1    General information

 

Argentex Group PLC ("the Company") is a public limited company, limited by shares, incorporated and domiciled in England and Wales. The address of the registered office is 25 Argyll Street, London, W1F 7TU.

 

On 25 June 2019, the Company listed its shares on AIM, the London Stock Exchange's market for small and medium size growth companies ("the IPO").

 

The Company is the ultimate parent company into which the results of all subsidiaries are consolidated. The Consolidated Financial Statements for the year ended 31 December 2023 and the nine month period ended 31 December 2022 comprise the financial statements of the Company and its subsidiaries (together, "the Group"). The Group changed its year end date from 31 March to 31 December in the prior period to align with the calendar year in order to provide more meaningful information to shareholders and prospective investors. Therefore, the Group presented a shortened period of nine months in the prior period and therefore amounts presented may not be entirely comparable.

 

The Consolidated Financial Statements are presented in pounds sterling (£), which is the currency of the primary economic environment in which the Group operates.

 

 

2    Significant accounting policies

 

The principal accounting policies are summarised below. 

 

2.1                 Basis of preparation

 

The Consolidated Financial Statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006.

 

The principal accounting policies adopted in the preparation of the Consolidated Financial Statements are set out below. The policies have been consistently applied to all of the periods presented, unless otherwise stated.

The Consolidated Financial Statements have been prepared under the historical cost convention, modified by the measurement at fair value of certain financial assets and liabilities and derivative financial instruments as stated in note 2.7.

 

2.2                 Adoption of new and revised standards

 

There are no new standards, interpretations and amendments which became mandatorily effective for the current reporting period which have had any material effect on the financial statements for the Group.

 

No upcoming changes under IFRS are likely to have a material effect on the reported results or financial position. Management continues to monitor upcoming changes.

 

2.3                 Going concern

 

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and have assessed the Group's prospects over a 12 month period from the approval date of these Consolidated Financial Statements. The Group's principal trading subsidiary, Argentex LLP, has been profitable since inception in 2011, the Group has no external debt, and the LLP continues to generate sufficient cash to support the activities of the Group. Budgets and cash flow forecasts are prepared to cover a variety of scenarios and are subsequently reviewed by the Directors to ensure they support the Group's continuing ability to operate as a going concern. Cash flow forecasts have also been assessed to ensure that sufficient operational cash is retained in the business over the forecast period. Specific consideration was given to the Group's expected decline in revenue and profit margin projections for FY24 and their impact on the Group's trading cash position.

 

Sensitivity analysis has been performed in respect of specific scenarios which could negatively impact the future performance of the Group, including lower levels of revenue, compression in profitability margins, extensions to the Group's working capital cycle, and significant increases in volatility requiring further collateral to be placed with the Group's institutional counterparties.

 

In addition, the Directors have also considered mitigating actions such as lower capital expenditure and other short-term cash management activities within their control (see note 24.2 for further disclosures relating to liquidity risk).

 

The Board of Directors is confident that in context of the Group's financial requirements these measures give sufficient liquidity to the Group to ensure that the Group can withstand significant shocks, whilst remaining as a going concern for the next twelve months from the date of approval of the Directors' report and financial statements.

 

For these reasons, the Directors adopt the going concern basis of accounting in preparing these Consolidated Financial Statements.

 

2.4                 Basis of consolidation

 

The Group Consolidated Financial Statements incorporate the Financial Statements of the Company and entities controlled by the Company (its subsidiaries) prepared to 31 December each year. Control is achieved where the Company is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, the Group takes into consideration the existence and effect of potential voting rights that currently are exercisable or convertible.

 

The Consolidated Financial Statements comprise the Company and the results, cash flows and changes in equity of the following subsidiary undertakings:

 

Name of undertaking	Nature of business	Country of incorporation
Argentex LLP	Foreign exchange broking	England
Argentex Capital Limited	Holding company	England
Argentex Foreign Exchange Limited	Holding company	England
Argentex B.V.	Foreign exchange broking	Netherlands
Argentex PTY LTD	Pending regulatory authorisation	Australia
Argentex Technologies Limited	Dormant subsidiary	England
Argentex (DIFC) (Managing Office) Ltd	Pending regulatory authorisation	United Arab Emirates

 

All subsidiary undertakings are 100% owned either directly or indirectly by Argentex Group PLC.

 

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

 

All intra-group transactions and balances and any unrealised gains and losses arising from intra-group transactions are eliminated in preparing the Consolidated Financial Statements.

 

The following UK subsidiary will take advantage of the audit exemption set out within section 479A of the Companies Act 2006 for the year ended 31 December 2023.

 

 

 

Name of undertaking	Company number
Argentex Foreign Exchange Limited	07814670

 

Argentex Group PLC guarantees all outstanding liabilities to which the subsidiary company listed above is subject at the end of the financial year, until they are satisfied in full. This is in accordance with Section 479C of the Companies Act 2006.

 

2.5                 Accounting for merger on formation of the Group

 

In June 2019, immediately prior to the Company's admission to AIM, Argentex Group PLC acquired all equity interests in Argentex LLP. This was effected through the acquisition of equity interests by a newly formed subsidiary, Argentex Capital Limited, and the acquisition of Pacific Foreign Exchange Limited (now Argentex Foreign Exchange Limited). Argentex LLP, Argentex Capital Limited and Argentex Foreign Exchange Limited are 100% owned (either directly or indirectly) subsidiaries of Argentex Group PLC and consolidated into these Financial Statements.

 

In applying merger accounting when preparing these Consolidated Financial Statements, to the extent the carrying value of the assets and liabilities acquired under merger accounting is different to the cost of investment, the difference is recorded in equity within the merger reserve.

 

2.6                 Revenue recognition

 

Revenue represents the difference between the cost and selling price of currency and is recognised after receiving the client's authorisation to undertake a foreign exchange transaction for immediate or forward delivery. Derivative assets and liabilities are initially measured at fair value at the date the derivative contract is entered into and are subsequently remeasured to fair value at each financial period end date. The resulting gain or loss is recognised within revenue immediately.

 

The difference between the costs and selling price of currency is recognised as revenue as this reflects the consideration to which the Group expects to be entitled in exchange for those services.

 

In relation to structured solutions, the Group recognises the net option premium receivable as revenue on the date that the structured solution is executed. The execution date is when a binding contract is entered into with the client or counterparty.  The revenue is fixed and determined representing the difference between the premiums paid. Structured solutions relates to a range of foreign exchange option structures.

 

2.7                 Financial instruments

 

The Group operates as a riskless principal deliverable foreign exchange broker therefore financial instruments are significant to its financial position and performance.

 

The Group's financial assets include derivative assets (foreign exchange spot, foreign exchange forward and foreign exchange structured solution option contracts with customers and banking counterparties) as well as amortised cost assets including cash and cash equivalents, other assets and trade and other receivables. The Group's financial liabilities include derivative liabilities (foreign exchange spot, foreign exchange forward and foreign exchange structured solution option contracts) and trade and other payables. The Group does not apply hedge accounting.

 

The Group undertakes matched principal broking involving immediate back-to-back derivative transactions with counterparties. These transactions are classified as derivative financial assets and liabilities. A derivative with a positive fair value is recognised as a financial asset and a derivative with a negative fair value is recognised as a financial liability. Where there is a legally enforceable right to offset the recognised amounts and an intention to settle on a net basis or to realise the asset and the liability simultaneously, financial assets and financial liabilities are offset, and the net amount presented in the Consolidated Statement of Financial Position. Management have presented the derivative assets and liabilities with banking counterparties and with clients on a gross basis.

 

2.7.1           Derivative financial assets

 

Derivative financial assets are recognised when the Group becomes a party to the contractual provisions of the instrument.

 

Derivative financial assets are measured at fair value through profit or loss ("FVTPL") as they are held for trading purposes.

 

Initial Recognition

Derivative assets are initially measured at fair value at the date the derivative contract is entered into. The resulting gain or loss is recognised within profit or loss immediately. Transaction costs directly attributable to the acquisition of such financial assets at fair value through profit or loss are recognised immediately in profit or loss.

 

Subsequent Measurement

Derivative assets are subsequently remeasured to fair value at each financial period end date. Any gains or losses derived from instances such as foreign exchange rate changes, which impact derivative financial asset revaluation, would be immediately recognised through profit or loss. Valuation adjustments to reflect potential inherent market risks on the fair value of derivative financial assets are calculated and recorded where material. The credit valuation adjustment ("CVA") reflects the market value of counterparty credit risk and takes into account counterparty, applicable collateral agreements, predicted losses and probabilities of default.

 

Derecognition

The Group derecognises derivative financial assets when they reach maturity and the contractual cashflows are exchanged between the client and the Group or the Group and the institutional counterparty. At this point, the assets have expired and the obligations of the Group, the client and the institutional counterparty have been discharged.

 

2.7.2           Other financial instrument assets

 

Other financial assets are those which are not derivatives in nature and have been classified using the amortised cost method. These assets arise principally as Solely Payments of Principal and Interest (SPPI) and are intended to be held to maturity with all cashflows collected.

 

Initial Recognition

Purchases or sales of financial assets are recognised and derecognised on a trade date basis when the Group becomes party to the contractual provisions of the instrument. They are initially recognised at fair value plus transactions costs that are directly attributable to their acquisition.

 

Subsequent Measurement

All recognised financial assets are subsequently remeasured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

 

The Group has applied the simplified approach in IFRS 9 to measure applicable loss allowances at lifetime expected credit loss ("ECL"). The Group determines the expected credit losses on these items by using a provision matrix, based on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current conditions and estimates of future economic conditions.

 

The Group writes off receivables when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or when the receivables are past due, whichever occurs earlier.

 

 

Derecognition

On derecognition of financial assets measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

 

2.7.3         Derivative financial liabilities

 

Derivative financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument.

 

Derivative financial liabilities are measured at FVTPL as they are held for trading purposes.

 

Initial Recognition

Derivative financial liabilities are initially measured at fair value at the date the derivative contract is entered into. The resulting gain or loss is recognised within profit or loss immediately. Transaction costs directly attributable to the acquisition of financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 

Subsequent Measurement

Derivative liabilities are subsequently remeasured to fair value at each financial period end date. Any gains or losses derived from instances such as foreign exchange changes, which impact financial liability revaluation, would be immediately recognised through profit or loss.

 

Derecognition

The Group derecognises derivative financial liabilities when they reach maturity and the contractual cashflows are exchanged between the client and the Group or the Group and the institutional counterparty. At this point, the liabilities have expired and the obligations of the Group, the client and the institutional counterparty have been discharged.

 

2.7.4           Other financial instrument liabilities

 

Other financial liabilities are obligations to pay for goods or services that have been acquired in the ordinary course of business, not including financial liabilities that are derivatives in nature. Other financial liabilities are classified using amortised cost. This is used as the default classification method for financial instruments not held as trade derivatives. The Group's other financial liabilities include trade and other payables.

Initial Recognition

The Group holds amounts payable to customers at amortised cost. These are short term balances that do not attract interest. Initial recognition consists of fair value minus transaction costs.

 

Subsequent Measurement

Subsequent measurement makes use of the effective interest rate method, where applicable, with interest related charges being recognised as finance costs in the Consolidated Statement of Comprehensive Income.

Derecognition

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

 

2.8                 Cash and cash equivalents

 

For the purpose of presentation in the Consolidated Statement of Cash Flows, cash and cash equivalents includes cash on hand or deposits held at call with financial institutions. Cash and cash equivalents includes client funds disclosed in note 17.

 

2.9                 Other assets

 

Other assets presented on the Statement of Financial Position is made up of cash held as collateral with banking counterparties and balances segregated to provide for out the money (OTM) positions with Client Assets Sourcebook (CASS) Clients.

 

2.10               Leases

 

In accordance with IFRS 16, at inception of a contract the Group assesses whether a contract is or contains a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.  To assess whether a contract conveys the right to control the use of the identified asset the Group considers whether:

1.   The Group has the right to operate the asset.

2.   The Group designed the asset in a way that predetermines how and for what purpose it will be used.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless this is not readily determinable, in which case the Group's incremental borrowing rate on commencement of the lease is used. Lease liabilities are remeasured when there is a change in future lease payments arising from a change in rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, either a corresponding adjustment is made to the carrying amount of the right of use asset and the revised carrying amount is depreciated over the remaining (revised) lease term, or it is recorded in the Consolidated Statement of Comprehensive Income if the carrying amount of the right to use assets has been reduced to zero.

Right of use assets are initially measured at the amount of the lease liability and included within Property, plant and equipment on the Consolidated Statement of Financial Position.

 

Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right of use assets are depreciated on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if judged to be shorter than the lease term.

 

Dilapidation provisions in relation to Group's leases are disclosed in Trade and other payables. The provisions relate to alterations made to the properties leased by the Group. The provisions are expected to unwind at the end of the leases.

 

2.11               Intangible assets and amortisation

 

Identifiable intangible assets are recognised when the Group controls the asset, it is probable that future economic benefits attributed to the asset will flow to the Group and the cost of the asset can be reliably measured.

 

Software development costs comprise the Group's bespoke dealing system. Costs that are directly associated with the production of the identifiable and unique dealing system controlled by the Group, and are probable of producing future economic benefits, are recognised as intangible assets. Direct costs of software development include employee costs and directly attributable overheads.

 

Costs are capitalised to the extent that they represent an improvement, enhancement or update to the intangible asset. Maintenance costs are expensed through the Consolidated Statement of Comprehensive Income.             

 

Amortisation is charged to the Consolidated Statement of Comprehensive Income over the estimated useful life of three years of the dealing system from the date developments are available for use, on a straight-line basis.

 

The amortisation basis adopted reflects the Group's consumption of the economic benefit from that asset.

 

The intangible asset is tested annually for impairment or more frequently if events or changes in circumstances indicate that the asset might be impaired.

 

2.12               Property, plant and equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation and any

recognised impairment loss.

 

Depreciation is charged so as to write off the cost of assets to their residual values, over their estimated useful lives, using the straight-line method, on the following bases:

 

                   Office equipment                  -           Three to five years

                   Computer equipment             -           Three years

                   Leasehold improvements       -           Over the period of the lease

                   Right of use assets               -           Over the period of the lease

 

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

 

2.13               Foreign currencies

 

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the Consolidated Statement of Financial Position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.

 

 

2.14               Cost of sales

 

Cost of sales includes bank charges paid to banking counterparties, third party platform fees and costs related to option products taken to limit Group exposure.

 

 

2.15               Adjusted operating profit

 

The Group presents adjusted operating profit as an Alternative Performance Measure in the notes to the Group Consolidated Financial Statements to provide further detail on prior period cost analysis and EPS. Adjusted operating profit excludes those items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to align with management's evaluation of financial performance in the period. Non-adjusted expenditure will typically relate to one off costs and structural set up costs.

 

 

2.16               Employee benefits

 

(i)         Short-term benefits

 

Short-term employee benefits including holiday pay and annual bonuses are accrued as services are rendered.

 

(ii)         Defined contribution pension plans

 

The Group operates a defined contribution pension plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the Consolidated Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

 

2.17               LLP Members' remuneration

 

LLP Members' remuneration is determined by reference to the nature of the participation of rights of Members of Argentex LLP, the Group's main trading subsidiary. It includes both remuneration where there is a contract of employment and any profits that are automatically divided between members by virtue of the members' agreement, to the extent that the Group does not have an unconditional right to avoid payment. To the extent that these profits remain unpaid at the period end, they are shown as liabilities in the Consolidated Statement of Financial Position.

 

 

2.18               LLP Members' interests

 

LLP equity capital is only repaid to outgoing members in accordance with the provision in the Members' Deed where the Group has both sufficient capital for FCA regulatory requirements, and the capital is replaced by new capital contributions from existing or new members. As such it is accounted for as equity.

 

Other amounts due to Members classified as a liability relate to undistributed profits and Members' taxation reserves.

 

 

2.19               Share-based payments

 

The cost of share-based employee compensation arrangements, whereby employees receive remuneration in the form of share options, is recognised as an employee benefit expense in the Consolidated Statement of Comprehensive Income. Where the entity settling the share options differs from the entity receiving the benefit of the share options (in the form of employee services), the entity's separate financial statements reflect the substance of the arrangement.

 

The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair value (excluding the effect of non-market-based vesting conditions) at the date of grant.

 

At the end of each reporting period the assumptions underlying the number of awards expected to vest are adjusted for the effects of non-market-based vesting conditions to reflect the conditions prevailing at that date.  The impact of any revisions to the original estimates is recognised in the Consolidated Statement of Comprehensive Income, with a corresponding adjustment to equity.  Fair value of the Company Share Option Plan (CSOP) scheme is measured using a Black-Scholes option pricing model. Fair value of the Value Creation Plan is measured using a Monte Carlo Simulation.

 

When share options are exercised, the Group issues new shares.  The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.

 

 

2.20               Taxation

 

The tax expense represents the sum of the tax currently payable and any deferred tax.

 

Tax currently payable is based on taxable profit for the period. Taxable profit may differ from operating profit as reported in the Consolidated Statement of Comprehensive Income as it may exclude items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the date of the Consolidated Statement of Financial Position.

 

To the extent it is material, deferred tax is calculated on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are recognised to the extent that it is probable future taxable profits will be available against which the temporary differences can be utilised.

 

 

2.21               Other operating income

 

Other operating income relates to net interest generated from the Group's house cash balance and client cash balances recognised as cash and cash equivalents on the Consolidated Statement of Financial Position along with interest generated on the Group's other asset balances.

 

 

3        Critical accounting judgements and key sources of estimation uncertainty       

In applying the Group's accounting policies, the Directors are required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

3.1                 Accounting judgements

 

The following are the critical judgements, apart from those involving estimations (which are presented separately below), that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in financial statements.

 

(i)    Capitalisation of costs to intangible assets

 

The extent to which costs should be capitalised to intangible assets is a key judgement. The Group capitalises costs as intangible assets if they have a value that will benefit the performance of the Group over future periods.

 

 

(ii)    Credit Valuation Adjustment

 

The CVA is a calculation based on the credit risk of counterparties inherent in the valuation of derivative financial instruments. The failure of a client to settle a contracted trade carries the risk of loss equal to the prevailing fair value of the trade. Within the CVA calculation to quantify credit risk, judgement is required in determining the credit quality of the client based on current market and other information and key estimates include loss on default of a client and the probability of default. A 10 percent increase across all Probability of Defaults (PDs) would result in decreased operating profit of £0.2m (2022: £0.1m).

 

(iii)   Share-based payments

 

In determining the fair value of equity-settled awards and the related charge to the Consolidated Statement of Comprehensive Income, the Group makes use of option valuation models which require key judgements to be made in assessing the inputs. Key judgements include the number of shares on vesting, the risk-free interest rate, dividend yield and share price volatility.

 

 

3.2                 Key sources of estimation uncertainty

 

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

 

                 Useful economic life of intangible assets (see note 14)

 

Technology within the financial services sector is in a perpetual state of development and evolution, providing uncertainty over the useful economic life of the Group's bespoke dealing system. Extending the estimated useful life of the intangible costs from 3 years to 4 years would result in increased operating profit of £0.4m (2022: £0.7m), decreasing the estimated useful life from 3 years to 2 years would result in decreased operating profit of £0.8m (2022: £1.3m).

 

 

 

4    Segment reporting

 

For the year to December 2023, the Group consisted of a single operating segment (being Argentex LLP's foreign currency dealing business) that operated in a market not bound by geographical constraints as the overseas subsidiaries are yet to obtain full licences in their jurisdictions and continued to trade on behalf of Argentex LLP.

 

There is no reliance on an individual customer and no customer contributed to more than 10 percent of revenues in the year ended 31 December 2023 or period ended 31 December 2022.

 

 

5    Revenue

 

	Year ended 31 December 2023		9 months ended 31 December 2022
An analysis of the Group's revenue is as follows:	£m		£m
Spot foreign exchange contracts	13.4		9.3
Forward foreign exchange contracts	29.5		27.9
Structured solutions	7.0		3.8
	49.9		41.0

 

6    Operating profit

 

	Year ended 31 December 2023		9 months ended 31 December 2022
Operating profit for the period is stated after charging:	£m		£m
Depreciation of plant and equipment	1.1		0.3
Depreciation of right of use assets	1.2		0.6
Amortisation of intangibles	1.6		1.1
Staff costs (see note 9)	27.7		20.2
Net foreign exchange (gains)	(0.4)		-

 

 

7    Auditor's remuneration

 

	Year ended 31 December 2023		9 months ended 31 December 2022
Fees payable to the Group's auditor and its associates for services to the Group:	£m		£m
The audit of financial statements of the Group and subsidiaries	0.4		0.3
Other assurance and advisory services	0.1		-
	0.5		0.3

 

8    Non-adjusted expenditure

 

The Directors classify certain costs as non-adjusted in accordance with the accounting policy set out in note 2.15. In the year to December 2023 there was no classified (£nil) non-adjusted costs.

 

In the nine month period to December 2022 the non-adjusted costs amount to £0.8m and related to the creation of and regulatory applications for overseas operations and fees incurred in the period in relation to the Group's executive leadership change.

 

 

9    Staff costs

 

The average number of employees employed by the Group, including executive and non-executive directors, was:
	Year ended 31 December 2023		9 months ended 31 December 2022
	No.		No.
Directors	6		7
LLP members (excl. executive directors)	4		5
Sales and dealing	85		66
Operations	74		47
	169		125
Employees, members and directors as at 31 December 2023 and 2022	196		137
	Year ended 31 December 2023		9 months ended 31 December 2022
	£m		£m
Staff costs for the above persons were:
Wages and salaries	20.3		12.7
Social security costs	2.3		1.4
Pension costs	0.5		0.1
Share-based payments	0.5		0.1
LLP members' remuneration*	2.6		4.2
Directors' remuneration	1.5		1.7
	27.7		20.2
Directors' remuneration
	Year ended 31 December 2023		9 months ended 31 December 2022
	£m		£m
Directors' remuneration comprised:
Salaries and LLP members' remuneration	1.5		1.7
*Excludes Directors of Argentex Group PLC who are/were also members of Argentex LLP.   Prior to IPO, profits from Argentex LLP were distributed according to individual equity holdings in the LLP. Following Admission, the self-employed LLP members are remunerated under the Amended and Restated LLP Agreement by a combination of (i) fixed annual remuneration (ii) participation in revenue commission schemes (iii) annual bonuses and (iv) other variable compensation based on the LLP's performance.
Key management are those persons having authority and responsibility for planning, controlling, and directing the activities of the Group, or in relation to the Company. In the opinion of the Board, the Group and Company's key management are the Directors of Argentex Group PLC. Information regarding their compensation is provided in the Remuneration Committee Report.

 

10   Dividends

		Year ended 31 December 2023		9 months ended 31 December          2022
		£m		£m
Amounts recognised as distributions to equity holders:
Final dividend for the 9 month period ended 31 December 2022 of 2.25p per share (December 2022: dividend for the year ended 31 March 2022 of 1.25p per share)		2.5		1.5
Interim dividend for the year to 31 December 2023 of 0.75p per share (2022: nil)		0.9		-
		3.4		1.5
Proposed final dividend for the year ended 31 December 2023 of nil per share (2022: 2.25p per share)		-		2.5

 

 

 

 

11   Finance costs

 

	Year ended 31 December 2023		9 months ended 31 December 2022
	£m		£m
Interest on lease arrangements	0.8		0.3

 

12   Taxation

 

	Year ended 31 December 2023		9 months ended 31 December 2022
	£m		£m
Income tax recognised in Consolidated Statement of Comprehensive Income
Current tax
Current tax on profit for the year	1.6		1.3
Adjustments in respect of prior years	0.3		-
Total current tax	1.9		1.3
Deferred tax
Origination and reversal of temporary differences	0.3		(0.5)
Total deferred tax	0.3		(0.5)
Total tax expense	2.2		0.8
Tax has been calculated using an estimated annual effective tax rate of 23.5% (2022: 19%) on profit before tax. The increase is due to the increase in the UK main rate of corporation tax on 01 April 2023 to 25% from 19%.
The difference between the total tax expense shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows:
	Year ended 31 December 2023		9 months ended 31 December 2022
	£m		£m
Profit for the year	5.1		7.0
Income tax expense	2.2		0.8
Profit before income taxes	7.3		7.8
Tax using the Company's domestic tax rate of 23.5% (2022:19%)	1.7		1.5
Effects of:
Expenses not deductible for tax purposes	0.1		-
Other amounts charged	-		0.2
Adjustments in respect of prior period	0.4		(0.4)
Tax credit relating to future periods	-		(0.5)
Total tax on ordinary activities	2.2		0.8

 

 

 

 

	Year ended 31 December 2023		9 months ended 31 December 2022
	£m		£m
Current tax assets and liabilities
Corporation tax	(0.6)		(0.7)
Current tax liability	(0.6)		(0.7)

 

 

 

	Year ended 31 December 2023		9 months ended 31 December 2022
	£m		£m
Deferred Tax
Assets
At 1 January 2023 and 1 April 2022	0.5		-
Current year movement	(0.3)		-
Tax credit relating to future periods	-		0.5
Total deferred tax asset	0.2		0.5
Deferred tax in relation to timing differences on fixed assets. There is no expiry on the deferred tax asset. The deferred tax asset is based on the future rate of corporation tax 25%.

 

13   Earnings per share

 

The Group calculates basic earnings to be net profit attributable to equity shareholders for the period. The Group also calculates an adjusted earnings figure, which excludes the effects of share-based payments, and non-adjusted costs as described further in note 2.15.

 

		Year ended 31 December 2023		9 months ended 31 December 2022
		£m		£m
	Earnings
	Earnings for the purposes of basic and diluted earnings per share
	- basic and diluted	5.1		7.0
	Adjustments for:
	Non-adjusted expenditure	-		0.8
	Shared-based payments	0.5		0.1
	Tax impact	(0.1)		(0.2)
	Adjusted earnings (basic and diluted)	5.5		7.7
	Number of shares   The calculation of basic and earnings per share is based on the following number of shares (m).
	Weighted average number of ordinary shares for the purposes of basic earnings per share	113.2		113.2
	Number of dilutive shares under option	0.1		0.1
	Weighted average number of ordinary shares for the purposes of dilutive earnings per share	113.3		113.3
	Earnings per share
	Basic	4.6p		6.2p
	Diluted	4.6p		6.2p
	Adjusted - Basic	5.0p		6.8p
	Adjusted - Diluted	5.0p		6.8p
	The calculation of diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, all of which arise from share options. A calculation is performed to determine the number of share options that are potentially dilutive based on the number of shares that could have been acquired at fair value, considering the monetary value of the subscription rights attached to outstanding share options.

 

 

 

14   Intangible fixed assets

 

		Software
		development
		costs
		£m
	Cost
	At 31 March 2022	7.4
	Additions	1.4
	At 31 December 2022	8.8
	Additions	1.8
	At 31 December 2023	10.6
	Amortisation
	At 31 March 2022	5.2
	Charge for the 9-month period	1.1
	At 31 December 2022	6.3
	Charge for year	1.6
	At 31 December 2023	7.9
	Net book value
	At 31 December 2022	2.5
	At 31 December 2023	2.7

15   Property, plant and equipment

 

	Leasehold improvements	Right of use asset	Office equipment	Computer equipment	Total
	£m	£m	£m	£m	£m
Cost
At 31 March 2022	1.8	7.3	0.8	0.7	10.6
Additions	-	-	0.5	-	0.5
Disposals	-	-	-	-	-
At 31 December 2022	1.8	7.3	1.3	0.7	11.1
Additions	2.0	6.6	0.5	0.4	9.5
Disposals	-	-	-	-	-
At 31 December 2023	3.8	13.9	1.8	1.1	20.6
Depreciation
At 31 March 2022	0.3	1.5	0.1	0.4	2.3
Charge for the period	0.1	0.6	0.1	0.1	0.9
Disposals	-	-	-	-	-
At 31 December 2022	0.4	2.1	0.2	0.5	3.2
Charge for the year	0.4	1.2	0.4	0.3	2.3
Disposals	-	-	-	-	-
At 31 December 2023	0.8	3.3	0.6	0.8	5.5
Net book value
At 31 December 2022	1.4	5.2	1.1	0.2	7.9
At 31 December 2023	3.0	10.6	1.2	0.3	15.1

Right of use asset relates to leases disclosed in note 20.