TIDMINX
RNS Number : 3781X
i-nexus Global PLC
20 December 2023
20 December 2023
i-nexus Global plc
("i-nexus", the "Company" or the "Group")
Final Results
i-nexus Global plc (AIM: INX), a leading provider of cloud-based
strategy applications designed for the Global 5000, today provides
its audited results for the year ended 30 September 2023
("FY23").
Financial Highlights
-- Monthly recurring revenue ("MRR"), the key financial metric
for the Group, grew by 16% in the year to GBP289k at 30 September
2023 (30 September 2022: GBP250k) as the business delivered a
second year of improved double-digit growth
-- Net retention1 in the period improved to 107% (FY22: 98%),
highlighting both the increasing strength of our client
relationships and the quality of our product
-- Total revenue, 92% of which is recurring, increased by 13% to
GBP3,528k (FY22: GBP3,127k) as a consequence of the new business
and account expansion successes since the start of 2022
-- Adjusted EBITDA2 loss for the period has reduced against
prior period levels to GBP499k (FY22: GBP552k), with the increase
in revenue being partially netted against the full-year cost impact
of the select investments made towards the end of FY22 considered
fundamental to the Group realizing the market opportunity
-- Cash and cash in transit3 at the period end improved to
GBP267k (30 September 2022: GBP99k), with the Group continuing with
its plan of deferring the placement of additional investment until
such time that the business delivers a position of at least
Adjusted EBITDA breakeven
-- The Group reported a loss before taxation for the year of GBP982k (FY22: loss of GBP1,105k).
-- In July 2023, the Company raised GBP500k by way of
Convertible Loan Notes from its supportive shareholder base,
strengthening its cash position for FY24
Strategic progress and operational highlights
-- Successfully delivered on the two-year go-to-market objective
of achieving back-to-back years of improved double-digit MRR growth
through our land and expand customer strategy
-- A key highlight of this strategy was over 70% of new logos
signed in the last two years have expanded their use of the
solution by an average value of 66% since onboarding
-- Seven new logos secured in the year (2022: nine) delivering
GBP23k MRR (FY22: GBP30k MRR), with equivalent levels of expansion
opportunity in these accounts through FY24 to customers signed in
the last two years
-- New customers span several new industries and countries,
demonstrating our ability to adapt and cater to diverse markets.
This is testament to our belief that all companies, regardless of
their industry or size, can benefit from a well-executed
strategy
-- Establishment of a growing partner programme, several
agreements signed with consulting firms in the year resulting in
our first new logos secured via the partner route
-- The Group continues to explore opportunities for product
innovation, with progress in FY23 culminating in the successful
completion of several "proof of concepts" for new products, which
are set to be trialled with new customers during FY24
Outlook
-- The Group has developed a new three-year strategy, focusing
on enhancing our product suite's capabilities. This strategic
approach is designed to expedite our customers' path to real value,
allowing them to prioritize processes over tools
-- New businesses successes in the first months of the year
include two new customer wins and an expansion with a key client
generating GBP12k MRR, with a further opportunity moving into the
contracting phase
-- As previously announced, one significant legacy customer,
currently generating MRR of GBP54k, will not be renewing its
contract with i-nexus from January 2024. The Company has swiftly
implemented mitigation strategies to protect cash flows and
minimise the impact on its progression towards an EBITDA breakeven
position
-- Business is well positioned to capitalise on the continued
rise in interest for a strategy execution software solution as
companies across all industries accelerate the digitization of
mission-critical processes in this post-pandemic era
Commenting on the results, Simon Crowther, Chief Executive
Officer, said: -
"I am pleased to share with you the encouraging progress i-nexus
has made over the past year, marking the conclusion of our two-year
strategy. The focus of this strategy was the decision to revise our
go-to-market approach, shifting our marketing focus to a
content-led strategy and deliberately securing smaller initial
deals, servicing limited business areas or teams within the
customer where demonstration of value would lead to the potential
for significant expansion opportunities.
"Under this approach, the Group has successfully delivered a
consistent volume of such logos (seven in FY23 and nine in FY22),
expanding the use of the solution in over 70% of the accounts
signed across FY21 and FY22, with an average MRR growth value of
66% since signing date. These successes have culminated in the
Group achieving one of its key financial goals of delivering
back-to-back years of improved double-digit MRR growth, with a 16%
increase in FY23 (FY22: 12%) to a year-end exit rate of GBP289k (30
September 2022: GBP250k, 30 September 2021: GBP223k).
"The increasing interest in strategy execution, our growing
confidence in lead nurturing and generation, our ongoing product
improvements, and the heightened engagement from our partners all
fuel our optimism for delivering incremental growth in customer
numbers and upsells. These factors collectively contribute to our
positive outlook for the future ."
For further information please contact:
i-nexus Global plc Via: Alma
Simon Crowther, CEO
Drew Whibley, CFO
Singer Capital Markets (Nominated Tel: +44 (0)207 496
Adviser and Broker) 3000
Sandy Fraser / Alex Bond
(Corporate Finance)
Alma Strategic Communications Tel: +44 (0)203 405
Caroline Forde / Robyn Fisher 0205
About i-nexus Global plc
i-nexus Global plc ("i-nexus") helps companies accelerate
business outcomes through robust strategic planning, predictable
project portfolio delivery, and real-time performance tracking to
ensure results are achieved. i-nexus' strategy applications replace
spreadsheets and presentations with a single application that
promotes collaboration, alignment, and communication in the pursuit
of improved business outcomes, while providing resource and
accompanying cost efficiencies.
Today, we support organisations in managing over 200,000
strategic programmes around the world.
Throughout this announcement:
(1) Net Retention is measured by the total of on-going MRR at
the period-end from clients in place at the start of the period as
a percentage of the opening MRR from those clients.
(2) Adjusted EBITDA excludes the impact of any impairment, loss
on disposal of assets, share based payment expenses and
non-underlying items
(3) Cash and cash in transit includes the combined value of cash
and cash equivalents and cash in transit classified within trade
and other receivables
Chairman's Statement
In my previous Chairman's statement I discussed the challenges
that i-nexus faced as global economies recovered from the Covid-19
pandemic and we all faced new challenges from global economic
disruption. Few commentators envisaged not only the severity of the
economic ructions but also the global political uncertainty, in
Europe, Africa, China and the Middle East. Despite these challenges
many industries have recovered and continue to do so in what has
been a high inflation environment.
The impact for i-nexus has been that we have continued to win
new customers and that some of our most engaged customers have or
are looking to substantially increase their use of our software.
Our customers are looking to speed up delivery across all aspects
of their businesses, whether it is production, supply chains,
yields, marketing and sales to name just a few areas. The use of
products such as i-nexus helps our customers achieve these
fundamental business improvement aims and increase their ability to
achieve their strategic goals with relative ease.
Our core product, Workbench, is one of the leading products to
automate the deployment of strategy across complex enterprises and
once deployed in scale it is critical to large customers gaining
visibility of progress towards their objectives. It is increasingly
clear that all our major customers have their own unique strategy
execution models, in many cases based around established models
such as Hoshin Kanri or OKR (Objectives and Key Results) but almost
always adjusted to the customer's particular requirements. We
incorporate much of the functionality required by our customers to
automate their strategic processes and we continue to strive to
make it faster and easier to deliver business value. We are looking
at how our customers, existing and new, can engage faster, deploy
quicker and reap benefits from the outset of an i-nexus deployment,
reducing the risk of a lengthy time to value and speeding up the
demand from customers for additional licences. We continue to
ensure our efforts are aligned to addressing this fundamental
challenge.
Although i-nexus has no direct dependency upon raw materials,
high inflation has had a significant impact on our staff, the
lifeblood of a software business. Our staff remain extremely loyal
to the business and in turn we have tried wherever possible to
ensure remuneration packages remain competitive. We must continue
to retain vital talent in the business.
I am cognisant of the current market capitalisation of the
business which, in my view, does not reflect the quality of the
Company's products, the expertise within the staff, nor the quality
of the customer base. The business and core product, Workbench,
have continued to make progress during FY23 but we remain an
extremely small Company in the quoted arena. We have little option
but to continue to focus on how to grow faster, getting the
business profitable and finding ways in which stability can be
enhanced. The Board of Directors and myself continue to strive to
achieve these aims as quickly and effectively as possible. With
Government increasingly interested in encouraging institutional
investors to support small UK businesses building for the long
term, we remain alert to all opportunities to accelerate the growth
of i-nexus.
Once again I would like to take this opportunity to thank our
loyal staff, customers and shareholders for their support and I
look forward to FY24 and the continued development of our products
to solve our customers challenging business needs.
Richard Cunningham
Chairman
Chief Executive Officer's Report
Overview
I am pleased to share with you the encouraging progress i-nexus
has made over the past year, marking the conclusion of our two-year
strategy which was developed following the global challenges
brought on by the Covid-19 pandemic.
The focus of this strategy was the decision to revise our
go-to-market approach, shifting our marketing focus to a
content-led strategy and deliberately securing smaller initial
deals, servicing limited business areas or teams within the
customer where demonstration of value would lead to the potential
for significant expansion opportunities.
Under this approach, the Group has successfully delivered a
consistent volume of such logos (seven in FY23 and nine in FY22),
expanding the use of the solution in over 70% of the accounts
signed across FY21 and FY22, with an average MRR growth value of
66% per logo since signing date.
These successes have culminated in the Group achieving one of
its key financial goals of delivering back-to-back years of
improved double-digit MRR growth, with a 16% increase in FY23
(FY22: 12%) to a year-end exit rate of GBP289k (30 September 2022:
GBP250k, 30 September 2021: GBP223k).
Supplementing this result has been the establishment of our
partner programme, providing a new path to market for the business
beyond our internal team, with several consulting firms signing
agreements in the year. These partners endorse our solutions to
their clients, thereby providing us with additional opportunities,
with our first partner-led deals being secured in FY23 and a
further one in Q1 FY24. The continued growth and development of
this programme is seen as a strategic priority for the forthcoming
year.
Our accomplishments are a reflection of our strategic focus and
the market opportunity that lies ahead. The business is optimistic
about the direction in which it is heading and we eagerly
anticipate sharing our continued progress.
Trading
The business continued to deliver a steady flow of new logos
this year with the addition of seven accounts (FY22: nine)
generating GBP23k of MRR (FY22: GBP30k MRR). Whilst these were
contracted at a marginally lower initial average value to the prior
year, the opportunity for expansion is equivalent to the profile of
accounts signed in the prior year.
Encouragingly, our new customers span a variety of new
industries and countries outside of our key markets, reflecting our
capability to cater to diverse markets. This diversity underpins
our conviction that all companies, irrespective of their industry
or size, can reap the benefits of a well-executed strategy.
A highlight of this year, and a key strategic objective, has
been the level of expansion within existing accounts, which
totalled GBP36k of MRR (FY22: GBP10k). As a consequence of this
growth, net retention (measured by the total value of on--going MRR
at the period--end from clients in place at the start of the period
as a percentage of the opening MRR from those clients) grew to
107%, up from 98% in the previous year.
While the delivery of several operational and financial goals
represents a successful outcome of the Group's two-year strategy,
especially considering the impact of the pandemic, we recognise
that the business has significant potential for far greater market
penetration. The Group's new three-year plan, summarised within the
Strategic Focus section of this report, has been developed to
capitalise on this potential, with particular focus on serving an
increasing proportion of businesses that are eager to deliver value
with minimal implementation requirements.
Market Opportunity
In today's dynamic business landscape, success hinges on more
than just setting goals-it's about executing them swiftly, with
keen insight, and across intricate ecosystems. At i-nexus , we
recognise this challenge, and our Strategy Execution Management
(SEM) software is purpose-built to deliver substantial value.
Bridging Strategy and Execution:
Our SEM software category continues to evolve and gain traction
as companies hasten to digitalise mission-critical processes in
this post-pandemic era. We believe that strategy without execution
is merely a wish, and execution without strategy lacks direction.
Our mission is to bridge this gap, providing a seamless platform
where strategy and operations converge. Key aspects of our solution
are:
-- Agility at Pace : Organisations need to move swiftly. Our
platform ensures that strategy execution keeps pace with the
ever-changing business environment.
-- Insightful Visibility : In complex ecosystems, visibility is
paramount. i-nexus provides high-level transparency, allowing
leaders to track performance seamlessly.
-- Collaboration at the Core : We foster collaboration across
teams, departments, and even entire organisations. Our platform
ensures that everyone is aligned, working toward common goals.
-- Strategy Meets Operations : We seamlessly integrate strategic
planning with operational execution. No more silos-just a holistic
view of progress.
Growth Indicators :
-- Active Buyers on G2 : We have seen a remarkable surge in
businesses looking for a strategy solution on the world's largest
tech marketplace - a staggering 222% increase since 2018.
-- Web Traffic Surge : At i-nexus, our web traffic has
skyrocketed. We've experienced a outstanding 561% growth since
2018. This surge aligns perfectly with the escalating demand for
effective strategy execution.
-- Sales Momentum : Our efforts translate into results. Sales
accepted leads have risen by 50% since 2018.
Industry Validation :
-- Gartner's Stamp of Approval : Strategic Portfolio Management,
a cornerstone of our offering, has been validated and accepted.
Organisations now focus on organisational readiness, recognising
the value of solutions like ours.
-- McKinsey's Insight : The rise of remote teams underscores the
need for software that facilitates seamless strategy execution and
collaboration. We're positioned to meet this demand head-on.
The market opportunity before us is substantial and expanding.
As we navigate this exciting landscape, i-nexus stands ready to
empower organisations worldwide.
People
The Board extends its heartfelt gratitude to our employees for
their unwavering support and dedication to the business and our
customers. Their commitment is reflected in the successes we have
achieved. At i-nexus, we are fortunate to have a team of talented
and devoted individuals who work together towards a common goal,
consistently delivering results. Their collective efforts are the
driving force behind our accomplishments.
Strategic Focus
As we transition from our successful two-year strategy, we
embark on a new three-year plan that is positioned around three key
themes:
1. Customer Experience and Engagement: We will help deliver
strategic value by finding new ways to encourage user adoption,
making our products more engaging and enjoyable, and offering
obligation-free trials of our software. The business will also
focus on enabling customer self-service, from onboarding to
expansion with a key component being to ensure configuration is
more accessible.
2. Product Enhancement: i-nexus is committed to leveraging
modern, cloud-native technology to help simplify development and
maintenance. The business will provide our customers with rich,
out-of-the-box visualisations and analytics, and gradually
transition our products to self-serve account management.
3. Strategic Planning and Execution: Focus placed on helping
customers orchestrate and "do the work" in-between data entry and
reporting insight. This is particularly true in the execute phase
of Strategy. On the other end of the spectrum, the business
acknowledges the growing interest in capabilities around
formulating strategies before strategic planning.
These themes represent our overarching goals for the next three
years and provide a clear direction for our efforts as we continue
to delivery on going value to our customers and evolve in the
marketplace.
In terms of 2024, our strategic focus will be on four key areas
that will drive our growth:
1. More efficient go-to-market (GTM) approach: We aim to enhance
our efficiency in delivering new growth while addressing the
challenge of lengthy sales cycles, ensuring a more streamlined and
agile process.
2. Develop compelling customer case studies: We will further
strengthen our understanding of their needs and maximise our impact
on their businesses. We plan to go live with a streamlined set of
customer value metrics generating insightful case studies.
3. Deliver enhanced/optimised management Workbench capability:
Having worked closely with customers and prospects, development of
several stories which are key areas of improvement.
4. Capitalise on successful proof of concepts: The business
continues to explore opportunities for product innovation. With
several "proof of concept" products successfully concluded, we will
trial these innovations with new customers.
Outlook
The business is off to a promising start this year, with our
core use cases consistently delivering progress. The active trials
of our platform by potential customers, coupled with the growing
expansion opportunities within our existing customer base, are
encouraging signs. We've kicked off the year on a positive note,
securing a new customer win and an expansion with a key client, and
we have two more promising opportunities moving into the
contracting phase.
While we did experience the loss of a significant, albeit
legacy, customer, we swiftly implemented mitigation strategies to
protect our cash flows and minimise the impact on our progress
towards an EBITDA breakeven position. This loss, while unfortunate,
has allowed us to shift our focus entirely to our newer systems,
propelling us forward.
Our attention remains firmly on ensuring the adequacy of our
cash resources and executing mindful investment decisions as we
steer i-nexus towards profitability. Despite the customer loss, we
have taken necessary measures to safeguard the business from a cost
perspective. The Directors continue to be of the opinion that the
Group has sufficient working capital for its present requirements,
that is for at least 12 months from the date of this release.
The increasing interest in strategy execution, our growing
confidence in lead nurturing and generation, our ongoing product
improvements, and the heightened engagement from our partners all
fuel our optimism for delivering incremental growth in customer
numbers and upsells. These factors collectively contribute to our
positive outlook for the future .
Simon Crowther
Chief Executive Officer
Chief Financial Officer's Report
Revenue
Licence revenues
Monthly recurring revenue ('MRR'), the key financial metric for
the Group, grew by 16% in the year to GBP289k at 30 September 2023
(30 September 2022: GBP250k) as the business delivered a second
year of improved double-digit growth (FY22: 12% increase in MRR). A
key contributor to this success is the realisation of our revised
land and expand go-to-market strategy from the start of 2022, with
logos secured during the last two years having seen average growth
in MRR value of 66% by the end of FY23. This level of expansion is
testament to the increasing strength of our client relationships
and quality of our product, with net retention (measured by the
total value of on--going MRR at the period--end from clients in
place at the start of the period as a percentage of the opening MRR
from those clients) in the year rising to 107% (FY22: 98%).
Supporting this growth was the Group's continued ability to
secure a consistent level of new logos in the year (FY23: seven,
FY22: nine) delivering GBP23k MRR (FY22: GBP30k MRR) with
equivalent levels of expansion opportunity in these accounts
through FY24 to customers signed in the last two years.
As expected, software revenues recognised in 2023 increased by
13% to GBP3,236k (FY22: GBP2,857k) as a consequence of the new
business and account expansion successes since the start of 2022.
These now represent 92% of overall revenue (FY22: 91%).
As announced, following the year-end, the Group was informed
that a major legacy customer, using the older, highly customised
version of the i-nexus software, does not intend to renew its
contract at the calendar year-end. Whilst the Board has rapidly put
in place mitigating actions such that the impact on the Group's
cash flows is minimised and the adjusted EBITDA breakeven position
can be substantially preserved, it is likely to moderate the
Group's FY24 MRR growth against FY22 and FY23 levels. Positively,
the business continues to deliver MRR growth through its core
proposition, securing a further two new logos and delivering a key
account expansion in Q1 FY24, totalling GBP12k MRR.
Services revenues
Revenue from associated professional services has increased by
8% to GBP292k (FY22: GBP270k), driven by an uplift in H2 through
the timing of delivering new customer deployments and existing
change orders, a trend expected to continue into FY24 underpinned
by the deferred revenue balance related to services at 30 September
2023 being a third higher than at 30 September 2022.
Gross Margin
Gross margin in the year remained stable at 80% (FY22: 79%) with
the increase in revenue driving the uplift from GBP2,461k to
GBP2,833k.
Reported Gross Margin is the combined Gross Margin over both
recurring software subscriptions and professional services.
Adjusted EBITDA
Adjusted EBITDA (EBITDA excluding the impact of impairment, loss
on disposal of assets, share-based payments, and non-underlying
items) totalled a loss of GBP499k for the period (FY22: loss of
GBP552k), with the increase in revenue being partially netted
against an uplift in overhead costs reflecting the Board's decision
towards the end of FY22 to accelerate a select number of
investments both in its existing employee base to preserve
retention and in additional resource needed for operational
delivery.
As mentioned in the FY22 Annual Report, there remains no plans
to make further investments until such time as the business is
delivering a positive Adjusted EBITDA.
Depreciation, amortisation and impairment
Total costs in respect of depreciation, amortisation, and
impairment were GBP339k in FY23 (FY22: GBP385k). With the business
having low capital expenditure requirements, the value is
principally made up of amortisation on intangible assets, being
capitalised development costs, totalling GBP198k (FY22: GBP165k)
and any subsequent impairment charges (FY23: GBP126k, FY22:
GBP155k).
These costs are reflective of the continual evolution of the
market in which the Group operates, the needs of its customers,
both present and prospective, and the Group's agile approach to
continually developing and improving its o ering.
Statutory results
The Group reported a loss before taxation for the year of
GBP982k (FY22: loss of GBP1,105k).
Cash and cash equivalents
The Group had cash & cash in transit at 30 September 2023 of
GBP267k (FY22: GBP99k), with the end of the financial year
representing the annual cash low point for the business given the
seasonality in cash flows arising from the timing of the invoicing
and collection of the Group's recurring revenue, the majority of
which is billed during Q1 and Q2.
During the year, the Group's cash position was enhanced by
securing GBP500k of funding through the issue of Fixed Rate
Unsecured Convertible Redeemable Loan Notes in order to assist with
the Group's working capital headroom in the near term to enable the
business to focus its efforts on delivering on its pipeline
opportunities and realising the growing expansion opportunities
within its customer base.
The business continues to drive a reduction in its net cash
outflow from operating activities (FY23: GBP228k, FY22: GBP237k),
with the impact of new business successes, improved service billing
and a strong renewal performance in the year being offset against
the full-year cost impact of the select investments made towards
the end of FY22.
Whilst the loss of a major legacy customer following the
year-end will affect the FY24 operating cash flows, the Board has
rapidly put in place mitigating actions such that the impact on the
Group's cash flows is minimised.
Careful cash management will continue to be a priority focus for
the Board. As previously outlined, there are currently no plans to
increase the existing cost base until such time as the business
achieves a position of at least Adjusted EBITDA breakeven.
The Group also continues to apply treasury and foreign currency
exposure management policies where possible to minimise both the
cost of finance and our exposure to foreign currency exchange rate
fluctuations.
Net debt at 30 September 2023 was GBP1,964k (30 September 2022:
GBP1,710k). On 21 June 2023, the Company agreed with the holders of
the GBP1,325k and GBP650k Convertible Loan Note tranches to extend
the redemption date from 4 November 2024 to 4 November 2025 and 29
September 2024 to 29 September 2025 respectively, see note 7 for
further details.
The Group prepares budgets, cashflow forecasts and undertakes
scenario planning to ensure that the Group can meet its liabilities
as they fall due.
The Board's assessment in relation to going concern, including a
description of its current scenario planning, is included on page
16 of the report.
Balance sheet
Trade receivables have remained broadly in line with FY22 levels
at GBP580k (30 September 2022: GBP609k) due to the timing of
receipt of annual licence fee and subscription invoices issued in
the final months of the year.
The growth in the Group's MRR and accompanying services resulted
in deferred revenue increasing to GBP1,477k at 30 September 2023
(30 September 2022: GBP1,320k). The Group's cash collection
disciplines remain strong with DSO (debtor days) at 30 September
2023 of 57 (30 September 2022: 60).
Principal risks and uncertainties
The Group's principal risks and uncertainties are set out on
pages 21 to 27.
Drew Whibley
Chief Financial O cer
Primary statements
Consolidated Statement of Comprehensive income
For the year ended 30 September 2023
2023 2022
GBP GBP
----------------------------------------------- ----------- -----------
Revenue 3,527,681 3,126,804
Cost of sales (694,230) (666,280)
----------------------------------------------- ----------- -----------
Gross profit 2,833,451 2,460,524
Administrative expenses (3,672,313) (3,408,424)
----------------------------------------------- ----------- -----------
Operating loss (838,862) (947,900)
----------------------------------------------- ----------- -----------
Adjusted EBITDA (498,748) (552,357)
Depreciation, amortisation, impairment and
pro fi t/loss on disposal (338,789) (384,975)
Share based payment expense (1,325) (10,568)
----------------------------------------------- ----------- -----------
Investment revenues 19 68
Finance costs (261,060) (231,288)
Other gains and losses 117,619 73,845
----------------------------------------------- ----------- -----------
Loss before taxation (982,284) (1,105,275)
Income tax income 226,214 234,391
----------------------------------------------- ----------- -----------
Loss for the year (756,070) (870,884)
----------------------------------------------- ----------- -----------
Other comprehensive income:
Items that will not be reclassified to profit
or loss
Currency translation di ff erences (47,745) (486)
----------------------------------------------- ----------- -----------
Total items that will not be reclassified
to profit or loss (47,745) (486)
----------------------------------------------- ----------- -----------
Total other comprehensive income for the year (47,745) (486)
----------------------------------------------- ----------- -----------
Total comprehensive income for the year (803,815) (871,370)
----------------------------------------------- ----------- -----------
2023 2022
GBP GBP
----------------------------------------------- ----------- -----------
Earnings per share
Basic (0.03) (0.03)
Diluted (0.03) (0.03)
----------------------------------------------- ----------- -----------
Consolidated Statement of Financial Position
As at 30 September 2023
2023 2022
GBP GBP
------------------------------ ------------ ------------
Non-current assets
Intangible assets 738,847 915,696
Property, plant and equipment 28,533 26,413
------------------------------ ------------ ------------
767,380 942,109
------------------------------ ------------ ------------
Current assets
Trade and other receivables 929,812 781,838
Current tax recoverable 225,758 224,000
Cash and cash equivalents 79,668 98,987
------------------------------ ------------ ------------
1,235,238 1,104,825
------------------------------ ------------ ------------
Total assets 2,002,618 2,046,934
------------------------------ ------------ ------------
Current liabilities
Trade and other payables 719,529 682,840
Borrowings 9,952 9,707
Deferred revenue 1,477,488 1,319,674
------------------------------ ------------ ------------
2,206,969 2,012,221
------------------------------ ------------ ------------
Net current liabilities (971,731) (907,396)
------------------------------ ------------ ------------
Non-current liabilities
Trade and other payables 421,831 254,407
Borrowings 22,435 32,387
Convertible loan notes 2,135,108 1,766,925
------------------------------ ------------ ------------
2,579,374 2,053,719
------------------------------ ------------ ------------
Total liabilities 4,786,343 4,065,940
------------------------------ ------------ ------------
Net liabilities (2,783,725) (2,019,006)
------------------------------ ------------ ------------
Equity
Called up share capital 2,957,161 2,957,161
Share premium account 7,256,188 7,256,188
Foreign exchange reserve (46,355) 1,390
Share option reserve 21,387 20,062
Equity reserve 269,622 231,851
Merger reserve 10,653,881 10,653,881
Retained earnings (23,895,609) (23,139,539)
------------------------------ ------------ ------------
Total equity (2,783,725) (2,019,006)
------------------------------ ------------ ------------
Consolidated Statement of Changes in Equity
For the year ended 30 September 2023
Share Foreign Share
Share premium Equity Merger exchange option Retained
capital account reserve reserve reserve reserve earnings Total
GBP GBP GBP GBP GBP GBP GBP GBP
---------------------------- --------- ------------ ----------- ----------- ------------ --------- ------------ -----------
Balance at
1 October 2022 2,957,161 7,256,188 231,851 10,653,881 1,390 20,062 (23,139,539) (2,019,006)
---------------------------- --------- ------------ ----------- ----------- ------------ --------- ------------ -----------
Year ended
30 September
2023:
Loss for the
year
Other comprehensive
income:
Exchange di ff
erences - - - - - - (756,070) (756,070)
on foreign operations - - - - (47,745) - - (47,745)
---------------------------- --------- ------------ ----------- ----------- ------------ --------- ------------ -----------
Total comprehensive
income for the
year - - - - (47,745) - (756,070) (803,815)
---------------------------- --------- ------------ ----------- ----------- ------------ --------- ------------ -----------
Transactions
with owners
in their capacity
as owners
Share option expense
in the year - - - - - 1,325 - 1,325
Issue of convertible
loan - - 37,771 - - - - 37,771
------------------------ --------- ------------ ----------- ----------- ------------ --------- ------------ -----------
Total contributions
by and
distributions
to owners
of the Company
recognised directly
in equity - - 37,771 - - 1,325 - 39,096
---------------------------- --------- ------------ ----------- ----------- ------------ --------- ------------ -----------
Balance at
30 September
2023 2,957,161 7,256,188 269,622 10,653,881 (46,355) 21,387 (23,895,609) (2,783,725)
---------------------------- --------- ------------ ----------- ----------- ------------ --------- ------------ -----------
Consolidated Statement of Cash Flows
For the year ended 30 September 2023
2023 2022
GBP GBP GBP GBP
------------------------------ --------- --------- --------- ---------
Operating activities
Loss after tax (756,070) (870,884)
Adjusted for non-cash items:
Taxation credit (226,214) (234,391)
Amortisation, depreciation,
and adjustments on disposal 338,789 384,975
Share-based payment expense 1,325 10,568
Finance income (19) (68)
Deferred income 157,814 -
Finance charges 261,060 231,288
Decrease in provisions (2,751) -
Other gains (117,619) (73,845)
------------------------------ --------- --------- --------- ---------
(343,685) (552,357)
(Increase)/decrease in
trade and other
receivables (145,223) 10,126
Increase in trade and other
payables 36,689 20,043
------------------------------ --------- --------- --------- ---------
Cash used in operations (452,219) (522,188)
Income tax refunded 224,456 285,391
------------------------------ --------- --------- --------- ---------
Net cash outflow from
operating activities (227,763) (236,797)
Investing activities
Purchase of intangible
assets -
internally generated (146,374) (136,234)
Purchase of property, plant
and equipment (17,686) (24,443)
Interest received 19 68
------------------------------ --------- --------- --------- ---------
Net cash used in investing
activities (164,041) (160,609)
Financing activities
Issue of convertible loans 436,000 -
Repayment of borrowings (9,707) (71,425)
Interest paid (6,063) (6,899)
------------------------------ --------- --------- --------- ---------
Net cash generated from/(used
in) financing activities 420,230 (78,324)
------------------------------ --------- --------- --------- ---------
Net increase/(decrease)
in cash and cash equivalents 28,426 (475,730)
Cash and cash equivalents
at
beginning of year 98,987 575,203
E ff ect of foreign exchange
rates (47,745) (486)
------------------------------ --------- --------- --------- ---------
Cash and cash equivalents
at end of year 79,668 98,987
------------------------------ --------- --------- --------- ---------
At the year end there was GBP187,389 of cash in transit held in
trade receivables. This cash related to trade in the year and was
received on 2 October 2023.
Notes to accounts
1. General information
i-nexus Global plc is a public company limited by shares
incorporated in England and Wales (registration number 11321642).
The registered office is 27-28 Eastcastle Street, London, W1W 8DH.
The Group's principal activities and nature of its operations are
disclosed on page 3-11 of this report.
The Group consists of i-nexus Global plc and all of its
subsidiaries.
Significant accounting policies
The following principal accounting policies have been used
consistently in the preparation of consolidated financial
information for i-nexus Global plc and its subsidiaries (the
'Group').
Basis of preparation
The financial information has been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted for
use in the United Kingdom and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS.
The financial information is prepared in sterling, which is the
functional currency of the Group. Monetary amounts in this
financial information are rounded to the nearest GBP1.
This financial information has been prepared applying the
accounting policies applied in the Group's most recent publicly
available financial statements.
The financial information incorporates the results of i-nexus
Global plc and all of its subsidiary undertakings as at 30
September 2023.
Going concern
After reviewing the Group's forecasts and projections, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future, being a period of at least twelve months from the date of
approval of these financial statements. The Group therefore
continues to adopt the going concern basis in preparing its
financial statements. Information used to make this decision is
detailed below.
A scenario testing exercise, in which the Directors prepared
detailed cash flow forecasts for the period covered by the going
concern forecast, was performed. The forecasts take into account
the Directors' views of current and future economic conditions that
are expected to prevail over the period including assumptions
regarding the sales pipeline, future revenues and costs with
various scenarios which reflect growth plans, opportunities, risks
and mitigating actions.
Alongside management's base case forecast, which incorporates
the impact of the Customer Update announcement, the Group prepared
an extreme downside scenario where, outside of the deals secured or
in contracting, any growth in MRR across the period would be o set
by non-renewals, reducing total billing across recurring and
services revenue by GBP350k. Under this extreme scenario, the Group
has given consideration to the potential actions available to
management to mitigate the impact of these sensitivities, in
particular the discretionary nature of certain costs incurred by
the Group alongside the employment of further mitigating actions in
order to ensure the continued availability of funds.
Financial performance in 2024 is not expected to be materially
impacted from current year levels due to the long-range revenue
visibility achieved through the recurring revenue business model.
These recurring revenues, representing 90% of total revenue, are
considered resilient given the majority are on multi- year terms.
The forecast also assumed that the Group does not have access to
any further external funding. Based on current trading, the extreme
downside scenario is considered very unlikely.
The Group continues to monitor the collection of monies from
clients with no material delays in payment being cited. The
business benefits from an Annual Licence Fee Model in which
software licence fees are received annually in advance.
Abridged financial information
This preliminary announcement has been prepared in accordance
with the basis of preparation set out above. Whilst the financial
information included in this preliminary announcement has been
prepared in accordance with IFRS, this announcement does not itself
contain sufficient information to comply with IFRS. This
preliminary announcement constitutes a dissemination announcement
in accordance with Section 6.3 of the Disclosures and Transparency
Rules (DTR).
2. Revenue and segmental reporting
The Group has one single business segment and therefore all
revenue is derived from the rendering of services as stated in the
principal activity. The Group operates in six geographical
segments, as set out below. This is consistent with the internal
reporting provided to the chief operating decision maker. The chief
operating decision maker, who is responsible for allocating
resources and assessing performance, has been identified as the
management team comprising the executive directors who make
strategic decisions.
Revenue analysed by class of business
Year ended Year ended
30 September 30 September
2023 2022
GBP GBP
Licence 3,235,964 2,856,720
Services 291,717 270,084
3,527,681 3,126,804
=============== ===============
Revenue analysed by geographical market
Year ended Year ended
30 September 30 September
2023 2022
GBP GBP
United Kingdom 774,825 716,295
USA 1,197,292 882,707
Switzerland 659,380 639,380
Germany 550,668 538,561
Rest of Europe 158,393 190,976
Rest of the World 187,123 158,885
3,527,681 3,126,804
=============== ===============
3. Adjusted EBITDA
The calculation of Adjusted Earnings is consistent with the
presentation of Adjusted Earnings before Interest, Tax,
Depreciation, and Amortisation, as presented on the face of the
Statement of Comprehensive Income. This adjusted element also
removes non-underlying items which, in the prior year, comprise
COVID-19 related redundancy costs and professional and consultancy
fees relating to the raising of finance. There were no such costs
in the current year. The Directors have presented this Alternative
Performance Measure ("APM") because they feel it most suitably
represents the underlying performance and cash generation of the
business, and allows comparability between the current and
comparative period in light of the rapid changes in the business,
and will allow an ongoing trend analysis of this performance based
on current plans for the business.
4. Earnings per share
The earnings per share has been calculated using the loss for
the year and the weighted average number of ordinary shares
outstanding during the year, as follows:
Year ended Year ended
30 September 30 September
2023 2022
GBP
Loss for the period attributable to equity
holders of the company (756,070) (870,884)
---------------- --------------
Weighted average number of ordinary shares
(for basic and diluted earnings per share 29,571,605 29,571,605
---------------- --------------
Earnings per share (basic and diluted) (0.03) (0.03)
================ ==============
The Diluted EPS is the same as the basic EPS in the current and
comparative year as the Group has incurred losses in each of the
periods concerned. The Group has a number of potentially dilutive
share options and convertible redeemable loan stock that could
dilute the earnings per share should the Group become profitable.
As at 30 September 2023 both the share options and the convertible
loan stock are out of the money.
5. Trade and other receivables
At 30 September At 30 September
2023 2022
GBP GBP
Trade receivables 580,379 608,560
Cash in transit 187,389 -
Provision for impairment (1,639) (4,390)
---------------- ----------------
766,129 604,170
---------------- ----------------
VAT recoverable 42,622 50,440
Other receivables - 2,390
Prepayments 121,061 124,838
---------------- ----------------
929,812 781,838
================ ================
Cash in transit represents monies remitted on 29 September 2023
which were received on 3 October 2023. The accounting policy is to
de-recognise a trade receivable when the cash is received and hence
this balance is included in trade and other receivables.
6. Borrowings
At 30 September At 30 September
2023 2022
GBP GBP
Current
Bank loans 9,952 9,707
9,952 9,707
---------------- ----------------
Non-current
Bank loans 22,435 32,387
22,435 32,387
---------------- ----------------
Total borrowings 32,387 42,094
================ ================
The Group had the following borrowings at 30 September 2023:
-- A Bounce Back Loan Scheme loan within bank loans which has an
interest rate of 2.5% payable from November 2021 when the
government grant incentive period expires. The loan is carried at
GBP32,387 in the financial statements. This loan is unsecured.
The directors consider the value of all financial liabilities to
be equivalent to their fair value.
7. Convertible Loan note
In 2021, two tranches of convertible loan notes were issued. The
first tranche was issued on 4
November 2020 with total proceeds of GBP1,325,000 and the second
tranche was issued on 29 September 2021 with total proceeds of
GBP650,000. In the current year, a further tranche was issued with
total proceeds of GBP500,000.
When issued, the first two trances had a redemption date three
years, and the third tranche has a redemption date of two years
following their date of issue. The loan note holders are entitled,
before the redemption date, to convert all or part of their holding
of loan notes into fully paid Ordinary Shares on the basis of 1
Ordinary Share for every 10p of principal nominal amount of loan
notes held, or, convert all or part of their holding of loan notes
into fully paid Ordinary Shares at the conversion rate; and/or
redeem all or part of their holding of loan notes.
In respect of the first two tranches, at the issue date the net
proceeds received were split between the
financial liability element of GBP1,743,149 and an equity
component of GBP231,851, representing the fair value of the
embedded option to convert the financial liability into equity. The
equity component of the convertible loan notes has been credited to
the equity reserve.
In respect of the third tranche, at the issue date the net
proceeds received were split between the financial liability
element of GBP462,229 and an equity component of GBP37,771,
representing the fair value of the embedded option to convert the
financial liability into equity. The equity component of the
convertible loan notes has been credited to the equity reserve. The
issue of the third tranche attracted transaction costs to the total
of GBP64,000 which have been deducted from the carrying amount of
the loan notes.
In the prior year the redemption date of the first tranche was
extended by a further year, to give a revised redemption date of 4
years following the original date of issue, being November 2024.
This modification was not considered to be substantial, as defined
in IFRS 9, therefore the existing liability was re-calculated as
the present value of the revised future cash flows discounted at
the original effective interest rate. A gain of GBP73,845 on the
modification of the liability has been recognised in other gains
and losses.
In the current year the redemption date of the first and second
tranches were extended by a further year, to give a revised
redemption date of five years and four years following the original
date of issue, being November 2025 and September 2025 respectively.
This modification was not considered to be substantial, as defined
in IFRS 9, therefore the existing liability was re-calculated as
the present value of the revised future cash flows discounted at
the original effective interest rate. A gain of GBP117,619 on the
modification of the liabilities has been recognised in other gains
and losses.
The extension to the redemption date is a modification only of
the existing convertible loan notes and
therefore has no impact on the equity element.
The liability component is measured at amortised cost, and the
difference between the carrying amount of the liability at the date
of issue and the amount reported in the statement of financial
position represents the effective interest rate less interest paid
to that date.
The convertible loan notes carry a coupon rate of 8% and are
recognised at their net present value using a discount rate of
12%.
Liability
GBP
Liability component at 1 October
2021 1,782,458
Interest charged 224,389
Interest accrued (166,077)
Gain on modification (73,845)
----------
Liability component at 30 September
2022 1,766,925
----------
Issue of convertible loan notes 398,229
Interest charged 254,997
Interest accrued (167,424)
Gain on modification (117,619)
----------
Liability component at 30 September
2023 2,135,108
----------
8. Share capital
At 30 September At 30 September
2023 2022
GBP GBP
Authorised, allotted, called
up and fully paid
29,571,605 (2022: 29,571,605)
Ordinary shares of GBP0.10
each 2,957,161 2,957,161
================ ================
Fully paid shares carry one vote per share and carry rights to a
dividend.
9. Principal risks and uncertainties
The Board of the Company regularly reviews business risk and the
Group's appetite for risk relative to its goals. There are a number
of potential risks and uncertainties, some of which could have a
material impact on the Group's performance, and therefore could
cause actual results to differ materially from those expected. Set
out below are the significant business risk areas identified,
together with an overview of the mitigating factors considered by
the Board. This is not an exhaustive list of the risks faced by the
Group and is not necessarily presented in order of priority.
Risk Description Mitigation
Working capital Whilst the Directors believe Trend: Level risk
Vulnerability of that the improvement in sales The Group prepares regular
the Group's working conversion seen across FY22 business forecasts and monitors
capital. and FY23 is sustainable, its projected cash flows,
the Group's working capital which are reviewed by the
position is still exposed Board.
should this weaken and /or The scenarios and sensitivities
its expected growth within demonstrate that there are
existing accounts be lower mitigating actions management
than planned in FY24. can implement should the
The recent injection of funds, plans not deliver the expected
as a result of the Convertible sales growth.
Bond issues in June 2023 The Group's Annual Licence
will provide the necessary Fee model, in which software
flexibility and coverage licence fees are received
to the risk posed should annually in advance, provides
any customer delay payment good levels of visibility
in order to satisfy the Group's such that any required mitigating
near term funding requirements actions can be implemented
The Group's continuing viability on a timely basis.
in the longer term remains
critically dependent on its
ability to secure new sales
and expand the use of the
software in existing accounts.
It is possible that the Group
will experience a slower
and/or lower sales conversion
rate than the Directors have
modelled within their base
case financial projections.
This could in turn have a
material adverse e ect on
the Group's business, results
of operations, financial
condition and prospects.
---------------------------------------- -----------------------------------------
Risk Description Mitigation
---------------------------------------- -----------------------------------------
Market & product Whilst the Board believes Trend: Level risk
development that there is strong evidence The Group has internal sales
The strategy market of an increasing trend to and marketing functions,
may not evolve digitalize strategy by its which are also supported
as expected or target customers, a large by a network of consulting
our products fail proportion of the Group's partners, that work with
to meet the expectations target market continues to potential customers to educate
of the market. use traditional methods and them on the benefits of digitising
in-house developed systems. strategy and the associated
Although the Group has achieved benefits the product can
its market position through o er an organisation.
a deep understanding of the The rate of incoming enquiries
market, and the 15 years continues to support the
of development of its i-nexus view that the need to digitise
software, there is no guarantee strategy is becoming ever
that either our product continues more of a focus for businesses.
to meet customer expectations The Board feels that the
or that the Group's competitors continued enhancement along
and potential competitors with the Group's product
(who may have significantly strategy and R&D focus mitigates
greater financial, marketing, this risk. The Board monitors
service, support, technical user satisfaction and the
and other resources than extent to which the software
the Group) may be able to continues to meet customer
develop competing products, expectation through various
respond more quickly to changes channels, including on the
in customer requirements G2 platform.
and devote greater resources
to the enhancement, promotion
and sale of their products,
which could have a negative
impact on the Group's business.
---------------------------------------- -----------------------------------------
Risk Description Mitigation
---------------------------------------- -----------------------------------------
Account Proliferation Trend: Reducing risk
Failure of our An important aspect of the Many of the new logos signed
existing accounts Group's growth strategy is across FY22 and FY23 were
to grow as planned, to proliferate sales of its "Land and Expand" opportunities
resulting from i-nexus software with existing with clear intent, whereby
dissatisfaction customers as a result of a smaller subset of a much
with the product the natural evolution of larger future deployment
and/or deployment the software use over time. have commenced using the
issues. product first. The business
Although the Group has a has seen the beneficial impact
number of examples where of this strategy in FY23
this has occurred in the with record levels of account
year, this is no guarantee growth both in terms of volume
that it will continue to and value. This team's e
happen at the increasing orts at growing our existing
rate predicted. Any failure accounts has been assisted
of this anticipated account by the recent product enhancements
proliferation occurring will aimed at improving user experience.
impact the Group's future The Board continue to monitor
success and adversely a ect the e cacy and outcomes of
its business, prospects and the Group's e orts in growing
financial position. existing accounts in FY24.
---------------------------------------- -----------------------------------------
Contractual obligations The Group's ability to attract Trend: Level risk
Failure to optimize new clients or retain existing The Group employs highly
our deployed product clients is largely dependent skilled personnel and has
or meet our contractual on its ability to provide business processes in place
obligations, client a reliable high-quality product to endeavour to ensure that
expectations or and services and to maintain any lapse is quickly identified
agreed service a good reputation. and addressed. In addition,
levels. Because many of the engagements significant issues and client
of the Group involve projects escalations are reported
that are critical to the to senior management and,
business, the failure or if appropriate, the Board.
inability of the Group to The Board reviews monthly
meet a client's expectations dashboards on project delivery
could have an adverse effect and client-related risks.
on the client's operations
and could result in damage
to the reputation of the
Group.
Certain contracts may provide
for a reduction in fees payable
by the client if service
levels fall below certain
specified thresholds, thus
potentially reducing or eliminating
the profit margin on any
particular contract.
If the Group fails to meet
its contractual obligations
or perform to client expectations,
it could be subject to legal
liability or damage to its
reputation and the client
may ultimately be entitled
to terminate the contract.
---------------------------------------- -----------------------------------------
Risk Description Mitigation
---------------------------------------- -----------------------------------------
Macroeconomic Adverse economic conditions Trend: Level risk
conditions worldwide can contribute The Group's preferred annual
Demand for the to slowdowns in the Information licence fee or subscription
Group's products Technology spending environment model generates recurring
may be adversely and may impact the Group's revenue which provides some
affected if economic business, resulting in reduced resilience against the full
and market conditions demand for its products as effects of market deterioration.
are unfavourable. a result of decreased spending Additionally, the Group operates
by clients and increased in multiple geographic regions
price competition for the across a number of business
Group's products. sectors. The present macro-economic
The Group's revenues, expenses environment is being monitored
and operating results could closely in conjunction with
vary significantly from period regular pipeline reviews.
to period as a result of
a variety of factors, some
of which are outside the
Directors' control.
---------------------------------------- -----------------------------------------
Dependence on During the year, a relatively Trend: Reducing risk
key Customers small group of key customers The majority of this small
Failure to retain provide approximately half group of customers are in
our larger key of the Group's MRR. The Group's contracts with a remaining
customers. financial performance is term of more than one year
therefore partly dependent and all bar one of them have
on the continued business been longstanding clients
relationship with these key for a period of at least
customers. five years.
Failure to manage the ongoing Whilst it was unfortunate
renewal of the contracts to part ways with a valued
with these key customers customer following the year-end,
on a commercially acceptable especially one with whom
basis could materially a we have enjoyed a strong
ect the Group's operations working relationship, the
and/or its financial condition. use of the highly customized
Following the year-end, the version of the software always
Company was informed that provided an increased level
one of these key customers, of inherent risk within their
the last remaining client account that was difficult
using the older, highly customized to mitigate.
version of the i-nexus software, As previously reported, the
does not intend to renew Group has a dedicated team
at its calendar year-end. of long-standing experienced
professionals acting as Success
Managers. They have well-
established processes and
reporting that allow them
to get early warning of any
issues.
---------------------------------------- -----------------------------------------
Risk Description Mitigation
---------------------------------------- -----------------------------------------
Security Breaches The Group is a Data Processor Trend: Level risk
and Cyber Attacks for its customers' confidential
Vulnerability of data. Although the Group The Group takes its Information
the Group's systems is ISO27001 accredited and Security very seriously as
to security breaches therefore employs security demonstrated by its ISO27001
or cyber attacks. and testing measures for accreditation. Employees
the software it deploys and are trained in this area
the broader security environment to ensure best practice measures
is well documented, these are followed for Information
measures may not protect Security.
it from all possible security
breaches that could harm The Group utilises the latest
the Group or its customers' security products, with sta
business. receiving regular security
awareness training and testing.
Given the reliance of the The security regime is regularly
business on its information reviewed, and the Group invests
technology systems, the software in state-of-the-art systems
is at risk from cyber attacks. to keep both its cloud platform
and o ce networks protected
Either of these security against cyber-attack.
events may result in significant
costs being incurred and In addition, our systems
other negative consequences are subjected to frequent
including reputational damage. and rigorous third-party
penetration testing to help
ensure our system integrity.
The Group has cyber security
insurance in place and the
Group endeavors to secure
limitations of liability
clauses in its customer contracts.
---------------------------------------- -----------------------------------------
Recruitment & As the Group grows it has Trend: Level risk
retention a dependence on the recruitment
Risk of failing and retention of highly skilled The Group works closely with
to attract and/or employees and an ongoing external parties to ensure
retain key personnel. reliance on a limited number competitive pay and benefits
of key personnel, including are being o ered to both
the Directors and senior attract and retain people.
management, who have significant
sector experience. We continue to invest in
people development and training
The job market is increasingly initiatives to provide opportunities
competitive in the cloud for career fulfillment and
technology sector, particularly progression. Wherever appropriate
following the pandemic and we seek to develop and promote
subsequent acceleration of from within the existing
cloud adoptions and digital sta pool.
transformation trends.
Executive and sta remuneration
The business requires specialist plans, incorporating long-term
technical skills that can incentives, have been implemented
be scarce. to mitigate this risk.
If members of the Group's
key senior team depart, the
Group may not be able to
find e ective replacements
in a timely manner, or at
all, and its business may
be disrupted .
---------------------------------------- -----------------------------------------
Risk Description Mitigation
---------------------------------------- -----------------------------------------
Dependence on Part of the Group's strategy Trend: Reducing risk
Channel Partners is to increasingly sell its
Failure to develop software through channel Significant efforts in relation
this additional partners. There are no guarantees to the evolution of this
route to market that su cient channel partners strategy have taken place
effectively. will be found to sell the across FY23 with good levels
Group's software at the rates of success.
planned.
The business has put in place
The Directors are confident a comprehensive process in
that engagements to date order to identify and ensure
by existing and prospective all channel partners are
channel partners provide the right strategic fit,
strong evidence of the opportunity with all agreements including
available. During the year, clauses to preserve against
the Group delivered multiple the under-delivery or non-delivery
new logos through its channel of customer requirements.
partners, with several further
agreements with strategic The Board will continue to
partners providing well progressed closely monitor progress
pipeline opportunities at through FY24 in this area.
year end.
Despite the significant progress
made in the year, unlocking
the full potential of a productive
channel partner programme
in the future could a ect
the Group's future success.
---------------------------------------- -----------------------------------------
Financial risk Credit risk Trend: Level risk
management Credit risk is the risk of
The principal financial financial loss to the Group The Group is principally
instruments used if a partner or customer exposed to credit risk from
by the Group, from fails to meet its contractual credit sales and/or bank
which financial obligations. default. It is Group policy
risk arises, are to assess the credit risk
trade receivables, of new customers and partners
cash at bank, trade before entering new contracts
and other payables. and it has a frequent and
proactive collections process.
Under the terms of our contracts
many services are charged
for in advance of delivery,
Liquidity risk thus mitigating the risk
Liquidity risk arises from further.
the Group's management of
working capital. It is the
risk that the Group will
encounter difficulty in meeting
its financial obligations Trend: Level risk
as they fall due.
On a monthly basis, the Directors
review the Group's trading
to date, the Group's full
year financial projections
as well as information regarding
cash balances, debtors, trading
and prospects. This allows
the Directors to form an
opinion as to the working
capital of the Group and
its likely future requirements
in order to plan accordingly.
---------------------------------------- -----------------------------------------
Risk Description Mitigation
---------------------------------------- -----------------------------------------
Currency risk Trend: Level risk
As a consequence of the Group's
exposure transacting in foreign All geographies addressed
currencies there are risks by the Group can be readily
associated with changes in serviced from the UK. The
foreign currency exchange Group applies treasury and
rates. foreign currency exposure
management policies to minimise
The Group is based in the both the cost of finance
United Kingdom and presents and our exposure to foreign
its consolidated financial currency exchange rate fluctuations.
statements in pounds Sterling.
Notwithstanding these hedging
The Group's current revenues arrangements, the Group
are generated primarily in does have exposure to translation
Sterling, US dollar and Euros. effects arising from movements
The Group also has some contractual in the relevant currency
obligations that are denominated exchange rates against sterling.
in US Dollars. Therefore, there can be no
assurance that its future
results or resources will
not be significantly affected
Inflation risk by fluctuations in exchange
Inflation risk has been very rates.
limited for most of the last
decade. However, as with
many technology businesses, Trend: Increasing risk
the Group is experiencing
increased inflationary pressures The inflationary environment
within its cost base. The continues to be closely monitored,
timing of a customer's invoice and commercial modelling
for their typically annually undertaken to assess the
in advance software fee can impact of inflationary increases.
also contribute to a delay
in inflationary pressures The Group is able to reduce
being passed to customers. the exposure in its client
contracts with the majority
allowing for inflationary
increases to be applied to
fees.
---------------------------------------- -----------------------------------------
10. Forward-looking Statements
This document contains forward-looking statements that involve
risks and uncertainties. All statements, other than those of
historical fact, contained in this document are forward-looking
statements. The Group's actual results could differ materially from
those anticipated in the forward-looking statements as a result of
many factors. Investors are urged to read this entire document
carefully before making an investment decision. The forward-looking
statements in this document are based on the relevant Directors'
beliefs and assumptions and information only as of the date of this
document, and the forward-looking events discussed in this document
might not occur. Therefore, Investors should not place any reliance
on any forward-looking statements. Except as required by law or
regulation, the Directors undertake no obligation to publicly
update any forward-looking statements, whether as a result of new
information, future earnings or otherwise.
It should be noted that the risk factors listed above are not
intended to be exhaustive and do not necessarily comprise all of
the risks to which the Group is or may be exposed or all those
associated with an investment in the Group. In particular, the
Group's performance is likely to be affected by changes in market
and/or economic conditions, political, judicial, and administrative
factors and in legal, accounting, regulatory and tax requirements
in the areas in which it operates and holds its major assets. There
may be additional risks and uncertainties that the Directors do not
currently consider to be material or of which they are currently
unaware, which may also have an adverse effect upon the Group.
11. Availability of Report and Accounts
The audited report and accounts for the year ended 30 September
2023 will be published and posted to shareholders in due course.
Following this a soft copy of the report and accounts will also be
available to download from the Group's website, www.i-nexus.com
.
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END
FR UKRRROBUUAUA
(END) Dow Jones Newswires
December 20, 2023 02:00 ET (07:00 GMT)
I-nexus Global (LSE:INX)
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