TIDMMTEC
RNS Number : 2279M
Made Tech Group PLC
13 September 2023
13 September 2023
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
MADE TECH GROUP PLC
("Made Tech" or the "Group")
AUDITED FINAL RESULTS 2023
Made Tech Group plc, a leading provider of digital, data and
technology services to the UK public sector, announces its audited
final results for the year to 31 May 2023 ("FY23" or the
"period").
Financial summary
FY23 FY22 Change
Revenue GBP40.2m GBP29.3m GBP10.9m
-------- -------- ---------
Gross profit GBP14.4m GBP11.3m GBP3.1m
-------- -------- ---------
Gross profit margin 35.81% 38.43% (2.6pp)
-------- -------- ---------
Adjusted EBITDA(1) GBP1.5m GBP2.6m (GBP1.1m)
-------- -------- ---------
Adjusted EBITDA margin 3.79% 9.04% (5.25pp)
-------- -------- ---------
Adjusted profit before tax(2) GBP1.0m GBP2.3m (GBP1.3m)
-------- -------- ---------
Sales Bookings(3) GBP69.9m GBP51.1m GBP18.8m
-------- -------- ---------
Contracted Backlog(4) GBP67.9m GBP38.2m GBP29.7m
-------- -------- ---------
Cash GBP8.5m GBP12.3m (GBP3.8m)
-------- -------- ---------
-- Revenue up 37% (organic) to GBP40.2m (FY22: GBP29.3m) and CAGR of over 80% over the last 5
years
-- Adjusted EBITDA at GBP1.5m (FY22: GBP2.6m) impacted by unexpected delays to scheduled work
streams towards year end
-- Cash at 31 May 2023 at GBP8.5m (FY22: GBP12.3m), following a GBP3.1m strategic investment
in new SaaS products and expanding capabilities
-- Contracted Backlog growth of 44% to GBP67.9m (FY22: GBP38.2M) and Sales Bookings up 37% to
GBP69.9m (FY22: GBP51.1m)
Operational highlights
-- Trend of increased contract sizes continued during FY23, with two contracts won over GBP10m,
seven over GBP5m and 10 over GBP2m during FY23, reflecting the Group's growing stature in
the market
-- First of three, higher margin, recurring revenue SaaS products successfully launched in the
year for local authority market, presenting a substantial market opportunity to generate recurring
revenues at higher margins
-- Cost base right sized, reducing from 484 at the HY end to 430 at the FY end (FY22: 478) and
further reduction in contractors from 10% at HY end to 8% at FY end (FY22: 35%)
-- Utilisation at 70% (FY22: 81%) impacted by changes at a number of our client organisations,
which resulted in the rephasing of certain projects at short notice.
-- Carbon neutral status achieved during the year and clear ESG objectives set
-- Leadership team strengthened with appointment of Tim Bardell as Chief Delivery and Transformation
Officer and Wayne Searle as Chief People Officer, as part of preparations for the next wave
of growth
Post year end highlights and outlook
-- Revenue for FY24 expected to be in line with FY23, due to near term political and macro environment
challenges. Digital transformation market expected to remain buoyant over the long term.
-- Firm focus on profitability with the Group reporting an improved adjusted EBITDA in the first
three months of the new financial year and trading in line with expectations for FY24
-- One of only 11 suppliers to win a place on Lot 2b of the new Digital and Legacy Application
Services framework ("DALAS"), which is expecting to spend GBP700m-800m until September 2027
-- With a strong team, brand and market positioning, a reputation for excellent digital delivery,
a clear strategy and a robust financial position, the board remains excited about the opportunities
which lie ahead
Rory MacDonald, CEO, commented:
"This year marked our first full year on the public markets, a
significant milestone in our corporate journey. Despite the
challenges of a turbulent macroeconomic landscape, we have made
significant strategic progress. We have delivered another year of
solid organic revenue growth, up 37% yearly. This continues our
impressive track record of organic growth, with a compound organic
annual growth rate ("CAGR") of c.80% over the last five years, a
market-leading figure within our sector.
We achieved a record level of sales bookings at GBP69.9m, driven
by a substantial number of contract renewals and expanding our
remit with key clients. This is a testament to the strength of our
client relationships and the quality of our services. In addition
to expanding our service lines, we have continued investing in
intellectual property ("IP") solutions. This financial year, we
spent GBP1.5m on developing three new SaaS products, specifically
designed for the local government market. Our investment in IP
solutions is a key part of our longer-term strategy to provide a
comprehensive, end-to-end transformation offering which spans
software and services.
Our financial position remains strong, as we stay debt-free and
had a cash balance of GBP8.5m at the end of FY23. Our immediate
focus is improving profitability and operating cashflow, as we
settle the business ahead of our next wave of growth.
Thank you to our shareholders, employees, partners and clients
for their ongoing support, and we look forward to delivering value
for you in the years ahead."
Online investor presentation
As part of the Group's Results roadshow, the management team
will also host an online investor presentation with Q&A
tomorrow, 14 September 2023, at 12.30pm. To participate, please
register with PI World at:
https://bit.ly/MTEC_FY23_results_presentation .
(1) Adjusted EBITDA means operating profit before depreciation, amortisation, exceptional items
and share based payment charge
(2) Adjusted profit before tax means profit before tax before amortisation of intangible assets,
share based payment charge and exceptional items
(3) Sales bookings represent the total value of sales contracts awarded in the year, to be delivered
in FY22-FY25
(4) Contracted Backlog is the value of contracted revenue that has yet to be recognised
Enquiries:
Made Tech via Belvedere PR
Rory MacDonald, CEO
Deborah Lovegrove, CFO
Singer Capital Markets (Nominated Adviser & Broker) Tel: +44 (0) 20 7496 3000
Jen Boorer/ Harry Gooden / Asha Chotai
--------------------------------
Belvedere PR (Financial PR) Email: madetech@belvederepr.com
Cat Valentine Tel: +44 (0) 7715 769078
Keeley Clarke Tel: +44 (0) 7967 816525
--------------------------------
About Made Tech
Made Tech is a high-growth provider of digital, data and
technology services to the UK public sector. Founded in 2008 and
with a headcount of over 430 across multiple UK locations, Made
Tech provides services that enable central government, healthcare
and local government organisations to digitally transform.
The Group's purpose is to "positively impact the future of
society by improving public sector technology". To achieve this the
Group has four key strategic missions: Modernise legacy technology
and working practices; Accelerate digital service and technology
delivery; Drive better decisions through data and automation; and
Enable technology and delivery skills to build better systems.
More information is available at www.madetech.com
CHAIR'S REPORT
I am pleased to present Made Tech's audited annual results for
the year ended 31 May 2023, another year of substantial revenue
growth for the business, which have been delivered despite the
continuing challenging wider economic circumstances.
With the post-Covid economic recovery being compromised by
inflationary pressures, including wage inflation, the continuing
delivery of strong revenue growth and increasing numbers of clients
are achievements which are testament to the talented teams we have
throughout the business. I must also acknowledge our disappointment
when, in the final few weeks of the financial year, unforeseen
rephasing of the required work packages by certain of our clients
and the consequent lower level of associated revenues negatively
impacted our performance in FY23.
Summary of the year
With revenue for the year nevertheless increasing by a
substantial 37% to GBP40.2m (FY22 GBP29.3m), this continues an
exceptionally strong track record of growth, delivering an 83% CAGR
over the last five years. Our gross profit also increased
significantly by 28% to GBP14.4m (FY22 11.3m). Due to the impact of
the deferral of work by certain clients as noted above, our
adjusted EBITDA for FY23 decreased by 43% to GBP1.5m (FY22
GBP2.6m). Although this has reduced our profitability in the short
term, we remain confident in our ability to build our business for
the future and deliver long-term returns and value for all our
stakeholders.
Strategic delivery
FY23 is the first full year of results since Made Tech's
admission to AIM in September 2021. At IPO, we set out our strategy
to achieve sustained revenue, profit and cashflow growth by
expanding the Group's capabilities, building out regional hubs and
growing the Group's market share within the health, local
government and central government sectors.
In FY23, we continued to make progress against the majority of
these strategic objectives. We have been successful in winning a
greater proportion of larger contracts, which reflects our growing
reputation in the market. Our revenues in the health sector
increased by 27% to GBP5m on the back of the major contract win in
FY22 with NHS Digital, which, although the phasing of work has been
later than originally anticipated and therefore didn't add to our
FY23 revenues, is now contributing to our revenues and presence in
the health sector in the current year. We were delighted to be
awarded our first contracts with the Met Office and Crown
Commercial Services, which together with renewals, helped to grow
our services to central government by over 60% to GBP29m. Our local
government services revenues contracted by 16% to GBP6m due to
budgetary pressures experienced in the year. To better service
local government clients, we moved our focus to developing our
first bespoke Software as a Service ("SaaS") recurring revenue
products, investing GBP1.5m in FY23 in developing three new SaaS
products, specifically designed for the local government market.
These products will deliver value for money for budget-constrained
local authorities and generate recurring revenues at higher margins
for Made Tech, presenting a substantial opportunity. Our first two
products help local government teams to manage their housing
stocks, streamlining repairs and managing voids and the third
enables local government to easily request and validate service
users' information quickly and accurately. The first of these
products has launched with a number of clients actively using these
services. Investment in our own intellectual property is a key part
of our longer-term strategy to provide a comprehensive, end-to-end
offering to our clients which spans software and services. We
believe this will both benefit our clients and reduce Made Tech's
exposure to variations in the timing of demand for our services and
ultimately add to the resilience of our business.
Our people are fundamental to the success and sustainability of
Made Tech. We rely on their skills, talent, motivation and
commitment to deliver services and solutions to our clients. We
have recently been delighted to recruit an experienced Chief People
Officer strengthening our senior leadership team, leading our
people strategy, and ensuring we create opportunities for our
people to develop and grow with Made Tech over the long term. We
continue to recruit talented individuals across the UK to ensure we
have the right mix of capabilities to meet our client demand. We
have paused our progress on regional hubs as we develop our hybrid
working strategy, taking account of the needs of our people at the
same time as optimising the quality of service we are able to
provide to our clients.
We continue to invest in our core services, expanding and
strengthening our range of capabilities. Our design capability now
has a team of almost 80 skilled professionals and, during the year,
we recruited an experienced leader to deliver further growth in
this area. Our data practice capability now has a team of around 20
data experts specialising in data science, artificial intelligence
and machine learning and we continue to add to these data
offerings. We are also investing in our transformation services
team, as we seek to engage earlier at a senior level with our
clients and to become a strategic partner as they plan the
long-term digital transformation of their organisations. In
addition, we are in the early stages of building our managed
services offering. This strategic progress has helped us to deliver
substantial growth in revenues but we acknowledge that investments
made in the year, to deliver future growth, impacted our profits
and cashflows in the year under review.
As we worked to deliver progress against our strategic
commitments during the year, adjustment of our headcount was
required to manage the impact of clients' changing demands and
tailor the mix of our talent pool to deliver the required range of
services. Our people have shown great commitment during and
adaptability to the changes needed over the past year and their
dedication towards both the business and our clients is a credit to
them.
The Board believes in the value of having alignment in the
interests of our people with those of our shareholders and remains
committed to offering our employees the opportunity to own shares
in the Company. At the FY23 year end, 36% of our people held shares
in our business and to promote the alignment of the interests of
our new recruits with those of our shareholders we have recently
awarded equity incentives to key new members of our executive
team.
Our financial position remains strong. Unlike many technology
businesses, Made Tech is debt free and our cash balance is robust
at GBP8.5m at the end of FY23, providing more than sufficient funds
to deliver our plans for future organic growth. This financial
strength gives us the flexibility to both invest for future growth
and take advantage of opportunities as they arise.
A responsible business
Following our IPO, we established an ESG Committee to guide and
oversee our progress against environmental, social and governance
targets. This is a key priority for us and the committee is chaired
by our CEO and has members who are enthusiastic volunteers from all
across our group, as well as myself and Helen Gilder from our NED
team. We are committed to continuing to develop our environmental,
social and governance priorities embedded within our overall
strategy and as a fundamental part of what it means to be Made
Tech. We are committed to sourcing, designing and offering services
and products which support social responsibility and environmental
sustainability. During FY23, we are pleased to have reduced our
overall carbon emissions and our carbon emissions per employee,
achieved carbon neutral status and have set ourselves the target of
being carbon net zero by 2030. Our mission in transforming public
services is to create a fairer and more equitable society, and we
recognise the importance and benefits of diversity in our business.
While our gender diversity remains better than the industry average
for the technology sector we recognise our ongoing imperative to
drive improvement in this space.
We recognise the value of good corporate governance in every
part of the business and consider that compliance with the QCA Code
serves the interests of all our key stakeholders and will support
the maintenance and creation of long-term value in the Company. In
FY23, the Board performed an internal formal evaluation of its
performance in its first full year as a listed company. The review
comprised the completion of a comprehensive questionnaire by all
Board members covering the effectiveness of the Board's performance
as a unit, as well as that of its committees and the individual
Directors. As this is the first time of undertaking this review,
these results will be used as a benchmark for the Board and will be
assessed again on a yearly basis.
Current trading and outlook
We are aware that the ongoing economic headwinds and the
forthcoming general election will put some pressure on our clients.
However, given the UK government's long term commitment to use
technology to improve both its operations and its interaction with
the public, we expect to be able play our part in delivering this
digital transformation for many years to come and look forward to
FY24 with cautious optimism.
To support our future growth, we have made strategic investments
in both our service capabilities and our SaaS products and we have
the resources and intent to continue investment in these areas, as
we see them as important elements in the long-term success of our
business. We have also invested in our executive management and
have strengthened our senior leadership team with the addition of a
Chief People Officer to lead our people strategy.
The Group has traded profitability in the first three months of
the new financial year, driven by right sizing of the cost base -
improved billable utilisation, reduced contractor numbers and
partner work, improved management information; and a reduction in
spend on capability investments. Our contracted backlog of GBP67.9m
is at record levels, providing good revenue cover to FY26 and we
have a promising pipeline of further new business opportunities. In
summary, we feel we are well placed to continue Made Tech's
progress as an increasingly important provider of technology
services and products to the UK public sector and we look forward
to delivering long-term returns and value for all our
stakeholders.
Joanne Lake
Non-Executive Chair
CHIEF EXECUTIVE'S REVIEW
I am delighted to present the Made Tech Group results for 2023.
I want to start by extending my deepest gratitude to our
shareholders, clients and dedicated team. Your unwavering support
and commitment have been instrumental in navigating the past 12
months, and for that, I am truly thankful.
This year marked our first full year on the public markets, a
significant milestone in our corporate journey. However, it has not
been without its challenges. The macroeconomic landscape has been
turbulent, with various factors causing instability in the wider
economic environment. This instability has particularly affected
the core government market within which we operate.
Despite these challenges, I am proud to report that we have made
significant strategic progress. Our resilience has allowed us to
navigate these uncertain times, and our achievements are a
testament to the strength of our business and the dedication of our
team.
We have delivered another year of exceptionally strong organic
revenue growth, up 37% yearly. This continues our impressive track
record of organic growth, with a compound annual growth rate
("CAGR") of c.80% over the last five years, a market-leading figure
within our sector.
The digital transformation market in which we operate remains
buoyant. We expect long-term demand from existing and new clients
as they seek to drive productivity enhancements and capitalise on
emerging opportunities, such as artificial intelligence. Many of
these clients lack the necessary in-house skills, presenting a
significant opportunity for our business.
Our brand and market positioning continue to be very strong. We
have built a reputation for excellent digital delivery, and this
positions us well to capitalise on the structural growth
opportunities ahead. We remain committed to delivering value for
our shareholders, clients and people, and I am confident that we
are well placed to continue our growth trajectory.
Continuing to grow at a pace
We achieved a record level of sales bookings at GBP69.9m, a
significant milestone for the Group. This achievement was driven by
a substantial number of contract renewals and expanding our remit
with key clients. This is a testament to the strength of our client
relationships and the quality of our services.
This year, we undertook our first independent customer
satisfaction review, showing an impressive 77% of our clients
expressed their strong satisfaction with the Company. The feedback
received highlighted our exceptional performance in fostering
robust client relationships, providing excellent client service and
promoting effective collaboration. We are thrilled with these
results and are committed to maintaining and improving this high
level of customer satisfaction and will continue to conduct these
reviews on an ongoing basis, reporting the results to our
investors.
We have also seen a trend of increased contract sizes, winning
two contracts over GBP10m, seven over GBP5m and ten over GBP2m
during FY23. This trend reflects our growing stature in the market,
and we expect to see this continue as we expand our business.
Regarding our sector-specific performance, our revenue in the
central government sector was up 61% to GBP29m. This was a strong
performance, driven by renewals and winning new mandates with the
Met Office and Crown Commercial Service.
In the health sector, revenue increased by 27% to GBP5m, and we
secured a new mandate at the Health Security Agency, despite
significant changes within NHS England and NHS Digital seen during
the year.
In the local government sector, our revenue decreased by 16% to
GBP6m. We saw increased budget pressure within the market, which
led us to adapt and refocus our go-to-market strategy for this
industry to focus purely on our new Software as a Service ("SaaS")
products.
Expanding the services we offer clients
Our goal has always been to provide an integrated digital
transformation offering to our clients, and I am pleased to
highlight significant strides towards this objective.
Our design capability, which we launched in 2021, has developed
impressively. We now have nearly 80 talented individuals,
contributing significantly to the business and improving the
quality of outcomes we deliver to our clients. Given the scale of
this team, we have appointed an experienced and specialised design
leader to drive this area forward.
In 2022, we launched our data practice, which now has a team of
approximately 20 data experts specialising in data science, AI and
machine learning. We have continued to invest in developing our
data offerings in 2023, further strengthening our capabilities in
an area which we expect to be critical moving forwards.
We are also in the early stages of building our managed services
offering. Although in its infancy, this new service line has
already enabled us to target new opportunities previously out of
reach. We expect contracts and revenues from this service to be
longer term, providing more visible and committed revenue streams
for the future.
We have made significant investments in our transformation
service. This is a key area of focus for us, as we look to position
the business as a more strategic partner, engaging at more senior
levels and providing more transformational impact for our client
organisations.
In total, we have invested GBP0.9m in FY23 to build our core
services. These investments are not just about expanding our
capabilities but also about driving new areas of growth and revenue
streams in the years ahead. They build on our already strong
reputation in the market, enabling us to deliver additional value
to clients.
Progressing our product strategy
In addition to expanding our service lines, we have continued
investing in intellectual property ("IP") solutions. This financial
year, we spent GBP1.5m on developing three new SaaS products,
specifically designed for the local government market.
Our first two products support local authorities in managing
their housing stock. Our Housing Repairs product streamlines the
repair process for residents and is more cost effective for local
authorities. Our Voids product reduces the relet times and housing
waiting lists.
Our third product, Evidence, is a software solution enabling
local authorities to verify individual identities and the evidence
required to establish eligibility to access a service. In an
increasingly digital world, verifying identities and eligibility
quickly and accurately is crucial, and our Evidence software
provides a reliable solution to this challenge.
We are excited about the opportunities these new products
present. We already have a number of local government clients
signed up and using these products, and we anticipate that this
number will grow in the coming years.
Our investment in IP solutions is a key part of our longer-term
strategy to provide a comprehensive, end-to-end transformation
offering which spans software and services. We are excited about
the potential of these new products and their future
contribution.
Nurturing our most important assets
Over the past year, we have slowed the pace of our regional
expansion, as we take the time to understand new hybrid working
patterns and develop our estate strategy. This decision reflects
our commitment to ensuring that our growth is sustainable and that
we are creating the best possible working environment for our
team.
We have strengthened our senior leadership team with the
appointments of Tim Bardell as Chief Delivery and Transformation
Officer and Wayne Searle as Chief People Officer, as part of our
preparations for the next wave of growth. These changes are
designed to ensure we have the right people in the right roles to
drive our business forward. There will be further positive changes
in the coming year, as we continue to strengthen our leadership
structure.
Being a responsible business
Environmental, social and governance ("ESG") considerations are
increasingly vital to our stakeholders and are central to our
operations. As a key supplier to the UK government, ESG is crucial
to our ability to secure work and long-term frameworks. Our ESG
strategy is deeply integrated into our business, and we have made
significant progress on various fronts in FY23.
Adopting best practice guidelines, like the QCA Code, and taking
feedback from our teams, clients and investors, we have developed
our ESG initiatives in a way that reflects our unique voice. You
can find more details in the ESG section of this FY23 Annual
Report.
A positive outlook
Although the economic uncertainty and the forthcoming general
election will continue to put short-term pressure on our clients,
we know there is a commitment to use technology to modernise and
improve the way our clients' organisations operate, and we fully
expect to benefit from the digital transformation opportunity for
many years to come.
Our strategic investments in data, managed services, design,
transformation and products set us up for future growth, and we
intend to continue investing for growth in the coming years,
confident in the long-term opportunity ahead for our business.
Our financial position remains strong, as we stay debt free and
had a cash balance of GBP8.5m at the end of FY23. This financial
strength gives us the flexibility to invest in growth and seize
opportunities as they arise. Our contracted backlog is the
strongest it has ever been, providing good revenue cover to FY26,
and we have a promising pipeline of new business opportunities.
In conclusion, while the political and macro environment
provides near-term challenges, we are confident in our ability to
navigate them and continue our growth trajectory. We have a strong
team, a clear strategy and a robust financial position, and we are
excited about the opportunities ahead.
I want to end by saying a big thank you to our shareholders,
employees, partners and clients for their ongoing support and we
look forward to continuing to deliver value for you in the years
ahead.
Rory MacDonald
Chief Executive Officer
FINANCIAL REVIEW
Adjusted performance measures
The Group uses adjusted measures as key performance indicators,
in addition to those reported under IFRS, as they are more
representative of the underlying performance of the business and
enable comparability between periods. These adjusted measures
exclude certain non-operational and exceptional items and have been
consistently applied in all years presented.
Revenue
Revenue for FY23 was GBP40.2m (FY22: GBP29.3m), growth of 37%.
The organic growth arose from a combination of strong growth from
existing key clients and winning contracts with new clients.
Gross profit
During the year, there was a decrease in gross profit as a
percentage of turnover, declining by 2.7% from 38.4% to 35.8%. This
decrease can primarily be attributed to a reduction in utilisation,
which dropped from 81% to 70%. The decline in margin was influenced
by shifts in the political landscape, resulting in client project
delays and the postponement of awarding new contracts. In addition,
the business faced a period of rising expenses due to inflationary
factors, increases in salaries, and travel costs associated with
transitioning back to on-site work after the pandemic.
FY23 FY22 Variance
Key statistics GBP'000 GBP'000 GBP'000
----------------------------------------- -------- -------- --------
Revenue 40,195 29,289 10,906
-------- -------- --------
Gross profit 14,393 11,257 3,136
-------- -------- --------
Gross profit margin 35.81% 38.43% (2.6pp)
-------- -------- --------
Adjusted EBITDA 1,521 2,649 (1,128)
-------- -------- --------
Adjusted EBITDA margin 3.79% 9.04% (5.25pp)
-------- -------- --------
Depreciation and amortisation (417) (308) (109)
-------- -------- --------
Share-based payment charge (2,068) (2,376) 308
-------- -------- --------
Exceptional items (574) (224) (350)
-------- -------- --------
Operating loss (1,538) (259) (1,279)
-------- -------- --------
Net finance income/(costs) 11 (29) 40
-------- -------- --------
Tax (72) (20) (52)
-------- -------- --------
Loss for the year (1,599) (308) (1,291)
-------- -------- --------
Weighted average number of shares ('000) 148,885 135,729 13,156
-------- -------- --------
Adjusted earnings per share (pence) 0.34p 1.29p (0.95)p
----------------------------------------- -------- -------- --------
In order to enhance margins in FY24 and beyond, we have
realigned our headcount with current forecasts and will continue to
do so on an ongoing basis. Over the past year, we have reduced our
headcount from 478 at 31 May 2022 to 430 at 31 May 2023.
Additionally, we have implemented significant changes to our
capacity management and reporting processes, with the goal of
optimising utilisation moving forward. These improvements will
enable us to maximise productivity and better capitalise on
available resources, ultimately strengthening our margins.
Adjusted EBITDA
Adjusted EBITDA for FY23 was GBP1.5m (FY22: GBP2.6m). Adjusted
EBITDA margin was 3.8% (FY22: 9.0%). During the year, the Company
continued to invest in new capabilities, clients and bids, to
support future revenue growth. We expect our pace of expansion to
moderate in the coming year due to the upcoming general election
and an increase in public sector competition driven by a slowdown
in public sector spending. Despite this, we have our largest ever
contracted backlog moving into FY24 at GBP67.9m, giving us good
revenue cover to FY26.
Operating loss
The GBP1.5m operating loss for the year (FY22: GBP0.3m operating
loss) includes a GBP2.1m share-based payment charge (FY22: GBP2.4m)
and exceptional items of GBP0.6m (FY22: GBP0.2m).
Total operating expenses were GBP15.9m (FY22: GBP11.5m).
Operating expenses excluding share-based payment charges and
exceptional items increased by 50% to GBP13.4m (FY22: GBP8.9m) to
support future revenue growth.
Share-based payment charge
The total charge for the period under IFRS 2 Share-based Payment
was GBP2.1m (FY22: GBP2.4m). This charge related to the FY21, FY22
and FY23 awards made under the Long Term Incentive Plan and the
Group Restricted Share Plan ("RSP") launched on 30 September
2021.
Exceptional items
Exceptional costs in the year were GBP574,000 (FY22:
GBP224,000). Costs in FY23 comprised GBP493k related to severance
payments and GBP80k related to reorganisation and restructuring
costs, as changes were made to align headcount with anticipated
revenue following the delays and postponements of client contracts
and revenue (FY22: GBP180,000 related to the Group's admission to
AIM in September 2021 and GBP45,000 related to severance
payments).
Taxation
The total taxation charge was a charge of GBP72,000 (FY22:
GBP19,760), giving rise to an effective tax credit/(charge) of 5%
(FY22: (7%)). The charge is lower than the UK standard rate of
taxation due to the use of tax losses brought forward. In future
years, we would expect the Group's effective rate of tax to move
closer to the UK corporation tax rate.
Basic earnings per share
The earnings per share analysis above covers both adjusted
earnings per share (profit after tax before amortisation of
intangibles, share-based payment charge and exceptional items
divided by the weighted average number of shares in issue during
the year), and statutory earnings per share (profit attributable to
equity holders divided by the weighted average number of shares in
issue during the year). Adjusted profit after tax was GBP1.0m
(FY22: GBP2.3m), a decrease in adjusted earnings per share of 0.95
pence. Basic earnings per share was negative in both years due to
the loss position.
Cash flow
Cash at year end was GBP8.5m (FY22: GBP12.3m). The Group's
current cash reserves provide sufficient capital to fund current
planned product development and working capital as the business
continues to grow. Cash flow for the year is set out below.
The combined underlying trade debtor and other receivables
totalled GBP6.2m (FY22: GBP6.1m). The increase of 8% is in line
with expectations, given revenue growth.
FY23 FY22 Variance
Cash flow GBP'000 GBP'000 GBP'000
----------------------------------------------------------- --------- -------- ---------
Adjusted EBITDA 1,521 2,649 (1,128)
--------- -------- ---------
Movement in working capital (1,477) (750) (727)
--------- -------- ---------
Capital expenditure investment (3,144) (2,336) (808)
----------------------------------------------------------- --------- -------- ---------
Adjusted operating cash flow (3,100) (437) (2,663)
--------- -------- ---------
Taxation - - -
--------- -------- ---------
Net finance cash flows (194) 12,072 (12,266)
--------- -------- ---------
Exceptional items (574) (224) (350)
--------- -------- ---------
Others 9 - 9
----------------------------------------------------------- --------- -------- ---------
Net cash flow (3,859) 11,411 (15,270)
--------- -------- ---------
Adjusted EBITDA to adjusted operating cash flow conversion (203.81%) (16.49%) (187.32%)
----------------------------------------------------------- --------- -------- ---------
Adjusted operating cash flow
Operating cash flow before tax payments, net finance costs and
payments in respect of exceptional items reduced by GBP2.7m. This
includes GBP3.2m of capital expenditure investment, of which
GBP3.1m related to ongoing investment in IP to support future
growth.
Balance sheet and shareholders' funds
Net assets increased in the year by GBP424k. Non-current assets
include GBP5m of investment in capitalised product development and
IP solution costs (see below). The balance sheet is summarised
below:
FY23 FY22 Variance
Net assets GBP'000 GBP'000 GBP'000
------------------- -------- -------- --------
Non-current assets 5,512 2,783 2,729
-------- -------- --------
Working capital 1,365 (9) 1,374
-------- -------- --------
Cash 8,474 12,333 (3,859)
-------- -------- --------
Lease liability (140) (320) 180
-------- -------- --------
Other net assets - - -
------------------- -------- -------- --------
Net assets 15,211 14,787 424
------------------- -------- -------- --------
Capitalised product development and IP solutions costs
The Group continues to invest in product development and IP
solutions. Our IP solutions act as business accelerators for the
clients we serve. These include business solutions encompassing
commercial software embedded within our end-to-end service, and
digital enablers such as methodologies and frameworks to drive
change across business and IT processes. Where these investments
are expected to result in future revenue, costs incurred that meet
the definition of product development and IP solutions in
accordance with IAS 38 Intangible Assets are capitalised in the
statement of financial position. During the year, the Group
capitalised GBP3.1m in respect of product development (FY22:
GBP1.9m).
Dividend policy
On admission to AIM in September 2021, the Group's stated
intention was to make dividend payments, and this policy remains in
place. However, as we believe that the opportunities ahead are
significant, we have taken the decision to retain cash in the
business and not pay a dividend in respect of FY23. The Board will
review the decision to pay a dividend in FY24, and will provide an
update in the Company's half year results, scheduled for
announcement in February 2024.
Alternative performance measures ("APMs")
Throughout the Annual Report and Accounts the Group has used a
number of APMs. These are used to provide additional clarity to the
Group's financial performance and are used internally by management
to monitor business performance, in its budgeting and forecasting
and also for determination of Directors' and senior management's
remuneration. These APMs are not defined under IFRS and, therefore,
may not be directly comparable with adjusted measures presented by
other companies. The non-GAAP measures are not intended to be a
substitute for or superior to any IFRS measures of performance.
However, they are considered by management to be important measures
used in the business for assessing performance.
The following are key non-GAAP measures identified by the Group
and used in the Strategic Report and financial statements:
-- adjusted EBITDA: operating profit before depreciation,
amortisation, share-based payments charge and exceptional
items;
-- adjusted operating profit: operating profit before
amortisation of intangible assets, share-based payments charge and
exceptional items;
-- adjusted profit before tax: profit before tax, amortisation
of intangible assets, share-based payments charge and exceptional
items;
-- adjusted earnings: profit after tax before amortisation of
intangible assets, share-based payments charge and exceptional
items less net finance costs and taxation;
-- adjusted earnings per share: adjusted earnings divided by a
weighted average number of shares in issue; and
-- adjusted operating cash flow: adjusted EBITDA less movements
in working capital, capital expenditure and lease payments.
The adjusted profit measures can be reconciled to the reported
statutory numbers as follows:
Adjusted EBITDA:
FY23 FY22 Variance
GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- --------
Loss after tax (1,599) (308) (1,291)
-------- -------- --------
Interest (receivable)/payable (11) 29 (40)
-------- -------- --------
Taxation 72 20 52
---------------------------------- -------- -------- --------
Loss before interest and taxation (1,538) (259) (1,279)
-------- -------- --------
Depreciation 417 308 109
-------- -------- --------
Share-based payment charge 2,068 2,376 (308)
-------- -------- --------
Exceptional items 574 224 370
---------------------------------- -------- -------- --------
Adjusted EBITDA 1,521 2,649 (1,128)
---------------------------------- -------- -------- --------
Adjusted profit/(loss) before tax:
FY23 FY22 Variance
GBP'000 GBP'000 GBP'000
---------------------------------------------- -------- -------- --------
Statutory loss before tax (1,527) (288) (1,239)
-------- -------- --------
Share-based payment expense and related costs 2,068 2,376 (308)
-------- -------- --------
Exceptional items 574 224 370
---------------------------------------------- -------- -------- --------
Adjusted profit/(loss) before tax 1,115 2,312 (1,197)
---------------------------------------------- -------- -------- --------
Adjusted profit/(loss) after tax:
FY23 FY22 Variance
GBP'000 GBP'000 GBP'000
---------------------------------------------- -------- -------- --------
Statutory loss after tax (1,599) (308) (1,291)
-------- -------- --------
Share-based payment expense and related costs 2,068 2,376 (308)
-------- -------- --------
Exceptional items 574 224 350
---------------------------------------------- -------- -------- --------
Adjusted profit/(loss) after tax 1,043 2,292 (1,249)
---------------------------------------------- -------- -------- --------
Deborah Lovegrove
Chief Financial Officer
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
FY23 FY22
Note GBP'000 GBP'000
Revenue 40,195 29,289
Cost of sales (25,802) (18,032)
--------------------------------------- ----- --------- ---------
Gross profit 14,393 11,257
--------------------------------------- ----- --------- ---------
Administrative expenses (12,931) (8,608)
Share-based payments 15 (2,068) (2,376)
Depreciation 11 (417) (308)
Exceptional items 7 (574) (224)
Other income 59 -
--------------------------------------- ----- --------- ---------
Operating loss (1,538) (259)
--------------------------------------- ----- --------- ---------
Interest payable 6 (14) (29)
--------------------------------------- ----- --------- ---------
Interest receivable 6 25
--------------------------------------- ----- --------- ---------
Loss before tax (1,527) (288)
--------------------------------------- ----- --------- ---------
Taxation expense 8 (72) (20)
--------------------------------------- ----- --------- ---------
Loss for the period (1,599) (308)
--------------------------------------- ----- --------- ---------
Total comprehensive loss attributable
to the owners of the parent (1,599) (308)
--------------------------------------- ----- --------- ---------
Loss per share:
Loss per ordinary share 9 (1.07p) (0.22p)
Diluted loss per ordinary share 9 (1.07p) (0.22p)
--------------------------------------- ----- --------- ---------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FY23 FY22
Note GBP'000 GBP'000
Assets
Non-current assets
Tangible assets 11 499 879
Intangible assets 10 5,013 1,904
Total non-current assets 5,512 2,783
------------------------------- ----- --------- ---------
Current assets
Trade and other receivables 6,193 6,065
Cash and cash equivalents 8,474 12,333
------------------------------- ----- --------- ---------
Total current assets 14,667 18,398
------------------------------- ----- --------- ---------
Total assets 20,179 21,181
------------------------------- ----- --------- ---------
Equity and liabilities
Equity
Share capital 75 74
Share premium 13,421 13,421
Share-based payment reserve 4,398 2,376
Deferred share reserve - 12
Capital redemption reserve 12 -
Retained deficit (2,695) (1,096)
------------------------------- ----- --------- ---------
15,211 14,787
------------------------------- ----- --------- ---------
Non-current Liabilities
Lease liabilities - 140
Deferred tax liability 14 92 20
------------------------------- ----- --------- ---------
Total non-current liabilities 92 160
------------------------------- ----- --------- ---------
Current liabilities
Trade and other payables 4,736 6,054
Lease liabilities 12 140 180
------------------------------- ----- --------- ---------
Total current liabilities 4,876 6,234
------------------------------- ----- --------- ---------
Total liabilities 4,968 6,394
Total equity and liabilities 20,179 21,181
------------------------------- ----- --------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
-based Deferred Capital Total
Share Share payment share redemption Retained equity/
Capital Premium reserve reserve reserve earnings (deficit)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Equity at 1 June 2021 1 - - - - (788) (787)
Loss for the period - - - - - (308) (308)
-------------------------- --------- --------- --------- --------- ------------- ---------- -----------
Transactions with
equity owners:
Issue of shares 73 13,421 - 12 - - 13,506
Share-based payment
reserve - - 2,376 - - - 2,376
-------------------------- --------- --------- --------- --------- ------------- ---------- -----------
Total transactions
with equity owners 73 13,421 2,376 12 - - 15,882
-------------------------- --------- --------- --------- --------- ------------- ---------- -----------
Balance at 31 May
2022 74 13,421 2,376 12 - (1,096) 14,787
-------------------------- --------- --------- --------- --------- ------------- ---------- -----------
Equity/(deficit)
at 1 June 2022 74 13,421 2,376 12 - (1,096) 14,787
Loss for the period - - - - - (1,599) (1,599)
-------------------------- --------- --------- --------- --------- ------------- ---------- -----------
Transactions with
equity owners:
Issue of shares 1 - - - - - 1
Cancellation of deferred
shares - - - (12) 12 - -
Share-based payment
reserve - - 2,022 - - - 2,022
-------------------------- --------- --------- --------- --------- ------------- ---------- -----------
Total transactions
with equity owners 1 12 2,022 (12) 12 - 2023
-------------------------- --------- --------- --------- --------- ------------- ---------- -----------
Balance at 31 May
2023 75 13,421 4,398 - 12 (2,695) 15,211
-------------------------- --------- --------- --------- --------- ------------- ---------- -----------
CONSOLIDATED CASH FLOW STATEMENT
FY23 FY22
Note GBP'000 GBP'000
Loss for the period (1,599) (308)
Adjustments for:
Tax charge 8 72 20
Net finance (credit)/charge in the
income statement 6 (11) 29
Loss on disposal of property, plant
and equipment 9 -
Depreciation of property, plant and
equipment 11 417 308
Share-based payment 2,068 2,376
------------------------------------------- ----- --------- ---------
Cash flows from operating activities
before changes in working capital 956 2,425
------------------------------------------- ----- --------- ---------
Increase in trade and other receivables (128) ( 3,521)
Decrease/(increase) in trade and
other payables (1,349) 2,771
------------------------------------------- ----- --------- ---------
Net cash flows (used by)/from operating
activities (521) 1, 675
------------------------------------------- ----- --------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment 11 (60) ( 432)
Addition of intangibles 10 (3,109) ( 1,904)
Interest and other fees received 6 25 -
------------------------------------------- ----- --------- ---------
Net cash flows used by investing
activities (3,144) ( 2,336)
------------------------------------------- ----- --------- ---------
Cash flows from financing activities
Issue of equity shares - 13,506
Interest and other fees paid 6 (4) (12)
Repayment of loans and borrowings - (1,250)
Repayment of lease liability 13 (180) ( 155)
Interest paid on lease liability (10) ( 17)
------------------------------------------- ----- --------- ---------
Net cash flows from/(used by) financing
activities (194) 12, 072
------------------------------------------- ----- --------- ---------
Net increase in cash and cash equivalents (3,859) 11,41 1
Cash and cash equivalents at the
start of the period 12,333 92 2
------------------------------------------- ----- --------- ---------
Cash and cash equivalents at the
end of the period 8,474 12,33 3
------------------------------------------- ----- --------- ---------
NOTES TO THE FINANCIAL STATEMENTS
1. Company information
The consolidated financial information represents the results of
Made Tech Group Plc (the "Company") and its subsidiary, together
comprising the Group ("Made Tech Group Plc" or the "Group").
Made Tech Group Plc is a company incorporated and domiciled in
England and Wales, registration number 12204805. The address of its
registered office is 4 O'Meara St, London SE1 1TE.
Made Tech Group Plc is quoted on the London Stock Exchange.
The principal activity of Made Tech Group Plc (the "Company") is
that of a holding company. The main trading company of the Group is
Made Tech Limited (company number 06591591) and the principal
activity of this company is a provider of digital, data and
technology services to the UK public sector. Service offerings
include digital service delivery, embedded capabilities, data
infrastructure and insights and legacy application
transformation.
2. Accounting policies
Accounting convention
The principal accounting policies adopted in the preparation of
the consolidated financial statements are set out below. They have
been consistently applied to the periods presented. The financial
statements are presented in Sterling rounded to the nearest
thousand (GBP'000) except where specified.
Basis of preparation of the consolidated financial
statements
The Group financial statements have been prepared in accordance
with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The Company financial statements
have been prepared under FRS 102. Both financial statements have
been prepared on the historical cost basis with the exception of
certain items which are measured at fair value as disclosed in the
principal accounting policies set out below. These policies have
been consistently applied to all years presented unless otherwise
stated.
Going concern
The Directors have considered the Group's cash flow forecasts
and they have no grounds for concern regarding the Group's ability
to meet its obligations as they fall due and continue to operate
within the existing cash balance and working capital facilities,
thus requiring no additional funding to maintain liquidity.
In reaching their decision to prepare the financial statements
on a going concern basis, the Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the Annual Report and Accounts.
Standards and amendments to existing standards adopted in these
accounts
In the current year, the Group has applied the following
standards and amendments for the first time for its annual
reporting period commencing 1 June 2022:
-- IAS 1 Presentation of Financial Statements and IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors
(Amendment - Definition of Material);
-- IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors (Amendment - Introduce a new definition for accounting
estimates); and
-- IAS 12 Income Taxes (Amendment - Deferred Tax related to
Assets and Liabilities arising from a Single Transaction).
-- Their adoption has not had any material impact on the
disclosures or on the amounts reported in these financial
statements.
Standards, amendments and interpretations to existing standards
that are not yet effective and have not been early adopted by the
Company in the 31 May 2023 financial statements
At the date of authorisation of these financial statements,
certain new accounting standards and interpretations have been
published that are not mandatory for 31 May 2023 reporting periods
and have not been early adopted by the Group. The Directors
continue to monitor developments in the accounting standards they
see as relevant, but do not expect that the adoption of these
standards will have a material impact on the financial statements
of the Group in the current or future reporting periods and on
foreseeable future transactions.
Basis of consolidation
The Group's consolidated financial statements incorporate the
results of the parent company and all of its subsidiary
undertakings. The parent controls a subsidiary if it is exposed, or
has rights, to variable returns from its involvement with the
subsidiary and has the ability to affect those returns through its
power over the subsidiary. The existence and effect of potential
voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another
entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are deconsolidated on the
date control ceases.
Inter-company transactions, balances and unrealised gains and
losses (where they do not provide evidence of impairment of the
asset transferred) on transactions between Group companies are
eliminated.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with policies adopted by the
Group.
Revenue recognition
Revenue is the fair value of the total amount receivable by the
Group for supplies of services. VAT or similar local taxes and
trade discounts are excluded. The Group's only source of revenue is
from the provision of digital, data and technology services to the
UK public sector, all of which are recognised in the same
manner.
Contracts for the provision of services are typically "time and
materials" contracts whereby the customer is contractually bound to
pay for services for each hour or day spent in delivering a
contractually agreed services scope. Materials are incidental
expenses incurred whilst delivering the services. These contracts
typically have no payment milestones or bundling with other
services and have no variable element. Revenue is therefore
recognised in line with the chargeable "time and materials" which
are allocated to the contracted project.
The Group recognised revenue each month once as it provides
these services for the duration of the contract. At the balance
sheet date, an asset is recognised for unbilled amounts for
services provided yet to be invoiced. Payment for the services is
based on the agreed payment terms.
Revenue contract liability is recorded when cash payments are
received in advance of satisfying the performance obligation.
Contract liabilities are recognised in profit or loss in the period
when the Group completes the agreed services to the customers. In
all other cases payments are due from customers within 30-60 days
(depending on the credit terms applicable) of the service being
agreed and invoiced.
Interest income and expenditure are reported on an accruals
basis.
EBITDA and adjusted EBITDA
Earnings before interest, taxation, depreciation and
amortisation ("EBITDA") and adjusted EBITDA are non--GAAP measures
used by management to assess the operating performance of the
Group. EBITDA is defined as operating profit before depreciation
and amortisation. Exceptional items and share-based payment charge
are excluded from EBITDA to calculate adjusted EBITDA.
The Directors primarily use the adjusted EBITDA measure when
making decisions about the Group's activities. As they are non-GAAP
measures, EBITDA and adjusted EBITDA measures used by other
entities may not be calculated in the same way and hence are not
directly comparable.
Exceptional items
The Group's income statement separately identifies exceptional
items. Such items are those that in the Directors' judgement are
one off in nature or non-operating and need to be disclosed
separately by virtue of their size or incidence. In determining
whether an item should be disclosed as an exceptional item, the
Directors consider quantitative and qualitative factors such as the
frequency, predictability of occurrence and significance. This is
consistent with the way financial performance is measured by
management and reported to the Board.
Intangible assets
Internally generated intellectual property
An internally generated intangible asset consisting of
intellectual property arising from development (or the development
phase) of an internal project is recognised if, and only if, all of
the following have been demonstrated:
-- the technical feasibility of completing the intangible asset
so that it will be available for use or sale;
-- the intention to complete the intangible asset and use or sell it;
-- the ability to use or sell the intangible asset;
-- how the intangible asset will generate probable future economic benefits;
-- the availability of adequate technical, financial and other
resources to complete the development and to use or sell the
intangible asset; and
-- the ability to measure reliably the expenditure attributable
to the intangible asset during its development.
Internally generated intellectual property continued
The amount initially recognised for internally generated
intangible assets is the sum of the expenditure incurred from the
date when the intangible asset first meets the recognition criteria
listed above. Where no internally generated intangible asset can be
recognised, development expenditure is charged to profit or loss in
the period in which it is incurred.
Subsequent to initial recognition, internally generated
intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses. Internally
generated intangibles not yet in use are not amortised but are
subject to annual impairment testing.
As yet, no internally generated intangible assets are being
amortised. Internally generated intangible assets are expected to
be amortised over three to five years.
Research expenditure is recognised as an expense in the period
in which it is incurred.
Tangible assets
Tangible assets are recorded at cost net of accumulated
depreciation and any provision for impairment. Depreciation is
provided to write off the cost of the asset less any residual value
over its useful economic life in line with below. The residual
values of assets are reviewed annually and revised where necessary.
Assets' useful economic lives are as follows:
Furniture and fittings 25% reducing balance
Office equipment 3 years straight line
Leasehold improvements 25% reducing balance
Right-of-use lease assets straight line over the lease term
Impairment
For the purposes of assessing impairment, assets are grouped at
the lowest level for which there are separately identifiable cash
flows. As a result, some assets are tested individually for
impairment and some are tested at cash-generating unit level.
Intangible assets not yet available for use are tested for
impairment at least annually. All other individual assets or
cash-generating units are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by
which the carrying amount exceeds the recoverable amount of the
asset or cash-generating unit. The recoverable amount is the higher
of fair value, reflecting market conditions less costs to sell, and
value in use based on an internal discounted cash flow evaluation.
The cash flow evaluations are a result of the Directors' estimation
of future sales and expenses based on their past experience and the
current market activity within the business. With the exception of
goodwill, which the Group does not currently have, all assets are
subsequently reassessed for indications that an impairment loss
previously recognised may no longer exist.
Any impairment charge arising from the review of the carrying
value of assets, where material, is disclosed separately on the
face of the consolidated income statement.
Financial assets
Financial assets and liabilities are recognised when the Group
becomes party to the contractual obligations of a financial
instrument. They are measured initially at fair value, net of
transaction costs. The Group subsequently classifies and measures
its financial assets as either financial assets at fair value
through profit or loss, at amortised cost, or fair value through
comprehensive income, as appropriate. The classification depends on
the purpose for which the financial assets were acquired. At the
reporting year end the financial assets of the Group were all
classified as loans or receivables held at amortised cost.
Trade receivables
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They
arise principally through the provision of goods and services to
customers but also incorporate other types of contractual monetary
assets.
They are initially recognised at fair value and measured
subsequent to initial recognition at amortised cost using the
effective interest method, less any impairment loss.
The Group's financial assets comprise trade receivables, other
receivables (excluding prepayments) and cash and cash
equivalents.
Trade and other receivables - impairment
The Group applies an expected credit loss model to calculate the
impairment losses on its trade receivables. The Group applies the
simplified approach to providing for expected credit losses
prescribed by IFRS 9, which permits the use of the lifetime
expected loss provision for all trade receivables. Trade
receivables at the reporting date have been put into groups based
on days past the due date for payment and an expected loss
percentage has been applied to each group to generate the expected
credit loss provision for each group and a total expected credit
loss provision has thus been calculated.
Financial liabilities
The Group's financial liabilities include trade and other
payables and borrowings which include lease liabilities.
Financial liabilities are recognised when the Group becomes a
party to the contractual agreements of the instrument. All
interest-related charges are recognised as an expense in the income
statement.
Trade payables are recognised initially at their fair value, net
of transaction costs and subsequently measured at amortised cost
less settlement payments.
Leases
At inception the Group assesses whether a contract contains a
lease. This assessment involved the exercise of judgement about
whether the Group obtains substantially all the economic benefits
from the use of that asset and whether the Group has the right to
direct the use of the asset.
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made before the
commencement date, plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the underlying asset or
to restore the underlying asset or the site on which it is located,
less any lease incentive received.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of
the lease term. The estimated useful lives of right-of-use assets
are determined on the same basis as those of property and
equipment. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The Group has elected not to recognise right-of-use assets and
lease liabilities for short-term leases that have a lease term of
12 months or less and leases of low value assets which it defines
as having a purchase cost of GBP5,000 or less. The Group recognises
the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
The lease liability is measured at amortised cost using the
effective interest method.
The Group presents right-of-use assets in "property, plant and
equipment" and lease liabilities in "borrowings" in the statement
of financial position.
Taxation
Current tax
Current income tax assets and liabilities comprise those
obligations to fiscal authorities in the countries in which the
Group carries out its operations. They are calculated according to
the tax rates and tax laws applicable to the fiscal period and the
country to which they relate. All changes to current tax
liabilities are recognised as a component of tax expense in the
income statement unless the tax relates to an item taken directly
to equity, in which case the tax is also taken directly to equity.
Tax relating to items recognised in other comprehensive income is
recognised in other comprehensive income.
Deferred tax
Deferred income taxes are calculated using the liability method
on temporary differences between the carrying amounts of assets and
liabilities and their tax bases.
A deferred tax asset is recognised for all deductible temporary
differences to the extent that it is probable that taxable profit
will be available against which the deductible temporary
differences can be utilised. Deferred tax is not provided on the
initial recognition of goodwill, nor on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries is not
provided if reversal of these temporary differences can be
controlled by the Group and it is probable that reversal will not
occur in the foreseeable future. In addition, tax losses available
to be carried forward as well as other income tax credits to the
Group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are always provided for in full.
Deferred tax assets, such as those resulting from assessing
deferred tax on the expense of share-based payments, are recognised
to the extent that it is probable that future taxable profits will
be available against which the temporary differences can be
utilised. Deferred tax assets and liabilities are calculated at tax
rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the balance sheet date.
Provisions, contingent liabilities and contingent assets
Provisions are recognised when the present obligations arising
from legal or constructive commitment resulting from past events
will probably lead to an outflow of economic resources from the
Group which can be estimated reliably.
Provisions are measured at the present value of the estimated
expenditure required to settle the present obligation, based on the
most reliable evidence available at the reporting date taking into
account risks and uncertainties surrounding the obligation.
All provisions are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
Employee benefits
The Group provides a range of benefits to employees, including
annual bonus arrangements, paid holiday arrangements and defined
contribution pension plans.
Short-term benefits, including holiday pay and other similar
non-monetary benefits, are recognised as an expense in the period
in which the service is received.
Termination benefits are recognised immediately as an expense
when the Group is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
Defined contribution pension plan
The Group operates a defined contribution pension scheme. The
assets are held separately from those of the Company in an
independently administered fund. The pension cost charge represents
contributions payable by the Company to the fund and is further
detailed in note 7. Other creditors include GBP206,643 (FY22:
GBP190,148) in respect of pension contributions committed but not
yet paid at year end.
The cost of pensions in respect of the Group's defined
contribution scheme is charged to the income statement in the
period in which the related employee services were provided.
Share-based payments
The Group operates equity settled share-based compensation plans
for the remuneration of its employees.
All employee services received in exchange for the grant of any
share-based compensation are measured at their fair values. These
are indirectly determined by reference to the share options
awarded. Their value is appraised at the grant date and excludes
the impact of any non-market vesting conditions (e.g. profitability
or sales growth targets).
All share-based compensation is ultimately recognised as an
expense in the income statement with a corresponding credit to the
share-based payment reserve, net of deferred tax where applicable.
If vesting periods or other vesting conditions apply, the expense
is allocated over the vesting period, based on the best available
estimate of the number of share options expected to vest. Fair
value of the awards are measured using the Black-Scholes valuation
model. Non-market vesting conditions are included in assumptions
about the number of options that are expected to become
exercisable. Estimates are subsequently revised if there is any
indication that the number of share options expected to vest
differs from previous estimates. No adjustment to expense
recognised in prior periods is made if fewer share options
ultimately are exercised than originally estimated. The impact of
the revision of the original estimates, if any, is recognised in
the statement of comprehensive income over the remaining vesting
period, with a corresponding adjustment to the share-based payment
reserve.
Where modifications are made to the vesting or lapse dates of
options the excess of the fair value of the revised options over
the fair value of the original options at the modification date is
expensed over the remaining vesting period.
Equity and reserves
Issued share capital
Ordinary shares are classified as equity. The nominal value of
shares is included in issued capital.
Share premium
The share premium account represents the excess over nominal
value of the fair value of consideration received for equity
shares, net of the expenses of the share issue.
Share-based payment reserve
The share-based payment reserve represents the total value
expensed at the balance sheet date in relation to the fair value of
the share options at their grant date expensed over the vesting
period under the relevant share option schemes.
Deferred shares
Ordinary deferred shares are classified as equity. The nominal
value of shares is included in deferred share capital.
Retained earnings
The retained earnings include all current and prior period
results for the Group and the results of the Group's subsidiaries
as determined by the income statement net of dividends paid.
Dividends
Final equity dividends to the shareholders of the Group are
recognised in the period that they are approved by shareholders.
Interim equity dividends are recognised in the period that they are
paid. Dividends receivable are recognised when the Group's right to
receive payment is established.
3. Judgements in applying accounting policies and key sources of estimation uncertainty
The preparation of financial statements requires management to
make judgements, estimations and assumptions that affect the
amounts reported for assets and liabilities as at the year-end date
and the amounts reported for revenues and expenses during the year.
These judgements and estimates are based on management's best
knowledge of the relevant facts and circumstances, their historical
experience and other factors including expectations of future
events. Actual results may differ from the amounts included in the
financial statements. The estimates and assumptions that have a
significant risk of material adjustment to the carrying amount of
assets and liabilities within the next financial year are
summarised below:
Judgements in applying accounting policies
Development costs
Capitalisation of development costs in accordance with IAS 38
requires analysis of the technical feasibility and commercial
viability of the project in the future. This in turn requires a
long-term judgement to be made about the development of the
industry in which the development will be marketed. Where the
Directors consider that sufficient evidence exists surrounding the
technical feasibility and commercial viability of the project which
indicates that the costs incurred will be recovered they are
capitalised within intangible fixed assets. The amount of the
capitalisation is based on estimates to judge the percentage of the
time relevant staff spend on projects. Where insufficient evidence
exists, the costs are expensed to the income statement.
Sources of estimation uncertainty
Impairment of intangible assets
Determining whether intangible assets are impaired requires an
estimation of the value in use of the cash--generating unit to
which the intangibles have been allocated. The value in use
calculations require an estimation of the future cash flows
expected to arise from the cash-generating units and a suitable
discount rate to calculate the present value.
Impairment of intangible assets
An assessment of impairment of intangibles is performed if there
is an indicator of impairment. The key estimate for the carrying
value of the intangibles is the cash flows associated with the
investment and the WACC. Each intangible is reviewed regularly to
ensure that it generates discounted positive cash flows.
The same principles used in the assessment of impairment of
goodwill are used for estimating the "value in use" of the cash
flows of the investment. Where there is an indication of
impairment, the investment is impaired by a charge to the
consolidated income statement. The key area of uncertainty is the
revenue growth. Management performs sensitivity analysis to
ascertain the level of growth rate that will start to impair the
investment on a yearly basis.
4. Financial instruments - risk management
The Board of Directors of Made Tech Group Plc has overall
responsibility for the determination of the Group's risk management
objectives and policies. The Group has in place a risk management
programme that seeks to limit the adverse effects on the financial
performance of the Group. All funding requirements and financial
risks are managed based on policies and procedures adopted by the
Board.
The Group does not enter into derivative transactions or trade
in financial instruments and the Directors believe the Group is not
materially exposed to commodity price risk.
The Group is exposed to the following financial risks:
-- credit risk;
-- liquidity risk; and
-- interest rate risk.
The Group is exposed to risks that arise from its use of
financial instruments. The principal financial instruments used by
the Group, from which financial instrument risk arises, are as
follows:
-- trade and other receivables;
-- cash and cash equivalents; and
-- trade and other payables.
To the extent financial instruments are not carried at fair
value in the consolidated statement of financial position, book
value approximates to fair value.
Trade and other receivables are measured at amortised cost. Book
values and expected cash flows are reviewed by the Board and any
impairment charged to the consolidated statement of comprehensive
income in the relevant period.
Trade and other payables are measured at amortised cost.
Financial instruments by category
Financial assets At 31 May 2023 At 31 May 2022
GBP'000 GBP'000
Cash and cash equivalents 8,474 12,333
Trade receivables 4,304 4,400
Other receivables 1,889 1,665
------------------------------- --------------- ---------------
Financial assets at amortised
cost 14,667 18,398
------------------------------- --------------- ---------------
At 31 May At 31 May 2022
Financial liabilities 2023 GBP'000 GBP'000
Current
Trade payables 1,634 2,705
Accruals 1,005 1,255
Social security and other taxes 1,889 1,891
Other payables 208 203
------------------------------------ -------------- ---------------
Trade and other payables 4,736 6,054
------------------------------------ -------------- ---------------
Non-current
Borrowings - lease liability - 142
Current
Borrowings - lease liability 140 180
------------------------------------ -------------- ---------------
Loans and borrowings 140 322
------------------------------------ -------------- ---------------
Financial liabilities at amortised
cost 4,876 6,376
------------------------------------ -------------- ---------------
The key risks to the Group and the policies and procedures put
in place by management to manage them are summarised below:
Interest rate risk
The Group is exposed to cash flow interest rate risk from bank
borrowings at variable rates. As at 31 May 2023 there are no loans
outstanding (FY22: GBPnil); therefore there is no material exposure
to interest rate risk.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations. The Group is mainly exposed to credit
risk from credit sales. The Group's net trade receivables for the
two reported periods are disclosed in the financial assets table
above.
The Group considers that its exposure to credit risk is
insignificant as it carries out work for public sector entities
without the risks attached to normal commercial credit sales.
The Directors do not consider that there is any concentration of
risk within other receivables.
Credit risk on cash and cash equivalents is considered to be
small as the counterparties are substantial banks with high credit
ratings. The maximum exposure is the amount of the deposit. To
date, the Group has not experienced any losses on its cash and cash
equivalent deposits.
Liquidity risk
Liquidity risk arises from the Group's management of working
capital. It is the risk that the Group will encounter difficulty in
meeting its financial obligations as they fall due.
Within
1 month 1-3 months 3-12 months 2-5 years
At 31 May 2023 GBP'000 GBP'000 GBP'000 GBP'000 5+ years
Trade Payables 1,634 - - - -
Accruals 554 257 194 - -
Other payables 2,097 - - - -
Bank loans - - - - -
Lease liability - 47 93 - -
----------------- --------- ----------- ------------ ---------- ---------
4,285 304 287 - -
----------------- --------- ----------- ------------ ---------- ---------
Within
1 month 1-3 months 3-12 months 2-5 years
At 31 May 2022 GBP'000 GBP'000 GBP'000 GBP'000 5+ years
Trade Payables 2,705 - - - -
Accruals 939 113 173 - -
Other payables 203 - - - -
Bank loans - - - - -
Lease liability - 47 133 142 -
----------------- --------- ----------- ------------ ---------- ---------
3,847 160 306 142 -
----------------- --------- ----------- ------------ ---------- ---------
Capital management
The Group's capital is made up as follows:
At At
31 May 2023 31 May 2022
GBP'000 GBP'000
Share capital - issued 75 74
Share capital - deferred - 12
Share premium 13,433 13,421
Share based payment reserve 4,398 2,376
Retained deficit (2,695) (1,096)
----------------------------- ------------- -------------
15,211 14,787
----------------------------- ------------- -------------
The Group's objectives when maintaining capital are:
-- to safeguard the entity's ability to continue as a going
concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and
-- to provide an adequate return to shareholders by pricing
services commensurately with the level of risk.
The capital structure of the Group consists of shareholders'
equity as set out in the consolidated statement of changes in
equity. All working capital requirements are financed from existing
cash resources, fundraising and borrowings.
5. Operating profit/(loss)
The operating profit/(loss) has been arrived at after
charging/(crediting):
Year to Year to
31 May 2023 31 May 2022
GBP'000 GBP'000
Fees paid to the Group's auditors
(see below) 56 186
Other accountancy fees 26 26
Loss on disposal of property, plant
and equipment 9 -
Advertising expense 548 388
Depreciation of property, plant
and equipment 417 308
Staff costs 30,904 19,546
------------------------------------- ------------- -------------
Year to Year to
31 May 2023 31 May 2022
GBP'000 GBP'000
Analysis of the fees paid to the
Group's auditors
Audit of the Group and Company's
financial statement 56 47
Other services - 139
------------------------------------- ------------- -------------
Total fees paid to Groups auditor 56 186
------------------------------------- ------------- -------------
Other services provided by the Groups' auditors relate to
professional services in connection with the Group's IPO in
September 2021.
6. Interest receivable/(payable)
Year to Year to
31 May 2023 31 May 2022
GBP'000 GBP'000
Interest received 25 -
Interest on bank loans and bank
fees (4) (12)
Interest on lease liability (10) (17)
------------------------------------- ------------- -------------
Total interest receivable/(payable) 11 (29)
------------------------------------- ------------- -------------
7. Exceptional items
Year to Year to
31 May 2023 31 May 2022
GBP'000 GBP'000
Transaction and IPO-related costs - 180
Termination costs 493 44
Restructuring costs 81 -
----------------------------------- ------------- -------------
Total exceptional items 574 224
----------------------------------- ------------- -------------
Exceptional items relate to the following:
-- termination costs - relating to severance for twenty
employees exited in the year (FY22: three employees); and
-- restructuring costs - relating to reorganisation and
restructuring improvements to improve efficiency and
accountability.
8. Taxation
The following tax was recognised in the income statement:
31 May 2023 31 May 2022
GBP'000 GBP'000
Corporation tax - -
Total current tax expense - -
Deferred tax
Origination and reversal of timing
differences 72 20
------------------------------------ ------------ ------------
Tax charge for the year 72 20
------------------------------------ ------------ ------------
The tax assessed for the year is different from the standard
rate of corporation tax as applied in the respective trading
domains where the Group operates.
The Group's tax charge can be reconciled to the profit/(loss) in
the income statement and effective tax rate as follows:
Year to Year to
31 May 2023 31 May 2022
GBP'000 GBP'000
Loss before tax (1,527) (288)
--------------------------------------- ------------- -------------
Tax credit at the UK corporation
tax rate of 20% (FY22: 19%) (305) (55)
Effects of:
Fixed asset differences 37 (53)
Expenses not deductible for tax
purposes 461 485
Utilisation of losses brought forward (28) (32)
Unused tax losses 462 17
IP capitalisation (622) (362)
Sundry items (5) -
--------------------------------------- ------------- -------------
Movement in deferred tax provision 72 20
--------------------------------------- ------------- -------------
Tax charge for the year 72 20
--------------------------------------- ------------- -------------
Deferred tax Year to Year to
31 May 2023 31 May 2022
GBP'000 GBP'000
At 1 June 20 -
Deferred tax recognised - -
Charge 72 20
------------------------- ------------- -------------
At 31 May 92 20
------------------------- ------------- -------------
Current taxes comprise the income taxes of the Group companies
which posted a taxable profit for the year, while deferred taxes
show changes in deferred tax assets and liabilities which were
recognised by the Group on the temporary differences between the
carrying amount of assets and liabilities and their amount
calculated for tax purposes and, on consolidation adjustments,
calculated using the rates that are expected to apply in the year
these differences will reverse.
No deferred tax has been provided on share based payments
amounting to GBP181,302.
At the reporting date, the Group has unused tax losses of
GBP3.1m (FY22: GBP0.8m) available for offset against future
profits. No deferred tax asset has been recognised in respect of
these losses due to the uncertainty of the timing of future taxable
profits forecast at the balance sheet date.
Factors that may affect future tax charges
On 24 May 2021, the UK Finance Act 2021 was substantively
enacted, increasing the UK corporation tax rate to 25% effective
from 1 April 2023. The impact of this rate change has been
considered when recognising the deferred tax in relation to the UK
companies in the Group. Where the asset or liability is expected to
unwind after 1 April 2023 the deferred tax has been recognised at
25%.
9. Loss per ordinary share
FY23 FY22
Loss per ordinary share GBP'000 GBP'000
Loss for the period (1,599) (308)
Weighted average number of ordinary
share in issue for the year ('000) 148,885 135,729
Loss per ordinary share (pence)
Basic loss per share (1.07p) (0.22p)
Diluted loss per share (1.07p) (0.22p)
------------------------------------- --------- ---------
Where a loss has been recorded the effect of options is not
dilutive and therefore the basic and diluted figure is the
same.
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potentially dilutive ordinary shares. The Company has potentially
dilutive ordinary shares arising from share options granted to
employees. Options are dilutive under the Group Restricted Share
Plan ("RSP") where the exercise price, together with the future
IFRS 2 charge of the option, is less than the average market price
of the Company's ordinary shares during the year. Options under the
LTIP schemes, as defined by IFRS 2, are contingently issuable
shares and are therefore only included within the calculation of
diluted EPS if the performance conditions, as set out in note 24,
are satisfied at the end of the reporting period, irrespective of
whether this is the end of the vesting period or not.
The calculation of adjusted earnings per share is based on the
after tax adjusted operating loss after adding back certain costs
as detailed in the table below. Adjusted earnings per share figures
are given to exclude the effects of share-based payments and
exceptional items, all net of taxation, and are considered to show
the underlying performance of the Group.
The adjusted basic earnings per share is calculated by dividing
the adjusted profit/(loss) after tax for the year by the weighted
average number of ordinary shares in issue during the period.
FY23 FY22
GBP'000 GBP'000
Loss for the period (1,599) (308)
Share based payments (including
associated taxes) 2,068 2,376
Exceptional items 574 224
Tax effect of the above (528) (494)
Adjusted profit after tax for the
year 515 1,798
Weighted average number of ordinary
share in issue for the year ('000) 148,885 135,729
Effect of dilutive potential ordinary
shares from share options 4,097 3,962
Weighted average number of ordinary
shares for the purposes of diluted
earnings per share ('000) 152,982 139,691
Adjusted Basic earnings per share 0.35p 1.33p
Adjusted diluted earnings per share 0.34p 1.29p
--------------------------------------- --------- ---------
10. Intangible assets
Intellectual
property Total
GBP'000 GBP'000
Cost
At 1 June 2021 - -
Additions 1,904 1,904
------------------- ------------- ---------
At 31 May 2022 1,904 1,904
Additions 3,109 3,109
------------------- ------------- ---------
At 31 May 2023 5,013 5,013
------------------- ------------- ---------
Amortisation
At 1 June 2021 - -
Charge for period - -
------------------- ------------- ---------
At 31 May 2022 - -
Charge for period - -
------------------- ------------- ---------
At 31 May 2023 - -
------------------- ------------- ---------
Net book value
At 31 May 2022 1,904 1,904
------------------- ------------- ---------
At 31 May 2023 5,013 5,013
------------------- ------------- ---------
During the year the Group has capitalised costs relating to
intellectual property. This is an internally generated intangible
asset that is currently still in the process of completion. Upon
completion the intellectual property is expected to be amortised
over a useful life of three to five years. Personnel costs of
GBP3,028,623 (FY22: GBP1,809,293) have been capitalised as
intangible assets.
Intangible assets have been tested for impairment by assessing
the value in use of the cash-generating units ("CGUs"). The value
in use calculations were based on projected cash flows in
perpetuity. Cash flows were based on five year forecasts with
varying growth rates derived from market demand and an assessment
of the asset's development pipeline. The growth rates shown are the
average applied to the cash flows of the individual CGUs and do not
form a basis for estimating the consolidated profits of the Group
in the future.
The discount rate used to test the cash-generating units was the
Group's pre-tax WACC of 12.4% (FY22: 10%). The value in use
calculations described above indicate significant headroom and
therefore do not give rise to impairment concerns.
As a result of these tests no impairment was considered
necessary.
11. Tangible assets
Furniture,
Land and fittings Right-of-use
buildings and equipment assets Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 June 2021 33 453 766 1,252
Additions - 432 - 432
At 31 May 2022 33 885 766 1,684
Additions - 60 - 60
------------------------ ------------ ---------------- --------------- ----------
Disposals - (106) - (106)
------------------------ ------------ ---------------- --------------- ----------
At 31 May 2023 33 839 766 1,638
------------------------ ------------ ---------------- --------------- ----------
Depreciation
As at 1 June 2021 17 152 328 497
Charge for period 4 151 153 308
At 31 May 2022 21 303 481 805
Charge for period 3 260 154 417
Eliminated on disposal - (83) - (83)
------------------------ ------------ ---------------- --------------- ----------
At 31 May 2023 24 480 635 1,140
------------------------ ------------ ---------------- --------------- ----------
Net book value
At 31 May 2022 12 582 285 879
------------------------ ------------ ---------------- --------------- ----------
At 31 May 2023 9 359 131 499
------------------------ ------------ ---------------- --------------- ----------
12. Leases
The Company leases office premises. Under IFRS 16 this lease has
been classified as a right-of-use asset. The lease liability is
included within tangible assets on the statement of financial
position. There are no other long-term leased assets.
Year to Year to
31 May 2023 31 May 2022
Right-of-use assets GBP'000 GBP'000
Balance as at 1 June 285 438
Depreciation charge for year (154) (153)
----------------------------------- ------------- -------------
Balance at 31 May 131 285
----------------------------------- ------------- -------------
Lease liability
Maturity analysis - contractual
discounted cash flows
Less than one year 140 180
One to five years - 140
----------------------------------- ------------- -------------
Total lease liabilities at 31 May 140 320
----------------------------------- ------------- -------------
Lease liabilities included in the
statement of financial position:
----------------------------------- ------------- -------------
Current 140 180
----------------------------------- ------------- -------------
Non-current - 140
----------------------------------- ------------- -------------
Right-of-use assets are included within tangible assets in the
consolidated statement of financial position.
Amounts recognised in the Consolidated income statement
The Consolidated income statement shows the following amounts
relating to leases:
Year to Year to
31 May 2023 31 May 2022
GBP'000 GBP'000
Interest paid on lease liability 10 17
---------------------------------- ------------- -------------
Any expense for short-term and low value leases is not material
and has not been presented.
13. Analysis of net cash
Cash Bank loans Lease liabilities Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 June 2021 922 (1,250) (475) (803)
Working capital movements (2,150) - - (2,150)
Income from share
issue net of IPO
costs 13,561 - - 13,561
Repayment of loans - 1,250 - 1,250
Payment of lease
liabilities - - 155 155
--------------------------- ---------- ------------- ------------------ ----------
At 31 May 2022 12,333 - (320) 12,013
Working capital movements (3,859) - - (3,859)
Payment of lease
liabilities - - 180 180
--------------------------- ---------- ------------- ------------------ ----------
At 31 May 2023 8,474 - (140) 8,334
--------------------------- ---------- ------------- ------------------ ----------
14. Deferred tax
Deferred tax liabilities are analysed as follows.
Year to Year to
31 May 2023 31 May 2022
GBP'000 GBP'000
Accelerated capital allowances (92) (167)
Tax losses - 147
-------------------------------- ------------- -------------
Total deferred tax liability (92) (20)
-------------------------------- ------------- -------------
Changes during each year are as follows:
Accelerated
capital allowances Tax losses Total
GBP'000 GBP'000 GBP'000
Balance at 1 June 2021 - - -
Tax (charge)/credit in respect
of current year (167) 147 (20)
Balance at 31 May 2022 (167) 147 (20)
Tax credit in respect of
current year 75 (147) (72)
-------------------------------- -------------------- ----------- ---------
Balance at 31 May 92 - (92)
-------------------------------- -------------------- ----------- ---------
15. Share-based payments
In the year ended 31 May 2023 the Group recognised total
expenses of GBP2,068,000 (FY22: GBP2,376,000) in respect of
equity--settled share-based payment awards under IFRS 2 Share-based
Payment.
Details of the maximum number of ordinary shares which may be
issued in future periods in respect of LTIP awards and RSAs
outstanding at 31 May 2023 are shown below:
LTIP RSAs
Number of Number
shares of shares
At 1 June 2022 2,443,643 3,517,342
Granted in the year - 511,564
Forfeited in the year (1,321,720) (821,241)
----------------------- ------------ -----------
At 31 May 2023 1,121,923 3,207,665
----------------------- ------------ -----------
Share awards granted in the year ended 31 May 2023 were limited
to below Board employees and structured as Restricted Share Awards
whereby vesting is based on continued service only. As such, the
IFRS 2 Share-based Payment fair value of each award granted was
equal to the face value of awards. Details of the awards granted
are as follows:
RSAs RSAs
23 February 23 February
2023 2023
Awards 406,122 105,442
Vesting Tranched vesting Tranched vesting
Share price at grant date (pence) 31 31
------------------------------------- ----------------- -----------------
Exercise price (pence) 0 0
------------------------------------- ----------------- -----------------
Expected volatility n/a n/a
------------------------------------- ----------------- -----------------
Expected life (years) c. 0.7, 1.7, c. 0.3, 1.3,
2.7 2.3
------------------------------------- ----------------- -----------------
Expected dividend yield 0% 0%
------------------------------------- ----------------- -----------------
Risk-free interest rate n/a n/a
------------------------------------- ----------------- -----------------
Fair value (pence) - holding period n/a n/a
------------------------------------- ----------------- -----------------
Fair value (pence) - no holding
period 31 31
------------------------------------- ----------------- -----------------
The exercise price for all RSAs granted in the year was
GBPnil.
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END
FR DLLFFXKLEBBL
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September 13, 2023 02:00 ET (06:00 GMT)
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