TIDMTRD
RNS Number : 2935Q
Triad Group Plc
18 June 2020
Legal Entity Identifier (LEI) No. 213800MDNBFVEQEN1G84
Triad Group Plc
AUDITED RESULTS FOR THE YEARED 31 MARCH 2020
(Company number: 2285049)
Triad Group Plc is pleased to announce its results for the year
ended 31 March 2020.
The Board does not propose the payment of a final dividend.
For further information, please contact:
Triad Group Plc
James McDonald
Company Secretary
Tel: 01908 278450
Arden Partners plc
Tom Price
Benjamin Cryer
020 7614 5932
Strategic report
Financial highlights
-- Revenue for the year ended 31 March 2020: GBP19.4m (2019: GBP22.7m)
-- Loss before tax: GBP0.6m (2019: GBP1.0m profit)
-- Loss after tax: GBP0.8m (2019: GBP0.9m profit)
-- Gross profit as a percentage of revenue: 14.7% (2019:19.3%)
Chairman's statement
Dr John Rigg
For the year ended 31 March 2020 the Group reports revenue of
GBP19.4m (2019: GBP22.7m). The loss before tax was GBP0.6m (2019
Profit: GBP1.0m) and gross profit as a percentage of revenue has
reduced to 14.7% (2019: 19.3%). Cash reserves have reduced to
GBP3.8m (2019: GBP4.6m). Further consideration of the impact of
Covid-19 is set out on pages 8 and 14.
Revenue has reduced by GBP3.3m due to a reduction in public
sector revenue (see note 4) across a small number of client
accounts. Gross profit as a percentage of revenue has been reduced
further by the planned investment in headcount as the Group
increases the ratio of permanent headcount to contractors on
consultant led engagements.The reduction in cash of GBP0.8m is
primarily due to the loss before tax of GBP0.6m, improvements in
working capital of GBP0.3m and dividends paid of GBP0.5m.
Overview Comments
These full year results are in line with mid-year expectations
and reflect a solid performance by the Group in testing conditions.
As indicated in my interim statement, I remain extremely proud of
the efforts put in by all of our staff.The second half of the year
saw some important achievements, including winning the
re-procurement of the business analysis service for the Ministry of
Justice Crime Programme. This important contract, to deliver a
complete business analysis capability, started in March 2020 with
an expected contract length of two years.This is an extremely
significant achievement and underscores the talent of our staff and
the Group's ability to win within what is a very competitive
marketplace.
The Group continued to recruit new consultants, and the Board
has encouraged the pace of recruitment to increase. The management
team is clear about the Group's direction to drive more profit
through the use of permanent consultants and this financial year
has seen significant effort go in to building for the future and
not simply focusing on current utilisation rates.
The Board of Directors has been refreshed during the year
following the resignation of non-executive director Steven
Sanderson and executive Finance Director/Company Secretary Nick
Burrows. I would like to thank both of them for their service to
the Group. I was also delighted to announce in December the
appointment of two new directors.Tim Eckes joined the Board as
Client Services Director and Charlotte Rigg joined as non-executive
director.James McDonald assumed the role of Company Secretary in
March 2020 and took over the role of Finance Director from Nick
Burrows.
Outlook
The impact of Covid-19 did not have a significant impact on the
results for last financial year but it did require us to adjust all
aspects of the Group's activities to operate on a fully remote
basis. It is testament to the agility of our workforce and systems,
combined with the willingness of our clients to entrust the ongoing
delivery of their objectives to Triad, that most of our engagements
have continued without interruption. I am also delighted to report
that our workforce has remained in good health, due in part to the
Group's decision to request all staff to work at home in late
March. We do not see any reason why we should not continue being
able to deliver services on this basis and we will adopt an
extremely careful approach towards locating staff back on-site. One
significant project was due to start at the beginning of the new
financial year but has been delayed due to the Covid-19 outbreak
and is likely to commence with a relaxation of lockdown
restrictions. Contractor numbers in some sectors have been
adversely affected but we are already seeing signs of recovery in
these areas as new working practices designed to cope with the
Covid situation emerge.
Despite the significant buffeting caused by the effects of
Covid-19, the Group is determined to rely on its own resources to
drive the business forward. The Group chose not to furlough staff,
instead focusing on activities designed to maximise our
effectiveness when the external situation improves. The Group
remains debt-free except for lease liabilities arising due to the
application of IFRS 16 and enjoys strong reserves of cash. We will
continue to monitor the situation carefully and will take the
actions necessary to preserve the health and wellbeing of the
organisation, maximise gross profit and drive profitability.
Dividend
The uncertainty caused by the Covid-19 outbreak means that the
conservation of cash is more important than ever. Consequently, the
Board has decided not to augment the half-year dividend, meaning
there will be no full-year payment. Nevertheless, the dividend
yield remains healthy at 4% for the year.
Employees
On behalf of the Board of Directors I would like to thank our
staff for their hard work last year and for the positive way in
which they have responded to the unprecedented challenges thrust
upon us and our wider community in March of this year.
John Rigg
Executive Chairman
17 June 2020
Managing Director's statement
Adrian Leer
Revenue in the year reduced by GBP3.3m to GBP19.4m (2019:
GBP22.7m) as a result of a number of public sector contract ends
and client losses. The Group made a loss before tax of GBP0.6m
(2019: profit GBP1.0m). Notwithstanding the losses made in the
year, I am extremely pleased to report on another strong year of
delivery to our clients. An enduring hallmark of our business is
the length of relationships we enjoy with our customers. We
continued to provide services to Ministry of Justice (MOJ) via our
business analysis contract and the contract to supply production
services. With both services part of the Crime Programme, Triad
consultants are playing a part in delivering one of the biggest
programmes of change experienced within the justice system. We have
been working with MOJ since 2014 and were delighted to win in March
the contract to supply business analysts for the next two years. We
also expect work to continue elsewhere at MOJ well into the new
financial year.
Our work with a significant policing client continued throughout
the year, with approximately ten full-time consultants engaged on a
range of activities from delivery management to technical
architecture.
At another client where we have enjoyed a working relationship
for many years, Department for Transport (DfT), we successfully
launched the Greenhouse Gases platform for managing the obligations
of fuel suppliers.This work built on the experience already
garnered from previous engagements with the added dimension of
creating an approach that complied with the requirements of
Government Digital Services (GDS).Working closely with the DfT
team, the project successfully delivered against its objectives,
including successful navigation of GDS assessments.
During the year, we also continued to work with Dalcour Maclaren
helping them to develop their Connect platform. Connect improves
the way in which schemes of work are managed and has played a
significant part in underpinning success at Dalcour Maclaren.
Our expertise in Microsoft technologies helped the company to
win repeat work at a major automotive retailer and at a new client
specialising in renewable energy.Energy management and renewable
energy is developing as an area of expertise for the company, both
within Government agencies and across industry.
Our resourcing function concentrates on augmenting our teams of
consultants and providing individuals and teams of contractors
directly to clients. From a direct resourcing perspective, the
numbers of contractors increased by year-end, although much of this
improvement was eradicated by service cancellations and suspensions
due to Covid-19.
We made significant preparations for the roll-out to the private
sector of the off-payroll legislation (IR35). These changes were
halted at the last moment, as part of the response to Covid-19. In
any case, our view was that we were well prepared for the changes
and that our business model provided some significant resilience
versus other competitors who rely on the supply of contractor
resources. Notably, our permanent recruitment fee income was higher
in the year than for many years previously. Whilst not a
significant component of revenue, this level of activity did
indicate a shift in client behaviour from the use of contingent
labour to an increase in permanent recruitment. We expect some
volatility in demand for resources of all types over the next 6-12
months as the impact of Covid-19 plays out and as we see clients
able to invest in short-term projects, our naturally flexible and
dynamic supply mechanisms allow us to respond quickly to demand for
technology expertise in whichever format our clients prefer.
Further consideration of the impact of Covid-19 is set out on pages
8 and 14.
We developed our offering around robotic process automation
(RPA) significantly during the year. With the recruitment of an
industry specialist, we have formulated a range of services
designed to help clients adopt and develop RPA to automate
processes. Our RPA offering complements our digital services
offering and, indeed, acts as a potential precursor to longer-term
digital transformation initiatives.
Elsewhere, our recruitment of new staff enhanced our
capabilities in artificial intelligence as well as adding to
existing core strengths in programme delivery, development and
business analysis.
The Group continued to develop its relationship with a small
number of global consultancies who value Triad's agility and
delivery track record, particularly within the UK public sector.
With a small number of assignments complete in the year, the
company sees these partnerships as supportive of our aim to secure
more long-term relationships with new clients.
The Group was awarded supplier status on the G-Cloud 11
framework and in September was also awarded a place on the Digital
Outcomes and Specialists (DOS) framework. In September we were
accredited as a Google Cloud partner alongside our multiple gold
Microsoft competencies. Our Microsoft specialists presented at the
World Power Platform tour, an event which generated a number of
exciting prospects.
Other events in the year included a round table exploring the
alignment of business strategy and technology within organisations.
The Group also helped to deliver a keynote presentation to the
commercial community with Crown Commercial Services around use of
the DOS framework. A number of ebooks were published as well as
increased levels of content generated by our consultants,
reflecting a desire to share more information with a wider audience
to promote the quality of our consultants' engagement with key
issues.
Towards the end of the financial year, with the advent of
Covid-19, the Group found itself relocating its entire workforce to
enable everyone to work from home. This transition happened
seamlessly overnight, and new communications systems were
introduced immediately to maintain and even enhance levels of
engagement across the organisation. This effective management of
working practices has enabled the Group to maintain trading, grow
new business and enhance cashflow. I am immensely proud of the
dedication, commitment and spirit shown by our employees in
responding so positively to such a challenging situation. I am also
grateful to our clients who have responded equally positively in
allowing us to work with them to establish successful ways of
working.
Adrian Leer
Managing Director
17 June 2020
Organisation overview
Triad Group Plc is engaged in the provision of IT consultancy,
solutions and resourcing services to the public and private
sectors.
Business model
The Group provides services to the public and private sectors in
the provision of IT consultancy and solutions services, and IT
resourcing (both contract and permanent). Typically, this entails
the supply of our own permanent consultants, the supply of
carefully chosen associates and contractors, or a combination of
these.
The Group operates in the United Kingdom from offices 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, mobility services and business
insights. Further capacity and expertise is provided via our
resourcing services.
-- We continue to adopt a "business first, technology second"
approach to solving our clients' problems. A cornerstone of our
service offer is our consultancy model, offering advice and
guidance to clients in terms of technology investments.
To develop long term client relationships across a broad client
base
-- Enduring client relationships fuel profitability. A hallmark
of our recent trading has been the frequency of repeat business,
which itself has been a function of outstanding delivery and
proactive business development within existing accounts.
-- Our consistent track record in this regard is our major asset
when developing propositions for new clients, along with the use of
case studies and references.
-- We have structured our service offering to enable clients to
engage early, thus enabling the building of
trust and confidence from the outset.
To work with partners
-- Our strategy includes working with carefully chosen partners
operating under their client frameworks in addition to the
frameworks on which Triad is listed. This will expose more
opportunities whilst reducing the cost of sale.
To leverage group capability and efficiency to increase
profitability
-- We continue to develop synergies across the Group's
activities both externally and internally, driving better outcomes
for clients whilst improving efficiency and effectiveness. The
management team sets objectives to ensure that these synergies are
exploited.
-- We enable our clients to benefit from access to a full range
of IT services, delivered through a single, easy to access, point
of sale.
-- We will continue to provide the highest quality of service to
our customers through our teams of skilled consultants and market
experts.
Principal risks and uncertainties
The Group's business involves risks and uncertainties, which the
Board systematically manages through its planning and governance
processes.
The Board has conducted a robust assessment of the principal
risks facing the Group, examining the Group's operating
environment, scanning for potential risks to the health and
wellbeing of the organisation. The Directors factor into the
business plan the likelihood and magnitude of risk in determining
the achievability of the operational objectives. Where feasible,
preventive and mitigating actions are developed for all principal
risks.
Senior management review the risk register and track the status
of these risk factors on an on-going basis, identifying any
emerging risks as they appear. Regular meetings are held between
the Executive Chairman and the Managing Director to ensure risks
are identified and communicated.
The outputs of this management review form part of the Board's
governance process, reviewed at regular Board meetings. When
emerging risks arise these are reviewed by senior management on an
immediate basis and communicated to the Board on a timely
basis.
The principal risks identified are:
Covid-19
The potential effects of the Covid-19 pandemic are wide-ranging
and have affected all aspects of activities both in the acquisition
of new business and the servicing of existing clients. The main
risks identified and potentially could occur, are a reduction in
new business pipeline opportunities, payment delays and the
recovery of debtor balances. These risks have not yet materialised.
The ability to effectively service clients remotely, and a very
strong focus on short-term forecasting and cash collection will
help to mitigate this risk. The Group's business model enables the
risk to be mitigated as services are mainly provided by external
contractors which enables the cost base to be scaled appropriately
in a quick manner.
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. The creation
of new services, acquisition of new clients and the development of
new commercial vehicles is important in protecting the Group from
fluctuations in market conditions. This risk is more likely in the
Covid-19 pandemic although current indications are a continued
investment by Government in public sector spending.
Brexit
The political and economic uncertainty caused by Brexit still
has the potential to negatively affect the public sector market due
to an impact on government spending plans and the cancellation or
delay of IT projects. Conversely, opportunities exist for the Group
to provide services to assist government departments in preparation
for Brexit, and post-Brexit reality. The strong relationships the
Group enjoys with a large range of public sector clients mitigates
this risk.
Revenue visibility
The pipeline of contracted orders for time and materials
consultancy work can be relatively short. The Board carefully
reviews forecasts to assess the level of risk arising from business
that is forecast to be won.
Availability of staff
The ability to recruit and retain staff, and access to
appropriately skilled resources are key to ensuring the ability to
win and deliver IT services to our clients. The Group continues to
recruit quality individuals, and ensures a resilient network of
associate resources is maintained. To mitigate this risk, the Group
reviews remuneration and benefits on an annual basis and adjusts
these accordingly within market rates.
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 mitigates to a high degree the risk of
competition.
There are or may be other risks and uncertainties faced by the
Group that the Directors currently deem immaterial, or of which
they are unaware, that may have a material adverse impact on the
Group.
The risk appetite of the Group is considered in light of the
principal risks and their impact on the ability to meet its
strategic objectives. The Board regularly reviews the risk appetite
which is set to balance opportunities for business development and
growth in areas of potentially higher risk, whilst maintaining
reputation, regulatory compliance, and high levels of customer
satisfaction.
Section 172 statement
Section 172 of the Companies Act 2006 requires Directors to take
into consideration the interests of key stakeholders in the Group
in their decision making.
The Board has identified the key stakeholders as shareholders,
clients, partners, employees and suppliers.
-- Shareholders: Dialogue is maintained with shareholders and
their advisors and issues of significance are communicated to
shareholders as necessary. In addition, a full shareholder briefing
is presented at the Group's annual general meeting of shareholders.
The Board took the decision to make the payment of an interim
dividend this year to reflect historical performance of the Group.
However, due to the perceived impact of Covid-19 and the potential
effects upon future cashflow, the Board has not proposed a final
dividend for the year ended 31 March 2020. These decisions have
been made to protect the interests of the shareholders future
earnings.
-- Clients: Effective and successful delivery of services to our
clients is the key focus of the Group. To increase effectiveness, a
review of utilisation rates and delivery structure has been
completed during the year to enhance the efficiency of the Group's
service to clients. Key account delivery and management tools have
also been reviewed and enhanced to promote efficiencies. The Group
continues with the strategy of assigning permanent employees as
consultants on projects, to improve and broaden the skill sets and
enhance delivery to clients.
-- Partners: The Group continue to cultivate strong
relationships with our business partners, with regular dialogue and
updates to ensure that delivery to our shared clients is as
effective as possible. The Group continue 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 the Group strives to achieve the
highest standards in its dealings with all employees. The Group has
increased its level of communication with employees during 2020
with regular Group meetings chaired by the Managing Director. The
Group continues 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 also reviewed
annually to ensure retention of employees.
-- Suppliers: The Group maintains appropriate arms-length
trading relationships with quality suppliers and is fully committed
to fairness in its dealing with suppliers, including embracing the
principle of paying suppliers within agreed credit terms during the
course of normal business. The Group has continued to form closer
relationships with suppliers during the Covid-19 pandemic to ensure
a continuance of a quality service.
The Directors continue to ensure there is full regard to the
long-term interests of both the Group and its key stakeholders
including the impact of its activities on the community, the
environment and the Group's reputation. In doing this the Directors
continue to act fairly and in good faith taking into account what
is most likely to promote the long-term success of the Group.
-- Relations with key stakeholders such as shareholders,
employees, and suppliers are maintained by regular, open and honest
communication in both verbal and written form.
-- The Directors are fully aware of their responsibilities to
promote the success of the Group in accordance with section 172 of
the Companies Act 2006.
-- The Directors continuously take into account the interests of
its principal stakeholders and how they are engaged. This is
achieved through information provided by management and also by
ongoing direct engagement with the stakeholders themselves.
-- The Board has ensured an appropriate business structure is in
place to ensure open an effective engagement with the workforce via
the executive directors and the senior management team.
-- The Board and the senior team continues to work responsibly
with all relevant stakeholders and has appropriate anti-corruption
and anti-bribery, equal opportunities and whistleblowing procedures
and policies in place.
-- As required, Non-Executive Directors, professional advisors
and the Company Secretary provide support to the Board to help
ensure that sufficient consideration is given to stakeholder
issues.
Viability Statement
In accordance with the Listing Rules the Directors have assessed
the Company's viability over the next five financial years. Given
the Group's business model and commercial and financial exposures
the Directors consider that five 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. 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.
Immediately prior to the Covid-19 pandemic, the Group had begun
to improve operational efficiencies, increase profitability and
build cash balances. As lockdown took hold, project wins were
postponed and a high level of uncertainty developed. As such, the
budgets and forecasts prepared by the Directors for the 2021
financial year were conservative.
The viability assessment considered the principle risks as set
out on page 6, and in particular, the risk presented to the
business of Covid-19. The Board modelled a number of realistic
scenarios based upon conservative budgets, including the loss of
key clients. In addition, the most severe scenario possible was
modelled which assumed that the effects of the pandemic would
worsen with all current client contracts discontinued at expiry,
with no extension or replacement and with no cost mitigation.
A further scenario took into account the potential impact of
IR35 legislation upon future trading capabilities. This was found
to have a limited impact.
In all scenarios, it was found that there was sufficient
headroom in cashflow to continue operating within current resources
for the next 12 months, and without the requirement to utilise the
available financing facility or obtain further external funding.
The Group was therefore found to have sufficient financial strength
to withstand further disruption due to the pandemic.
There is less visibility over the medium term outlook and the
wider economic impact of Covid-19, but t he 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 5 year
viability period. In reaching this assessment, the Board has taken
into account future trading, increased negative effects of
Covid-19, access to external funding and strong cashflow
expectations.
Performance assessment, financial review and outlook
Financial and non-financial key performance indicators (KPIs)
used by the Board to monitor progress are revenue, profit from
operations, EBITDA, gross margin and headcount. Financial KPIs are
discussed in more detail in the Financial Review below. The outlook
for the Group is discussed in the Chairman's statement on page
1.
The KPIs are as follows;
2020 2019
Revenue GBP19,354,000 GBP22,713,000
(Loss)/Profit from operations GBP(568,000) GBP1,019,000
Earnings before interest, tax,
depreciation and amortisation GBP(299,000) GBP1,090,000
(EBITDA)*
Gross margin 14.7% 19.3%
Average headcount 62 56
*EBITDA - Loss from operations of GBP(568,000) adding back the
depreciation and amortisation charge in the year of GBP269,000
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.
Diversity and Inclusion
Diversity and inclusion is a key component of working life in
the Group. Employees are encouraged to take an active role in
decision making and driving the business forward, including several
platforms within the business to share good practice, successes and
potential improvements. The appointment of Charlotte Rigg in the
financial year has now increased the female proportion within the
senior management to 25% which is representative of the Group as a
whole. We continue to include diversity within our recruitment
policies and make improvements as appropriate.
The following table shows the average number of persons employed
during the year, by gender, who were directors, senior managers or
employees of the Company.
Male Female Total
Directors 6 1 7
----- ------- ------
Senior managers - 1 1
----- ------- ------
Employees 40 14 54
----- ------- ------
Total 46 16 62
----- ------- ------
Environment and greenhouse gas reporting
The Group is committed to ensuring that the actual and potential
environmental impact of its activities is understood and managed
effectively. The Group has used both mileage reports and meter
readings to prepare the data.
The annual quantity of Greenhouse Gas (GHG) emissions for the
period 1 April 2019 to 31 March 2020 in tonnes of
carbon dioxide equivalents (tCO(2) e) for the Group is shown in the table below:
Emissions 2020 2019
tCO(2) e* tCO(2) e*
---------- ----------
Emission source:
---------- ----------
Combustion of fuel 17 16
---------- ----------
Electricity and heat purchased
for own use 55 71
---------- ----------
Total 72 87
---------- ----------
tCO(2) e per GBP1m revenue 3.7 3.8
---------- ----------
FTE 62 56
---------- ----------
Intensity ratio (tCO(2) e per
FTE) 0.06 0.07
---------- ----------
*The calculation of tCO(2) e for each source has been prepared
in accordance with DEFRA guidelines for GHG reporting.
The annual energy consumed as a result of the purchase of
electricity and heat for the period 1 April 2019 to 31 March 2020
in kWh is shown in the table below:
2020 2019
Energy consumed (kWh) 213,357 165,981
------------ ------------
kWh per GBP1m revenue 10,998 7,312
------------ ------------
FTE 62 56
------------ ------------
Intensity ratio (kWh per FTE) 3,441 2,964
------------ ------------
The emissions are generated solely by activities in the UK.
Emissions generated by electricity consumption is 76% (2019:
82%).
Whilst the Group has not set any specific targets in relation
for emissions due to the relatively small size of the impact, the
Company monitors the emissions on an annual basis. The Directors
believe that the impact is negligible given the low numbers of
employees.
The Group has not been subject to any environmental fines during
the year ended 31 March 2020 (2019: nil).
Social, community and human rights issues
We do not report on social, community and human rights issues as
the Group has no significant matters to report that would be
required to understand the performance of the Group's business.
Financial review
Group performance
Group revenue has decreased to GBP19.4m (2019: GBP22.7m). This
is due to a reduction in public sector revenue (see note 4) across
a number of key accounts. Gross margin as a percentage of revenue
has reduced to 14.7% (2019: 19.3%) reflecting both the reduction in
volume projects, business mix and the planned investment in
headcount as the Group increases the ratio of permanent headcount
to contractors on consultant led engagements.
The Group reports a loss from operations before taxation of
GBP0.6m (2019: profit GBP1.0m). The Group reports a loss after tax
of GBP0.8m (2019: profit GBP0.9m). The loss arose due to a
reduction in gross profit of GBP1.5m which was due to the loss of a
number of volume accounts and an increase in permanent headcount,
combined with an increase in administrative costs of GBP0.1m due to
an increase in salary related expenses. The effects upon
profitability due to the adption of IFRS 16 are negligible.
The balance sheet remains strong with no external borrowings,
with the exception of the lease liabilities arising due to the
application of IFRS 16, and the Group enjoys strong reserves of
cash at GBP3.8m (2019: GBP4.6m).
Overheads
Administrative expenses for the year are GBP3.4m (2019:
GBP3.3m). As at 1 April 2019 the Group transitioned to IFRS16
'Leases', using the modified retrospective approach (See note 1).
This increased the depreciation charge with respect to the right of
use asset by GBP0.2m and reduced operating lease rental expense by
a corresponding GBP0.2m.
Staff costs
Total staff costs have increased to GBP5.2m (2019: GBP4.6m)
(note 7). The total average headcount for the year has increased to
62 (2019: 56), which reflects the investment in fee earning
headcount as the Group increases the ratio of permanent heads to
contractors on consultant led engagements.
Cash
Cash and cash equivalents at 31 March 2020 decreased to GBP3.8m
(2019: GBP4.6m). There was a net cash inflow from operating
activities of GBP0.06m (2019: GBP1.3m). The net cash outflow from
financing activities was GBP0.8m (2019: outflow of GBP0.3m) which
included dividend payments totalling GBP0.5m (2019: GBP0.3m) during
the year, see note 9. The net cash outflow from investing
activities was GBP0.02m (2019: GBP0.2m).
Fixed assets
Tangible assets were increased by GBP1.0m (2019:GBP0.1m) which
predominantly related to the creation of the right of use assets of
GBP0.6m (2019:nil) and a finance lease receivable of GBP0.3m (2019:
nil) with respect to the adoption of IFRS16 'Leases' (note 1). A
further GBP0.1m related to purchased assets (2019: GBP0.1m).
Net assets
The net asset position of the Group at 31 March 2020 was GBP4.6m
(2019: GBP5.8m). The movements during the year are detailed on page
39. The net effect of the transition to IFRS16 'Leases' (note 1) is
nil (2019: nil).
Share options
A total of 11,000 options were exercised by directors and staff
during the year (2019: 355,000). No options were granted during the
year (2019: nil). An expense of GBP28,000 (2019: GBP28,000) has
been recognised relating to options granted in March 2018.
New standards
From 1 April 2019, the Group has adopted IFRS 16 'Leases'. The
impact of the adoption of this standard can be found in note 1.
By order of the Board
James McDonald
Finance Director
17 June 2020
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 2020. The Board confirms that these, taken as a
whole, are fair, balanced and understandable, and that they provide
the information necessary for shareholders to assess the Group's
and Company's position and performance, business model and
strategy, and that the narrative sections of the report are
consistent with the financial statements and accurately reflect the
Group's performance and financial position.
The Strategic Report provides information relating to the
Group's activities, its business and strategy and the principal
risks and uncertainties faced by the business, including analysis
using financial and other KPIs where necessary. These sections,
together with the Directors' Remuneration and Corporate Governance
Reports, provide an overview of the Group, including environmental
and employee matters and give an indication of future developments
in the Group's business, so providing a balanced assessment of the
Group's position and prospects, in accordance with the latest
narrative reporting requirements. The Group's subsidiary
undertakings are disclosed in the notes to the financial
statements.
Corporate Governance disclosures required within the Directors'
Report have been included within our Corporate Governance Report
beginning on page 17 and form part of this report
Share capital and substantial shareholdings
Share capital
As at 31 March 2020, 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 20 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 himself 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 2020, since the date of the last annual report in
June 2019, the Company had received no 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.
As at 17 June 2020, no notifications have been received since
the year-end.
Dividends
An interim dividend was paid during the year of 1p (2019:1p).
The Directors do not propose a final dividend (2019: 2p).
Financial instruments
The Board reviews and agrees policies for managing financial
risk. These policies, together with an analysis of the Group's
exposure to financial risks are summarised in note 3 of these
financial statements.
Research and development activity
Research and development activities are undertaken with the
prospect of gaining new technical knowledge and understanding, and
developing new software. During the year, a dedicated small team of
analysts and developers built proofs-of-concept within the robotic
process automation arena. Activities included the development of a
tool to model investment, a mobile tool for modelling impact
assessments, and a working prototype for automating critical
functions within the recruitment sector.
Directors' interests in contracts
Directors' interests in contracts are shown in note 23 to the
accounts.
Directors' insurance and indemnities
The Company maintains Directors' and Officers' liability
insurance which gives appropriate cover for any legal action
brought against its Directors and Officers. The Directors also have
the benefit of the indemnity provisions contained in the Company's
Articles of Association. These provisions, which are qualifying
third-party indemnity provisions as defined by Section 236 of the
Companies Act 2006, were in force throughout the year and are
currently in force.
Disclosure of information to auditor
All of the current Directors have taken all the steps that they
ought to have taken to make themselves aware of any information
needed by the Company's auditor for the purposes of their audit and
to establish that the auditor is aware of that information.The
Directors are not aware of any relevant audit information of which
the auditor is unaware.
Forward-looking statements
The Strategic Report contains forward-looking statements. Due to
the inherent uncertainties, including both economic and business
risk factors, underlying such forward-looking information, the
actual results of operations, financial position and liquidity may
differ materially from those expressed or implied by these
forward-looking statements.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Strategic Report. The financial position of the
Group, its cash flows, liquidity position and borrowing facilities
are described in the Strategic Report. In addition, note 3 to the
financial statements includes the Group's objectives, policies and
processes for managing its capital, its financial risk management
objectives, details of its financial instruments and hedging
activities, and its exposure to credit risk and liquidity risk. The
Group meets its day to day working capital requirements through
cash reserves and a finance facility (which is currently
unutilised).
The Group operates an efficient low-cost and historically cash
generative model. The client base generally consists of large
blue-chip entities, particularly within the public sector, enjoying
long-term and productive client relationships. As such, debt
recovery has been reliable and predictable with a low exposure to
bad debts. For the year ended 31 March 2020, the Group has not
utilised any external debt or lending facilities (2019: nil). The
Group has remained in full operation throughout the lockdown period
as services can be provided remotely and have seen a delay in
commencement of one contract as well as a pause on the provision of
contractor staff, where work needs to be completed onsite. The
Group has won a number of new smaller ad-hoc projects arising from
the IT challenges experienced by companies in lockdown.
The going concern assessment considered a number of realistic
scenarios including the impact of the loss of key clients upon
future cashflows. In addition, in the most severe scenario
possible, a reverse stress test was modelled which assumed that the
effects of the pandemic would worsen with all current client
contracts discontinued at expiry with no extension or replacement
and with no cost mitigation. Even in the most extreme scenario the
Group has enough liquidity and long-term contracts to support the
business through the going concern period. The Directors have
concluded from these assessments that the Group would have
sufficient headroom in cash balances to continue in operation.
Further information in relation to the Directors' consideration
of the going concern position of the Company is contained in the
Viability Statement on page 8.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and at least
twelve months from the date of approval of the financial
statements. Accordingly, they continue to adopt the going concern
basis in preparing the annual report and accounts.
Auditor
BDO LLP have indicated their willingness to continue in office.
Accordingly, a resolution to reappoint BDO LLP as auditors of the
Company will be proposed at the next Annual General Meeting .
Environment and greenhouse gas reporting
Carbon dioxide emissions data is contained in the Corporate
Social Responsibility section of the Strategic Report.
Statement of Directors' responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with 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 Company financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted
by the European Union. Under company law the Directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group
and Company and of the profit or loss for the Group and Company 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
IFRSs as adopted by the European Union,, subject to any material
departures disclosed and explained in the financial statements;
-- prepare a Directors' Report, Strategic Report and Director's
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 and, as
regards the Group financial statements, Article 4 of the IAS
Regulation. 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 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.
The Directors confirm to the best of their knowledge:
-- The Group financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union and Article 4 of the IAS
Regulation and give a true and fair view of the assets,
liabilities, financial position and profit and loss of the
Group.
-- The annual report includes a fair review of the development
and performance of the business and the financial position of the
Group and the Parent Company, together with the description of the
principal risks and uncertainties that they face.
By order of the Board
James McDonald
Company Secretary
17 June 2020
Corporate governance report
The Board has considered the principles and provisions of the UK
Corporate Governance Code 2018 ("the Code") applicable for this
financial period. The changes made in the revised Code attempt to
improve corporate governance processes and encourage companies to
demonstrate how good governance contributes to the achievement of
long-term success for stakeholders. The Group keep governance
matters under constant review. Despite the changes in the Code
requiring a review of processes, there has not been a requirement
to make fundamental changes to strategy or working practices.
The following statement sets out the Group's application of the
principles of the Code and the extent of compliance with the Code's
provisions, made in accordance with the requirements of the Listing
Rules.
The Board
The Board is responsible for the long-term and sustainable
success of the business, and considers all opportunities and risks
as set out in the principal risks and uncertainties on page 6.
Further, the Board considers how good governance can assist in
promoting the delivery of the strategy, by reference to strong
stakeholder engagement. Details of how the Board drive this
engagement can be found within the s172 Statement on page 7.
The Directors who held office during the financial year
were:
Executive Directors
John Rigg, Chairman
Adrian Leer, Managing Director
Nick Burrows, Finance Director (left
19.03.20)
Tim Eckes, Client Services Director
(appointed 01.01.20)
Independent non-executive Directors
Alistair Fulton, senior independent
non-executive Director
Steven Sanderson (left 04.09.19)
Chris Duckworth
Charlotte Rigg (appointed 01.01.20)
John Rigg is Chairman. He is a Chartered Accountant. He was a
founder of Marcol Group Plc and was its Managing Director from 1983
until 1988. Marcol was floated on the Unlisted Securities Market in
1987. He was Chairman of Vega Group plc from 1989 until 1996,
holding the post of Chief Executive for much of this period. Vega
floated on the main market in 1992. He was a founder shareholder of
Triad and served as the Chairman of the Company from 1988 up to
just before its flotation in 1996, when he resigned to develop new
business interests overseas. He was appointed as non-executive
Chairman in June 1999: in May 2004 he became part-time executive
Chairman. Between 4 February 2005 and 5 September 2007 John was
acting Group Chief Executive.
Adrian Leer is Managing Director. He was appointed to the Board
on 3 March 2015. He initially joined Triad in 2009 in a
consultative capacity, providing advice to the business regarding
its fledgling geospatial product, Zubed, and helping to secure
significant wins with major clients. In 2010, he became General
Manager of Zubed Geospatial. Adrian became Commercial Director of
Triad Consulting & Solutions in 2012.
Tim Eckes 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. Over the last 5
years, as Managing Consultant, he has played a significant role in
growing the business through the development of long lasting and
profitable relationships with key clients.
Alistair Fulton is a non-executive Director. He is a Chartered
Engineer and member of the British Computer Society. He was the
founding Managing Director of Triad. He continued in this role
until February 1997 when he became non-executive Chairman, a
position he retained until June 1999, when he took up his present
position.
Chris Duckworth was appointed on 1 July 2017 as a non-executive
Director. He has held numerous positions within public and private
companies as Finance Director, Managing Director, Non-Executive
Director and Chairman. He was a founding shareholder and from 1989
to 1994 was Finance Director of Triad where he remained as a
non-executive Director until 1999. From 1989 to 1994 he was Finance
Director of Vega Group PLC after which he served as a non-executive
Director until 1997. He was a founding shareholder and Chairman of
Telecity PLC in May 1998 and subsequently acted as a non-executive
Director until August 2001.
Charlotte Rigg is a non-executive Director and was appointed to
the Board on 1 January 2020. Charlotte Rigg's experience is both
extensive and diverse. Over the last 25 years she has built an
internationally recognised stud farm and runs a sizeable upland
grazing farm in Cumbria where the stud is based. In addition,
Charlotte runs a successful and expanding investment property
portfolio which has been established for over 20 years.
James McDonald is Finance Director. He was appointed to the
Board 16 June 2020. He joined the Company in February 2020 and, in
March, assumed the position of Company Secretary and acting Finance
Director. He is a Chartered Certified Accountant and has previously
held a senior finance position at Foxtons Group plc, prior to which
he was Group Finance Director and Company Secretary at Brook Street
Bureau Plc. He qualified with EY in London.
The Board exercises full and effective control of the Group and
has a formal schedule of matters specifically reserved to it for
decision making, including responsibility for formulating,
reviewing and approving Group strategy, budgets and major items of
capital expenditure.
Regularly the Board will consider and discuss matters that
include, but are not limited to:
-- Strategy;
-- Shareholder value;
-- Financial performance and forecast;
-- 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
regular Group-wide communication meetings chaired by the Managing
Director takes place where there is a forum available for all staff
to participate. Further, on-line vehicles 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.
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 significant commitments outside the
Group.
Alistair Fulton is the nominated senior independent
non-executive Director. Chris Duckworth and Charlotte Rigg are
non-executive Directors. All have long-standing experience in both
executive and non-executive roles and are free from any business or
other relationship that could materially interfere with the
exercise of their independent judgement. The Board benefits from
their experience and independence, when they bring their judgement
to Board decisions. The Board considers that all continue to remain
independent for the reasons stated above.
The Group has a procedure for Directors to take independent
professional advice in connection with the affairs of the Group and
the discharge of their duties as Directors.
The Board has an Audit Committee, comprised of the Executive
Chairman John Rigg, and the independent non-executive Directors,
Alistair Fulton and (with effect from 17 December 2019) Chris
Duckworth. The Committee is chaired by Alistair Fulton.
The Board has a Remuneration Committee, comprised of the
Executive Chairman John Rigg, and the independent non-executive
Directors, Alistair Fulton, and (with effect from 16 June 2020)
Charlotte Rigg. No third-party advisors have a position on the
committee or have provided services to the Committee during the
year. The Committee is chaired by Alistair Fulton.
The following table shows the attendance of Directors at
scheduled meetings of the Board and Audit and Remuneration
Committees during the year ended 31 March 2020 and shows that the
Board are able to allocate sufficient time to the company to
discharge their responsibilities effectively.
Audit Remuneration
Board Committee Committee
Number of meetings held
Number of meetings attended
Executive Directors: 9 1 -
John Rigg (Chairman) 9 1 -
Nick Burrows (left 19.03.20) 9 - -
Adrian Leer 9 - -
Tim Eckes (appointed 3 - -
01.01.20)
Non-executive Directors:
Alistair Fulton 8 1 -
Steven Sanderson (left
04.09.19) 3 1 -
Chris Duckworth 9 - -
Charlotte Rigg (appointed 2 - -
01.01.20)
Audit Committee
The members of the Audit Committee are shown above.
The Board believe that John Rigg and Steven Sanderson (resigned
4 September 2019), Chartered Accountants with broad experience of
the IT industry, and Alistair Fulton, who has been a Director of
companies in the IT sector for over 30 years and Chris Duckworth
with many years of experience in senior finance positions in listed
companies, have recent and relevant financial experience, as
required by the Code.
The Audit Committee is responsible for reviewing the Group's
annual and interim financial statements and other announcements. It
is also responsible for reviewing the Group's internal financial
controls and its internal control and risk management systems. It
considers the appointment and fees of the external auditor and
discusses the audit scope and findings arising from audits. The
Committee is also responsible for assessing the Group's need for an
internal audit function.
Consideration of significant issues in relation to the financial
statements
The Audit Committee have considered the following significant
issues in relation to the preparation of these financial
statements;
Revenue recognition: The Committee has considered revenue
recognised in projects during, and active at the end of, the
financial year to ensure revenue has been recognised correctly.
IFRS 16 'Leases': The Committee have considered the adoption and
accounting treatment with respect to the new standard implemented 1
April 2020.
Going concern: The Committee has reviewed budgets 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 following 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.
Internal audit
The Audit Committee has considered the need for a separate
internal audit function this year but does not consider it
appropriate in view of the size of the Group. The Group is
certified to ISO 9001: 2015.
Internal controls and risk management
The Board has applied the internal control and risk management
provisions of the Code by establishing a continuous process for
identifying, evaluating and managing the significant and emerging
risks faced by the Group. The Board regularly reviews the process,
which has been in place from the start of the year to the date of
approval of this report and which is in accordance with FRC
guidance on risk management, internal control and related financial
and business reporting. The Board is responsible for the Group's
system of internal control and for reviewing its effectiveness.
Such a system is designed to manage rather than eliminate risk of
failure to achieve business objectives, and can only provide
reasonable and not absolute assurance against misstatement or
loss.
In compliance with the Code, the Audit Committee regularly
reviews the effectiveness of the Group's systems of internal
financial control and risk management. The Board's monitoring
covers all controls, including financial, operational and
compliance controls and risk management. It is based principally on
reviewing reports from management to consider whether significant
weaknesses and risks are effectively managed and, if applicable,
considering the need for more extensive monitoring.
The Board has also performed a specific assessment for the
purpose of this annual report. This assessment considers all
significant aspects of internal control and risk management arising
during the period covered by the report.
The key elements of the internal control and risk management
systems are described below:
-- Clearly documented procedures contained in a series of
manuals covering Group operations and management, which are subject
to internal project audit and external audit as well as regular
Board review.
-- The Group's controls include appropriate segregation of
duties which are embedded in the organisation
-- The Group has a formal process for planning, reporting and
reviewing financial performance against strategy, budgets and
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
Director 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 24.
Whistleblowing
Staff may contact the senior independent non-executive Director,
in confidence, to raise genuine concerns of possible improprieties
in financial reporting or other 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 The roles of chairman and chief executive should
9 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 There should be a nominations committee which
17/23 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 All directors should be subject to annual re-election.
18 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 The chair should not remain in post beyond nine
19 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 The board should undertake a formal and rigorous
21/23 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 Open advertising and/or an external search consultancy
20 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 The chair of the board should not be a member
24 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 The requirement to detail performance against
ARR 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
17 June 2020
Directors' Remuneration report
On the following pages we set out the Remuneration Report for
the year ended 31 March 2020. The members of the Remuneration
Committee are shown in the Corporate Governance Report on page
17.
This report has been prepared in accordance with the Companies
Act 2006 and is split into two sections as follows;
1. The Directors' remuneration policy.
2. The Annual report on remuneration. This will be subject to an
advisory shareholder vote at this years' Annual General
Meeting.
As outlined by the Executive Chairman and the Managing Director
in their annual statements on pages 1 and 3, 2020 was a year for
the continuation of the strategy of the investment in permanent
consultants in an environment of pressure in public sector
business. To contain operating costs and maintain cash balances,
the Committee carefully reviewed Director's remuneration. As such,
no major decisions or changes were made to Directors' remuneration
during the year. Outside of the normal course of business, there
were also no discretionery payments other than for loss of office
(see page 27). The Committee intends to implement the Directors
remuneration for the following year as agreed at the 2019 Annual
General Meeting.
Directors' remuneration policy
The remuneration policy sets out the framework within which the
Company remunerates its Directors. The Company's remuneration
policy and report was put to a shareholder vote at the 2019 Annual
General Meeting of the Company and was approved by 63.1% of
shareholders and with 36.8% against and 100 votes withheld. See
page 13 of the Director's Report for further details of voting
rights.
The Committee acknowledges the votes against the policy and has
carefully reviewed the outcome. The Committee aims to align
remuneration with Group financial performance by taking into
account the difficult trading environment, and to ensure the
long-term health of the business. The Committee 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.
Policy table - executive Directors
Element Relevance to Operation Maximum payable Performance
short and long-term metrics
strategic objectives
Base salary Reflects the Reviewed annually Ordinarily, None, although
individual's taking into salary increases individual
skills, responsibilities consideration will be in performance
and experience. individual line with is considered
and company average increases when setting
Supports the wide performance awarded to salary levels.
recruitment and and the wider other employees
retention of employee pay in the Company.
Executive Directors. review.
-------------------------- ------------------------ -------------------- ---------------------
Benefits Protects the Benefits in Benefits are None.
in kind well-being of kind include set at a level
Directors and company cars considered
provides fair or allowances, to be appropriate
and reasonable private medical taking into
market competitive insurance, account individual
benefits. life cover circumstances.
and permanent
health insurance.
Benefits are
reviewed periodically.
-------------------------- ------------------------ -------------------- ---------------------
Pension Provides competitive The Company The Company None.
post-retirement pays contributions matches individual
benefits to support into a personal contributions
the recruitment pension scheme up to a maximum
and retention or cash alternative. of 5%.
of Executive
Directors.
-------------------------- ------------------------ -------------------- ---------------------
Share option Encourages share The Company The potential Specific performance
scheme ownership amongst operates an value of options criteria are
employees and EMI share held rises specified
aligns their option scheme. as the Company's at the time
interests with Discretionary share price of awarding
the shareholders. awards are increases. the share
made in accordance options to
with the scheme ensure alignment
rules. with the interests
of shareholders.
-------------------------- ------------------------ -------------------- ---------------------
The award of share options is at the discretion of the
Remuneration Committee: there is no scheme providing entitlement to
share options, and there is no long-term incentive scheme. The
Group does not believe that performance related bonuses are
appropriate at the present time. The executive Directors' existing
interests in shares and share options are expected to align their
interests with those of shareholders.
Policy table - non-executive Directors
Element Relevance to Operation Maximum payable Performance
short and long-term metrics
strategic objectives
Fees Competitive Reviewed annually. In general, Not applicable.
fees to attract the level
experienced of fee increase
Directors. for the non-executive
Directors
will be set
taking account
of any change
in responsibility.
---------------------- ------------------- ----------------------- ----------------
The remuneration of the non-executive Directors is agreed by the
Board. However, no Director is involved in deciding their own
remuneration.
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 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.
Directors' service contracts and policy
The details of the Directors' contracts are summarised as
follows:
Date of contract Notice period
J C Rigg 01/07/1999 1 month
A M Fulton 19/02/1997 1 month
A Leer 03/03/2015 6 months
C J Duckworth 01/07/2017 1 month
T J Eckes 01/01/2020 3 months
C M Rigg 01/01/2020 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
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.
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 policy is unchanged from the previous year as endorsed by
the unanimous vote in favour of the approval of the Directors'
Remuneration Report at the Annual General Meeting in August
2019.
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:
2020
Director Basic salary Benefits Pension Other* Total
and fees in kind
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Executive
J C Rigg 60 - - - 60
N E Burrows (left 19.03.20) 120 13 26 43 202
A Leer 167 15 19 - 201
T J Eckes (appointed
01.01.20) 28 1 4 - 33
Non-executive
A M Fulton 40 - - 15 55
S M Sanderson (left
04.09.19) 15 - - - 15
C J Duckworth 35 - - - 35
C Rigg (appointed 01.01.20) - - - - -
*This represents for Nick Burrows a payment in lieu of share
options forfeited of GBP42,500. For A M Fulton the total of
GBP15,000 represents back-pay.
2019
Director Basic salary Benefits Pension Other* Total
and fees in kind
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Executive
J C Rigg 60 - - - 60
N E Burrows 122 12 20 - 154
A Leer 167 15 17 35 234
Non-executive
A M Fulton 35 - - - 35
S M Sanderson 35 - - - 35
C J Duckworth 35 - - - 35
* This represents a discretionary one-off bonus for A Leer of
GBP35,000.
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.
Other than vesting conditions in relation to outstanding share
options (see note 20), no performance measures or targets were in
place for either the year ended 31 March 2020 or any prior
financial year, upon which any variable pay elements could become
payable during the year.
Three Directors are members of a money purchase 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
Finance Director and Company Secretary Nick Burrows was paid a
one-time discretionary settlement fee for loss of office of
GBP30,000 during the year. The Board believed this was necessary to
ensure a smooth hand-over with his successor.
Directors' interests in shares
The Directors who held office at the end of the financial year
had the following beneficial interests in the ordinary shares of
the Company. No change has occurred between the year end and the
date of this report.
1 April 31 March 2020
2019
A M Fulton 354,100 354,100
J C Rigg 4,509,400 4,509,400
S M Sanderson (left 04.09.19) 104,089 -
N E Burrows (left 19.03.20) 14,893 -
A Leer 155,379 155,379
C J Duckworth 13,379 13,379
T J Eckes (appointed 01.01.20) - 60,374
C M Rigg (appointed 01.01.20) - 100,000
Directors' share options
The interests of executive Directors in share options were as
follows:
At beginning Forfeited Exercised At end Exercise Exercise period
of year during during of year price
year year
N E Burrows
:
23.09.14 to
granted 23.09.11 100,000 (100,000) - - 13.5p 23.09.21
18.09.17 to
granted 18.09.14 25,000 (25,000) - - 11.0p 18.09.24
09.03.21 to
granted 09.03.18 75,000 (75,000) - - 53.5p 09.03.28
A Leer:
09.03.21 to
granted 09.03.18 150,000 - - 150,000 53.5p 09.03.28
T J Eckes:
09.03.21 to
granted 09.03.18 60,000 - - 60,000 53.5p 09.03.28
----------- ----------- ----------- -----------
410,000 (200,000) - 210,000
----------- ----------- ----------- -----------
No share options were exercisable at the end of the year (2019:
125,000).
Share options are exercisable provided that the relevant
performance requirement has been satisfied.
For options granted on 9 March 2018: 100% of the shares granted
under an Option will vest if the Company's share price at 31 March
2021 has increased by 30% or more from the share price as at the
date of grant. 50% of shares granted under an Option will vest if
the Company's share price at 31 March 2021 has increased by 15%
from the share price as at the date of grant. Between these upper
and lower thresholds, awards vest on a straight-line basis.
For all other options: In any financial year commencing at least
one year after the date of grant, the Company shall have achieved a
positive basic earnings per share (subject to adjustment to exclude
identified exceptional items), as reported in its audited annual
accounts.
The total share-based payment expense recognised in the year in
respect of Directors' share options is GBP15,762 (2019:
GBP11,821).
The market price of the Company's shares was 27p at 31 March
2020 and the range during the year was between 25p and 55p.
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/2935Q_1-2020-6-17.pdf
Chief executive remuneration
For the financial year ended 31 March 2020 the salary of the
Executive Chairman was GBP60,000 (2019: GBP60,000). Employee
salaries increased, on average, by 4% in the year. Given the
external marketplace, The Committee made the decision during the
year to award an increase to employees only.
The remuneration paid to the Executive Chairman for the
financial years 2011 to 2020 were as follows:
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
GBP25,000 GBP25,000 GBP25,000 GBP25,000 GBP25,000 GBP25,000 GBP25,000 GBP60,000 GBP60,000 GBP60,000
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
The annual amounts paid above relate to salary only. The
Executive Chairman did not receive any discretionary payments
during these periods.
Relative importance of spend on pay
The total dividends or other cash distributions to shareholders
during the year was GBP479,169 (2019: GBP316,300), see note 9. The
total employee remuneration (including Directors) during the year
was GBP5.171m (2019: GBP4.567m).
Consideration of matters related to Directors' remuneration
During the financial year, the remuneration committee did not
consider Directors' remuneration. No external advice was sought in
relation to matters discussed at these meetings.
Alistair Fulton
Chairman, Remuneration Committee
17 June 2020
Independent auditor's report to the members of Triad Group
Plc
Opinion
We have audited the financial statements of Triad Group Plc (the
'Parent Company') and its subsidiaries (the 'Group') for the year
ended 31 March 2020 which comprise the Group and Company statements
of comprehensive income and expense, the Group and Company
statements of changes in equity, the Group and Company statements
of financial position, the 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
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
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 2020 and of the Group's
and the Parent Company's loss for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the requirements of the
Companies Act 2006; and, as regards the Group financial statements,
Article 4 of the IAS Regulation.
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 are 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. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to principal risks, going concern and
viability statement
We have nothing to report in respect of the following
information in the annual report, in relation to which the ISAs
(UK) require us to report to you whether we have anything material
to add or draw attention to:
-- the directors' confirmation set out on page 6 in the annual
report that they have carried out a robust assessment of the
Group's emerging and principal risks and the disclosures in the
annual report that describe the principal risks and the procedures
in place to identify emerging risks and explain how they are being
managed or mitigated;
-- the directors' statement set out on page 15 in the financial
statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting in preparing the
financial statements and the directors' identification of any
material uncertainties to the Group and the Parent Company's
ability to continue to do so over a period of at least twelve
months from the date of approval of the financial statements;
-- whether the directors' statement relating to going concern
required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained in
the audit; or
-- the directors' explanation set out on page 8 in the annual
report as to how they have assessed the prospects of the Group,
over what period they have done so and why they consider that
period to be appropriate, and their statement as to whether they
have a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related
disclosures drawing attention to any necessary qualifications or
assumptions.
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.
Revenue recognition
As detailed in note 1, revenue is recognised predominantly on a
time and materials basis. Agreements to place a number of
consultants for a period of time are agreed with customers. Revenue
is then recognised based on the timesheets recorded and approved,
either internally or externally, and a charge is based on an agreed
hourly rate as per the agreement.
We considered there to be a significant risk over the
completeness of revenue due to potential missing or late timesheets
or contractor invoices and existence of revenue through fraudulent
manual postings to revenue in the financial close process.
How we addressed the key matter in our audit
We tested the operating effectiveness of key controls over the
approval of timesheets and the recognition of these invoices in the
accounting system.
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 is recorded in the correct
period.
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 performed testing on a sample basis over the revenue postings
throughout the year, agreeing the posting to timecard, confirmation
of charge out rate and sales invoice, ensuring the transactions are
recorded in line with the accounting policy and in the correct
accounting period.
We tested a sample of manual journal postings to revenue,
agreeing the posting to bank payment, sales invoices, credit notes
and timecards where appropriate.
We tested a sample of year end accrued and deferred income
balances and agreed them to sales invoices, bank payment where
appropriate and timecards.
We performed testing on a sample basis over the timecards
received either side of the year end, agreeing them to sales
invoices to ensure they have been recorded in the correct
period.
We selected a sample of contracts for services provided in the
year and agreed the revenue recognised against the policy
stipulated in the contract to check that the revenue recognition
was appropriate and reviewed the accounting treatment to ensure
compliance with the requirements of the accounting standards.
Key observations:
We have noted no errors arising in relation to the revenue
recognition as a result of the audit testing completed.
Going concern and Covid-19
Covid-19 was declared a pandemic in the financial year and as
detailed in note 1 is expected to have an impact on the future
performance of the Group. As at 31 March 2020 the Group holds cash
of GBP3.84m, net current assets of GBP4.182m and net assets of
GBP4.555m.
The Group's going concern assessment, prepared for a period of
12 months from the date of the approval of the financial
statements, considers the potential impacts of the pandemic and a
stress test scenario has been prepared. This scenario has assumed
that there will be a significant downturn in performance from no
new projects being won, utilisation of consultants reduces and
contractor income drops to close to nil by the end of the going
concern assessment period.
Due to the potential impact on the Group from Covid-19 and the
significant judgements made in the going concern assessment we
considered there to be a significant risk over the appropriateness
of the presentation of the going concern status.
How we addressed the key matter in our audit
We considered the nature of the Group, its business model and
related risks to going concern arising including the impact of the
Covid-19 pandemic.
We evaluated the Directors' assessment of the Group's ability to
continue as a going concern, including challenging the underlying
data by agreeing it to actual performance in the previous financial
year, client contracts, bank statements and comparing it to post
year-end financial performance. We challenged the key assumptions
used, including recoverability of trade receivables, levels of
future revenue and staff costs by comparing them against previous
financial performance and enquires with management. We evaluated
the Directors' plans for future actions in relation to their going
concern assessment. We have assessed the reasonableness of the
forecasts against historic and post year end actual
performance.
We examined the forecasts and stress test provided by the Group.
We tested the integrity of the models by checking the formulas, the
arithmetic accuracy and any hard coding. Where appropriate we have
agreed the inputs to the model to supporting documentation such as
contracts with clients and bank statements.
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 enquires.
We obtained confirmation of the financing facilities available
to the Group and assessed the availability of cash to the Group
over the forecast period and the level of headroom available.
Our application of materiality
We apply the concept of materiality both in planning and
performing of 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. M isstatements below these levels will not
necessarily be evaluated as immaterial as we also take into account
the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on
the financial statements as a whole.
The materiality for the Group financial statements as a whole
was set at GBP97,000 (2019: GBP114,000). This was determined with
reference to a benchmark of revenue of which it represents 0.5%
(2019:0.5%). 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,
In determining the performance materiality we based our
assessment on a level of 65% (2019: 70%) of materiality. In setting
the level of performance materiality we considered a number of
factors including the expected total value of known and likely
misstatements (based on past experience and other factors), the
amount of areas of estimation within the financial statements and
the type of audit testing to be completed.
The materiality threshold is the same for the Group and Parent
Company as the rest of the entities within the Group are dormant.
.
The reporting threshold to the Audit Committee was set at
GBP1,935 (2019: GBP2,280) which is 2% of the materiality threshold.
We also agreed to report differences below these thresholds that,
in our view, warranted reporting on qualitative grounds.
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 at the Group and Parent Company level.
The Group operates solely in the United Kingdom. The Group
financial statements are a consolidation of six companies made up
of one trading Company (the Parent Company) which provides
consultancy and development services and five dormant companies. In
establishing the overall approach to the Group audit, we determined
the type of work that needed to be performed on each Company.
Based on our assessment we performed an audit of the complete
financial information of the Parent Company as the only trading
Company and only significant component.
In our audit, we tested and examined information, using sampling
and other auditing techniques, to the extent we considered
necessary to provide a reasonable basis for us to draw conclusions.
Our audit evidence was largely obtained through substantive
procedures.
Capability of the audit to detect irregularities, including
fraud
We obtained an understanding of the regulatory and legal
framework applicable to the Group and the industry in which it
operates and considered the risk of acts by the company which were
contrary to applicable laws and regulations, including fraud.
These included but were not limited to compliance with the
Companies Act 2006, Corporate Governance, the UK listing rules and
UK tax legislation.
We designed audit procedures to respond to the risk, 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.
We focused on laws and regulations that could give rise to a
material misstatement in the company financial statements. Our
tests included, but were not limited to the investigation, through
the review of minutes and enquires of management, of potential
non-compliance with laws and regulations and review of the
communications with the regulatory bodies.
There are inherent limitations in the audit procedures described
above and the further removed noncompliance with laws and
regulations is from the events and transactions reflected in the
financial statements, the less likely we would become aware of it.
We also addressed the risk of management override of internal
controls, including testing journals and evaluating whether there
was evidence of bias by the Directors that represented a risk of
material misstatement due to fraud.
Other information
The directors are responsible for the othe r 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.
In connection with our audit of the financial statements, 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
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of the other information, we are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the
other information and to report as uncorrected material
misstatements of the other information where we conclude that those
items meet the following conditions:
-- Fair, balanced and understandable set out on page 13 - the
statement given by the directors that they consider the annual
report and financial statements taken as a whole is fair, balanced
and understandable and provides the information necessary for
shareholders to assess the Group's position, performance, business
model and strategy, is materially inconsistent with our knowledge
obtained in the audit; or
-- Audit committee reporting set out on page 19 - the section
describing the work of the audit committee does not appropriately
address matters communicated by us to the audit committee
-- Directors' statement of compliance with the UK Corporate
Governance Code set out on page 22 - the parts of the directors'
statement required under the Listing Rules relating to the
Company's compliance with the UK Corporate Governance Code
containing provisions specified for review by the auditor in
accordance with Listing Rule 9.8.10R(2) do not properly disclose a
departure from a relevant provision of the UK Corporate Governance
Code.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, the part of the directors' remuneration report
to be audited has been properly prepared in accordance with the
Companies Act 2006.
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.
Matters on which we are required to report by exception
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.
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 set out on page 15,
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.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were
appointed by the Directors to audit the financial statements for
the year ending 31 March 2006 and subsequent financial periods. The
period of total uninterrupted engagement is 15 years, covering the
years ending 31 March 2006 to 31 March 2020.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Group or the Parent Company and we remain
independent of the Group and the Parent Company in conducting our
audit.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of our report
This report is made solely to the Parent Company's members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to
the Parent Company's members those matters we are required to state
to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company and the
Parent Company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
James Fearon (Senior Statutory Auditor)
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 2020
Group and Company Note 2020 2019
GBP'000 GBP'000
Revenue 4 19,354 22,713
Cost of sales (16,500) (18,337)
------------- -------------
Gross profit 2,854 4,376
Administrative expenses (3,422) (3,357)
------------- -------------
(Loss)/Profit from operations 5 (568) 1,019
Finance income 13 20 -
Finance expense 6 (54) (2)
------------- -------------
(Loss)/Profit before tax (602) 1,017
Tax Charge 8 (159) (132)
------------- -------------
(Loss)/Profit for the year and total
comprehensive income attributable to
equity holders of the parent (761) 885
------------- -------------
Basic (loss)/earnings per share 10 (4.76p) 5.60p
--------- ---------
Diluted (loss)/earnings per share 10 (4.76p) 5.44p
--------- ---------
All amounts relate to continuing activities.
Statements of changes in equity
for the year ended 31 March 2020
Group
Share Share premium Capital Retained Total
Capital account redemption earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2018 156 619 104 4,246 5,125
Profit for the
year and total
comprehensive income - - - 885 885
Dividend paid - - - (316) (316)
Ordinary shares
issued 4 40 - - 44
Share-based payments - - - 28 28
-------- -------- -------- -------- --------
At 1 April 2019 160 659 104 4,843 5,766
Loss for the year
and total comprehensive
income - - - (761) (761)
Dividend paid - - - (479) (479)
Ordinary shares
issued - 1 - - 1
Share-based payments - - - 28 28
-------- -------- -------- -------- --------
At 31 March 2020 160 660 104 3,631 4,555
--------- --------- --------- --------- ---------
Company
Share Share premium Capital Retained Total
Capital account redemption earnings
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2018 156 619 104 4,241 5,120
Profit for the
year and total
comprehensive income - - - 885 885
Dividend paid - - - (316) (316)
Ordinary shares
issued 4 40 - - 44
Share-based payments - - - 28 28
-------- -------- -------- -------- --------
At 1 April 2019 160 659 104 4,838 5,761
Loss for the year
and total comprehensive
income - - - (761) (761)
Dividend paid - - - (479) (479)
Ordinary shares
issued - 1 - - 1
Share-based payments - - - 28 28
-------- -------- -------- -------- --------
At 31 March 2020 160 660 104 3,626 4,550
--------- --------- --------- --------- ---------
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.
Statements of financial position
at 31 March 2020
Registered number: 2285049
Group Company
Note 2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 11 10 15 10 15
Property, plant and equipment 12 275 205 275 205
Right of use assets 13 622 - 622 -
Finance lease receivables 13 297 - 297 -
Deferred tax 8 32 191 32 191
---------- ---------- ---------- ----------
1,236 411 1,236 411
---------- ---------- ---------- ----------
Current assets
Trade and other receivables 15 2,741 3,333 2,741 3,333
Cash and cash equivalents 16 3,840 4,604 3,840 4,604
---------- ---------- ---------- ----------
6,581 7,937 6,581 7,937
---------- ---------- ---------- ----------
Total assets 7,817 8,348 7,817 8,348
---------- ---------- ---------- ----------
Current liabilities
Trade and other payables 17 (2,127) (2,480) (2,132) (2,485)
Financial liabilities 18 - (3) - (3)
Lease liabilities 13 (272) - (272) -
---------- ---------- ---------- ----------
(2,399) (2,483) (2,404) (2,488)
---------- ---------- ---------- ----------
Non-current liabilities
Financial liabilities 18 - (17) - (17)
Long term provisions 19 (197) (82) (197) (82)
Lease liabilities 13 (666) - (666) -
---------- ---------- ---------- ----------
(863) (99) (863) (99)
---------- ---------- ---------- ----------
Total liabilities (3,262) (2,582) (3,267) (2,587)
---------- ---------- ---------- ----------
Net assets 4,555 5,766 4,550 5,761
----------- ----------- ----------- -----------
Shareholders' equity
Share capital 20 160 160 160 160
Share premium account 660 659 660 659
Capital redemption reserve 104 104 104 104
Retained earnings 3,631 4,843 3,626 4,838
---------- ---------- ---------- ----------
Total shareholders' equity 4,555 5,766 4,550 5,761
---------- ---------- ---------- ----------
The financial statements on pages 36 to 66 were approved by the
Board of Directors and authorised for issue on 17 June 2020 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 2285049.
Statements of cash flows
for the year ended 31 March 2020
Group and company Note 2020 2019
GBP'000 GBP'000
Cash flows from operating activities
Loss for the year before taxation (602) 1,017
Adjustments for:
Depreciation of property, plant
and equipment 97 65
Amortisation of right of use assets 166 -
Amortisation/impairment of intangible
assets 5 6
Interest received (20) -
Finance expense 60 2
Share-based payment expense 28 28
Changes in working capital
Decrease in trade and other receivables 593 652
Decrease in trade and other payables (374) (415)
Increase/(Decrease) in provisions 115 (74)
-------------- --------------
Cash generated by operations 68 1,281
Finance expense (4) (2)
-------------- --------------
Net cash inflow from operating
activities 64 1,279
-------------- --------------
Investing activities
Finance lease interest received 20 -
Finance lease payments received 123 -
Purchase of intangible assets - (17)
Purchase of property, plant and
equipment (166) (134)
-------------- --------------
Net cash used in investing activities (23) (151)
-------------- --------------
Financing activities
Proceeds of issue of shares - 44
Lease liabilities principal payments (270) -
Lease liabilities interest payments (56) -
Finance lease principal payments - (3)
Dividends paid 9 (479) (316)
-------------- --------------
Net cash outflow from financing
activities (805) (275)
-------------- --------------
Net (decrease)/increase in cash
and cash equivalents (764) 853
Cash and cash equivalents at beginning
of the period 4,604 3,751
-------------- --------------
Cash and cash equivalents at end
of the period 16 3,840 4,604
-------------- --------------
Notes to the financial statements
for the year ended 31 March 2020
1. Principal accounting policies
Basis of preparation
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated.
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS and IFRIC
interpretations), as adopted by the European Union (EU), issued by
the International Accounting Standards Board (IASB) and with those
parts of the Companies Act 2006 applicable to companies preparing
their accounts under IFRS.
These financial statements have been prepared on a going concern
basis.
These financial statements have been prepared on a historical
cost basis and are presented in sterling, the functional currency
of the Company.
Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Strategic Report. The financial position of the
Group, its cash flows, liquidity position and borrowing facilities
are described in the Strategic Report. In addition, note 3 to the
financial statements includes the Group's objectives, policies and
processes for managing its capital, its financial risk management
objectives, details of its financial instruments and hedging
activities, and its exposure to credit risk and liquidity risk. The
Group meets its day to day working capital requirements through
cash reserves and an invoice finance facility (which is currently
unutilised).
The Group operates an efficient low-cost and historically cash
generative model. The client base generally consists of large
blue-chip entities, particularly within the public sector, enjoying
long-term and productive client relationships. As such, debt
recovery has been reliable and predictable with a low exposure to
bad debts. For the year ended 31 March 2020, the Group has not
utilised any external debt or lending facilities (2019:nil). The
Group has remained in full operation throughout the lockdown period
as services can be provided remotely, have seen a delay in
commencement of one contract as well a pause on the provision of
contractor staff where work needs to be completed onsite. The Group
has won a number of new smaller ad-hoc projects arising from the IT
challenges experienced by companies in lockdown.
The going concern assessment considered a number of realistic
scenarios including the impact of the loss of key clients upon
future cashflows. In addition, in the most severe scenario
possible, a reverse stress test was modelled which assumed that the
effects of the pandemic would worsen with all current client
contracts discontinued at expiry with no extension or replacement
and with no cost mitigation. Even in the most extreme scenario the
Group has enough liquidity and long-term contracts to support the
business through the going concern period. The Directors have
concluded from these assessments that the Group would have
sufficient headroom in cash balances to continue in operation.
Further information in relation to the Directors' consideration
of the going concern position of the Company is contained in the
Viability Statement on page 8.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and at least
twelve months from the date of approval of the financial
statements. Accordingly, they continue to adopt the going concern
basis in preparing the annual report and accounts.
New standards adopted for the year ended 31 March 2020
The following International Financial Reporting Standards were
adopted by the Group as at 1 April 2019.
IFRS 16 Leases
IFRS 16 became effective for the Group from 1 April 2019. It
requires that leases are recognised in the statement of financial
position as assets and liabilities with exceptions where the
underlying asset is of low value, or where the lease term is 12
months or less.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using an incremental borrowing rate which is the rate a
lessee would have to pay to borrow over a similar term and with a
similar security, to buy a similar asset.
A right-of-use asset comprises the original lease liability,
initial directs costs and amounts paid up front and is subsequently
measured at cost less accumulated depreciation.
The Group as a lessee has recognised right-of-use assets
representing its rights to use the underlying assets and lease
liabilities representing its obligation to make lease payments. The
Group has property lease contracts with terms remaining at the
balance sheet date ranging of between 3-5 years.
The Group has adopted IFRS 16 using the modified retrospective
approach and accordingly the information presented for prior years
has not been restated as permitted under the specific transitional
provisions in IFRS 16. It remains as previously reported under IAS
17.
The following practical expedients have been adopted on
transition:
-- not to capitalise a right-of-use asset or related lease
liability where the lease expires before 31 March 2020;
-- to use hindsight in determining the lease term if the
contract contains options to extend or terminate the lease; and
-- lease payments for contracts with a duration of 12 months or
less and contracts for which the underlying asset is of a low value
will continue to be expensed to the Consolidated Income Statement
on a straight-line basis over the lease term.
The Group subleases part of one property lease to a third party.
The sublease was previously recognised as an operating lease. On
application of IFRS 16, the Group has reconsidered the accounting
treatment and instead recognised this as a finance lease as the
sublease is for the life of the right of use asset.
A lease receivable has therefore been recognised and the portion
of the right of use asset related to the subleased property was
derecognised. The sublease has been calculated as the discounted
future lease receipts. The lease receivable is unwound over the
life of the finance lease and reduces as lease receipts are
received.
Consolidated Balance Sheet
On initial application, the Group has elected to record
right-of-use assets based on the corresponding lease liability. As
of 1 April 2019, right-of-use assets of GBP0.79m, lease receivable
of GBP0.42m and lease obligations of GBP1.128m were recorded.
Prepayments were reduced by GBP0.08m, being the value of prepaid
operating lease payments as at 1 April 2019.
GBP'000
Initial recognition of right of use assets 788
Initial recognition of lease receivable 420
Initial recognition of lease liabilities (1,128)
Reduction of prepayments, included in
right of use assets (80)
--------------
Impact on retained earnings -
--------------
When measuring lease liabilities, the Group discounted lease
payments using its incremental borrowing rate at 1 April 2019. The
rate applied is 5.0%. This was an estimate calculated using
commercially available loan facilities and short-term interest rate
expectations.
The Group has recognised GBP0.62m of right-of-use assets, lease
receivable of GBP0.30m and GBP0.94m of lease liability as at 31
March 2020.
Reconciliation between the Group's operating lease commitments
and lease liability
The following table reconciles the Group's operating lease
commitments as a lessee at 31 March 2019, as previously disclosed
in the Financial Statements, to the lease obligations recognised on
initial application of IFRS 16 at 1 April 2019:
GBP'000
Operating lease commitments at 31 March 2019
as disclosed in the Financial Statements* 847
Operating lease commitments related to cars (9)
Break clause in the year not exercised 452
Impact of discounting on leases (162)
--------------
Lease liabilities recognised at 1 April 2019 1,128
--------------
(*) the operating lease commitments disclosure at 31 March 2019
included lease payments to be made following a break clause of
GBP532,000 based on the intention of the company not to exercise
the break and a rent prepayment of GBP80,000. This did not impact
the IFRS 16 lease liability at 1 April 2019 as the break was in the
company's control. This has been corrected above and the operating
lease commitment comparative disclosure in note 22 has also been
corrected to exclude these amounts.
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.
Amounts are written off to administrative expenses against the
carrying amount of trade receivables when it is certain that the
receivable will not be realised.
Cash
Cash in the statement of financial position comprises cash held
on demand with banks. For the purpose of the consolidated cash flow
statement, cash and cash equivalents consist of cash, as defined
above, net of bank borrowings due on demand.
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
For the year ended 31 March 2019, costs in respect of operating
leases were charged to the statement of comprehensive income and
expense on a straight-line basis over the lease term.
For the year ended 31 March 2019, finance lease payments are
apportioned between the finance charge and the reduction of the
outstanding liability. The finance charge is allocated so as to
produce a constant periodic rate of interest on the remaining
balance of the liability.
For the year ended 31 March 2020 lease costs follow the
accounting treatment 'IFRS 16 Leases'. All leasing arrangements,
where the Group is the lessee, are recognised as a lease liability
and corresponding right of use asset.
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 reduces over the
period of the lease as payments are made.
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.
Lessor
For the year ended 31 March 2019, income in respect of operating
leases were recognised in the statement of comprehensive income and
expense on a straight-line basis over the lease term.
For the year ended 31 March 2020 lessor arrangements follow the
accounting treatment 'IFRS 16 Leases'. Where the lease indicates a
finance lease a lease receivable is recognised. The lease
receivable is calculated as the discounted total lease receipts for
the lease term.
Interest income is subsequently recognised in the statement of
comprehensive income and expense on the lease receivable and the
balance reduces over the lease term as receipts are received.
Foreign currencies
Assets and liabilities expressed in foreign currencies are
translated into sterling at the exchange rate ruling on the date of
the statement of financial position. Transactions in foreign
currencies are recorded at the exchange rate ruling as at the date
of the transaction. All differences on exchange are taken to the
statement of comprehensive income and expense in the year in which
they arise.
Revenue
Revenue recognised in any financial period is based on the
delivery of performance obligations and an assessment of when
control is transferred to the customer. Revenue is either
recognised at a 'point in time' when a performance obligation has
been performed, or 'over time' as control of the performance
obligation is transferred to the customer.
The majority of the Group's revenue is derived from the
provision of services under time and materials contracts.
Performance obligations under such contracts relate to the
provision of staff to customers. The transaction price of the
performance obligation is determined by reference to charge-out
rates for supplied staff and are specified in the contract. Since
the customer simultaneously receives and consumes the benefits of
the Group's performance obligations under such contracts, revenue
is recognised over time using the output method which uses a direct
measurement of value to the customer of the services transferred to
date.
Where temporary workers are supplied to customers, the
associated revenue is recognised gross (inclusive of the cost of
the temporary workers) since the Group is acting as principal.
Under IFRS 15, in order to be recognised as principal, there must
be a transfer of control between the vendor and the customer. Where
the Group provides temporary contractors, it is acting as principal
since it receives resourcing requirements directly from the
customer, has prime responsibility to find suitable candidates and
negotiate pay rates with them, and delivers the resources to the
client including acceptance that the service provided meets the
client's expectations. Revenue is therefore recognised as the gross
amount invoiced to customers.
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. 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. For fixed
price contracts revenue is recognised on an over time basis using
the input (percentage completion) method. Percentage completion is
calculated as the total hours worked as at the statement of
financial position date divided by the total expected hours to be
worked to complete the project.
Revenue for permanent recruitment services is based on a
percentage of a successful candidate's remuneration package, as
agreed with the customer at inception of the contract. Revenue is
recognised at a point in time when the performance obligation has
been satisfied at the time the candidate commences employment and
subject to a provision for clawback of fees for candidates that
leave prior to the notice period ending.
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 scheme. Share options granted to
employees are valued at the date of grant using an appropriate
option pricing model and are charged to operating profit over the
performance or vesting period of the scheme. The annual charge is
modified to take account of shares forfeited by employees who leave
during the performance or vesting period and, in the case of
non-market related performance conditions, where it becomes
unlikely the option will vest.
Provisions
A provision is recognised when the Group has a legal or
constructive obligation as a result of a past event and it is
probable that an outflow of economic benefits will be required to
settle the obligation. If the effect is material, expected future
cash flows are discounted using a current pre-tax rate that
reflects the risks specific to the liability. Calculations of these
provisions require judgements to be made. The Group has provided
for property dilapidation as detailed in note 19.
New standards and interpretations
A number of amendments to exisiting standards have been issued
but which are not yet mandatory, and have not been adopted by the
Group in these financial statements. The Directors do not
anticipate that their adoption in future periods will have a
material impact on the financial statements of the Group.
2. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. The Group makes estimates and assumptions concerning
the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
IFRS 16 Leases
A right of use asset of GBP0.6m (2019:nil), a total lease
liability of GBP0.9m (2019:nil) and a finance lease receivable of
GBP0.3m (2019:nil) have been recognised in accordance with the
accounting policies on page 41 with respect to the adoption of IFRS
16 'Leases'. The Directors have made following critical accounting
estimates and judgements in relation to these balances:
-- Lease term: The Directors are of the opinion that property
lease assets and liabilities should be calculated with relation to
the first available break date as the expectation is that the lease
break will be taken.
-- Incremantal borrowing rate (IBR): The Directors have
calculated the IBR at 5%, based upon readily available credit
facilities and estimated movements in the base rate, covering a
time frame commensurate with the time to the first avaliable break
date.
Dilapidation provisions:
The Directors have recognised a dilapidation provision for both
the leases held totalling GBP197,000 (2019: GBP87,000). The
provision is required to recognise the costs of restoring the
properties to their original state at the end of the lease period.
The provision has been calculated using generally accepted industry
averages of between 15 and 20% of lease costs and the Directors'
experience with the landlord as well as experience in similar
negotiations.
3. Financial risk management
The Group uses financial instruments that are necessary to
facilitate its ordinary purchase and sale activities, namely cash,
bank borrowings in the form of a receivables finance facility and
trade payables and receivables: the resultant risks are foreign
exchange risk, interest rate risk, credit risk and liquidity risk.
The Group does not use financial derivatives in its management of
these risks.
The Board reviews and agrees policies for managing these risks
and they are summarised below. These policies are consistent with
last year.
3.1 Financial risk factors
Foreign exchange risk
There are a small number of routine trading contracts with both
suppliers and clients in euros. In all such circumstances the
contracts with supplier and client will be in the same currency
thereby mitigating the Group's exposure to movements in exchange
rates. Payments and receipts are made through a bank account in the
currency of the contract therefore balances held in any foreign
currency are to facilitate day to day transactions. With a
functional currency of sterling there are the following foreign
currency net assets:
Group and company Note 2020 2019
GBP'000 GBP'000
Currency: Euros
Net cash 16 132 100
Trade and other receivables 15 19 8
Trade and other payables 17 (25) (17)
-------- --------
126 91
--------- ---------
Any change in currency rates would have no significant effect on
results.
Interest rate risk
The Group has access to a financing facility with a major UK
bank. At the balance sheet date in the current or prior year this
facility has not been utilised.
Cash balances are held in short-term interest bearing accounts,
repayable on demand: these attract interest rates which fluctuate
in relation to movements in bank base rate. This maintains
liquidity and does not commit the Group to long term deposits at
fixed rates of interest.
There were no borrowings, aside from lease liabilities arising
from the application of IFRS 16, during the year.
Credit risk
The Group is mainly exposed to credit risk from credit sales. It
is Group policy to assess the credit risk of new customers before
entering into contracts. Each new customer is assessed, using
external ratings and relevant information in the public domain,
before any credit limit is granted. In addition, trade receivables
balances are monitored on a regular basis to minimise exposure to
credit losses. The amount charged to the income statement during
the year in respect of expected credit losses was GBP6,000 (2019:
(GBP20,000)).
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 2020 2019
GBP'000 GBP'000
Trade and other receivables 15 2,500 2,964
Contract assets 15 68 58
Other debtors 15 17 95
Cash and cash equivalents 16 3,840 4,604
---------- ----------
6,425 7,721
--------- ---------
Liquidity risk
The Group's liquidity risk arises from its management of working
capital. The Group has a facility to borrow an amount up to 90% of
approved trade debtors subject to a maximum limit of GBP2.6m. The
facility may be terminated by the bank and Group with one and three
month's written notice respectively. The Board receives regular
cash flow and working capital projections to enable it to monitor
its available headroom under this facility. At the statement of
financial position these projections indicated that the Group
expected to have sufficient liquid resources to meet its reasonably
expected obligations. Maturity of financial liabilities is set out
in notes 17 and 18.
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 39% of Group revenue
(2019: 33%) and was in the public sector. One other customer
contributed more than 10% of Group revenue (2019: none).
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 2020 2019
GBP'000 GBP'000
Time and materials 19,017 22,472
Fixed price 82 111
Percentage fee based 255 130
---------- ----------
19,354 22,713
--------- ---------
The Group also disaggregates revenue by operating sector
reflecting the different commercial risks (e.g. credit risk)
associated with each.
Group and company 2020 2019
GBP'000 GBP'000
Public sector 10,277 13,432
Private sector 9,077 9,281
---------- ----------
19,354 22,713
--------- ---------
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 2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 58 1,216 (43) (25)
Transfers in the period from
contract assets to trade receivables (58) (1,216) - -
Excess of revenue recognised
over cash (or right to cash)
being recognised in the period 68 58 - -
Amounts included in contract
liabilities that was recognised
as revenue in the period - - 43 25
Cash received in advance of
performance and not recognised
as revenue in the period - - (41) (43)
-------- -------- -------- --------
At 31 March 68 58 (41) (43)
--------- --------- --------- ---------
There is no expectation of a material expected lifetime credit
loss arising in relation to contract assets.
5. (Loss)/Profit from operations
2020 2019
GBP'000 GBP'000
(Loss)/Profit from operations is stated
after charging:
Depreciation of owned assets 97 65
Amortisation of right of use assets 166 -
Amortisation of intangible assets 5 6
Operating leases for land and buildings - 303
Other operating leases 6 13
Auditor remuneration:
Audit of financial statements: Group
and company 59 57
--------- ---------
6. Finance expense
2020 2019
GBP'000 GBP'000
Other interest payable 1 1
Interest expense on lease liability 56 -
Net foreign exchange gain (3) 1
-------- --------
Total finance expense 54 2
--------- ---------
7. Employees and Directors
Group and company 2020 2019
Number Number
Average number of persons (including
Directors) employed
Senior management 8 8
Fee earners 37 31
Sales 10 11
Administration and finance 7 6
--------- ---------
62 56
--------- ---------
Staff costs for the above persons 2020 2019
(including Directors) GBP'000 GBP'000
Wages and salaries 4,176 3,722
Social security costs 482 420
Defined contribution pension costs 485 397
Equity settled share-based payments 28 28
--------- ---------
5,171 4,567
--------- ---------
2020 2019
Directors GBP'000 GBP'000
Emoluments 554 489
Benefits in kind 29 27
Money purchase pension contributions 49 37
-------- --------
Total remuneration 632 553
--------- ---------
Social security costs 65 61
--------- ---------
697 614
--------- ---------
The above 2020 disclosure includes a one-time discretionary
settlement fee for loss of office of GBP30,000 for Nick Burrows
(2019: GBPnil).
Three Directors (2019: two) had retirement benefits accruing
under money purchase pension schemes. Key management personnel are
considered to be the Directors. James McDonald was employed in
February 2020 and there was a handover period before he took the
role of Finance Director. With Nick Burrows leaving in March 2020
he became key management personnel and will be included in
subsequent disclosures.
8. Tax charge/credit
2020 2019
GBP'000 GBP'000
Current tax
Current tax on profits for the year - -
Deferred tax
Decrease in recognised deferred tax
asset 159 132
-------- --------
Total tax charge for the year 159 132
--------- ---------
The differences between the actual tax charge for the year and
the standard rate of corporation tax in the UK applied to profits
for the year are as follows:
2020 2019
GBP'000 GBP'000
(Loss)/Profit before tax (602) 1,017
(Loss)/Profit before tax multiplied
by standard rate of corporation tax
in the UK of 19% (2019: 19%) (114) 193
Expenses not deductible for tax purposes 13 (44)
Recognition of deferred tax on losses - (17)
Reversal of previously recognised
deferred tax on losses 156 -
Movement in deferred tax not recognised
for current year losses
Prior year adjustments 101 -
3 -
-------- --------
Tax charge for the year 159 132
--------- ---------
2020 2019
GBP'000 GBP'000
Deferred tax asset
The movement in deferred tax is as
follows:
At beginning of the year 191 323
Utilisation against taxable profits - (149)
(Reversal)/recognition of previously
unrecognised deferred tax on losses (149) 47
Decrease in relation to timing differences (10) (30)
-------- --------
At end of the year 32 191
--------- ---------
Deferred tax assets have been recognised in respect of tax
losses where the Directors believe it is probable that the assets
will be recovered. A deferred tax asset amounting to GBP710,000
(2019: GBP395,000) has not been recognised in respect of trading
losses of GBP3,741,000 (2019: GBP2,327,000), which can be carried
forward indefinitely.
The Chancellor recently announced that the main rate of UK
corporation tax is to remain at 19%. This rate of corporation tax
has been reflected in the calculation of the deferred tax.
9. Dividends
2020 2019
GBP'000 GBP'000
Final dividend for the year ended
31 March 2019 - 2.0p per share 319 158
Interim dividend for the year ended
31 March 2020 - 1.0p per share 160 158
______ _________
Total dividend paid 479 316
--------- --------------
The Directors do not propose a final dividend (2019: 2.0p per
share).
10. Earnings per ordinary share
Earnings per share have been calculated on the profit for the
year divided by the weighted average number of shares in issue
during the period based on the following:
2020 2019
(Loss)/Profit for the year GBP(761,000) GBP885,000
--------------- ---------------
Average number of shares in issue 15,972,842 15,798,113
Effect of dilutive options - 481,416
_________ _________
Average number of shares in issue
plus dilutive options 15,972,842 16,279,529
--------------- ---------------
Basic (loss)/earnings per share (4.76)p 5.60p
--------- ---------
Diluted (loss)/earnings per share (4.76)p 5.44p
--------- ---------
11. Intangible assets
Group and company Purchased
software
GBP'000
Cost
At 31 March 2018 272
Additions 17
Disposals (163)
--------
At 31 March 2019 126
Additions -
Disposals -
--------
At 31 March 2020 126
---------
Accumulated amortisation/impairment
At 31 March 2018 268
Charge for the year 6
Disposals (163)
--------
At 31 March 2019 111
Charge for the year 5
Disposals -
--------
At 31 March 2020 116
---------
Net book value
At 31 March 2020 10
---------
At 31 March 2019 15
---------
12. Property, plant and equipment
Group and company Computer Fixtures Motor
hardware & fittings vehicles Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 31 March
2018 173 766 39 978
Additions 22 112 - 134
Disposals (16) (484) - (500)
-------- -------- -------- --------
At 31 March
2019 179 394 39 612
Additions 29 138 - 167
Disposals (17) (30) - (47)
-------- -------- -------- --------
At 31 March
2020 191 502 39 732
--------- --------- --------- --------
Accumulated
depreciation
At 31 March
2018 124 709 9 842
Charge for
the year 26 30 9 65
Disposals (16) (484) - (500)
-------- -------- -------- --------
At 31 March
2019 134 255 18 407
Charge for
the year 26 62 9 97
Disposals (17) (30) - (47)
-------- -------- -------- --------
At 31 March
2020 143 287 27 457
--------- --------- --------- --------
Net book value
At 31 March
2020 48 215 12 275
--------- --------- --------- --------
At 31 March
2019 45 139 21 205
--------- --------- --------- --------
13. Leases
The Group as a lessee:
The Group has leases contracts for its office premises with
terms remaining ranging from 3 to 5 years. The Group has the option
to terminate one of its leases as disclosed in note 2. 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
GBP'000 GBP'000
At 31 March 2019
Opening position 788 788
Amortisation (166) (166)
-------- --------
At 31 March 2020 622 622
-------- --------
Lease Liabilities
The carrying amount of the lease liabilities recognised are as
follows:
Land and buildings
Total
GBP'000 GBP'000
At 31 March 2019
Opening position 1,128 1,128
Interest expense 56 56
Lease payments (246) (246)
-------- --------
At 31 March 2020 938 938
-------- --------
At the balance sheet date, the Group had outstanding commitments
for future lease payments as follows:
Between Between Between
At 31 March Up to 3 3 and 12 1 and 2 2 and 5
2020 months months years years
GBP'000 GBP'000 GBP'000 GBP'000
Lease Liabilties 54 218 288 378
-------- -------- -------- --------
The Group as a lessor:
Finance lease receivables
The Group has entered into a lease arrangement considered to be
a finance lease, representing rentals payable to the Group for a
rental of a proportion of a leased property. The carrying amounts
of the lease receivable asset are as follows:
Land and buildings
Total
GBP'000 GBP'000
At 31 March 2019
Opening position 420 420
Interest received 20 20
Payments received (143) (143)
-------- --------
At 31 March 2020 297 297
-------- --------
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 GBP440.
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 through
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
GBP1.
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 37 Sunningdale
House, Caldecotte Lake Drive, Caldecotte, Milton Keynes MK7
8LF.
15. Trade and other receivables
Group and company 2020 2019
GBP'000 GBP'000
Trade receivables 2,526 2,984
Less: provision for expected credit losses (26) (20)
-------- --------
Trade receivables-net 2,500 2,964
Contract assets 68 58
Other debtors 17 95
-------- --------
Trade and other receivables 2,585 3,117
Prepayments 156 216
-------- --------
2,741 3,333
--------- ---------
The fair value of trade and other receivables approximates
closely to their book value.
The lifetime expected credit losses on trade receivables as at
31 March 2020 is calculated as follows:
Group and company Expected Gross carrying Credit
default amount loss
rate (B) allowance
(A) (A x B)
% GBP'000 GBP'000
Current 0.5 2,236 11
Up to 30 days past due 5.0 290 15
-------- --------
2,526 26
--------- ---------
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 2019 were calculated as follows:
Group and company Expected Gross carrying Credit
default amount loss
rate (B) allowance
(A) (A x B)
% GBP'000 GBP'000
Current - 2,461 -
Up to 30 days past due 2.5 330 9
30 to 60 days past due 5.0 164 8
Over 60 days past due 10.0 29 3
-------- --------
2,984 20
--------- ---------
Movements on the provision for expected credit loss are as
follows:
Group and company 2020 2019
GBP'000 GBP'000
At beginning of the year 20 45
Charged to income statement 6 -
Credited to income statement - (20)
Written off during the year - (5)
-------- --------
At end of the year (credit loss allowance) 26 20
--------- ---------
The carrying amount of the Group's trade and other receivables
are denominated in the following currencies:
Group and company 2020 2019
GBP'000 GBP'000
Sterling 2,566 3,109
Euros 19 8
-------- --------
2,585 3,117
---------- ----------
16. Cash and cash equivalents
Group and company 2020 2019
GBP'000 GBP'000
Cash available on demand 3,840 4,604
--------- ---------
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 2020 2019
GBP'000 GBP'000
Sterling 3,708 4,504
Euros 132 100
-------- --------
3,840 4,604
--------- ---------
For the purpose of the consolidated cash flow statement, cash
and cash equivalents consist of cash, as detailed above, net of any
bank borrowings repayable on demand. There were no bank borrowings
during the year.
17. Trade and other payables
Group Company
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 1,205 1,617 1,205 1,617
Accruals 312 301 312 301
Owed to subsidiary - - 5 5
-------- -------- -------- --------
1,517 1,918 1,522 1,923
Contract liabilities 41 43 41 43
Other taxation and social security 569 519 569 519
-------- -------- -------- --------
2,127 2,480 2,132 2,485
--------- --------- --------- ---------
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
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Sterling 1,475 1,901 1,480 1,906
Euros 25 17 25 17
-------- -------- -------- --------
1,500 1,918 1,505 1,923
--------- --------- --------- ---------
18. Financial liabilities
Group and company 2019
GBP'000
Current
Finance lease obligations 3
---------
Non-current
Finance lease obligations 17
---------
The carrying amount of finance lease obligations related to
future lease payments on a motor vehicle.
The fair value of bank borrowings approximates closely to their
book value.
The carrying amount of the Group's financial liabilities is all
denominated in sterling.
19. Provisions
Group and company Provision for
property dilapidations
GBP'000
At 1 April 2019 82
Additions 115
Charged to income statement -
Utilised in year -
--------
At 31 March 2020 197
---------
The maturity profile of the present value of provisions is as
follows:
Group and company 2020 2019
GBP'000 GBP'000
Current
Provision for property dilapidation - -
-------- --------
- -
--------- ---------
Non-current
Provision for property dilapidation 197 82
--------- ---------
The provision for property dilapidation covers the estimated
future costs required to meet obligations under property leases to
redecorate and repair property.
20. Share capital
2020 2019
Ordinary shares of 1p each
Issued, called up and fully paid:
Number 15,979,979 15,968,979
Nominal value GBP159,800 GBP159,690
During the year 11,000 1p ordinary shares were issued as a
result of the exercise by employees of share options:
Number Option price Increase in share Increase in share
capital premium
11,000 13.5p GBP110 GBP1,375
----------- ---------- -----------
11,000 GBP110 GBP1,375
----------- ---------- -----------
21. Share -based payments
At 31 March 2020, 817,600 options granted under employee share
option schemes remain outstanding:
Date option Number Exercise Period options exercisable
granted price
23 September 23 September 2014 to 23 September
2011 157,600 13.5p 2021
18 September 18 September 2017 to 18 September
2014 105,000 11.0p 2024
9 March 2018 555,000 53.5p 9 March 2021 to 9 March 2028
Under the terms of the scheme, options vest after a period of
three years continued employment and are subject to the following
performance conditions:
For options granted on 9 March 2018: 100% of the shares granted
under an option will vest if the Company's share price at 31 March
2021 has increased by 30% or more from the share price as at the
date of grant. 50% of shares granted under an option will vest if
the Company's share price at 31 March 2021 has increased by 15%
from the share price as at the date of grant. Between these upper
and lower thresholds, awards vest on a straight-line basis.
For all other options: In any financial year commencing at least
one year after the date of grant, the Company shall have achieved a
positive basic earnings per share (subject to adjustment to exclude
identified exceptional items), as reported in its audited annual
accounts.
Options have been valued using the Black-Scholes option-pricing
model. No performance conditions were included in the fair value
calculations.
No options were granted during the year (2019: nil).
The total expense recognised in the year is GBP28,000 (2019:
GBP28,000).
A reconciliation of option movements over the year to 31 March
2020 is shown below:
2020 2019
Number Weighted Number Weighted
of options average of options average
exercise exercise
price price
Pence Pence
Outstanding at start of
year 1,028,600 37.7 1,413,600 31.6
Granted - - - -
Exercised (11,000) 13.5 (355,000) 12.1
Forfeited (200,000) 27.4 (30,000) 53.5
-------------- --------------
Outstanding at end of
year 817,600 40.3 1,028,600 37.7
-------------- --------------
Exercisable at end of
year 262,600 12.5 398,600 12.7
-------------- --------------
There were 11,000 options exercised during the year. The above
figures include options held by Directors which are set out in the
Directors' Remuneration Report on page 24.
The weighted average share price at the date of exercise for
share options exercised during the period was 43.0p (2019: 52.3p).
The options outstanding as at 31 March 2020 had an exercise price
of 11.0p, 13.5p or 53.5p and a weighted average remaining
contractual life of 6.2 years (2019: 6.8 years).
22. Commitments
The Group has applied IFRS 16 on 1 April 2019 and therefore this
note has been recorded for comparison purposes only.
The Group and Company had no capital commitments at 31 March
2020 (31 March 2019: GBP67,000).
The future undiscounted minimum lease payments which fall due
are as follows:
Restated*
2019
GBP'000
Not later than 1 year 202
Later than 1 year and no later than
5 years 645
---------
847
---------
(*) the operating lease commitments disclosure at 31 March 2019
incorrectly included lease payments to be made following a break
clause of GBP532,000 based on the intention of the company not to
exercise the break and a rent prepayment of GBP80,000. The
disclosure previously recorded commitments not later than 1 year of
GBP327,000 and later than 1 year and no later than 5 years of
GBP1,132,000.
The future minimum lease payments for 2019 represent operating
leases under pre-IFRS16 accounting principles.
The Group sublets part of its Godalming office. The future
aggregate minimum lease payments to the Group under non-cancellable
operating leases are:
2019
GBP'000
Not later than 1 year
Later than 1 year and no later than 119
5 years -
---------
119
---------
23. Related party transactions
The Group and Company rents one of its offices under a lease
expiring in 2028, with a break clause in 2023. The current annual
rent of GBP215,000 was fixed, by independent valuation, at the last
rent review in 2008. JC 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 GBPnil (2019: GBPnil).
Five year record
For accounting periods commencing after 1 April 2018 the
accounting treatment changed due to the introduction of IFRS 9 and
IFRS 15. For the accounting period commencing 1 April 2019 further
changes were made due to the introduction of IFRS 16. Therefore the
accounting policies over the period detailed below will vary and be
inconsistent.
Consolidated income statement
Years ended 31 March 2020 2019 2018 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 19,354 22,713 27,819 30,912 28,317
Gross profit 2,854 4,376 4,724 5,000 4,236
(Loss)/Profit before tax (602) 1,017 1,662 1,521 863
Tax (charge)/credit (159) (132) (38) 13 350
(Loss)/Profit after tax (761) 885 1,624 1,534 1,213
Retained (loss)/profit for the
financial year (761) 885 1,624 1,534 1,213
Basic (loss)/earnings per share
(pence) (4.76) 5.60 10.45 10.08 8.01
--------- --------- --------- --------- ---------
Balance sheet
As at 31 March 2020 2019 2018 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets 1,236 411 463 503 483
Current assets 6,581 7,937 7,736 7,299 5,638
Current liabilities (2,399) (2,483) (2,997) (4,118) (3,757)
Non-current liabilities (863) (99) (77) (45) (308)
_____ _____ _____ _____ _____
Net assets 4,555 5,766 5,125 3,639 2,056
--------- --------- --------- --------- ---------
Share capital 160 160 156 155 151
Share premium account 660 659 619 605 562
Capital redemption reserve 104 104 104 104 104
Retained earnings 3,631 4,843 4,246 2,775 1,239
_____ _____ _____ _____ _____
Equity shareholders' funds 4,555 5,766 5,125 3,639 2,056
--------- --------- --------- --------- ---------
Shareholders' information and financial calendar
Share register
Equiniti maintain the register of members of the Company. If you
have any questions about your personal holding of the Company's
shares, please contact:
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Telephone: 0371 384 2486
If you change your name or address or if the details on the
envelope enclosing the report, including your postcode, are
incorrect or incomplete, please notify the registrar in
writing.
Shareholders' enquiries
If you have an enquiry about the Group's business, or about
something affecting you as a shareholder (other than queries that
are dealt with by the registrar) you should contact the Company
Secretary, by letter or telephone at the Company's registered
office.
Company Secretary and registered office:
James McDonald
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone: 01908 278450
Email: investors@triad.co.uk
Website: www.triad.co.uk
Financial calendar
Annual General Meeting The date of the AGM is to be confirmed.
The Board are considering the
impact of Covid-19 on AGM arrangements
and will publish the AGM notice
at the appropriate time.
Financial year ended 31 March 2021:
expected announcement of results
Half year November 2020
Full year June 2021
Corporate information
Executive Directors
John Rigg, Chairman
Adrian Leer, Managing Director
Tim Eckes, Client Services Director
James McDonald, Finance Director
Non-executive Directors
Alistair Fulton
Chris Duckworth
Charlotte Rigg
Secretary and registered office
James McDonald
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone: 01908 278450
Email: investors@triad.co.uk
Website: www.triad.co.uk
Country of incorporation and domicile of parent company
United Kingdom
Legal form
Public limited company
Company number
2285049
Registered Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Brokers
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR
Solicitors
Freeths
Davy Avenue
Knowlhill
Milton Keynes
MK5 8HJ
Bankers
Lloyds Bank plc
City Office
11-15 Monument Street
London
EC3V 9JA
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR GPUWCQUPUGQM
(END) Dow Jones Newswires
June 18, 2020 02:00 ET (06:00 GMT)
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