REG - Triad Group Plc - Annual Financial Report
26/05/2022 07:00
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RNS Number : 8402M Triad Group Plc 26 May 2022
Legal Entity Identifier (LEI) No. 213800MDNBFVEQEN1G84
Triad Group Plc ("Triad" or "the Company")
Audited results for the year ended 31 March 2022
(Company number: 02285049)
Triad Group Plc is pleased to announce its audited results for the year ended
31 March 2022.
The Board is proposing a final dividend of 4p per share, bringing the total
dividend to 6p for the financial year. The dividend is subject to shareholder
approval at the Annual General Meeting ("AGM"), and details of the AGM will be
announced at the appropriate time.
For further information, please contact:
Triad Group Plc
James McDonald
Finance Director and Company Secretary
Tel: 01908 278450
Arden Partners plc
Ruari McGirr
Alexandra Campbell-Harris
Tel: 020 7614 5900
Strategic report
Financial highlights
Year ended Year ended Difference
31 March 2022
31 March 2021
Revenue £17.0m £17.8m -£0.8m
Gross Profit £4.8m £3.8m +£1.0m
Gross Profit % 28.1% 21.4% +6.7%
Profit before tax £1.1m £0.6m +£0.5m
Profit after tax £1.2m £0.7m +£0.5m
Cash reserves £5.3m £4.9m +£0.4m
Basic earnings per share 7.16p 4.28p +2.88p
Final dividend - proposed 4p 2p +2p
Chairman's statement
Dr John Rigg
Financial headlines
For the year ended 31 March 2022 the Group reports revenue of £17.0m (2021:
£17.8m). The gross profit as a percentage of revenue has increased to 28.1%
(2021: 21.4%) and profit before tax was £1.1m (2021: £0.6m). Profit after
tax was £1.2m (2021: £0.7m) as a result of positive movements in the
deferred tax asset (see page 14). Cash reserves have increased to £5.3m
(2021: £4.9m). The effects of the Covid-19 pandemic upon both financial
results in 2022 and current trading are set out on pages 6 and 18.
Gross profit increased by £1.0m during the year due to the ongoing increase
of consultancy revenues as a proportion of total revenue, serviced by
permanent fee earning consultants. Total revenue in the year reduced by a net
£0.8m. Gross profit as a percentage of revenue has increased significantly to
28.1% (2021: 21.4%) as a result of the expansion of higher-margin consultancy
services. Cash has increased by £0.4m during the year to £5.3m (2021:
£4.9m), which reflects the translation of profits, less dividends, to cash.
Overview of results
I am very pleased to report another impressive set of results, building on the
strong position created in the previous year. The Group continued to deliver
outstanding service to our clients despite the ongoing challenge of Covid-19
and the restrictions associated with the pandemic. Most of our staff continued
to work from home during the period, without compromising on either quality or
productivity.
During the year, I was also very pleased to see the progress made in
recruiting more permanent fee-earning consultants. This recruitment is a
cornerstone of the strategy to reinforce our credentials as a pre-eminent
consultancy and to move away from the transactional business of IT
recruitment. The Group has largely completed during the year the transition to
a pure consultancy and in so doing has laid important foundations for the
future. Indeed, the improvements in gross profit and gross margin during the
year are already testament to the benefits of the strategy. Further
operational changes to underpin our consultancy ethos included the successful
elimination of all sales commission schemes in favour of a salary-only
remuneration scheme, implemented without losing any staff in the process.
Using the Group's internal team for the significant majority of our
recruitment during the year, the Group's headcount increased by 37 from 81 to
118 at year end, with all of the new recruits being fee-earning consultants.
Despite the significant increase in headcount, utilisation levels as a
percentage of available time improved during the year. Much of this consultant
utilisation went into delivering services at key accounts including the
Ministry of Justice, Department for Business, Energy and Industrial Strategy,
Westcoast Holdings Ltd, and Department for Transport. I am very proud to know
that our clients are trusting us with mission-critical projects, many of which
are making a profound impact not only on the client organisations themselves
but on the wider society in areas such as criminal justice and carbon
emissions.
I was also extremely proud to see the Group's successful application to join
the new Digital Specialists and Programmes framework towards the end of the
year, making the Group one of only 27 organisations across the UK to hold a
place on both lots of this important route into Government digital services.
Outlook
Following a significant year of transition, the Group is looking forward to
building on the foundations laid. The new year has started with good
utilisation levels that are planned to improve significantly across the
period. Headcount is planned to increase to meet expected demand.
The Group will continue to work with clients in need of expert teams of
consultants capable of providing technology-based services and products to
solve their business problems. Whilst competition remains fierce, we remain
confident in our ability to command fees commensurate with the value we are
creating for our clients. We will continue to leverage our expertise in
Central Government and Law Enforcement to deepen our presence in these sectors
whilst also expanding our footprint in the private sector, particularly in
businesses who need to be liberated from the grip of their legacy systems.
The Group remains debt free except for lease liabilities reported due to the
application of IFRS 16 and enjoys strong reserves of cash.
Although the national economy as a whole is currently looking at testing times
ahead, I am confident that the Group has been carefully engineered through
cash control, quality recruitment, customer selection and management
cohesiveness to demonstrate its robustness and resilience. I look forward to
the future with great enthusiasm.
Dividend
Recognising the strength of this year's performance and the Group's confidence
in the near future, the Board proposes a final dividend of 4p per share (2021:
2p per share), which together with the interim dividend already paid of 2p
(2021: nil), totals 6p per share for the financial year (2021: 2p per share).
Employees
On behalf of the Board of Directors, I would like to thank all of the staff
for their commitment and contribution during a very challenging year.
Dr John Rigg
Executive Chairman
25 May 2022
Managing Director's statement
Adrian Leer
Profit in the year increased to £1.1m representing significant progress with
the strategy to concentrate the Group's efforts on its consultancy offering,
serviced by permanent fee earning consultants. This was underscored by
improvements in gross margin percentage, up to 28.1% from 21.4% in the
previous year. Revenue declined by £0.8m to £17.0m due to the reduction of
lower-margin contractor assignments. Indeed, consulting revenue increased by
70% versus previous year. Cash reserves increased by £0.4m to £5.3m. The
Group experienced no trading bad debts and had no external funding
requirements.
Business commentary
The Group's profit reflects the hard work of our expanding team as we continue
on our journey to become one of the UK's favourite technology consultancies.
Our consultant headcount increased by 37, all of whom were sourced via our
internal team and colleague referrals. Many of these new recruits helped to
fulfil demand on key services, including Ministry of Justice, Department for
BEIS, and Department for Transport.
Our services continued to be provided on a predominantly remote basis due to
the restrictions of the pandemic. A benefit of the now-established remote
working model has been our ability to attract staff from areas across the UK,
including Cardiff, Aberdeen and Bristol. Our virtual on-boarding process has
been hailed by staff as best-in-class and reflects our determination to offer
something different to consultants joining the business.
The majority of our work centred around significant engagements with existing
clients, some of which were at the early stages of development at the
beginning of the year.
At Ministry of Justice, we have been increasing the size of our project
management and PMO team to cope with the delivery of 30+ projects during the
year. Our consultants have been involved in successful delivery across a broad
spectrum of projects including work on the Nightingale courts, prison estate
expansion, and youth education services. Elsewhere at MOJ, our business
analysis service continued to provide a core capability to the Crime programme
as the Common Platform rolled out across the courts of England and Wales. In
June, we completed the transition of the PSD service on the Crime programme to
the new service provider marking a successful multi-year engagement where
Triad teams established the operations capability for this critical platform.
During the year, we also grew the number of consultants supporting a variety
of initiatives at Department for Business, Energy and Industrial Strategy.
Projects included significant Microsoft SharePoint migration activity, various
software delivery projects, and the roll-out of communication facilities
across wide swathes of this significant Government organisation.
At Department for Transport, our team is developing a system to help fuel
suppliers manage their renewable fuel obligations. This project epitomises
Triad's expert approach to making robust digital services that help Government
enact and implement legislation in the shape of modern, maintainable
solutions. Indeed, we were delighted to have our work with DfT short-listed at
the BCS/UK IT Industry awards for the "best public sector project".
The multi-year association with our policing client continued throughout the
period, allowing us to provide expert technical capability and delivery
management capacity to help modernise the systems being used to support
front-line law enforcement.
Within the private sector, highlights included the complex software and
platform engineering work we undertook for Westcoast Holdings Ltd, helping one
of the UK's biggest technology distributors to avail themselves of best
practice around the introduction of automated delivery pipelines within a very
demanding operational environment. At Renewable Energy Systems we played a key
role in helping them successfully complete the on-time sale of their French
operation, now known as Q-Energy and the latest client to join the Triad fold.
Our long-running association with leading law firm Foot Anstey continued, and
during the period we provided continuing strategic advice to the office of the
Chief Technology Officer and some advanced innovation around the use of data
lakes within a legal practice.
In the non-profit sector, we have been working with Marine Stewardship Council
to develop a highly functional prototype for their fishery assessment process.
This drew heavily on our user research and user experience practice, who have
been very active during the year highlighting across multiple channels the
importance of UR/UX in good digital services.
Our work has been recognised through a number of client nominations,
short-listing in national and regional competitions, and through partner
accreditations. We were delighted to win the Tech Company of the Year award at
the Global Business Tech Awards. One of the few UK consultancies with seven
Microsoft Gold competencies, we are also one of only a handful of Workpoint
partners in the UK. We have been continuing to explore the application of
blockchain as a technology with our partner Stratis, and sponsored their
hackathon event to encourage teams to develop innovative ways of exploiting
the technology.
During the year we gained places on two significant Government frameworks:
Technology Services 3 (TS3), and Digital Specialists and Programmes (DSP). On
the latter, we were one of only 27 companies in the UK to qualify for both
lots - an achievement of which we are justifiably proud. As part of our
strategic focus to expand our law enforcement footprint, we also successfully
applied to join the Home Office ACE framework and the Fortrus framework.
Further, our Managing Consultant is now a member of the TechUK Digital Justice
Working Group, helping to influence industry thinking within this important
domain.
Social value is rightly an increasing concern of Government and features
prominently in its procurement exercises. Triad has been active in this field,
being a founder member of the Social Value Leadership Team facilitated by the
Worshipful Company of Information Technologists. Our own social value efforts
have focused on helping people to find jobs whether through our University
challenge event or our emphasis on helping people with disabilities to
consider a career in technology. We also encouraged staff to participate in
fund-raising activities for our chosen charity, Action for Children, with a
number of colleagues participating in the national "Boycott your Bed"
campaign.
Many of our colleagues have contributed their thinking to industry via forums
such as Digital Leaders, with presentations on test automation, user
experience and wellbeing in the workplace being among the highlights.
This combination of hard work, outstanding customer service and a passion for
the profession encapsulates neatly the essence of Triad consultants and I
would like to extend my thanks to all of them and their support teams for
playing such an important part in delivering the success of the last year.
Adrian Leer
Managing Director
25 May 2022
Organisation overview
Triad Group Plc is engaged in the provision of information technology
consultants to deliver technology-enabled business change to organisations in
the public sector, private sector, and not-for-profit sector.
Business model
The Group provides a range of consultancy services to clients to help them
deliver a tangible return on their investment in technology. Our primary
engagement model is to deliver these services via our permanent consultants,
sometimes augmented by carefully selected associates. We rely upon our
in-house resourcing team to provide both permanent and associate staff,
ensuring that we maintain tight control of our supply chain and quality at all
times.
Our services span the delivery life cycle from high level consulting, early
strategy, programme management, project delivery, software delivery, and
support activities.
The Group operates mainly in the United Kingdom. Our workforce is increasingly
distributed across the UK too, and we have permanent office space in Godalming
(registered office) and Milton Keynes.
Principal objectives
The principal objectives of the Group are to;
· Provide clients with industry leading service in our core skills.
· Achieve sustainable profitable growth across the business and
increase long term shareholder value.
The key elements of our strategy to achieve our objectives are;
To provide a range of specialist services relevant to our clients' business
· Our services include consultancy, change leadership, project
delivery, software development and business insights. Further capacity and
expertise may be provided via our associate network.
· We continue to adopt a "business first, technology second"
approach to solving our clients' problems. A cornerstone of our service offer
is our consultancy model, offering advice and guidance to clients in terms of
technology investments.
To develop long term client relationships across a broad client base
· Enduring client relationships fuel profitability. A hallmark of
our recent trading has been the frequency of repeat business, which itself has
been a function of outstanding delivery and proactive business development
within existing accounts.
· Our consistent track record in this regard is our major asset
when developing propositions for new clients, along with the use of case
studies and references.
· We have structured our service offering to enable clients to
engage early, thus enabling the building of trust and confidence from the
outset.
To work with partners
· Our strategy includes working with carefully chosen partners
operating under their client frameworks in addition to the frameworks on which
Triad is listed. This will expose more opportunities whilst reducing the cost
of sale.
To leverage group capability and efficiency to increase profitability
· We continue to develop synergies across the Group's activities
both externally and internally, driving better outcomes for clients whilst
improving efficiency and effectiveness. The management team sets objectives to
ensure that these synergies are exploited.
· We enable our clients to benefit from access to a full range of
IT services, delivered through a single, easy to access, point of sale.
· We will continue to provide the highest quality of service to our
customers through our teams of skilled consultants and market experts.
Principal risks and uncertainties
The Group's business involves risks and uncertainties, which the Board
systematically manages through its planning and governance processes.
The Board has conducted a robust assessment of the principal risks facing the
Group, examining the Group's operating environment, scanning for potential
risks to the health and wellbeing of the organisation. The Directors factor
into the business plan the likelihood and magnitude of risk in determining the
achievability of the operational objectives. Where feasible, preventive and
mitigating actions are developed for all principal risks.
Senior management review the risk register and track the status of these risk
factors on an on-going basis, identifying any emerging risks as they appear.
Regular meetings are held between the Executive Chairman and the Managing
Director to ensure risks are identified and communicated.
The outputs of this management review form part of the Board's governance
process, reviewed at regular Board meetings. When emerging risks arise, these
are reviewed by senior management on an immediate basis and communicated to
the Board as appropriate.
The principal risks identified are:
Covid-19
The business was proven to be agile and robust through the pandemic. The main
risks that may potentially occur, are a reduction in new business pipeline
opportunities, payment delays and the recovery of debtor balances. These risks
were met head-on during the crisis, and the same mitigating actions taken
during this period are still consistently applied - the requirement to service
clients remotely and effectively, a very strong focus on short-term
forecasting, and maintaining and improving cash collection. The pandemic
generated a new world of work, with a greater emphasis on flexible working.
Employee engagement is key to mitigating the risks presented in this new
marketplace, with a continuous review of flexible working patterns,
remuneration and benefits remain critical.
IT services market
The demand for IT services is affected by UK market conditions. This includes,
for example, fluctuations in political and economic uncertainty, and the level
of public sector spending. Negative impacts can reduce revenue growth and
maintenance due to the loss of key clients, reduction in sales pipelines and
reduction in current services. The creation of new services, acquisition of
new clients and the development of new commercial vehicles is important in
protecting the Group from fluctuations in market conditions.
Economy
The political and economic uncertainty generated by Brexit still has the
potential negatively to affect the Group's marketplace due to an impact on
Government spending plans and the cancellation or delay of IT projects. The
strong relationships the Group enjoys with a large range of public sector
clients within the UK mitigated this risk during the year. During and
following the Brexit transition, the Group continued to build strong trading
partnerships with EU based companies. Due to the current lack of restrictions
of trading digital services within the EU, the Directors do not foresee this
changing in the future.
Due to the nature of the Group's client base and activities in the UK, the
current conflict in Ukraine is not considered to have a direct impact, however
there may be a secondary effect as a result of the impact on the wider
economy. The Directors have not seen any impact to date but will continue to
monitor this closely.
Inflationary pressures in the UK manifest mainly in attraction and retention
of staff and the Group's response to this risk is outlined within the
availability of staff below.
Revenue visibility
The pipeline of contracted orders for time and materials consultancy work can
be relatively short and this reduces visibility on long-term revenue
generation. The Board carefully reviews forecasts to assess the level of risk
arising from business that is forecast to be won.
Availability of staff
In an extremely difficult market for talent acquisition, the ability to access
appropriately skilled resources, recruit and retain the best quality staff are
key to ensuring the ability to deliver profitable growth and deliver IT
services to our clients. This situation is exacerbated by existing and
long-term outlook upon salary and general inflation increases. The Group
continues to recruit the best quality individuals and ensures a resilient
network of associate resources is scaled appropriately to meet the demands of
the business. To mitigate these risks, the Group reviews remuneration and
benefits on an annual basis and adjusts these accordingly within market rates.
In addition, the Group operates a Company-wide staff development programme to
ensure continuous personal growth and consistent staff engagement. The
on-boarding of new consultants is managed by a highly experienced and
dedicated team of resourcing professionals, and this provides quality
assurance processes to accelerate hiring and reduce attrition.
Competition
The Group operates in a highly competitive environment. The markets in which
the Group operates are continually monitored to respond effectively to
emerging opportunities and threats. The Group ensures a high quality of
service to long-tenured clients, which includes continuous review of delivery
against project plan and obtaining client feedback. This promotes longevity of
client relationships and to a high degree mitigates the risk of competition.
There are or may be other risks and uncertainties faced by the Group that the
Directors currently deem immaterial, or of which they are unaware, that may
have a material adverse impact on the Group.
The risk appetite of the Group is considered in light of the principal risks
and their impact on the ability to meet its strategic objectives. The Board
regularly reviews the risk appetite which is set to balance opportunities for
business development and growth in areas of potentially higher risk, whilst
maintaining reputation, regulatory compliance, and high levels of customer
satisfaction.
Section 172 statement
Section 172 of the Companies Act 2006 requires Directors to take into
consideration the interests of key stakeholders in the Group in their decision
making. Engagement with the Group's stakeholders is essential to successfully
managing the business and the effectiveness of this engagement helps to
understand the impact of key decisions on stakeholders.
The Board has identified the key stakeholders as shareholders, clients,
partners, employees and suppliers.
· Shareholders: Shareholders play a significant part in deciding
the direction of the business. Dialogue is maintained with shareholders
and their advisors and issues of significance are communicated to shareholders
as necessary. In addition, a full shareholder briefing is presented at the
Group's annual general meeting of shareholders. The Board awarded an interim
dividend of 2p per share (2021: nil per share) to shareholders as the result
of careful review of forecasted profitability and cash flow. The Board has
proposed a final dividend of 4p per share for the year ended 31 March 2022 due
to the recent trading performance and expected cash flows (2021: 2p per
share).
· Clients: Delivering a quality service is the key to the Group's
future success, and effective and successful delivery of services to our
clients is the key focus of the Group. To increase effectiveness, a constant
review of utilisation rates and delivery structures has been undertaken to
enhance the efficiency of the Group's service to clients. Key account delivery
and management tools have also been reviewed and enhanced to promote
efficiencies. The Group continues with the strategy of building permanent
consultant numbers to improve and broaden the skill sets and enhance delivery
to clients, and utilise contractors on a limited basis.
· Partners: Effective working relationships that enable future
growth are important to the Group. The Group continue to cultivate strong
relationships with our business partners, with regular dialogue and updates to
ensure that delivery to our shared clients is as effective as possible. During
the financial year, the Group continued to explore delivery methods with
partners that enable the acquisition of new business, including the successful
partnership with Workpoint to deliver licensing and consultancy.
· Employees: Motivated and satisfied employees are the lifeblood of
our business and our people are key to our success. The Group strives to
achieve the highest standards in its dealings with all employees. During the
financial year, the Group continued its high level of communication with
employees, with regular Group meetings chaired by the Managing Director, who
also held one-to-one meeting with employees as requested. The Group continued
to provide appropriate comprehensive induction and ongoing training tailored
to individual needs. Extensive employee benefits are provided which are
continually reviewed to enhance the wellbeing of all employees. Remuneration
packages are reviewed on an annual basis to ensure retention of employees, as
are flexible working environments. During the financial year, the Board
awarded a number of employees restricted stock units (RSUs) under the new
Triad Employee Share Incentive Plan. See page 36 for details.
· Suppliers: Effective engagement with suppliers enables the Group
to deliver a quality service to our clients. The Group maintains appropriate
arms-length trading relationships with quality suppliers and is fully
committed to fairness in its dealing with them, including embracing the
principle of paying suppliers within agreed credit terms during the course of
normal business. The Group formed closer relationships with suppliers during
the Covid-19 pandemic to ensure a continuance of a quality service.
The Directors continue to ensure there is full regard to the long-term
interests of both the Group and its key stakeholders including the impact of
its activities on the community, the environment and the Group's reputation.
In doing this, the Directors continue to act fairly and in good faith taking
into account what is most likely to promote the long-term success of the
Group.
· Relations with key stakeholders such as shareholders, employees,
and suppliers are maintained by regular, open and honest communication in both
verbal and written form.
· The Directors are fully aware of their responsibilities to
promote the success of the Group in accordance with section 172 of the
Companies Act 2006.
· The Directors continuously take into account the interests of its
principal stakeholders and how they are engaged. This is achieved through
information provided by management and also by ongoing direct engagement with
the stakeholders themselves.
· The Board has ensured an appropriate business structure is in
place to ensure open and effective engagement with the workforce via the
Executive Directors and the senior management team.
· The Board and the senior team continues to work responsibly with
all relevant stakeholders and has appropriate anti-corruption and
anti-bribery, equal opportunities and whistleblowing procedures and policies
in place.
· As required, non-Executive Directors, professional advisors and
the Company Secretary provide support to the Board to help ensure that
sufficient consideration is given to stakeholder issues.
Viability statement
In accordance with the Listing Rules the Directors have assessed the Company's
viability over the next three financial years. Given the Group's business
model and commercial and financial exposures the Directors consider that three
years is an appropriate period for the assessment. The maximum period of
visibility of commercial arrangements with clients is currently two years,
however in considering the assessment period assumptions have been made beyond
this immediate timeframe based upon the strategic direction of the business.
As part of the long-term viability assessment the Directors have considered
the principal risks.
This assessment of viability has been made with reference to the Group's
current financial and operational positions. Revenue projections, cash flows,
availability of required finance, commercial opportunities and threats, and
the Group's experience in managing adverse conditions in the past have been
reviewed. The Group was founded in 1988 and has survived several recessions.
Despite the potentially negative and severe effect of the Covid-19 pandemic
presented in 2020 and into 2022, the Group was able to successfully navigate
the issues presented by the disruptions. For the year ended 31 March 2022, all
key ratios and profitability improved, and cash reserves increased without the
requirement for any external funding or needing to take advantage of
Government support schemes. This success was due to the agility of the
business model, client delivery techniques and the quality of our employees
and hiring processes.
The effects of IR35 have been minimal as the Group has continued to reduce
contracting fee earners in favour of higher margin permanent employees and the
risk in this area is not considered to be material.
As of the date of these accounts, Brexit has had no impact upon the current
client base and there have been no direct impacts felt by the business. In
fact, greater dialogue has commenced with potential EU and European trading
partners and this is expected to continue.
Despite the recent successful trading position, risks still exist with respect
to the Covid-19 pandemic and the threat from competition. The Directors have
therefore approached the budget and forecasting cycle for the 2023 financial
year with a conservative outlook.
The viability assessment considered the principal risks as set out on page 6.
The Board modelled a number of realistic scenarios based upon conservative
budgets and forecasts. This included modelling the most severe scenario
possible which assumed that all current client contracts discontinued at
expiry, with no extension or replacement and with no further cost mitigation.
The group have extended at a high level these forecasts to 3 years for the
purposes of considering viability.
In all scenarios, it was found that there was sufficient headroom in cash flow
to continue operating within current resources for the next 18 months, and
without the requirement to utilise the available financing facility as
detailed in note 3 or obtain further external funding. The Group was therefore
found to have sufficient financial strength to withstand further disruption
due to the pandemic.
The Board believes that the Group remains well placed to navigate effectively
a prolonged period of uncertainty and to mitigate the risks presented by it.
Based upon the results of this analysis, the Board has a reasonable
expectation that the Group will be able to continue in operation and be able
to meet its liabilities over the next 3-year viability period. In reaching
this assessment, the Board has taken into account future trading, access to
external funding and cash flow expectations.
Performance assessment, financial review and outlook
Financial and non-financial key performance indicators (KPIs) used by the
Board to monitor progress are revenue, profit from operations, EBITDA, gross
margin and headcount. Financial KPIs are discussed in more detail in the
Financial review below. The outlook for the Group is discussed in the
Chairman's statement on page 1.
The KPIs are as follows;
2022 2021
Revenue £17,015,000 £17,815,000
Profit from operations £1,108,000 £686,000
Earnings before interest, tax, depreciation and amortisation (EBITDA)¹
£1,379,000 £944,000
Gross margin 28.1% 21.4%
Average headcount 104 68
¹ EBITDA - Profit from operations of £1,108,000 (2021: £686,000) adding
back the depreciation and amortisation charge in the year of £271,000 (2021:
£258,000)
Corporate social responsibility
Our employees
The Group is committed to equal opportunities and operates employment policies
which are designed to attract, retain and motivate high quality staff,
regardless of gender, age, race, religion or disability. The Group has a
policy of supporting staff in long term career development.
Culture and engagement
The Group recognises the importance of having effective communication and
consultation with, and of providing leadership to, all its employees. The
Group promotes the involvement of its employees in understanding the aims and
performance of the business. An assessment of culture, engagement and future
contribution made to the business by employees is made at each Board meeting
and is considered a key aspect of the meetings. The Board has been satisfied
with policies and practices and they are aligned with the Group's purpose and
strategy and no corrective action is required.
The Group strives to recruit and retain high quality employees at the cutting
edge of technology. A key engagement factor is the continuous professional
development of all staff and the Group is committed to providing increased
training and development opportunities, to enhance both the expertise and
engagement of our workforce, and improving the quality of our services to our
clients.
Diversity and inclusion
Diversity and inclusion is a key component of working life in the Group.
Employees are encouraged to take an active role in decision making and driving
the business forward, including several platforms within the business to share
good practice, successes and potential improvements. The appointment of
Charlotte Rigg as Director in 2020 increased the female proportion within the
senior management team to 20% which is comparable to the Group as a whole. We
continue to include diversity within our recruitment policies and make
improvements as appropriate.
The following table shows the average number of persons employed during the
year, by gender, who were directors, senior managers or employees of the
Company.
Male Female Total
Directors 6 1 7
Senior managers 2 1 3
Employees 69 25 94
Total 77 27 104
The average female proportion of the Group during the year ending 31 March
2022 was 26% (2021: 22%)
Environment and greenhouse gas reporting
This statement contains the Group's first TCFD aligned disclosure in
accordance with FCA requirements of Premium Listed UK Corporates. The Group
has provided responses across the TCFD's pillars and aims to advance the
maturity of its climate-related actions and disclosures on an annual basis.
The four pillars are as follows:
Governance - Governance of climate related risks and opportunities Assessing, identifying, and managing climate related issues is part of the
management team's responsibilities. The Board are informed of any climate
related issues identified by the management team as and when they arise. When
an issue is identified, the Board will monitor the progress of addressing this
issue on a relevant basis.
Strategy - Impacts of actual or potential climate related risks and No actual or potential impacts on the Group have been analysed due to the
opportunities limited impact of climate related issues and opportunities over the short,
medium and long term, and these have not been considered when making strategic
decisions. If, and when a risk or opportunity is deemed to have a greater
impact, the Group will follow the same process as identifying and assessing
other risks and opportunities, described on page 6.
With the Group's workforce having a full 2 years' experience of working
remotely, no localised climate issues will have a material impact. National
climate related risks, including electrical supply issues to the entire
country at a single time, have been deemed exceptionally remote and not
assessed.
Due to the nature of the business, materiality of climate related risks and
opportunities is determined by length of downtime of the workforce.
There are no financial related disclosures due to the immateriality of the
risks and opportunities, in line with the TCFD recommendations.
Risk Management - identification, assessment, and management of climate related risks
Climate related risks are assessed as per other risks to the Group, described
on page 6.
There are no regulatory requirements that would have a material impact on the
Group, and in line with our Carbon Reduction Plan, the Group is moving towards
zero rated emissions by 2050.
Metrics - metrics and targets used to assess, manage and report relevant The Group's emissions per scope are detailed below in line SECR requirements,
climate-related risks and opportunities along with our KPIs of tCO(2)e per £1m of revenue and per average total
headcount. In November 2021 the Group published its first Carbon Reduction
Plan, available on our website, committing to achieving Net Zero emissions by
2050. It included a shorter-term target to reduce carbon emissions by 18.1% to
150 tCO(2)e over the five years to 2025, whilst staff numbers are growing. The
continuing reduction will be achieved by embedding a degree of working from
home as an ongoing policy, implementing a paperless office environment,
switching to green energy tariffs, and increasing the profile of environmental
issues and promotion of good practices through staff communication channels.
The current measurements remain on target against this plan.
The Group has used mileage reports, public transport journey details and meter
readings converted to tCO(2)e using the 2021 UK Government's conversion
factors for company reporting of greenhouse gas emissions.
The annual quantity of Greenhouse Gas (GHG) emissions for the period 1 April
2021 to 31 March 2022 in tonnes of carbon dioxide equivalents (tCO(2)e) for
the Group is shown in the table below, updated following reassessment of
carbon footprint criteria:
GHG emissions 2022 2021
tCO(2)e¹ tCO(2)e¹
Emission source:
Scope 1 - Combustion of fuel 8 11
Scope 2 - Electricity and heat purchased for own use 26 29
Total 34 40
Scope 3 - Including business travel and commuting 11 -
Total 45 40
tCO(2)e per £1m revenue 2.6 2.2
FTE 104 68
Intensity ratio (tCO(2)e per FTE) 0.4 0.6
¹ The calculation of tCO(2)e for each source has been prepared in accordance
with DEFRA guidelines for GHG reporting.
The annual energy consumed as a result of the purchase of electricity and heat
for the period 1 April 2021 to 31 March 2022 in kWh is shown in the table
below:
2022 2021
Energy consumed (kWh) 124,397 122,763
kWh per £1m revenue 7,317 6,897
FTE 104 68
Intensity ratio (kWh per FTE) 1,196 1,805
The emissions are generated solely by activities in the UK. Emissions
generated by electricity consumption is 59% (2021: 71%).
The Group has not been subject to any environmental fines during the year
ended 31 March 2022 (2021: nil).
Social, community and human rights issues
Triad takes its responsibilities to the community and society as a whole very
seriously. With people at the core of our values, during 2020 Triad was proud
to have achieved its first Disability Confident badge - Disability Confident
1(st) level ("Committed"). In 2022 we plan to work up to the highest level
(level 3), and we are using this to guide and improve our practices,
particularly with regard to equality of opportunity for disabled staff and
through our recruitment processes.
We have been looking for a way to best make an impact on the employment gaps
that exist for under-represented groups working in UK technology and during
2021 we became members of Tech Talent Charter. Through this we have publicly
declared our commitment to workplace equality, have access to a community of
best practice and share data on diversity within our own Group. We believe we
are working together to make a real difference to inclusion and diversity
across the technology sector.
The Group actively supports charities. Managing Director Adrian Leer is a
board member of Action for Children, and our staff participate in regular
fund-raising activities for the charity, promoted and supported by Triad.
There are no human rights issues that impact upon operations.
Financial review
Group performance
Group revenue has decreased to £17.0m (2021: £17.8m). This reduction is due
to the continued focus on consultancy assignments serviced by permanent fee
earning consultants, which has led to a reduction in relatively low margin
contractor led assignments and an increase in higher margin consultancy
business. This strategy has resulted in an increase in gross profit to £4.8m
(2021: £3.8m) and an increase in gross margin as a percentage of revenue to
28.1% (2021: 21.4%). This strategy continues to improve the Group's service
quality to our client base and improves profitability.
The Group reports a profit from operations before taxation of £1.1m (2021:
£0.6m). The positive variance in profitability before tax of £0.5m was due
to the increase in gross profit (£1.0m) offset by the increase in overheads
of (£0.5m). The Group reports a profit after tax of £1.2m (2021: £0.7m).
The balance sheet remains strong with no external debt, with the exception of
the lease liabilities arising due to the application of IFRS 16, and the Group
enjoys strong reserves of cash at £5.3m (2021: £4.9m) and no bad debts
(2021: nil).
Overheads
Administrative expenses for the year are £3.7m (2021: £3.1m). The increase
of £0.6m was predominantly due to personnel costs. The Group was able to
sustain this increase in cost as a result of improvements in both trading and
gross margins. As such, the Group was able to significantly grow profitability
and now manages a sustainable cost base to support future profit growth.
Staff costs
Total staff costs have increased to £8.6m (2021: £5.7m) (note 7). The total
average headcount for the year has increased to 104 (2021:68). The average
number of consultants during the year was 77 (2021: 42) and at the close of
the year the number was 95 (2021: 58). Growth in consultant numbers
hand-in-hand with new business wins continues to be the main driver to the
Group's strategy of growing both margin and profitability. Non-consultant
staff numbers at the close of the year have remained static as the ratio of
fee earners to administration staff improved to 9:1 (2021: 5:1).
Cash
Cash and cash equivalents as at 31 March 2022 increased to £5.3m (2021:
£4.9m). The maintenance of working capital efficiencies during an extended
period of growth during the year, resulted in a net cash inflow from operating
activities of £1.2m (2021: £1.3m). During the year, trading and cash
collection was such that the Group was not required to take advantage of the
Government deferral schemes or access its Lloyds financing facility. The net
cash outflow from financing activities was £0.8m (2021: outflow £0.3m),
which included dividends paid of £0.7m (2021: nil). The net cash outflow from
investing activities was £0.01m (2021: inflow £0.1m), with minimal capital
expenditure in the year and relating mainly to the purchase of technology for
new permanent members of staff to support gross profit growth.
Non-current assets
Non-current assets excluding taxation reduced by £0.1m (2021: increase
£0.36m). This is predominantly related to the net effect of a reduction in
the right of use asset of £0.2m (2021: reduction £0.1m) and the finance
lease receivable of £0.1m (2021: £0.2m), which is now classified as a
current asset. An increase of £0.05m was related to purchased assets (2021:
increase £0.05m) and trade receivables increased by £0.1m (2021: £nil).
Taxation
The Group adopts a low risk approach to its tax affairs. The Group does not
employ any complex tax structures or engage in any aggressive tax planning or
tax avoidance schemes. The deferred tax asset increased to £0.16m (2021:
£0.07m) in the year, mainly due to the expectation that tax losses brought
forward will be offset against future profits (see note 8).
Net assets
The net asset position of the Group at 31 March 2022 was £6.0m (2021:
£5.3m). The movements during the year are detailed on page 50.
Share options
A total of 511,000 options were exercised by Directors and staff during the
year (2021: 48,600).
On 30 March, a total of 750,000 restricted stock options were granted to both
Directors and staff (2021: nil). A share based expense has been recognised in
the year of £476 (2021:37,000)
Dividends
With the strong expectation of continued profitability and future positive
cash flows, the Board are proposing a final dividend of 4p per share (2021: 2p
per share), which together with the interim dividend already paid of 2p (2021:
nil), totals 6p per share for the financial year (2021: 2p per share). See
note 9.
By order of the Board
James McDonald
Finance Director
25 May 2022
Directors' report
The Directors present their Annual report on the activities of the Group,
together with the financial statements for the year ended 31 March 2022. The
Board confirms that these, taken as a whole, are fair, balanced and
understandable, and that they provide the information necessary for
shareholders to assess the Group's and Company's position and performance,
business model and strategy, and that the narrative sections of the report are
consistent with the financial statements and accurately reflect the Group's
performance and financial position.
The Strategic report provides information relating to the Group's activities,
its business and strategy and the principal risks and uncertainties faced by
the business, including analysis using financial and other KPIs where
necessary. These sections, together with the Directors' remuneration and
Corporate Governance reports, provide an overview of the Group, including
environmental and employee matters and give an indication of future
developments in the Group's business, so providing a balanced assessment of
the Group's position and prospects, in accordance with the latest narrative
reporting requirements. The Group's subsidiary undertakings are disclosed in
the notes to the financial statements.
Corporate Governance disclosures required within the Directors' report have
been included within our Corporate Governance report beginning on page 21 and
form part of this report.
Share capital and substantial shareholdings
Share capital
As at 31 March 2022, the Company's issued share capital comprised a single
class of shares referred to as ordinary shares. Details of the ordinary share
capital can be found in note 19 to these financial statements.
Voting rights
The Group's articles provide that on a show of hands at a general meeting of
the Company every member who (being an individual) is present in person and
entitled to vote shall have one vote and on a poll, every member who is
present in person or by proxy shall have one vote for every share held. The
notice of the Annual General Meeting specifies deadlines for exercising voting
rights and appointing a proxy or proxies to vote in relation to resolutions to
be passed at the Annual General Meeting.
Transfer of shares
There are no restrictions on the transfer of ordinary shares in the Company
other than as contained in the Articles:
· The Board may, in its absolute discretion, and without giving any
reason for its decision, refuse to register any transfer of a share which is
not fully paid up (but not so as to prevent dealing in listed shares from
taking place) and on which the Company has a lien. The Board may also refuse
to register any transfer unless it is in respect of only one class of shares,
in favour of no more than four transferees, lodged at the Registered office,
or such other place as the Board may decide, for registration, accompanied by
a certificate for the shares to be transferred (except where the shares are
registered in the name of a market nominee and no certificate has been issued
for them) and such other evidence as the Board may reasonably require to prove
the title of the intending transferor or his right to transfer the shares.
Certain restrictions may from time to time be imposed by laws and regulations,
for example:
· Insider trading laws; and
· Whereby certain employees of the Group require the approval of
the Company to deal in the Company's ordinary shares.
Appointment and replacement of directors
The Board may appoint Directors. Any Directors so appointed shall retire from
office at the next Annual General Meeting of the Company, but shall then be
eligible for re-appointment.
The current Articles require that at the Annual General Meeting one third of
the Directors shall retire from office but shall be eligible for
re-appointment. The Directors to retire by rotation at each Annual General
Meeting shall include any Director who wishes to retire and not offer
themselves for re-election and otherwise shall be the Directors who, at the
date of the meeting, have been longest in office since their last appointment
or re-appointment.
A Director may be removed from office by the service of a notice to that
effect signed by at least three quarters of all the other Directors.
Amendment of the Company's Articles of Association
The Company's Articles may only be amended by a special resolution passed at a
general meeting of shareholders.
Substantial shareholdings
Since the year end, the Company received the following notification on 11
April 2022, relating to interests in the Company's issued share capital, as
required under the Disclosure and Transparency Rules (DTR 5) when a notifiable
threshold is crossed:
Percentage of issued share capital
M Makar (23.89%)
M Needham and S Cook (as the joint trustees in bankruptcy of M Makar) 23.89%
As at 25 May 2022, no notifications have been received since the year end.
Dividends
There was a 2p per share interim dividend paid during the year (2021: nil per
share). The Directors propose a final dividend of 4p per share (2021: 2p).
Financial instruments
The Board reviews and agrees policies for managing financial risk. These
policies, together with an analysis of the Group's exposure to financial risks
are summarised in note 3 of these financial statements.
Research and development activity
Research and development activities are undertaken with the prospect of
gaining new technical knowledge and understanding and developing new software.
During the year, dedicated small teams worked on a number of reusable
frameworks, including test automation across major software and Government
projects. Teams also developed reusable components and tools including mail
merge and skills matrix management systems.
Directors' interests in contracts
Directors' interests in contracts are shown in note 21 to the accounts.
Directors' insurance and indemnities
The Company maintains Directors' and Officers' liability insurance which gives
appropriate cover for any legal action brought against its Directors and
Officers. The Directors also have the benefit of the indemnity provisions
contained in the Company's Articles of Association. These provisions, which
are qualifying third-party indemnity provisions as defined by Section 236 of
the Companies Act 2006, were in force throughout the year and are currently in
force.
Disclosure of information to auditor
All of the current Directors have taken all the steps that they ought to have
taken to make themselves aware of any information needed by the Company's
auditor for the purposes of their audit and to establish that the auditor is
aware of that information. The Directors are not aware of any relevant audit
information of which the auditor is unaware.
Forward-looking statements
The Strategic report contains forward-looking statements. Due to the inherent
uncertainties, including both economic and business risk factors, underlying
such forward-looking information, the actual results of operations, financial
position and liquidity may differ materially from those expressed or implied
by these forward-looking statements.
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position, are set out in the Strategic
report. The financial position of the Group, its cash flows, liquidity
position and borrowing facilities are described in the Strategic report. In
addition, note 3 to the financial statements includes the Group's objectives,
policies and processes for managing its capital, its financial risk management
objectives, details of its financial instruments and hedging activities, and
its exposure to credit risk and liquidity risk. The Group meets its day to day
working capital requirements through cash reserves and an invoice finance
facility (which is currently unutilised).
The Group operates an efficient low-cost and historically cash generative
model. The client base generally consists of large blue-chip entities,
particularly within the public sector, enjoying long-term and productive
client relationships. As such, debtor recovery has been reliable and
predictable with a low exposure to bad debts. For the year ended 31 March
2022, the Group has not utilised any external debt, the current finance
facilities or accessed any Government support schemes (2021: nil). Due to the
ability to operate services remotely, the Group has remained in full operation
throughout the pandemic periods and it is expected that it will continue to do
so. The success of the business during the year ended 31 March 2022
illustrates the operational flexibility of both the Group and its current and
future client base.
The going concern assessment considered a number of realistic scenarios
covering the period ending 30 September 2023, including the ability of future
client acquisition, and the impact of the reduction in services of key clients
upon future cash flows. In addition, in the most severe scenario possible, a
reverse stress test was modelled which included all current client contracts
discontinued at expiry with no extension or replacement and with no cost
mitigation. Even in the most extreme scenario, the Group has enough liquidity
and long-term contracts to support the business through the going concern
period. The Directors have concluded from these assessments that the Group
would have sufficient headroom in cash balances to continue in operation.
Further information in relation to the Directors' consideration of the going
concern position of the Group is contained in the Viability statement on page
8.
After making enquiries, including a review of the wider economy including
Brexit, inflationary pressures and the Ukraine conflict, the Directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and at least twelve months
from the date of approval of the financial statements. Accordingly, they
continue to adopt the going concern basis in preparing the annual report and
accounts.
Auditor
BDO LLP have indicated their willingness to continue in office. Accordingly, a
resolution to reappoint BDO LLP as auditors of the Company will be proposed at
the next Annual General Meeting.
Environment and greenhouse gas reporting
Carbon dioxide emissions data is contained in the Corporate social
responsibility section of the Strategic report.
Statement of Directors' responsibilities
The Directors are responsible for preparing the annual report and the
financial statements in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006 and applicable law
and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors are required to prepare the
Group financial statements and have elected to prepare the Parent Company
financial statements in accordance with UK adopted international accounting
standards ('IFRS'). Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and company and of the profit or
loss for the group for that period.
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable
and prudent;
· state whether they have been prepared in accordance with UK
adopted international accounting standards ('IFRS'), subject to any material
departures disclosed and explained in the financial statements
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and the Company will
continue in business;
· prepare a directors' report, a strategic report and directors'
remuneration report which comply with the requirements of the Companies Act
2006.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006.
They are also responsible for safeguarding the assets of the company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities. The Directors are responsible for ensuring that the
annual report and accounts, taken as a whole, are fair, balanced, and
understandable and provides the information necessary for shareholders to
assess the group's performance, business model and strategy.
Website publication
The directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are
published on the company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the company's website is the responsibility of
the directors. The directors' responsibility also extends to the ongoing
integrity of the financial statements contained therein.
Directors' responsibilities pursuant to DTR4
The directors confirm to the best of their knowledge:
· The financial statements have been prepared in accordance with
the applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit and loss of the group and
company.
· The annual report includes a fair review of the development and
performance of the business and the financial position of the Group and
Company, together with a description of the principal risks and uncertainties
that they face.
By order of the Board
James McDonald
Company Secretary
25 May 2022
Corporate Governance report
The Board has considered the principles and provisions of the UK Corporate
Governance Code 2018 ("the Code") applicable for this financial period. The
changes made in the revised Code attempt to improve corporate governance
processes and encourage companies to demonstrate how good governance
contributes to the achievement of long-term success for stakeholders. The
Group keep governance matters under constant review. Despite the changes in
the Code requiring a review of processes, there has not been a requirement to
make fundamental changes to strategy or working practices.
The following statement sets out the Group's application of the principles of
the Code and the extent of compliance with the Code's provisions, made in
accordance with the requirements of the Listing Rules.
The Board
The Board is responsible for the long-term and sustainable success of the
business, and considers all opportunities and risks as set out in the
principal risks and uncertainties on page 6. Further, the Board considers how
good governance can assist in promoting the delivery of the strategy, by
reference to strong stakeholder engagement. Details of how the Board drive
this engagement can be found within the S172 statement on page 7.
The Directors who held office during the financial year were:
Executive Directors
John Rigg, Chairman
Adrian Leer, Managing Director
James McDonald, Finance Director
Tim Eckes, Client Services Director
Independent non-Executive Directors
Alistair Fulton, senior independent non-Executive Director
Chris Duckworth
Charlotte Rigg
John Rigg is Chairman. He is a Chartered Accountant. He was a founder of
Marcol Group Plc and was its Managing Director from 1983 until 1988. Marcol
was floated on the Unlisted Securities Market in 1987. He was Chairman of Vega
Group plc from 1989 until 1996, holding the post of Chief Executive for much
of this period. Vega floated on the main market in 1992. He was a founder
shareholder of Triad and served as the Chairman of the Company from 1988 up to
just before its flotation in 1996, when he resigned to develop new business
interests overseas. He was appointed as non-executive Chairman in June 1999:
in May 2004 he became part-time executive Chairman. Between 4 February 2005
and 5 September 2007 John was acting Group Chief Executive.
Adrian Leer is Managing Director. He was appointed to the Board on 3 March
2015. He initially joined Triad in 2009 in a consultative capacity, providing
advice to the business regarding its fledgling geospatial product, Zubed, and
helping to secure significant wins with major clients. In 2010, he became
General Manager of Zubed Geospatial. Adrian became Commercial Director of
Triad Consulting & Solutions in 2012.
Tim Eckes is Client Services Director. He was appointed to the Board on 1
January 2020. Tim Eckes joined Triad in 1991 as a graduate software engineer
before moving into a number of technical and commercial roles. He has
multi-sector experience, having been involved in engagements across finance,
telecoms, travel and central government. In 5 years preceding his appointment
to the Board, as Managing Consultant he played a significant role in growing
the business, through the development of long lasting and profitable
relationships with key clients.
Alistair Fulton is a non-executive Director. He is a Chartered Engineer and
member of the British Computer Society. He was the founding Managing Director
of Triad. He continued in this role until February 1997 when he became
non-executive Chairman, a position he retained until June 1999, when he took
up his present position. He was a board member of CSSA for 15 years, President
in 2000/2001, and is currently Master of the Worshipful Company of Information
Technologists, the 100th Livery Company of the City of London.
Chris Duckworth was appointed on 1 July 2017 as a non-executive Director. He
has held numerous positions within public and private companies as Finance
Director, Managing Director, non-executive Director and Chairman. He was a
founding shareholder and from 1989 to 1994 was Finance Director of Triad where
he remained as a non-executive Director until 1999. From 1989 to 1994 he was
Finance Director of Vega Group PLC after which he served as a non-executive
Director until 1997. He was a founding shareholder and Chairman of Telecity
PLC in May 1998 and subsequently acted as a non-executive Director until
August 2001.
Charlotte Rigg is a non-executive Director and was appointed to the Board on 1
January 2020. Charlotte Rigg's experience is both extensive and diverse. Over
the last 25 years she has built an internationally recognised stud farm and
runs a sizeable upland grazing farm in Cumbria where the stud is based. In
addition, Charlotte runs a successful and expanding investment property
portfolio which has been established for over 20 years.
James McDonald is Finance Director and was appointed to the Board on 16 June
2020. He joined the Company in February 2020 and, in March 2020, assumed the
position of Company Secretary and acting Finance Director. He is a Chartered
Certified Accountant and has previously held a senior finance position at
Foxtons Group plc, prior to which he was Group Finance Director and Company
Secretary at Brook Street Bureau Plc. He qualified with EY in London.
The Board exercises full and effective control of the Group and has a formal
schedule of matters specifically reserved to it for decision making, including
responsibility for formulating, reviewing and approving Group strategy,
budgets and major items of capital expenditure.
Regularly the Board will consider and discuss matters that include, but are
not limited to:
· Strategy;
· Shareholder value;
· Financial performance and forecasts;
· Alignment of culture to Group values;
· Employee engagement;
· Human resources; and
· City and compliance matters.
The Executive Chairman, John Rigg, is responsible for the leadership and
efficient operation of the Board. This entails ensuring that Board meetings
are held in an open manner and allow sufficient time for agenda points to be
discussed. It also entails the regular appraisal of each Director, providing
feedback and reviewing any training or development needs.
Employee engagement is taken very seriously by the Board, and the need to
engage with the workforce is even more important since the onset of the
pandemic. Bi-weekly Group-wide communication meetings chaired by the Managing
Director take place where there is a forum available for all staff to
participate and contribute directly with management. Senior management meet
daily to discuss the business and create appropriate communications that
predominantly seek to enhance the well-being of staff but also look to align
Group values to strategy. Further, on-line platforms exist that enable
constructive discussions concerning operational delivery and best practice.
Given the size of the Group, it is not appropriate to develop any
sub-committees for this purpose and direct Group forums encourage all staff to
participate without dilution of message.
In a competitive marketplace for talent, the Board ensure further engagement
via regular pay reviews and formal staff development processes, which enable
training and career aspirations to be discussed along with the facilitation of
individual career paths. The Board are firmly of the view that the culture
centred around the recruitment and retention of quality staff, their
wellbeing, development and future career and remuneration aspirations will
drive the strategic aims of the business and drive stakeholder value in the
long-term.
The Board meets regularly with senior management to discuss operational
matters. The non-Executive Directors must satisfy themselves on the integrity
of financial information and that financial controls and systems of risk
management are robust. Following presentations by senior management and a
disciplined process of review and challenge by the Board, clear decisions on
the policy or strategy are adopted that preserve Group values and are
sustainable over the long-term. The responsibility for implementing Board
decisions is delegated to management on a structured basis and monitored at
subsequent meetings.
During the period under review, and to date, the Executive Chairman has not
held any business commitments outside the Group.
Alistair Fulton is the nominated senior independent non-executive Director.
Chris Duckworth and Charlotte Rigg are non-Executive Directors. All have
long-standing experience as company directors and are free from any business
or other relationship that could materially interfere with the exercise of
their independent judgement. The Board benefits from their experience and
independence, when they bring their judgement to Board decisions. The Board
considers that all continue to remain independent for the reasons stated
above.
The Group has a procedure for Directors to take independent professional
advice in connection with the affairs of the Group and the discharge of their
duties as Directors.
The Board has an Audit Committee, comprised of the Executive Chairman John
Rigg, and the independent non-Executive Directors, Alistair Fulton and Chris
Duckworth. The Committee is chaired by Alistair Fulton.
The Board has a Remuneration Committee, comprised of the Executive Chairman
John Rigg, and the independent non-Executive Directors, Alistair Fulton, and
Charlotte Rigg. No third-party advisors have a position on the committee or
have provided services to the Committee during the year. The Committee is
chaired by Alistair Fulton.
The following table shows the attendance of Directors at scheduled meetings of
the Board and Audit and Remuneration Committees during the year ended 31 March
2022 and shows that the Board are able to allocate sufficient time to the
company to discharge their responsibilities effectively.
Board Audit Remuneration
Committee
Committee
Number of meetings held 11 1 2
Number of meetings attended
Executive Directors:
John Rigg (Chairman) 8 - 2
Adrian Leer 11 - -
Tim Eckes 11 - -
James McDonald 10 - -
Non-Executive Directors:
Alistair Fulton 11 1 2
Chris Duckworth 10 1 -
Charlotte Rigg 11 - 2
Audit Committee
The members of the Audit Committee are shown above.
The Board believe that John Rigg, a Chartered Accountant with broad experience
of the IT industry, Alistair Fulton, who has been a Director of companies in
the IT sector for over 30 years and Chris Duckworth, with many years of
experience in senior finance positions in listed companies, have recent and
relevant financial experience, as required by the Code.
The Audit Committee is responsible for reviewing the Group's annual and
interim financial statements and other announcements. It is also responsible
for reviewing the Group's internal financial controls and its internal control
and risk management systems. It considers the appointment and fees of the
external auditor and discusses the audit scope and findings arising from
audits. The Committee is also responsible for assessing the Group's need for
an internal audit function.
Consideration of significant issues in relation to the financial statements
The Audit Committee have considered the following significant issues in
relation to the preparation of these financial statements;
Revenue recognition: The Committee has considered revenue recognised in
projects during, and active at the end of the financial year to ensure revenue
has been recognised correctly.
IFRS 16 'Leases': The Committee have considered the accounting treatment with
respect to the critical accounting estimates.
Dilapidations provisions: The Committee have considered the accounting
treatment with respect to the critical accounting estimates.
Going concern: The Committee has reviewed budgets, deferred tax calculations
and cash flow projections against borrowing facilities available to the Group,
to ensure the going concern basis of preparation of the results remains
appropriate.
Meetings with auditor and senior finance team
Members of the Audit Committee met with the senior finance team in advance of
their meeting with the auditor, prior to commencement of the year-end audit to
discuss;
· Audit scope, strategy and objectives
· Key audit and accounting matters
· Independence and audit fee
A meeting was held prior to the completion of the audit with the senior
finance team and the auditor to assess the effectiveness of the audit and
discuss audit findings.
Effectiveness of external audit process
The Committee conducts an annual review of the effectiveness of the annual
report process. Inputs into the review include feedback from the finance team,
planning and scope of the audit process and identification of risk, the
execution of the audit, communication by the auditor with the Committee, how
the audit adds value and a review of auditor independence and objectivity.
Feedback is provided to the external auditor and management by the Committee,
with any actions reviewed by the Committee.
Auditor independence and objectivity
The Committee has procedures in place to ensure that independence and
objectivity is not impaired. These include restrictions on the types of
services which the external auditor can provide, in line with the FRC Ethical
Standards on Auditing. The external auditor has safeguards in place to ensure
that objectivity and independence is maintained and the Committee regularly
reviews independence taking into consideration relevant UK professional and
regulatory requirements. The external auditor is required to rotate the audit
partner responsible for the Group audit every five years.
Non-audit fees
During the year the Group did not engage its auditor for any non-audit work,
other than the review of the interim statements which has been retrospectively
agreed by the Committee.
The Committee is responsible for reviewing any non-audit work to ensure it is
permissible under EU audit regulations and that fees charged are justified,
thus ensuring auditor independence is preserved.
Appointment of external auditor
BDO LLP was reappointed external auditor in 2017 following a tendering
process.
BDO LLP has confirmed to the Committee that they remain independent and have
maintained internal safeguards to ensure that the objectivity of the
engagement partner and audit staff is not impaired.
Mandatory rotation of the auditor is required for the year ending 31 March
2024 and the Board are preparing to apply the appropriate tendering and
selection process to appoint a new auditor.
Internal audit
The Audit Committee has considered the need for a separate internal audit
function this year but does not consider it appropriate in view of the size of
the Group. The Group is certified to ISO 9001: 2015.
Internal controls and risk management
The Board has applied the internal control and risk management provisions of
the Code by establishing a continuous process for identifying, evaluating and
managing the significant and emerging risks faced by the Group. The Board
regularly reviews the process, which has been in place from the start of the
year to the date of approval of this report and which is in accordance with
FRC guidance on risk management, internal control and related financial and
business reporting. The Board is responsible for the Group's system of
internal control and for reviewing its effectiveness. Such a system is
designed to manage rather than eliminate risk of failure to achieve business
objectives and can only provide reasonable and not absolute assurance against
misstatement or loss.
In compliance with the Code, the Audit Committee regularly reviews the
effectiveness of the Group's systems of internal financial control and risk
management. The Board's monitoring covers all controls, including financial,
operational and compliance controls and risk management. It is based
principally on reviewing reports from management to consider whether
significant weaknesses and risks are effectively managed and, if applicable,
considering the need for more extensive monitoring.
The Board has also performed a specific assessment for the purpose of this
annual report. This assessment considers all significant aspects of internal
control and risk management arising during the period covered by the report.
The key elements of the internal control and risk management systems are
described below:
· Clearly documented procedures contained in a series of manuals
covering Group operations and management, which are subject to internal
project audit and external audit as well as regular Board review.
· The Group's controls include appropriate segregation of duties
which are embedded in the organisation
· The Group has a formal process for planning, reporting and
reviewing financial performance against strategy, budgets, forecasts and on a
monthly, bi-annual and annual basis.
· An appropriate budgeting process where the business prepares
budgets for the coming year, which are approved by the Board.
· Close involvement in the day-to-day management of the business by
the Executive Directors.
· Regular meetings between the Executive Chairman, Executive
Directors and senior managers to discuss and monitor potential risks to the
business, and to implement mitigation plans to address them.
Remuneration Committee
The Remuneration Committee is responsible for setting remuneration for
Executive Directors and the Chairman in accordance with the remuneration
policy below. In addition, the Committee is responsible for recommending and
monitoring the level and structure of remuneration for senior management.
The Group's Remuneration Committee is authorised to take appropriate counsel
to enable it to discharge its duty to make recommendations to the Board in
respect of all aspects of the remuneration package of Directors. The Committee
also takes into account the general workforce remuneration awards when setting
Director remuneration.
The Directors' remuneration report can be found on page 28.
Whistleblowing
Staff may contact the senior independent non-executive Director, in
confidence, to raise genuine concerns of possible improprieties in financial
reporting, or employee related matters.
Board evaluation
Board members are made fully aware of their duties and responsibilities as
Directors of listed companies and are supported in understanding and applying
these by established and more experienced Directors. The Executive Chairman
continuously evaluates the ability of the Board to perform its duties and
recognises the strengths and addresses any weaknesses of the Board. In
addition, training is available for any Director at the Group's expense should
the Board consider it appropriate in the interests of the Group.
Relations with shareholders
Substantial time and effort is spent by Board members on meetings with and
presentations to existing and prospective investors. The views of shareholders
derived from such meetings are disseminated by the Chairman to other Board
members.
Private shareholders are invited to attend and participate at the Annual
General Meeting.
Terms of reference
The terms of reference of the Audit and Remuneration Committees are available
on request from the Company Secretary.
Statement of compliance
The Board considers that it has been compliant with the provisions of the Code
for the whole of the period, except as detailed below:
Provision 9 The roles of chairman and chief executive should not be exercised by the same
individual. John Rigg is the Executive Chairman. Adrian Leer is Managing
Director. The Board currently has no plans to recruit a Chief Executive
Officer as it considers that the duties are being satisfactorily covered by
members of the Executive Board and the Group's senior management.
Provisions 17/23 There should be a nominations committee which should lead the process for
board appointments and make recommendations to the board. The Board
considers that because of its size, the whole Board should be involved in
Board appointments.
Provision 18 All directors should be subject to annual re-election. The Board consider that
because of its size, re-election by rotation in accordance with the Company's
Articles of Association at the Annual General Meeting is sufficient.
Provision 19 The chair should not remain in post beyond nine years from the date of their
first appointment to the board. The Board considers that because of its size
and critically, due to the experience of the Executive Chairman, this would
not be appropriate. The Board believe that re-election in accordance with the
Company's Articles of Association is sufficient.
Provisions 21/23 The board should undertake a formal and rigorous annual evaluation of its own
performance and that of its committees and individual Directors. There is a
process of continuous informal evaluation, due to the small size of the Board.
Provision 20 Open advertising and/or an external search consultancy should generally be
used for the appointment of the chair and non-executive directors. The Board
has a strong culture of promoting from within with relevant experience to the
Group.
Provision 24 The chair of the board should not be a member of the audit committee. The
Board considers that because of its size, and the relevant knowledge and
experience of the Executive Chairman, that this is not appropriate.
DTR 7.2.8 ARR The requirement to detail performance against a diversity policy. The Group
has a diversity policy which meets our legal requirements. The monitoring of
performance against this policy is an area which the Board take very seriously
and continuously look to improve. The size of the Group and the long tenure of
senior staff provide constraints to improving ratios in the short-term.
By order of the Board
James McDonald
Company Secretary
25 May 2022
Directors' remuneration report
On the following pages we set out the remuneration report for the year ended
31 March 2022. The members of the Remuneration Committee are shown in the
Corporate Governance report on page 21.
This report has been prepared in accordance with the Companies Act 2006 and is
split into two sections as follows;
1. The Directors' remuneration policy.
2. The Annual report on remuneration. This will be subject to an advisory
shareholder vote at this years' Annual General Meeting.
During the year the Committee carefully reviewed Directors' remuneration.
Given the recent profitable growth of the business, and the continued positive
trajectory under strong strategic and operational guidance, the Committee
awarded salary increases to the Executive Directors during the year. Outside
of the normal course of business, the Committee also awarded one-time
discretionary payments to the Executive Directors to reward and strengthen
their continued commitment.
Directors' remuneration policy
The remuneration policy sets out the framework within which the Company
remunerates its Directors. The Company's remuneration report was put to a
shareholder vote at the 2021 Annual General Meeting of the Company and was
approved by 100% of shareholders with 4,481 votes withheld. See page 16 of
the Directors' report for further details of voting rights.
The Committee welcomed the unanimous approval of the shareholders, which
represented 43% of the total shareholding. The Committee aims to align
meaningful remuneration with Group financial performance by taking into
account the difficult trading environment, and to ensure the long-term health
of the business. The performance of the Directors has been deemed by the
Committee to be more than satisfactory, with progression on key strategic
objectives and a return to profitability.
The Committee has taken steps to further align the remuneration of the
Directors with shareholders by revising the Remuneration Policy and
implementing the Triad Employee Share Incentive Plan. The Policy and Plan were
put to the shareholders at the General Meeting held on 25 March 2022, where
the Policy was approved by 99.9% of shareholders votes with 5,558 votes
withheld. The Plan was also approved by 99.9% of shareholder votes with 1,408
votes withheld.
The Committee therefore concludes that the remuneration is fair and
appropriate but will continue to seek shareholder feedback.
The remuneration policy will be put to a shareholder vote every three years
unless any changes to the policy are proposed before then.
The Committee intends to implement the Directors' remuneration for the
following year as agreed at the 2022 General Meeting.
Policy table - Executive Directors
Element & purpose Operation Maximum payable Performance metrics
Base salary Reviewed annually taking into consideration market data, business performance, Ordinarily, salary increases will be in line with average increases awarded to None, although individual performance is considered when setting salary
external economic factors, the complexity of the business and the role, cost, other employees in the Company. levels.
and the incumbent's experience and performance as well as the wider employee
pay review. In certain circumstances, such as a change in responsibility or development in
Reflects the individual's skills, responsibilities and experience. role increases beyond this may be made subject to the factors mentioned in the
Operation column
Supports the recruitment and retention of Executive Directors.
Benefits in kind Benefits in kind include company cars or allowances, private medical Benefits are set at a level considered to be appropriate taking into account None.
insurance, life cover and permanent health insurance. Benefits are reviewed individual circumstances.
periodically.
Protects the well-being of Directors and provides fair and reasonable market
competitive benefits.
The Remuneration Committee retains discretion to provide other benefits
depending on the circumstances which may include but are not limited to
relocation costs or allowances to facilitate recruitment.
Pension The Company pays contributions into a personal pension scheme or cash The Company matches individual contributions up to a maximum of 5%. None.
alternative.
Provides competitive post-retirement benefits to support the recruitment and This limit is in line with the limits available for all employees.
retention of Executive Directors.
All employee share scheme Executive Directors shall be eligible to participate in any future all The limits will be in line with the HMRC limits for the relevant schemes. Any conditions shall be in line with HMRC guidance for such schemes and there
employee share schemes (e.g. Save-as-you-earn or Share Incentive Plan) if may be no performance conditions if appropriate.
adopted by the Company.
To provide employees with the opportunity to own shares in the Company.
Share option scheme The Company operates an EMI share option scheme. Discretionary awards are made The potential value of options held rises as the Company's share price Specific performance criteria are specified at the time of awarding the share
in accordance with the scheme rules. increases. options to ensure alignment with the interests of shareholders.
Encourages share ownership amongst employees and aligns their interests with
the shareholders.
Employee Share Incentive Plan The Remuneration Committee may make share awards annually under the Plan. The maximum award that may be granted shall be 200% of salary. Awards may have performance conditions attached.
Incentivises long-term value creation, aligning the interests of Executives The Plan will give the Remuneration Committee flexibility to make awards in The Remuneration Committee has discretion to determine appropriate measures,
and shareholders through share awards. the form of conditional awards (performance share award). targets and ranges in respect of each award when made.
Performance share awards shall have a performance period of at least 3 years. The Remuneration Committee may also adjust the formulaic outcome of awards
where it deems that it is not reflective of overall business performance.
Awards shall not vest in full any earlier than 3 years, but the Remuneration
Committee retains discretion to vest in tranches. Awards made to Executive
Directors will have an additional post-vesting holding period of 2 years
during which shares cannot be sold other than to settle tax liabilities which
may arise.
Malus and clawback provisions apply.
The award of shares under the Plan or EMI scheme is at the sole discretion of
the Remuneration Committee: there is no contractual entitlement for any
Director to receive an award annually or otherwise. The Group does not believe
that a performance related annual cash bonus is appropriate at the present
time and that solely equity-based incentives are a more appropriate mechanism
for incentivising, rewarding and retaining Executive Directors.
Shareholding Guidelines
The Remuneration Committee is introducing shareholding guidelines in order to
encourage a build-up of shares over time for the Executive Directors.
Whilst there is no formal requirement beyond the 2 year post-vesting holding
period, the Remuneration Committee expects that a substantial portion of
shares earned from incentive arrangements will continue to be held by the
Executive Directors in the longer term.
Policy table - non-Executive Directors
Element Relevance to short and long-term strategic objectives Operation Maximum payable Performance metrics
Fees Competitive fees to attract experienced Directors. Reviewed annually. In general, the level of fee increase for the non-Executive Directors will be Not applicable.
set taking account of any change in responsibility.
The remuneration of the non-Executive Directors is agreed by the Board.
However, no Director is involved in deciding their own remuneration.
Malus and Clawback provisions
The Plan contains malus and clawback provisions which may trigger in
exceptional circumstances and which include:
· material misstatement of company accounts;
· fraud, gross misconduct or misbehaviour;
· materially mistaken, misrepresented or incorrect information has
been used to assess the value of an award;
· an error in assessing or setting performance conditions;
· material reputational damage or
· a downturn in financial performance or corporate failure for
which the relevant individual is responsible or has significantly contributed
to.
Malus may apply until settlement, and clawback may apply after vesting for up
to 2 years, and these provisions allow the Remuneration Committee to recover
value delivered in connection with awards and amend or reduce awards in the
above circumstances (potentially to nil).
Discretion
The Remuneration Committee has discretion in several areas of the remuneration
policy as set out in this report. The Remuneration Committee may also exercise
operational and administrative discretions under relevant plan rules approved
by shareholders as set out in those rules. In addition, the Remuneration
Committee has the discretion to amend the remuneration policy in respect of
minor or administrative matters where it would be, in the opinion of the
Remuneration Committee, disproportionate to seek or await shareholder
approval.
As noted, the Remuneration Committee reviews all incentive outturns to assess
whether they align to the overall performance of the business and the
experience of its key stakeholders over the period e.g., shareholders and
employees. The Remuneration Committee retains discretion to adjust the
formulaic outcome of incentives upwards or downwards to reflect its judgement.
Any such exercise of discretion will be disclosed in the relevant annual
report.
Pre-existing remuneration arrangements and minor changes
The Remuneration Committee may make remuneration payments outside of the terms
of this remuneration policy where the terms of the payment were agreed prior
to the introduction of this or prior remuneration policies, provided the terms
were in line with the remuneration policy in place at that time, or where the
terms were agreed prior to the relevant Director being a member of the Board.
Any such payments may be satisfied in line with the terms agreed
Approach to recruitment remuneration
The Group's remuneration policy is to provide remuneration packages which
secure and retain management of the highest quality. Therefore, when
determining the remuneration packages of new executive Directors, the
Remuneration Committee will structure a package in accordance with the general
policy for Executive Directors as shown above. In doing so the Remuneration
Committee will consider a number of factors including:
· the salaries and benefits available to executive Directors of
comparable companies;
· the need to ensure Executive Directors' commitment to the
continued success of the Group;
· the experience of each Executive Director; and
· the nature and complexity of the work of each Executive Director.
The Remuneration Committee may determine that an initial salary positioning
below market is appropriate and in those circumstances, may in the years
following appointment award increases greater than levels awarded to the wider
workforce in the short-term.
Incentive levels will be in line with the limits for Executive Directors and
the structure will be as permissible under the policy.
If applicable, relocation allowances may be made in line with the policy.
The Company may offer to buy out incentives which have been forfeited from a
previous employer. Where such awards are made, they will seek to match the
value and time horizons of foregone awards and will reflect any performance
conditions attached.
The Company will not make any sign-on bonuses or "golden hello" payments when
appointing Executive Directors
Directors' service contracts and policy
The details of the Directors' contracts are summarised as follows:
Date of contract Notice period
J C Rigg 01/07/1999 1 month
A M Fulton 19/02/1997 1 month
A Leer 03/03/2015 6 months
C J Duckworth 01/07/2017 1 month
T J Eckes 01/01/2020 6 months
C M Rigg 01/01/2020 1 month
J McDonald 16/06/2020 6 months
All contracts are for an indefinite period. No contract has any provision for
the payment of compensation upon the termination of that contract.
Illustrations of application of remuneration policy
As there are currently no performance related or variable elements of
Executive Director remuneration it is not appropriate to prepare illustrations
required under the legislation.
Policy on payment for loss of office
The primary principle underpinning the determination of any payments on loss
of office is that payments for failure will not be made. Contracts and
incentive plan rules have been drafted in such a way that the Remuneration
Committee has the necessary powers to ensure this.
It is the Group's policy in relation to Directors' contracts that:
· Executive Directors should have contracts with an indefinite term
providing for a maximum of six months' notice by either party.
· non-Executive Directors should have terms of engagement for an
indefinite term providing for one month notice by either party.
· there is no provision for termination payments to Directors.
In relation to the Plan, awards will normally lapse for a leaver and the plan
rules contain Good Leaver provisions that shall determine the treatment of
awards in the following cases:
· death,
· ill-health, injury, disability
· the employing company / business / part of the business being
transferred outside of the Group or
· any other reason at the discretion of the Remuneration Committee
In such cases:
· Awards will ordinarily be pro-rated based on time served over the
vesting period.
· Vesting will normally occur at the normal time except upon death
where vesting may be accelerated.
· Performance conditions shall still apply.
The Remuneration Committee reserves discretion however to determine the exact
treatment of awards having due regard to the circumstances at the relevant
time.
Consideration of employment conditions elsewhere in the Group
In setting the executive Directors' remuneration, the Committee takes into
account the pay and employment conditions applicable across the Group in the
reported period. No consultation has been held with employees in respect of
Executive Directors' remuneration.
Consideration of shareholders' views
The Remuneration Committee considers the views of institutional investors and
published guidelines of its shareholders when making remuneration decisions.
Furthermore, the Remuneration Committee is open to conversations with
shareholders on the design of the policy and any remuneration decisions made
concerning Executive Directors.
Annual report on remuneration (audited)
Directors' remuneration - single total figure of remuneration
The remuneration of each of the Directors for the period they served as a
Director are set out below:
2022
Director Basic salary Benefits Pension Total Fixed Pay One-time Total Variable Pay Total
and fees in kind Discretionary
payment
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Executive
J C Rigg 60 - - 60 - - 60
A Leer ¹ 163 18 30 211 161 161 372
T J Eckes ² 133 2 21 156 64 64 220
J McDonald ³ 139 - 14 153 64 64 217
Non-Executive
A M Fulton 40 - - 40 - - 40
C J Duckworth 35 - - 35 - - 35
C Rigg 35 - - 35 - - 35
Total 605 20 65 690 289 289 979
2021
Director Basic salary Benefits Pension Total Fixed Pay Other Total Variable Pay Total
and fees in kind
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Executive
J C Rigg 60 - - 60 - - 60
A Leer 161 15 25 201 - - 201
T J Eckes ⁴ 131 3 17 151 5 5 156
J McDonald (appointed 16.06.20) ⁵ 105 - 11 116 - - 116
Non-Executive
A M Fulton 40 - - 40 - - 40
C J Duckworth 35 - - 35 - - 35
C Rigg 35 - - 35 - - 35
Total 567 18 53 638 5 5 643
¹ Adrian Leer's basic salary was increased from £175,000 to £200,000 p.a.
with effect from 1 January 2022
² Tim Eckes' basic salary was increased to £150,000 p.a. with effect from 1
January 2022.
³ James McDonald's basic salary was increased to £150,000 p.a. with effect
from 1 January 2022.
⁴ Tim Eckes basic salary and car allowance was agreed on 16 June 2020 at
£130,000 p.a. and £10,200 respectively, effective 1 January 2020. A total
amount of £4,925 was paid in back-pay relating to the year ending 31 March
2020.
⁵ James McDonald was appointed Finance Director 16 June 2020 on a salary of
£130,000 p.a. and car allowance of £10,200 p.a. effective 1 July 2020. His
salary, pension and benefits are pro-rated to reflect the period 16 June 2020
to 31 March 2021.
Other Remuneration
In November 2021, the Executive Directors were awarded a one-time
discretionary payment for their commitment and contribution during a very
challenging year as follows: Adrian Leer £160,500, Tim Eckes £64,200 and
James McDonald £64,200. Other than vesting conditions in relation to
outstanding share award schemes (see note 20), no performance measures or
targets were in place for either the year ended 31 March 2022 or any prior
financial year, upon which any variable pay elements could become payable
during the year.
Benefits in kind include the provision of company car and medical insurance.
Pension includes a 5% employer contribution together with contributions made
under an employee salary sacrifice scheme.
Three Directors are members of a money purchase pension scheme into which the
Group contributed during the year.
Payments to past Directors
There were no payments to past Directors during the year.
Payment for loss of office
There were no payments for loss of office during the year.
Directors' interests in shares
The Directors who held office at the end of the financial year had the
following beneficial interests in the ordinary shares of the Company. No
change has occurred between the year end and the date of this report.
1 April 2021 31 March 2022
A M Fulton 337,040 337,040
J C Rigg 4,509,400 4,594,400
A Leer 155,379 305,379
C J Duckworth 22,026 22,026
T J Eckes 60,374 120,374
C M Rigg 100,000 112,000
J McDonald - 27,600
Total 5,184,219 5,518,819
Directors' share options
EMI scheme
The interests of Executive Directors in the EMI share option scheme were as
follows:
At beginning of year Forfeited during year Exercise during At end of year Exercise price Exercise period
year
A Leer:
granted 09.03.18 150,000 - (150,000) - 53.5p 09.03.21 to 09.03.28
T J Eckes:
granted 09.03.18 60,000 - (60,000) - 53.5p 09.03.21 to 09.03.28
210,000 - (210,000) -
As the performance conditions were met all 210,000 above were exercisable on 1
April 2021 and were subject to relevant close period (2021: nil).
Share options are exercisable provided that the relevant performance
requirement has been satisfied.
For options granted on 9 March 2018: The vesting date was set at 31 March 2021
and the exercise period ends on 9 March 2028, and 100% of the shares granted
under an Option will vest if the Company's share price at 31 March 2021 has
increased by 30% or more from the share price as at the date of grant. 50% of
shares granted under an Option will vest if the Company's share price at 31
March 2021 has increased by 15% from the share price as at the date of grant.
Between these upper and lower thresholds, awards vest on a straight-line
basis.
The total share-based payment expense recognised in the year in respect of
Directors' EMI share options is nil (2021: £13,619).
The market price of the Company's shares was 130p at 31 March 2022 and the
range during the year was between 95p and 165p.
The total cash remitted to the Company by the Directors to exercise the share
options during the year was £112k (2021: nil)
Restricted Stock Units
On 30 March 2022 the Committee awarded the Executive Directors the following
restricted stock units (RSUs):
Director Date award made Number Performance condition Vesting date
Adrian Leer 30 March 2022 60,000 135.0p 30 March 2025
Tim Eckes 30 March 2022 60,000 135.0p 30 March 2025
James McDonald 30 March 2022 60,000 135.0p 30 March 2025
The Award will Vest if the Board determines that the Market Value of a Share
on the third anniversary of the Award Date is equal to or greater than the
Market Value of a Share on the Award Date. The market value at the Award Date
is 135p.
The total share-based payment expense recognised in the year in respect of
Directors' RSU share options is £114 (2021: nil).
Malus, clawback and hold over periods are as per the Plan.
Further details relating to share awards can be found in note 20.
Annual report on remuneration (unaudited)
Performance graph
The following graph shows the Group's performance, measured by total
shareholder return, compared with the performance of the FTSE Fledgling Index
("FTSEFI") also measured by total shareholder return ("TSR"). The FTSEFI has
been selected for this comparison because it is an index of companies with
similar current market capitalisation to Triad Group Plc.
http://www.rns-pdf.londonstockexchange.com/rns/8402M_1-2022-5-25.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8402M_1-2022-5-25.pdf)
Chief executive remuneration
For the financial year ended 31 March 2022 the salary of the Executive
Chairman was £60,000 (2021: £60,000). Employee salaries increased, on
average, by 3.8% in the year.
The remuneration paid to the Executive Chairman for the financial years 2013
to 2022 were as follows:
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
£25,000 £25,000 £25,000 £25,000 £25,000 £60,000 £60,000 £60,000 £60,000 £60,000
The annual amounts paid above relate to salary only. The Executive Chairman
did not receive any discretionary payments during these periods.
Relative importance of spend on pay
The total dividends or other cash distributions to shareholders during the
year was £653k (2021: £nil), see note 9. The total employee remuneration
(including Directors) during the year was £8.620m (2021: £5.705m).
Percentage change in Directors' remuneration
The tables below show the change in Directors' remuneration compared to the
employees of the company, where Directors and employees have been employed by
Triad for the full relevant financial years (2021: 41 employees, 2022: 43
employees).
Basic salary and fees 2021 2022
J C Rigg 0% 0%
A Leer 0% 3.6%
T J Eckes n/a 0.1%
J McDonald n/a 9.4%
A M Fulton 0% 0%
C J Duckworth 0% 0%
C Rigg n/a 0%
Employees of the company 3.7% 3.8%
Benefits in kind ¹ 2021 2022
J C Rigg n/a n/a
A Leer (1.7%) 19.9% ²
T J Eckes n/a (23.4%)
J McDonald n/a n/a
A M Fulton n/a n/a
C J Duckworth n/a n/a
C Rigg n/a n/a
Employees of the company (5.7%) (18.3%)
¹ The negative values in this table represent a reduction in costs for the
provision of identical benefits
² Represents the increase in provision of company car
Other (includes commission and bonus payments) 2021 2022
J C Rigg n/a n/a
A Leer n/a 100%
T J Eckes n/a 100%
J McDonald n/a 100%
A M Fulton (100%) ³ n/a
C J Duckworth n/a n/a
C Rigg n/a n/a
Employees of the company (9.5%) (44.3%) ⁴
³ Represents back pay paid in 2020
⁴ Represents cessation of a commission scheme for a small number of
employees
The Group is exempt from disclosing data with respect to the CEO pay ratio due
to employee numbers being less than 250.
Consideration of matters related to Directors' remuneration
During the financial year, the Remuneration Committee met twice to discuss
Directors' remuneration. No external advice was sought in relation to matters
discussed at this meeting.
Alistair Fulton
Chairman, Remuneration Committee
25 May 2022
Independent auditor's report to the members of Triad Group Plc
Opinion on the financial statements
In our opinion:
· the financial statements give a true and fair view of the state
of the Group's and of the Parent Company's affairs as at 31 March 2022 and of
the Group's and Parent Company's profit for the year then ended;
· the Group financial statements have been properly prepared in
accordance with UK adopted international accounting standards;
· the Parent Company financial statements have been properly
prepared in accordance with UK adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
We have audited the financial statements of Triad Group Plc (the 'Parent
Company') and its subsidiaries (the 'Group') for the year ended 31 March 2022
which comprise the Group and Parent Company statements of comprehensive income
and expense, the Group and Parent Company statements of changes in equity, the
Group and Parent Company statements of financial position, the Group and
Parent Company statements of cash flows and notes to the financial statements,
including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable
law and UK adopted international accounting standards and as regards the
Parent Company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are
further described in the
Auditor's responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion. Our audit
opinion is consistent with the additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were appointed by the
Directors to audit the financial statements for the year ending 31 March 2006
and subsequent financial periods. The period of total uninterrupted engagement
including retenders and reappointments is 17 years, covering the years ending
31 March 2006 to 31 March 2022. We remain independent of the Group and the
Parent Company in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including the FRC's
Ethical Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements. The non-audit services prohibited by that standard were not
provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the Directors'
assessment of the Group and the Parent Company's ability to continue to adopt
the going concern basis of accounting included:
· We considered the nature of the Group, its business model and
related risks to going concern arising, including factors that affect the
current economic climate such as the ongoing impact of Covid-19 and other
macro events such as the Russia and Ukraine conflict.
· We evaluated the Directors' assessment of the Group's and Parent
Company's ability to continue as a going concern, including challenging the
underlying data by checking the accuracy of the assessments by comparing
actual outcomes to prior year forecasts, client contracts and post year-end
financial performance.
· We examined the forecasts and stress test provided by the Group.
We tested the integrity of the models by checking the formulae, the arithmetic
accuracy and any hard coding.
· We challenged the rationale for the key assumptions, using our
knowledge of the business and the sector, corroborating to supporting
documentation where appropriate.
· Enquires were made of management as to any future events or
conditions that may affect the Group's ability to continue as a going concern,
we have also inspected the minutes of Board meetings to support our enquiries.
· We obtained confirmation of the financing facilities available to
the Group and assessed the availability of cash to the Group over the forecast
period and the level of cash headroom available.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group and the Parent Company's
ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
In relation to the Parent Company's reporting on how it has applied the UK
Corporate Governance Code, we have nothing material to add or draw attention
to in relation to the Directors' statement in the financial statements about
whether the Directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
Overview
Coverage 100% of the Group profit before tax
Key audit matters 2022 2021
Revenue recognition X X
Materiality Group financial statements as a whole
£85
k
(20
21:
£89
k)
bas
ed
on
0.5
%
(20
21:
0.5
%)
of
rev
enu
e
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
The Group operates solely in the United Kingdom. The Group consists of six
companies, five which are dormant, with the Parent Company being the only
trading entity and significant component. The Group engagement team performed
a full scope audit on the Parent Company.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit, and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key audit matter How the scope of our audit addressed key audit matter
Revenue recognition We considered there to be a significant risk over the existence of revenue. We We performed testing on a sample basis over the revenue postings pre and post
believe this risk could manifest itself through: year end, agreeing the posting to supporting documentation, checking that the
transaction is recorded in the correct period.
As detailed in note 1 and 4 to the financial statements.
· fictitious invoices or contractor/candidates;
We performed testing on a sample basis over the contractor costs incurred
· manipulation of cut-off; before and after the year end, agreeing these to supporting documentation and
checking that the revenue associated with these has been recorded in the
· manipulation of revenue through journal entries; correct period.
· manipulation of principal vs agent; and
· manipulation of contractor accrual. We performed testing on a sample basis over the timecards received either side
of the year end, agreeing them to sales invoices to ensure they have been
recorded in the correct period.
In view of the significance of revenue recognition to the financial statements
and the potential for fraud this was considered to be a key audit matter.
We performed testing on a sample basis over the revenue postings throughout
the year, agreeing the postings to payment, timecard, confirmation of charge
out rate and sales invoice as appropriate, to check that the transactions
exist and are recorded in line with the accounting policy and in the correct
accounting period.
We tested a sample of manual journal postings to revenue, agreeing the posting
to bank payment, sales invoices, credit notes and timecards where appropriate.
We tested a sample of year end accrued and deferred income balances and agreed
them to sales invoices, bank payment where relevant and timecards.
We tested a sample of new customers and contractors during the period to
supporting documentation to confirm existence.
We tested a sample of new contracts during the year to check that revenue has
been appropriately recognised as principal or agent as appropriate.
We selected a sample of contracts for services provided in the year and agreed
the revenue recognised against the policy stipulated in the contract to check
that the revenue recognition was appropriate and reviewed the accounting
treatment to check compliance with the requirements of the accounting
standards.
Key observations:
Based on the procedures performed we did not identify any material matters to
report.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole and performance materiality as follows:
Group and Parent Company financial statements
2022 2021
£k £k
Materiality 85 89
Basis for determining materiality 0.5% of revenue 0.5% of revenue
Rationale for the benchmark applied Given the fluctuations in profit, we consider revenue to be the most Given the fluctuations in profit, we consider revenue to be the most
appropriate benchmark as we believe it is one of the principal considerations appropriate benchmark as we believe it is one of the principal considerations
for users of the financial statements in assessing the financial performance for users of the financial statements in assessing the financial performance
and development of the Group. and development of the Group.
Performance materiality 64 58
Basis for determining performance materiality 75% of materiality. The threshold was selected based on assessment of the 65% of materiality. The threshold was selected based on assessment of the
balances subject to estimation, the level of audit differences historically balances subject to estimation, the level of audit differences historically
and the mainly substantive approach to the audit. The threshold was increased and the mainly substantive approach to the audit.
in the year given the low level of audit differences arising historically.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual
audit differences in excess of £4k (2021: £2k). We also agreed to report
differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report other than the
financial statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors' statement in relation to
going concern, longer-term viability and that part of the Corporate Governance
Statement relating to the parent company's compliance with the provisions of
the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit.
Going concern and longer-term viability · The Directors' statement with regards to the appropriateness of
adopting the going concern basis of accounting and any material uncertainties
identified set out on page 18; and
· The Directors' explanation as to their assessment of the Group's
prospects, the period this assessment covers and why the period is appropriate
set out on page 8.
Other Code provisions · Directors' statement on fair, balanced and understandable set out
on page 16;
· Board's confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on page 6;
· The section of the annual report that describes the review of
effectiveness of risk management and internal control systems set out on page
25; and
· The section describing the work of the audit committee set out on
page 24.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during
the course of the audit, we are required by the Companies Act 2006 and ISAs
(UK) to report on certain opinions and matters as described below.
Strategic report and Directors' report In our opinion, based on the work undertaken in the course of the audit:
· the information given in the Strategic report and the Directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the Strategic report and the Directors' report have been prepared
in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent
Company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the Directors'
report.
Directors' remuneration In our opinion, the part of the Directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the Parent Company financial statements and the part of the
Directors' remuneration report to be audited are not in agreement with the
accounting records and returns; or
· certain disclosures of Directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors' responsibilities, the
Directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors are responsible for
assessing the Group's and the Parent Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· Based on our understanding of the regulatory and legal framework
applicable to the Group and Parent Company and the industry in which it
operates and considered the risk of acts by the Group and Parent Company which
were contrary to applicable laws and regulations, including fraud.
· These included but were not limited to compliance with the
Companies Act 2006, Corporate Governance, the UK listing rules and UK tax
legislation.
· We focused on laws and regulations that could give rise to a
material misstatement in the Group and Parent Company financial statements.
Our procedures included, but were not limited to the investigation, through
the review of minutes and enquires of management, of potential non-compliance
with laws and regulations and review of the communications with the regulatory
bodies.
· Our tests included, but were not limited to, agreement of the
financial statement disclosures to underling supporting documentation, review
of any correspondence with regulators and legal advisors and enquiries made of
management.
· Fraud risk could manifest itself in the existence of revenue
through fictious invoices or contractor/candidates; manipulation of cut-off;
manipulation of revenue through journal entries; manipulation of principal vs
agent; and manipulation of contractor accruals. The audit procedures performed
in relation to revenue recognition are documented in the key audit matter
section of our audit report.
· We also addressed the risk of management override of internal
controls, including testing journals and evaluating whether there was evidence
of bias in any key estimates that represented a risk of material misstatement
due to fraud.
· We tested the appropriateness of journal entries and other
adjustments and assessed whether the judgements made in making accounting
estimates could be indicative of a potential bias. We evaluated the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
· We also communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members and remained alert to any
indications of fraud or non-compliance with laws and regulations throughout
the audit.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through collusion.
There are inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely we are
to become aware of it.
A further description of our responsibilities is available on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Use of our report
This report is made solely to the Parent Company's members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Parent Company's
members those matters we are required to state to them in an auditor's report
and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Parent Company and
the Parent Company's members as a body, for our audit work, for this report,
or for the opinions we have formed.
James Fearon
(Senior Statutory Auditor)
25 May 2022
For and on behalf of BDO LLP, Statutory Auditor
London, UK
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Statements of comprehensive income and expense
for the year ended 31 March 2022
Group and Company Note 2022 2021
£'000 £'000
Revenue 4 17,015 17,815
Cost of sales (12,231) (14,005)
Gross profit 4,784 3,810
Administrative expenses (3,676) (3,124)
Profit from operations 5 1,108 686
Finance income 13 10 15
Finance expense 6 (37) (57)
Profit before tax 1,081 644
Tax Credit 8 88 41
Profit for the year and total comprehensive income attributable to equity holders of the parent 1,169 685
Basic earnings per share 10 7.16p 4.28p
Diluted earnings per share 10 7.04p 4.24p
All amounts relate to continuing activities.
The notes on pages 52 to 72 form part of the financial statements.
Statements of changes in equity for the year ended 31 March 2022
Group Share Capital Share premium account Capital redemption reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000
At 1 April 2020 160 660 104 3,631 4,555
Profit for the year and total comprehensive income - - - 685 685
Ordinary shares issued - 6 - - 6
Share-based payments - - - 37 37
At 1 April 2021 160 666 104 4,353 5,283
Profit for the year and total comprehensive income - - - 1,169 1,169
Ordinary shares issued 5 214 - - 219
Dividend paid (note 9) - - - (653) (653)
Share-based payments - - - - -
At 31 March 2022 165 880 104 4,869 6,018
Company Share Share premium account Capital redemption reserve Retained earnings Total
Capital
£'000 £'000 £'000 £'000 £'000
At 1 April 2020 160 660 104 3,626 4,550
Profit for the year and total comprehensive income - - - 685 685
Ordinary shares issued - 6 - - 6
Share-based payments - - - 37 37
At 1 April 2021 160 666 104 4,348 5,278
Profit for the year and total comprehensive income - - - 1,169 1,169
Ordinary shares issued 5 214 - - 219
Dividend paid (note 9) - - - (653) (653)
Share-based payments - - - - -
At 31 March 2022 165 880 104 4,864 6,013
Share capital represents the amount subscribed for share capital at nominal
value.
The share premium account represents the amount subscribed for share capital
in excess of the nominal value.
The capital redemption reserve represents the nominal value of the purchase
and cancellation of its own shares by the Company in 2002.
Retained earnings represents the cumulative net gains and losses recognised in
the statement of comprehensive income and expense.
The notes on pages 52 to 72 form part of the financial statements.
Statements of financial position at 31 March 2022
Registered number: 02285049
Group Company
Note 2022 2021 2022 2021
£'000 £'000 £'000 £'000
Non-current assets
Intangible assets 11 2 6 2 6
Property, plant and equipment 12 278 225 278 225
Right-of-use assets 13 345 532 345 532
Finance lease receivables 13 - 85 - 85
Trade and other receivables 15 130 - 130 -
Deferred tax 8 161 73 161 73
916 921 916 921
Current assets
Trade and other receivables 15 2,554 2,514 2,554 2,514
Finance lease receivables 13 84 108 84 108
Cash and cash equivalents 16 5,325 4,918 5,325 4,918
7,963 7,540 7,963 7,540
Total assets 8,879 8,461 8,879 8,461
Current liabilities
Trade and other payables 17 (2,134) (2,248) (2,139) (2,253)
Short term provisions 18 (61) - (61) -
Lease liabilities 13 (269) (307) (269) (307)
(2,464) (2,555) (2,469) (2,560)
Non-current liabilities
Trade and other payables 17 (104) - (104) -
Long term provisions 18 (136) (197) (136) (197)
Lease liabilities 13 (157) (426) (157) (426)
(397) (623) (397) (623)
Total liabilities (2,861) (3,178) (2,866) (3,183)
Net assets 6,018 5,283 6,013 5,278
Shareholders' equity
Share capital 19 165 160 165 160
Share premium account 880 666 880 666
Capital redemption reserve 104 104 104 104
Retained earnings 4,869 4,353 4,864 4,348
Total shareholders' equity 6,018 5,283 6,013 5,278
The financial statements on pages 48 to 73 were approved by the Board of
Directors and authorised for issue on 25 May 2022 and were signed on its
behalf by:
Adrian Leer James McDonald
Director Director
Triad Group Plc is registered in England and Wales with registered number
02285049
The notes on pages 52 to 72 form part of the financial statements.
Statements of cash flows for the year ended 31 March 2022
Group and company Note 2022 2021
£'000 £'000
Cash flows from operating activities
Profit for the year before taxation 1,081 644
Adjustments for:
Profit on sale of asset - (7)
Depreciation of property, plant and equipment 79 80
Amortisation of right of use assets 187 173
Amortisation of intangible assets 5 5
Interest received (10) (15)
Finance expense 35 45
Share-based payment expense - 37
Changes in working capital
(Increase)/Decrease in trade and other receivables (169) 226
(Decrease)/Increase in trade and other payables (11) 121
Cash generated by operations 1,197 1,309
Foreign exchange gain 1 6
Net cash inflow from operating activities 1,198 1,315
Investing activities
Finance lease interest received 10 15
Finance lease payments received 109 104
Proceeds from sale of asset - 15
Purchase of intangible assets (1) (1)
Purchase of property, plant and equipment (132) (38)
Net cash used in investing activities (14) 95
Financing activities
Proceeds of issue of shares 220 6
Lease liabilities principal payments (307) (287)
Lease liabilities interest payments (37) (51)
Dividends paid 9 (653) -
Net cash outflow from financing activities (777) (332)
Net increase in cash and cash equivalents 407 1,078
Cash and cash equivalents at beginning of the period 4,918 3,840
Cash and cash equivalents at end of the period 16 5,325 4,918
The notes on pages 52 to 72 form part of the financial statements.
Notes to the financial statements for the year ended 31 March 2022
1. Principal accounting policies
Basis of preparation for Group and company
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The policies have been consistently applied to
all the years presented, unless otherwise stated.
These financial statements have been prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act
2006 and with UK adopted International Financial Reporting Standards (IFRSs).
These financial statements have been prepared on a going concern basis.
These financial statements have been prepared on a historical cost basis and
are presented in pounds sterling, generally rounded to the nearest thousand,
the functional currency of the Company.
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position, are set out in the Strategic
report. The financial position of the Group, its cash flows, liquidity
position and borrowing facilities are described in the Strategic report. In
addition, note 3 to the financial statements includes the Group's objectives,
policies and processes for managing its capital, its financial risk management
objectives, details of its financial instruments and hedging activities, and
its exposure to credit risk and liquidity risk. The Group meets its day to day
working capital requirements through cash reserves and an invoice finance
facility (which is currently unutilised).
The Group operates an efficient low-cost and historically cash generative
model. The client base generally consists of large blue-chip entities,
particularly within the public sector, enjoying long-term and productive
client relationships. As such, debtor recovery has been reliable and
predictable with a low exposure to bad debts. For the year ended 31 March
2022, the Group has not utilised any external debt, the current finance
facilities or accessed any Government support schemes (2021: nil). Due to the
ability to operate services remotely, the Group has remained in full operation
throughout the pandemic periods and it is expected that it will continue to do
so. The success of the business during the year ended 31 March 2022
illustrates the operational flexibility of both the Group and its current and
future client base.
The going concern assessment considered a number of realistic scenarios
covering the period ending 30 September 2023, including the ability of future
client acquisition, and the impact of the reduction in services of key clients
upon future cash flows. In addition, in the most severe scenario possible, a
reverse stress test was modelled which included all current client contracts
discontinued at expiry with no extension or replacement and with no cost
mitigation. Even in the most extreme scenario, the Group has enough liquidity
and long-term contracts to support the business through the going concern
period. The Directors have concluded from these assessments that the Group
would have sufficient headroom in cash balances to continue in operation.
Further information in relation to the Directors' consideration of the going
concern position of the Group is contained in the Viability statement on page
8.
After making enquiries, including a review of the wider economy including
Brexit, inflationary pressures and the Ukraine conflict, the Directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and at least twelve months
from the date of approval of the financial statements. Accordingly, they
continue to adopt the going concern basis in preparing the annual report and
accounts.
Basis of consolidation
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee and the ability of the investor to use its power to affect
those variable returns. The consolidated financial statements present the
results of the Company and its subsidiaries ("the Group") as if they formed a
single entity. Intercompany transactions and balances between Group companies
are therefore eliminated in full.
Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated
depreciation and any impairment in value.
Depreciation is calculated as to write off the cost of assets, less their
estimated residual values, on a straight-line basis over the expected useful
economic lives of the assets concerned. Depreciation is charged to
administrative expenses in the statement of comprehensive income and expense.
The principal annual rates used for this purpose are:
%
Computer hardware 25-33
Fixtures and fittings 10-33
Motor vehicles 25-33
Leasehold improvements 10-33
Intangible assets
Intangible assets are stated at cost, net of accumulated amortisation and any
impairment in value. The cost of internally developed software is the
attributable salary costs and directly attributable overheads.
Amortisation is calculated to write off the cost of assets, less their
estimated residual values, on a straight-line basis over the expected useful
economic lives of the assets concerned. Amortisation is charged to
administration expenses in the statement of comprehensive income and expense.
The principal annual rates used for this purpose are:
%
Purchased computer software 25-33
Impairment of non-financial assets
Non-financial assets are subject to impairment tests whenever events or
changes in circumstances indicate that their carrying amount may not be
recoverable. Where the carrying value of an asset exceeds its recoverable
amount the asset is written down accordingly. Impairment is charged to
administration expenses in the statements of comprehensive income and expense.
Trade and other receivables
Trade and other receivables are initially recognised at fair value plus
transaction costs, and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
At each reporting date an amount of impairment is recognised as lifetime
expected credit losses (lifetime ECL's).
Lifetime ECL's are calculated using a provision matrix that groups trade
receivables according to the time past due, and at provision rates based on
historical observed default rates, adjusted for forward looking estimates. At
every reporting date, the historical observed default rates and
forward-looking estimates are updated.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprises
cash held on demand with banks. The carrying amount of these assets is equal
to their fair value.
Trade and other payables
Trade and other payables are recognised initially at fair value, and
subsequently measured at amortised cost using the effective interest method.
Leases
The Group as Lessee:
All leasing arrangements, where the Group is the lessee (defined as leases
that last more than one year or of a high value), are recognised as a lease
liability and corresponding right-of-use asset.
Lease liability:
The lease liability is calculated as the discounted total fixed payments for
the lease term, termination payments, exercise price of purchase options,
residual value guarantee and certain variable payments. An interest charge is
recognised in the statement of comprehensive income and expense on the lease
liability at an incremental borrowing rate. The lease liability is presented
across separate lines (current and non-current) in the statement of financial
position. The lease liability increases to reflect the interest charge on the
lease liability, at an incremental borrowing rate. The lease liability reduces
over the period of the lease as payments are made. The lease liability is
re-calculated if there is a modification, a change in the lease term, a change
in the lease payments or a change in the assessment to purchase the underlying
assets.
Right-of-use assets:
The right-of-use asset is calculated as the original lease liability, initial
direct costs and amounts paid upfront. The right of use asset is subsequently
measured at cost less accumulated amortisation. The amortisation is charged on
a straight-line basis over the life of the lease.
The Group as lessor:
For the year ended 31 March 2022 lessor arrangements follow the accounting
treatment 'IFRS 16 Leases'. Where the lease indicates a finance lease a lease
receivable is recognised. The lease receivable is calculated as the discounted
total lease receipts for the lease term.
Interest income is subsequently recognised in the statement of comprehensive
income and expense on the lease receivable and the balance reduces over the
lease term as receipts are received.
Foreign currencies
Assets and liabilities expressed in foreign currencies are translated into
sterling at the exchange rate ruling on the date of the statement of financial
position. Transactions in foreign currencies are recorded at the exchange rate
ruling as at the date of the transaction. All differences on exchange are
taken to the statement of comprehensive income and expense in the year in
which they arise.
Revenue
Revenue recognised in any financial period is based on the delivery of
performance obligations and an assessment of when control is transferred to
the customer. Revenue is either recognised at a 'point in time' when a
performance obligation has been performed, or 'over time' as control of the
performance obligation is transferred to the customer.
The majority of the Group's revenue is derived from the provision of services
under time and materials contracts. Performance obligations under such
contracts relate to the provision of staff to customers. The transaction price
of the performance obligation is determined by reference to charge-out rates
for supplied staff and are specified in the contract. Since the customer
simultaneously receives and consumes the benefits of the Group's performance
obligations under such contracts, revenue is recognised over time using the
output method which uses a direct measurement of value to the customer of the
services transferred to date.
Where temporary workers are supplied to customers, the associated revenue is
recognised gross (inclusive of the cost of the temporary workers) since the
Group is acting as principal. Under IFRS 15, in order to be recognised as
principal, there must be a transfer of control between the vendor and the
customer. Where the Group provides temporary contractors, it is acting as
principal since it receives resourcing requirements directly from the
customer, has prime responsibility to find suitable candidates and negotiate
pay rates with them, and delivers the resources to the client including
acceptance that the service provided meets the client's expectations. Revenue
is therefore recognised as the gross amount invoiced to customers.
In relation to time and materials contracts, since it has a right to
consideration from a customer in an amount that corresponds directly with the
value to the customer of the Group's performance completed to date, the Group
recognises revenue in the amount to which it has a right to invoice.
Revenue from fixed price contracts, which may include software and product
development or support contracts, is determined by reference to those fixed
prices, agreed at inception of the contract. For fixed price contracts revenue
is recognised on an over time basis using the input (percentage completion)
method. Percentage completion is calculated as the total hours worked as at
the statement of financial position date divided by the total expected hours
to be worked to complete the project. Revenue for permanent recruitment
services is based on a percentage of a successful candidate's remuneration
package, as agreed with the customer at inception of the contract. Revenue is
recognised at a point in time when the performance obligation has been
satisfied at the time the candidate commences employment and subject to a
provision for clawback of fees for candidates that leave prior to the notice
period ending.
Revenue from licences is recognised net at the point of transaction. The Group
enters into a distinct contract with a client for the licences. The Group acts
as a reseller and the Client is bound by the terms and conditions of the end
user agreement of the licence provider. As control of the licences are
transferred to the client at contract agreement, the Group is acting as agent
which enables the recognition of revenue at the point of transaction.
The Company has taken advantage of the practical exemption not to disclose the
value of unfilled performance obligations as the contracts ongoing at the
period end are for less than 12 months.
Taxation
The charge for taxation is based on the profit or loss for the year as
adjusted for disallowable items. It is calculated using tax rates that have
been enacted or substantively enacted by the statement of financial position
date.
Full provision is made for deferred tax on all temporary differences resulting
from the difference between the carrying value of an asset or liability and
its tax base, and on tax losses carried forward indefinitely. Deferred tax
assets are recognised to the extent that it is probable that the deferred tax
asset will be recovered in the foreseeable future. Deferred tax is calculated
at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled.
Pension costs
Contributions to defined contribution plans are charged to the statements of
comprehensive income and expense as the contributions accrue.
Share-based payments
Share-based incentive arrangements are provided to employees under the Group's
share option and conditional share incentive award scheme. Both awards granted
to employees are valued at the date of grant using an appropriate option
pricing model and are charged to operating profit over the performance or
vesting period of the scheme. The annual charge is modified to take account of
shares forfeited by employees who leave during the performance or vesting
period and, in the case of non-market related performance conditions, where it
becomes unlikely the option will vest.
Provisions
A provision is recognised when the Group has a legal or constructive
obligation as a result of a past event and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the effect is
material, expected future cash flows are discounted using a current pre-tax
rate that reflects the risks specific to the liability. Calculations of these
provisions require judgements to be made. The Group has provided for property
dilapidation as detailed in note 18.
New standards and interpretations
Climate change accounting
In preparing the Consolidated financial statements management has considered
the impact of climate change, particularly in the context of the disclosures
included in the Strategic Report. These considerations did not have a material
impact on the financial reporting judgements and estimates.
A number of amendments to existing standards have been issued but which are
not yet mandatory, and have not been adopted by the Group in these financial
statements. The Directors do not anticipate that their adoption in future
periods will have a material impact on the financial statements of the Group.
2. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The Group makes estimates
and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates
and assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial
year are discussed below.
Key judgements and sources of estimation uncertainty
................................
IFRS 16 leases
A right-of-use asset of £0.3m (2021: £0.5m), a total lease liability of
£0.4m (2021: £0.7m) and a finance lease receivable of £0.1m (2021: £0.2m)
have been recognised in accordance with the accounting policies on page 52
with respect to IFRS 16 'Leases'. During the previous year, a rent review was
undertaken on the Milton Keynes lease, which resulted in an increase to the
right of use asset and to the lease liability of £0.08m. The Directors have
made the following critical accounting estimates and judgements in relation to
these balances:
· Lease term: The Directors are of the opinion that property lease assets
and liabilities should be calculated with relation to the first available
break date as the expectation is that the lease break will be taken.
· Incremental borrowing rate (IBR): The Directors have calculated the IBR
at 5%, based upon readily available credit facilities and Bank of England base
rate, covering a time frame commensurate with the time to the first available
break date.
Dilapidation provisions:
The Directors have recognised a dilapidation provision for both the leases
held totalling £197,000 (2021: £197,000). The provision is required to
recognise the costs of restoring the properties to their original state at the
end of the lease period. The provision has been calculated using generally
accepted industry averages of between 15 and 20% of lease costs and the
Directors' experience with the landlords as well as experience in similar
negotiations.
Deferred taxation:
The Directors have recognised a deferred tax asset of £161k (2021: £73k).
This asset is to recognise the expectation that corporation tax losses brought
forward will be utilised against future taxable profits. The Directors' have
based this upon a conservative estimation of the level of taxable profits in
the medium-term.
3. Financial risk management
The Group uses financial instruments that are necessary to facilitate its
ordinary purchase and sale activities, namely cash, bank borrowings in the
form of a receivables finance facility and trade payables and receivables: the
resultant risks are foreign exchange risk, interest rate risk, credit risk and
liquidity risk. The Group does not use financial derivatives in its management
of these risks.
The Board reviews and agrees policies for managing these risks and they are
summarised below. These policies are consistent with last year.
3.1 Financial risk factors
Foreign exchange risk
There are a small number of routine trading contracts with both suppliers and
clients in euros. In all such circumstances the contracts with supplier and
client will be in the same currency thereby mitigating the Group's exposure to
movements in exchange rates. Payments and receipts are made through a bank
account in the currency of the contract therefore balances held in any foreign
currency are to facilitate day to day transactions. With a functional currency
of sterling there are the following foreign currency net assets:
Group and company Note 2022 2021
£'000 £'000
Currency: Euros
Cash and cash equivalents 16 86 156
Trade and other receivables 15 (10) -
Trade and other payables 17 - (10)
76 146
Any change in currency rates would have no significant effect on results.
Interest rate risk
The Group has access to a financing facility with a major UK bank. At the
balance sheet date in the current or prior year this facility has not been
utilised. The facility borrowing rate 1.75% above base rate and so when
required to be utilised, this represents an interest rate risk.
Cash balances are held in short-term interest-bearing accounts, repayable on
demand: these attract interest rates which fluctuate in relation to movements
in bank base rate. This maintains liquidity and does not commit the Group to
long term deposits at fixed rates of interest.
There were no borrowings, aside from lease liabilities arising from the
application of IFRS 16, during the year.
Credit risk
The Group is mainly exposed to credit risk from credit sales. It is Group
policy to assess the credit risk of new customers before entering into
contracts. Each new customer is assessed, using external ratings and relevant
information in the public domain, before any credit limit is granted. In
addition, trade receivables balances are monitored on a regular basis to
minimise exposure to credit losses. The amount credited to the income
statement during the year in respect of expected credit losses was £5,000
(2021: credited to the income statement £7,000).
The Group is also exposed to credit risk from contract assets, being revenue
earned but not yet invoiced (note 15).
The Group also has credit risk from cash deposits with banks (note 16).
The Group's maximum exposure to credit risk is:
Group and company Note 2022 2021
£'000 £'000
Finance lease receivable 13 84 193
Trade and other receivables 15 2,113 1,996
Contract assets 15 212 170
Other debtors 15 208 229
Cash and cash equivalents 16 5,325 4,918
7,942 7,506
Liquidity risk
The Group's liquidity risk arises from its management of working capital. The
Group has a facility to borrow an amount up to 90% of approved trade debtors
subject to a maximum limit of £2.6m. The facility may be terminated by the
bank and Group with one and three month's written notice respectively. The
Board receives regular cash flow and working capital projections to enable it
to monitor its available headroom under this facility. At the statement of
financial position these projections indicated that the Group expected to have
sufficient liquid resources to meet its reasonably expected obligations.
Maturity of financial liabilities is set out in notes 17.
Capital risk management
The Group's capital comprises of shareholders' equity. Its objectives when
managing capital are to safeguard the Group's ability to continue as a going
concern in order to maximise shareholder value. To maintain or adjust the
capital structure the Group may adjust the dividend payment to shareholders,
return capital to shareholders, issue new shares or alter the level of
borrowings.
3.2 Fair value estimation
The carrying value of financial assets and liabilities approximate their fair
values.
4. Revenue
The Group operates solely in the UK. All material revenues are generated in
the UK.
The largest single customer contributed 35% of Group revenue (2021: 47%) and
was in the public sector. Two other customers contributed more than 10% of
Group revenue (2021: one).
Disaggregation of revenue
In accordance with IFRS 15, the Group disaggregates revenue by contract type
as management believe this best depicts how the nature, timing and uncertainty
of the Group's revenue and cash flows are affected by economic factors.
Accordingly, the following table disaggregates the Group's revenue by contract
type:
Group and company 2022 2021
£'000 £'000
Time and materials 16,593 17,344
Fixed price 118 175
Percentage fee based 211 296
Licences 93 -
17,015 17,815
The Group also disaggregates revenue by operating sector reflecting the
different commercial risks (e.g. credit risk) associated with each.
Group and company 2022 2021
£'000 £'000
Public sector 11,090 11,357
Private sector 5,925 6,458
17,015 17,815
Contract balances
For all contracts, the Group recognises a contract liability to the extent
that payments made are greater than the revenue recognised at the period end
date. When payments are made less than the revenue recognised at the period
end date, the Group recognises a contract asset for the difference.
Contract assets and contract liabilities are included within 'trade and other
receivables' and 'trade and other payables' respectively on the face of the
statement of financial position.
Contract assets Contract liabilities
Group and Company 2022 2021 2022 2021
£'000 £'000 £'000 £'000
At 1 April 68 68 (41) (41)
Transfers in the period from contract assets to trade receivables (68) (68) - -
Excess of revenue recognised over cash (or right to cash) being recognised in 471 170 - -
the period
Amounts included in contract liabilities that was recognised as revenue in the - - 41 41
period
Cash received in advance of performance and not recognised as revenue in the - - (116) (256)
period
At 31 March 471 170 (116) (256)
There is no expectation of a material expected lifetime credit loss arising in
relation to contract assets.
5. Profit from operations
2022 2021
£'000 £'000
Profit from operations is stated after charging:
Profit on disposal of fixed asset - (7)
Depreciation of owned assets 79 80
Amortisation of right of use assets 187 173
Amortisation of intangible assets 5 5
Auditor remuneration:
Audit of financial statements: Group and company 66 59
Non-audit services 2 2
6. Finance expense
2022 2021
£'000 £'000
Interest expense on lease liability 37 51
Net foreign exchange loss - 6
Total finance expense 37 57
7. Employees and Directors
Group and company 2022 2021
Number Number
Average number of persons (including Directors) employed
Senior management 10 9
Fee earners 77 42
Sales 8 8
Administration and finance 9 9
104 68
The number of permanent fee earners as at 31 March 2022 was 95 (2021: 58).
Staff costs for the above persons (including Directors) 2022 2021
£'000 £'000
Wages and salaries 6,995 4,599
Social security costs 827 537
Defined contribution pension costs 798 532
Equity settled share-based payments - 37
8,620 5,705
2022 2021
Directors £'000 £'000
Emoluments 894 593
Benefits in kind 20 18
Money purchase pension contributions 65 57
Total remuneration 979 668
Social security costs 115 73
1,094 741
Three Directors (2021: 3) had retirement benefits accruing under money
purchase pension schemes. Key management personnel are considered to be the
Directors.
8. Tax (credit)/charge
2022 2021
£'000 £'000
Current tax
Current tax on profits for the year - -
Deferred tax
Increase in recognised deferred tax asset (85) (41)
Change in tax rate (3) -
Total tax credit for the year (88) (41)
The differences between the actual tax charge for the year and the standard
rate of corporation tax in the UK applied to profits for the year are as
follows:
2022 2021
£'000 £'000
Profit before tax 1,081 644
Profit before tax multiplied by standard rate of corporation tax in the UK of 205 122
19% (2021: 19%)
Expenses not deductible for tax purposes 8 2
Allowances recognised (91) -
Recognition of deferred tax on losses (220) (165)
Change in tax rate (3) -
Prior year adjustments 13 -
Tax credit for the year (88) (41)
2022 2021
£'000 £'000
Deferred tax asset
The movement in deferred tax is as follows:
At beginning of the year 73 32
Reversal of previously unrecognised deferred tax on losses 85 41
Tax rate changes 3 -
At end of the year 161 73
Deferred tax assets have been recognised in respect of tax losses where the
Directors believe it is probable that the assets will be recovered. This
expectation of recovery is calculated by modelling conservative estimates of
future taxable profits that can be offset with historic trading losses brought
forward. A deferred tax asset amounting to £473,000 (2021: £550,000) has not
been recognised in respect of trading losses of £1,892,000 (2021:
£2,896,000), which can be carried forward indefinitely.
Deferred tax assets have not been recognised for potential temporary
differences arising from unexercised share options of £22k (2021: £29k) and
general provisions of £42k (2021: £11k) as the Directors believe it is not
certain these assets will be recovered.
The UK Budget on 3 March 2021 announced an increase in the UK corporation tax
rate from 19% to 25% with effect from 1 April 2023. The effect of the rate
increase is reflected in the consolidated financial statements as has been
substantively enacted at the balance sheet date.
9. Dividends
2022 2021
£'000 £'000
Final dividend for the year ended 31 March 2021 - 2p per share 323 -
Interim dividend for the year ended 31 March 2022 - 2p per share 330 -
Total dividend paid 653 -
The Directors propose a final dividend of 4p per share (2021: 2p per share),
bringing the total dividend to 6p for the financial year (2021: 2p per share).
10. Earnings per ordinary share
Earnings per share have been calculated on the profit for the year divided by
the weighted average number of shares in issue during the period based on the
following:
2022 2021
Profit for the year £1,169,000 £685,000
Average number of shares in issue 16,325,415 15,994,082
Effect of dilutive options 288,934 176,113
Average number of shares in issue plus dilutive options 16,614,349 16,170,195
Basic earnings per share 7.16p 4.28p
Diluted earnings per share 7.04p 4.24p
11. Intangible assets
Group and company Purchased software
£'000
Cost
At 31 March 2020 126
Additions 1
Disposals -
At 31 March 2021 127
Additions 1
Disposals -
At 31 March 2022 128
Accumulated amortisation/impairment
At 31 March 2020 116
Charge for the year 5
Disposals -
At 31 March 2021 121
Charge for the year 5
Disposals -
At 31 March 2022 126
Net book value
At 31 March 2022 2
At 31 March 2021 6
12. Property, plant and equipment
Group and company Computer Fixtures Motor Total
hardware & fittings vehicles
£'000 £'000 £'000 £'000
Cost
At 31 March 2020 191 502 39 732
Additions 31 7 - 38
Disposals (3) - (35) (38)
At 31 March 2021 219 509 4 732
Additions 43 89 - 132
Disposals (26) (8) - (34)
At 31 March 2022 236 590 4 830
Accumulated depreciation
At 31 March 2020 143 287 27 457
Charge for the year 22 54 4 80
Disposals (3) - (27) (30)
At 31 March 2021 162 341 4 507
Charge for the year 28 51 - 79
Disposals (26) (8) - (34)
At 31 March 2022 164 384 4 552
Net book value
At 31 March 2022 72 206 - 278
At 31 March 2021 57 168 - 225
13. Leases
The Group as a lessee:
The Group has leases contracts for its office premises with terms remaining
ranging from 1 to 3 years. The lease liability has been calculated on the
basis of the termination option being taken. There are no other future cash
outflows in relation to the lease to which the Group is potentially exposed.
Each lease is represented on the balance sheet as a right of use asset and a
lease liability. Short-term leases are not recognised and expensed to the
profit and loss statement.
Right-of-use assets
The carrying amounts of the right-of-use assets are as follows:
Land and buildings Total
£'000 £'000
At 31 March 2020
Opening position 622 622
Rent review increase 83 83
Amortisation (173) (173)
At 31 March 2021 532 532
Amortisation (187) (187)
At 31 March 2022 345 345
Lease liabilities
The carrying amount of the lease liabilities recognised are as follows:
Land and buildings Total
£'000 £'000
At 31 March 2020
Opening position 938 938
Rent review increase 82 82
Interest expense 51 51
Lease payments (338) (338)
At 31 March 2021 733 733
Interest expense 37 37
Lease payments (344) (344)
At 31 March 2022 426 426
At the balance sheet date, the Group had outstanding commitments for future
lease payments as follows:
At 31 March 2021 Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years
£'000 £'000 £'000 £'000
Discounted lease liabilities 77 230 269 157
Undiscounted lease liabilities 86 258 290 167
At 31 March 2022 Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years
£'000 £'000 £'000 £'000
Discounted lease liabilities 81 188 121 36
Undiscounted lease liabilities 86 204 129 38
The Group as a lessor:
Finance lease receivables
The Group has entered into a lease arrangement considered to be a finance
lease, representing rentals payable to the Group for a rental of a proportion
of a leased property. The carrying amounts of the lease receivable asset are
as follows:
Land and buildings Total
£'000 £'000
At 31 March 2020
Opening position 297 297
Interest income 15 15
Payments received (119) (119)
At 31 March 2021 193 193
Interest income 10 10
Payments received (119) (119)
At 31 March 2022 84 84
At the balance sheet date, the Group had future lease receivables as follows:
At 31 March 2021 Up to 3 months Between 3 and 12 months Between 1 and 2 years
£'000 £'000 £'000
Discounted lease receivables 27 81 85
Undiscounted lease receivables 30 89 89
At 31 March 2022 Up to 3 months Between 3 and 12 months
£'000 £'000
Discounted lease receivables 28 56
Undiscounted lease receivables 30 59
The total lease receivable of £84k (2021: £193k) is disclosed as non-current
assets of £nil (2021: £85k) and current assets of £84k (2021: £108k).
14. Investments
Company
Investments are:
(a) Generic Software Consultants Limited ("Generic"), a 100% subsidiary
undertaking, in respect of both voting rights and issued shares, which is
registered in England and Wales and has an issued share capital of 5,610 US$1
ordinary shares. The investment is stated in the Company's books at £440.
Up to 31 March 2009 Generic acted as an agent for the business, but did not
enter into any transactions in its own right: its business was included within
the figures reported by the Company. On 1 April 2009 the agency agreement was
terminated and all business is now conducted directly by the parent company
including its Generic business.
(b) Triad Special Systems Limited, Generic Online Limited, Zubed Geospatial
Limited, Zubed Sales Limited, are all 100% subsidiaries which are registered
in England and Wales. They are dormant companies, which have never traded.
Each has a share capital of £1.
The registered office of Triad Special Systems is Huxley House, Weyside Park,
Catteshall Lane, Godalming, Surrey GU7 1XE. The registered office of the other
subsidiaries is 3 Caldecotte Lake Business Park, Caldecotte Lake Drive,
Caldecotte, Milton Keynes MK7 8LF.
15. Trade and other receivables
Group and company 2022 2021
£'000 £'000
Trade receivables 1,868 2,015
Less: provision for expected credit losses (14) (19)
Trade receivables-net 1,854 1,996
Contract assets 212 170
Unbilled income 259 -
Other debtors 208 229
Trade and other receivables 2,533 2,395
Prepayments 151 119
2,684 2,514
Analysed as:
Non-current asset: unbilled income 130 -
Current asset 2,554 2,514
Total 2,684 2,514
Other debtors of £208k (2021: £229k) is with respect to legal costs
recoverable and accrued interest thereon with a shareholder who holds more
than 20% of the company's issued share capital. The fair value of trade and
other receivables approximates closely to their book value.
Unbilled income is in respect to the billing profile of a licence agreement.
The lifetime expected credit losses on trade receivables as at 31 March 2022
is calculated as follows:
Group and company Expected default rate Gross carrying amount Credit loss allowance
(A) (B) (A x B)
% £'000 £'000
Current 0.75 1,856 13
Up to 30 days past due 5.0 12 1
1,868 14
No provision has been recognised for contract assets and other debtors as they
are expected to be fully recovered.
The lifetime expected credit losses on trade receivables as at 31 March 2021
were calculated as follows:
Group and company Expected default rate Gross carrying amount Credit loss allowance
(A) (B) (A x B)
% £'000 £'000
Current 0.75 1,931 15
Up to 30 days past due 5.0 84 4
2,015 19
Movements on the provision for expected credit loss are as follows:
Group and company 2022 2021
£'000 £'000
At beginning of the year 19 26
Charged to income statement - -
Credited to income statement (5) (7)
At end of the year (credit loss allowance) 14 19
The carrying amount of the Group's trade and other receivables are denominated
in the following currencies:
Group and company 2022 2021
£'000 £'000
Sterling 2,543 2,395
Euros (10) -
2,533 2,395
16. Cash and cash equivalents
Group and company 2022 2021
£'000 £'000
Cash available on demand 5,325 4,918
The fair value of cash and cash equivalents approximates closely to their book
value.
The carrying amount of the Group's cash and cash equivalents is denominated in
the following currencies:
Group and company 2022 2021
£'000 £'000
Sterling 5,239 4,762
Euros 86 156
5,325 4,918
For the purpose of the consolidated cash flow statement, cash and cash
equivalents consist of cash, as detailed above.
The Group has access to a financing facility with a major UK bank. At the
balance sheet date in the current or prior year this facility has not been
utilised. The facility borrowing rate is 1.75% above base rate.
17. Trade and other payables
Group Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Trade payables 667 923 667 923
Accruals 525 324 525 324
Owed to subsidiary - - 5 5
1,192 1,247 1,197 1,252
Contract liabilities 116 256 116 256
Other taxation and social security 930 745 930 745
2,238 2,248 2,243 2,253
Analysed as:
Current liability 2,134 2,248 2,139 2,253
Non-current liability: accruals 104 - 104 -
Total 2,238 2,248 2,243 2,253
The majority of trade and other payables are settled within three months from
the year end.
The fair value of trade and other payables approximates closely to their book
value.
The carrying amount of trade and other payables is denominated in the
following currencies:
Group Company
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Sterling 1,192 1,237 1,197 1,242
Euros - 10 - 10
1,192 1,247 1,197 1,252
18. Provisions
Group and company Provision for property dilapidations
£'000
At 1 April 2021 197
Additions -
Charged to income statement -
Utilised in year -
At 31 March 2022 197
The maturity profile of the present value of provisions is as follows:
Group and company 2022 2021
£'000 £'000
Current
Provision for property dilapidation 61 -
Non-current
Provision for property dilapidation 136 197
The provision for property dilapidation covers the estimated future costs
required to meet obligations under property leases to redecorate and repair
property.
19. Share capital 2022 2021
Ordinary shares of 1p each
Issued, called up and fully paid:
Number 16,539,579 16,028,579
Nominal value £165,396 £160,286
During the year 511,000 1p ordinary shares were issued as a result of the
exercise by employees of share options:
Number Option price Increase in share capital Increase in share premium
129,000 13.5p £1,290 £16,125
5,000 11.0p £50 £500
377,000 53.5p £3,770 £197,925
511,000 £5,110 £214,550
20. Share-based payments
At 31 March 2022, 228,000 options granted under employee share option schemes
remain outstanding:
Date option granted Number Exercise price Period options exercisable
18 September 2014 70,000 11.0p 18 September 2017 to 18 September 2024
9 March 2018 158,000 53.5p 1 April 2021 to 9 March 2028
Under the terms of the scheme, options vest after a period of three years
continued employment and are subject to the following performance conditions:
For options granted on 9 March 2018: 100% of the shares granted under an
option will vest if the Company's share price at 31 March 2021 has increased
by 30% or more from the share price as at the date of grant. 50% of shares
granted under an option will vest if the Company's share price at 31 March
2021 has increased by 15% from the share price as at the date of grant.
Between these upper and lower thresholds, awards vest on a straight-line
basis.
For options granted on 18 September 2014: in at least one financial year after
the date of grant, the Company shall have achieved a positive basic earnings
per share (subject to adjustment to exclude identified exceptional items), as
reported in its audited annual accounts.
Options have been valued using the Black-Scholes option-pricing model. No
performance conditions were included in the fair value calculations.
No options were granted during the year (2021: nil).
During the year, a number of restricted stock units were granted under the new
Triad Employee Share Incentive Plan, and remain outstanding as follows:
Date award made Number Performance condition Vesting date
30 March 2022 750,000 135.0p 30 March 2025
The Award will Vest if the Board determines that the Market Value of a Share
on the third anniversary of the Award Date is equal to or greater than the
Market Value of a Share on the Award Date. The market value at the Award Date
is 135.0p.
The total expense recognised in the year is £476 (2021: £37,000).
A reconciliation of the total share award movements over the year to 31 March
2022 is shown below:
2022 2021
Number of options Weighted average exercise price Number of options Weighted average exercise price
Pence Pence
Outstanding at start of year 739,000 42.2 817,600 40.3
Granted 750,000 1.0 - -
Exercised (511,000) 43.0 (48,600) 12.5
Forfeited - - (30,000) 38.0
Outstanding at end of year 978,000 10.2 739,000 42.2
Exercisable at end of year 228,000 40.5 739,000 42.2
There were 511,000 share options exercised during the year. There are no share
options held by Directors in the above figures, and a total of 180,000
restricted stock units (RSUs). Transactions with Directors are set out in the
Directors' remuneration report on page 28.
The weighted average share price at the date of exercise for share options
exercised during the period was 118.2p (2021: 75.6p). The options outstanding
as at 31 March 2022 had an exercise price of 11.0p or 53.5p, and with respect
to the RSUs 135.0p, with a weighted average remaining contractual life of 3.4
years (2021: 5.4 years).
The inputs into the share-based payments model to calculate the RSU awards
were as follows:
Expected volatility 35%
Expected life 3 years
Risk-free rate 1.7%
Exercise price 1p
Valuation 135p
21. Related party transactions and ultimate control
The Group and Company rents one of its offices under a lease expiring in 2028,
with a break clause in 2023. The current annual rent of £215,000 was fixed,
by independent valuation, at the last rent review in 2008. J C Rigg, a
Director, has notified the Board that he has a 50% beneficial interest in this
contract. The balance owed at the year-end was £nil (2021: £nil). There is
no ultimate controlling party.
Five year record
For accounting periods commencing after 1 April 2018 the accounting treatment
changed due to the introduction of IFRS 9 and IFRS 15. For the accounting
period commencing 1 April 2019 further changes were made due to the
introduction of IFRS 16. Therefore the accounting policies over the period
detailed below will vary and be inconsistent.
Consolidated income statement
Years ended 31 March 2022 2021 2020 2019 2018
£'000 £'000 £'000 £'000 £'000
Revenue 17,015 17,815 19,354 22,713 27,819
Gross profit 4,784 3,810 2,854 4,376 4,724
Profit/(Loss) before tax 1,081 644 (602) 1,017 1,662
Tax credit/(charge) 88 41 (159) (132) (38)
Profit/(Loss) after tax 1,169 685 (761) 885 1,624
Retained profit/(loss) for the financial year 1,169 685 (761) 885 1,624
Basic earnings/(loss) per share (pence) 7.16 4.28 (4.76) 5.60 10.45
Balance sheet
As at 31 March 2022 2021 2020 2019 2018
£'000 £'000 £'000 £'000 £'000
Non-current assets 916 921 1,236 411 463
Current assets 7,963 7,540 6,581 7,937 7,736
Current liabilities (2,464) (2,555) (2,399) (2,483) (2,997)
Non-current liabilities (397) (623) (863) (99) (77)
Net assets 6,018 5,283 4,555 5,766 5,125
Share capital 165 160 160 160 156
Share premium account 880 666 660 659 619
Capital redemption reserve 104 104 104 104 104
Retained earnings 4,869 4,353 3,631 4,843 4,246
Equity shareholders' funds 6,018 5,283 4,555 5,766 5,125
Shareholders' information and financial calendar
Share register
Equiniti maintain the register of members of the Company. If you have any
questions about your personal holding of the Company's shares, please contact:
EQ
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Telephone: 0371 384 2486
If you change your name or address or if the details on the envelope enclosing
the report, including your postcode, are incorrect or incomplete, please
notify the registrar in writing.
Shareholders' enquiries
If you have an enquiry about the Group's business, or about something
affecting you as a shareholder (other than queries that are dealt with by the
registrar) you should contact the Company Secretary, by letter or telephone at
the Company's registered office.
Company Secretary and registered office:
James McDonald
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone: 01908 278450
Email: investors@triad.co.uk
Website: www.triad.co.uk
Financial calendar
Annual General Meeting The date of the AGM is to be confirmed.
Financial year ended 31 March 2023: expected announcement of results
Half year November 2022
Full year June 2023
Corporate information
Executive Directors
John Rigg, Chairman
Adrian Leer, Managing Director
Tim Eckes, Client Services Director
James McDonald, Finance Director
Non-Executive Directors
Alistair Fulton
Chris Duckworth
Charlotte Rigg
Secretary and registered office
James McDonald
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone: 01908 278450
Email: investors@triad.co.uk
Website: www.triad.co.uk
Country of incorporation and domicile of parent company
United Kingdom
Legal form
Public limited company
Company number
02285049
Registered Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Brokers
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR
Solicitors
Freeths
Davy Avenue
Knowlhill
Milton Keynes
MK5 8HJ
Bankers
Lloyds Bank plc
City Office
11-15 Monument Street
London
EC3V 9JA
Registrars
EQ
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
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