REG - Tialis Essential IT - Final Results and Notice of AGM
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RNS Number : 8754D Tialis Essential IT PLC 12 May 2026
Tialis Essential IT Plc
("Tialis" or the "Company")
Audited Results for the Year Ended 31 December 2025 and Notice of AGM
Tialis, the mid-market IT Managed Services provider, is pleased to announce
its audited results for the year ended 31 December 2025.
Highlights in the year include:
· Group revenues of £17.7 million (2024: £20.8 million).
· Adjusted EBITDA remained resilient at £1.8 million (2024: £2.0 million).
· Strategic progress made in reshaping the Group's portfolio during 2025 through
selective acquisitions and investments, supporting long-term value creation.
· Robust cash generation in 2025, enabling continued investment and further
strengthening of the balance sheet.
· A strong current sales pipeline of £8m annual value, providing good
visibility over future growth.
· Looking forward, approximately 77% of expected 2026 revenue is supported by
existing contracts, with balance to be delivered from new business wins.
The Annual Report and Accounts for the year ended 31 December 2025 will
shortly be available on the Company's website at www.tialis.com
(http://www.tialis.com/) .
Copies of the Annual Report and Accounts will be posted to shareholders by
shortly along with the notice of AGM which will be held at 10.00 am on 22 June
2026 at the offices of DAC Beachcroft LLP, 25 Walbrook, London EC4N 8AF.
For more information, contact:
Tialis Essential IT Plc Tel: +44 (0)344 874 1000
Peter Hallett, Interim Non-Executive Chairman
Cavendish Capital Markets Ltd Tel: +44 (0)20 7220 0500
Nominated Adviser and Broker
Corporate finance: Jonny Franklin-Adams/ Elysia Bough
Chairman's Statement
I am pleased to present the Chairman's Statement for the year ended 31 December 2025. This has been a year of continued operational progress, tighter strategic focus and improving financial stability for Tialis Essential IT PLC ("Tialis" or "the Group"), while navigating a challenging macro‑economic backdrop and periods of slower customer decision‑making across parts of the IT services marketplace. The Group has remained focused on supporting customers, strengthening its core Managed Services business, deepening customer and partner relationships, diversifying its revenue base, and pursuing structured growth opportunities that the Board believes can support long-term value creation. During the period, there were also a number of changes to the Board which are set out below.
Highlights
Group revenues were £17.7 million (2024: £20.8 million) reflecting the
impact of contract insourcing by two customers, alongside a temporary
softening in project activity and delayed customer orders in the context of a
challenging market environment. The Board believes these conditions are
cyclical and that underlying demand for the Group's services remains robust.
Adjusted EBITDA remained stable at £1.8 million (2024: £2.0 million),
underlining the resilience of the Group's operating model and the benefits of
our previous cost efficiency initiatives.
Importantly, the business also remained strongly cash generative during the
year at an operating activated level, enabling the Group both to invest in
selected strategic opportunities and to accelerate debt reduction.
During the year, the Group renewed and extended a number of significant
contracts, closing the year with a strong and well‑diversified
new‑business pipeline of approximately £8 million of annual contract value
("ACV"), supporting greater revenue visibility.
We were particularly pleased to see momentum return in the second half of the
year, including the addition of a large global systems integrator to our
partner network. Tialis secured two strategically important multi‑year
awards:
· A £50 million, 5‑year follow‑on framework agreement with a
long‑standing enterprise customer, covering Lifecycle Services, Tech Bars,
End User Support and Field Engineering across their operations.
· A £15 million, 5‑year contract with a major UK Government
Department, which commenced in September 2025, further strengthening our
position as a trusted provider across the UK public sector.
Together, these awards materially enhance forward revenue visibility and
demonstrate the continued confidence placed in Tialis by its customers across
both enterprise and public sector markets.
The Group has continued to execute against its strategy to create a
simplified, well‑scaled, profitable managed services organisation centred
around the Tialis Essential IT Manage Limited platform. Our strategy retains
three core pillars:
· Organic growth through expansion of our partner ecosystem and
market share;
· Development of high‑margin Lifecycle Services as a
differentiator in the end‑user device market;
· Targeted inorganic growth where acquisition opportunities provide
synergistic value and recurring returns for shareholders.
In 2025, the Group took meaningful steps in expanding its investment
portfolio:
AI Auxesis Limited
Tialis launched AI Auxesis, a 50%-owned subsidiary dedicated to AI‑driven
customer experience analytics. AI Auxesis has made a strategic investment in
QPC 2020 Limited ("QPC"). Since the investment, QPC has secured a global
partnership agreement with Genesys, established multiple strategic alliances,
and delivered early enterprise wins, signalling an encouraging early growth
trajectory.
Digital Petcare UK Limited
Tialis acquired a £1.485 million loan, which it subsequently restructured
into equity and a new interest‑bearing facility. This transaction enabled
Tialis to secure a 14.14% shareholding in Digital Petcare while continuing to
generate a 12% interest return on the new facility of £0.7 million.
CloudCoCo Group plc
The Group acquired 10.6% of CloudCoCo Group plc, further diversifying its
investment holdings within the UK technology sector.
MXLG Acquisitions Limited
The Group acquired 50% of MXLG Acquisitions Limited ("MXLGA"), a joint venture with Liberty Global Europe 2 Limited. The Board believes this investment is aligned with Tialis' stated strategy of disciplined capital allocation into opportunities that can enhance long-term shareholder value, broaden the Group's exposure to attractive end markets and create additional routes to future cash generation.
MXLGA provides Tialis with exposure to a complementary platform operating in the SME technology services market in the UK, with scope for operational development and longer-term strategic upside. Since acquisition on 7 October 2025, the joint venture achieved revenues of £5.7 million, adjusted EBITDA of £0.5 million and a loss after taxation of £0.4 million.
The Board believes the investment has the potential to generate attractive returns over time and further supports the Group's strategy of combining a resilient core operating business with selective higher-growth and higher-return opportunities.
Board Changes
During 2025 and early 2026, the Board undertook a number of important changes.
Peter Hallett and Rachel Horsefield joined the Board as Non‑Executive
Directors in September 2025. Following the Board changes announced on 30
January 2026, Peter Hallett has since assumed the role of Interim
Non-Executive Chairman to support an orderly transition and maintain effective
independent oversight while the Board progresses the appointment of a
permanent Chair.
Matthew Riley stepped down in October 2025. David (Niall) O'Regan was
appointed Chief Executive Officer in January 2026, reflecting the Board's
confidence in his leadership of the Group's operational activities. Andrew Ian
Smith stepped down from the Board in January 2026.
The Board is focused on maintaining continuity, effective governance and
disciplined execution of the Group's strategy during this period of
transition. As Interim Chairman, I am confident in the depth, commitment and
capability of the leadership team, and the Board expects to appoint a
permanent Chair in due course.
People
Our colleagues remain central to the Group's success. During 2025, the Group
reduced average headcount as part of organisational simplification initiatives
designed to better align the cost base with business needs. The Board is
deeply appreciative of the professionalism, commitment and continued customer
focus shown by employees during a period of change.
We remain committed to fostering a culture anchored in collaboration,
accountability, and inclusivity. Mandatory training programmes continue to
support our priorities in equality, diversity, health & safety and data
security.
Strategy
We intend to continue with our organic initiatives which are already
demonstrating positive momentum, including the expansion of our partner
network and we are also exploring expansion into Europe. The Board will
continue to assess selective inorganic opportunities where these are
strategically coherent, financially disciplined and supportive of long-term
shareholder value.
We are also exploring additional complementary solutions that can be added to
our current services portfolio, which would increase our offering to customers
in the end user device market. In addition to this, we are also looking at
marketing strategies to increase our brand awareness to the direct market,
which can deliver quicker turnaround on Request For Proposal (RFP) wins and
therefore faster in year revenue recognition. The transformation of
traditional on-site support maintenance solutions, to our Lifecycle services
is also key, as it improves our margins, reduces costs for our customers and
has less risk of margin erosion than traditional people-based services.
We also recognise the importance placed on sustainability and plan to continue
to improve on our ESG targets and our offering of carbon neutral solutions to
our customers. Please find more details in the Strategic Report under the
Environmental Policies.
Capital restructuring proposed
The Directors are proposing a special resolution that will be put to
shareholders at the upcoming 2026 AGM to approve a capital reduction. The
capital reduction being requested is: (i) to cancel the share premium reserve
(which currently stands at approximately £63.7 million); and (ii) to cancel
and extinguish the 496,702,800 deferred shares of 2.49 pence each in issue
(which have no rights or economic value) and release the amounts created by
such reduction of capital to distributable reserves.
This would provide the Company with additional flexibility in the future,
including in relation to share buy-backs and dividends, should the Board
consider it appropriate to do so.
Global economic and geopolitical environment
The global economic and geopolitical environment remained uncertain during the
year and continues to evolve. Persistent inflationary pressures, elevated
interest rates, labour cost increases and wider supply chain and supplier cost
inflation continued to affect the UK operating environment.
These conditions affected the Group principally through externally driven
increases in employment costs, insurance premiums, software and licence
charges, business rates and certain third-party service costs. The Board has
responded through active cost management, operational simplification and
continued focus on margin discipline.
The Board continues to monitor developments closely and believes that the
Group's diversified customer base, strong public-sector exposure and proactive
cost management provide resilience against these external challenges. While
uncertainty remains, the Board is confident that Tialis is well positioned to
navigate the current environment and to capitalise on opportunities as market
conditions stabilise.
Current trading and outlook
Trading in the current financial year remains in line with Board expectations.
Our in-year pipeline for 2026 stands at £8 million annual value with a broad
range of customers and continues to grow, giving us strong visibility over
future growth.
Our expectation for the year is that approximately 77% of revenue will be
generated from existing contracts with the remainder derived from new business
wins. This, together with a buoyant pipeline, underpins confidence in a year
of strong growth for the Group.
The key priority for 2026 is to further increase the focus and utilisation of
our lifecycle facility which delivers greater efficiency for our end-user
customers, improved levels of customer satisfaction and stronger margins.
Initiatives are currently underway with our most significant partner to
support an increase in activity in this area.
Joint venture performance and outlook
The Group has also seen a strong start to 2026 with regard to its joint
venture investment in MXLG Acquisitions Limited. The joint venture commenced
the year positively, securing and delivering significant one-off revenues in
January 2026. As a result, performance for the first quarter of 2026 is ahead
of budget. The Board is encouraged by this early momentum and believes it
provides a positive indication of the joint venture's potential contribution
in the year ahead.
Financial Review
Results
Revenue for the full year was £17.7 million (2024: £20.8 million). Gross
profit margin remained constant at 29%, although resulting gross profit has
decreased year-on-year to £5.0 million (2024: £6.0 million). Adjusted
EBITDA¹ remained at £1.8 million (2024: Adjusted EBITDA of £2.0 million).
The net loss after tax for the year was £1.6 million (2024: loss £3.2
million), after £1.3 million amortisation and impairment expense and fair
value loss on deferred and contingent consideration (2024: £2.2 million
amortisation and impairment expense and fair value profit on deferred and
contingent consideration).
The increase in certain operating costs during the year reflects the wider
macro-economic environment outlined above. Inflationary pressures and
externally driven cost increases fed through to the Group's cost base,
including higher employment-related costs, insurance premiums, business rates,
software and licence charges and certain supplier pricing increases.
¹ Adjustments are as follows; Interest, tax, depreciation, amortisation,
impairment charge, non-underlying items, fair value (loss) / profit and
share-based payments.
Non-underlying items
Non-underlying items relating to on-going restructuring and reorganisation
amount to £0.4 million in the year (2024: £0.7 million).
Finance costs
After incurring net finance charges of £0.4 million relating to interest and
arrangement fees for loan notes, leases and bank debt (2024: £0.4 million),
the loss before tax is £1.7 million (2024: loss of £3.3 million).
Taxation
The utilisation of tax losses and the benefit of the increase in the rate of
corporation tax on the deferred tax asset has resulted in a tax credit for the
year of £0.2 million (2024: tax credit £0.1 million).
Loss on operations
Whilst the underlying trading performance of our Manage business shows
significant positive EBITDA, the aggregate impact of group costs, finance
costs and amortisation charges result in a loss after tax for the year of
£1.5 million (2024: £3.2 million), which equates to a basic loss per share
of 5.55 pence (2024: loss per share of 13.11 pence).
Statement of Financial Position
Non-current assets
The Group has property, plant and equipment of £0.5 million (2024: £0.7
million) all of which are subject to depreciation as per the policies set out
in the accompanying financial statements. During the year there were additions
of £0.2 million (2024: £0.2 million additions).
Further, intangible assets of customer contracts and related relationships are
£3.6 million (2024: £4.8 million) and are subject to amortisation as per the
policies set out in the accompanying financial statements.
Trade and other receivables
Trade and other receivables have decreased to £4.2 million from £4.4
million.
Trade and other payables
Trade and other payables amounted to £2.6 million (2024: £4.1 million),
including trade payables of £1.3 million (2024: £1.3 million), taxation
and social security of £0.7 million (2024: £1.2 million) and accruals of
£0.6 million (2024: £0.6 million).
The deferred and contingent consideration of £nil million (2024: £1.05
million) is included in other payables.
Contract liabilities arise from customers being invoiced in advance of
services delivered, in accordance with individual contractual terms, at the
balance sheet date this amounted to £0.3 million (2024: £0.8 million).
Cashflow and net debt
Net cash generated from operating activities during the year was £1.4 million
(2024: £1.9 million), demonstrating the continued cash-generative nature of
the Group's core Manage business despite a lower revenue base. Cash generation
remained robust, supported by disciplined working capital management and the
strength of the Group's relationships with key strategic partners.
During the year, the Group continued to invest selectively in attractive
strategic opportunities while also accelerating debt repayment. In particular,
£1.0 million of bank borrowings was repaid during the year, reflecting the
Board's focus on balance sheet discipline and financial flexibility.
After investment in growth opportunities, modest capital expenditure and the
repayment of debt and lease liabilities, the Group ended the year with bank
borrowings of £3.0 million and a cash balance of £0.7 million (2024: bank
borrowings of £4.0 million and cash of £0.9 million). The Board believes
this demonstrates both the resilience of the Group's cash generation and its
ability to fund investment while strengthening the balance sheet.
Borrowings
As at 31 December 2025, the bank borrowings liability in the balance sheet was
£3.0 million (2024: £4.0 million).
Donations to charities
There were donations to charities of £nil in the year (2024: £1,982).
Going concern
The Directors have produced detailed trading and cashflow forecasts. In
reaching their conclusion on the going concern basis of accounting, the
Directors note and rely on the improved trading performance, the positive cash
generation that the business is now experiencing and the current signed order
book. A reverse stress test of the model has been run to determine at what
level of shortfall in revenues the Group would run out of cash. Given the
committed orders already obtained and the visibility of future revenues, the
directors do not consider it likely that revenues could drop to such an extent
that the Group would run out of cash. They have also considered the impact of
any delayed customer payments and have developed plans to mitigate any such
delays to ensure that the group can continue to settle its liabilities as they
fall due and operate as a going concern.
The directors therefore have an expectation that the Group and Company have
adequate resources available to them to continue in operational existence for
a period of at least 12 months from the date of approval of these financial
statements. Accordingly, the Group and Company continue to adopt the going
concern basis in preparing these consolidated financial statements.
Financing and dividend
The Directors do not propose a dividend in respect of the current financial
year (2024: £nil).
Peter Hallett
Interim Non-Executive Chairman
11 May 2026
Strategic Report
Review of the Business
A detailed review of the business is set out in the Chairman's Statement and
the Financial Review. The year under review represented a period of
consolidation and strategic progress for the Group with both continuing
revenues and gross margin remaining consistent year-on-year and adjusted
EBITDA¹ remaining positive, despite the impact of non‑cash charges, finance
costs and restructuring activity on reported post‑tax results. Future
developments and current trading and prospects are set out in the Executive
Director's Statement and the Financial Review. These reports together with the
Corporate Governance Statement are incorporated into this Strategic Report by
reference and should be read as part of this report. The Group's strategy is
focused on maximising value for stakeholders by increasing revenues and
profits by upselling to our current customer base as well as by bringing new
customers on board.
At 31 December 2025, the Board comprised four Directors (2024: three) two of
whom are male and two are female. At 31 December 2025 the Group had 212
employees including Directors (2024: 268) of which 169 were male (2024: 245)
and 43 were female (2024: 44).
¹ Adjusted EBITDA is defined as earnings before interest, tax, depreciation,
amortisation, impairment charges, non-underlying items, loss on disposal of
fixed assets and share-based payments.
Key performance Indicators
The Board uses a range of financial and non‑financial key performance
indicators ("KPIs") to assess operational performance, financial resilience
and progress against the Group's strategic objectives. These KPIs are reviewed
regularly by the Board and are consistent with those used internally to manage
the business.
KPI 2025 2024 Commentary
Revenue £17.7m £20.8m Decrease reflects contract insourcing by two customers and delayed project
activity
Gross margin 29% 29% Margin stability demonstrates continued operational discipline
Adjusted EBITDA(1) £1.8m £2.0m Largely resilient despite lower revenue, reflecting cost actions taken
Net cash from operations £1.4m £1.9m Ongoing cash generation from the core Manage business
Average headcount 243 283 Reduction aligned with organisational simplification and cost base resizing
Customer concentration (largest partner) 60% 81% Reduced concentration lowers commercial risk
Revenue and Adjusted EBITDA are the primary measures used by the Board to assess the scale and underlying profitability of the Group. While revenue declined year‑on‑year, gross margins remained stable and Adjusted EBITDA performance reflects the benefits of cost efficiency and simplification initiatives.
Cash generation remains a key focus, supporting liquidity, debt servicing and ongoing investment. The Group continued to generate positive operating cashflows in 2025.
Headcount is monitored as a key operational KPI, reflecting the alignment of the Group's cost base with activity levels. The reduction during the year was driven by organisational simplification initiatives.
Customer concentration is a key commercial risk indicator. The reduction in reliance on the largest partner during the year represents progress against the Group's strategy to diversify revenues.
Principal Risks and Uncertainties
Identifying, evaluating, and managing the principal risks and uncertainties
facing the Group is an integral part of the way the Group does business. There
are policies and procedures in place throughout the operations, embedded
within our management structure and as part of our normal operating processes.
The Board reviews the principal risks on a bi-annual basis. The impact,
measures in place and tactics to mitigate risks are assessed on a regular
basis. The risk categories, set out below, have been identified by the Board
as those currently considered to potentially have the most material impact on
the Group's future performance. In addition to these risks, note 25 contains
details of financial risks.
Customer concentration
The Group has a significant revenue concentration with a single Partner (60%)
(2024: 81%) which represents a further reduction in concentration
year‑on‑year. This is mitigated as there are a number of end customers,
all with different agreements and contract end dates. The Group has traded
with the Partner for over 20 years and has long standing relationships. The
Group is also focused on reducing this concentration and is working on several
opportunities to achieve this.
Market and Economic Conditions
Market and economic conditions are recognised as one of the principal risks in
the current trading environment; however, the Board believes the Group's
exposure is mitigated by the high proportion of public sector and
mission‑critical end‑customers. Risk is mitigated by the
monitoring of trading conditions and changes in government legislation, the
development of action plans to address specific legislative changes and the
constant search for ways to achieve new efficiencies in the business without
impacting service levels.
The Board does not believe the current macro-economic outlook has changed the
Group's prospects given the large proportion of the end-customers being in the
public sector. The Group has also undertaken stress testing of the detailed
trading forecasts and cashflows taking into account inflation and interest
rate increases. The Board does not consider that these will change the outlook
at present. In relation to interest rates increases, the Group's debt is at
a fixed rate.
Reliance on Key Personnel and Management
The success of the Group is dependent on the services of key management and
operating personnel. The Directors believe that the Group's future success
will be largely dependent on its ability to retain and attract highly skilled
and qualified personnel and to train and manage its employee base. During the
year, the restructuring programme continued which resulted in more members of
staff being made redundant and other members of staff moving into new roles.
For those who remain there are several employee benefits and active
communication is encouraged within the business to mitigate the risk of losing
skilled and qualified individuals. Furthermore, there is an apprenticeship
scheme which the Group believes will assist in training and retaining younger
individuals going forward.
Competition
The Group operates in a highly competitive marketplace and while the Directors
believe the Group enjoys certain strengths and advantages in competing for
business, some competitors are much larger with considerable scale. The Group
monitors competitors' activity and constantly reviews its own services and
prices to ensure a competitive position in the market is maintained.
Technology
The market for our services is in a state of constant innovation and change.
We devote significant resource to the development of new service lines,
ensuring new technologies can be incorporated and integrated with the Group's
core services. The nature of the Group's services means that they are exposed
to a range of technological risks, such as viruses, hacking and an
ever-changing spectrum of security risk. We maintain constant pro-active
vigilance against such risks and the Group maintains membership of some of the
highest levels of security accreditation as part of the service it offers its
customers.
s.172(1) Companies Act 2006: Statement of Directors' Duties to Stakeholders
Promoting the success of the Company
The Directors are aware of their duty under section 172(1) of the Companies
Act 2006 to act in the way which they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its members as
a whole and, in doing so, to have regard (amongst other matters) to:
· The likely consequences of any decision in the long term;
· The interests of the Company's employees;
· The need to foster the Company's business relationships with
suppliers, customers and others;
· The impact of the Company's operations on the community and the
environment;
· The desirability of the Company maintaining a reputation for high
standards of business conduct; and
· The need to act fairly between members of the Company.
The Board recognises that the long-term success of the Company requires
positive interaction with its stakeholders. Positive engagement with
stakeholders will enable our stakeholders to better understand the activities,
needs and challenges of the business and enable the Board to better understand
and address relevant stakeholder views which will assist the Board in its
decision making and to discharge its duties under Section 172 of the Companies
Act 2006.
Our Commitment
The Company is committed to operating with an inclusive, transparent, and
respectful culture and places particular emphasis on operating to the highest
ethical and environmental standards.
The Directors take personal ownership of the policies and maintenance of the
necessary exacting standards of business conduct throughout the organisation
and for delivering these corporate and social responsibilities.
Stakeholder Engagement
Recruitment and employee management are undertaken in line with the Company
Employment Policy which has committed to a working environment with equal
opportunities for all, without discrimination and regardless of sex, sexual
orientation, age, race, ethnicity, nationality, religion, or disability.
We are committed to being an equal opportunities employer and oppose all forms
of unlawful discrimination. We believe that staff members should be treated on
their merits and that employment-related decisions should be based on
objective job-related criteria such as aptitude and skills. For these reasons,
all staff members, and particularly managers with responsibility for
employment-related decisions, must comply with the practices described below:
· recruitment;
· pay and benefits;
· promotion and training;
· disciplinary, performance improvement and redundancy procedures.
As part of the induction of all employees and on a recurring annual basis, all
employees have to complete a mandatory set of training courses, one of which
is on equality, diversity and inclusion in both the workplace and local
communities.
We conduct a gender pay analysis annually and the report is published on the
Company's website.
Tialis seeks to attract and retain staff by acting as a responsible employer.
The health, safety and well-being of employees is important to the Company.
All employees have access and are encouraged to use the Employee Assistance
Program with a 24-hour helpline.
Furthermore, the Company has committed to continuous development schemes and
will support employees to attain the best for themselves and the Company
through personal assessment, training and mentoring.
Externally, Tialis has established long-term partnerships that complement its
in-house expertise and has built a network of specialised partners within the
industry and beyond.
The Directors have committed to promoting a company culture that treats
everyone fairly and with respect and this commitment extends to all principal
stakeholders including shareholders, employees, consultants, suppliers,
customers, and the communities where it is active.
All Directors are encouraged to act in a way they consider, in good faith, to
be most likely to promote the success of the Company for the benefit of its
shareholders. In doing so, they each have regard to a range of matters when
making decisions for the long-term success of the Company.
Health and Safety
Tialis Group cares profoundly about the health and safety of our employees,
customers and the communities who could be affected by our activities and aims
to protect them from any foreseeable hazard or danger arising from our
activities. To this end in 2025 the Company completed a series of safety
related studies and reviews, including electrical and gas, quantified risk
assessments and layer of protection analysis using external experts to review
the product risk and the application on our Dartford site. In all instances
the findings of the safety risk assessments have demonstrated that the risk
arising from the Tialis Group's activities is well within acceptable tolerable
risk levels. In 2026 the Company will revisit these assessments to identify
any changes that have been introduced which may represent new or variants of
risk.
We have a Health and safety policy and as mentioned above all employees have
to complete a mandatory set of training courses, which include several health
and safety courses, including manual handling, mental health awareness, stress
awareness, bullying and harassment, display screen set-up and a general health
and safety course.
The Directors recognise that the key to successful health and safety
management requires an effective policy, organisation, and arrangements which
reflect the commitment of senior management. The executive management team
implement the Company's health and safety policy and ensure that the Company
Health and Safety (HSE) management system and safety standards are all
maintained, monitored, and improved where necessary.
The Company's activities at its Dartford site were delivered HSE incident free
in 2025.
Environment Policies
The Company's Environmental Policy recognises the importance of our technology
from a global challenge perspective. The Company will regularly evaluate the
environmental impact of its activities, products, and services, taking all
actions necessary to continually improve the Company's and its products'
environmental performance.
The Company is proud to have been awarded ISO 14001.
Tialis Group has a Carbon Reduction Strategy which is published on the company
website. We at Tialis Group are committed to reducing our impact on the
environment in order to help safeguard our planet for future generations. We
have committed to a well-below 2 degrees Celsius trajectory and to maintaining
our scope 1 and scope 2 greenhouse gas emissions at a level 30% lower than in
our base year of 2018. We have invested in an environmental management system
certified to ISO 14001 to ensure that we can monitor and manage our activities
to meet our targets.
In addition to committing to maintaining our scope 1 and 2 emissions at 30%
less than they were in 2018, we will also work to reduce our overall
greenhouse gas emissions (scopes 1, 2 and 3) by 2.5% every year from a 2021
baseline. We have engaged with Science Based Targets (SBTi) to validate our
30% reduction target. SBTi has confirmed that our target of a 30% reduction
from 2018 has been accepted and will be published on their website. They have
undertaken due diligence on the 2018 information we provided and verified its
accuracy. As the work we have done in the last few years has helped us achieve
the 30% target already, we will now ensure that we maintain this lower level.
As mentioned above all employees have to complete a mandatory set of training
courses, which include an environmental awareness course.
Strategy
The Group's purpose is to build value for the investors and shareholders
through the development of innovative service offerings designed to reduce
business IT costs and increase efficiencies for our partners and customers.
We intend to continue with our organic initiatives that continue to
demonstrate positive growth, including the expansion of our partner network
and we are also exploring expansion into Europe. The Group is considering
growth through acquisition and would consider synergistic targets that would
expand and deepen our service offerings.
We are also exploring additional complementary solutions that can be added to
our current services portfolio, which would increase our offering to customers
in the end user device market. In addition to this, we are also looking at
marketing strategies to increase our brand awareness to the direct market,
which can deliver quicker turnaround on RFP wins and therefore faster in year
revenue recognition. The transformation of traditional on-site support
maintenance solutions, to our Lifecycle services is also key, as it improves
our margins, reduces costs for our customers and has less risk of margin
erosion than traditional people-based services.
We also recognise the importance placed on sustainability and plan to continue
to improve on our ESG targets and our offering of carbon neutral solutions to
our customers.
On behalf of the Board
Peter Hallett
Interim Non-Executive Chairman
11 May 2026
24 Dublin Street Edinburgh EH1 3PP
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2025
Year ended Year ended
31 December 31 December
Note 2025 2024
£000 £000
Continuing operations
Revenue 3 17,663 20,842
Cost of sales 4 (12,623) (14,830)
Gross profit 5,040 6,012
Administrative expenses 4 (6,244) (8,911)
Adjusted EBITDA* 1,752 2,006
Non underlying items 6 (429) (688)
Depreciation 12 (397) (388)
Amortisation and impairment 13 (1,262) (2,280)
Fair value (loss) / profit on investments in financial assets 16 (86) -
Fair value (loss) / profit on deferred and contingent consideration 4,13 (582) (971)
Charges for share-based payments 28 (200) (578)
Operating (loss) / profit (1,204) (2,899)
Finance income 7 67 27
Finance costs 8 (411) (466)
Share of post-tax losses of equity accounted joint ventures 15 (180) -
Loss on ordinary activities before taxation (1,728) (3,338 )
Income tax 10 185 144
Loss for the year (1,543) (3,194)
Loss for the year attributable to:
Non-controlling interest 51 -
Owner of the parent (1,594) (3,194)
(1,543) (3,194)
Total basic and diluted loss per share 11 (5.55) p (13.11) p
* Adjusted EBITDA is defined as earnings before interest, tax, depreciation,
amortisation, impairment charge, non-underlying items, fair value (loss) /
profit and share-based payments
The notes are an integral part of these financial statements
Statements of Financial Position
As at 31 December 2025
Note Group Company
2025 2024 2025 2024
£000 £000 £000 £000
Non-current assets
Property, plant and equipment 12 477 718 - -
Intangible assets 13 3,555 4,817 - -
Investments in subsidiaries 14 - - 17,336 18,211
Investments in equity-accounted joint ventures 15 7,006 - - -
Investments in financial assets 16 913 - - -
Deferred tax asset 10 3,698 3,479 - -
Trade and other receivables 17 800 100 8,665 704
16,449 9,114 26,001 18,915
Current assets
Trade and other receivables 17 3,425 4,317 386 144
Cash and cash equivalents 18 664 854 235 13
4,089 5,171 621 157
Total assets 20,538 14,285 26,622 19,072
Current liabilities
Trade and other payables 19 2,573 4,092 330 1,533
Contract liabilities 20 319 770 - -
Borrowings 22 349 325 - -
3,241 5,187 330 1,533
Non-current liabilities
Borrowings 22 3,116 4,686 3,016 4,335
Convertible loan notes 23 - - - -
Provisions 21 394 352 - -
3,510 5,038 3,016 4,335
Total liabilities 6,751 10,225 3,346 5,868
Net assets 13,787 4,060 23,276 13,204
Equity attributable to equity holders of the parent
Share capital 27 12,767 12,611 12,767 12,611
Share premium 63,746 52,957 63,746 52,957
Equity reserve 58 58 58 58
Share based payment reserve 780 583 780 583
Retained earnings (63,740) (62,149) (54,075) (53,005)
13,611 4,060 23,276 13,204
Non-controlling interest 33 176 - - -
Total equity 13,787 4,060 23,276 13,204
The notes are an integral part of these financial statements. The Company made
a loss of £1.8 million in the year ended 31 December 2025 (2024: Loss £2.1
million) and in accordance with s408 of the Companies Act 2006 has not
presented a company statement of comprehensive income. These financial
statements were approved by the Board of Directors on 11 May 2026 and were
signed on its behalf by:
Peter Hallett, Interim Non-Executive Chairman
Company registered number: SC368538
Statements of Changes in Equity
for the year ended 31 December 2025
Group Share Capital (a) Share Premium (b) Equity reserve (c) Share based payments reserve (d) Retained Earnings (e) Non-controlling interest (f) Total equity
£000 £000 £000 £000 £000 £000 £000
Balance at 1 January 2024 12,610 52,865 58 11 (58,961) - 6,583
Loss for the financial year and total comprehensive expense - - - - (3.194) - (3,194)
Shares issued for the acquisition of Allvotec and in lieu of a bonus to an 1 92 - - - - 93
employee (note 27)
Transactions with owners recorded directly in equity
Share based payments charge for leavers - - - (6) 6 - -
Share based payments charge (note 28) - - - 578 - - 578
At 31 December 2024 12,611 52,957 58 583 (62,149) - 4,060
Balance at 1 January 2025 12,611 52,957 58 583 (62,149) - 4,060
Loss for the financial year and total comprehensive expense - - - - (1,594) 51 (1,543)
Shares issued for cash 2 123 - - - - 125
Shares issued to acquire investment assets 95 7,250 - - - - 7,345
Shares issued to acquire loan assets 26 1,462 - - - - 1,488
Shares issued to settle deferred consideration 24 1,615 - - - - 1,639
Shares issued to convert loan notes 9 339 - - - - 348
Non-controlling interest acquired on acquisition - - - - - 125 125
Transactions with owners recorded directly in equity
Share based payments charge for leavers - - - (3) 3 - -
Share based payments charge (note 28) - - - 200 - - 200
At 31 December 2025 12,767 63,746 58 780 (63,740) 176 13,787
(a) Share capital represents the nominal value of equity shares and
deferred shares
(b) Share premium represents the excess over nominal value of the fair
value of consideration received for equity shares net of expenses of the
share issue
(c) The equity reserve consists of the equity component of convertible
loan notes that were issued as part of the fundraising in August 2018 less the
equity component of instruments converted or settled
The fair value of the equity component of convertible loan notes issued is the
residual value after deduction of the fair value of the debt component of the
instrument from the face value of the loan note
(d) Share based payments reserve represents the accumulated cost of the
share options in issue
(e) Retained earnings represents retained profits and accumulated losses
(f) Non-controlling interests represent retained profits and accumulated
losses attributable to the non-controlling interest
Company Share Capital (a) Share Premium (b) Equity reserve (c) Share based payments reserve (d) Retained Earnings (e) Total equity
£000 £000 £000 £000 £000 £000
Balance at 1 January 2024 12,610 52,865 58 11 (50,937) 14,607
Total comprehensive loss for the year
Loss for the year - - - - (2,074) (2,074)
Shares issued in lieu of a bonus to an employee (note 27) 1 92 - - - 93
Share based payment charge for leavers - - - - (6) 6 -
Share based payment charge - - - 578 - 578
Balance at 31 December 2024 12,611 52,957 58 583 (53,005) 13,204
Total comprehensive loss for the year
Loss for the year - - - - (1,073) (1,073)
Shares issued for cash 2 123 - - - 125
Shares issued to acquire investment assets 95 7,250 - - - 7,345
Shares issued to acquire loan notes 26 1,462 - - - 1,488
Shares issued to acquire deferred consideration 24 1,615 - - - 1,639
Shares issued to convert loan notes 9 339 - - - 348
Share based payment charge for leavers - - - (3) 3 -
Share based payment charge - - - 200 - 200
Balance at 31 December 2025 12,767 63,746 58 780 (54,075) 23,276
(a) Share capital represents the nominal value of equity shares and deferred
shares
(b) Share premium represents the excess over nominal value of the fair value
of consideration received for equity shares net of expenses of the share
issue
(c) The equity reserve consists of the equity component of convertible loan
notes that were issued as part of the fundraising in August 2018
less the equity component of instruments converted or settled
The fair value of the equity component of convertible loan notes issued is the
residual value after deduction of the fair value of the debt
component of the instrument from the face value of the loan note
(d) Share based payments reserve represents the accumulated cost of the
share options in issue.
(e) Retained earnings represents retained profits and accumulated losses
Statements of Cash Flows
for the year ended 31 December 2025
Group Note 2025 2024
£000 £000
Cash flows from operating activities
Total loss before tax (1,728) (3,338)
Adjustments for:
Depreciation of property, plant and equipment 12 397 388
Amortisation of intangible assets 13 1,262 2,280
Fair value (loss) / profit on investments in financial assets 16 86 -
Net finance expenses 7, 8 344 439
Share based payments 28 200 578
Share of post-tax losses of equity accounted joint ventures 15 180 -
Decrease in trade and other receivables 1,177 702
(Decrease) / increase in trade and other payables and contract liabilities (365) 789
Increase in provisions 42 51
Net cash generated from operating activities 1,548 1,889
Cash flows from investing activities
Acquisition of investments 16 (337) -
Acquisition of subsidiary company 32 125 -
Acquisition of property, plant and equipment 12 (35) (28)
Net cash used in investing activities (247) (28)
Cash flows from financing activities
Interest received 7 67 22
Interest paid 8 (382) (2,133)
New share issue 125 -
Supplier finance repaid - (900)
Repayment of loan notes, net of expenses 22 - (2,257)
New loan note received - 300
Bank borrowings received - 4,000
Bank borrowings paid 22 (1,000) -
Repayment of lease liabilities 22 (348) (313)
Net cash absorbed by financing activities (1,538) (1,281)
Net (decrease) / increase in cash and cash equivalents (190) 580
Cash and cash equivalents at 1 January 854 274
Cash and cash equivalents at 31 December 664 854
Cash and cash equivalents comprise
Cash at bank 18 664 854
Company Note 2025 2024
£000 £000
Cash flows from operating activities
Loss before tax for the year (1,073) (2,074)
Adjustments for:
Net financial expenses 198 389
Impairment of investments in subsidiaries 1,000 -
Share based payments 28 200 578
325 (1,107)
Increase in trade and other receivables (99) (104)
Increase in trade and other payables 475 1,300
Net cash generated by operating activities 701 89
Cash flows from investing activities
Amounts repaid / (lent) by subsidiaries 690 (63)
Net cash generated / (utilised) from investing activities 690 (63)
Cash flows from financing activities
Purchase of investment 14 (125) -
Net cash used in investing activities (125)
Cash flows from financing activities
New loan note received - 300
Bank borrowings received - 4,000
Interest received 150 -
Interest paid (319) (2,062)
New share issue 125 -
Bank borrowings paid (1,000) -
Repayment of loan notes, net of expenses - (2,257)
Net cash absorbed from financing activities (1,044) (19)
Net increase in cash and cash equivalents 222 7
Cash and cash equivalents at 1 January 13 6
Cash and cash equivalents at 31 December 18 235 13
Notes to the Consolidated Financial Statements
1 Accounting policies
Tialis Essential IT PLC ("Tialis Group") is a company incorporated in
Scotland, domiciled in the United Kingdom and limited by shares which are
publicly traded on AIM, the market of that name operated by the London Stock
Exchange. The registered office is 24 Dublin Street, Edinburgh EH1 3PP and the
principal place of business is in the United Kingdom.
The principal activity of the Group is the provision of end-to-end IT
solutions, concentrating on end-user device management and on-site support
solutions and AI consulting services.
The principal accounting policies, which have been applied consistently in the
preparation of these consolidated and parent company financial statements
throughout the year and by all subsidiary companies are set out below.
1.1 Basis of preparation
The consolidated and parent company financial statements of Tialis Group have
been prepared on the going concern basis and in accordance with UK-adopted
International Accounting Standards. The consolidated financial statements have
been prepared under the historical cost convention. The Company has elected to
take the exemption under section 408 of the Companies Act 2006 to not present
the parent Company's Income Statement.
The accounting framework requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the
process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements are
disclosed in note 1.26 in the accounting policies. The financial statements
are prepared in GBP (being the functional currency of the Group) and rounded
to the nearest £1,000.
Going concern
The Directors have produced detailed trading and cashflow forecasts. In
reaching their conclusion on the going concern basis of accounting, the
Directors note and rely on the improved trading performance, the positive cash
generation that the business is now experiencing and the current signed order
book. A reverse stress test of the model has been run to determine at what
level of shortfall in revenues the Group would run out of cash. Given the
committed orders already obtained and the visibility of future revenues, the
directors do not consider it likely that revenues could drop to such an extent
that the Group would run out of cash. They have also considered the impact of
any delayed customer payments and have developed plans to mitigate any such
delays to ensure that the group can continue to settle its liabilities as they
fall due and operate as a going concern. The directors therefore have an
expectation that the Group and Company have adequate resources available to
them to continue in operational existence for a period of at least 12 months
from the date of approval of these financial statements. Accordingly, the
Group and Company continue to adopt the going concern basis in preparing these
consolidated financial statements.
1.2 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.
The Group applies the acquisition method to account for business combinations.
The consideration transferred for the acquisition of a subsidiary is the total
of 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, 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 in the acquiree on an
acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognised amounts of
the acquiree's identifiable net assets.
Acquisition related costs are expensed as incurred.
Intercompany transactions, balances and unrealised gains on transactions
between Group companies are eliminated on consolidation. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with
policies adopted by the Group.
1.3 Investments in subsidiaries
Investments in subsidiaries are held at cost less accumulated impairment
losses. A formal assessment of the recoverability of the investment values is
undertaken on an annual basis by the Directors. Where indicators of impairment
are identified, fixed asset investments are impaired accordingly.
1.4 Investments in joint ventures
A joint venture is a joint arrangement whereby the parties that have joint
control of the arrangement have rights to the net assets of the joint
arrangement. Joint control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are
incorporated in these financial statements using the equity method of
accounting.
Under the equity method, an investment in an associate or a joint venture is
recognised initially in the consolidated statement of financial position at
cost and adjusted thereafter to recognise the group's share of the profit or
loss and other comprehensive income of the associate or joint venture. When
the group's share of losses of an associate or a joint venture exceeds the
group's interest in that associate or joint venture (which includes any
long-term interests that, in substance, form part of the group's net
investment in the associate or joint venture), the group discontinues
recognising its share of further losses. Additional losses are recognised only
to the extent that the group has incurred legal or constructive obligations or
made payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the
equity method from the date on which the investee becomes an associate or a
joint venture. On acquisition of the investment in an associate or a joint
venture, any excess of the cost of the investment over the group's share of
the net fair value of the identifiable assets and liabilities of the investee
is recognised as goodwill, which is included within the carrying amount of the
investment. Any excess of the group's share of the net fair value of the
identifiable assets and liabilities over the cost of the investment, after
reassessment, is recognised immediately in profit or loss in the period in
which the investment is acquired.
When a group entity transacts with an associate or a joint venture of the
group, profits and losses resulting from the transactions with the associate
or joint venture are recognised in the group's consolidated financial
statements only to the extent of interests in the associate or joint venture
that are not related to the group.
A formal assessment of the recoverability of the investment values is
undertaken on an annual basis by the Directors. Where indicators of impairment
are identified, investments in joint ventures are impaired accordingly.
1.5 Intangible assets
Goodwill
Goodwill is initially measured as the excess of the aggregate of the
consideration transferred and the fair value of any non- controlling interest
over the fair value of the net identifiable assets acquired and liabilities
assumed. If this consideration is lower than the fair value of the net assets
of the subsidiary acquired, the difference is recognised in the income
statement as a bargain purchase.
Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
For the purposes of impairment testing, goodwill acquired in a business
combination is allocated to a cash generating unit.
Goodwill impairment reviews are undertaken annually or more frequently if
events or changes in circumstances indicate a potential impairment. Any
impairment is recognised immediately as an expense and is not subsequently
reversed.
Other intangible assets arising from business combinations
Intangible assets that meet the criteria to be separately recognised as part
of a business combination are carried at cost (which is equal to their fair
value at the date of acquisition) less accumulated amortisation and impairment
losses. An intangible asset acquired as part of a business combination is
recognised outside of goodwill if the asset is separable or arises from
contractual or other legal rights and its fair value can be measured reliably.
Intangible assets acquired in this manner include trademarks and customer
contracts. They are amortised over their estimated useful lives on a
straight-line basis as follows:
· Customer contracts and related
relationships 2-13 years
·
Trademarks
5 years
Impairment and amortisation charges are included within the administrative
expenses line in the income statement.
Technology development
Expenditure on internally developed technology is capitalised if it can be
demonstrated that:
- it is technically feasible to develop the technology for it to be used or
sold
- adequate resources are available to complete the development
- there is an intention to complete and for the Group to use or sell the
technology
- use or sale of the asset will generate future economic benefits, and
- expenditure on the project can be measured reliably.
Capitalised development costs are amortised over the periods the Group expects
to benefit from using or selling the assets developed. The amortisation
expense is included within the administrative expenses line in the income
statement. Development expenditure not satisfying the above criteria and
expenditure on the research phase of internal projects are recognised in the
consolidated income statement as incurred.
Software and licensing
Separately acquired software and licenses are shown at historical cost less
accumulated amortisation and impairment losses.
They are amortised over their estimated useful lives on a straight-line basis
as follows:
· Software and
licensing
8 years
1.6 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any impairment in value. The cost includes the original price of the asset
and the cost attributable to bringing the asset to its current working
condition for its intended use.
Depreciation, down to residual value, is calculated on a straight-line basis
over the estimated useful life of the asset, which is reviewed on an annual
basis, as follows:
· Leasehold
property
Over remaining lease term
· Network
infrastructure
3 - 10 years
· Equipment, fixtures and
fittings
3 - 5 years
An item of property, plant and equipment is de-recognised upon disposal or
when no future economic benefits are expected to arise from the continued use
of the asset. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the
carrying amount of the item) is included in the income statement in the year
the item is de-recognised.
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The
right-of-use asset is measured at cost, which comprises the initial amount of
the lease liability, adjusted for, as applicable, any lease payments made at
or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the cost of
inventories, an estimate of costs expected to be incurred for dismantling and
removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the
unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Where the Group expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is over its
estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
1.7 Impairment of assets
Goodwill is not subject to amortisation and is reviewed for impairment
annually or more frequently if events or changes in circumstances indicate the
carrying value may be impaired. As at the acquisition date, any goodwill
acquired is allocated to each of the cash generating units expected to benefit
from the business combination's synergies. Impairment is determined by
assessing the recoverable amount of each cash generating unit to which the
goodwill relates. When the recoverable amount of the cash generating unit is
less than the carrying amount, including goodwill, an impairment loss is
recognised.
Other intangible assets and property, plant and equipment are subject to
amortisation and depreciation and are reviewed for impairment whenever events
or changes in circumstances indicate the carrying values may not be
recoverable. If any such indication exists and where the carrying value
exceeds the estimated recoverable amount, the assets or cash generating units
are written down to their recoverable amount.
The recoverable amount of intangible assets and property, plant and equipment
is the greater of the fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to
their present values using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset. For an asset that does not generate largely independent cash inflows,
the recoverable amount is determined by the cash generating unit to which the
asset belongs. Fair value less costs to sell is, where known, based on actual
sales price net of costs incurred in completing the disposal. Non-financial
assets, other than goodwill, that were impaired in previous periods are
reviewed annually to assess whether the impairment is still relevant.
1.8 Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction from proceeds.
1.9 Leases
A lease liability is recognised at the commencement date of a lease. The lease
liability is initially recognised at the present value of the lease payments
to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the
Group's incremental borrowing rate. Lease payments comprise of fixed payments
less any lease incentives receivable, variable lease payments that depend on
an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the
option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a
rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest
method. The carrying amounts are remeasured if there is a change in the
following: future lease payments arising from a change in an index or a rate
used; residual guarantee; lease term; certainty of a purchase option and
termination penalties. When a lease liability is remeasured, an adjustment is
made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
1.10 Provisions
Provisions are recognised when the Company has a present obligation (legal or
constructive) as a result of a past event where it is probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. If the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows at a risk-free
rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
1.11 Current and deferred income tax
Current tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities, based on tax rates and
laws that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided for on all temporary differences at the
balance sheet date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes, with the following
exceptions:
· where the temporary difference arises from the initial
recognition of goodwill or an asset or liability in a transaction that is not
a business combination that at the time of the transaction neither affects
accounting nor taxable profit or loss;
· in respect of taxable temporary differences associated with
investments in subsidiaries, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future; and
· deferred income tax assets are recognised only to the extent that
it is probable that taxable profits will be available against which deductible
temporary differences carried forward tax credits or tax losses can be
utilised.
1.12 Trade and other receivables
Trade receivables, which principally represent amounts due from customers, are
recognised at amortised cost as they meet the IFRS 9 classification test of
being held to collect, and the cash flow characteristics represent solely
payments of principal and interest.
The Group has applied the Simplified Approach applying a provision matrix
based on number of days past due to measure lifetime expected credit losses
and after taking into account customers with different credit risk profiles
and current and forecast trading conditions.
Trade receivables are written-off when there is no reasonable expectation of
recovery, such as a debtor failing to engage in a repayment plan with the
company. The Group's trade and other receivables are non-interest bearing.
1.13 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in
hand and short-term deposits with an original maturity of three months or
less.
For the purposes of the consolidated cash flow statement, cash and cash
equivalents consist of cash and cash equivalents as defined above.
1.14 Foreign currencies
The presentational currency of the Group is Pound Sterling (£) and the Group
conducts the majority of its business in Sterling. Transactions in foreign
currencies are initially recorded in the presentational currency by applying
the rate of exchange ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are retranslated at the
presentational currency rate of exchange ruling at the balance sheet date. All
differences are taken to the income statement.
1.15 Pensions
The Group operates a defined contribution scheme. Pension costs are charged
directly to the income statement in the period to which they relate on an
accruals basis. The Group has no further payment obligations once
contributions have been made.
The Group also operates two individual defined benefit plans, as a result of
two employees who were TUPE'd into the Group. These are closed to any other
employees. A defined benefit plan defines the pension benefit that the
employee will receive on retirement, usually dependent upon several factors
including age, length of service and remuneration. A defined benefit plan is a
pension plan that is not a defined contribution plan.
The liability is recognised in the balance sheet in respect of the defined
benefit plan is the present value of the defined benefit obligation at the
reporting date less the fair value of the plan assets at the reporting date.
If the defined benefit plan is in surplus an asset is only recognised if this
is deemed recoverable.
The defined benefit obligation is calculated using the projected unit credit
method. Annually the Group engages independent actuaries to calculate the
obligation. The present value is determined by discounting the estimated
future payments using market yields on high quality corporate bonds that are
denominated in sterling and that have terms approximating the estimated period
of the future payments ('discount rate').
The fair value of plan assets is measured in accordance with IFRS 13 Fair
Value Measurement and the Company's accounting policies for similar assets.
Fair value is determined using appropriate valuation techniques, maximising
the use of observable inputs and minimising the use of unobservable inputs.
Actuarial gains and losses arising from experience adjustments and changes in
actuarial assumptions are charged or credited to other comprehensive income.
These amounts together with the return on plan assets, less amounts included
in net interest, are disclosed in other comprehensive income.
The cost of the defined benefit plan, recognised in profit or loss as employee
costs, except where included in the cost of an asset, comprises:
(a) the increase in pension benefit liability arising from
employee service during the period; and
(b) the cost of plan introductions, benefit changes,
curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net
balance of the defined benefit obligation and the fair value of plan assets.
This cost is recognised in profit or loss as 'finance expense/ income'.
The company also contributes to group personal pension policies, such
contributions being charged against profits when paid.
1.16 Accrual for employee benefits, including holiday pay
Provision is made for employee benefits, including holiday pay, to the extent
of the liability as if all employees of the Group had left the business at its
reporting date.
1.17 Financial assets and liabilities
The Group's financial assets and liabilities mainly comprise cash, borrowings,
trade and other receivables and trade and other payables. These are accounted
for in accordance with the relevant accounting policy note.
All recognised financial assets are measured subsequently in their entirety at
either amortised cost or fair value, depending on the classification of the
financial assets. Financial assets at FVTPL are measured at fair value at the
end of each reporting period, with any fair value gains or losses recognised
in profit or loss at the end of each reporting period.
Trade and other payables are not interest bearing and are stated at their
amortised cost.
Financial liabilities are classified as at fair value through the profit and
loss when the financial liability is contingent consideration of an acquirer
in a business combination.
1.18 Convertible loan notes
The component parts of convertible loans issued by the Company are classified
separately as financial liabilities and equity in accordance with the
substance of the contractual arrangements and the definitions of a financial
liability and an equity instrument. At the date of issue, the fair value of
the liability portion of convertible loan notes is determined using a market
interest rate for a comparable loan note with no conversion option. This
amount is recorded as a liability on an amortised cost basis using the
effective interest method until the loan notes are redeemed or converted
either during or at the end of the term of the convertible loan notes. The
remainder of the carrying amount of the loan notes is allocated to the
conversion option and shown within equity and is not subsequently remeasured.
When the conversion option remains unexercised at the maturity date of the
convertible note, the balance recognised in equity will be transferred to
retained earnings. No gain or loss is recognised in the income statement upon
conversion or expiration of the conversion options.
1.19 Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at fair value less directly
attributable transaction costs. After initial recognition, interest-bearing
loans and borrowings are subsequently measured at amortised cost using the
effective interest method. Gains and losses arising on the repurchase,
settlement or otherwise cancellation of liabilities are recognised in the
finance cost line in the income statement.
1.20 Finance costs
Loans are carried at fair value on initial recognition, net of unamortised
issue costs of debt. These costs are amortised over the loan term.
All other borrowing costs are recognised in the income statement on an
accruals basis, using the effective rate method.
1.21 Revenue
Revenue is measured at the fair value of the consideration received or
receivable for the sale of goods and services in the ordinary course of the
Group's activities. Revenue is shown net of Valued Added Tax, returns, rebates
and discounts and after the elimination of sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably
measured, it is probable that future economic benefits
will flow to the entity and when specific criteria have been met for each of
the Group's activities as described below.
Recurring revenue
The largest portion of the Group's revenues relates to a number of network,
cloud and IT managed services, which the Group offers to its customers. All of
the revenue in this category is contracted and includes a full range of
support, maintenance, subscription and service agreements. Revenue for these
types of services is recognised as the services are provided on the basis that
the customer simultaneously receives and consumes the benefits provided by the
Group's performance of the services over the contract term. In terms of
performance obligations, the customer can benefit from each service on its own
and the Group's promise to transfer the service to the customer is separately
identifiable from other promises in the contract. The transaction price for
each service is allocated to each performance obligation. The costs incurred
for these revenue streams typically match the revenue pattern. A contract
liability is recognised when billing occurs ahead of revenue recognition. A
contract asset is recognised when the revenue recognition criteria were met
but in accordance with the underlying contract, the sales invoice has not been
issued yet.
Project revenue
These project services include mainly installation and consultancy services.
Performance obligations are met once the hours or days have been worked.
Revenue is therefore recognised over time based on the hours or days worked at
the agreed price per hour or day. The costs incurred for this revenue stream
generally match the revenue pattern, as a significant portion of consultancy
costs relate to staff costs, which are recognised as incurred. Consultancy
services are generally provided on a time and material basis.
1.22 Non-underlying items
It is the policy of the Group to identify certain costs, which are material
either because of their size or nature, separately on the face of the Income
Statement in order that the underlying profitability of the business can be
clearly understood. These costs are identified as non-underlying items, and
comprise;
a) Professional fees incurred in sourcing and completing acquisitions
and disposals including legal expenses
b) Professional fees incurred in restructuring and refinancing
acquisitions
c) Integration costs which are incurred by the Group when integrating
one trading business into another, including rebranding of acquired businesses
d) Redundancy costs, including employment related costs of staff made
redundant up to the date of their leaving as a consequence of integration
e) Property costs such as lease termination penalties and vacant
property provisions and third-party advisor fee
1.23 Segmental reporting
The Chief Operating Decision Maker ("CODM") has been identified as the
executive directors of the Company and its subsidiaries, who review the
Group's internal reporting in order to assess performance and allocate
resources.
The CODM assess profit performance principally through adjusted profit
measures consistent with those disclosed in these financial statements. The
Board believes that the Group comprises of two reporting segments, being the
provision of end-to-end IT solutions, concentrating on end-user device
management and on-site support solutions and AI consulting services.
Whilst the CODM reviews the revenue streams and related gross margins of the
two categories separately (IT solutions and Consulting services), the
operating costs and asset base used to derive these revenue streams are the
same for both categories and are presented as such in the Group's internal
reporting.
1.24 Non-Controlling Interests
Non‑controlling interests represent equity in subsidiaries not attributable,
directly or indirectly, to the Company. Non‑controlling interests are
presented separately within equity in the Consolidated Statement of Financial
Position.
The Group measures non‑controlling interests at their proportionate share of
the fair value of the subsidiaries' identifiable net assets at the date of
acquisition. Profit or loss and total comprehensive income are attributed to
the owners of the Company and to non‑controlling interests, even if this
results in the non‑controlling interests having a deficit balance.
Transactions with non‑controlling interests that do not result in a loss of
control are accounted for as equity transactions.
1.25 Standards and interpretations not yet applied by the Group
For the purposes of the preparation of these consolidated financial
statements, the Group has applied all standards and interpretations that are
effective for accounting periods beginning on or after 1 January 2025. There
was no significant impact of new standards and interpretations adopted in the
year.
No new standards, amendments or interpretations to existing standards that
have been published and that are mandatory for the Group's accounting periods
beginning on or after 1 January 2026, or later periods, have been adopted
early. The new standards and interpretations are not expected to have any
significant impact on the financial statements when applied.
1.26 Critical accounting estimates and judgements
Estimates
The Group makes estimates and assumptions concerning the future, which by
definition will seldom result in actual results that match the accounting
estimate. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amount of assets and liabilities
within the next financial year are discussed below:
Recoverability of deferred tax asset -This includes estimates of the level
of future profitability, and a judgement as to the likelihood of the group
undergoing a restructure of its finances which would result in significant
finance cost savings.
A change in the estimate of future profits would result in an equivalent
change to the deferred tax asset recognised of 25% of the change in profits.
There are no reasonably plausible scenarios which would result in the future
profitability not being sufficient to enable full recovery of the tax losses
in the assessment period.
Impairment of intercompany balances - The directors use estimates in assessing
the level of impairment of intercompany balances at each period end, including
the likely methods of recovery of the balances and future profitability of the
underlying trade which would enable repayments to be made.
Judgements
In the process of applying the Group's accounting policies, management makes
various judgements which can significantly affect the amounts recognised in
the financial statements. Critical judgements are considered to be:
Classification of non-underlying items - the Directors have exercised
judgement when classifying certain costs arising during integration and
strategic reorganisation projects. The Directors believe that these costs are
all related to the types of costs described in 1.22 above and are
appropriately classified.
Recoverability of deferred tax asset - the Directors have exercised judgement
on the recoverability of tax losses attributable to future trading profits
generated by the Group, and in doing so this has given rise to a deferred tax
asset, details of which are shown in note 10 to the financial statements. The
judgement involves assessing the extent to which trading losses can be offset
against future profits.
Useful economic lives of tangible and intangible assets - The annual
depreciation and amortisation charge for tangible and intangible assets are
sensitive to changes in the estimated useful economic lives and residual
values of the assets. The useful economic lives and residual values are
re-assessed annually. They are amended when necessary to reflect current
estimates, based on technological advancement, future investments, economic
utilisation and the physical condition of the assets. The remaining useful
economic life of the Allvotec contract lists and assets are considered a
source of estimation uncertainty.
Deferred and Contingent Consideration - the Directors have exercised judgement
on the costs that will arise for the deferred consideration and the valuation
as shown in note 13 to the financial statements. At the year end, the deferred
and contingent consideration amounted to £nil (31 December 2024: £1.06m).
2 Segment reporting
The Chief Operating Decision Maker ("CODM") has been identified as the
executive directors of the Company and its subsidiaries, who review the
Group's internal reporting in order to assess performance and allocate
resources.
The CODM assess profit performance principally through adjusted profit
measures consistent with those disclosed in these interim financial
statements. The Board believes that the Group comprises of two reporting
segments, being the provision of end-to-end IT solutions, concentrating on
end-user device management and on-site support solutions and AI consulting
services.
Whilst the CODM reviews the revenue streams and related gross margins of the
two categories separately (IT solutions and Consulting services), the
operating costs and asset base used to derive these revenue streams are the
same for both categories and are presented as such in the Group's internal
reporting.
2025 2024
£000 £000
Revenue
IT solutions 17,006 20,842
Consulting services 657 -
Total revenue 17,663 20,842
Gross Profit
IT solutions 4,720 6,012
Consulting services 320 -
Total revenue 5,040 6,012
3 Revenue
Disaggregation of revenue from contracts with customers is as follows:
Year ended 31 December 2025 Managed Projects Total
services
Geographical regions £000 £000 £000
United Kingdom 15,590 2,029 17,619
Europe 29 - 29
Rest of the World 13 2 15
Total 15,632 2,031 17,663
Timing of revenue recognition
Goods transferred at a point in time 632 - 632
Services transferred over time 15,000 2,031 17,031
Total 15,632 2,031 17,663
The revenue from the largest customer was £10.5m (2024: £17.0 million) or
60% of total revenue (2024: 81%). No other customers account for more than 15%
of revenue.
Year ended 31 December 2024 Managed Projects Total
Services
Geographical regions £000 £000 £000
United Kingdom 17,897 2,902 20,799
Europe 23 12 35
Rest of the World 8 - 8
Total 17,928 2,914 20,842
Timing of revenue recognition
Goods transferred at a point in time 821 - 821
Services transferred over time 17,107 2,914 20,021
Total 17,928 2,914 20,842
Contract balances
2025 2024
£000 £000
Receivables included within trade and other receivables 2,114 2,972
Contract assets 661 696
2,775 3,668
Contract liabilities (319) (770)
Total 2,456 2,898
Contract assets predominantly relate to fulfilled obligations in respect of
projects and managed services which are billed monthly and in arrears. At the
point where completed work is invoiced, the contract asset is derecognised,
and a corresponding receivable recognised. Contract liabilities relate to
consideration received from customers in advance of work being completed.
The Group's standard payment terms are 30 days from the date of invoice.
Refunds are only due in the exceptional circumstances where the Group does not
meet the performance obligations set out in a contract. The majority of
revenue for services is invoiced monthly, sometimes quarterly, in advance, and
goods are invoiced on delivery.
Unsatisfied performance obligations
All contracts for the provision of services are for periods of one year or
less or are billed based on resources utilised. As permitted under IFRS 15,
the transaction price allocated to these unsatisfied contracts is not
disclosed.
4 Expenses by nature
2025 2024
£000 £000
Direct staff costs 8,743 10,077
Third party cost of sales 3,881 4,753
Employee costs within administrative expenses 2,501 3,197
Amortisation of intangible assets 1,262 2,280
Fair value (loss) / profit on investments in financial assets 86 -
Depreciation 397 388
Share-based payments 200 578
Non-underlying items 429 688
Fair value loss / (profit) on deferred consideration 582 971
Other administrative costs 786 809
Total cost of sales and administrative expenses 18,867 23,741
5 Auditor's remuneration
2025 2024
£000 £000
Audit of these financial statements 33 28
Amounts receivable by auditors and their associates in respect of:
Audit of financial statements of subsidiaries of the Company 61 50
Total 94 78
6 Non-underlying items
In accordance with the Group's policy in respect of non-underlying items, the
following charges were incurred for the year in relation to continuing
operations:
2025 2024
£000 £000
Acquisition expense 93 -
Due diligence on potential acquisitions in the year - 103
Employee share option plan set-up expense - 2
One-off legal fees - 55
Loan Note Consultancy Fees - 79
Restructuring and reorganisation costs 336 449
429 688
Restructuring and reorganisation costs in the year ended 31 December 2025 and
the year ended 31 December 2024 relate to costs incurred on the restructure of
the Group, predominantly redundancy costs, of which £0.3 million are staff
related as disclosed in note 9 (2024: £0.4 million). The redundancy costs
include employment related costs of staff made redundant because of
restructuring. The legal expenses were non-recurring expenses incurred during
the year.
7 Finance Income
Continuing Operations 2025 2024
£000 £000
Interest received 67 27
67 27
8 Finance costs
Continuing Operations 2025 2024
£000 £000
Interest expense on lease liabilities 59 77
Other interest 30 8
Interest expense in respect of bank borrowings 288 107
Interest expense in respect of loan notes 34 274
411 466
9 Employee benefits expense
Staff costs for the year for the Group, including Directors, relating to
continuing operations amounted to:
2025 2024
£000 £000
Wages and salaries 8,925 10,740
Social security costs 1,074 1,119
Other pension costs 909 967
Restructuring costs 336 449
11,244 13,275
At 31 December 2025, the Group employed 212 staff, including Directors (2024:
283).
The average monthly number of persons employed by the Group during the year,
including Directors, analysed by category, and relating to continuing
operations, was as follows:
Number of employees
2025 2024
Operations 218 251
Sales and Marketing 5 8
Administration 16 24
Directors 4 5
Total average monthly headcount 243 288
The Company employed an average of 4 employees during 2025 (2024: 5), which
were the Non-Executive Directors Peter Hallett and Rachel Horsefield, the
Executive Director Andrew Ian Smith and the Chief Financial Officer Nicola
Chown. Their remuneration is as shown below.
For Directors who held office during the year, emoluments for the year ended
31 December 2025 for the Group were as follows:
Salary/fees Salary/fees
2025 2024
£ £
Executive
Andrew Ian Smith1 103,250 221,000
Andy Parker(2) - 151,250
Nicola Chown 170,485 172,649
Non-Executive
Nicolas Bedford(3) - 36,667
Matthew Riley(4) 30,923 40,000
Peter Hallett(5) 18,923 -
Rachel Horsefield(6) 18,923 -
Total 342,504 621,566
1. Directors' emoluments to Andrew Ian Smith were paid to MXC
Advisory Limited, a subsidiary of MXC Capital Limited.
2. Andy Parker stepped down from his role as Executive Chairman
on 10 September 2024.
3. Nicolas Bedford resigned 1 December 2024.
4. Matthew Riley resigned 8 October 2025.
5. Peter Hallett was appointed 8 September 2025.
6. Rachel Horsefield was appointed 8 September 2025.
Social security costs in respect of Directors' emoluments were £27,125 (2024:
£46,792). Pension contributions paid to Directors during the year were
£37,771 (2024: £23,560).
None of the Directors made any gains on the exercise of share options in 2025
or 2024.
10 Taxation
2025 2024
£000 £000
Current tax
Current year 34 -
Current tax 34 -
Deferred tax credit (219) (144)
Total tax credit (185) (144)
(a) Tax on loss on ordinary activities
Reconciliation of the total income tax credit:
2025 2024
£000 £000
Loss before taxation from continuing operations (1,728) (3,338)
Tax using the United Kingdom corporation tax rate of 25% (2024: 25%) (432)
(835)
Non-deductible expenses 282 464
Amortisation and impairment of goodwill and intangibles - non qualifying - 241
assets
Tax losses utilised - not previously recognised (2) (3)
Adjustment for rate change - -
Prior year adjustment (33) (11)
Total tax credit (185) (144)
(b) Deferred tax (asset)/liability
2025 2024
£000 £000
At 1 January (3,479) (3,335)
Credit to income statement (219) (144)
At 31 December (3,698) (3,479)
(Asset) Liability Net (asset)/
liability
£000 £000 £000
At 1 January 2024 (4,484) 1,149 (3,335)
Timing differences in respect of tangible assets 52 - 52
Timing differences in respect of intangible assets - (292) (292)
Short term timing differences (51) - (51)
Recognition of losses (177) 324 147
(176) 32 (144)
At 31 December 2024 (4,660) 1,181 (3,479)
Timing differences in respect of tangible assets 43 - 43
Timing differences in respect of intangible assets - (292) (292)
Short term timing differences (66) - (66)
Recognition of losses 96 - 96
73 (292) (219)
At 31 December 2025 (4,587) 889 (3,698)
Deferred tax liabilities arose in respect of the amortisation of intangible
assets recognised on acquisitions as follows:
2025 2024
£000 £000
Fixed asset timing differences 889 1,181
At 31 December 889 1,181
Deferred tax assets arose in respect of trade losses and fixed asset and other
differences, details as follows:
2025 2024
£000 £000
Tax losses recognised 4,237 4,321
Other temporary differences 114 59
Depreciation in advance of capital allowances 236 280
At 31 December 4,587 4,660
Deferred tax assets are recognised for tax losses carried forward of £18.3
million (2024: £18.6 million) to the extent that the realisation of the
related tax benefit through future taxable profits is probable. In assessing
recoverability, management considers that the appropriate period over which
profits can be assessed with a reasonable degree of certainty, and therefore
used to offset the losses, is the period to 31 December 2030. The future
taxable profits are assumed to include the impact of the planned conversion of
borrowings to equity.
The evidence supporting the recognition of the deferred tax asset for losses
is the partial use of losses in the year.
The Group had unrecognised trading losses carried forward at 31 December 2025
of £3.5 million (2024: £3.7 million). The Company has no deferred tax assets
or deferred tax liabilities as at 31 December 2025 or 31 December 2024.
The Finance Bill 2023, which was substantively enacted on 24 May 2023,
included the announcement that the corporation tax rate for years starting
from April 2023 would increase to 25% on profits over £250,000 and that the
rate for small profits under £50,000 will remain at 19% and there will be a
tapered rate for businesses with profits under £250,000 so that they pay less
than the main rate. Deferred tax balances were re-measured at the 2023
reporting date taking into account the new rate of tax of 25%.
11 Earnings per share
Basic earnings per share has been calculated using the loss after tax for the
year attributable to the owner of the parent of £1.6 million (2024: Loss
£3.2 million) and a weighted average number of ordinary shares of 33,155,084
(2024: 24,303,502 ). The weighted average number of ordinary shares for the
purpose of calculating the basic and diluted measures is the same. This is
because the outstanding warrants details of which are given in note 26, would
have the effect of reducing the loss from continuing operations per ordinary
share and therefore would be anti-dilutive under the terms of IAS 33.
2025 2024
Total basic and diluted loss per share (pence) (5.55) p (13.11) p
12 Property, plant and equipment
Group Leasehold property Car Leases Equipment, fixtures, and fittings Computer software Total
£000 £000 £000 £000 £000
Cost
At 1 January 2025 1,515 250 249 120 2,134
Additions - 121 35 - 156
Disposals - - - - -
At 31 December 2025 1,515 371 284 120 2,290
Accumulated depreciation
At 1 January 2025 1,063 108 156 89 1,416
Charge for the year 208 105 54 30 397
Disposals - - - - -
At 31 December 2025 1,271 213 210 119 1,813
Net carrying amount
31 December 2025 244 158 74 1 477
31 December 2024 452 142 93 31 718
Group Leasehold property Car Leases Equipment, fixtures, and fittings Computer software Total
£000 £000 £000 £000 £000
Cost
At 1 January 2024 1,515 116 221 120 1,972
Additions - 134 28 - 162
Disposals - - - - -
At 31 December 2024 1,515 250 249 120 2,134
Accumulated depreciation
At 1 January 2024 855 23 101 49 1,028
Charge for the year 208 85 55 40 388
Disposals - - - - -
At 31 December 2024 1,063 108 156 89 1,416
Net carrying amount
31 December 2024 452 142 93 31 718
31 December 2023 659 93 120 71 943
Right of use assets
The carrying amounts of property, plant and equipment include right of use
assets as detailed below:
Leasehold Car leases Total
Cost £000 £000 £0000
At 1 January 2024 1,515 116 1,631
Additions - 134 134
Disposal - - -
At 31 December 2024 1,515 250 1,765
Additions - 121 121
Disposal - - -
At 31 December 2025 1,515 371 1,886
Accumulated depreciation
At 1 January 2024 855 23 878
Charge for the year 208 85 293
Disposal - - -
At 31 December 2024 1,063 108 1,171
Charge for the year 208 105 313
Disposal - - -
At 31 December 2025 1,271 213 1,484
Net carrying amount
31 December 2025 244 158 402
31 December 2024 452 142 595
Additions to the right-of-use assets during the year were £0.1 million (2024:
£0.1 million).
The depreciation charge for the year of £0.3 million (2024: £0.3 million)
relates to continuing operations and has been charged to administrative
expenses.
Company
The Company has no property, plant and equipment at 31 December 2025 or at 31
December 2024.
13 Intangible assets
Group Goodwill Trademarks Customer contracts and related relationships Technology development Software and Licensing Total
£000 £000 £000 £000 £000 £000
Cost:
At 1 January 2024 15,598 1,707 17,418 935 1,833 37,491
Additions - - - - - -
At 31 December 2024 15,598 1,707 17,418 935 1,833 37,491
Additions - - - - - -
At 31 December 2025 15,598 1,707 17,418 935 1,833 37,491
Impairment and amortisation:
At 1 January 2024 15,598 1,707 10,321 935 1,833 30,394
Amortisation for the year - - 2,280 - - 2,280
Disposal - - - - - -
At 31 December 2024 15,598 1,707 12,601 935 1,833 32,674
Amortisation for the year * - - 1,262 - - 1,262
Disposal - - - - - -
At 31 December 2025 15,598 1,707 13,863 935 1,833 33,936
Net carrying amount:
At 31 December 2025 - - 3,555 - - 3,555
At 31 December 2024 - - 4,817 - - 4,817
*£1.3 million of the amortisation charge is included in the loss for the year
from continued operations in the Income Statement within administrative
expenses.
The remaining unamortised life of the intangible assets at 31 December 2025 of
Tialis IT Essential Manage customer contracts and related relationships is 3
years, net carrying value £3.6 million.
Allvotec asset acquisition February 2023
On 1 February 2023, Tialis Essential IT PLC acquired the profitable partner
contracts from Allvotec Limited, a division of Daisy Group, for an initial
consideration of £2.042 million. On the same date, Tialis Essential IT Manage
Limited, a subsidiary of Tialis Essential IT PLC, acquired the same contracts
from Tialis Essential IT PLC for the consideration of £2.042 million.
In addition to the partner contracts the Company had provided for the
estimated deferred consideration of £0.1 million, onerous contract provision
of £0.08 million and subtracted £0.08 million of acquired tangible assets to
arrive at the £2.2 million addition in prior years.
During period from acquisition to 31 December 2025, Tialis was able to agree
renewals and extensions of the existing contracts and as a consequence, the
deferred consideration estimate has increased to £1.638 million, which was
paid in shares issued in Tialis Essential IT PLC, at a price of 89.2 pence per
ordinary share (see note 27). This increase is shown as a fair value
adjustment on the face of the Statement of Comprehensive Income and was £0.58
million (2024: £0.97 million).
Company 2025 2024
£000 £000
Additions - -
Disposals - -
At 31 December - -
The company had no intangible assets at 1 January 2025 or 31 December 2025.
14 Investments in subsidiaries
Company 2025 2024
£000 £000
At 1 January 2025 18,211 18,211
Additions 125 -
Impairment of investment in subsidiary companies (1,000) -
At 31 December 2025 17,336 18,211
The Company has the following investments in subsidiaries:
Country of Class of Ownership Ownership Non-controlling interests Non-controlling interests
Incorporation shares held 2025 2024 2025 2024
Held directly by Tialis Essential IT PLC
Tialis Essential IT Financing Limited England(1) Ordinary 100% 100% - -
Tialis Essential IT Debt Limited England(1) Ordinary 100% - -- -
Tialis Essential IT Investments Limited England(1) Ordinary 100% - - -
AI Auxesis Limited England(1) Ordinary 50% - 50% -
Held indirectly by Tialis Essential IT PLC
Tialis Essential IT Manage Limited England(1) Ordinary 100% 100%
1 Registered office is located at Unit
2, Quadrant Court, Crossways Business Park, Greenhithe, Dartford, England, DA9
9AY.
Profit allocated to the non-controlling interests for the year amounted to
£0.1m (2024: £nil).
At 31 December 2025, the trading subsidiaries of the Company were Tialis
Essential IT Manage Limited and AI Auxesis Limited.
At 31 December 2024, the only trading subsidiary of the Company was Tialis
Essential IT Manage Limited.
Tialis Essential IT Manage Limited's activity consists of IT Managed services.
AI Auxesis Limited's activity consists of AI consulting services.
AI Auxesis Limited is exempt from the requirements of the Companies Act
relating to the audit of individual accounts by virtue of Section 479A and the
parent company has guaranteed all their liabilities at the reporting date.
The following subsidiaries are non-trading which are Tialis Essential IT
Financing Limited, Tialis Essential IT Debt Limited and Tialis Essential IT
Investments Limited.
Tialis Essential IT Financing Limited is exempt from the requirements of the
Companies Act relating to the audit of individual accounts by virtue of
Section 479A and the parent company has guaranteed all their liabilities at
the reporting date.
Tialis Essential IT Debt Limited is exempt from the requirements of the
Companies Act relating to the audit of individual accounts by virtue of
Section 479A and the parent company has guaranteed all their liabilities at
the reporting date.
Tialis Essential IT Investments Limited is exempt from the requirements of the
Companies Act relating to the audit of individual accounts by virtue of
Section 479A and the parent company has guaranteed all their liabilities at
the reporting date.
15 Investments in equity-accounted joint ventures
Group 2025 2024
£000 £000
At 1 January 2025 - -
Additions 7,186 -
Share of post-tax (losses) of equity accounted joint ventures (180) -
At 31 December 2025 7,006 -
Company 2025 2024
£000 £000
At 1 January 2025 and 31 December 2025 - -
The Group has the following investments in joint ventures:
Principal Country of Ownership
activity Incorporation 2025 2024
Held indirectly by Tialis Essential IT PLC
MXLG Acquisitions Limited Provision of IT services and solutions 1 England2 50% -
1 Provision of IT services and
solutions to customers in the SME ("Small and Medium Enterprises") sector in
the United Kingdom.
2 Registered office is located at The
Walbrook, 25 Walbrook, London, EC4N 8AF.
The contractual arrangement provides the group with only the rights to the net
assets of the joint arrangement, with the rights to the assets and obligation
for liabilities of the joint arrangement resting primarily with MXLG
Acquisitions Limited. Under IFRS 11 this joint arrangement is classified as a
joint venture and has been included in the consolidated financial statements
using the equity method.
Summarised consolidated financial information in relation to the joint venture
is presented below:
2025 2024
As at 31 December £000 £000
Current assets 16,327 -
Non-current assets 6,678 -
Current liabilities (26,477) -
Non-current liabilities (806) -
Included in the above amounts are:
Cash and cash equivalents 2,350 -
Current financial liabilities (excluding trade payables) (16,435) -
Non-current financial liabilities (806) -
Net liabilities (100%) (4,278) -
Group share of net liabilities (50%) (2,139) -
2025 2024
Since acquisition to 31 December £000 £000
Revenues 5,697 -
Total comprehensive loss (100%) (360) -
Group share of total comprehensive loss (50%) (180) -
Included in the above amounts are:
Depreciation and amortisation (663) -
Interest expense (215) -
Income tax income 179 -
The bank loan of £10 million (2024: £10 million) accrues interest at a rate
of 7.75% (2024: 8.5%), with interest payable monthly and is due for repayment
on 16 October 2026. The security of the bank loan is limited to fixed charges
over the company's investments in its subsidiaries (MXLG Intermediate Holdings
Limited and Koris365 UK Limited). There is also a guarantee between the above
subsidiaries in respect of the bank loan.
Reconciliation of the above summarised financial information to the carrying
amount of the interest in the joint venture recognised in the consolidated
financial statements:
2025 2024
MXLG Acquisitions Limited £000 £000
Net liabilities of the joint venture (4,278) -
Proportion of the group's ownership interest in the joint venture (2,139) -
Goodwill 9,145 -
Carrying value of the group's interest in the joint venture 7,006 -
16 Investments in financial assets
Group 2025 2025 2025 2024 2024 2024
£000 £000 £000 £000 £000 £000
Fair value through Profit and loss Amortised Cost Total Fair value through Profit and loss Amortised Cost Total
At 1 January 2025 - - - - - -
Additions 199 800 999 - - -
Revaluation of investments (86) - (86) - - -
At 31 December 2025 113 800 913 - - -
Company 2025 2024
£000 £000
At 1 January and 31 December 2025 - -
The Group has the following investments:
Classification Country of Class of Ownership Ownership
Incorporation shares held 2025 2024
Held indirectly by Tialis Essential IT PLC
CloudCoco Group PLC Fair value through profit and loss England Ordinary 10.6% -
Digital PetCare UK Limited Amortised cost England Ordinary 14.14% -
QPC 2020 Limited Amortised cost England Ordinary 2% -
CloudCoco Group PLC is listed on the AIM market. The share price as of 31
December 2025 was 0.15p per share and the Group holds 75,066,275 shares.
The Digital PetCare UK Limited investment was acquired through the conversion
of a £500,000 loan note into 738,120 ordinary voting shares of nominal value
0.01p per share.
QPC 2020 Limited investment consists of 45,624 ordinary voting shares of
nominal value 0.01p per share and was acquired for cash consideration of £0.3
million.
17 Trade and other receivables
Group Company
Current 2025 2024 2025 2024
£000 £000 £000 £000
Trade receivables 2,114 2,972 138 -
Contract assets 661 696 - -
Prepayments and other receivables 650 649 65 104
Amounts due from subsidiary undertakings - - 183 -
Taxation and social security - - - 40
144
3,425 4,317 386
Group Company
Non-current 2025 2024
£000 £000 2025 2024
£000 £000
Other receivables 100 100 - -
Loan note receivable 700 - - -
Amounts due from subsidiary undertakings - - 8,665 704
100
800 8,665 704
Loan note receivable is a term loan agreement for £0.7 million with Digital
PetCare UK Limited, which is secured through debentures issued from Digital
PetCare UK Limited, Vethelpdirect.com and Digital Practice Limited. The loan
note bears interest at 12% per annum.
In accordance with IFRS 9, the Group reviews the amount of credit loss
associated with its trade receivables, and contract assets.
Customer credit risk is managed according to strict credit control policies.
The majority of the Group's revenues are derived from national or
multi-national organisations with no prior history of default with the Group.
There is low incidence of default in the top 50 customers. In respect of these
customers credit risk is deemed lower on customers that contribute higher
revenue due to an increased dependency on the group's services for business
continuity, and because they are larger more secure businesses.
The Group has applied the Simplified Approach applying a provision matrix
based on categorisation of the customer based on total revenue received by the
group per annum to measure lifetime expected credit losses and after taking
into account customers with different credit risk profiles and current and
forecast trading conditions and the days past due. The historical loss rates
will be adjusted to reflect current and forward-looking information on
macroeconomic factors affecting the ability of customers to settle the
receivables.
At period end, customers were categorised into three categories based on spend
in the last 12 months:
1. Top 20
2. Top 50
3. Other
Impairment was calculated based on the category the customer falls in to:
Category Impairment Rate Carrying amount Ccr credit loss allowance
(net of VAT)
2025 2024 2025 2024 2025 2024
% % £000 £000 £000 £000
Top 20 0 0 2,114 2,972 - -
Top 50 2 2 - - - -
Other 5 5 - - - -
Specific 100 100 - - - -
2,114 2,972 - -
The group is exposed to credit concentration risk with its largest customer
comprising 60% (2024: 81%) of outstanding trade receivables.
Specific provisions are also made based on known issues or changes in the
lifetime expected credit loss. As at 31 December 2025, trade receivables of
£nil (2024: £nil) were impaired and fully provided for.
The creation and release of a provision for impaired receivables has been in
the main included in "administrative expenses" in the Income Statement, with
an amount being set against contract assets, £nil (2024: £nil). The other
asset classes within the Group's trade and other receivables do not contain
impaired assets.
Amounts due from subsidiary undertakings
The Company has funded the trading activities of its principal subsidiaries by
way of inter-company loans. The amounts advanced do not have any specific
terms relating to their repayment, are unsecured and are interest free. As all
loans to trading subsidiaries are to be treated as due on demand, they fall
within the scope of IFRS 9.
The Company has funded the non-trading subsidiaries namely Tialis Essential IT
Debt Limited and Tialis Essential IT Investments Limited. The amounts advanced
are interest bearing at a rate of 12%. They are unsecured and repayable on
demand.
In accordance with IFRS 9, the Company is required to make an assessment of
expected credit losses. Having considered the quantum and probability of
credit losses expected to arise, management concluded that no additional
impairment charge was required for expected credit loss. There is no movement
in the provision.
The calculation of the allowance for lifetime expected credit losses requires
a significant degree of estimation and judgement, in particular in determining
the probability weighted likely outcome for each scenario considered to
determine the expected credit loss in each scenario. Should the assumptions in
the business plan vary, this could have a significant impact on the carrying
value of the intercompany loans in following periods.
The recoverability is sensitive to the probability of the achievement of
future cash flows; however, given the trading projections and the level of
provisions, there is currently no reasonably plausible scenario in which the
provision would alter materially. A breakdown of the balances is set out in
note 28.
18 Cash and cash equivalents
Group Company
2025 2024 2025 2024
£000 £000 £000 £000
Cash and cash equivalents 664 854 235 13
The table below shows the balance with the major counterparty in respect of
cash and cash equivalents.
Group Company
2025 2024 2025 2024
Credit rating £000 £000 £000 £000
A 664 854 235 13
19 Trade and other payables
Group Company
2025 2024 2025 2024
£000 £000 £000 £000
Current
Trade payables 1,336 1,273 287 448
Other payables - -
1,051 1,056
Taxation and social security 686 1,179 7 -
Corporation tax payable 34 - - -
Accruals 517 589 36 29
2,573 330
4,092 1,533
Amounts due to subsidiary undertakings are unsecured, interest free and are
repayable on demand.
20 Contract liabilities
Group Company
2025 2024 2025 2024
£000 £000 £000 £000
Contract liabilities recognisable within 12 months 319 770 - -
Income is deferred to the Statement of Financial Position when invoicing of
revenue to customers occurs ahead of revenue recognition in the Income
Statement.
21 Provisions
Property provision
Dilapidation provisions are built up over the associated lease based on
estimates of costs of work required to fulfil the Group's contractual
obligation under the lease agreements to return the property to the same
condition as at the commencement of the lease. The provision is not expected
to be utilised until 2027.
Other provisions
Other provisions relate to payments payable by the Group with regards to
defined benefits pension schemes in which one employee is a participant - see
note 29.
Group Property provision Other provision
Total
£000 £000 £000
Balance at 1 January 2025 330 22 352
Increase in year 42 - 42
Balance at 31 December 2025 372 394
22
2025 2024
£000 £000
Non-current 394 352
The Company has no provisions at 31 December 2025 (31 December 2024: £nil).
22 Borrowings
Group Company
2025 2024 2025 2024
£000 £000 £000 £000
Non-current
Lease liabilities 100 351 - -
Bank borrowings 3,016 4,021 3,016 4,021
Loan Notes - 314 - 314
3,116 3,016
4,686 4,335
Group Company
2025 2024 2025 2024
£000 £000 £000 £000
Current
Lease liabilities 349 325 - -
349 -
325 -
The carrying value is not materially different to the fair value of these
liabilities.
The bank borrowings are a revolving credit facility with a termination date of
8 September 2027, with a weighted interest rate comprising of a margin of
3.75% per annum plus the SONIA (Sterling overnight index average) reference
rate. Each member of the group is a guarantor and grants security as the
lender may require.
The group has failed to meet the adjusted leverage covenant as at 30 September
2025 and 31 December 2025. The remaining financial covenants of its borrowing
facilities were all complied with during the 2025 reporting period. The
group's bankers have issued reservation of rights letters with respect to the
September 2025 and December 2025 breaches. Subsequent to the year end, the
group and the bankers have agreed to an amendment to the adjusted leverage
covenant which takes effect from the 31 March 2026 period and each relevant
period thereafter. This amendment confirmed the reservation of rights has
lapsed and that any breaches referred to in those letters were waived.
Lease liabilities
The present value of lease liabilities is as follows:
31 December 2025
Group Gross contractual amounts payable Interest
Carrying amount
2025 2025 2025
£000 £000 £000
Less than one year 385 36 349
Between one and five years 104 4 100
40
489 449
31 December 2024
Group Gross contractual
amounts Carrying
payable Interest amount
2024 2024 2024
£000 £000 £000
Less than one year 379 54 325
Between one and five years 377 26 351
80
756 676
The Company has no lease liabilities at 31 December 2025 (31 December 2024:
nil)
Reconciliation of borrowings:
Group Non-current Lease liabilities Current Lease liabilities Non-current Borrowings Bank Borrowings Total Borrowings
£000 £000 £000 £000 £000
Balance at 1 January 2025
351 325 314 4,021 5,011
Non-cash changes
Transfer from current to non-current (251) 251 - - -
New finance leases - 121 - - 121
Loan note interest - - 34 - 34
Loan note converted to shares - - (348) - (348)
Interest - - - 288 288
Lease interest - 59 - - 59
Cash flows
Lease interest paid - (59) - - (59)
Interest paid - - - (293) (293)
Repayment - - - (1,000) (1,000)
Repayment of lease liabilities - (348) - - (348)
Balance at 31 December 2025
100 349 - 3,016 3,465
The total cash outflow for leases in the year including interest was £348,000
(2024: £313,000).
Company Non-Current Borrowings Bank Borrowings Total Borrowings
£000 £000 £000
Balance at 1 January 2025 4,021
314 4,335
Non-cash changes
Loan note interest 34 - 34
Loan note conversion to shares (348) - (348)
Interest - 288 288
Cash Flows
Interest Paid - (293) (293)
Repayment - (1,000) (1,000)
Balance at 31 December 2025 3,016
- 3,016
23 Convertible loan notes
Group and Company
£000
Balance at 1 January 314
2025
Interest accrued 34
Loan note converted to shares (see note 25) (348)
Balance at 31 December 2025 -
On 9 September 2024, the Company issued £0.3million of an unsecured loan
note, which carries an interest rate of 15% and is for a term of 3 years 3
months ("CLN"). The CLN holder may convert all outstanding notes together with
all accrued but unpaid interest shall into fully paid Ordinary Shares at the
Conversion Price of 40p per ordinary share.
On 8 October 2025 £0.3million of the unsecured loan note was converted into
870,405 Ordinary shares of 1p each, at a conversion price of 40p per share.
24 Financial instruments by category
The objectives of the Group's treasury activities are to manage financial
risk, secure cost-effective funding where necessary and minimise adverse
effects of fluctuations in the financial markets on the value of the Group's
financial assets and liabilities, on reported profitability and on cash flows
of the Group.
The Group's principal financial instruments for fundraising are convertible
loan notes and loan notes. The Group has various other financial instruments
such as cash, trade receivables and trade payables that arise directly from
its operations.
Group 2025 2024
Assets £000 £000
Amortised cost:
Trade receivables net of credit loss provision 2,114 2,972
Contract assets 661 696
Loan note receivable 700 -
Other receivables 650 649
Cash and cash equivalents 664 854
Total 4,789 5,171
Company 2025 2024
Assets £000 £000
Amortised cost:
Trade receivables net of credit loss provision 138 144
Amounts due from subsidiary undertakings 8,665 704
Cash and cash equivalents 235 13
Total 9,038 861
The carrying amount of these assets is equivalent to their fair value. At 31
December 2025, trade receivables are reported net of the expected credit loss
provision of £nil (2024: £nil), amounts due from subsidiary undertakings are
reported net of the expected credit loss provision of £nil (2024: £nil).
Group 2025 2024
Liabilities at amortised cost £000 £000
Trade payables 1,336 1,273
Accruals and other payables 517 584
Liability held at fair value through profit and loss - 1,056
Lease liabilities 449 676
Bank borrowings 3,016 4,021
Loan Notes - 314
Total 5,318 7,924
Company 2025 2024
Liabilities £000 £000
Trade payables 287 448
Accruals and other payables 43 29
Liability held at fair value through profit and loss - 1,056
Intercompany payables 576 -
Bank borrowings 3,016 4,021
Loan Notes - 314
Total 3,922 5,868
The carrying amount of these liabilities is equivalent to their fair value.
The Group has not entered into any derivative financial instruments in the
current or preceding period.
25 Financial risk management
The Group's activities are exposed to a variety of financial risks: market
risk (including cash flow interest rate risk and price risk), credit risk and
liquidity risk. The Group's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse
effects on the Group's financial performance.
Risk management is carried out centrally under policies approved by the Board
of Directors. Management identifies, evaluates and seeks to mitigate financial
risks. The Board of Directors provides principles for overall risk management
as well as policies covering specific areas, such as foreign exchange risk,
interest rate risk, credit risk, use of derivative financial instruments and
non-derivative financial instruments, and investments of excess liquidity.
Cash flow interest risk
The Group pays interest on its borrowings.
The Group has no borrowings at variable rates which would expose the Group to
cash flow interest rate risk. Borrowings issued at fixed rates expose the
Group to fair value interest rate risk. The Group does not enter into
derivatives.
Price risk
The Group is not exposed to significant commodity or security price risk.
Credit risk
Credit risk is managed at a subsidiary level. Credit risk arises from cash and
cash equivalents as well as credit exposures to customers, including
outstanding receivables. Individual risk limits are set based on internal and
external ratings and reviewed by management. The utilisation of credit limits
is regularly monitored with appropriate action taken by management in the
event of the breach of a credit limit. The Group has applied the simplified
approach applying a provision matrix based on number of days past due to
measure lifetime expected credit losses and after taking into account
customers with different credit risk profiles and current and forecast trading
conditions. The Group has recognised a provision in respect of trade
receivables of £nil (2024: £nil).
Liquidity risk
Management reviews cash forecasts of trading companies of the Group in
accordance with practice and limits set by the Group. The Group's liquidity
management policy involves projecting cash flows and considering the level of
liquid assets necessary to meet these.
The parent company's operations expose it to the following risks:
Interest rate risk
The Company pays interest on its loan note and bank borrowings. These are at
fixed rates and therefore there is no exposure to cash flow interest rate
risk. Borrowings issued at fixed rates expose the Company to fair value
interest rate risk. The Company does not enter into derivatives.
Credit risk
The Company is exposed to credit risk mainly in respect of inter-company
receivables. Details of the approach to credit loss provisions in respect of
intercompany receivables is set out in note 17 and note 26.
The tables below analyse the Group and the Company's financial liabilities
into relevant maturity groupings based on the remaining period at the balance
sheet date to the contractual maturity date. These amounts disclosed in the
table are the contracted undiscounted cash flows. Balances within 12 months
equal their carrying balances as the impact of discounting is not significant.
Group
Within 1 year 1-2 years More than 2 years Total
At 31 December 2025 £000 £000 £000 £000
Trade and other payables 2,573 - - 2,573
Lease liabilities 349 100 - 449
Loan Notes - - - -
Bank Borrowings - 3,016 - 3,016
2,922 3,116 - 6,038
Group
Within 1 year 1-2 years More than 2 years Total
At 31 December 2024 £000 £000 £000 £000
Trade and other payables 4,092 - - 4,092
Lease liabilities 325 312 39 676
Convertible loan notes - - 314 314
Loan Notes - - 4,021 4,021
4,417 9,103
312 4,374
Company
Within 1 year 1-2 years More than 2 years Total
At 31 December 2025 £000 £000 £000 £000
Trade and other payables 330 - - 330
Intercompany payables - - - -
Loan Notes - - - -
Bank Borrowings - 3,016 - 3,016
330 3,016 - 3,346
Company
Within 1 year 1-2 years More than 2 years Total
At 31 December 2024 £000 £000 £000 £000
Trade and other payables 1,533 - - 1,533
Intercompany payables - - - -
Convertible loan notes - - 314 314
Loan Notes - - 4,021 4,021
1,533 - 4,335 5,868
26 Capital risk management
The Group's objectives when managing capital are to safeguard the Group's
future growth and its ability to continue as a going concern in order to
provide returns for shareholders and to maintain an optimal capital structure
to reduce the cost of capital. The Group operates in the network and cloud
hosting sector, which, from time-to-time requires substantial fixed asset
investments, but the Group is financed predominately by equity.
In order to maintain or adjust the capital structure, the Group has previously
both issued new shares, bank debt and bank facilities, and both unsecured and
secured loan notes. The Group monitors capital on the basis of the ratio of
net debt to Adjusted EBITDA. As at 31 December 2025 the ratio was 2.1 (2024:
2.1). Net debt as at 31 December 2025 is calculated as total bank borrowings,
as at 31 December 2025 £nil, and loan notes (including 'current and
non-current borrowings' as shown in the consolidated balance sheet), plus
loans, less cash and cash equivalents. Adjusted EBITDA is defined as earnings
before interest, tax, depreciation, amortisation, impairment charge,
non-underlying items, (loss)/gain on disposal of fixed assets and share-based
payments.
The loan note instrument under which the Secured Loan Notes were issued does
not contain any covenants, however, the Group continues to carefully monitor
its capital position. The Group adopts a risk-averse position with respect to
borrowings and maintains significant headroom to ensure that any unexpected
situations do not create financial stress.
The Group has not proposed a dividend for the current or prior year.
27 Called up share capital - Group and Company
Shares issued and fully paid 2025 2024
£000 £000
39,909,832 (2024: 24,326,744) Ordinary shares at 1p 399
243
496,702,800 (2024: 496,702,800) deferred shares at 2.49p 12,368 12,368
Shares issued and fully paid 12,767 12,611
Shares issued and fully paid 2025 2024
£000 £000
Beginning of the year 12,611 12,610
New shares issued during the year 2 -
Issued during the year to acquire investment assets 95 -
Issues during the year to acquire loan assets 26 -
Issues during the year to settle deferred consideration 24 -
Issues during the year to conversion of loan notes 9 -
Issued during the year in lieu of 2021 staff bonus - 1
Shares issued and fully paid 12,767 12,611
Share capital allotted, called up and fully paid 2025 2025 2024
No. Ordinary Shares No. Deferred Shares No. Shares
Beginning of the year 24,326,744 496,702,800 24,222,744
Issue of 104,000 shares at 1p in lieu of 2021 staff bonus (three tranches) - - 104,000
Issue of 208,333 new shares in April 2025 208,333 - -
Issued during the year to acquire investment assets 9,844,154 - -
Issues during the year to acquire loan assets 2,320,313 - -
Issues during the year to settle deferred consideration 2,339,883 - -
Issues during the year to conversion of loan notes 870,405 - -
End of the year 39,909,832 496,702,800 24,326,744
The par value of the new Ordinary shares is 1p and the Deferred shares is
2.49p.
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at meetings of the
Company.
The holders of Deferred shares are not entitled to receive dividends, nor are
they entitled to vote. The holders of Deferred shares are entitled to £1 for
the entire class on winding up. The Company at anytime may, at its option,
redeem all the Deferred shares for £1. The Directors consider the Deferred
shares of no economic value.
On 31 May 2024 104,000 new Ordinary 1p shares were allotted to a member of
staff in lieu of one-third of his 2021 bonus.
On 30 April 2025 208,333 new Ordinary 1p shares were allotted and paid for in
cash.
On 7 July 2025 2,320,313 new Ordinary 1p shares were allotted in settlement of
a loan note acquisition and 310,821 new Ordinary 1p shares were allotted in
settlement of an investment acquisition.
On 8 October 2025 9,533,333 new Ordinary 1p shares were allotted in settlement
of an investment acquisition, 870,405 new Ordinary 1p shares were allotted in
settlement of a loan note conversion to share capital and 2,339,883 new
Ordinary 1p shares were allotted in settlement of the deferred consideration
following the acquisition of Allvotec in 2023.
As at 31 December 2025 the Company has a total number of shares in issue of
536,612,632 with a total nominal value of £12,766,998. The Company has
39,909,832 new Ordinary shares of 1p and 496,702,800 Deferred shares of 2.49p.
28 Share-based payments
The share-based payment charge comprises:
2025 2024
£000 £000
Equity-settled share-based charges arising from share options 200 578
Total charge 200 578
On 15 December 2023 the Company granted a total of 1,547,288 share options to
executive directors, senior managers, employees and consultants of the Company
(the "Share Options"). Of the total Share Options, 400,000 were granted to
Andrew Ian Smith, Executive Director. The award of the Share Options is part
of Tialis' Long Term Incentive Plan ("LTIP") and is designed to retain and
motivate the senior leadership team, employees and consultants. Under the
rules of the LTIP, the Share Options are being granted at nil cost or the
nominal value of the Company's ordinary shares of 1p each and are subject to
vesting rules (the "Vesting Rules").
Under the Vesting Rules, the Share Options vest as follows:
- the second anniversary of the Grant Date: One-third of Award vests;
- the third anniversary of the Grant Date: Two-thirds of Award vests; and
- the fourth anniversary of the Grant Date: Remainder of Award vests.
The shares cannot be issued until the Group releases them in accordance with
the rules of the LTIP. If the relevant trading company of Tialis is sold or
the overall Group is taken over, the award will vest and be released in full,
subject to the detailed rules of the LTIP. It is at this point that the
employee can realise the value of their Share Options.
The resulting interests of Andrew Ian Smith in Tialis can be summarised as
follows:
Director Ordinary shares of 1p held % of issued share capital LTIP Options held prior to this award LTIP Options awarded
Andrew Ian Smith* 678,166 1.7% - 400,000
* Andrew Ian Smith was the Chief Executive Officer and major shareholder of
MXC Capital Limited ("MXC") whose holding of 26,806,630 Ordinary Shares
represents 67.17% of the Company's issued ordinary share capital. Andrew Ian
Smith and MXC hold in aggregate 27,484,796 Ordinary Shares, representing
68.87% of the Company's issued ordinary share capital.
There are a total of 1,483,069 (2024: 1,547,288) Share Options outstanding,
representing approximately 3.7% (2024: 6.39%) of the current issued share
capital of the Company with an Exercise Price of 1p. A further nil (2024:
43,750) share options were granted during the year. During the year, 14,325
share options lapsed (2024: 93,644) in accordance with the share issue
documents.
In determining the fair value of the share options granted during the year,
the Company assessed the historical share price volatility associated with the
Company's share price. The fair value of options issued during the year were
calculated using a Black-Scholes model. The share price at grant date was 62p
per share and no dividend yield was expected.
29 Pensions
The Group operates a defined contribution pension 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 £0.9 million for the year ended 31
December 2025 (31 December 2024: £1.0 million). Contributions totalling £0.1
million (31 December 2024: £0.1 million) were payable to the fund at 31
December 2025 and are included in creditors: amounts due within one year.
In addition, the Group operates four individual defined benefit pension
schemes; details of each are noted below.
The Mercer DB Master Trust - Tialis Group Limited Section
This scheme is open. It has one individual who is no longer employed by the
Group and as a result is a deferred member. The value of plan assets is £0.03
million. The value of plan liabilities is £0.02 million. Total net assets are
£0.02 million and the funding level is 121%. Due to the size and nature of
the scheme, and the fact that the funding is a positive position, and the
Directors are not certain that the Group will get a recovery on the scheme, so
therefore no amounts have been provided in the accounts.
The impact on the statement of comprehensive income for this scheme was £0.02
million during the year ended 31 December 2025. (31 December 2024: £0.02
million). This is in relation to fees.
The assets are held as follows:
2025 2025 2024 2024
£000 %age £000 %age
Mercer Diversified Growth Fund 3,492 18 10,433 35
Mercer Passive Global Equity CCF 3,279 16 7,792 26
Mercer MGI UK Inflation Linked Bond Fund 1,872 9 1,921 7
Mercer GBP Inflation LDI Bond Fund 4,762 24 5,599 19
Mercer Synthetic Equity-Linked Bond Fund 3,495 18 - -
Mercer Passive Short Dated UK Index Linked Gilt Fund 925 5 - -
Net Current Assets 2,077 10 3,765 13
Total Assets 19,902 100 29,510 100
Future funding obligations
The Trustees are required to carry out an actuarial valuation every 3 years.
The last actuarial valuation of the Schemes was performed by the Scheme
Actuary for the Trustees as at 5 April 2024.
Refer to other commitments, note 31 for the fees funding position going
forward.
Railways Pension Scheme - Omnibus Section
Tialis is no longer a participant in the scheme. It had one individual who was
employed by the Group and has retired during the year. Once the member
retired, the Section 75 debt of £0.001million was triggered and paid.
The impact on the statement of comprehensive income for this scheme was
£0.001 million during the year ended 31 December 2025. (31 December 2024:
£0.003 million). This is in relation to the employer's contributions.
Principal Civil Service Pension Scheme
Tialis participates in the Principal Civil Service Pension Scheme, a statutory
public service pension arrangement providing defined benefits to eligible
employees.
Tialis has been admitted to the scheme as an admitted body. There are six
employees on this scheme.
This scheme is an unfunded pension scheme. Tialis's obligations are to pay the
pension contributions only. There are no S75 exit debt clauses as this scheme
is funded by the general taxpayer. This scheme is regarded as a Defined
Contribution scheme as the company has no liabilities.
Tialis entered into this scheme September 2025, as at year end there is no
valuation.
The pension cost charge represents contributions payable by the group to the
fund and amounted to £0.02 million for the year ended 31 December 2025.
Future funding obligations
The Trustees are required to carry out an actuarial valuation every 3 years.
The Principal Civil Service Pension Scheme was last formally valued as at 31
March 2020, with the valuation completed in September 2023. The next statutory
actuarial valuation is due as at 31 March 2024, with any resulting
contribution changes effective from 1 April 2027.
Environment Agency Pension Fund, part of the Local Government Pension Scheme
Tialis participates in the Environment Agency Pension Fund, which is part of
the Local Government Pension Scheme, a funded statutory defined benefit
pension scheme.
Tialis is in the process of applying for admitted body status. This scheme is
a funded scheme, however the end-customer will act as the guarantor of the
admission agreement, meaning that any past liabilities are absorbed by the
Environment Agency, as the deemed employer for the purposes of the agreement,
and these liabilities are ultimately underpinned by end-customer, who would
meet any funding deficits rather than the Environment Agency. This scheme is
regarded as a Defined Contribution scheme as the company has no liabilities.
Tialis entered into this scheme September 2025, as at year end there is no
valuation.
The pension cost charge represents contributions payable by the group to the
fund and amounted to £0.02 million for the year ended 31 December 2025.
Future funding obligations
The Trustees are required to carry out an actuarial valuation every 3 years.
The Environment Agency Pension Fund, part of the Local Government Pension
Scheme, was last formally valued as at 31 March 2022. The next formal
valuation is underway as at 31 March 2025 (completion was targeted for 31
March 2026).
30 Related parties
Key management comprise of the Directors and Chief Operating Officer.
Directors' emoluments are disclosed in note 9.
Key management personnel
Total remuneration for key management personnel 2025 2024
£000 £000
Compensation 150 466
Social security 20 75
Pension contributions to money purchase pension scheme 30 44
Total 200 585
Number of key management personnel accruing benefits under defined 1 3
contributions
Andrew Ian Smith, Executive Director at 31 December 2025, held 2.23% (2024:
2.23%) through his Self-Invested Pension Plan. Andrew Ian Smith was the Chief
Executive Officer and a substantial shareholder of MXC Capital Limited (MXC).
MXC owned 75.86% (2024: 75.86%) of the issued share capital of the Company at
31 December 2025. Together, Andrew Ian Smith and MXC owned 78.09% (2024:
78.09%) of the issued share capital of the Company at 31 December 2025.
During the year, the following transactions were conducted between related
parties:
The Group and Company paid MXC Capital Markets LLP, a subsidiary of MXC, for
corporate finance advice and other services amounting to £9,000 (2024:
£30,000). The balance owed to MXC Capital Markets LLP as at 31 December 2025
was £nil (2024: £27,000).
The Group and Company paid MXC Advisory Limited, a subsidiary of MXC, fees of
£55,250 (2024: £221,000) in respect of the services of Andrew Ian Smith as
Executive Director. The balance owed to MXC Advisory Limited as at 31 December
2025 was £nil (2024: £132,600).
The Group and Company received from MXC Capital (UK) Limited, a subsidiary of
MXC, fees of £195,266 (2024: £nil) in respect of the services of Nicola
Chown as CFO and of the finance functions. The balance owed by MXC Capital
(UK) Limited as at 31 December 2025 was £nil.
The Group acquired investments totalling £8.8m (2024: £nil) for
consideration of share issues from MXC Capital Limited.
The Group and Company received £95,000 from MXLG Intermediate Holdings
Limited, a subsidiary of MXLG Acquisitions Limited, the joint venture
investment (see note 15) in respect of management fees. The balance owed by
MXLG Intermediate Limited as at 31 December 2025 is £114,000 (2024: £nil).
The Group and Company received £114,098 from Koris365 UK Limited, a
subsidiary of MXLG Acquisitions Limited, the joint venture investment (see
note 15) in respect of ordinary course of business trading. The balance owed
by MXLG Intermediate Limited as at 31 December 2025 is £23,666 (2024: £nil).
The Group and Company paid £31,641 to Koris365 UK Limited, a subsidiary of
MXLG Acquisitions Limited, the joint venture investment (see note 15) in
respect of ordinary course of business trading. The balance owed by MXLG
Intermediate Limited as at 31 December 2025 is £7,144.
The Company had the following balances with its subsidiary companies:
2025 2024
Receivables £000 £000
Tialis Essential IT Manage Limited - 695
Tialis Essential IT Debt Limited 1,165 -
Tialis Essential IT Investments Limited 7,500 -
Tialis Essential IT Financing Limited 183 9
Total 8,848 704
31 Other commitments
The Group has signed an agreement for the administration of the defined
benefit pension with Mercer Trust with regards to an employee. Tialis has an
obligation under this agreement to continue to remit £1,766 per month for
management and administration charges until the employee either withdraws from
the pension or retires. A commitment of £233,112 based on his retirement date
of 2036 (11 years x £21,192 pa) has been estimated by the Board.
32 Acquisition of Subsidiaries
On 16 June 2025, the Group acquired 100% of the shares in Tialis Essential IT
Debt Limited and Tialis Essential IT Investments Limited on incorporation.
On 15 April 2025, the Group acquired 50% of the shares in AI Auxesis on
incorporation.
Summarised financial information in relation to acquisition of AI Auxesis as
follows:
2025 2024
As at 15 April 2025 date £000 £000
Cash 250 -
Non-current assets - -
Current liabilities - -
Non-current liabilities - -
Net assets (100%) 250 -
Group share of net assets (50%) 125 -
Goodwill - -
Total consideration 125 -
Satisfied by:
Cash 125 -
Net cash inflow arising on acquisition of subsidiary company:
Cash Consideration (125) -
Cash and cash equivalents acquired 250 -
125 -
33 Non-controlling interests
2025 2024
£000 £000
Opening balance - -
Share of profit / (loss) for the year 51 -
Non-controlling interests acquired on acquisition 125 -
Closing balance 176 -
34 Post balance sheet events
The Directors are proposing a special resolution that will be put to
shareholders at the upcoming 2026 AGM to approve a capital reduction. The
capital reduction being requested is: (i) to cancel the share premium reserve
(which currently stands at approximately £63.7 million); and (ii) to cancel
and extinguish the 496,702,800 deferred shares of 2.49 pence each in issue
(which have no rights or economic value) and release the amounts created by
such reduction of capital to distributable reserves.
35 Ultimate controlling party
As at 31 December 2025, MXC Capital Limited (MXC) is the ultimate controlling
party and, at 31 December 2025, owned 67.17% of the issued share capital and
voting rights of the Company. There is no ultimate controlling party of MXC.
On 11 March 2026, MXC Capital Limited was liquidated and all its shares held
in Tialis Essential IT PLC were distributed to the shareholders of MXC Capital
Limited at a rate of 0.9466426 Tialis Essential IT PLC share for every MXC
Capital Limited share held at the record date. As at this date, there are no
ultimate controlling parties of Tialis Essential IT PLC.
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