TIDMTRD
RNS Number : 8498B
Triad Group Plc
15 June 2021
Legal Entity Identifier (LEI) No. 213800MDNBFVEQEN1G84
Triad Group Plc ("Triad" or "the Company")
Audited results for the year ended 31 March 2021
(Company number: 2285049)
Triad Group Plc is pleased to announce its audited results for
the year ended 31 March 2021.
The Board is proposing a final dividend of 2.0p per share. The
dividend is subject to shareholder approval at the Annual General
Meeting ("AGM"), and details of the AGM will be announced at the
appropriate time.
For further information, please contact:
Triad Group Plc
James McDonald
Finance Director and Company Secretary
Tel: 01908 278450
Arden Partners plc
Richard Johnson
Tel: 020 7614 5900
Strategic report
Financial highlights
-- Revenue for the year ended 31 March 2021: GBP17.8m (2020: GBP19.4m)
-- Gross profit: GBP3.8m (2020: GBP2.9m)
-- Gross profit as a percentage of revenue: 21.4% (2020: 14.7%)
-- Profit before tax: GBP0.6m (2020 Loss: GBP0.6m)
-- Profit after tax: GBP0.7m (2020 Loss: GBP0.8m)
-- Cash reserves: GBP4.9m (2020: GBP3.8m)
Chairman's statement
Dr John Rigg
Financial headlines
For the year ended 31 March 2021 the Group reports revenue of
GBP17.8m (2020: GBP19.4m). The gross profit as a percentage of
revenue has increased to 21.4% (2020: 14.7%) and profit before tax
was GBP0.6m (2020 Loss: GBP0.6m). Profit after tax was GBP0.7m
(2020 Loss: GBP0.8m) reflecting the increase in the deferred tax
asset (see page 13). Cash reserves have increased to GBP4.9m (2020:
GBP3.8m). The effects of the Covid-19 pandemic upon both financial
results in 2021 and current trading are set out on pages 8 and
17.
Gross profit has increased by GBP0.9m during the year due to an
increase in higher margin consultancy engagements, particularly in
the public sector (see note 4). Revenue in the year has reduced by
a net GBP1.6m, mainly due to the reduction in private sector low
margin contractor led assignments. Gross profit as a percentage of
revenue has subsequently increased significantly by 6.7%,
reflecting the improvements in both the ratio of consultants to
contractors on consultancy engagements and the focus upon higher
margin core business. Cash has also increased significantly by
GBP1.1m due to the profit in the year and improvements in working
capital.
Overview of results
I am delighted to report a very strong set of results, delivered
during a year of unprecedented global challenges. The Group has
worked almost entirely on a remote basis during the period, and I
am also pleased to confirm that we experienced no significant
Covid-19 related illnesses during that time.
The Group's return to profit has been accompanied by some
significant progress on the strategic front. Reinforcing the
Group's reputation as a consultancy, trusted by clients to deliver
tangible results from their technology investments, we have
significantly increased the number of permanent fee-earning
consultants during the period. At the same time, the Group has been
steadily exiting from lower value and non-core activities in the
resourcing area. Combined, this has resulted in a much clearer
focus for the business going forwards and has also brought rewards
in the guise of much improved gross margin. Gross margin has
increased from 14.7% of revenue in the previous year to 21.4% in
the period. Indeed, gross profit as a percentage of revenue in the
second half of the year reached 25.5% versus 14.9% for the same
period of the previous year. Whilst revenue reduced in the year by
GBP1.6m, the growth of consulting assignments at an average margin
percentage of 33% and the reduction in contractor assignments and
non-core business at an average of 14%, has materially increased
gross profit.
The Group successfully utilised its in-house resourcing
capability to support the recruitment of a net additional 21
consultants during the period. Further, consultant utilisation
increased in the year from 49% to 63% and, with the growth in
headcount, consultant days billed increased year on year. Our new
recruits come from a number of disciplines, notably business
analysts, project managers, software engineers, user research
consultants and delivery managers.
It was very pleasing to note some substantial successes during
the year, including opportunities with Ministry of Justice,
Department for Business, Energy & Industrial Strategy, Ofgem,
Department for Transport, Renewable Energy Systems Ltd and
Westcoast Ltd. In all of these situations, Triad's reputation for
delivery excellence has been a key factor in client decisions to
place their trust in us.
Outlook
The Group is looking to build on the momentum created during the
previous year. Several of the recently won contracts are still
ramping up and significant further recruitment is planned to
service demand on these and the new work we hope to win.
The clear emphasis of the business going forward is on
consultant led engagements where we can add value to our clients by
minimising the risk of their technology investments. All of our
business development effort is organised to underpin this mission
and we are optimistic about securing more work across both the
public sector and the private sector.
The Group remains debt free except for lease liabilities arising
due to the application of IFRS 16 and enjoys strong reserves of
cash.
Dividend
Recognising the strength of this year's performance and the
Group's confidence in the near future, the Board proposes a
dividend of 2p per share (2020: nil per share).
Employees
On behalf of the Board of Directors, I would like to thank all
of the staff (including our 20+ new starters) for their commitment
and contribution during a very challenging year.
Dr John Rigg
Executive Chairman
14 June 2021
Managing Director's statement
Adrian Leer
Revenue in the year reduced by GBP1.6m to GBP17.8m (2020:
GBP19.4m) as the business focussed on higher margin consultancy
assignments. Gross profit increased significantly by 33% to GBP3.8m
(2020: GBP2.9m) reflecting the long-term strategy to improve both
the ratio of consultants to contractors on consultant led
engagements and the focus upon higher margin core business. Due to
the continued efforts in these areas, the Group made a return to
profit before tax in the year of GBP0.6m (2020: loss of GBP0.6m).
The Group also increased cash reserves by GBP1.1m to GBP4.9m (2020:
GBP3.8m) with an improved trade debt profile and no external
funding requirements.
Business commentary
It has been an invigorating and exciting year full of
significant challenges. The outbreak of Covid-19 and particularly
the ensuing restrictions have had a huge impact on our business,
and it is probably the most significant in many years. The response
of the organisation has been magnificent, with a seamless
conversion from largely office-based working to completely
home-based working achieved overnight.
The demands of supporting the remote, distributed workforce have
led to a better connected and more informed organisation, thanks to
the new communications channels established. Engendering a sense of
the Triad family has been crucial not only for the health and
wellbeing of existing staff but also for those 20+ new recruits who
joined in the last year. I am pleased to say that engagement levels
have never been better, and our teams have responded very
positively to the requirement to deliver outstanding digital
services on a remote basis.
We are on a mission to become one of the UK's favourite
technology consultancies. During the year, this mission has
necessitated a determined move away from pure-play recruitment and
resourcing to allow us to concentrate fully on our technology
consulting activities. We are already seeing the benefits of this
approach coming through in our gross margin and profit metrics. Our
in-house resourcing function is focused on driving our permanent
consultant headcount, augmented only where necessary with associate
resources. Having control of the human resources supply chain from
end to end gives us an important competitive advantage as well as
speed and agility that organisations reliant on third parties do
not enjoy.
Successes during the year included winning places on a number of
frameworks including two at Ofgem for a range of delivery
management services, the pan-Governmental Artificial Intelligence
framework, and the latest editions of Digital Outcomes &
Specialists (DOS 5) and G-Cloud 12. Our G-Cloud offering has been
expanded to offer a wider range of 17 services and has already
generated success at organisations like Department for Business,
Energy & Industrial Strategy for whom we have delivered a
number of project-based services.
We were extremely pleased to emerge as winners of the Project
Management Delivery Partner lot for the Ministry of Justice (MoJ)
Digital & Technology team's invitation to tender, and work
started on this contract in the new financial year. We expect to be
involved in the significant programmes of work in play across the
MoJ estate over the next two years. Elsewhere at MoJ, the
production services contract was extended twice meaning that it ran
throughout the financial year. A procurement exercise was run
during the period to secure a supplier who would take that service
into a "business as usual" state at the completion of the
programme. Regrettably, we learned at the beginning of the new
financial year that MoJ had selected another supplier for this
role.
Two significant developments at Department for Transport (DfT)
were underpinned by Triad expertise. Both within the RTFO
(Renewable Transport Fuel Obligation) section of DfT, we helped the
team to successfully launch the new GOS (Greenhouse Gas Operating
System) system which supports the regulation of greenhouse gases.
We helped steer this through Government assessment to move it from
Beta status to a fully live service. We were also selected to
perform a discovery assessment for the older ROS (RTFO Operating
System) system, originally written by Triad many years ago, and
subsequently won the contract to progress from discovery phase to
alpha phase and hopefully through to live completion.
After a Covid-related delay, work started on a significant
project with Westcoast Ltd (one of the UK's leading technology
distributors) to modernise their legacy system whilst allowing
business to operate uninterrupted. Eventually starting in February
2021, we expect work to continue well into the next financial
year.
Work also started with Renewable Energy Systems (RES) Ltd to
provide a contemporary project management system, based on the
Japanese Obeya principles, that supports their delivery of
renewable energy programmes. This project involves use of Workpoint
software to complement Microsoft 365, and we see great potential
through our partnership with Workpoint to deliver similar projects
in the future.
We have been engaged by Marine Stewardship Council (MSC) to help
with the development and delivery of their assessment platform.
Across DfT, Ofgem, RES and MSC we are developing a significant
presence within organisations and sectors that drive sustainability
of resources, and we see this as an increasingly significant source
of opportunity.
We did not experience any significant impact from the roll-out
of the Off Payroll (IR35) legislation thanks to our careful
assessment and thorough planning process. As we alter the mix of
permanent staff and contractors, the exposure to IR35 reduces.
Where possible, we are offering clients - particularly those in
Central Government - a fully "on payroll" team, thereby eliminating
for the client any risk of non-compliance.
I am pleased to report that during the year the Group became a
Disability Confident employer and a signatory to the Tech Talent
Charter. Both developments underscore our commitment to the ongoing
development of a diverse workforce that feels fully included in the
work of the Group. I am also very pleased to note our support of
the charity Action for Children last year through their "Boycott
your bed" campaign. This support continues into the new financial
year.
The new financial year sees the Group operating with more
permanent fee-earning consultants than at any time in the last 10
years and with a renewed focus on being the technology consultancy
of choice. The Group has expanded its business development capacity
to include a focus on areas such as financial services and
technologies such as blockchain, in addition to an increased focus
on the public sector.
I would also like to thank the staff for their incredible
support and contributions during the year.
Adrian Leer
Managing Director
14 June 2021
Organisation overview
Triad Group Plc is engaged in the provision of information
technology consultants to deliver technology-enabled business
change to organisations in the public sector, private sector, and
not-for-profit sector.
Business model
The Group provides a range of consultancy services to clients to
help them deliver a tangible return on their investment in
technology. Our primary engagement model is to deliver these
services via our permanent consultants, sometimes augmented by
carefully selected associates. We rely upon our in-house resourcing
team to provide both permanent and associate staff, ensuring that
we maintain tight control of our supply chain and quality at all
times.
Our services span the delivery life cycle from high level
consulting, early strategy, programme management, project delivery,
software delivery, and support activities.
The Group operates mainly in the United Kingdom. Our workforce
is increasingly distributed across the UK too, and we have
permanent office space in Godalming (registered office) and Milton
Keynes.
Principal objectives
The principal objectives of the Group are to;
-- Provide clients with industry leading service in our core skills.
-- Achieve sustainable profitable growth across the business and
increase long term shareholder value.
The key elements of our strategy to achieve our objectives
are;
To provide a range of specialist services relevant to our
clients' business
-- Our services include consultancy, change leadership, project
delivery, software development and business insights. Further
capacity and expertise is provided via our associate network.
-- We continue to adopt a "business first, technology second"
approach to solving our clients' problems. A cornerstone of our
service offer is our consultancy model, offering advice and
guidance to clients in terms of technology investments.
To develop long term client relationships across a broad client
base
-- Enduring client relationships fuel profitability. A hallmark
of our recent trading has been the frequency of repeat business,
which itself has been a function of outstanding delivery and
proactive business development within existing accounts.
-- Our consistent track record in this regard is our major asset
when developing propositions for new clients, along with the use of
case studies and references.
-- We have structured our service offering to enable clients to
engage early, thus enabling the building of trust and confidence
from the outset.
To work with partners
-- Our strategy includes working with carefully chosen partners
operating under their client frameworks in addition to the
frameworks on which Triad is listed. This will expose more
opportunities whilst reducing the cost of sale.
To leverage group capability and efficiency to increase
profitability
-- We continue to develop synergies across the Group's
activities both externally and internally, driving better outcomes
for clients whilst improving efficiency and effectiveness. The
management team sets objectives to ensure that these synergies are
exploited.
-- We enable our clients to benefit from access to a full range
of IT services, delivered through a single, easy to access, point
of sale.
-- We will continue to provide the highest quality of service to
our customers through our teams of skilled consultants and market
experts.
Principal risks and uncertainties
The Group's business involves risks and uncertainties, which the
Board systematically manages through its planning and governance
processes.
The Board has conducted a robust assessment of the principal
risks facing the Group, examining the Group's operating
environment, scanning for potential risks to the health and
wellbeing of the organisation. The Directors factor into the
business plan the likelihood and magnitude of risk in determining
the achievability of the operational objectives. Where feasible,
preventive and mitigating actions are developed for all principal
risks.
Senior management review the risk register and track the status
of these risk factors on an on-going basis, identifying any
emerging risks as they appear. Regular meetings are held between
the Executive Chairman and the Managing Director to ensure risks
are identified and communicated.
The outputs of this management review form part of the Board's
governance process, reviewed at regular Board meetings. When
emerging risks arise these are reviewed by senior management on an
immediate basis and communicated to the Board on a timely
basis.
The principal risks identified are:
Covid-19
The business was proven to be agile and robust through the
pandemic. The main risks that remain and potentially could occur,
are a reduction in new business pipeline opportunities, payment
delays and the recovery of debtor balances. These risks were met
head-on during 2021 and the same mitigating actions taken during
the year are being applied - the focus on servicing clients
remotely and effectively, a very strong focus on short-term
forecasting, and improving cash collection. In a competitive
marketplace driven by the pandemic, employee engagement is also key
to mitigating the risks presented by Covid-19. The continuous
review of flexible working patterns, remuneration and the mix of
on-site and remote working is critical.
IT services market
The demand for IT services is affected by UK market conditions.
This includes, for example, fluctuations in political and economic
uncertainty, and the level of public sector spending. Negative
impacts can reduce revenue growth and maintenance due to the loss
of key clients, reduction in sales pipelines and reduction in
current services. The creation of new services, acquisition of new
clients and the development of new commercial vehicles is important
in protecting the Group from fluctuations in market conditions.
This risk is more likely in the current Covid-19 pandemic but
investment by Government in public sector spending continues, and
the ability for new business acquisition has been enhanced with a
greater focus in this area in-line with strategy.
Brexit
The political and economic uncertainty generated by Brexit still
has the potential to negatively affect the Group's marketplace due
to an impact on Government spending plans and the cancellation or
delay of IT projects. The strong relationships the Group enjoys
with a large range of public sector clients within the UK mitigated
this risk during the year. During and following the Brexit
transition, the Group continued to build strong trading
partnerships with EU based companies. Due to the current lack of
restrictions of trading digital services within the EU, the
Directors do not foresee this changing in the future.
Revenue visibility
The pipeline of contracted orders for time and materials
consultancy work can be relatively short and this reduces
visibility on long-term revenue generation. The Board carefully
reviews forecasts to assess the level of risk arising from business
that is forecast to be won.
Availability of staff
The ability to recruit and retain the best quality staff, and
obtain access to appropriately skilled resources are key to
ensuring the ability to deliver profitable growth and deliver IT
services to our clients, in what continues to be a rapidly
competitive market for talent. The Group continues to recruit
quality individuals, and ensures a resilient network of associate
resources is scaled appropriately to meet the demands of the
business. To mitigate this risk, the Group reviews remuneration and
benefits on an annual basis and adjusts these accordingly within
market rates. In addition, the Group operates a Company-wide staff
development programme to ensure continuous personal growth and
consistent staff engagement. The on-boarding of new consultants is
managed by a highly experienced and dedicated team of resourcing
professionals, and this provides quality assurance processes to
accelerate hiring and reduce attrition.
Competition
The Group operates in a highly competitive environment. The
markets in which the Group operates are continually monitored to
respond effectively to emerging opportunities and threats. The
Group ensures a high quality of service to long-tenured clients,
which includes continuous review of delivery against project plan
and obtaining client feedback. This promotes longevity of client
relationships and to a high degree mitigates the risk of
competition.
There are or may be other risks and uncertainties faced by the
Group that the Directors currently deem immaterial, or of which
they are unaware, that may have a material adverse impact on the
Group.
The risk appetite of the Group is considered in light of the
principal risks and their impact on the ability to meet its
strategic objectives. The Board regularly reviews the risk appetite
which is set to balance opportunities for business development and
growth in areas of potentially higher risk, whilst maintaining
reputation, regulatory compliance, and high levels of customer
satisfaction.
Section 172 statement
Section 172 of the Companies Act 2006 requires Directors to take
into consideration the interests of key stakeholders in the Group
in their decision making. Engagement with the Group's stakeholders
is essential to successfully managing the business and the
effectiveness of this engagement helps to understand the impact of
key decisions on stakeholders.
The Board has identified the key stakeholders as shareholders,
clients, partners, employees and suppliers.
-- Shareholders: Shareholders play a significant part in
deciding the direction of the business. Dialogue is maintained with
shareholders and their advisors and issues of significance are
communicated to shareholders as necessary. In addition, a full
shareholder briefing is presented at the Group's annual general
meeting of shareholders. The Board took the decision not to make
the payment of an interim dividend this year due to the continued
threat of the impact of Covid-19 and the potential effects upon
future cash flow. This decision was made to protect the interests
of the shareholders' future earnings. The Board has proposed a
final dividend of 2p per share for the year ended 31 March 2021 due
to the recent trading performance and expected cash flows (2020:
nil per share).
-- Clients: Delivering a quality service is the key to the
Group's future success and effective and successful delivery of
services to our clients is the key focus of the Group. To increase
effectiveness, a constant review of utilisation rates and delivery
structures has been undertaken to enhance the efficiency of the
Group's service to clients. Key account delivery and management
tools have also been reviewed and enhanced to promote efficiencies.
The Group continues with the strategy of building permanent
consultants and where appropriate replacing contractors with
consultants on projects to improve and broaden the skill sets and
enhance delivery to clients.
-- Partners: Effective working relationships that enable future
growth are important to the Group. The Group continue to cultivate
strong relationships with our business partners, with regular
dialogue and updates to ensure that delivery to our shared clients
is as effective as possible. During 2021, the Group continued to
explore delivery methods with partners that enable the acquisition
of new business, including the successful partnership with
Workpoint to deliver the RES project.
-- Employees: Motivated and satisfied employees are the
lifeblood of our business and our people are key to our success.
The Group strives to achieve the highest standards in its dealings
with all employees. During 2021, the Group has increased its level
of communication with employees with regular Group meetings chaired
by the Managing Director. The Group continued to provide
appropriate comprehensive induction and ongoing training tailored
to individual needs. Extensive employee benefits are provided which
are continually reviewed to enhance the wellbeing of all employees.
Remuneration packages have been reviewed on an annual basis to
ensure retention of employees, as are flexible working environments
in light of the Covid-19 pandemic.
-- Suppliers: Effective engagement with suppliers enables the
Group to deliver a quality service to our clients. The Group
maintains appropriate arms-length trading relationships with
quality suppliers and is fully committed to fairness in its dealing
with them, including embracing the principle of paying suppliers
within agreed credit terms during the course of normal business.
The Group formed closer relationships with suppliers during the
Covid-19 pandemic to ensure a continuance of a quality service.
The Directors continue to ensure there is full regard to the
long-term interests of both the Group and its key stakeholders
including the impact of its activities on the community, the
environment and the Group's reputation. In doing this, the
Directors continue to act fairly and in good faith taking into
account what is most likely to promote the long-term success of the
Group.
-- Relations with key stakeholders such as shareholders,
employees, and suppliers are maintained by regular, open and honest
communication in both verbal and written form.
-- The Directors are fully aware of their responsibilities to
promote the success of the Group in accordance with section 172 of
the Companies Act 2006.
-- The Directors continuously take into account the interests of
its principal stakeholders and how they are engaged. This is
achieved through information provided by management and also by
ongoing direct engagement with the stakeholders themselves.
-- The Board has ensured an appropriate business structure is in
place to ensure open and effective engagement with the workforce
via the Executive Directors and the senior management team.
-- The Board and the senior team continues to work responsibly
with all relevant stakeholders and has appropriate anti-corruption
and anti-bribery, equal opportunities and whistleblowing procedures
and policies in place.
-- As required, non-executive Directors, professional advisors
and the Company Secretary provide support to the Board to help
ensure that sufficient consideration is given to stakeholder
issues.
Viability statement
In accordance with the Listing Rules the Directors have assessed
the Company's viability over the next five financial years. Given
the Group's business model and commercial and financial exposures
the Directors consider that five years is an appropriate period for
the assessment. The maximum period of visibility of commercial
arrangements with clients is currently two years, however in
considering the assessment period assumptions have been made beyond
this immediate timeframe. As part of the long-term viability
assessment the Directors have considered the principal risks.
This assessment of viability has been made with reference to the
Group's current financial and operational positions. Revenue
projections, cash flows, availability of required finance,
commercial opportunities and threats, and the Group's experience in
managing adverse conditions in the past have been reviewed. The
Group was founded in 1988 and has survived several recessions.
Despite the potentially negative and severe effect of the
Covid-19 pandemic in early 2020, the Group was able to successfully
navigate the issues presented by the disruptions and for the year
ended 31 March 2021 significantly improved all key ratios and
profitability and built cash reserves without the requirement for
any external funding or take advantage of Government support
schemes. This success was due to the agility of the business model,
client delivery techniques and the quality of our employees and
hiring processes.
The effects of IR35 have been minimal as the Group has continued
to reduce contracting fee earners in favour of higher margin
permanent employees and the risk in this area is not considered to
be material.
As of the date of these accounts, Brexit has had no impact upon
the current client base and there have been no direct impacts felt
by the business. In fact, greater dialogue has commenced with
potential EU and European trading partners and this is expected to
continue.
Despite the recent successful trading position, risks still
exist with respect to the Covid-19 pandemic and the threat from
competition. The Directors have therefore approached the budget and
forecasting cycle for the 2022 financial year with a conservative
outlook.
The viability assessment considered the principal risks as set
out on page 6, and in particular, the risk presented to the
business of Covid-19. The Board modelled a number of realistic
scenarios based upon conservative budgets and forecasts. This
included modelling the most severe scenario possible which assumed
that the effects of the pandemic would worsen with all current
client contracts discontinued at expiry, with no extension or
replacement and with no cost mitigation.
In all scenarios, it was found that there was sufficient
headroom in cash flow to continue operating within current
resources for the next 12 months, and without the requirement to
utilise the available financing facility or obtain further external
funding. The Group was therefore found to have sufficient financial
strength to withstand further disruption due to the pandemic.
There is less visibility over the medium term outlook and the
wider economic impact of Covid-19, but the Board believes that the
Group remains well placed to navigate effectively a prolonged
period of uncertainty and to mitigate the risks presented by
it.
Based upon the results of this analysis, the Board has a
reasonable expectation that the Group will be able to continue in
operation and be able to meet its liabilities over the next 5-year
viability period. In reaching this assessment, the Board has taken
into account future trading, continued negative effects of
Covid-19, access to external funding and cash flow
expectations.
Performance assessment, financial review and outlook
Financial and non-financial key performance indicators (KPIs)
used by the Board to monitor progress are revenue, profit from
operations, EBITDA, gross margin and headcount. Financial KPIs are
discussed in more detail in the Financial review below. The outlook
for the Group is discussed in the Chairman's statement on page
1.
The KPIs are as follows;
2021 2020
========================================================================== ============== ===============
Revenue GBP17,815,000 GBP19,354,000
========================================================================== ============== ===============
Profit/(Loss) from operations GBP686,000 GBP(568,000)
========================================================================== ============== ===============
Earnings before interest, tax, depreciation and amortisation (EBITDA)(1)
GBP944,000 GBP(299,000)
========================================================================== ============== ===============
Gross margin 21.4% 14.7%
========================================================================== ============== ===============
Average headcount 68 62
(1) EBITDA - Profit from operations of GBP686,000 adding back
the depreciation and amortisation charge in the year of
GBP258,000
Corporate social responsibility
Our employees
The Group is committed to equal opportunities and operates
employment policies which are designed to attract, retain and
motivate high quality staff, regardless of gender, age, race,
religion or disability. The Group has a policy of supporting staff
in long term career development.
Culture and engagement
The Group recognises the importance of having effective
communication and consultation with, and of providing leadership
to, all its employees. The Group promotes the involvement of its
employees in understanding the aims and performance of the
business. An assessment of culture, engagement and future
contribution made to the business by employees is made at each
Board meeting and is considered a key aspect of the meetings. The
Board has been satisfied with policies and practices and they are
aligned with the Group's purpose and strategy and no corrective
action is required.
The Group strives to recruit and retain high quality employees
at the cutting edge of technology. A key engagement factor is the
continuous professional development of all staff and the Group is
committed to providing increased training and development
opportunities, to enhance both the expertise and engagement of our
workforce, and improving the quality of our services to our
clients.
Diversity and inclusion
Diversity and inclusion is a key component of working life in
the Group. Employees are encouraged to take an active role in
decision making and driving the business forward, including several
platforms within the business to share good practice, successes and
potential improvements. The appointment of Charlotte Rigg as
Director in 2020 increased the female proportion within the senior
management to 22% which is representative of the Group as a whole.
We continue to include diversity within our recruitment policies
and make improvements as appropriate.
The following table shows the average number of persons employed
during the year, by gender, who were directors, senior managers or
employees of the Company.
Male Female Total
================= ===== ======= ======
Directors 6 1 7
================= ===== ======= ======
Senior managers 1 1 2
================= ===== ======= ======
Employees 46 13 59
================= ===== ======= ======
Total 53 15 68
Environment and greenhouse gas reporting
The Group is committed to ensuring that the actual and potential
environmental impact of its activities is understood and managed
effectively. The Group has used both mileage reports and meter
readings to prepare the data.
The annual quantity of Greenhouse Gas (GHG) emissions for the
period 1 April 2020 to 31 March 2021 in tonnes of carbon dioxide
equivalents (tCO(2) e) for the Group is shown in the table
below:
Emissions 2021 2020
tCO(2) e(1) tCO(2) e(1)
Emission source:
============================================ ============ ============
Combustion of fuel - 17
============================================ ============ ============
Electricity and heat purchased for own use 29 55
============================================ ============ ============
Total 29 72
============================================ ============ ============
tCO(2) e per GBP1m revenue 1.6 3.7
============================================ ============ ============
FTE 68 62
============================================ ============ ============
Intensity ratio (tCO(2) e per FTE) 0.4 1.2
(1) The calculation of tCO(2) e for each source has been
prepared in accordance with DEFRA guidelines for GHG reporting.
The annual energy consumed as a result of the purchase of
electricity and heat for the period 1 April 2020 to 31 March 2021
in kWh is shown in the table below:
2021 2020
=============================== ======== ========
Energy consumed (kWh) 122,763 213,357
=============================== ======== ========
kWh per GBP1m revenue 6,897 10,998
=============================== ======== ========
FTE 68 62
=============================== ======== ========
Intensity ratio (kWh per FTE) 1,805 3,441
The emissions are generated solely by activities in the UK.
Emissions generated by electricity consumption is 99% (2020:
76%).
Whilst the Group has not set any specific targets in relation
for emissions due to the relatively small size of the impact, the
Group monitors the emissions on an annual basis. The impact of the
Covid-19 pandemic and the change to remote working has dramatically
reduced energy consumption and emissions. With the expectations of
further remote and flexible working patterns, these metrics are
expected to be low in future years. The Directors believe that the
Group's impact to the environment is negligible given the low
numbers of employees.
The Group has not been subject to any environmental fines during
the year ended 31 March 2021 (2020: nil).
Social, community and human rights issues
Triad takes its responsibilities to the community and society as
a whole very seriously. With people at the core of our values, in
October 2020 Triad is proud to have achieved its first Disability
Confident badge - Disability Confident 1(st) level ("Committed").
In 2022 we plan to work up to the highest level (level 3), and we
are using this to guide and improve our practices, particularly
with regard to equality of opportunity for disabled staff and
through our recruitment processes.
We have been looking for a way to best make an impact on the
employment gaps that exist for BAME, female and disabled people
working in UK technology and in March 2021 we also became members
of Tech Talent Charter. Through this we have publicly declared our
commitment to workplace equality, have access to a community of
best practice and share data on diversity within our own Group. We
believe we are working together to make a real difference to
inclusion and diversity across the technology sector.
The Group actively supports charities. Managing Director, Adrian
Leer is a board member of Action for Children and our staff
participate in regular fund-raising activities for the charity,
promoted and supported by Triad.
There are no human rights issues that impact upon
operations.
Financial review
Group performance
Group revenue has decreased to GBP17.8m (2020: GBP19.4m). This
is predominantly due to the reduction in private sector low margin
contractor led assignments, offset with an increase in higher gross
margin consulting business. This is in-line with the continued
strategy of servicing consultancy assignments with permanent fee
earning consultants, and has resulted in an increase in gross
profit to GBP3.8m (2020: GBP2.9m) and an increase in gross margin
as a percentage of revenue to 21.4% (2020: 14.7%). This strategy
continues into the 2022 financial year and will provide a sound
basis for future profitable growth.
The Group reports a profit from operations before taxation of
GBP0.6m (2020: loss GBP0.6m). The positive variance in
profitability before tax of GBP1.2m was due to the increase in
gross profit (GBP0.9m) and the reduction in overheads of (GBP0.3m).
The Group reports a profit after tax of GBP0.7m (2020: loss
GBP0.8m).
The balance sheet remains strong with no external borrowings,
with the exception of the lease liabilities arising due to the
application of IFRS 16, and the Group enjoys strong reserves of
cash at GBP4.9m (2020: GBP3.8m) and no bad debts (2020: nil).
Overheads
Administrative expenses for the year are GBP3.1m (2020:
GBP3.4m). Due to the financial risks derived from both the Covid-19
pandemic and Brexit (see page 6), the Group reduced expense budgets
across all cost lines without damaging the ability to grow higher
margin business. As such, the Group was able to significantly grow
profitability and now manages a sustainable cost base to support
future profit growth.
Staff costs
Total staff costs have increased to GBP5.7m (2020: GBP5.2m)
(note 7). The total average headcount for the year has increased to
68 (2020:62) and due to the strategy of building permanent
fee-earning consultants during the year, the number of consultants
at the year-end has increased by a net 21 to 58 (2020: 37).
Consultant numbers continue to grow into the new financial year and
is a key component of the Group's strategy to grow both margin and
profitability. Non-consultant staff numbers at the close of the
year have remained static as the ratio of fee earners improves to
5:1 (2020: average 4:1).
Cash
Cash and cash equivalents at 31 March 2021 increased to GBP4.9m
(2020: GBP3.8m). There was a net cash inflow from operating
activities of GBP1.3m (2020: GBP0.06m) which reflects the return to
profitability and the improvements in working capital. During the
year, the Group did not take advantage of the Government deferral
schemes. Capital expenditure in the year was managed very carefully
and fixed asset additions related mainly to the purchase of
technology for new permanent members of staff, which supported the
growth in gross profit. The net cash outflow from financing
activities was GBP0.3m (2020: outflow of GBP0.8m) and the net cash
inflow from investing activities was GBP0.1m (2020: outflow
GBP0.02m). Due to the need to augment cash reserves due to the
pandemic, no dividends were paid in the year (2020: GBP0.5m).
However, with a return to profitability and the strong expectation
of future positive cash flows, the Board are proposing a final
dividend of 2p per share (2020: nil per share), see page 57.
Non-current assets
Non-current assets excluding taxation were reduced by GBP0.36m
(2020: increase GBP1.0m) which predominantly related to the net
reduction in the right of use asset of GBP0.1m (2020: increase
GBP0.6m) and the finance lease receivable of GBP0.2m (2020:
GBP0.3m). A further reduction of GBP0.05m related to purchased
assets (2020: increase GBP0.1m).
Taxation
The Group adopts a low risk approach to its tax affairs. The
Group does not employ any complex tax structures or engage in any
aggressive tax planning or tax avoidance schemes. The deferred tax
asset increased to GBP0.07m (2020: GBP0.03m) in the year, mainly
due to the expectation that tax losses brought forward will be
offset against future profits (see note 8).
Net assets
The net asset position of the Group at 31 March 2021 was GBP5.3m
(2020: GBP4.6m). The movements during the year are detailed on page
45.
Share options
A total of 48,600 options were exercised by directors and staff
during the year (2020: 11,000). No options were granted during the
year (2020: nil). An expense of GBP37,000 (2020: GBP28,000) has
been recognised relating to options granted in March 2018.
By order of the Board
James McDonald
Finance Director
14 June 2021
Directors' report
The Directors present their Annual report on the activities of
the Group, together with the financial statements for the year
ended 31 March 2021. The Board confirms that these, taken as a
whole, are fair, balanced and understandable, and that they provide
the information necessary for shareholders to assess the Group's
and Company's position and performance, business model and
strategy, and that the narrative sections of the report are
consistent with the financial statements and accurately reflect the
Group's performance and financial position.
The Strategic report provides information relating to the
Group's activities, its business and strategy and the principal
risks and uncertainties faced by the business, including analysis
using financial and other KPIs where necessary. These sections,
together with the Directors' remuneration and Corporate Governance
reports, provide an overview of the Group, including environmental
and employee matters and give an indication of future developments
in the Group's business, so providing a balanced assessment of the
Group's position and prospects, in accordance with the latest
narrative reporting requirements. The Group's subsidiary
undertakings are disclosed in the notes to the financial
statements.
Corporate Governance disclosures required within the Directors'
report have been included within our Corporate Governance report
beginning on page 20 and form part of this report.
Share capital and substantial shareholdings
Share capital
As at 31 March 2021, the Company's issued share capital
comprised a single class of shares referred to as ordinary shares.
Details of the ordinary share capital can be found in note 19 to
these financial statements.
Voting rights
The Group's articles provide that on a show of hands at a
general meeting of the Company every member who (being an
individual) is present in person and entitled to vote shall have
one vote and on a poll, every member who is present in person or by
proxy shall have one vote for every share held. The notice of the
Annual General Meeting specifies deadlines for exercising voting
rights and appointing a proxy or proxies to vote in relation to
resolutions to be passed at the Annual General Meeting.
Transfer of shares
There are no restrictions on the transfer of ordinary shares in
the Company other than as contained in the Articles:
-- The Board may, in its absolute discretion, and without giving
any reason for its decision, refuse to register any transfer of a
share which is not fully paid up (but not so as to prevent dealing
in listed shares from taking place) and on which the Company has a
lien. The Board may also refuse to register any transfer unless it
is in respect of only one class of shares, in favour of no more
than four transferees, lodged at the Registered office, or such
other place as the Board may decide, for registration, accompanied
by a certificate for the shares to be transferred (except where the
shares are registered in the name of a market nominee and no
certificate has been issued for them) and such other evidence as
the Board may reasonably require to prove the title of the
intending transferor or his right to transfer the shares.
Certain restrictions may from time to time be imposed by laws
and regulations, for example:
-- Insider trading laws; and
-- Whereby certain employees of the Group require the approval
of the Company to deal in the Company's ordinary shares.
Appointment and replacement of directors
The Board may appoint Directors. Any Directors so appointed
shall retire from office at the next Annual General Meeting of the
Company, but shall then be eligible for re-appointment.
The current Articles require that at the Annual General Meeting
one third of the Directors shall retire from office but shall be
eligible for re-appointment. The Directors to retire by rotation at
each Annual General Meeting shall include any Director who wishes
to retire and not offer themselves for re-election and otherwise
shall be the Directors who, at the date of the meeting, have been
longest in office since their last appointment or
re-appointment.
A Director may be removed from office by the service of a notice
to that effect signed by at least three quarters of all the other
Directors.
Amendment of the Company's Articles of Association
The Company's Articles may only be amended by a special
resolution passed at a general meeting of shareholders.
Substantial shareholdings
As at 31 March 2021, since the date of the last annual report in
June 2020, the Company had received the following notifications
relating to interests in the Company's issued share capital, as
required under the Disclosure and Transparency Rules (DTR 5) when a
notifiable threshold is crossed:
Percentage of issued share capital
T Charlton 5.51%
As at 14 June 2021, no notifications have been received since
the year-end.
Dividends
There was no interim dividend paid during the year (2020: 1p).
The Directors propose a final dividend of 2p per share (2020: nil
per share).
Financial instruments
The Board reviews and agrees policies for managing financial
risk. These policies, together with an analysis of the Group's
exposure to financial risks are summarised in note 3 of these
financial statements.
Research and development activity
Research and development activities are undertaken with the
prospect of gaining new technical knowledge and understanding, and
developing new software. During the year, dedicated small teams
worked on artificial intelligence capabilities within software
applications, project management tool capabilities, and developed
bespoke employee development portals to enhance the investment in
our people.
Directors' interests in contracts
Directors' interests in contracts are shown in note 21 to the
accounts.
Directors' insurance and indemnities
The Company maintains Directors' and Officers' liability
insurance which gives appropriate cover for any legal action
brought against its Directors and Officers. The Directors also have
the benefit of the indemnity provisions contained in the Company's
Articles of Association. These provisions, which are qualifying
third-party indemnity provisions as defined by Section 236 of the
Companies Act 2006, were in force throughout the year and are
currently in force.
Disclosure of information to auditor
All of the current Directors have taken all the steps that they
ought to have taken to make themselves aware of any information
needed by the Company's auditor for the purposes of their audit and
to establish that the auditor is aware of that information. The
Directors are not aware of any relevant audit information of which
the auditor is unaware.
Forward-looking statements
The Strategic report contains forward-looking statements. Due to
the inherent uncertainties, including both economic and business
risk factors, underlying such forward-looking information, the
actual results of operations, financial position and liquidity may
differ materially from those expressed or implied by these
forward-looking statements.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Strategic report. The financial position of the
Group, its cash flows, liquidity position and borrowing facilities
are described in the Strategic report. In addition, note 3 to the
financial statements includes the Group's objectives, policies and
processes for managing its capital, its financial risk management
objectives, details of its financial instruments and hedging
activities, and its exposure to credit risk and liquidity risk. The
Group meets its day to day working capital requirements through
cash reserves and an invoice finance facility (which is currently
unutilised).
The Group operates an efficient low-cost and historically cash
generative model. The client base generally consists of large
blue-chip entities, particularly within the public sector, enjoying
long-term and productive client relationships. As such, debt
recovery has been reliable and predictable with a low exposure to
bad debts. For the year ended 31 March 2021, the Group has not
utilised any external debt, lending facilities or accessed any
Government support schemes (2020: nil). Due to the ability to
operate services remotely, the Group has remained in full operation
throughout recent lockdown periods and will continue to do so as
external factors dictate. The success of the business during the
year ended 31 March 2021 illustrates the operational flexibility of
both the Group and its current and future client base.
The going concern assessment considered a number of realistic
scenarios including the impact of the reduction in services of key
clients upon future cash flows. In addition, in the most severe
scenario possible, a reverse stress test was modelled which
included the effects of any future Covid-19 pandemic issues, with
all current client contracts discontinued at expiry with no
extension or replacement and with no cost mitigation. Even in the
most extreme scenario, the Group has enough liquidity and long-term
contracts to support the business through the going concern period.
The Directors have concluded from these assessments that the Group
would have sufficient headroom in cash balances to continue in
operation.
Further information in relation to the Directors' consideration
of the going concern position of the Group is contained in the
Viability statement on page 8.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and at least
twelve months from the date of approval of the financial
statements. Accordingly, they continue to adopt the going concern
basis in preparing the annual report and accounts.
Auditor
BDO LLP have indicated their willingness to continue in office.
Accordingly, a resolution to reappoint BDO LLP as auditors of the
Company will be proposed at the next Annual General Meeting.
Environment and greenhouse gas reporting
Carbon dioxide emissions data is contained in the Corporate
social responsibility section of the Strategic report.
Statement of Directors' responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006 and applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements and have
elected to prepare the Company financial statements in accordance
with the requirements of the Companies Act 2006. Under company law
the Directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss for the
Group and Company for that period. The directors are also required
to prepare financial statements in accordance with international
financial reporting standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006, subject to any material
departures disclosed and explained in the financial statements;
-- state whether they have been prepared in accordance with
international financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union,
subject to any material departures disclosed and explained in the
financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business;
-- prepare a Directors' report, Strategic report and Directors'
remuneration report which comply with the requirements of the
Companies Act 2006.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006 and, as
regards the Group financial statements, Article 4 of the IAS
Regulation.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities. The Directors are
responsible for ensuring that the annual report and accounts, taken
as a whole, are fair, balanced, and understandable and provide the
information necessary for shareholders to assess the Group's
position and performance, business model and strategy.
Website publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company's website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Company's website is the responsibility of the Directors.
The Directors' responsibility also extends to the ongoing integrity
of the financial statements contained therein.
Directors' responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
-- The financial statements have been prepared in accordance
with the applicable set of accounting standards and Article 4 of
the IAS Regulation and give a true and fair view of the assets,
liabilities, financial position and profit and loss of the
group.
-- The annual report includes a fair review of the development
and performance of the business and the financial position of the
Group and the Parent Company, together with the description of the
principal risks and uncertainties that they face.
By order of the Board
James McDonald
Company Secretary
14 June 2021
Corporate Governance report
The Board has considered the principles and provisions of the UK
Corporate Governance Code 2018 ("the Code") applicable for this
financial period. The changes made in the revised Code attempt to
improve corporate governance processes and encourage companies to
demonstrate how good governance contributes to the achievement of
long-term success for stakeholders. The Group keep governance
matters under constant review. Despite the changes in the Code
requiring a review of processes, there has not been a requirement
to make fundamental changes to strategy or working practices.
The following statement sets out the Group's application of the
principles of the Code and the extent of compliance with the Code's
provisions, made in accordance with the requirements of the Listing
Rules.
The Board
The Board is responsible for the long-term and sustainable
success of the business, and considers all opportunities and risks
as set out in the principal risks and uncertainties on page 6.
Further, the Board considers how good governance can assist in
promoting the delivery of the strategy, by reference to strong
stakeholder engagement. Details of how the Board drive this
engagement can be found within the S172 statement on page 7.
The Directors who held office during the financial year
were:
Executive Directors
John Rigg, Chairman
======================================================
Adrian Leer, Managing Director
======================================================
James McDonald, Finance Director (appointed 16.06.20)
======================================================
Tim Eckes, Client Services Director
======================================================
Independent non-executive Directors
Alistair Fulton, senior independent non-executive Director
===========================================================
Chris Duckworth
===========================================================
Charlotte Rigg
===========================================================
John Rigg is Chairman. He is a Chartered Accountant. He was a
founder of Marcol Group Plc and was its Managing Director from 1983
until 1988. Marcol was floated on the Unlisted Securities Market in
1987. He was Chairman of Vega Group plc from 1989 until 1996,
holding the post of Chief Executive for much of this period. Vega
floated on the main market in 1992. He was a founder shareholder of
Triad and served as the Chairman of the Company from 1988 up to
just before its flotation in 1996, when he resigned to develop new
business interests overseas. He was appointed as non-executive
Chairman in June 1999: in May 2004 he became part-time executive
Chairman. Between 4 February 2005 and 5 September 2007 John was
acting Group Chief Executive.
Adrian Leer is Managing Director. He was appointed to the Board
on 3 March 2015. He initially joined Triad in 2009 in a
consultative capacity, providing advice to the business regarding
its fledgling geospatial product, Zubed, and helping to secure
significant wins with major clients. In 2010, he became General
Manager of Zubed Geospatial. Adrian became Commercial Director of
Triad Consulting & Solutions in 2012.
Tim Eckes is Client Services Director. He was appointed to the
Board on 1 January 2020. Tim Eckes joined Triad in 1991 as a
graduate software engineer before moving into a number of technical
and commercial roles. He has multi-sector experience, having been
involved in engagements across finance, telecoms, travel and
central government. In 5 years preceding his appointment to the
Board as Managing Consultant, he played a significant role in
growing the business through the development of long lasting and
profitable relationships with key clients.
Alistair Fulton is a non-executive Director. He is a Chartered
Engineer and member of the British Computer Society. He was the
founding Managing Director of Triad. He continued in this role
until February 1997 when he became non-executive Chairman, a
position he retained until June 1999, when he took up his present
position. He was a board member of CSSA for 15 years, President in
2000/2001, and is currently Senior Warden of the Worshipful Company
of Information Technologists, the 100th Livery Company of the City
of London.
Chris Duckworth was appointed on 1 July 2017 as a non-executive
Director. He has held numerous positions within public and private
companies as Finance Director, Managing Director, non-executive
Director and Chairman. He was a founding shareholder and from 1989
to 1994 was Finance Director of Triad where he remained as a
non-executive Director until 1999. From 1989 to 1994 he was Finance
Director of Vega Group PLC after which he served as a non-executive
Director until 1997. He was a founding shareholder and Chairman of
Telecity PLC in May 1998 and subsequently acted as a non-executive
Director until August 2001.
Charlotte Rigg is a non-executive Director and was appointed to
the Board on 1 January 2020. Charlotte Rigg's experience is both
extensive and diverse. Over the last 25 years she has built an
internationally recognised stud farm and runs a sizeable upland
grazing farm in Cumbria where the stud is based. In addition,
Charlotte runs a successful and expanding investment property
portfolio which has been established for over 20 years.
James McDonald is Finance Director and was appointed to the
Board on 16 June 2020. He joined the Company in February 2020 and,
in March 2020, assumed the position of Company Secretary and acting
Finance Director. He is a Chartered Certified Accountant and has
previously held a senior finance position at Foxtons Group plc,
prior to which he was Group Finance Director and Company Secretary
at Brook Street Bureau Plc. He qualified with EY in London.
The Board exercises full and effective control of the Group and
has a formal schedule of matters specifically reserved to it for
decision making, including responsibility for formulating,
reviewing and approving Group strategy, budgets and major items of
capital expenditure.
Regularly the Board will consider and discuss matters that
include, but are not limited to:
-- Strategy;
-- Shareholder value;
-- Financial performance and forecasts;
-- Alignment of culture to Group values;
-- Employee engagement;
-- Human resources; and
-- City and compliance matters.
The Executive Chairman, John Rigg, is responsible for the
leadership and efficient operation of the Board. This entails
ensuring that Board meetings are held in an open manner and allow
sufficient time for agenda points to be discussed. It also entails
the regular appraisal of each Director, providing feedback and
reviewing any training or development needs.
Employee engagement is taken very seriously by the Board, and
the need to engage with the workforce is even more important since
the onset of the pandemic. Bi-weekly Group-wide communication
meetings chaired by the Managing Director take place where there is
a forum available for all staff to participate and contribute
directly with management. Senior management meet daily to discuss
the business and create appropriate communications that
predominantly seek to enhance the well-being of staff but also look
to align Group values to strategy. Further, on-line platforms exist
that enable constructive discussions concerning operational
delivery and best practice. Given the size of the Group, it is not
appropriate to develop any sub-committees for this purpose and
direct Group forums encourage all staff to participate without
dilution of message.
In a competitive marketplace for talent, the Board ensure
further engagement via regular pay reviews and formal staff
development processes, which enable training and career aspirations
to be discussed along with the facilitation of individual career
paths. The Board are firmly of the view that the culture centred
around the recruitment and retention of quality staff, their
wellbeing, development and future career and remuneration
aspirations will drive the strategic aims of the business and drive
stakeholder value in the long-term.
The Board meets regularly with senior management to discuss
operational matters. The non-executive Directors must satisfy
themselves on the integrity of financial information and that
financial controls and systems of risk management are robust.
Following presentations by senior management and a disciplined
process of review and challenge by the Board, clear decisions on
the policy or strategy are adopted that preserve Group values and
are sustainable over the long-term. The responsibility for
implementing Board decisions is delegated to management on a
structured basis and monitored at subsequent meetings.
During the period under review, and to date, the Executive
Chairman has not held any significant commitments outside the
Group.
Alistair Fulton is the nominated senior independent
non-executive Director. Chris Duckworth and Charlotte Rigg are
non-executive Directors. All have long-standing experience in both
executive and non-executive roles and are free from any business or
other relationship that could materially interfere with the
exercise of their independent judgement. The Board benefits from
their experience and independence, when they bring their judgement
to Board decisions. The Board considers that all continue to remain
independent for the reasons stated above.
The Group has a procedure for Directors to take independent
professional advice in connection with the affairs of the Group and
the discharge of their duties as Directors.
The Board has an Audit Committee, comprised of the Executive
Chairman John Rigg, and the independent non-executive Directors,
Alistair Fulton and Chris Duckworth. The Committee is chaired by
Alistair Fulton.
The Board has a Remuneration Committee, comprised of the
Executive Chairman John Rigg, and the independent non-executive
Directors, Alistair Fulton, and (with effect from 16 June 2020)
Charlotte Rigg. No third-party advisors have a position on the
committee or have provided services to the Committee during the
year. The Committee is chaired by Alistair Fulton.
The following table shows the attendance of Directors at
scheduled meetings of the Board and Audit and Remuneration
Committees during the year ended 31 March 2021 and shows that the
Board are able to allocate sufficient time to the company to
discharge their responsibilities effectively.
Board Audit Remuneration
Committee Committee
===================================== ====== =========== =============
Number of meetings held 11 1 1
===================================== ====== =========== =============
Number of meetings attended
Executive Directors:
=========================================================================
John Rigg (Chairman) 11 1 1
===================================== ====== =========== =============
Adrian Leer 11 - -
===================================== ====== =========== =============
Tim Eckes 11 - -
===================================== ====== =========== =============
James McDonald (appointed 16.06.20) 8 - -
===================================== ====== =========== =============
Non-executive Directors:
=========================================================================
Alistair Fulton 11 1 1
===================================== ====== =========== =============
Chris Duckworth 11 1 -
===================================== ====== =========== =============
Charlotte Rigg 11 - 1
===================================== ====== =========== =============
Prior to his appointment to the Board on 16 June 2020, James
McDonald attended an additional 3 Board meetings and 1 Audit
Committee meeting in his capacity as Company Secretary and acting
Finance Director.
Audit Committee
The members of the Audit Committee are shown above.
The Board believe that John Rigg, a Chartered Accountant with
broad experience of the IT industry, Alistair Fulton, who has been
a Director of companies in the IT sector for over 30 years and
Chris Duckworth, with many years of experience in senior finance
positions in listed companies, have recent and relevant financial
experience, as required by the Code.
The Audit Committee is responsible for reviewing the Group's
annual and interim financial statements and other announcements. It
is also responsible for reviewing the Group's internal financial
controls and its internal control and risk management systems. It
considers the appointment and fees of the external auditor and
discusses the audit scope and findings arising from audits. The
Committee is also responsible for assessing the Group's need for an
internal audit function.
Consideration of significant issues in relation to the financial
statements
The Audit Committee have considered the following significant
issues in relation to the preparation of these financial
statements;
Revenue recognition: The Committee has considered revenue
recognised in projects during, and active at the end of the
financial year to ensure revenue has been recognised correctly.
IFRS 16 'Leases': The Committee have considered the accounting
treatment with respect to the critical accounting estimates.
Dilapidations provisions: The Committee have considered the
accounting treatment with respect to the critical accounting
estimates.
Going concern: The Committee has reviewed budgets and cash flow
projections against borrowing facilities available to the Group to
ensure the going concern basis of preparation of the results
remains appropriate.
Meetings with auditor and senior finance team
Members of the Audit Committee met with the senior finance team
in advance of their meeting with the auditor, prior to commencement
of the year-end audit to discuss;
-- Audit scope, strategy and objectives
-- Key audit and accounting matters
-- Independence and audit fee
A meeting was held prior to the completion of the audit with the
senior finance team and the auditor to assess the effectiveness of
the audit and discuss audit findings.
Effectiveness of external audit process
The Committee conducts an annual review of the effectiveness of
the annual report process. Inputs into the review include feedback
from the finance team, planning and scope of the audit process and
identification of risk, the execution of the audit, communication
by the auditor with the Committee, how the audit adds value and a
review of auditor independence and objectivity. Feedback is
provided to the external auditor and management by the Committee,
with any actions reviewed by the Committee.
Auditor independence and objectivity
The Committee has procedures in place to ensure that
independence and objectivity is not impaired. These include
restrictions on the types of services which the external auditor
can provide, in line with the FRC Ethical Standards on Auditing.
The external auditor has safeguards in place to ensure that
objectivity and independence is maintained and the Committee
regularly reviews independence taking into consideration relevant
UK professional and regulatory requirements. The external auditor
is required to rotate the audit partner responsible for the Group
audit every five years.
Non-audit fees
During the year the Group did not engage its auditor for any
non-audit work.
The Committee is responsible for reviewing any non-audit work to
ensure it is permissible under EU audit regulations and that fees
charged are justified, thus ensuring auditor independence is
preserved.
Appointment of external auditor
BDO LLP was reappointed external auditor in 2017 following a
tendering process.
BDO LLP has confirmed to the Committee that they remain
independent and have maintained internal safeguards to ensure that
the objectivity of the engagement partner and audit staff is not
impaired.
Internal audit
The Audit Committee has considered the need for a separate
internal audit function this year but does not consider it
appropriate in view of the size of the Group. The Group is
certified to ISO 9001: 2015.
Internal controls and risk management
The Board has applied the internal control and risk management
provisions of the Code by establishing a continuous process for
identifying, evaluating and managing the significant and emerging
risks faced by the Group. The Board regularly reviews the process,
which has been in place from the start of the year to the date of
approval of this report and which is in accordance with FRC
guidance on risk management, internal control and related financial
and business reporting. The Board is responsible for the Group's
system of internal control and for reviewing its effectiveness.
Such a system is designed to manage rather than eliminate risk of
failure to achieve business objectives and can only provide
reasonable and not absolute assurance against misstatement or
loss.
In compliance with the Code, the Audit Committee regularly
reviews the effectiveness of the Group's systems of internal
financial control and risk management. The Board's monitoring
covers all controls, including financial, operational and
compliance controls and risk management. It is based principally on
reviewing reports from management to consider whether significant
weaknesses and risks are effectively managed and, if applicable,
considering the need for more extensive monitoring.
The Board has also performed a specific assessment for the
purpose of this annual report. This assessment considers all
significant aspects of internal control and risk management arising
during the period covered by the report.
The key elements of the internal control and risk management
systems are described below:
-- Clearly documented procedures contained in a series of
manuals covering Group operations and management, which are subject
to internal project audit and external audit as well as regular
Board review.
-- The Group's controls include appropriate segregation of
duties which are embedded in the organisation
-- The Group has a formal process for planning, reporting and
reviewing financial performance against strategy, budgets,
forecasts and on a monthly, bi-annual and annual basis.
-- An appropriate budgeting process where the business prepares
budgets for the coming year, which are approved by the Board.
-- Close involvement in the day-to-day management of the business by the Executive Directors.
-- Regular meetings between the Executive Chairman, Executive
Directors and senior managers to discuss and monitor potential
risks to the business, and to implement mitigation plans to address
them.
Remuneration Committee
The Remuneration Committee is responsible for setting
remuneration for Executive Directors and the Chairman in accordance
with the remuneration policy below. In addition, the Committee is
responsible for recommending and monitoring the level and structure
of remuneration for senior management.
The Group's Remuneration Committee is authorised to take
appropriate counsel to enable it to discharge its duty to make
recommendations to the Board in respect of all aspects of the
remuneration package of Directors. The Committee also takes into
account the general workforce remuneration awards when setting
Director remuneration.
The Directors' remuneration report can be found on page 27.
Whistleblowing
Staff may contact the senior independent non-executive Director,
in confidence, to raise genuine concerns of possible improprieties
in financial reporting or other matters.
Board evaluation
Board members are made fully aware of their duties and
responsibilities as Directors of listed companies and are supported
in understanding and applying these by established and more
experienced Directors. The Executive Chairman continuously
evaluates the ability of the Board to perform its duties and
recognises the strengths and addresses any weaknesses of the board.
In addition, training is available for any Director at the Group's
expense should the Board consider it appropriate in the interests
of the Group.
Relations with shareholders
Substantial time and effort is spent by Board members on
meetings with and presentations to existing and prospective
investors. The views of shareholders derived from such meetings are
disseminated by the Chairman to other Board members.
Private shareholders are invited to attend and participate at
the Annual General Meeting.
Terms of reference
The terms of reference of the Audit and Remuneration Committees
are available on request from the Company Secretary.
Statement of compliance
The Board considers that it has been compliant with the
provisions of the Code for the whole of the period, except as
detailed below:
Provision 9 The roles of chairman and chief executive should not be exercised by the same individual
. John Rigg is the Executive Chairman. Adrian Leer is Managing Director. The Board currently
has no plans to recruit a Chief Executive Officer as it considers that the duties are being
satisfactorily covered by members of the Executive Board and the Group's senior management.
Provisions 17/23 There should be a nominations committee which should lead the process for board appointments
and make recommendations to the board. The Board considers that because of its size, the whole
Board should be involved in Board appointments.
Provision 18 All directors should be subject to annual re-election. The Board consider that because of
its size, re-election by rotation in accordance with the Company's Articles of Association
at the Annual General Meeting is sufficient.
Provision 19 The chair should not remain in post beyond nine years from the date of their first appointment
to the board. The Board considers that because of its size and critically, due to the experience
of the Executive Chairman, this would not be appropriate. The Board believe that re-election
in accordance with the Company's Articles of Association is sufficient.
Provisions 21/23 The board should undertake a formal and rigorous annual evaluation of its own performance
and that of its committees and individual Directors . There is a process of continuous informal
evaluation, due to the small size of the Board.
Provision 20 Open advertising and/or an external search consultancy should generally be used for the
appointment
of the chair and non-executive directors. The Board has a strong culture of promoting from
within with relevant experience to the Group.
Provision 24 The chair of the board should not be a member of the audit committee. The Board considers
that because of its size, and the relevant knowledge and experience of the Executive Chairman,
that this is not appropriate.
DTR 7.2.8 ARR The requirement to detail performance against a diversity policy . The Group has a diversity
policy which meets our legal requirements. The monitoring of performance against this policy
is an area which the Board take very seriously and continuously look to improve. The size
of the Group and the long tenure of senior staff provide constraints to improving ratios in
the short-term.
By order of the Board
James McDonald
Company Secretary
14 June 2021
Directors' remuneration report
On the following pages we set out the remuneration report for
the year ended 31 March 2021. The members of the Remuneration
Committee are shown in the Corporate Governance report on page
20.
This report has been prepared in accordance with the Companies
Act 2006 and is split into two sections as follows;
1. The Directors' remuneration policy.
2. The Annual report on remuneration. This will be subject to an
advisory shareholder vote at this years' Annual General
Meeting.
As outlined by the Executive Chairman and the Managing Director
in their annual statements on pages 1 and 3, given the uncertainty
of both the pandemic and Brexit, it was felt that containing
operating costs and maintaining cash balances was appropriate, and
the Committee carefully reviewed Director's remuneration. As such,
no salary increases were awarded to the Directors in the year.
Outside of the normal course of business, there were also no
discretionary payments. The Committee intends to implement the
Directors remuneration for the following year as agreed at the 2020
Annual General Meeting.
Directors' remuneration policy
The remuneration policy sets out the framework within which the
Company remunerates its Directors. The Company's remuneration
report was put to a shareholder vote at the 2020 Annual General
Meeting of the Company and was approved by 62.0% of shareholders
and with 38.0% against with no votes withheld. See page 15 of the
Directors' report for further details of voting rights.
The Committee acknowledges the votes against the policy and has
carefully reviewed the outcome. The Committee aims to align
remuneration with Group financial performance by taking into
account the difficult trading environment, and to ensure the
long-term health of the business. The performance of the Directors
has been deemed by the Committee to be more than satisfactory
throughout the pandemic, with progression on key strategic
objectives and a return to profitability. The Committee therefore
concludes that the remuneration is fair and appropriate but will
continue to seek shareholder feedback.
The remuneration policy will be put to a shareholder vote every
three years unless any changes to the policy are proposed before
then.
Policy table - executive Directors
Element Relevance to short Operation Maximum payable Performance metrics
and long-term
strategic objectives
==================== ====================== ======================= ====================== =======================
Base salary Reflects the Reviewed annually Ordinarily, salary None, although
individual's skills, taking into increases will be in individual performance
responsibilities and consideration line with average is considered when
experience. individual and increases awarded to setting salary levels.
company-wide other employees
Supports the performance and the in the Company.
recruitment and wider employee pay
retention of review.
Executive Directors.
==================== ====================== ======================= ====================== =======================
Benefits in kind Protects the Benefits in kind Benefits are set at a None.
well-being of include company cars level considered to
Directors and or allowances, private be appropriate taking
provides fair and medical insurance, into account
reasonable market life cover individual
competitive benefits. and permanent health circumstances.
insurance.
Benefits are reviewed
periodically.
==================== ====================== ======================= ====================== =======================
Pension Provides competitive The Company pays The Company matches None.
post-retirement contributions into a individual
benefits to support personal pension contributions up to a
the recruitment and scheme or cash maximum of 5%.
retention of alternative.
Executive Directors.
==================== ====================== ======================= ====================== =======================
Share option scheme Encourages share The Company operates The potential value Specific performance
ownership amongst an EMI share option of options held rises criteria are specified
employees and aligns scheme. Discretionary as the Company's at the time of
their interests with awards are made in share price awarding the share
the shareholders. accordance increases. options to ensure
with the scheme rules. alignment with the
interests of
shareholders.
The award of share options is at the discretion of the
Remuneration Committee: there is no scheme providing entitlement to
share options, and there is no long-term incentive scheme. The
Group does not believe that performance related bonuses are
appropriate at the present time. The Executive Directors' existing
interests in shares and share options are expected to align their
interests with those of shareholders.
Policy table - non-executive Directors
Element Relevance to short and Operation Maximum payable Performance metrics
long-term strategic objectives
======== ================================ =================== =============================== ====================
Fees Competitive fees to attract Reviewed annually. In general, the level of fee Not applicable.
experienced Directors. increase for the non-executive
Directors will be set taking
account
of any change in
responsibility.
The remuneration of the non-executive Directors is agreed by the
Board. However, no Director is involved in deciding their own
remuneration.
Approach to recruitment remuneration
The Group's remuneration policy is to provide remuneration
packages which secure and retain management of the highest quality.
Therefore, when determining the remuneration packages of new
executive Directors, the Remuneration Committee will structure a
package in accordance with the general policy for executive
Directors as shown above. In doing so the Committee will consider a
number of factors including:
-- the salaries and benefits available to executive Directors of comparable companies;
-- the need to ensure executive Directors' commitment to the continued success of the Group;
-- the experience of each Executive Director; and
-- the nature and complexity of the work of each Executive Director.
Directors' service contracts and policy
The details of the Directors' contracts are summarised as
follows:
Date of contract Notice period
============== ================= ==============
J C Rigg 01/07/1999 1 month
============== ================= ==============
A M Fulton 19/02/1997 1 month
============== ================= ==============
A Leer 03/03/2015 6 months
============== ================= ==============
C J Duckworth 01/07/2017 1 month
============== ================= ==============
T J Eckes 01/01/2020 6 months
============== ================= ==============
C M Rigg 01/01/2020 1 month
============== ================= ==============
J McDonald 16/06/2020 6 months
All contracts are for an indefinite period. No contract has any
provision for the payment of compensation upon the termination of
that contract.
Illustrations of application of remuneration policy
As there are currently no performance related or variable
elements of Executive Director remuneration it is not appropriate
to prepare illustrations required under the legislation.
Policy on payment for loss of office
It is the Group's policy in relation to Directors' contracts
that:
-- executive Directors should have contracts with an indefinite
term providing for a maximum of six months' notice by either
party.
-- non-executive Directors should have terms of engagement for
an indefinite term providing for one month notice by either
party.
-- there is no provision for termination payments to Directors.
Consideration of employment conditions elsewhere in the
Group
In setting the executive Directors' remuneration, the Committee
takes into account the pay and employment conditions applicable
across the Group in the reported period. No consultation has been
held with employees in respect of Executive Directors'
remuneration.
Consideration of shareholders views
The policy is unchanged from the previous year as endorsed by
the majority vote in favour of the approval of the Directors'
remuneration report at the Annual General Meeting in September
2020.
Annual report on remuneration (audited)
Directors' remuneration - single total figure of
remuneration
The remuneration of each of the Directors for the period they
served as a Director are set out below:
2021
==================================== ======================================================
Director Basic salary Benefits Pension Other Total
and fees in kind
==================================== ============= ========= ======== ======== ========
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================================== ============= ========= ======== ======== ========
Executive
==================================== ============= ========= ======== ======== ========
J C Rigg 60 - - - 60
A Leer 161 15 25 - 201
T J Eckes(1) 131 3 17 5 156
J McDonald (appointed 16.06.20)(1) 105 - 11 - 116
==================================== ============= ========= ======== ======== ========
Non-executive
==================================== ============= ========= ======== ======== ========
A M Fulton 40 - - - 40
C J Duckworth 35 - - - 35
C Rigg 35 - - - 35
2020
================================ ======================================================
Director Basic salary Benefits Pension Other Total
and fees in kind
================================ ============= ========= ======== ======== ========
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================================ ============= ========= ======== ======== ========
Executive
================================ ============= ========= ======== ======== ========
J C Rigg 60 - - - 60
N E Burrows (left 19.03.20)(2) 120 13 26 43 202
A Leer 167 15 19 - 201
T J Eckes (appointed 01.01.20) 28 1 4 - 33
Non-executive
================================ ============= ========= ======== ======== ========
A M Fulton(2) 40 - - 15 55
S M Sanderson (left 04.09.19) 15 - - - 15
C J Duckworth 35 - - - 35
C Rigg (appointed 01.01.20) - - - - -
(1) Tim Eckes basic salary and car allowance was agreed on 16
June 2020 at GBP130,000 p.a. and GBP10,200 respectively, effective
1 January. A total amount of GBP4,925 was paid in back-pay relating
to the year ending 31 March 2020. James McDonald was appointed
Finance Director 16 June 2020 on a salary of GBP130,000 p.a. and
car allowance of GBP10,200 p.a. effective 1 July 2020. His salary,
pension and benefits are pro-rated to reflect the period 16 June
2020 to 31 March 2021.
(2) This represents for Nick Burrows a payment in lieu of share
options forfeited of GBP42,500. For A M Fulton the total of
GBP15,000 represents back-pay.
Benefits in kind include the provision of company car and
medical insurance.
Pension includes a 5% employer contribution together with
contributions made under an employee salary sacrifice scheme.
Other than vesting conditions in relation to outstanding share
options (see note 20), no performance measures or targets were in
place for either the year ended 31 March 2021 or any prior
financial year, upon which any variable pay elements could become
payable during the year.
Three Directors are members of a money purchase scheme into
which the Group contributed during the year.
Payments to past Directors
There were no payments to past Directors during the year.
Payment for loss of office
Former Finance Director and Company Secretary Nick Burrows was
paid a one-time discretionary settlement fee for loss of office of
GBP30,000 in the year ended 31 March 2020. The Board believed this
was necessary to ensure a smooth hand-over with his successor.
Directors' interests in shares
The Directors who held office at the end of the financial year
had the following beneficial interests in the ordinary shares of
the Company. No change has occurred between the year end and the
date of this report.
1 April 2020 31 March 2021
================================= ============= ==============
A M Fulton 265,200 337,040
J C Rigg 4,509,400 4,509,400
A Leer 155,379 155,379
C J Duckworth 13,379 22,026
T J Eckes 60,374 60,374
C M Rigg 100,000 100,000
J McDonald (appointed 16.06.20) - -
================================= ============= ==============
Directors' share options
The interests of executive Directors in share options were as
follows:
At beginning Forfeited Exercise At end of year Exercise price Exercise
of year during year during period
year
================ =============== =============== =============== =============== =============== ===============
A Leer:
======================================================================================================================
granted 09.03.21 to
09.03.18 150,000 - - 150,000 53.5p 09.03.28
================ =============== =============== =============== =============== =============== ===============
T J Eckes:
======================================================================================================================
granted 09.03.21 to
09.03.18 60,000 - - 60,000 53.5p 09.03.28
================ =============== =============== =============== =============== =============== ===============
210,000 - - 210,000
As the performance conditions were met all 210,000 above were
exercisable on 1 April 2021 and subject to relevant close period
(2020: nil).
Share options are exercisable provided that the relevant
performance requirement has been satisfied.
For options granted on 9 March 2018: The vesting date was set at
31 March 2021 and the exercise period ends on 9 March 2028, and
100% of the shares granted under an Option will vest if the
Company's share price at 31 March 2021 has increased by 30% or more
from the share price as at the date of grant. 50% of shares granted
under an Option will vest if the Company's share price at 31 March
2021 has increased by 15% from the share price as at the date of
grant. Between these upper and lower thresholds, awards vest on a
straight-line basis.
For all other options: In any financial year commencing at least
one year after the date of grant, the Company shall have achieved a
positive basic earnings per share (subject to adjustment to exclude
identified exceptional items), as reported in its audited annual
accounts.
The total share-based payment expense recognised in the year in
respect of Directors' share options is GBP13,619 (2020:
GBP15,762).
The market price of the Company's shares was 125p at 31 March
2021 and the range during the year was between 24p and 150p.
Annual report on remuneration (unaudited)
Performance graph
The following graph shows the Group's performance, measured by
total shareholder return, compared with the performance of the FTSE
Fledgling Index ("FTSEFI") also measured by total shareholder
return ("TSR"). The FTSEFI has been selected for this comparison
because it is an index of companies with similar current market
capitalisation to Triad Group Plc.
http://www.rns-pdf.londonstockexchange.com/rns/8498B_1-2021-6-14.pdf
Chief executive remuneration
For the financial year ended 31 March 2021 the salary of the
Executive Chairman was GBP60,000 (2020: GBP60,000). Employee
salaries increased, on average, by 3.7% in the year.
The remuneration paid to the Executive Chairman for the
financial years 2012 to 2021 were as follows:
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
GBP25,000 GBP25,000 GBP25,000 GBP25,000 GBP25,000 GBP25,000 GBP60,000 GBP60,000 GBP60,000 GBP60,000
The annual amounts paid above relate to salary only. The
Executive Chairman did not receive any discretionary payments
during these periods.
Relative importance of spend on pay
The total dividends or other cash distributions to shareholders
during the year was GBPnil (2020: GBP479,169), see note 9. The
total employee remuneration (including Directors) during the year
was GBP5.705m (2020: GBP5.171m).
Percentage change in Directors' remuneration
The tables below show the change in Directors' remuneration
compared to the employees of the company, where Directors and
employees have been employed by Triad for the full relevant
financial years.
Basic salary and fees 2021
========================================================================== =================
J C Rigg 0%
========================================================================== =================
A Leer 0%
========================================================================== =================
T J Eckes n/a
========================================================================== =================
J McDonald n/a
========================================================================== =================
A M Fulton 0%
========================================================================== =================
C J Duckworth 0%
========================================================================== =================
C Rigg n/a
========================================================================== =================
Employees of the company 3.7%
========================================================================== =================
Benefits in kind (1) 2021
========================================================================== =================
J C Rigg n/a
========================================================================== =================
A Leer (1.7%)
========================================================================== =================
T J Eckes n/a
========================================================================== =================
J McDonald n/a
========================================================================== =================
A M Fulton n/a
========================================================================== =================
C J Duckworth n/a
========================================================================== =================
C Rigg n/a
========================================================================== =================
Employees of the company (5.7%)
========================================================================== =================
(1) The negative values in this table represent a reduction in costs for the provision of
identical benefits
Other (includes commission and bonus payments) 2021
========================================================================== =================
J C Rigg n/a
========================================================================== =================
A Leer n/a
========================================================================== =================
T J Eckes n/a
========================================================================== =================
J McDonald n/a
========================================================================== =================
A M Fulton (100%) (2)
========================================================================== =================
C J Duckworth n/a
========================================================================== =================
C Rigg n/a
========================================================================== =================
Employees of the company (9.5%)
========================================================================== =================
(2) Represents back pay paid in 2020
Consideration of matters related to Directors' remuneration
During the financial year, the remuneration committee met once
to discuss Directors' remuneration. No external advice was sought
in relation to matters discussed at this meeting.
Alistair Fulton
Chairman, Remuneration Committee
14 June 2021
Independent auditor's report to the members of Triad Group
Plc
Opinion on the financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Parent Company's affairs as at 31
March 2021 and of the Group's and Parent Company's profit for the
year then ended;
-- the Group financial statements have been properly prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006;
-- the Group financial statements have been properly prepared in
accordance with international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union;
-- the Parent Company financial statements have been properly
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006; and, as regards
the Group financial statements, Article 4 of the IAS
Regulation.
We have audited the financial statements of Triad Group Plc (the
'Parent Company') and its subsidiaries (the 'Group') for the year
ended 31 March 2021 which comprise Group and Company statements of
comprehensive income and expense, the Group and Company statements
of changes in equity, the Group and Company statements of financial
position, the Group and Company statements of cash flows and notes
to the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and
international accounting standards in conformity with the
requirements of the Companies Act 2006 and international financial
reporting standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those
standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion. Our audit opinion is consistent with the
additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were
appointed by the Directors to audit the financial statements for
the year ended 31 March 2006 and subsequent financial periods. The
period of total uninterrupted engagement including retenders and
reappointments is 16 years, covering the years ending 31 March 2006
to 31 March 2021. We remain independent of the Group and the Parent
Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. The
non-audit services prohibited by that standard were not provided to
the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Directors' assessment of the Group and the Parent
Company's ability to continue to adopt the going concern basis of
accounting included:
-- We considered the nature of the Group, its business model and
related risks to going concern arising.
-- We evaluated the Directors' assessment of the Group's ability
to continue as a going concern, including challenging the
underlying data by comparing it to actual performance in the
previous financial year, client contracts and comparing it to post
year-end financial performance. We challenged the key assumptions
used, including recoverability of trade receivables, levels of
future revenue and staff costs by comparing them against previous
financial performance and enquires with management.
-- We examined the forecasts and stress test provided by the
Group. We tested the integrity of the models by checking the
formulae, the arithmetic accuracy and any hard coding.
-- Enquires were made of management as to any future events or
conditions that may affect the Group's ability to continue as a
going concern, we have also inspected the minutes of Board meetings
to support our enquiries.
-- We obtained confirmation of the financing facilities
available to the Group and assessed the availability of cash to the
Group over the forecast period and the level of headroom
available.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and Parent Company's ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
In relation to the Parent Company's reporting on how it has
applied the UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the Directors' statement
in the financial statements about whether the Directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Overview
Coverage All subsidiary entities in the Group are dormant as such 100% of the Group profit, revenue
and assets have been subject to full scope audit.
------------------ --------------------------------------------------------------------------------------------------
Key audit matters 2021 2020
------------------
Revenue recognition X X
------------------
Going concern and Covid-19 X
Going concern and Covid-19 is no longer considered to be a key audit matter because the Group
has performed well throughout the pandemic.
------------------ --------------------------------------------------------------------------------------------------
Materiality Group financial statements as a whole
GBP89k (2020: GBP97k) based on 0.5% (2020: 0.5%) of revenue
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including the Group's system of internal
control, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there
was evidence of bias by the Directors that may have represented a
risk of material misstatement.
The Group operates solely in the United Kingdom. The Group
financial statements are a consolidation of six companies made up
of one trading Company (the Parent Company) which provides
consultancy and development services and five dormant companies. In
establishing the overall approach to the Group audit, we determined
the type of work that needed to be performed on each Company.
Based on our assessment we performed an audit of the complete
financial information of the Parent Company as the only trading
Company and only significant component.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team.
This matter was addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on this
matter.
Key audit matter How the scope of our audit addressed
key audit matter
------------------------------------------------------------------------------ --------------------------------------
Revenue recognition Revenue is recognised predominantly We tested the operating effectiveness
on a time and materials basis. controls over the approval of
As detailed in note 1 and Agreements to place a number external timesheets and
4 to the financial of consultants for a period of time the recording of the related sales
statements. are agreed with customers. Revenue is invoices in the accounting system.
then recognised
based on the timesheets recorded and We performed testing on a sample
approved, either internally or basis over the revenue postings pre
externally, and a charge and post year end, agreeing
is calculated at an agreed hourly the posting to supporting
rate as per the contract. documentation, ensuring the
transaction is recorded in the
We considered there to be a correct
significant risk over the period.
completeness of revenue due to
potential We performed testing on a sample
missing or late timesheets or basis over the contractor costs
contractor invoices and existence of incurred before and after
revenue through fraudulent the year end, agreeing these to
manual postings to revenue. supporting documentation and checking
that the revenue associated
with these has been recorded in the
correct period.
We performed testing on a sample
basis over the revenue postings
throughout the year, agreeing
the posting to timecard, confirmation
of charge out rate and sales invoice,
ensuring the transactions
are recorded in line with the
accounting policy and in the correct
accounting period.
We tested a sample of manual journal
postings to revenue, agreeing the
posting to bank payment,
sales invoices, credit notes and
timecards where appropriate.
We tested a sample of year end
accrued and deferred income balances
and agreed them to sales
invoices, bank payment where
appropriate and
timecards.
We performed testing on a sample
basis over the timecards received
either side of the year
end, agreeing them to sales invoices
to ensure they have been recorded in
the correct period.
We selected a sample of contracts for
services provided in the year and
agreed the revenue
recognised against the policy
stipulated in the contract to check
that the revenue recognition
was appropriate and reviewed the
accounting treatment to ensure
compliance with the requirements
of the accounting standards.
Key observations:
We did not identify any significant
issues as a result of the procedures
performed.
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole and performance materiality
as follows:
Group and Parent Company financial statements
--------------------------------------- -----------------------------------------------------------------------------
2021 2020
GBPk GBPk
--------------------------------------- ------------------------------------- --------------------------------------
Materiality 89 97
--------------------------------------- ------------------------------------- --------------------------------------
Basis for determining materiality 0.5% of revenue 0.5% of revenue
--------------------------------------- ------------------------------------- --------------------------------------
Rationale for the benchmark applied We consider revenue to be the most We consider revenue to be the most
appropriate benchmark as it is one appropriate benchmark as it is one of
of the principal considerations the principal considerations
for users of the financial for users of the financial statements
statements in assessing the in assessing the financial
financial performance and performance and development
development of the Group.
of the Group.
--------------------------------------- ------------------------------------- --------------------------------------
Performance materiality 58 63
--------------------------------------- ------------------------------------- --------------------------------------
Basis for determining performance 65% of materiality, the threshold 65% of materiality, the threshold was
materiality was selected to reflect the amount selected to reflect the amount of
of balances subject to balances subject to
estimation, the amount of audit estimation, the amount of audit
differences historically arising and differences historically arising and
the mainly substantive the mainly substantive
approach to the audit. approach to the audit.
Reporting threshold
We agreed with the Audit Committee that we would report to them
all individual audit differences in excess of GBP2k (2020: GBP2k).
We also agreed to report differences below this threshold that, in
our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report other than the financial statements and our auditor's report
thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors' statement
in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the parent
company's compliance with the provisions of the UK Corporate
Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit.
Going concern and longer-term viability
* The Directors' statement with regards to the
appropriateness of adopting the going concern basis
of accounting and any material uncertainties
identified set out on page 17; and
* The Directors' explanation as to its assessment of
the entity's prospects, the period this assessment
covers and why the period is appropriate set out on
page 8.
---------------------------------------- ------------------------------------------------------------------
Other Code provisions
* Directors' statement on fair, balanced and
understandable set out on page 15;
* Board's confirmation that it has carried out a robust
assessment of the emerging and principal risks set
out on page 6;
* The section of the annual report that describes the
review of effectiveness of risk management and
internal control systems set out on page 24; and
* The section describing the work of the audit
committee set out on page 23.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work
performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and
matters as described below.
Strategic report and Directors' report In our opinion, based on the work undertaken in the course
of the audit:
* the information given in the Strategic report and the
Directors' report for the financial year for which
the financial statements are prepared is consistent
with the financial statements; and
* the Strategic report and the Directors' report have
been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the
Group and Parent Company and its environment
obtained in the course of the audit, we have not identified
material misstatements in the
strategic report or the Directors' report.
--------------------------------------------------- -----------------------------------------------------------------
Directors' remuneration In our opinion, the part of the Directors' remuneration report
to be audited has been properly
prepared in accordance with the Companies Act 2006.
--------------------------------------------------- -----------------------------------------------------------------
Matters on which we are required to report by We have nothing to report in respect of the following
exception matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
* adequate accounting records have not been kept by the
Parent Company, or returns adequate for our audit
have not been received from branches not visited by
us; or
* the Parent Company financial statements and the part
of the Directors' remuneration report to be audited
are not in agreement with the accounting records and
returns; or
* certain disclosures of Directors' remuneration
specified by law are not made; or
* we have not received all the information and
explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors'
responsibilities the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group's and the Parent Company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the
Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the regulatory and legal
framework applicable to the Group and the industry in which it
operates and considered the risk of acts by the Group which were
contrary to applicable laws and regulations, including fraud.
-- These included but were not limited to compliance with the
Companies Act 2006, Corporate Governance, the UK listing rules and
UK tax legislation.
-- We focused on laws and regulations that could give rise to a
material misstatement in the Group financial statements. Our tests
included, but were not limited to the investigation, through the
review of minutes and enquires of management, of potential
non-compliance with laws and regulations and review of the
communications with the regulatory bodies.
-- Our tests included, but were not limited to, agreement of the
financial statement disclosures to underling supporting
documentation, review of any correspondence with regulators and
legal advisors and enquiries made of management.
-- We also addressed the risk of management override of internal
controls, including testing journals and evaluating whether there
was evidence of bias by the Directors that represented a risk of
material misstatement due to fraud. We addressed the risk of fraud
in relation to revenue recognition by reviewing amounts charged,
testing the operating effectiveness around certain key controls and
investigating the manual postings to revenue. Further detail in
relation to the testing of revenue recognition has been detailed in
the key audit matters section of our report.
-- We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely we are to become aware of it.
A further description of our responsibilities is available on
the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor's report.
Use of our report
This report is made solely to the Parent Company's members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to
the Parent Company's members those matters we are required to state
to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company and the
Parent Company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
James Fearon
(Senior Statutory Auditor)
14 June 2021
For and on behalf of BDO LLP, Statutory Auditor
London, UK
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Statements of comprehensive income and expense for the year
ended 31 March 2021
Group and Company Note 2021 2020
GBP'000 GBP'000
Revenue 4 17,815 19,354
Cost of sales (14,005) (16,500)
----------------------------------------------------------------------------------------- ----- --------- ---------
Gross profit 3,810 2,854
Administrative expenses (3,124) (3,422)
----------------------------------------------------------------------------------------- ----- --------- ---------
Profit/(Loss) from operations 5 686 (568)
Finance income 13 15 20
Finance expense 6 (57) (54)
----------------------------------------------------------------------------------------- ----- --------- ---------
Profit/(Loss) before tax 644 (602)
Tax Credit/(Charge) 8 41 (159)
----------------------------------------------------------------------------------------- ----- --------- ---------
Profit/(Loss) for the year and total comprehensive income attributable to equity holders
of
the parent 685 (761)
----------------------------------------------------------------------------------------- ----- --------- ---------
Basic earnings/(loss) per share 10 4.28p (4.76p)
----------------------------------------------------------------------------------------- ----- --------- ---------
Diluted earnings/(loss) per share 10 4.24p (4.76p)
----------------------------------------------------------------------------------------- ----- --------- ---------
All amounts relate to continuing activities.
The notes on pages 47 to 67 form part of the financial
statements.
Statements of changes in equity for the year ended 31 March
2021
Group Share Capital Share premium account Capital redemption Retained earnings Total
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 160 659 104 4,843 5,766
Loss for the year and
total comprehensive
income - - - (761) (761)
Dividend paid - - - (479) (479)
Ordinary shares issued - 1 - - 1
Share-based payments - - - 28 28
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
At 1 April 2020 160 660 104 3,631 4,555
Profit for the year
and total
comprehensive income - - - 685 685
Ordinary shares issued - 6 - - 6
Share-based payments - - - 37 37
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
At 31 March 2021 160 666 104 4,353 5,283
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
Company Share Share premium account Capital redemption Retained earnings Total
Capital reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 160 659 104 4,838 5,761
Loss for the year and
total comprehensive
income - - - (761) (761)
Dividend paid - - - (479) (479)
Ordinary shares issued - 1 - - 1
Share-based payments - - - 28 28
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
At 1 April 2020 160 660 104 3,626 4,550
Profit for the year
and total
comprehensive income - - - 685 685
Ordinary shares issued - 6 - - 6
Share-based payments - - - 37 37
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
At 31 March 2021 160 666 104 4,348 5,278
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
Share capital represents the amount subscribed for share capital
at nominal value.
The share premium account represents the amount subscribed for
share capital in excess of the nominal value.
The capital redemption reserve represents the nominal value of
the purchase and cancellation of its own shares by the Company in
2002.
Retained earnings represents the cumulative net gains and losses
recognised in the statement of comprehensive income and
expense.
The notes on pages 47 to 67 form part of the financial
statements.
Statements of financial position at 31 March 2021
Registered number: 2285049
Group Company
Note 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 11 6 10 6 10
Property, plant and equipment 12 225 275 225 275
Right-of-use assets 13 532 622 532 622
Finance lease receivables 13 85 297 85 297
Deferred tax 8 73 32 73 32
------------------------------- ----- -------- -------- -------- --------
921 1,236 921 1,236
------------------------------- ----- -------- -------- -------- --------
Current assets
Trade and other receivables 15 2,514 2,741 2,514 2,741
Finance lease receivables 13 108 - 108 -
Cash and cash equivalents 16 4,918 3,840 4,918 3,840
------------------------------- ----- -------- -------- -------- --------
7,540 6,581 7,540 6,581
------------------------------- ----- -------- -------- -------- --------
Total assets 8,461 7,817 8,461 7,817
------------------------------- ----- -------- -------- -------- --------
Current liabilities
Trade and other payables 17 (2,248) (2,127) (2,253) (2,132)
Lease liabilities 13 (307) (272) (307) (272)
------------------------------- ----- -------- -------- -------- --------
(2,555) (2,399) (2,560) (2,404)
------------------------------- ----- -------- -------- -------- --------
Non-current liabilities
Long term provisions 18 (197) (197) (197) (197)
Lease liabilities 13 (426) (666) (426) (666)
------------------------------- ----- -------- -------- -------- --------
(623) (863) (623) (863)
------------------------------- ----- -------- -------- -------- --------
Total liabilities (3,178) (3,262) (3,183) (3,267)
------------------------------- ----- -------- -------- -------- --------
Net assets 5,283 4,555 5,278 4,550
------------------------------- ----- -------- -------- -------- --------
Shareholders' equity
Share capital 19 160 160 160 160
Share premium account 666 660 666 660
Capital redemption reserve 104 104 104 104
Retained earnings 4,353 3,631 4,348 3,626
------------------------------- ----- -------- -------- -------- --------
Total shareholders' equity 5,283 4,555 5,278 4,550
------------------------------- ----- -------- -------- -------- --------
The financial statements on pages 43 to 68 were approved by the
Board of Directors and authorised for issue on 14 June 2021 and
were signed on its behalf by:
Adrian Leer James McDonald
Director Director
Triad Group Plc is registered in England and Wales with
registered number 2285049.
The notes on pages 47 to 67 form part of the financial
statements.
Statements of cash flows for the year ended 31 March 2021
Group and company Note 2021 2020
GBP'000 GBP'000
Cash flows from operating activities
Profit/(Loss) for the year before taxation 644 (602)
Adjustments for:
Profit on sale of asset (7) -
Depreciation of property, plant and equipment 80 97
Amortisation of right of use assets 173 166
Amortisation of intangible assets 5 5
Interest received (15) (20)
Finance expense 45 60
Share-based payment expense 37 28
Changes in working capital
Decrease in trade and other receivables 226 593
Increase/(Decrease) in trade and other payables 121 (374)
Increase in provisions - 115
------------------------------------------------------ ----- --------- ---------
Cash generated by operations 1,309 68
Foreign exchange gain/(loss) 6 (4)
------------------------------------------------------ ----- --------- ---------
Net cash inflow from operating activities 1,315 64
------------------------------------------------------ ----- --------- ---------
Investing activities
Finance lease interest received 15 20
Finance lease payments received 104 123
Proceeds from sale of asset 15 -
Purchase of intangible assets (1) -
Purchase of property, plant and equipment (38) (166)
------------------------------------------------------ ----- --------- ---------
Net cash used in investing activities 95 (23)
------------------------------------------------------ ----- --------- ---------
Financing activities
Proceeds of issue of shares 6 -
Lease liabilities principal payments (287) (270)
Lease liabilities interest payments (51) (56)
Dividends paid 9 - (479)
------------------------------------------------------ ----- --------- ---------
Net cash outflow from financing activities (332) (805)
------------------------------------------------------ ----- --------- ---------
Net increase/(decrease) in cash and cash equivalents 1,078 (764)
Cash and cash equivalents at beginning of the period 3,840 4,604
------------------------------------------------------ ----- --------- ---------
Cash and cash equivalents at end of the period 16 4,918 3,840
------------------------------------------------------ ----- --------- ---------
The notes on pages 47 to 67 form part of the financial
statements.
Notes to the financial statements for the year ended 31 March
2021
1. Principal accounting policies
Basis of preparation
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated.
These financial statements have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and in accordance with
international financial reporting standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European
Union.
These financial statements have been prepared on a going concern
basis.
These financial statements have been prepared on a historical
cost basis and are presented in sterling, the functional currency
of the Company.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position,
are set out in the Strategic report. The financial position of the
Group, its cash flows, liquidity position and borrowing facilities
are described in the Strategic report. In addition, note 3 to the
financial statements includes the Group's objectives, policies and
processes for managing its capital, its financial risk management
objectives, details of its financial instruments and hedging
activities, and its exposure to credit risk and liquidity risk. The
Group meets its day to day working capital requirements through
cash reserves and an invoice finance facility (which is currently
unutilised).
The Group operates an efficient low-cost and historically cash
generative model. The client base generally consists of large
blue-chip entities, particularly within the public sector, enjoying
long-term and productive client relationships. As such, debt
recovery has been reliable and predictable with a low exposure to
bad debts. For the year ended 31 March 2021, the Group has not
utilised any external debt, lending facilities or accessed any
Government support schemes (2020: nil). Due to the ability to
operate services remotely, the Group has remained in full operation
throughout recent lockdown periods and will continue to do so as
external factors dictate. The success of the business during the
year ended 31 March 2021 illustrates the operational flexibility of
both the Group and its current and future client base.
The going concern assessment considered a number of realistic
scenarios including the impact of the reduction in services of key
clients upon future cash flows. In addition, in the most severe
scenario possible, a reverse stress test was modelled which
included the effects of any future Covid-19 pandemic issues, with
all current client contracts discontinued at expiry with no
extension or replacement and with no cost mitigation. Even in the
most extreme scenario, the Group has enough liquidity and long-term
contracts to support the business through the going concern period.
The Directors have concluded from these assessments that the Group
would have sufficient headroom in cash balances to continue in
operation.
Further information in relation to the Directors' consideration
of the going concern position of the Company is contained in the
Viability statement on page 8.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and at least
twelve months from the date of approval of the financial
statements. Accordingly, they continue to adopt the going concern
basis in preparing the annual report and accounts.
Basis of consolidation
Where the Company has control over an investee, it is classified
as a subsidiary. The Company controls an investee if all three of
the following elements are present: power over the investee,
exposure to variable returns from the investee and the ability of
the investor to use its power to affect those variable returns. The
consolidated financial statements present the results of the
Company and its subsidiaries ("the Group") as if they formed a
single entity. Intercompany transactions and balances between Group
companies are therefore eliminated in full.
Property, plant and equipment
Property, plant and equipment are stated at cost, net of
accumulated depreciation and any impairment in value.
Depreciation is calculated as to write off the cost of assets,
less their estimated residual values, on a straight-line basis over
the expected useful economic lives of the assets concerned.
Depreciation is charged to administrative expenses in the statement
of comprehensive income and expense. The principal annual rates
used for this purpose are:
%
======================== ======
Computer hardware 25-33
======================== ======
Fixtures and fittings 10-33
======================== ======
Motor vehicles 25-33
======================== ======
Leasehold improvements 10-33
Intangible assets
Intangible assets are stated at cost, net of accumulated
amortisation and any impairment in value. The cost of internally
developed software is the attributable salary costs and directly
attributable overheads.
Amortisation is calculated to write off the cost of assets, less
their estimated residual values, on a straight-line basis over the
expected useful economic lives of the assets concerned.
Amortisation is charged to administration expenses in the statement
of comprehensive income and expense. The principal annual rates
used for this purpose are:
%
============================= ======
Purchased computer software 25-33
Impairment of non-financial assets
Non-financial assets are subject to impairment tests whenever
events or changes in circumstances indicate that their carrying
amount may not be recoverable. Where the carrying value of an asset
exceeds its recoverable amount the asset is written down
accordingly. Impairment is charged to administration expenses in
the statements of comprehensive income and expense.
Trade and other receivables
Trade and other receivables are initially recognised at fair
value plus transaction costs, and subsequently measured at
amortised cost using the effective interest method, less provision
for impairment.
At each reporting date an amount of impairment is recognised as
lifetime expected credit losses (lifetime ECL's).
Lifetime ECL's are calculated using a provision matrix that
groups trade receivables according to the time past due, and at
provision rates based on historical observed default rates,
adjusted for forward looking estimates. At every reporting date,
the historical observed default rates and forward-looking estimates
are updated.
Amounts are written off to administrative expenses against the
carrying amount of trade receivables when it is certain that the
receivable will not be realised.
Cash
Cash in the statement of financial position comprises cash held
on demand with banks.
Trade and other payables
Trade and other payables are recognised initially at fair value,
and subsequently measured at amortised cost using the effective
interest method.
Leases
The Group as Lessee:
All leasing arrangements, where the Group is the lessee (defined
as leases that last more than one year or of a high value), are
recognised as a lease liability and corresponding right-of-use
asset.
Lease liability:
The lease liability is calculated as the discounted total fixed
payments for the lease term, termination payments, exercise price
of purchase options, residual value guarantee and certain variable
payments. An interest charge is recognised in the statement of
comprehensive income and expense on the lease liability at an
incremental borrowing rate. The lease liability is presented across
separate lines (current and non-current) in the statement of
financial position. The lease liability increases to reflect the
interest charge on the lease liability, at an incremental borrowing
rate. The lease liability reduces over the period of the lease as
payments are made. The lease liability is re-calculated if there is
a modification, a change in the lease term, a change in the lease
payments or a change in the assessment to purchase the underlying
assets. A re-calculation has been made in the period in respect of
a change in the lease payments.
Right-of-use assets:
The right-of-use asset is calculated as the original lease
liability, initial direct costs and amounts paid upfront. The right
of use asset is subsequently measured at cost less accumulated
amortisation. The amortisation is charged on a straight-line basis
over the life of the lease.
The Group as lessor:
For the year ended 31 March 2021 lessor arrangements follow the
accounting treatment 'IFRS 16 Leases'. Where the lease indicates a
finance lease a lease receivable is recognised. The lease
receivable is calculated as the discounted total lease receipts for
the lease term.
Interest income is subsequently recognised in the statement of
comprehensive income and expense on the lease receivable and the
balance reduces over the lease term as receipts are received.
Foreign currencies
Assets and liabilities expressed in foreign currencies are
translated into sterling at the exchange rate ruling on the date of
the statement of financial position. Transactions in foreign
currencies are recorded at the exchange rate ruling as at the date
of the transaction. All differences on exchange are taken to the
statement of comprehensive income and expense in the year in which
they arise.
Revenue
Revenue recognised in any financial period is based on the
delivery of performance obligations and an assessment of when
control is transferred to the customer. Revenue is either
recognised at a 'point in time' when a performance obligation has
been performed, or 'over time' as control of the performance
obligation is transferred to the customer.
The majority of the Group's revenue is derived from the
provision of services under time and materials contracts.
Performance obligations under such contracts relate to the
provision of staff to customers. The transaction price of the
performance obligation is determined by reference to charge-out
rates for supplied staff and are specified in the contract. Since
the customer simultaneously receives and consumes the benefits of
the Group's performance obligations under such contracts, revenue
is recognised over time using the output method which uses a direct
measurement of value to the customer of the services transferred to
date.
Where temporary workers are supplied to customers, the
associated revenue is recognised gross (inclusive of the cost of
the temporary workers) since the Group is acting as principal.
Under IFRS 15, in order to be recognised as principal, there must
be a transfer of control between the vendor and the customer. Where
the Group provides temporary contractors, it is acting as principal
since it receives resourcing requirements directly from the
customer, has prime responsibility to find suitable candidates and
negotiate pay rates with them, and delivers the resources to the
client including acceptance that the service provided meets the
client's expectations. Revenue is therefore recognised as the gross
amount invoiced to customers.
In relation to time and materials contracts, since it has a
right to consideration from a customer in an amount that
corresponds directly with the value to the customer of the Group's
performance completed to date, the Group recognises revenue in the
amount to which it has a right to invoice.
Revenue from fixed price contracts, which may include software
and product development or support contracts, is determined by
reference to those fixed prices, agreed at inception of the
contract. For fixed price contracts revenue is recognised on an
over time basis using the input (percentage completion) method.
Percentage completion is calculated as the total hours worked as at
the statement of financial position date divided by the total
expected hours to be worked to complete the project. Revenue for
permanent recruitment services is based on a percentage of a
successful candidate's remuneration package, as agreed with the
customer at inception of the contract. Revenue is recognised at a
point in time when the performance obligation has been satisfied at
the time the candidate commences employment and subject to a
provision for clawback of fees for candidates that leave prior to
the notice period ending.
The Company has taken advantage of the practical exemption not
to disclose the value of unfilled performance obligations as the
contracts ongoing at the period end are for less than 12
months.
Taxation
The charge for taxation is based on the profit or loss for the
year as adjusted for disallowable items. It is calculated using tax
rates that have been enacted or substantively enacted by the
statement of financial position date.
Full provision is made for deferred tax on all temporary
differences resulting from the difference between the carrying
value of an asset or liability and its tax base, and on tax losses
carried forward indefinitely. Deferred tax assets are recognised to
the extent that it is probable that the deferred tax asset will be
recovered in the foreseeable future. Deferred tax is calculated at
the tax rates that are expected to apply to the period when the
asset is realised or liability is settled.
Pension costs
Contributions to defined contribution plans are charged to the
statements of comprehensive income and expense as the contributions
accrue.
Share-based payments
Share-based incentive arrangements are provided to employees
under the Group's share option scheme. Share options granted to
employees are valued at the date of grant using an appropriate
option pricing model and are charged to operating profit over the
performance or vesting period of the scheme. The annual charge is
modified to take account of shares forfeited by employees who leave
during the performance or vesting period and, in the case of
non-market related performance conditions, where it becomes
unlikely the option will vest.
Provisions
A provision is recognised when the Group has a legal or
constructive obligation as a result of a past event and it is
probable that an outflow of economic benefits will be required to
settle the obligation. If the effect is material, expected future
cash flows are discounted using a current pre-tax rate that
reflects the risks specific to the liability. Calculations of these
provisions require judgements to be made. The Group has provided
for property dilapidation as detailed in note 18.
New standards and interpretations
A number of amendments to existing standards have been issued
but which are not yet mandatory, and have not been adopted by the
Group in these financial statements. The Directors do not
anticipate that their adoption in future periods will have a
material impact on the financial statements of the Group.
2. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. The Group makes estimates and assumptions concerning
the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
IFRS 16 leases
A right-of-use asset of GBP0.5m (2020: GBP0.6m), a total lease
liability of GBP0.7m (2020: GBP0.9m) and a finance lease receivable
of GBP0.2m (2020: GBP0.3m) have been recognised in accordance with
the accounting policies on page 49 with respect to IFRS 16
'Leases'. During the year a rent review was undertaken on the
Milton Keynes lease, which resulted in an increase to the right of
use asset and to the lease liability of GBP0.08m. The Directors
have made the following critical accounting estimates and
judgements in relation to these balances:
-- Lease term: The Directors are of the opinion that property
lease assets and liabilities should be calculated with relation to
the first available break date as the expectation is that the lease
break will be taken.
-- Incremental borrowing rate (IBR): The Directors have
calculated the IBR at 5%, based upon readily available credit
facilities and Bank of England base rate, covering a time frame
commensurate with the time to the first available break date.
Dilapidation provisions:
The Directors have recognised a dilapidation provision for both
the leases held totalling GBP197,000 (2020: GBP197,000). The
provision is required to recognise the costs of restoring the
properties to their original state at the end of the lease period.
The provision has been calculated using generally accepted industry
averages of between 15 and 20% of lease costs and the Directors'
experience with the landlords as well as experience in similar
negotiations.
3. Financial risk management
The Group uses financial instruments that are necessary to
facilitate its ordinary purchase and sale activities, namely cash,
bank borrowings in the form of a receivables finance facility and
trade payables and receivables: the resultant risks are foreign
exchange risk, interest rate risk, credit risk and liquidity risk.
The Group does not use financial derivatives in its management of
these risks.
The Board reviews and agrees policies for managing these risks
and they are summarised below. These policies are consistent with
last year.
3.1 Financial risk factors
Foreign exchange risk
There are a small number of routine trading contracts with both
suppliers and clients in euros. In all such circumstances the
contracts with supplier and client will be in the same currency
thereby mitigating the Group's exposure to movements in exchange
rates. Payments and receipts are made through a bank account in the
currency of the contract therefore balances held in any foreign
currency are to facilitate day to day transactions. With a
functional currency of sterling there are the following foreign
currency net assets:
Group and company Note 2021 2020
GBP'000 GBP'000
Currency: Euros
Cash and cash equivalents 16 156 132
Trade and other receivables 15 - 19
Trade and other payables 17 (10) (25)
----------------------------- ----- -------- --------
146 126
----------------------------- ----- -------- --------
Any change in currency rates would have no significant effect on
results.
Interest rate risk
The Group has access to a financing facility with a major UK
bank. At the balance sheet date in the current or prior year this
facility has not been utilised.
Cash balances are held in short-term interest-bearing accounts,
repayable on demand: these attract interest rates which fluctuate
in relation to movements in bank base rate. This maintains
liquidity and does not commit the Group to long term deposits at
fixed rates of interest.
There were no borrowings, aside from lease liabilities arising
from the application of IFRS 16, during the year.
Credit risk
The Group is mainly exposed to credit risk from credit sales. It
is Group policy to assess the credit risk of new customers before
entering into contracts. Each new customer is assessed, using
external ratings and relevant information in the public domain,
before any credit limit is granted. In addition, trade receivables
balances are monitored on a regular basis to minimise exposure to
credit losses. The amount credited to the income statement during
the year in respect of expected credit losses was GBP7,000 (2020:
charged to the income statement GBP6,000).
The Group is also exposed to credit risk from contract assets,
being revenue earned but not yet invoiced (note 15).
The Group also has credit risk from cash deposits with banks
(note 16).
The Group's maximum exposure to credit risk is:
Group and company Note 2021 2020
GBP'000 GBP'000
Finance lease receivable 13 193 297
Trade and other receivables 15 1,996 2,500
Contract assets 15 170 68
Other debtors 15 229 17
Cash and cash equivalents 16 4,918 3,840
----------------------------- ----- -------- --------
7,506 6,722
----------------------------- ----- -------- --------
Liquidity risk
The Group's liquidity risk arises from its management of working
capital. The Group has a facility to borrow an amount up to 90% of
approved trade debtors subject to a maximum limit of GBP2.6m. The
facility may be terminated by the bank and Group with one and three
month's written notice respectively. The Board receives regular
cash flow and working capital projections to enable it to monitor
its available headroom under this facility. At the statement of
financial position these projections indicated that the Group
expected to have sufficient liquid resources to meet its reasonably
expected obligations. Maturity of financial liabilities is set out
in notes 17.
Capital risk management
The Group's capital comprises of shareholders' equity. Its
objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to maximise
shareholder value. To maintain or adjust the capital structure the
Group may adjust the dividend payment to shareholders, return
capital to shareholders, issue new shares or alter the level of
borrowings.
3.2 Fair value estimation
The carrying value of financial assets and liabilities
approximate their fair values.
4. Revenue
The Group operates solely in the UK. All material revenues are
generated in the UK.
The largest single customer contributed 47% of Group revenue
(2020: 39%) and was in the public sector. One other customer
contributed more than 10% of Group revenue (2020: one).
Disaggregation of revenue
In accordance with IFRS 15, the Group disaggregates revenue by
contract type as management believe this best depicts how the
nature, timing and uncertainty of the Group's revenue and cash
flows are affected by economic factors. Accordingly, the following
table disaggregates the Group's revenue by contract type:
Group and company 2021 2020
GBP'000 GBP'000
Time and materials 17,344 19,017
Fixed price 175 82
Percentage fee based 296 255
----------------------- -------- --------
17,815 19,354
---------------------- -------- --------
The Group also disaggregates revenue by operating sector
reflecting the different commercial risks (e.g. credit risk)
associated with each.
Group and company 2021 2020
GBP'000 GBP'000
Public sector 11,357 10,277
Private sector 6,458 9,077
-------------------- -------- --------
17,815 19,354
------------------- -------- --------
Contract balances
For all contracts, the Group recognises a contract liability to
the extent that payments made are greater than the revenue
recognised at the period end date. When payments are made less than
the revenue recognised at the period end date, the Group recognises
a contract asset for the difference.
Contract assets and contract liabilities are included within
'trade and other receivables' and 'trade and other payables'
respectively on the face of the statement of financial
position.
Contract assets Contract liabilities
Group and Company 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 68 58 (41) (43)
Transfers in the period from contract assets to trade receivables (68) (58) - -
Excess of revenue recognised over cash (or right to cash) being
recognised in the period 170 68 - -
Amounts included in contract liabilities that was recognised as revenue
in the period - - 41 43
Cash received in advance of performance and not recognised as revenue in
the period - - (256) (41)
------------------------------------------------------------------------- -------- -------- ----------- ----------
At 31 March 170 68 (256) (41)
------------------------------------------------------------------------- -------- -------- ----------- ----------
There is no expectation of a material expected lifetime credit
loss arising in relation to contract assets.
5. Profit/(Loss) from operations
2021 2020
GBP'000 GBP'000
Profit/(Loss) from operations is stated after charging:
Profit on disposal of fixed asset (7) -
Depreciation of owned assets 80 97
Amortisation of right of use assets 173 166
Amortisation of intangible assets 5 5
Low value lease - 6
Auditor remuneration:
Audit of financial statements: Group and company 61 59
--------------------------------------------------------- -------- --------
6. Finance expense
2021 2020
GBP'000 GBP'000
Other interest payable - 1
Interest expense on lease liability 51 56
Net foreign exchange loss/(gain) 6 (3)
------------------------------------- ---------- ----------
Total finance expense 57 54
------------------------------------- ---------- ----------
7. Employees and Directors
Group and company 2021 2020
Number Number
Average number of persons (including Directors) employed
Senior management 9 8
Fee earners 42 37
Sales 8 10
Administration and finance 9 7
-------------------------------------------------------------- -------- --------
68 62
-------------------------------------------------------------- -------- --------
The number of permanent fee earners as at 31 March 2021 was 58 (2020: 37).
Staff costs for the above persons (including Directors) 2021 2020
GBP'000 GBP'000
Wages and salaries 4,599 4,176
Social security costs 537 482
Defined contribution pension costs 532 485
Equity settled share-based payments 37 28
-------------------------------------------------------------- -------- --------
5,705 5,171
-------------------------------------------------------------- -------- --------
2021 2020
Directors GBP'000 GBP'000
Emoluments 593 554
Benefits in kind 18 29
Money purchase pension contributions 57 49
-------------------------------------- -------- --------
Total remuneration 668 632
-------------------------------------- -------- --------
Social security costs 73 65
-------------------------------------- -------- --------
741 697
-------------------------------------- -------- --------
Three Directors (2020: three) had retirement benefits accruing
under money purchase pension schemes. Key management personnel are
considered to be the Directors. James McDonald was employed in
February 2020 followed by a handover period prior to his
appointment as Finance Director on 16 June 2020. During this
handover period he was considered to be key management and his
remuneration is included in the emoluments for the year ending 31
March 2020.
The 2020 emoluments includes a one-time discretionary settlement
fee for loss of Directors' office of GBP30,000.
8. Tax (credit)/charge
2021 2020
GBP'000 GBP'000
Current tax
Current tax on profits for the year - -
Deferred tax
(Increase)/Decrease in recognised deferred tax asset (41) 159
------------------------------------------------------ -------- --------
Total tax charge for the year (41) 159
------------------------------------------------------ -------- --------
The differences between the actual tax charge for the year and
the standard rate of corporation tax in the UK applied to profits
for the year are as follows:
2021 2020
GBP'000 GBP'000
Profit/(Loss) before tax 644 (602)
Profit/(Loss) before tax multiplied by standard rate of corporation tax in the UK of 19% (2020:
19%) 122 (114)
Expenses not deductible for tax purposes 2 13
(Recognition)/reversal of deferred tax on losses (165) 156
Movement in deferred tax not recognised for current year losses - 101
Prior year adjustments - 3
------------------------------------------------------------------------------------------------- -------- --------
Tax (credit)/charge for the year (41) 159
------------------------------------------------------------------------------------------------- -------- --------
2021 2020
GBP'000 GBP'000
Deferred tax asset
The movement in deferred tax is as follows:
At beginning of the year 32 191
Reversal/(Recognition) of previously unrecognised deferred tax on losses 41 (149)
Decrease in relation to timing differences - (10)
-------------------------------------------------------------------------- -------- --------
At end of the year 73 32
-------------------------------------------------------------------------- -------- --------
Deferred tax assets have been recognised in respect of tax
losses where the Directors believe it is probable that the assets
will be recovered. This expectation of recovery is calculated by
modelling conservative estimates of future taxable profits that can
be offset with historic trading losses brought forward. A deferred
tax asset amounting to GBP550,000 (2020: GBP710,000) has not been
recognised in respect of trading losses of GBP2,896,000 (2020:
GBP3,741,000), which can be carried forward indefinitely.
The Chancellor recently announced that the main rate of UK
corporation tax is to increase on 1 April 2023 from 19% to 25%. The
prevailing corporation tax rate of 19% has been reflected in the
calculation of the deferred tax.
9. Dividends
2021 2020
GBP'000 GBP'000
Final dividend for the year ended 31 March 2020 - nil per share - 319
Interim dividend for the year ended 31 March 2021 - nil per share - 160
------------------------------------------------------------------- --------- --------
Total dividend paid - 479
------------------------------------------------------------------- --------- --------
The Directors propose a final dividend of 2p per share (2020:
nil per share).
10. Earnings per ordinary share
Earnings per share have been calculated on the profit for the
year divided by the weighted average number of shares in issue
during the period based on the following:
2021 2020
Profit/(Loss) for the year GBP685,000 GBP(761,000)
--------------------------------------------------------- ---------------- ----------------
Average number of shares in issue 15,994,082 15,972,842
Effect of dilutive options 176,113 -
--------------------------------------------------------- ---------------- ----------------
Average number of shares in issue plus dilutive options 16,170,195 15,972,842
--------------------------------------------------------- ---------------- ----------------
Basic earnings/(loss) per share 4.28p (4.76)p
--------------------------------------------------------- ---------------- ----------------
Diluted earnings/(loss) per share 4.24p (4.76)p
--------------------------------------------------------- ---------------- ----------------
11. Intangible assets
Group and company Purchased software
GBP'000
Cost
At 31 March 2019 126
Additions -
Disposals -
------------------------------------- -------------------
At 31 March 2020 126
Additions 1
Disposals -
------------------------------------- -------------------
At 31 March 2021 127
------------------------------------- -------------------
Accumulated amortisation/impairment
At 31 March 2019 111
Charge for the year 5
Disposals -
------------------------------------- -------------------
At 31 March 2020 116
Charge for the year 5
Disposals -
------------------------------------- -------------------
At 31 March 2021 121
------------------------------------- -------------------
Net book value
At 31 March 2021 6
------------------------------------- -------------------
At 31 March 2020 10
------------------------------------- -------------------
12. Property, plant and equipment
Group and company Computer Fixtures Motor Total
hardware & fittings vehicles
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 31 March 2019 179 394 39 612
Additions 29 138 - 167
Disposals (17) (30) - (47)
-------------------------- ---------- ------------ ---------- --------
At 31 March 2020 191 502 39 732
Additions 31 7 - 38
Disposals (3) - (35) (38)
-------------------------- ---------- ------------ ---------- --------
At 31 March 2021 219 509 4 732
-------------------------- ---------- ------------ ---------- --------
Accumulated depreciation
At 31 March 2019 134 255 18 407
Charge for the year 26 62 9 97
Disposals (17) (30) - (47)
-------------------------- ---------- ------------ ---------- --------
At 31 March 2020 143 287 27 457
Charge for the year 22 54 4 80
Disposals (3) - (27) (30)
-------------------------- ---------- ------------ ---------- --------
At 31 March 2021 162 341 4 507
-------------------------- ---------- ------------ ---------- --------
Net book value
At 31 March 2021 57 168 - 225
-------------------------- ---------- ------------ ---------- --------
At 31 March 2020 48 215 12 275
-------------------------- ---------- ------------ ---------- --------
13. Leases
The Group as a lessee:
The Group has leases contracts for its office premises with
terms remaining ranging from 2 to 4 years. The lease liability has
been calculated on the basis of the termination option being taken.
There are no other future cash outflows in relation to the lease to
which the Group is potentially exposed. Each lease is represented
on the balance sheet as a right of use asset and a lease liability.
Short-term leases are not recognised and expensed to the profit and
loss statement. A property lease was subject to a rent review
during the year based upon prevailing rental evidence as at October
2019 and this increased the right-of-use asset and lease liability
by GBP83k.
Right-of-use assets
The carrying amounts of the right-of-use assets are as
follows:
Land and buildings Total
GBP'000 GBP'000
At 31 March 2019
Opening position 788 788
Amortisation (166) (166)
---------------------- ------------------- --------
At 31 March 2020 622 622
---------------------- ------------------- --------
Rent review increase 83 83
Amortisation (173) (173)
---------------------- ------------------- --------
At 31 March 2021 532 532
---------------------- ------------------- --------
Lease liabilities
The carrying amount of the lease liabilities recognised are as
follows:
Land and buildings Total
GBP'000 GBP'000
At 31 March 2019
Opening position 1,128 1,128
Interest expense 56 56
Lease payments (246) (246)
---------------------- ------------------- --------
At 31 March 2020 938 938
---------------------- ------------------- --------
Rent review increase 82 82
Interest expense 51 51
Lease payments (338) (338)
---------------------- ------------------- --------
At 31 March 2021 733 733
---------------------- ------------------- --------
At the balance sheet date, the Group had outstanding discounted
commitments for future lease payments as follows:
At 31 March 2021 Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years
GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------------- ------------------------ ---------------------- ----------------------
Lease liabilities 77 230 269 157
------------------- --------------- ------------------------ ---------------------- ----------------------
As at 31 March 2020, the Group had outstanding discounted
commitments for future lease payments as follows:
At 31 March 2020 Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years
GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------------- ------------------------ ---------------------- ----------------------
Lease liabilities 54 218 288 378
------------------- --------------- ------------------------ ---------------------- ----------------------
At the balance sheet date, the Group had outstanding
undiscounted commitments for future lease payments as follows:
At 31 March 2021 Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years
GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------------- ------------------------ ---------------------- ----------------------
Lease liabilities 86 258 290 167
------------------- --------------- ------------------------ ---------------------- ----------------------
As at 31 March 2020, the Group had outstanding undiscounted
commitments for future lease payments as follows:
At 31 March 2020 Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years
GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------------- ------------------------ ---------------------- ----------------------
Lease liabilities 76 241 322 406
------------------- --------------- ------------------------ ---------------------- ----------------------
The Group as a lessor:
Finance lease receivables
The Group has entered into a lease arrangement considered to be
a finance lease, representing rentals payable to the Group for a
rental of a proportion of a leased property. The carrying amounts
of the lease receivable asset are as follows:
Land and buildings Total
GBP'000 GBP'000
At 31 March 2019
Opening position 420 420
Interest income 20 20
Payments received (143) (143)
------------------- ------------------- --------
At 31 March 2020 297 297
------------------- ------------------- --------
Interest income 15 15
Payments received (119) (119)
------------------- ------------------- --------
At 31 March 2021 193 193
------------------- ------------------- --------
At the balance sheet date, the Group had discounted future lease
receivables as follows:
At 31 March 2021 Up to 3 months Between 3 and 12 months Between 1 and 2 years
GBP'000 GBP'000 GBP'000
------------------- --------------- ------------------------ ----------------------
Lease receivables 27 81 85
------------------- --------------- ------------------------ ----------------------
As at 31 March 2020, the Group had discounted future lease
receivables as follows:
At 31 March 2020 Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years
GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------------- ------------------------ ---------------------- ----------------------
Lease receivables 26 78 108 85
------------------- --------------- ------------------------ ---------------------- ----------------------
At the balance sheet date, the Group had undiscounted future
lease receivables as follows:
At 31 March 2021 Up to 3 months Between 3 and 12 months Between 1 and 2 years
GBP'000 GBP'000 GBP'000
------------------- --------------- ------------------------ ----------------------
Lease receivables 30 89 89
------------------- --------------- ------------------------ ----------------------
As at 31 March 2020, the Group had undiscounted future lease
receivables as follows:
At 31 March 2020 Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years
GBP'000 GBP'000 GBP'000 GBP'000
------------------- --------------- ------------------------ ---------------------- ----------------------
Lease receivables 30 89 119 89
------------------- --------------- ------------------------ ---------------------- ----------------------
The total lease receivable of GBP193k (2020: GBP297k) is
disclosed as non-current assets of GBP85k and current assets of
GBP108k. The comparative disclosure for 2020 has not been made.
14. Investments
Company
Investments are:
(a) Generic Software Consultants Limited ("Generic"), a 100%
subsidiary undertaking, in respect of both voting rights and issued
shares, which is registered in England and Wales and has an issued
share capital of 5,610 US$1 ordinary shares. The investment is
stated in the Company's books at GBP440.
Up to 31 March 2009 Generic acted as an agent for the business,
but did not enter into any transactions in its own right: its
business was included within the figures reported by the Company.
On 1 April 2009 the agency agreement was terminated and all
business is now conducted directly by the parent company through
its Generic business.
(b) Triad Special Systems Limited, Generic Online Limited, Zubed
Geospatial Limited, Zubed Sales Limited, are all 100% subsidiaries
which are registered in England and Wales. They are dormant
companies, which have never traded. Each has a share capital of
GBP1.
The registered office of Triad Special Systems is Huxley House,
Weyside Park, Catteshall Lane, Godalming, Surrey GU7 1XE. The
registered office of the other subsidiaries is 3 Caldecotte Lake
Business Park, Caldecotte Lake Drive, Caldecotte, Milton Keynes MK7
8LF.
15. Trade and other receivables
Group and company 2021 2020
GBP'000 GBP'000
Trade receivables 2,015 2,526
Less: provision for expected credit losses (19) (26)
-------------------------------------------- -------- --------
Trade receivables-net 1,996 2,500
Contract assets 170 68
Other debtors 229 17
-------------------------------------------- -------- --------
Trade and other receivables 2,395 2,585
Prepayments 119 156
-------------------------------------------- -------- --------
2,514 2,741
-------------------------------------------- -------- --------
Other debtors of GBP229k (2020: GBP17k) is with respect to legal
costs recoverable and accrued interest thereon with a shareholder
who holds more than 20% of the company's issued share capital. The
fair value of trade and other receivables approximates closely to
their book value.
The lifetime expected credit losses on trade receivables as at
31 March 2021 is calculated as follows:
Group and company Expected default rate Gross carrying amount Credit loss allowance
(A) (B) (A x B)
% GBP'000 GBP'000
Current 0.75 1,931 15
Up to 30 days past due 5.0 84 4
------------------------ ---------------------- ---------------------- ----------------------
2,015 19
------------------------ ---------------------- ---------------------- ----------------------
No provision has been recognised for contract assets and other
debtors as they are expected to be fully recovered.
The lifetime expected credit losses on trade receivables as at
31 March 2020 were calculated as follows:
Group and company Expected default rate Gross carrying amount Credit loss allowance
(A) (B) (A x B)
% GBP'000 GBP'000
Current 0.5 2,236 11
Up to 30 days past due 5.0 290 15
------------------------ ---------------------- ---------------------- ----------------------
2,526 26
------------------------ ---------------------- ---------------------- ----------------------
Movements on the provision for expected credit loss are as
follows:
Group and company 2021 2020
GBP'000 GBP'000
At beginning of the year 26 20
Charged to income statement - 6
Credited to income statement (7) -
At end of the year (credit loss allowance) 19 26
-------------------------------------------- -------- --------
The carrying amount of the Group's trade and other receivables
are denominated in the following currencies:
Group and company 2021 2020
GBP'000 GBP'000
Sterling 2,395 2,566
Euros - 19
------------------- -------- --------
2,395 2,585
------------------- -------- --------
16. Cash and cash equivalents
Group and company 2021 2020
GBP'000 GBP'000
Cash available on demand 4,918 3,840
-------------------------- -------- --------
The fair value of cash and cash equivalents approximates closely
to their book value.
The carrying amount of the Group's cash and cash equivalents is
denominated in the following currencies:
Group and company 2021 2020
GBP'000 GBP'000
Sterling 4,762 3,708
Euros 156 132
------------------- -------- --------
4,918 3,840
------------------- -------- --------
For the purpose of the consolidated cash flow statement, cash
and cash equivalents consist of cash, as detailed above.
17. Trade and other payables
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 923 1,205 923 1,205
Accruals 324 312 324 312
Owed to subsidiary - - 5 5
------------------------------------ -------- -------- -------- --------
1,247 1,517 1,252 1,522
Contract liabilities 256 41 256 41
Other taxation and social security 745 569 745 569
------------------------------------ -------- -------- -------- --------
2,248 2,127 2,253 2,132
------------------------------------ -------- -------- -------- --------
The majority of trade and other payables are settled within
three months from the year end.
The fair value of trade and other payables approximates closely
to their book value.
The carrying amount of trade and other payables is denominated
in the following currencies:
Group Company
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
Sterling 1,237 1,475 1,242 1,480
Euros 10 25 10 25
---------- -------- -------- -------- --------
1,247 1,500 1,252 1,505
---------- -------- -------- -------- --------
18. Provisions
Group and company Provision for property dilapidations
GBP'000
At 1 April 2020 197
Additions -
Charged to income statement -
Utilised in year -
At 31 March 2021 197
----------------------------- -------------------------------------
The maturity profile of the present value of provisions is as
follows:
Group and company 2021 2020
GBP'000 GBP'000
Non-current
Provision for property dilapidation 197 197
------------------------------------- -------- --------
The provision for property dilapidation covers the estimated
future costs required to meet obligations under property leases to
redecorate and repair property.
19. Share capital 2021 2020
Ordinary shares of 1p each
Issued, called up and fully paid:
Number 16,028,579 15,979,979
Nominal value GBP160,286 GBP159,800
During the year 48,600 1p ordinary shares were issued as a
result of the exercise by employees of share options:
Number Option price Increase in share capital Increase in share premium
28,600 13.5p GBP286 GBP3,575
20,000 11.0p GBP200 GBP2,000
------- ------------- -------------------------- --------------------------
48,600 GBP486 GBP5,575
20. Share-based payments
At 31 March 2021, 739,000 options granted under employee share
option schemes remain outstanding:
Date option granted Number Exercise price Period options exercisable
===================== ======== =============== =======================================
23 September 2011 129,000 13.5p 23 September 2014 to 23 September 2021
===================== ======== =============== =======================================
18 September 2014 75,000 11.0p 18 September 2017 to 18 September 2024
===================== ======== =============== =======================================
9 March 2018 535,000 53.5p 1 April 2021 to 9 March 2028
Under the terms of the scheme, options vest after a period of
three years continued employment and are subject to the following
performance conditions:
For options granted on 9 March 2018: 100% of the shares granted
under an option will vest if the Company's share price at 31 March
2021 has increased by 30% or more from the share price as at the
date of grant. 50% of shares granted under an option will vest if
the Company's share price at 31 March 2021 has increased by 15%
from the share price as at the date of grant. Between these upper
and lower thresholds, awards vest on a straight-line basis.
For all other options: In at least one financial year after the
date of grant, the Company shall have achieved a positive basic
earnings per share (subject to adjustment to exclude identified
exceptional items), as reported in its audited annual accounts.
Options have been valued using the Black-Scholes option-pricing
model. No performance conditions were included in the fair value
calculations.
No options were granted during the year (2020: nil).
The total expense recognised in the year is GBP37,000 (2020:
GBP28,000).
A reconciliation of option movements over the year to 31 March
2021 is shown below:
2021 2020
Number of options Weighted average Number of options Weighted average
exercise price exercise price
Pence Pence
Outstanding at start of
year 817,600 40.3 1,028,600 37.7
Granted - - - -
Exercised (48,600) 12.5 (11,000) 13.5
Forfeited (30,000) 38.0 (200,000) 27.4
-------------------------- ------------------ ------------------------ ------------------ ------------------------
Outstanding at end of
year 739,000 42.2 817,600 40.3
-------------------------- ------------------ ------------------------ ------------------ ------------------------
Exercisable at end of
year 739,000 42.2 262,600 12.5
-------------------------- ------------------ ------------------------ ------------------ ------------------------
There were 48,600 options exercised during the year. The above
figures include options held by Directors which are set out in the
Directors' remuneration report on page 27.
The weighted average share price at the date of exercise for
share options exercised during the period was 75.6p (2020: 43.0p).
The options outstanding as at 31 March 2021 had an exercise price
of 11.0p, 13.5p or 53.5p and a weighted average remaining
contractual life of 5.4 years (2020: 6.2 years).
21. Related party transactions
The Group and Company rents one of its offices under a lease
expiring in 2028, with a break clause in 2023. The current annual
rent of GBP215,000 was fixed, by independent valuation, at the last
rent review in 2008. J C Rigg, a Director, has notified the Board
that he has a 50% beneficial interest in this contract. The balance
owed at the year-end was GBPnil (2020: GBPnil).
Five year record
For accounting periods commencing after 1 April 2018 the
accounting treatment changed due to the introduction of IFRS 9 and
IFRS 15. For the accounting period commencing 1 April 2019 further
changes were made due to the introduction of IFRS 16. Therefore the
accounting policies over the period detailed below will vary and be
inconsistent.
Consolidated income statement
Years ended 31 March 2021 2020 2019 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 17,815 19,354 22,713 27,819 30,912
Gross profit 3,810 2,854 4,376 4,724 5,000
Profit/(Loss) before tax 644 (602) 1,017 1,662 1,521
Tax credit/(charge) 41 (159) (132) (38) 13
Profit/(Loss) after tax 685 (761) 885 1,624 1,534
Retained profit/(loss) for the financial year 685 (761) 885 1,624 1,534
Basic earnings/(loss) per share (pence) 4.28 (4.76) 5.60 10.45 10.08
----------------------------------------------- -------- -------- -------- -------- --------
Balance sheet
As at 31 March 2021 2020 2019 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets 921 1,236 411 463 503
Current assets 7,540 6,581 7,937 7,736 7,299
Current liabilities (2,555) (2,399) (2,483) (2,997) (4,118)
Non-current liabilities (623) (863) (99) (77) (45)
----------------------------------------------- -------- -------- -------- -------- --------
Net assets 5,283 4,555 5,766 5,125 3,639
----------------------------------------------- -------- -------- -------- -------- --------
Share capital 160 160 160 156 155
Share premium account 666 660 659 619 605
Capital redemption reserve 104 104 104 104 104
Retained earnings 4,353 3,631 4,843 4,246 2,775
----------------------------------------------- -------- -------- -------- -------- --------
Equity shareholders' funds 5,283 4,555 5,766 5,125 3,639
----------------------------------------------- -------- -------- -------- -------- --------
Shareholders' information and financial calendar
Share register
Equiniti maintain the register of members of the Company. If you
have any questions about your personal holding of the Company's
shares, please contact:
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Telephone: 0371 384 2486
If you change your name or address or if the details on the
envelope enclosing the report, including your postcode, are
incorrect or incomplete, please notify the registrar in
writing.
Shareholders' enquiries
If you have an enquiry about the Group's business, or about
something affecting you as a shareholder (other than queries that
are dealt with by the registrar) you should contact the Company
Secretary, by letter or telephone at the Company's registered
office.
Company Secretary and registered office:
James McDonald
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone: 01908 278450
Email: investors@triad.co.uk
Website: www.triad.co.uk
Financial calendar
Annual General Meeting The date of the AGM is to be confirmed. The Board are considering the impact of Covid-19 on
AGM arrangements and will publish the AGM notice at the appropriate time.
Financial year ended 31 March 2022: expected announcement of results
Half year November 2021
Full year June 2022
Corporate information
Executive Directors
John Rigg, Chairman
Adrian Leer, Managing Director
Tim Eckes, Client Services Director
James McDonald, Finance Director
Non-executive Directors
Alistair Fulton
Chris Duckworth
Charlotte Rigg
Secretary and registered office
James McDonald
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone: 01908 278450
Email: investors@triad.co.uk
Website: www.triad.co.uk
Country of incorporation and domicile of parent company
United Kingdom
Legal form
Public limited company
Company number
2285049
Registered Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Brokers
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR
Solicitors
Freeths
Davy Avenue
Knowlhill
Milton Keynes
MK5 8HJ
Bankers
Lloyds Bank plc
City Office
11-15 Monument Street
London
EC3V 9JA
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
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END
FR GPURPQUPGGAC
(END) Dow Jones Newswires
June 15, 2021 02:00 ET (06:00 GMT)
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