REG - Triad Group Plc - Half-year Report
07/11/2024 07:00
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RNS Number : 1599L Triad Group Plc 07 November 2024
Legal Entity Identifier (LEI) No. 213800MDNBFVEQEN1G84
Triad Group Plc
Half year results for the six months ended 30 September 2024
Financial highlights
Six months to Six months to Change Audited year ended
30 September 2024
30 September 2023
31 March 2024
Revenue £10.21m £6.39m +£3.82m £14.0m
Gross profit £2.97m £0.95m +£2.02m £2.8m
Gross profit % 29.1% 14.9% +14.2% 20.1%
Profit/(Loss) before tax £0.75m (£0.99m) +£1.74m (£1.3m)
Profit/(Loss) after tax £0.78m (£1.00m) +£1.78m (£1.0m)
Cash reserves £2.88m £2.62m +£0.26m £2.1m
Basic earnings/(loss) per share 4.66p (6.03p) +10.69p (6.10p)
Interim/final dividend payable 2p 2p - 4p
Chairman's statement
Dr John Rigg
Overview of results
In my Trading Update of 22(nd) August 2024, I expressed my absolute confidence
that investors would not be disappointed by the first half results. These
interim accounts demonstrate that my confidence was not misplaced. The six
months' results up to 30(th) September 2024, reported today, reflect a sound
and sustainable transformation.
The results have been achieved organically without resorting to a dash for
growth at all costs, or compromising in any way our fundamental boutique
business model. This is based on value for money, effective delivery, and
quality and reliability in our long term support of all our clients. We are
building long term relationships which will enable us to provide additional
operational and financial benefits to the public sector and thereby support
the new Government in its welcome drive to apply the benefits of digital
technology to efficiency and cost control.
Our cash balance is strengthening nicely and reflecting the increase in
profits with the usual slight lag due to payment terms. We are continuing our
recruitment drive and focusing even more closely on the very highest quality
of new joiners. This will result in the generation of new business and an
ability to reflect specialist focus and skills in areas where we can command
higher margins. We are entirely confident of our ability to absorb the effect
on profitability and cash flow of the increases to Employer's National
Insurance announced in the recent Budget.
In my statement of 22(nd) August, I also said that "We must be patient and
carry on until things settle down.". Clearly the process of settling down is
not yet complete; however, I am delighted to report that we are seeing strong
signs of acceleration and enthusiasm in decision making from the public sector
as a whole.
Business highlights
The Company started the new financial year on the back of a record-breaking
series of contract wins which necessitated significant recruitment to satisfy
client demand. Having already recruited 18 people in the final quarter of the
previous year, in anticipation of increased workload, the Company recruited a
further 24 consultants across the period. This resulted in a total headcount
of 133 technology specialists at the end of the half-year. The latest cohort
of staff brought with them skills and expertise from a wide range of
disciplines including enterprise architecture, software engineering, quality
assurance, business analysis and cloud technologies.
Activity levels ramped up rapidly during the period, seeing multiple contracts
running concurrently with double-digit headcount on each. A broad range of
engagements has included helping the Met Office to improve its offering to
service users, the Office of Product Safety & Standards to protect
consumers from harmful products, the Foreign, Commonwealth & Development
Office to support its diplomats globally, and the Department for Transport to
improve facilities planning via its Connectivity Tool. Not only have our teams
been focused on delivery, but they have also been assisting with uplifting the
digital skills of the civil service teams with whom we collaborate. This
combination of delivery and upskilling has played a key role in securing the
extremely positive feedback from clients which is a hallmark of our service.
The second half looks set to continue in a similar vein, bolstered we
anticipate by an increase in opportunities following the settlement of
Government's spending plans.
Outlook
We are extremely enthusiastic about the outlook. Our interim results reflect
the Company as it currently stands, without being run 'hot' in the pursuit of
short-term profit. The level of spare capacity is carefully judged to enable
new business to be accommodated quickly, as soon as it is won. We have no
hesitation in acquiring the finest new staff and covering their salaries and
costs in anticipating future growth.
The internal morale and cohesion of our staff (almost all permanent
employees), resulting from many teams having extended experience of working
together and a programme of social and cultural interaction, is one of our
greatest strengths.
Dividend
The Board have carefully considered the level of interim dividend and believe
it is prudent, given that things are still settling down, to recommend that
the interim dividend be maintained at the same level as the last two years at
2p.
It is of paramount importance to our business strategy that we remain debt
free and cash rich, and have the flexibility and agility which this brings.
Employees
I would like to thank all our staff, both our long serving employees and first
rate recent recruitees, who have performed excellently.
Dr John Rigg
Executive Chairman
6 November 2024
Unaudited condensed consolidated statement of comprehensive income and expense for the six months ended 30 September 2024
Group and Company Note Unaudited Unaudited Audited year ended 31 March
2024 2023 2024
£'000 £'000 £'000
Revenue 2 10,210 6,393 14,046
Cost of sales (7,239) (5,442) (11,227)
Gross profit 2,971 951 2,819
Administrative expenses (2,229) (1,932) (4,097)
Profit/(Loss) from operations 742 (981) (1,278)
Finance income 28 14 40
Sundry income 3 357 - -
Lease Impairment 8 (357) - -
Finance expense 4 (23) (27) (53)
Profit/(Loss) before tax 747 (994) (1,291)
Tax credit/(charge) 5 30 (5) 278
Profit/(Loss) for the period and total comprehensive income attributable to equity holders of the parent 777 (999) (1,013)
Basic earnings/(loss) per share 7 4.66p (6.03p) (6.10p)
Diluted earnings/(loss) per share 7 4.54p (6.03p) (6.10p)
All amounts relate to continuing activities.
Unaudited condensed consolidated statement of changes in equity for the six months ended 30 September 2024
Group Share Capital Share premium account Capital redemption reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000
At 1 April 2023 166 894 104 4,030 5,194
Loss for the period and total comprehensive income - - - (999) (999)
Dividend paid - - - (664) (664)
Ordinary shares issued - 7 - - 7
Share-based payments - - - 110 110
At 30 September 2023 (unaudited) 166 901 104 2,477 3,648
At 1 April 2024 166 906 104 2,223 3,399
Profit for the period and total comprehensive income - - - 777 777
Dividend paid - - - (667) (667)
Ordinary shares issued 1 13 - - 14
Share-based payments - - - 121 121
At 30 September 2024 (unaudited) 167 919 104 2,454 3,644
At 1 April 2023 166 894 104 4,030 5,194
Loss for the year and total comprehensive income - - - (1,013) (1,013)
Dividend paid - - - (996) (996)
Ordinary shares issued - 12 - - 12
Share-based payments - - - 202 202
At 31 March 2024 166 906 104 2,223 3,399
Unaudited condensed consolidated statement of financial position as at 30 September 2024
Note Unaudited 2024 Unaudited 2023 Audited year ended 31 March
2024
£'000 £'000 £'000
Non-current assets
Intangible assets - 1 -
Property, plant and equipment 177 177 173
Right-of-use assets 8 298 481 389
Finance lease receivables 8 - 348 297
Deferred tax 5 416 103 386
891 1,110 1,245
Current assets
Trade and other receivables 9 2,884 2,529 3,105
Finance lease receivables 8 - 96 99
Cash and cash equivalents 2,882 2,621 2,052
5,766 5,246 5,256
Total assets 6,657 6,356 6,501
Current liabilities
Trade and other payables 10 (2,103) (1,610) (2,152)
Short term provisions (136) - (136)
Lease liabilities 8 (188) (271) (215)
(2,427) (1,881) (2,503)
Non-current liabilities
Long term provisions (139) (197) (61)
Lease liabilities 8 (447) (630) (538)
(586) (827) (599)
Total liabilities (3,013) (2,708) (3,102)
Net assets 3,644 3,648 3,399
Shareholders' equity
Share capital 167 166 166
Share premium account 919 901 906
Capital redemption reserve 104 104 104
Retained earnings 2,454 2,477 2,223
Total shareholders' equity 3,644 3,648 3,399
Unaudited condensed consolidated statement of cash flows
for the six months ended 30 September 2024
Note Unaudited 2024 Audited year ended 31 March
£'000 Unaudited 2023 2024
£'000 £'000
Cash flows from operating activities
Profit/(Loss) for the period before taxation 747 (994) (1,291)
Adjustments for:
Depreciation of property, plant and equipment 35 33 66
Amortisation of right of use assets 91 91 183
Other income received (78) - -
Sundry income received 3 (357) - -
Impairment of finance leases 8 357
Amortisation of intangible assets - - 1
Interest received (28) (14) (40)
Finance expense 4 23 27 52
Share-based payment expense 121 110 202
Changes in working capital
Decrease/(Increase) in trade and other receivables 299 12 (564)
Decrease in trade and other payables (49) (660) (117)
Increase in provisions 78 - -
Cash generated/(used) by operations 1,239 (1,395) (1,508)
Deposit interest received 23 - 17
Foreign exchange loss (1) - (2)
Net cash inflow/(outflow) from operating activities 1,261 (1,395) (1,493)
Investing activities
Finance lease interest received 8 6 14 24
Finance lease payments received 8 396 45 94
Purchase of property, plant and equipment (39) (8) (40)
Net cash generated in investing activities 363 51 78
Financing activities
Proceeds of issue of shares 13 6 12
Lease liabilities principal payments 8 (118) (145) (293)
Lease liabilities interest payments 8 (22) (27) (51)
Dividends paid 6 (667) (664) (996)
Net cash outflow from financing activities (794) (830) (1,328)
Net increase/(decrease) in cash and cash equivalents 830 (2,174) (2,743)
Cash and cash equivalents at beginning of the period 2,052 4,795 4,795
Cash and cash equivalents at end of the period 2,882 2,621 2,052
Notes to the financial statements for the six months ended
30 September 2024
1. Principal accounting policies
Basis of preparation
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 periods presented, unless otherwise stated.
These financial statements have been prepared in accordance with UK adopted
International Financial Reporting Standards (IFRSs) and the provisions of the
Companies Act 2006.
The comparative financial information for the year ended 31 March 2024
included within this report does not constitute the full statutory accounts
for that period. The statutory Annual Report and Financial Statements for 2024
have been filed with the Registrar of Companies. The Independent Auditor's
Report on the Annual Report and Financial Statements for 2024 was unqualified,
did not draw attention to any matters by way of emphasis, and did not contain
a statement under 498(2) or 498(3) of the Companies Act 2006.
The financial information for the half years ended 30 September 2024 and 30
September 2023 does not constitute statutory accounts within the meaning of
section 434(3) of the Companies Act 2006 and has been neither audited nor
reviewed pursuant to guidance issued by the Auditing Practices Board.
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 Group.
Going Concern
The Group continues to operate an efficient low-cost and cash generative
model. For the six months ended 30 September 2024, the Group has not utilised
any external debt or lending facilities (2023: nil) with no exposure to bad
debts in the period. Cash balances have increased to £2.9m at the balance
sheet date (2023: £2.6m), which includes a total dividend paid in the 6
months period of £0.7m (2023 £0.7m). The future cash position remains
robust.
The positive going concern assessment made for the year ended 31 March 2024 is
still relevant to both current and future trading expectations. This going
concern assessment included in particular a reverse stress test model which
included the most extreme scenario possible with all current client contracts
discontinued at expiry, with no extension or replacement and with no cost
mitigation. Following a review of these assessments in light of current
trading performance and cash flow forecasts for the next 12 months, the
Directors have concluded that the Group would have sufficient headroom and
cash balances to continue in operation.
After making enquiries, 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 half year accounts.
New standards, interpretations and amendments
The accounting policies applied in these financial statements are as applied
in the annual report and accounts for the year ended 31 March 2024.
2. Revenue
The Group operates solely in the UK. All material revenues are generated in
the UK.
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 Unaudited six months ended Unaudited six months ended 30 September Audited year ended
30 September 2023 31 March
2024 2024
£'000 £'000 £'000
Time and materials 10,020 6,161 13,344
Fixed price 160 234 708
Licencing 30 (2) (6)
10,210 6,393 14,046
Licence revenue of -£2k (Audited year ended 31 March 2024: -£6k) in the
previous year is due to adverse foreign exchange rates differences in the
contract period.
The Group also disaggregates revenue by operating sector reflecting the
different commercial risks (e.g., credit risk) associated with each.
Group and Company Unaudited six months ended Unaudited six months ended 30 September Audited year ended
30 September 2023 31 March
2024 2024
£'000 £'000 £'000
Public sector 9,400 4,994 11,385
Private sector 810 1,399 2,661
10,210 6,393 14,046
3. Sundry income
Unaudited six months ended Unaudited six months ended 30 September Audited year ended
30 September 2023 31 March
2024 2024
£'000 £'000 £'000
Reinstatement of right-of-use asset 357 - -
Sundry income 357 - -
4. Finance expense
Unaudited six months ended Unaudited six months ended 30 September Audited year ended
30 September 2023 31 March
2024 2024
£'000 £'000 £'000
Interest expense on lease liability 22 27 51
Net foreign exchange loss 1 - 2
Total finance expense 23 27 53
5. Tax (credit)/charge
Unaudited six months ended 30 September 2024 Unaudited six months ended 30 September Audited year ended
2023 31 March
2024
£'000 £'000 £'000
Current tax
Current tax on profits for the period - - -
Deferred tax
(Increase)/decrease in recognised deferred tax asset (30) 5 (278)
Total tax (credit)/charge for the period (30) 5 (278)
The differences between the actual tax charge for the period and the standard
rate of corporation tax in the UK applied to profits/(losses) for the period
are as follows:
Unaudited six months ended 30 September 2024 Unaudited six months ended 30 September 2023 Audited year ended
31 March
2024
£'000 £'000 £'000
Profit/(Loss) before tax 747 (994) (1,291)
Profit/(Loss) before tax multiplied by standard rate of corporation tax in the 187 (249) (323)
UK of 25% (2024:25%)
Expenses not deductible for tax purposes 43 6 67
Allowances recognised (25) (3) (18)
Utilisation of losses brought forward (203) - -
(Recognition)/derecognition of deferred tax on losses (30) 251 (4)
Temporary differences (2) - -
Tax (credit)/charge for the period (30) 5 (278)
Unaudited six months ended 30 September 2024 Unaudited six months ended 30 September 2023 Audited year ended
31 March
2024
£'000 £'000 £'000
Deferred tax asset
The movement in deferred tax is as follows:
At beginning of the period 386 108 108
Reversal of previously unrecognised/(recognised) deferred tax on losses 34 (5) 278
Reduction in relation to timing differences (4) - -
At end of the period 416 103 386
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 estimates of future taxable
profits that can be offset with historic trading losses brought forward. In
calculating this taxable profit, probabilities are applied to current
forecasts and adjustments to taxable
profits are taken into consideration. A deferred tax asset amounting to
£230,142 (2023: £689,022) has not been recognised in respect of trading
losses of £920,566 (2023: £2,756,089), which can be carried forward
indefinitely.
Deferred tax assets have not been recognised for potential temporary
differences arising from unexercised share options and restricted stock units
of £436k (2023: £114k) and general provisions of £27k (2023: £27k) as the
Directors believe it is not certain these assets will be recovered.
6. Dividends
The Directors propose an interim dividend for the period to 30 September 2024
of 2p per share (2023 interim dividend: 2p per share).
The Company will pay the dividend on 20 December 2024 to all shareholders on
the register of members of the Company at the close of business on 22 November
2024. The ex-dividend date will be on 21 November 2024.
7. Earnings per ordinary share
Earnings/(losses) per share have been calculated on the profit/(loss) for the
year divided by the weighted average number of shares in issue during the
period based on the following:
Unaudited 30 September 2024 Unaudited 30 September 2023 Audited 31 March
2024
Profit/(loss) for the period £777,000 (£999,000) (£1,013,000)
Average number of shares in issue 16,661,391 16,571,366 16,600,680
Effect of dilutive options 468,551 - -
Average number of shares in issue plus dilutive options 17,129,942 16,571,366 16,600,680
Basic earnings/(loss) per share 4.66p (6.03p) (6.10p)
Diluted earnings/(loss) per share 4.54p (6.03p) (6.10p)
8. Leases
The carrying amounts of the right-of-use assets recognised and the movements
during the period are outlined below:
Land and buildings Total
£'000 £'000
At 31 March 2023
Opening position 572 572
Amortisation (91) (91)
At 30 September 2023 481 481
At 31 March 2024
Opening position 389 389
Reinstatement 357 357
Impairment (357) (357)
Amortisation (91) (91)
At 30 September 2024 298 298
During the period, the Company entered into a settlement agreement to
terminate the leasing arrangement with its tenant. A right-of-use asset of
£357k has been reinstated that has been impaired by the same amount until a
new tenant is established.
Lease Liabilities
The carrying amounts of the lease liabilities recognised are as follows:
Land and buildings Total
£'000 £'000
At 31 March 2023
Opening position 1,046 1,046
Interest expense 27 27
Lease payments (172) (172)
At 30 September 2023 901 901
At 31 March 2024
Opening position 753 753
Interest expense 22 22
Lease payments (140) (140)
At 30 September 2024 635 635
At the balance sheet date, the Group had outstanding commitments for future
lease payments as follows:
At 30 September 2023 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 74 197 184 446
Undiscounted lease liabilities 86 231 215 484
At 30 September 2024 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 51 137 193 254
Undiscounted lease liabilities 59 161 215 269
Finance lease receivables
During the period, the lease pertaining to the finance lease receivable was
terminated and the total finance lease receivable asset of £402k was
derecognised.
The carrying amounts of the lease receivable asset are as follows:
Land and buildings Total
£'000 £'000
At 31 March 2023
Opening position 490 490
Interest received 13 13
Payments received (59) (59)
At 30 September 2023 444 444
At 31 March 2024
Opening position 396 396
Interest received 6 6
Disposals (402) (402)
At 30 September 2024 - -
At the balance sheet date, the Group had no future finance lease receivables.
The prior year was as follows:
At 30 September 2023 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 receivables 24 72 101 247
Undiscounted lease receivables 30 89 119 267
9. Trade and other receivables
Unaudited six months ended 30 September 2024 Unaudited six months ended 30 September 2023 Audited year ended
31 March
2024
£'000 £'000 £'000
Trade receivables 2,453 1,643 2,734
Less: provision for expected credit losses (5) (5) (5)
Trade receivables-net 2,448 1,638 2,729
Contract assets 147 603 203
Unbilled income - 1 -
Other debtors 6 5 -
Trade and other receivables 2,601 2,247 2,932
Prepayments 283 282 173
2,884 2,529 3,105
Analysed as:
Current asset 2,884 2,529 3,105
Total 2,884 2,529 3,105
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.
Movements on the provision for expected credit loss are as follows:
Unaudited six months ended 30 September 2024 Unaudited six months ended 30 September 2023 Audited year ended
31 March
2024
£'000 £'000 £'000
At beginning of the period 5 5 5
Credited to income statement - - -
At end of the period (credit loss allowance) 5 5 5
The carrying amount of the Group's trade and other receivables are denominated
in the following currencies:
Unaudited six months ended 30 September 2024 Unaudited six months ended 30 September 2023 Audited year ended
31 March
2024
£'000 £'000 £'000
Sterling 2,600 2,222 2,931
Euros 1 25 1
2,601 2,247 2,932
10. Trade and other payables
Unaudited six months ended 30 September 2024 Unaudited six months ended 30 September 2023 Audited year ended
31 March
2024
£'000 £'000 £'000
Trade payables 443 606 419
Accruals 276 165 506
719 771 925
Contract liabilities 39 33 68
Other taxation and social security 1,345 806 1,159
2,103 1,610 2,152
Analysed as:
Current liability 2,103 1,610 2,152
Total 2,103 1,610 2,152
The majority of trade and other payables are settled within three months from
the period 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:
Unaudited six months ended 30 September 2024 Unaudited six months ended 30 September 2023 Audited year ended
31 March
2024
£'000 £'000 £'000
Sterling 719 641 920
Euros - 130 5
719 771 925
11. Related party transactions and ultimate control
The Group and Company rents one of its offices under a lease. 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 period end was
£nil (2023: £nil). There is no ultimate controlling party.
12. Statement of the directors' responsibilities
The Board confirms to the best of their knowledge:
· that the condensed consolidated half year financial statements for
the six months to 30 September 2024 have been prepared in accordance with IAS
34 'Interim Financial Reporting' as per UK adopted international accounting
standards; and
· that the Half Year Report includes a fair review of the information
required by sections 4.2.7R and 4.2.8R of the Disclosure and Transparency
Rules, being an indication of important events that have occurred during the
period and their impact on the condensed consolidated half year financial
statements; a description of the principal risks and uncertainties for the
remainder of the current financial year; and the disclosure requirements in
respect of material related party transactions.
By order of the Board
James McDonald
Company Secretary
6 November 2024
Names of the current Board of Directors can be found on the Company website at
www.triad.co.uk (http://www.triad.co.uk) .
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