Tan Delta Systems - Full year results for 12 months ended 31 Dec 2025
Tan Delta Systems plc
("Tan Delta", or the "Company")
Full year results for the twelve months ended 31 December 2025
Tan Delta (AIM:TAND), a leading provider of intelligent real time sensor based monitoring and maintenance systems for commercial and industrial equipment, announces its audited results for the twelve months ended 31 December 2025.
FINANCIAL HIGHLIGHTS
· Revenue of £1.22 million (2024: £1.22 million)
· Gross profit margin of 60% (2024: 62%)
· Adjusted loss before tax* of £1.55 million (2024: £1.14 million)
· Cash balances of £1.49 million as at 31 December 2025 (31 December 2024: £3.08 million), with no bank debt at either year end.
COMMERCIAL HIGHLIGHTS
· Commercial opportunity pipeline increased to over £75 million (2024: £35 million)
· Multiple paid-for customer evaluations progressing towards potential fleet-wide rollouts
· Strategic agreement signed with global oil producer
· Second phase evaluation initiated with the world's largest online retailer
· Continued engagement with major global OEMs and industrial operators
* Adjusting costs of £0.04 million (2024: £0.04 million) comprising share options costs.
For enquiries, please contact:
Tan Delta Systems plc
+44 845 094 8710
Chris Greenwood, CEO
John Higginbottom, CFO & COO
Zeus (Nominated Adviser and Broker)
+44 203 829 5000
James Hornigold, Ed Beddows, Alex Slater (Investment Banking)
Nick Searle (Equity Capital Markets)
CHIEF EXECUTIVE OFFICER'S STATEMENT
This year has seen continued solid progress towards largescale rollouts and widescale market adoption. Multiple customers are progressing paid-for evaluations of our real time oil analysis solutions with a view to future fleet rollouts and long term adoption. We currently have visibility of future prospects potentially worth more than £75 million.
Revenue for 2025 was £1.22 million (2024: £1.22 million) with a gross profit margin of 60% (2024: 62%), resulting in an adjusted loss for the period of £1.55 million (2024: £1.14 million). The increased loss reflects increased overheads to support expanding customer trial support activities. As at 31 December 2025, the Company has no bank debt and cash balances were £1.49 million.
Industrial and commercial equipment operators are understandably cautious when adopting technologies that may become embedded within their maintenance and operational practices for many years. As a result, the path to full deployment typically involves a structured process of evaluation, technology validation, operational testing, and rollout planning. While this creates longer sales cycles, it also establishes a robust foundation for long-term customer relationships and large-scale adoption.
Against this backdrop, I am pleased to report that Tan Delta Systems plc has continued to make significant progress. Market awareness of our technology is increasing, the number of active customer evaluations continues to grow, and we have a healthy pipeline of prospects at various stages of the assessment and deployment process. This momentum is reflected in the value of visible rollout opportunities, where customers are engaged in paid evaluation programmes, which increased from approximately £35 million in 2024 to more than £75 million in 2025.
Supporting these opportunities has required increased operational focus and customer engagement. Our teams have dedicated considerable effort to ensuring customers receive the technical and commercial support necessary to successfully evaluate our technology and build confidence for wider deployment. This increased activity is reflected in our overhead costs during the year.
Several notable milestones were achieved during the period. These included a major global e-commerce operator progressing to a second phase of evaluation across multiple sites, the commencement of a programme with one of the world's leading baggage handling companies to monitor gear motors used in conveyor systems, and the signing of a strategic agreement with Shell Marine. Together, these initiatives demonstrate the broad applicability of our technology across multiple industrial sectors and asset types.
As customer engagement has expanded, our principal operational challenge has been ensuring that we have sufficient resources to support the growing number of evaluations and prepare for anticipated future rollouts. Accordingly, we have prioritised investment in customer support, deployment readiness, and operational capability, while moderating expenditure on new product development activities during the period.
The long-term fundamentals underpinning our business remain highly attractive. Equipment operators across industries continue to face increasing pressure to reduce operating costs, improve reliability, extend asset life, and meet sustainability objectives. Our strategy remains focused on supporting customers through evaluation, validation, and deployment, while building a growing base of reference customers that can accelerate wider market adoption. As real-time oil condition monitoring becomes increasingly recognised as a critical component of predictive maintenance programmes, we expect customer references and successful deployments to contribute to shorter sales cycles and broader commercial adoption over time.
While the timing of customer deployment decisions remains difficult to predict with precision, we expect a number of ongoing evaluations to progress towards commercial rollout decisions during late 2026, with adoption expected to build thereafter.
Finally, I would like to express my sincere gratitude to our employees, shareholders, customers, suppliers, and fellow Board members. Their continued support, commitment, and belief in our vision have been instrumental in the progress achieved to date. Together, we remain focused on building a sustainable, scalable business that delivers long-term value for all stakeholders.
STRATEGIC REPORT
The directors present their strategic report for the year ended 31 December 2025.
BUSINESS REVIEW
The principal activity of Tan Delta Systems plc is the development and supply of oil condition monitoring equipment into a diverse range of global markets, delivering services that enable operators of rotating equipment, from trucks and ships to generators and wind turbines, to reduce oil consumption, maintenance costs, breakdowns and carbon footprint.
The Key Performance Indicators (KPIs) used by the Board to monitor performance are revenue growth, gross profit margin, adjusted profit margin and cash conversion. These measures are in line with the Company's strategic objectives of delivering profitable growth which in turn drive shareholder value.
MARKET REVIEW
Industrial operators are increasingly adopting predictive maintenance and real-time condition monitoring technologies to improve reliability, reduce maintenance costs and support operational efficiency objectives.
Across industrial sectors there is a growing focus on reducing downtime, extending equipment life and improving sustainability outcomes through better use of operational data and real-time monitoring solutions.
The Company continues to focus on sectors where the operational and commercial benefits of condition monitoring are most compelling, including power generation, mining, industrial equipment, marine and transportation.Tan Delta Systems plc has strategically targeted key sectors, including Power Generation, Mining, Commercial Marine, Agriculture, and Transportation. Our product offering is continuously refined to address the specific needs and challenges of these markets, delivering clear and compelling value propositions that drive the adoption of our sensing technology.
Section 172 and Stakeholder Engagement
Ensuring meaningful engagement with stakeholders is crucial for our achievements, enabling the Board and management to enhance decision-making. The Board acknowledges its duty to comprehend and weigh stakeholder perspectives in its decision-making framework, steadfast in cultivating productive business connections. Tan Delta Systems plc's strategy regarding stakeholder engagement and our Section 172 Statement can be found on page 13.
FINANCIAL REVIEW
Whilst revenue was consistent (2025: £1.22 million, 2024: £1.22 million), the Company saw a significant improvement in convertible pipeline opportunities. Although conversion in 2025 was lower than anticipated, the opportunities still exist and we remain focused on order acquisition in 2026.
Revenue
Revenue in the year was generated by sales of oil condition monitoring equipment from a wide range of customers and sectors.
We saw a decrease in revenue achieved in the UK due to a slower than expected roll out with a number of customers. Annual revenue for Europe and Rest of the World increased by 6% on average in 2025.
Gross profit
Gross profit margin decreased from 62% in 2024 to 60% in 2025, whilst ensuring that our product offering has an attractive return for our customers. Inflation on supply was reduced compared to previous years and any future cost pressure is expected to be passed on through pricing and mitigated by good supply chain management. Since year end, there has been a comprehensive review of all price lists which will help maintain margins at historical levels.
Operating expenses
Operating expenses grew (2025: £2.40 million, 2024: £2.09 million) due to the full year effect of additional costs incurred during 2024 as the business established the right structure to support growth plans.
Reported loss/profit before tax
The reported loss before tax was £1.59 million in 2025 (2024: £1.17 million). During the year, operating expenses increased because of investments in sales, marketing, and product development. Interest income was £0.09 million lower than 2024.
Finance income and expenses
Cash reserves were invested in interest earning bank accounts generating interest income of £0.08 million (2024: £0.17 million).
Interest expense was accounted for on the right of use asset in accordance with IFRS 16.
Cash
The year-end cash balance for 2025 was £1.49 million (2024: £3.08 million).
Accounting policies
The financial information has been prepared consistently in accordance with the UK adopted International Accounting Standards.
Use Of Non-GAAP Financial Performance Measures
This Annual Report and Financial Statements include certain alternative performance measures that are not defined by UK‑adopted International Financial Reporting Standards ('IFRS'). The directors consider that these measures, when presented alongside the most directly comparable IFRS measures, provide useful additional information to shareholders and enhance an understanding of the Group's financial performance. Management uses these measures, together with the related IFRS measures, to monitor and assess the Group's operational performance. Alternative performance measures should not be considered in isolation or as a substitute for information presented in accordance with IFRS.
The following table provides a reconciliation of the alternative performance measures to the most directly comparable IFRS measures.
12 months ended
12 months ended
31-Dec-25
31-Dec-24
Adjusted operating loss before tax
Reported operating loss
(1,666,659)
(1,337,051)
Non-underlying items:
Share Option Costs
(41,007)
(36,905)
Adjusted operating loss
(1,625,652)
(1,300,146)
Adjusted loss before tax
Reported loss
(1,592,312)
(1,173,402)
Non-underlying items:
Share Option Costs
(41,007)
(36,905)
Adjusted loss
(1,551,305)
(1,136,497)
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2025
Note
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Revenue
4
1,222,256
1,215,328
Cost of sales
(485,007)
(460,990)
Gross profit
737,249
754,338
Administrative expenses
5
(2,403,908)
(2,091,389)
Loss from operations
Adjusting items (included in administrative expenses)
6
(41,007)
(36,905)
Loss from operations excluding adjusting items
(1,625,652)
(1,300,146)
Total loss from operations
(1,666,659)
(1,337,051)
Interest expense
7
(1,778)
(2,612)
Interest income
8
76,125
166,261
Loss before tax
Adjusting items (included in administrative expenses)
(41,007)
(36,905)
Loss before tax excluding adjusting items
(1,551,305)
(1,136,497)
Loss before tax
(1,592,312)
(1,173,402)
Taxation
9
12,961
5,682
Loss for the period attributable to equity holders of the Company
(1,579,351)
(1,167,720)
Other comprehensive income
Total other comprehensive income
-
-
Total comprehensive loss for the period attributable to equity holders of the Company
(1,579,351)
(1,167,720)
Basic and diluted earnings per share
10
(0.02)
(0.02)
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2025
Note
As at
As at
31-Dec-25
31-Dec-24
£
£
Non-current assets
Intangible assets
11
57,626
111,928
Right of use asset
12
40,153
66,922
Property, plant and equipment
13
64,745
73,923
162,524
252,773
Current assets
Inventories
14
554,264
733,136
Trade and other receivables
15
381,817
309,619
Cash and cash equivalents
16
1,490,049
3,083,552
2,426,130
4,126,307
Total assets
2,588,654
4,379,080
Current liabilities
Trade and other payables
17
291,075
514,936
Short term lease liability
18
29,080
28,221
320,155
543,157
Non-current liabilities
Long term lease liability
18
14,869
43,949
14,869
43,949
Total liabilities
335,024
587,106
Net assets
2,253,630
3,791,974
Equity attributable to equity holders of the Company
Ordinary share capital
19
73,224
73,224
Share premium account
20
5,426,204
5,426,204
Other reserves
21
97,001
55,994
Retained earnings
20
(3,342,799)
(1,763,448)
Total equity
2,253,630
3,791,974
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2025
£
Share capital
Share premium account
Other reserves
Retained losses
Total equity
Balance at 1 January 2024
73,224
5,426,204
19,089
(595,728)
4,922,789
Ordinary share capital
-
-
-
-
-
Comprehensive income:
Loss for the period
-
-
-
(1,167,720)
(1,167,720)
Share option costs
-
-
36,905
-
36,905
Balance at 31 December 2024
73,224
5,426,204
55,994
(1,763,448)
3,791,974
Balance at 1 January 2025
73,224
5,426,204
55,994
(1,763,448)
3,791,974
Ordinary share capital
-
-
-
-
-
Comprehensive income:
Loss for the period
-
-
-
(1,579,351)
(1,579,351)
Share option costs
-
-
41,007
-
41,007
Balance at 31 December 2025
73,224
5,426,204
97,001
(3,342,799)
2,253,630
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2025
Note
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Cash flows from operating activities
Loss / Profit before Tax
(1,592,312)
(1,173,402)
Adjustments for non-cash/non-operating items:
Depreciation
22,153
25,231
Amortisation of intangible assets
54,302
51,911
Amortisation of right of use assets
26,769
26,768
Taxation
12,961
5,682
Share Options Costs
41,007
36,905
Interest income
(76,125)
(166,261)
Interest expense
1,778
2,612
Operating cash flows before movements in working capital
(1,509,467)
(1,190,554)
Decrease / (increase) in inventories
178,872
(367,803)
Increase in trade and other receivables
(72,198)
(34,974)
(Decrease) / increase in trade and other payables
(223,861)
49,096
Net cash used in from operating activities
(1,626,654)
(1,544,235)
Cash flows from investing activities
Investment in property, plant and equipment
(12,974)
(43,474)
Investments in intangible assets
-
(20,003)
Proceeds from investments in Bank
76,125
166,261
Net cash from / (used in) investing activities
63,151
102,784
Cash flows from financing activities
Repayment of lease liabilities
(30,000)
(30,000)
Net cash from / (used in) financing activities
(30,000)
(30,000)
Net increase / (decrease) in cash and cash equivalents
(1,593,503)
(1,471,451)
Cash and cash equivalents at the beginning of the period
3,083,552
4,555,003
Cash and cash equivalents at the end of the period
16
1,490,049
3,083,552
4. Revenue from contract customers
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
United Kingdom
346,151
385,068
Europe
428,773
391,350
Rest of the World
447,332
438,910
1,222,256
1,215,328
Segmental reporting
The Chief Operating Decision Maker ("CODM") has been identified as the directors. The CODM reviews the Company's internal reporting in order to assess performance and allocate resources. The CODM has determined that there is one single operating segment, being the manufacture and sale of oil sensors.
5. Administrative expenses by nature
Included in Administrative expenses is auditors' fees of £67,850 (2024: £59,631). There are no non audit fees in either year. Employee benefits and expenses (including directors) were £1,592,593 in 2025 (2024: £1,261,265). During the year ended 31 December 2025, the Company capitalised staff costs of £nil (2024: £20,003). This amount has been included within intangibles in the statement of financial position. Research and development expenditure recognised as an expense in 2025 is £53,405 (2024: £25,757).
Directors' remuneration
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Directors' emoluments
Salaries and benefits
370,000
299,538
Pension contributions
15,500
12,385
385,500
311,923
Directors' remuneration continued
In 2025 the highest paid director received £157,500 (2024: £136,500). There was no compensation for loss of office for the directors that resigned during the year.
In 2023, the Company granted 1,253,745 share options to two Executive directors, in line with the disclosures set out in the Company's Admission Document. The options have an exercise price of 26p. Steve Johnson's options (250,749 shares) were cancelled on 5 July 2024.
Opening number of shares granted
Awards lapsed /surrendered /cancelled in the year
Number of awards over shares at the end
2025
Executive directors
Chris Greenwood
1,002,996
-
1,002,996
Total
1,002,996
-
1,002,996
2024
Executive directors
Chris Greenwood
1,002,996
-
1,002,996
Steve Johnson
250,749
(250,749)
-
Total
1,253,745
(250,749)
1,002,996
Total remuneration inclusive of directors
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Salaries and benefits
1,396,761
1,143,467
National Insurance
141,352
94,611
Pension contributions
54,480
43,190
Total remuneration
1,592,593
1,281,268
Less: capitalised product development costs
-
20,003
1,592,593
1,261,265
Average number of employees (including directors)
12 months ended
12 months ended
31-Dec-25
31-Dec-24
Employees (including directors)
20
15
6. Adjusting items
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Share Option Costs
41,007
36,905
41,007
36,905
7. Interest expense
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Interest on finance leases
1,778
2,612
1,778
2,612
8. Interest income
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Interest Income
76,125
166,261
9. Taxation
12 months ended
12 months ended
31-Dec-25
31-Dec-24
Normal taxation:
- current year charge
12,961
5,682
- prior year charge
-
-
Charge to the statement of comprehensive income
12,961
5,682
The total charge for the year can be reconciled to the accounting profit as follows:
Loss / Profit before taxation
(1,592,312)
(1,173,402)
Tax calculated at tax rate of 25% (2024: 25%)
398,078
293,351
Non-deductible expenses & Allowances
Share option costs
(10,252)
(9,226)
Professional fees
-
(37)
Fixed asset differences
(74)
4,684
R&D expenditure
8,961
6,568
Trading losses
(383,752)
(281,062)
Employer pension
-
(74)
Surrender of tax losses for R&D tax credit refund
-
(8,522)
12,961
5,682
In 2025 Tan Delta Systems plc used 25% (2024: 25%) as the corporate effective tax rate. The Company was not liable for corporation tax during the past two years due to taxable losses being sustained in each of the years reported. A deferred tax asset has not been recognised in respect of such losses due to uncertainty of future profit streams. The Company will recognise a deferred tax asset when there is clear visibility of profits. Accumulated tax losses carried forward were £3.3 million (31 Dec 2024: £1.7 million)
10. Earnings per share
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Earnings per share are as follows:
Basic and diluted earnings per share
(0.02)
(0.02)
The calculations of basic and diluted earnings per share are based upon:
(Loss) / Profit for the period attributable to the owners
(1,579,351)
(1,167,720)
Number
Number
Weighted average number of ordinary shares
73,223,800
73,223,800
The calculation of basic earnings per share is based on the results attributable to ordinary shareholders divided by the number of ordinary shares outstanding as if the bonus issue and share split had occurred at the beginning of the earliest period presented. The earnings per share calculations for the period and prior period presented are based on the new number of shares.
The number of shares in issue at the end of the period is used as the denominator in calculating basic earnings per share. As the Company is loss making the effect of instruments that convert into ordinary shares is considered anti-dilutive, hence there is no difference between the diluted and non-diluted loss per share.
11. Intangible assets
Intangible assets
£
2025
Cost
Opening balance as at 1 January 2025
184,113
Additions
-
Disposals
-
Closing balance as at 31 December 2025
184,113
Accumulated amortisation
Opening balance as at 1 January 2025
(72,185)
Amortisation
(54,302)
Disposals
-
Closing balance as at 31 December 2025
(126,487)
Carrying amount as at 31 December 2025
57,626
Intangible assets
£
2024
Cost
Opening balance as at 1 January 2024
164,110
Additions
20,003
Disposals
-
Closing balance as at 31 December 2024
184,113
Accumulated amortisation
Opening balance as at 1 January 2024
(20,274)
Amortisation
(51,911)
Disposals
-
Closing balance as at 31 December 2024
(72,185)
Carrying amount as at 31 December 2024
111,928
Intangible assets comprise the costs incurred during the development of Tan Delta Systems plc products and software. They are amortised on a straight-line basis over their estimated useful lives from the date they are available for use.
An amortisation period of three years has been adopted based on the expected period of commercial advantage of the technology. Useful lives are reconsidered if circumstances relating to the asset change or if there is an indication that the initial estimate requires revision. Impairment assessments are performed regularly to identify whether any internal or external indicators of impairment exist. Based on these reviews, the carrying value of assets does not exceed their recoverable amounts.
12. Right of use asset
Right of use asset
£
2025
Cost
Opening balance as at 1 January 2025
200,764
Additions
-
Disposals
-
Closing balance as at 31 December 2025
200,764
Accumulated amortisation
Opening balance as at 1 January 2025
(133,842)
Amortisation
(26,769)
Disposals
-
Closing balance as at 31 December 2025
(160,611)
Carrying amount as at 31 December 2025
40,153
Right of use asset
£
2024
Cost
Opening balance as at 1 January 2024
200,764
Additions
-
Disposals
-
Closing balance as at 31 December 2024
200,764
Accumulated amortisation
Opening balance as at 1 January 2024
(107,074)
Amortisation
(26,768)
Disposals
-
Closing balance as at 31 December 2024
(133,842)
Carrying amount as at 31 December 2024
66,922
The Company leases one property for commercial use with a lease term of 10 years (remaining lease term is 1 year and 6 months). All lease payments, in substance, are fixed over the term and are capitalised as part of the right-of-use asset. All expected future cash out flows are reflected within the measurement of the lease liabilities at each year end.
Impairment assessments are performed regularly to identify whether any internal or external indicators of impairment exist. Based on these reviews, the carrying value of assets does not exceed their recoverable amounts.
13. Property, plant and equipment
Plant and machinery
Office equipment
Furniture and fixtures
Tenants Improvements
Total
£
£
£
£
£
2025
Cost
Opening balance as at 1 January 2025
85,239
43,854
8,723
10,966
148,782
Additions
-
12,974
-
-
12,974
Disposals
-
-
-
-
-
Closing balance as at 31 December 2025
85,239
56,828
8,723
10,966
161,756
Accumulated depreciation
Opening balance as at 1 January 2025
(44,744)
(14,460)
(4,965)
(10,689)
(74,858)
Additions
(9,409)
(11,425)
(1,205)
(114)
(22,153)
Disposals
-
-
-
-
-
Closing balance as at 31 December 2025
(54,153)
(25,885)
(6,170)
(10,803)
(97,011)
Carrying amount as at 31 December 2025
31,086
30,943
2,553
163
64,745
Plant and machinery
Office equipment
Furniture and fixtures
Tenants Improvements
Total
£
£
£
£
£
2024
Cost
Opening balance as at 1 January 2024
67,847
17,933
8,561
10,966
105,307
Additions
17,392
25,920
162
-
43,474
Disposals
-
-
-
-
-
Closing balance as at 31 December 2024
85,239
43,853
8,723
10,966
148,781
Accumulated depreciation
Opening balance as at 1 January 2024
(31,762)
(5,577)
(3,792)
(8,496)
(49,627)
Additions
(12,982)
(8,883)
(1,173)
(2,193)
(25,231)
Disposals
-
-
-
-
-
Closing balance as at 31 December 2024
(44,744)
(14,460)
(4,965)
(10,689)
(74,858)
Carrying amount as at 31 December 2024
40,495
29,393
3,758
277
73,923
Impairment assessments are performed regularly to identify whether any internal or external indicators of impairment exist. Based on these reviews, the carrying value of assets does not exceed their recoverable amounts.
14. Inventories
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Raw Materials
378,882
369,547
Finished goods
175,382
371,692
Total
554,264
741,239
Less: Provision
-
(8,103)
554,264
733,136
The cost of inventories recognised as an expense in the year ended 31 December 2025 amounted to £407,598 (2024: £360,554). This is included in cost of sales in the statement of profit or loss and comprehensive income. During the year ended 31 December 2025, the Company wrote off a total stock value of £nil (2024: £nil). Prior year provision of £8k was released through cost of sales in 2025.
15. Trade and other receivables
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Amounts falling due within one year:
Trade receivables
266,062
187,978
Other receivables
35,333
83,987
Tax recoverable
-
12,897
Prepayments
80,422
24,757
381,817
309,619
Refer Note 22 to the financial statements for further details on expected credit losses.
16. Cash and cash equivalents
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Cash at banks
1,490,049
3,083,552
Included in cash and cash equivalents are balances held either in instant access accounts or in accounts where funds can be accessed when giving the bank thirty-two days' notice. These balances have accordingly been classified as cash and cash equivalents.
17. Trade and other payables
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Trade payables
147,157
380,324
Other payables
23,207
30,778
Other Taxation and social security
39,544
29,789
Accruals
72,544
64,414
Deferred Income
8,623
9,631
291,075
514,936
18. Borrowings and liabilities
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Current:
Bank loans
-
-
Lease liability
29,080
28,221
29,080
28,221
Non-current:
Bank loans
-
-
Lease liability
14,869
43,949
14,869
43,949
19. Share capital
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Allotted, called up and fully paid
Share capital
73,224
73,224
Total
73,224
73,224
Called up share capital represents the nominal value of shares that have been issued. All classes of shares have full voting, dividends, and capital distribution rights.
20. Share Premium
Share premium account
This represents the excess value recognised from the issue of ordinary shares above nominal value.
21. Share Based Payments
When the Company listed on AIM in August 2023, it instituted an EMI share options scheme. The Company granted 1,253,745 share options in line with the disclosures made in the Company's Admission Document. The options have an exercise price of 26p. These options are granted in five equal tranches and will vest annually over five years. The fair value of each option granted was estimated on the grant date using the Black Scholes option pricing model with the following assumptions:
Tranche
1
2
3
4
5
1. Stock Price
0.26
0.26
0.26
0.26
0.26
2. Exercise Price
0.26
0.26
0.26
0.26
0.26
3. Expected Term (years)
5.5
6
6.5
7
7.5
4. Volatility (annualised %)
45%
45%
43%
44%
44%
5. Dividend Yield *
-
-
-
-
-
6. Risk-Free Interest Rate *
4.70%
4.70%
4.70%
4.70%
4.70%
Fair Value
0.12
0.13
0.13
0.13
0.14
On 5 July 2024 250,749 shares granted to Steve Johnson were cancelled.
Opening number of shares granted
Number of shares granted in the year
Awards lapsed /surrendered /cancelled in the year
Awards exercised in the year
Number of awards over shares at the end
Expiry date
2025
Executive directors
Chris Greenwood
1,002,996
-
-
-
1,002,996
31/12/2028
Total
1,002,996
-
-
-
1,002,996
2024
Executive directors
Chris Greenwood
1,002,996
-
-
-
1,002,996
31/12/2028
Steve Johnson
250,749
-
(250,749)
-
-
Total
1,253,745
-
(250,749)
-
1,002,996
Other reserve
This represents the cumulative fair value of share options charged to the statement of comprehensive income net of the transfers to the profit and loss reserve on exercised and cancelled/lapsed options.
12 months ended
12 months ended
31-Dec-25
31-Dec-24
Share option charges for share-based payments
£
£
Opening Balance
55,994
19,089
Share option costs
41,007
36,905
Closing balance
97,001
55,994
22. Financial instruments and risk management
The Company has exposure to the following risks from its use of financial instruments;
· Market risk
· Liquidity risk
· Credit risk
· Foreign exchange risk
This note presents information about the Company's exposure to each of the above risks, objectives, policies and processes for measuring and managing risk as well as the Company's management of capital. The Board of directors has the overall responsibility for the establishment and oversight of the Company`s risk management framework.
The table below sets out the Company's classification of financial assets and liabilities in the statement of financial position. There were no financial assets and liabilities in the following category in 2025 and 2024 financial periods;
· Financial assets and liabilities at fair value through profit and loss.
Fair value of financial instruments continued
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Categories of financial instruments
Financial assets
Receivables and cash
1,871,866
3,393,171
Financial liabilities
Payables
335,024
587,106
Financial liabilities at amortized cost
Financial assets at amortized cost
Total carrying value
Fair value
2025
Note
£
£
£
£
Assets
-
1,871,866
1,871,866
1,871,866
Trade and other receivables
15
-
381,817
381,817
381,817
Bank balance and cash
16
-
1,490,049
1,490,049
1,490,049
Liabilities
335,024
-
335,024
335,024
Trade and other payables
17
291,075
-
291,075
291,075
Borrowings & leases
18
43,949
-
43,949
43,949
2024
Assets
-
3,393,171
3,393,171
3,393,171
Trade and other receivables
15
-
309,619
309,619
309,619
Bank balance and cash
16
-
3,083,552
3,083,552
3,083,552
Liabilities
587,106
-
587,106
587,106
Trade and other payables
17
514,936
-
514,936
514,936
Borrowings & leases
18
72,170
-
72,170
72,170
Fair value of financial instruments continued
The estimated net fair values as at 31 December 2025 have been determined using available market information as outlined below. This value is indicative of the amounts the Company could realise in the normal course of business.
The fair value of receivables, bank balances, and payables approximate their carrying amount due to the short-term maturities of these instruments. The fair value of finance lease liabilities is not significantly different to their carrying values, as the carrying values approximate their fair values.
Financial assets and liabilities disclosures require the measurement of fair values which differ from the carrying values of these financial assets and liabilities. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
The valuation of the Company's financial instruments is based on market observables whereby the owned assets and owed liabilities are similar to, but not the same as, those traded in an active market. In this case, the fair values of the financial instruments reported requires the
use of inputs that are unobservable in the market. As such the fair value hierarchy of the entity's financial instruments is a level 3.
Fair value hierarchy
All financial instruments measured at fair value must be classified into one of the levels below:
· Level 1: Quoted prices in active markets;
· Level 2: Level 1 quoted prices are not available, but fair value is based on observable market data; and
· Level 3: Inputs that are not based on observable market data.
Market risk
Market risk is the risk that changes in market prices such as interest rates will affect the Company's income or expenses. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return on risk.
Fair value of financial instruments continued
Interest rate risk management
Interest rate risk is the risk that the value of the financial instrument will fluctuate due to changes in market interest rates. The Company is exposed to fluctuations in interest rates (i.e. cash flow interest rate risk) on its bank balances and finance leases. It does not at present hedge its exposure to adverse interest rate movements.
At the reporting date the interest rate profile of the Company's interest-bearing financial instruments was:
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Variable rate instruments
Asset
Bank balance and cash
1,490,049
3,083,552
Liability
Borrowings & leases
43,949
72,170
Cash flow sensitivity analysis for variable rate instruments:
A change of 100 basis points in interest rates at the reporting date would have increased/ (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables in particular foreign currency rates remain constant:
Variable rate instruments
(Decrease) / increase in equity and profit or loss
100bp increase
100bp decrease
£
£
2025
Asset
Bank balance and cash
14,900
(14,903)
Liability
Borrowings & leases
439
(439)
2024
Asset
Bank balance and cash
30,836
(30,836)
Liability
Borrowings & leases
722
(722)
Fair value of financial instruments continued
Liquidity risk
Liquidity risk arises when there are insufficient liquid assets (cash and readily convertible securities) available to meet financial obligations. There were no material changes in the exposure to liquidity risk and its objectives, policies and processes for managing and measuring the risk during the current financial year.
The Company's approach to managing liquidity is to ensure as far as possible that it will always have sufficient liquidity to meet its liabilities when due under both normal and stressed conditions without incurring unacceptable losses or risking damage to the Company's reputation.
The Company ensures that it has sufficient cash on demand to meet expected operational expenses in the short-term including the servicing of financial obligations this excludes the potential impact of extreme circumstances that cannot reasonably be predicted such as natural disasters.
The following liquid resources are available:
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Trade and other receivables
381,817
309,619
Cash and cash equivalents
1,490,049
3,083,552
Total
1,871,866
3,393,171
The table below analyses the Company's financial liabilities which will be settled on a gross basis into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows.
Carrying
Contractual
0-12 months
1-3 years
Amount
cash flows
2025
Note
£
£
£
£
Trade and other payables
17
291,075
291,075
291,075
-
Borrowings & leases
18
43,949
45,000
30,000
15,000
Total
335,024
336,075
321,075
15,000
2024
Trade and other payables
17
514,936
514,936
514,936
-
Borrowings & leases
18
72,170
75,000
30,000
45,000
Total
587,106
589,936
544,936
45,000
Fair value of financial instruments continued
Credit risk
This risk represents the risk that the borrower or counterparty fails to meet an obligation when it falls due. The exposures may arise, for instance from deterioration in the borrower's financial position, from a reduction in the value of securities held as collateral and from entering into contracts under which counterparties have an obligation to repay. In order to minimise the risk, the Company endeavours only to deal with companies which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored.
IFRS 9 requires the use of forward-looking information to recognise expected credit losses - the 'expected credit loss model'. Recognition of credit losses is not dependent on the Company first identifying a credit loss event, instead the Company considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current economic conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
When the Company becomes aware of a financial asset that is irrecoverable, the Company writes off the financial asset through the profit and loss. The Company considers its maximum exposure per class to be as follows:
12 months ended
12 months ended
31-Dec-25
31-Dec-24
£
£
Trade and other receivables
381,817
309,619
Bank balance and cash
1,490,049
3,083,552
Total
1,871,866
3,393,171
Fair value of financial instruments continued
Credit risk continued
Cash and cash equivalents
The Company determines appropriate internal credit limits for each counterparty. In determining these limits, the Company considers the counterparty's credit rating established by an accredited ratings agency and performs internal risk assessments.
The Company holds its cash balances in financial institutions with a rating of A+ and BBB+.
Given these credit ratings, management does not expect any counterparty to fail to meet its obligations. While cash and cash equivalents are subject to the impairment requirements of IFRS9, no impairment losses were identified.
Exposure at Default (EAD)
Probability of possible defaults (PD)
Loss given default (LGD)
Expected credit losses (ECL)
2025
£
£
Cash & Cash equivalents
1,490,049
0%
0%
-
Exposure at Default (EAD)
Probability of possible defaults (PD)
Loss given default (LGD)
Expected credit losses (ECL)
2024
£
£
Cash & Cash equivalents
3,083,552
0%
0%
-
Trade receivables
The Company has adopted a simplified approach for determining expected credit losses which considers the lifetime of assets. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. The expected credit losses are calculated based on the probable defaults which are considered on the historic payment trends of the customer, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix. The Company assesses impairment regularly of trade receivables on a collective basis as they possess shared credit risk characteristics based on grouping debt by days overdue. On that basis the expected credit loss allowance was determined to be immaterial.
Fair value of financial instruments continued
Credit risk continued
Trade receivables continued
The ageing of trade receivables and credit loss allowances at the reporting date were:
Exposure at Default (EAD)
Probability of possible defaults (PD)
Loss given default (LGD)
Expected credit losses (ECL)
2025
£
£
Current
190,278
0%
0%
-
1 - 30 days
29,430
0%
0%
-
31 - 60 days
30,849
0%
0%
-
Over 61 days
15,505
0%
0%
-
Total
266,062
-
Exposure at Default (EAD)
Probability of possible defaults (PD)
Loss given default (LGD)
Expected credit losses (ECL)
2024
£
£
Current
74,659
0%
0%
-
1 - 30 days
49,378
0%
0%
-
31 - 60 days
9,197
0%
0%
-
Over 61 days
54,744
0%
0%
-
Total
187,978
-
Foreign exchange risk
Foreign exchange risk arises when the Company enters into transactions in a currency other than its functional currency. The Company's policy is, where possible, to settle liabilities denominated in a currency other than its functional currency with cash already denominated in that currency.
23. Related party transactions
During the year, the key management personnel remuneration included within staff costs are as follows:
12 months ended
12 months ended
31-Dec-25
31-Dec-24
Key management personnel compensation
£
£
(Directors' remuneration)
Short-term employee benefits
416,831
329,397
Pension contributions
15,500
12,385
Post-employment benefits
-
-
Termination benefits
-
-
Equity compensation benefits
-
-
Total
432,331
341,782
Key management personnel are considered to be the directors of Tan Delta Systems plc.
24. Events after reporting period
No adjusting or significant non-adjusting events have occurred between reporting date and the date of authorisation.
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