Consolidated Statement of Changes in Equity

Year ended 30 November 2023

 

 

Group	Share capital £'000	Treasury shares £'000	Share premium account £'000	Capital redemption reserve £'000	Share option reserve £'000	Foreign exchange reserve £'000	Other reserve £'000	Retained earnings £'000	Total £'000
At 30 November 2021	6,528	(148)	74,419	395	901	309	502	(21,897)	61,009
Loss for the year	-	-	-	-	-	-	-	(4,193)	(4,193)
Other comprehensive income for the year	-	-	-	-	-	2,427	-	-	2,427
Issue of Share Capital	(2)	7	5	-	-	-	-	-	10
Share-based payments	-	-	-	-	1,121		-	-	1,121
At 30 November 2022	6,526	(141)	74,424	395	2,022	2,736	502	(26,090)	60,374
Loss for the year	-	-	-	-	-	-	-	(7,902)	(7,902)
Other comprehensive income for the year	-	-	-	-	-	(3,701)	-	-	(3,701)
Issue of Share Capital	-	-	-	-	-	-	-	-	-
Share-based payments	-	-	-	-	915		-	-	915
At 30 November 2023	6,526	(141)	74,424	395	2,937	(965)	502	(33,992)	49,686

 

Share capital and share premium account

When shares are issued, the nominal value of the shares is credited to the share capital reserve. Any premium paid above the nominal value is taken to the share premium account. Pulsar Group plc shares have a nominal value of 5p per share. Directly attributable transaction costs associated with the issue of equity investments are accounted for as a reduction from the share premium account.

 

Treasury shares

The returned shares are held in treasury and attract no voting rights. The return of shares has been accounted for in accordance with IAS 32 'Financial instruments: Presentation' such that the instruments have been deducted from equity with no gain or loss recognised in profit or loss. The balance on this reserve represents the cost to the Group of the treasury shares held.

 

Share option reserve

This reserve arises as a result of amounts being recognised in the consolidated statement of comprehensive income relating to share-based payment transactions granted under the Group's share option scheme. The reserve will fall as share options vest and are exercised over the life of the options.

 

Capital redemption reserve

This reserve arises as a result of keeping with the doctrine of capital maintenance when the Company purchases and redeems its own shares. The amounts transferred into/out from this reserve from a purchase/ redemption is equal to the amount by which share capital has been reduced/increased, when the purchase/ redemption has been financed wholly out of distributable profits, and is the amount by which the nominal value exceeds the proceeds of any new issue of share capital, when the purchase/redemption has been financed partly out of distributable profits.

 

Foreign exchange reserve

This reserve comprises of gains and losses arising on retranslating the net assets of overseas operations into sterling.

 

Other reserve

This reserve arises as a result of the difference between the fair value and the nominal value of consideration shares issued on acquisition for which merger relief is taken under S612 of the Companies Act 2006.

 

Retained earnings

The retained earnings reserve records the accumulated profits and losses of the Group since inception of the business. Where subsidiary undertakings are acquired, only profits and losses arising from the date of acquisition are included.

 

Consolidated statement of cash flow

Year ended 30 November 2023

	Note	2023 £'000	Restated 2022 £'000
Loss for the year		(7,902)	(4,193)
Adjusted for:
Taxation	8	(2,931)	(3,295)
Financial expense	7	253	295
Financial income		(12)	(14)
Depreciation and amortisation	10,12,15	7,753	6,943
Share based payments		915	1,121
Share of loss of associate	11	198	254
Operating cash (outflow)/ inflow before changes in working capital		(1,726)	1,111
Increase in trade and other receivables		1,131	2,799
Increase in trade and other payables		4,584	1,351
Decrease in accruals		(635)	(1,942)
Increase/(decrease) in contract liabilities		4,012	(1,125)
Decrease in provisions		(81)	(438)
Net cash inflow from operations before taxation		7,285	1,756
Taxation received		1,272	711
Net cash inflow from operations		8,557	2,467
Cash flows from investing Interest received		12	14
Acquisition of property, plant and equipment	12	(509)	(506)
Acquisition of intangible assets	10	(8,575)	(8,046)
Net cash outflow from investing		(9,072)	(8,538)
Cash flows from financing
Interest paid		(241)	(286)
Lease liabilities paid	20	(1,800)	(2,356)
Issue of shares		-	10
Net cash outflow from financing		(2,041)	(2,632)
Net decrease in cash and cash equivalents		(2,556)	(8,703)
Opening cash and cash equivalents	22	4,922	13,456
Exchange (losses)/gains on cash and cash equivalents		(118)	169
Closing cash and cash equivalents	22	2,248	4,922

Deferred income and trade debtors have been restated see Note 26 of the financial statements.

 

Notes to the Consolidated Financial Statements

 

1. General Information

 

Pulsar Group Plc ('the Company') (formerly Access Intelligence PLC) and its subsidiaries (together the 'Group') provides advanced tools and human insight to give brands, agencies and organisations the power to anticipate, react and adapt.

 

The Company is a public limited company under the Companies Act 2006 and is listed on the AIM market of the London Stock Exchange and is incorporated and domiciled in the UK. The address of the Company's registered office is provided in the Directors and Advisers page of this Annual Report.

 

In May 2024 the Group rebranded from Access Intelligence Plc to Pulsar Group Plc. The Pulsar brand has long been highly regarded as the leading technology offering in the growing audience intelligence market, which has driven the rebrand.

 

The financial information set out in this document does not constitute the Group's statutory accounts for the years ended 30 November 2022 or 2023.  Statutory accounts for the years ended 30 November 2022 and 30 November 2023, which were approved by the Directors on 23 May 2024, have been reported on by the Independent Auditors.  The Independent Auditor's Reports on the Annual Report and Financial Statements for each of 2022 and 2023 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 

Statutory accounts for the year ended 30 November 2022 have been filed with the Registrar of Companies.  The statutory accounts for the year ended 30 November 2023 will be delivered to the Registrar of Companies in due course and will be posted to shareholders shortly, and thereafter will be available from the Company's registered office at The Johnson Building, 79 Hatton Garden, London EC1N 8AW and from the Company's website: www.pulsargroup.com

 

The financial information set out in these results has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations in conformity with the requirements of the Companies Act 2006.  The accounting policies adopted in these results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the financial statements for the year ended 30 November 2023, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 December 2021.  There are deemed to be no new standards, amendments and interpretations to existing standards, which have been adopted by the Group, that have had a material impact on the financial statements.

 

2. Accounting policies

 

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been applied consistently to all the years presented, unless otherwise stated.

 

Basis of preparation

The financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The consolidated financial statements have been prepared under the historical cost convention and on a going concern basis.

 

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

 

Going concern

The Strategic Report and opening pages to the annual report discuss Pulsar Group's business activities and headline results, together with the financial statements and notes which detail the results for the year, net current liability position and cash flows for the year ended 30 November 2023.

 

The Board has further considered three year financial forecasts, which included detailed, sensitised, 19-month cash flow forecasts from the date of signing the accounts. The sensitised forecasts contained adverse assumptions around new business and upsell being reduced by 15% and renewal rates also decreasing by 3 percentage points compared to expected levels, whilst additional cost reduction initiatives were not assumed. These adverse assumptions have been modelled and, if they were to crystallise, the forecasts confirm that the Group would still be able to continue to operate for at least 12 months from the date of this report. The Board considers the assumptions and plausible downside scenarios that have been modelled to test going concern to be reasonable and reflective of the long-term 'software as a service' contracts and contracted recurring revenue.

 

The Group meets its day to day working capital requirements through its cash balance which was £2,248,000 at 30 November 2023. It did not have a debt facility or bank overdraft at the year end but during 2024 has entered into a £3,000,000 overdraft facility and a £3,000,000 loan facility which are both in place at the date of signing the accounts. The £3,000,000 debt facility is in place for a period of 18 months whilst the overdraft is repayable on demand.

 

As at the date of this report, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

 

Significant judgements in applying the Group's accounting policies

The areas where the Board has made critical judgements in applying the Group's accounting policies (apart from those involving estimations which are dealt with separately below) are:

 

A)   Recognition of deferred tax assets

Judgement is applied in the assessment of deferred tax assets in relation to losses to be recognised in the financial statements. As the Board has forecasted a taxable profit in APAC in the next two years, a deferred tax asset in excess of deferred tax liabilities has been recognised in respect of this region. No deferred tax asset in excess of deferred tax liabilities has been recognised in respect of the EMEA region. At 30 November 2023, the Group recognised a deferred tax asset of £6,808,000 (2022: £4,345,000) and a deferred tax liability of £5,057,000 (2022: £5,404,000). See Note 19 for further detail.

 

B) Capitalisation of development costs

Management applies judgement when determining the value of development costs to be capitalised as an intangible asset in respect of its product development programme. Judgements include the technical feasibility, intention and availability of resources to complete the intangible asset so that the asset will be available for use or sale and assessment of likely future economic benefits. During the year, the Group capitalised £8,498,000 (2022: £7,986,000) of development costs. See Note 10 for further detail.

 

C) Identification of cash generating units for goodwill impairment testing

Judgement is applied in the identification of cash-generating units ("CGUs"). The Directors have judged that the primary CGUs used for impairment testing should be: EMEA & NA, comprising AIMediaData Limited, Access Intelligence Media and Communications Limited, ResponseSource Ltd, Vuelio Australia Pty Limited, Fenix Media Limited and Face US Inc; and APAC, comprising the acquired Isentia entities. See Note 10 for further detail.

 

D) Non-recurring administrative expenses

Due to the Group's activity in recent years, there are a number of items which require judgement to be applied in determining whether they are non-recurring in nature. In the current year these relate largely to: restructuring costs, duplicate software costs and non-recurring business rates. See Note 5 for further detail.

 

E) Control of associates

The Group holds a 21.4% stake in Track Record Holdings Limited. Management has applied judgement in assessing that the Group has significant influence over this Company and it is therefore appropriate to treat Track Record Holdings Limited as an associate. On the basis that the Group has appointed a director to the board of Track Record Holdings Limited, it has been assessed that the Group has significant influence but not control over the Company and therefore it is appropriate to treat Track Record Holdings Limited as an associate.

Significant estimates in applying the Group's accounting policies

The areas where the Board has made significant estimates and assumptions in applying the Group's accounting policies which could have a material impact on the financial statements are:

 

A) Carrying value of goodwill

The Group uses forecast cash flow information and estimates of future growth to assess whether goodwill is impaired. Key assumptions include the EBITDA margin allocated to each CGU, the growth rate to perpetuity and the discount rate. If the results of an operation in future years are adverse to the estimates used for impairment testing, impairment may be triggered at that point. Further details, including sensitivity testing, are included within Note 10.

 

B) Time spent on capitalisable activities

The determination of the value of capitalised development costs associated with employee salaries and related expenses is based on an estimation of the time allocated by employees to activities that fulfil the criteria specified in IAS 38.

New standards and interpretations

The adoption of the following mentioned amendments in the current year have not had a material impact on the Group's/Company's financial statements.

·    Amendments to IFRS 3 : Reference to the Conceptual Framework (1 January 2022)

·    Amendments to IAS 16 : Proceeds before Intended Use (1 January 2022)

·    Amendments to IAS 37 : Onerous Contracts - Cost of Fulfilling a Contract (1 January 2022)

·    Annual Improvements to IFRS Standards 20182020 (1 January 2022)

·    IFRS 17 Insurance Contracts (Amendment): Initial Application of IFRS 17 and IFRS 9 - Comparative Information

·    IFRS 17 Insurance Contracts and Amendments to IFRS 17

·    Amendments to IAS 1 and IFRS Practice Statement 2 : Disclosure of Accounting Policies (1 January 2023)

·    Amendments to IAS 8 : Definition of Accounting Estimates (1 January 2023)

·    Amendments to IAS 12 : Deferred Tax related to Assets and Liabilities arising from a Single Transaction (1 January 2023)

 

New standards, amendments and interpretations issued but not yet effective

At the date of authorisation of the financial statements, the Company has not early adopted the following amendments to Standards and Interpretations that have been issued but are not yet effective:

·    Amendments to IAS 1 : Classification of liabilities as current or non-current (1 January 2024)

·    Amendments to IFRS 16 : Lease Liability in a Sale and Leaseback (1 January 2024)

·    Amendments to IAS 1 : Non-current Liabilities with Covenants (1 January 2024)

 

These Standards and amendments are effective from accounting periods beginning on or after the dates shown above. The directors do not expect any material impact as a result of adopting the standards and amendments listed above in the financial year they become effective.

 

Basis of consolidation

The Group financial statements comprise the financial statements of the Company and all of its subsidiary undertakings made up to the financial year end. Subsidiaries are entities that are controlled by the Group. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

 

The results of subsidiary undertakings acquired or disposed of in the year are included in the Group statement of comprehensive income from the effective date of acquisition or to the effective date of disposal. Accounting policies are consistently applied throughout the Group. Inter-company balances and transactions have been eliminated. Material profits from intercompany sales, to the extent that they are not yet realised outside the Group, have also been eliminated.

 

Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an associate. Investments in associates are accounted for using the equity method of accounting after initially being recognised at cost.

 

Under the equity method of accounting, the Group's investments in associates are initially recognised at cost and adjusted thereafter to recognise the Group's share of post-acquisition profits and losses and other comprehensive income in the consolidated statement of profit and loss and other comprehensive income.

 

Dividends received or receivable from associates are recognised as a reduction in the carrying amount of the investment.

 

When the Group's share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognise further losses unless it has incurred obligations or made payments on behalf of the other entity.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

 

Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.

 

Foreign currency translation

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency).

 

In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.

 

At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

 

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the reporting date.

 

Exchange differences arising on translating the opening net assets at opening rate and the results of over-

seas operations at actual rate are recognised in other comprehensive income and accumulated in the foreign exchange reserve.

 

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are charged to the consolidated statement of comprehensive income.

 

Business combinations

In accordance with IFRS 3 "Business Combinations", the fair value of consideration paid for a business combination is measured as the aggregate of the fair values at the date of exchange of assets given and liabilities incurred or assumed in exchange for control.

 

The assets, liabilities and contingent liabilities of the acquired entity are measured at fair value as at the acquisition date. When the initial accounting for a business combination is determined, it is done so on a provisional basis with any adjustments to these provisional values made within 12 months of the acquisition date and are effective as at the acquisition date.

 

Where a business combination agreement provides for an adjustment to the cost of a business acquired contingent on future events, the Group accrues the fair value of the additional consideration payable as a liability at acquisition date. This amount is reassessed at each subsequent reporting date with any adjustments recognised in the consolidated statement of comprehensive income.

 

Transaction costs are expensed to the statement of comprehensive income as incurred. Acquisition-related employment costs are accrued over the period in which the related services are received and are recorded as exceptional costs.

 

Revenue

Revenue represents the amounts derived from the provision of services, stated net of Value Added Tax. The methodology applied to income recognition is dependent upon the services being supplied.

 

In respect of income relating to annual or multi-year service contracts and/or hosted services which are invoiced in advance, it is the Group's policy to recognise revenue on a straight-line basis over the period of the contract. This is considered a faithful depiction of the transfer of services to the customer because they are provided access to the Group's software for the duration of the contract period. The full value of each sale is credited to contract liabilities when invoiced to be released to the statement of comprehensive income in equal instalments over the contract period.

 

During the course of a customer's relationship with the Group, their system may be upgraded. These upgrades can be separated into two distinct types:

·    Specific upgrades, i.e. moving from an old legacy system to one of the Group's latest products. This would require the migration of the customer's data from the old system and the set-up of their new system; and

·    Non-specific upgrades, i.e. enhancements to customers' systems as a result of internal development effort to improve the stability or functionality of the platform for all customers.

 

Customers do not have a contractual right to non-specific upgrades and therefore, the provision of these non-specific upgrades are accounted for as part of the related service contract as explained above.

 

For specific upgrades, customers are required to purchase these separately through signing a new contract which sets out the one-off professional service fee for the upgrade to cover migration costs and any increase in their annual subscription fee. The provision of this specific upgrade is therefore, accounted for as a separate service contract as explained above.

 

The Group does not have any further obligations that it would have to provide for under the subscription arrangements.

 

In respect of income derived from the provision of research and insights projects, which are based on fixed price contracts with specified performance obligations and for which customers are invoiced based on a payment schedule over the term of the contract, it is the Group's policy to recognise revenue to reflect the benefit received by the customer. The proportion of revenue recognised is based on the output method using milestones completed, such as the delivery of insight reports to a customer.

 

The Group does not have any further obligations that it would have to provide for under its arrangements for

provision of research and insights projects.

 

Cost of sales

Cost of sales comprises third party costs directly related to the provision of services to customers.

 

Non-IFRS Key performance indicators

The Group uses EBITDA and Adjusted EBITDA as the Directors believe the disclosure provides additional information on the core operational performance of the Group. For more information and definition, please the Strategic Report within the annual report.

 

Leases

All leases are now considered under IFRS 16. A right of use asset and lease liability are recognised in the

Consolidated Statement of Financial Position. The right of use asset is amortised on a straight-line basis to the consolidated statement of comprehensive income. Lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. The interest expense is recognised in the consolidated statement of comprehensive income. Where leases are modified the right of use asset and lease liability are remeasured at the date of modification to account for the modification.

 

Finance income and finance expenses

Finance income and finance expenses are recognised in profit or loss as they accrue, using the effective interest method. Finance income relates to interest income on the Group's bank account balances.

 

Interest payable comprises interest payable or finance charges on loans classified as liabilities.

 

Dividend distributions

Dividend distributions are recognised as transactions with owners on payment when liability to pay is established.

 

Intangible assets - Goodwill

Goodwill represents amounts arising on acquisition of subsidiaries. Goodwill represents the difference between the cost of the acquisition and the fair value of the net identifiable assets and contingent liabilities

acquired. Identifiable intangible assets are those which can be sold separately or which arise from legal rights regardless of whether those rights are separable.

 

Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is allocated to cash generating units and is not amortised but is tested annually for impairment.

 

If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss.

 

Intangible assets - research and development expenditure

Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:

·    the technical feasibility of completing the intangible asset so that the asset will be available for use or sale;

·    its intention to complete and its ability and intention to use or sell the asset;

·    how the asset will generate future economic benefits;

·    the availability of resources to complete the asset; and

·    the ability to measure reliably the expenditure during development.

 

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses.

 

Amortisation of the asset begins from the date development is complete and the asset is available for use, which may be before first sale. It is amortised over the period of expected future benefit. Amortisation

is charged to the consolidated statement of comprehensive income. During the period of development, the asset is tested for impairment annually.

 

In 2023 there were twenty-three (2022: Thirty-one) capitalised development projects. The projects undertaken in the current and prior year relate to the development of new functionality within the Vuelio and Pulsar platforms. The directors assessed the capitalisation criteria of its internally generated material intangible assets through a review of the output of the work performed, the specific costs proposed for capitalisation, the likely completion of the work and the likely future benefits to be generated from the work. The directors assess the useful life of the completed capitalised development projects to be five years from the date of the first sale or when benefits begin to be realised and amortisation will begin at that time.

 

 

Intangible assets - database

On acquisition of businesses in prior years, a fair value was calculated in respect of the PR and media contacts databases acquired. Subsequent expenditure on maintaining this database is expensed as incurred.

 

Amortisation is calculated on a straight-line basis over the estimated useful economic life of the database. It is the directors' view that this useful economic life is three years based on the level of ongoing investment required to maintain the quality of data in the database.

 

Intangible assets - customer relationships

On acquisition of businesses in the current and prior years, a fair value was calculated in respect of the customer relationships acquired. Amortisation is calculated on a straight-line basis over the estimated useful economic life of the customer relationships. It is the directors' view that this useful economic life is up to 14 years, based on known and forecast customer retention rates.

 

Intangible assets - brand value

Acquired brands, which are controlled through custody or legal rights and could be sold separately from the rest of the Group's businesses, are capitalised where fair value can be reliably measured. The Group applies a straight-line amortisation policy on all brand values.

 

The conclusion is that a realistic life for the brand equity would be up to a 'generation' or 20 years. Where there is an indication of impairment, the directors will perform an impairment review by analysing the future discounted cash flows over the remaining life of the brand asset to determine whether impairment is required.

 

Software licences

Software licences include software that is not integral to a related item of hardware. These items are stated at cost less accumulated amortisation and any impairment. Amortisation is calculated on a straight-line basis over the estimated useful economic life. Although perpetual licences are maintained under support and maintenance agreements, a useful economic life of five years has been determined.

 

Impairment of non-financial assets

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the profit or loss within non-recurring admin expenses.

 

Impairment losses recognised in respect of cash-generating units are allocated first to the carrying amount of the goodwill allocated to that cash-generating unit and then to the carrying amount of the other assets in the unit on a pro rata basis, applied in priority to non-current assets ahead of more liquid items. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

 

Financial instruments

 

Financial assets

Financial assets are measured at amortised cost, fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL). The measurement basis is determined by reference to both the business model for managing the financial asset and the contractual cash flow characteristics of the financial asset. The Group's financial assets comprise of trade and other receivables and cash and cash equivalents.

 

Trade receivables

Trade receivables are measured at amortised cost and are carried at the original invoice amount less allowances for expected credit losses.

 

Expected credit losses are calculated in accordance with the simplified approach permitted by IFRS 9, using a provision matrix applying lifetime historical credit loss experience to the trade receivables.

 

The expected credit loss rate varies depending on whether, and the extent to which, settlement of the trade receivables is overdue and it is also adjusted as appropriate to reflect current economic conditions and estimates of future conditions. For the purpose of determining credit loss rates, customers are classified into groupings that have similar loss patterns. The key drivers of the loss rate are the aging of the debtor, the geographic location and the Company sector (public vs private). When a trade receivable is determined to have no reasonable expectation of recovery it is written off, firstly against any expected credit loss allowance available and then to the statement of comprehensive income. Subsequent recoveries of amounts previously provided for or written off are credited to the statement of comprehensive income. Long-term receivables are discounted where the effect is material.

 

Cash and cash equivalents

Cash held in deposit accounts is measured at amortised cost.

 

Financial liabilities

The Group's financial liabilities consist of trade payables, loans and borrowings, and other financial liabilities. Trade payables are non-interest bearing. Trade payables initially recognised at their fair value and subsequently measured at amortized cost. Loans and borrowings and other financial liabilities, which include the liability component of convertible redeemable loan notes, are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost using the effective interest rate method. Interest expense is measured on an effective interest rate basis and recognised in the statement of comprehensive income over the relevant period.

 

Provisions

Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event, it is probable that the obligation will be required to be settled, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Provisions are discounted when the time value of money is material.

 

Deferred income

The Group's customer contracts include a diverse range of payment schedules dependent upon the nature and type of services being provided. The Group often agrees payment schedules at the inception of long-term contracts under which it receives payments throughout the term of contracts. These payment schedules may include progress payments as well as regular monthly or quarterly payments for ongoing service delivery. Payments for transactional services may be at delivery date, in arrears or in advance.

 

A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Group performs under the contract. The aggregate amount is disclosed in Note 16.

 

Current and deferred income tax

The tax expense for the year comprises current and deferred tax. Tax is recognised in the consolidated statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

 

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

 

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

 

The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in the future, against which the reversal of temporary differences can be deducted. Recognition, therefore, involves judgement regarding the future financial performance of the particular legal entity or tax group in which the deferred tax asset has been recognised. Historical differences between forecast and actual taxable profits have not resulted in material adjustments to the recognition of deferred tax assets.

 

Share-based payments

The Group issues equity-settled share-based payments to certain employees. These equity-settled share-based payments are measured at fair-value at the date of the grant. The fair value as determined at the grant date is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. Fair value is measured by use of the Monte Carlo method. The charges to profit or loss are recognised in the subsidiary employing the individual concerned.

 

Employee benefits

Individual subsidiaries of the Group operate defined contribution pension schemes for their employees. The assets of the schemes are not managed by the Group and are held separately from those of the Group. The annual contributions payable are charged to the statement of comprehensive income when they fall due for payment.

 

 

3. Revenue

 

The Group's revenue is primarily derived from the rendering of services. The Group's revenue was generated from the following territories:

	2023 £'000	2022 £'000
United Kingdom	22,353	20,659
North America	2,875	2,586
Europe excluding UK	2,129	1,844
Australia and New Zealand	26,530	30,876
Asia	8,010	8,797
Rest of the world	505	948
TOTAL	62,402	65,710

 

 

4. Segment reporting

 

Segment information is presented in respect of the Group's operating segments which are based upon the Group's management and internal business reporting. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly head office expenses.

 

No single customer generates more than 10% of the Group's revenue. The Group operating segments have been decided upon according to the geographic markets in which they operate being the information provided to the Chief Executive Officer and the Board, given both regions provide the same products and services

 

EMEA & NA covers the United Kingdom, Europe and North America. APAC covers Australia, New Zealand and Southeast Asia.

 

The segment information for the year ended 30 November 2023, is as follows:

 

	EMEA & NA	APAC	Total
2023	£'000	£'000	£'000
External revenue	28,193	34,209	62,402
Adjusted EBITDA	471	6,792	7,263
Non-recurring costs	(2,692)	(6,296)	(8,988)
Share of loss of associate	(198)	-	(198)
Share-based payments	(764)	(151)	(915)
Depreciation and amortisation	(3,916)	(3,838)	(7,754)
Financial income	10	2	12
Financial expense	784	(1,037)	(253)
Taxation	238	2,693	2,931
(Loss) After Tax	(6,067)	(1,835)	(7,902)
Reportable segment assets	46,032	44,657	90,689
Reportable segment liabilities	22,634	18,369	41,003
Other information: Additions to intangible assets	5,309	3,266	8,575
Other information: Additions to property, plant and equipment	76	433	509
Other information: Investment in associate - equity method	264	-	264

 

The segment information for the year ended 30 November 2022, is as follows:

	EMEA & NA	APAC	Total
2022	£'000	£'000	£'000
External revenue	26,462	39,248	65,710
Adjusted EBITDA	(113)	2,440	2,327
Non-recurring costs	(1,920)	705	(1,215)
Share of loss of associate	(254)	-	(254)
Share-based payments	(925)	(196)	(1,121)
Depreciation and amortisation	(3,281)	(3,663)	(6,944)
Financial income	10	4	14
Financial expense	731	(1,026)	(295)
Taxation	685	2,610	3,295
(Loss)/profit After Tax	(5,067)	874	(4,193)
Reportable segment assets (restated)	47,209	46,467	93,676
Reportable segment liabilities (restated)	19,015	14,287	33,302
Other information: Additions to intangible assets	4,191	3,855	8,046
Other information: Additions to property, plant and equipment	116	390	506
Other information: Investment in associate - equity method	462	-	462

   Deferred income and trade debtors have been restated see Note 26 of the financial statements

 

 

5. Operating loss

 

Operating loss is stated after charging:	2023	2022
	£'000	£'000
Employee benefit expenses before capitalised costs	34,344	38,801
Depreciation of property, plant and equipment	524	746
Depreciation charge	1,526	2,140
Amortisation of development costs	3,573	1,687
Amortisation of acquired software platforms	1,013	1,213
Amortisation of brand values	212	217
Amortisation of software licences	66	58
Amortisation of database	-	5
Amortisation of customer list	840	878
Loss on disposal of property, plant and equipment	20	-
(Profit) /Loss on foreign currency translation	89	(106)
Non-recurring items (see below)	8,988	1,215
Auditor's remuneration (see below)	589	549
Research and development and other technical	646	2,289
expenditure (a further £8,498,000 (2022: £7,986,000) was capitalised)
Increase/(decrease) in expected credit loss provision	120	(190)
Non-recurring items The non-recurring costs are made up of the following:
Non-recurring salary costs - integration and restructuring	7,231	3,715
Non-recurring duplicated technology costs	1,888	-
Non-recurring copyright related expense/(income)	528	(2,703)
Non-recurring expense - other	321	203
Non-recurring income - business rates overprovision	(980)	-
TOTAL	8,988	1,215
Auditor's remuneration is further analysed as:
Fees payable to the Company's auditor for the audit of the Company's annual accounts	241	287
The audit of the Company's subsidiaries, pursuant to legislation	348	262
TOTAL	589	549

 

 

6. Particulars of employees

 

The average number of persons (including directors) employed by the Group during the year was:

	2023	2022
Technical and support	168	263
Commercial	777	757
Finance and administration	83	81
	1,028	1,101

 

The average number of persons (including directors) employed by the Group during the year was:

 

Costs incurred in respect of these employees were:

 

	2023 £'000	2022 £'000
Wages and salaries costs	27,994	32,126
Social security costs	1,656	2,361
Pension costs	1,978	1,608
Health insurance	219	196
Employee benefits	1,575	2,486
Compensation for loss of office	926	24
	34,348	38,801

 

The compensation for loss of office charge of £926,000 (2022: £24,000) relates to 66 employees (2022: 4) who were made redundant during the year.

 

The reportable key management personnel are considered to be comprised of the Company directors, the remuneration for whose services during the year is detailed below.

 

Directors' remuneration	Salaries £	Fees £	2023 £	2022 £
Executive Directors
J Arnold	400,000	-	400,000	360,876
M Fautley	250,000	-	250,000	250,000
Non-Executive Directors
C Satterthwaite	-	80,000	80,000	80,000
C Pilling	-	40,000	40,000	40,000
K Puris	-	16,667	16,667	40,000
L Gilbert	-	40,000	40,000	40,000
S Vawda	-	50,625	50,625	47,500
M Jackson	-	-	-	18,205
TOTAL	650,000	227,292	877,292	876,581

K Puris resigned on the 03 March 2023.

 

J Arnold received payments into a personal retirement money purchase pension scheme during the year of £40,000 (2022: £42,348).

 

M Fautley received health insurance benefits during the year of £992 (2022: £788). M Fautley received payments into a personal retirement money purchase pension scheme during the year of £18,750 (2022: £25,000) and pension allowance of £5,490 (2022: £Nil). No other directors received any other benefits other than those detailed above.

 

The directors who have served during the year and details of their interests, including family interests, in the Company's ordinary 5p shares at 30 November 2023 are disclosed below:

 

	30 Nov 23 Beneficial No.	Share options granted	30 Nov 23 Options No.	30 Nov 22 Beneficial No.	Share options granted	30 Nov 22 Options No.
J Arnold	754,281	-	1,600,000	754,281	-	1,600,000
M Fautley	94,596	-	39,603	94,596	-	39,603
C Satterthwaite	79,811	-	400,000	79,811	-	400,000
C Pilling	50,000	-	19,801	50,000	-	19,801
K Puris	-	-	-	-	-	19,801
L Gilbert	-	-	19,801	-	-	19,801
S Vawda**	16,666	-	19,801	16,666	-	19,801
TOTAL	995,354	-	2,099,006	995,354	-	2,118,807

 

 

7. Financial expense
	2023 £'000	2022 £'000
Interest charge in respect of lease liabilities	229	278
Other interest	24	17
Total financial expense	253	295

 

 

8. Taxation	2023 £'000	2022 £'000
Current income tax
UK corporation tax credit for the year	92	-
Adjustment in respect of prior year	5	(583)
Double Taxation Relief	(92)	-
Foreign taxation	150	181
Adjustment in respect of prior periods (foreign tax)	22	-
Total current income tax credit	177	(402)
Deferred tax (Note 21)
Origination and reversal of temporary differences	(3,110)	(2,833)
Adjustments in respect of prior periods	2	(60)
Total deferred tax	(3,108)	(2,893)
Total tax credit	(2,931)	(3,295)

 

As shown below the tax assessed on the loss on ordinary activities for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 23% (2022: 19%).

 

The differences are explained as follows:	2023	2022
Factors affecting tax credit	£'000	£'000
Loss on ordinary activities before tax	(10,833)	(7,488)
Loss on ordinary activities multiplied by effective rate of tax	(2,492)	(1,423)
Items not deductible for tax purposes	767	(976)
Adjustment in respect of prior years	(1,086)	(476)
Additional R&D claim CTA 2009	(149)	(240)
Deferred tax not recognised	29	(180)
Total tax credit	(2,931)	(3,295)