embedding and living them across the
organisation:
· Care: we pay attention to detail, act responsibly, and truly care for
our customers
· Collaboration: we're supportive, helpful, and respectful, working
with businesses to achieve a common goal
· Transparency: we're open and honest and offer full transparency to
everyone we work with
· Continuous Improvement: we're curious about new ideas and are always
looking for ways to do things better
Our Chief People Officer leads our people and culture initiatives within our
Executive Management Committee. All employees are eligible to receive
additional remuneration above their base pay linked to their performance and
demonstrating our values. Employees use Skillcast's compliance portal and
tools to read and attest to policies and receive compliance training.
We undertake several initiatives to promote our values and culture, including
quarterly virtual town halls, employee surveys, and various employee-led
initiatives.
Our market
Skillcast serves companies predominantly in the UK that face an increasingly
complex regulatory environment. To meet their obligations, companies must
educate staff, maintain accurate records, and monitor and analyse employee
conduct. As a result, many are turning to digital platforms like Skillcast to
manage compliance efficiently and demonstrate accountability to regulators,
customers, and stakeholders.
We estimate the Total Addressable Market (TAM) in the UK for platforms such as
the Skillcast Portal to exceed £1.6 billion. This estimate is based on
company size data from the UK Department for Business and Trade and
Skillcast's pricing across relevant business segments. The current serviceable
market is estimated at £0.5 billion by the global market research and
advisory firm, Technavio (Corporate Compliance Training Market Analysis, Size
and Forecast 2024-2028 by Technavio).
Around half of this market consists of small businesses (fewer than 50
employees), which Skillcast serves with our CoreCompliance solution. The
remainder comprises mid-sized and large enterprises, which Skillcast serves
with various plans for Managed Portal Services and Remote Services.
Business model
Skillcast offers innovative GRC solutions to make compliance simple. We enable
companies to digitise and automate their compliance training, record-keeping,
monitoring and other processes. By consolidating these functions onto a single
platform, Skillcast streamlines operations and minimises the risk of
compliance oversights, ensuring our clients have a more efficient and secure
compliance framework. We aim to reduce operational costs while enhancing
employees' compliance experience.
We are the sector leaders in staff compliance training with comprehensive
coverage of corporate regulations. Our Essentials and Compliance Bites
libraries cover all the key topics for general compliance in the UK. Our FCA
Compliance and Insurance Compliance libraries cover all the key topics in the
FCA Handbook for UK financial services firms. Our Global Compliance and Global
Risk libraries cater to the needs of multinational corporations that need
jurisdiction-neutral, multilingual training. Our off-the-shelf courses can be
customised easily to meet every client's unique needs and risk perceptions.
Skillcast Portal is our technology platform, which features a learning
management system (LMS) and various tools designed to facilitate compliance
management. These tools include a Policy Hub for delivering corporate policies
and gathering employee attestations, Anonymous Surveys for honest employee
feedback, Staff Declarations for self-reported disclosures, Compliance
Registers for documenting various compliance-related activities such as gifts
& hospitality, and other features for managing and recording in-person
training and events. This integrated platform ensures a uniform user and
administrator experience, consolidates data by breaking down silos, and
reduces the risk of compliance failures.
We offer three plan levels for our Managed Portal Services: Standard, Enhanced
and Premium. All these plans are available through annual subscriptions,
simplifying procurement and allowing businesses to deploy training and
compliance resources on time and with minimal effort.
Skillcast Standard suits companies of all sizes that are getting started with
staff compliance and want to build a compliance portal for their staff.
Although this is the least expensive plan, it still comes with full corporate
branding, dashboard reporting, and platinum-rated customer service with a
designated Customer Success Manager (CSM). Additionally, clients can choose
the e-learning libraries they need and additional tools for their compliance
programme.
Skillcast Enhanced includes all the features of Standard and our innovative
learning features: Aida- our AI compliance assistant, fast track completion
options for experienced employees, diagnostics for automatic competency-based
assignments, and nudge learning - combining our microlearning library with the
question-of-the-day to make compliance programmes more effective.
Skillcast Premium includes all the features of Enhanced plus our suite of
tools to make compliance management simple, including staff declarations,
compliance registers, anonymous surveys, Policy Hub and Training 360 to track
offline training and other activities.
We also provide e-learning courses for our customers to deploy on third-party
portals. We now have an improved offering for such clients, called Skillcast
Remote Services, which can enhance the functionality of the customers' portals
along with the content provision. For small businesses, we offer
CoreCompliance, a preconfigured, self-serve, e-commerce staff compliance
e-learning solution. Clients can effortlessly set up their employees with
access to 150+ engaging compliance courses, assign mandatory training and
monitor all activity from intuitive administrator dashboards.
High-quality recurring subscription revenues
Staff compliance is a non-discretionary cost for many companies, especially in
regulated sectors like financial services. This provides Skillcast with the
potential to grow in even stagnant economic environments.
Subscriptions to our technology and content are the key drivers in our growth
strategy. These subscriptions constitute a book of high-quality annual
recurring revenues (ARR) contracts, which grew organically at 25% to £11.6
million in December 2024 (2023 growth 37% to £9.3 million in December 2023).
In 2024, 83% (2023: 76%) of our revenues came from such subscriptions, with
the rest from professional services, which include bespoke content development
and customisation of OTS courses and were lower at £2.3 million (2023: £2.8
million) as demand for large bespoke work fell. While not core to our growth
strategy, we remain committed to our professional services, which are critical
for helping our clients make compliance more relevant and engaging for their
staff.
Our total revenue increased by 17% to £13.2 million (2023: £11.3 million),
and EBITDA increased by £1.1 million to £0.5 million (2023: LBITDA of £0.6
million) as the benefits of our post-IPO investments started to become
evident. With a break-even H1 2024, all our EBITDA was generated in H2 2024.
Our free cash flow was £2.0 million (2023: £-0.3 million).
We typically enter into annual contracts for our subscriptions and invoice
upfront. This gives us healthy cash flows from operations and high revenue
visibility over the coming twelve months.
Strategic and operational progress in 2024
Our focus in 2024 remained on growing the subscription business, as measured
by our ARR book, and on return to profitability as we neared the end of our
post-IPO investment phase. We believe Skillcast has a tremendous growth
opportunity to help companies simplify compliance as they seek to digitise
their staff compliance to reduce costs, improve employee experience and reduce
the risk of breaches in the face of ever-growing regulations.
Our business model of recurring annual subscriptions provides a stable base we
can build upon with product upsells and new customer acquisitions.
Here are some of the highlights of the work done on our strategic objectives
in 2024:
· Restructured the marketing team to drive data-driven decisions,
refreshed the brand and rebuilt our website, which launched in March 2025.
· Attained Cyber Essentials Plus accreditation from the National Cyber
Security Centre, achieved SOC 2 Type 2 compliance and launched our Trust
Centre (trust.skillcast.com) to enhance our commitment to data security.
· Launched our Sandbox environment, which enables prospects to try out
features in a live working environment to aid sales of our digital compliance
solutions to clients.
· Launched our Advisory Board comprising pre-eminent compliance
industry experts to provide strategic direction and endorse our proposition.
· Launched Skillcast Premium, our all-inclusive service product bundle
that accounted for 6% of our total ARR by December 2024.
· Launched Skillcast CoreCompliance, our self-serve, cost-effective
e-learning solution for small businesses, which accounted for 1% of ARR by
December 2024.
· Rolled out new standard terms of service to our annual subscription
contracts with automatic renewals, with nearly 95% acceptance of clients
coming up for renewal accepting the new terms.
· Migrated customer support to a new platform to enable faster response
times, chat-based support, as well as insights to drive further customer
experience and productivity improvements.
· Developed Aida, the compliance assistant that helps employees engage
with and clarify compliance concepts - undergone client trials in Q1 2025 with
a launch planned for Q2.
· Started Partnership programmes to drive sales through referrals,
resellers and platform integrations
· Improved employee benefits plan to sustain our high employee
retention rate.
· Reduced the size of the professional services team in light of lower
market demand for such services and implemented changes to refocus our bespoke
development offering on areas of core strengths.
ESG
We are committed to promoting inclusivity, sustainability, and integrity, and
fostering diversity, well-being, and personal growth within our organisation.
Environmental, Social, and Governance (ESG) is inherent in our products and
services, not only in staff compliance that we promote but also in
digitisation that helps lower waste and carbon footprint. We are equally
focused on minimising our own environmental and social impact and reaching
net-zero by 2050. In 2024, 100% renewable energy was sourced for our UK
office. We also maintained our status as a Living Wage Employer, enhanced
mental health and well-being and employee benefits. We continue to monitor
risks and enhance our risk management framework. We have developed and
reviewed all our policies and used our Policy Hub tool to raise staff
awareness efficiently and effectively.
Vivek Dodd
Chief Executive Officer
29 April 2025
Financial Review
A third successful year post-IPO with revenues growing 17% on the year and
overhead investment growth rate halving to 9% on the year. This has led to a
return to profitability in the second half of the year as planned. By ending
the year with a 25% increase in ARR, we remain well-placed for further revenue
growth and improvement in profit margin growth in 2025.
Revenues for the year ended 31 December 2024 increased by 17% to £13.2
million (2023: £11.3 million), driven by new subscription customers, with
ARR* growing 25% on the year to £11.6 million (2023: £9.3 million). In
contrast, overheads increased by £0.7m/9% as the post-IPO investment phase
ended and the Group returned to profitability. EBITDA increased £1.1m on the
year to £0.5m (2023 LBITDA: £0.6m). Net cash at year-end of £9.1 million
was 26% above last year (2023: £7.2 million), with free cash flow of £2.0
million (2023: -£0.3million).
Key Performance Indicators
Key performance indicators (KPIs) tracked through monthly reviews against
targets approved by the Board
2024 2023 % change
£'000 £'000
Revenue 13,240 11,302 +17%
Software-as-a-service revenue (SaaS revenue) 10,987 8,547 +29%
Gross Margin 73.6% 69.7% +3.9 pts
Overheads 9,505 8,759 +9%
EBITDA / (LBITDA) 500 -625 n/a
*Annual recurring (SaaS) revenue (ARR) as at 31 December 11,640 9,311 +25%
Net retention rate 101% 105% -4 pts
Churn (as a percentage of ARR) 11% 7% +4pts
Deferred revenue from subscriptions as at 31 December 5,345 4,276 +25%
Cash at 31 December 9,115 7,222 +26%
Free cash flow ** 1,965 -341 n/a
Number of employees at 31 December 120 118 +2%
Rule of 40 *** 29% 32% -3%
* defined later in the financial report in Alternative Performance Measures
section
Revenue
61% of total revenue were derived from clients in the financial services
industries, consistent with the previous year. 78% of total revenues were
derived from the UK (2023: 79%), 11% from the EU (2023: 9%) and 11% from
elsewhere (2023: 13%). The top 10 customers accounted for 15% of total
revenues (2023: 23%).
Subscription revenues typically accrue from twelve-month contracts, invoiced
up front, for our compliance e-learning libraries and compliance technology.
During 2024, subscription revenue growth helped grow the proportion of
revenues from subscriptions to 83% (2023: 76%) of total revenues.
Subscription ("SaaS") revenues grew 29% to £11.0 million (2023: £8.5
million). The growth was driven by a combination of new clients, product
upsells and increased users at existing clients.
Subscription revenue growth was supported by the launch of several new
products. In January 2024, Skillcast Premium was launched, an all-inclusive
service bundle that includes e-learning and all our compliance management
"regtech" products to support upsells. Customers on our Premium Plan accounted
for 6% of our ARR by the end of December 2024.
In December 2023, we released Skillcast Core Compliance, our self-serve,
cost-effective compliance e-learning solution for small businesses with up to
50 users. We started marketing this product in February 2024 and by December
2024 it accounted for 1% of ARR.
Annual recurring revenue (ARR*), our key performance indicator to measure
subscription sales progress, grew by 25% to £11.6 million over the past 12
months (December 2023: £9.3 million). Average ARR per client increased 10% on
the previous year and the number of subscription clients increased 14% to
1,328 (2023: 1,168). New sales lifted ARR by 23% from December 2023 and net
retention rate was 101% (2023: 105%), which included 11% churn (2023: 7%).
2023 net retention was boosted by a standard 7% price rise on new business and
renewals throughout the year. Since the IPO in December 2021, ARR has doubled
to £11.6m at 31 December 2024 (31 December 2021: £5.8m).
Revenue from Professional Services was £2.3 million, which was 18% below the
same period last year (2023: £2.8 million). The reduction reflected a lower
4% average spend per client and 15% fewer clients as increased economic
uncertainty impacted client budgets for bespoke e-learning solutions.
Gross profit
Gross Profit Margin increased by 3.9 percentage points to 73.6% (2023: 69.7%).
The increase was primarily due to greater productivity within the content team
and a reduction in the Professional Services team in response to falling
demand for bespoke Professional Services.
In addition, the prior year included one-off transitional higher cloud
computing costs incurred during the migration of all clients to Microsoft
Azure, which was completed in March 2023.
Gross Margin from our SaaS revenues increased to 80.1% (2023: 73.9%) through
operational gearing while in our Professional Services business Gross Margins
fell to 41.7% (2023: 56.5%).
Overheads
The rate of overhead growth reduced to 9% (2023: 18%) as the planned post-IPO
investment phase was largely complete.
In absolute terms, overheads were £9.5 million in the period, an increase on
the prior year of £0.7 million (2023: £1.3 million). 74% of overheads are
employee-related (2023: 78%), and £0.2 million of the increase in the year
was from higher employee costs. A further £0.2 million was incurred in
consultancy costs as we switched to outsourcing our sales operations function.
Marketing activity increased by £0.2 million on the prior year following the
hire of our first Head of Marketing in January 2024. The remaining increase
was derived from £0.1 million higher subscription costs and professional
fees.
Overheads excluding depreciation and amortisation as a percentage of ARR fell
during the year and represented 40% of ARR in H2 2024, 4 percentage points
below H2 2021 (excluding IPO costs). The graph below demonstrates how this
measure temporarily increased due to planned investments primarily in the
commercial and organisational infrastructure to support ARR growth and is now
falling back to lower than pre-IPO levels.
Headcount
On 31 December 2024, the total headcount had increased to 120 (31 December
2023: 118). Total average headcount increased in 2024 by 5% to 121 (2023:
115). The largest growth area was in the client services function, with an
increase of seven heads during the period. Total staff costs increased 5% to
£9.5 million (2023: £9.0 million), with average salary increases of 5%
awarded in January 2024. In April 2024, the Company offered all employees
private medical insurance, life assurance and employer pension contributions
of 4% of basic salary. Prior to this time only UK employees benefitted from a
stakeholder pension plan.
EBITDA
As a consequence of operational gearing in the business, increasing gross
margin and slower overhead growth, the Group returned to sustained
profitability and delivered a £1.1 million improvement in EBITDA* to £0.5
million for FY 2024 (2023: -£0.6 million).
The Rule of 40*** was 29% in the period, 3 percentage points below the prior
year (2023: 32%).
Depreciation and amortisation
The Group incurred £0.3 million in depreciation and amortisation (December
2023: £0.3 million) relating to office and IT equipment and leases for its
two offices in London and Malta. The Group does not capitalise any research or
development costs.
Interest receivable
£0.3 million of bank interest was received on cash balances during the year
(2023: £0.3 million) as the Group benefited from the interest rates and
putting surplus cash on deposit.
Tax
The Group reported a profit before tax of £0.5 million (2023: loss of £0.6
million).
The taxation charge for the Group in 2024 was £0.1 million. No taxes are due
in the UK for the current year as the Group intends to utilise losses from
prior years.
Corporation tax of £0.1 million was paid during the year in relation to prior
year UK corporation tax liabilities. This was an effective tax rate of 7%
reduced by losses brought from previous years and the recognition of a
deferred tax asset. Now the Group has returned to profitability it expects to
be able to utilise this asset in future years.
Earnings per share (EPS)
The basic earnings per share for the period was 0.572 pence on 89.5 million
shares (2023: -0.733 pence). On a diluted basis, on 89.7 million shares EPS
was 0.570 pence (2023: not applicable).
Dividends
With a business backed by strong ARR growth supporting future recurring
revenues that provide strong cash generation, the Board is committed to paying
dividends. In light of the return to profitability the Board has updated its
dividend policy and for the foreseeable future will increase dividends broadly
in line with future increases in subscription revenue levels.
Accordingly, at the AGM on 24 June 2025, the Board will propose a final
dividend per share of 0.349p up 25% on the 0.279p paid as the final dividend
for 2023. Taken in combination with an interim dividend per share of 0.168p
that was paid in October 2024 this will result in a full year dividend per
share of 0.517p (2023: 0.447p) an increase of 16%. The final dividend will
be paid on 25 July 2025 to shareholders on the register on 4 July 2025.
Balance sheet and cash flow
Net assets at 31 December 2024 were £5.8 million (31 December 2023: £5.7
million). The £0.1 million increase in the year was due to the £0.5 million
in comprehensive income in the year less £0.4 million of dividend payments.
Non-current assets of £0.7 million at 31 December 2024 (31 December 2023:
£0.8 million) reduced by a net £0.1 million as reducing office lease
liabilities in accordance with IFRS 16. The Group does not capitalise any
intellectual property additions to its products' content or technology, and
costs are expensed as they are incurred.
Current assets, excluding cash, were £4.3 million at 31 December 2024 (31
December 2023: £4.2 million). This predominantly includes trade receivables
which grew only 3% to £3.1 million at 31 December 2024 (31 December 2023:
£3.0 million) despite the 17% growth in revenue on the year through improved
cash collection. As a consequence, debtor days at 31 December 2024 were 54 (31
December 2023: 67). Debtors more than 60 days overdue represented 11% of trade
receivables at 31 December 2024 (31 December 2023: 14%). There was small
immaterial reduction in the allowance for expected credit losses in the year.
A further £0.6 million of trade receivables is due from the Maltese tax
authorities relating to withholding tax rebates on dividends declared from
subsidiary companies.
Total liabilities at 31 December 2024 of £8.3 million increased by £1.7
million on the year (31 December 2023: £6.6 million). The biggest contributor
to the increase was a £1.2 million increase in unrecognised revenue from
subscription revenue signed contracts, representing a 27% increase on the
year.
The Group has no bank debt and at 31 December 2024 held cash of £9.1 million
(31 December 2023: £7.2 million). Free cash flow** during the year was £2.0
million (2023: -£0.3 million) as the Group generated cash from a return to
profitability of £0.5 million (2023: -0.6 million), and up front payments
from a growing contractual book of £1.8 million (2023: £1.4 million).
Alternative Performance Measures
The Group elects to report certain financial measures not defined or
recognised under IFRS, including EBITDA. See note 3 of the Group Consolidated
Accounts, Annual Recurring Revenue (ARR) and Free Cash Flow defined below.
*Annual Recurring Revenue (ARR)
ARR is also used to assess the performance and the trend of subscription
revenue. ARR is calculated by multiplying the Monthly Recurring Revenue
("MRR") by twelve. MRR is defined as the subscription revenue recognised in a
month, excluding any retrospective upward adjustments arising at the end of
the contract where there have been more subscribers than a client originally
contracted for, less any contract losses (Churn) or downward adjustments
arising on contract renewal. The Directors consider that the ARR, derived from
software-as-a-service (SaaS) sales, is a key measure of the performance of the
business. The ARR increased by 37% in the year to £9.3 million at 31 December
2024.
** Free cash flow
Free Cash Fow is calculated as net cash flows from operations less capital
expenditure and lease costs.
*** Rule of 40
The Rule of 40 is a defined as the addition of the EBITDA percentage margin in
the year and the ARR percentage growth on the previous year.
Richard Steele
Chief Financial Officer
29 April 2025
Skillcast Group PLC
Company statement of financial position
As at 31 December 2024
For the year ended 31 December 2024
Note 2024 2023
£ £
Revenue 4 13,240,009 11,301,700
Cost of sales (3,495,768) (3,429,372)
Gross profit 4 9,744,241 7,872,328
Administrative expenses (9,499,526) (8,759,363)
Operating profit 244,715 (887,035)
Profit/ (Loss) before interest, tax, depreciation & amortisation 3 499,958 (625,325)
Other Income 400
-
Finance income 328,330 258,752
Finance expense (24,806) (19,680)
Profit/ (loss) before taxes 5 548,639 (647,963)
Income tax 7 (37,270) (7,473)
Profit/(loss) after tax and total comprehensive income 511,369 (655,436)
Earnings/(loss) per share:
Basic 17 0.572p (0.733)p
Diluted 17 0.570p -
Skillcast Group PLC
Consolidated statement of financial position
As at 31 December
Note 2024 2023
£ £
Assets
Non-current assets
Property, plant and equipment 10 265,146 323,762
Right-of-use assets 11 309,196 459,923
Deferred tax assets 15 84,611 11,999
658,953 795,684
Current assets
Trade and other receivables 8 4,330,686 4,239,768
Cash and cash equivalents 9 9,115,118 7,221,681
13,445,804 11,461,449
TOTAL ASSETS 14,104,757 12,257,133
Issued capital and reserves attributable to owners
Share capital 16 89,459 89,459
Share Premium 3,490,541 3,490,541
Share Option Reserve 19 388,731 355,029
Retained earnings 1,868,861 1,757,376
Total equity 5,837,592 5,692,405
Liabilities
Current liabilities
Trade and other payables 12 2,200,156 1,570,820
Contract liability 13 5,684,309 4,501,025
Current lease liabilities 184,964 118,674
Income tax payable 14 35,414 23,794
8,104,843 6,214,313
Non-current liabilities
Long-term lease liabilities 162,322 350,415
162,322 350,415
Total liabilities 8,267,165 6,564,728
TOTAL EQUITY AND LIABILITIES 14,104,757 12,257,133
Consolidated statement of changes in equity
For period ended 31 December 2024
Note Share capital Share Premium Share Option Reserve Retained earnings Total
1 January 2023 89,459 3,490,541 223,331 2,812,695 6,616,026
Comprehensive Income for the period
(Loss) for the year - - - (655,436) (655,436)
Total comprehensive Income for the period - - - (655,436) (655,436)
Total contributions by and distributions to owners
Share Option Reserve - - 131,698 - 131,698
Dividends - Prior Year (249,591) (249,591)
Dividends - Current Year - - - (150,292) (150,292)
Total contributions by and distributions to owners - - 131,698 (399,883) (268,185)
31 December 2023 89,459 3,490,541 355,029 1,757,376 5,692,405
1 January 2024 89,459 3,490,541 355,029 1,757,376 5,692,405
Comprehensive Income for the period
Profit for the year - - - 511,369 511,369
Total comprehensive Income for the period - - - 511,369 511,369
Contributions by and distributions to owners
Share Option Reserve - - 33,702 - 33,702
Dividends - Prior Year 18 (249,592) (249,592)
Dividends - Current Year 18 - - - (150,292) (150,292)
Total contributions by and distributions to owners - - 33,702 (399,884) (366,182)
31 December 2024 89,459 3,490,541 388,731 1,868,861 5,837,592
Skillcast Group PLC
Consolidated statement of cash flows
For the year ended 31 December
Note 2024 2023
£ £
Cash flows from operating activities
Profit/ (loss) before tax 548,639 (647,963)
Adjustments for:
Depreciation of property, plant and equipment 3 102,051 105,609
Amortisation of right-of-use assets 3 150,728 156,101
Finance income (328,330) (258,752)
Share based payment 33,702 131,698
Finance expense 24,806 19,680
Unrealised foreign exchange (gain)/ loss 4,670
Changes in working capital
(Increase)/decrease in trade and other receivables (90,918) (909,194)
Increase in trade and other payables, including contract liabilities 1,812,620 1,434,714
Cash generated from operations 2,257,968 31,893
Income taxes paid (98,263) -
Net cash flows from operating activities 2,159,705 31,893
Cash flow from investing activities
Purchases of property, plant and equipment (43,435) (175,084)
Interest received 328,330 258,752
Net cash generated/(used) in investing activities 284,895 83,668
Cash flow financing activities
Principal paid on lease liabilities (121,803) (178,319)
Dividends paid (399,884) (399,884)
Interest paid on lease liabilities (24,806) (19,680)
Net cash (used) in financing activities (546,493) (597,883)
Net increase/ (decrease) in cash and cash equivalents 1,898,107 (482,322)
Effects of foreign exchange fluctuations on cash and cash equivalents (4,670)
Cash and cash equivalents at beginning of period 7,221,681 7,704,003
Cash and cash equivalents at end of period 9,115,118 7,221,681
Notes to the consolidated financial statements
Skillcast Group PLC
Notes to the consolidated financial statements
31 December 2024
1 General Information
Skillcast Group PLC ('Company') is registered in the United Kingdom with
registration number 12305914 and is limited by shares and registered on the
London AIM stock exchange. Its registered office is at 80 Leadenhall Street,
London, England, EC3A 3DH. The Company is the ultimate parent of Inmarkets
Ltd, Inmarkets Group Ltd and Inmarkets International Ltd.
This report and financial statements reflect the consolidated activities and
transactions of the Company and other group companies ('Group').
Up to the 28 July 2021 the Company was a private limited company. On the 28
July 2021 the Company re-registered as a public company as Skillcast Group
PLC. The Company did this in preparation of admission to the AIM market of the
London Stock Exchange. On 1 December 2021 the Company's ordinary shares were
admitted in trading on AIM.
The Company is primarily involved in providing management services to other
entities in the group. The Group provides software and content subscriptions
and related professional services to enable companies to transform their staff
compliance. Operating from its two bases, in London and Malta, the Group helps
companies across a broad spectrum of industry sectors in the UK, EU and in the
rest of the world, to train their staff and demonstrate compliance with
various laws, regulations, and standards that are relevant for their business.
2.1 Basis of preparation and statement of compliance
The Financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31 December 2024 or 2023 but
is derived from the 2024 accounts.
A copy of the statutory accounts for the year to 31 December 2024 will be
available on the Company's website and will be delivered to the Registrar of
Companies following the Company's AGM. The auditors have reported on those
accounts, their report was (i) Unqualified, (ii) did not include a reference
to any matters to which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2023
nor 2024.
Whilst the financial statements from which this announcement is derived have
been prepared in accordance with UK-adopted International Accounting Standards
and applicable law, this announcement does not itself contain sufficient
information to comply with the UK-adopted International Accounting
Standards. The Annual Report, containing full financial statements that
comply with UK-adopted International Accounting Standards, will be published
to shareholders later in May 2025.
The Directors have a reasonable expectation that the Company has adequate
resources to continue in operational existence for the foreseeable future.
Therefore, in the preparation of the 2024 financial statements they continue
to adopt the going concern basis. These financial statements have been
prepared in accordance with UK adopted International Accounting Standards in
conformity with the requirements of the Companies Act 2006. They have been
prepared under the historical cost convention and on a going concern basis.
The financial statements are presented in Pounds Sterling, which is the
Group's presentation currency.
2.2 Summary of material accounting policies
Revenue recognition
Software as a Service (SaaS) subscriptions
The Group provides subscriptions for the right of access to its content and
technology products to clients for subscription periods of typically twelve
months.
Revenue is recognised evenly (apportioned on a monthly basis), over the
contractual period of the subscription for all products and services
contracted for.
The Group has fulfilled its performance obligations once all products and
services have become available for use for the client, and recognises revenue
on this basis irrespective of whether the products or services are
subsequently used.
The balance of the revenue which has not been recognised at the reporting date
is deferred as a contract liability in current liabilities, until it is due to
be recognised as revenue.
Professional services
The Group provides customised and standard content to its clients provided
under fixed-price contracts which is generally non-recurring revenue.
Fixed price contracts are recognised on the percentage of completion method
unless the outcome of the contract cannot be reliably determined, in which
case contract revenue is only recognised to the extent of contract costs
incurred that are recoverable. This is because either the Group is creating an
asset with no alternative use to it and the contract contains the right to
payment for work completed to date, or the client is simultaneously receiving
and consuming the benefits of the Group's services as it performs.
Business development costs incurred as part of a bid or tender process are
expensed as incurred. There are no material costs incurred during the period
between the contract being awarded and service delivery commencing.
For fixed-price contracts, the client pays the fixed amount based on a payment
schedule. If the services rendered by the Group exceed the payment, an amount
recoverable on contract assets is recognised. Conversely, if the payments
exceed the services rendered, a liability is recognised.
Amounts recoverable on contracts are included in current assets and represent
revenue recognised on account.
Segmentation
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision-maker (which takes the form of the Board of Directors of
the Group), in order to allocate resources to the segment and to assess its
performance. The Directors of the Group consider the Group is organised as one
business unit and all assets, liabilities, revenues and expenditure are
retained and recorded as such. However, the Group does segment revenue by type
of revenue, namely SaaS subscriptions and Professional Services, and on a
geographic basis.
However, the Group has started to analyse and consider costs and gross profit
of SaaS and Professional Services. In doing this it is making estimates of
time spent and notional allocations of cost between them. It is expected that
this will continue in the future and be developed further. The purpose of this
is to provide more insight for decision making. See note 4 for gross profit
information.
Foreign currencies
The financial statements are presented in the Company's functional currency,
Pounds Sterling, being the currency of the primary economic environment in
which the Group operates. Transactions denominated in currencies other than
the functional currency are translated at the rates of exchange ruling on the
date of transaction. Monetary assets and liabilities denominated in currencies
other than the functional currency are re-translated to the functional
currency at the exchange rate ruling at year end. Exchange differences arising
on the settlement and on the re-translation of monetary items are dealt with
in the statement of comprehensive income. When deemed to be material these
will be disclosed.
Taxes
Current and deferred tax is recognised in profit or loss, except when it
relates to items recognised in other comprehensive income or directly in
equity, in which case the current and deferred tax is also dealt with in other
comprehensive income or in equity, as appropriate.
Current tax is based on the taxable result for the period. The taxable result
for the period differs from the result as reported in profit or loss because
it excludes items which are non-assessable or disallowed and it further
excludes items that are taxable or deductible in other periods. It is
calculated using tax rates that have been enacted or substantively enacted by
the end of the reporting period.
Deferred tax is accounted for using the balance sheet liability method in
respect of temporary differences arising from differences between the carrying
amount of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax
rates that have been enacted or substantively enacted by the end of the
reporting period.
Current tax assets and liabilities are offset when the Group has a legally
enforceable right to set off the recognised amounts and intends either to
settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to set off its current tax assets and liabilities and the
deferred tax assets and liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable
entities which intend either to settle current tax liabilities and assets on a
net basis, or to realise the assets and settle the liabilities simultaneously,
in each future period in which significant amounts of deferred tax liabilities
or assets are expected to be settled or recovered.
In Malta, Inmarkets Group Ltd is able to reclaim a proportion of the
corporation tax paid by its subsidiary, Inmarkets International Ltd, as long
as it meets certain criteria laid down by the Maltese tax authorities. The
criteria include that the relevant corporation tax has been paid by Inmarkets
International Ltd and that dividends to Inmarkets Group Ltd have been declared
by Inmarkets International and are payable to non-Maltese tax resident
shareholders. It is Group policy to reclaim Maltese corporation tax to the
fullest extent permissible and to recognise this income in Inmarkets Group Ltd
based upon dividends declared, or that will be declared once tax returns are
completed, for the financial year. The reclaimed corporation tax is presented
as netted off with the income tax expense and in other receivables.
3 Earnings/ (loss) before interest, tax, depreciation and amortisation EBITDA/
(LBITDA)
2024 2023
£ £
Operating profit 244,715 (887,035)
Other interest 2,464
Depreciation 102,051 105,609
Amortisation 150,728 156,101
EBITDA/ (LBITDA) 499,958 (625,325)
EBITDA and LBITDA are not terms recognised under IFRS and therefore the
reported figures may not be comparable to other companies with similar
measures.
4 Revenue & gross profit
2024 2023
£ £
Revenue by major product lines
Software as a Service (SaaS) subscriptions (i) 10,987,628 8,547,389
Professional services (ii) 2,252,381 2,754,311
13,240,009 11,301,700
(i) SaaS subscriptions - The Group provides right of access of subscriptions
to its content and technology products to the customer over time for the
subscription periods that are typically twelve months. The revenue is
recognised evenly over the period of the subscription. This revenue includes
subscriptions to: (a) Skillcast Portal - the Group's integrated compliance
management application that comes with a broad range of tools, namely SELMS,
Policy Hub, Compliance Declarations, Surveys, Compliance Registers, Training
360, Events Management and SMCR 360; and (b) the Skillcast OTS course
libraries, namely Essentials, FCA Compliance, Insurance Compliance and Risk.
(ii) Professional services - The Group provides customised and standard
content to its clients under fixed-price contracts. This non-recurring revenue
includes: (a) bespoke e-learning development projects for large corporates;
(b) translations of those bespoke courses; (c) customisation of OTS courses
for subscription clients; and (d) other content and technology consultancy.
2024 2023
£ £
Gross profit by product lines
Software as a Service (SaaS) subscriptions (i) 8,804,612 6,316,026
Professional services (ii) 939,629 1,556,302
9,744,241 7,872,328
The Group has analysed costs along product lines after having identifiable
direct costs and using judgement to allocate other direct costs such as staff
based on a proportion related to that product line.
£ £
Revenue geographic split by customer
UK 10,393,492 8,913,470
Europe 1,444,687 942,870
Rest of world 1,401,830 1,445,360
13,240,009 11,301,700
Non-current assets in which they are based are shown below:
Property, plant and equipment
UK 140,674 175,327
Malta 124,472 148,435
265,146 323,762
Right of use assets
UK 149,492 255,042
Malta 159,704 204,880
309,196 459,922
5 Profit/ (loss) before taxes
The profit/ (loss) before taxation is stated after charging the following
amounts:
2024 2023
£ £
Staff cost (CoS) 2,443,389 2,194,546
Subcontracted services (CoS) 667,124 785,053
Staff costs (Admin) 7,005,261 5,779,421
Directors' compensation 1,128,125 1,053,731
Professional fees 486,877 269,952
Depreciation and amortisation expense 252,780 261,710
Fees payable to the Company's auditor for the audit of Parent and Subsidiaries 99,425 47,133
The aggregate amount of research and development expenditure recognised
as expenses during the period is £1,291,200 (2023: £1,230,999).
Skillcast Group PLC
Notes to the consolidated financial statements continued
31 December 2024
6 Staff costs and employee information
2024 2023
£ £
Salaries & wages 8,291,777 7,847,604
Social security costs 841,545 873,174
Pension 189,440 124,747
Share-based payment expenses 33,702 131,698
Other payroll costs 92,186 50,475
9,448,650 9,027,698
The Group companies contribute towards the state pension in accordance with
local legislation. The only obligation of the companies is to make the
required contributions. Costs are expensed in the period in which they are
incurred.
Number of staff
The average number of persons employed by the Group during the year was 121,
and at December 2024 the number of persons employed was 120, analysed by
category as follows:
At 31 December At 31 December Average Average
2024 2023 2024 2023
Directors 7 7 7 7
Administration 5 5 5 4
Client Service 33 26 30 25
Operations/Production 18 21 20 22
Sales & Marketing 32 34 34 34
Finance 5 5 5 4
Technology 20 20 20 19
120 118 121 115
Key management personnel
The remuneration of key management personnel (considered to be the Directors
and Senior Management) is £1,418,369 (2023: £1,486,336) and is set out in
the table below in aggregate for each of the categories specified in IAS24:
Related Party Disclosures. See note 17 of the Group Consolidated Accounts
for additional information relating to related party transactions that are
included in the table below.
2024 2023
Directors Senior Management Total Directors Senior Management Total
£ £ £ £ £ £
Wages and Salaries 926,118 111,001 1,037,119 912,511 199,883 1,112,394
Social Security 149,600 2,410 152,010 137,011 4,154 141,165
Pension 44,651 0 44,651 38,522 0 38,522
Share-based payment expenses 563 13,343 13,906 20,335 9,501 29,836
Other benefits 7,193 0 7,193 0 0 0
Consultancy fees 0 163,490 163,490 0 164,419 164,419
1,128,125 290,244 1,418,369 1,108,379 377,957 1,486,336
The Company made contributions to defined contribution personal pension
schemes for three Directors in the period (2023: three).
Vivek Dodd is a Director and owns more than 50% of the shares in the parent
company and is the ultimate controlling party.
7 Income tax expense
2024 2023
£ £
Current year tax charge 19,120 7,473
Prior year tax charge 80,123 -
Deferred tax movement (61,973) -
37,270 7,473
A reconciliation of the current income tax expense applicable to the profit
before taxation at the statutory rate to the current income tax expensed at
the effective tax rate of the Company is as follows:
8 Current assets - trade and other receivables
2024 2023
£ £
Trade receivables 3,106,264 3,008,270
Less: Allowance for expected credit losses (58,558) (95,353)
3,047,706 2,912,917
Prepayments 404,704 472,379
Accrued Income 195,343 157,668
Maltese withholding tax 628,057 628,057
Other receivables 54,876 68,747
1,282,980 1,326,851
As of 31 December 2024, trade receivables totalled £3,106,574 (2023:
£3,008,270). Within this figure, £2,060,434 was not due (2023: £1,649,657).
The directors believe that the value of provisions is sufficient although any
actual impairment can be higher or lower.
The Maltese withholding tax relates to withholding tax rebate claim post a
Group restructure necessary for the IPO in December 2021. Due to an error in
the original filing of the restructure, which has now been rectified, the
withholding tax rebate filing was delayed. The Group does not consider it
necessary to provide for this receivable.
9 Current assets - cash and cash equivalents
2024 2023
£ £
Cash at bank 9,115,118 7,221,681
9,115,118 7,221,681
2024 2023
£ £
Geographic split
United Kingdom 8,715,774 6,644,470
Malta 399,344 577,211
9,115,118 7,221,681
2024 2023
£ £
Cash Held by Currency (in Pound Sterling)
Pound Sterling 8,520,192 6,962,276
Euro 538,828 254,382
Czech Koruna 135 2,326
US Dollar 55,963 2,697
9,115,118 7,221,681
10 Non-current assets - property, plant and equipment
Reconciliations of the written down values at the beginning and end of the
current and previous financial year are set out below:
Computer Software & Hardware Furniture and Fixtures Office Equipment Leasehold Improvements Total
Balance at 1 January 2023 87,328 82,644 1,350 82,965 254,287
Additions 36,825 36,358 2,418 99,483 175,084
Disposals - - - - -
Depreciation expense (53,869) (16,174) (1,288) (34,278) (105,609)
Balance at 31 December 2023 70,284 102,828 2,480 148,170 323,762
Balance at 1 January 2024 70,284 102,828 2,480 148,170 323,762
Additions 39,020 2,589 490 1,336 43,435
Disposals - - - - -
Depreciation expense (46,920) (15,690) (1,272) (38,169) (102,051)
Balance at 31 December 2024 62,384 89,727 1,698 111,337 265,146
11 Non-current assets - Right-of-use assets
Reconciliations of the written down values at the beginning and end of the
current and previous financial periods are set out below:
Leasehold property Car leases Total
Balance at 1 January 2023 610,651 5,373 616,024
Additions - - -
Disposals - - -
Amortisation expense (150,728) (5,373) (156,101)
Balance at 31 December 2023 459,923 - 459,923
Balance at 1 January 2024 459,923 - 459,923
Additions - - -
Disposals - - -
Amortisation expense (150,727) - (150,727)
Balance at 31 December 2024 309,196 - 309,196
The Group leases its offices, typically for a period of several years, with an
option to extend (see note 21 of the Group Consolidated Accounts). On renewal,
the terms of the lease are renegotiated.
12 Current liabilities - trade and other payables
2024 2023
£ £
Trade payables 179,695 94,095
Accruals 624,400 794,740
Amount due to shareholders 450 450
Sales and payroll taxes 1,294,594 628,339
Wages & Pension payable 101,017 53,196
2,200,156 1,570,820
13 Current liabilities - Contract liability
Subscriptions Professional Services
Balance at 1 January 2023 3,212,733 225,031
New Contracts 9,610,826 2,754,135
Revenue Recognised (8,547,389) (2,754,311)
Balance at 31 December 2023 4,276,170 224,855
Balance at 1 January 2024 4,276,170 224,855
New Contracts 12,057,352 2,365,941
Revenue Recognised (10,987,628) (2,252,381)
Balance at 31 December 2024 5,345,894 338,415
14 Current liabilities - Income tax
2024 2023
£ £
Corporation tax payable 35,414 23,794
15 Non-current liabilities - Deferred tax
The deferred tax (liability)/asset for the year is analysed as follows. 2024 2023
£ £
At beginning of the period 11,999 11,999
Movement in the year 72,612 -
At end of the period 84,611 11,999
Deferred tax asset
Temporary differences - on short term differences including share based 109,133 11,999
payments
Fixed asset temporary differences (24,521) -
Deferred tax assets have been recognised as it is probable that there will be
sufficient future taxable profits available to recover or utilise them. The
Group returned to profitability in 2024 after a planned period of investment.
It has produced three year forecasts that support this judgement.
16 Equity - issued capital
2024 2023
£ £
Issued Shares 89,459,460 89,459,460
Par value per share 0.10p 0.10p
Total 89,459 89,459
All shares in the Company are fully paid up. Ordinary shares entitle the
holder to participate in dividends and the proceeds on the winding up of the
Company in proportion to the number of, and amounts paid, on the shares held.
On a show of hands, every member present at a meeting in person or by proxy
shall have one vote and upon a poll, each share shall have one vote.
17 Earnings per share
Earnings per share (EPS) is calculated on the basis of profit attributable to
equity shareholders divided by the weighted average number of shares in issue
for the year.
Diluted earnings per share has been calculated on the same basis as above,
except that the weighted average number of ordinary shares that would be
issued on the conversion of the dilutive potential ordinary shares as
calculated using the treasury stock method (arising from the Company's share
option scheme and warrants) into ordinary shares has been added to the
denominator.
2024 2023
Profit/ (loss) before tax 548,639 (647,963)
Tax (37,270) (7,473)
Profit/ (loss) after tax 511,369 (655,436)
Earnings 511,369 (655,436)
Weighted average number of ordinary shares (undiluted) 89,459,460 89,459,460
Effect of dilutive potential ordinary shares 274,595 (3,786,667)
Diluted average number of shares 89,734,055 85,672,793
Earnings per share (basic) 0.572p (0.733p)
Earnings per share (diluted) 0.570p -
18 Dividends
2024 2023
Pence per £ Pence per £
share share
Dividend declared - Final 2023 0.279p 249,592
Dividend declared - Interim 2024 0.168p 150,292
Dividend declared - Final 2022 0.279p 249,592
Dividend declared - Interim 2023 0.168p 150,292
Dividend declared per share 0.477p 0.477p
During the period under review, the Group generated a profit before tax of
£542,944 (2023: loss before tax of £647,963). A final dividend of
£249,592 (0.279p) was declared and paid with regards to the year ended 2023
and £150,292 (0.168p) interim dividend was declared and paid with regards to
the year ended 2024. The Group's policy is to at least maintain dividend
payments.
The Board is proposing a final dividend of 0.391p per share. In combination
with the interim dividend, if confirmed by the shareholders at the AGM, this
will represent a total dividend for the year of £462,282 (2023: £399,884) or
0.517p per share based upon the number of shares currently in issue. If
further approved by shareholders at the AGM on 24 June 2025, the final
dividend will be paid on 25 July 2025 to shareholders on the register at the
close of business on 4 July 2025.
19 Share options and warrants
Share options
The share option scheme, adopted by the Company after admission to AIM on 1
December 2021, was established to reward and incentivise the executive
management team and staff for delivering share price growth. The option
schemes are equity settled.
The share scheme is administered by the Remuneration Committee.
No options were granted during 2024 (2023: 1,600,000 with a weighted average
fair value of 4 pence). 600,000 options lapsed during 2024 (2023: 540,000)
with a weighted average fair value of 10 pence (2023: 7 pence) These fair
values were based on the Company's share price at the date of grant. Out of
the 5,080,000 outstanding options (2023: 5,680,000), 3,193,033 options were
exercisable (2023: 2,070,300).
A charge of £39,094 (2023: £131,698) has been recognised in the consolidated
statement of comprehensive income for the year relating to these options.
Options are exercisable in accordance with the contracted vesting schedules;
if an employee leaves the employment of the Company prior to the options
vesting, then unless otherwise agreed, the share options will lapse.
Details of the share options outstanding at the year-end are as follows:
Number WAEP* Number WAEP*
2024 2024 2023 2023
Outstanding at 1 January as per 2024 Reporting 5,680,000 32.5p 4,670,000 37p
Adjustment to 2022 Grants - - (50,000) 37p
Granted during the year - - 1,600,000 21p
Exercised during year - - - 0p
Lapsed during year 600,000 35.1p 540,000 28p
Outstanding at 31 December 5,080,000 32.2p 5,680,000 32.5p
Thereof exercisable at 31 December 3,193,033 34.3p 2,070,300 36p
* Weighted average exercise price
The weighted average remaining contractual life of the options outstanding at
the statement of financial position date is 8.3 years.
Share options granted are valued under the Black-Scholes model. All options
granted vest equally over 3 or 4 years. A dividend yield was assumed based on
the Group's stated policy of paying £400,000 per annum. No options were
granted in 2024. Options were granted in 2023 with an exercise price of 21
pence. An expected volatility of 27% has been assumed for options granted in
2023. Options granted at the time of the IPO in 2021 had an exercise price
equal to the IPO price of 37 pence.
20 Financing cash flows
A reconciliation of the financing cash flow is set out below:
2024 2023
£ £
Lease liability
At 1 January 469,089 647,408
Additions - -
Interest expense 24,806 19,680
Lease payments (146,609) (197,999)
At 31 December 347,286 469,089
Dividend liability
At 1 January - -
Dividends declared 399,884 399,884
Dividend payments (399,884) (399,884)
At 31 December - -
Net financing payments (546,493) (597,883)
Financing per statement of cash flows (546,493) (597,883)
A final dividend of £249,592 was declared and paid in 2023 with regards to
the year ended 31 December 2022 and £150,292 interim dividend was also
declared and paid for the year ended 31 December 2023.
21 Events after the reporting period
Apart from the final dividend declared as disclosed in note 18, no other
matter or circumstance has arisen since 31 December 2024 that has
significantly affected, or may significantly affect the Group's operations,
the results of those operations, or the Group's state of affairs in future
financial years.
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