TIDMTRD
RNS Number : 8402M
Triad Group Plc
26 May 2022
Legal Entity Identifier (LEI) No. 213800MDNBFVEQEN1G84
Triad Group Plc ("Triad" or "the Company")
Audited results for the year ended 31 March 2022
(Company number: 02285049)
Triad Group Plc is pleased to announce its audited results for
the year ended 31 March 2022.
The Board is proposing a final dividend of 4p per share,
bringing the total dividend to 6p for the financial year. 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
Ruari McGirr
Alexandra Campbell-Harris
Tel: 020 7614 5900
Strategic report
Financial highlights
Year ended Year ended
31 March 2022 31 March 2021 Difference
--------------------------- --------------- --------------- -----------
Revenue GBP17.0m GBP17.8m -GBP0.8m
--------------------------- --------------- --------------- -----------
Gross Profit GBP4.8m GBP3.8m +GBP1.0m
--------------------------- --------------- --------------- -----------
Gross Profit % 28.1% 21.4% +6.7%
--------------------------- --------------- --------------- -----------
Profit before tax GBP1.1m GBP0.6m +GBP0.5m
--------------------------- --------------- --------------- -----------
Profit after tax GBP1.2m GBP0.7m +GBP0.5m
--------------------------- --------------- --------------- -----------
Cash reserves GBP5.3m GBP4.9m +GBP0.4m
--------------------------- --------------- --------------- -----------
Basic earnings per share 7.16p 4.28p +2.88p
--------------------------- --------------- --------------- -----------
Final dividend - proposed 4p 2p +2p
--------------------------- --------------- --------------- -----------
Chairman's statement
Dr John Rigg
Financial headlines
For the year ended 31 March 2022 the Group reports revenue of
GBP17.0m (2021: GBP17.8m). The gross profit as a percentage of
revenue has increased to 28.1% (2021: 21.4%) and profit before tax
was GBP1.1m (2021: GBP0.6m). Profit after tax was GBP1.2m (2021:
GBP0.7m) as a result of positive movements in the deferred tax
asset (see page 14). Cash reserves have increased to GBP5.3m (2021:
GBP4.9m). The effects of the Covid-19 pandemic upon both financial
results in 2022 and current trading are set out on pages 6 and
18.
Gross profit increased by GBP1.0m during the year due to the
ongoing increase of consultancy revenues as a proportion of total
revenue, serviced by permanent fee earning consultants. Total
revenue in the year reduced by a net GBP0.8m. Gross profit as a
percentage of revenue has increased significantly to 28.1% (2021:
21.4%) as a result of the expansion of higher-margin consultancy
services. Cash has increased by GBP0.4m during the year to GBP5.3m
(2021: GBP4.9m), which reflects the translation of profits, less
dividends, to cash.
Overview of results
I am very pleased to report another impressive set of results,
building on the strong position created in the previous year. The
Group continued to deliver outstanding service to our clients
despite the ongoing challenge of Covid-19 and the restrictions
associated with the pandemic. Most of our staff continued to work
from home during the period, without compromising on either quality
or productivity.
During the year, I was also very pleased to see the progress
made in recruiting more permanent fee-earning consultants. This
recruitment is a cornerstone of the strategy to reinforce our
credentials as a pre-eminent consultancy and to move away from the
transactional business of IT recruitment. The Group has largely
completed during the year the transition to a pure consultancy and
in so doing has laid important foundations for the future. Indeed,
the improvements in gross profit and gross margin during the year
are already testament to the benefits of the strategy. Further
operational changes to underpin our consultancy ethos included the
successful elimination of all sales commission schemes in favour of
a salary-only remuneration scheme, implemented without losing any
staff in the process.
Using the Group's internal team for the significant majority of
our recruitment during the year, the Group's headcount increased by
37 from 81 to 118 at year end, with all of the new recruits being
fee-earning consultants. Despite the significant increase in
headcount, utilisation levels as a percentage of available time
improved during the year. Much of this consultant utilisation went
into delivering services at key accounts including the Ministry of
Justice, Department for Business, Energy and Industrial Strategy,
Westcoast Holdings Ltd, and Department for Transport. I am very
proud to know that our clients are trusting us with
mission-critical projects, many of which are making a profound
impact not only on the client organisations themselves but on the
wider society in areas such as criminal justice and carbon
emissions.
I was also extremely proud to see the Group's successful
application to join the new Digital Specialists and Programmes
framework towards the end of the year, making the Group one of only
27 organisations across the UK to hold a place on both lots of this
important route into Government digital services.
Outlook
Following a significant year of transition, the Group is looking
forward to building on the foundations laid. The new year has
started with good utilisation levels that are planned to improve
significantly across the period. Headcount is planned to increase
to meet expected demand.
The Group will continue to work with clients in need of expert
teams of consultants capable of providing technology-based services
and products to solve their business problems. Whilst competition
remains fierce, we remain confident in our ability to command fees
commensurate with the value we are creating for our clients. We
will continue to leverage our expertise in Central Government and
Law Enforcement to deepen our presence in these sectors whilst also
expanding our footprint in the private sector, particularly in
businesses who need to be liberated from the grip of their legacy
systems.
The Group remains debt free except for lease liabilities
reported due to the application of IFRS 16 and enjoys strong
reserves of cash.
Although the national economy as a whole is currently looking at
testing times ahead, I am confident that the Group has been
carefully engineered through cash control, quality recruitment,
customer selection and management cohesiveness to demonstrate its
robustness and resilience. I look forward to the future with great
enthusiasm.
Dividend
Recognising the strength of this year's performance and the
Group's confidence in the near future, the Board proposes a final
dividend of 4p per share (2021: 2p per share), which together with
the interim dividend already paid of 2p (2021: nil), totals 6p per
share for the financial year (2021: 2p per share).
Employees
On behalf of the Board of Directors, I would like to thank all
of the staff for their commitment and contribution during a very
challenging year.
Dr John Rigg
Executive Chairman
25 May 2022
Managing Director's statement
Adrian Leer
Profit in the year increased to GBP1.1m representing significant
progress with the strategy to concentrate the Group's efforts on
its consultancy offering, serviced by permanent fee earning
consultants. This was underscored by improvements in gross margin
percentage, up to 28.1% from 21.4% in the previous year. Revenue
declined by GBP0.8m to GBP17.0m due to the reduction of
lower-margin contractor assignments. Indeed, consulting revenue
increased by 70% versus previous year. Cash reserves increased by
GBP0.4m to GBP5.3m. The Group experienced no trading bad debts and
had no external funding requirements.
Business commentary
The Group's profit reflects the hard work of our expanding team
as we continue on our journey to become one of the UK's favourite
technology consultancies. Our consultant headcount increased by 37,
all of whom were sourced via our internal team and colleague
referrals. Many of these new recruits helped to fulfil demand on
key services, including Ministry of Justice, Department for BEIS,
and Department for Transport.
Our services continued to be provided on a predominantly remote
basis due to the restrictions of the pandemic. A benefit of the
now-established remote working model has been our ability to
attract staff from areas across the UK, including Cardiff, Aberdeen
and Bristol. Our virtual on-boarding process has been hailed by
staff as best-in-class and reflects our determination to offer
something different to consultants joining the business.
The majority of our work centred around significant engagements
with existing clients, some of which were at the early stages of
development at the beginning of the year.
At Ministry of Justice, we have been increasing the size of our
project management and PMO team to cope with the delivery of 30+
projects during the year. Our consultants have been involved in
successful delivery across a broad spectrum of projects including
work on the Nightingale courts, prison estate expansion, and youth
education services. Elsewhere at MOJ, our business analysis service
continued to provide a core capability to the Crime programme as
the Common Platform rolled out across the courts of England and
Wales. In June, we completed the transition of the PSD service on
the Crime programme to the new service provider marking a
successful multi-year engagement where Triad teams established the
operations capability for this critical platform.
During the year, we also grew the number of consultants
supporting a variety of initiatives at Department for Business,
Energy and Industrial Strategy. Projects included significant
Microsoft SharePoint migration activity, various software delivery
projects, and the roll-out of communication facilities across wide
swathes of this significant Government organisation.
At Department for Transport, our team is developing a system to
help fuel suppliers manage their renewable fuel obligations. This
project epitomises Triad's expert approach to making robust digital
services that help Government enact and implement legislation in
the shape of modern, maintainable solutions. Indeed, we were
delighted to have our work with DfT short-listed at the BCS/UK IT
Industry awards for the "best public sector project".
The multi-year association with our policing client continued
throughout the period, allowing us to provide expert technical
capability and delivery management capacity to help modernise the
systems being used to support front-line law enforcement.
Within the private sector, highlights included the complex
software and platform engineering work we undertook for Westcoast
Holdings Ltd, helping one of the UK's biggest technology
distributors to avail themselves of best practice around the
introduction of automated delivery pipelines within a very
demanding operational environment. At Renewable Energy Systems we
played a key role in helping them successfully complete the on-time
sale of their French operation, now known as Q-Energy and the
latest client to join the Triad fold. Our long-running association
with leading law firm Foot Anstey continued, and during the period
we provided continuing strategic advice to the office of the Chief
Technology Officer and some advanced innovation around the use of
data lakes within a legal practice.
In the non-profit sector, we have been working with Marine
Stewardship Council to develop a highly functional prototype for
their fishery assessment process. This drew heavily on our user
research and user experience practice, who have been very active
during the year highlighting across multiple channels the
importance of UR/UX in good digital services.
Our work has been recognised through a number of client
nominations, short-listing in national and regional competitions,
and through partner accreditations. We were delighted to win the
Tech Company of the Year award at the Global Business Tech Awards.
One of the few UK consultancies with seven Microsoft Gold
competencies, we are also one of only a handful of Workpoint
partners in the UK. We have been continuing to explore the
application of blockchain as a technology with our partner Stratis,
and sponsored their hackathon event to encourage teams to develop
innovative ways of exploiting the technology.
During the year we gained places on two significant Government
frameworks: Technology Services 3 (TS3), and Digital Specialists
and Programmes (DSP). On the latter, we were one of only 27
companies in the UK to qualify for both lots - an achievement of
which we are justifiably proud. As part of our strategic focus to
expand our law enforcement footprint, we also successfully applied
to join the Home Office ACE framework and the Fortrus framework.
Further, our Managing Consultant is now a member of the TechUK
Digital Justice Working Group, helping to influence industry
thinking within this important domain.
Social value is rightly an increasing concern of Government and
features prominently in its procurement exercises. Triad has been
active in this field, being a founder member of the Social Value
Leadership Team facilitated by the Worshipful Company of
Information Technologists. Our own social value efforts have
focused on helping people to find jobs whether through our
University challenge event or our emphasis on helping people with
disabilities to consider a career in technology. We also encouraged
staff to participate in fund-raising activities for our chosen
charity, Action for Children, with a number of colleagues
participating in the national "Boycott your Bed" campaign.
Many of our colleagues have contributed their thinking to
industry via forums such as Digital Leaders, with presentations on
test automation, user experience and wellbeing in the workplace
being among the highlights.
This combination of hard work, outstanding customer service and
a passion for the profession encapsulates neatly the essence of
Triad consultants and I would like to extend my thanks to all of
them and their support teams for playing such an important part in
delivering the success of the last year.
Adrian Leer
Managing Director
25 May 2022
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 may be 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 as appropriate.
The principal risks identified are:
Covid-19
The business was proven to be agile and robust through the
pandemic. The main risks that may potentially occur, are a
reduction in new business pipeline opportunities, payment delays
and the recovery of debtor balances. These risks were met head-on
during the crisis, and the same mitigating actions taken during
this period are still consistently applied - the requirement to
service clients remotely and effectively, a very strong focus on
short-term forecasting, and maintaining and improving cash
collection. The pandemic generated a new world of work, with a
greater emphasis on flexible working. Employee engagement is key to
mitigating the risks presented in this new marketplace, with a
continuous review of flexible working patterns, remuneration and
benefits remain 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.
Economy
The political and economic uncertainty generated by Brexit still
has the potential negatively to 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.
Due to the nature of the Group's client base and activities in
the UK, the current conflict in Ukraine is not considered to have a
direct impact, however there may be a secondary effect as a result
of the impact on the wider economy. The Directors have not seen any
impact to date but will continue to monitor this closely.
Inflationary pressures in the UK manifest mainly in attraction
and retention of staff and the Group's response to this risk is
outlined within the availability of staff below.
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
In an extremely difficult market for talent acquisition, the
ability to access appropriately skilled resources, recruit and
retain the best quality staff are key to ensuring the ability to
deliver profitable growth and deliver IT services to our clients.
This situation is exacerbated by existing and long-term outlook
upon salary and general inflation increases. The Group continues to
recruit the best quality individuals and ensures a resilient
network of associate resources is scaled appropriately to meet the
demands of the business. To mitigate these risks, 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 awarded an interim dividend of
2p per share (2021: nil per share) to shareholders as the result of
careful review of forecasted profitability and cash flow. The Board
has proposed a final dividend of 4p per share for the year ended 31
March 2022 due to the recent trading performance and expected cash
flows (2021: 2p 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
consultant numbers to improve and broaden the skill sets and
enhance delivery to clients, and utilise contractors on a limited
basis.
-- 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 the financial year, the Group
continued to explore delivery methods with partners that enable the
acquisition of new business, including the successful partnership
with Workpoint to deliver licensing and consultancy.
-- 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 the financial year, the Group continued
its high level of communication with employees, with regular Group
meetings chaired by the Managing Director, who also held one-to-one
meeting with employees as requested. 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 are reviewed on an annual basis to ensure
retention of employees, as are flexible working environments.
During the financial year, the Board awarded a number of employees
restricted stock units (RSUs) under the new Triad Employee Share
Incentive Plan. See page 36 for details.
-- 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 three financial years. Given
the Group's business model and commercial and financial exposures
the Directors consider that three 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 based upon the strategic direction of the
business. 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 presented in 2020 and into 2022, the Group was
able to successfully navigate the issues presented by the
disruptions. For the year ended 31 March 2022, all key ratios and
profitability improved, and cash reserves increased without the
requirement for any external funding or needing to 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 2023 financial year with a conservative
outlook.
The viability assessment considered the principal risks as set
out on page 6. 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 all
current client contracts discontinued at expiry, with no extension
or replacement and with no further cost mitigation. The group have
extended at a high level these forecasts to 3 years for the
purposes of considering viability.
In all scenarios, it was found that there was sufficient
headroom in cash flow to continue operating within current
resources for the next 18 months, and without the requirement to
utilise the available financing facility as detailed in note 3 or
obtain further external funding. The Group was therefore found to
have sufficient financial strength to withstand further disruption
due to the pandemic.
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 3-year
viability period. In reaching this assessment, the Board has taken
into account future trading, 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;
2022 2021
========================================================================== =============== ==============
Revenue GBP17,015,000 GBP17,815,000
========================================================================== =============== ==============
Profit from operations GBP1,108,000 GBP686,000
========================================================================== =============== ==============
Earnings before interest, tax, depreciation and amortisation (EBITDA)(1)
GBP1,379,000 GBP944,000
========================================================================== =============== ==============
Gross margin 28.1% 21.4%
========================================================================== =============== ==============
Average headcount 104 68
(1) EBITDA - Profit from operations of GBP1,108,000 (2021:
GBP686,000) adding back the depreciation and amortisation charge in
the year of GBP271,000 (2021: 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 team to 20% which is comparable to 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 2 1 3
================= ===== ======= ======
Employees 69 25 94
================= ===== ======= ======
Total 77 27 104
The average female proportion of the Group during the year
ending 31 March 2022 was 26% (2021: 22%)
Environment and greenhouse gas reporting
This statement contains the Group's first TCFD aligned
disclosure in accordance with FCA requirements of Premium Listed UK
Corporates. The Group has provided responses across the TCFD's
pillars and aims to advance the maturity of its climate-related
actions and disclosures on an annual basis. The four pillars are as
follows:
Governance - Governance of climate related risks and Assessing, identifying, and managing climate related
opportunities issues is part of the management team's
responsibilities. The Board are informed of any climate
related issues identified by the management
team as and when they arise. When an issue is identified,
the Board will monitor the progress
of addressing this issue on a relevant basis.
========================================================== ==========================================================
Strategy - Impacts of actual or potential climate No actual or potential impacts on the Group have been
related risks and opportunities analysed due to the limited impact of
climate related issues and opportunities over the short,
medium and long term, and these have
not been considered when making strategic decisions. If,
and when a risk or opportunity is
deemed to have a greater impact, the Group will follow
the same process as identifying and
assessing other risks and opportunities, described on
page 6.
With the Group's workforce having a full 2 years'
experience of working remotely, no localised
climate issues will have a material impact. National
climate related risks, including electrical
supply issues to the entire country at a single time,
have been deemed exceptionally remote
and not assessed.
Due to the nature of the business, materiality of
climate related risks and opportunities
is determined by length of downtime of the workforce.
There are no financial related disclosures due to the
immateriality of the risks and opportunities,
in line with the TCFD recommendations.
========================================================== ==========================================================
Risk Management - identification, assessment, and
management of climate related risks Climate related risks are assessed as per other risks to
the Group, described on page 6.
There are no regulatory requirements that would have a
material impact on the Group, and in
line with our Carbon Reduction Plan, the Group is moving
towards zero rated emissions by 2050.
========================================================== ==========================================================
Metrics - metrics and targets used to assess, manage and The Group's emissions per scope are detailed below in
report relevant climate-related risks line SECR requirements, along with our
and opportunities KPIs of tCO(2) e per GBP1m of revenue and per average
total headcount. In November 2021 the
Group published its first Carbon Reduction Plan,
available on our website, committing to achieving
Net Zero emissions by 2050. It included a shorter-term
target to reduce carbon emissions by
18.1% to 150 tCO(2) e over the five years to 2025,
whilst staff numbers are growing. The continuing
reduction will be achieved by embedding a degree of
working from home as an ongoing policy,
implementing a paperless office environment, switching
to green energy tariffs, and increasing
the profile of environmental issues and promotion of
good practices through staff communication
channels. The current measurements remain on target
against this plan.
The Group has used mileage reports, public transport journey
details and meter readings converted to tCO(2) e using the 2021 UK
Government's conversion factors for company reporting of greenhouse
gas emissions.
The annual quantity of Greenhouse Gas (GHG) emissions for the
period 1 April 2021 to 31 March 2022 in tonnes of carbon dioxide
equivalents (tCO(2) e) for the Group is shown in the table below,
updated following reassessment of carbon footprint criteria:
GHG emissions 2022 2021
tCO(2) e(1) tCO(2) e(1)
Emission source:
====================================================== ============ ============
Scope 1 - Combustion of fuel 8 11
====================================================== ============ ============
Scope 2 - Electricity and heat purchased for own use 26 29
------------------------------------------------------ ------------ ------------
Total 34 40
====================================================== ============ ============
Scope 3 - Including business travel and commuting 11 -
------------------------------------------------------ ------------ ------------
Total 45 40
====================================================== ============ ============
tCO(2) e per GBP1m revenue 2.6 2.2
====================================================== ============ ============
FTE 104 68
====================================================== ============ ============
Intensity ratio (tCO(2) e per FTE) 0.4 0.6
(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 2021 to 31 March 2022
in kWh is shown in the table below:
2022 2021
=============================== ======== ========
Energy consumed (kWh) 124,397 122,763
=============================== ======== ========
kWh per GBP1m revenue 7,317 6,897
=============================== ======== ========
FTE 104 68
=============================== ======== ========
Intensity ratio (kWh per FTE) 1,196 1,805
The emissions are generated solely by activities in the UK.
Emissions generated by electricity consumption is 59% (2021:
71%).
The Group has not been subject to any environmental fines during
the year ended 31 March 2022 (2021: 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,
during 2020 Triad was 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 under-represented groups working in
UK technology and during 2021 we 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 GBP17.0m (2021: GBP17.8m). This
reduction is due to the continued focus on consultancy assignments
serviced by permanent fee earning consultants, which has led to a
reduction in relatively low margin contractor led assignments and
an increase in higher margin consultancy business. This strategy
has resulted in an increase in gross profit to GBP4.8m (2021:
GBP3.8m) and an increase in gross margin as a percentage of revenue
to 28.1% (2021: 21.4%). This strategy continues to improve the
Group's service quality to our client base and improves
profitability.
The Group reports a profit from operations before taxation of
GBP1.1m (2021: GBP0.6m). The positive variance in profitability
before tax of GBP0.5m was due to the increase in gross profit
(GBP1.0m) offset by the increase in overheads of (GBP0.5m). The
Group reports a profit after tax of GBP1.2m (2021: GBP0.7m).
The balance sheet remains strong with no external debt, with the
exception of the lease liabilities arising due to the application
of IFRS 16, and the Group enjoys strong reserves of cash at GBP5.3m
(2021: GBP4.9m) and no bad debts (2021: nil).
Overheads
Administrative expenses for the year are GBP3.7m (2021:
GBP3.1m). The increase of GBP0.6m was predominantly due to
personnel costs. The Group was able to sustain this increase in
cost as a result of improvements in both trading and gross margins.
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 GBP8.6m (2021: GBP5.7m)
(note 7). The total average headcount for the year has increased to
104 (2021:68). The average number of consultants during the year
was 77 (2021: 42) and at the close of the year the number was 95
(2021: 58). Growth in consultant numbers hand-in-hand with new
business wins continues to be the main driver to the Group's
strategy of growing both margin and profitability. Non-consultant
staff numbers at the close of the year have remained static as the
ratio of fee earners to administration staff improved to 9:1 (2021:
5:1).
Cash
Cash and cash equivalents as at 31 March 2022 increased to
GBP5.3m (2021: GBP4.9m). The maintenance of working capital
efficiencies during an extended period of growth during the year,
resulted in a net cash inflow from operating activities of GBP1.2m
(2021: GBP1.3m). During the year, trading and cash collection was
such that the Group was not required to take advantage of the
Government deferral schemes or access its Lloyds financing
facility. The net cash outflow from financing activities was
GBP0.8m (2021: outflow GBP0.3m), which included dividends paid of
GBP0.7m (2021: nil). The net cash outflow from investing activities
was GBP0.01m (2021: inflow GBP0.1m), with minimal capital
expenditure in the year and relating mainly to the purchase of
technology for new permanent members of staff to support gross
profit growth.
Non-current assets
Non-current assets excluding taxation reduced by GBP0.1m (2021:
increase GBP0.36m). This is predominantly related to the net effect
of a reduction in the right of use asset of GBP0.2m (2021:
reduction GBP0.1m) and the finance lease receivable of GBP0.1m
(2021: GBP0.2m), which is now classified as a current asset. An
increase of GBP0.05m was related to purchased assets (2021:
increase GBP0.05m) and trade receivables increased by GBP0.1m
(2021: GBPnil).
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 GBP0.16m (2021: GBP0.07m) 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 2022 was GBP6.0m
(2021: GBP5.3m). The movements during the year are detailed on page
50.
Share options
A total of 511,000 options were exercised by Directors and staff
during the year (2021: 48,600).
On 30 March, a total of 750,000 restricted stock options were
granted to both Directors and staff (2021: nil). A share based
expense has been recognised in the year of GBP476 (2021:37,000)
Dividends
With the strong expectation of continued profitability and
future positive cash flows, the Board are proposing a final
dividend of 4p per share (2021: 2p per share), which together with
the interim dividend already paid of 2p (2021: nil), totals 6p per
share for the financial year (2021: 2p per share). See note 9.
By order of the Board
James McDonald
Finance Director
25 May 2022
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 2022. 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 21 and form part of this report.
Share capital and substantial shareholdings
Share capital
As at 31 March 2022, 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
Since the year end, the Company received the following
notification on 11 April 2022, 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
M Makar (23.89%)
M Needham and S Cook (as the joint trustees in bankruptcy of M Makar) 23.89%
As at 25 May 2022, no notifications have been received since the
year end.
Dividends
There was a 2p per share interim dividend paid during the year
(2021: nil per share). The Directors propose a final dividend of 4p
per share (2021: 2p).
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 a number of reusable frameworks, including test
automation across major software and Government projects. Teams
also developed reusable components and tools including mail merge
and skills matrix management systems.
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, debtor
recovery has been reliable and predictable with a low exposure to
bad debts. For the year ended 31 March 2022, the Group has not
utilised any external debt, the current finance facilities or
accessed any Government support schemes (2021: nil). Due to the
ability to operate services remotely, the Group has remained in
full operation throughout the pandemic periods and it is expected
that it will continue to do so. The success of the business during
the year ended 31 March 2022 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 covering the period ending 30 September 2023, including
the ability of future client acquisition, and 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 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, including a review of the wider economy
including Brexit, inflationary pressures and the Ukraine conflict,
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 Parent Company financial statements in
accordance with UK adopted international accounting standards
('IFRS'). 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 for that period.
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 UK
adopted international accounting standards ('IFRS'), 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 group and the
Company will continue in business;
-- prepare a directors' report, a 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.
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 provides the
information necessary for shareholders to assess the group's
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, give a true and
fair view of the assets, liabilities, financial position and profit
and loss of the group and company.
-- The annual report includes a fair review of the development
and performance of the business and the financial position of the
Group and Company, together with a description of the principal
risks and uncertainties that they face.
By order of the Board
James McDonald
Company Secretary
25 May 2022
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
====================================
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 Master 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 business 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 as
company directors 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 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 2022 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 2
========================= ====== =========== =============
Number of meetings attended
Executive Directors:
=============================================================
John Rigg (Chairman) 8 - 2
========================= ====== =========== =============
Adrian Leer 11 - -
========================= ====== =========== =============
Tim Eckes 11 - -
========================= ====== =========== =============
James McDonald 10 - -
========================= ====== =========== =============
Non-Executive Directors:
=============================================================
Alistair Fulton 11 1 2
========================= ====== =========== =============
Chris Duckworth 10 1 -
========================= ====== =========== =============
Charlotte Rigg 11 - 2
========================= ====== =========== =============
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, deferred tax
calculations 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, other than the review of the interim statements
which has been retrospectively agreed by the Committee.
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.
Mandatory rotation of the auditor is required for the year
ending 31 March 2024 and the Board are preparing to apply the
appropriate tendering and selection process to appoint a new
auditor.
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 28.
Whistleblowing
Staff may contact the senior independent non-executive Director,
in confidence, to raise genuine concerns of possible improprieties
in financial reporting, or employee related 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
25 May 2022
Directors' remuneration report
On the following pages we set out the remuneration report for
the year ended 31 March 2022. The members of the Remuneration
Committee are shown in the Corporate Governance report on page
21.
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.
During the year the Committee carefully reviewed Directors'
remuneration. Given the recent profitable growth of the business,
and the continued positive trajectory under strong strategic and
operational guidance, the Committee awarded salary increases to the
Executive Directors during the year. Outside of the normal course
of business, the Committee also awarded one-time discretionary
payments to the Executive Directors to reward and strengthen their
continued commitment.
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 2021 Annual General
Meeting of the Company and was approved by 100% of shareholders
with 4,481 votes withheld. See page 16 of the Directors' report for
further details of voting rights.
The Committee welcomed the unanimous approval of the
shareholders, which represented 43% of the total shareholding. The
Committee aims to align meaningful 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, with progression on key strategic
objectives and a return to profitability.
The Committee has taken steps to further align the remuneration
of the Directors with shareholders by revising the Remuneration
Policy and implementing the Triad Employee Share Incentive Plan.
The Policy and Plan were put to the shareholders at the General
Meeting held on 25 March 2022, where the Policy was approved by
99.9% of shareholders votes with 5,558 votes withheld. The Plan was
also approved by 99.9% of shareholder votes with 1,408 votes
withheld.
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.
The Committee intends to implement the Directors' remuneration
for the following year as agreed at the 2022 General Meeting.
Policy table - Executive Directors
Element & purpose Operation Maximum payable Performance metrics
============================ ============================ ============================ ============================
Base salary Reviewed annually taking Ordinarily, salary None, although individual
into consideration market increases will be in line performance is considered
Reflects the individual's data, business performance, with average increases when setting salary levels.
skills, responsibilities external economic awarded to other employees
and experience. factors, the complexity of in the Company.
the business and the role, In certain circumstances,
Supports the recruitment cost, and the incumbent's such as a change in
and retention of Executive experience responsibility or
Directors. and performance as well as development in role
the wider employee pay increases
review. beyond this may be made
subject to the factors
mentioned in the Operation
column
============================ ============================ ============================ ============================
Benefits in kind Benefits in kind include Benefits are set at a level None.
company cars or allowances, considered to be
Protects the well-being of private medical insurance, appropriate taking into
Directors and provides fair life cover account individual
and reasonable market and permanent health circumstances.
competitive benefits. insurance. Benefits are
reviewed periodically.
The Remuneration Committee
retains discretion to
provide other benefits
depending on the
circumstances
which may include but are
not limited to relocation
costs or allowances to
facilitate recruitment.
============================ ============================ ============================ ============================
Pension The Company pays The Company matches None.
contributions into a individual contributions up
Provides competitive personal pension scheme or to a maximum of 5%.
post-retirement benefits to cash alternative.
support the recruitment and This limit is in line with
retention of the limits available for
Executive Directors. all employees.
============================ ============================ ============================ ============================
All employee share scheme Executive Directors shall The limits will be in line Any conditions shall be in
be eligible to participate with the HMRC limits for line with HMRC guidance for
To provide employees with in any future all employee the relevant schemes. such schemes and there may
the opportunity to own share schemes be no performance
shares in the Company. (e.g. Save-as-you-earn or conditions if appropriate.
Share Incentive Plan) if
adopted by the Company.
============================ ============================ ============================ ============================
Share option scheme The Company operates an EMI The potential value of Specific performance
share option scheme. options held rises as the criteria are specified at
Encourages share ownership Discretionary awards are Company's share price the time of awarding the
amongst employees and made in accordance increases. share options to ensure
aligns their interests with with the scheme rules. alignment with the
the shareholders. interests of shareholders.
============================ ============================ ============================ ============================
Employee Share Incentive The Remuneration Committee The maximum award that may Awards may have performance
Plan may make share awards be granted shall be 200% of conditions attached.
annually under the Plan. salary.
Incentivises long-term The Remuneration Committee
value creation, aligning The Plan will give the has discretion to determine
the interests of Executives Remuneration Committee appropriate measures,
and shareholders flexibility to make awards targets and ranges
through share awards. in the form of conditional in respect of each award
awards (performance share when made.
award).
The Remuneration Committee
Performance share awards may also adjust the
shall have a performance formulaic outcome of awards
period of at least 3 years. where it deems
that it is not reflective
Awards shall not vest in of overall business
full any earlier than 3 performance.
years, but the Remuneration
Committee retains
discretion to vest in
tranches. Awards made to
Executive Directors will
have an additional
post-vesting holding period
of 2 years during which
shares cannot be sold other
than to settle
tax liabilities which may
arise.
Malus and clawback
provisions apply.
The award of shares under the Plan or EMI scheme is at the sole
discretion of the Remuneration Committee: there is no contractual
entitlement for any Director to receive an award annually or
otherwise. The Group does not believe that a performance related
annual cash bonus is appropriate at the present time and that
solely equity-based incentives are a more appropriate mechanism for
incentivising, rewarding and retaining Executive Directors.
Shareholding Guidelines
The Remuneration Committee is introducing shareholding
guidelines in order to encourage a build-up of shares over time for
the Executive Directors.
Whilst there is no formal requirement beyond the 2 year
post-vesting holding period, the Remuneration Committee expects
that a substantial portion of shares earned from incentive
arrangements will continue to be held by the Executive Directors in
the longer term.
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.
Malus and Clawback provisions
The Plan contains malus and clawback provisions which may
trigger in exceptional circumstances and which include:
-- material misstatement of company accounts;
-- fraud, gross misconduct or misbehaviour;
-- materially mistaken, misrepresented or incorrect information
has been used to assess the value of an award;
-- an error in assessing or setting performance conditions;
-- material reputational damage or
-- a downturn in financial performance or corporate failure for
which the relevant individual is responsible or has significantly
contributed to.
Malus may apply until settlement, and clawback may apply after
vesting for up to 2 years, and these provisions allow the
Remuneration Committee to recover value delivered in connection
with awards and amend or reduce awards in the above circumstances
(potentially to nil).
Discretion
The Remuneration Committee has discretion in several areas of
the remuneration policy as set out in this report. The Remuneration
Committee may also exercise operational and administrative
discretions under relevant plan rules approved by shareholders as
set out in those rules. In addition, the Remuneration Committee has
the discretion to amend the remuneration policy in respect of minor
or administrative matters where it would be, in the opinion of the
Remuneration Committee, disproportionate to seek or await
shareholder approval.
As noted, the Remuneration Committee reviews all incentive
outturns to assess whether they align to the overall performance of
the business and the experience of its key stakeholders over the
period e.g., shareholders and employees. The Remuneration Committee
retains discretion to adjust the formulaic outcome of incentives
upwards or downwards to reflect its judgement. Any such exercise of
discretion will be disclosed in the relevant annual report.
Pre-existing remuneration arrangements and minor changes
The Remuneration Committee may make remuneration payments
outside of the terms of this remuneration policy where the terms of
the payment were agreed prior to the introduction of this or prior
remuneration policies, provided the terms were in line with the
remuneration policy in place at that time, or where the terms were
agreed prior to the relevant Director being a member of the Board.
Any such payments may be satisfied in line with the terms
agreed
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 Remuneration 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.
The Remuneration Committee may determine that an initial salary
positioning below market is appropriate and in those circumstances,
may in the years following appointment award increases greater than
levels awarded to the wider workforce in the short-term.
Incentive levels will be in line with the limits for Executive
Directors and the structure will be as permissible under the
policy.
If applicable, relocation allowances may be made in line with
the policy.
The Company may offer to buy out incentives which have been
forfeited from a previous employer. Where such awards are made,
they will seek to match the value and time horizons of foregone
awards and will reflect any performance conditions attached.
The Company will not make any sign-on bonuses or "golden hello"
payments when appointing Executive Directors
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
The primary principle underpinning the determination of any
payments on loss of office is that payments for failure will not be
made. Contracts and incentive plan rules have been drafted in such
a way that the Remuneration Committee has the necessary powers to
ensure this.
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.
In relation to the Plan, awards will normally lapse for a leaver
and the plan rules contain Good Leaver provisions that shall
determine the treatment of awards in the following cases:
-- death,
-- ill-health, injury, disability
-- the employing company / business / part of the business being
transferred outside of the Group or
-- any other reason at the discretion of the Remuneration Committee
In such cases:
-- Awards will ordinarily be pro-rated based on time served over the vesting period.
-- Vesting will normally occur at the normal time except upon
death where vesting may be accelerated.
-- Performance conditions shall still apply.
The Remuneration Committee reserves discretion however to
determine the exact treatment of awards having due regard to the
circumstances at the relevant time.
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 Remuneration Committee considers the views of institutional
investors and published guidelines of its shareholders when making
remuneration decisions. Furthermore, the Remuneration Committee is
open to conversations with shareholders on the design of the policy
and any remuneration decisions made concerning Executive
Directors.
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:
2022
======================================================================================================================
Director Basic salary Benefits Pension Total Fixed Pay One-time Total Variable Pay Total
and fees in kind Discretionary
payment
================ ============= ========= ======== ================ =============== =================== ========
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
================ ============= ========= ======== ================ =============== =================== ========
Executive
================ ============= ========= ======== ================ =============== =================== ========
J C Rigg 60 - - 60 - - 60
A Leer (1) 163 18 30 211 161 161 372
T J Eckes (2) 133 2 21 156 64 64 220
J McDonald (3) 139 - 14 153 64 64 217
================ ============= ========= ======== ================ =============== =================== ========
Non-Executive
================ ============= ========= ======== ================ =============== =================== ========
A M Fulton 40 - - 40 - - 40
C J Duckworth 35 - - 35 - - 35
C Rigg 35 - - 35 - - 35
Total 605 20 65 690 289 289 979
================ ============= ========= ======== ================ =============== =================== ========
2021
======================================================================================================================
Director Basic salary Benefits Pension Total Fixed Pay Other Total Variable Pay Total
and fees in kind
======================= ============= ========= ======== ================ ======== =================== ========
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
======================= ============= ========= ======== ================ ======== =================== ========
Executive
======================= ============= ========= ======== ================ ======== =================== ========
J C Rigg 60 - - 60 - - 60
A Leer 161 15 25 201 - - 201
T J Eckes 131 3 17 151 5 5 156
J McDonald (appointed
16.06.20) 105 - 11 116 - - 116
Non-Executive
======================= ============= ========= ======== ================ ======== =================== ========
A M Fulton 40 - - 40 - - 40
C J Duckworth 35 - - 35 - - 35
C Rigg 35 - - 35 - - 35
Total 567 18 53 638 5 5 643
======================= ============= ========= ======== ================ ======== =================== ========
(1) Adrian Leer's basic salary was increased from GBP175,000 to
GBP200,000 p.a. with effect from 1 January 2022
(2) Tim Eckes' basic salary was increased to GBP150,000 p.a.
with effect from 1 January 2022.
(3) James McDonald's basic salary was increased to GBP150,000
p.a. with effect from 1 January 2022.
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 2020. 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.
Other Remuneration
In November 2021, the Executive Directors were awarded a
one-time discretionary payment for their commitment and
contribution during a very challenging year as follows: Adrian Leer
GBP160,500, Tim Eckes GBP64,200 and James McDonald GBP64,200. Other
than vesting conditions in relation to outstanding share award
schemes (see note 20), no performance measures or targets were in
place for either the year ended 31 March 2022 or any prior
financial year, upon which any variable pay elements could become
payable during the year.
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.
Three Directors are members of a money purchase pension 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
There were no payments for loss of office during the year.
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 2021 31 March 2022
=============== ============= ==============
A M Fulton 337,040 337,040
J C Rigg 4,509,400 4,594,400
A Leer 155,379 305,379
C J Duckworth 22,026 22,026
T J Eckes 60,374 120,374
C M Rigg 100,000 112,000
J McDonald - 27,600
=============== ============= ==============
Total 5,184,219 5,518,819
=============== ============= ==============
Directors' share options
EMI scheme
The interests of Executive Directors in the EMI share option
scheme 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 were subject to relevant close
period (2021: 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.
The total share-based payment expense recognised in the year in
respect of Directors' EMI share options is nil (2021:
GBP13,619).
The market price of the Company's shares was 130p at 31 March
2022 and the range during the year was between 95p and 165p.
The total cash remitted to the Company by the Directors to
exercise the share options during the year was GBP112k (2021:
nil)
Restricted Stock Units
On 30 March 2022 the Committee awarded the Executive Directors
the following restricted stock units (RSUs):
Director Date award made Number Performance condition Vesting date
================ ================= ======= ====================== ==============
Adrian Leer 30 March 2022 60,000 135.0p 30 March 2025
================ ================= ======= ====================== ==============
Tim Eckes 30 March 2022 60,000 135.0p 30 March 2025
================ ================= ======= ====================== ==============
James McDonald 30 March 2022 60,000 135.0p 30 March 2025
The Award will Vest if the Board determines that the Market
Value of a Share on the third anniversary of the Award Date is
equal to or greater than the Market Value of a Share on the Award
Date. The market value at the Award Date is 135p.
The total share-based payment expense recognised in the year in
respect of Directors' RSU share options is GBP114 (2021: nil).
Malus, clawback and hold over periods are as per the Plan.
Further details relating to share awards can be found in note
20.
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/8402M_1-2022-5-25.pdf
Chief executive remuneration
For the financial year ended 31 March 2022 the salary of the
Executive Chairman was GBP60,000 (2021: GBP60,000). Employee
salaries increased, on average, by 3.8% in the year.
The remuneration paid to the Executive Chairman for the
financial years 2013 to 2022 were as follows:
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
========== ========== ========== ========== ========== ========== ========== ========== ========== ==========
GBP25,000 GBP25,000 GBP25,000 GBP25,000 GBP25,000 GBP60,000 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 GBP653k (2021: GBPnil), see note 9. The total
employee remuneration (including Directors) during the year was
GBP8.620m (2021: GBP5.705m).
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 (2021: 41 employees, 2022: 43 employees).
Basic salary and fees 2021 2022
=================================================================== ============== ==========
J C Rigg 0% 0%
=================================================================== ============== ==========
A Leer 0% 3.6%
=================================================================== ============== ==========
T J Eckes n/a 0.1%
=================================================================== ============== ==========
J McDonald n/a 9.4%
=================================================================== ============== ==========
A M Fulton 0% 0%
=================================================================== ============== ==========
C J Duckworth 0% 0%
=================================================================== ============== ==========
C Rigg n/a 0%
=================================================================== ============== ==========
Employees of the company 3.7% 3.8%
=================================================================== ============== ==========
Benefits in kind (1) 2021 2022
=================================================================== ============== ==========
J C Rigg n/a n/a
=================================================================== ============== ==========
A Leer (1.7%) 19.9% (2)
=================================================================== ============== ==========
T J Eckes n/a (23.4%)
=================================================================== ============== ==========
J McDonald n/a n/a
=================================================================== ============== ==========
A M Fulton n/a n/a
=================================================================== ============== ==========
C J Duckworth n/a n/a
=================================================================== ============== ==========
C Rigg n/a n/a
=================================================================== ============== ==========
Employees of the company (5.7%) (18.3%)
=================================================================== ============== ==========
(1) The negative values in this table represent a reduction in costs for the provision of
identical benefits
(2) Represents the increase in provision of company car
Other (includes commission and bonus payments) 2021 2022
=================================================================== ============== ==========
J C Rigg n/a n/a
=================================================================== ============== ==========
A Leer n/a 100%
=================================================================== ============== ==========
T J Eckes n/a 100%
=================================================================== ============== ==========
J McDonald n/a 100%
=================================================================== ============== ==========
A M Fulton (100%) (3) n/a
=================================================================== ============== ==========
C J Duckworth n/a n/a
=================================================================== ============== ==========
C Rigg n/a n/a
=================================================================== ============== ==========
Employees of the company (9.5%) (44.3%)
=================================================================== ============== ==========
(3) Represents back pay paid in 2020
Represents cessation of a commission scheme for a small number of employees
The Group is exempt from disclosing data with respect to the CEO
pay ratio due to employee numbers being less than 250.
Consideration of matters related to Directors' remuneration
During the financial year, the Remuneration Committee met twice
to discuss Directors' remuneration. No external advice was sought
in relation to matters discussed at this meeting.
Alistair Fulton
Chairman, Remuneration Committee
25 May 2022
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 2022 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 UK adopted international accounting standards;
-- the Parent Company financial statements have been properly
prepared in accordance with UK adopted international accounting
standards and as applied in accordance with the provisions of the
Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements of Triad Group Plc (the
'Parent Company') and its subsidiaries (the 'Group') for the year
ended 31 March 2022 which comprise the Group and Parent Company
statements of comprehensive income and expense, the Group and
Parent Company statements of changes in equity, the Group and
Parent Company statements of financial position, the Group and
Parent 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 UK adopted international
accounting standards and as regards the Parent Company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
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 ending 31 March 2006 and subsequent financial periods. The
period of total uninterrupted engagement including retenders and
reappointments is 17 years, covering the years ending 31 March 2006
to 31 March 2022. 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, including factors that
affect the current economic climate such as the ongoing impact of
Covid-19 and other macro events such as the Russia and Ukraine
conflict.
-- We evaluated the Directors' assessment of the Group's and
Parent Company's ability to continue as a going concern, including
challenging the underlying data by checking the accuracy of the
assessments by comparing actual outcomes to prior year forecasts,
client contracts and post year-end financial performance.
-- 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.
-- We challenged the rationale for the key assumptions, using
our knowledge of the business and the sector, corroborating to
supporting documentation where appropriate.
-- 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 cash 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 the 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 100% of the Group profit before tax
------------------ ----------------------------------------------------------------
Key audit matters 2022 2021
------------------
Revenue recognition X X
------------------
Materiality Group financial statements as a whole
GBP85k (2021: GBP89k) based on 0.5% (2021: 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
consists of six companies, five which are dormant, with the Parent
Company being the only trading entity and significant component.
The Group engagement team performed a full scope audit on the
Parent Company.
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.
These matters were 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 these
matters.
Key audit matter How the scope of our audit
addressed key audit matter
--------------------------------------------------------------------------------------- -----------------------------
Revenue We considered there to be a significant risk over the We performed testing on a
recognition existence of revenue. We believe this sample basis over the
risk could manifest itself through: revenue postings pre and
As detailed in post year end, agreeing
note 1 and 4 to * fictitious invoices or contractor/candidates; the posting to supporting
the financial documentation, checking that
statements. the transaction is recorded
* manipulation of cut-off; in the
correct period.
* manipulation of revenue through journal entries; We performed testing on a
sample basis over the
contractor costs incurred
* manipulation of principal vs agent; and before and after
the year end, agreeing these
to supporting documentation
* manipulation of contractor accrual. and checking that the
revenue associated
with these has been recorded
in the correct period.
In view of the significance of revenue recognition to
the financial statements and the potential We performed testing on a
for fraud this was considered to be a key audit sample basis over the
matter. timecards received either
side of the year
end, agreeing them to sales
invoices to ensure they have
been recorded in the correct
period.
We performed testing on a
sample basis over the
revenue postings throughout
the year, agreeing
the postings to payment,
timecard, confirmation of
charge out rate and sales
invoice as appropriate,
to check that the
transactions exist and 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
relevant and timecards.
We tested a sample of new
customers and contractors
during the period to
supporting documentation
to confirm existence.
We tested a sample of new
contracts during the year to
check that revenue has been
appropriately
recognised as principal or
agent as appropriate.
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
check compliance with the
requirements
of the accounting standards.
Key observations:
Based on the procedures
performed we did not
identify any material
matters to report.
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
--------------------------------------- -----------------------------------------------------------------------------
2022 2021
GBPk GBPk
--------------------------------------- ------------------------------------- --------------------------------------
Materiality 85 89
--------------------------------------- ------------------------------------- --------------------------------------
Basis for determining materiality 0.5% of revenue 0.5% of revenue
--------------------------------------- ------------------------------------- --------------------------------------
Rationale for the benchmark applied Given the fluctuations in profit, we Given the fluctuations in profit, we
consider revenue to be the most consider revenue to be the most
appropriate benchmark appropriate benchmark
as we believe it is one of the as we believe it is one of the
principal considerations for users principal considerations for users of
of the financial statements the financial statements
in assessing the financial in assessing the financial
performance and development of the performance and development of the
Group. Group.
--------------------------------------- ------------------------------------- --------------------------------------
Performance materiality 64 58
--------------------------------------- ------------------------------------- --------------------------------------
Basis for determining performance 75% of materiality. The threshold 65% of materiality. The threshold was
materiality was selected based on assessment of selected based on assessment of the
the balances subject balances subject
to estimation, the level of audit to estimation, the level of audit
differences historically and the differences historically and the
mainly substantive approach mainly substantive approach
to the audit. The threshold was to the audit.
increased in the year given the low
level of audit differences
arising historically.
Reporting threshold
We agreed with the Audit Committee that we would report to them
all individual audit differences in excess of GBP4k (2021: 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 Code 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 18; and
* The Directors' explanation as to their assessment of
the Group'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 16;
* 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 25; and
* The section describing the work of the audit
committee set out on page 24.
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 exception We have nothing to report in respect of the following
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:
-- Based on our understanding of the regulatory and legal
framework applicable to the Group and Parent Company and the
industry in which it operates and considered the risk of acts by
the Group and Parent Company 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 and Parent Company financial
statements. Our procedures 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.
-- Fraud risk could manifest itself in the existence of revenue through fictious invoices or contractor/candidates; manipulation of cut-off; manipulation of revenue through journal entries; manipulation of principal vs agent; and manipulation of contractor accruals. The audit procedures performed in relation to revenue recognition are documented in the key audit matter section of our audit report.
-- We also addressed the risk of management override of internal
controls, including testing journals and evaluating whether there
was evidence of bias in any key estimates that represented a risk
of material misstatement due to fraud.
-- We tested the appropriateness of journal entries and other
adjustments and assessed whether the judgements made in making
accounting estimates could be indicative of a potential bias. We
evaluated the business rationale of any significant transactions
that are unusual or outside the normal course of business.
-- 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)
25 May 2022
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 2022
Group and Company Note 2022 2021
GBP'000 GBP'000
Revenue 4 17,015 17,815
Cost of sales (12,231) (14,005)
----------------------------------------------------------------------------------------- ----- --------- ---------
Gross profit 4,784 3,810
Administrative expenses (3,676) (3,124)
----------------------------------------------------------------------------------------- ----- --------- ---------
Profit from operations 5 1,108 686
Finance income 13 10 15
Finance expense 6 (37) (57)
----------------------------------------------------------------------------------------- ----- --------- ---------
Profit before tax 1,081 644
Tax Credit 8 88 41
----------------------------------------------------------------------------------------- ----- --------- ---------
Profit for the year and total comprehensive income attributable to equity holders of the
parent 1,169 685
----------------------------------------------------------------------------------------- ----- --------- ---------
Basic earnings per share 10 7.16p 4.28p
----------------------------------------------------------------------------------------- ----- --------- ---------
Diluted earnings per share 10 7.04p 4.24p
----------------------------------------------------------------------------------------- ----- --------- ---------
All amounts relate to continuing activities.
The notes on pages 52 to 72 form part of the financial
statements.
Statements of changes in equity for the year ended 31 March
2022
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 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 1 April 2021 160 666 104 4,353 5,283
Profit for the year
and total
comprehensive income - - - 1,169 1,169
Ordinary shares issued 5 214 - - 219
Dividend paid (note 9) - - - (653) (653)
Share-based payments - - - - -
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
At 31 March 2022 165 880 104 4,869 6,018
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
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 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 1 April 2021 160 666 104 4,348 5,278
Profit for the year
and total
comprehensive income - - - 1,169 1,169
Ordinary shares issued 5 214 - - 219
Dividend paid (note 9) - - - (653) (653)
Share-based payments - - - - -
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
At 31 March 2022 165 880 104 4,864 6,013
----------------------- -------------- ---------------------- ----------------------- ------------------ --------
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 52 to 72 form part of the financial
statements.
Statements of financial position at 31 March 2022
Registered number: 02285049
Group Company
Note 2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 11 2 6 2 6
Property, plant and equipment 12 278 225 278 225
Right-of-use assets 13 345 532 345 532
Finance lease receivables 13 - 85 - 85
Trade and other receivables 15 130 - 130 -
Deferred tax 8 161 73 161 73
------------------------------- ----- -------- -------- -------- --------
916 921 916 921
------------------------------- ----- -------- -------- -------- --------
Current assets
Trade and other receivables 15 2,554 2,514 2,554 2,514
Finance lease receivables 13 84 108 84 108
Cash and cash equivalents 16 5,325 4,918 5,325 4,918
------------------------------- ----- -------- -------- -------- --------
7,963 7,540 7,963 7,540
------------------------------- ----- -------- -------- -------- --------
Total assets 8,879 8,461 8,879 8,461
------------------------------- ----- -------- -------- -------- --------
Current liabilities
Trade and other payables 17 (2,134) (2,248) (2,139) (2,253)
Short term provisions 18 (61) - (61) -
Lease liabilities 13 (269) (307) (269) (307)
------------------------------- ----- -------- -------- -------- --------
(2,464) (2,555) (2,469) (2,560)
------------------------------- ----- -------- -------- -------- --------
Non-current liabilities
Trade and other payables 17 (104) - (104) -
Long term provisions 18 (136) (197) (136) (197)
Lease liabilities 13 (157) (426) (157) (426)
------------------------------- ----- -------- -------- -------- --------
(397) (623) (397) (623)
------------------------------- ----- -------- -------- -------- --------
Total liabilities (2,861) (3,178) (2,866) (3,183)
------------------------------- ----- -------- -------- -------- --------
Net assets 6,018 5,283 6,013 5,278
------------------------------- ----- -------- -------- -------- --------
Shareholders' equity
Share capital 19 165 160 165 160
Share premium account 880 666 880 666
Capital redemption reserve 104 104 104 104
Retained earnings 4,869 4,353 4,864 4,348
------------------------------- ----- -------- -------- -------- --------
Total shareholders' equity 6,018 5,283 6,013 5,278
------------------------------- ----- -------- -------- -------- --------
The financial statements on pages 48 to 73 were approved by the
Board of Directors and authorised for issue on 25 May 2022 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 02285049
The notes on pages 52 to 72 form part of the financial
statements.
Statements of cash flows for the year ended 31 March 2022
Group and company Note 2022 2021
GBP'000 GBP'000
Cash flows from operating activities
Profit for the year before taxation 1,081 644
Adjustments for:
Profit on sale of asset - (7)
Depreciation of property, plant and equipment 79 80
Amortisation of right of use assets 187 173
Amortisation of intangible assets 5 5
Interest received (10) (15)
Finance expense 35 45
Share-based payment expense - 37
Changes in working capital
(Increase)/Decrease in trade and other receivables (169) 226
(Decrease)/Increase in trade and other payables (11) 121
Cash generated by operations 1,197 1,309
Foreign exchange gain 1 6
------------------------------------------------------ ----- --------- ---------
Net cash inflow from operating activities 1,198 1,315
------------------------------------------------------ ----- --------- ---------
Investing activities
Finance lease interest received 10 15
Finance lease payments received 109 104
Proceeds from sale of asset - 15
Purchase of intangible assets (1) (1)
Purchase of property, plant and equipment (132) (38)
------------------------------------------------------ ----- --------- ---------
Net cash used in investing activities (14) 95
------------------------------------------------------ ----- --------- ---------
Financing activities
Proceeds of issue of shares 220 6
Lease liabilities principal payments (307) (287)
Lease liabilities interest payments (37) (51)
Dividends paid 9 (653) -
------------------------------------------------------ ----- --------- ---------
Net cash outflow from financing activities (777) (332)
------------------------------------------------------ ----- --------- ---------
Net increase in cash and cash equivalents 407 1,078
Cash and cash equivalents at beginning of the period 4,918 3,840
------------------------------------------------------ ----- --------- ---------
Cash and cash equivalents at end of the period 16 5,325 4,918
------------------------------------------------------ ----- --------- ---------
The notes on pages 52 to 72 form part of the financial
statements.
Notes to the financial statements for the year ended 31 March
2022
1. Principal accounting policies
Basis of preparation for Group and company
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 with UK adopted
International Financial Reporting Standards (IFRSs).
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 pounds sterling, generally rounded
to the nearest thousand, 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, debtor
recovery has been reliable and predictable with a low exposure to
bad debts. For the year ended 31 March 2022, the Group has not
utilised any external debt, the current finance facilities or
accessed any Government support schemes (2021: nil). Due to the
ability to operate services remotely, the Group has remained in
full operation throughout the pandemic periods and it is expected
that it will continue to do so. The success of the business during
the year ended 31 March 2022 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 covering the period ending 30 September 2023, including
the ability of future client acquisition, and 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 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, including a review of the wider economy
including Brexit, inflationary pressures and the Ukraine conflict,
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.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position
comprises cash held on demand with banks. The carrying amount of
these assets is equal to their fair value.
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.
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 2022 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.
Revenue from licences is recognised net at the point of
transaction. The Group enters into a distinct contract with a
client for the licences. The Group acts as a reseller and the
Client is bound by the terms and conditions of the end user
agreement of the licence provider. As control of the licences are
transferred to the client at contract agreement, the Group is
acting as agent which enables the recognition of revenue at the
point of transaction.
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 and conditional share incentive
award scheme. Both awards 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
Climate change accounting
In preparing the Consolidated financial statements management
has considered the impact of climate change, particularly in the
context of the disclosures included in the Strategic Report. These
considerations did not have a material impact on the financial
reporting judgements and estimates.
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.
Key judgements and sources of estimation uncertainty
................................
IFRS 16 leases
A right-of-use asset of GBP0.3m (2021: GBP0.5m), a total lease
liability of GBP0.4m (2021: GBP0.7m) and a finance lease receivable
of GBP0.1m (2021: GBP0.2m) have been recognised in accordance with
the accounting policies on page 52 with respect to IFRS 16
'Leases'. During the previous 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 (2021: 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.
Deferred taxation:
The Directors have recognised a deferred tax asset of GBP161k
(2021: GBP73k). This asset is to recognise the expectation that
corporation tax losses brought forward will be utilised against
future taxable profits. The Directors' have based this upon a
conservative estimation of the level of taxable profits in the
medium-term.
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 2022 2021
GBP'000 GBP'000
Currency: Euros
Cash and cash equivalents 16 86 156
Trade and other receivables 15 (10) -
Trade and other payables 17 - (10)
----------------------------- ----- -------- --------
76 146
----------------------------- ----- -------- --------
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. The facility borrowing rate 1.75%
above base rate and so when required to be utilised, this
represents an interest rate risk.
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 GBP5,000 (2021:
credited to the income statement GBP7,000).
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 2022 2021
GBP'000 GBP'000
Finance lease receivable 13 84 193
Trade and other receivables 15 2,113 1,996
Contract assets 15 212 170
Other debtors 15 208 229
Cash and cash equivalents 16 5,325 4,918
----------------------------- ----- -------- --------
7,942 7,506
----------------------------- ----- -------- --------
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 35% of Group revenue
(2021: 47%) and was in the public sector. Two other customers
contributed more than 10% of Group revenue (2021: 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 2022 2021
GBP'000 GBP'000
Time and materials 16,593 17,344
Fixed price 118 175
Percentage fee based 211 296
Licences 93 -
---------------------- -------- --------
17,015 17,815
---------------------- -------- --------
The Group also disaggregates revenue by operating sector
reflecting the different commercial risks (e.g. credit risk)
associated with each.
Group and company 2022 2021
GBP'000 GBP'000
Public sector 11,090 11,357
Private sector 5,925 6,458
-------------------- -------- --------
17,015 17,815
------------------- -------- --------
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 2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 68 68 (41) (41)
Transfers in the period from contract assets to trade receivables (68) (68) - -
Excess of revenue recognised over cash (or right to cash) being
recognised in the period 471 170 - -
Amounts included in contract liabilities that was recognised as revenue
in the period - - 41 41
Cash received in advance of performance and not recognised as revenue in
the period - - (116) (256)
------------------------------------------------------------------------- -------- -------- ----------- ----------
At 31 March 471 170 (116) (256)
------------------------------------------------------------------------- -------- -------- ----------- ----------
There is no expectation of a material expected lifetime credit
loss arising in relation to contract assets.
5. Profit from operations
2022 2021
GBP'000 GBP'000
Profit from operations is stated after charging:
Profit on disposal of fixed asset - (7)
Depreciation of owned assets 79 80
Amortisation of right of use assets 187 173
Amortisation of intangible assets 5 5
Auditor remuneration:
Audit of financial statements: Group and company 66 59
Non-audit services 2 2
-------------------------------------------------- -------- --------
6. Finance expense
2022 2021
GBP'000 GBP'000
Interest expense on lease liability 37 51
Net foreign exchange loss - 6
------------------------------------- ---------- ----------
Total finance expense 37 57
------------------------------------- ---------- ----------
7. Employees and Directors
Group and company 2022 2021
Number Number
Average number of persons (including Directors) employed
Senior management 10 9
Fee earners 77 42
Sales 8 8
Administration and finance 9 9
-------------------------------------------------------------- -------- --------
104 68
-------------------------------------------------------------- -------- --------
The number of permanent fee earners as at 31 March 2022 was 95 (2021: 58).
Staff costs for the above persons (including Directors) 2022 2021
GBP'000 GBP'000
Wages and salaries 6,995 4,599
Social security costs 827 537
Defined contribution pension costs 798 532
Equity settled share-based payments - 37
-------------------------------------------------------------- -------- --------
8,620 5,705
-------------------------------------------------------------- -------- --------
2022 2021
Directors GBP'000 GBP'000
Emoluments 894 593
Benefits in kind 20 18
Money purchase pension contributions 65 57
-------------------------------------- -------- --------
Total remuneration 979 668
-------------------------------------- -------- --------
Social security costs 115 73
-------------------------------------- -------- --------
1,094 741
-------------------------------------- -------- --------
Three Directors (2021: 3) had retirement benefits accruing under
money purchase pension schemes. Key management personnel are
considered to be the Directors.
8. Tax (credit)/charge
2022 2021
GBP'000 GBP'000
Current tax
Current tax on profits for the year - -
Deferred tax
Increase in recognised deferred tax asset (85) (41)
Change in tax rate (3) -
------------------------------------------- -------- --------
Total tax credit for the year (88) (41)
------------------------------------------- -------- --------
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:
2022 2021
GBP'000 GBP'000
Profit before tax 1,081 644
Profit before tax multiplied by standard rate of corporation tax in the UK of 19% (2021: 19%) 205 122
Expenses not deductible for tax purposes 8 2
Allowances recognised (91) -
Recognition of deferred tax on losses (220) (165)
Change in tax rate (3) -
Prior year adjustments 13 -
----------------------------------------------------------------------------------------------- -------- --------
Tax credit for the year (88) (41)
----------------------------------------------------------------------------------------------- -------- --------
2022 2021
GBP'000 GBP'000
Deferred tax asset
The movement in deferred tax is as follows:
At beginning of the year 73 32
Reversal of previously unrecognised deferred tax on losses 85 41
Tax rate changes 3 -
------------------------------------------------------------ -------- --------
At end of the year 161 73
------------------------------------------------------------ -------- --------
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 GBP473,000 (2021: GBP550,000) has not been
recognised in respect of trading losses of GBP1,892,000 (2021:
GBP2,896,000), which can be carried forward indefinitely.
Deferred tax assets have not been recognised for potential
temporary differences arising from unexercised share options of
GBP22k (2021: GBP29k) and general provisions of GBP42k (2021:
GBP11k) as the Directors believe it is not certain these assets
will be recovered.
The UK Budget on 3 March 2021 announced an increase in the UK
corporation tax rate from 19% to 25% with effect from 1 April 2023.
The effect of the rate increase is reflected in the consolidated
financial statements as has been substantively enacted at the
balance sheet date.
9. Dividends
2022 2021
GBP'000 GBP'000
Final dividend for the year ended 31 March 2021 - 2p per share 323 -
Interim dividend for the year ended 31 March 2022 - 2p per share 330 -
----------------------------------------------------------------- -------- --------
Total dividend paid 653 -
----------------------------------------------------------------- -------- --------
The Directors propose a final dividend of 4p per share (2021: 2p
per share), bringing the total dividend to 6p for the financial
year (2021: 2p 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:
2022 2021
Profit for the year GBP1,169,000 GBP685,000
--------------------------------------------------------- ---------------- ----------------
Average number of shares in issue 16,325,415 15,994,082
Effect of dilutive options 288,934 176,113
--------------------------------------------------------- ---------------- ----------------
Average number of shares in issue plus dilutive options 16,614,349 16,170,195
--------------------------------------------------------- ---------------- ----------------
Basic earnings per share 7.16p 4.28p
--------------------------------------------------------- ---------------- ----------------
Diluted earnings per share 7.04p 4.24p
--------------------------------------------------------- ---------------- ----------------
11. Intangible assets
Group and company Purchased software
GBP'000
Cost
At 31 March 2020 126
Additions 1
Disposals -
------------------------------------- -------------------
At 31 March 2021 127
Additions 1
Disposals -
------------------------------------- -------------------
At 31 March 2022 128
------------------------------------- -------------------
Accumulated amortisation/impairment
At 31 March 2020 116
Charge for the year 5
Disposals -
------------------------------------- -------------------
At 31 March 2021 121
Charge for the year 5
Disposals -
------------------------------------- -------------------
At 31 March 2022 126
------------------------------------- -------------------
Net book value
At 31 March 2022 2
------------------------------------- -------------------
At 31 March 2021 6
------------------------------------- -------------------
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 2020 191 502 39 732
Additions 31 7 - 38
Disposals (3) - (35) (38)
-------------------------- ---------- ------------ ---------- --------
At 31 March 2021 219 509 4 732
Additions 43 89 - 132
Disposals (26) (8) - (34)
-------------------------- ---------- ------------ ---------- --------
At 31 March 2022 236 590 4 830
-------------------------- ---------- ------------ ---------- --------
Accumulated depreciation
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
Charge for the year 28 51 - 79
Disposals (26) (8) - (34)
-------------------------- ---------- ------------ ---------- --------
At 31 March 2022 164 384 4 552
-------------------------- ---------- ------------ ---------- --------
Net book value
At 31 March 2022 72 206 - 278
-------------------------- ---------- ------------ ---------- --------
At 31 March 2021 57 168 - 225
-------------------------- ---------- ------------ ---------- --------
13. Leases
The Group as a lessee:
The Group has leases contracts for its office premises with
terms remaining ranging from 1 to 3 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.
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 2020
Opening position 622 622
Rent review increase 83 83
Amortisation (173) (173)
---------------------- ------------------- --------
At 31 March 2021 532 532
---------------------- ------------------- --------
Amortisation (187) (187)
---------------------- ------------------- --------
At 31 March 2022 345 345
---------------------- ------------------- --------
Lease liabilities
The carrying amount of the lease liabilities recognised are as
follows:
Land and buildings Total
GBP'000 GBP'000
At 31 March 2020
Opening position 938 938
Rent review increase 82 82
Interest expense 51 51
Lease payments (338) (338)
---------------------- ------------------- --------
At 31 March 2021 733 733
---------------------- ------------------- --------
Interest expense 37 37
Lease payments (344) (344)
---------------------- ------------------- --------
At 31 March 2022 426 426
---------------------- ------------------- --------
At the balance sheet date, the Group had outstanding 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
--------------------------- --------------- ------------------------ ---------------------- ----------------------
Discounted lease
liabilities 77 230 269 157
--------------------------- --------------- ------------------------ ---------------------- ----------------------
Undiscounted lease
liabilities 86 258 290 167
--------------------------- --------------- ------------------------ ---------------------- ----------------------
At 31 March 2022 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
--------------------------- --------------- ------------------------ ---------------------- ----------------------
Discounted lease
liabilities 81 188 121 36
--------------------------- --------------- ------------------------ ---------------------- ----------------------
Undiscounted lease
liabilities 86 204 129 38
--------------------------- --------------- ------------------------ ---------------------- ----------------------
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 2020
Opening position 297 297
Interest income 15 15
Payments received (119) (119)
------------------- ------------------- --------
At 31 March 2021 193 193
------------------- ------------------- --------
Interest income 10 10
Payments received (119) (119)
------------------- ------------------- --------
At 31 March 2022 84 84
------------------- ------------------- --------
At the balance sheet date, the Group had 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
-------------------------------- --------------- ------------------------ ----------------------
Discounted lease receivables 27 81 85
-------------------------------- --------------- ------------------------ ----------------------
Undiscounted lease receivables 30 89 89
-------------------------------- --------------- ------------------------ ----------------------
At 31 March 2022 Up to 3 months Between 3 and 12 months
GBP'000 GBP'000
-------------------------------- --------------- ------------------------
Discounted lease receivables 28 56
-------------------------------- --------------- ------------------------
Undiscounted lease receivables 30 59
-------------------------------- --------------- ------------------------
The total lease receivable of GBP84k (2021: GBP193k) is
disclosed as non-current assets of GBPnil (2021: GBP85k) and
current assets of GBP84k (2021: GBP108k).
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 including
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 2022 2021
GBP'000 GBP'000
Trade receivables 1,868 2,015
Less: provision for expected credit losses (14) (19)
-------------------------------------------- -------- --------
Trade receivables-net 1,854 1,996
Contract assets 212 170
Unbilled income 259 -
Other debtors 208 229
-------------------------------------------- -------- --------
Trade and other receivables 2,533 2,395
Prepayments 151 119
-------------------------------------------- -------- --------
2,684 2,514
-------------------------------------------- -------- --------
Analysed as:
Non-current asset: unbilled income 130 -
Current asset 2,554 2,514
Total 2,684 2,514
-------------------------------------------- -------- --------
Other debtors of GBP208k (2021: GBP229k) 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.
Unbilled income is in respect to the billing profile of a
licence agreement.
The lifetime expected credit losses on trade receivables as at
31 March 2022 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 1,856 13
Up to 30 days past due 5.0 12 1
------------------------ ---------------------- ---------------------- ----------------------
1,868 14
------------------------ ---------------------- ---------------------- ----------------------
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 2021 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 0.75 1,931 15
Up to 30 days past due 5.0 84 4
------------------------ ---------------------- ---------------------- ----------------------
2,015 19
------------------------ ---------------------- ---------------------- ----------------------
Movements on the provision for expected credit loss are as
follows:
Group and company 2022 2021
GBP'000 GBP'000
At beginning of the year 19 26
Charged to income statement - -
Credited to income statement (5) (7)
At end of the year (credit loss allowance) 14 19
-------------------------------------------- -------- --------
The carrying amount of the Group's trade and other receivables
are denominated in the following currencies:
Group and company 2022 2021
GBP'000 GBP'000
Sterling 2,543 2,395
Euros (10) -
------------------- -------- --------
2,533 2,395
------------------- -------- --------
16. Cash and cash equivalents
Group and company 2022 2021
GBP'000 GBP'000
Cash available on demand 5,325 4,918
-------------------------- -------- --------
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 2022 2021
GBP'000 GBP'000
Sterling 5,239 4,762
Euros 86 156
------------------- -------- --------
5,325 4,918
------------------- -------- --------
For the purpose of the consolidated cash flow statement, cash
and cash equivalents consist of cash, as detailed above.
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. The facility borrowing rate is
1.75% above base rate.
17. Trade and other payables
Group Company
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Trade payables 667 923 667 923
Accruals 525 324 525 324
Owed to subsidiary - - 5 5
------------------------------------ -------- -------- -------- --------
1,192 1,247 1,197 1,252
Contract liabilities 116 256 116 256
Other taxation and social security 930 745 930 745
------------------------------------ -------- -------- -------- --------
2,238 2,248 2,243 2,253
------------------------------------ -------- -------- -------- --------
Analysed as:
Current liability 2,134 2,248 2,139 2,253
Non-current liability: accruals 104 - 104 -
Total 2,238 2,248 2,243 2,253
------------------------------------ -------- -------- -------- --------
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
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Sterling 1,192 1,237 1,197 1,242
Euros - 10 - 10
---------- -------- -------- -------- --------
1,192 1,247 1,197 1,252
---------- -------- -------- -------- --------
18. Provisions
Group and company Provision for property dilapidations
GBP'000
At 1 April 2021 197
Additions -
Charged to income statement -
Utilised in year -
At 31 March 2022 197
----------------------------- -------------------------------------
The maturity profile of the present value of provisions is as
follows:
Group and company 2022 2021
GBP'000 GBP'000
Current
Provision for property dilapidation 61 -
Non-current
Provision for property dilapidation 136 197
------------------------------------- -------- --------
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 2022 2021
Ordinary shares of 1p each
Issued, called up and fully paid:
Number 16,539,579 16,028,579
Nominal value GBP165,396 GBP160,286
During the year 511,000 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
129,000 13.5p GBP1,290 GBP16,125
5,000 11.0p GBP50 GBP500
377,000 53.5p GBP3,770 GBP197,925
-------- ------------- -------------------------- --------------------------
511,000 GBP5,110 GBP214,550
20. Share-based payments
At 31 March 2022, 228,000 options granted under employee share
option schemes remain outstanding:
Date option granted Number Exercise price Period options exercisable
===================== ======== =============== =======================================
18 September 2014 70,000 11.0p 18 September 2017 to 18 September 2024
===================== ======== =============== =======================================
9 March 2018 158,000 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 options granted on 18 September 2014: 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 (2021: nil).
During the year, a number of restricted stock units were granted
under the new Triad Employee Share Incentive Plan, and remain
outstanding as follows:
Date award made Number Performance condition Vesting date
================= ======== ====================== ==============
30 March 2022 750,000 135.0p 30 March 2025
The Award will Vest if the Board determines that the Market
Value of a Share on the third anniversary of the Award Date is
equal to or greater than the Market Value of a Share on the Award
Date. The market value at the Award Date is 135.0p.
The total expense recognised in the year is GBP476 (2021:
GBP37,000).
A reconciliation of the total share award movements over the
year to 31 March 2022 is shown below:
2022 2021
Number of options Weighted average Number of options Weighted average
exercise price exercise price
Pence Pence
Outstanding at start of
year 739,000 42.2 817,600 40.3
Granted 750,000 1.0 - -
Exercised (511,000) 43.0 (48,600) 12.5
Forfeited - - (30,000) 38.0
-------------------------- ------------------ ------------------------ ------------------ ------------------------
Outstanding at end of
year 978,000 10.2 739,000 42.2
-------------------------- ------------------ ------------------------ ------------------ ------------------------
Exercisable at end of
year 228,000 40.5 739,000 42.2
-------------------------- ------------------ ------------------------ ------------------ ------------------------
There were 511,000 share options exercised during the year.
There are no share options held by Directors in the above figures,
and a total of 180,000 restricted stock units (RSUs). Transactions
with Directors are set out in the Directors' remuneration report on
page 28.
The weighted average share price at the date of exercise for
share options exercised during the period was 118.2p (2021: 75.6p).
The options outstanding as at 31 March 2022 had an exercise price
of 11.0p or 53.5p, and with respect to the RSUs 135.0p, with a
weighted average remaining contractual life of 3.4 years (2021: 5.4
years).
The inputs into the share-based payments model to calculate the
RSU awards were as follows:
Expected volatility 35%
Expected life 3 years
Risk-free rate 1.7%
Exercise price 1p
Valuation 135p
21. Related party transactions and ultimate control
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 (2021: GBPnil). There is no
ultimate controlling party.
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 2022 2021 2020 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 17,015 17,815 19,354 22,713 27,819
Gross profit 4,784 3,810 2,854 4,376 4,724
Profit/(Loss) before tax 1,081 644 (602) 1,017 1,662
Tax credit/(charge) 88 41 (159) (132) (38)
Profit/(Loss) after tax 1,169 685 (761) 885 1,624
Retained profit/(loss) for the financial year 1,169 685 (761) 885 1,624
Basic earnings/(loss) per share (pence) 7.16 4.28 (4.76) 5.60 10.45
----------------------------------------------- -------- -------- -------- -------- --------
Balance sheet
As at 31 March 2022 2021 2020 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets 916 921 1,236 411 463
Current assets 7,963 7,540 6,581 7,937 7,736
Current liabilities (2,464) (2,555) (2,399) (2,483) (2,997)
Non-current liabilities (397) (623) (863) (99) (77)
----------------------------------------------- -------- -------- -------- -------- --------
Net assets 6,018 5,283 4,555 5,766 5,125
----------------------------------------------- -------- -------- -------- -------- --------
Share capital 165 160 160 160 156
Share premium account 880 666 660 659 619
Capital redemption reserve 104 104 104 104 104
Retained earnings 4,869 4,353 3,631 4,843 4,246
----------------------------------------------- -------- -------- -------- -------- --------
Equity shareholders' funds 6,018 5,283 4,555 5,766 5,125
----------------------------------------------- -------- -------- -------- -------- --------
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:
EQ
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.
Financial year ended 31 March 2023: expected announcement of results
Half year November 2022
Full year June 2023
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
02285049
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
EQ
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
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END
FR PPUBWAUPPGMA
(END) Dow Jones Newswires
May 26, 2022 02:00 ET (06:00 GMT)
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