TPXimpact Holdings PLC

("TPXimpact", the "Group" or the "Company")

Unaudited preliminary results for the year ended 31 March 2025

Strong performance despite short-term UK public sector disruption

TPXimpact Holdings PLC (AIM: TPX), the technology-enabled services company focused on people-powered digital transformation, announces its unaudited preliminary results for the year ended 31 March 2025 ("FY25") and a trading update for the year ending 31 March 2026 ("FY26").

FY25 Financial Highlights:

Operational and Impact Highlights:

Post-Period Trading and Outlook:

¹ In measuring our performance, the financial measures that we use include those which have been derived from our reported results in order to eliminate factors which distort period-on-period comparisons. These are considered non-GAAP financial measures and include measures such as like-for-like revenue, adjusted EBITDA and net debt. All are defined in note 7 of the financial statements.

² We have recalculated our emissions back to FY22 due to a change in classification treatment

³ 18% of the UK population belong to a Black, Asian, mixed or other ethnic group (2021 Census data)

Bjorn Conway, Chief Executive Officer, commented:

"This has been a year of significant market disruption, particularly across the UK public sector, and I'm proud of the resilience and focus TPXimpact has shown in navigating these challenges. While our financial results reflect the impact of contract delays and spending reviews, we have taken decisive steps to protect profitability and create a more efficient, sustainable business.

Our continued commitment to operational discipline and purpose-led transformation has enabled us to maintain a strong financial foundation and improve margins-important achievements in a difficult market. We've stayed true to our values, advancing our commitments on inclusion, sustainability and social impact, while continuing to invest in our people and the future of our business.

As we enter the final year of our three-year plan, our strategy is clear: to strengthen our revenue base, accelerate profitability and unlock new growth opportunities, all guided by the values and purpose that define who we are. I'm grateful to our talented team, our clients and our shareholders for their continued support and belief in what we're building together.

While our near-term focus remains on disciplined execution and margin improvement, we are laying the foundation for sustainable revenue growth beyond this plan, positioning us for long-term value creation."

Enquiries:

 About TPXimpact

We believe in a world enriched by people-powered digital transformation. Working in collaboration with organisations, we're on a mission to accelerate positive change and build a future where people, places and the planet are supported to thrive.

Led by passionate people, TPXimpact works closely with its clients in agile, multidisciplinary teams; challenging assumptions, testing new approaches and building confidence and capabilities. Combining our rich heritage with expertise in human-centred design, data, experience and technology, we work to create sustainable solutions with the flexibility to learn, evolve and change.

The business is being increasingly recognised as a leading alternative digital transformation provider to the UK public services sector, with over 90% of its client base representing public services.

More information is available at www.tpximpact.com.

CEO Statement

In a year defined by significant market challenges, particularly within the UK public sector following the change in government and subsequent spending reviews, I am pleased to report that TPXimpact has demonstrated resilience and strategic agility. While revenues have not met our initial expectations, we have taken decisive action to protect the profitability of the business and position ourselves for sustainable growth.

Through disciplined cost control and operational efficiency, we have maintained a sound financial foundation despite the headwinds, ensuring that our net debt remains comfortably within our banking covenants. These measures reflect our commitment to financial stability whilst ensuring the business has a robust platform for growth.

Market Context and Financial Performance

The past year has been marked by widespread contract delays and spending reviews across the UK public sector, impacting the entire industry. While these headwinds contributed to an 8.2% decline in revenue to £77.3m (FY24: £84.3m), our strategic focus on operational efficiency and cost control has delivered meaningful improvements across key profitability metrics.

Gross margin increased to 28.6% (FY24: 25.1%), driven by tighter project execution, resource planning and greater commercial discipline. This improvement reflects the scalability of our model and provides a strong foundation for future operating leverage as markets recover. Adjusted EBITDA rose to £5.6m (FY24: £4.6m), with adjusted EBITDA margin improving to 7.3% (FY24: 5.5%). Restructuring costs and working capital movements resulted in a modest increase in net debt (excluding lease liabilities) to £8.5m and a leverage ratio of 1.51x net debt to adjusted EBITDA. This is at the lower end of our target leverage range of 1.5-2.0x.

Strategic Focus and Operational Improvements

Year two of our three-year plan was characterised as "Form and Integrate" and we have made significant progress. Our three core businesses, Digital Transformation, manifesto and KITS, have been streamlined to deliver greater value to our clients.

Throughout recent market challenges, we have remained focused on operational efficiency, taking difficult but necessary steps to restructure the organisation. This review has been guided by a clear objective: to protect and strengthen the areas of our business that deliver the greatest value to our clients, while scaling back in areas where future demand is limited. The restructuring resulted in 69 employees leaving the business during FY25.

Our total headcount at year-end has decreased by 9%, reflecting the strategic right-sizing measures implemented earlier this year. Our permanent-to-contractor ratio remains approximately 70:30, allowing us to deploy resources quickly and efficiently while continuing to recruit full-time employees as new opportunities arise and market conditions improve.

Commitment to Purpose and Values

Throughout this period, we have remained committed to our PACT values-Purpose, Accountability, Craft, and Togetherness. The principles behind our B-Corp certification continue to be a source of pride and a guiding framework for our operations, ensuring that our business decisions reflect our commitment to people, places, and the planet.

We have maintained our investment in key purpose initiatives, including our Future Leaders programme, which continues to provide opportunities for young entrepreneurs from underrepresented backgrounds. Our commitment to diversity and inclusion remains unwavering, with ongoing efforts to improve representation and equity across the organisation. We have more than halved our gender pay gap (GPG) over the past two years and are currently tracking at 7%. Our equality pay uplifts and focus on progression have made a difference to GPG.

We've continued to break down barriers to entry and progression by becoming a Disability Confident Committed Employer, a Living Wage Employer and joining the Social Mobility Index.

Environmental, Social and Governance

We have continued to make progress on our environmental commitments, with all our offices now running on renewable electricity and our carbon intensity showing further improvement to 16.7 tCO2e/£1m of revenue (FY24: 19.9²). Our procurement and sustainability teams have strengthened our supply chain oversight, ensuring that our operations align with our values and commitments.

Our MSAT (Modern Slavery Assessment Tool) score has improved to 88% (FY24: 70%), reflecting our enhanced approach to modern slavery prevention throughout our supply chain. We remain on track to achieve our target of 90% next year.

Our social value proposition remains central to our client offering, particularly in the public sector, where social impact requirements are increasingly embedded in procurement criteria. We have further refined our approach to measuring and reporting social value, ensuring that we can demonstrate tangible impact across our projects and operations.

People and Culture

In a year of significant change, our people have demonstrated remarkable resilience, adaptability, and commitment. We have increased our focus on leadership development and skills enhancement, ensuring that our teams are equipped to navigate the evolving market landscape and deliver excellence for our clients.

In 2025, the organisation's Inclusion & Belonging survey score rose to 65%, up from 62%¹ the previous year. This score reflects how strongly employees feel a sense of belonging, psychological safety, and inclusion, key indicators of overall engagement and well-being at work. Notably, more employees reported feeling they can bring their authentic selves to work and feel part of the organisation.

An updated inclusion action plan is being developed in partnership with the Inclusion Council to build on this progress. The organisation is proud of the continued commitment employees show to its mission and values and remains focused on areas needing further attention, particularly the ethnicity pay gap.

¹ FY24 employee inclusion scores restated to provide a like-for-like comparison

² We have recalculated our emissions back to FY22 due to a change in classification treatment

Looking Ahead

The fundamental drivers of digital transformation remain strong, with organisations across sectors seeking to enhance efficiency, improve service delivery, and drive innovation.

We are focused on extending our reach beyond our traditional markets, exploring opportunities in adjacent sectors and service areas where our capabilities can deliver significant value. We are also investing in our capabilities in emerging technologies, including responsible AI, where we see substantial growth potential.

Our financial strategy remains focused on margin improvement, cash generation and debt reduction. We have implemented enhanced financial controls and forecasting mechanisms to ensure that we can navigate the ongoing market uncertainties while seizing opportunities as they arise. We have set clear priorities for the year ahead: stabilising revenue, protecting and growing profitability, and targeting an FY26 Adjusted EBITDA of £6-7m. In parallel, we aim to reduce net debt to £7-8m, bringing leverage down to approximately 1.0-1.5x net debt to adjusted EBITDA.

Conclusion

Whilst the past year has presented significant challenges, we have remained resilient and adapted to the market environment to ensure the long-term sustainability and success of the business.

I remain deeply grateful to our people for their unwavering commitment during this period of change, to our clients for their continued trust and partnership and to our shareholders for their support and confidence in our strategy.

With greater policy certainty and uplift in public investment following the government's spending review, we see growing demand across our core markets, from health and housing, to justice, education and infrastructure. These trends play directly to our strengths in digital service design, data integration, platform engineering and agile delivery.

The return of multi-year budgets across government creates the conditions for longer-term digital transformation, not just short-term delivery. With a proven track record in designing and scaling impactful services, TPXimpact is well placed to be a strategic partner to departments as they mature their digital roadmaps, build internal capability and deliver lasting productivity gains.

In FY26, we will continue to invest in key areas, including responsible AI, automation and low-carbon digital platforms to stay ahead of client needs and market expectations.

These combined strengths position TPXimpact as one of the UK's most relevant technology service companies; purpose-led, outcomes-driven and directly aligned to where government is investing for long-term impact

Financial Review

The unaudited preliminary results for the year ended 31 March 2025 ("FY25") reflect continued positive momentum and robust operational execution across the Group. This was demonstrated by growth in EBITDA and adjusted EBITDA margin, with a further material reduction in gross borrowings, despite a decrease in revenue when compared to the prior year.

Revenue decreased by 8.2% to £77.3m (FY24: £84.3m), reflecting softer demand across both central government and the not-for-profit sector. This was driven by slower decision-making following the change in government and funding constraints outlined in the Chancellor's Autumn Statement in October 2024.

Over 90% of our revenue was generated from public sector clients, with Central Government accounting for around 68%. We continue to see significant opportunity in the private sector, supported by established relationships in financial services and utilities. Our top 10 clients contributed 72% of total revenues.

Cost of sales decreased by over 12% to £55.2m (FY24: £63.1m), resulting in gross profit of £22.1m (FY24: £21.2m), up over 4% year-on-year. Gross margin increased to 28.6% from 25.1% in FY24, a reflection of the strategic decisions taken earlier in the year to streamline our structure and focus on delivering value more efficiently.

Our total headcount has decreased by 9%, reflecting the strategic right-sizing measures implemented earlier this year. Our permanent-to-contractor ratio remains approximately 70:30, allowing us to maintain agility in workforce deployment while continuing to recruit full-time employees as new opportunities arise and market conditions improve.

Utilisation and productivity improved across the business, most notably in our Digital Transformation unit. These gains were driven by targeted restructuring efforts in FY25, aimed at aligning our delivery capacity with softer market demand. As a direct result, utilisation rates rose and contributed to a significant improvement in profitability. Adjusted EBITDA increased by 21.3% to £5.6m (FY24: £4.6m), with adjusted EBITDA margin rising to 7.3% (FY24: 5.5%), a notable achievement in a year of declining revenue. While the restructuring involved some one-off costs, reported as exceptional items, these actions were critical to establishing a leaner, more agile operating model. Employee retention dipped slightly to 86%, down from 88% in FY24.

Reported operating loss from continuing operations was £(8.7)m (FY24: £(22.8)m), including non-cash goodwill impairment charges of £4.5m (FY24: £14.5m). Share-based payment charges were flat at £1.4m (FY24: £1.4m), while restructuring and transformation costs increased to £2.1m (FY24: £1.4m) as a result of the restructuring actions described above. Amortisation of acquired intangibles reduced to £5.4m (FY24: £7.7m).

Core administrative expenses were broadly flat at £18.0m (FY24: £17.7m), reflecting disciplined cost control and selective investment in back-office functions.

Adjusted profit before tax from continuing operations was £3.3m (FY24: £1.8m) and reported loss before tax was £(10.0)m (FY24: £(24.8)m). Net finance costs decreased to £1.3m (FY24: £2.0m) due to lower interest rates and average borrowings. A tax credit of £0.9m (FY24: £2.7m) reflected deferred tax benefits.

Adjusted diluted earnings per share from continuing operations increased to 3.0p (FY24: 2.1p), while reported diluted loss per share was (10.1)p (FY24: (24.5)p).

The Board will continue to review dividend policy however, no dividend is proposed for FY25.

Net Debt and Cash Flow

Net debt (excluding lease liabilities) at 31 March 2025 was £8.5m, at the lower end of our 1.5x to 2.0x target (FY24: £7.1m). The £1.4m increase in net debt in the year reflects net cash generated from operations of £1.0m, a corporation tax refund of £0.4m, offset by interest paid of £1.1m, share repurchases for the Company EBT (Employee Benefit Trust) of £0.7m, and long-term lease payments of £1.0m. Debt repayments of £3.0m reduced gross borrowings to £13.2m by year-end. A further £1.5m repayment since year-end brought gross borrowings down to £11.7m by 20 June 2025. The leverage ratio at 31 March 2025 stood at 1.51 (net debt/12-month adjusted EBITDA), and all banking covenants were comfortably met.

Current Trading

In the first two months of FY26, profitability remained on budget and ahead of the same period in FY25. We secured £19m in new business during the first two months of FY26, and the pipeline of qualified opportunities remains robust, positioning us well for continued momentum.

Unaudited preliminary results for the year ended 31 March 2025

Consolidated Income Statement

For the year ended 31 March 2025

Consolidated Statement of Financial Position

At 31 March 2025