RNS Number : 3222X
Triad Group Plc
20 December 2023
 

Legal Entity Identifier (LEI) No. 213800MDNBFVEQEN1G84

 

Triad Group Plc

Half year results for the six months ended 30 September 2023

 

Financial highlights

 

Six months to
30 September 2023

Six months to
30 September 2022

Change

Audited year ended

31 March 2023

Revenue

£6.39m

£7.12m

-£0.73m

£14.9m

Gross profit

£0.95m

£1.38m

-£0.43m

£3.5m

Gross profit %

14.9%

19.3%

-4.4%

23.6%

(Loss)/Profit before tax

(£0.99m)

(£0.41m)

-£0.58m

£0.0m

Loss after tax

(£1.00m)

(£0.41m)

-£0.59m

(£0.0m)

Cash reserves

£2.62m

£4.37m

-£1.75m

£4.8m

Basic loss per share

(6.03p)

(2.48p)

-3.55p

(0.27p)

Interim/final dividend payable

2p

2p

-

4p

 

Chairman's statement

Dr John Rigg

 

Overview of results

 

In my Chairman's statement accompanying the first half year results for the previous year, I explained that a weak first half had been entirely the result of "external factors beyond our control".  I also said that we were expecting a strong upturn in the second half, and this in fact proved to be the case. The disappointing results announced above are the result of similar circumstances and influences as those we experienced during the first half of last year but significantly worse. We had expected this would not be the case, but unfortunately, once again due to factors entirely outside our control, this has not proved to be so.

Now to the excellent news. During the last two months, we have succeeded in winning four new longer-term lines of business, with prestigious clients in the public sector. All four have now been formally awarded. One major result of this will be that the cliff edge which we have experienced, particularly in the last two years at March 31st will not affect us in future as we will be able to continue working seamlessly through that period. This should transform our second half results for the current year, and in particular the full year results for the next financial year and going forward. I personally have never felt so confident and enthusiastic about the state and prospects of the Company for more than 20 years.

Unlike many firms in our sector who have sought to lay off staff, the Company held its nerve and used its strong position to maintain staffing levels in line with those established over the last two years. Without doing so, our successful efforts to secure the long-term pipeline would have been severely undermined. We are now vigorously pursuing the recruitment of a substantial number of the very best professional staff.

The model of the business reflects a commitment to the use of permanent staff to produce the very best outcomes for our clients. Steps were taken during the period to improve and increase our work-winning rate to sustain higher headcount levels and the associated risk of bench costs arising from the model.

Our strategy concentrates on providing outstanding digital consultancy services to Central Government clients and their agencies. In addition, we are continuing to develop our footprint in the UK's law enforcement arena including both national bodies and local forces. Whilst we have other clients within the portfolio, our work-winning efforts have been focused on these two important sectors where our track record and strength in depth allows us to make a real impact on society.

I believe that we are at the beginning of a period of increasing major success and growth. I have no doubt that other significant client wins will follow in due course.

Outlook

I can do no better than to repeat and confirm what I said last year that "The vital signs of the Company, including cash, margins and control of overheads, continue to be extremely robust. The quality of our technological expertise is constantly improving and our business is based upon the reality of delivering working effective systems and advice to meet real client needs and policy demands. As a result, the level of internal morale, client confidence and accumulated goodwill also continues to strengthen. Our staff turnover is very low."

Underlying this impressive level of success is the superb quality of our people at every level.

Business highlights

The first half saw several projects concluding successfully, including two separate engagements around the implementation of legislation within policing, the completion of development on a major project at DfT, and the successful handover of a discovery project to an existing team at our OPSS client.

Our consultants on the MoJ project management service continued to deliver outcomes in areas as diverse as prisons expansion, legacy justice systems replacements, and deployment of Wi-Fi across the probation estate.

Within law enforcement, we delivered a common user interface template for a national policing organisation and completed the fit out of regional operations room capabilities. We also started work to introduce a new records management system into a pioneering police force. Our policing footprint expanded as we took on Kent and Essex police forces, helping them to develop their contact management strategy.

For DEZNZ, we successfully moved the digital service for the Clean Heat Market Mechanism (CHMM) from alpha to beta, passing the GDS assessment in record time.

The recent significant contract wins involve providing digital expertise across domains including programme and project management, business architecture and business analysis, and full-spectrum digital delivery capabilities (including the implementation of AI co-pilots within corporate functions) to support ongoing pipelines of work at our new clients.

In November, at the highly prestigious BCS UK IT Industry Awards ceremony attended by many of the best known names in our industry, our work in two separate projects was rewarded when we received two top prizes: for Digital Transformation Project of the Year with MoJ, and for User Experience (UX) Project of the Year with DfT.  We were also delighted to see one of our staff recognised as the Rising Star of the Year at the same award ceremony. No other company at the ceremony received as many as three awards.

 

Dividend

The Board now have the confidence to maintain the interim dividend at the same level as last year at 2p.

Employees

I would like to thank all our staff, both our long serving employees and first rate recent recruitees, who have performed excellently despite some of the most challenging external circumstances the Company has experienced in its 35 year history.

 

Dr John Rigg

Executive Chairman

19 December 2023

 

Unaudited condensed consolidated statement of comprehensive income and expense for the six months ended 30 September 2023


 

Group and Company

Note

Unaudited

2023

Unaudited

2022

Audited year ended 31 March

2023



£'000

£'000

£'000

Revenue

2

6,393

7,123

14,858

Cost of sales


(5,442)

(5,745)

(11,354)

Gross profit


951

1,378

3,504

Administrative expenses


(1,932)

(1,783)

(3,469)

(Loss)/Profit from operations


(981)

(405)

35

Finance income


14

2

17

Finance expense

3

(27)

(10)

(43)

(Loss)/Profit before tax


(994)

(413)

9

Tax (charge)/credit

4

(5)

2

(53)

Loss for the period and total comprehensive income attributable to equity holders of the parent


(999)

(411)

(44)

Basic loss per share

6

(6.03p)

(2.48p)

(0.27p)

Diluted loss per share

6

(6.03p)

(2.48p)

(0.27p)

 

All amounts relate to continuing activities.

 

Unaudited condensed consolidated statement of changes in equity for the six months ended 30 September 2023


 

Group

Share Capital

Share premium account

Capital redemption reserve

Retained earnings

Total


£'000

£'000

£'000

£'000

£'000

At 1 April 2022

165

880

104

4,869

6,018

Loss for the period and total comprehensive income

-

-

-

(411)

(411)

Dividend paid

-

-

-

(663)

(663)

Ordinary shares issued

1

6

-

-

7

Share-based payments

-

-

-

117

117

At 30 September 2022 (unaudited)

166

886

104

3,912

5,068

 

 

 

 

 

 

At 1 April 2023

166

894

104

4,030

5,194

Loss for the period and total comprehensive income

-

-

-

(999)

(999)

Dividend paid

-

-

-

(664)

(664)

Ordinary shares issued

-

7

-

-

7

Share-based payments

-

-

-

110

110

At 30 September 2023 (unaudited)

166

901

104

2,477

3,648

 

 

 

 

 

 

At 1 April 2022

165

880

104

4,869

6,018

Loss for the year and total comprehensive income

-

-

-

(44)

(44)

Dividend paid

-

-

-

(995)

(995)

Ordinary shares issued

1

14

-

-

15

Share-based payments

-

-

-

200

200

At 31 March 2023

166

894

104

4,030

5,194

 

Unaudited condensed consolidated statement of financial position as at 30 September 2023


 


Note

Unaudited 2023

Unaudited 2022

Audited year ended 31 March

 2023



£'000

£'000

£'000

Non-current assets


 

 

 

Intangible assets


1

1

1

Property, plant and equipment


177

238

199

Right-of-use assets

7

481

251

572

Finance lease receivables

7

348

-

396

Deferred tax

4

103

163

108



1,110

653

1,276

Current assets


 



Trade and other receivables

8

2,529

2,294

2,541

Finance lease receivables

7

96

29

94

Cash and cash equivalents


2,621

4,369

4,795



5,246

6,692

7,430

Total assets


6,356

7,345

8,706

Current liabilities


 



Trade and other payables

9

(1,610)

(1,815)

(2,269)

Short term provisions


-

(61)

-

Lease liabilities

7

(271)

(168)

(292)



(1,881)

(2,044)

(2,561)

Non-current liabilities


 



Long term provisions


(197)

(136)

(197)

Lease liabilities

7

(630)

(97)

(754)



(827)

(233)

(951)

Total liabilities


(2,708)

(2,277)

(3,512)

Net assets


3,648

5,068

5,194

Shareholders' equity


 



Share capital


166

166

166

Share premium account


901

886

894

Capital redemption reserve


104

104

104

Retained earnings


2,477

3,912

4,030

Total shareholders' equity


3,648

5,068

5,194

 

Unaudited condensed consolidated statement of cash flows for the six months ended 30 September 2023


 

 

Note

Unaudited 2023

£'000

 

 Unaudited 2022

£'000

Audited year ended 31 March

2023

£'000

Cash flows from operating activities


 



(Loss)/Profit for the period before taxation

 

(994)

(413)

9

Adjustments for:

 

 



Depreciation of property, plant and equipment

 

33

44

87

Amortisation of right of use assets

 

91

94

185

Amortisation/impairment of intangible assets

 

-

1

1

Interest received

 

(14)

(2)

(17)

Finance expense


27

11

43

Share-based payment expense

 

110

117

200

Changes in working capital

 

 



Decrease in trade and other receivables

 

12

391

143

(Decrease)/Increase in trade and other payables

 

(660)

(422)

32

Cash (consumed)/generated by operations


(1,395)

(179)

683

Foreign exchange gain


-

-

1

Net cash (outflow)/inflow from operating activities


(1,395)

(179)

684

Investing activities


 



Finance lease interest received


14

2

17

Finance lease payments received


45

55

102

Purchase of property, plant and equipment


(8)

(5)

(9)

Net cash used in investing activities


51

52

110

Financing activities


 



Proceeds of issue of shares


6

6

15

Lease liabilities principal payments


(145)

(161)

(300)

Lease liabilities interest payments


(27)

(11)

(44)

Dividends paid

5

(664)

(663)

(995)

Net cash outflow from financing activities


(830)

(829)

(1,324)

Net decrease in cash and cash equivalents


(2,174)

(956)

(530)

Cash and cash equivalents at beginning of the period


4,795

5,325

5,325

Cash and cash equivalents at end of the period


2,621

4,369

4,795

 

Notes to the financial statements for the six months ended 30 September 2023

 

1.    Principal accounting policies

 

Basis of preparation


The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the periods presented, unless otherwise stated.

 

These financial statements have been prepared in accordance with UK adopted International Financial Reporting Standards (IFRSs) and the provisions of the Companies Act 2006.

 

The comparative financial information for the year ended 31 March 2023 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2023 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2023 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 financial information for the half years ended 30 September 2023 and 30 September 2022 does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 and has been neither audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.

 

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 continues to operate an efficient low-cost and cash generative model. For the six months ended 30 September 2023, the Group has not utilised any external debt or lending facilities (2022: nil) with no exposure to bad debts in the period. Cash balances have reduced to £2.6m at the balance sheet date (2022: £4.4m), which reflects a total dividend paid in the 6 months period of £0.7m (2022 £0.7m). The future cash position remains robust.

 

The going concern assessment made at the year ended 31 March 2023 is still relevant to both current and future trading expectations. This going concern assessment included in particular a reverse stress test model which included the most extreme scenario possible with all current client contracts discontinued at expiry, with no extension or replacement and with no cost mitigation. Following a review of these assessments in light of current trading performance and cash flow forecasts for the next 12 months, the Directors have concluded that the Group would have sufficient headroom and cash balances to continue in operation.

 

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and at least twelve months from the date of approval of the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the half year accounts.

 

New standards, interpretations and amendments

 

The accounting policies applied in these financial statements are as applied in the annual report and accounts for the year ended 31 March 2023.

 

2.    Revenue

 

The Group operates solely in the UK. All material revenues are generated in the UK.

 

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

Unaudited six months ended

30 September

2023

Unaudited six months ended 30 September

2022

Audited year ended

31 March

2023


£'000

£'000

£'000

Time and materials

6,161

7,043

14,386

Fixed price

234

62

442

Licencing

(2)

-

12

Permanent recruitment fees

-

18

18


6,393

7,123

14,858

 

The Group also disaggregates revenue by operating sector reflecting the different commercial risks (e.g., credit risk) associated with each.

 

Group and Company

Unaudited six months ended

30 September

2023

Unaudited six months ended 30 September

2022

Audited year ended

31 March

2023


£'000

£'000

£'000

Public sector

4,994

5,594

11,597

Private sector

1,399

1,529

3,261


6,393

7,123

14,858

 

3.    Finance expense

 


 Unaudited six months ended

30 September

2023

Unaudited six months ended 30 September

2022

Audited year ended

31 March

2023

 

£'000

£'000

£'000

Interest expense on lease liability

27

10

44

Net foreign exchange gain

-

-

(1)

Total finance expense

27

10

43

 

4.    Tax charge/(credit)

 


Unaudited six months ended 30 September 2023

Unaudited six months ended 30 September

2022

Audited year ended

31 March

2023


£'000

£'000

£'000

Current tax

 



Current tax on profits for the period

-

-

-

Deferred tax

 



Decrease/(increase) in recognised deferred tax asset

5

(2)

40

Change in tax rate

-

-

13

Total tax charge/(credit) for the period

5

(2)

53

 

The differences between the actual tax charge for the period and the standard rate of corporation tax in the UK applied to profits for the period are as follows:

 


Unaudited six months ended 30 September 2023

Unaudited six months ended 30 September 2022

Audited year ended

 31 March

 2023


£'000

£'000

£'000

(Loss)/Profit before tax

(994)

(413)

9

(Loss)/Profit before tax multiplied by standard rate of corporation tax in the UK of 25% (2022:19%)

(249)

(103)

2

Expenses not deductible for tax purposes

6

44

4

Allowances recognised

(3)

(7)

(13)

Derecognition of deferred tax on losses

251

66

58

Change in tax rate

-

(3)

13

Prior year adjustments

-

1

(11)

Tax charge/(credit) for the period

5

(2)

53

 


Unaudited six months ended 30 September 2023

Unaudited six months ended 30 September 2022

Audited year ended

31 March

 2023


£'000

£'000

£'000

Deferred tax asset

 



The movement in deferred tax is as follows:

 



At beginning of the period

108

161

161

Reversal of previously recognised deferred tax on losses

(5)

(1)

(40)

Increase in relation to timing differences

-

3

-

Tax rate changes

-

-

(13)

At end of the period

103

163

108

 

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 estimates of future taxable profits that can be offset with historic trading losses brought forward. A deferred tax asset amounting to £689,022 (2022: £530,000) has not been recognised in respect of trading losses of £2,756,089 (2022: £2,125,000), which can be carried forward indefinitely.

 

Deferred tax assets have not been recognised for potential temporary differences arising from unexercised share options and restricted stock units of £114k (2022: £107k) and general provisions of £27k (2022: £24k) 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.

 

5.    Dividends

 

The Directors propose an interim dividend for the period to 30 September 2023 of 2p per share (2022 interim dividend: 2p per share).

 

The Company will pay the dividend on 31 January 2024 to all shareholders on the register of members of the Company at the close of business on 5 January 2024. The ex-dividend date will be on 4 January 2024.

 

6.    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:

 


            Unaudited 30 September 2023

            Unaudited 30 September 2022

            Audited 31 March

2023

Loss for the period

(£999,000)

(£411,000)

(£44,000)

Average number of shares in issue

16,571,366

16,554,727

16,565,870

Effect of dilutive options

-

-

-

Average number of shares in issue plus dilutive options

16,571,366

16,554,727

16,565,870

Basic loss per share

(6.03p)

(2.48p)

(0.27p)

Diluted loss per share

(6.03p)

(2.48p)

(0.27p)

 

7.    Leases

 

Right-of-use Assets

 

The carrying amounts of the right-of-use assets recognised and the movements during the period are outlined below:


Land and buildings

Total


£'000

£'000

At 31 March 2022

 

 

Opening position

345

345

Amortisation

(94)

(94)

At 30 September 2022

251

251

At 31 March 2023



Opening position

572

572

Amortisation

(91)

(91)

At 30 September 2023

481

481

 

As of 6th October 2022, the lease break option on one lease was not enacted, and the lease continues until 27th March 2028. As of this date, the total asset value was increased by £412,000.

 

Lease Liabilities

 

The carrying amounts of the lease liabilities recognised are as follows:

 

 

Land and buildings

Total

 

£'000

£'000

At 31 March 2022

 

 

Opening position

426

426

Interest expense

11

11

Lease payments

(172)

(172)

At 30 September 2022

265

265

At 31 March 2023



Opening position

1,046

1,046

Interest expense

27

27

Lease payments

(172)

(172)

At 30 September 2023

901

901

 

As of 6th October 2022, the lease break option on one premises was not enacted, and the lease continues until 27th March 2028. As of this date, the total lease liability was increased by £920,000.

 

At the balance sheet date, the Group had outstanding commitments for future lease payments as follows:

 

At 30 September 2022

Up to 3 months

Between 3 and 12 months

Between 1 and 2 years

 

£'000

£'000

£'000

Discounted lease liabilities

79

89

97

Undiscounted lease liabilities

86

97

102

 

At 30 September 2023

Up to 3 months

Between 3 and 12 months

Between 1 and 2 years

Between 2 and 5 years

 

£'000

£'000

£'000

£'000

Discounted lease liabilities

74

197

184

446

Undiscounted lease liabilities

86

231

215

484

 

Finance lease receivables

 

The carrying amounts of the lease receivable asset are as follows:

 


Land and buildings

Total


£'000

£'000

At 31 March 2022

 

 

Opening position

84

84

Interest received

2

2

Payments received

(57)

(57)

At 30 September 2022

29

29

At 31 March 2023



Opening position

490

490

Interest received

13

13

Payments received

(59)

(59)

At 30 September 2023

444

444

 

As of 2nd October 2022, the lease break option on one premises was not enacted by the tenant, and the lease continues until 23rd March 2028. As of this date, the total finance lease receivable was increased by £508,000.

 

At the balance sheet date, the Group had future lease receivables as follows:

 

At 30 September 2022

Up to 3 months

 

£'000

Discounted lease receivables

29

Undiscounted lease receivables

30

 

At 30 September 2023

Up to 3 months

Between 3 and 12 months

Between 1 and 2 years

Between 2 and 5 years

 

£'000

£'000

£'000

£'000

Discounted lease receivables

24

72

101

247

Undiscounted lease receivables

30

89

119

267

 

8.    Trade and other receivables

 

 

Unaudited six months ended 30 September 2023

Unaudited six months ended 30 September 2022

Audited year ended

31 March

 2023


£'000

£'000

£'000

Trade receivables

1,643

1,241

2,006

Less: provision for expected credit losses

(5)

(14)

(5)

Trade receivables-net

1,638

1,227

2,001

Contract assets

603

548

225

Unbilled income

1

141

150

Other debtors

5

160

-

Trade and other receivables

2,247

2,076

2,376

Prepayments

282

218

165


2,529

2,294

2,541

Analysed as:

 



Current asset

2,529

2,294

2,541

Total

2,529

2,294

2,541

 

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.

 

Movements on the provision for expected credit loss are as follows:

 

 

Unaudited six months ended 30 September 2023

Unaudited six months ended 30 September 2022

Audited year ended

31 March

 2023


£'000

£'000

£'000

At beginning of the period

5

14

14

Credited to income statement

-

-

(9)

At end of the period (credit loss allowance)

5

14

5

 

The carrying amount of the Group's trade and other receivables are denominated in the following currencies:

 

 

Unaudited six months ended 30 September 2023

Unaudited six months ended 30 September 2022

Audited year ended

31 March

 2023


£'000

£'000

£'000

Sterling

2,222

2,076

2,376

Euros

25

-

-


2,247

2,076

2,376

 

9.    Trade and other payables

 


Unaudited six months ended 30 September 2023

Unaudited six months ended 30 September 2022

Audited year ended

31 March

 2023


£'000

£'000

£'000

Trade payables

606

524

666

Accruals

165

301

335


771

825

1,001

Contract liabilities

33

81

37

Other taxation and social security

806

909

1,231


1,610

1,815

2,269

Analysed as:

 



Current liability

1,610

1,815

2,269

Total

1,610

1,815

2,269

 

The majority of trade and other payables are settled within three months from the period 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:

 


Unaudited six months ended 30 September 2023

Unaudited six months ended 30 September 2022

Audited year ended

31 March

 2023


£'000

£'000

£'000

Sterling

641

825

1,001

Euros

130

-

-


771

825

1,001

 

10.  Related party transactions and ultimate control

 

The Group and Company rents one of its offices under a lease with a sub-tenant in occupation on one floor. The current annual rent of £215,000 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 period end was £nil (2022: £nil). There is no ultimate controlling party.

 

11.  Statement of the directors' responsibilities

 

The Board confirms to the best of their knowledge:

 

·    that the condensed consolidated half year financial statements for the six months to 30 September 2023 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as per UK adopted international accounting standards; and

 

·    that the Half Year Report includes a fair review of the information required by sections 4.2.7R and 4.2.8R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the period and their impact on the condensed consolidated half year financial statements; a description of the principal risks and uncertainties for the remainder of the current financial year; and the disclosure requirements in respect of material related party transactions.

 

By order of the Board

 

James McDonald

Company Secretary

19 December 2023

 

Names of the current Board of Directors can be found on the Company website at www.triad.co.uk.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR UKOARORUUAAA