Elixirr International
plc
("Elixirr", the "Company" or
the "Group")
RESULTS FOR THE SIX MONTHS
ENDED 30 JUNE 2024
Record first half revenue
performance with expectations unchanged for FY 24
Elixirr International
plc (AIM:ELIX), an established, global award-winning,
challenger consultancy, is pleased to report its unaudited interim
results for the six months ended 30 June 2024 (H1 24).
Comparative results are presented for the six months ended 30 June
2023 (H1 23).
Financial Highlights
·
|
28% increase in revenue compared
to H1 23, with revenue totalling £53.0m (H1 23: £41.6m) and Group
record revenue in four of the six months in the period
|
·
|
Organic revenue growth of 14%
compared to H1 23
|
·
|
23% increase in adjusted EBITDA
[1] compared to H1 23, totalling £15.1m, with an
adjusted EBITDA margin of 29%, at the top-end of the guidance range
[2]
|
·
|
22% increase in profit before tax,
totalling £12.0m (H1 23: £9.9m)
|
·
|
16% increase in adjusted diluted
EPS [1] compared to H1 23
|
·
|
Strong period-end balance sheet,
with net cash of £22.1m (H1 23: £19.5m) [3]
|
|
H1
24
|
H1
23
|
Change
|
Revenue
|
£53.0m
|
£41.6m
|
+28%
|
Adjusted EBITDA
[1]
|
£15.1m
|
£12.3m
|
+23%
|
Adjusted EBITDA
margin
|
29%
|
30%
|
-1pp
|
Profit before tax
|
£12.0m
|
£9.9m
|
+22%
|
Adjusted diluted EPS
[1]
|
21.5p
|
18.5p
|
+16%
|
[1] In order to provide better clarity to the underlying
performance of the Group, Elixirr uses adjusted EBITDA and adjusted
earnings per share as alternative performance measures ('APMs').
Please refer to note 2 of the Group's interim condensed
consolidated financial statements.
[2] Guidance range of 27-29% for FY 24.
[3] No debt other than office leases capitalised under IFRS16,
which are not included in the definition of net cash.
Operating Highlights
·
|
H1 24 saw us progress our strong
growth trajectory as a business and continue to outperform the
wider consulting market.
|
·
|
There has been continued growth
across each pillar of our four-pillar strategy which highlights the
increasing demand for our broad suite of services across the
Group.
|
·
|
Creation of additional value from
our previous acquisitions, with £8m+ cross-sell revenue having been
achieved in H1 24 - 82% growth on the cross-sell revenue generated
in H1 23.
|
·
|
One new UK Partner hired in H1 24
with experience founding, scaling and exiting multiple businesses.
Two new Partners have joined us since the end of the period - one
to build out our cybersecurity practice, and the second to enhance
our financial services expertise. One Partner promotion took effect
at the beginning of the year, marking the firm's first Partner
promotion from within an acquired business. This underscores
Elixirr's ongoing integration of acquired companies and
demonstrates our commitment to developing talent across the
Group.
|
·
|
Following these investments in our
Partner team, we have still delivered average revenue per
client-facing Partner of £2.09m in H1 24 (+2% increase compared to
H1 23).
|
·
|
Increase in number of £1m+ clients
from 18 in H1 23 to 22 in H1 24[1],
demonstrating our ability to deepen and maintain relationships with
clients.
|
·
|
Bringing on 30+ new clients across
the Elixirr Group through our improving brand visibility and
networks.
|
·
|
The first vest of options for
longstanding employees that were in the business pre-IPO occurred
in July 2024 - highlighting the value of Elixirr's equity incentive
schemes for our team without any dilution of existing shareholders.
The holders of 97% of the options chose to continue to hold their
equity rather than sell.
|
·
|
Recognised for the first time on
the World's Best Management Consulting Firms 2024 list by Forbes,
demonstrating our growing reputation and brand value.
|
[1] On a 12-month trailing basis.
Current Trading and Outlook
Our strong momentum has continued
into the start of the second half and our expectations for the full
year remain unchanged. The Board continues to expect to report
revenue within the guidance range of £104-110m and profitability
remains strong - full year EBITDA margin is expected to be within
the 27-29% guidance range.
Commenting on the results, Stephen Newton, Chief
Executive Officer said:
"We do things differently at Elixirr and our performance in
the first half of the year further proves that our strategy and
model is working. I am so proud of our talented team who continue
to help our clients tackle the toughest boardroom issues in new
ways. I would also like to thank our clients, both old and new, for
trusting in us as partners in their journey to building more
innovative businesses worldwide.
Alongside our exceptional results, I am delighted that
earlier this year the first tranche of pre-IPO options became
exercisable for some of our team, which we satisfied through the
EBT rather than diluting our shareholders. They are the first group
of employees to realise the benefit of our collective work in
profitably growing the firm over the last 4 years. Shared ownership
is key to Elixirr's entrepreneurial culture, and I am particularly
delighted by this milestone. Additionally, for the first time,
Elixirr has recently been recognised on the World's Best Management
Consulting Firms 2024 list by Forbes. This is based on our
performance within 13 industries, including healthcare, banking and
technology, as well as 14 functional consulting areas such as
strategy and digital transformation. Such recognition further
validates our progress so far and reinforces that Elixirr is firmly
on the journey to becoming the best consulting firm in the
world.
We expect this strong performance to continue for the rest of
the year."
Enquiries:
For enquiries, please refer to our
Investor Contacts page:
https://www.elixirr.com/investors/investor-contacts
Elixirr International
plc
+44 (0)20 7220 5410
Stephen Newton, Chief Executive
Officer
Graham Busby, Chief Financial
Officer
investor-relations@elixirr.com
Cavendish Capital Markets Ltd (Nominated Adviser & Joint
Broker) +44 (0)20 7220
0500
Stephen Keys, Callum Davidson
(Corporate Finance)
Sunila De
Silva (ECM)
Investec Bank plc (Joint
Broker)
+44 (0) 20 7597 4000
Carlton Nelson, Henry Reast
(Corporate Broking)
Notes to editors
Elixirr is an award-winning global
consulting firm working with clients across a diverse range of
industries, markets and geographies.
Founded in 2009, the firm set out
to be the 'challenger consultancy' and do things differently than
the large corporate consultancies dominating the industry: working
openly and collaboratively with clients from start to finish,
delivering outcomes based on innovative thinking, not methodology,
and treating each client's business like their own. Elixirr has
been quoted on the AIM market of the London Stock Exchange since
2020. In addition to strong organic growth, Elixirr has acquired
six boutique firms - Den Creative, Coast Digital, The Retearn
Group, iOLAP, Responsum and Insigniam - to grow the Group's
capabilities, diversity the business, expand into new geographies
and access new clients.
This announcement contains inside information for the
purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of
MAR.
Disclaimer
This announcement contains certain
statements that are, or may be, forward looking statements with
respect to the financial condition, results of operations, business
achievements and/or investment strategy of the Company. Such
forward looking statements are based on the Board's expectations of
external conditions and events, current business strategy, plans
and the other objectives of management for future operations, and
estimates and projections of the Company's financial performance.
Though the Board believes these expectations to be reasonable at
the date of this document they may prove to be erroneous. Forward
looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, achievements
or performance of the Group, or the industry in which the Group
operates, to be materially different from any future results,
achievements or performance expressed or implied by such forward
looking statements.
INTERIM MANAGEMENT REPORT
Financial Performance Review
|
H1 24
|
H1 23
|
Change
|
Revenue
|
£53.0m
|
£41.6m
|
+28%
|
Gross profit
|
£17.4m
|
£14.3m
|
+21%
|
Adjusted EBITDA
[1]
|
£15.1m
|
£12.3m
|
+23%
|
Adjusted EBITDA
margin
|
29%
|
30%
|
-1pp
|
Profit before tax
|
£12.0m
|
£9.9m
|
+22%
|
Adjusted diluted EPS
[1]
|
21.5p
|
18.5p
|
+16%
|
Net cash [2]
|
£22.1m
|
£19.5m
|
+14%
|
[1] In order to provide better clarity to the underlying
performance of the Group, Elixirr uses adjusted EBITDA and adjusted
earnings per share as alternative performance measures ("APMs").
Please refer to note 2 of the Group's interim condensed
consolidated financial statements.
[2] No debt other than office leases capitalised under IFRS16,
which are not included in the definition of net cash.
The Board is pleased to report
that the Group delivered a strong performance in H1 24, with
continued growth in revenue and adjusted EBITDA, in line with our
ambition to build the best digital, data, AI and strategy
consultancy in the world. We have continued to deliver a broad
range of exceptional services to our client base, leveraging the
acquisitions made and Partners hired and promoted in FY
23.
During H1 24, Group revenue
increased to £53.0m with four record revenue months. This
represents 28% absolute revenue growth compared to H1 23. Organic
revenue growth was 14%, with £4.1m growth from expanding existing
client accounts. Growth from new clients has increased
significantly from £4.3m in H1 23 to £6.4m in H1 24. The growth in
new and existing clients is testament to our growing brand
reputation and ability to win new work, expanding key accounts
whilst maintaining high client retention and utilising the networks
of our new Partners hired from the market and those who joined us
through acquisitions.
The following revenue bridge
displays the elements of the growth in revenue from £41.6m in H1 23
to £53.0m in H1 24.
The Group's revenue growth was
accompanied by industry leading profitability. Group gross profit
increased by 21% to £17.4m (H1 23: £14.3m) and was delivered at a
33% gross profit margin (H1 23: 34%).
Group adjusted EBITDA increased by
23% compared to H1 23, totalling £15.1m (H1 23: £12.3m), and
maintaining our consistent track record of profitability with an
adjusted EBITDA margin of 29% (H1 23: 30%), which is in line with
the FY 24 guidance of 27-29% adjusted EBITDA margin.
Profit before tax increased by 22%
to £12.0m (H1 23: £9.9m), with growth in EBITDA having flowed
through to profit before tax.
Adjusted diluted earnings per
share increased by 16% to 21.5p (H1 23: 18.5p). This increase was
less than the growth in profit before tax given the higher
effective tax rate during H1 24 (UK corporation tax main rate
increased from 19% to 25% with effect from 1 April
2023).
The Group's net cash position
increased by 14% from £19.5m at 30 June 2023 to £22.1m at 30 June
2024. The increase resulted from higher operating cash flow in H1
24 compared to H1 23, due to growth in EBITDA as well as improved
working capital performance. The increase in cash generated from
operating activities was partially offset by our interim dividend
payment for FY 23 of £2.5m paid in February 2024.
Net assets as at 30 June 2024
totalled £122.6m (31 December 2023: £119.6m). The increase in net
assets during H1 24 includes: the retained profit for the period of
£3.5m (after the FY 23 final and interim dividends totalling £6.9m
and partially offset by a credit for the share-based payments
charge and related deferred tax of £1.5m); the sale of shares by
the EBT of £0.9m less purchases of shares by the EBT of £1.6m; and
foreign currency gains of £0.2m following the strengthening of the
US dollar.
Operational Review
In the first half of FY 24,
Elixirr leveraged its broad offering across the Group to provide
exceptional services for clients, enhancing existing relationships
and developing relationships with new clients:
·
|
Scaled relationships with existing
clients, growing our 'gold clients' (clients with £1m+ revenue) by
22% whilst simultaneously generating new client relationships (30+
new clients added across the Group)
|
·
|
Increased cross-sell across the
Group with particular focus on leveraging the networks of the
Insigniam Partner team
|
·
|
Transitioned to an internal model
across all capabilities, aligned to industry verticals, geographies
and capabilities to better support Partners selling to
clients
|
·
|
More than doubled revenue
generated from marketing leads from H1 23 to H1 24, and increased
website traffic by 32%, reflecting our growing brand
|
·
|
Launched a Data and AI Academy in
South Africa, aimed at helping recent graduates gain hands-on
exposure to the IT industry. These programmes ensure that we
continue to grow our own expert talent pool and diversify our
Centre of Excellence beyond Croatia, while contributing back to the
countries and communities that have helped to make Elixirr
successful
|
During the period, we helped our
clients tackle a variety of challenges, including:
·
|
We supported the day 1 readiness
for a $2 billion acquisition for a global industrials firm. Defined
the plan and methodology required to manage the complex integration
activities and TSA Exit of IT Services
|
·
|
Implemented a Generative
AI-powered dashboard and ChatBot for a US telecommunications
company, increasing sales prospecting productivity by
90%+
|
·
|
We supported a major nonprofit to
redefine its technology operating model by designing the
capabilities needed to support the organisation's broader scaling
strategy. This included enhancing data and analytics,
cybersecurity, business partnering, and IT risk management
capabilities
|
·
|
Successfully launched a new brand,
website, customer portal and mobile app for a major US industrials
firm, integrating everything with SAP and Salesforce to enhance the
digital experience. This digital transformation used cross-brand
experience from across the Elixirr Group
|
·
|
We partnered with a leading global
pharmaceutical company to align and strengthen the senior
leadership team of their manufacturing and supply division, in
preparation to drive the next phase of a new target operating
model
|
·
|
Redefined the data strategy and
data programme for a leading global reinsurance broker, and
utilised cross-brand expertise to deliver this programme of work.
This included the design and implementation of multiple, innovative
broking and analytics tools and business processes
|
Elixirr has been acknowledged in
H1 24 through multiple awards and accolades, including:
·
|
Being recognised for the first
time on the World's Best Management Consulting Firms 2024 list by
Forbes
|
·
|
Listed as one of the UK's Leading
Management Consultants 2024 by the Financial Times for our work
across Data, IT & Technology, Finance, Innovation and
Marketing
|
·
|
Recognised again by Consultancy.UK
as a Top Consulting Firm in the UK, earning platinum and gold
rankings in eleven service areas, including Strategy, Digital and
Data Science
|
·
|
Listed again on the Global
Outsourcing 100® in 2024, the annual list of the world's best
outsourcing service providers and advisors compiled by the
International Association of Outsourcing Professionals
(IAOP®)
|
·
|
Recognised as one of the
fastest-growing alumni-led businesses by Longhorn 100 - an
organisation promoting the entrepreneurial success of University of
Texas Alumni
|
Growth Strategy
Elixirr's growth strategy remains
centred around the following pillars:
1. Stretching our existing
Partners
2. Promoting Partners from
within
3. Hiring new Partners
4. Acquiring new
businesses
H1 24 average revenue per
client-facing Partner of £2.09m is largely consistent with H1 23
(+2% increase), as set out in the Partner revenue bridge below.
This continues growth in this metric at the same time as making
investments in growing the Partner team, reflecting the impact of
promoted Partners becoming accountable for client revenue, and the
addition of acquired Partners. This performance highlights the
ability of the entire Elixirr Partner team to maintain a
consistently high-quality bar across engagements.
1. Stretching our existing
Partners
In H1 24, the established Partners
in our firm generated average revenue of £2.56m each - this was an
18% increase on the £2.18m achieved in H1 23 and reflects the
increase in Partner revenue targets for FY 24 as well as a focus on
strengthening client relationships through providing more
value-adding services from our acquisitions, all of which has
resulted in an increase in the number of clients generating
>£1.0m revenue to 22 from 18 in H1 23.
2. Promoting Partners from
within
Our strategy of giving promoted
Partners a 'runway' to develop their Partner-level experience
continued to pay off, with the promoted Partner team achieving
£4.6m revenue in H1 24.
In January 2024 Nick Larsen joined
the Partner team and he is the firm's first Partner promotion from
within one of our acquisitions, bringing deep technical data and
analytics expertise into the leadership team. This was a
significant milestone in our acquisition strategy, reflecting the
successful integration of Elixirr Digital Inc (formerly iOLAP)
within the Elixirr Group. In this role, based out of Elixirr's
Dallas office, Nick will continue his focus on growing the Group's
Amazon Web Services practice and helping clients navigate their
cloud journeys.
Nick has spent his career in
consulting and professional services firms and has worked with
leading global organisations, running the delivery of complex,
high-tech data platforms across sectors from telecom to CPG. His
appointment to Partner is and will continue to be key in
contributing to Elixirr's future success.
Of Elixirr's current Partner team,
ten have been promoted from the Principal grade. Growing our own
talent is also key to our future success, and we have remained
focused on developing Principal talent during the first half of the
year with two external hires and a further three Managers promoted
to Principal, bringing our client-facing Principal team to
38.
3. Hiring new Partners
We have continued to progress our
third growth pillar, hiring new Partners in 2024.
We continually progress a pipeline of potential
Partner candidates and anticipate that several new Partners will be
joining us in the coming months.
Nicola Hartland joined in Q1,
boasting previous experience as an entrepreneur and having founded,
scaled and exited multiple businesses. Her focus is primarily on
business development, and she has made excellent progress, having
sourced over 50 introductions for the firm since joining the
Partner team.
In addition, we continue to build
a pipeline of future Partner hires in key strategic focus areas and
geographies. Two new Partners have joined us since the end of the
period - one to build out our cybersecurity practice, and the
second to enhance our financial services expertise, facilitating
further penetration into key markets. We are very excited at the
impact both will have on our firm, alongside our future planned
Partner hires who are in the pipeline.
4. Acquiring new businesses
Our dedicated mergers and
acquisitions team screened a further 700+ targets in the first half
of 2024, with several potential acquisition opportunities across
the various stages of the pipeline. In H2 24 we will focus on
maturing later stage opportunities that meet the Elixirr quality
bar and our exacting criteria for target firms.
During H1 24 we were very pleased
with the performance of both our recent acquisitions, Elixirr AI
(formerly Responsum) and Insigniam. Insigniam complements the
Group's existing service offerings by bringing specialist services
in transformation, leadership alignment, cultural change and
executive coaching to Elixirr, as well as additive industries such
as healthcare, pharma and biotech. Elixirr AI provides us with
cutting-edge generative AI technology, and we are seeing strong and
growing demand from current and new clients for our AI strategy and
execution capabilities.
Acquiring top-quality businesses
remains a key priority of our growth strategy. Looking across all
our acquisitions saw the creation of additional value for our
clients in H1 24, with £8m+ cross-sell revenue having been achieved
in the period - an 82% growth on the cross-sell revenue generated
in H1 23. Through this proven growth, we will continue to add to
our suite of capabilities and enhance our service offering for our
clients, bringing new entrepreneurial leaders into our existing
Partner team.
Outlook
The Board remains confident in the
Group's outlook for FY 24. The Board continues to expect to report
revenue within the guidance range of £104-110m and profitability
remains strong. We also expect the full year EBITDA margin to be
within the 27-29% guidance range.
Gavin
Patterson
Stephen Newton
Chairman
Chief Executive Officer
Interim Condensed Consolidated Statement of Comprehensive
Income
For the six months ended 30 June
2024
|
|
Six months
ended
30 June
2024
Unaudited
|
|
Six
months ended
30 June
2023
Unaudited
|
|
Note
|
£'000s
|
|
£'000s
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
53,034
|
|
41,550
|
Cost of sales
|
|
(35,684)
|
|
(27,270)
|
Gross profit
|
|
17,350
|
|
14,280
|
|
|
|
|
|
Administrative expenses
|
|
(5,065)
|
|
(4,089)
|
Operating profit before M&A-related
items
|
|
12,285
|
|
10,191
|
|
|
|
|
|
Depreciation
|
|
710
|
|
575
|
Amortisation of intangible
assets
|
|
1,031
|
|
871
|
Share-based payments
|
12
|
1,112
|
|
712
|
Adjusted EBITDA
|
|
15,138
|
|
12,349
|
|
|
|
|
|
M&A-related items
|
4
|
(15)
|
|
(55)
|
Operating profit
|
|
12,270
|
|
10,136
|
Net finance expense
|
|
(252)
|
|
(263)
|
Profit before tax
|
|
12,018
|
|
9,873
|
Taxation
|
|
(3,179)
|
|
(2,206)
|
|
|
|
|
|
Profit for the period
|
|
8,839
|
|
7,667
|
|
|
|
|
|
Exchange differences on translation
of foreign operations
|
|
166
|
|
(1,367)
|
|
|
|
|
|
Total comprehensive income for the period
|
|
9,005
|
|
6,300
|
|
|
|
|
|
Basic earnings per Ordinary share
(p)
|
5
|
18.9
|
|
16.6
|
Diluted earnings per Ordinary share
(p)
|
5
|
17.1
|
|
15.0
|
Adjusted basic earnings per Ordinary
share (p)
|
5
|
23.7
|
|
20.5
|
Adjusted diluted earnings per
Ordinary share (p)
|
5
|
21.5
|
|
18.5
|
All results relate to continuing
operations.
The attached notes form part of
these interim condensed consolidated financial
statements.
Interim Condensed Consolidated Statement of Financial
Position
As at 30 June 2024
|
|
As at
30 June
2024
Unaudited
|
|
As
at
31
December 2023
Audited
|
|
As
at
30 June
2023
Unaudited
|
|
Note
|
£'000s
|
|
£'000s
|
|
£'000s
|
Assets
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
Intangible assets
|
6
|
100,335
|
|
100,905
|
|
81,215
|
Property, plant and
equipment
|
|
4,941
|
|
5,612
|
|
5,108
|
Other receivables
|
7
|
1,968
|
|
1,985
|
|
1,293
|
Loans to shareholders
|
7
|
7,316
|
|
7,604
|
|
6.094
|
Deferred tax asset
|
|
4,147
|
|
3,477
|
|
2,051
|
Total non-current assets
|
|
118,707
|
|
119,583
|
|
95,761
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Trade and other
receivables
|
7
|
17,839
|
|
16,686
|
|
13,838
|
Corporation tax
|
|
-
|
|
-
|
|
175
|
Cash and cash
equivalents
|
|
22,148
|
|
18,130
|
|
19,494
|
Total current assets
|
|
39,987
|
|
34,816
|
|
33,507
|
|
|
|
|
|
|
|
Total assets
|
|
158,694
|
|
154,399
|
|
129,268
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Trade and other payables
|
8
|
20,481
|
|
19,056
|
|
15,440
|
Lease liabilities
|
|
1,197
|
|
1,150
|
|
749
|
Corporation tax
|
|
382
|
|
268
|
|
-
|
Other creditors
|
9
|
4,405
|
|
1,144
|
|
2,749
|
Total current liabilities
|
|
26,465
|
|
21,618
|
|
18,938
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
|
Lease liabilities
|
|
3,588
|
|
4,214
|
|
3,993
|
Deferred tax liability
|
|
2,132
|
|
2,000
|
|
1,406
|
Other non-current
liabilities
|
9
|
3,940
|
|
7,005
|
|
2,963
|
Total non-current liabilities
|
|
9,660
|
|
13,219
|
|
8,362
|
|
|
|
|
|
|
|
Total liabilities
|
|
36,125
|
|
34,837
|
|
27,300
|
|
|
|
|
|
|
|
Net assets
|
|
122,569
|
|
119,562
|
|
101,968
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Share capital
|
10
|
52
|
|
52
|
|
52
|
Share premium
|
10
|
29,557
|
|
29,922
|
|
24,512
|
Capital redemption reserve
|
|
2
|
|
2
|
|
2
|
EBT share reserve
|
11
|
(2,001)
|
|
(1,745)
|
|
(2,384)
|
Merger relief reserve
|
10
|
46,870
|
|
46,870
|
|
46,870
|
Foreign currency translation
reserve
|
|
544
|
|
378
|
|
511
|
Retained earnings
|
|
47,545
|
|
44,083
|
|
32,405
|
Total shareholders' equity
|
|
122,569
|
|
119,562
|
|
101,968
|
Interim Condensed Consolidated Statement of Changes in
Equity
For the six months ended 30 June
2024
|
Share
capital
£'000s
|
Share
premium
£'000s
|
Capital
redemption reserve
£'000s
|
EBT share
reserve
£'000s
|
Merger
relief reserve
£'000s
|
Foreign
currency translation reserve
£'000s
|
Retained
earnings
£'000s
|
Total
£'000s
|
|
|
|
|
|
|
|
|
|
As at 31 December 2022 and 01 January
2023
|
52
|
25,599
|
2
|
(7,147)
|
46,870
|
1,878
|
28,661
|
95,915
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
7,667
|
7,667
|
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
(1,367)
|
-
|
(1,367)
|
|
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(4,940)
|
(4,940)
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
-
|
662
|
662
|
Deferred tax recognised in
equity
|
-
|
-
|
-
|
-
|
-
|
-
|
355
|
355
|
Sale of Ordinary shares
|
-
|
(1,087)
|
-
|
8,160
|
-
|
-
|
-
|
7,073
|
Acquisition of Ordinary
shares
|
-
|
-
|
-
|
(3,397)
|
-
|
-
|
-
|
(3,397)
|
|
|
|
|
|
|
|
|
|
As at 30 June 2023
|
52
|
24,512
|
2
|
(2,384)
|
46,870
|
511
|
32,405
|
101,968
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
9,571
|
9,571
|
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
(133)
|
-
|
(133)
|
|
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
Ordinary share issues
|
-
|
5,417
|
-
|
-
|
-
|
-
|
-
|
5,417
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
-
|
1,032
|
1,032
|
Deferred tax recognised in
equity
|
-
|
-
|
-
|
-
|
-
|
-
|
1,075
|
1,075
|
Sale of Ordinary shares
|
-
|
(7)
|
-
|
1,162
|
-
|
-
|
-
|
1,155
|
Acquisition of Ordinary
shares
|
-
|
-
|
-
|
(523)
|
-
|
-
|
-
|
(523)
|
|
|
|
|
|
|
|
|
|
As at 31 December 2023 and 01 January
2024
|
52
|
29,922
|
2
|
(1,745)
|
46,870
|
378
|
44,083
|
119,562
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
8,839
|
8,839
|
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
166
|
-
|
166
|
|
|
|
|
|
|
|
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(6,907)
|
(6,907)
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
-
|
960
|
960
|
Deferred tax recognised in
equity
|
-
|
-
|
-
|
-
|
-
|
-
|
570
|
570
|
Sale of Ordinary shares
|
-
|
(365)
|
-
|
1,295
|
-
|
-
|
-
|
930
|
Acquisition of Ordinary
shares
|
-
|
-
|
-
|
(1,551)
|
-
|
-
|
-
|
(1,551)
|
|
|
|
|
|
|
|
|
|
As
at 30 June 2024
|
52
|
29,557
|
2
|
(2,001)
|
46,870
|
544
|
47,545
|
122,569
|
|
|
|
|
|
|
|
|
|
Share capital
Share capital represents the
nominal value of share capital subscribed.
Share premium
The share premium account is used
to record the aggregate amount or value of premiums paid when the
Company's shares are issued at a premium, net of associated share
issue costs.
Capital redemption reserve
The capital redemption reserve is a
non-distributable reserve into which amounts are transferred
following the redemption or purchase of the Company's own
shares.
EBT share reserve
The Employee Benefit Trust ("EBT")
share reserve represents the cost of shares repurchased and held in
the EBT.
Merger relief reserve
This reserve records the amounts
above the nominal value received for shares sold, less transaction
costs in accordance with section 610 of the Companies Act
2006.
Foreign currency translation reserve
The foreign currency translation
reserve represents exchange differences that arise on consolidation
from the translation of the financial statements of foreign
subsidiaries.
Retained earnings
The retained earnings
reserve represents cumulative net gains and losses
recognised in the statement of comprehensive income and
equity-settled share-based payment reserves and related deferred
tax on share-based payments.
Interim Condensed Consolidated Statement of Cash
Flows
For the six months ended 30 June
2024
|
|
Six months
ended
30 June
2024
Unaudited
|
|
Six
months ended
30 June
2023
Unaudited
|
|
Note
|
£'000s
|
|
£'000s
|
Cash flows from operating activities:
|
|
|
|
|
Cash generated from
operations
|
14
|
10,650
|
|
6,535
|
Taxation paid
|
|
(3,018)
|
|
(2,666)
|
Net cash generated from operating activities
|
|
7,632
|
|
3,869
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
(32)
|
|
(42)
|
Software development
costs
|
|
(132)
|
|
-
|
Payment for acquisition of
subsidiary, net of cash acquired
|
|
(162)
|
|
(6,610)
|
Interest received
|
|
191
|
|
148
|
Net cash utilised in investing activities
|
|
(135)
|
|
(6,504)
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
EBT Ordinary share
purchases
|
|
(1,796)
|
|
(3,397)
|
EBT Ordinary share sales
|
|
1,295
|
|
7,202
|
Loans to shareholders
|
|
(500)
|
|
(2,000)
|
Loans repaid by
shareholders
|
|
765
|
|
645
|
Ordinary share dividends paid to
shareholders
|
|
(2,485)
|
|
-
|
Lease liability payments
|
|
(536)
|
|
(361)
|
Interest paid
|
|
(123)
|
|
(124)
|
Net cash (utilised)/generated from financing
activities
|
|
(3,380)
|
|
1,965
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents
|
|
4,117
|
|
(670)
|
|
|
|
|
|
Cash and cash equivalents at
beginning of the period
|
|
18,130
|
|
20,433
|
Effects of exchange rate changes on
cash and cash equivalents
|
|
(99)
|
|
(269)
|
Cash and cash equivalents at the end of the
period
|
|
22,148
|
|
19,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the Group's Interim Condensed Consolidated Financial
Statements
1. Basis of
Preparation and Significant Accounting Policies
1.1. General
information
Elixirr International plc (the
"Company") and its subsidiaries' (together the "Group") principal
activities are the provision of consultancy services.
The Company is a public company
limited by shares incorporated in England and Wales and domiciled
in the UK. The address of the registered office is 12 Helmet Row,
London, EC1V 3QJ and the Company number is
11723404.
The consolidated financial
statements were authorised for issue in accordance with a
resolution of the Directors on 20 September 2024.
1.2. Basis of
preparation
These interim financial statements
have been prepared in accordance with IAS 34 Interim Financial Reporting and
should be read in conjunction with the Group's last annual
consolidated financial statements, as at and for the year ended 31
December 2023. They do not include all of the information required
for a complete set of IFRS financial statements, however, selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the
Group's financial position and performance since the last annual
financial statements.
Statutory accounts
Financial information contained in
this document does not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006 ("the
Act").
The financial information provided
for the current six-month period ended 30 June 2024 and comparative
period ended 30 June 2023 is unaudited. The financial information
provided for the comparative period ended 31 December 2023 was
audited.
1.3. Basis of
consolidation
These financial statements
consolidate the financial statements of the Company and its
subsidiary undertakings as at 30 June 2024.
Subsidiaries are fully
consolidated from the date of acquisition, being the date on which
the Group obtains control, and continue to be consolidated until
the date that such control ceases. The acquisition method of
accounting has been adopted. The financial statements of
subsidiaries are prepared for the same reporting period as the
parent company, using consistent accounting policies.
All intra-group balances, income
and expenses and unrealised gains and losses resulting from
intra-group transactions are eliminated in full.
1.4. Measurement
convention
These financial statements have
been prepared under the historical cost convention, except as
otherwise described in the accounting policies.
The preparation of the
consolidated financial information in compliance with IFRS requires
the use of certain critical accounting estimates and management
judgements in applying the accounting policies. The significant
estimates and judgements that have been made and their effect is
disclosed in note 1.6.1.
1.5. Going
concern
The Directors have, at the time of
approving the financial statements, a reasonable expectation that
the Company and the Group have adequate resources to continue in
operation for the foreseeable future. The Group's forecasts and
projections, taking into account reasonable possible changes in
trading performance, show that the Group has sufficient financial
resources, together with assets that are expected to generate cash
flow in the normal course of business. Accordingly, the Directors
have adopted the going concern basis in preparing these
consolidated financial statements.
1.6. Material accounting
policies
Please refer to the Group's last
annual consolidated financial statements for full disclosure of the
principal accounting policies that have been adopted in the
preparation of these interim condensed consolidated financial
statements. The key accounting policies that affected the Group in
the period are documented below.
1.6.1. Judgements and key
sources of estimation uncertainty
The preparation of the financial
statements requires management to make estimates and judgements
that affect the reported amounts of assets, liabilities, costs and
revenue in the financial statements. Actual results could differ
from these estimates. The judgements, estimates and associated
assumptions are based on historical experience and other factors
that are considered to be relevant.
In the process of applying the
Group's accounting policies, the Directors have made no judgements
(excluding those involving estimations), which are considered to
have a significant effect on the amounts recognised in the
financial statements for the period ending 30 June 2024.
The key sources of estimation
uncertainty that could cause an adjustment to be required to the
carrying amount of assets or liabilities within the next accounting
period are:
·
|
Revenue is recognised in line with
time worked on a project unless the engagement is conditional or
contingent. Management review accrued revenue to determine whether
there is any likelihood of any amendments or provisions required
based on project progress and relationship with the
client.
|
·
|
The Group's policy on recognising
an impairment of the trade receivables balance is based on a review
of individual receivable balances, their ageing and management's
assessment of realisation. This review and assessment is conducted
on a continuing basis and any material change in management's
assessment of trade receivable impairment is reflected in the
carrying value of the asset.
|
·
|
Provisions for dilapidations are
accrued based on estimation of the cost expected to crystallise on
vacating leased premises.
|
·
|
In determining the fair value of
intangible assets arising on business combinations, management is
required to estimate the timing and amount of future cash flows
applicable to the intangible assets being
acquired.
|
·
|
Management has estimated the
share-based payments expense under IFRS 2. In determining the fair
value of share-based payments, management has considered several
internal and external factors in order to judge the probability
that management and employee share incentives may vest and to
assess the fair value of share options at the date of grant. Such
assumptions involve estimating a number of future performance and
other factors.
|
·
|
The Elixirr Digital Inc (formerly
iOLAP), Elixirr AI Inc (formerly Responsum) and Insigniam
contingent consideration calculations under IFRS 3 contain
estimation uncertainty, as the earn-out potentially payable in each
case is linked to the future performance of the acquiree. In
estimating the fair value of the contingent consideration, at both
the acquisition date and the period end, management has estimated
the potential future cash flows of the acquirees and assessed the
likelihood of an earn-out payment being made. These estimates could
potentially change as a result of events over the coming
years.
|
1.6.2. Revenue
recognition
Revenue is measured as the fair
value of consideration received or receivable for satisfying
performance obligations contained in contracts with clients,
excluding discounts and Value Added Tax. Variable consideration is
included in revenue only to the extent that it is highly probable
that a significant reversal will not be required when the
uncertainties determining the level of variable consideration are
resolved.
This occurs as follows for the
Group's various contract types:
·
|
Time-and-materials contracts are
recognised over time as services are provided at the fee rate
agreed with the client where there is an enforceable right to
payment for performance completed to date.
|
·
|
Fixed-fee contracts are recognised
over time based on the actual service provided to the end of the
reporting period as a proportion of the total services to be
provided where there is an enforceable right to payment for
performance completed to date. This is determined based on the
actual inputs of time and expenses relative to total expected
inputs.
|
Where contracts include multiple
performance obligations, the transaction price is allocated to each
performance obligation based on its stand-alone selling price.
Where these are not directly observable, they are estimated based
on expected cost-plus margin. Adjustments are made to allocate
discounts proportionately relative to the stand-alone selling price
of each performance obligation.
Estimates of revenues, costs or
extent of progress toward completion are revised if circumstances
change. Any resulting increase or decrease in estimated revenues or
costs are reflected in the statement of comprehensive income in the
period in which the circumstances that give rise to the revision
became known.
Fees are normally billed on a
monthly basis. If the revenue recognised by the Group exceeds the
amounts billed, a contract asset is recognised. If the amounts
billed exceed the revenue recognised, a contract liability is
recognised. Unbilled revenue is recognised at the fair value of
consultancy services provided at the reporting date reflecting the
stage of completion (determined by costs incurred to date as a
percentage of the total anticipated costs) of each assignment.
Contract assets are reclassified as receivables when billed and the
consideration has become unconditional because only the passage of
time is required before payment is due.
The Group's standard payment terms
require settlement of invoices within 30 days of
receipt.
The Group does not adjust the
transaction price for the time value of money as it does not expect
to have any contracts where the period between the transfer of the
promised services to the client and the payment by the client
exceeds one year.
1.6.3. Business
combinations, goodwill and consideration
Business combinations
The Group applies the acquisition
method of accounting to account for business combinations in
accordance with IFRS 3, 'Business Combinations'.
The consideration transferred for
the acquisition of a subsidiary is the fair value of the assets
transferred, the liabilities incurred and the equity interests
issued by the Group. The consideration transferred includes the
fair value of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The excess of the consideration transferred over
the fair value of the Group's share of the identifiable net assets
acquired is recorded as goodwill. All transaction related costs are
expensed in the period they are incurred as operating expenses. If
the consideration is lower than the fair value of the net assets of
the subsidiary acquired, the difference is recognised in the income
statement.
Goodwill
Goodwill is initially measured at
cost and any previous interest held over the net identifiable
assets acquired and liabilities assumed. If the fair value of the
net assets acquired is in excess of the aggregate consideration
transferred, the Group re-assesses whether it has correctly
identified all of the assets acquired and all of the liabilities
assumed and reviews the procedures used to measure the amounts to
be recognised at the acquisition date. If the reassessment still
results in an excess of the fair value of net assets acquired over
the aggregate consideration transferred, then the gain is
recognised in the income statement.
After initial recognition,
goodwill is measured at cost less any accumulated impairment
losses. For the purposes of impairment testing, goodwill is
allocated to each of the Group's cash-generating units expected to
benefit from the synergies of the combination. Cash-generating
units to which goodwill has been allocated are tested for
impairment annually, or more frequently when there is an indication
that the unit may be impaired.
The Group performs impairment
reviews at the reporting period end to identify any goodwill or
intangible assets that have a carrying value that is in excess of
its recoverable amount. Determining the recoverability of goodwill
and the intangible assets requires judgement in both the
methodology applied and the key variables within that methodology.
Where it is determined that an asset is impaired, the carrying
value of the asset will be reduced to its recoverable amount with
the difference recorded as an impairment charge in the income
statement.
Contingent and non-contingent deferred consideration on
acquisition
Contingent and non-contingent
deferred consideration may arise on acquisitions. Non-contingent
deferred consideration may arise when settlement of all or part of
the cost of the business combination falls due after the
acquisition date. Contingent deferred consideration may arise when
the consideration is dependent on future performance of the
acquired company.
Deferred consideration associated
with business combinations settled in cash is assessed in line with
the agreed contractual terms. Consideration payable is recognised
as capital investment cost when the deferred or contingent
consideration is not employment-linked. Alternatively,
consideration is recognised as remuneration expense over the
deferral or contingent performance period, where the consideration
is also contingent upon future employment. Where the contingent
consideration is settled in a variable number of shares or cash,
the consideration is classified as a liability and measured at fair
value through profit and loss.
1.6.4. Foreign
currency translation
The presentational currency of
these financial statements and the functional currency of the Group
is pounds sterling.
Functional and presentational
currency
Items included in the financial
statements of each of the Group's entities are measured using the
currency of the primary economic environment in which the entity
operates ('the functional currency'). The financial statements are
presented in 'sterling', which is the Group's and Company's
functional currency and presentation currency.
On consolidation, the results of
overseas operations are translated into sterling at rates
approximating to those ruling when the transactions took place. All
assets and liabilities of overseas operations are translated at the
rate ruling at the reporting date. Exchange differences arising on
translating the opening net assets at opening rate and the results
of overseas operations at actual rate are recognised in other
comprehensive income.
Transactions and
balances
Foreign currency transactions are
translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in
the income statement.
1.6.5.
Intangible assets
Intangible assets are measured at
cost less accumulated amortisation and any accumulated impairment
losses. Intangible assets acquired in a business combination are
initially measured at their fair value (which is regarded as their
cost). Subsequent to initial recognition, intangible assets
acquired in a business combination are reported at cost less
accumulated amortisation and any accumulated impairment
losses.
Intangible assets acquired in a
business combination are identified and recognised separately from
goodwill where they satisfy the definition of an intangible asset
under IAS 38. Such assets are only recognised if either:
·
|
They are capable of being
separated or divided from the company and sold, transferred,
licensed, rented or exchanged, either individually or together with
a related contract, identifiable asset or liability, regardless of
whether the company intends to do so; or
|
·
|
They arise from contractual or
other legal rights, regardless of whether those rights are
transferable or separable from the entity or from other rights and
obligations.
|
The cost of such intangible assets
is the fair value at the acquisition date. All intangible assets
acquired through business combinations are amortised over their
estimated useful lives. The significant intangibles recognised by
the Group, their useful economic lives and the methods used to
determine the cost of the intangibles acquired in business
combinations are as follows:
Intangible Asset
|
Useful Economic Life
|
Valuation Method
|
Trademark
|
33.33% reducing balance
|
Relief from Royalty
method
|
Customer relationships
|
10 - 25% reducing
balance
|
Multi-Period Excess Earnings
method
|
Order book
|
Over order term
|
Multi-Period Excess Earnings
method
|
1.6.6. Tangible
assets
Tangible fixed assets are stated at
cost net of accumulated depreciation and accumulated impairment
losses.
Costs comprise purchase costs
together with any incidental costs of acquisition.
Depreciation is provided to write
down the cost less the estimated residual value of all tangible
fixed assets by equal instalments over their estimated useful
economic lives on a straight-line basis. The following rates are
applied:
Tangible fixed asset
|
Useful economic life
|
Leasehold improvements
|
Over the life of the
lease
|
Computer equipment
|
3 years
|
Fixtures and fittings
|
3 years
|
The assets' residual values, useful
lives and depreciation methods are reviewed, and adjusted
prospectively if appropriate, if there is an indication of a
significant change since the last reporting date. Low value
equipment including computers is expensed as incurred.
1.6.7.
Impairments of tangible and intangible assets
At each reporting end date, the
Group reviews the carrying amounts of its tangible and intangible
assets (other than goodwill) to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss
(if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset
belongs.
The recoverable amount is the
higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.
If the recoverable amount of an
asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An
impairment loss is recognised immediately in profit and
loss.
Where an impairment subsequently
reverses, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no
impairment loss been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit and loss.
1.6.8. Employee
benefits
Post-retirement
benefits
The Group pays into defined
contribution pension schemes on behalf of employees, which are
operated by third parties. The assets of the schemes are held
separately from those of the Group in independently administered
funds.
The amount charged to the income
statement represents the contributions payable to the scheme in
respect of the accounting period.
Share-based payments
The cost of share-based employee
compensation arrangements, whereby employees receive remuneration
in the form of share options, is recognised as an employee benefit
expense in the statement of profit and loss.
The total expense to be
apportioned over the vesting period of the benefit is determined by
reference to the fair value (excluding the effect of non-market
based vesting conditions) at the grant date. Fair value is measured
by use of Black Scholes option valuation model.
At the end of each reporting
period the assumptions underlying the number of awards expected to
vest are adjusted for the effects of non-market based vesting
conditions to reflect conditions prevailing at that date. The
impact of any revisions to the original estimates is recognised in
the statement of profit or loss, with a corresponding adjustment to
equity.
The Group has the obligation to
pay employers' national insurance on the exercise of certain UK
employee options. The Group has opted to account for the tax
obligation under IFRS 2 as a cash-settled share-based payment
arrangement as the amount of employers' national insurance due at
the time of exercise is based on the share price of the equity
instruments of the Company. The cash-settled share-based payment
liability is estimated at each period end using the closing share
price of the Company and the prevailing employers' national
insurance rate. The number of awards expected to vest are
consistent with the treatment for equity-settled share-based
payments. The cost of employers' national insurance is included
within share-based payments expense in the statement of
comprehensive income.
Please refer to note 12 for
further details.
1.6.9. Earnings
per share
The Group presents basic and
diluted earnings per share.
Basic EPS is calculated by
dividing the profit attributable to the Group's Ordinary
shareholders by the weighted average number of Ordinary shares
outstanding during the period.
The calculation of diluted EPS
assumes conversion of all potentially dilutive Ordinary shares,
which arise from share options outstanding. A calculation is
performed to determine the number of share options that are
potentially dilutive based on the number of shares that could have
been acquired at fair value from the future assumed proceeds of the
outstanding share options.
2. Alternative
Performance Measures ("APMs")
In order to provide better clarity
to the underlying performance of the Group, Elixirr uses adjusted
EBITDA and adjusted EPS as alternative performance measures. These
measures are not defined under IFRS. These non-GAAP measures are
not intended to be a substitute for, or superior to, any IFRS
measures of performance, but have been included as the Directors
consider adjusted EBITDA and adjusted EPS to be key measures used
within the business for assessing the underlying performance of the
Group's ongoing business across periods.
Adjusted EBITDA excludes the
following items from operating profit: non-cash depreciation and
amortisation charges, share-based payments and non-recurring
M&A-related items. Adjusted EPS excludes the following items
from profit after tax: amortisation charges, share-based payments,
non-recurring M&A-related items, M&A-related non-cash
finance costs and their related tax impacts.
The table below sets out the
reconciliation of the Group's adjusted EBITDA and adjusted profit
before tax from profit before tax:
|
H1 24
|
H1
23
|
|
£'000s
|
£'000s
|
Profit before tax
|
12,018
|
9,873
|
Adjusting items:
|
|
|
M&A-related items (note
4)
|
15
|
55
|
Amortisation of intangible
assets
|
1,031
|
871
|
Share-based payments
|
1,112
|
712
|
Finance cost - contingent
consideration
|
367
|
293
|
Adjusted profit before tax
|
14,543
|
11,804
|
Depreciation
|
710
|
575
|
Net finance income (excluding
contingent consideration)
|
(115)
|
(30)
|
Adjusted EBITDA
|
15,138
|
12,349
|
|
|
| |
The table below sets out the
reconciliation of the Group's adjusted profit after tax to adjusted
profit before tax:
|
H1 24
|
H1
23
|
|
£'000s
|
£'000s
|
Adjusted profit before tax
|
14,543
|
11,804
|
Tax charge
|
(3,179)
|
(2,206)
|
Tax impact of adjusting
items
|
(272)
|
(140)
|
Adjusted profit after tax
|
11,092
|
9,458
|
Adjusted profit after tax is used
in calculating adjusted basic and adjusted diluted EPS. Adjusted
profit after tax is stated before adjusting items and their
associated tax effects.
Adjusted EPS is calculated by
dividing the adjusted profit after tax for the period attributable
to Ordinary shareholders by the weighted average number of Ordinary
shares outstanding during the period. Adjusted diluted EPS is
calculated by dividing adjusted profit after tax by the weighted
average number of shares adjusted for the impact of potential
Ordinary shares.
Potential Ordinary shares are
treated as dilutive when their conversion to Ordinary shares would
decrease EPS. Please refer to note 5 for further detail.
|
H1 24
|
H1
23
|
|
p
|
p
|
Adjusted EPS
|
23.7
|
20.5
|
Adjusted diluted EPS
|
21.5
|
18.5
|
3. Segment
Reporting & Restatement
IFRS 8 requires that operating
segments be identified on the basis of internal reporting and
decision-making. The Group is operated as one global business by
its executive team, with key decisions being taken by the same
leaders irrespective of the geography where work for clients is
carried out. The Directors therefore consider that the Group has
one operating segment. As such, no additional disclosure has been
recorded under IFRS 8.
H1 24 revenue includes £0.4m of
reimbursable expenses. H1 23 revenue and cost of sales have been
restated to reclassify reimbursable expenses as revenue, which was
previously reported in cost of sales. The reimbursable expenses
revenue was reclassified by restating each of the affected
financial statement line items for the prior period as
follows:
|
H1
23
|
Increase
|
H1 23
(Restated)
|
|
£'000s
|
£'000s
|
£'000s
|
Statement of Comprehensive Income (extract)
|
|
|
|
Revenue
|
41,139
|
411
|
41,550
|
Cost of Sales
|
(26,859)
|
(411)
|
(27,270)
|
4.
M&A-related Items
|
H1 24
|
H1
23
|
|
£'000s
|
£'000s
|
M&A-related items
|
15
|
55
|
The M&A-related items include
non-recurring costs associated with M&A activity.
5. Earnings Per
Share
The Group presents non-adjusted
and adjusted basic and diluted EPS for its Ordinary shares. Basic
EPS is calculated by dividing the profit for the period
attributable to Ordinary shareholders by the weighted average
number of Ordinary shares outstanding during the period.
Diluted EPS takes into
consideration the Company's dilutive contingently issuable shares.
The weighted average number of Ordinary shares used in the diluted
EPS calculation is inclusive of the number of share options and
ESPP matching awards that are expected to vest (subject to
performance criteria being met) and the number of shares that may
be issued to satisfy contingent M&A deferred
consideration.
The profits and weighted average
number of shares used in the calculations are set out
below:
|
H1 24
|
H1
23
|
Basic and Diluted EPS
|
|
|
|
|
|
Profit attributable to the Ordinary
equity holders of the Group used in calculating basic and diluted
EPS (£'000s)
|
8,839
|
7,667
|
Basic earnings per Ordinary share
(p)
|
18.9
|
16.6
|
Diluted earnings per Ordinary share
(p)
|
17.1
|
15.0
|
|
|
|
|
H1 24
|
H1
23
|
Adjusted Basic and Diluted EPS
|
|
|
|
|
|
Profit attributable to the ordinary
equity holders of the Group used in calculating adjusted basic and
diluted EPS (note 2) (£'000s)
|
11,092
|
9,458
|
Adjusted basic earnings per Ordinary
share (p)
|
23.7
|
20.5
|
Adjusted diluted earnings per
Ordinary share (p)
|
21.5
|
18.5
|
|
|
|
|
H1 24
|
H1
23
|
|
Number
|
Number
|
Weighted average number of shares
|
|
|
|
|
|
Weighted average number of ordinary
shares used as the denominator in calculating non-adjusted and
adjusted basic EPS
|
46,850,312
|
46,186,481
|
Number of dilutive Ordinary
shares
|
4,735,999
|
4,940,924
|
Weighted average number of ordinary
shares used as the denominator in calculating non-adjusted and
adjusted diluted EPS
|
51,586,311
|
51,127,405
|
6. Goodwill and
Intangible Fixed Assets
|
Goodwill
|
Trademarks
|
Customer
Relationships
|
Order
Book
|
Software
|
Total
|
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
£'000s
|
Cost
|
|
|
|
|
|
|
At 31 December 2022 and
01 January 2023
|
76,975
|
7,135
|
4,554
|
1,149
|
-
|
89,813
|
Losses from foreign
exchange
|
(1,356)
|
-
|
(143)
|
(60)
|
-
|
(1,559)
|
At 30 June 2023
|
75,619
|
7,135
|
4,411
|
1,089
|
-
|
88,254
|
Acquisition of business
|
18,312
|
-
|
1,546
|
466
|
364
|
20,688
|
Additions
|
-
|
-
|
-
|
-
|
65
|
65
|
Gains/(losses) from foreign
exchange
|
(270)
|
-
|
(18)
|
(7)
|
4
|
(291)
|
At 31 December 2023
|
93,661
|
7,135
|
5,939
|
1,548
|
433
|
108,716
|
Additions
|
-
|
-
|
-
|
-
|
172
|
172
|
Gains/(losses) from foreign
exchange
|
263
|
-
|
28
|
10
|
(3)
|
298
|
At
30 June 2024
|
93,924
|
7,135
|
5,967
|
1,558
|
602
|
109,186
|
|
|
|
|
|
|
|
Amortisation
|
|
|
|
|
|
|
At 31 December 2022 and
01 January 2023
|
-
|
(4,950)
|
(776)
|
(506)
|
-
|
(6,232)
|
Charge for the period
|
-
|
(339)
|
(330)
|
(202)
|
-
|
(871)
|
Gains from foreign
exchange
|
-
|
-
|
32
|
32
|
-
|
64
|
At 30 June 2023
|
-
|
(5,289)
|
(1,074)
|
(676)
|
-
|
(7,039)
|
Charge for the period
|
|
(288)
|
(323)
|
(170)
|
-
|
(781)
|
Gains from foreign
exchange
|
-
|
-
|
5
|
4
|
-
|
9
|
At 31 December 2023
|
-
|
(5,577)
|
(1,392)
|
(842)
|
-
|
(7,811)
|
Charge for the period
|
-
|
(241)
|
(441)
|
(305)
|
(44)
|
(1,031)
|
Gains/(losses) from foreign
exchange
|
-
|
-
|
(7)
|
(5)
|
3
|
(9)
|
At
30 June 2024
|
-
|
(5,818)
|
(1,840)
|
(1,152)
|
(41)
|
(8,851)
|
|
|
|
|
|
|
|
Net
book value
|
|
|
|
|
|
|
At 30 June 2023
|
75,619
|
1,846
|
3,337
|
413
|
-
|
81,215
|
At 31 December 2023
|
93,661
|
1,558
|
4,547
|
706
|
433
|
100,905
|
At
30 June 2024
|
93,924
|
1,317
|
4,127
|
406
|
562
|
100,335
|
Goodwill
Goodwill arising on acquisition of
a business in H2 23 relates to the acquisitions of Elixirr AI Inc
(formerly Responsum) and Insigniam and was calculated as the fair
value of the consideration less the fair value of the net
identifiable assets at the date of the acquisition.
In line with IAS 36, the carrying
value of goodwill is not subject to systematic amortisation but is
reviewed at least annually for impairment. The Group performs an
annual impairment assessment. At 30 June 2024, the Directors
determined that there are no indications that the assets held are
at risk of impairment.
Customer Relationships and Order
Book
Additions in H2 23 represent the
fair value of customer relationships and order books from the
acquisitions of Elixirr AI Inc
(formerly Responsum) and
Insigniam.
The fair values were determined by
applying the Multi-Period Excess Earnings method. The amortisation
charge is recognised within administrative expenses.
7.
Receivables
|
H1
24
|
FY
23
|
|
£'000s
|
£'000s
|
Non-current assets
|
|
|
Loans to shareholders
|
7,316
|
7,604
|
Other receivables
|
1,968
|
1,985
|
|
9,284
|
9,589
|
Current assets
|
|
|
Trade receivables
|
15,964
|
15,295
|
Less: allowance for doubtful
debts
|
-
|
-
|
Trade receivables - net
|
15,964
|
15,295
|
Prepayments and deposits
|
1,477
|
840
|
Contract assets
|
256
|
288
|
Other receivables
|
142
|
263
|
|
17,839
|
16,686
|
|
|
|
Loans to shareholders represent
amounts owed by shareholders, who are senior employees of the
Group. The loans to shareholders are interest-free and expected to
be repaid beyond one year.
Non-current other receivables
include property deposits and s455 tax receivable.
The carrying value of non-current
other receivables and loans to shareholders is considered to be a
reasonable approximation of their fair value, but has not been
discounted to present value.
Trade receivables are non-interest
bearing and receivable under normal commercial terms. Management
considers that the carrying value of trade and other receivables
approximates to their fair value. The expected credit loss on trade
and other receivables was not material at the current or prior year
ends.
8.
Trade and Other Payables
|
H1 24
|
FY
23
|
|
£'000s
|
£'000s
|
Trade payables
|
1,800
|
1,774
|
Other taxes and social security
costs
|
2,254
|
1,899
|
Accruals
|
8,740
|
11,308
|
Dividend payable
|
4,421
|
-
|
Contract liabilities
|
3,266
|
3,938
|
Other payables
|
-
|
137
|
|
20,481
|
19,056
|
The fair value of trade and other
payables approximates to book value at the period end. Trade
payables are non-interest bearing and are normally settled
monthly.
Trade payables comprise amounts
outstanding for trade purchases and ongoing costs.
Contract liabilities arise from
the Group's revenue generating activities relating to payments
received in advance of performance delivered under a contract.
These contract liabilities typically arise on short-term timing
differences between performance obligations in some milestone or
fixed fee contracts and their respective contracted payment
schedules.
9. Other
Creditors and Other Non-current Liabilities
|
H1 24
|
FY
23
|
|
£'000s
|
£'000s
|
|
|
|
Other creditors
|
|
|
Contingent
consideration
|
4,405
|
1,144
|
|
4,405
|
1,144
|
|
|
|
Other non-current liabilities
|
|
|
Dilapidations
|
376
|
377
|
Cash-settled share-based
payments
|
364
|
360
|
Contingent
consideration
|
3,200
|
6,268
|
|
3,940
|
7,005
|
Contingent consideration in H1 24
includes earn-out payments which are contingent on performance and
arose from the acquisition of Elixirr Digital Inc (formerly iOLAP),
Elixirr AI Inc (formerly Responsum) and Insigniam.
Cash-settled share-based payments
include obligations for the Group's employers' NI on options that
are yet to vest. Refer to note 12 for further details.
Other non-current liability
payments fall due beyond 12 months from the reporting
date.
10.
Share capital, Share premium and Merger Relief
Reserve
|
H1 24
|
|
Issued
shares
|
Par
value
|
Merger
relief reserve
|
Share
premium
|
|
Number
|
£
|
£'000s
|
£'000s
|
£0.00005 Ordinary shares
|
47,272,811
|
2,364
|
46,870
|
29,557
|
£1 Redeemable Preference
shares
|
50,001
|
50,001
|
-
|
-
|
|
47,322,812
|
52,365
|
46,870
|
29,557
|
|
|
|
|
|
|
FY
23
|
|
Issued
shares
|
Par
value
|
Merger
relief reserve
|
Share
premium
|
|
Number
|
£
|
£'000s
|
£'000s
|
£0.00005 Ordinary shares
|
47,272,811
|
2,364
|
46,870
|
29,922
|
£1 Redeemable Preference
shares
|
50,001
|
50,001
|
-
|
-
|
|
47,322,812
|
52,365
|
46,870
|
29,922
|
The total number of voting rights
in the Company at 30 June 2024 was 47,272,811.
Ordinary shares
On a show of hands every holder of
Ordinary shares present at a meeting, in person or by proxy, is
entitled to one vote, and on a poll each share is entitled to one
vote. The shares entitle the holder to participate in dividends,
and to share in the proceeds of winding up the Company in
proportion to the number of and amounts paid on the shares held.
These rights are subject to the prior entitlements of the
Redeemable Preference shareholders.
Redeemable Preference
shares
The Redeemable Preference shares
are entitled to dividends at a rate of 1% per annum of paid-up
nominal value. The shares have preferential right, before any other
class of share, to a return of capital on winding-up or reduction
of capital or otherwise of the Company. The Redeemable Preference
shares are redeemable 100 years from the date of issue or at any
time prior at the option of the Company.
11. Employee
Benefit Trust ("EBT") Share Reserve
The EBT is accounted for under
IFRS 10 and is consolidated on the basis that the parent has
control, thus the assets and liabilities of the EBT are included in
the Group statement of financial position and shares held by the
EBT in the Company are presented as a deduction from
equity.
The EBT share reserve comprises of
Ordinary and Redeemable Preference shares bought and held in the
Group's EBT.
At 30 June 2024, the EBT held
381,892 (FY 23: 397,667) Ordinary shares and 50,001 Preference
shares (FY 23: 50,001) at a weighted average cost of £5.11 (FY 23:
£4.26) and £1.01 (FY 23: £1.01), respectively.
12. Share-based
Payments
Share Option Plans
The Group operates EMI, CSOP and
unapproved share option plans with time-based and performance-based
vesting conditions.
During H1 24, a total of 2,000,392
(H1 23: 2,112,139) share options were granted to employees and
senior management. The weighted average fair value of the options
awarded in the period is £1.68 (H1 23: £1.23) per share.
Details of share option awards
made are as follows:
|
Number of share options
(000's)
|
Weighted average
exercise price (£)
|
Outstanding at 31 December
2023
|
13,568
|
3.76
|
Granted during the period
|
2,000
|
5.82
|
Forfeited during the
period
|
(1,264)
|
3.39
|
Outstanding at 30 June 2024
|
14,304
|
4.08
|
Exercisable at 30 June 2024
|
532
|
5.48
|
The options outstanding at 30 June
2024 had a weighted average remaining contractual life of 2.5 years
(H1 23: 2.7 years) and a weighted average exercise price of £4.08
(H1 23: £3.37) per share.
The options were fair valued at
the grant date using the Black Scholes option valuation model. The
inputs into the model were as follows:
|
H1 24
|
H1
23
|
Weighted average share price at
grant date (£)
|
5.63
|
4.93
|
Weighted average exercise price
(£)
|
5.82
|
5.15
|
Volatility (%)
|
38.8%
|
27.0%
|
Weighted average vesting period
(years)
|
4.5
|
4.3
|
Risk free rate (%)
|
4.0%
|
3.7%
|
Expected dividend yield
(%)
|
2.3%
|
2.3%
|
Expected volatility was determined
by calculating the historic volatility of the Company's share
price. The expected expense calculated in the model has been
adjusted, based on management's best estimate, for the effects of
non market-based performance conditions and employee
attrition.
Reasonable changes in the above
inputs do not have a material impact on the share-based payment
charge in H1 24.
Fixed Consideration
Options
In addition to the share options
set out in the table above, share options with an exercise price of
£0.00005 were issued in connection with the acquisition of Elixirr
Digital Limited. These share options are for a fixed monetary
consideration where the number of share options is variable and
determined with reference to the share price at the date of
vesting.
The monetary value of such share
options is as follows:
|
Value
(£'000s)
|
Outstanding at 31 December
2023
|
500
|
Exercised during the
period
|
(500)
|
Outstanding at 30 June 2024
|
-
|
Exercisable at 30 June 2024
|
-
|
The share price at the date of
exercise of the Elixirr Digital Limited options was
£5.85.
Employee Share Purchase Plan
("ESPP")
The Group operates an employee
share purchase plan where the employees of the Group (excluding
Partners) are eligible to contribute a percentage of their gross
salary to purchase shares in the Company. The Company makes a
matching award of shares that will vest over time dependent on
continued employment.
During H1 24, the Company awarded
233,690 (H1 23: 185,546) matching shares on the basis of one
matching share for every one employee share purchased during FY 23.
The matching shares vest equally over a 5-year period with the
first tranche vesting on 31 January 2025.
Details of ESPP awards made are as
follows:
|
Number of ESPP awards
(000's)
|
Outstanding at 31 December
2023
|
204
|
Granted during the period
|
234
|
Vested and converted to shares during
the period
|
(42)
|
Forfeited during the
period
|
(28)
|
Outstanding at 30 June 2024
|
368
|
13. Ordinary
Dividends
An interim Ordinary share dividend
in respect of the financial year ended 31 December 2023 of 5.3
pence per Ordinary share was paid on 15 February 2024.
The Board proposed a final Ordinary
share dividend in respect of the financial year ended 31 December
2023 of 9.5 pence per Ordinary share, which was approved by
shareholders at the Annual General Meeting in June 2024, and paid
on 20 August 2024.
14.
Cash Flow Information
Cash generated from
operations:
|
H1 24
|
H1
23
|
|
£'000s
|
£'000s
|
Profit before taxation
|
12,018
|
9,873
|
Adjustments for:
|
|
|
Depreciation and
amortisation
|
1,741
|
1,446
|
Net finance expense
|
252
|
263
|
Share-based payments
|
1,056
|
712
|
Increase in trade and other
receivables
|
(1,292)
|
(2,982)
|
Decrease in trade and other
payables
|
(3,068)
|
(3,038)
|
Foreign exchange
|
(57)
|
261
|
|
10,650
|
6,535
|
15.
Events After the Reporting Date
On 8 July 2024, the EBT purchased
1,419,890 Ordinary shares from certain Directors, PDMRs, employees
and shareholders of the Company at a price of 565 pence per share
and for a total cost of £8.0m. The purchase was to ensure that the
EBT had sufficient shares to satisfy demand (including to satisfy
1,128,887 options that were exercised in July 2024) without
dilution of existing shareholders.
On 20 August 2024 the Company paid
the final Ordinary share dividend in respect of the financial year
ended 31 December 2023. The amount paid of £4.4m represented 9.5
pence per Ordinary share.
As at 20 September 2024, in
accordance with the Financial Conduct Authority's Disclosure and
Transparency Rules, the Company continues to have 47,272,811
Ordinary shares in issue, of which none are held in Treasury. The
total number of voting rights in the Company is 47,272,811. This
figure of 47,272,811 may be used by shareholders in the Company as
the denominator for the calculations by which they will determine
if they are required to notify their interest in, or a change in
their interest in, the share capital of the Company under the FCA's
Disclosure and Transparency Rules.