Legal Entity Identifier (LEI) No.
213800MDNBFVEQEN1G84
Triad Group Plc ("Triad" or
"the Company")
Audited results for the year ended 31 March
2024
(Company number:
02285049)
Triad Group Plc is pleased to
announce its audited results for the year ended 31 March
2024.
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
Zeus
Capital Limited
Alexandra Campbell-Harris
Tel: 020 7614 5900
Strategic report
Financial highlights
|
Year ended
31 March 2024
|
Year
ended
31 March 2023
|
Difference
|
Revenue
|
£14.0m
|
£14.9m
|
-£0.9m
|
Gross Profit
|
£2.8m
|
£3.5m
|
-£0.7m
|
Gross Profit %
|
20.1%
|
23.6%
|
-3.5%
|
(Loss)/Profit before tax
|
(£1.3m)
|
£0.0m
|
-£1.3m
|
Loss after tax
|
(£1.0m)
|
(£0.0m)
|
-£1.0m
|
Cash reserves
|
£2.1m
|
£4.8m
|
-£2.7m
|
Basic loss per share
|
(6.10p)
|
(0.27p)
|
-5.83p
|
Final dividend - proposed
|
4p
|
4p
|
-
|
Chairman's statement
Dr
John Rigg
Financial headlines
For the year ended 31 March 2024 the
Group reports revenue of £14.0m (2023: £14.9m). The gross profit as
a percentage of revenue has reduced to 20.1% (2023: 23.6%)
primarily as a result of reduced levels of consultant utilisation,
particularly in the first half of the year (unaudited interim
accounts). The loss before tax was £1.3m (2023: profit £0.0m) and
the loss after tax was £1.0m (2023: £0.0m). Cash reserves have
reduced to £2.1m (2023: £4.8m).
The losses made in the first half of
the year reflected the decision to retain a large bench of
off-charge consultants along side a renewed focus upon work winning
activities and the need for rapid reaction capabilities. New
business wins in the second half generated a much improved revenue
performance utilising in part the previously benched employees and,
critically for future financial periods, a large increase in the
number of fee earning consultants which reached 116 by the close of
the year (2023: 94). The majority of these new consultants were fee
earning immediately.
Triad's business model dictates that
cash balances will predictably follow both the profit or loss and,
as appropriate, dividend distribution to shareholders. In the year,
there were no bad debts (2023: nil) and the Group expects that cash
balances will grow as profitability recovers.
Overview of results
As predicted, we absorbed almost all
the costs of recruitment and set up associated with our major new
business wins in the fourth quarter of last year and, as a result,
are reporting a break-even result after tax for the second half of
that year.
Outlook
In my Trading Statement dated
7th March 2024, I indicated that we should expect "a
flying start for our new financial year beginning in April". I can
now confirm that our progress since the year end has shown that my
words have turned out to be a very substantial understatement. A
transformation of our results is now being achieved in the current
financial year.
We are continuing to recruit at pace
and of the highest quality. Our cash flow is very strong, and
we are bidding for major further lines of business. Our orderbook
is also extremely healthy and we are already aiming up to two years
ahead in our efforts to win new major contracts. Further detail
follows in the Managing Director's statement below.
I believe that the recent excellent
performance in the share price is further proof that our status as
a quoted company (Main Market, Premium Segment) is of great value
to the Company, combined with the fact that we continue to be an
SME and have substantial headroom for further expansion within the
SME category.
Dividend
Recognising the strength of our
business development performance this year and the Company's
confidence in the long-term future, the Board proposes a final
dividend of 4p per share (2023: 4p per share), which together with
the interim dividend already paid of 2p (2023: 2p per share),
totals 6p per share for the financial year (2023: 6p per
share).
We will review the dividend for the
current year (ending 31 March 2025) in the light of the half year
results.
Employees
On behalf of the Board of Directors,
I would like to thank all of the staff for their commitment and
contribution during another very important year.
Dr
John Rigg
Executive Chairman
25 June 2024
Managing Director's statement
Adrian Leer
Business commentary
To use the sporting cliché, this was
certainly a game of two halves, with record sales wins in the
second half laying superb foundations, albeit on the back of a
difficult first half. The financial results reflect a depressed
first half affected by several projects coming to an end, the
running down of a major contract, and a corresponding shortage of
new contract wins. This all led to higher than planned numbers of
consultants on the bench. With a very lean business model, the
utilisation level of our permanent consultants significantly
impacts profitability. However, as reported in the Company's
interim update, we steadfastly maintained our headcount with the
strong expectation of future work coming through. This stance was
vindicated with the arrival of several new and significant
contracts during the second half, setting the stage for future
levels of performance not seen for over 20 years.
Operational Review
The new contracts comprise repeat
business with existing clients and the acquisition of new
clients. At the Office of Product Safety & Standards
(OPSS), the Company is acting as the digital delivery partner. At
the Ministry of Justice (MOJ) we succeeded in winning the latest
iteration of their programme and project management service, in
partnership with Bramble Hub. The Company won another digital
delivery partner contract with the Industrial Decarbonisation &
Emissions Trading unit with the Department for Energy Security
& Net Zero (DESNZ), plus a similar contract with the Foreign,
Commonwealth & Development Office (FCDO). Another new client
was the Met Office, where the Company was successful in winning the
contract to provide business analysis and architecture as a managed
service. Further wins during the second half included the
digitalisation of the Sustainable Aviation Fuel initiative at
Department for Transport (DfT), where we also secured a project to
develop their Connectivity Planning Tool.
Within law enforcement, the Company
won a contract to support a secure national hosting platform,
alongside engagements at Kent, Essex, Norfolk, and Suffolk police
forces to help develop strategies around command and control
systems.
Combined, these contracts had an
award value in excess of £25m and represented one of the most
successful periods of contract wins in the Company's
history.
Assignments included the development
of a Dynamics-based enterprise management system at OPSS, the
development of a GDS-approved digital service for the Clean Heat
Market Mechanism, the management of 20+ significant projects across
MOJ, and the scoping of a future platform at Met Office for
observations data that will be managed by their new supercomputer.
A significant dimension of our work has been the development of
governance frameworks for the management of data and the use of AI,
including at clients such as OPSS, DESNZ and FCDO.
The final quarter saw the
mobilisation of these new contracts, including the recruitment of
new consultants to satisfy demand. Overall, the consultant
headcount increased by 26, with most of these arriving during the
latter stage of the period. At year-end, the number of fee-earning
consultants was 116, with further recruitment following in the new
financial year. Whilst all recruitment was built around anticipated
demand, there was inevitably a financial impact caused by the
on-boarding and bedding-in of new hires. A source of significant
pride to the Company is that these new hires were recruited by our
in-house team, maintaining our tight grip on the candidate
attraction and recruitment process whilst avoiding external agency
fees. Pleasingly, the proportion of women employed increased to
30%, continuing an upward trend over the last four
years.
Staff engagement remained a crucial
focus, particularly with the need to assimilate large numbers of
new recruits. In addition to daily team meetings, all staff
participate in fortnightly briefings with myself and whole company
gatherings take place in London twice each year. A significant
motivation for our staff is the opportunity to make a difference
across our client portfolio. In all engagements we are helping the
greater good, be that by making the streets safer, protecting
consumers from harmful products, or by improving the environment.
Another measure of staff engagement has been the participation of
staff in the popular "Day in the life" series of blog articles,
with nearly 30% of the organisation publishing their own stories
online.
A great source of motivation has
been the Company's commitment to the "Boycott your Bed" fundraising
campaign, supporting the charity Action for Children. More than 10%
of staff took part in this annual event, involving a sleep-out in
London to raise funds and awareness for a great cause.
At our December gathering, the
Company was able to celebrate industry recognition from the
prestigious BCS & Computing UK IT Industry Awards 2023. Our
work with the HM Prison and Probation service won the award for
digital transformation project of the year. The application of user
research expertise at DfT led to the Company winning the UX project
of the year. And, as the only company to pick up three awards, our
own Lucy Harvey was recognised as "Rising star of the year".
These awards reflect not only the great work of our teams but also
the quality of the working relationships with our clients, without
whom these outcomes would not be possible.
Outlook
With the aforementioned contract
wins, our client portfolio is significantly more diverse and less
reliant on individual contracts. Our consultant headcount has
already increased in the new financial year, and the current
portfolio also draws upon a wide range of technical disciplines and
expertise. This provides welcome resilience, as well as offering a
broad spectrum of case studies and developments upon which further
wins can be based.
The strategy is to continue driving
work within the existing portfolio as well as using the experience
gained there to generate work across the wider UK public sector.
Regardless of the general election outcome, we expect the digital
workload in Government to be significant, with a focus on driving
productivity and efficiency. The forthcoming Procurement Act should
see ongoing support for the SME agenda, and the Company intends to
continue enjoying its SME status whilst having room to expand its
headcount as new contracts come on stream.
Further to the chairman's statement,
I would like to also thank all of the staff who have contributed so
impressively to building a platform that should see the Company
achieve new heights over the coming years.
Adrian Leer
Managing Director
25 June 2024
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. This is
mainly on a time and materials basis. 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 trading history 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.
The Executive Directors 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:
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
business relationships are important in protecting the Group from
fluctuations in market conditions.
Economy
The political and economic
uncertainty generated by Brexit still has the potential to
negatively 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.
The 2024 general election may provide
challenges to the business as a consequence of slow decision making
or a change in budgets within Government spending plans. However,
the Directors believe that the Group's recent long-term public
sector contract wins and strong relationships across the sector
will mitigate this risk. In addition, the calling of the election
in early July 2024 does further mitigate the risks associated with
decision making processes through the remainder of the
year.
Due to the nature of the Group's
client base and activities in the UK, the continued conflict in
Ukraine has not had a direct impact and is not considered to do so
in the future. However, there may still be a secondary effect as a
result of the impact on the wider economy. The Directors will
continue to monitor this situation closely.
Inflationary pressures and the
challenging interest rate environment in the UK mainly affect the
Group's ability to attract and retain staff as wage inflation will
continue to be a risk to the business. The Group's response to this
risk is outlined within the Availability of staff
below.
The growth in the consultant
population in-line with contract wins results in an increasingly
larger cost base that must be matched by revenue to both maintain
and grow profitability. Uncertainty in the economy poses a risk to
profitability. This risk is mitigated by constant review of new
business pipelines and resource allocations by the Executive
Director team and regular reporting to the Board.
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. Political
uncertainty, particularly in the public sector, can reduce
visibility in securing new business. The Board carefully reviews
forecasts to assess the level of risk arising from business that is
forecast to be won and maintains very strong relationships with key
client relationships.
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 is key to
ensuring the ability to deliver profitable growth and deliver IT
services to our clients. During the year, the cost of living crisis
resulted in general inflation increases across the wider economy.
To mitigate these risks, 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. The Group also 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 maintain very low attrition rates. To encourage retention, when
appropriate and sufficient headroom exists to do so, selected staff
are awarded share options and restricted stock units.
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.
The risk associated with
environmental, social and corporate governance (ESG) is considered
to be low, although the group takes its responsibilities in this
regard very strongly. Details of these responsibilities can be
found on page 11.
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 are closely involved with the
strategic direction and culture of the business. Dialogue is
maintained with shareholders and issues of significance are
communicated 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 (2023: 2p per
share) to shareholders. This decision was made following a detailed
review of future profitability and cash flow which as a result of
significant contract wins in late December 2023, showed a material
and continued improvement. The expected financial performance is
such that the Board has proposed a final dividend of 4p per share
for the year ended 31 March 2024 due to the recent trading
performance and expected cash flows (2023: 4p 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 continuous review of consultant allocation,
utilisation rates and delivery structures is made 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 the strategy of building
permanent consultant numbers to improve and broaden the skill sets
and enhance delivery to clients, and utilises associates only on a
limited basis where rare technical expertise is
required.
· Partners: Effective working relationships that enable future
growth are important to the Group. The Group continue to cultivate
strong relationships with our business partners which may include
intermediaries and sub-vendor arrangements, 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.
· 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 to
deliver a high level of communication with employees, including
regular Group meetings chaired by the Managing Director. One-to-one
meetings with employees and the Managing Director are also
available on request and regularly take place. 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 and grading reviews. The Group operates the Triad
Employee Share Incentive Plan, which facilitates awards of
restricted stock units (RSUs) to employees from time to time within
allowable limits. See page 74 for details.
· Suppliers: Effective engagement with suppliers enables the
Group to deliver a quality service to our clients. The Group
maintains appropriate arm's-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 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 management team continue 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.
The Directors do not consider there
to be any key decisions made in the year.
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.
An example of the robust performance
of the business model was the successful navigation of the Covid-19
pandemic. Despite the overwhelming threat the pandemic presented,
the Group was able to improve profitability and increased cash
reserves without the requirement for 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.
Brexit has had no material negative
impact upon the Group's client base and trading results, and the
Board do not expect this to change.
The effects of IR35 legislation is
minimal as the Group has continued to reduce associate fee earners
in favour of higher margin permanent consultants. The risk in this
area is not considered material.
Despite material contract wins in
late 2023, the Directors have approached the budget and forecasting
cycle for the 2025 financial year with a conservative outlook, but
are confident in the business model and the ability of both new
business acquisition and highly skilled and long tenured
consultants to improve upon these conservative
expectations.
The viability assessment considered
the principal risks as set out on page 9. 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 external funding or exercise cost mitigation
programmes. The Group was therefore found to have sufficient
financial strength to withstand considerable financial
headwinds.
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 non-GAAP KPI's that the
Directors consider the users of the financial statements to be
interested in are (Loss)/Profit from operations and EBITDA. The
Directors consider that the users of the financial statements are
focused on profitable growth and dividend distribution and as such
(Loss)/Profit from operations is a KPI. The Directors consider that
EBITDA is a KPI as it indicates the results that will translate to
cash balances.
The KPIs are as follows;
|
2024
|
2023
|
Revenue
|
£14,046,000
|
£14,858,000
|
(Loss)/Profit from operations
|
(£1,278,000)
|
£35,000
|
(Loss)/Earnings before interest, tax, depreciation and
amortisation (EBITDA)¹
|
(£1,028,000)
|
£308,000
|
Gross
margin
|
20.1%
|
23.6%
|
Average
headcount
|
117
|
115
|
¹ EBITDA - Loss from operations of
£1,278,000 (2023: profit £35,000) adding back the depreciation and
amortisation charge in the year of £250,000 (2023:
£273,000)
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. 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
|
5
|
2
|
7
|
Senior
managers
|
2
|
-
|
2
|
Employees
|
75
|
33
|
108
|
Total
|
82
|
35
|
117
|
At 31 March 2024 there were 7 Board
members, of which 5 (2023: 6) were male and 2 (2023: 1) were
female. Alison Lander was appointed as an independent non-Executive
Director on 1 June 2023 and Senior non-Executive Director Alistair
Fulton retired from the Board with effect on 31 July
2023.
Charlotte Rigg was appointed to the
senior position on the Board as Deputy Executive Chairman on 1 June
2023; we note that LR 9.8.6 1 ii) does not include this role but
confirm that this is a senior role in the Company.
No members of the Board were from a
minority ethnic background. The Board continue to recruit the best
possible talent regardless of ethnicity.
Therefore, the Company has not yet
met the targets set out in LR 9.8.6 (R). Although the Company has
not met the targets, Board composition is reviewed regularly to
ensure that there is a suitable range of skills and experience
amongst the Directors.
As part of a plan to consolidate and
strengthen the Board during 2023, Alison Lander was appointed as an
independent non-Executive Director and Charlotte Rigg was promoted
to a more senior role. We will continue to keep the Board's
composition and in particular the diversity and blend of
backgrounds, skills, and experience under review.
The following table shows the gender
identity and ethnic background of the board and senior management
team during the year.
|
Number of Board
members
|
Percentage of the
Board
|
Number of senior positions on
the Board
|
Number in the senior
management team
|
Percentage of senior
management
|
Men
|
5
|
71%
|
4
|
2
|
86%
|
Women
|
2
|
29%
|
1
|
-
|
14%
|
|
|
|
|
|
|
White
British or other White
|
7
|
100%
|
5
|
2
|
100%
|
The appointment of Alison Lander to
the Board on 1 June 2023 has increased the female representation on
the Board to 29% (2023: 14%) which is approximately in line with
the average Group female representation of 30% (2023: 28%). The
Board consists of mainly long Triad Group tenured Directors, and
with respect to both female and non - white British Directors,
there are no specific board diversity targets as management
continue to recruit and nurture the best available talent,
regardless of gender or ethnicity.
Environment and greenhouse gas
reporting
This statement contains the Group's
TCFD aligned disclosure in accordance with FCA requirements of
Premium Listed UK Corporates. We have not yet completed planning
for different climate related scenarios, including 2 degree or
lower. 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 Group's key metrics used by the
organisation to assess climate-related risks and opportunities in
line with its strategy and risk management processes are Scope 1,
Scope 2 and Scope 3 emissions.
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. They run a formal review each
year in line with the production of the Company's Carbon Reduction
Plan and also review during regular project audits. Triad's ISO9001
audits also provide a biannual review of issues and risks. 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.
The
Directors considered climate-related issues when reviewing its
strategy, risk management and business plans, but have found no
issues impacting these items. It has also considered
climate-related issues when setting the budget and organisational
performance, identifying increased costs of utilities and social
value commitments. These social value commitments have a dedicated
project manager which are reviewed by management each quarter,
along with individual project audits facilitating a continuous
review during the year.
|
Strategy -
Impacts of actual or potential climate related risks and
opportunities
|
No actual or potential impacts on the
Group have been analysed due to the limited impact of climate
related issues over the short, medium and long term, including
lower carbon economy considerations and a 2°C or lower scenario,
and these have not been considered when making strategic decisions.
If, and when a risk is deemed to have a greater impact, the Group
will follow the same process as identifying and assessing other
risks, described on page 6.
The service nature of the business
and the potential downtime of consultants in between assignments,
means that climate risk is mitigated in this situation.
With the Group's workforce currently
working remotely from locations across the country and having in
excess of 4 years' remote working experience, no localised climate
issues will have a material impact. As an example, the management
team has assessed the impact of potential localised planned
three-hour outages to the National Grid and have deemed this to
have no 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.
There are no financial related
disclosures due to the immateriality of the risks, in line with the
TCFD recommendations.
The Group has been involved in
climate related projects, such as the Department for Transport's
Renewable Transport Fuels Obligation Operating System (ROS) and
Sustainable Aviation Fuels projects, and with the Department for
Energy Security and Net Zero's Clean Heat Market Mechanism
discovery and alpha phases. The Directors are proud of the Group's
achievements and contribution to the green agenda, and our
increased expertise in this area provides further opportunities to
be involved in projects of this nature in the future.
|
Risk Management - identification, assessment,
and management of climate related risks
|
Climate
related risks are assessed as per other risks to the Group, and
described on page 6.
Other than
this disclosure requirement, there are no other regulatory
requirements that would have a material impact on the Group, and in
line with our Carbon Reduction Plan and detailed in the Metrics
sections, the Group is moving towards zero rated emissions by 2050.
Triad's Carbon Reduction Plan can be found on the Company
website.
|
Metrics -
metrics and targets used to assess, manage and report relevant
climate-related risks and opportunities
|
As stated in the Strategy section, no
actual or potential impacts have been analysed, therefore no
metrics have been produced.
The Group's emissions per scope are
detailed below in line with SECR requirements, along with our KPIs
of tCO2e per £1m of revenue and per average total
headcount, using the emission factors from the Government's GHG
Conversion Factors 2023.
Scope 1 - Combustion of fuel; one of
the Group's offices uses gas for heating, which due to the current
remote nature of the workforce is being used at a minimum level for
both properties. A single company car is also being used where
public transport is not available.
Scope 2 - Electricity; both offices
now are now supplied by renewable energy suppliers.
Scope 3; this covers business travel
and employee commuting. Our employees are encouraged to use public
transport where available.
In November 2023 the Group published
its latest Carbon Reduction Plan, available on our website,
committing to achieving Net Zero emissions by 2050. During the
year, we have continued to promote remote collaborative working to
minimise travel, finalised our progression to a paperless office,
facilitated electric vehicle charging points at our Milton Keynes
office, continued the provision of a cycle to work scheme,
rebuilding laptops for reuse and disposing only
when no longer suitable, and where possible that disposal is to a
third party such as a school and as a final recourse, to recycling.
The continuing reduction will be achieved by continuing to embed a
degree of working from home as an ongoing policy, increasing the
profile of environmental issues and the promotion of good practices
through staff communication environmental channels and introducing
additional, client specific social value initiatives, such as
carbon offsetting. The management team will continue to review the
scope 1 and 2 emissions from office activities and identify and
implement reductions through changes to policies and practices. The
current measurements remain on target against this plan.
Triad has set no specific targets or
commitments, or incorporated climate related performance metrics
into remuneration policies. Our key competitors would also have the
same low generation of emissions and their climate related
strategies and commitments have no impact on the Group.
|
The Group has used mileage reports,
public transport journey details and meter readings converted to
tCO2e using the 2023 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 2023 to 31 March 2024 in
tonnes of carbon dioxide equivalents (tCO2e) for the
Group is shown in the table below:
GHG
emissions
|
2024
|
2023
|
tCO2e¹
|
tCO2e¹
|
Emission source:
|
|
|
Scope 1 - Combustion of
fuel
|
8
|
7
|
Scope 2 - Electricity and heat
purchased for own use
|
25
|
29
|
Total
|
33
|
36
|
Scope 3 - Including business travel
and commuting
|
27
|
24
|
Total
|
60
|
60
|
tCO2e per £1m revenue
|
4.3
|
4.0
|
FTE
|
117
|
115
|
Intensity ratio (tCO2e per FTE)
|
0.5
|
0.5
|
¹ The calculation of
tCO2e for each source has been prepared in accordance
with DEFRA guidelines for GHG reporting. The tCO2e per
£1m of revenue has increased to 4.3 (2023: 4.0) due to the
reduction in revenue at the same intensity ratio of 0.5 (2023: 0.5)
with an approximately equal number of FTEs
The annual energy consumed as a
result of the purchase of electricity and heat for the period 1
April 2023 to 31 March 2024 in kWh is shown in the table
below:
|
2024
|
2023
|
Energy consumed (kWh)
|
120,955
|
151,355
|
kWh per £1m revenue
|
8,640
|
10,158
|
FTE
|
117
|
115
|
Intensity ratio (kWh per FTE)
|
1,034
|
1,316
|
The emissions are generated solely
by activities in the UK. Emissions generated by electricity
consumption is 40% (2023: 48%).
The Group has not been subject to
any environmental fines during the year ended 31 March 2024 (2023:
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 Level 1 ("Committed"). To show our continued commitment
in this area, during 2023 we achieved Disability Confident Level 2
("Employer"), with the continued ambition to move to the highest
level (Level 3 - "Leader") over the next 12 months.
We are using this to guide our
practices, particularly with regards to equality of opportunity for
disabled staff and through our recruitment process. An example of
this is the introduction of a Disability & Accessibility
Network, which has been set up to support Triad employees including
those with physical and mental impairments.
From becoming members of Tech Talent
Charter in 2021, we have continued to improve our monitoring of
under-represented groups in the workplace through the introduction
of company-wide surveys on social mobility and diversity, alongside
updating our Equal Opportunities Policy to reflect our commitments.
We believe we are working to make a real difference to inclusion
and diversity within our organisation and across the technology
sector. Along with this survey, client specific social value
commitments include a new staff survey to gauge physical and mental
wellbeing levels across a client assignment which is embraced by
the Group.
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. During the year, the Group continued to support The City of
London Police Cadets, which helped to fund extra-curricular
development activities for young people within the
organisation.
There are no human rights issues that
impact upon operations.
There were no political donations
made in the year (2023: nil).
Financial review
Group performance
Group revenue has decreased to
£14.0m (2023: £14.9m). This reduction was due predominantly to the
planned contraction in associate led revenues and despite a
difficult marketplace, consultancy revenue (both time and materials
and fixed) was in line with the prior period. As a consequence of
material contract wins in the second half of the year, consultancy
revenues grew by 4% compared to the second half of the prior year.
Gross profit reduced to £2.8m (2023: £3.5m), primarily due to the
overall reduction in revenue and a temporary increase in
consultants off charge in the first half, but also due to the
increase in consultant numbers in advance to service new contract
wins during the transition and this reduced the gross profit as a
percentage of revenue reducing to 20.1% (2023:
23.6%).
The Group reports a loss from
operations before taxation of £1.3m (2023: profit £9k). The
reduction in profitability was due to a reduction in gross profit
(£0.7m) combined with an increase in administrative expenses of
£0.6m. The Group reports a loss after tax of £1.0m (2023: loss
£44k), which included a recognition of a deferred tax asset of
£278k (2023: derecognition 53k).
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
reserves of cash at £2.1m (2023: £4.8m) and no bad debts (2023:
nil).
Administrative expenses
Administrative expenses for the year
are £4.1m (2023: £3.5m). The increase of £0.6m was due to
discretionary one-off payments of £0.1m, increased personnel costs
of £0.2m, audit fees of £0.1m and general high inflation increases
across property, technology platforms and other expenses of
£0.2m.
Staff costs
Total staff costs have increased to
£10.7m (2023: £10.0m) (note 7) which is due to the increase in the
average fee earning consultant number to 95 (2023: 93), general
salary inflation and one-off discretionary payments made to
Directors. The growth in consultant numbers has materially improved
the ratio of fee earners to administration staff to 23:1 (2023:
19:1). The number of fee earning consultants at the close of the
year was 116 (2023: 96), reflecting the recruitment of permanent
consultants in step with new contract wins.
Cash
Cash and cash equivalents as at 31
March 2024 reduced to £2.1m (2023: £4.8m). Despite good invoicing
and credit control processes, the loss made in the year resulted in
a net outflow from operating activities of £1.5m (2023: inflow
£0.7m). The net cash outflow from financing activities was £1.3m
(2023: £1.3m), which included dividends paid of £1.0m (2023:
£1.0m). The net cash inflow from investing activities was £0.1m
(2023: £0.1m) and as in previous periods reflects the low
investment in capital expenditure other than IT equipment to
support newly hired consultants. During the year, the Lloyds
invoicing facility was deemed to be not appropriate to support the
business model and was terminated. Due to the robust cash flow
forecasts, the Directors do not believe a replacement facility is
required in the foreseeable future. The facility was not utilised
during the year.
Non-current assets
Non-current assets excluding
taxation decreased by £0.3m (2023: increase £0.4m). This was mainly
due to the amortisation of the right of use asset of £0.2m (2023:
increase £0.2m) and the reduction in the finance lease receivable
of £0.1m (2023: increase £0.4m).
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 £0.4m (2023:
£0.1m) in the year, mainly due to the expectation that tax losses
brought forward will be offset against future taxable profits (see
note 8).
Net assets
The net asset position of the Group
at 31 March 2024 was £3.4m (2023: £5.2m). Further movements during
the year are detailed on page 52.
Share options and restricted stock
units
A total of 47,118 options were
exercised by staff during the year (2023: 43,084). No further
options were granted in the year (2023: nil).
No restricted stock options (RSUs)
were granted to either Directors or staff during the year (2023:
nil).
A share-based expense has been
recognised in the year of £202,883 (2023: £200,128).
Dividends
With the strong expectation of
future profitability and positive cash flows, the Board are
proposing a final dividend of 4p per share (2023: 4p per share),
which together with the interim dividend already paid of 2p (2023:
2p per share), totals 6p per share for the financial year (2023: 6p
per share). See note 9.
By order of the Board
James McDonald
Finance Director
25 June 2024
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 2024. 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 the employment, training, career
development, treatment of disabled persons and environmental
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 note 14 to the financial statements.
Corporate Governance disclosures
required within the Directors' report, including details of
Directors holding office, have been included within our Corporate
Governance report beginning on page 22 and form part of this
report.
Share capital and substantial shareholdings
Share capital
As at 31 March 2024, 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
As at 31 March 2024, since the date
of the last annual report in June 2023, the Company had received no
confirmed notifications 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.
Shareholdings that have fallen below the minimum 3% required under
DTR5 are not disclosed.
As at 25 June 2024, no further
notifications have been received since the year end.
Dividends
There was a 2p per share interim
dividend paid during the year (2023: 2p per share). The Directors
propose a final dividend of 4p per share (2023: 4p per
share).
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, our
activities included building a number of reusable test automation
frameworks for user interface (UI), application programming
interface (API) and security testing to support future work winning
activities. These were built using Playwright, Selenium, Rest
Assured and ZAProxy web automation testing tools.
We also created a Minimal (API)
Marketplace proof of concept using WolverineFX, VUE3 and .Net 8.
None of the research and development activity met the required
criteria for capitalisation.
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
(including the Parent Company), 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.
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 very low exposure to bad debts. For the year
ended 31 March 2024, the Group has not utilised any external debt
or financing instruments and in March 2024 the existing invoicing
facility was terminated.
The going concern assessment
considered a number of realistic scenarios covering the period
ending 30 September 2025, including the ability of future client
acquisition, and the impact of the reduction in services of key
clients upon future cash flows. The most severe scenario possible,
assumed all current client contracts discontinued at expiry with no
extension or replacement and with no cost mitigation. Even in this
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
9.
After making enquiries, including a
review of the wider economy including 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
The last accounting period
permissible for BDO LLP to continue in office is for the year
ending 31 March 2025. It has been agreed that BDO will not be
retained as auditors. Accordingly, a resolution to reappoint BDO
LLP as auditors of the Company will not be proposed at the next
Annual General Meeting and the Group are now engaged in the search
for a new auditor. It is expected that a new auditor will be
appointed in late 2024.
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 Parent 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.
Post balance sheet events and future
developments
Refer to note 22 of the financial
statements for details of post balance sheet events.
Details of the Group's business
activities and the factors likely to affect its future development,
performance and position are set out in the Strategic Report on
pages 1 to 16.
There are no branches opened or
employees working outside of the United Kingdom subsequent to the
year end.
There have been no purchases of own
shares subsequent to the year end.
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 June 2024
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
Dr John Rigg, Chairman
|
Charlotte Rigg, Deputy Executive
Chairman (effective 1 June 2023)
|
Adrian Leer, Managing
Director
|
James McDonald, Finance
Director
|
Tim Eckes, Client Services
Director
|
Independent non-Executive
Directors
Alistair Fulton, senior independent
non-Executive Director (retired 31 July 2023)
|
Chris Duckworth, senior independent
non-Executive Director (effective 1 August 2023)
|
Charlotte Rigg (to 31 May
2023)
|
Alison Lander (appointed 1 June
2023)
|
On 1 June 2023 the Board was
consolidated and strengthened by the appointment of non-Executive
Director Charlotte Rigg to her new role as Deputy Executive
Chairman. On the same date, Alison Lander was appointed to the
Board as non-Executive Director.
On 31 July 2023 senior independent
non-Executive Director Alistair retired from the Board.
Current directorships are as
follows:
Dr
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.
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.
Chris Duckworth is a
non-Executive Director and was appointed on 1 July 2017. 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 also 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. Chris was appointed as chairman of both the
Audit Committee and Remuneration Committee in July 2023.
Charlotte Rigg is Deputy
Executive Chairman and was appointed to this position on 1 June
2023. She was appointed to the Board as non-Executive Director 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.
Alison Lander is a
non-Executive Director and was appointed to this position on 1 June
2023. She is a science graduate with many years' experience of
working with blue-chip organisations within the IT sector,
including Vickers Shipbuilding, Fokker Space and Triad Group Plc.
She has also had a continuous relationship with the Group,
assisting the Chairman and Board for over 20 years.
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.
Chris Duckworth is the nominated
senior independent non-Executive Director. Charlotte Rigg is Deputy
Executive Chairman and Alison Lander is a non-Executive Director.
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, Chris Duckworth and Alison Lander. The
Committee is chaired by Chris Duckworth.
The Board has a Remuneration
Committee, comprised of the Executive Chairman John Rigg, the
independent non-Executive Director Chris Duckworth and Deputy
Executive Chairman 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 Chris
Duckworth.
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
2024 and shows that the Board are able to allocate sufficient time
to the Company to discharge their responsibilities
effectively.
|
Board
|
Audit
Committee
|
Remuneration
Committee
|
Number of meetings held
|
16
|
3
|
3
|
Number of meetings
attended
|
Executive Directors:
|
John Rigg (Chairman)
|
16
|
3
|
3
|
Charlotte Rigg (Deputy Executive
Chairman, effective 1 June 2023)
|
13
|
-
|
1
|
Adrian Leer
|
16
|
-
|
-
|
Tim Eckes
|
15
|
-
|
-
|
James McDonald
|
16
|
-
|
-
|
Non-Executive Directors:
|
Alistair Fulton (retired 31 July
2023)
|
5
|
1
|
2
|
Chris Duckworth
|
13
|
3
|
1
|
Charlotte Rigg (to 31 May
2023)
|
2
|
-
|
-
|
Alison Lander (appointed 1 June
2023)
|
14
|
1
|
|
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,
Chris Duckworth, with many years of experience in senior finance
positions in listed companies and Alison Lander, who has a
qualification in ESG, has joined the Committee to reflect the
increasing non-financial disclosures required for compliance with
listing rules, particularly sustainability and climate change, 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. Furthermore, the Committee has also assessed whether the
Group is acting as agent or principle in a transaction.
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.
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 2025 and the Board are
preparing to apply the appropriate tendering and selection process
to appoint a new auditor a year in advance of this
mandate.
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 and ISO 27001:2013.
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 29.
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 June 2024
Directors' remuneration report
On the following pages we set out the
remuneration report for the year ended 31 March 2024. The members
of the Remuneration Committee are shown in the Corporate Governance
report on page 22.
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 year's Annual General Meeting.
During the year the Committee
carefully reviewed Directors' remuneration. Given the continued
positive trajectory under strong strategic and operational
guidance, the Committee awarded salary increases to the Board that
would be effective in the next financial year.
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
2023 Annual General Meeting of the Company and was approved
by 68% of shareholders with no votes withheld. See page
17 of the Directors'
report for further details of voting rights.
The Committee welcomed the unanimous
approval of the shareholders, which represented 45% 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 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
2024 General Meeting.
Policy table - Executive
Directors
Element & purpose
|
Operation
|
Maximum payable
|
Performance metrics
|
Base
salary
Reflects the individual's skills,
responsibilities and experience.
Supports the recruitment and
retention of Executive Directors.
|
Reviewed annually taking into
consideration market data, business performance, external economic
factors, the complexity of the business and the role, cost, and the
incumbent's experience and performance as well as the wider
employee pay review.
|
Ordinarily, salary increases will be
in line with average increases awarded to other employees in the
Company.
In certain circumstances, such as a
change in responsibility or development in role increases beyond
this may be made subject to the factors mentioned in the Operation
column
|
None, although individual performance
is considered when setting salary levels.
|
Benefits in kind
Protects the well-being of Directors
and provides fair and reasonable market competitive
benefits.
|
Benefits in kind include company cars
or allowances, private medical insurance, life cover and permanent
health insurance. Benefits are reviewed periodically.
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.
|
Benefits are set at a level
considered to be appropriate taking into account individual
circumstances.
|
None.
|
Pension
Provides competitive post-retirement
benefits to support the recruitment and retention of Executive
Directors.
|
The Company pays contributions into a
personal pension scheme or cash alternative.
|
The Company matches individual
contributions up to a maximum of 5%.
This limit is in line with the limits
available for all employees.
|
None.
|
All
employee share scheme
To provide employees with the
opportunity to own shares in the Company.
|
Executive Directors shall be eligible
to participate in any future all employee share schemes (e.g.
Save-as-you-earn or Share Incentive Plan) if adopted by the
Company.
|
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 may be no performance
conditions if appropriate.
|
Share option scheme
Encourages share ownership amongst
employees and aligns their interests with the
shareholders.
|
The Company operates an EMI share
option scheme. Discretionary awards are made in accordance with the
scheme rules.
|
The potential value of options held
rises as the Company's share price increases.
|
Specific performance criteria are
specified at the time of awarding the share options to ensure
alignment with the interests of shareholders.
|
Employee Share Incentive Plan
Incentivises long-term value
creation, aligning the interests of Executives and shareholders
through share awards.
|
The Remuneration Committee may make
share awards annually under the Plan.
The Plan will give the Remuneration
Committee flexibility to make awards in the form of conditional
awards (performance share award).
Performance share awards shall have a
performance period of at least 3 years.
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 maximum award that may be granted
shall be 200% of salary.
|
Awards may have performance
conditions attached.
The Remuneration Committee has
discretion to determine appropriate measures, targets and ranges in
respect of each award when made.
The Remuneration Committee may also
adjust the formulaic outcome of awards where it deems that it is
not reflective of overall business performance.
|
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 set taking account of any
change in responsibility.
|
Not applicable.
|
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 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
|
A J Lander
|
01/06/2023
|
1
month
|
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:
2024
|
Director
|
Basic
salary
and
fees
|
Benefits
in
kind
|
Pension
|
Total Fixed
Pay
|
One-time
Discretionary
payment
|
Total Variable
Pay
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Executive
|
|
|
|
|
|
|
|
J C Rigg
¹
|
74
|
-
|
-
|
74
|
-
|
-
|
74
|
C Rigg
(effective 1 June 2023) ²
|
50
|
-
|
-
|
50
|
-
|
-
|
50
|
A Leer ³
|
196
|
17
|
36
|
249
|
45
|
45
|
294
|
T J Eckes ⁴
|
156
|
2
|
26
|
184
|
35
|
35
|
219
|
J McDonald ⁵
|
166
|
-
|
18
|
184
|
35
|
35
|
219
|
Non-Executive
|
|
|
|
|
|
|
|
A M Fulton
(retired 31 July 2023)
|
17
|
-
|
-
|
17
|
-
|
-
|
17
|
C J
Duckworth ⁶
|
49
|
-
|
-
|
49
|
-
|
-
|
49
|
C Rigg (to
31 May 2023)⁶
|
7
|
-
|
-
|
7
|
-
|
-
|
7
|
A Lander
(appointed 1 June 2023) ⁷
|
42
|
-
|
-
|
42
|
-
|
-
|
42
|
Total
|
758
|
19
|
80
|
856
|
115
|
115
|
971
|
2023
|
Director
|
Basic
salary
and
fees
|
Benefits
in
kind
|
Pension
|
Total Fixed
Pay
|
One-time
Discretionary
payment
|
Total Variable
Pay
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Executive
|
|
|
|
|
|
|
|
J C
Rigg
|
60
|
-
|
-
|
60
|
-
|
-
|
60
|
A Leer
|
180
|
19
|
33
|
232
|
-
|
-
|
232
|
T J Eckes
|
145
|
2
|
25
|
172
|
-
|
-
|
172
|
J McDonald
|
153
|
-
|
16
|
169
|
-
|
-
|
169
|
Non-Executive
|
|
|
|
|
|
|
|
A M
Fulton
|
40
|
-
|
-
|
40
|
-
|
-
|
40
|
C J
Duckworth
|
35
|
-
|
-
|
35
|
-
|
-
|
35
|
C
Rigg
|
35
|
-
|
-
|
35
|
-
|
-
|
35
|
Total
|
648
|
21
|
74
|
743
|
-
|
-
|
743
|
¹ John Rigg's
basic salary was increased from £60,000 to £75,000 with effect from
1 May 2023
² Charlotte
Rigg became the Deputy Executive Chairman on 1 June 2023 and her
basic salary was increased to £60,000.
³ Adrian
Leer's basic salary was increased from £200,000 to £220,000 with
effect from 1 May 2023
⁴ Tim Eckes'
basic salary was increased from £150,000 to £165,000 with effect
from 1 May 2023
⁵ James
McDonald's basic salary was increased from £150,000 to £165,000
with effect from 1 May 2023
⁶ Non-Executive Directors were awarded an increase of £15,000 to
£50,000 with effect from 1 May 2023
⁷ Non-Executive Director Alison Lander's annual salary is
£50,000 and effective from 1 June 2023
Other Remuneration
During the period, the Executive
Directors were awarded one-time discretionary payments for their
commitment to the business during a very challenging year as
follows: Adrian Leer £45,000, Tim Eckes £35,000 and James McDonald
£35,000. 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 2024 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.
|
1 April
2023
|
|
31 March
2024
|
|
|
|
|
J C Rigg
|
4,794,400
|
|
4,794,400
|
A
Leer
|
305,379
|
|
305,379
|
C J
Duckworth
|
22,026
|
|
22,026
|
T J
Eckes
|
120,374
|
|
120,374
|
C M
Rigg
|
312,000
|
|
329,779
|
J
McDonald
|
27,600
|
|
27,600
|
A J
Lander
|
-
|
|
147,290
|
Total
|
5,581,779
|
|
5,746,848
|
Directors' restricted share 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 £53,447 (2023: £53,447).
Malus, clawback and hold over
periods are as per the Plan.
The market price of the Company's
shares was 238.0p at 31 March 2024 and the range during the year
was between 105p and 244p.
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/8658T_1-2024-6-25.pdf
Chief Executive remuneration
For the financial year ended 31
March 2024 the salary of the Executive Chairman was £73,750 (2023:
£60,000). Employee salaries increased, on average, by 5.4% in the
year (2023: 6.5%).
The remuneration paid to the
Executive Chairman for the financial years 2015 to 2024 were as
follows:
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
£25,000
|
£25,000
|
£25,000
|
£60,000
|
£60,000
|
£60,000
|
£60,000
|
£60,000
|
£60,000
|
£73,750
|
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 £996k (2023:
£995k), see note 9. The total employee remuneration (including
Directors) during the year was £10.677m (2023:
£10.028m).
Percentage change in Directors' remuneration
The tables below show the change in
Directors' remuneration for those that held office during the year,
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, 2023: 57
employees, 2024: 87 employees).
Basic salary and fees
|
2021
|
2022
|
2023
|
2024
|
J C
Rigg
|
0%
|
0%
|
0%
|
22.9%
|
A
Leer
|
0%
|
3.6%
|
10.3%
|
9.2%
|
T J
Eckes
|
n/a
|
0.1%
|
10.3%
|
6.6%
|
J
McDonald
|
n/a
|
9.4%
|
10.6%
|
8.6%
|
A M
Fulton
|
0%
|
0%
|
0%
|
n/a
|
C J
Duckworth
|
0%
|
0%
|
0%
|
39.3%
|
C
Rigg
|
n/a
|
0%
|
0%
|
63.1%
|
A Lander
(appointed 1 June 2023)
|
n/a
|
n/a
|
n/a
|
n/a
|
Employees
of the Company
|
3.7%
|
3.8%
|
6.5%
|
5.4%
|
|
Benefits in kind ¹
|
2021
|
2022
|
2023
|
2024
|
J C
Rigg
|
n/a
|
n/a
|
n/a
|
n/a
|
A
Leer
|
(1.7%)
|
19.9%
²
|
2.3%
|
(7.5%)
|
T J
Eckes
|
n/a
|
(23.4%)
|
4.6%
|
10.8%
|
J
McDonald
|
n/a
|
n/a
|
n/a
|
n/a
|
A M
Fulton
|
n/a
|
n/a
|
n/a
|
n/a
|
C J
Duckworth
|
n/a
|
n/a
|
n/a
|
n/a
|
C
Rigg
|
n/a
|
n/a
|
n/a
|
n/a
|
A Lander
(appointed 1 June 2023)
|
n/a
|
n/a
|
n/a
|
n/a
|
Employees
of the Company
|
(5.7%)
|
(18.3%)
|
(7.1%)
|
32.7%
|
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
|
2023
|
2024
|
J C
Rigg
|
n/a
|
n/a
|
n/a
|
n/a
|
A
Leer
|
n/a
|
100%
|
(100%)
|
100%
|
T J
Eckes
|
n/a
|
100%
|
(100%)
|
100%
|
J
McDonald
|
n/a
|
100%
|
(100%)
|
100%
|
A M
Fulton
|
(100%)
³
|
n/a
|
n/a
|
n/a
|
C J
Duckworth
|
n/a
|
n/a
|
n/a
|
n/a
|
C
Rigg
|
n/a
|
n/a
|
n/a
|
n/a
|
A Lander
(appointed 1 June 2023)
|
n/a
|
n/a
|
n/a
|
n/a
|
Employees
of the Company
|
(9.5%)
|
(44.3%)
⁴
|
(88.2%)
⁴
|
0.0%
|
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 on three occasions to discuss Directors'
remuneration. No external advice was sought in relation to matters
discussed at this meeting.
Chris Duckworth
Chairman, Remuneration
Committee
25 June 2024
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 2024 and
of the Group's and Parent Company's loss 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 2024 which
comprise Group and Company Statement of comprehensive income
and expenses, Group and Company Statement of changes in equity,
Group and Company statement of financial position, Group and
Company Statement 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 Audit Committee to audit
the financial statements for the year ended 31 March 2006 and
subsequent financial periods. The period of total uninterrupted
engagement including retenders and reappointments is 19 years,
covering the years ended 31 March 2006 to 31 March 2024. 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.
· We
evaluated the Directors' assessment of the Group's ability to
continue as a going concern, including challenging the underlying
data by comparing it to actual performance in the previous
financial year to consider the historical accuracy of the
Directors' forecast, client contracts and comparing it to post
year-end financial performance.
· We
challenged the rationale for the key assumptions used, levels of
future revenue and staff costs by comparing them against previous
financial performance and enquires with management.
· We
examined the forecasts and stress test provided by the Group and
the appropriateness of the assumptions made.
· We
tested the integrity of the models by checking the formulae, the
arithmetic accuracy and any hard coding.
· 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
assessed the availability of cash to the Group over the forecast
period and the level of headroom available.
· Reviewing post-balance sheet results, specifically the cash
flow position against that budgeted; and
· Considering the adequacy of the disclosures in the financial
statements against our knowledge of the Group, the Directors' going
concern assessment and the requirements of the accounting
standards.
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 ND we
have concluded that Director's use of the going concern basis of
accounting in the preparation of the financial statements is
appropriate.
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% (2023: 100%) of Group
revenue
|
Key audit matters
|
|
2024
|
2023
|
Revenue recognition
|
X
|
X
|
Materiality
|
Group financial statements as a whole
|
£70k (2023: £74k) based on 0.5%
(2023: 0.5%) of revenue
|
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 of which
are dormant, with the Parent Company being the only trading entity
and the significant component. The Group engagement team performed
a full scope audit on the Parent Company.
Climate change
Our work on the assessment of
potential impacts on climate-related risks on the Group's
operations and financial statements included:
· Enquiries and challenge of management to understand the
actions they have taken to identify climate-related risks and their
potential impacts on the financial statements and adequately
disclose climate-related risks within the annual report;
· Our
own qualitative risk assessment taking into consideration the
sector in which the Group operates and how climate change affects
this particular sector;
· Review
of the minutes of Board and Audit Committee meeting and other
papers related to climate change and performed a risk assessment as
to how the impact of the Group's commitment as set out in page 11
may affect the financial statements and our audit;
· We
challenged the extent to which climate-related considerations,
including the expected cash flows from the initiatives and
commitments have been reflected, where appropriate, in management's
going concern assessment and viability assessment; and
· We
also assessed the consistency of managements disclosures included
as Other Information on pages 10 and 11 with the financial
statements and with our knowledge obtained from the
audit.
Based on our risk assessment
procedures, we did not identify there to be any Key Audit Matters
materially impacted by climate-related risks.
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
As detailed in note 1 and 4 to the
financial statements.
|
We considered there to be a
significant risk of material misstatement due to fraud relating to
the existence of revenue at year end and (cut-off) overstatement of
revenue. We believe this fraud risk could arise through:
· Fraudulent journal postings to revenue to
inappropriately overstate revenue for the year.
· Time
and bill revenue could be incorrectly included/recognised at the
year end, to inflate results for the year end.
· Fictitious contractors could be created to increase revenue in
the year.
· Contractor accruals could be manipulated by omitting
liabilities relating to revenue recognised or defer costs into the
following period. This would result in costs being recognised in a
period after revenue recognition.
· Accrued income could also be inappropriately calculated and
recognised, resulting in overstatement of revenue at
year end.
· There
is a risk the disclosures made in the financial statements are not
complete and accurate due to their complexity and details as
required by applicable accounting standard.
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 obtained an understanding of the
process follow as well as design and implementation of controls
within revenue.
We obtained an extract of all
journals relating to revenue and tested all postings based on a
defined risk criteria and where the contra entries do not align
with expectations. These were agreed to supporting
documentation.
Manual adjustments to revenue in
the consolidation were tested and agreed to supporting
documentation.
We performed testing on a sample
basis over the revenue postings pre and post year end, agreeing the
posting to supporting documentation, ensuring the transaction was
recorded in the correct period and revenue was recognised
appropriately.
We performed testing on a sample
basis over the contractor costs incurred before and after the year
end, agreeing these to supporting documentation and checking that
the revenue associated with these has been recorded in the correct
period.
We agreed a sample of new
contractors and customers during the period to supporting
documentation to confirm existence.
We planned to test a sample of
credit notes for time and bill revenue recognised post year end. As
none were seen to have been posted in April 2024 we considered
whether this was in line with month-on-month credit note totals and
also extended our testing into May 2024 in order to confirm revenue
had been recognised in the correct period.
We performed testing on a sample
basis over the timecards either side of the year end, agreeing them
to sales invoices to ensure they have been recorded in the correct
period.
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, ensuring the transactions exist and
are recorded in line with the accounting policy and in the correct
accounting period.
We tested a sample of year end
accrued income balances and agreed them to sales invoices, bank
payment where appropriate and timecards.
We have audited the disclosures
made in the financial statements agreeing back to the supporting
data and other work performed to audit revenue
transactions
Key observations:
Based on the procedures performed
we did not identify any matters that revenue recognition was
inappropriate.
|
|
|
|
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
|
|
2024
£k
|
2023
£k
|
Materiality
|
70
|
74
|
Basis for determining
materiality
|
0.5% of
revenue
|
0.5% of
revenue
|
Rationale for the benchmark
applied
|
We consider revenue to be the most
appropriate benchmark as it is one of the principal considerations
for users of the financial statements in assessing the financial
performance and development of the Group and Parent
Company.
|
We consider revenue to be the most
appropriate benchmark as it is one of the principal considerations
for users of the financial statements in assessing the financial
performance and development of the Group and Parent
Company.
|
Performance materiality
|
52
|
55
|
Basis for determining performance
materiality
|
75% of materiality, the threshold
was selected to reflect the amount of balances subject to
estimation, the amount of audit differences historically arising
and the mainly substantive approach to the audit.
|
75% of materiality, the threshold
was selected to reflect the amount of balances subject to
estimation, the amount of audit differences historically arising
and the mainly substantive approach to the audit.
|
The Group consists of six companies,
five which are dormant, with the Parent Company being the only
trading entity and significant component. As such, 100% of Group
materiality was allocated to the Parent Company (2023:
100%).
Reporting threshold
We agreed with the Audit Committee
that we would report to them all individual audit differences in
excess of £3.5k (2023: £4k). 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 pages 9, 19 and 20;
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 pages 19 and 20.
|
Other Code provisions
|
· Directors' statement on fair, balanced and understandable set
out on page 17;
· 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 26;
and
· The
section describing the work of the audit committee set out on
page 25.
|
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.
|
Corporate governance
statement
|
In our opinion, based on the work
undertaken in the course of the audit the information about
internal control and risk management systems in relation to
financial reporting processes and about share capital structures,
given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure
Guidance and Transparency Rules sourcebook made by the Financial
Conduct Authority (the FCA Rules), is consistent with the financial
statements and has been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and
understanding of the Group and the Parent Company and its
environment obtained in the course of the audit, we have not
identified material misstatements in this information.
In our opinion, based on the work
undertaken in the course of the audit information about the Parent
Company's corporate governance code and practices and about its
administrative, management and supervisory bodies and their
committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA
Rules.
We have nothing to report arising
from our responsibility to report if a corporate governance
statement has not been prepared by the Group and Parent
Company.
|
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 within the Directors'
report, 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:
Non-compliance with laws and
regulations
· We
obtained an understanding of the legal and regulatory frameworks
that are applicable to the Group and Parent Company and determined
that the most significant frameworks which are directly relevant to
specific assertions in the financial statements are those that
relate to the reporting framework, rules of the London Stock
Exchange, the Companies Act 2006 and relevant tax compliance
regulations. We made enquires of management, those responsible for
legal and compliance procedures and the Company Secretary. We
corroborated our enquires through our review of board minutes and
papers provided to the Audit Committee; and
· We
reviewed correspondence with regulatory and tax authorities for any
instances of non-compliance with laws and regulations. We reviewed
the financial statement disclosures and agreed to supporting
documentation. We involved tax specialists in the audit and
reviewed legal expenditure accounts to understand the nature of
expenditure incurred.
Fraud
· We
assessed the susceptibility of the Group's and Parent Company's
financial statements to material misstatements, including how fraud
might occur, by meeting with management from across the Group to
understand where they considered there was a susceptibility to
fraud;
· We
obtained an understanding of the Group's policies and procedures
relating to, detecting and responding to the risks of fraud, and
internal controls established to mitigate risks related to
fraud.
· Fraud
risk could manifest itself in relation to management override of
controls and in the existence of revenue (revenue recognition
assessed as a Key Audit Matter above) through fraudulent postings
to revenue at year end; incorrect revenue recognition at year end;
fictitious contractors or customers; manipulation of contractor
accruals; and manipulation of accrued income. 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, through the testing of journals and evaluation of whether
there was evidence of bias by the Directors that represented a risk
of material misstatement due to fraud;
· We
reviewed minutes of meetings of those charged with governance for
any known or suspected instances of fraud and enquired with
management and those charged with governance regarding any known or
suspected instances of fraud;
· We
performed analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud, and considered remuneration incentive
schemes and performance targets and the related financial
statements areas impacted by these;
· We
tested the appropriateness of journal entries and other adjustments
and assess 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; and
· We
communicated relevant identified laws and regulations and potential
fraud risks to all engagement team members who were all deemed to
have appropriate competence and capabilities 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.
Owen Pettifor (Senior Statutory
Auditor)
25 June 2024
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 2024
Group and Company
|
Note
|
2024
|
2023
|
|
|
£'000
|
£'000
|
Revenue
|
4
|
14,046
|
14,858
|
Cost of sales
|
|
(11,227)
|
(11,354)
|
Gross profit
|
|
2,819
|
3,504
|
Administrative expenses
|
|
(4,097)
|
(3,469)
|
(Loss)/Profit from operations
|
5
|
(1,278)
|
35
|
Finance income
|
13
|
40
|
17
|
Finance expense
|
6
|
(53)
|
(43)
|
(Loss)/Profit before tax
|
|
(1,291)
|
9
|
Tax Credit/(Charge)
|
8
|
278
|
(53)
|
Loss for the year and total comprehensive loss
attributable to equity holders of the parent
|
|
(1,013)
|
(44)
|
Basic loss per share
|
10
|
(6.10p)
|
(0.27p)
|
Diluted loss per share
|
10
|
(6.10p)
|
(0.27p)
|
All amounts relate to continuing
activities.
The notes on pages
54 to 77 form part of the financial
statements.
Statements of changes in equity for the year ended 31 March 2024
Group
|
Share
Capital
|
Share
premium account
|
Capital
redemption reserve
|
Retained
earnings
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 1 April 2022
|
165
|
880
|
104
|
4,869
|
6,018
|
Loss for the year and total
comprehensive loss
|
-
|
-
|
-
|
(44)
|
(44)
|
Ordinary shares issued
|
1
|
14
|
-
|
-
|
15
|
Dividend paid (note 9)
|
-
|
-
|
-
|
(995)
|
(995)
|
Share-based payments
|
-
|
-
|
-
|
200
|
200
|
At 1 April 2023
|
166
|
894
|
104
|
4,030
|
5,194
|
Loss for the year and total
comprehensive loss
|
-
|
-
|
-
|
(1,013)
|
(1,013)
|
Ordinary shares issued
|
-
|
12
|
-
|
-
|
12
|
Dividend paid (note 9)
|
-
|
-
|
-
|
(996)
|
(996)
|
Share-based payments
|
-
|
-
|
-
|
202
|
202
|
At
31 March 2024
|
166
|
906
|
104
|
2,223
|
3,399
|
|
Company
|
Share
Capital
|
Share
premium account
|
Capital
redemption reserve
|
Retained
earnings
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 1 April 2022
|
165
|
880
|
104
|
4,864
|
6,013
|
Loss for the year and total
comprehensive loss
|
-
|
-
|
-
|
(44)
|
(44)
|
Ordinary shares issued
|
1
|
14
|
-
|
-
|
15
|
Dividend paid (note 9)
|
-
|
-
|
-
|
(995)
|
(995)
|
Share-based payments
|
-
|
-
|
-
|
200
|
200
|
At 1 April 2023
|
166
|
894
|
104
|
4,025
|
5,189
|
Loss for the year and total
comprehensive loss
|
-
|
-
|
-
|
(1,013)
|
(1,013)
|
Ordinary shares issued
|
-
|
12
|
-
|
-
|
12
|
Dividend paid (note 9)
|
-
|
-
|
-
|
(996)
|
(996)
|
Share-based payments
|
-
|
-
|
-
|
202
|
202
|
At
31 March 2024
|
166
|
906
|
104
|
2,218
|
3,394
|
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
54 to 77 form part of the financial
statements.
Statements of financial position at 31 March 2024
Registered number:
02285049
|
|
Group
|
Company
|
|
Note
|
2024
|
2023
|
2024
|
2023
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
Non-current assets
|
|
|
|
|
|
Intangible assets
|
11
|
-
|
1
|
-
|
1
|
Property, plant and
equipment
|
12
|
173
|
199
|
173
|
199
|
Right-of-use assets
|
13
|
389
|
572
|
389
|
572
|
Finance lease receivables
|
13
|
297
|
396
|
297
|
396
|
Deferred tax
|
8
|
386
|
108
|
386
|
108
|
|
|
1,245
|
1,276
|
1,245
|
1,276
|
Current assets
|
|
|
|
|
|
Trade and other
receivables
|
15
|
3,105
|
2,541
|
3,105
|
2,541
|
Finance lease receivables
|
13
|
99
|
94
|
99
|
94
|
Cash and cash equivalents
|
16
|
2,052
|
4,795
|
2,052
|
4,795
|
|
|
5,256
|
7,430
|
5,256
|
7,430
|
Total assets
|
|
6,501
|
8,706
|
6,501
|
8,706
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
17
|
(2,152)
|
(2,269)
|
(2,157)
|
(2,274)
|
Short term provisions
|
18
|
(136)
|
-
|
(136)
|
-
|
Lease liabilities
|
13
|
(215)
|
(292)
|
(215)
|
(292)
|
|
|
(2,503)
|
(2,561)
|
(2,508)
|
(2,566)
|
Non-current liabilities
|
|
|
|
|
|
Long term provisions
|
18
|
(61)
|
(197)
|
(61)
|
(197)
|
Lease liabilities
|
13
|
(538)
|
(754)
|
(538)
|
(754)
|
|
|
(599)
|
(951)
|
(599)
|
(951)
|
Total liabilities
|
|
(3,102)
|
(3,512)
|
(3,107)
|
(3,517)
|
Net
assets
|
|
3,399
|
5,194
|
3,394
|
5,189
|
Shareholders' equity
|
|
|
|
|
|
Share capital
|
19
|
166
|
166
|
166
|
166
|
Share premium account
|
|
906
|
894
|
906
|
894
|
Capital redemption reserve
|
|
104
|
104
|
104
|
104
|
Retained earnings
|
|
2,223
|
4,030
|
2,218
|
4,025
|
Total shareholders' equity
|
|
3,399
|
5,194
|
3,394
|
5,189
|
The financial statements on pages 50
to 77 were approved
by the Board of Directors and authorised for issue on 25 June 2024
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
54 to 77 form part of the financial
statements.
Statements of cash flows for the
year ended 31 March 2024
Group and Company
|
Note
|
2024
£'000
|
2023
£'000
|
Cash flows from operating
activities
|
|
|
|
(Loss)/Profit for the year before
taxation
|
|
(1,291)
|
9
|
Adjustments for:
|
|
|
|
Depreciation of property, plant and
equipment
|
12
|
66
|
87
|
Amortisation of right of use
assets
|
13
|
183
|
185
|
Amortisation of intangible
assets
|
11
|
1
|
1
|
Interest received
|
13
|
(40)
|
(17)
|
Finance expense
|
6
|
52
|
43
|
Share-based payment
expense
|
|
202
|
200
|
Changes in working capital
|
|
|
|
(Increase)/Decrease in trade and
other receivables
|
|
(564)
|
143
|
(Decrease)/Increase in trade and
other payables
|
|
(117)
|
32
|
Cash
(used)/generated by operations
|
|
(1,508)
|
683
|
Deposit interest received
|
|
17
|
-
|
Foreign exchange
(loss)/gain
|
|
(2)
|
1
|
Net
cash (outflow)/inflow from operating activities
|
|
(1,493)
|
684
|
Investing activities
|
|
|
|
Finance lease interest
received
|
13
|
24
|
17
|
Finance lease payments
received
|
13
|
94
|
102
|
Purchase of property, plant and
equipment
|
12
|
(40)
|
(9)
|
Net
cash generated from investing activities
|
|
78
|
110
|
Financing activities
|
|
|
|
Proceeds of issue of
shares
|
|
12
|
15
|
Lease liabilities principal
payments
|
13
|
(293)
|
(300)
|
Lease liabilities interest
payments
|
13
|
(51)
|
(44)
|
Dividends paid
|
9
|
(996)
|
(995)
|
Net
cash outflow from financing activities
|
|
(1,328)
|
(1,324)
|
Net
decrease in cash and cash equivalents
|
|
(2,743)
|
(530)
|
Cash and cash equivalents at
beginning of the period
|
|
4,795
|
5,325
|
Cash
and cash equivalents at end of the period
|
16
|
2,052
|
4,795
|
The notes on pages
54 to 77 form part of the financial
statements.
Notes to the financial statements for the year ended 31 March 2024
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 UK adopted International Financial
Reporting Standards (IFRSs) and the provisions of the Companies Act
2006.
These financial statements have been
prepared on a historical cost basis and are presented in pounds
sterling, generally rounded to the nearest thousand, the
presentational currency of the Group. The functional currency of
the Parent Company is pounds sterling.
Going concern
The Group's business activities
(including the Parent Company), 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.
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 very low exposure to bad debts. For the year
ended 31 March 2024, the Group has not utilised any external debt
or financing instruments and in March 2024 the existing invoicing
facility was terminated.
The going concern assessment
considered a number of realistic scenarios covering the period
ending 30 September 2025, including the ability of future client
acquisition, and the impact of the reduction in services of key
clients upon future cash flows. In addition, The most severe
scenario possible modelled, assumed all current client contracts
discontinued at expiry with no extension or replacement and with no
cost mitigation. Even in this 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
9.
After making enquiries, including a
review of the wider economy including 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 include
cash at bank and in hand and highly liquid interest-bearing
securities with maturities of three months or less subject to
insignificant risk of changes in 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 2024
lessor arrangements follow the accounting treatment 'IFRS 16
Leases'. Where the lease indicates a finance lease a lease
receivable is recognised and the right of use asset is
derecognised. 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 the payment
received against the lease receivable. The balance reduces over the
lease term as the initially recognised asset is de-recognised and
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. Typically, contracts are long-term and greater than one
year, and work streams are managed by individual statements of work
within that contract up to and sometimes exceeding the contract
value, where this has been agreed with the customer.
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 specified in the contract and any
recoverable expenses. 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 from the vendor to 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. The Group is acting as
principle and therefore revenue is 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. Milestones are set deliverables or time-based and are
agreed at inception of the contract.
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 which is deemed to be 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
not modified for shares lapsed, but 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.
The Group has also considered the
following standards and amendments to published standards are
effective for periods on or after 1 January 2023, and concluded
they do not have a material impact upon the financial
statements:
· IFRS
17 Insurance Contracts
· Amendments to IAS 1 Presentation of Financial Statements
Amendments to IAS 8 Accounting policies
· Changes in Accounting Estimates and Errors Amendments to IAS
12 Income taxes
Statements of cash flows
The Group considers that share
based payment expense is a key staff reward mechanism to encourage
profitable growth and is therefore classified within cash flows
from operating activities in the cash flow statement. Deposit
interest received is derived from short-term and typically
overnight interest-bearing accounts and is generated as a
consequence of excess cash balances and is therefore not classified
within operating activities. Finance lease interest received is
generated by the recognition of a finance lease receivable
associated with a sub-tenant in one property, and is therefore
classified as an investing activity.
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 £0.4m (2023:
£0.6m), a total lease liability of £0.8m (2023: £1.0m) and a
finance lease receivable of £0.4m (2023: £0.5m) have been
recognised in accordance with the accounting policies on
page 56 with
respect to IFRS 16 'Leases'. 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 generally be calculated with
relation to the first available break date as the expectation is
that the lease break may be taken. During the lease break
review period, trading and market conditions will be taken into
account and assets and liabilities will be calculated.
· 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. Would
the IBR calculation at inception of the leases have increased by
20% (100 basis points or 1%) to 6%, then at the balance sheet date
the Right of Use asset would reduce by £10k to £378k, the finance
lease receivable would reduce by £9k to £387k and the lease
liability would reduce by £34k to £719k.
Dilapidation provisions:
The Directors have recognised a
dilapidation provision for both the leases held totalling £197,000
(2023: £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 as a consequence of wear and tear during tenancy,
as required under the lease obligations. The provision has been
calculated based upon industry accepted current averages on floor
space by price per square meter and the Directors' experience with
the landlords, as well as experience in similar negotiations.
Should the average price per square metre vary by 20% the provision
required would increase or decrease by £51,000 to £248k.
Deferred taxation:
The Directors have recognised a
deferred tax asset of £386k (2023: £108k). This asset is to
recognise the expectation that corporation tax losses brought
forward will be utilised against future probable taxable profits.
The Directors' have based this upon a estimation of the level of
taxable profits in the medium-term. If the estimated future taxable
profits varies by 20% the deferred tax asset would increase or
decrease by £83k.
Operating Segment:
The Directors consider that there is
only a single operating segment of the entity.
3. Financial risk
management
The Group uses financial instruments
that are necessary to facilitate its ordinary purchase and sale
activities, namely cash 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 the trading Company's functional currency of
sterling there are the following foreign currency net
assets:
Group and Company
|
Note
|
2024
|
2023
|
|
|
£'000
|
£'000
|
Currency: Euros
|
|
|
|
Cash and cash equivalents
|
16
|
44
|
18
|
Trade and other
receivables
|
15
|
1
|
-
|
Trade and other payables
|
17
|
(5)
|
-
|
|
|
40
|
18
|
Any changes in foreign exchange
rates would not have a significant impact on the results of the
Company.
Interest rate risk
During the year, the Group had
access to a financing facility with a major UK bank. At the balance
sheet date in the current or prior year this facility had not been
utilised. The facility borrowing rate was 1.75% above base rate and
so when required to be utilised, this represented an interest rate
risk. During the year, the Lloyds invoicing facility was deemed to
be not appropriate to support the business model and was
terminated.
Cash balances are held on deposit
from time to time overnight 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. There was no
charge to the income statement during the year (2023: credited to
the income statement £9,000).
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
|
2024
|
2023
|
|
|
£'000
|
£'000
|
Finance lease receivable
|
13
|
396
|
490
|
Trade and other
receivables
|
15
|
2,729
|
2,001
|
Contract assets
|
15
|
203
|
225
|
Cash and cash equivalents
|
16
|
2,052
|
4,795
|
|
|
5,380
|
7,511
|
Liquidity risk
The Group's liquidity risk arises
from its management of working capital. Due to the changing nature
of the core business, during the year the Group terminated an
invoicing facility with Lloyds. The Board receives regular cash
flow and working capital projections to enable it to monitor its
cash flow. 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 note 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 20% of Group revenue (2023: 32%) and was in the public
sector. Four other customers, 3 public, 1 private, contributed more
than 10% of Group revenue (2023: four, 2 public, 2
private).
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
|
|
2024
|
2023
|
|
|
£'000
|
£'000
|
Time and materials
|
|
13,344
|
14,386
|
Fixed price
|
|
708
|
442
|
Permanent recruitment fees
|
|
-
|
18
|
Licences
|
|
(6)
|
12
|
|
|
14,046
|
14,858
|
Licence revenue of -£6k (2023: 12k)
in the current 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
|
|
2024
|
2023
|
|
|
£'000
|
£'000
|
Public sector
|
|
11,385
|
11,597
|
Private sector
|
|
2,661
|
3,261
|
|
|
14,046
|
14,858
|
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
|
2024
|
2023
|
2024
|
2023
|
|
£'000
|
£'000
|
£'000
|
£'000
|
At 1 April
|
375
|
471
|
(37)
|
(116)
|
Transfers in the period from
contract assets to trade receivables
|
(375)
|
(471)
|
-
|
-
|
Excess of revenue recognised over
cash (or right to cash) being recognised in the period
|
203
|
375
|
-
|
-
|
Amounts included in contract
liabilities that was recognised as revenue in the period
|
-
|
-
|
37
|
116
|
Cash received in advance of
performance and not recognised as revenue in the period
|
-
|
-
|
(68)
|
(37)
|
At 31 March
|
203
|
375
|
(68)
|
(37)
|
There is no expectation of a
material expected lifetime credit loss arising in relation to
contract assets.
There are no contract assets and
contract liabilities within the same contract.
5. (Loss)/Profit from
operations
|
2024
|
2023
|
|
£'000
|
£'000
|
(Loss)/Profit from operations is stated after
charging:
|
|
|
Depreciation of owned assets (note
12)
|
66
|
87
|
Amortisation of right of use assets
(note 13)
|
183
|
185
|
Amortisation of intangible assets
(note 11)
|
1
|
1
|
Auditor remuneration:
|
|
|
Audit of financial statements: Group
and Company
|
175
|
94
|
6. Finance expense
|
2024
|
2023
|
|
£'000
|
£'000
|
|
|
|
Interest expense on lease
liability
|
51
|
44
|
Net foreign exchange
loss/(gain)
|
2
|
(1)
|
Total finance expense
|
53
|
43
|
7. Employees and Directors
Group and Company
|
2024
|
2023
|
|
Number
|
Number
|
Average number of persons (including
Directors) employed during the year
|
|
|
Senior management
|
9
|
9
|
Fee earners
|
95
|
93
|
Sales
|
8
|
8
|
Administration and finance
|
5
|
5
|
|
117
|
115
|
At the year end, the number of
permanent fee earners as at 31 March 2024 was 116 (2023: 96).
Included in senior management are 2 non-Board members who may be
fee earning from time to time.
|
Staff costs for the above persons (including
Directors)
|
2024
|
2023
|
|
£'000
|
£'000
|
Wages and salaries
|
8,461
|
7,907
|
Social security costs
|
1,005
|
981
|
Defined contribution pension
costs
|
1,009
|
940
|
Equity settled share-based
payments
|
202
|
200
|
|
10,677
|
10,028
|
|
2024
|
2023
|
Directors
|
£'000
|
£'000
|
Emoluments
|
872
|
648
|
Benefits in kind
|
20
|
21
|
Money purchase pension
contributions
|
79
|
74
|
Total remuneration
|
971
|
743
|
Social security costs
|
110
|
85
|
|
1,081
|
828
|
Three Directors (2023: 3) had
retirement benefits accruing under money purchase pension schemes.
Key management personnel are considered to be the Directors.
Further information on Directors' remuneration can be found on
page 29.
8. Tax (credit)/charge
|
2024
|
2023
|
|
£'000
|
£'000
|
Current tax
|
|
|
Current tax on (loss)/profits for
the year
|
-
|
-
|
Deferred tax
|
|
|
(Increase)/Decrease in recognised
deferred tax asset
|
(278)
|
40
|
Change in tax rate
|
-
|
13
|
Total tax (credit)/charge for the
year
|
(278)
|
53
|
The differences between the actual
tax charge for the year and the standard rate of corporation tax in
the UK applied to (losses)/profits for the year are as
follows:
|
2024
|
2023
|
|
£'000
|
£'000
|
(Loss)/profit before tax
|
(1,291)
|
9
|
(Loss)/profit before tax multiplied
by standard rate of corporation tax in the UK of 25% (2023:
19%)
|
(323)
|
2
|
Expenses not deductible for tax
purposes
|
67
|
4
|
Allowances recognised
|
(18)
|
(13)
|
(Recognition)/Derecognition of
deferred tax on losses
|
(4)
|
58
|
Change in tax rate
|
-
|
13
|
Prior year adjustments
|
-
|
(11)
|
Tax (credit)/charge for the
year
|
(278)
|
53
|
|
2024
|
2023
|
|
£'000
|
£'000
|
Deferred tax asset
|
|
|
The movement in deferred tax is as
follows:
|
|
|
At beginning of the year
|
108
|
161
|
Reversal of previously
unrecognised/(recognised) deferred tax on losses
|
278
|
(40)
|
Tax rate changes
|
-
|
(13)
|
At end of the year
|
386
|
108
|
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
£461,000 (2023: £484,000) has not been recognised in respect of
trading losses of £1,842,297 (2023: £1,934,000), 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 options of £296k
(2023: £130k) and general provisions of £27k (2023: £21k) 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
|
2024
|
2023
|
|
£'000
|
£'000
|
Final dividend for the year ended
31 March 2023 - 4p (2022: 4p) per share (declared and paid in the
following year)
|
664
|
663
|
Interim dividend for the year ended
31 March 2024 - 2p (2023: 2p) per share
|
332
|
332
|
Total dividend paid
|
996
|
995
|
The Directors propose a final
dividend of 4p per share (2023: 4p per share),
bringing the total dividend to 6p for the financial year
(2023: 6p per share).
10. Losses per ordinary share
Losses per share have been
calculated on the loss for the year divided by the weighted average
number of shares in issue during the period based on the
following:
|
2024
|
2023
|
Loss for the year
|
(£1,013,000)
|
(£44,000)
|
Average number of shares in
issue
|
16,600,680
|
16,565,870
|
Effect of dilutive
options
|
-
|
-
|
Average number of shares in issue
plus dilutive options
|
16,600,680
|
16,565,870
|
Basic loss per share
|
(6.10p)
|
(0.27p)
|
Diluted loss per share
|
(6.10p)
|
(0.27p)
|
11. Intangible assets
Group and Company
|
Purchased
software
|
|
£'000
|
Cost
|
|
At 31 March 2022
|
128
|
Additions
|
-
|
Disposals
|
-
|
At 31 March 2023
|
128
|
Additions
|
-
|
Disposals
|
-
|
At
31 March 2024
|
128
|
|
|
Accumulated amortisation/impairment
|
|
At 31 March 2022
|
126
|
Charge for the year
|
1
|
Disposals
|
-
|
At 31 March 2023
|
127
|
Charge for the year
|
1
|
Disposals
|
-
|
At
31 March 2024
|
128
|
|
|
Net
book value
|
|
At
31 March 2024
|
-
|
At 31 March 2023
|
1
|
12. Property, plant and equipment
Group and Company
|
Computer
hardware
|
Fixtures
&
fittings
|
Motor
vehicles
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
Cost
|
|
|
|
|
At 31 March 2022
|
236
|
590
|
4
|
830
|
Additions
|
7
|
2
|
-
|
9
|
Disposals
|
(2)
|
-
|
-
|
(2)
|
At 31 March 2023
|
241
|
592
|
4
|
837
|
Additions
|
36
|
4
|
-
|
40
|
Disposals
|
-
|
-
|
-
|
-
|
At
31 March 2024
|
277
|
596
|
4
|
877
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
At 31 March 2022
|
164
|
384
|
4
|
552
|
Charge for the year
|
30
|
57
|
-
|
87
|
Disposals
|
(1)
|
-
|
-
|
(1)
|
At 31 March 2023
|
193
|
441
|
4
|
638
|
Charge for the year
|
26
|
40
|
-
|
66
|
Disposals
|
-
|
-
|
-
|
-
|
At
31 March 2024
|
219
|
481
|
4
|
704
|
|
|
|
|
|
Net
book value
|
|
|
|
|
At
31 March 2024
|
58
|
115
|
-
|
173
|
At 31 March 2023
|
48
|
151
|
-
|
199
|
13. Leases
The
Group as a lessee:
The Group has lease contracts for
its office premises with terms remaining ranging from 6 months to 4
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 2022
|
|
|
Opening position
|
345
|
345
|
Change in lease term
|
412
|
412
|
Amortisation
|
(185)
|
(185)
|
At
31 March 2023
|
572
|
572
|
Amortisation
|
(183)
|
(183)
|
At
31 March 2024
|
389
|
389
|
Lease liabilities
The carrying amount of the lease
liabilities recognised are as follows:
|
Land and
buildings
|
Total
|
|
£'000
|
£'000
|
At
31 March 2022
|
|
|
Opening position
|
426
|
426
|
Change in lease term
|
920
|
920
|
Interest expense
|
44
|
44
|
Lease payments
|
(344)
|
(344)
|
At
31 March 2023
|
1,046
|
1,046
|
Interest expense
|
51
|
51
|
Lease payments
|
(344)
|
(344)
|
At
31 March 2024
|
753
|
753
|
At the balance sheet date, the Group
had outstanding commitments for future lease payments as
follows:
At
31 March 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
|
72
|
220
|
215
|
539
|
Undiscounted lease
liabilities
|
86
|
258
|
253
|
591
|
|
|
|
|
|
At
31 March 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
|
75
|
140
|
188
|
350
|
Undiscounted lease
liabilities
|
86
|
167
|
215
|
376
|
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. During the
year ending 31 March 2023, a lease break option on one lease was
not enacted by a tenant, and the lease continues until
23rd March 2028. This increased the total finance lease
receivable by £508,000.
The carrying amounts of the lease
receivable asset are as follows:
|
Land and
buildings
|
Total
|
|
£'000
|
£'000
|
At
31 March 2022
|
|
|
Opening position
|
84
|
84
|
Change in lease term
|
508
|
508
|
Interest income
|
17
|
17
|
Payments received
|
(119)
|
(119)
|
At
31 March 2023
|
490
|
490
|
Interest income
|
24
|
24
|
Payments received
|
(118)
|
(118)
|
At
31 March 2024
|
396
|
396
|
At the balance sheet date, the Group
had future lease receivables as follows:
At
31 March 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
|
23
|
71
|
99
|
297
|
Undiscounted lease
receivables
|
30
|
89
|
119
|
326
|
At
31 March 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
receivables
|
24
|
75
|
104
|
193
|
Undiscounted lease
receivables
|
30
|
89
|
119
|
208
|
The total lease receivable of £396k
(2023: £490k) is disclosed as non-current assets of £297k (2023:
£396k) and current assets of £99k (2023: £94k).
After the year end, the Company
entered into a settlement agreement to terminate the leasing
arrangement with its tenant. The resulting office space will
not be used by the business for its own use and we are exploring
opportunities to re-let the space.
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
|
2024
|
2023
|
|
£'000
|
£'000
|
Trade receivables
|
2,734
|
2,006
|
Less: provision for expected credit
losses
|
(5)
|
(5)
|
Trade receivables-net
|
2,729
|
2,001
|
Contract assets (see note
4)
|
203
|
225
|
Unbilled income
|
-
|
150
|
Trade and other
receivables
|
2,932
|
2,376
|
Prepayments
|
173
|
165
|
|
3,105
|
2,541
|
Analysed as:
|
|
|
Non-current asset: unbilled
income
|
-
|
-
|
Current asset
|
3,105
|
2,541
|
Total
|
3,105
|
2,541
|
The fair value of trade and other
receivables approximates closely to their book value.
Unbilled income in the previous year
is in respect to the billing profile of a licence
agreement.
Trade receivables represent an
unconditional right to consideration.
The lifetime expected credit losses
on trade receivables as at 31 March 2024 is calculated as
follows:
Group and Company
|
Expected default
rate
|
Gross carrying
amount
|
Credit loss
allowance
|
|
(A)
|
(B)
|
(A x
B)
|
|
%
|
£'000
|
£'000
|
Current
|
0.15
|
2,357
|
4
|
Up to 30 days past due
|
-
|
319
|
-
|
Up to 60 days past due
|
-
|
27
|
-
|
Over 60 days past due
|
5.0
|
31
|
1
|
|
|
2,734
|
5
|
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 2023 were calculated as
follows:
Group and Company
|
Expected default
rate
|
Gross carrying
amount
|
Credit loss
allowance
|
|
(A)
|
(B)
|
(A x
B)
|
|
%
|
£'000
|
£'000
|
Current
|
0.25
|
1,988
|
5
|
Up to 30 days past due
|
-
|
14
|
-
|
Up to 60 days past due
|
-
|
2
|
-
|
Over 60 days past due
|
5.0
|
2
|
-
|
|
|
2,006
|
5
|
Movements on the provision for
expected credit loss are as follows:
Group and Company
|
2024
|
2023
|
|
£'000
|
£'000
|
At beginning of the year
|
5
|
14
|
Credited to income
statement
|
-
|
(9)
|
At end of the year (credit loss
allowance)
|
5
|
5
|
The carrying amount of the Group's
trade and other receivables are denominated in the following
currencies:
Group and Company
|
2024
|
2023
|
|
£'000
|
£'000
|
Sterling
|
2,931
|
2,376
|
Euros
|
1
|
-
|
|
2,932
|
2,376
|
16. Cash and cash equivalents
Group and Company
|
2024
|
2023
|
|
£'000
|
£'000
|
Cash and cash equivalents
|
2,052
|
4,795
|
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
|
2024
|
2023
|
|
£'000
|
£'000
|
Sterling
|
2,008
|
4,777
|
Euros
|
44
|
18
|
|
2,052
|
4,795
|
For the purpose of the consolidated
cash flow statement, cash and cash equivalents consist of cash, as
detailed above.
During the year, the Group had
access to a financing facility with a major UK bank. At the balance
sheet date, in both the current or prior year, this facility was
not utilised. The facility borrowing rate was 1.75% above base
rate. The invoicing facility was terminated at the close of the
year.
17. Trade and other payables
|
Group
|
Company
|
|
2024
|
2023
|
2024
|
2023
|
|
£'000
|
£'000
|
£'000
|
£'000
|
Trade payables
|
419
|
666
|
419
|
666
|
Accruals
|
506
|
335
|
506
|
335
|
Owed to subsidiary
|
-
|
-
|
5
|
5
|
|
925
|
1,001
|
930
|
1,006
|
Contract liabilities (see note
4)
|
68
|
37
|
68
|
37
|
Other taxation and social
security
|
1,159
|
1,231
|
1,159
|
1,231
|
|
2,152
|
2,269
|
2,157
|
2,274
|
Analysed as:
|
|
|
|
|
Current liability
|
2,152
|
2,269
|
2,157
|
2,274
|
Total
|
2,152
|
2,269
|
2,157
|
2,274
|
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
|
|
2024
|
2023
|
2024
|
2023
|
|
£'000
|
£'000
|
£'000
|
£'000
|
Sterling
|
920
|
1,001
|
925
|
1,006
|
Euros
|
5
|
-
|
5
|
-
|
|
925
|
1,001
|
930
|
1,006
|
18. Provisions
Group and Company
|
Provision for property
dilapidations
|
|
£'000
|
At 1 April 2023
|
197
|
Additions
|
-
|
Charged to income
statement
|
-
|
Utilised in year
|
-
|
At
31 March 2024
|
197
|
The maturity profile of the present
value of provisions is as follows:
Group and Company
|
2024
|
2023
|
|
£'000
|
£'000
|
Current
|
|
|
Provision for property
dilapidation
|
136
|
-
|
Non-current
|
|
|
Provision for property
dilapidation
|
61
|
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
|
2024
|
2023
|
Ordinary shares of 1p each
|
|
|
Issued, called up and fully
paid:
|
|
|
Number
|
16,629,781
|
16,582,663
|
Nominal value
|
£166,298
|
£165,827
|
During the year 47,118 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
|
30,000
|
11.0p
|
£300
|
£3,000
|
17,118
|
53.5p
|
£171
|
£8,987
|
47,118
|
|
£471
|
£11,987
|
20. Share-based payments
The Group operated the employee
share option incentive scheme and restricted stock units (RSUs)
incentive plans during the year, which are both equity settled
schemes.
Share Option Incentive Scheme
At 31 March 2024, 137,798 options
granted under employee share option schemes remain
outstanding:
Date option
granted
|
Number
|
Exercise
price
|
Period options
exercisable
|
18
September 2014
|
20,000
|
11.0p
|
18
September 2017 to 18 September 2024
|
9 March
2018
|
117,798
|
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
were subject to the following performance conditions:
For options granted on 9 March 2018:
100% of the shares granted under an option vested as the Company's
share price at 31 March 2021 increased by 30% or more from the
share price as at the date of grant. 50% of shares granted under an
option vested if the Company's share price at 31 March 2021
increased by 15% from the share price as at the date of grant.
Between these upper and lower thresholds, awards were to vest on a
straight-line basis. Given the share price as at 31 March 2021,
100% of these options vested on 31 March 2021.
For options granted on 18 September
2014: in at least one financial year after the date of grant, the
Company achieved a positive basic earnings per share (subject to
adjustment to exclude identified exceptional items), as reported in
its audited annual accounts. This vesting condition was met and
these options vested on 17 September 2017.
Options have been valued using the
Black-Scholes option-pricing model. No performance conditions were
included in the fair value calculations.
The contractual life of all vested
options is 7 years.
No options were granted during the
year (2023: nil).
Restricted Stock Units (RSUs)
In March 2022 a number of restricted
stock units (RSUs) 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 following 3
years continuous employment and 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. These shares vest automatically after 3 years. The
market value at the Award Date was 135.0p and the fair value of the
RSUs was 88.8p.
The RSUs have been valued using the
Monte Carlo pricing model. No performance conditions were included
in the fair value calculations.
The total expense recognised in the
year is £202,000 (2023: £200,128).
No RSUs were granted during the year
(2023: nil).
A reconciliation of the total share
award movements over the year to 31 March 2024 is shown
below:
|
2024
|
2023
|
|
Number of
options
|
Weighted average exercise
price of the share award
|
Number of
options
|
Weighted
average exercise price of the share award
|
|
|
Pence
|
|
Pence
|
Outstanding at start of
year
|
934,916
|
9.1
|
978,000
|
10.2
|
Granted
|
-
|
-
|
-
|
-
|
Exercised
|
(47,118)
|
26.4
|
(43,084)
|
33.8
|
Forfeited
|
-
|
-
|
-
|
-
|
Outstanding at end of year
|
887,798
|
8.2
|
934,916
|
9.1
|
Exercisable at end of year
|
137,798
|
47.3
|
184,916
|
42.0
|
There were 47,118 share options
exercised during the year. In the reconciliation above, there are
no share options and a total of 180,000 restricted stock units
(RSUs) held by Directors. Transactions with Directors are set out
in the Directors' remuneration report on page 29.
The options exercisable of 137,798
relate to the 2014 and 2018 grants which have all vested (2023:
184,916 all vested).
The weighted average share price at
the date of exercise for share options exercised during the period
was 145.1p (2023: 113.5p). The options outstanding as at 31 March
2024 had an exercise price of 11.0p or 53.5p, and with respect to
the RSUs, 1.0p. The weighted average remaining contractual life is
1.4 years (2023: 2.4 years).
The inputs into the share-based
payments model to calculate the RSU awards were as
follows:
Expected volatility
|
77%
|
Expected life
|
3 years
|
Risk-free rate
|
1.4%
|
Exercise price
|
1.0p
|
Share price at grant date
Fair value
Dividend Yield
|
135.0p
88.8p
4.4%
|
21. Related party transactions and ultimate
control
The Group and Company rents one of
its offices under a lease with a sub-tenant in occupation on one
floor. 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 (2023: £nil). There is no ultimate controlling
party.
22. Events after reporting period
After the year end, the Company
entered into a settlement agreement to terminate the leasing
arrangement with its tenant. The resulting office space will
not be used by the business for its own use and we are exploring
opportunities to re-let the space.
Five year record
Consolidated income statement
|
Years ended 31 March
|
2024
|
2023
|
2022
|
2021
|
2020
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Revenue
|
14,046
|
14,858
|
17,015
|
17,815
|
19,354
|
Gross profit
|
2,819
|
3,504
|
4,784
|
3,810
|
2,854
|
(Loss)/Profit before tax
|
(1,291)
|
9
|
1,081
|
644
|
(602)
|
Tax credit/(charge)
|
278
|
(53)
|
88
|
41
|
(159)
|
(Loss)/Profit after tax
|
(1,013)
|
(44)
|
1,169
|
685
|
(761)
|
Retained (loss)/profit for the
financial year
|
(1,013)
|
(44)
|
1,169
|
685
|
(761)
|
Basic (loss)/earnings per share
(pence)
|
(6.10)
|
(0.27)
|
7.16
|
4.28
|
(4.76)
|
|
Balance sheet
|
As at 31 March
|
2024
|
2023
|
2022
|
2021
|
2020
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Non-current assets
|
1,245
|
1,276
|
916
|
921
|
1,236
|
Current assets
|
5,256
|
7,430
|
7,963
|
7,540
|
6,581
|
Current liabilities
|
(2,503)
|
(2,561)
|
(2,464)
|
(2,555)
|
(2,399)
|
Non-current liabilities
|
(599)
|
(951)
|
(397)
|
(623)
|
(863)
|
Net assets
|
3,399
|
5,194
|
6,018
|
5,283
|
4,555
|
Share capital
|
166
|
166
|
165
|
160
|
160
|
Share premium account
|
906
|
894
|
880
|
666
|
660
|
Capital redemption reserve
|
104
|
104
|
104
|
104
|
104
|
Retained earnings
|
2,223
|
4,030
|
4,869
|
4,353
|
3,631
|
Equity shareholders' funds
|
3,399
|
5,194
|
6,018
|
5,283
|
4,555
|
Shareholders' information and financial
calendar
Share register
EQ 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
Highdown House
Yeoman Way
Worthing
West Sussex
BN99 3HH
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 2025:
expected announcement of results
|
|
|
Half-year
|
November 2024
|
Full-year
|
June 2025
|
Corporate information
Executive Directors
John Rigg, Chairman
Charlotte Rigg, Deputy Executive
Chairman
Adrian Leer, Managing
Director
Tim Eckes, Client Services
Director
James McDonald, Finance
Director
Non-Executive Directors
Chris Duckworth
Alison Lander
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
Zeus Capital Ltd
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
Highdown House
Yeoman Way
Worthing
West Sussex
BN99 3HH