REG - Touchstar PLC - Final Results
Tue 07:00
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RNS Number : 5097G Touchstar PLC 29 April 2025
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain
Touchstar plc
Results for the year ended 31 December 2024
2025 - a year of internal transition.
The Board of Touchstar plc ((AIM: TST) "Touchstar", the "Company" or the
"Group"), suppliers of mobile data computing solutions and managed services to
a variety of industrial sectors, is pleased to announce its results for the
twelve months ended 31 December 2024 ("FY24" and "Period").
Key Financials
2024 2023
Revenue £6,893,000 £7,224,000 Decline 4.6%
Recurring revenue £3,051,000 £2,921,000 Increase 4.5%
Adjusted Pre - tax profit * £445,000 £675,000 Decline 34%
Pre - tax profit £388,000 £675,000 Decline 42.5%
Post tax profit £366,000 £639,000 Decline 43%
Adjusted EPS * 5.16p 7.63p Decline 32.4%
Basic EPS 4.47p 7.63p Decline 41.4%
Total ordinary Dividend per share 3.0p 2.5p Increase 20%
EBITDA* £1,156,000 £1,336,000 Decline 13.5%
Year-end cash £2,918,000 £3,005,000 Decline £87,000
Margins 60.2% 59.3% +90 basis points
*Excludes net exceptional costs of £57,000 (Cost of the strategic review
amounted to £77,500 less the release of £20,500 historical exceptional
liability)
· Revenue decline principally due to a major order initially
scheduled for delivery in 2024, now confirmed for installation in 2025.
· Recurring revenue of £3,051,000 represents 44.3% of total
revenue in 2024
· Dividend increased by 20% to 3.0p
· Balance sheet remains strong with year-end cash of £2,918,000
· Gross margins remain healthy and improved 90 basis points to
60.2% in FY24
Strategic progress
Following the conclusion of the Strategic review in February 2025, the Board
has commenced implementation of a plan to regenerate forward momentum and
capitalise on the potential of the business with the objective of enhancing
long term shareholder value.
Implemented transition to next generation management team
· Lynden Jones appointed to Board and will succeed Mark Hardy as
CEO from 1 July 2025
· Executive Committee formed, tasked with driving through new
strategy
· Ian Martin to remain as Chair
Increase the rate of growth
· Increased investment in sales resource and marketing activity
· Website revamped
· Sectors such as warehousing where the Group can offer full end to
end solutions being prioritised
· Build on the 20 non-petrochemical companies benefitting from the
Touchstar solution
· Increase market penetration into new sectors such as BIOMAS
distribution
· Access control now offering fire and security products to
customers
· Increased investment into products to accelerate overseas sales
· Invest in acquisitive growth using the cash generation of the
business
Enhance market profile with improved digital footprint, communication and
marketing
· Increase news flow
· Integrate message to both trade and investors
· Marketing to retail investors through webinars, shows and digital
platforms
Surplus cash strategy
· Cash generation will be focused upon investment into business
· Balance sheet to remain strong with no borrowings
· Progressive dividend policy maintained
· Potential to return up to £1m of surplus cash via share buybacks
Current Trading
· The significant order that had been expected in 2024 has now been
confirmed for 2025
· Order book at start of year was £1,270,000 nearly double the
level of prior year (2023: £694,000)
· Solid potential within sales pipeline, market stable, despite
rising uncertainty
· The recurring revenue run rate is expected to grow further in
2025
Ian Martin, Chairman of Touchstar commented: "2025 will be a year of internal
transition. Significant changes are being made to the organisation, with
opportunities to grow within the UK and overseas, enhance market position,
cross -sell to the customer base, and enter new industry sectors."
For further information, please contact:
Touchstar plc Ian Martin/ Mark Hardy/Lynden Jones 0161 874 5050
Zeus Capital - Nominated adviser and broker Mike Coe/ Darshan Patel 0203 829 5000
Information on Touchstar plc can be seen at: www.touchstarplc.com
(http://www.touchstarplc.com/)
Chairmans Statement
The year 2024 presented challenges for our business. The delay of a major
order adversely affected our financial performance and undermined the
credibility we had established in meeting expectations. In response, we
conducted a thorough internal review, scrutinised our strategy, and rigorously
examined all facets of our operations. Although this process was difficult, we
learned valuable lessons and took decisive action to address the issues.
We have now set our sights on creating a stronger business, built upon the
solid foundation we have created. Focus is on becoming more significant, this
will not happen overnight, and we are working to a 3-5-year timeframe.
Confident that we have the capability and capacity to succeed, along with the
ability and cash available, we are now ensuring the investment is made to
enable this potential to be realised. 2025 will be a year of internal
transition as we build that growth engine. We have entered a phase that will
require higher levels of investment and may erode short term profits.
Significant changes are being made to the organisation, with opportunities to
grow within the UK and overseas, enhance market position, cross -sell to the
customer base, and enter new industry sectors.
The future is exciting and all at Touchstar are committed to deliver on this
ambition.
Overview of 2024
We began 2024 with optimism, but the year was ultimately defined by two key
events. Firstly, the Board initiated a strategic review of the business to
evaluate value creation for shareholders. Secondly, the rescheduling of a
major contract's delivery date from 2024 to this year had adverse effects on
our short-term financial performance and credibility. This occurred amidst a
general pause and caution following the UK general election and change of
government.
Strategic review process and conclusion
In the first nine months of 2024, the Company received two unsolicited
approaches that ultimately did not progress. The Board subsequently determined
that a strategic review, to formally and openly explore the Company's options,
was in the best interest of shareholders.
Therefore, the Board conducted a strategic review of the Company to identify
the path for future growth and value creation for its Shareholders. This was
undertaken in a professional, open and friendly manner - with three stated
objectives. To achieve the right valuation for shareholders, find the best
environment for the business to succeed and increase opportunity for our
employees.
The strategic review considered various options, including a potential sale of
the Company, its assets and other relevant transactions. Although we worked
actively with potential parties no indicative offer was deemed satisfactory,
not helped by the prior mentioned order moving between financial years.
Through the process several lessons were learnt that were consistent.
· Business and technology highly rated
· Fuel distribution seen as "jewel in the crown"
· Large potential in taking fuel sector expertise overseas
· With the right partner and resources, organic growth rate could
be accelerated
· Cash valued less than £1 for a £1
· Issues around cost and transition to a new management team
Changes flowing from strategic review
Following from the strategic review the Board has worked on a road map, the
objective of which is to accelerate to the next stage of development, increase
the underlying value of the business and enhance returns to shareholders.
The four drivers of the plan are to:
· increase the rate of organic growth - through further investment
in the fuel delivery business in overseas markets as well as building on the
ability of the Group's technology platform and solutions to be applied in a
wider range of vertical sectors.
Particular areas of focus will be:
· Industrial chemicals and gases projects identified and actively
pursued
· Success in BIOMASS market being built upon
· Clear and concise strategy to expand European fuel sector
penetration
· Renewed momentum to continue diversification into non
petrochemical market, expanding on the 20 plus customer's already won
· Targeting the Warehouse sector as Group offers a full end to end
solution
· Selling more services and solutions into our installed base - ACT
now selling fire and security as well as access control
· Investment being increased into the products to ensure technology
matches the potential of the business
To support these initiatives there will be additional recruitment to the sales
team, greater engagement at trade shows and a revamping of the website.
· make changes the management team - to facilitate the next stage
of the Group's development.
Management changes have already been implemented with Lynden Jones joining the
Board and designated to succeed Mark Hardy as CEO with effect from 1 July
2025.
Lynden has been with the Company for over 14 years. He rose to Managing
Director of our Access Control business ("ATC"), successfully enhanced
customer experience and improved operational efficiency and profitability.
Under his leadership ATC has been transformed. Revenue has grown 29% over the
last two years, it has gained access to new and exciting sectors and the
financial performance further improved by a move to a SAAS/ recurring revenue
driven model. Skills he will now bring to the wider business.
· increase the Group's marketing and promotional activities - the
Company is undertaking several steps aimed at enhancing the Group's profile.
This will include an increase news flow with both trade and investors and
greater engagement with retail investor both via webinars and in person
· utilisation of surplus cash - under current expectations the
company has surplus cash over and above the requirements of the business
The cash management strategy will operate to the following guidelines:
· the Company will retain a strong balance sheet with no borrowings
· cash generation will first be applied to growth initiatives
· the Company's dividend policy will remain progressive
· share buybacks will resume.
Dividend and resumption of share buybacks
The Board recommends a final ordinary dividend of 1.5p per share (FY23: 1.5p).
Together with the interim dividend of 1.5p (FY23: 1.0p) paid in November 2024,
this makes a total ordinary dividend for the year of 3.0p (FY23: 2.5p).
Subject to the approval of shareholders at the Annual General Meeting, the
final ordinary dividend of 1.5p per share will be paid on 12 August 2025 to
shareholders on the register on 25 July 2025. The ex-dividend date will be 24
July 2025.
The Company intends to resume purchasing its own shares. We believe up to
£1.0m could be applied for share buybacks in the next year although the exact
level will be dependent upon availability of shares and the price. The maximum
price payable must not exceed 105% of the average of the closing middle market
price per ordinary share for the previous five days.
People
Over the last few years, the substantial progress of the business has been
built upon the dedication and skills of our people. Throughout the strategic
review process this again shone through with all involved impressing with
their passion, understanding of the customer's needs, the dynamics of the
marketplace and pride in our technology. I feel humbled to work with such a
group.
I would personally like to thank Mark Hardy, who is stepping down in July
2025. I have worked alongside Mark for many years, as we first stabilised a
faltering company, from which we created a platform for the future - in both
the good and the difficult times it has been an adventure and pleasure.
CEO - Mark Hardy comments on business review
"In 2024, the Group operated profitably, we believe the systems supplied have
effectively enhanced our customers' services to their clients. The Group faced
a 4.6% decline in turnover, primarily due to timing factors on a large order
and a general downturn in the marketplace. The Company witnessed elements of
cautiousness in the marketplace, following the change in government.
Whilst our turnover was down on 2023, we experienced a slight improvement on
margin increasing to 60.2% (2023: 59.3%). One of our fundamental KPIs for the
business is to maintain and build the annual recurring revenue with licence
and support fees. This continued in an upward trend and our contracted
recurring revenue increased to £3,051,000 (2023: £2,921,000).
The marketplace remains in good shape emphasising our product relevance to
industry. Both order intake and the order bank improved on the previous
year. Order intake for 2024 amounted to £4,867,000 compared to £3,850,500 in
2023. The order book on 31 December 2024 was nearly double last year at
£1,270,000 (2023: £694,000). We continue to invest in our products with
2024 investment reaching £978,000 (2023: £972,000). Product development is
expected to be at a similar level this year.
The business has strengthened during the year, particularly with the employees
and the positive contribution they all make to the business. We have been
successful in recruiting and retaining good quality people with a 'can do'
attitude. This results in an extremely effective business, and we have enjoyed
securing a number of new customers, adding to the already healthy blue chip
customer base."
CEO designate Lynden Jones - introduction, impressions, potential and actions
"Since joining the Touchstar Group, I have gained valuable insights into the
broader organisation through the merger of various businesses. This process
has enabled me to help ensure that we maintain high standards across systems,
processes, and workflows. I'm particularly excited about the opportunities for
further growth that lie ahead. One of the most significant areas of potential
is the ability to cross-sell across our divisional customer bases. I see this
as a critical strategic approach, and I am fully committed to supporting and
guiding this effort to drive mutual growth.
By understanding the full breadth of the team, I am well-positioned to lead
and support this divisional growth. Energising our staff and fuelling their
passion for this collective vision will be a key factor in our success. As we
continue to grow and strengthen the business, our cohesive approach will not
only make us more valuable to our customers but will also enhance the
integration of our services.
Offering a comprehensive end-to-end package to both existing and new customers
is the next step in advancing our position in the UK market. While focusing on
growing our UK market share, I recognise the importance of expanding into new
verticals and geographical locations. This will secure the long-term future
and sustainability of the Group.
However, I also understand that such growth requires time and investment. The
strength and expansion of the UK market will be the foundation that allows us
to strategically plan and invest in new products, locations, and partnerships.
This next chapter is crucial to the continued evolution of the Group and to
ensuring its long-term success."
Financial review
Regrettably, 2024 did not mark another year of forward progression in our
financial performance. As always, we maintained strict controls over the cost
base and achieved improved margins, however the decline in revenue impacted
short term profitability.
FY24 FY23 Variance
Revenue £6,893,000 £7,224,000 (4.6%)
Operating profit £322,000 £599,000 (46.2%)
Interest and finance costs £66,000 £76,000 (£10,000)
Adjusted profit before tax* £445,000 £675,000 (34%)
Profit before tax £388,000 £675,000 (42.5%)
Tax (£22,000) (£36,000) +£14,000
Profit after tax £366,000 £639,000 (42.7%)
Basic earnings per share 4.47p 7.63p (41.4%)
Dividend per share 3.0p 2.5p 20%
*Excludes net exceptional costs of £57,000 (Cost of the strategic review
amounted to £77,500 less the release of £20,500 historical exceptional
liability)
Revenue decreased by 4.6% to £6,893,000 (FY23: £7,224,000). The decline was
predominately due to a large petrochemical distribution installation being
delayed from Q4 2024 to 2025. Although, it is worth noting that there appeared
to be a decline in market activity around the time of the UK election.
Growth in recurring revenue, as expected, continued rising by 4.5% in FY24 to
£3,051,000 (FY23: £2,921,000). For 2024 recurring revenue represented 44%
of total sales (FY23: 40%). The business strategy is to continue to build the
level of recurring revenues in both absolute terms and in relation to total
sales.
Gross margins improved slightly by 90 basis points and maintained a healthy
level at 60.2% (FY23: 59.3%). We expect margins to trend upward as recurring
revenue increases as a proportion of total revenue albeit margins can show
short-term volatility quarter by quarter.
Administrative overheads were tightly controlled at £3,785,000
(FY23:£3,637,000); however, the 4.1% increase reflects the rising costs of
doing business, inflationary pressures, and proactive measures, such as salary
adjustments.
The business is highly sensitive to changes in revenue and profitability was
negatively impacted by the 4.5% decline in revenues which resulted in a 42.5%
reduction in profits in FY24 to £388,000 (FY23: £675,000).
The tax charge reduced to £22,000 (FY23: £36,000) and FY24 post-tax profits
declined by 42.7% to £366,000 (FY23: £639,000).
Earnings per share showed a similar trend and fell by 41.4% to 4.47p in FY24
(FY23: 7.63p). The Company suspended the buyback programme during the
strategic review period and bought no shares in 2024 (FY23: 275,000) at a
total cost of £252,000 (average cost per share of 91p). The total number of
shares with voting rights are 8,200,277 (FY23: 8,200,277).
Adjusted EBITDA* declined at a lower rate than profitability by 13.5% in 2024
at £1,156,000 (FY23: £1,336,000).
*Excludes net exceptional costs of £57,000 (cost of the strategic review
amounted to £77,500 less the release of £20,500 historical exceptional
liability)
FY24 FY23 Change
Operating profit before interest and tax £322,000 £599,000 (46.2%)
Amortisation £534,000 £532,000 +0.4%
Depreciation - owned assets £47,000 £46,000 +0.2%
Depreciation - leased assets £196,000 £159,000 +23.2%
EBITDA £1,099,000 £1,336,000
Exceptional costs* £57,000 £nil
Adjusted EBITDA £1,156,000 £1,336,000 (13.5%)
Spend on Research and Development (R&D) £978,000 £972,000 +0.6%
R & D Capitalisation £684,000 £583,000 +17.5%
*Excludes net exceptional costs of £57,000 (Cost of the strategic review
amounted to £77,500 less the release of £20,500 historical exceptional
liability)
Amortisation and depreciation release in 2024 remained at similar levels to
2023. CAPEX spending on R & D is expected to increase again but not to
return to FY18 levels of £929,000.
FY24 FY23 Change
Cash £2,918,000 £3,005,000 (£87,000)
Cash per Share 34.4p 36.6p (2.2p)
Cash applied to dividends and buy-backs £246,000 £334,000 (£88,000)
The balance sheet remains strong. Cash and cash per share at year end were
lower than the prior year due to lower profitability and the cost of the
dividends paid rising from £82,000 in FY23 to £246,000 in FY24.
The order book, which we report inclusive of recurring revenues due in the
forthcoming year, stood at £4,038,000 at the year-end (FY23: £3,611,000).
This is made up of contracted recurring revenue due of £3,051,000 (FY23:
£2,917,000) and new orders of £987,000 (FY23: £422,000). We noticed that
customers paused placing orders around the time of the UK election but seem to
now have normalised behaviour.
Current trading and outlook
Whilst Touchstar made progress in 2024 and demonstrated its ability to respond
to short term upset, the slower market conditions of the second half of the
year meant that the year did not go as we had hoped. The strategic review
has highlighted the way forward and we have a plan. Implementation of the plan
and the Company's robust financial health will put us in a good position to
deliver long-term profitable growth, whilst navigating near-term developments
in market conditions. 2025 will be a transitional year as we invest and adapt
to a platform that can deliver higher rates of growth, enabling the business
to be scaled. This requires a higher level of investment across the
organisation. This has begun and while it may affect short term performance,
the Board remains confident in the business and excited by our future.
We are confident that we can manage inflationary headwinds, trade uncertainty
and return to delivery of financial progress in 2025. The financial results
are budgeted to be second half weighted due the timing of installation of the
larger projects.
The broader market and sector within which we operate started the year
relatively stable, although it should be noted we sense a general increasing
mood of uncertainty and anxiety in the business community. We entered 2025
better placed than the prior year, with a higher order book and a strong
pipeline of opportunity, although there is much to be done as we pursue more
ambitious plans. I have confidence in our people's ability to unlock this
potential and deliver higher returns for shareholders.
I Martin
Chairman
28 April 2025
Consolidated income statement for the year ended 31 December 2024
2024 2023
£'000 £'000
Revenue 6,893 7,224
Cost of sales (2,743) (2,937)
Gross profit 4,150 4,287
Distribution costs (43) (51)
Administrative expenses (3,785) (3,637)
Operating profit before exceptional costs and share-based payment provision
408 658
Exceptional costs (57) -
Share-based payment provision included in administrative expenses (29) (59)
Operating profit 322 599
Finance income 79 85
Finance costs (13) (9)
Profit before income tax 388 675
Income tax charge (22) (36)
Profit for the year attributable to the owners of the parent 366 639
Earnings per ordinary share (pence) attributable to owners of the parent
during the year:
2024 2023
Basic 4.47p 7.63p
Adjusted 5.16p 7.63p
Diluted 4.43p 7.58p
The exercise price of all share options granted at 31 December 2024 were below
the average market share of ordinary shares during the period to 31 December
2024 and therefore deemed dilutive.
There is no other comprehensive income or expense in the current year or prior
year and consequently no statement of other comprehensive income or expense
has been presented.
All activity in 2024 relating to continuing operations.
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 not to present the parent Company income statement. The
profit for the Company is detailed in the Statement of financial position and
the Company statement of changes in shareholders' equity.
Consolidated statement of changes in equity for the year ended 31 December
2024
Share capital Treasury shares Share premium account Share based payment Reserves Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 424 - 1,119 58 1,332 2,933
Dividend - - - - (82) (82)
Purchase of own shares - (252) - - - (252)
Cost of capital reduction in subsidiary - - - - (34) (34)
Share based payment charge - - - 59 - 59
Transactions with shareholders - (252) - 59 (116) (309)
Total comprehensive income (profit for the year) - - - - 639 639
Capital reduction - - (1,119) - 1,119 -
At 31 December 2023 424 (252) - 117 2,974 3,263
Dividend to shareholders - - - - (246) (246)
Repatriation of unclaimed dividends - - - - 24 24
Share based payment charge - - - 29 - 29
Transactions with shareholders - - - 29 (222) (193)
Total Comprehensive income (profit for the year) - - - - 366 366
At 31 December 2024 424 (252) - 146 3,118 3,436
Company statement of changes in equity for the year ended 31 December 2024
Share capital Treasury shares Share premium account Share based payment Reserves Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 424 - 1,119 58 (2,376) (775)
Dividend - - - - (82) (82)
Purchase of own shares - (252) - - - (252)
Cost of capital reduction - - - - (34) (34)
Share based payment charge - - - 59 - 59
Transactions with shareholders - (252) - 59 (116) (309)
Total Comprehensive income (profit for the year) - - - - 1,591 1,591
Capital reduction - - (1,119) - 1,119 -
At 31 December 2023 424 (252) - 117 218 507
Dividend to shareholders - - - - (246) (246)
Repatriation of unclaimed dividends - - - - 24 24
Share based payment charge - - - 29 - 29
Transactions with shareholders - - - 29 (222) (193)
Total Comprehensive income (profit for the year) - - - - 576 576
At 31 December 2024 424 (252) - 146 572 890
Consolidated and Company statements of financial position as at 31 December
2024
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Non-current assets
Intangible assets 1,288 1,137 - -
Investments - - 119 95
Property, plant and equipment EQUIPMENTEQUIPMENTEQUIPMENT 108 66 - -
EQUIPMENTequipment
Right-of-use assets 180 225 - -
Deferred tax assets 9 20 9 2
Trade and other receivables 88 - -
1,673 1,448 128 97
Current assets
Inventories 992 1,153 - -
Trade and other receivables 1,650 1,199 2 239
Corporation tax receivable 87 18 - -
Cash and cash equivalents 2,918 3,005 1,240 292
5,647 5,375 1,242 531
Total assets 7,320 6,823 1,370 628
Current liabilities
Trade and other payables 1,383 1,191 480 121
Contract liabilities 2,018 1,938 - -
Lease liabilities 91 149 - -
3,492 3,278 480 121
Non-current liabilities
Deferred tax liabilities 170 90 - -
Contract liabilities 148 130 - -
Lease liabilities 74 62 - -
392 282 - -
Total liabilities 3,884 3,560 480 121
Consolidated and Company statement of financial position as at 31 December
2024 (continued)
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Capital and reserves attributable
to owners of the parent
Retained earnings 3,118 2,974 572 218
Share capital 424 424 424 424
Treasury shares (252) (252) (252) (252)
Share based payment reserve 146 117 146 117
Share premium - - - -
Total equity 3,436 3,263 890 507
Total equity and liabilities 7,320 6,823 1,370 628
Consolidated and Company cash flow statement for the year ended 31 December
2024
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Operating activities
Operating Profit/(loss) 322 599 (31) (8)
Adjustments for:
Depreciation 243 205 - -
Amortisation 534 532 - -
Share-based payment provision 29 59 5 11
Movement in:
Inventories 161 (187) - -
Trade and other receivables (539) (224) 237 176
Trade and other payables and contract liabilities 290 (398) 359 (134)
Cash generated from/(used in) operations 1,040 586 570 45
Interest received 79 85 - -
Interest paid (13) (9) - -
Net cash generated from operating activities 1,106 662 570 45
Investing activities
Addition of intangible assets (684) (583) - -
Purchase of property, plant and equipment (89) (17) - -
Net cash used in investing activities (773) (600) - -
Financing activities
Dividend paid to shareholders (246) (82) (246) (82)
Repatriation of unclaimed dividends 24 24
Purchase of own shares - (252) - (252)
Cost of capital reduction - (34) - (34)
Dividend received from subsidiary - - 600 1,600
Principal elements of lease payments (198) (165) - -
Net cash generated from financing activities (420) (533) 378 1,232
Net (decrease)/increase in cash and cash equivalents (87) (471) 948 1,277
Cash and cash equivalents at start of the year 3,005 3,476 292 (985)
Cash and cash equivalents at end of the year 2,918 3,005 1,240 292
1 General information
Touchstar plc (the 'Company') and its subsidiaries (together 'the Group')
design and build rugged mobile computing devices and develop software
solutions used in a wide variety of field-based delivery, logistics and
service applications. The Company is a public company limited by share capital
incorporated and domiciled in the United Kingdom. The Company has its listing
on the AIM. The address of its registered office is 1 George Square, Glasgow,
G2 1AL.
2 Basis of preparation
The final results for the year ended 31 December 2024 have been prepared in
accordance with the accounting policies set out in the annual report and the
accounts for the year ended 31 December 2023.
The Group Financial Statements have been prepared in accordance with the
International Financial Reporting Standards ('IFRS') as adopted by the United
Kingdom, IFRS IC interpretations and the Companies Act 2006 applicable to
companies reporting under IFRSs and the AIM Rules for Companies. The Group
Financial Statements have been prepared under the historical cost convention.
While the financial information included in this final announcement has been
computed in accordance with IFRS, this announcement does not itself contain
sufficient information to comply with IFRS. The accounting policies used in
preparation of this final announcement have remained unchanged from those set
out in the Group's 2023 statutory financial statements other than those
described below. They are also consistent with those in the Group's
statutory financial statements for the year ended 31 December 2024 which have
yet to be published. The final results for the year ended 31 December 2024
were approved by the Board of Directors on 28 April 2025.
The financial information set out in this final announcement does not
constitute the Group's statutory financial statements for the year ended 31
December 2024 but is derived from those financial statements which were
approved by the Board of Directors on 28 April 2025. The Auditors have
reported on the Group's statutory financial statements and their report was
unqualified and (ii) did not contain a statement under section 498(2) or
498(3) Companies Act 2006. The statutory financial statements for the year
ended 31 December 2024 have not yet been delivered to the Registrar of
Companies and will be delivered following the Company's Annual General
Meeting.
The comparative figures are derived from the Group's statutory financial
statements for the year ended 31 December 2024 which carried an unqualified
audit report, did not contain a statement under section 498(2) or 498(3)
Companies Act 2006 and have been filed with the Registrar of Companies.
Going concern
These financial statements have been prepared on a going concern basis, which
assumes that the Group will be able to meet its liabilities when they fall
due. As of 31 December 2024, the Group held unencumbered cash of £2,919,000
(2023: £3,005,000), after considering overdraft balances as presented in note
23. The Group still holds an undrawn £200,000 on demand overdraft facility as
of 31 December 2024 (also £nil in April 2025).
The directors remain confident in the business, the skillset employed in its
dedicated staff, solid product set and loyal customer base.
External global economic challenges continued to affect business during 2024,
causing slow order conversion impacting Group sales during the year which
decreased on 2023 by 4.6%, in spite of this margins slightly increased from
59.5% in 2023 to 60.2% in 2024 due to product mix. Nevertheless, the business
maintained tight control of costs and remained profitable, generating a profit
after tax of £347,000 (2023: £639,000).
The Group continues to benefit from a supportive bank who have provided the
borrowing facility since 2005. The Group has reduced its reliance on the
facility provided by the bank and since early 2023 has an average of
£1,600,000 placed on deposit thereby generating cash via receivable interest.
In assessing the Company's ability to continue as a going concern, the Board
has reviewed the Group's cash flow and profit forecasts removing completely
reliance on any facilities. The impact of potential risks and related
sensitivities to the forecasts were considered in assessing the likelihood of
additional facilities being required in the future.
The directors have at the time of approving the financial statements, a
reasonable expectation that the company has adequate resources to continue in
operational existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the financial statements.
3 Critical accounting estimates and judgements
The Group and Company makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom equal the
related actual results. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
(a) Development expenditure
The Group recognises costs incurred on development projects as an intangible
asset which satisfies the requirements of IAS 38. The calculation of the costs
incurred includes the percentage of time spent by certain employees on the
development project. The decision whether to capitalise and how to determine
the period of economic benefit of a development project requires an assessment
of the commercial viability of the project and the prospect of selling the
project to new or existing customers.
(b) Impairment of intangibles
Judgement is required in determining both the useful economic life of the
asset along with any impairment, notably intangible software development
costs. Useful economic life is based on the life expectancy of software
licences and recoverable amounts are based on a calculation of expected future
cash flows, which require assumptions and estimates of future performance to
be made. Cash flows are discounted to their present value using pre-tax
discount rates based on the Directors market assessment of risks specific to
the asset.
(c) Stock provisions
Judgement is required in relation to the appropriate provision to be made for
the write down of slow moving or obsolete inventory. Such provisions are made
based on the assessment of the Group's prospective sale of inventories and
their net realisable value, which are subject to estimation uncertainty.
(d) Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of
estimation and judgement. It is based on the lifetime expected credit loss,
grouped based on days overdue, and makes assumptions to allocate an overall
expected credit loss rate for each group. These assumptions include recent
sales experience, historical collection rates, and forward-looking information
that is available.
After due consideration of the assumptions detailed above, no credit loss
provision was considered necessary for the year ended 31 December 2024 (2023:
nil).
4 Analysis of revenue
2024 2023
£'000 £'000
Recognised at a point in time 3,842 4,303
Recognised over time (recurring revenue) 3,051 2,921
6,893 7,224
5 Share-based employee remuneration
The Touchstar plc EMI Share Option Plan (Plan) was approved by the
shareholders at the Annual 2021 AGM on 23 June 2021. It is a share-based
payment scheme for employee remuneration which will be settled in equity.
The Plan is part of the remuneration package for Group employees as selected
by the Group's Remuneration Committee. Options under this Plan will vest if
performance conditions, are met pertaining to profit after tax and recurring
revenue growth as defined in the Plan.
Participants in this Plan must be employed until the end of the agreed vesting
period unless deemed as 'good employees' by the Group's Remuneration Committee
on leaving. Upon vesting, each option allows the holder to purchase each
allocated share at the market price determined at the grant date.
The number of options granted during the year and outstanding at 31 December
2024:
Group
2024 2023
Number Number
At 1 January 422,000 422,000
Granted during the year - -
At 31 December 422,000 422,000
6 Income tax credit
2024 2023
£'000 £'000
Corporation tax
Current tax credit (87) -
Adjustment in respect of prior years 18 -
Deferred tax charge 91 36
22 36
Corporation tax is calculated at a rate of 25% (2023: 23.5%) of the estimated
assessable profit for the year. The 2023 rate is the weighted average tax
rate applicable for the year.
Factors affecting the tax credit for the year
The charge for the year can be reconciled to the reported profit as follows:
2024 2023
£'000 £'000
Profit before income tax 388 675
Multiplied by the calculated standard rate of corporation tax in the UK of 25% 97 159
(2023: hybrid rate 23.52%)
Effects of:
Items not deductible for tax purposes 8 14
Enhanced research and development deduction (201) (214)
Surrender of tax losses for R&D tax credit 131 -
Tax losses for current year unrecognised - 66
Losses recognised in the period 7 19
Use of previously recognised losses (46) -
Use of previously unrecognised losses (32) -
Difference between writing-down allowances and depreciation 40 (8)
Adjustment in respect of prior years 18 -
Total tax charge for the year 22 36
.
Factors affecting the future tax charge
There are no factors currently affecting the future tax charge.
7 Dividends
During the year an interim dividend of 1.5p per share was paid (2023: 1p). The
board recommends a final dividend of 1.5p per share (2023: 1.5p). Together
with the interim dividend of 1.5p, paid in November 2024, gives a total
dividend for the year of 3.0p (2023: 2.5p).
8 Earnings per share
The calculation of earnings per share is based on profit attributable to
owners of the parent and the
weighted average number of ordinary shares in issue during the year.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares arising from share options granted to employees where the exercise
price is less than the market price of the Company's ordinary shares at the
year end.
The 211,000 options issued during 2024 were cancelled as one of the two
criteria set was not met. (2023: None).
2024 2023
Basic 4.47p 7.63p
Adjusted 5.16p n/a
Diluted 4.43p 7.58p
Reconciliations of the earnings and weighted average number of shares used in
the calculation are set out below:
2024 2023
£'000 £'000
Basic earnings attributable to owners of the parent - for Basic EPS 366 639
Exceptional costs (note 5) 57 -
Adjusted earnings attributable to owners of the parent - for Adjusted EPS 423 639
2024 2023
No. No.
Basic weighted average number of shares, excluding own shares, in issue 8,200,077 8,371,477
Dilutive effect of share options 62,479 54,108
Dilutive weighted average number of shares, excluding own shares, in issue 8,262,556 8,425,555
9 Intangible assets
Group
Goodwill Development expenditure Total
£'000 £'000 £'000
Cost
At 1 January 2023 8,591 3,615 12,206
Additions - 583 583
Disposal - (16) (16)
At 31 December 2023 8,591 4,182 12,773
Additions - 684 684
Disposal - (587) (587)
At 31 December 2024 8,591 4,279 12,870
Accumulated amortisation
At 1 January 2023 8,591 2,528 11,119
Amortisation charge - 532 532
Disposal - (15) (15)
At 31 December 2023 8,591 3,045 11,636
Amortisation charge - 534 534
Disposal - (587) (587)
At 31 December 2024 8,591 2,992 11,583
Net book value
At 31 December 2024 - 1,288 1,288
At 31 December 2023 - 1,137 1,137
At 1 January 2023 - 1,087 1,087
Amortisation of £534,000 (2023: £532,000) is included within administrative
expenses in the income statement.
Development expenditure
The calculation of the costs incurred includes third party developers along
with the percentage of time spent by certain employees on hardware and
software development for deployment in business operations. The decision
whether to capitalise and how to determine the period of economic benefit of a
development project requires an assessment of the commercial viability of the
project and the prospect of selling the project to new or existing customers.
Management determined budgeted sales growth based on historic performance and
its expectations of market development via each product set's underlying
pipeline.
A review of future cashflows for each of the product sets did not result in
any impairment.
Development expenditure has been capitalised on an ongoing basis and therefore
has a remaining useful economic life ranging from 0 to 5 years.
10 Property, plant and equipment
Plant and machinery Fixtures, fittings, tools and equipment Total £'000
£'000 £'000
Cost
At 1 January 2023 255 338 593
Additions 9 8 17
Disposals (21) - (21)
At 31 December 2023 243 346 589
Additions 65 24 89
At 31 December 2024 308 370 678
Accumulated depreciation
At 1 January 2023 205 294 499
Charge for the year 26 20 46
Disposals (22) - (22)
At 31 December 2023 209 314 523
Charge for the year 27 20 47
At 31 December 2024 236 334 570
Net book value
At 31 December 2024 72 36 108
At 31 December 2023 34 32 66
At 1 January 2023 50 44 94
Depreciation expenditure of £47,000 (2023: £46,000) is included within
administrative expenses in the income statement.
11 IFRS 16 Right of use assets
Premises Motor vehicles Total £'000
£'000 £'000
Cost
At 1 January 2023 510 310 820
Additions - 86 86
Disposals - (38) (38)
At 31 December 2023 510 358 868
Additions - 152 152
Disposal (510) (217) (727)
At 31 December 2024 - 293 293
Accumulated depreciation
At 1 January 2023 327 194 521
Charge for the year 82 77 159
Disposals - (37) (37)
At 31 December 2023 409 234 643
Charge for the year 92 104 196
Disposal (501) (225) (726)
At 31 December 2024 - 113 113
Net book value
At 31 December 2024 - 180 180
At 31 December 2023 101 124 225
At 1 January 2023 183 116 299
Both property leases, Manchester and East Sussex expired in December 2024. The
East Sussex premises was vacated with the team being relocated to shared
offices on a short-term rental. The Manchester lease rolled over under the
Landlord and Tenant Act 1985 has since been renewed on similar terms in April
2025.
Depreciation expenditure of £196,000 (2023: £159,000) is included within
administrative expenses in the income statement.
12 Cash and cash equivalents
Group Company
2024 2023 2024 2023
£'000 £'000 £'000 £'000
Cash at bank and in hand 2,918 3,005 1,240 292
The above balances are not offset in the Consolidated Statement of Financial
Position and are included for illustrative purposes only.
The Company holds cash on deposit included as cash and cash equivalents. The
amount held on 95-day notice deposit at 31 December 2024 was £1,030,000
(2023: £1,563,000) earning interest at a rate of 3.55% per annum over base.
The Group bank overdraft facility is secured by a bond and floating charge
over the entire assets of the Group.
At 31 December 2024, the Group had total committed undrawn facilities of
£200,000 (2023: £200,000).
The Group now operates within a £200,000 net overdraft facility which takes
into account both the gross cash position of each Group entity netted off
against any borrowings. As at the 31 December 2024, this represents the net
cash and cash equivalents balance of £2,918,000 (2023: £3,005,000).
The Company and its subsidiaries have given a guarantee in relation to the
overdraft facilities extended to The Group.
13 Reserves
The following describes the nature of each reserve within equity:
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal value.
Share-based payment reserve Provision for options granted under the Group Enterprise Management Incentive
Scheme.
Retained earnings All other net gains and losses and transactions with owners (e.g. dividends)
not recognised elsewhere.
Treasury shares Weighted average cost of own shares held in treasury.
The following describes the nature of each transaction within equity:
Reserve transactions Description and purpose
Purchase of own shares At the 31 December 2024 the Group held 275,000 of its own shares with a fair
value of £252,000, these are being held in treasury (2023: 275,000 with a
fair value of £252,000). No shares were repurchased during the year (2023:
275,000 at a fair value of £252,000).
14 Share capital
Group and Company
2024 2024 2023 2023
Number £'000 Number £'000
Ordinary shares of 5p each 8,475,077 424 8,475,077 424
All shares are authorised, issued and fully paid up.
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