31 August 2022

GRC International Group PLC

("GRC" or the "Group")

Final results for the year ended 31 March 2022

Continued strong organic revenue growth with improved margins and positive EBITDA

GRC International Group PLC (AIM: GRC), an integrated cyber security and privacy solutions business, announces its audited year end results for 12 months to 31 March 2022 (FY22).

Financial highlights

·      Revenue up 18% to £13.9m (FY21: £11.8m)

·      Billings* were up 20% to £14.8m (FY21: £12.3m)

·      Recurring and contracted revenue up 22% to £8.2m (FY21: £6.7) - 59% of total revenue (FY21: 57%).

·      FY22 billings from recurring revenue products accounting for 56% of total billings (FY21: 54%)

·      Gross profit was up 34% to £8.2m (FY21: £6.1m), with gross margin up by 700 basis points to 59% (FY21: 52%) - reflecting continued improvement in operational gearing

·      EBITDA** of £1.0m (FY21: £1.1m loss)

·      Loss before tax reduced to £1.0m (FY21: £2.8m loss)

·      Year-end cash £2.1m (FY21: £0.2m), reflecting January 2022 share placing and particularly strong February and March trading and cash performance

Operational highlights

·      Recurring revenue subscriber base up 41% to 5,089 (FY21: 3,600)

·      57% of transactions from returning existing customers (FY21: 45%)

·      Website visits up 17% to 4,312k (FY21: 3,691k)

·      Internal automation projects have delivered operational efficiencies across the business.

*Billings equate to the total value (net of VAT) of invoices raised and cash sales through the Group's websites. This figure does not take account of accrued or deferred income adjustments that are required to comply with UK-adopted International Financial Reporting Standards ("IFRS") but is considered to provide useful information to the users of the Group's financial information. Billings is considered by the Board to be a key metric for managing the business due to its direct relationship with cash flow. Cash receipts are driven by billings achieved each month rather than revenue recognised in accordance with IFRS.

**EBITDA is defined in the Financial Review within this announcement.

Alan Calder, Chief Executive Officer, said:

"We performed strongly last year, delivering on our two key objectives - to improve the quality of earnings and revenue forward visibility with significant organic growth and a positive EBITDA.

"Overall billings were up 21% and recurring billings were up to 56% with transactions from returning customers up to 57%. EBITDA saw a £2.1m turnaround to £1.0m against a prior year loss of £1.1m.

"Our domestic and international markets continue to grow and our strong performance in the final quarter of FY22 continued into the first five months of the current financial year.  Trading remains robust and the substantial progress we made last year should support our long term growth aspirations."

The Company's annual report and accounts for the year ended 31 March 2022 is available to view electronically on the Company's website at www.grci.group/results-reports-presentations and hard copies will be sent to the shareholders on or around 1 September 2022.

Enquiries:

GRC International Group PLC                                                                                          +44 (0)330 999 0222

Alan Calder, Chief Executive Officer

Christopher Hartshorne, Finance Director

Singer Capital Markets (Nominated Adviser and Joint Broker)                                +44 (0)20 7496 3000

Phil Davies, James Fischer

Dowgate Capital Limited (Joint Broker)                                                                        +44 (0)20 3903 7715

James Serjeant, Russell Cook, Nicholas Chambers

Meare Consulting                                                                                                               +44 (0)7990 858548

Adrian Duffield

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018).

About GRC International Group PLC ("GRC" or "the Group")

GRC is an international governance, risk management and compliance company whose main business is cyber defence-in-depth.

A technology business, its proprietary premier brands including the market leader, IT Governance, offer 'Our expertise, your peace of mind' for GRC's wide range of domestic and international corporate customers across all industrial sectors.

GRC's three operating divisions - Software as a Service (SaaS), e-Commerce and Services - offer a wide range of products and services encompassing: IT governance, risk management, compliance with data protection and cyber security regulations, online and in-person training and staff awareness, consultancy, online publishing and distribution as well as software. The Group's capabilities also include products and services to enable corporates to address wider governance issues such as money laundering and bribery.

In addition to its UK business, GRC has operations in the EU and US. 

Overview

Importantly, we achieved our two key objectives last year. The first was to improve the quality of earnings and forward visibility of our revenue while delivering significant organic growth. The second was to deliver positive EBITDA.

The Group performed strongly through calendar 2021 and this accelerated into Q4 of FY22. March 2022 was our best month of billing since May 2018, despite the economic and geopolitical headwinds.

Year on year, overall billings were up 20%, recurring billings were up to 56% (FY21: 51%) of total billings with our subscription numbers up 41% to 5,089. Transactions from returning customers was also up to 57% of the total. As a result, we saw organic revenue growth of 18%.

We moved strongly into positive EBITDA, achieving £1.0m against a prior year EBITDA loss of £1.1m, a turnaround of just over £2m.

We also successfully completed a £3m oversubscribed share placing in January 2022. This enables us to continue to invest in products and business automation, that substantially improves our profitability, as well as to strengthen the balance sheet position and support working capital.

Strategy

As we have said before, we are seeing significant international growth opportunities in the digitally transformed, Cloud-based, increasingly vulnerable, hybrid- working environment as a result of:

•             Corporates, large and small, domestic and multinational, having to deal with increasingly complex regulations and enforcement in the Group's three primary geographic markets of UK, EU and US

•             All clients facing escalating nation-state and criminal (serious organised crime) cyber-attacks

•             Significant and deep-seated cyber and compliance skills deficits.

In this environment, our strategy is to accelerate growth nationally and internationally, organically and by acquisition. Today's fragmented and rapidly growing international cyber markets offer significant organic and consolidation opportunities. The Group's resilience and agility will enable it to exploit those opportunities in the years ahead.

The Group's medium-term objective is to build annual revenue, both organically and through acquisition, to approximately £50m, with gross margins and EBITDA margins in the order of 65% and 25% respectively. Incentives are being put in place to ensure alignment throughout the organisation with these objectives.

Current trading and outlook

The strong sales momentum, billings, numbers of new business leads and cash generation in Q4 FY 22 has continued into the current financial year. Importantly, we ended the last financial year with £2.4m of FY23 revenue already invoiced.

Our overall growth is driven by client acquisition through our e-commerce division, the continued development of expertise through our services division to solve client problems and create opportunities for SaaS deployment.

The SaaS division underpins our Cyber Defence-in-Depth offering and is expected to support continued double-digit

organic divisional billings growth in the current financial year.

We will continue to invest in our e-commerce and SaaS infrastructure in order to extend our automated fulfilment and customer support. This enables our account managers to concentrate on landing and expanding our client relationships, which improves forward revenue visibility, widens gross margins and increases customer lifetime value.

After a strong final quarter in FY22 momentum has continued into the first five months of the new financial year.  Trading remains robust and in line with expectations. The substantial progress made last year should support the Group's long term growth aspirations.

Operational review

Operational execution

Our technology capabilities and track record, together with our deep expertise and Cyber Defence-in-Depth model, provide our clients with peace of mind. They know that our comprehensive, integrated range of products and services enables them to build cyber resilience through deploying our Cyber Defence-in-Depth solutions.

We support our clients, helping them comply and thrive while they tackle cyber resilience, compliance and data protection. Our primary focus is on the people and process domains, and on ensuring that our solutions align

with appropriate national and international standards. Our productised services and packaged offerings simplify choice for smaller customers. It also enables effective cross and up-selling. At the same time, our expertise enables us to create custom solutions for corporate and enterprise clients.

Our wide-ranging, proprietary product and service offering, supported by substantial IP, is primarily delivered through the market- leading IT Governance brand and our unique Cyber Defence-in-Depth model.

During the last financial year, we continued to invest in and build on our 20 years of content marketing, book publishing, PR activity and Search Engine Optimisation (SEO) dominance which resulted in growing volumes of incoming customers seeking specific solutions.

We also continued to add external service accreditations, wide-ranging customer endorsements and high Net Promoter Score (NPS) scores to help convert incoming customers.

International development

The Group is well established in the UK and its main brand, IT Governance, has significant recognition.

Our businesses are now established in the US and EU, and we see significant organic and M&A growth opportunities.

Our initial Asia-Pacific website is open as we begin to explore a number of regional opportunities.

Quality and accreditations

Our business management system continues to be accredited to ISO/IEC 27001, ISO/IEC 27701, BS 10012 and ISO 9001. These accreditations, combined with those from professional bodies such as CREST, the UK's National Cyber Security Centre (NCSC), and the Payment Card Industry Data Security Standard (PCI SSC), our Cyber Essentials Plus certificate and from training organisations and exam institutes, such as the International Board for IT Governance Qualifications (IBITGQ), ISC2, ISACA, BCS and the UK's CIISec, are all reflections of the care we take to ensure that we practice what we preach.

Our focus on quality is reflected in our NPS scores, which we use for engaging customer feedback. We achieve average scores across the Group in excess of 50, which is a consistently 'Good' score.

Divisional performance

Services

Our services division helps corporate and public organisations meet compliance and cyber risk management objectives. This division offers:

•             ISO/IEC 27001 (and related standards) implementation, audit and support services

•             A wide range of cyber security management systems and control implementations

•             Penetration testing

•             PCI DSS & Cloud compliance

•             Legal, General Data Protection Regulation (GDPR) Data Protection Office (DPO) and Privacy by Design services

We continued to increase our penetration of the mid-size enterprise market, with wins of multi- year contracts from key customers around the world. We also steadily increased the numbers of clients who are signed up to ongoing annual PCI QSA, Penetration testing, ISO 27001 support, DPO and EU/UK representative contracts.

During Q4, the Group's cyber security incident response service achieved CREST accreditation. This, combined with GRC's unique Cyber Safeguard service package, which includes cyber insurance from Hamilton Insurance, enables the Group to support a growing number of customers that are particularly exposed to cyber attacks.

On 1 April 2022, the Group launched a Cloud Security consultancy service to help mid-sized corporate clients ensure that their Cloud infrastructures are securely configured. The service is fully described on the UK website and sold directly to our existing medium and large consultancy clients through our consultancy and professional services teams. Allied with the Group's Microsoft Global Training Partnership, this expands the footprint in the fast-growing Cloud security market.

e-Commerce

This division encompasses:

•             Eight B2B e-commerce websites

•             ITGP, our publishing business, offers a wide range of books and standards, covering cyber security, GDPR, privacy/ data protection, risk & compliance

•             'Learn from Anywhere' training delivery model, with accredited training for a wide range of cyber security and privacy qualifications.

We made significant progress with developing self-paced versions of all the best-selling instructor-led courses in our portfolio. This enables us to target markets and time zones for which our Instructor-led offering is either difficult to attend or unaffordable.

Software as a Service

This division is focused on delivering cyber security and privacy subscription solutions from a growing range of cloud- based platforms. These include

•             CyberComply GRC platform

•             Cyber Essentials certification

•             Vulnerability Scanning

•             GRC e-learning (staff awareness training)

•             Privacy as a Service

•             DocumentKits templates.

•             Cyber Safeguard, our Cyber security as a Service offering.

We significantly expanded the range of cyber security and privacy standards and frameworks that can be addressed though the CyberComply platform. At the same time, we started expanding the staff awareness e-learning portfolio outside the core cyber security and privacy product range to include the other GRC subjects (such as anti-bribery and anti-money laundering) that clients expect to see on GRC staff awareness platforms.

Financial report

Billings

Billings were up 20% to £14.8m (FY21: £12.3m). Billings equate to the total value of invoices raised as cash sales through the Group's websites. The figure does not take account of accrued or deferred income adjustments that are required to comply with accounting standards for revenue recognition.

The Board considers this to be a key performance indicator because it has a much closer relationship than accounting revenue to cash receipts from customers. It also provides good forward visibility of future accounting revenue since much of the Group's invoicing takes place ahead of delivery.

Revenue

Revenue for the year ended 31 March 2022 was up 18% to £13.9m (FY21: £11.8m). The comparative period was particularly impacted by the effects of the early months of COVID-19. H2 revenue at £7.3m was up 11% on the previous six months (H1 FY22: £6.6m), despite continuing uncertainty in the wider economy over inflation, rising energy prices and other geopolitical factors.

Recurring and contracted revenue was up 22% to £8.2m (FY21: £6.7). This accounted for 59% of total revenue (FY21: 57%).

The most significant revenue growth was in the e-Commerce division, which includes sales of public training courses and documentation toolkits. These were hardest hit during the COVID-19 pandemic and have recovered strongly, with the introduction of recurring revenue product lines and longer term projects in this division contributing to the growth and making this revenue stream more resilient going forward. The growth in the Software as a Service division reflects the Group's focus on and investment in developing its high margin and highly scalable recurring revenue.

International

International revenue was up 43% to £3.0m (FY21: £2.1m), representing 22% (FY21: 18%) of total Group revenue. The Group services the majority of its US based clients through its IT Governance USA business and most of its European clients through its IT Governance EU business. Invoicing in USD and EUR respectively. The use of local staff and suppliers in those territories means cost is incurred in local currency providing a natural partial hedge against foreign exchange risk.

The Group saw growth in both its US and European revenues, of 44% and 14% respectively in FY22 at constant currency, notwithstanding the differing rates of general economic recovery from the pandemic around the world, along with other worldwide macro-economic challenges.

Gross profit

Gross profit was up 34% to £8.2m (FY21: £6.1m), with gross margin also up by 700 basis points to 59% (FY21: 52%).

The majority of the Group's direct cost base relates to headcount for consultants and client delivery staff. The COVID-19 related sudden and dramatic revenue drop in the early part of the comparative period meant that sales revenue was temporarily out of alignment with the Group's costs.

Where possible, the Group focused on retaining the staff it needed to deliver the expected strong growth and client delivery coming out of the pandemic. This resulted in better consultant utilisation rates and therefore better margins in the Services division as revenue recovered. This, along with the Group's focus on higher-margin subscription services, has driven the overall improvement in margin. In particular, the growth in retainer type arrangements for some services contracts has driven margin improvement in the services division and also improved forward visibility of revenue.

Notably, the Group's two fastest-growing revenue divisions, SaaS and e-Commerce, have the highest gross margin:

Administrative expenses

Administrative expenses increased by £0.2m (2%) to £9.1m (FY21: £8.9m), compared with revenue increasing by 18%.

The increase in administrative expenses was mostly due to staff costs and related expenses, with only a small increase in headcount required to support the growth in revenue.

The Group's investment in automation and focus on SaaS revenue lines has improved the overall operational gearing which has seen top-line growth without the proportionate increases in staff. This is expected to result in a continued widening of margins.

EBITDA

EBITDA (earnings before interest, tax, depreciation and amortisation) is considered by the Board to be an important key performance indicator. It is a more accurate measure of underlying business performance as it removes the impact of non-cash accounting adjustments.

EBITDA was £1.0m (FY21: loss £1.1m). The positive performance in the last quarter of FY21 continued through FY22, delivering the Group's first positive EBITDA full year result since FY18.

Finance expense

The net finance expense of £0.3m (FY21: £0.2m) relates to interest on the Group's borrowings and leases accounted for under IFRS 16.

Loss before tax

Loss before tax was £1.0m (FY21: loss £2.8m).

Taxation

No provision for tax has been made in the period (FY21: £Nil).

The small tax charge recognised primarily relates to the unwinding of deferred tax on the acquisition of DQM GRC, offset by the effect of changes in tax rates.

Earnings/loss pe share

Loss per share was 0.98 pence (FY21: loss per share 2.58 pence).

Dividend

To ensure the Group maintains financial flexibility and an appropriate level of financial headroom for investment and working capital the Board is not proposing a dividend in respect of the year ending 31 March 2022.  The board will review its dividend policy annually.

Cash flow and cash/debt

The Group's closing cash position net of a bank overdraft was £2.1m (31 March 2021: £0.2m).

Borrowings (excluding lease obligations) at period end were £1.1m (31 March 2021: £1.3m).

The Group has banking facilities to provide adequate headroom for unforeseen working capital requirements by way of an invoice discounting facility that was inherited as part of the acquisition of DQM GRC in 2019.

In addition, the unsecured loan facility provided by Andrew Brode for the amount of £700,000 at an interest rate of 5% above the Bank of England base rate to provide additional working capital is available to the Company until at least 31 December 2023 and shall automatically renew for a further 12 months unless terminated by either party. As at the period end and the date of this report, £350,000 remained available to be drawn down.

Further information on Going Concern is provided in the Financial Statements 'Nature of operations and general information' section (Principal accounting policies) of the Annual Report.

Statement of financial position

Net assets were £8.7m (31 March 2021: £6.9m).

Net current liabilities at period end were down by £2.0m to £3.2m (31 March 2021: £5.2m).

In January 2022, GRC International completed a successful £3m oversubscribed share placing. This is enabling the Group to continue its product investment and business automation programmes, including the development of new features and functionality across all units in the SaaS division, at the same time as making agreed repayments (under the 'time to pay' arrangements) against the deferred HM Revenue & Customs (HMRC) tax liabilities that arose through the COVID-19 pandemic.

The main factor in the overall decrease in net current liabilities of £1.9m was the increase in cash balance resulting from the January share placing and a strong Q4 trading and cash performance.

The trade and other payables balance includes a deferred income balance of £1.8m (31 March 2021: £1.1m), relating to training and consultancy projects due to be delivered after the statement of financial position date. The 63% increase in this balance signifies improving revenue trends and provides some visibility of income to be recognised in FY23.

Intangible assets

The Group's accounting policy is that only directly attributable staff costs of the technical teams developing the assets are capitalised. No management time is capitalised, and neither is any proportion of overheads or borrowing costs.

Additions of £1.2m (FY21: £1.2m) relate to software, website development and the development of courseware.

Capital structure

The issued share capital at 31 March 2022 was 107,826,246 (31 March 2021: 99,931,509) ordinary shares of £0.001 each.

There were no share options granted in the period to 31 March 2022.

Risks and uncertainties

The Board continually assesses and monitors the key risks of the business. The key risks that could affect the Group's performance, and the factors that mitigate these risks, are set out on pages 24 to 25 of the Annual Report.

Consolidated Income Statement

For the year ended 31 March

Consolidated Statement of Comprehensive Income

For the year ended 31 March

Consolidated Balance Sheet as at 31 March

Consolidated Statement of Changes in Equity

For the year ended 31 March 2022

For the year ended 31 March 2021

Consolidated Statement of Cash Flows

FOR THE YEAR ENDED 31 MARCH

Nature of Operations and General Information

1.             Nature of Operations and General Information

GRC International Group plc (GRC International Group or 'the Company') is a public limited company limited by shares, incorporated and domiciled in England and Wales. The registered company number is 11036180 and the registered office is Unit 3 Clive Court, Bartholemew's Walk, Cambridgeshire Business Park, Ely, Cambridgeshire, CB7 4EA.

The principal activities of GRC International Group plc and its subsidiary companies (together, the "Group") are those of a one-stop shop for IT Governance including books, tools, learning and consultancy services.

The financial information for the year ended 31 March 2022 and the year ended 31 March 2021 does not constitute the company's statutory accounts for those years. Statutory accounts for the year ended 31 March 2021 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 31 March 2022 will be delivered to the Registrar of Companies in due course.

The auditors' report on the accounts for 31 March 2022 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. The auditors' report on the accounts for 31 March 2021 did draw attention to an emphasis of matter regarding going concern.

2.             Principal Accounting Policies

Basis of preparation

The consolidated financial statements of GRC International Group plc and entities controlled by the Company (its subsidiaries) for the years presented has been prepared in accordance with UK-adopted international accounting standards

Basis of consolidation

The results for the year ended 31 March 2022 and 31 March 2021 include the results of GRC International Group plc and its subsidiaries.

A subsidiary is a company controlled directly by the Group. Control is achieved where the Group has the power over the investee, rights to variable returns and the ability to use the power to affect the investee's returns.

Income and expenses of subsidiaries acquired during the year are included in the Consolidated Income Statement from the effective date of control. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group.

All intra-Group transactions, balances, income and expenses are eliminated in full on consolidation.

The principal accounting policies adopted are set out in the Annual Report and Financial Statements.

These accounting policies comply with each IFRS that is mandatory for accounting periods ending on 31 March 2022.

3.             Segmental reporting

Operating segments

For the purposes of segmental reporting, the Group's Chief Operating Decision Maker ('CODM') is considered to be the Board of Executive Directors of the Company. The Board receives information on a consolidated basis. Given the extent and nature of central support services provided centrally in support of the Group's different revenue streams, the Board therefore considers that the Group operates as a single operating segment.

Revenue by geographic destination

Revenue across all operating segments is generated from the UK but includes overseas sales:

Information about major customers

No customers contributed 10% or more to the Group's revenue in any period presented.

4.             Revenue

Revenue is all derived from continuing operations.

Notwithstanding that the Group's revenues are often interdependent, the Group has disaggregated revenue into various categories in the following tables which is intended to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic date:

5.             Goodwill

Goodwill arising from business combinations has been allocated to the Group's DQM cash-generating unit ('CGU'). Goodwill is tested at least annually for impairment and whenever there are indicators that goodwill might be impaired.

For the DQM CGU, the carrying amount of goodwill has been assessed for impairment by comparing the carrying amount of the CGU in which it is included to the recoverable amount based on value in use of the CGU. The value in use calculation for the cash-generating unit uses: estimated future cash flows, for which the key assumptions are forecast revenue over the next five years, based on management's estimates; the terminal growth rate for revenues beyond that period, which reflects a cautious approach for the purpose of measuring a value in use; and a pre-tax discount rate, which is based on management's assessment of risk inherent in the estimated future cash flows.

The pre-tax cash flows for the forecast period are derived from the most recent financial budget for the year ending 31 March 2023 approved by the Board. The extrapolation for the period 2024 to 2028 is based on management estimates with an assumption of 15% revenue growth.

As of 31 March 2022, the value in use of the cash-generating unit was greater by £7,015k than the CGU's carrying amount. The key assumptions used were the forecasts as explained above, the terminal growth rate of 2%, and the pre-tax discount rate of 7.2%. Management's methodology does not include the use of small company or company specific risk Premia because in the judgement of the directors, the degree of risk attached to the cash flow assumptions is such that no additional risk premium in the discount rate is considered necessary. The growth in cashflows and the selection of the discount rate are a judgement that management has made which may have a bearing on the identification of impairment losses.

The changes in key assumptions that would individually give rise to a material impairment loss are as follows:

a) The discount rate would have to increase by 4.0%.

b) Operating costs would have to rise by 15%, assuming that revenue levels were still to grow by 15%.

c) Future revenue increases by 14% less than is modelled in the forecast period (assuming margins remain the same) in order to reduce the headroom to nil, all other variables remaining constant.

6.             Intangible assets

Amortisation is included within administrative expenses.

Intangible assets includes capitalised related party costs incurred.

All intangible assets have been developed internally with the exception of those arising on the business acquisition in 2019. For CGUs requiring impairment testing under IAS 36 Impairment of Assets, the method used to determine recoverable amount is value-in-use.

7.             Trade and other receivables

None of the Company's trade and other receivables are secured by collateral or credit enhancements.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses on a collective basis. To measure expected credit losses on a collective basis, trade receivables and contract assets are grouped based on a similar credit risk and ageing.

The Group's policy for monitoring default risk over receivables is based on the ongoing evaluation of the collectability and ageing analysis of trade and other receivables. Considerable judgement is required in assessing the ultimate realisation of these receivables, including reviewing the potential likelihood of default, the past collection history of each customer and the current economic conditions.

The Group uses a third-party credit scoring system to assess the creditworthiness of potential new customers before accepting them. Credit limits are defined by customer based on this information. All customer accounts are subject to review on a regular basis by senior management and actions are taken to address debt ageing issues.

To determine the level of expected credit loss provision required historical loss rates are adjusted for current and forward-looking information on macroeconomics factors affecting the Group's customers. The Group has identified gross domestic product growth rates, employment rates and inflation rates as the key macroeconomic factors in the countries in which the Group operates. The rates applied vary from 10% to 100% depending on the above factors and the age of the debt.

The Group has not previously recorded any credit loss provision on the grounds of materiality.

The maturity profile of trade and other receivables is set out in the table below:

The analysis of trade and other receivables by foreign currency is set out in the table below:

The Group's foreign currency receivables are denominated in the functional currency of the subsidiaries in which they arise. There is no impact on the loss for the year from foreign exchange rate movements on such financial instruments.

8.             Trade and other payables

Amounts falling due within one year:

Amounts falling due after one year:

Amounts falling due after one year relate to the non-current element of the tax and social security arrangements agreed with HMRC based on time to pay arrangements. The balance payable is expected to reduce as cash payments are made and as claims for R&D tax credits are claimed from HMRC as and when quantified in respect of year ended 31 March 2020. 31 March 2021 and 31 March 2022 respectively.

9.             Borrowings

(i) Secured liabilities and assets pledged as security

Of the Other loans, £82,000 (2021: £260,000) is secured against future receivables. The remaining secured bank loans and overdrafts are secured against assets of the business.

Lease liabilities are secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default.

The Group has a number of loans in the period presented, and are summarised as follows:

In addition, the Group has access to an Invoice discounting facility.

10.           Earnings per share

Basic earnings per share is based on the loss after tax for the year and the weighted average number of shares in issue during each year.

Diluted earnings per share is calculated by adjusting the average number of shares in issue during the year to assume conversion of all dilutive potential ordinary shares.

Taking the Group's share options into consideration in respect of the Group's weighted average number of ordinary shares for the purposes of diluted earnings per share, is as follows:

Due to the losses incurred during the year, a diluted loss per share has not been calculated as this would serve to reduce the basic loss per share. There were 426,760 (2021: 426,760) share incentives outstanding at the end of the year that could potentially dilute basic earnings per share in the future.