27 June 2025

 

Sorted Group Holdings plc

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

 

Audited Results for the year ended 31 December 2024

and

Related Party Transaction

 

Sorted (AIM: SORT), a leading provider of delivery experience and post-purchase technology, announces its audited results for the year ended 31 December 2024 ("FY 2024").

 

Financial Performance

 

·      Revenues in FY 2024 were £5,636,903 compared to £6,673,922 in the 15-month period ended 31 December 2023 ("2023") representing approximately a 15.54% decrease in revenues

 

·      Administrative costs for FY 2024 were £4,990,127 (2023: £12,251,877)

 

·      Operating loss before exceptional administrative expenses, amortisation and depreciation for FY 2024 was £1,110,004 (2023: £7,952,584)

 

·      Loss per share from continuing operations decreased from 2.3649p in 2023 to 0.5215p in FY 2024

 

 Financial Position at FY 2024

 

·      Net assets were £1,415,326 (2023: liability of £573,523)

 

·      Net current assets were £830,432 (2023: liability of £5,368,065)

 

·      Cash and cash equivalents of £2,655,840 (2023: £408,479)

 

·      Borrowings were £4,463,947 (2023: £2,805,000)

 

Related Party Transaction

 

The Group entered into an arrangement with Shard Credit Partners Venture Debt I Sarl ("Shard Venture Debt") in August 2022 to obtain funding of £3.0 million from Shard Venture Debt, which may increase by a further £5.0 million subject to the satisfaction of certain condition precedents (the "Shard Facility"). The Shard Facility is secured with a fixed charge over fixed property and intellectual property as well secured with a variable charge over all the property and undertakings of the Group. The Shard Facility has a fixed interest rate of 10.75%.

 

The Group has agreed with Shard Venture Debt that starting from 30 June 2025, in any particular quarter, if the Company chooses to not pay any accrued interest in cash at the end of that quarter, the Company will be required to pay that quarter's interest at an increased accrued interest rate of 18%, payable at the end of the Shard Facility's maturity date (22 August 2027) (the "Shard Facility Variation")

 

Shard Venture Debt is directly connected and controlled by Shard Credit Partners Venture Debt Fund I LP ("Shard Credit Partners"). Shard Credit Partners is a substantial shareholder (as defined in the AIM Rules for Companies). The Shard Facility Variation is therefore classified as transaction with a related party for the purposes of the AIM Rules for Companies. The directors of the Company having consulted with the Company's nominated adviser, Allenby Capital Limited, consider that the Shard Facility Variation is fair and reasonable insofar as the Company's shareholders are concerned.

 

Posting of Annual Report and Accounts

 

The Group also announces that it has today posted to its shareholders the annual report and accounts for FY 2024.

 

A copy of this announcement and the Company's report & accounts will shortly be available on the Company's website.

                                                 

For further information please contact:

 

Sorted Group Holdings plc                                                                    Tel: +44 (0)3300 555 284

Simon Wilkinson, Chairman

Mahmoud Warriah, Chief Financial Officer

 

Allenby Capital Limited (Nominated Adviser)                                         Tel: +44 (0)20 3328 5656

David Hart

Vivek Bhardwaj

 

Turner Pope Investments (TPI) Ltd (Broker)                                            Tel: +44 (0)20 3657 0050

James Pope

Andy Thacker

 

About Sorted

 

Sorted's Delivery Experience supports retailers in providing exceptional delivery experiences and analysing post-purchase performance. It enables customers to track deliveries of parcels with ease.

 

Founded more than a decade ago, Sorted is trusted by leading retailers - such as Asda, ASOS and M&S - to make customer purchase experiences a differentiator.

 

www.sorted.com

@SortedOfficial

Media contact - Shaun Weston - shaun.weston@sorted.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAIRMAN'S REPORT

FOR THE YEAR ENDED 31 DECEMBER 2024

 

Dear Shareholders,

 

I am pleased to present the Chairman's statement for Sorted Group Holdings PLC (the "Company") (formerly Location Sciences Group PLC) and its subsidiaries (the "Group" or "Sorted") 2024 report and accounts.

 

On 30 January 2024 we announced and published an AIM admission document which detailed, inter alia, the proposed acquisition of Sorted Holdings Limited ("SHL") and its subsidiary undertakings, Sorted Group Limited ("SGL") and Clicksit App Limited ("CAL"), a proposed subscription of 2,285,712 new ordinary shares at 87.50 pence per new ordinary share to raise approximately £2.0 million, a proposed 625 to 1 share consolidation, a proposed change of name and AIM ticker symbol to Sorted Group Holdings PLC and SORT respectively, director appointments, a notice of general meeting, and the restoration of trading of the Company's existing ordinary shares on AIM. Terms were agreed for the acquisition of the entire issued and to be issued share capital of SHL for an aggregate nominal consideration of approximately £66.73 to be paid in cash at completion (the "Proposed Acquisition").

 

This constituted a reverse acquisition of the Company by SHL for accounting purposes (the "Reverse Acquisition").  The impact of the Reverse Acquisition on the financial statements previously reported for the period ended 31 December 2023 is discussed within the Independent Director's Financial Review. Please refer also to notes 2.3 and 26 of the financial statements for further details.

 

The Proposed Acquisition was outlined as attractive for a number of reasons. These included:

 

·      Significant opportunity to leverage SHL's technology and substantial capital investment (exceeding £70 million);

·      Attractive software-as-a-service ("SaaS") business model in the ecommerce sector with scalable, predictable revenue performance;

·      Diverse customer base of household retail brands and strong industry partnerships;

·      Global ecommerce market forecast to grow significantly;

·      Entry into a highly fragmented market; and

·      Obtaining a UK-based business with over 60 employees.

 

On 16 February 2024, all resolutions were duly passed at a general meeting of the Company. The proposals set out in the AIM admission document completed on 19 February 2024 with the enlarged group successfully admitting to AIM on the same day ("Admission"). As part of this, Carmen Carey was appointed as Chief Executive Officer, Mahmoud Warriah as Chief Financial Officer and Petar Cvetkovic as Non-Executive Director. To reflect the Company's new name, the website changed to www.sorted.com on Admission.

 

The financial year ended 31 December 2024 ("FY24") presented a number of challenges with reported revenues of £5,636,903 (15-month period ended 31 December 2023: £6,673,922). While this represents a decline in comparison to the 15-month period ended 31 December 2023, this represents a modest increase to the unaudited pro-rated period of 12 months to 31 December 2023 of £5,339,138. In any event, the business performed well in stabilising the customer base and delivered a significant year-on-year reduction in costs, transforming the Group's underlying cost structure.

 

The successful fundraises in 2021 and 2024 provided the Company with liquidity, and, together with undrawn loan facilities (details of which are set out in note 27) position us to pursue our strategic acquisition objectives despite a complex market environment.

 

Looking forward, we remain cautiously optimistic. The acquisition of SHL has provided us with a valuable platform for potential growth opportunities. Armed with this knowledge, we are actively exploring avenues for sustainable expansion and enhancement of our overall offerings.

 

Notable highlights for FY24 include:

 

·       On 30 April 2024, the Company announced that SGL had received approximately £2.0 million in research and development ("R&D") tax credits from His Majesty's Revenue & Customs ("HMRC") (together the "R&D Tax Credit"). The R&D Tax Credit relates to SGL's claim made to HMRC in respect of the financial year ended 30 September 2022. The R&D Tax Credit has been directly applied towards reducing the Group's pay as you earn ("PAYE") and value added tax ("VAT") liabilities.

 

·       On 28 May 2024, it was announced that Carmen Carey stepped down as Chief Executive Officer ("CEO") and Executive Director of the Group with immediate effect and continued to support Sorted during a three month notice period, leaving 27 August 2024.

 

·       On 30 September 2024 the Group announced that it had received approximately £1.1 million in cash as a result of a successful R&D Tax Credit Claim. The R&D Tax Credit Claim relates to SGL's claim made to HMRC in respect of the 15 month period ended 31 December 2023.

 

·       On 4 October 2024, the Company announced the disposal to ZigZag Global Limited of the business and intellectual property (including the software, systems and content assets) used to operate and deliver the Group's "Returns" business used by small to medium fashion apparel retailers, charities and educational institutions (the "Disposal").

 

·       The consideration received by Sorted for the Disposal was £775,000 in cash. The cash was used to settle in part CAL's liabilities of about £1.4m including accumulated losses and transaction costs. The gross assets the subject of the Disposal as at 31 December 2023 were approximately £247,000 and generated a profit before tax in the 15 months ended 31 December 2023 of approximately £64,000.

 

·       On 21 November 2024, the Company announced the appointment of Rawlinson & Hunter Audit LLP as its new external auditor for the financial year ended 31 December 2024. Rawlinson & Hunter Audit LLP was the auditors for SHL and its group for the financial year ended 31 December 2023.

 

·       On 6 December 2024, the Company announced the implementation of new share incentive awards ("New Awards") under the existing Sorted Group Holdings Plc Share Option Plan to retain and incentivise key management personnel. The New Awards were made to one Director of the Company and certain persons discharging managing responsibility ("PDMR").

 

During FY24, we also undertook significant restructuring efforts to align the business with its strategic goals and to ensure its long-term sustainability, which are outlined as follows:

 

·       Employee Headcount Reduction: The headcount was reduced from 90 to 55, eliminating an expensive corporate layer that was no longer required for the business. This enabled the board of directors of Sorted (the "Board" or the "Directors") to promote the next level of high-end talent to form the new senior management team.

 

·       Cost Reduction: We have reduced back-office costs related to legal, HR, and finance functions, enabling management to reallocate resources towards front-office functions, specifically software engineering and sales. This is anticipated to lead to a total people cost reduction of approximately £1.2 million on an annualised basis.

 

·       Property Costs: We have reorganised our offices, closed the London office and resized the Manchester office to be more fit for purpose. This is expected to deliver an annualised six-figure saving.

 

·       Operational Efficiencies: We are introducing efficiencies to run the Sorted platform more cost-effectively. Our second largest cost, outside of personnel, is our IT infrastructure, which we will focus on reducing in the second half of the financial year ending 31 December 2025 ("FY25").

 

FY24 has been transformative for our Group as we have embarked on a strategic initiative to foster a "start-up" mentality within our organisation. The key objectives have been to streamline our operations, reduce unnecessary corporate and executive costs, and return to our nimble roots in Manchester.

 

Outlook and Future Strategy

 

As we look forward to the remainder of FY25, we are optimistic about the future. Our strategic focus on agility, efficiency, and customer satisfaction will continue to guide us. We are confident that the steps we have taken will not only strengthen our market position but also lay a solid foundation for sustained growth and success. The addition of SHL has provided us with a valuable platform for potential growth opportunities. Armed with this knowledge, we are actively exploring avenues for sustainable expansion and enhancement of our offerings.

 

The successful fundraises that took place in 2021 and 2024 provided us with sufficient resources and, together with the £1m Bidco 3 Limited Loan Facility, enable us to pursue our strategic acquisition objective against the backdrop of the complex business landscape.

 

Focus and Vision

 

The Sorted 2.0 transformation plan remains a central strategic priority for the Group, with assessments and development plans continuing through FY25 and extending well into the next financial years up and to the financial year ending 31 December 2028. In parallel, Sorted is actively evaluating how emerging AI technologies can be harnessed to accelerate the evolution of its Delivery Experience Platform. If these technologies reach the necessary level of maturity, they have the potential to be truly transformative for the Group - enabling greater scalability and innovation across the product suite.

 

Meanwhile, Sorted continues to drive commercial growth in FY25 using its current technology platform, with momentum already visible in the market. The business remains confident in securing new sales, particularly for its Ship and Track products.

 

In conclusion, while FY24 presented its challenges, we are strategically positioned for the future. With a solid financial foundation, streamlined operations, and a focus on delivering a new strategic path going forward, we are confident in our ability to create long-term value for our shareholders. We thank our shareholders and stakeholders for our continued trust and support.

 

Yours sincerely,

 

Simon Wilkinson

Executive Chairman, Sorted Group Holdings PLC

 

INDEPENDENT DIRECTOR'S FINANCIAL REVIEW

FOR THE YEAR ENDED 31 DECEMBER 2024

 

Dear Shareholders,

 

As one of the two Independent Directors of Sorted Group Holdings PLC, I am pleased to present my report alongside the Chairman's Report for the FY24 report and accounts. As a member of the Board, my role is to provide an unbiased perspective and to act in the best interests of the Company and its shareholders.

 

Throughout FY24, I actively participated in the strategic review process and monitored the Company's performance, governance, and risk management. I have assessed the decisions made and actions taken by the Board, ensuring that they align with the company's values and objectives.

 

Financial Performance

 

The financial performance should be considered in light of the Reverse Acquisition, set out in detail in notes 2.3 and 26. In summary, the comparative amounts were restated such that the figures for the 15 months ended 31 December 2023, as well as the Consolidated Statement of Financial Position as on 31 December 2023, represent those of SHL, being the accounting parent, and its subsidiaries (before the Reverse Acquisition). In addition, the financial reporting for the 15 month period ended 31 December 2023 of SHL and its subsidiaries has been restated following the conversion from UK GAAP to International Financial Reporting Standards (refer note 28). The results for the year ended 31 December 2024, as well as the Consolidated Statement of Financial Position as on 31 December 2024 is for SHL and its subsidiaries but also includes the balances of Sorted Group Holdings Plc and subsidiaries as on 31 December 2024 and the results of the same from the Reverse Acquisition date of 16 February 2024. The Company Statement of Financial Position and Company only disclosures refer to Sorted Group Holdings Plc, being the parent entity as defined by the UK Companies Act.

 

The financial performance of Sorted Group Holdings PLC in FY24 reflected the challenges faced by the Company and the broader market environment. I have scrutinised the financial statements and worked closely with the team to understand the underlying causes and evaluate the appropriateness of the strategic initiatives undertaken. I have enclosed below a summary of the Group's financial performance and statement of financial position at the end of the year:

 

All figures in £GBP (unless otherwise stated)	Year to 31 December 2024	Six months to 30 June 2024	12 months to 31 December 2023*	Comparison to prior period
Revenue	5,636,903	3,188,490	5,339,138	6%
Administrative costs	4,990,127	3,654,220	9,801,502	(49%)
Loss before tax	4,858,609	3,434,205	9,614,482	(49%)
Loss per share	52.15p	51.2p	189.19p	(72%)
Net assets	1,415,326	1,614,157	(573,523)	Positive increase
Net current assets/(liabilities)	830,432	(370,891)	(5,368,065)	Positive increase
Cash at bank	2,655,840	2,340,065	408,479	550%
Group borrowings	4,463,947	4,425,366	7,159,395	(38%)

 

* The financial performance items have been pro-rated to 12 months to enhance comparability and is unaudited.

 

The Board made further reductions in overheads during FY24 and the impact of these can be seen in the decreased administration costs in FY24 of £4,990,127 compared to the previously reported 15 month period ended 31 December 2023 of £12,251,877, representing a 59% period on period reduction (note that this is comparing 12 months in FY24 to the previously reported 15 month period). The loss before tax includes the costs of the acquisition of SHL in FY24.

 

Strategic Review and Actions Taken

 

During FY22, the Board embarked on a comprehensive strategic review to pinpoint the most viable pathways for sustainable growth and the creation of shareholder value. This exercise led to the identification of SHL as a prime target and the most viable option to provide long-term sustainable growth and create shareholder value. The acquisition of SHL completed on 19 February 2024.

 

Corporate Governance

 

We are committed to upholding the highest standards of corporate governance. Throughout the year, we monitored the Company's compliance with applicable laws, regulations, and best practices. We reviewed the effectiveness of internal controls, risk management systems, and ethical practices. We are pleased to report that Sorted Group Holdings PLC has maintained a robust governance framework, with appropriate checks and balances in place to safeguard shareholder interests.

 

Stakeholder Relations

 

As an Independent Director, I place great importance on the Company's relationships with its key stakeholders. I have closely monitored the engagement efforts undertaken by the team to foster a positive team culture, ensure fair treatment, and provide opportunities for professional growth. Furthermore, I have assessed the Company's relationships with clients, suppliers, and other stakeholders, ensuring that open lines of communication are maintained and that their expectations are being met.

 

Looking Ahead

 

As an Independent Director, I remain committed to our fiduciary duties and to serving the best interests of Sorted Group Holdings PLC and its shareholders. I will continue to provide oversight, guidance, and independent perspectives to the Board as the company navigates the evolving landscape. I will monitor progress against strategic objectives, evaluate risk management practices, and advocate for responsible and sustainable business practices.

 

Whilst the Group plans to appoint a new CEO, in the intervening period, Simon Wilkinson, the Group's Chairman, has taken on the role of Executive Chairman. In addition to Simon Wilkinson's software and general management expertise, Sorted will also draw on the significant experience of its other existing board members to oversee the operations of the business, including the distribution and logistics expertise of Petar Cvetkovic, a Non-Executive Director.

 

In order to recognise Simon Wilkinson's increased involvement in the operations of the business, Sorted has entered a consultancy arrangement with him whereby the Group will pay Mr Wilkinson a daily consultancy rate of £1,750.00 (the "Consultancy Arrangement"). It is anticipated that Mr Wilkinson will work a maximum of three days per week pursuant to the Consultancy Arrangement.

 

In conclusion, I express our appreciation for the trust placed in us by the shareholders of Sorted Group Holdings PLC. I believe that the Company's strategic initiatives, including the disposal of the Returns business and the ongoing commitment to find a new strategic direction for the Group, will position it for long-term success. I remain vigilant in our oversight role and am dedicated to the Company's continued growth and value creation.

 

Respectfully submitted,

 

 

Dr Nigel Burton

Independent Non-Executive Director, Sorted Group Holdings PLC

 

STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2024

 

The Directors present their strategic report for the year ended 31 December 2024 ("FY24"). The comparative reporting period is for the 15-month period ended 31 December 2023 ("FY23").

 

Fair review of the business

The fair review of the business is set out in the Executive Chairman's and Independent Director's reviews, which describe in detail the financial results and future plans for Sorted Group Holdings PLC.  The Board monitors progress on the overall Group strategy and the individual strategic elements by reference to KPls. The primary measures are revenue, costs, EBITDA before exceptional items and working capital levels.

 

Principal risks and uncertainties

The principal risks to the Group are as follows:

 

Description	Sorted Group Holdings PLC continues to be in a cash consumption phase.
Impact	Going concern has been carefully considered and details are provided in the Corporate Governance Report below and in note 2.2 of the Group's financial statements.
Mitigation	As at 31 December 2024, the Group had just over £2.65 million in net cash resources and an unused £3 million loan facility. As noted in note 27,  subsequent to the year end this loan facility has been reduced to £1 million.  In addition, the Group's main lender, Shard, agreed to the deferral of interest on amounts owed to them until 2027 payable on the Shard loan of Facility. The Directors consider that the Group has sufficient funds to meet its requirements for the foreseeable future.
Description	Competition risk.
Impact	New entrants into the market and taking market share.
Mitigation	The Group is continually investing in its platform to become market leader. Key to this is executing the Group's vision to be the only Delivery Experience Platform able to serve the entirety of the market from SMB through to large enterprise and across all three pillars of the retail post-purchase journey; Carrier Selection, Order Tracking and Returns Management.
Description	Online security risk.
Impact	As a SaaS platform the Group has risk relating to online security vulnerabilities.
Mitigation	The Group has rigorous processes and procedures in place, including collaborating with third-party security specialist firms to validate the robustness of its security measures, to mitigate this risk which is continually reviewed and enhanced to meet the emerging threats and business needs.
Description	Credit risk.
Impact	Possibility that a counterparty will default on its contractual obligations resulting in a loss to the Group.
Mitigation	The Group has adopted a policy of only dealing with credit worthy counterparties as a means of mitigating the risk of financial loss from defaults.
Description	Changes in regulation negatively impact the Group's market.
Impact	The Group may find the demand for its products is reduced and/ or the Group may be forced to change or stop selling one or more of its products.
Mitigation	The Board takes account of commentators and industrial bodies as to the direction of policy change.

 

The Board meets regularly to review specific and general risks that face the Group. The Board strives to position the Group in a way that any risks can be minimised and met, should the need arise.

 

The Group is managing these risks by reducing the overheads of the Group and continuing to analyse new opportunities as they arise. The Board are committed to delivering shareholder value in the long-term.

 

Strategic risks

 

Following the strategic review, a significant milestone in the Company's strategy was achieved with the purchase of Sorted Holdings Limited on 19 February 2024, aligning with the strategic goals set out in the FY23 financial accounts.

 

However, a strategic risk lies in the effective execution of these initiatives. Ensuring successful implementation, alignment across the organisation, and timely delivery of desired outcomes require careful planning, resource allocation, and effective management of change. Any delays, misalignment, or inadequate execution could impede the Company's ability to achieve its strategic objectives and may result in lost opportunities, lower competitiveness, and suboptimal financial performance.

 

It is important for Sorted Group Holdings PLC to establish clear goals, allocate appropriate resources, and monitor the progress of these strategic initiatives. The Company should implement robust project management practices, establish effective communication channels, and regularly evaluate and adjust the execution plan as needed. Additionally, strong leadership and stakeholder engagement are crucial to drive alignment and foster a culture of accountability throughout the organisation.

 

By proactively addressing this strategic risk and implementing effective execution strategies, Sorted Group Holdings PLC can enhance its chances of successfully realising the desired outcomes of the strategic initiatives and drive long-term value for shareholders.

 

This report, in conjunction with the Chairman's statement and Independent Director's report, form the Strategic Report for the purposes of s414A of the Companies Act 2006.

 

Section 172 statement

 

The Directors believe that they have effectively implemented their duties under section 172 of the Companies Act 2006 through adherence to the Quoted Companies Alliance Corporate Governance Code, as disclosed on pages 10 to 13 and as published on our website:  https://sorted.com/investors/corporate-governance/. The Chairman's Report details the Group's future plans to achieve its long-term strategy.

 

The Group is committed to maintaining an excellent reputation and strive for high standards, while maintaining an awareness of the environmental impact of the work that it does and strives to reduce its carbon footprint.

 

The Directors recognise the importance of the wider stakeholders in delivering their strategy and achieving sustainability within the business; in ensuring that all our stakeholders are considered as part of every decision process we believe we act fairly between all members of the Company.

 

CORPORATE GOVERNANCE

FOR THE YEAR ENDED 31 DECEMBER 2024

 

The Board recognises the importance of good corporate governance in order to protect and build upon the substantial investments made by our diverse shareholder base. We have chosen to apply the Quoted Companies Alliance Corporate Governance Code (the "QCA Code"), which was developed by the Quoted Companies Alliance ("QCA") in consultation with a number of significant institutional small company investors, as an alternative corporate governance code applicable to AIM companies. The underlying principle of the QCA Code is that "the purpose of good corporate governance is to ensure that the company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term". The Board anticipates that whilst the Company will continue to comply with the QCA Code, given the Group's size and plans for the future, it will also endeavour to have regard to the provisions of the UK Corporate Governance Code as best practice guidance to the extent appropriate for a company of its size and nature.

 

An explanation of how these principles have been applied during FY24 is set out in the Company's website. Details of the Directors' Remuneration, Audit Committee and internal control sections are set out in this report.

 

Certain information required under the QCA Code is included within the Strategic report and the Directors Remuneration Report.

 

Name	Date Appointed	Date Resigned	Role	Committees
Petar Cvetkovic	30/01/2024	-	Non-Executive Director	Remuneration, Nomination, Audit
Nigel Burton	25/05/2021	-	Non-Executive Director	Remuneration, Nomination, Audit

The Board is responsible to the shareholders for the proper management of the Group through setting the overall strategy of the business and to review the people, performance, policies and budgets of the Group. The Board typically meets quarterly and also meets for any other extraordinary matters as they may arise. Detailed information on matters to be discussed during the meetings are circulated in advance of the meeting to ensure non-executive directors can contribute in an educated manner.

 

Independence

 

The Independent Directors at the reporting date are Dr Nigel Burton and Petar Cvetkovic. Petar was appointed in this role on 30 January 2024. The Independent Directors are responsible for monitoring the Board and ensuring no individual or group takes control of the Board's decision making and that all key stakeholders are fully briefed on matters and their responsibilities

 

Board Balance

 

A minimum of 50% of the Board will always consist of non-executive directors. During FY24 all non-executive directors were independent of the management team and are not involved in any other business or relationship, either as an executive or non-executive, which may impair their independent nature and judgement.

 

As announced on 28 May 2024, the Group intends to appoint a new chief executive officer when it becomes appropriate for the business to do so. In the interim, Simon Wilkinson will continue to operate as the Group's executive chairman.

 

Nomination Committee

 

The Group's nomination committee is responsible for reviewing and making proposals to the Board on the appointment of Directors and meets as necessary. During FY24, the Group's nomination committee consisted of Petar Cvetkovic and Dr. Nigel Burton.

 

Performance Evaluation and Re-election

 

The Board has continued to evaluate its effectiveness and performance during FY24, taking into account the Financial Reporting Council's Guidance on Board Effectiveness. Director appraisals will be performed to ensure that their performance is, and continues to be, effective, that where appropriate they maintain their independence and that they are demonstrating continued commitment to the role. The Directors will be evaluated internally based on their responsibilities to the Board. At the AGM 50% of continuing Directors stand for re-election on an annual basis.

 

The Directors carry out continued professional development throughout the year where appropriate and each Director keeps up to date with market changes through the use of market articles and industry contacts.

 

Remuneration Committee

 

The Group's Remuneration Committee is responsible for the specific remuneration and incentive packages for each of the Company's executive directors, senior executives and managers. During FY24, the Group's Remuneration Committee consisted of Nigel Burton and Petar Cvetkovic. Further details of the Committee's remit are contained in the Directors' Remuneration Report on pages 14 to 16.

 

Relations with Shareholders

 

The Group encourages two-way communication with both its institutional and private investors and responds promptly to all queries received. The Non-Executive Directors communicate regularly with the Group's institutional shareholders and ensure that their views are communicated fully to the Board. The Board recognises the Group's AGM as an important opportunity to meet with the Group's private shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM.

 

Annual General Meeting

 

The Annual General Meeting of the Group provides shareholders with the opportunity to be updated on the Group's progress and to ask questions of the Board.

 

Financial Reporting and Internal Control

 

The Company has established policies covering the key areas of internal financial control and the appropriate procedures, controls, authority levels and reporting requirements which must be applied throughout the Group.

 

The key procedures that have been established in respect of internal financial control are:

 

·      An annual budget set by the Board

·      Monthly management accounts with comparisons to budget

·      Monthly forecast updates with comparisons to budget

·      Monthly cashflow forecasts with comparisons to budget

·      Weekly meetings of the Executive Directors and Senior Management to review priorities and issues

·      Restriction of user access to systems, including but not limited to Financial, HR and Technology.

 

The above controls have been established to support the growth of the business and to protect against future risks.

 

Corporate Culture

 

It is the Board's view that the Group's corporate culture is consistent with its objectives, strategy and business model. The Board is aware that the culture set by the Board will greatly impact all aspects of the Group and the way that employees behave. The Board invites employees to provide feedback on their peers and management.

 

Consolidated Accounts

 

The before mentioned Financial Reporting and Internal Controls apply to all subsidiaries. The accounts of all subsidiaries are combined with those of the Company to form consolidated accounts each month. Following Admission, the Chief Financial Officer is responsible for producing the consolidated accounts, including the elimination of intercompany transactions and balances.

 

Audit Committee

 

The Group's Audit Committee is responsible for ensuring the financial performance of the Group is properly monitored and reported on, the effectiveness of accounting systems and financial reporting procedures. During FY24, the Group's Audit Committee consisted of Petar Cvetkovic and Nigel Burton, who acted as Non-Executive Chairman of the committee.

 

The Committee considers all proposals for non-audit services and ensures that these do not impact on the objectivity and independence of the auditor. The Audit Committee reviews, with the external auditor, the safeguards and procedures developed by the auditor to counter threats or perceived threats to their objectivity and independence. Non-audit services performed by the external auditor are assessed for threats to objectivity and independence on a case-by-case basis.

 

Board and Committee Attendance

 

Name	Main Board	Audit Committee	Remuneration Committee	Nomination Committee
Simon Wilkinson	10/10	1/1*	1/1*	1/1*
Nigel Burton	10/10	1/1	1/1	1/1
Mahmoud Warriah	10/10	1/1*	1/1*	1/1*
Petar Cvetkovic	10/10	1/1	1/1	1/1

 

* Simon Wilkinson and Mahmoud Warriah attended these meetings as observers only.

 

Going concern

 

The Directors have taken a view of the Group as a whole.

 

The Group ended FY24 with cash resources of £2,655,840 and debt of £4,463,947

 

The acquisition of SHL resulted in the exit from the Verify business to focus on the SHL business to deliver shareholder value in the long term.

 

However, despite the actions of the Board, the Group continued to operate with a trading loss during FY24. The new funds raised during 2021 were utilised to acquire the SHL business on 19 February 2024. The Board will continue to monitor cash resources and progress the ongoing business review.

 

Based on the current status, after making enquiries and considering the existing cash resources of the business and the further cost reductions made during 2024, plus the Sorted Holdings Limited acquisition, the £2m fundraise and the loan facilities with Bidco 3 Limited, further details of which are set out in note 27, the Board has a reasonable expectation that the Group will be able to execute its plans in the medium term such that the Group will have adequate resources to continue in operational existence for the foreseeable future. This provides the Board with assurance on the Group's ability to continue as a going concern and therefore adopt the going concern basis of accounting in preparing the annual financial statements.

 

DIRECTORS' REMUNERATION

FOR THE YEAR ENDED 31 DECEMBER 2024

 

As a Company admitted to trading on AIM, Sorted Group Holdings PLC is not required to present a directors' remuneration report, however, a number of voluntary disclosures have been made. The Company has complied with the disclosure requirements set out in the AIM Rules.

 

Remuneration Committee

 

During FY24, the Remuneration Committee, comprising Dr Nigel Burton and Petar Cvetkovic, determines the Group's policy for executive remuneration and the individual remuneration packages for executive directors. In setting the Group's remuneration policy, the committee considers a number of factors including:

 

·      salaries and benefits available to executive directors of comparable companies; and

·      the need to both attract and retain executives of appropriate calibre.

 

Remuneration of executive directors

 

Consistent with this policy, benefit packages awarded to executive directors comprise a mix of basic salary and performance-related remuneration that is designed as an incentive. The remuneration packages can comprise the following elements:

 

·      base salary: the Remuneration Committee sets the base salaries to reflect responsibilities and the skills, knowledge and experience of the individual;

·      bonus scheme: the executive directors are eligible to receive a bonus dependent on both individual and Group performance as determined by the Remuneration Committee;

·      equity: share options; and

·      various other add on benefits such as private medical insurance.

 

The executive directors are engaged under separate contracts which require a notice period of three or six months given at any time by the individual.

 

Year to 31 December 2024

 

Director	Salary and Fees	Pension	Consultancy Fee	Total
	£	£	£	£
M Warriah	176,839	8,036	-	184,875
S Wilkinson	50,269	-	180,505	230,773
C Carmen	135,072	576	-	135,748
	362,179	8,612	180,505	551,296

 

Year ended 31 December 2023

 

The Company did not have any executive directors for the year ended 31 December 2023.

 

Remuneration of non-executive directors

 

The fees and equity awarded to non-executive directors are determined by the Board. The non-executive directors do not receive any other forms of benefit such as private medical insurance.

 

Year ended 31 December 2024

 

Director	Salary and Fees	Total
	£	£
N Burton (Non-executive)	50,269	50,269
P Cvetkovic (Non-executive)	61,439	61,439
	111,708	111,708

 

Year ended 31 December 2023

 

Director	Salary and Fees	Total
	£	£
S Wilkinson (Non-executive)	83,437	83,437
N Burton (Non-executive)	76,406	76,406
	159,843	159,843

 

Included within 2023 directors' remuneration for S Wilkinson and N Burton is remuneration of £83,837 and £76,406 respectively that was settled by issue of ordinary shares.

 

Note that the information for the year ended 31 December 2023 is for the Company, i.e., Sorted Group Holdings Plc. The financial statements present Sorted Holdings Limited as comparatives (see notes 2.3 and 26).

 

Director Warrants

 

Non-transferable warrants to subscribe for, in aggregate, 192,000 Ordinary Shares were issued to the Executive Directors and the Non-Executive Directors, exercisable at 125p for five years from 25 May 2021, provided that the Ordinary Shares have traded at a Volume Weighted Average Price (VWAP) at or above 187.5p for 20 consecutive Business Days, or on a change of control of the Company.

 

Name	Number of Ordinary Shares subject to Director Warrants
Simon Wilkinson	48,000
Dr Nigel Burton	48,000

 

Broker Warrants

 

Transferable warrants to subscribe for, in aggregate, 66,000 Ordinary Shares were issued to the Executive Directors and the Non-Executive Directors, exercisable at 125p for five years from 25 May 2021.

 

Name	Number of Ordinary Shares subject to Broker Warrants
Dr Nigel Burton	40,000
Mark Slade**	16,000
David Rae*	10,000

 

*Director between 12 February 2018 to 22 June 2022.

**Director between 24 July 2017 to 22 June 2022

 

Promoter Warrants

 

Promoter warrants were issued to certain investors in the fundraising completed on 25 May 2021 in consideration of those persons assembling and co-ordinating the Concert Party's investment in the Company. As part of this issuance, non-transferable warrants to subscribe for, in aggregate, 800,000 Ordinary Shares were issued to Simon Wilkinson, exercisable at 125p for five years from 25 May 2021.

 

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2024

 

The Directors are pleased to present the annual report and audited financial statements of Sorted Group Holdings PLC for the year ended 31 December 2024.

 

Dividends

 

The Directors do not recommend the payment of a dividend.

 

Board of Directors

 

Simon Wilkinson, Executive Chairman

Simon joined Sorted Group Holdings PLC as Non-Executive Chairman in May 2021 and executive chairman on 24 May 2024. Simon is a highly experienced software executive and entrepreneur, having been involved with a number of public and private companies over his career. He was most recently CEO then Chairman of Mobica, a world-leading, award-winning software services company offering bespoke development, QA and consultancy. He was previously Chief Executive Officer of Myriad Group AG, which was listed in Zurich, and founder and Chief Executive Officer of Magic4 Ltd, a mobile messaging software market leader, backed by 3i, Philips Ventures and Motorola Ventures.

 

Nigel Burton, Non-Executive Director

Nigel was appointed as a Non-Executive Director in May 2021. Nigel spent 14 years as an investment banker at leading city institutions including UBS Warburg and Deutsche Bank, including as the Managing Director responsible for the energy and utilities industries. Following this he spent 15 years as Chief Financial Officer or Chief Executive Officer of a number of private and public companies. He is currently a Non-Executive Director of BlackRock Throgmorton Investment Trust pie, eEnergy Group pie, and Metir plc.

 

Mahmoud Warriah, Chief Financial Officer

From startups to blue chips, Mahmoud has a strong track record of successfully delivering commercial, transitional and business transformational change. He is a qualified chartered accountant with extensive experience across multiple sectors and draws upon his computer science degree to resolve complex operational challenges. Mahmoud has been Sorted's acting interim Chief Financial Officer since 3 October 2022 and was appointed Chief Financial Officer on 29 January 2024.

 

Petar Cvetkovic, Non-Executive Director

Petar is the Founder and current Chairman of Welford Investments Limited, which specialises in equity holdings in growth companies, ownership of freehold commercial properties and advisory work. Over the course of his 37-year career, he has led some of the UK's best-known logistic firms, working in parcels, contract and shared-user distribution as well as supply chain and international logistics. Petar was formerly the Chief Executive Officer of DX (Group) Plc and Target Express.

 

Research and development

 

Following the Board's strategic review, Sorted Group Holdings PLC continues to invest into research and development relating to its platform.

 

Financial Risk Management

 

The Group's financial instruments comprise cash and cash equivalents, trade receivables and payables and borrowings. The main risks arising from the Group's financial instruments are interest rate risk, credit risk, liquidity risk and foreign currency risk.

 

Interest rate and credit risk - the principal assets of the Group are its cash deposits. These are short-term liquid assets and as a result the exposure to interest rate income risk is not considered significant. The principal focus of the Directors has been to minimise any credit risk in relation to its cash deposits even at the expense of interest income received. Borrowings include financial instruments on fixed interest rate terms and a revolving credit facility at a variable rate. As a result, the exposure to interest rate expense risk is low and no active management of interest rate risk is undertaken by the Board.

 

Foreign currency risk - the main functional currency is sterling. Throughout 2024, the Company's transactions have primarily been denominated in sterling and the Group has had low exposure to foreign currency risk.

 

Liquidity risk - the Board's policy is to ensure that sufficient cash and cash equivalents are held on a short-term basis at all times in order to meet the Group's operational needs. The Group does actively raise funds  through market placings and other loan facilities.

 

The Group has been operating at a trading loss due to its stage of development and seeks to ensure that its investments will deliver long term value to shareholders. Liquidity risk is actively managed through regular review of cash requirements of the business in conjunction with the strategic and operational plans for the Group.

 

Substantial shareholdings

 

As at 28 May 2025 the Directors had been notified of the following holdings representing 3% or more of the issued share capital of the Company:

 

	Number of ordinary shares	Percentage of issued share capital
Shard Credit Partners Venture Debt Fund I LP	2,752,140	36.02%
Turner Pope Investments (TPI) Ltd	615,800	8.06%
Richard Hughes	320,000	4.19%
Mahmud Kamani	320,000	4.19%
SDI (Retail Co 8) Ltd (Frasers Group)	285,714	3.74%

 

 

Directors

 

The Directors, who held office during the FY24, were as follows:

 

S Wilkinson

N Burton

M Warriah (appointed 29 January 2024)

P Cvetkovic (appointed 29 January 2024)

C Carey (appointed 29 January 2024, resigned 24 May 2024)

 

The Company maintains director and officers' liability insurance.

 

Statement of Directors' responsibilities

 

The Directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as endorsed by the UK Endorsement Board. 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 of the Group and Company for that period. In preparing these financial statements, the Directors are required to:

 

·      select suitable accounting policies and apply them consistently;

·      make judgements and accounting estimates that are reasonable and prudent;

·      state whether applicable International Financial Reporting Standards (IFRSs) as endorsed by the UK Endorsement Board have been followed, subject to any material departures disclosed and explained in the financial statements; and

·      prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and 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 Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Directors' interests in shares

 

During FY24, the Directors held the following interests in Sorted Group Holdings PLC:

 

	At 31 December 2024			At 31 December 2023
	Ordinary Shares of 62.5p each	Options over Ordinary Shares of 62.5p each	Warrants over Ordinary Shares of 62.5p each	Ordinary Shares of 0.1p each	Options over Ordinary Shares of 0.1p each	Warrants over Ordinary Shares of 0.1p each
S Wilkinson	228,571	-	848,000	100,000,000	-	530,000,000
N Burton	204,571	-	88,000	85,000,000	-	55,000,000
M Warriah	114,285	115,000	-	-	-	-
P Cvetkovic	40,000	-	-	40,000	-	-

 

The market price of the Company's shares at the end of FY24 was 53.51p.

 

Disclosure of information to auditor

 

Each of the persons who are Directors at the time when this directors' report is approved has confirmed that:

·      so far as that Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and

·      that Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the auditor is aware of that information.

 

Annual General Meeting

 

Notice of the forthcoming Annual General Meeting of the Company together with resolutions relating to the Company's ordinary business will be given to the members separately.

 

Reappointment of auditors

 

The auditors, Rawlinson Hunter Audit LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

 

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SORTED GROUP HOLDINGS PLC

 

OPINION 

 

We have audited the financial statements of Sorted Group Holdings PLC (the "Company") and its subsidiaries (the "Group") for the year ended 31 December 2024 which comprise the Consolidated Income Statement, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements of Cash Flows, the Consolidated and Company Statements of Changes in Equity and the related notes.   

 

The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and, as regards the Company financial statements, as applied in accordance with the provisions of the Companies Act 2006. 

 

In our opinion:  

 

·      the financial statements give a true and fair view of the state of the Group's and of the Company's affairs as at 31 December 2024 and of the Group's loss for the year then ended;

·      the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;

·      the Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards; and

·      the financial statements have been prepared in accordance with the requirements 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 are independent of the Group and the 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 entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 

 

CONCLUSIONS RELATING TO GOING CONCERN  

 

The Directors have prepared the Group's and the Company's financial statements on the going concern basis as they have concluded that there are no material uncertainties that could have cast significant doubt over the Group's and the Company's ability to continue as a going concern for at least one year from the date of the approval of the Group's and the Company's financial statements ("the going concern period"). 

 

Our responsibility is to conclude on the appropriateness of the Directors' conclusions and, had there been a material uncertainty related to going concern, to make reference to that in this auditor's report.  

 

Our evaluation of the Directors' assessment of the Group's and the Company's ability to continue to adopt the going concern basis of accounting included: 

 

·      obtaining the Directors' going concern assessment and the forecasts they have prepared for each of the two years to 31 December 2026 which predict available cash, after draw down on loan facilities, of £381,000, and challenging the rationale for assumptions used in the preparation of these forecasts;

·      considering the impact of the various geopolitical events and the wider economic issues arising from these on the Directors' assessment to continue to adopt the going concern basis of accounting;

·      the availability of future funding, including the £3m undrawn Bidco 2024 Loan Facility which is available until 31 January 2026 and which, from 1 February 2026, is replaced by a new £1m facility with Bidco 3 Limited which is available until 31 January 2027;

·      considering the inherent risks to the Group and the Company's business model and how these risks might affect the Group's and the Company's financial resources or ability to continue operations over the going concern period. We evaluated these risks and concluded that they were not significant enough to require us to perform additional procedures;

·      verifying the agreement by the Group's main lender, Shard Credit Partners Venture Debt I Sarl ("Shard"), to defer interest due to them, until August 2027;

·      verifying the agreement by Shard to allow the £564,826 held in Escrow, to be used by the Group to enable the Group to meet its liabilities as they fall due; and

·      considering the reasonableness of the inclusion in the Directors' forecasts of the research and development ("R&D") tax credit claims from HMRC of £278,657 and £402,290 in respect of 2024 and 2025, expected to be received in 2025 and 2026, respectively.

 

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's and the Company's ability to continue as a going concern for a period of at least twelve months from when the Group financial statements are authorised for issue. 

 

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. 

 

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group's and the Company's ability to continue as a going concern. 

 

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. 

 

KEY AUDIT MATTERS  

 

Key audit matters are those matters that, in our professional judgment, 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) 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.  

 

Risk 1: Accounting for the reverse acquisition 

 

Reverse takeovers do not occur frequently and involve a number of technical accounting considerations. As a result, there is a risk that the reverse acquisition by Sorted Holdings Limited (the accounting parent and legal subsidiary) of Sorted Group Holdings PLC (the accounting subsidiary and legal parent) did not apply the legal and accounting requirements under Companies Act 2006 and International Financial Reporting Standards ("IFRS") respectively when preparing the consolidated financial statements. 

 

How we address the Key Audit Matter 

 

We reviewed and considered the accounting papers prepared by management reflecting the requirements of the Companies Act 2006 and IFRS, and their application to the nature and circumstances of the transaction. 

 

Our own review of the requirements of the Companies Act 2006 and the accounting rules outlined in IFRS concurred that management's accounting papers and conclusions on the application of the rules was in accordance with our understanding of the requirements. 

 

We reviewed the basis, parameters and consolidation calculations prepared by management and agreed the numbers recognised to the underlying records. 

 

Key observations communicated to the Audit Committee 

 

Management had appropriately applied the legal and accounting requirements of the reverse takeover in their calculations of the reverse acquisition consolidation.  

 

Risk 2: Revenue recognition 

 

There is a risk that the transition from recognising revenue under Financial Reporting Standard 102 ("FRS 102") as previously reported by subsidiaries to IFRS 15 Revenue from Contracts with Customers, for the main trading subsidiary Sorted Group Limited, would result in a material change in when revenue was recognised. 

 

In addition, there are risks over revenue completeness and existence. 

 

How we address the Key Audit Matter 

 

We reviewed the accounting papers prepared by management which compared the recognition requirements of IFRS 15 with FRS 102 in respect of the various revenue streams which assessed that there was no impact. 

 

A sample of revenue was tested in accordance with the recognition requirements of IFRS 15 which indicated that management had correctly applied the rules and there was no revenue recognition impact resulting from the transition.  

 

Completeness and existence of revenue was tested by agreeing the revenue recognised to the expected amount for a sample of revenue contracts.  No material unexplained differences were identified.  

  

Key observations communicated to the Audit Committee 

 

The transition from FRS 102 to IFRS 15 has not resulted in a revenue recognition impact for the Group and revenue is considered to be materially complete and correctly stated.  

 

Risk 3: Accounting treatment of rental leases on transition from FRS 102 to IFRS 

 

The risk arises that the leases held by the Sorted Group Limited subsidiary were not correctly recognised and disclosed in the financial statements on the transition from FRS 102 to IFRS 16 Leases. 

 

How we address the Key Audit Matter 

 

Management's calculations of the right of use assets and liabilities arising following the adoption of IFRS and the appropriateness of the term and discount rate used in the calculation were reviewed. Other parameters were agreed to the underlying lease agreements. 

 

The prior period adjustments reflected in the financial statements to recognise the right of use assets and liabilities were agreed to the lease adjustment calculations. 

 

Key observations communicated to the Audit Committee 

 

Capitalisation of leases has been appropriately applied in the transition from FRS 102 to IFRS 16 including recognition of right of use assets and liabilities.  

 

Risk 4: Disposal of the intellectual property and returns business of Clicksit App Limited under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations 

 

There was a risk that the discontinued trading activity of the Clicksit App Limited subsidiary, which ceased trading activity during the year, and the profit on disposal of that operation was not correctly reflected in the Income Statement and notes to the financial statements. 

 

How we address the Key Audit Matter 

 

We reviewed and agreed management's calculations of the profit on discontinued operations and the results of the business unit which was disposed of in the year. 

 

Our review of the disclosure and recognition requirements under IFRS confirmed that management had correctly applied them in the financial statements. 

 

Key observations communicated to the Audit Committee 

 

The disposal of the business unit and its results to the date of disposal have been presented and reported in the financial statements in accordance with IFRS 5 requirements.  

 

Risk 4: Valuation of system development costs in intangible assets 

 

The risk exists that the system development costs in intangible assets relating to the Sorted Group Limited subsidiary are impaired. 

 

How we address the Key Audit Matter 

 

The impairment review prepared by management was reviewed for the appropriateness of the valuation basis and parameters used in the calculation supporting the value. 

 

Key observations communicated to the Audit Committee 

 

No impairment of the valuation of the system development costs in intangible assets needed to be reflected in the financial statements relating to the subsidiary undertaking. 

 

Risk 5: Redemption premium of 436% on the convertible loan in borrowings is payable 

 

There is a risk that the holders of the convertible loans could enforce the 436% redemption premium in the convertible loan agreement. 

 

How we address the Key Audit Matter 

 

We reviewed the circumstances in the convertible loan agreements under which the redemption premium of 436% becomes enforceable. 

 

From correspondence between management and their legal advisors we concluded that at the year end the Group had the necessary consents and approvals  in place such that these circumstances were not applicable and hence the redemption premium was not enforceable by the holders. 

 

Key observations communicated to the Audit Committee 

 

The Group has the necessary consents and approvals in place to ensure that the Redemption Premium is not payable. 

 

Risk 6: Going concern

 

There exists a risk that the going concern basis is not appropriate in the preparation of these financial statements.

 

How we address the Key Audit Matter

 

Refer the "Conclusions Relating to Going Concern" section of this Report.

 

Key observations communicated to the Audit Committee

 

Due to operations of the Group being cash negative, the Group is reliant upon the £3m undrawn Bidco 2024 Loan Facility which is available until 31 January 2026 and which, from 1 February 2026, will be replaced by a new £1m facility with Bidco 3 Limited which is available until 31 January 2027, as well as the agreement by its main lender to defer interest payments due to them until August 2027, access to £564,826 held in an Escrow account and R&D tax credits anticipated to be received from HMRC in 2025 and 2026, of £278,657 and £402,290, respectively.   

 

OUR APPLICATION OF MATERIALITY 

 

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion. 

 

Materiality 

 

Materiality is defined as the magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures. 

 

We determined materiality for the Group £190,000 based on 5% of net loss before tax. We believe that net loss before tax provides us with a basis for determining materiality which is the most relevant measure to the stakeholders of the Group. 

 

We determined materiality for the Company £40,000 based on 3% of net assets. We believe that net assets provide the most appropriate measure to the stakeholders of the nature of the Company as an investment holding entity. 

 

We calculated materiality during the planning stage of the audit based on the management accounts provided to us.  The materiality was subsequently reviewed based on the final financial statements.  Final materiality for the Group was £240,000. 

 

Performance materiality 

 

Performance materiality is the application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.  

 

On the basis of our risk assessments, together with our assessment of the Group's overall control environment, our judgment was that performance materiality was 75% of our planning materiality, namely £142,500. This is at the top end of the range of 50% and 75% typically used. In arriving at the top range of 75%, we considered the nature of the transactions in the Income Statement and the balances in the Consolidated Statement of Financial Position and the relative value of transactions recorded in the other primary statements. 

 

Reporting threshold 

 

Our reporting threshold is defined as an amount below which identified misstatements are considered as being clearly trivial. 

 

We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £10,000, which is set at approximately 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. 

 

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion. 

 

AN OVERVIEW OF THE SCOPE OF OUR AUDIT  

 

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing the risks of material misstatement at the Group level.  

 

We performed an audit of the complete financial information of 5 full scope components. 

 

The Group comprises the Company, 4 consolidated subsidiaries and 2 immaterial dormant entities which are not consolidated. Monitoring and control over the operations of these subsidiaries is centralised in Manchester and London. 

 

The full scope components accounted for 100% of the numbers reported in the Consolidated Income Statement and Consolidated Statement of Financial Position. 

 

Whilst materiality for the Group financial statements as a whole was set out as detailed in this report, each component of the Group was audited to an equal or lower level of materiality. 

 

Audits of the components were performed at a materiality level calculated by reference to a proportion of Group materiality appropriate to the relative scale of the business concerned.  

 

OTHER INFORMATION 

  

The Directors are responsible for the other information. The other information comprises the information included in the Annual Report and Consolidated Financial Statements, 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.  

 

In connection with our audit of the financial statements, 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. 

 

OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006  

 

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;

·      the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements; and

·      the part of the Report of the Remuneration Committee required to be audited by us has been properly prepared in accordance with the Companies Act 2006. 

 

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION  

 

In the light of the knowledge and understanding of the Group and the 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.  

 

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 Company, or returns adequate for our audit have not been received from branches not visited by us; or

·      the 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 directors' responsibilities statement, 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 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 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.  

 

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 Group and the industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of UK regulations. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to inflate revenue of the Group and the Company, and management bias in accounting estimates and judgmental areas of the financial statements, such as intangible asset valuations and accruals. Audit procedures performed by us included: 

 

·      discussing with the Directors and management involved in the risk and compliance functions including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

·      reviewing correspondence between the Group and legal advisors, and discussions with management responsible for compliance with laws and regulations;

·      reviewing Board minutes as well as relevant meeting minutes;

·      challenging assumptions made by management in arriving at accounting estimates and judgements;

·      identifying and testing journal entries, in particular, any journal entries posted with unusual account combinations, such as a credit to revenue and a debit to the statement of financial position (other than to expected accounts), which may be indicative of the overstatement or manipulation of revenue; and

·      designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing. 

 

Because of the inherent limitations of an audit and the audit procedures described above, there is an unavoidable risk that we will not have detected all irregularities, including some leading to material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remains a higher risk of non-detection of irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations. 

 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. 

 

OTHER MATTERS 

 

The comparative Company financial statements were audited by Hazlewoods LLP and the comparative Group financial statements of Sorted Holdings Limited which undertook the reverse acquisition and provided the comparative Group results were audited by Rawlinson & Hunter Audit LLP, under Financial Reporting Standard 102. 

 

USE OF OUR REPORT 

 

This report is made solely to the 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 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 Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. 

  

William Watson (Senior Statutory Auditor) 

For and on behalf of 

 

RAWLINSON & HUNTER AUDIT LLP 

Statutory Auditor 

Chartered Accountants 

Eighth Floor 

6 New Street Square 

New Fetter Lane 

London 

EC4A 3AQ 

 

 

Date: 26 June 2025 

 

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2024

 

		Year ended 31 December 2024	15 month period ended 31 December 2023
	Note	£	£
Revenue	4	5,636,903	6,673,922
Cost of sales		(1,756,780)	(2,420,820)
Gross profit		3,880,123	4,253,102
Administrative expenses		(4,990,127)	(12,251,877)
Other operating income		-	46,191
Operating loss before exceptional administrative expenses, amortisation and depreciation		(1,110,004)	(7,952,584)
Amortisation and depreciation		(3,003,219)	(3,483,793)
Goodwill impairment	14	(199,910)	-
Operating loss		(4,313,133)	(11,436,377)
Finance expense	10	(765,017)	(587,526)
Finance income	9	219,541	5,800
Loss before taxation	5	(4,858,609)	(12,018,103)
Income tax	11	1,107,777	2,000,000
Total comprehensive loss from continuing operations		(3,750,832)	(10,018,103)
Profit on discontinued operation, net of tax	12	387,473	63,733
Total comprehensive loss for the year / period		(3,363,359)	(9,954,370)
Earnings and loss per share
Loss per share from continuing operations - basic and diluted	13	(0.5215)	(2.3649)
Earnings per share from discontinued operations - basic and diluted	13	0.0539	0.0150
Total loss per share from operations - basic and diluted	13	(0.4676)	(2.3499)

 

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in these financial statements.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024

 

		31 December 2024	31 December 2023	1 October 2022
	Note	£	£	£
Assets
Non-current assets
Intangible assets	14	4,952,128	7,454,644	7,392,649
Right-of-use assets	15	102,098	114,647	254,473
Property, plant and equipment	15	42,056	34,511	73,790
		5,096,282	7,603,802	7,720,912
Current assets
Trade and other receivables	17	951,969	2,827,793	1,359,300
Cash and cash equivalents		2,655,840	408,479	7,059,643
		3,607,809	3,236,272	8,418,943
Current liabilities
Trade and other payables	18	(2,723,264)	(4,131,186)	(3,430,015)
Lease liability	20	(54,113)	(118,756)	(259,067)
Borrowings	19	-	(4,354,395)	(500,000)
		(2,777,377)	(8,604,337)	(4,189,082)
Net current assets / (liabilities)		830,432	(5,368,065)	4,229,861
Total assets less current liabilities		5,926,714	2,235,737	11,950,773
Non-Current liabilities
Lease liability	20	(47,441)	(4,260)	(4,926)
Borrowings	19	(4,463,947)	(2,805,000)	(2,805,000)
		(4,511,388)	(2,809,260)	(2,809,926)
Net Assets / (Liabilities)		1,415,326	(573,523)	9,140,847
Equity
Called up share capital	22	18,467,735	16,340,507	16,340,507
Share premium reserve	22	20,939,009	20,088,118	20,088,118
Other reserves	22	40,655,530	38,281,441	38,041,441
Retained earnings	22	(78,646,948)	(75,283,589)	(65,329,219)
Equity attributable to owners of the Company		1,415,326	(573,523)	9,140,847

 

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2024