TIDMALT
RNS Number : 0300H
Altitude Group PLC
25 July 2023
Altitude Group plc
("Altitude", the "Company" or the "Group")
Audited Annual Results for the Year Ended 31 March 2023 and
Notice of Annual General Meeting
ALTITUDE DELIVERS IN CURRENT YEAR AND LOCKS IN FUTURE GROWTH
Financial Highlights
-- Group revenues increased by GBP6.9 million to GBP18.8
million, up 57.2% (2022: GBP11.9 million)
-- Gross profit increased 39.9% by GBP2.5 million to GBP8.6 million (2022: GBP6.2 million)
-- We are proud to report a record Group adjusted operating
profit* growing by 83.4% to GBP2.0 million (2022: GBP1.1 million)
replacing GBP0.5m of US Government retention credit with
sustainable profitable growth
-- Basic and diluted earnings per share increased by 293% to 0.55p (2022: 0.14p)
-- Cash inflow from operating activities increased by GBP1.8
million to GBP1.6 million (2022: outflow GBP0.2m) driven by
significant revenue growth and increased trading activities
-- Cash outflow from investing activities of GBP1.1 million (2022: GBP0.9 million)
-- Cash increased by GBP0.3 million to GBP1.2 million (2022: GBP0.9 million)
-- The Group secured a financing facility of $1.7 million to
support future substantial growth in Merchanting. The facility
remains undrawn and the Group is debt-free
* Operating profit before share-based payment charges,
amortisation of intangible assets, depreciation of tangible assets
and exceptional charges
Key corporate developments and operational highlights
-- The Group enjoyed a record year of adjusted operating profit
-- The Group invested in pipeline growth and business
development efforts, which have paid off, and driven significant
growth across its Merchanting divisions, providing GBP1.6 million
of operating cashflow to drive future growth
-- The US delivered adjusted operating profit growth of 49%
reaching $4.1 million (2022: $2.8 million)
-- The Group's adjacent market solution has proven to be
disruptive in the sector and is driving hyper-growth across the
Group with the signing of high-value multi-year contracts which
will all generate revenue in the first half of the current
financial year. Further contracts have been signed after the
year-end.
-- ACS added significant revenue growth, doubling the annualised
expected revenue run-rate from Affiliates in the year
-- Services revenue has grown by 35%, which delivers a 90.6% fall through to gross margin
-- US AIM membership has continued to grow, and currently totals
2,214 global members, up from 1,917 at acquisition, consolidating
its position as one of the largest distributor organisations
Please note that percentages are calculated based on unrounded
numbers as reported in the primary statements.
Notice of Annual General meeting ("AGM")
The Company also gives notice that its AGM will be held at the
offices of Zeus, 125 Old Broad Street, 12th Floor, London, EC2N 1AR
on 14 September 2023 at 11 a.m. The Notice of AGM and the Annual
Report for the year ended 31 March 2023 will be posted to
shareholders and will be available on the Group's website (
https://www.altitudeplc.com/reports-results ) in due course.
Outlook
-- Preferred Partner service revenues underlyingly grew by 21.5%
in the US compared to reported growth of 11.4%-15.6% Industry
reported distributor sales growth reflecting a healthy, active
membership network. Source (ASI and PPAI).
-- New ACS Merchanting affiliates doubling expected annualised
revenue signed during the year with full year impact in FY24
-- Significant new adjacent market contracts won and expected to
start transacting by September 2023 with further investment in
pipeline for continued scalable growth
-- The Group remains debt free with an increased facility to support growth
-- The Board is confident that the Group will deliver
substantial growth for FY24 and win further material contracts for
future years
Nichole Stella , Group CEO of Altitude, said:
"This financial year was one of great progress, strong trading
and record breaking results. We increased market share in our core
markets and proved to be a disruptive force in a new market. As a
result, the Group has shown growth across the business far
exceeding our original expectations. This performance is a
testament to not only the incredible hard work of our dedicated
staff and management team but also a testament to the success of
the strategy that was put in place when I arrived and renewed with
vigour in 2021. I am delighted that we grew the existing business
by 57.2% which in itself is no small feat, but to do it on a global
basis whilst establishing a new vertical is a great achievement. We
have a business that is robust, ambitious and is very well
positioned for scalable growth. We look forward to the future, both
near term and longer term, with great confidence."
Altitude Group plc Via Zeus
Nichole Stella, Chief Executive Officer
Graham Feltham, Chief Financial Officer
Zeus (Nominated Adviser & Broker) Tel: +44 (0) 203
Dan Bate/David Foreman/James Edis (Investment 829 5000
Banking)
Dominic King (Corporate Broking)
Chairman's Statement
I am pleased to report that the Group has shown strong
performance in FY23 and once again delivered revenue growth
exceeding 50%.
The management team remained highly focused on operational
gearing and delivery of continuous scalable growth despite
macro-economic headwinds. This focus proved successful and the
Group delivered 57% revenue growth to GBP18.8 million via the
continued delivery of growth in AIM Services and the scaling of our
Merchanting programmes. Growth in adjusted operating profit of 83%
to GBP2.0 million has been achieved against the previous year that
included a non-recurring GBP0.5m US Government credit. This is an
excellent result and is testament to the continued delivery of our
strategy and the power of our business model.
The management team continued development of our technology and
marketing platforms to provide our AIM distributors, ACS Affiliates
and Preferred Partner suppliers with market leading capabilities.
The AIM distribution network continues to grow, with ACS Affiliates
doubling their expected annualised revenue. Significant new
contracts were signed in our Adjacent Market Programme to further
boost revenue in FY24 and build an exciting new growth engine for
future years.
Year in Focus
We have seen growth in both our core businesses and our Adjacent
Market Programmes outstrip the market.
This is a very positive demonstration of our commitment to
provide value to our superb network of excellent suppliers and
distributors via exceptional service and the highest standards.
Technology innovation and development remain at the core of our
business as we continue to gain more expert users and utilise their
demands and needs to drive improvement. Our technology partnership
with Fully Promoted is a prime example who selected to work with us
after carrying out an industry wide review of fit-for-purpose
technology. We will continue to invest capital and resource in
technology for the benefit of all our stakeholders.
The strategy to develop diversified revenue streams within our
Merchanting business has yielded excellent results. In our Adjacent
Markets we have won a significant number of material contracts in
the education sector in its first year of business development, via
our fresh and innovative approach to the sector. The doubling of
our revenue base for ACS has resulted from the exceptional support
we provide to them to grow their business unencumbered by
bureaucracy. The results of this investment in Merchanting can be
seen in this report but the full impact will be seen in future
years through diversity, growth rate, and significantly enhanced
pipeline. The focus of the management team is firmly on delivery
and execution of this strategy. They have repeatedly delivered
above market expectations during this year, and I have trust in
them to continue their excellent performance.
Cash has been managed well during the year generating an
additional GBP0.3 million. Prudently the process was undertaken to
extend our existing credit facility from $0.7 million to $1.7
million in anticipation of growth in Adjacent Markets where there
is an element of up-front investment in fit out and inventory to
service the 5 year contracts. The facility has been secured ahead
of time and will be under constant review. The Group remains debt
free with the material credit facility in place to support future
growth as opportunity arises.
Looking Forward
A business only moves forward though the dedication of its
people. On behalf of the Board I'd like to thank all the Altitude
Group's employees for their hard work and passion which has
delivered another strong set of results.
As we move through 2023 and 2024, we will focus on the world
class onboarding of the material contracts won, accelerating
acquisition of new contracts, and continuing to develop our
technology to expand and enhance our unique promotional goods
marketplace. The Management team are under no illusions, the
success of our contract wins provides operational challenges to
navigate and overcome whilst maintaining the hunger to further
improve and win new business. I am confident we have the right team
in place under the dynamic and agile leadership of Nichole to
continue delivery of our strategy.
We have made significant progress, achieved notable milestones,
and positioned ourselves for sustained growth in a dynamic
marketplace. We remain committed to listening to and delivering
superior value to our stakeholders and look forward to the exciting
opportunities that lie ahead.
David Smith
Non-Executive Chairman
24 July 2023
Chief Executive's Statement
The year ended 31 March 2023 ("FY23") has proven to be a
breakthrough year for the Group, setting new records and heralding
a notable phase of transformation and scalability across the entire
organisation. Against a backdrop of macro-economic challenges, the
Group has seen strong growth in our promotional products divisions
and the rapid advancement and expansion in our Adjacent Markets
Programs (AMPs) throughout North America.
Via our AMPs we identified, targeted, and seized a significant
opportunity in the higher-education space and successfully launched
our Gear Shop solution providing technology & e-commerce
solutions, marketing tools, supply chain know-how and innovative
retail experiences across the US markets. Throughout the year we
expanded our pipeline and collaborated closely with our course
material partner. The combination of different specialisms and
enhanced services proved disruptive within the Educational/
Collegiate markets. In the year the Group delivered significant
multi-year contract wins and maintained an ever-growing pipeline.
Continued expansion and delivery of our Gear Shop technology
solutions, marketing tools, supply chain know-how and innovative
retail experiences across the US markets will remain a primary and
growing focus within the Group's business model.
Thanks to the team's unwavering dedication, exceptional
performance, and relentless pursuit of growth, the Group has once
again achieved a year of outstanding results. Group revenues
increased 57.2% to GBP18.8 million (2022: GBP11.9 million) and
Group adjusted operating profit* increased 83.4% to GBP2.0 million
(2022: GBP1.1 million). Further, I am pleased to report our above
stated growth significantly out-paced the market. The promotional
product industry trade association, PPAI, recently released the
U.S. promotional products market, which grew by 15.6% over 2022 and
reported sales figures to $25.5 billion (2022: $22.1 billion).
Operational Excellence
As a company we are always focused on continuous improvement and
heightened operational gearing. We do this by regularly evaluating
and implementing new strategies to drive process optimisation,
building programmes that focus on economies of scale and improve
our technology and systems to increase production efficiency. Over
the last year, the Group has made great gains in streamlining
operations which have empowered us to invest back in the business
to drive pipeline growth and new revenue generating activities.
This focus on operational gearing has enhanced our ability to adapt
to changing market conditions and take advantage of new
opportunities.
Services
During FY23, our Services Revenue demonstrated remarkable
growth, increasing 35.1% and reaching GBP8.5 million (2022: GBP6.3
million). Simultaneously, our Merchanting Revenue experienced a
81.9% increase, totalling GBP10.2 million (2022: GBP5.6 million).
These impressive outcomes serve as a testament to the achievements
and advancements made by our business in expanding our market
presence and diversifying our revenue streams.
Our Services programs have a global reach, with members located
in every state in the US, as well as across Canada and the UK.
Currently, our global membership stands at 2476, with an impressive
aggregate pipeline sales of GBP2.9 billion and an average
individual annual turnover of GBP1.2 million. Furthermore, we are
proud to have established partnerships with over 300 Preferred
Partners across the US, Canada, and the UK.
Merchanting
In contrast, our Merchanting programs are exclusively focused in
the US, and are steadily expanding across the country. These
programmes consist of ACS, where we recruit high-calibre
promotional product sales professionals to join ACS. These sales
professionals act as our sales agent and in return we provide
access to our Preferred Partner network and administrative,
accounting and financial assistance. Also within our Merchanting
revenue stream is our AMPs, where we provide branded merchandise
solutions within adjacent markets. This includes our Gear Shop
solution.
In FY23, we doubled our revenue base for ACS, to GBP9.7 million
(2022: GBP5.4 million). This growth highlights the strong emphasis
we place on recruitment of high-quality affiliates and our
commitment to maintaining exceptional quality standards.
Additionally, throughout the financial year we invested in our
AMPs pipeline. As previously noted, we identified, targeted, and
invested in business development and pipeline growth within the
higher-education space and successfully launched our Gear Shop
solution. This investment proved powerful and disruptive within the
sector, and the Group successfully signed multiple new significant
contracts. All contracts are expected to begin generating revenue
for the Group in the first half of the financial year ending 31
March 2024 ("FY24").
Technology
The core of all our operations, across both the Services and
Merchanting segments of our business, is our technology platforms.
Operating within an agile and continuous improvement environment,
we have consistently invested in enhancing our systems. This
ongoing commitment enables us to achieve greater efficiency,
leverage valuable data insights, and establish best-in-industry
integrations and systems. The result is a streamlined and optimised
operation that empowers us to deliver exceptional services to our
clients.
As a testament to the power of our technology, in FY23, we
continued to attract a growing number of users, including notable
partnerships like Fully Promoted. Fully Promoted, a global
franchise group, chose our order management platform after
conducting a comprehensive industry-wide review of over 20 tech
providers.
We are always focused on new technology and have begun to
harness the power of AI within the Group. Our core development
teams continue to review how we as a Group can maximize AI
technology to drive automation and streamline efficiency across all
of our platforms and business divisions.
Credit Facility
We were also pleased to report in the financial year that the
Group secured an increase in its working capital credit facility
(the "Facility") with TD Bank N.A. to $1.7 million, previously
$700k. The facility increase was secured from continued successful
delivery across all areas of the business. The Facility has no
significant financial covenants and will provide access to
non-dilutive funding to support the continued execution of the
Group's growth strategy. The Facility is currently undrawn.
The Management team continues to be focused on scalable growth
in the new financial year and accelerating future growth. We are
focused on delivery and committed to achieving our aspirations to
build a $100 million business.
Market Opportunities
As noted previously, PPAI's market research estimates the
current size of the U.S. promotional products market in 2022, a
healthy increase of more than 15% over 2021. Their report further
states that the market remains optimistic for 2023 with nearly 70%
of the industry's distributors expecting even higher sales in 2023,
meaning we could continue to see the industry's momentum continue
to gain higher ground. The market remains highly fragmented with a
network of 23,000 distributors and the top 5 market-leading
distributor organisations representing a small segment of the
market at c.$3 billion in sales.
At present, the Group boasts a network of over 2,214
distributors in North America, accounting for approximately 10% of
the total distributor companies in the industry. With a highly
skilled management team and advanced technology tailored to the
industry, we offer comprehensive solutions to suppliers, including
pricing benefits, marketing support, finance assistance, and
administrative services. This strong foundation positions us
optimally to drive business growth through our service programs,
namely AIM Membership, our Preferred Partner program, and our
merchanting program known as ACS Affiliate Services.
Pairing ongoing industry expansion and the presence of an
untapped addressable market, along with our powerful software
solutions and programs, we are confident in the Group's continued
significant promotional product market opportunity.
Additionally, we are seeing incredible momentum within the Group
across identified adjacent markets opportunities. Our primary areas
of focus are the print industry with a reported market size of c$79
billion and the higher education service provider sector with a
stated $12 billion market size. Currently we are actively and
aggressively building our pipeline, closing opportunities and
disrupting the higher education adjacent market. Having signed
significant multi-year contracts in this financial year, we see
this as an important and significant growth area for the Group in
the immediate term and future.
Our People & Our Commitment
Our workforce and community form the backbone of our business.
We remain dedicated to fostering employee growth and cultivating a
welcoming and engaging culture that recognises the achievements and
contributions of all employees at every level of the organisation.
Throughout the year, we continued to prioritise internal
promotions, enabling 12 individuals to advance their careers and
expand their skill sets.
Diversity, Equity & Inclusion
Our organisation fully embraces and upholds the values of
diversity, equity, and inclusion (DEI). These principles play a
vital role in how we form our teams, develop our leaders, and
establish collaborative, innovative, and inclusive environments
within the Altitude Group and our wider industry. Our inclusive
culture fosters a range of perspectives, encourages open and honest
discussions, and empowers each individual within our team and the
broader communities we serve.
Community Engagement & Giving Back
At Altitude, our commitment to community engagement and giving
back is core to who we are and what we believe to be vital for the
overall success and well-being of society. We actively participated
in a variety of community-based initiatives in the financial year
including launching a JustGiving fundraiser with a corporate match
for those impacted by the war in Ukraine and the "adoption" of an
animal rescue whose mission is to rescue, rehabilitate and educate,
as well as providing scholarship funds to students within the
campus communities we serve. We know this commitment fosters a
strong bond between our company and the communities we operate in,
and also increases loyalty and employee satisfaction. Our goal is
to be a part of a growing commitment to corporate responsibility
that contributes to a more inclusive resilient society that works
towards the betterment of all.
Outlook
This financial year was one of great progress, strong trading
and record breaking results. We increased market share in our core
markets and proved to be a disruptive force in a new market. As a
result, the Group has shown growth across the business far
exceeding our original expectations. This performance is a
testament to not only the incredible hard work of our dedicated
staff and management team but also a testament to the success of
the strategy that was put in place when I arrived and renewed with
vigour in 2021. I am delighted that we grew the existing business
by 57.2% which in itself is no small feat, but to do it on a global
basis whilst establishing a new vertical is a great achievement. We
have a business that is robust, ambitious and is very well
positioned for scalable growth. We look forward to the future, both
near term and longer term, with great confidence.
Nichole Stella
Chief Executive
24 July 2023
Chief Operating Officer's Report
We continued to invest strategically in technology development
and operational efficiencies during the year. As a result, the
Group ended FY23 with significantly greater functionality and
infrastructure to support both our Merchanting and Services
business segments. This period saw a particular focus on leveraging
technology to support increasing volumes and enhance operational
efficiency along with continuing advancements to our feature rich
member and affiliate Tech Suite solutions.
Product Innovation and Development
Our proprietary e-commerce and marketplace technology suite
provides an end-to-end SaaS solution that enables our users to
source, showcase and fulfil orders for branded items throughout the
US and UK. Technological advancement remains core to our strategy,
and we made remarkable progress in developing and launching new
functionality to members and affiliates. Our talented in-house
research and development team introduced several advancements to
the AIM and ACS Tech Suite that address the evolving needs of our
users. These innovations have not only driven customer satisfaction
but also contributed to our revenue growth, by enabling more
efficient platform usage by larger volume affiliates and quicker
onboarding of users.
Throughout this period seven planned technology releases were
made available to users which included over 25 substantial new user
facing features including: API company store order integrations
expanding our customer reach; enhancements to our in-built
presentation tools to advance users sales capabilities and
optimised purchasing capabilities to increase user; and internal
order processing efficiencies.
Core to our systems is the accuracy and availability of data
that is exchanged between users and Preferred Partners. Access to
live inventory, order and shipping information from Preferred
Partners allows users to process orders efficiently and in a
centralised location, while making communications more efficient
for Preferred Partners. The Group now have over 200 integrations
exchanging live data between Preferred Partners and Tech Suite
users.
The Group has witnessed an increase in the depth of system usage
with a 14.5% growth over 2022 in users processing orders through
the Tech Suite platform and a 16% growth in volume of orders
processed. There are currently 478 distributors utilising the Tech
Suite for search and order creation.
Following the Group's introduction of adjacent market programmes
in 2022, IT and system environments including fixed and mobile
point-of-sale configurations with shared inventory-based ecommerce
websites, were designed to support the groups Merchanting revenues.
There are currently 11 point-of-sale locations, 18 ecommerce
solutions and complementary pop-up ecommerce stores transactional
with a robust operational plan to enable further scaling.
Operational Excellence
We continued to enhance our operational efficiency and agility
through various initiatives. We have initiatives to implement
artificial intelligence across different departments, resulting in
streamlined processes and greater ability to scale more
effectively. We have also implemented greater automation in areas
such as data conversion resulting in the capacity to migrate groups
of users at greater pace.
Cybersecurity and Data Protection
Safeguarding our systems, data, and customer information is of
paramount importance. We have implemented increased cybersecurity
measures to protect our digital infrastructure from evolving
threats and increased the frequency of employee training on cyber
security and related topics. Furthermore, we have reinforced our
commitment to data protection, privacy compliance and payment
industry standards and rolled this out into our adjacent market
operations.
Looking Ahead
As we look ahead, we remain committed to providing best-in-class
solutions to our market by embracing customer feedback and emerging
trends to support our business strategies. We will continue to
invest in research and development, data intelligence and further
exploring areas such as artificial intelligence and automation to
enhance user experiences and drive scalable growth through
operational efficiency.
Deborah Wilkinson
Chief operating Officer
24 July 2023
Chief Financial Officer's Report
Financial Results
Group revenues for the year increased by GBP6.9 million to
GBP18.8 million (2022: GBP11.9 million), an increase of 57% with an
underlying growth of 41% at constant currency.
FY23 is the year of 'lift off' for Altitude with 35% growth in
Services and an 82% growth in Merchanting. Service growth is mainly
driven from throughput revenue, derived from membership activity
through our VIP Supplier network, surpassing the industry
distributor average of 15.6% (as reported in PPAI Research), which
reflects our commitment to a high quality distributor membership
model. The Merchanting Division has grown from additions to our
Affiliate sales network, which is the main driver behind the 82%
increase over last year. Importantly, we have also grown our
Adjacent Market Programmes ('AMPs') focusing on our Gear Shops
within the Educational Sector. Altitude's entrance into a
complementary adjacent market provides growth opportunities as well
as diversification. As communicated we have secured a number of
contracts that will positively impact the results in future
years.
Operational gearing is a key area of focus for us with the
profitability generated from our Services business model we have
invested in the growth of our Merchanting Division. With ACS
delivering high levels of revenue growth for lower margin,
profitability is sensitive to overhead increases therefore process
efficiency and cost control is essential to maximise profit fall
through. Within our Gear Shops we assess returns on each contract
to measure the appropriate level of investment in a strong central
team. The central Gear Shop team will then be equipped to deliver
further growth. To ensure scalability in FY24 we are investing in
systems and processes.
Year ended Year ended
31 March 31 March
2023 2022
GBP'000 GBP'000
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Group Group Change % Change
Turnover
Services 8,523 6,308 2,215 35.1%
Merchanting 10,238 5,628 4,610 81.9%
Total 18,761 11,936 6,825 57.2%
--------------- ----------- ----------- -------
Gross Profit
Services 7,718 5,750 1,968 34.2%
Merchanting 887 400 487 121.8%
Total 8,605 6,150 2,455 39.9%
--------------- ----------- ----------- -------
Gross Profit
Margin
Services 90.6% 91.2%
Merchanting 8.7% 7.1%
Total 45.9% 51.5%
--------------- ----------- -----------
Gross profit has increased by GBP2.5 million, a 40% increase, to
GBP8.6 million (2022: GBP6.2 million). This is mainly driven by an
increase in the AIM distributors purchasing through our Preferred
Partner network, demonstrating the value of our services to our
Preferred Partners.
Gross margin was 45.9% (2022: 51.5%) reflecting the growth in
lower margin Merchanting activity, whilst Services retained a
consistently high margin. The relationship of the growth in AMPs
and our ACS Affiliate model impacts our Gross Profit margin. AMPs
deliver a higher gross profit margin than the ACS Affiliate model,
which is a volume business. ACS won some larger one-off orders this
year, which is testament to our goal of enabling our Affiliates to
grow and deliver more activity and value.
Administration expenses before share-based payments,
amortisation of intangible assets, depreciation of tangible assets
and exceptional charges of GBP6.6 million (2022: GBP5.1 million)
are ahead of prior year by GBP1.5 million. This increase has been
driven by a prior year one-off US Government Employee Retention
Scheme Credit of GBP0.5 million, a GBP0.5 million foreign currency
translation, with the remaining increase of GBP0.5 million driven
from a mix of additional travel and marketing activities to drive
pipeline and people costs.
Adjusted operating profit* increased by 83.4% to GBP2.0 million
(2022: GBP1.1 million). The statutory profit before taxation was
GBP0.4 million (2022: profit of GBP0.1 million), whilst the
adjusted profit*** before taxation increased by GBP0.8 million to
GBP0.9 million (2022: GBP0.1 million). Please see below for
constant currency analysis.
Exceptional costs
The Group incurred exceptional costs of GBP0.1 million (2022:
GBP0.2 million) relating to second-phase finance transformation
costs, along with a provision for the historic portion of a VAT
reclaim and legal costs.
Development
The Group capitalised GBP0.9 million of software development
(2022: GBP0.8 million). The commitment to investing in our
technology is underpinned by our spend and our close relationship
with our Affiliates and members in driving customer focused
improvements. This is discussed in more detail in the COO
review.
Earnings per share
Basic earnings per share were 0.55p (2022: 0.14p), an increase
of 293%. Adjusted basic earnings per share** was 1.63p (2022:
0.48p), representing an increase of 240%. The calculation for
adjusted earning per share has been updated to be consistent with
external measures by adding back amortisation on acquired
intangibles whereas previously all depreciation and amortisation
was added back.
Taxation
The Group is carrying a deferred taxation asset of GBP 458,000
mainly in respect of tax losses carried forward. Based on future
forecasts the Directors believe the Group's profits will be
sufficient to fully utilise the deferred tax asset within the next
four years. The Group was again successful in its application for
the R&D tax credit although expect that this will reduce in
light of the UK Governments budget resulting in a profit and loss
tax credit of GBP193,000 (2022: GBP254,000).
Cash ow
Operating cash inflow before changes in working capital was
GBP2.0 million (2022: GBP1.1 million). Working capital represented
an outflow of GBP0.4 million (2022: GBP1.5 million) principally
driven by an increase in inventory driven by the early start of a
significant Merchanting contract. Operating cash inflow therefore
increased by GBP1.8 million to GBP1.6 million (2022: outflow GBP0.2
million). Net cash outflow from investing activities of GBP1.1
million (2022: GBP0.9 million outflow) is mainly represented by our
development spend. Financing activities included the repayment of
finance agreements and interest of GBP0.2 million (2022: GBP0.2
million). Total net cash inflow was GBP0.2 million (2022: GBP1.2
million outflow). The year-end cash balance stood at GBP1.2 million
(2022: GBP0.9 million) with no debt.
Treasury
The Group continues to manage the cash position in a manner
designed to meet the operational needs of the businesses. Cash
balances held in foreign currencies reflect the geographies in
which the Group operates. There is no policy to hedge the Group ' s
currency exposures arising from the profit translation or the
effect of exchange rate movements on the Group ' s overseas net
assets.
The Group has secured an increased credit facility (the
"Facility") with TD Bank N.A., to $1.7m (2022: $0.7 million). The
Facility has no significant financial covenants and is secured by
the assets of the US Group with a parental guarantee from Altitude
Group PLC and is senior to the subordinated Intercreditor loans.
The Facility will provide access to non-dilutive funding to support
the Group in executing its growth strategy. The Facility has a
small annual arrangement fee and incurs interest at 1% above the US
Prime Rate on drawdown. This Facility remains undrawn at the year
end.
Share capital
The number of shares increased by 166,666 to 70,847,830 (2022:
70,681,164). All of the shares issued in the period were in respect
of options exercised by employees and are detailed in the full
notes to the Annual Report.
The Company issued share options to senior management of
2,648,000 (2022: 444,444). During the year the number of share
options exercised was 166,666 (2022: 213,896) with the number of
share options forfeited being 1,211,110 (2022: 2,329,667). The
total number of share options outstanding at the year-end is
6,357,447 (2022: 4,299,445).
Key performance indicators
The Group ' s key performance indicators as discussed above
are:
Year Year Impact Underlying Total
ended ended of currency change Change
translation
31 March 31 March
2023 2022
GBP'000 GBP'000 GBP'000 %
--------- --------- ------------- -------- ----- --------
Revenue 18,761 11,936 1,988 4,837 41% 6,825
Gross profit 8,605 6,150 853 1,602 26% 2,455
Gross margin 46% 52%
Adjusted operating
profit* 1,957 1,067 326 564 53% 890
Statutory profit/(loss)
before tax 152 (157) 1 308 309
Adjusted profit before
tax*** 915 84 26 805 958% 831
-------- -----
*Adjusted operating profit is before share-based payment
charges, amortisation of intangible assets, depreciation of
tangible assets and exceptional charges is a consistently used
measure used to show the performance of the revenue generating
activities and the related costs involved in the delivery of the
revenue for the current year
** Basic adjusted earnings per share is calculated using profit
after tax but before share-based payment charges, amortisation of
acquired intangible assets and exceptional charges and the weighted
average number of equity voting shares in issue and, when relevant,
in respect of diluted earnings per share includes the effect of
share options that could potentially dilute basic earnings per
share. This provides a consistent metric with the Income Statement
for underlying performance
***Adjusted profit before tax is profit before tax adjusted for
share based charges, exceptional costs and amortisation on acquired
intangibles. This metric is to review the performance of the
underlying business including the depreciation for development
costs.
Significant judgements and estimates
In preparing the financial statements the Directors have made
judgements and estimates in applying accounting policies. Details
of the most significant areas where judgements and estimates have
been made are set out in note 1 to the group financial
statements.
Principal risks and uncertainties
The Group ' s financial and operational performance is subject
to a number of risks. The Board seeks to ensure that appropriate
processes are put in place to manage, monitor and mitigate these
risks. The Board considers the principal risks faced by the Group
to be as follows at 31 March 2023:
-- a significant deterioration in economic conditions,
particularly in USA affecting SME's, the principal target customers
for the Group's technology products
-- significant delays and or cost overruns in developing and
delivering products to meet customer requirements in the targeted
market sectors
-- a risk of cyber attack that targets our systems causing
downtime to end user processing or point of sale
-- predatory pricing or other actions by established competitors in our market sectors
-- the risk of bad debts arising from AIM Capital Solutions
-- a significant, adverse movement in the short-term in the US $ exchange rate compared with GBP
-- the propensity of AIM distributor members to migrate orders to AIM preferred suppliers
-- the propensity of AIM distributor members to upgrade
membership to include enhanced marketing and sales support
services
-- deteriorating retention of the membership base of the acquired AIM business
-- a risk of under-reported revenue through incomplete visibility of member transactions
In all cases the Group seeks to mitigate these risks wherever
possible by continuous marketing initiatives and promotions to
stimulate market demand and continuous development of enhanced
member services and the promotion of AIM Capital Solutions to high
quality distributors with careful attention to credit risk. In
addition, we maintain close relationships with all customers with
service contracts based on transactional volume, and monitor
progress using data sampling and quarterly confirmation. We also
manage development projects closely and ensure that we continue to
offer services that meet our customer needs. The Group has also
expanded its reach and diversified with AMPs and extended into the
Education sector.
Historically operations in the USA have been funded from the UK,
exposing the group to adverse short-term exchange rate movements.
US operations are now self-funding, mitigating the risk from short
term exchange rate fluctuations. The US now regularly remits funds
back to the UK, generally on a monthly basis at relatively low
levels. Management have reviewed the requirement of a formal
hedging strategy however this will only be necessary if the funding
levels increase. In the meantime, spot rates have been utilised
with an outsourced foreign currency firm.
The Board are considering, with the onset of growth and
potential utilisation of the US credit facility in FY24, to
undertake a review of the primary economic environment that the
Group is operating in and re-evaluating the functional for the
Group.
AIM is the largest distributor member organisation in the USA,
with circa 9% market share in a very fragmented market. We assess
the risk of predatory pricing from other established competitors to
be low as they do not possess the scale or geographic coverage
necessary influence the market as a whole. AIM members are
incentivised to order from AIM preferred suppliers through the
provision of significant discounts.
Cyber Security processes and controls including reminders and
training and regularly provided to all staff to ensure they remain
extra vigilant and exercise extreme caution when using email and
the internet.
Liquidity
The Group remains debt free with a cash balance of GBP1.2
million as at the year end.
We have extended our finance facility by $1.0 million to $1.7
million with TD Bank. The facility will support the growth in
Merchanting specifically with our AMPs new contract signings into
the new year.
Graham Feltham
Chief Financial Officer
24 July 2023
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2023
Year Year
to to
31 March 31 March
Notes 2023 2022
GBP'000 GBP'000
Revenue 2 18,761 11,936
Cost of sales (10,156) (5,786)
Gross profit: 8,605 6,150
------------------------------------------------ ------ --------- ---------
Administrative expenses before share-based
payment charges, depreciation, amortisation,
and exceptional charges (6,648) (5,083)
Operating profit before share-based payment
charges, depreciation, amortisation, and
exceptional charges 1,957 1,067
Share-based payment (charges)/credits (511) 127
Depreciation and Amortisation (1,131) (1,044)
Exceptional charges 3 (101) (234)
------------------------------------------------ ------ --------- ---------
Total administrative expenses (8,391) (6,234)
------------------------------------------------ ------ --------- ---------
Operating profit/(loss) 214 (84)
------------------------------------------------ ------ --------- ---------
Finance charges (62) (73)
Profit/(loss) before taxation 152 (157)
------------------------------------------------ ------ --------- ---------
Taxation 238 254
Profit attributable to operations 390 97
------------------------------------------------ ------ --------- ---------
Other comprehensive income:
Items that may be reclassified subsequently
to profit and loss:
-- Foreign exchange differences 425 302
Total comprehensive income for the year 815 399
------------------------------------------------ ------ --------- ---------
Earnings per ordinary share attributable
to the equity shareholders of the Company:
- Basic and diluted (pence) 4 0.55p 0.14p
Consolidated Statement of Changes in Equity
for the year ended 31 March 2023
Foreign
exchange
Share Share Retained translation Total
capital premium losses reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
At 31 March 2021 282 20,151 (11,932) (712) 7,789
------------------------------ -------- -------- --------- ------------- --------
Profit for the period - - 97 - 97
Foreign exchange differences - - - 302 302
Total comprehensive income - - 97 302 399
------------------------------ -------- -------- --------- ------------- --------
Transactions with owners
recorded directly in equity
Share-based payment credit - - (127) - (127)
Shares issued for cash 1 43 - - 44
Total transactions with
owners 1 43 (127) - (83)
------------------------------ -------- -------- --------- ------------- --------
At 31 March 2022 283 20,194 (11,962) (410) 8,105
------------------------------ -------- -------- --------- ------------- --------
Profit for the period - - 390 - 390
Foreign exchange differences - - - 425 425
Total comprehensive income - - 390 425 815
------------------------------ -------- -------- --------- ------------- --------
Transactions with owners
recorded directly in equity
Share-based payment charge - - 511 - 511
Shares issued for cash - - - - -
Total transactions with
owners - - 511 - 511
------------------------------ -------- -------- --------- ------------- --------
At 31 March 2023 283 20,194 (11,061) 15 9,431
------------------------------ -------- -------- --------- ------------- --------
Consolidated Balance Sheet
as at 31 March 2023
As at As at
31 March 31 March
2023 2022
GBP'000 GBP'000
Non-current assets
Goodwill 2,934 2,781
Intangible assets 2,652 2,477
Property, plant and equipment 202 139
Right of use assets 471 606
Deferred tax assets 458 436
Total non-current assets 6,717 6,439
---------------------------------------- --------- ---------
Current assets
Inventory 361 29
Trade and other receivables 5,521 3,875
Corporation Tax Receivable 91 42
Cash and cash equivalents 1,173 902
Total current assets 7,146 4,848
---------------------------------------- --------- ---------
Total assets 13,863 11,287
---------------------------------------- --------- ---------
Liabilities
Current liabilities
Trade and other payables (3,699) (2,282)
(3,699) (2,282)
--------------------------------------- --------- ---------
Net current assets 3,447 2,566
---------------------------------------- --------- ---------
Non-current liabilities
Deferred tax liabilities (347) (364)
Lease liabilities (386) (536)
(733) (900)
--------------------------------------- --------- ---------
Total liabilities (4,261) (3,182)
---------------------------------------- --------- ---------
Net assets 9,431 8,105
---------------------------------------- --------- ---------
Equity attributable to equity holders
of the Company
Called up share capital 283 283
Share premium account 20,194 20,194
Retained losses and foreign exchange (11,046) (12,372)
Total equity 9,431 8,105
---------------------------------------- --------- ---------
Consolidated Cash Flow Statement
for the year ended 31 March 2023
Year to Year to
31 March 31 March
2023 2022
GBP'000 GBP'000
Operating profit/(loss) 214 (84)
Amortisation of intangible assets 901 845
Depreciation 230 199
Share-based payment charges 511 (127)
Exceptional items 101 234
Operating cash flow before changes in working
capital 1,957 1,067
------------------------------------------------------ --------- ---------
Movement in inventory (339) (29)
Movement in trade and other receivables (1,532) (1,398)
Movement in trade and other payables 1,404 (101)
Changes in working capital (467) (1,528)
------------------------------------------------------ --------- ---------
Net cash flow from operating activities before
exceptional items 1,490 (461)
------------------------------------------------------ --------- ---------
Exceptional items (84) (179)
Net cash flow from operating activities after
exceptional items 1,406 (640)
------------------------------------------------------ --------- ---------
Income tax received 144 413
Net cash flow from operating activities 1,550 (227)
------------------------------------------------------ --------- ---------
Cash ows from investing activities
Purchase of tangible assets (119) (64)
Purchase of intangible assets (986) (788)
Net cash flow from investing activities (1,105) (852)
------------------------------------------------------ --------- ---------
Cash ows from financing activities
Repayment of lease borrowings (163) (135)
Lease interest paid (47) (52)
Other interest paid (15) (21)
Issue of shares for cash (net of expenses) - 44
Net cash flow from financing activities (225) (164)
------------------------------------------------------ --------- ---------
Net increase/(decrease) in cash and cash equivalents 220 (1,243)
------------------------------------------------------ --------- ---------
Cash and cash equivalents at the beginning
of the period 902 2,095
------------------------------------------------------ --------- ---------
Effect of foreign exchange rate changes on cash
and cash equivalents 51 50
Net (decrease)/increase in cash and cash equivalents 220 (1,243)
Cash and cash equivalents at the end of the
period 1,173 902
------------------------------------------------------ --------- ---------
Notes to the Consolidated Financial Statements
1. Financial Information
The financial information in this preliminary announcement has
been extracted from the audited Group Financial Statements for the
year ended 31 March 2023 and does not constitute statutory accounts
within the meaning of section 434 of the Companies Act 2006.
The Group Financial Statements for 2022 were delivered to the
registrar of companies, and those for 2023 will be delivered in due
course. The auditor's report on the Group Financial Statements for
2022 and 2023 were both unqualified and unmodified. The auditors'
report was signed on 24 July 2023. The Group Financial Statements
and this preliminary announcement were approved by the Board of
Directors on 24 July 2023
The audited accounts will be posted to all shareholders and will
be available on the Group's website (
https://www.altitudeplc.com/reports-results ) in due course.
Basis of preparation
The group financial statements have been prepared in accordance
with UK adopted International Accounting Standards. The Company
financial statements have been prepared under FRS 101.
Both financial statements have been prepared on the historical
cost basis, with the exception of certain items which are measured
at fair value as disclosed in the principal accounting policies set
out below. The financial information is presented in Sterling and
has been rounded to the nearest thousand (GBP000).
The preparation of financial statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources of information. 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.
The Group has consistently applied the accounting policies to
all periods presented in these consolidated financial
statements.
New standards impacting the Group that have not been adopted in
the annual financial statements for the year ended 31 March 2023
are:
-- Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
-- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
-- Definition of Accounting Estimate (Amendments to IAS 8)
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12)
-- Non-Current Liabilities with Covenants (Amendments to IAS 1)
Management anticipates that these new standards, interpretations
and amendments will be adopted in the financial statements as and
when they are applicable and adoption of these new standards,
interpretations and amendments, will be reviewed for their impact
on the financial statements prior to their initial application.
The following principal accounting policies have been applied
consistently to all periods presented in these Group financial
statements:
Going concern
The financial statements have been prepared on a going concern
basis.
The Group is following a strong growth trajectory despite the
macro-economic conditions of high inflation and growing interest
rates amidst fears of recession. The prolonged war in Ukraine and
corrections in the Banking industry has created instability and a
slowing down in the global economic recovery. The Promo Industry
has continued to grow but at far lower growth rates experienced
last year as the Industry came out of the pandemic. With single
digit growth reported by the industry bodies in the quarter ending
March 2023 there is a degree of caution with some level of churn in
distributers expected along with a potential reluctance to change
network or affiliation. The Group continues to maintain strong
relationships within the AIM network and additionally has entered
into strategic partnerships and added diversifying revenues from
the AMPs whilst constantly monitoring growth spend and cash
forecasts.
The Board is confident that the Group has sufficient liquidity
to manage the growth of the company and can flex on overhead spend
should any part of the business underperform against our
expectations. The financial statements have therefore been prepared
on a going concern basis. The directors have taken steps to ensure
that they believe the going concern basis of preparation remains
appropriate. The key conditions are summarised below:
-- The Directors have prepared cash flow forecasts extending to
September 2024. The cash flow forecasts include a mid scenario and
sensitised cases.
-- The low scenario assumes reductions in revenue of c12% compared to the mid-scenario.
-- The forecasts assume regular collections and payments in line
with the normalised conditions experienced with detailed modelling
of growth cash outflows included.
-- The base and sensitised cash flow forecasts do not include
any mitigating factors available to management in terms of:
-- discontinuing the development of AIM Capital Services to release working capital
-- reactionary cost reduction programmes in respect of headcount and organisation
-- securing new working capital facilities in respect of any
growth of Merchanting business outside of the sensitised
forecast.
-- The Group maintains the distributor membership and preferred
suppliers throughout the forecast period.
-- The Group continues to develop the product offerings to meet
the demands of the market and customers.
-- The Directors have considered the position of the individual
trading companies in the Group to ensure that these companies are
also able to continue to meet their obligations as they fall
due.
-- There are not believed to be any contingent liabilities which
could result in a significant impact on the business if they were
to crystallise.
Based on the above indications and assumptions, the Directors
believe that it remains appropriate to prepare the financial
statements on a going concern basis.
The financial statements do not include any adjustments that
would result from the basis of preparation being inappropriate.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and the entities controlled by the
Company (its subsidiaries) made up to 31 March each period. Control
is achieved when the Company:
-- has the power over the investee
-- is exposed, or has rights, to variable return from its involvement with the investee and
-- has the ability to use its power to affect returns
The Company reassesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements above. Consolidation of a subsidiary
begins when the Company obtains control over the subsidiary and
ceases when the Company loses control over the subsidiary.
The acquisition method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of an
acquisition is measured as the fair value of the assets given,
equity instruments issued, and liabilities incurred or assumed at
the date of exchange. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date,
irrespective of the extent of any minority interest. The excess of
the cost of acquisition over the fair value of the Group's share of
the identifiable net assets acquired is recorded as goodwill. If
the cost of acquisition is less than the fair value of net assets
of the subsidiary acquired, the difference is recognised directly
in the Consolidated Statement of Comprehensive Income.
All intra-group balances and transactions, including unrealised
profits arising from intra-group transactions, are eliminated fully
on consolidation.
Contract costs
Costs to fulfil a contract are capitalised, amortised and
assessed for impairment if they meet the required criteria. If the
costs do not meet the criteria they are expensed as incurred.
Costs to fulfil a contract are recognised as an asset only if
they:
-- Relate directly to a contract, or to an anticipated contract
that can be specifically identified
-- Generate or enhance resources to be used to satisfy performance obligations in future, and
-- Are expected to be recovered.
The policy applies to contracts that are greater than one year
in length.
The asset is amortised over the life of the contract once the
contract is live.
Revenue recognition
Revenue represents the amounts receivable, excluding sales
related taxes, for goods and services supplied during the period to
external customers shown net of sales taxes, returns, rebates and
discounts.
When assessing revenue recognition against IFRS15, the Group
assess the contract against the five steps of IFRS15:
-- Identifying the contract with a customer
-- Identifying the performance obligations
-- Determining the transaction price
-- Allocating the transaction price to the performance obligations
-- Recognising revenue when/as performance obligation(s) are satisfied
This process includes the assessment of the performance
obligations within the contract and the allocation of contract
revenue across these performance obligations once identified.
Revenue is recognised either at a point in time or over time, when,
or as, the Group satisfies performance obligations by transferring
the promised goods or services to its customers.
The difference between the amount of income recognised and the
amount invoiced on a particular contract is included in the
statement of financial position as accrued or deferred income.
Amounts included in accrued and deferred income due within one year
are expected to be recognised within one year and are included
within current assets and current liabilities respectively.
The Group has a number of different revenue streams which are
described below.
Services Revenue
Includes a range of member and member-related revenues as well
as legacy software license revenue.
Member subscription revenues
AIM distributor members pay a monthly subscription fee for basic
membership which confers immediate access to a range of commercial
benefits at no additional cost to the member. Members may elect to
upgrade their membership to access a range of enhanced services
provided by AIM in exchange for an increased monthly subscription
fee. Subscription revenues are recognised on a monthly basis over
the membership period.
Other discretionary services
Certain other services are made available to AIM members on a
discretionary usage basis such as artwork processing services,
catalogues and merchandise boxes. These revenues are recognised
upon performance of the service or delivery of the product. For
example, catalogue and merchandise box revenues are recognised on
dispatch of the products to members.
Events and exhibitions revenues
AIM promotes and arranges events for AIM members and groups of
supplier customers to meet and build relationships. Revenue from
these events is recognised once the performance obligations have
been satisfied, typically on completion of an event or
exhibition.
Preferred Partner revenues
AIM provides services to vendors within the promotional products
industry whereby Preferred Partners are actively promoted to AIM
members via a variety of methods including utilising the AIM
technology platform, webinars, email communications and quarterly
publications.
Revenues are variable and depend on the value of purchases made
and services utilised by the AIM members from Preferred Partners.
Revenue is recognised over time by reference to the value of
transactions in the period. Payment for AIM's marketing services is
made by Preferred Partner customers on a calendar quarter or annual
basis. Revenue is recognised to the extent that it is highly
probable that it will not reverse based on historic fact pattern
and latest market information.
Software and technology services revenues
Revenues in respect of software product licences and associated
maintenance and support services are recognised evenly over the
period to which they relate. An element of technology services
revenue is dependent on the value of orders processed via the
Group's technology platforms. Revenue is accrued based on the value
of underlying transactions and the relevant contractual
arrangements with the customer. Revenue is constrained to the
extent that is that it is highly probable that it will not
reverse.
Merchanting revenues
Merchanting revenues arise when group companies contract with
customers to supply promotional products. By far the most
significant operation that carries out merchanting is within ACS.
Over the past 18 months significant investment in our technology
and the evolution of contracting with our affiliates along with
enforcement of contractual terms has prompted the Directors to
re-evaluate the application of IFRS 15. Under the terms of the ACS
contract the AIM member affiliates act as independent sales
representatives of ACS to secure sales with customers. The
contracts have evolved since the inception of ACS along with
enforcement, monitoring and control over the substance of the
contracts. All transactions are mandatorily processed through the
AIM technology platform and utilise ACS people and know-how to
efficiently operate the full end to end process.
ACS bears the risk of the transaction as Principal, provisioning
of orders and contracting with the customer, determining the
transaction price, provision of fulfilment and supplier contracts
and pricing, performing credit control and processing payments. The
sale of the promotional products, with the related costs of goods
supplied, freight and AIM affiliates selling commission recognised
as the cost of goods sold. The revenue is recognised on the
shipment of the goods from the supplier and as notified by the
supplier invoice which are raised following shipment. The Directors
accept that the technical transfer of risks and rewards to the
customer occur on delivery of the goods which are usually delivered
within 2-5 days of shipment. The Directors use a proxy of the
shipment date as the trigger for recognising revenue.
The Group also sources products directly through its network of
Preferred Partners, which it sells to AIM members and adjacent
markets, where such sales do not conflict with the interest of
either suppliers or the AIM membership. The Group Buy scheme falls
under Merchanting and is a facility that supported the sales of
Personal Protective Equipment in the prior year.
2. Segmental information
The chief operating decision maker has been identified as the
Board of Directors and the segmental analysis is presented based on
the Group's internal reporting to the Board. At 31 March 2023, the
Group has two operating segments, North America, and the United
Kingdom & Europe along with a Central segment. The Group
further analyses performance to Gross Profit by presenting
'Service' and 'Merchanting' as shown. Service revenues are derived
from servicing our AIM membership base and generating throughput
with our contracted Preferred Partners. Merchanting revenues are
sales of promotional products where the Group acts as principal in
the underlying transaction.
Segment assets consist primarily of property, plant and
equipment, intangible assets, trade and other receivables and cash
and cash equivalents. Segment liabilities comprise operating
liabilities. Capital expenditure comprises additions to property,
plant and equipment and intangible assets, including additions
resulting from acquisitions through business combinations. Assets
and liabilities at 31 March 2023 and capital expenditure for the
period then ended are as follows.
Year Year Year Year
ended ended ended ended
31 March 31 March 31 March 31 March
2023 2023 2023 2023
GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ---------
North UK and Central Group
America Europe
Turnover
Services 7,155 1,368 - 8,523
Merchanting 10,238 - - 10,238
Total 17,393 1,368 - 18,761
---------------------------------------------- --------- --------- --------- ---------
Cost of Sales
Services (582) (223) - (805)
Merchanting (9,351) - - (9,351)
Total (9,933) (223) - (10,156)
---------------------------------------------- --------- --------- --------- ---------
Gross Profit
Services 6,573 1,145 - 7,718
Merchanting 887 - - 887
Total 7,460 1,145 - 8,605
---------------------------------------------- --------- --------- --------- ---------
Operating Profit/(Loss) before
share-based payment charges, depreciation,
amortisation, and exceptional charges 3,426 170 (1,639) 1,957
Share-based payment charges - - (511) (511)
Depreciation (171) (59) - (230)
Amortisation (168) (733) - (901)
Management fees (2,397) 778 1,619 -
Exceptional charges (65) (14) (22) (101)
Finance charges (41) (21) - (62)
Segmental profit before income
tax 584 121 (553) 152
---------------------------------------------- --------- --------- --------- ---------
Assets* 11,187 2,368 308 13,863
Liabilities* (3,475) (462) (495) (4,432)
Net Assets 7,712 1,906 (187) 9,431
---------------------------------------------- --------- --------- --------- ---------
*external balances disclosed for
segmental purposes
Capital expenditure
Intangible assets (99) (887) - (986)
Property, plant and equipment (91) (26) (2) (119)
Right of use assets - - - -
Capital Expenditure (190) (913) (2) (1,105)
---------------------------------------------- --------- --------- --------- ---------
Year Year Year Year
ended ended ended ended
31 March 31 March 31 March 31 March
2023 2023 2023 2023
GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ---------
North UK and Central Group
America Europe
Timing of Revenue Recognition
At a point in time 11,216 186 - 11,402
Over time 6,177 1,182 - 7,359
Total Revenue 17,393 1,368 - 18,761
-------------------------------- --------- --------- --------- ---------
Year Year Year Year
ended ended ended ended
31 March 31 March 31 March 31 March
2022 2022 2022 2022
GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ---------
North UK and Central Group
America Europe
Turnover
Services 5,139 1,169 - 6,308
Merchanting 5,628 - - 5,628
Total 10,767 1,169 - 11,936
------------------------------------------------ --------- --------- --------- ---------
Cost of Sales
Services (518) (40) - (558)
Merchanting (5,228) - - (5,228)
Total (5,746) (40) - (5,786)
------------------------------------------------ --------- --------- --------- ---------
Gross Profit
Services 4,621 1,129 - 5,750
Merchanting 400 - - 400
Total 5,021 1,129 - 6,150
------------------------------------------------ --------- --------- --------- ---------
Operating Profit/(Loss) before share-based
payment charges, depreciation, amortisation,
and exceptional charges 2,034 286 (1,253) 1,067
Share-based payment charges - - 127 127
Depreciation (142) (57) - (199)
Amortisation (156) (689) - (845)
Management fees (1,495) 581 914 -
Exceptional charges (91) - (143) (234)
Finance charges (41) (32) - (73)
Segmental profit before income
tax 109 89 (355) (157)
------------------------------------------------ --------- --------- --------- ---------
Assets* 8,745 1,715 827 11,287
Liabilities* (1,689) (619) (874) (3,182)
Net Assets 7,056 1,096 (47) 8,105
------------------------------------------------ --------- --------- --------- ---------
*external balances disclosed for
segmental purposes
Capital expenditure
Intangible assets - (788) - (788)
Property, plant and equipment (51) (13) - (64)
Right of use assets - - - -
Capital Expenditure (51) (801) - (852)
------------------------------------------------ --------- --------- --------- ---------
Year Year Year Year
ended ended ended ended
31 March 31 March 31 March 31 March
2022 2022 2022 2022
GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ---------
North UK and Central Group
America Europe
Timing of Revenue Recognition
At a point in time 5,984 47 - 6,031
Over time 4,783 1,122 - 5,905
Total Revenue 10,767 1,169 - 11,936
-------------------------------- --------- --------- --------- ---------
A central cost of GBP411,000 was previously reported as a cost
allocated to North America for FY22 and has been restated to a
central cost in the table above within Operating Profit/(Loss)
before share-based payment charges, depreciation, amortisation, and
exceptional charges. Central costs were previously reported at a
loss of GBP842,000 and North America was a profit of
GBP1,623,000.
3. Exceptional charges
Analysis of exceptional items:
Year ended Year ended
31 March 31 March
2023 2022
GBP'000 GBP'000
----------- -----------
Legal, professional and consultancy costs 84 168
Other exceptional costs 17 66
101 234
------------------------------------------- ----------- -----------
Exceptional charges principally relate to the second-phase of
finance transformation costs, along with a provision for the
historic portion of a VAT reclaim. (2022: relates to finance
transformation being the recruitment of a new CFO and business
modelling, the one-off costs relating to the change of our
corporate broker and NOMAD and the write-off of a bad debt). Other
exceptional costs principally relates to a reversal of a historic
tax prepayment (2022: relates to a bad-debt write-off).
4. Basic and diluted earnings per ordinary share
The calculation of earnings per ordinary share is based on the
profit for the period after taxation and the weighted average
number of equity voting shares in issue as follows:
Year ended Year ended
31 March 31 March
2023 2022
----------- -----------
Profit attributable to the equity shareholders
of the Company (GBP000) 390 97
Weighted average number of shares (number
'000) 70,813 70,657
Fully diluted weighted average number of
shares (number '000) 71,198 70,957
Basic and diluted profit per ordinary share
(pence) 0.55p 0.14p
Adjusted profit per ordinary share (pence)
Profit attributable to the equity shareholders
of the Company (GBP000) 390 97
add back:
Share based payments 511 (127)
Amortisation on acquired intangibles* 151 134
Exceptional charges 100 234
Adjusted earnings 1,152 338
Adjusted basic and diluted earnings per ordinary
share (pence) 1.63p 0.48p
*To be consistent with external metrics and the updated Group's
key performance indicators adjusted earnings has been amended to
only adjust for amortisation on acquired intangibles and not for
depreciation and other amortisation as reported in previous
years.
Disclosure of the number of shares in issue including the
effects of share options that could potentially dilute basic loss
per share in the future were not included in the table above as the
calculation of diluted earnings per share has an immaterial impact.
We determine potentially dilutive shares as any share which is
exercisable on publishing of the Annual Report.
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END
FR KZGZNGDLGFZZ
(END) Dow Jones Newswires
July 25, 2023 02:00 ET (06:00 GMT)
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