REG - Smarttech247 Group - Final Results
23/01/2025 07:00
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RNS Number : 3655U Smarttech247 Group PLC 23 January 2025
Certain information contained within this Announcement is deemed by the
Company to constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon
publication of this Announcement, this information is now considered to be in
the public domain.
23 January 2025
Smarttech247 Group PLC
("Smarttech247", the "Group" or the "Company")
Final Results
Smarttech247 (AIM: S247), a multi-award-winning provider of AI-enhanced
cybersecurity services providing automated managed detection and response for
a portfolio of international clients, is pleased to announce its audited final
results for the 12 months ended 31 July 2024.
Operational highlights
· Several new multi-year contracts have been won during the period,
spearheaded by the Group's Managed Detection and Response ("MDR") VisionX
platform
· Listing of VisionX on the Amazon Web Services (AWS) Marketplace in
August 2023
· Multiple strategic partnerships were signed over the past year,
including with Abnormal Security in August 2023, the integration of Google
Chronicle's security technology in March 2024 and partnering with Cisco
Systems Inc. in April 2024
· In May 2024, the Company announced a partnership with CNS Middle East,
allowing Smarttech247 to expand into a new geography
· Continued development of its technology platforms, including a new and
improved version of VisionX, launching Aio, an AI Assistant for VisionX and a
version of VisionX dedicated to mid-sized business
· In June 2024, Smarttech247 was recognised in the Market Guide for
Managed Detection and Response, produced by Gartner, a leading research and
advisory company
· 100% client retention rate for MDR clients in FY2024
· Operations have been expanded and headcount increased in order to be in a
position to deliver growth and develop new products
· Positive start to FY2025 with a number of new contracts won and
renewals from existing customers
Financial highlights
· Revenue increased by 8.2% to €13.2 million (31 July 2023: €12.2
million)
· Significant growth (50%) in ARR on a run rate basis increasing to
€9.1 million (31 July 2023: €6.1 million)
· Gross profit maintained at circa €5.0 million (31 July 2023:
€5.15 million)
· Adjusted EBITDA of €1.35 million (31 July 2023: €2.70 million)
· Adjusted operating profit of €782,000 (31 July 2023: €2.15
million)
· Cash of €3.34 million at the period end (31 July 2023: €6.06
million)
Raluca Saceanu, CEO of Smarttech247, commented:
"I am pleased to announce another year of progress and innovation for
Smarttech247. These results reflect steady progress in our strategic
priorities and operational capabilities. Our Managed Detection and Response
platform, VisionX, continues to redefine cybersecurity standards, and its
listing on the AWS Marketplace has opened doors to new opportunities.
Additionally, our advancements in artificial intelligence, including the
launch of Aio, our AI Assistant for VisionX, underline our commitment to
leveraging cutting-edge technologies to better serve our clients.
"The recognition by Gartner, partnerships with global leaders like Google,
Cisco, and Abnormal Security, and our expansion into new markets, such as the
Middle East, further position us as a trusted partner in the evolving
cybersecurity landscape. With 100% client retention and a 50% increase in
Annual Recurring Revenue, we have built a strong foundation for sustained
success.
"As we enter FY2025, our focus remains on innovation, operational excellence,
and deepening customer relationships. We are confident that these strategic
priorities will drive long-term value for our stakeholders and reinforce our
position as a leader in the cybersecurity space."
- Ends -
The Annual Report and Accounts for the financial year ended 31 July 2024 will
be available to download from the Group's website via:
https://www.smarttech247.com/aim-rule-26/
(https://www.smarttech247.com/aim-rule-26/)
*Smarttech247 is a recognised vendor in 2024 Gartner® Market Guide for
Managed Detection and Response.
For further information please contact:
Smarttech247 Group PLC Tel: +353 21 206 6033
Ronan Murphy, Executive Chairman
Raluca Saceanu, Chief Executive Officer
Nicholas Lee, Finance Director
SPARK Advisory Partners Limited - Nominated Adviser Tel: + 44 (0) 20 3368 3550
Mark Brady / Adam Dawes / Angus Campbell
Cavendish Capital Markets Limited - Corporate Broker Tel: +44 (0) 20 7220 0500
Marc Milmo / Hamish Waller
Tim Redfern / Sunila de Silva - Broking
Yellow Jersey PR Tel: +44 (0) 20 3004 9512
Charles Goodwin / Annabelle Wills / Bessie Elliot
About Smarttech247
Smarttech247 is a multi-award winning automated MDR (Managed Detection &
Response) company. Its platform is trusted by international organisations and
provides threat intelligence with managed detection and response to provide
actionable insights, 24/7 threat detection, investigation and response.
The Group's services are geared towards proactive prevention, and it achieves
this by utilising the latest technologies, along with an experienced incident
response team.
Smarttech247's offices are located in Ireland, United Kingdom, Romania, Poland
and the USA. The Company was admitted to trading on the London Stock Exchange
on 15 December 2022.
For further information please visit www.smarttech247.com
(http://www.smarttech247.com)
*Gartner disclaimers
Market Guide for Managed Detection and Response, 24 June 2024, Pete Shoard,
Andrew Davies, Mitchell Schneider, Angel Berrios, Craig Lawson.
Gartner does not endorse any vendor, product or service depicted in its
research publications, and does not advise technology users to select only
those vendors with the highest ratings or other designation. Gartner research
publications consist of the opinions of Gartner's research organization and
should not be construed as statements of fact. Gartner disclaims all
warranties, expressed or implied, with respect to this research, including any
warranties of merchantability or fitness for a particular purpose.
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its
affiliates in the
U.S. and internationally and is used herein with permission. All rights
reserved.
Chairman's Statement
INTRODUCTION
Smarttech247 Group plc (the "Company") is a public limited company whose
shares are quoted on the AIM market of the London Stock Exchange. The Company
is a multi-award-winning provider of AI-enhanced cybersecurity services
providing automated managed detection and response for a portfolio of
international clients. It has four directly and indirectly owned subsidiaries,
Zefone Limited, Smart Systems Security Limited, Smarttech 247 Cyber Security
Sarl incorporated and Smarttech Sp z.o.o. (together "Smarttech247" or the
"Group").
We are pleased to report our results for the year to 31 July 2024.
HIGHLIGHTS
The key highlights for the year are as follows:
Year to 31 July 2024 31 July 2023 Change
€000 €000 %
Revenue 13,174 12,180 +8.2%
Gross profit* 4,977 5,151 -3.4%
Gross profit margin 37.8% 42.3%
Operating costs 5,232 5,326 -1.8%
Adjusted EBITDA ** 1,350 2,698
Operating profit (includes other income) 228 303 -24.8%
Profit before tax 185 204
ARR run rate*** 9,082 6,066 +49.7%
As at
Cash 3,344 6,062
Net assets 12,267 11,483
* Please see Note 5 for revised analysis of gross profit for the prior year.
** Adjusted EBITDA is a non-IFRS measure and has been reconciled to the
underlying IFRS numbers in Note 6.
*** ARR run rate based on July revenue in each year from multi-year contracts
extrapolated for a full year.
· The period saw continued growth in revenues and ARR run rate.
· A number of new contracts were won during the period, spearheaded
by the Group's Managed Detection and Response ("MDR") VisionX platform.
· Some significant partnerships have been entered into with leading
players in the industry.
· Operations have been expanded and headcount increased in order to be
in a position to deliver growth and develop new products.
· New products are being developed including a new VisionX product
with further development of ThreatHub and NoPhish.
· Post period end, further new contract wins and contract renewals
have been achieved in FY2025.
REVIEW OF THE YEAR
During 2024, the Group has continued to grow, building out its platform and
headcount to service demand.
The Group now has the platform in place to support and accelerate its revenue
growth. We have also continued to develop new products and won multiple new
contracts with major global companies and institutions. These contracts are a
clear demonstration of the quality of the service that we provide and
represent clear reference points for new customers. We are often competing
with global companies to win new business and succeeding, more details on
which are covered in the Chief Executive Officer's ("CEO") Statement.
The listing of Smarttech247 at the end of 2022, has provided the Company with
greater visibility and credibility in overseas geographies which form a key
part of our strategic growth plans. I am proud of the team that we now have
in place and would like to thank them for their hard work and commitment in
getting the Group to its current position.
OUTLOOK AND STRATEGY
Cyber-attacks continue relentlessly with serious implications for the
companies concerned but we believe that our combination of managed detection
and response capabilities with an absolute focus on our clients can help to
significantly reduce the impact of an attack and manage the situation. We
therefore see excellent opportunities for future growth.
We have started FY2025 well with more contracts being won and a number of
existing contracts being renewed so we are very much looking forward to
continuing this progress in the coming year.
Ronan Murphy
Executive Chairman
22 January 2025
Chief Executive Officer's Statement
As we reflect on Smarttech247's journey in financial year 2024, I am proud of
the resilience, innovation, and commitment displayed by our team, which has
propelled us to new heights in an ever-evolving cybersecurity landscape. We
have strategically positioned ourselves as a trusted partner to businesses
globally, helping them secure their operations and navigate the complex
challenges posed by cyber threats. We continued to make progress on a number
of fronts: winning new customers, building out our cybersecurity platform,
increasing our strategic partnerships and developing new products. Growth
across our client base and an increase in ARR have strengthened our position
and allowed us to reinvest in product development and our people, ensuring
that we remain at the forefront of innovation. We are extremely well-placed to
grow revenue and as we embark on a new era at Smarttech247, we are pleased
with the Group's prospects and the strategic advances we are making.
Contracts
In the past year, Smarttech247 has successfully secured several multi-year
contracts across diverse industries, underscoring our position as a trusted
cybersecurity provider. These contracts, won in competitive processes often
against larger global organisations, are a testament to the value of our
VisionX platform, and our strategic partnerships. Our expanding client base in
sectors such as government, pharmaceuticals, automotive, and finance not only
validates our offerings but also enhances our global market presence.
Many of these contracts are multi-year, providing certainty in recurring
revenue, while others, though shorter term, demonstrate a high renewal rate,
contributing to our robust annual recurring revenue. Below is a breakdown of
key contracts and expansions that highlight our growth and commitment to
delivering best-in-class cybersecurity solutions.
· In August 2023, as part of Smarttech247's new partnership with
Abnormal Security, which is discussed further below, a multi-year contract
worth circa €360,000, over two years, was won with a global organisation
within the aviation industry sector.
· In October 2023, the Company also won a contract from an existing
Government of Ireland department customer, worth €400,000 over two years. As
part of this contract, we supplied the client with state-of-the-art SIEM
technology which allows them to enhance security visibility and provide
actionable insights.
· AutoNation, an existing client of Smarttech247, which is also the
largest automotive retailer in the United States, extended its existing
partnership with the Group for a further three years which is a testament to
the success of the ongoing relationship. Furthermore, AutoNation's Vice
President and CISO, Chip Regan, explained in a case study why Smarttech247 was
the obvious choice when it came to its cybersecurity needs and, specifically,
how partnering with Smarttech247 has allowed AutoNation to achieve a granular
level of security and monitoring on a scale that suits such a large
enterprise.
· In November 2023, Smarttech247 secured a new contract with a global
pharmaceutical solutions organisation, based in the USA, worth circa
€900,000 over three years to deploy our AI-enhanced VisionX platform that
will help the client strengthen its security structure.
· Also, in March 2024, the Group announced a new managed detection and
response contract with a global packaging company, worth approximately €1
million over three years. This contract utilises both Smarttech247's VisionX
platform as well as its email security tool NoPhish, underscoring their
versatility and advanced capabilities.
· In April 2024, Smarttech247 signed a new contract with a large banking
and insurance organisation, worth €720,000 over three years. Also, a new
additional three-year contract with an existing global pharmaceutical
solutions client, based in the USA, worth circa $2.1 million in total was also
announced.
Post period end highlights
· In August 2024, the Group signed a three-year contract,
worth €860,000, with an Irish public sector agency, with the potential to
extend the contract for a further two years and also a €160,000 consultancy
contract with a fintech company. An existing major customer also renewed its
contract worth €750,000 per annum with additional purchases worth up to
€350,000.
· In September 2024, a public tender worth €100,000 over three years was
won and in November 2024, an existing US pharmaceutical customer renewed its
current contract for another year worth €300,000 per annum.
· December 2024 was particularly busy and included a new MDR contract over
three years with a hospital in Ireland worth €150,000 over the life of the
contract, the renewal for five additional years of a contract with a leading
Irish university worth, in total, over €1 million and additional sales to an
existing US pharmaceutical customer worth €150,000 over the next year.
In conclusion, Smarttech247's success in winning these multi-year contracts
reaffirms our position as a leader in cybersecurity services. These
partnerships showcase the strength of our technology, especially the VisionX
MDR platform, and the trust our clients place in our capabilities. By focusing
on providing recurring revenue through multi-year contracts and high renewal
rates for short-term projects, we ensure financial stability and growth for
the Group. These achievements not only validate our service quality but also
serve as strong reference points for future clients, supporting our continued
global expansion and competitive differentiation.
Strategic Partnerships
At Smarttech247, our strategic partnerships play a critical role in enhancing
our technological capabilities, expanding our market reach, and delivering
comprehensive cybersecurity solutions to our clients. Over the past year, we
have strengthened existing partnerships and established new alliances that
underscore our commitment to providing industry-leading security solutions
tailored to the evolving threat landscape. Below, we outline some of our most
impactful partnerships and the ways they contribute to our success.
· In August 2023, the Group was approved to list its VisionX platform
on the Amazon Web Services ("AWS") Marketplace. This listing is expected to
provide a host of benefits such as exposure to a large customer base,
streamlined purchasing processes and scalability.
· Smarttech247 also has a strategic partnership with Abnormal Security,
a leading behavioural AI-based email security platform. Abnormal Security is
being integrated into Smarttech247's comprehensive MDR capability to provide a
unified and proactive security solution. The Company has already signed its
first contract, as a result of this partnership, with a global aviation
organisation.
· In October 2023, Smarttech247 secured a partnership with Splunk
Inc. (NASDAQ: SPLK), a cybersecurity and observability leader. This
partnership utilises Smarttech247's VisionX platform and this collaboration
will leverage its capabilities alongside Splunk's solutions to offer
unparalleled security efficiencies.
· In March 2024, the Group announced a strategic partnership with Google
with a view to extending Smarttech247's existing suite of solutions by
integrating cutting-edge technologies from Google Chronicle into its flagship
platform, VisionX, as part of its comprehensive MDR offering. As part of this
arrangement, Google's advanced SIEM (Security Information and Event
Management) capabilities are now available on Smarttech247's VisionX platform.
By integrating Google Chronicle's security technology into our MDR,
organisations will have access to advanced threat detection and response
ensuring proactive defence against sophisticated cyber threats, enabling swift
and effective incident response.
· In April 2024, Smarttech247 partnered with Cisco Systems Inc. (NASDAQ:
CSCO) ("Cisco") to deliver a complete security solution for threat prevention,
detection, investigation and response. Cisco delivers software-defined
networking, cloud and security solutions to companies worldwide and recently
completed its acquisition of cybersecurity firm Splunk Inc., with which
Smarttech247 already has a strategic partnership agreement. This new
partnership will see Smarttech247 integrate Cisco's security technologies into
its AI-enhanced cybersecurity services, offering clients an even more
comprehensive and robust defence against evolving cyber threats. Cisco's range
of security technologies for network, device, user and cloud security will
integrate with Smarttech247's existing suite of cybersecurity solutions. These
technologies, combined with Splunk's cybersecurity capabilities gained in the
recent acquisition, will enhance Smarttech247's VisionX platform, allowing
organisations to proactively secure their digital assets and mitigate risks
effectively.
· In May 2024, the Company announced a partnership with CNS Middle
East ("CNS"), a leading technology firm specialising in digital solutions
across the Middle East. Through this collaboration, Smarttech247 and CNS will
combine their expertise to offer advanced cybersecurity solutions tailored to
the unique needs of organisations in the Middle East. By leveraging
Smarttech247's advanced threat detection solutions and CNS's expert
capabilities, clients can expect enhanced protection against cyber-attacks,
ensuring the security and resilience of their assets.
· Also in May 2024, it announced its strategic partnership with
Egress, the integrated cloud email security firm. As part of the partnership,
Smarttech247 will offer Egress' Intelligent Email Suite, enabling its
customers access to its advanced range of inbound and outbound email security
solutions. It will allow Smarttech247's customers to benefit from the only
cloud email security platform to continuously assess human risk and adapt its
policy controls, providing them with automated and tailored protection.
This, combined with Smarttech247's 24/7 threat detection and response
capabilities, will help to simplify organisations' cybersecurity, enabling
them to focus on other high-priority areas of the business without
compromising on security.
Smarttech247 continues to work with several leading industry players whose
products can be incorporated within its MDR platform as required. These
partners include Palo Alto Networks, Forcepoint, Microsoft, IBM and
Crowdstrike.
Technology platform and Innovation
Smarttech247 has continued to enhance and progress its technology platform and
product offering.
Towards the end of 2023, the Group launched a new version of VisionX, the
Company's managed detection and response platform. This new version offers a
very different functionality in that it is multi-tenancy and has a completely
new User Interface - this is a very important element of the VisionX platform
as it is heavily relied upon by product users to enable them to assess the
effectiveness of their security operations in real-time. This new design
offers users an intuitive approach that simplifies complex security
operations. With improved functionality, advanced analytics, threat hunting
and customisable dashboards, customers will gain unprecedented insights into
their organisation's security posture.
In January 2024, the Company announced the launch of Aio, its VisionX AI
assistant, which will provide enhanced AI features including risk analysis and
more rapid incident responses enabling organisations to leverage AI and
intelligent automation to enhance their security operations.
Also in January 2024, the Company launched a version of VisionX dedicated to
mid-sized businesses with a view to expanding the Group's addressable market
and to enable mid-sized businesses to benefit from the same level of security
which is often only available to larger enterprises.
In February 2024, Smarttech247's email security tool NoPhish was extended to
users of Google Mail. Previously only available on Microsoft Outlook, NoPhish
is designed to empower users in the fight against phishing and other
email-based threats. By integrating with Google Mail this expansion provides
comprehensive email security solutions for a wider audience.
NoPhish employs advanced analysis algorithms to evaluate the content and
legitimacy of the reported emails, offering instant feedback to the user. In
cases where an email is identified as suspicious or malicious, NoPhish takes
proactive measures by automatically removing the email from the user's inbox,
thereby mitigating the risk of accidental exposure to harmful content.
The Group has also continued to develop its Continuous Threat Exposure
Management software, Threathub. Threathub allows organisations to manage their
risk continuously by providing them with automated threat modelling and
dynamic risk governance capabilities. The Group is currently building a
sales pipeline for this product.
People and platform
At Smarttech247, our people are our greatest asset, driving the innovation and
dedication that fuel our growth. Over the past year, we have focused on
expanding our team to meet the demands of our growing client base and the
dynamic cybersecurity landscape. By increasing headcount, we are building the
capacity needed to support future revenue growth and accelerate product
development.
This expansion is a significant milestone, particularly given the competitive
market for qualified cybersecurity professionals. Our ability to attract and
retain top-tier talent underscores our reputation as an employer of choice
within the industry. We continue to foster a culture that values inclusivity,
diversity, and professional growth, empowering each team member to contribute
to our mission.
During the period, Sascha Maier was appointed to the Group's Advisory Board.
Sascha is currently the Group Chief Information and Security Officer at SV
Group, a leading hospitality and catering group in Europe. In this role, he
oversees the Cyber Resilience strategy for the entire group, including all
brands, subsidiaries, and the foundation.
Furthermore, Jason Rice, Vice President of Sales at Forcepoint, was appointed
to the Group's Advisory Board. Jason has over 20 years of enterprise software
experience supporting Fortune 2000 organisations to identify the appropriate
technology that improves service, secures data and reduces risk.
In June 2024, Smartech247 announced the intention to open an office
in Switzerland, furthering the Company's global business expansion strategy
following its recently announced strategic partnership in the Middle East.
As part of this expansion, the Company will hire locally based professionals
to be based in its new office, located in Zurich. The new team is expected to
play a critical role in supporting the continued growth of the Company's
VisionX platform.
Recent research has highlighted that Swiss companies are facing increasing
threats from AI generated phishing emails, disinformation campaigns and supply
chain attacks. With the Swiss Financial Market Supervisory
Authority identifying cyber risks as one of the most significant operational
threats to financial institutions, Smarttech247's expansion is set to
strengthen its global presence whilst supporting the growing number of
businesses in Switzerland in their fight against cybercrime.
In September 2024, post period end, Smarttech247 announced an enhanced sales
strategy designed to accelerate growth by introducing a new channel-based
route to market. This approach will broaden our market reach and is a key
component of our ambitious growth plans. To support this strategy, we are
investing in increased headcount across our key geographical markets over the
next 12 months, strengthening our presence and capacity to serve clients
worldwide.
This strategic shift will see Smarttech247 place greater emphasis on channel
and strategic partnerships to target rapid expansion whilst enhancing customer
value across its global customer base. In parallel with this initiative, the
Company is also launching its Partnership Programme with incentives designed
to empower partners and drive mutual growth, with a key focus on efforts to
enhance Smarttech247's sales and service delivery with core strategic
partners. Previously, the Company's strategy focused on direct sales to
customers but this new strategic shift will allow Smarttech247 to leverage the
successful partnerships the Company has curated.
Smarttech247 is in advanced discussions with leading systems integrators and
distributors to bring a range of its cybersecurity solutions, including
VisionX MDR and ThreatHub, to a broader market, strengthening the Company's
presence in key regions and scaling operations to meet the growing global
demand. This new programme will provide Smarttech247's partners with the
tools, resources and support to help partners maximise revenue potential and
deliver value to customers via incentives including financial rewards,
co-marketing opportunities and access to training and certifications
programmes.
To support this strategy, Smarttech247 has already been building out its
platform and expects to increase its headcount further in Ireland and across
other key markets over the next 12 months, expanding the Company's operations
in technical support, sales, marketing and partner support.
Environmental, Social, and Governance ("ESG") Commitment
At Smarttech247, we believe that our responsibility extends beyond delivering
cutting-edge cybersecurity solutions. We are dedicated to integrating
Environmental, Social, and Governance principles into our business strategy,
reflecting our commitment to responsible corporate citizenship.
Environmental Responsibility
We recognise the importance of environmental stewardship in today's world.
This year, Smarttech247 made significant strides in reducing our environmental
impact by implementing a comprehensive sustainability plan. Our Environmental
Policy outlines measurable actions to lower our carbon footprint and promote
sustainable practices across all operations. Among key initiatives, we
implemented strategies for energy efficiency, sustainable procurement and
waste reduction.
Social Responsibility
Our commitment to social responsibility is at the heart of our Company's
mission. We strive to make a meaningful impact on the communities in which we
operate and to foster an inclusive, supportive environment within our
organisation. Key initiatives include our Diversity and Inclusion programmes,
such as Women in Cybersecurity, our employee well-being and development focus
and our community engagement.
Governance Excellence
Smarttech247's governance framework is built on a foundation of integrity,
transparency, and accountability. We are committed to upholding the highest
standards in all aspects of our business, ensuring trust among our clients,
investors, and stakeholders. Our governance practices are guided by
internationally recognised standards, including ISO certifications.
Looking ahead, Smarttech247 is committed to continuously advancing our ESG
efforts as part of our broader mission to create long-term value for our
clients, employees, and society. We understand that our growth must be
balanced with a commitment to sustainable and responsible practices. In the
coming year, we plan to expand our ESG initiatives in order to continue to
reduce our environmental impact, foster further diversity and inclusion, and
strengthen our governance framework.
Industry awards and profile
In October 2023, Smarttech247 was awarded the Email Security Solution of the
Year title at The Computing Security Awards 2023 for its product NoPhish. This
cutting-edge solution operates in real-time, detecting and responding to
phishing attempts. By analysing reported emails and identifying malicious
elements, such as attachments or URLs, NoPhish enables organisations to stay
ahead of cyber threats. Phishing remains a critical concern for companies
globally and NoPhish offers clients a defence through its proactive approach
and intelligence.
Other award nominations during this period include being named as a Deloitte
Fast 50 Technology Company for 2023, becoming a finalist for the 'Scale Up of
the Year' award at the Tech Industry Alliance Awards and a nomination for the
'Cyber Security Solution Provider of the Year' at the 2023 EU Cyber Awards.
In December 2023, the Group published its cybersecurity report, "Global
Cybersecurity: Perspectives and Trends for 2024". This document reported that
there had been a 50% increase in cyber-attacks during 2023 and highlighted
critical issues in cybersecurity, offering strategic perspectives on emerging
threats, industry trends, and the geopolitical dynamics expected to shape the
threat landscape throughout 2024. The report also finds that external
malicious actors account for 83% of data breaches and financial motives are
still the driving force behind over 94% of actual breaches.
On 6 March 2024, Smarttech247 hosted its Zero Day Con 2024 conference for the
8th time. This event brings together leading technology firms, industry
experts and government officials to allow business leaders to learn more about
the latest cybersecurity trends. This year was again a very successful
conference with over 600 international cybersecurity industry participants
attending, including senior security executives and speakers from the FBI,
NCIS and other industry leaders.
In June 2024, Smarttech247 was included in the Market Guide for Managed
Detection and Response produced by Gartner, a leading research and advisory
company. The yearly report has become the recognised industry guide for buyers
considering MDR service providers.
Gartner's report emphasises the importance of human-led MDR, speed and service
predictability and the need to go beyond reactive security measures with
proactive threat hunting and exposure management. These all align with
Smarttech247's offerings.
Smarttech247's technology agnostic VisionX platform using AI, via Aio, its Gen
AI Assistant, integrates advanced security technologies with expert human
analysis, ensuring comprehensive threat detection and response capabilities
tailored to business-driven risk requirements.
Smarttech247 excels in providing MDR services that are quick to deploy and
operate, with its high-touch support organisations accelerate their security
operations capabilities without compromising on effectiveness.
Smarttech247's MDR offering goes beyond reactive measures by integrating
proactive threat hunting and exposure management with a data-centric approach,
thereby enhancing overall cyber resilience and efficiency.
Financial Commentary
In terms of financial performance, the revenue of the Group increased by in
excess of 8% over the prior year reflecting the progress made in winning
several new contracts during FY2024. A number of the contracts are multi-year
and, depending on when they were won during the year, will affect the level of
revenue actually recognised within the accounting period for that particular
contract.
However, in terms of annual recurring revenue ("ARR") on a run rate basis,
which takes into account the reduced full-year impact of contracts that start
part way through the year, we have achieved a circa 50% increase. Furthermore,
ARR for FY2024 represents approximately 60% of total revenues for that year,
which is a key performance indicator reflecting the Group's growing strength
and resilience. This significant increase underscores our success in securing
long-term, sustainable revenue streams, and it positions us strongly for
continued expansion in the coming years. We have also achieved a 100% client
retention rate for MDR clients during the period which clearly demonstrates
the quality of the service that we provide. Going forward, we expect our new
channel-based route to market, which we introduced in September 2024 to
enhance our sales strategy thereby accelerating our sales growth.
Gross profit margins have reduced slightly compared to the previous year. The
cost of our Polish and Romanian operations has increased as a result of
building out our platform to support increasing sales and more general salary
inflation. Going forward, we expect to be able to reduce these costs through
both operational improvements and a significant increase in the automation of
our activities.
Like-for-like operating costs after having adjusted for the one-off costs
relating to the Company's Initial Public Offering on AIM ("IPO") in the prior
year, have increased during the year. This is principally due to growing our
operations in Ireland and the full-year impact of the costs associated with
being a listed company.
During the period, we have continued to invest in our products and
technologies which is clearly necessary and important for a company in this
sector. We have capitalised the relevant expenditure in line with our
accounting policies, however, this investment has reduced our period-end cash
balance compared to the previous period. The Group still retains a substantial
cash balance at the period end and, going forward, both improved profitability
through increasing sales, a reduction in costs and a reduction in our
capital/R&D expenditure should lead to an improving cash position.
FY2025 has started well with both new contracts being won and a number of
existing clients renewing their contracts.
Going forward, the Company remains well-positioned and well-funded for growth
in an exciting sector and with a customer base that clearly values the
services that the Company is able to provide.
Outlook
As we look to the future, Smarttech247 is poised to capitalise on one of the
most significant opportunities in modern technology: the rapid growth of
AI-driven security solutions. Artificial intelligence is transforming
industries and reshaping the way organisations operate. However, with this
transformation comes heightened risks and new, sophisticated threats. Our
advanced cybersecurity solutions are well positioned to empower clients in
deploying AI securely, ensuring they can harness its full potential without
compromising their data integrity or security posture. By providing robust,
AI-enhanced threat detection, response, and monitoring capabilities, we enable
our clients to stay ahead of evolving cyber risks and maintain trust in their
AI-driven operations.
In parallel, the exponential growth of data security demands a proactive
approach that aligns perfectly with Smarttech247's capabilities. Organisations
face enormous data security risks and our VisionX platform delivers precisely
the level of protection required for their data-rich environments. The demand
for advanced data security solutions is set to surge, and Smarttech247 is
well-positioned to capture this growth through innovative, tailored solutions
that meet the needs of modern enterprises.
Looking ahead, we remain deeply committed to expanding our ARR by focusing on
long-term, multi-year contracts and increasing the renewal rate of our
short-term offerings. This focus on ARR reflects our confidence in the value
of our services and our commitment to sustainable growth. In addition to
growing our ARR, we are also exploring new strategic partnerships and market
expansions to deepen our presence in sectors like healthcare, finance, and
government-industries where data security and AI integration are
mission-critical. For our investors, the message is clear: Smarttech247 is at
the forefront of the AI and data security evolution, and we are fully equipped
to lead in this space, creating enduring value and delivering long-term,
stable returns.
We have continued our positive momentum into the 2025 financial year with a
number of new customers and the renewal or extension of existing contracts and
with our innovation, strategic focus, and commitment to excellence, we are
well-positioned to accelerate this growth trajectory. By expanding our
offerings, strengthening client relationships, and exploring new markets, we
are poised to deliver robust and sustainable value to our investors and
stakeholders in the year ahead.
Raluca Saceanu
CEO
22 January 2025
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 July 2024
2024 2023
€'000 Restated*
€'000
Note
Continuing operations
Revenue 4 13,174 12,180
Cost of sales* 5 (8,197) (7,029)
Gross profit 4,977 5,151
Administrative expenses* 6 (5,232) (5,326)
Other operating income 7 483 478
Operating profit 228 303
Other gains and losses - 1
Finance costs 10 (43) (100)
Profit before taxation 185 204
Income tax 11 (52) (371)
Profit for the year from continuing operations 133 (167)
Total profit for the year attributable to equity holders of the parent
Other comprehensive income - foreign currency translation 97 -
Total comprehensive profit for the year attributable to equity holders of the 230 (167)
parent
Basic earnings per share - € cents 12 0.107 (0.166)
Diluted earnings per share - € cents 12 0.101 n/a
STATEMENT OF FINANCIAL POSITION
As at 31 July 2024
GROUP Note 2024 2023
€'000
€'000
Non-current assets
Intangible assets 13 6,910 3,934
Property, plant and equipment 14 177 153
Right-of-use asset 19 265 331
Financial assets 15 1,175 1,162
Total non-current assets 8,527 5,580
Current assets
Trade and other receivables 17 5,928 6,423
Cash and cash equivalents 18 3,344 6,062
Total current assets 9,272 12,485
TOTAL ASSETS 17,799 18,065
Equity attributable to owners of the parent
Called up share capital 20 1,436 1,436
Share premium 20 6,365 6,365
Share based payment reserve 21 1,108 554
Other reserves 22 (1,215) (1,215)
Foreign exchange reserve 131 34
Retained earnings 4,442 4,309
Total equity 12,267 11,483
Non-current liabilities
Lease liability 19 241 260
Total non-current liabilities 241 260
Current liabilities
Trade and other payables 24 5,263 6,231
Lease liability 19 28 91
Total current liabilities 5,291 6,322
Total liabilities 5,532 6,582
TOTAL EQUITY AND LIABILITIES 17,799 18,065
These Financial Statements were approved by the board of Directors on 22
January 2025 and were signed on its behalf by:
Raluca Saceanu
Director
COMPANY - company number 14385467 Note 2024 2023
€'000
€'000
Non-current assets
Investments 16 1,405 1,116
Total non-current assets 1,405 1,116
Current assets
Intercompany receivable 3,746 3,166
Trade and other receivables 17 186 184
Cash and cash equivalents 18 2,626 2,949
Total current assets 6,558 6,299
TOTAL ASSETS 7,963 7,415
Equity attributable to owners of the parent
Called up share capital 20 1,436 1,436
Share premium 20 6,365 6,365
Share based payment reserve 21 1,108 554
Foreign exchange reserve 135 22
Retained earnings (1,281) (1,016)
Total equity 7,763 7,361
Current liabilities
Intercompany payables 96 32
Trade and other payables 24 104 22
Total current liabilities 200 54
Total liabilities 200 54
TOTAL EQUITY AND LIABILITIES 7,963 7,415
Under section 408 of the Companies Act 2006, the Company is exempt from the
requirement to present its own income statement or statement of comprehensive
income. The Company's loss for the year was €265K (2023: €1,016K).
These Financial Statements were approved by the board of Directors on 22
January 2025 and were signed on its behalf by:
Raluca Saceanu
Director
STATEMENT OF CASHFLOW
As at 31 July 2024 GROUP Notes 2024 2023
€'000
€'000
Cash flow from operating activities
Profit / (loss) for the financial year 133 (167)
Adjustments for:
Interest payable 10 11 64
Finance costs 10 32 36
Impact of foreign exchange - (9)
Taxation - 223
Share based payments 554 554
IPO costs in shares - 608
Depreciation and amortisation 6 568 549
Fair value loss / (gain) on investments (13) (1)
Changes in working capital:
Decrease / (increase) in trade and other receivables 607 (241)
(Decrease) / increase in trade and other payables (978) 1,532
Net cash inflow from operating activities 914 3,148
Cash flow from investing activities
Cash acquired on acquisition - 7
Purchase of intangible fixed assets 13 (3,408) (2,625)
Purchase of tangible fixed assets 14 (94) (112)
Net cash inflow / (outflow) from investing activities (3,502) (2,730)
Cash flows from financing activities
Net proceeds from the issue of shares - 3,373
Repayment of lease liabilities 19 (115) (76)
Other finance costs (9) (7)
Net cash (outflow) / inflow from financing activities (124) 3,290
Net (decrease)/ increase in cash and cash equivalents (2,712) 3,708
Cash and cash equivalents at beginning of period 6,062 2,358
Foreign exchange impact on cash (6) (4)
Cash and cash equivalents at the end of the period 19 3,344 6,062
Significant non-cash transactions
The only significant non-cash transactions that are included in the cash flow
were the issue of shares and share options as detailed in Notes 20 and 21.
COMPANY Notes 2024 2023
€'000
€'000
Cash flow from operating activities
Loss for the financial year (265) (1,016)
Adjustments for:
Share based payments 265 450
IPO costs in shares - 608
Changes in working capital:
(Increase) in trade and other receivables (468) (521)
Increase in trade and other payables 145 55
Net cash outflow from operating activities (323) (424)
Cash flows from financing activities
Net proceeds from the issue of shares - 3,373
Net cash inflow from financing activities - 3,373
Net (decrease)/ increase in cash and cash equivalents (322) 2,949
Cash and cash equivalents at beginning of period 2,949 -
Cash and cash equivalents at the end of the period 18 2,626 2,949
Significant non-cash transactions
The only significant non-cash transactions that are included in the cash flow
were the issue of shares and share options as detailed in Notes 20 and 21.
GROUP Share Capital Share Premium SBP Reserve Other Reserve Foreign Exchange Reserve Retained Earnings Total Equity
€'000 €'000 €'000 €'000 €'000 €'000 €'000
Balance at 1 August 2022 (unaudited) - - - 23 34 4,476 4,533
Loss for the year - - - - - (167) (167)
Other comprehensive income - - - - - - -
Total comprehensive loss for the year - - - - - (167) (167)
Capital reorganisation 1,012 - - (1,012) - - -
Issue of shares to settle acquired CLN 159 2,577 - - - - 2,736
Issue of shares 265 4,108 - - - - 4,373
Acquisition of Smart Securities - - - (226) - - (226)
Share based payments - - 554 - - - 554
Share issue costs - (320) - - - - (320)
Total transaction with owners 1,436 6,365 554 (1,238) - - 7,117
Balance at 31 July 2023 1,436 6,365 554 (1,215) 34 4,309 11,483
Profit for the year - - - - - 133 133
Other comprehensive income - - - - 97 - 97
Total comprehensive income for the year - - - - 97 133 230
Share based payments - - 554 - - - 554
Total transaction with owners - - 554 - - - 554
Balance at 31 July 2024 1,436 6,365 1,108 (1,215) 131 4,442 12,267
STATEMENT OF CHANGE IN EQUITY
As at 31 July 2024
COMPANY Share Capital Share Premium SBP Reserve Foreign Exchange Reserve Retained Earnings Total Equity
€'000 €'000 €'000 €'000 €'000 €'000
Loss for the year - - - - (1,016) (1,016)
Other comprehensive income - - - 22 - 22
Total comprehensive income/(loss) for the year - - - 22 (1,016) (994)
Issue of shares as part of capital reorganisation 1,012 - - - - 1,012
Issue of shares to settle acquired CLN 159 2,577 - - - 2,736
Issue of shares 265 4,108 - - - 4,373
Share based payments - - 554 - - 554
Share issue costs - (320) - - - (320)
Total transaction with owners 1,436 6,365 554 - - 8,355
Balance at 31 July 2023 1,436 6,365 554 22 (1,016) 7,361
(Loss) for the year - - - - (265) (265)
Other comprehensive income - - - 113 - 113
Total comprehensive income/(loss) for the year - - - 113 (265) (152)
Share based payments - - 554 - - 554
Total transaction with owners - - 554 - - 554
Balance at 31 July 2024 1,436 6,365 1,108 135 (1,281) 7,763
NOTES TO THE FINANCIAL INFORMATION
For the year ended 31 July 2024
1. GENERAL INFORMATION
Smarttech247 Group plc ("Smarttech247") is a public limited company
incorporated and registered in England and Wales with its registered office at
165 Fleet Street, London, EC4A 2DY. The Company's registered number is
14385467. The Company has four 100% owned subsidiaries, Zefone Limited
incorporated and registered in Ireland, Smart Systems Security Limited,
incorporated and registered in England and Wales, Smarttech 247 Cyber Security
Sarl incorporated and registered in Romania and Smartech Sp z.o.o.
incorporated and registered in Poland (together "the Group").
The Group's principal activities consist of providing managed detection and
response capabilities to global organisations, and associated services
including penetration testing, governance risk and compliance and cyber
consultancy.
The consolidated Financial Statements were approved for issue by the Board of
Directors on 22 January 2025.
2 ACCOUNTING POLICIES
IAS 8 requires that management shall use its judgement in developing and
applying accounting policies that result in information which is relevant to
the economic decision-making needs of users, that are reliable, free from
bias, prudent, complete and represent faithfully the financial position,
financial performance and cash flows of the entity.
2.1 Basis of preparation
The financial statements for the year ended 31 July 2024 have been prepared in
accordance with UK-adopted International Financial Reporting Standards
("IFRS") with the principal accounting policies applied in the preparation of
the Financial Statements are set out below. These policies have been
consistently applied to the period presented, unless otherwise stated.
On 18 November 2022, Smarttech247 Group plc which had never traded, acquired
100% of Zefone Limited. The Group has used merger accounting to account for
this acquisition as there was no change in the shareholders or holdings, and
therefore it is accounted for with no change in the book values of assets and
liabilities and no fair value accounting applied. Consequently, the prior year
incorporated the full year results for Zefone Limited and its subsidiaries as
well as the trading of the Company from incorporation on 29 September 2022 to
31 July 2023, prepared under IFRS. See Note 2.6 for further information.
The financial statements have been prepared under the historical cost
convention as modified, where applicable, by the measurement at fair value of
selected non-current assets, financial assets and financial liabilities.
The preparation of financial statements in conformity with UK IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts in the financial statements. The
areas involving a higher degree of judgement or complexity, or areas where
assumptions or estimates are significant to the financial statements, are
disclosed in Note 2.24.
The principal accounting policies are set out below and have, unless otherwise
stated, been applied consistently in the financial statements.
The consolidated financial statements are presented in Euros (€) unless
otherwise stated, which is the Company's functional currency and the Group and
Company's presentational currency and presented to the nearest €'000.
2.2 New standards, amendments and interpretations
The Group and Company have adopted all of the new and amended standards and
interpretations issued by the International Accounting Standards Board that
are relevant to its operations and effective for accounting periods commencing
on or after 1 August 2023.
No standards or Interpretations that came into effect for the first time for
the financial year beginning 1 August 2023 have had an impact on the Group or
Company.
2.3 New standards and interpretations not yet adopted
Standards and amendments to standards that have been issued that are
applicable for the Group but are not effective for 2024 and have not been
early adopted are:
Standard Impact on initial application Effective date
Amendments to IAS 1 Classification of liabilities as Current or Non-current, effective from 1 1 January 2024
January 2024
or Non-current
Amendments to IFRS 16 Leases Lease Liability in a Sale and Leasebacks 1 January 2024
Amendments to IAS 1 Presentation of Financial Statements Non-current Liabilities with Covenants 1 January 2024
Amendments to IAS21 Lack of exchangeability 1 January 2025
Amendments IFRS 9 and IFRS 7 - Financial instruments Classification and measurement of financial instruments 1 January 2026
IFRS 18 - Presentation and Disclosure in Financial Statements Presentation and Disclosure of financial Statements 1 January 2027
The effect of these new and amended Standards and Interpretations which are in
issue but not yet mandatorily effective is not expected to be material.
The directors are evaluating the impact that these standards may have on the
financial statements of Group.
2.4 Going concern
Management has prepared the financial statements on a going concern basis. The
directors are satisfied that adequate resources are available to the Group,
taking into consideration the funds generated from the successful AIM listing
and associated fundraise during the prior year. Furthermore, the Group is
expected to generate positive cash flow from its operating business going
forward. Consequently, they have no reason to believe that any material
uncertainty exists that would cast a doubt about the ability of the Group and
Company to continue as a going concern.
In making this judgement management considered the Group's budgets and cash
flow forecasts for a period of at least twelve months from the date of
approval of the financial information and the level of existing cash resources
which demonstrates that the Group will be in a position to meet its
liabilities as they fall due.
The Group has therefore adopted the going concern basis in preparing the
financial statements.
2.5 Basis of consolidation
Subsidiaries are all entities (including structured entities) over which the
Group has control. 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.
Inter-company transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated.
The Group has applied the acquisition method to account for certain business
combinations within the Group. With this method, the consideration transferred
for the acquisition of a subsidiary is the fair values of the assets
transferred, the liabilities incurred to the former owners of the acquiree and
the equity interests issued by the group. The consideration transferred
includes the fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. The Group recognises
any non-controlling interest on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share of the
recognised amounts of acquiree's identifiable net assets.
The Group has also used merger accounting as described in more detail below in
Note 2.6 for the combination of Smarttech247 Group plc and Zefone Limited, its
principal trading subsidiary.
2.6 Merger accounting
The Company was incorporated on 29 September 2022 with one £0.01 ordinary
share and on 18 November 2022, became the parent company of the Group when it
issued 87,499,999 £0.01 ordinary shares in exchange for 100% of the ordinary
shares in Zefone Limited as part of a share for share exchange.
This transaction was not considered to be a business combination within the
scope of IFRS3 as the transaction was between entities under common control.
This is a key judgement, and as a transaction where there was no change in the
shareholders or holdings, is accordingly accounted for using merger accounting
with no change in the book values of assets and liabilities and no fair value
accounting applied.
Further information on the transaction is included in Note 22.
2.7 Foreign currency translation
(i) Functional and presentation currency
Items included in the financial information for each of the Group's entities
are measured using the currency of the primary economic environment in which
the entity operates ('the functional currency'). The consolidated financial
information is presented in €, which is the Company's presentation and
functional currency. The individual financial statements of each of the
Company's wholly owned subsidiaries are prepared in the currency of the
primary economic environment in which it operates (its functional currency).
IAS 21 The Effects of Changes in Foreign Exchange Rates requires that assets
and liabilities be translated using the exchange rate at period end, and
income, expenses and cash flow items are translated using the rate that
approximates the exchange rates at the dates of the transactions (i.e. the
average rate for the period). The foreign exchange differences on translation
are recognised in other comprehensive income/(loss).
(ii) Transactions and balances
Transactions denominated in a foreign currency are translated into the
functional currency at the exchange rate at the date of the transaction.
Assets and liabilities in foreign currencies are translated to the functional
currency at rates of exchange ruling at statement of financial position date.
Gains or losses arising from settlement of transactions and from translation
at period-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the statement of comprehensive income for
the period.
(iii) Group companies
The results and financial position of all the Group entities that have a
functional currency different from the presentation currency are translated
into the presentation currency as follows:
- assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of the statement of
financial position;
- income and expenses for each statement of comprehensive income are
translated at the average exchange rate; and
- all resulting exchange differences are recognised as a separate
component of equity.
On consolidation, exchange differences arising from the translation of the net
investment in foreign operations are taken to shareholders' equity. When a
foreign operation is partially disposed or sold, exchange differences that
were recorded in equity are recognised in the statement of comprehensive
income as part of the gain or loss on sale.
2.8 Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive
Board of Directors.
2.9 Impairment of non-financial assets
Non-financial assets and intangible assets not subject to amortisation are
tested annually for impairment at each reporting date and whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable.
An impairment review is based on discounted future cash flows. If the expected
discounted future cash flow from the use of the assets and their eventual
disposal is less than the carrying amount of the assets, an impairment loss is
recognised in profit or loss and not subsequently reversed.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are largely independent cash flows (cash generating
units or "CGUs").
2.10 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, and demand
deposits with banks and other financial institutions and bank overdrafts.
2.11 Fair value measurement
Fair value measurement IFRS 13 establishes a single source of guidance for all
fair value measurements. IFRS 13 does not change when an entity is required to
use fair value, but rather provides guidance on how to measure fair value
under IFRS when fair value is required or permitted. The resulting
calculations under IFRS 13 affected the principles that the Company uses to
assess the fair value, but the assessment of fair value under IFRS 13 has not
materially changed the fair values recognised or disclosed. Further
information is set out at Note 2.12 (c).
IFRS 13 mainly impacts the disclosures of the Company. It requires specific
disclosures about fair value measurements and disclosures of fair values, some
of which replace existing disclosure requirements in other standards.
2.12 Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Group classifies its financial assets in the following measurement
categories:
- those to be measured at amortised cost;
- At fair value through profit or loss.
The classification depends on the Group's business model for managing the
financial assets and the contractual terms of the cash flows.
The Group classifies financial assets as at amortised cost only if both of the
following criteria are met:
- the asset is held within a business model whose objective is to
collect contractual cash flows; and
- the contractual terms give rise to cash flows that are solely
payment of principal and interest.
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that
is, the date on which the Group commits to purchase or sell the asset).
Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the Group
has transferred substantially all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss ("FVPL"), transaction costs that are directly attributable to the
acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate
method. Any gain or loss arising on derecognition is recognised directly in
profit or loss and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a separate line
item in the statement of comprehensive income.
Financial investments
Listed investments are valued at closing bid price on 31 July of each year.
Unlisted investments that are not publicly traded and whose fair value cannot
be measured reliably, are measured at fair value through profit and loss, less
impairment. For details of the key assumptions used and the impact of changes
to these assumptions, see Note 15.
Fair value measurement
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place
either:
- In the principal market for the asset or liability; or
- In the absence of a principal market, in the most advantageous
market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would
use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs. All assets and liabilities for which fair value is
measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input
that is significant to the fair value measurement as a whole:
- Level 1 - Quoted (unadjusted) market prices in active markets for
identical assets or liabilities
- Level 2 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is directly or indirectly
observable
- Level 3 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on
a recurring basis, the Company determines whether transfers have occurred
between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes
of assets and liabilities on the basis of the nature, characteristics and
risks of the asset or liability and the level of the fair value hierarchy, as
explained above.
d) Impairment
The Group assesses, on a forward-looking basis, the expected credit losses
associated with any debt instruments carried at amortised cost.
The impairment methodology applied depends on whether there has been a
significant increase in credit risk, with the Group performing the following
procedures to reduce the risk of credit losses:
- Performing credit checks on existing, new or prospective customers
- Maintaining regular dialogue with senior staff of existing customers
to discuss payments of invoices
For trade receivables, the Group applies the simplified approach permitted by
IFRS 9, which requires expected lifetime losses to be recognised from initial
recognition of the receivables. The Group's most significant clients are
public or regulated industry entities which generally have high credit ratings
or are of a high credit quality due to the nature of the client. These
customers are not considered to have been significantly impacted by Covid.
Expected credit losses are assessed on an individual customer basis, based on
the historical payment profiles of the customers, the current and historic
relationship with the customer, and the industry in which the customer
operates. There have been no impairments of trade receivables in the periods.
2.13 Leases
Leases are recognised as a right-of-use asset and a corresponding lease
liability at the date at which the leased asset is available for use by the
Group.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
- Fixed payments (including in-substance fixed payments), less any
lease incentives receivable;
- Variable lease payments that are based on an index or a rate,
initially measured using the index or rate as at the commencement date;
- Amounts expected to be payable by the Group under residual value
guarantees;
- The exercise price of a purchase option if the Group is reasonably
certain to exercise that option; and
- Payments of penalties for terminating the lease, if the lease term
reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Company, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
In all instances the leases were discounted using the incremental borrowing
rate.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to profit or loss over the lease period. Right-of-use assets
are measured at cost which comprises the following:
- The amount of the initial measurement of the lease liability;
- Any lease payments made at or before the commencement date less any
lease incentives received;
- Any initial direct costs; and
- Restoration costs.
Right-of-use assets are depreciated over the shorter of the asset's useful
life and the lease term on a straight-line basis. If the Company is reasonably
certain to exercise a purchase option, the right-of-use asset is depreciated
over the underlying asset's useful life.
Payments associated with short-term leases (term less than 12 months) and all
leases of low-value assets (generally less than €20K) are recognised on a
straight-line basis as an expense in profit or loss.
2.14 Equity
Share capital is determined using the nominal value of shares that have been
issued.
Share premium account includes any premiums received on the initial issuing of
the share capital. Any transaction costs associated with the issuing of shares
are deducted from the Share premium account, net of any related income tax
benefits.
Retained losses includes all current and prior period results as disclosed in
the statement of comprehensive income.
2.15 Share based payments
The Group has made awards of warrants and options on its unissued share
capital to certain parties in return for services provided to the Group. Under
IFRS 2, these share-based payments are either valued at the value of the
services provided or where this data is not available a fair value should be
calculated using the Black Scholes Option Pricing model and/or the Monte Carlo
valuation model which is how they have been valued in this case. The
valuation of these warrants and options involves making several critical
estimates relating to price volatility, future dividend yields, expected life
of the options and interest rates. These assumptions have been integrated into
the Black Scholes Option Pricing model and the Monte Carlo valuation model to
derive a value for these share-based payments. These assumptions are described
in more detail in Note 21.
2.16 Revenue
Under IFRS 15, Revenue from Contracts with Customers, five key points to
recognise revenue have been assessed:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the
contract; and
Step 5: Recognise revenue when (or as) a Group entity satisfies a performance
obligation.
The Group recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits will flow to the Group,
and specific criteria have been met for each of the Group's activities, as
described below.
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services provided
in the normal course of business, net of discounts, VAT and other sales
related taxes.
The Group bases its estimates on all available information including
historical results and experience taking into consideration the type of
customer, the type of transaction and the specifics of each arrangement. Where
the Group makes sales relating to a future financial period, these are
deferred and recognised under 'accrued expenses and deferred income' in the
Statement of Financial Position.
The Group derives revenue from the provision of managed detection and response
and other cyber security services, whereby revenue from a contract to provide
services is recognised in the period in which the services are provided in
accordance with the stage of completion of the contract when all of the
following conditions are satisfied:
- the amount of revenue can be measured reliably;
- it is probable that the Company will receive the consideration due
under the contract;
- the stage of completion of the contract at the end of the reporting
period can be measured reliably; and
- the costs incurred and the costs to complete the contract can be
measured reliably.
Revenue from the sale of products is recognised when the customer has received
the products, which is when it is considered that the performance obligations
have been met.
In arrangements where fees are invoiced ahead of revenue being recognised,
deferred income is recorded.
2.17 Government grants
Capital grants received and receivable are treated as deferred income and
amortised to the Income Statement annually over the useful economic life of
the asset to which it relates. Revenue grants are credited to the Income
Statement when received.
2.18 Taxation
The taxation expense for the year comprises current and deferred tax and is
recognised in the statement of comprehensive income except to the extent that
it relates to items recognised in other comprehensive income, or directly in
equity, in which case the tax expense is also recognised in other
comprehensive income or directly in equity.
Current tax represents the amount expected to be paid or recovered in respect
of taxable profits for the financial year and is calculated using the tax
rates and laws that have been enacted or substantially enacted at the
Statement of Financial Position date.
Deferred tax arises from timing differences that are differences between the
taxable profits and total comprehensive income as stated in the financial
statements. The timing differences arise from the inclusion of income and
expenses in tax assessments in periods different from those in which they are
recognised in the financial statements.
Deferred tax is proved in full on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the
financial statement. Deferred tax is determined using tax rates (and laws)
that have been enacted or substantively enacted by the balance sheet date and
are expected to apply when the related deferred income tax asset is realised
of the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probably that
future taxable profits will be available against which temporary differences
can be utilised. Current or deferred taxation assets and liabilities are not
discounted.
2.19 Research and development tax credits and grants
Tax credits and grants in connection with the amounts spent by the Group on
research and development are received from Enterprise Ireland and the Irish
Government. The relevant tax credit is recognised on an accruals basis,
however the application process can take a significant period of time and the
outcome can be uncertain. Consequently, this income is only accounted for in
the period when approval is received.
2.20 Property, plant and equipment
Property, plant and equipment are recorded at historical cost or deemed cost,
less accumulated depreciation and impairment losses. Costs includes prime
cost, overheads and interest incurred in financing the construction of
property, plant and equipment. Capitalisation of interest ceases when the
asset is brought into use.
Property, plant and equipment are stated at cost less accumulated depreciation
and accumulated impairment losses.
Depreciation is provided on all tangible fixed assets at rates calculated to
write off the cost of fixed assets, less their estimated residual value, over
their estimated useful lives as follows:
Plant and machinery - 12.5% straight line
Fixtures and fittings - 12.5% straight line
The Group's policy is to review the remaining useful economic lives and
residual values of property, plant and equipment on an on-going basis and to
adjust the depreciation charge to reflect the remaining estimated useful
economic useful life and residual value.
Fully depreciated property, plant and equipment are retained in the cost of
property, plant and equipment and related accumulated depreciation until they
are removed from service. In the case of disposals, assets and related
depreciation are removed from the financial statements and the net amounts,
less proceeds from disposal, is charges or credited to the income statement.
2.21 Intangible assets
Costs incurred on developments projects (relating to the development and
testing of new or improved products) are recognised as intangible assets when
it is probable that the project will, after considering its commercial and
technical feasibility, be completed and generate future economic benefits and
its costs can be measured reliably. The expenditure capitalised comprises all
directly attributable costs, including costs of materials, services, direct
labour and an appropriate proportion of overheads. Other development
expenditures that do not meet these criteria are recognized as an expense as
incurred. Development costs previously recognised as an expense are not
recognised as an asset in a subsequent period.
Capitalised development costs are recorded as intangible assets and amortised
from the point at which the asset is ready for use. Intangible asset
impairment reviews are undertaken annually, or more frequently if events or
changes in circumstances indicate a potential impairment. The method and
useful lives of finite life intangible assets are reviewed annually. Changes
in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period. The carrying
value of the Group's intangible assets have been reviewed against the net
present value of the future cashflows discounted at the rate of 10% that are
expected to be generated from those assets.
Research and development expenditure
Development expenditure is written off in the same period unless the Board is
satisfied as to the technical, commercial and financial viability of
individual projects. In this situation, the expenditure is capitalised and
amortised over the period from which the Group is expected to benefit.
Amortisation is provided on all intangible assets so as to write off the cost
of an asset over its estimated useful life as follows:
Development costs -
20-33.3% straight line
Software license
Software licenses are valued at costs less accumulated amortisation
Website and software licenses - 33.3% straight line or
over the term of the licence
2.22 Convertible loan notes, borrowings and borrowing costs
Convertible loan notes classified as financial liabilities and borrowings are
recognised initially at fair value, net of transaction costs. After initial
recognition, loans are subsequently carried at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption value is
recognised in the statement of comprehensive income over the period of the
borrowings using the effective interest method. Fees paid on the establishment
of loan facilities are capitalised as a prepayment for liquidity services and
amortised over the period of the loan to which it relates.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability or at least 12 months
after the end of the reporting period.
2.23 Employee benefits
Short-term benefits
Short-term benefits, including holiday pay and other similar non-monetary
benefits are recognised as an expense in the period in which the employee's
entitlement to the benefit accrues.
Defined contribution pension plan
The Company operates a defined contribution plan. A defined contribution plan
is a pension plan under which the company pays fixed contributions into a
separate fund. Under defined contribution plans, the Company has no legal or
constructive obligations to pay further contributions if the fund does not
hold sufficient assets to pay all employees the benefits relating to employee
services in the current and prior periods.
For defined contribution plans, the Company pays contributions to privately
administered pension plans on a contractual or voluntary basis. The Company
has no further payment obligations once the contributions have been paid. The
contributions are recognised as employee benefit expense when they are due.
Prepaid contributions are recognised as an asset to the extent that a cash
refund or reduction in the future payments is available.
2.24 Critical accounting judgements and key sources of estimation
uncertainty
The preparation of these financial statements requires management to make
judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses.
Judgements and estimates are continually evaluated and are based on historical
experiences and other factors, including expectations of future events that
are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
Basis of acquisition accounting
The Group has applied the merger accounting method to account for certain
business combinations within the Group. Merger accounting has been applied as
the entities were commonly controlled at the point of acquisition. The assets
and liabilities have been recognised at their book values. The choice of the
accounting policy is a key judgement.
Establishing useful economic lives for depreciation purposes of property,
plant and equipment
Long-lived assets, consisting primarily of property, plant and equipment,
comprise a significant portion of the total assets. The annual depreciation
charge depends primarily on the estimated useful economic lives of each type
of asset and estimates of residual values. The directors regularly review
these asset useful economic lives and change them as necessary to reflect
current thinking on remaining lives in light of prospective economic
utilisation and physical condition of the assets concerned. Changes in asset
useful lives can have a significant impact on depreciation and amortisation
charges for the period. Detail of the useful economic lives is included in the
accounting policies.
Providing for doubtful debts
The Group makes an estimate of the recoverable value of trade and other
receivables. The Group uses estimates based on historical experience in
determining the level of debts, which the company believes, will not be
collected. These estimates include such factors as the current credit rating
of the debtor, the ageing profile of receivables and historical experience.
Any significant reduction in the level of customers that default on payments
or other significant improvements that resulted in a reduction in the level of
bad debt provision would have a positive impact on the operating results. The
level of provision required is reviewed on an ongoing basis.
Amortisation of Intangible Assets (Note 13)
The annual amortisation of intangible assets depends primarily on the
estimated useful lives of assets and estimates of residual value. The
directors regular review these assets useful lives and change them as
necessary to reflect current thinking on remining lives in light of
prospective economic utilisation. Changes in asset useful lives can have a
significant impact on amortisation charges for the period. Detail of the
useful life is included in the accounting policy.
Carrying Value of Intangible Assets (Note 13)
Determining whether there are indicators of impairment of the company's
intangible assets. Factors taken into consideration in reaching such a
decision include the economic viability and expected future financial
performance of the asset and where it is a component of a larger
cash-generating unit, the viability and expected future performance of that
unit. The directors are satisfied that the carrying value of the Group's
intangible assets are at least equal to their recoverable amounts.
Valuation of unlisted investments (Note 15)
The fair value of financial instruments that are not traded in an active
market is determined using valuation techniques. The company uses its
judgement to select a variety of methods and make assumptions that are mainly
based on market conditions existing at the end of each reporting period. For
details of the key assumptions used and the impact of changes to these
assumptions, see Note 15.
Share based payments (Note 21)
The Group issues options and warrants to its employees, directors, investors
and advisors. These are valued in accordance with IFRS 2 "Share-based
payments". In calculating the related charge on issuing shares and warrants
the Group will use a variety of estimates and judgements in respect of inputs
used including share price volatility, risk free rate, and expected life.
Changes to these inputs may impact the related charge. In the period the Group
did not perform any new valuations but released expenses to the statement of
other comprehensive income from valuations in prior periods.
3. SEGMENT REPORTING
The following information is given about the Group's reportable segments:
The Chief Operating Decision Maker is the Board of Directors. The Board
reviews the Group's internal reporting in order to assess performance of the
Group. Management has determined the operating segment based on the reports
reviewed by the Board.
The Board considers that during the years ended 31 July 2023 and 31 July 2024
the Group operated in the single business segment of managed detection and
response capabilities to global organisations.
4. REVENUE
2024 2023
€'000
€'000
Ireland 5,986 5,971
Europe 335 79
Rest of the world 6,854 6,130
13,174 12,180
The vast majority of the Group's revenue is derived from the principal
activity of providing managed detection and response capabilities to global
organisations, and associated services including penetration testing,
governance risk and compliance and cyber consultancy. The geographical
classification is based on the nationality of the entity invoiced and not on
the nationality of the parent company in the group.
In 2024, the Group had two customers that represented 35% of total revenue.
In 2023, the Group had two customers that represented 37% of total revenue.
Where revenue is included as deferred income at the year end, all of this
balance is expected to be received during the course of the following year.
2024 2023
€'000
€'000
Revenue recognised at a point in time 6,162 5,720
Revenue recognised over time 7,012 6,460
13,174 12,180
5. COST OF SALES
2024 2023
€'000
Restated
€'000
Cost sales - purchases 5,460 5,374
Cost sales - direct costs 2,737 1,655
8,197 7,029
During 2023, certain costs, principally wages and salaries, that were incurred
in Poland and Romania were included under general administration expenses.
However, management have reviewed these costs and believe they should be
treated as cost of sales as they relate to the costs of providing MDR services
and so have been included in cost of sales in 2024. For the two periods to
be properly comparable, the prior year has therefore been restated. This is
purely a reclassification between cost of sales and administration expenses
with no net change to the results of the prior period. The reclassification is
believed to give a more accurate position of gross margins within the
financial statements.
The impact of the reclassification adjustment to the cost of sales and
administrative expenses is set out below:
2023 2023
€'000 Reclass adjustment €'000 Restated
€'000
Cost sales - purchases 5,374 - 5,374
Cost sales - direct costs - 1,655 1,655
5,374 1,655 7,029
Within the restated figures for 2023, cost of sales - purchases have reduced
slightly and certain of the prior year's costs included in administration
expenses, principally wages and salaries have been moved to cost of sales -
direct costs resulting in a net increase of €1,655,000.
2023 Reclass adjustment €'000 2023
€'000
Restated
€'000
Administrative expenses 6,981 (1,655) 5,326
6,981 (1,655) 5,326
Within the restated figures for 2023, administration costs have reduced by
€1,655,000, equivalent to the movement in total cost of sales.
6. ADMINISTRATIVE EXPENSES
2024 2023
€'000
Restated
€'000
Wages and salaries (including directors) 2,842 1,900
Consultancy and professional fees 513 338
Administrative expenses 779 701
Amortisation of intangible fixed assets 432 428
Depreciation of right-of-use assets 66 63
Depreciation of tangible fixed assets 70 56
IPO related costs - 977
CLN settlement costs - 315
Share based payments 554 554
Other expenses (24) (6)
5,232 5,326
The restatement adjustment for 2023 as described above is principally going
through wages and salaries costs but also across other categories as costs
within this category have been reclassified as direct costs attributable to
cost of sales. Included above within Administrative Expenses are certain
one-off costs that principally relate to IPO costs, issue of share options and
CLN settlement costs.
2024 2023
€'000
€'000
IPO related costs - 977
Share based payments 554 554
CLN settlement costs - 315
Total one-off costs 554 1,846
Operating profit 228 303
Adjusted operating profit 782 2,149
Add back depreciation and amortisation 568 549
Adjusted EBITDA 1,350 2,698
The following auditors' fees are included in Administrative Expenses:
2024 2023
€'000
€'000
Audit of Group and Company 70 50
For audit work in relation to subsidiary companies 25 25
For audit related services - 33
For non-audit services - 85
95 193
7. OTHER OPERATING INCOME
2024 2023
€'000
€'000
Other 26 63
R&D grant - 415
R&D tax credit 457 -
483 478
During the year, the Group received:
(i) Research and Development grant of €nil from Enterprise
Ireland (2023: €415K).
(ii) Research and Development tax credit of €457K (2023:
€nil).
(iii) Other includes €13K fair value gain on investments
(2023: €1K) with balance of €13K from Enterprise Ireland (2023: €62K)
8. EMPLOYEES
Staff costs (inclusive of director's salaries) comprise:
2024 2023
€'000
€'000
Wages and salaries 6,923 5,099
Pension costs 55 28
Share based payments 554 554
Other costs and taxes 505 368
Total employee costs 8,037 6,048
Employee costs have been accounted for as follows:
Employee costs capitalised 2,573 2,277
Employee costs included in cost of sales 2,068 1,317
Employee cost include in administration expenses 2,842 1,900
Share based payments 554 554
Total 8,037 6,048
Staff costs include the total cost to the Group of its employees irrespective
of whether the cost is included within the profit and loss account under costs
of sales, administration costs or capitalised and carried as an intangible
asset in the case of certain wages and salaries that relate to research and
development.
The average monthly number of employees, including the Directors, during the
year was 162 (2023: 135).
9. DIRECTORS' REMUNERATION
2024 2023
€'000
€'000
Directors' remuneration 430 313
Pension contributions 23 18
Share based payments 265 296
Other costs and taxes - 11
718 638
During the year, retirement benefits accruing to Directors of €nil (2023:
€nil) in respect of defined contribution pension schemes.
The highest paid Director received remuneration of €183K (2023: €157k).
The value of the Group's contributions paid to a defined contribution pension
scheme in respect of the highest paid Director amounted to €13K (2023:
€14K).
10. FINANCE COSTS
2024 2023
€'000
€'000
Interest 11 71
Lease liability finance charges (Note 19) 32 29
43 100
11. TAXATION
2024 2023
€'000
€'000
The charge for year is made up as follows:
Corporation tax
Corporation taxation on the results for the year 52 371
52 371
Deferred tax
Deferred tax - -
- -
Taxation charge on profits on ordinary activities on profits on ordinary 52 371
activities
The headline rate of UK corporation tax for the year ended 31 July 2023 was
25%, previously 19% for periods to 31 March 2023. Additionally, the UK's
Marginal Relief rules applied from 1 April 2023. With regard to Marginal
Relief, the main rate of 25% applies broadly where a company has augmented
profits in excess of £250K. Between £50K to £250K, a marginal rate of
relief will apply proportionately between 19% and 25%, with 19% applying to
profits below £50K.
Factors affecting tax change for the year
2024 2023
€'000
€'000
Profit on ordinary activities before tax 185 204
Tax calculated at domestic tax rates applicable to profits in respective 35 37
countries.
Effects of:
Expenses not deductible for tax purposes 85 365
Group relief surrendered / (claimed) - (3)
Foreign tax - other 5 3
Remeasurement of deferred tax for changes in tax rate - (2)
Adjustments in respect of prior year - 30
Difference in overseas tax rates (52) (109)
Other movements (21) 50
Taxation charge on profits on ordinary activities 52 371
The weighted average applicable tax rate was 19% (2023: 18%). The increase is
caused by the change in main rate of tax in the UK to 25% (2023: 19%),
affecting the overall group average.
12. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is calculated by
dividing the profit or loss for the year by the weighted average number of
ordinary shares in issue during the year.
Basic Earnings Per Share 2024 2023
Profit / (loss) for the year from continuing operations - € 133,000 (167,000)
Weighted number of ordinary shares in issue 124,078,982 100,500,026
Basic earnings per share from continuing operations - € cents 0.107 (0.166)
Diluted Earnings Per Share 2024 2023
Profit/(loss) for the year from continuing operations - € 133,000 (167,000)
Weighted number of ordinary shares in issue 124,078,982 100,500,026
Weighted number of dilutive securities in issue 8,006,891 n/a
132,085,873 n/a
Diluted earnings per share from continuing operations - € cents 0.101 n/a
The weighted average number of ordinary shares in issue for the prior year has
been used as the total number of shares swapped for the purchase of Zefone
Limited as if those shares were in issue during the prior year. Diluted
earnings per share was not calculated in 2023 as it is assumed that there were
no dilutive instruments given the Group incurred a loss for the period.
13. INTANGIBLE ASSETS
Group Website & software licenses Development costs Total €'000
€'000
€'000
Cost
At 1 August 2022 1,227 1,533 2,760
Additions - 2,625 2,625
At 31 July 2023 1,227 4,158 5,385
Additions 85 3,323 3,408
At 31 July 2024 1,312 7,481 8,793
Amortisation
At 31 July 2022 912 109 1,021
Charge for the year 241 189 430
At 31 July 2023 1,153 298 1,451
Charge for the year 58 374 432
At 31 July 2024 1,211 672 1,883
Net book value
31 July 2023 74 3,860 3,934
31 July 2024 101 6,809 6,910
The Directors have considered the carrying value of these balances in order to
determine whether any impairment of the Group's intangible assets is required.
This has included considering the economic viability and expected future
financial performance of the products relating to these assets by modelling
the expected net future cash flows expected to be generated. All development
expenditure is capitalised and not recognised as an expense during the period.
A model has been prepared for the Cash Generating Unit ("CGU") in order to
calculate the likely level of cash that can be generated by that CGU. The
model has been prepared on a detailed basis from the sales pipeline for the
first two years and then the cashflow in year two is grown at the rate of 10%
per annum for years three and four. The resulting cash flows are then
discounted back to a net present value ("NPV") using a 10% discount rate.
The NPV is then compared to the carrying value of the intangible asset for
that CGU. In terms of sensitivities, the Directors have considered the impact
of a reduction in revenue on the NPV calculated and are satisfied that any
resulting reduction in NPV is offset by the prudent approach of not ascribing
any value to the cash generated after year four.
The Board considers the net present values calculated to be prudent,
particularly as the value of cash generated in perpetuity has not been
included. and is satisfied that the carrying value of the Group's intangible
assets are at least equal to their recoverable amounts.
14. PROPERTY, PLANT AND EQUIPMENT
Group Plant & machinery Fixtures & fittings €'000 Total
€'000 €'000
Cost
At 1 August 2022 35 194 229
Additions 20 92 112
At 31 July 2023 55 286 341
Additions 94 - 94
At 31 July 2024 149 286 435
Depreciation
At 1 August 2022 26 106 132
Charge for the year 11 45 56
At 31 July 2023 37 151 188
Charge for the year 27 43 70
At 31 July 2024 64 194 258
Net book value
At 31 July 2023 18 135 153
At 31 July 2024 85 92 177
15. FINANCIAL FIXED ASSETS
Group Level 3- Unlisted investments €'000 Level 1- Listed investments €'000 Total
€'000
Investment
Cost of valuation
At 1 August 2022 1,039 122 1,161
Revaluations - 1 1
At 31 July 2023 1,039 123 1,162
Additions - 13 13
At 31 July 2024 1,039 136 1,175
Carrying amount
At 31 July 2023 1,039 123 1,162
At 31 July 2024 1,039 136 1,175
IFRS 13 valuation hierarchy:
Level 1 represents those assets, which are measured
using unadjusted quoted prices for identical assets.
Level 2 applies inputs other than quoted prices that
are observable for the assets either directly (as prices) or indirectly
(derived from prices).
Level 3 applies inputs, which are not based on
observable market data.
Unlisted investments comprise the investment in Visibility Blockchain Limited
of 35,940 B Preference Shares. These shares do not give rights to receive
notice of any general meeting of Visibility Blockchain Limited, or to attend
thereat or vote on any resolution at a general meeting. Unlisted investments
are valued using level 3 inputs under the IFRS 13 Fair Value Hierarchy. The
valuation of this investment is based on using level 3 inputs identified
above. These include the value at which the most recent funding round
involving third party investors took place where over €10 million in new
equity was raised, management's view of the likely proceeds from the sale of
this company based on indications received to date and growth in revenue. As a
result of the above analysis, the revaluation during the year is €nil (2023:
€nil).
Listed investments relate to a portfolio investment comprising of various
equities, bonds and alternative financial instruments. These are valued
using the share price at each reporting date, which is a level 1 input under
the IFRS 13 Fair Value Hierarchy.
16. INVESTMENTS
Company 2024 2023
€000
€000
Investment in Zefone Limited 1,405 1,116
1,405 1,116
Company subsidiary undertakings
The Group owned interests in the following subsidiary undertakings, which are
included in the consolidated financial statements:
Name Business Activity Country of Incorporation Registered Address Percentage Holding
Zefone Limited Provision of cybersecurity products and services Ireland Unit 17A, 100%
Building 4700
Cork Airport Business Park, Cork
Smart Systems Security Limited Provision of cybersecurity products and services England and Wales 85 Great Portland Street, London W1W 7LT 100%
Smartech 247 sp. z.o.o. Provision of cybersecurity products and services Poland Krakovie Przy ul., Podole 60, 100%
30-394 Krakov
Smartech247 Cyber Security SRL Provision of cybersecurity products and services Romania Bd Iancu de Hunedoara 54 B, Etaj 2, Bucuresti - Sectorul 1 100%
17. TRADE AND OTHER RECEIVABLES
Group 2024 2023
€'000
€'000
Trade receivables 4,066 5,194
Accrued revenue 387 53
Other receivables 898 278
Director's current account 65 57
Prepayments 512 841
5,928 6,423
Company 2024 2023
€'000
€'000
Other receivables 159 167
Prepayments 27 17
186 184
Other receivables principally comprise the sales tax element of purchases made
and other tax recoverable. The majority of the amounts receivable are in Euros
and USD, and are current in terms of age profile with the majority of the
balance having now been received post year end.
2024 2023
€'000
€'000
Due in less than 30 days 2,779 2,103
Due between 30 and 60 832 2,333
Due between 60 and 90 days 230 341
Over 90 days 226 417
4,066 5,194
2024 2023
€'000
€'000
Currency of receivables
Euro 1,525 1,726
USD 2,424 3,340
GBP 118 128
4,066 5,194
18. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and short-term deposits held
with banks with a A-1+ rating. The carrying value of these approximates to
their fair value. Cash and cash equivalents included in the cash flow
statement comprise the following statement of financial position amounts.
Group 2024 2023
€'000
€'000
Cash and cash equivalents 3,344 6,062
3,344 6,062
Company 2024 2023
€'000
€'000
Cash and cash equivalents 2,626 2,949
2,626 2,949
The table below shows the currency profiles of cash and cash equivalents:
Group 2024 2023
€'000
€'000
Euro 396 289
USD 154 2,714
GBP 2,712 3,002
Polish Zloty 63 49
Romanian Leu 19 8
3,344 6,062
Company 2024 2023
€'000
€'000
GBP 2,626 2,949
2,626 2,949
19. LEASES
The Group had the following lease assets and liabilities:
Group 2024 2023
€'000
€'000
Right-of-use assets
Properties 265 331
265 331
Lease liabilities
Current 28 91
Non-current 241 260
269 351
2024 2023
€'000
€'000
Maturity on the lease liabilities are as follows:
Current 28 91
Due between 1-2 years 31 68
Due between 2-5 years 72 105
Due beyond 5 years 138 87
269 351
Right of use assets
A reconciliation of the carrying amount of the right-of-use asset is as
follows:
2024 2023
€'000
€'000
Properties
Opening balance 331 64
Additions - 330
Depreciation (66) (63)
265 331
Lease liabilities
A reconciliation of the carrying amount of the lease liabilities is as
follows:
2024 2023
€'000
€'000
Opening balance 351 68
Additions - 330
Payment made (114) (76)
Finance charge (Note 10) 32 29
269 351
The Group leases captured under IFRS 16 relate predominantly to the office
premises in both Ireland and Romania, with an office lease in Poland coming to
an end in 2023, which was extended on a short-term basis and thus falling
outside the scope of IFRS16 in 2024.
20. SHARE CAPITAL
Number of £0.01 shares Share Capital Share premium
€'000 €'000
One £0.01 share issued on incorporation 1 - -
Shares issued on exchange for Zefone Limited shares (1) 87,499,999 1,012 -
Shares issued on conversion of convertible loan note at £0.1732 (2) 13,646,441 158 2,577
Shares subscribed for by EBT (3) 10,546,713 122 -
Placing shares issued at £0.2966 12,385,828 144 4,108
Share issue costs - - (320)
At 31 July 2023 124,078,982 1,436 6,365
At 31 July 2024 124,078,982 1,436 6,365
(1) The issue of shares with a nominal value of €1,012,000 (£875,000) in
exchange for the 2 £1 shares in Zefone Limited with a nominal value of £2
results on elimination of the difference in a credit to a merger reserve
(within other reserves) of €1,012,000 (£875,000) in accordance with the
merger accounting principles as set out in Note 2.
(2) The issue price for the issue of shares to convert the convertible loan
notes was based on the conversion terms which specified a particular valuation
at which the conversion should take place. The liability to be settled
amounted to €2,683,562 and the number of shares issued amounted to
13,646,441 which therefore gave an effective issue price of £0.1732.
(3) During the prior period, the Company established a Employee Benefit Trust
("EBT") and issued 10,546,713 shares to the EBT at nominal value. The
subscription of these shares was funded through a loan provided by the Group
to the EBT.
During the prior period, certain costs associated with the IPO amounting to
€868K were also settled by the issue of new shares, of which €260K was
included in share issue costs. There were no such costs incurred in the
current period.
The number of new shares currently authorised to be issued, as approved at the
Company's most recent AGM, was 31 million.
21. SHARE BASED PAYMENT RESERVE
2024 2023
€'000
€'000
Advisor warrants issued (1) 107 107
Employee options issued (2, 3) 1,001 447
1,108 554
( )
(1) On 30 November 2022, 863,115 warrants were issued to advisors and have
been fair valued in accordance with IFRS 2 at the fair value of the services
received. The warrants have an exercise price of £0.2966 and a time to expiry
of 4 years from grant.
(2) On 30 November 2022, 4,541,290 employee options were granted under the
Group's LTIP. These options have different vesting conditions based on
performance milestones that can be viewed below.
(3) On 28 April 2023 and 23 May 2023 2,451,728 and 177,195 employee options
were granted under the Group's LTIP. These options have different vesting
conditions based on performance milestones that can be viewed below.
Share based payments valuation
The following tables summarise the valuation techniques and inputs used to
calculate the values of share-based payments in the period:
Warrants
On 30 November 2022, 863,115 warrants were issued to advisors and have been
fair valued in accordance with IFRS 2 at the fair value of the services
received. The warrants have an exercise price of £0.2966 and a time to expiry
of 4 years from grant.
Grant date Number Share price Exercise price Volatility RF Rate Technique
£ £ % %
30 Nov 2022 863,115 0.2966 0.2966 41.0 3.00 Black Scholes
The charge during the year for warrants was €nil (2023: €107K).
Options
On 30 June 2022, 28 April 2023 and 23 May 2023 4,541,290, 1,446,737 and
147,589 employee options were granted under the Groups LTIP respectively. The
option vesting details are listed below:
Vesting Event Trigger for Vesting Number of options vested on date of vesting
1 - First anniversary date of the date of Admission 50%
2 - Second anniversary date of date of Admission; and 25%
- The date if any on which the placing price has increased by 200%
3 - Third anniversary date of date of Admission; and 25%
- The date if any on which the placing price has increased by 200%
On 28 April 2023 and 23 May 2023 968,189 and 39,969 employee options were
granted under the Group's LTI respectively. The option vesting details are
listed below:
Vesting Event Trigger for Vesting Number of options vested on date of vesting
1 - First anniversary date of the date of Admission 50%
2 - Second anniversary date of date of Admission; and 50%
- The date if any on which the placing price has increased by 200%
All of the options issued subject to vesting condition 1 were valued using the
Black Scholes methodology, whilst the options issued subject to vesting
conditions 2 and 3 were value using the Monte Carlo technique. Additionally, a
non-marketable discount rate of 7.94% has been applied across all of the
employee warrants when calculating their value.
Vesting Condition 1
Grant date Number Share price Exercise price Volatility RF Rate Technique
£ £ % %
30 Nov 2022 2,270,645 0.2966 0.2966 48.5 3.24 Black Scholes
28 Apr 2023 1,207,464 0.3600 0.2966 48.6 3.72 Black Scholes
23 May 2023 88,597 0.3600 0.2966 48.6 4.38 Black Scholes
Vesting Condition 2
Grant date Number Share price Exercise price Volatility RF Rate Technique
£ £ % %
30 Nov 2022 1,135,323 0.2966 0.2966 48.5 3.24 Monte Carlo
28 Apr 2023 850,962 0.3600 0.2966 48.6 3.72 Monte Carlo
23 May 2023 51,700 0.3600 0.2966 48.6 4.38 Monte Carlo
Vesting Condition 3
Grant date Number Share price Exercise price Volatility RF Rate Technique
£ £ % %
30 Nov 2022 1,135,323 0.2966 0.2966 48.5 3.24 Monte Carlo
28 Apr 2023 361,684 0.3600 0.2966 48.6 3.80 Monte Carlo
23 May 2023 36,897 0.3600 0.2966 48.6 4.38 Monte Carlo
The number and average exercise price of share options and warrants as
follows:
2024 2023
Weighted average exercise price Number of options / warrants Weighted average exercise price Number of options / warrants
Opening balance £0.2966 8,006,891 - -
Granted during the year (warrants) - - £0.2966 863,115
Granted during the year (options) - - £0.2966 7,143,776
Cancelled during the year (options) £0.2966 (223,207) - -
Outstanding at the end of the year £0.2966 7,783,684 £0.2966 8,006,891
Exercisable at the end of the year £0.2966 4,211,797 £0.2966 863,115
Share options and warrants outstanding at 31 July 2024 had a weighted average
exercise price of £0.2966 (2023: £0.2966) and a weighted average contractual
life of 1.36 years (2023: 3.48 years). To date no share options and warrants
have been exercised.
The charge during the year for employee options was €554K (2023: €554K),
which has taken into account approximately 15% employees who left during the
year. In accordance with IFRS 2 whereby a 'true up' of the impact on the
share-based payment charge of €28K for these leavers relating to the prior
year being captured in the current year.
There are no market based vesting conditions attaching to any of the warrants.
22. OTHER RESERVES
2024 2023
€'000
€'000
Merger reserve (1,215) (1,215)
(1,215) (1,215)
As referred to in Note 2 above, on 18 November 2022, the Company became the
parent company of the Group when it issued 87,499,999 £0.01 ordinary shares
in exchange for 100% of the ordinary shares in Zefone Limited. Zefone Limited
has been shown as the continuing entity and its comparative financial
information shown for 2022. Intercompany transactions and balances between
Group companies are therefore eliminated in full. The equity presented is that
of Smarttech247 Group plc with the difference on elimination of Zefone
Limited's capital of €1,012,000 (£875,000) being shown as a merger reserve.
In the prior year, Zefone acquired Smart Systems Security Limited for €1,190
(£1,000) with the total identifiable net liabilities acquired being
€225,000, resulting in the €226,000 being recorded to other reserve.
In 2022, Zefone acquired Smarttech247 SP. Z O.O. for €2,112 (10,000 Polish
Zloty) with the total identifiable net assets acquire being €26,000,
resulting in the €23,000 being recorded to other reserve.
23. RESERVES
Foreign exchange reserve
Foreign exchange differences arising on translating into the reporting
currency.
Share based payment reserve
Cumulative charge recognised under IFRS 2 in respect of share-based payment
awards.
Retained earnings
Retained earnings represents cumulative profits and losses net of dividends
and other adjustments.
24. TRADE AND OTHER PAYABLES
Group 2024 2023
€'000
€'000
Trade creditors 2,477 3,183
Corporation tax - 220
Other taxation and social security 609 753
Accruals 339 56
Deferred income 1,623 1,869
Other payables 215 150
5,263 6,231
Of the deferred income balance at the period end, none is expected to be
received beyond one year after the period end.
Company 2024 2023
€'000
€'000
Trade creditors 25 7
Other taxation and social security 11 5
Accruals 68 10
Intercompany payable 96 32
200 54
The table below sets out the maturity profile of the financial liabilities at
31 July 2024, namely trade and other payables, corporation tax, deferred
income and lease liabilities:
2024 2023
€'000
€'000
Due in less than 30 days 2,005 2,201
Due in between 30 and 60 days 362 772
Due in more than 60 days 111 210
2,477 3,183
The table below sets out the maturity profile of the deferred income balance
at 31 July 2024:
2024 2023
€'000
€'000
Due within 1 year 1,504 1,449
Due after 1 year 119 420
1,623 1,869
25. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Capital Risk Management
The Company manages its capital to ensure that entities in the Group will be
able to continue as a going concern while maximising the return to
stakeholders. The overall strategy of the Company and the Group is to minimise
costs and liquidity risk.
The capital structure of the Group consists of equity attributable to equity
holders of the parent, comprising issued share capital, foreign exchange
reserves and retained earnings as disclosed in the Consolidated Statement of
Changes of Equity.
The Group is exposed to a number of risks through its normal operations, the
most significant of which are interest, credit, foreign exchange, and
liquidity risks. The management of these risks is vested to the Board of
Directors.
Credit Risk
Credit risk arises on financial instruments such as trade receivables,
short-term bank deposits.
Policies and procedures exist to ensure that customers have an appropriate
credit history. The Group's most significant clients are public or regulated
industry entities which generally have high credit ratings or are of a high
credit quality due to the nature of the client.
Counterparty exposure positions are monitored regularly so that credit
exposures to any one counterparty are within acceptable limits.
At the balance sheet date there were no significant concentrations of credit
risk.
Trade and other receivables and contract assets included in the balance sheet
are stated net of expected credit loss (ECL) provisions which have been
estimated on a customer-by-customer basis, based on the relationship with the
customer and its historical payment profile. There are no provisions held
against trade receivables at the balance sheet date.
The Group's maximum exposure to credit by class of individual financial
instrument is shown in the table below:
2024 2024 2023 2023
Carrying Value Maximum Exposure Carrying Value Maximum Exposure
€'000 €'000 €'000 €'000
Cash and cash equivalents 3,344 3,344 6,062 6,062
Trade receivables 4,066 4,066 5,194 5,194
7,410 7,410 11,256 11,256
Currency Risk
The Group operates in a global market with income and costs possibly arising
in a number of currencies and is exposed to foreign currency risk primarily in
respect of entities within the Group entering into commercial transactions
arising from sales or purchases in currencies other than the Companies'
functional currency. Currency exposures are reviewed regularly.
The Group has a limited level of exposure to foreign exchange risk through
their foreign currency denominated cash balances and a portion of the Group's
costs being incurred in Euro, Polish Zloty and Romanian Leu. Accordingly,
movements in the Euro exchange rate against these currencies could have a
detrimental effect on the Group's results and financial condition. Such
changes are not considered likely to have a material effect on the Group's
financial position at 31 July 2024.
Currency risk is managed by maintaining some cash deposits in currencies other
than Sterling. The table below shows the currency profiles of cash and cash
equivalents:
2024 2023
€'000
€'000
Cash and cash equivalents
Euro 396 289
USD 154 2,714
GBP 2,712 3,002
Polish Zloty 63 49
Romanian Leu 19 8
3,344 6,062
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group's approach to managing
liquidity is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Group's reputation.
The Group seeks to manage liquidity risk by regularly reviewing cash flow
budgets and forecasts to ensure that sufficient liquidity is available to meet
foreseeable needs and to invest cash assets safely and profitably. The Group
deems there is sufficient liquidity for the foreseeable future.
The Group had cash and cash equivalents at year end as below:
2024 2023
€'000
€'000
Cash and cash equivalents 3,344 6,062
3,344 6,062
Interest Rate Risk
The Group is exposed to interest rate risk whereby the risk can be a reduction
of interest received on cash surpluses held and an increase in interest on
borrowings the Group may have. The maximum exposure to interest rate risk at
the reporting date by class of financial asset was:
2024 2023
€'000
€'000
Bank balances 3,344 6,062
3,344 6,062
26. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Group Financial assets at amortised cost Financial liabilities at amortised cost Total
2024
Financial assets / liabilities €'000 €'000 €'000
Trade and other receivables (1) 5,416 - 5,416
Cash and cash equivalents 3,344 - 3,344
Trade and other payables (2) - (4,924) (4,924)
Lease liabilities (current and non-current) - (269) (269)
8,760 (5,193) 3,567
( )
(1) Trade and other receivables excludes prepayments.
(2) Trade and other payables excludes accruals.
Group Financial assets at amortised cost Financial liabilities at amortised cost Total
2023
Financial assets / liabilities €'000 €'000 €'000
Trade and other receivables (1) 5,582 - 5,582
Cash and cash equivalents 6,062 - 6,062
Trade and other payables (2) - (6,175) (6,175)
Lease liabilities (current and non-current) - (351) (351)
11,644 (6,526) 5,118
(1) Trade and other receivables excludes prepayments.
(2) Trade and other payables excludes accruals.
Company Financial assets at amortised cost Financial liabilities at amortised cost Total
2024
Financial assets / liabilities €'000 €'000 €'000
Trade and other receivables (1) 159 - 159
Cash and cash equivalents 2,626 - 2,626
Trade and other payables (2) - (36) (36)
2,785 (36) 2,749
(1) Trade and other receivables excludes prepayments.
(2) Trade and other payables excludes accruals and intercompany payables.
Company Financial assets at amortised cost Financial liabilities at amortised cost Total
2023
Financial assets / liabilities €'000 €'000 €'000
Trade and other receivables (1) 167 - 167
Cash and cash equivalents 2,949 - 2,949
Trade and other payables (2) - (8) (8)
3,116 (8) 3,108
(1) Trade and other receivables excludes prepayments.
(2) Trade and other payables excludes accruals and intercompany payables.
27. RECONCILIATION OF MOVEMENT IN NET DEBT
2024 At 1 August 2023 Non-cash changes Cashflow At 31 July 2023
€'000 €'000 €'000 €'000
Cash at bank 6,062 (7) (2,711) 3,344
Lease liabilities - current & non-current (351) (32) 114 (269)
Net Debt 5,711 (39) (2,597) 3,075
2023 At 1 August 2022 Non-cash changes Cashflow At 31 July 2023
€'000 €'000 €'000 €'000
Cash at bank 2,358 (4) 3,708 6,062
Borrowings - non-current (2,342) 2,342 - -
Lease liabilities - current & non-current (68) (359) 76 (351)
Net Debt (52) 1,979 3,784 5,711
*Non-cash movements in cash related to the foreign exchange impact on non €
denominated cash balances, whilst on the lease liabilities relates to the
finance charges incurred on the lease liabilities plus additional leases
executed during the year.
The non-cash movements on borrowings relate to interest accrued and
reclassifications between current and non-current portions of the borrowings.
28. MERGER ACQUISITIONS
Smart Systems Security Limited
On 18 November 2022, Zefone acquired Smart Systems Security Limited for
€1,190 (£1,000). The initial estimate of the fair value of the assets
acquired and liabilities assumed of Smarttech Systems Security Limited at the
date of acquisition based upon the balance sheet at 30 November 2022 were as
follows:
€'000
Cash 1
Total consideration 1
Recognised amounts of assets and liabilities acquired:
Trade and other receivables 5
Cash 8
Trade and other liabilities (239)
Total identifiable net assets (226)
Net difference taken to merger reserve (225)
Zefone Limited
On 18 November 2022, through the Share Exchange Agreement, Smarttech247 Group
plc acquired 100% of the shares of Zefone Limited.
On 18 November 2022, the convertible loan notes described in Note 23 were
novated up to Smarttech247 Group plc under the Deed of Novation, conditional
on the share for share exchange noted above and admission to the AIM market.
For more detail, please refer to Note 22 and Note 2.6 for information on the
presentation of the Financial Statements.
29. RELATED PARTY TRANSACTIONS
The Group's investments in subsidiaries have been disclosed in Note 16 and
details of directors' emoluments are set out in the Directors' Remuneration
report beginning on page 21.
Ronan Murphy, who is a director of the Group, is also a director of and has a
significant indirect interest in Visibility Blockchain Limited of 21.4%.
Consequently, Visibility Blockchain Limited is regarded as a related party by
virtue of Ronan Murphy's ability to exert significant influence over
Visibility Blockchain Limited.
The following amounts are receivable at the financial year end:
2024 2023
€'000
€'000
Visibility Blockchain Limited 70 89
70 89
The following amounts are due to related parties:
2024 2023
€'000
€'000
Visibility Blockchain Limited` 347 441
347 441
Net balance with related parties:
2024 2023
€'000
€'000
Visibility Blockchain Limited (277) (352)
(277) (352)
Certain revenue is recognised between Zefone Limited and Visibility Blockchain
Limited under a reseller agreement. During the year the total amount of
services charged under a reseller agreement by Visibility Blockchain Limited
to Zefone Limited amounted to €307K (2023: €447K).
Certain operating expenses are incurred by the Group and then recharged to
Visibility Blockchain Limited. During the year the total amount of expenses
allocated to Visibility Blockchain Limited by Zefone Limited amounted to
€206K (2023: €365K). In the opinion of the directors these amounts arise
in the ordinary course of business and the terms of the amounts due are in
accordance with the terms ordinarily offered by the Group.
On 18 November 2022, Amplified Technologies Limited ("Amplified"), which is
100% owned by Ronan Murphy, a director of the Company, sold its 100%
shareholding in Zefone Limited to the Company in return for new shares in the
Company, effectively exchanging 100% ownership of Zefone Limited for 100%
ownership of the Company as a precursor to the IPO of the Company. As at the
period end, Amplified owed €18K to the Group in connection with a liability
settle by the Group on behalf of Amplified (2023: €0K).
Ronan Murphy has a loan outstanding with the Group amounting to €65K (2023:
€57K). This loan is unsecured, interest free and is repayable on demand.
30. PENSION COMMITMENTS
The Group operates a defined contribution scheme. The assets of the scheme are
held separately from those of the Group in an independently administered fund.
The pension cost charge represents contributions payable by the Group to the
fund and amounted to €134K (2022: €75K). €25K (2022: €10K) was payable
to the fund at the statement of financial position date and is included with
creditors.
31. CAPITAL COMMITMENTS
There were no capital commitments as at 31 July 2024 or 31 July 2023.
32. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 July 2024 or 31 July 2023.
33. EVENTS SUBSEQUENT TO PERIOD END
There have been no further events subsequent to period end.
34. CONTROL
In the opinion of the Directors as at the year end and the date of the
financial statements, Ronan Murphy is the ultimate controlling party.
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