Chief Executive's Report

 

 

Introduction

The year ended 30 September 2025 was another where relatively modest improvements in headline revenue and profitability masked progress within our smart buildings businesses as we pursue our aim of creating a valuable PropTech group.

 

Trading review

Revenue from continuing operations increased to £20.1 million from £18.6 million, of which smart buildings accounted for 50% and architectural services 50% with both divisions increasing their gross profits. The overall nominally profitable result at the profit before tax level was the combination of a welcome return to profitability from our architecture businesses and a break-even performance in our smart buildings activities, with central costs absorbing the operational profitability.

 

We have commenced reporting recurring revenues in our smart buildings businesses, to help investors understand the progress we are making in changing the nature of the Group's revenue streams. Measured at the period end, the annualised recurring revenue from the Group's owned intellectual property is £751,000, up 68% compared to the prior year.

 

Smart Buildings

 

The vision

Our vision is to build a technology led property services group, drawing on our strong architecture heritage.

 

Smart buildings integrate advanced technologies, data analytics, and automation to create buildings that can act for themselves and provide enhanced occupier experiences. They optimise energy consumption, streamline operations, and personalise experiences for occupants. By interconnecting systems, leveraging the Internet of Things (IoT) and artificial intelligence (AI), smart buildings offer real-time monitoring and management, energy savings, improved comfort, proactive maintenance, and cost reduction.

 

The Smart Buildings business model

In comparison with pure architecture a smart buildings business model has two fundamental advantages essential to the creation of shareholder value, namely scalability and longevity.

 

·      Growing revenue from property related software and services is not constrained by the need to take on ever increasing numbers of staff. This provides an ability to scale revenues without a proportionate increase in costs, which does not exist where income is principally the function of hours charged.

 

·      Architects also typically primarily get paid only during a building's planning and construction phases whereas with smart buildings income can be generated throughout the entire life of the building without needing resource-intensive support.

 

Vanti

Vanti is by far the largest of the Group's current smart buildings activities, and now includes all the former Torpedo Factory Group businesses, including Stage Technology. As a consequence much of its revenue at its current stage of development is still project-based system integration work, although an increasing focus is being developed on longer term software opportunities.

 

Vanti revenue grew 9% in the year, with gross profit increasing to £4.9 million (2024: £4.2 million). Within these amounts there were differing outcomes for the Smart Core software led activities and the traditional installation activities.

 

Smart Core

We are encouraged by the adoption of our flagship Smart Core software product by leading property clients. The landmark skyscraper in the City of London that purchased the first enterprise licence of Smart Core in summer 2024 is moving into support, generating an annual six figure revenue. We also completed additional deployment of Smart Core at a premium Birmingham office and other central London locations adding an additional Enterprise licence and two Master Service Agreements (MSAs) in the process helping increase recurring revenue streams.

 

Our plan for the commercial development of Smart Core is to continue to extend its deployment including into two further prominent sites in central London one of which is mid installation. Our "land and expand" strategy of selling further into existing clients is also underway with two prestigious tenants at previous project sites taking up additional Smart Core instances with other tenant pricing discussions in progress. These will ensure continued growth in the square footage where Smart Core is deployed.

 

Recurring revenue streams through software or MSAs associated with Smart Core stood at the rate of £42,000 per month as at the year end. Smart Core was also a key project integration differentiator being the central factor in over £1 million of master systems integration (MSI) project revenue over the financial year.

 

To date Smart Core has been deployed only as part of Vanti's integration work. The current deployment model means the software has yet to be sold through third parties. This limits the rate at which we can scale Smart Core revenue streams.

 

Our plan for the technical development of Smart Core in the current and following financial year is threefold. We intend to:

 

1.         take Smart Core from being a developer-delivered tool to being a scalable product ready for third party integrators to deploy;

2.         develop a channel partner ecosystem and build a pipeline of opportunities through those partners; and

3.         create a technology partner ecosystem and marketplace to open up additional revenue streams for Smart Core.

 

System Integration Work

The installation-led activities across MSI, Audio Visual (AV) and Stage and performance technology had a strong start to the year under review before tailing off in the second half.

 

As noted in the chairman's statement a significant contributory factor was the impact of the imposition of VAT on private school fees, which resulted in much of the seasonal surge of work for educational establishments during the summer months not materialising and therefore impacted our Stage and performance technology line.

 

We have been responding to the downturn in activity by implementing a cost reduction exercise in the integration activities (including making changes to the management team) to better match contracted revenues with costs, while protecting resources for the development of Smart Core as we continue to commercialise this proprietary Building Operating System software.

 

ecoDriver

ecoDriver is the Group's energy monitoring platform, selling software, consultancy services, sensors and other hardware that allow clients to monitor their energy usage and identify savings.

 

 

Revenues continued to grow strongly, albeit from a low base. The high number of new deployments in the year resulted in lower gross profit margins as much of the costs of installation are typically recovered in subsequent years. This larger installed base, however, allows us to generate increased SaaS revenues and margins in subsequent years as the business matures.

 

The business generated losses at a higher level than last year as, given ecoDriver's relatively small scale at present, we continue to prioritise growing market share over short term profit. With energy prices in the UK high and forecast to remain so, we believe ecoDriver's services will be increasingly valuable in the years ahead.

 

Alongside our financial performance, this year has seen continued progress in the development of the ecoDriver platform. We enhanced EDDIE our AI Sustainability assistant, making it more intuitive and better able to support users in turning energy data into actionable insights. We have also delivered new features requested both by existing and new clients, ensuring the platform continues to evolve in line with real-world needs. Looking ahead, our roadmap includes the development of generation three of EDDIE, focused on delivering deeper insight, improved usability and even greater impact in reducing energy waste and supporting decarbonisation.

 

Anders + Kern

Anders + Kern distributes hardware to workplace technology system integrators. We acquired the company in 2023 for £0.5 million based on a longer term strategy to use its client base to deploy the software that the Group develops. However, changes of ownership at two of its main suppliers led to new distribution arrangements. Following this the division's performance deteriorated sharply and we took the decision to sell shortly before the end of the period under review.

 

Architecture

The Group has two established UK architecture businesses, Veretec, which offers executive architecture services - often in partnership with pure design architects - and Aukett Swanke Limited, which offers a full design service.  Additionally, the Group owns 25% of Aukett + Heese, a leading Berlin based architecture practice and 50% of Aukett + Heese Frankfurt, an architecture and general planning practice serving businesses in the Frankfurt area.

 

The UK architecture businesses generated revenue of £10.1 million, up from £9.5 million with profit before management charges increasing from £0.25 million to £0.97 million. Of this amount £0.4 million relates to a one off gain relating to the accounting treatment of a new lease as more fully explained in notes 15 and 38.

 

The return of the UK architecture businesses to overall profit is a welcome development and one we believe is set to continue based on the performance to date in the current financial year.

 

Veretec

Veretec, our executive architecture practice, grew strongly during the year and enjoys a market leading position.

 

It exceeded its revenue target during the year, with sales of £7.55 million representing growth of 27.5% on the £5.92 million achieved in the prior year.

 

Veretec has delivered several successful projects during the period, although as a general rule residential projects have been more challenging than commercial ones.

 

The Building Safety Act presents a number of opportunities for Veretec to demonstrate the value of its business model, with a requirement to achieve Gateway 2 approval, the new "hard stop" checkpoint for high risk buildings. At the time of writing, this is widely reported as taking an average of 43 weeks to achieve, and 48 weeks in London. On its first project to require this standard, Veretec successfully achieved Gateway 2 approval in 13 weeks, setting a new record for the fastest achievement. This unlocks real value for developers.

 

 

Aukett Swanke Limited

Aukett Swanke Limited (ASL) is the Group's full service architectural and interior design practice. The first half of the year was hampered by project delays and pauses between work stages, resulting in losses; however several large projects were confirmed in the second half, leading to a profitable final quarter, and a momentum of success which has continued into the current year.

 

Notable completions in the year were 7 Princes Street, a flagship office in the City of London, and the fit-out of new West End headquarters for Lazard. New commissions included ongoing work at Lloyd's of London as we continue to work alongside them to upgrade their work space, and a new 350 room hotel also in the City of London.

 

Additionally, ASL has continued to work closely with Vanti to develop a symbiotic relationship, where ASL's contacts create opportunities for Vanti and Smart Core, while the knowledge from working with Vanti boosts Aukett Swanke's credentials for the delivery of smart buildings that will not just look good, but provide a great experience for those who live and work in and around them.

 

German investments

The Berlin and Frankfurt businesses are associated undertakings, so we do not include their results in our consolidated revenue and operating profit numbers. We did though receive approximately £0.33 million in management charges and dividends from our German investments.

 

Under German accounting rules for larger construction firms, profits can only be recognised after a contract has been completed, regardless of any income received during the life of such a contract and with contracts sometimes lasting for several years. As a result, there is an inevitable delay in receiving dividend payments from our Berlin investment that under UK accounting rules could be made years earlier.

 

While the accounting carrying value of our German investments is £1.0 million we regard their true value as being much greater. In contrast to previous years the Berlin based business, while forecasting continued profitability, has a more cautious short term outlook, although the Frankfurt based business looks to be having another strong year.

 

Central costs

After the sizable reduction in audit costs in the prior year, the reduction in central costs was smaller this year. We believe we have reduced the Group's central costs to a level which is appropriate for a group that is actively evaluating significant M&A opportunities and seeking to engage more actively with investors.

 

Funding

 

To fund our core businesses

The September 2024 £2.5 million disposal of Torpedo Factory Group's former west London freehold, meant we entered the financial year under review with relatively low debts. Notwithstanding this the nature of the current Group meant that we traded throughout the year with a tight working capital position. To alleviate this, we raised £1.1 million through the issue of 12% Convertible Loan Notes repayable on 31 December 2027.

 

To fund growth

We have been mindful not to dilute shareholders unnecessarily in the pursuit of growth. Where possible, as with the recent Work.Place.Create. acquisition described below, we have sought to use the cashflows from the acquired business to fund the bulk of the purchase consideration.

 

 

 

Acquisitions after the end of the period under review

 

MapBI

In November 2025, we announced the creation of MapBI, formed from the acquisition of 3DEO, a geospatial information system (GIS) software company which facilitates smart cities and portfolio-wide data on building performance. Terms of the acquisition are set out in the post balance sheet event note, note 38. It was gratifying to report in January that from a standing start MapBI had secured approximately £20,000 of monthly recurring revenue (MRR) and won a place on the Thames Freeport Connectivity Lab with live trials being implemented at DP London Gateway.

 

We also anticipate that MapBI's acquisition of 3DEO's intellectual property brings the group pre-existing software that should save significant development time at Smart Core.

 

Work.Place.Create.

In January 2026 we announced the acquisition of Work.Place.Create. by Aukett Swanke, our full service architecture business. Details of this are set out in the post balance sheet event note, note 38. The business has been integrated into Aukett Swanke and we are confident it will boost Aukett Swanke's profitability in the current and subsequent years. It is also expected to generate additional leads for our smart buildings businesses. Where architecture is primarily concerned with developers and landlords, interior design is more generally associated with tenants. This gives us an additional avenue of approach to the market, and also tends to have a faster turnaround without planning delays or long construction timescales.

 

Current trading

In the first half of the current financial year, while the architecture businesses are performing profitably and ahead of the equivalent period last year, the implementation of cost reductions in the traditional integration work at Vanti means that their first half performance will show a loss. MapBI is also making modest short term losses as we build the recurring revenues.

 

Accordingly, for the Group as a whole, first half trading will be another moderate loss. At this stage of the Group's transition to a software led PropTech group, a large proportion of revenue continues to come from one off projects, which can be subject to potential delays and project overruns, and as such while no dramatic change in overall performance is expected it is difficult to predict with confidence the outcome for the full year from the Group's existing businesses.

 

Our software assets - ecoDriver, Vanti's Smart Core, and MapBI's Active Maps - continue to make good progress both commercially and technically. Operating real-world infrastructure requires deep integration with building systems, robust security and trusted data governance. These capabilities form durable infrastructure that AI builds upon to unlock tremendous value for our clients, and we expect this value to be reflected in strong growth in our recurring revenues.

 

Future plans

The Group remains glad of its public quoted status in the belief that this offers us optimum access to the right kind of capital. Our chairman commented in his statement that a significant barrier to growth of AIM companies by acquisition has been the time and cost of producing documentation to effect acquisitions where failing just one of five different measures of relative size can mean it is classed as a reverse takeover. To that end we participated actively in discussions with Government and the London Stock Exchange (LSE) who have been reviewing changes to facilitate the growth of AIM companies.

 

It was therefore encouraging to see updated guidance from the LSE on the interpretation of the AIM Rules, in a manner that is intended to make larger acquisitions within a Group's core competencies much faster to execute and with much lower transactional costs. This gives us scope to look at transformational acquisitions. As it will take some time for the developments in the existing Smart Buildings businesses to be generating strong predictable profits, so in the short term the investment case is predicated on acquisitive growth. Finding the right transactions will take time but the search is well underway. We are a growth company and intend to remain so.

 

I would again like to thank our employees for their support over the past year, particularly those who purchase our shares every month, demonstrating their belief in what we are building. I would also like to thank the Quoted Companies Alliance for its support and for allowing me to have an input on their efforts to make public markets work better for the benefit of all. I remain excited to be running an AIM company and am looking forward to taking advantage of the new opportunities the LSE is opening up to allow smaller quoted companies to accelerate their growth.

 

Current and prospective shareholders are encouraged to visit our investor-focused website at www.builtcybernetics.com and sign up to receive updates and engage with the business as we continue to report our progress.

 

 

 

 

 

Nick Clark

Chief Executive

20 March 2026

 

Financial review

 

 

Basis of presentation

The Group operates two separate divisions, Smart Buildings and Architecture. 

 

The results of Anders + Kern are not included within Smart Buildings as at the year-end they were classed as discontinued activities.

 

Group's interest in the Berlin and Frankfurt operations are consolidated in the Group's financial statements as the share of results of associates and joint ventures. Accordingly, their revenue, gross profit and costs are not included in the following tables, but the Group's share of their profits are included in the trading profit/(loss).

 

 

Segmental analysis from continuing operations  

 

Year ended 30 September 2025	Smart Buildings £'000	Architecture   £'000	Group costs* £'000	Total   £'000
Revenue	9,946	10,115	-	20,061
Gross profit	5,277	9,772	-	15,049
Trading profit/(loss)	(209)	742	(456)	77
Exceptional costs	-	-	-	-
Profit/(loss) before tax	(209)	742	(456)	77

 

 

Year ended 30 September 2024	Smart Buildings £'000	Architecture   £'000	Group costs* £'000	Total   £'000
Revenue	9,069	9,564	-	18,633
Gross profit	4,607	9,299	-	13,906
Trading (loss)/profit	(74)	405	(652)	(321)
Exceptional costs	(859)	(352)	(27)	(1,238)
(Loss)/profit before tax	(673)	53	(679)	(1,299)

 

*Group costs are shown net of management charges to subsidiaries, and the German associate and joint venture. Group costs excluding income from management charges are disclosed in Note 3.

 

 

Smart Buildings businesses

 

Year ended 30 September 2025	Vanti £'000	ecoDriver £'000	Other £'000	Total £'000
Revenue	9,375	571	-	9,946
Gross profit	4,908	369	-	5,277
Trading loss	(74)	(135)	-	(209)
Exceptional costs	-	-	-	-
Loss before tax	(74)	(135)	-	(209)
Annualised recurring revenue - Maintenance and other1	955	-	-	955
Annualised recurring revenue - Internal IP1	500	251	-	751

 

 

Year ended 30 September 2024	Vanti £'000	ecoDriver £'000	Other £'000	Total £'000
Revenue	8,592	477	-	9,069
Gross profit	4,200	407	-	4,607
Trading loss	(26)	(48)	-	(74)
Exceptional costs	(599)	(260)	-	(859)
Loss before tax	(625)	(48)	-	(673)
Annualised recurring revenue - Maintenance and other1	751	-	-	751
Annualised recurring revenue - Internal IP1	226	218	-	444

¹Alternative performance measures, refer to page 16 for definition

 

Vanti (including TFG Stage Technology)

 

Vanti grew revenue by 9% year on year showing a loss before tax of £74k, the comparable for the prior year was a £26k loss after taking out one off costs (primarily the £585k cost of revaluation of The Old Torpedo Factory freehold property sold during the prior year).

 

The company follows a twin track approach where focus is on recurring revenue streams associated with software and the company's internally generated intellectual Property (IP) combined with more traditional installation activities of an MSI. Recurring revenue streams now account for approximately 20% of the total turnover with the majority of this being on long-term software and service contracts which have continued to increase as the year progressed.

 

Installation activities as noted in the Chief Executive's statement saw a decline in the second half of the year which led to a limited performance in terms of overall profitability. However, we are confident that this will build again over the course of 2025/26 and have undertaken a cost cutting exercise in the meantime to mitigate risk.

 

We continue to invest heavily in our internal IP with £250k of development capitalisation. However, this is a small proportion of the annual spend to bring this product quickly to market so that it is not just a developer-delivered tool and is increasingly a scalable product ready for third party integration.

 

The company's primary focus is realising revenues off the back of its IP development, as a result short term profitability will continue to be at a reduced level while we expedite bringing this product to a wider scalable market.

 

ecoDriver

 

ecoDriver grew revenue by 19.7% year on year, although cost of sales was higher leading to a lower gross profit, as the new orders required the installation of higher quantities of equipment. Whilst lowering the gross profit in the year, this puts ecoDriver into a stronger position to deliver increased long term SaaS revenues in future years.

 

The segment recorded a modest loss excluding group management charges, with £166k of software development costs being capitalised. Approximately 34% of ecoDriver's revenue is recurring, under long term contracts for software licence fees and advisory services.

 

 

Architecture businesses

 

Year ended 30 September 2025	Veretec £'000	ASL £'000	Other £'000	Total £'000
Revenue	7,547	2,568	-	10,115
Revenue less sub consultant costs1	7,304	2,468	-	9,772
Trading profit	509	93	140	742
Exceptional costs	-	-	-	-
Profit before tax	509	93	140	742
FTE technical staff1	71	25	-	96
Net revenue per FTE technical staff1	103	99	-	102

 

Year ended 30 September 2024	Veretec £'000	ASL £'000	Other £'000	Total £'000
Revenue	5,918	3,607	39	9,564
Revenue less sub consultant costs1	5,823	3,437	39	9,299
Trading profit	224	37	144	405
Exceptional costs	(164)	(100)	(88)	(352)
Profit/(loss) before tax	60	(63)	56	53
FTE technical staff1	58	34	2	94
Net revenue per FTE technical staff1	100	101	20	99

¹Alternative performance measures, refer to page 16 for definition

 

United Kingdom Architecture

 

The UK's architecture revenue increased 6.2%, and stripping out pass through subconsultant costs revenue increased 5.5% year on year.   

 

With net revenue per full time equivalent technical staff remaining broadly consistent with the previous year, the increase in revenues fed through to an increase in the contribution of the UK architecture businesses both before and after central management charges.

 

Of this amount £0.42m included in the profit relates to a one off gain relating to the accounting treatment of the London office lease.

 

The overall result marked contrasting years for the Group's two UK architectural practices. Veretec grew significantly with revenue increasing 27.5% to £7.55m. Much of the growth was in the second half of the year as staff numbers increased from 62 FTEs at the start of the year to over 87 by September 2025. Despite the outlay of recruitment and other associated costs to get staff started and a relatively short time in which many those new staff were generating profits, Veretec was still able to contribute £0.51m of profit before tax in the year.

 

Aukett Swanke Limited revenue however was down 28.8% year on year to £2.57m. The practice suffered from client delays with a number of significant projects either sold or paused by clients. One of the projects which had stopped in the prior year restarted under new ownership mid way through the year, and other new projects enable second half revenue to be 32% higher than the first half of the year, with the projects then set to continue through into the next financial year.  With a team size averaging 25 FTEs through the year, and the benefit of the gain on the new lease, ASL was able to erase the first half loss and ended the year with a £0.09m profit before tax.

 

 

Continental Europe

 

The principal components of the Continental Europe hub are the two German investments, for which under prevailing accounting rules we do not show revenue and costs but only report our share of profits.

	2025 £'000	2024 £'000
Revenue	-	39
Revenue less sub consultant costs1	-	39
Trading profit	157	161
Exceptional costs	-	(88)
Profit before tax	157	73
FTE technical staff1	-	2
Net revenue per FTE technical staff1	-	20
Including 100% of associate & joint ventures
Total revenues under management	15,888	16,862
Revenue less sub consultant costs1	11,613	11,487
FTE technical staff1	119	117
Net revenue per FTE technical staff1	98	98

¹Alternative performance measures, refer to page 16 for definition

 

The hub result before tax (including Group management charges), including the joint venture and associate in Germany, was a profit of £157k (2024: £73k).

 

Continental Europe's result represents the activities of the associate in Berlin and joint venture in Frankfurt. The prior year included 3 months' trade of the former Turkey subsidiary up to the sale in December 2023, and a loss on disposal.

 

Berlin continued to experience an ongoing sluggish market, primarily in the residential sector. However, the year to 30 September 2025 still represented another profitable year from the Berlin and Frankfurt studios with the result very similar to the prior year after stripping out the prior year loss in Turkey.

 

Total revenues under management decreased 5.8%, whilst revenue less sub consultant costs increased 1.1%. Staff numbers increased marginally to 119 FTEs (2024: 117), so net revenue per FTE technical staff remained constant at £98k (2024: £98k).

 

 

Balance sheet

 

Non-current assets increased by £511k, principally as the result of capitalised IT development costs of £448k.

 

Notwithstanding a £183k increase in cash and cash equivalents, total current assets fell by £1,778k, principally due to decreases of £1,444k in trade and other receivable and of £504k in contract assets.

 

Total current liabilities decreased by £2,528k, principally due to decreases of £1,430k in trade and other payables and of £724k in contract liabilities.

 

Non-current liabilities increased by £1,072k principally as the result of the convertible loans notes issued during the period.

 

 

Cashflow

 

In the period under review the Group generated £80k from operations and received a further £34k from tax credits. £211k was received as dividends from our German investments and £178k from the issue of new shares and the sale of investments. Additionally, £1,115k was received from the issue of convertible loan notes.

 

In aggregate £792k was spent in loan, lease and net interest payments. £448k was invested in software development and £138k on additions to property plant and equipment.

 

The net effect of all of these movements was that cash increased by £204k to £393k.

 

 

Financing and Going Concern

 

Basis of the board's opinion

The Board has produced cash flow forecasts for a period of 18 months from the approval of these financial statements, which comprise detailed income statements, statements of the financial position and cash flow statements for each of the Group's operations. The Board has also considered the risks and uncertainties associated with the principal operations and the funding position in general, including the consideration of a number of differing scenarios based on varying trading performance across the Group.

 

The Group's forecasts are prepared using information on secure contracted work and potential work which is deemed to have a greater than 50% chance of being undertaken, with the income figures suitably discounted, and on new work based on historical experience.

 

Mitigating action

Should either the cash generation from the Group's existing business units decline or the push for growth in the smart buildings arena lead to a prolonged shortfall in cash the Board has the following funding or mitigating options beyond the typical cost cutting in the face of declining activities:

·      Vanti Ltd has received a time limited fully approved offer for an £890k loan which can be drawn down as needed.

·      The Board believes the commercial value of a number of its businesses and investments is substantial in relation to the Group as a whole and if necessary could be realised at values which are in excess of book value.

·      As a company with shares quoted on the London Stock Exchange there is the option to seek additional equity investment from the issue of new shares, as was demonstrated by the share subscription in connection with the Vanti transaction.

·      The Group has outstanding warrants entitling holders to subscribe £235,000 of cash for new shares. The exercise price is 1 penny per share, which is a significant discount to the current market price, and it is therefore reasonable to expect the warrants will be exercised prior to their expiry in May 2027.

 

Other funding and mitigating options available to the board are also discussed in note 1.

 

Based on forecasts prepared and reviewed for the period to 30 September 2027, the Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future. For this reason, the Board considers it appropriate to prepare the financial statements on a going concern basis.

 

 

The going concern statement in the Directors' report and corresponding section in note 1 provide a summary of the assessments made by the directors to establish the financial risk to the Group over the next 12 months. This is further supplemented by the principal risks and uncertainties section in the Strategic Report.

 

Key Performance Indicators ("KPIs")

 

The key performance indicators used within the Group for assessing financial performance are:

 

Groupwide KPIs

 

·      Result before taxation is further assessed on pages 11 to 14;

 

·      Cash at bank and in hand and net funds / (debt), which is assessed further on page 2.

 

Smart Buildings businesses specific KPIs

 

·      Annual recurring revenue - Recurring revenue recognised in the month of September 2025 extrapolated as an annualised figure (September revenue multiplied by twelve). Then subdivided into:

 

i)          Maintenance and other, assessed on pages 11 to 12;

 

ii)          Internal IP - representing software licence sales from software which is owned by the Group, assessed on pages 11 to 12.

 

Architecture businesses specific KPIs

 

·      Revenue less sub consultant costs which reflects the revenue generated by our own technical staff but excludes the revenue attributable to sub consultants, which are mainly passed through at cost. This is the key driver of profitability for our business, and is discussed by segment on pages 13 to 14;

 

·      Revenue less sub consultant costs being generated per full time equivalent (FTE) technical member of staff ('net revenue per FTE technical staff'). This KPI is only analysed on a segmental basis and calculations for each segment can be found on pages 13 to 14; 

 

·      Full time equivalent technical members of staff are given for each hub on pages 13 to 14.

 

 

 

 

 

Antony Barkwith

Group Finance Director

20 March 2026

Strategic report

 

The Directors present their Strategic Report for the Group for the year ended 30 September 2025.

 

Strategy

 

We aim to create shareholder value over the medium and longer terms through the provision of smart building systems and services drawing on our extensive architecture heritage. At the same time we aim to provide an attractive and rewarding working environment for our staff.

 

Business Model

 

Smart Buildings

 

We intend to establish a leading presence in the delivery of smart buildings systems and services, which entails acquiring and developing our own smart buildings software, the deployment of smart building systems, and the provision of related services.

 

As this side of the Group's activities continues to develop and as we further develop our own systems the proportion of income represented by software licencing and related services is expected to increase. In so doing this element of the Group's business will be far more scalable than the traditional architecture model.

 

Architecture

 

Our architecture and interior design businesses operate in the UK and Germany, with other locations continuing to operate through licence based arrangements where the responsibility for profit rests with local management and owners. 

 

The UK Architecture hub comprises two principal service offers: an executive architectural delivery service operating under the Veretec brand, and a comprehensive architectural design including master planning, interior design and fit-out capability under the Aukett Swanke brand.

 

Additionally, we have equity interests in leading architecture practices in Berlin and Frankfurt and brand licence arrangements in the UAE and Turkey.

 

Our architecture business model is to charge on a time or project basis for the work of our professional staff.

 

 

 

 

 

 

 

Principal Risks and Uncertainties

 

The directors consider the principal risks and uncertainties facing the business are as follows:

 

Geo-political factors

Political events and decisions, or the lack thereof, can seriously affect the markets and economies in which the Group operates, leading to a lack of decisions by government bodies and also by clients.  More specifically anything that creates or adds to economic uncertainty has the possibility of delaying long term property related investment decisions. In turn this directly impacts workload and can even delay committed projects.

 

Levels of property development activity

Changes in development activity levels have a direct impact on the number of projects that are available. These changes can be identified by rises and falls in overall GDP, construction output, planning application submissions, construction tenders and starts, investment in the property sector and numbers of new clients.

 

In addressing this risk, the Group considers which markets and which clients to focus upon based on the strength of their financial covenant so that there is clear ability to provide both project seed capital and geared funding to complete the delivery process.

 

Share price volatility

A strong share price and higher market capitalisation attract new investors and provide the Group with greater flexibility when considering M&A activity. Conversely a weaker share price affords the Group less flexibility. The share price has performed well but trading volumes remain low suggesting a risk of volatility.

 

As a member of the QCA we engaged with Government, parliamentarians, and the LSE on the future of AIM. While there was a further reduction in the number of companies on AIM in 2025, it was pleasing to see the LSE relaxing the interpretation of the AIM rules in ways that should materially benefit the Company.

 

Technical Risk

There can be no guarantee that the Group's current competitors or new entrants to the markets in which the Group's businesses operate will not bring superior technologies, software, products or services to the market which, in consequence, make the Group's current offerings obsolete. The Group therefore needs to enhance and develop these offerings and will need to anticipate or respond promptly and successfully to technological change. If the Group is unable to do this sufficiently well, or at all, it may be at a significant disadvantage to the competition. The Group seeks to mitigate this risk through, inter alia, a well structured development programme and ongoing investment in its software and by staying abreast of market trends.

 

Operational gearing and funding

As a small but acquisitive Group we have a relatively high level of operational gearing, through staffing, IT and property costs, which can make it difficult to reduce costs sufficiently quickly to immediately avoid losses and associated cash outflows when faced with sharp and unpredicted falls in revenue.

 

The Directors seek to ensure that the Group retains appropriate funding arrangements and regularly and stringently monitor expected future requirements through the Group's annual budgeting, monthly forecasting and cash flow, and weekly and daily cash reporting processes in order to react immediately to a required change with maximum flexibility.

 

Towards the end of the period under review the Company successfully raised over £1m of Convertible Loan Notes greatly improving liquidity for the Group.                                                                                        

 

 

Staff skills and retention

Our business model relies upon a certain standard and number of skilled individuals based on qualifications and project track record. Failure to retain such skills makes the strategies of the Group difficult to achieve.

 

The Group aims to ensure that knowledge is shared and that particular skills are not unique to just one individual.

 

The Group conducts external surveys to ensure that salaries and benefits are appropriate and comparable to market levels and endeavours to provide an attractive working environment for staff.

 

Staff training programmes, career appraisals and education assistance are provided, including helping our professionally qualified staff comply with their continuing professional development obligations. Training programmes take various forms including external courses and external speakers.

 

Quality of technical delivery

In common with other firms providing professional services, the Group is subject to the risk of claims of professional negligence from clients.

 

The Group seeks to minimise these risks by retaining skilled professionals at all levels and operating quality assurance systems which have many facets. These systems include identifying specific individuals whose roles include focusing on maintaining quality assurance standards and spreading best practice.

 

The Group's UK architecture operations are registered under ISO 9001 which reflects the quality of the internal systems under which we work. As part of these registrations an external assessor undertakes regular compliance reviews. In addition, as part of its service to members, the Mutual, which provides professional indemnity insurance to the UK, undertakes annual quality control assessments.

 

The Group's UK architecture businesses maintain professional indemnity insurance in respect of professional negligence claims but are exposed to the cost of excess deductibles on any successful claims.

 

For Aukett Swanke Limited, this insurance cover is provided by The Wren, which is an industry body formed to provide such insurance, and of which Aukett Swanke Limited is a member.  The Wren is a mutual organisation owned and funded by its members and accordingly, Aukett Swanke Limited can be subject to cash calls alongside other members in the event The Wren's reserves fall to a level where its capital ratios are below the level required by its regulator.

 

Contract pricing

Fee proposals to clients are prepared by experienced practice directors who will be responsible for the delivery of the projects. Fee proposals are based on appropriate due diligence regarding the scope and nature of the project, knowledge of similar projects previously undertaken by the Group and estimates of the resources necessary to deliver the project. Fee proposals for larger projects are subject to review and approval by senior Group management and caveats are included where appropriate.

 

Under performing acquisitions

The acquisition of businesses for too high a price or which do not trade as expected can have a material negative impact on the Group, affecting results and cash, as well as absorbing excessive management time.

 

The Group invests senior management time and Group resources into both pre- and post-acquisition work. Pre-acquisition there is a due diligence process and price modelling based on several criteria. Agreements entered into are subject to commercial technical and legal review. Post-acquisition there is structured implementation planning and ongoing monitoring and review.

Cybersecurity Risk

An unauthorised intrusion, phishing infiltration, denial of service or some similar act by a malevolent party could disrupt the integrity, continuity, security and trust of the Group's systems, including those licenced to customers. Although the Group has protections and backup systems in place, should these protections fail or be breached in a cyber attack, this could impact the day to day operations of the Group and result in costly litigation, significant financial liability and a loss in confidence in the Group's ability to serve its clients securely, which could have a material adverse impact on the Group's business. In addition, due to the ever-evolving nature of these threats, the Group is required to continue to invest resources to enhance the Group's security systems. The Group has technical and physical controls in place to mitigate unauthorised access to client data, as well as cyber liability insurance, but may not be able to prevent a material event in the future.

 

The Strategic Report was approved by the Board on 20 March 2026 and signed on its behalf by

 

 

 

 

Nick Clark

Chief Executive