24 May
2024
PULSAR GROUP PLC
("Pulsar Group", the "Company" or the
"Group")
FINAL RESULTS FOR THE YEAR ENDED 30
NOVEMBER 2023
Pulsar Group Plc (AIM: PULS), the market
leading audience intelligence business delivering
Software-as-a-Service ("SaaS") solutions for the global marketing
and communications industries, announces its final results for the
year ended 30 November 2023.
Highlights
·
During 2023, Pulsar Group focussed its efforts in two key
areas: the continued advancement of its market leading products
including the release of the Group's next generation platform into
the APAC region; and further refinement of the Group's operating
model to improve EBITDA margins and free cash flow
conversion.
·
Annualised Recurring Revenue ("ARR") increased by
£2.7m1 in the period, demonstrating clear progress in
growth momentum across the Group when compared to flat year on year
ARR1 in 2022. This growth was underpinned by both
improved renewal rates and new business win performance year on
year.
· A
strong turnaround in ARR performance has been delivered in the APAC
region resulting in the first period of ARR growth since the
acquisition of Isentia. APAC ARR growth of £1.6m for the year
represents a £4.1m1 improvement compared to the prior
year where ARR declined by £2.5m1. In the EMEA & NA
region, ARR growth for the year was £1.1m.
·
Revenue for the year was £62.4 million (2022: £65.7 million),
with recurring revenue comprising 95% of total revenue (2022: 93%)
as the Group has focussed on winning and delivering profitable,
long-term customer contracts.
· The
Group delivered Adjusted EBITDA for the year of £7.3 million (2022:
£2.3 million). A key focus over the last two years has been to
ensure that the Group has a stable and profitable core business as
the platform from which to grow. As part of the global integration
of the Group over the past two years Pulsar Group headcount has
reduced from 1,110 FTE in November 2022 to 940 FTE in March 2024,
alongside the delivery of improved renewal rates and growing ARR.
Across all regions, management remains focussed on improving margin
and cash generation as a priority during 2024.
· New
client wins in the EMEA & North America region during the year
include Carnival, Colt Technology, the Delegation of the European
Union to the United Kingdom, Dentsu, the English Football League,
Essar Group, Financial Conduct Authority, GB Railfreight, Guardian
Life, Havas, Kraft Heinz, Marie Curie, McCann, National Grid, The
National Trust, Ofgem, Save The Children, Tesco, and UK
Infrastructure Bank.
· In
the APAC region, new features and functionality from the global
Pulsar proposition have resulted in a series of win-backs from key
competitors. Client wins include Amazon, Hyundai, Mazda, National
University of Singapore, Network 10, Uluru Dialogues, Red Cherry,
Senate of the Philippines, World Health Organisation and several
multi-year contracts across all levels of Government in the
region.
· At
30 November 2023, the Group's cash balance was £2.2 million (2022:
£4.9 million). Since the period end, the Group has put in
place a £3,000,000 debt facility and a £3,000,000 overdraft
facility. At 31 March 2024, the Group's net debt position was
£1,252,000.
Christopher Satterthwaite, Non-Executive
Chairman of Pulsar, commented:
"Pulsar Group's comprehensive audience
intelligence solution is at the forefront of innovation in
marketing and communications. It has been embraced by leading
global agencies who forge strategies for the world's largest brands
and organisations.
The growing demand for audience intelligence is
undeniable as governments, corporations, brands, and individuals
adapt to the pressures of today's communication landscape. Pulsar's
technology equips organisations with the insight and engagement
strategies they need to effectively navigate these challenges,
which have only been heightened by the widespread adoption of
Artificial Intelligence in media and social channels.
In 2023, the resonance of the Group's offering
has helped to achieve a significant acceleration in ARR growth and
improved Adjusted EBITDA margins, overcoming the challenges of a
difficult macro-economic environment. The turnaround in the APAC
region has been particularly impressive, driven by strong reception
of our market-leading products and services among existing, former,
and new customers.
The Board is pleased with the progress achieved
in 2023 in advancing the Group's product offering and in generating
profitable, global ARR growth. We remain confident in the Group's
ability to deliver growth, improved margins and cash flow in 2024
and beyond.
1
On a constant currency basis.
For further
information:
Pulsar Group
Plc
|
020 3426 4070
|
Joanna Arnold (CEO)
Mark Fautley (CFO)
|
|
Cavendish Capital
Markets Limited (Nominated Adviser and Broker)
|
020 7220 0500
|
Corporate
Finance:
Marc Milmo / Fergus Sullivan
|
|
Corporate
Broking:
Sunila de Silva
|
|
|
|
|
Forward
looking statements
This announcement contains forward-looking
statements.
These statements appear in a number of places
in this announcement and include statements regarding our
intentions, beliefs or current expectations concerning, among other
things, our results of operations, revenue, financial condition,
liquidity, prospects, growth, strategies, new products, the level
of product launches and the markets in which we operate.
Readers are cautioned that any such
forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, and that actual results may
differ materially from those in the forward-looking statements as a
result of various factors.
These factors include any adverse change in
regulations, unforeseen operational or technical problems, the
nature of the competition that we will encounter, wider economic
conditions including economic downturns and changes in financial
and equity markets. We undertake no obligation publicly to update
or revise any forward-looking statements, except as may be required
by law.
This announcement contains an extract from the
Pulsar Group Plc Annual Report 2023.
Chairman's
statement
A volatile geopolitical and macroeconomic
climate has been a challenge for the marketing and communications
industry in 2023. Marketing and communications professionals have
faced an additional challenge with the proliferation of Chat GPT
and generative AI, which has impacted national, corporate, brand
and individual narratives not least through misinformation and
disinformation.
Between navigating the volume of content online
and new challenges in detecting the difference between fact and
fiction, there has seldom been a more challenging time to be a
marcomms professional. Consumers expect both personalisation and
authenticity. Without the support of audience insights and an
innovative technology toolkit, marketers and communicators can miss
the mark in all forms of messaging and content creation. The risk
they face is losing connection with the communities they interact
with unless they fully understand them.
This time of challenge also presents a major
opportunity for brands to stand out in the crowd with authenticity
and relevance. Audience intelligence is critical to how marketers
and communicators credibly connect with their constituencies. The
Pulsar brand has long been highly regarded as the leading
technology offering in the growing audience intelligence market,
which has driven the rebrand of Access Intelligence to Pulsar Group
(the Group).
Pulsar Group continues to support a diverse
client base with a wide range of products and services, helping our
clients navigate these challenging times. For Government agencies
and regulated organisations around the globe, omnichannel audience
intelligence is used to identify misinformation and support the
rollout of targeted messaging. Major masthead agencies in the US
leverage these insights to deliver strategic creative
campaigns.
The APAC region has had a particularly strong
year, and the Board has been heartened to see how strongly the
audience intelligence proposition resonates across Asia, Australia
and New Zealand. In this region, we've benefitted from the
continued delivery of the product roadmap and an extensive suite of
new functionality in Pulsar aimed at the PR and comms practitioner.
As a result, we've seen a marked turnaround in constant currency
Annualised Recurring Revenue (ARR) performance in APAC from a
decline of £2.5m during FY22 to growth of £1.6m in FY23. ARR growth
in the region has continued through the first quarter of FY24 and
has been underpinned by increasing new customer wins and win-backs
alongside higher renewal rates.
ARR is a key metric used by the business and is
calculated as the change in the annual value of new business won,
plus upsells into our existing customer base, less any customer
losses.
In Asia and Australia, new features and
functionality from the global Pulsar proposition have resulted in a
series of win-backs from key competitors. Client wins include
Amazon, Hyundai, Mazda, National University of Singapore, Network
10, Uluru Dialogues, Red Cherry, Senate of the Philippines, World
Health Organisation and several multi-year contracts across all
levels of Government in the region.
Investment in our broadcast monitoring
capabilities across the APAC region has paid off, with several
win-backs commenting on superior performance from our AI-driven
innovation as one of the reasons for their return. Our
award-winning broadcast monitoring capabilities have now been fully
replicated across South-East Asia, and integrated into our product
offering for greater global consistency and customer
satisfaction.
Whilst the ubiquity of generative AI makes the
audience intelligence value proposition more essential, the global
economic headwinds have impacted non-recurring campaign revenue
during the year. We've seen pressure on marketing budgets for small
and midsize businesses, and in agencies in certain territories.
While we still consider this to be a valuable market segment longer
term, in the current economic climate we have focused investment on
the territories and activities that promise the certainty of
long-term ARR contracts over short- term non-recurring
revenue.
The EMEA and North America region has continued
to deliver growth with ARR increasing by £1.1m during the year
alongside an improvement in margins. Performance in Europe has
remained on track whilst the previously reported slowdown in
decision making at the enterprise level in North America continued.
Nonetheless we
have developed a healthy pipeline of
opportunities and leading global agencies including Havas and
McCann have now adopted our combined audience intelligence
proposition. We've also seen an acceleration in ARR growth in the
region during the first quarter of FY24 with a number of
opportunities from the North America pipeline closing.
Across EMEA and North America significant
client wins include Carnival, Colt Technology, the Delegation of
the European Union to the United Kingdom, Dentsu, the English
Football League, Essar Group, Financial Conduct Authority, GB
Railfreight, Guardian Life, Havas, Kraft Heinz, Marie Curie,
McCann, National Grid, The National Trust, Ofgem, Save The
Children, Tesco, and UK Infrastructure Bank.
Increasing
capabilities through global efficiencies
Business transformation has moved at a rapid
pace this year, with the Group now benefitting from the completion
of multiple strategic initiatives to integrate global teams and
support more efficient ways of working. In some territories, we
have been able to leverage our global teams to provide in-house
client services, whilst continuing to automate data aggregation and
enrichment globally.
Successful transformation projects such as
integrating the APAC region onto the Group's CRM and finance
systems, the migration of EMEA team members to Google Workspace and
the launch of a new HRIS system globally have provided strong
foundations for employees across the globe to work cohesively
together. The strong progress made in integrating systems and
processes has given us the right benchmarks to drive continuous
performance improvement and encourage our teams to innovate at
pace.
A key focus over the last two years has been to
ensure that the Group has a stable and profitable core business as
the platform from which to grow. As part of the global integration
of the Group over the past two years we have reduced headcount from
1,110 FTE in November 2022 to 940 FTE by March 2024 alongside the
delivery of improved renewal rates and growing ARR. Whilst the FTE
reduction has resulted in significant restructuring and
non-recurring costs during the year, it has supported an
improvement in Adjusted EBITDA from £2.3m in FY22 to £7.3m in
FY23.
Product
development at pace
We have made significant progress on our
strategic product objectives with the introduction of Pulsar 3.0 in
Q3. Pulsar is now a fully integrated media, social and audience
intelligence platform offering universal access to all forms of
data about public opinion globally. We have made particular
progress in APAC with the integration of proprietary data streams
from TV, radio, podcasts and print news, as well as introducing new
global social data partnerships.
We have introduced multiple comms-specific
solutions to the platform, including a global media contacts
database and distribution product (Pulsar CONTACTS), a global
instant search product (Pulsar SEARCH) as well as a mobile app,
advanced coverage reports, syndication detection, smart instant
alerts and the ability to customise AI data enrichment around
client's specific use case and industries.
As access to data broadens, we are introducing
AI solutions to help users tackle complex questions across hundreds
of languages, multiple media formats and audiences. AI
Summarisation helps detect key narratives and provide context for
any data point in the product. AI Co-pilot helps customers create
complex queries in seconds. AI Lenses automatically benchmarks a
brand or an influential voice against a set of values or attributes
to assess brand affinity. AI Voice provides a much-needed view into
how Large Language Models (LLMs) are portraying a brand or an issue
of public opinion.
We continue to invest in generative AI as we
see the potential of LLMs to reinvent media, social, and audience
intelligence products. LLMs enable the creation of conversational
interfaces that push data in the background and will help us
broaden the adoption of our intelligence products to non-technical
and dataliterate teams in any organisation.
At the same time, we continue to leverage our
expertise in advanced machine learning for natural language
processing, image analysis and speech-to-text, which is
increasingly seen as complementary to generative AI and positions
the Group at the forefront of the business intelligence
space.
The new and ongoing innovation efforts at
Pulsar support our Audience Intelligence strategy by providing a
deep understanding of the context behind public conversations. Our
proprietary Media Graph maps the relationships between voices,
outlets and topics within the news space and already powers our
media database solution. A further layer of insight is added with
our Audience Graph which shows how the general public engages with
journalists, outlets and public opinion.
A good example of this dynamic is our new
Pulsar NARRATIVES product which is an AI solution designed to
detect narratives in media and social conversation and map their
evolution over time. NARRATIVES uses NLP-based clustering for
precision and generative AI for summarisation and contextual
enrichment providing an instant search experience similar to the
simplicity and speed of a web search.
We believe these innovations are going to be
transformative for both the PR and marketing industries because in
an environment where any individual or group, friendly or malign
can have a voice and build an audience, being relevant and
distinctive have become survival strategies, not just
best-practices. Knowing your audience is the only way to stay
secure and relevant.
Supporting our
clients to navigate a fragmented world
We help our clients make data-driven decisions
on how best to reach audiences, with messages that
matter
to them. We provide our clients with the voices
of the communities that are actively shaping the narrative in which
they seek or are forced to participate.
As the online marketplace becomes fragmented,
our focus is to understand audiences by the interests, opinions and
behaviours they openly share in an increasing number of public
spaces and communities. Our insights are linked to audience data
that is aggregated and anonymised, with recommendations that speak
to audiences at scale.
Our research and insights services help our
clients understand public opinions across issues including energy
transition, trust in government institutions, perceptions on the
impact industry regulators have on public services and the
prevalence of misleading health information online. Our clients
include public service providers such as NHS England and
ministerial departments such as DCMS and MoJ who use our insights
to inform policy decision making and guide
communications.
Diversity and inclusion sit at the very heart
of the audience intelligence proposition provided to clients and
industry partners to deepen their understanding of their audiences.
This approach is exemplified by the work we completed this year in
identifying prominent misinformation narratives and media bias
ahead of The Voice referendum in Australia.
Across the Group, we have an impressive track
record in demonstrating the real-world impact that media
representation has on diverse communities. This year, we've
continued our landmark public research partnership with Sport New
Zealand into women's participation in sports, and we've begun a
similar project with the Victorian Government, creating benchmarks
that are proven to change social behaviour.
We have built a considerable body of work in
media representation research, including work with Women in Media
and Media Diversity Australia to highlight gender and ethnic
diversity in the Australian media landscape. This year, we're also
working with the Stella Prize literary award on their audit of
media for the space given to women and non-binary
authors.
Current
trading
ARR growth has accelerated during the first
four months of FY24 with growth in excess of £1.3m for the period
compared to £0.7m for the comparative period in FY23. Both the APAC
and the EMEA and North America regions have delivered increased ARR
growth to support this acceleration. Group renewal rates have
significantly improved year on year in addition to a number of
blue-chip global customer wins and win- backs during the
period.
A particular highlight year to date has been a
major international advertising agency network not only renewing
their contract early but also putting in place a multi-year
contract to expand the service they take from their North American
and UK offices, to all of their global regions, increasing the ARR
of their contract by over 200%.
New clients during the first four months for
FY24 include Alpine Racing, Ambulance Victoria, Coty, Electronic
Arts, Insurance Council of Australia, Medicines New Zealand, Next,
Reckitt Benckiser, Securities Commission Malaysia, Unilever and
Universities Australia.
Overall, we are pleased with the growth
delivered during the first four months and continue to trade in
line with the Board's expectations.
In
summary
The Group's results for 2023 highlight the
continued progress that has been made with the integration and
transformation of Isentia. The ongoing delivery of the Group's
product roadmap has supported a significant turnaround in ARR
performance in the APAC region year on year whilst the completion
of several global integration and transformation projects has
enabled the Group to establish a stable and profitable core
business from which to grow in all serviced regions.
There is no doubt that demand for audience
intelligence is growing as governments, corporations, brands and
individuals adapt to the constant pressure of today's communication
environment. The Pulsar platform provides our clients with insight
and engagement strategies to help navigate these challenges
heightened by the widescale adoption of AI in media and social
channels. Geo-political and macro-economic trends in 2023 have been
a challenge in the marketing and communication industries. However,
with the level of innovation and personal commitment of our teams,
the Board is encouraged by the progress being made in 2023 and the
start of 2024.
Christopher Satterthwaite CBE
Chairman
Strategic
report (Extract)
Results
During 2023, Pulsar Group focussed its efforts
in two key areas: the continued advancement of its market leading
products including the release of the Group's next generation
platform into the APAC region; and further refinement of the
Group's operating model to improve EBITDA margins and free cash
flow conversion.
One of the key financial metrics monitored by
the Board is the change in the Group's Annualised Recurring Revenue
('ARR') base year-on-year. The change in ARR base reflects the
annual value of new business won, plus upsells into our existing
customer base, less any customer losses. It is an important metric
for the Group as it is a leading indicator of future revenue. The
Group's constant currency ARR increased by £2.7m in the period,
demonstrating clear progress in growth momentum across the Group
when compared to flat year on year ARR in 2022. This growth was
underpinned by both improved renewal rates and new business win
performance year on year.
Each region within the Group contributed to the
ARR growth, with a strong turnaround being delivered in APAC where
the first ARR growth has been delivered since the acquisition of
Isentia. The APAC ARR growth of £1.6m for the year represents a
£4.1m improvement in performance compared to the prior year where
APAC ARR declined by £2.5m.
Performance in Europe continues to remain on
track with ARR and margin both increasing year on year. The
previously reported slowdown in decision making at the enterprise
level in North America has continued albeit a healthy pipeline of
opportunities continues to be developed in this market and a number
of leading global agencies have adopted our combined audience
intelligence proposition during the year. Overall ARR growth in the
EMEA & NA region for the year was £1.1m.
ARR
|
FY21
|
FY22 Change
|
FY22
|
FY23 Change
|
FY23
|
EMEA & North America (Constant
Currency)
|
£26.9m
|
+£2.5m
|
£29.4m
|
+£1.1m
|
£30.5m
|
EMEA & North America (Reported)
|
£26.9m
|
+£2.5m
|
£29.4m
|
+£1.1m
|
£30.5m
|
APAC (Constant Currency)
|
£31.7m
|
-£2.5m
|
£29.2m
|
+1.6m
|
£30.8m
|
APAC (Reported)
|
£32.0m
|
-£1.4m
|
£30.6m
|
+0.2m
|
£30.8m
|
Group (Constant Currency)
|
£58.6m
|
+£0.0m
|
£58.6m
|
+£2.7m
|
£61.3m
|
Group (Reported)
|
£58.9m
|
+1.10m
|
£60.0m
|
+£1.3m
|
£61.3m
|
The Group's audience intelligence proposition
is resonating well where the combination of global media monitoring
and world class social listening has secured major new wins. In
addition the Group has seen a number of very encouraging winbacks
from competitors in the period as customers that had left Isentia
prior to its acquisition by Pulsar Group have now returned to
benefit from the Group's market-leading technology and
services.
Revenue in the year was £62,402,000 (2022:
£65,710,000). Recurring revenue comprised 95% of the total (2022:
93%), with sales teams incentivised to focus on high contribution
SaaS products. The Group had an adjusted profit before interest,
tax, depreciation and amortisation (Adjusted EBITDA) for the year
of £7,263,000 (2022: £2,327,000).
The Directors believe that the disclosure of
Adjusted EBITDA provides additional useful information on the core
operational performance of the Group and its ongoing cost base to
shareholders, and review the results of the Group on an adjusted
basis internally. It is an important metric as it provides clear
guidance on the on going long-term cost base and profitability of
the Group. The term 'adjusted' is not a defined term under IFRS and
may not therefore be comparable with similarly titled profit
measurements reported by other companies. It is not intended to be
a substitute for, or superior to, IFRS measurements of
profit.
Adjustments are made in respect of the
Group's:
·
Non-recurring administrative expenses;
·
Share of profit or loss of associates; and
·
Share-based payment charges.
Adjusted EBITDA excludes non-recurring
administrative expenses of £8,988,000 (2022: £1,215,000), a share
of loss of associate of £198,000 (2022: £254,000), and a
share-based payments charge of £915,000 (2022:
£1,121,000).
Non-recurring administrative expenses include
costs incurred in relation to the migration and integration of
Isentia and associated restructuring costs. Between November 2022
and March 2024, Group FTE reduced from 1,110 to 940 as a result of
the global integration and restructuring of the business.
Non-recurring salary costs for the year were £7,231,000 (2022:
£3,715,000) which includes the year to date costs and redundancy
costs of roles that either exited during 2023 or which were
identified to exit during 2024, primarily during the first quarter.
Non-recurring salary costs also includes the cost of specific roles
hired to deliver the global integration of the business and which
are not considered to be required longer term. In addition to
non-recurring salary costs, the Group incurred £1,888,000 (2022:
£Nil) of duplicated technology costs as it built out key
functionality across multiple platforms which is expected to scale
back down during 2025. Non-recurring copyright related expense for
the year was £528,000 (2022: income £2,703,000). The Group also had
other non-recurring expenses of £320,000 (2022: £203,000) and the
release of a business rates overprovision generated a non-recurring
income of £980,000 (2022: £Nil).
The Group's earnings before interest, tax,
depreciation and amortisation (EBITDA) loss for the year was
£2,838,000 (2022: loss of £263,000). EBITDA is an important metric
as it provides guidance on the financial performance of the Group
including non-recurring costs incurred. Loss before taxation was
£10,833,000 (2022: £7,488,000). In arriving at the loss before
taxation, the Group has incurred £241,000 of net financial expense
(2022: £281,000) and charged £7,754,000 in depreciation and
amortisation (2022: £6,944,000). £2,065,000 of this charge related
to the amortisation of intangible assets arising on acquisition
(2022: £2,312,000).
Loss per
share
The basic loss per share was 9.09p (2022:
1.38p).
Cash
Cash at the year end stood at £2,248,000 (2022:
£4,922,000). The Group had Nil debt at the year end (2022: £Nil).
The total decrease in cash and cash equivalents during the year was
£2,674,000 (2022: increase of £8,534,000). The net cash inflow from
operations during the year was £8,557,000 (2022: inflow of
£2,467,000).
The net cash outflow from investing activities
for the year was £9,072,000 (2022: outflow of £8,538,000),
reflecting the increased investment in the Group's products and in
the prior year the acquisition of Isentia and a further investment
in an associate entity.
The net cash outflow from financing activities
for the year was £2,041,000 (2022: outflow of £2,632,000),
reflecting investment in sales and marketing, plus interest and
lease liability repayments in respect of the Group's head
office.
At the year end the Group had no bank
borrowings or overdrafts. Since the period end, the Group has put
in place a £3,000,000 overdraft facility and a £3,000,000 loan
facility. At 31 March 2024, the Group's net debt position was
£1,252,000.
Key
performance indicators
Management accounts are prepared on a monthly
basis and provide performance indicators covering revenue, gross
margins, EBITDA, result before tax, result after tax, cash balances
and recurring revenue. Recurring revenue is the proportion of Group
revenue which is expected to continue in the future. The key
performance indicators for the year are:
£'m
|
2023
|
2022
|
Annual Contract Value base
|
61.3
|
60.0
|
Revenue
|
62.4
|
65.7
|
Gross margin (%)
|
74%
|
76%
|
Adjusted EBITDA
|
7.3
|
2.3
|
EBITDA loss
|
(2.8)
|
(0.3)
|
Loss before taxation
|
(10.8)
|
(7.5)
|
Loss after taxation
|
(7.9)
|
(4.2)
|
Cash
|
2.2
|
4.9
|
Recurring revenue
|
59.5
|
61.0
|
These performance indicators are measured
against both an approved budget and the previous year's actual
results. Further analysis of the Group's performance is provided
earlier in this Strategic Report.
Each month the Board assesses the performance
of the Group based on key performance indicators. These are used in
conjunction with the controls described in the corporate governance
statement and relate to a wide variety of aspects of the business,
including: new business and renewal sales performance; marketing,
development and research activity; year to date financial
performance, profitability forecasting and cash flow
forecasting.
Consolidated
Statement of Comprehensive Income
Year ended 30 November 2023
|
|
2023
|
2022
|
|
Note
|
£'000
|
£'000
|
|
|
|
|
Revenue
|
3
|
62,402
|
65,710
|
Cost of sales
|
|
(16,340)
|
(15,915)
|
Gross
profit
|
|
46,062
|
49,795
|
Recurring administrative expenses
|
|
(38,799)
|
(47,468)
|
Adjusted
EBITDA
|
|
7,263
|
2,327
|
Non-recurring administrative
expenses
|
5
|
(8,988)
|
(1,215)
|
Share of loss of associate
|
11
|
(198)
|
(254)
|
Share-based payments
|
21
|
(915)
|
(1,121)
|
EBITDA
|
|
(2,838)
|
(263)
|
Depreciation of tangible fixed
assets
|
12
|
(524)
|
(747)
|
Depreciation of right-of-use assets
|
15
|
(1,526)
|
(2,140)
|
Amortisation of intangible assets - internally
generated
|
10
|
(3,639)
|
(1,745)
|
Amortisation of intangible assets - acquisition
related
|
10
|
(2,065)
|
(2,312)
|
Operating
loss
|
5
|
(10,592)
|
(7,207)
|
Financial income
|
|
12
|
14
|
Financial expense
|
7
|
(253)
|
(295)
|
Loss before
taxation
|
|
(10,833)
|
(7,488)
|
Taxation credit
|
8
|
2,931
|
3,295
|
Loss for the
year
|
|
(7,902)
|
(4,193)
|
|
|
|
|
Other
comprehensive (loss)/income
|
|
|
|
Exchange (losses)/gains arising on translation
of foreign operations
|
|
(3,701)
|
2,427
|
Total
comprehensive loss for the period attributable to the owners of the
Parent Company
|
(11,603)
|
(1,766)
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
2023
|
2022
|
Basic loss per share
|
9
|
(9.09p)
|
(1.38)p
|
Diluted loss per share
|
9
|
(9.09p)
|
(1.38)p
|
Consolidated
Statement of Financial Position
At 30 November 2023
|
|
2023
|
Restated
2022
|
|
Note
|
£'000
|
£'000
|
Non-current
assets
|
|
|
|
Intangible assets
|
10
|
68,621
|
69,269
|
Investment in associate
|
11
|
264
|
462
|
Right-of-use assets
|
15
|
2,190
|
1,896
|
Property, plant and equipment
|
12
|
793
|
861
|
Deferred tax asset
|
19
|
6,808
|
4,345
|
Total
non-current assets
|
|
78,676
|
76,833
|
Current
assets
|
|
|
|
Trade and other receivables
|
13,26
|
9,765
|
10,896
|
Current tax receivables
|
|
-
|
1,025
|
Cash and cash equivalents
|
22
|
2,248
|
4,922
|
Total current
assets
|
|
12,013
|
16,843
|
Total
assets
|
|
90,689
|
93,676
|
Current
liabilities
|
|
|
|
Trade and other payables
|
14
|
13,533
|
8,945
|
Accruals
|
|
4,311
|
4,946
|
Contract liabilities
|
16,26
|
15,031
|
11,019
|
Current tax liabilities
|
|
148
|
-
|
Provisions
|
23
|
217
|
-
|
Lease liabilities
|
15
|
1,300
|
1,610
|
Total current
liabilities
|
|
34,540
|
26,520
|
Non-current
liabilities
|
|
|
|
Provisions
|
23
|
173
|
471
|
Lease liabilities
|
15
|
1,233
|
907
|
Deferred tax liabilities
|
19
|
5,057
|
5,404
|
Total
non-current liabilities
|
|
6,463
|
6,782
|
Total
liabilities
|
|
41,003
|
33,302
|
Net
assets
|
|
49,686
|
60,374
|
Equity
|
|
|
|
Share capital
|
20
|
6,526
|
6,526
|
Treasury shares
|
|
(141)
|
(141)
|
Share premium account
|
|
74,424
|
74,424
|
Capital redemption reserve
|
|
395
|
395
|
Share option reserve
|
|
2,937
|
2,022
|
Foreign exchange reserve
|
|
(965)
|
2,736
|
Other reserve
|
|
502
|
502
|
Retained earnings
|
|
(33,992)
|
(26,090)
|
Total equity
attributable to the equity holders of the Parent
Company
|
|
49,686
|
60,374
|
Deferred income and trade debtors
have been restated see Note 26 of the financial
statements.
Consolidated
Statement of Changes in Equity
Year ended 30 November 2023
Group
|
Share capital
£'000
|
Treasury shares £'000
|
Share premium account
£'000
|
Capital redemption reserve
£'000
|
Share option reserve
£'000
|
Foreign exchange reserve
£'000
|
Other reserve £'000
|
Retained earnings
£'000
|
Total £'000
|
At 30 November
2021
|
6,528
|
(148)
|
74,419
|
395
|
901
|
309
|
502
|
(21,897)
|
61,009
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(4,193)
|
(4,193)
|
Other comprehensive income for the
year
|
-
|
-
|
-
|
-
|
-
|
2,427
|
-
|
-
|
2,427
|
Issue of Share Capital
|
(2)
|
7
|
5
|
-
|
-
|
-
|
-
|
-
|
10
|
Share-based payments
|
-
|
-
|
-
|
-
|
1,121
|
|
-
|
-
|
1,121
|
At 30 November
2022
|
6,526
|
(141)
|
74,424
|
395
|
2,022
|
2,736
|
502
|
(26,090)
|
60,374
|
Loss for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(7,902)
|
(7,902)
|
Other comprehensive income for the
year
|
-
|
-
|
-
|
-
|
-
|
(3,701)
|
-
|
-
|
(3,701)
|
Issue of Share Capital
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Share-based payments
|
-
|
-
|
-
|
-
|
915
|
|
-
|
-
|
915
|
At 30 November
2023
|
6,526
|
(141)
|
74,424
|
395
|
2,937
|
(965)
|
502
|
(33,992)
|
49,686
|
Share capital
and share premium account
When shares are issued, the nominal value of
the shares is credited to the share capital reserve. Any premium
paid above the nominal value is taken to the share premium account.
Pulsar Group plc shares have a nominal value of 5p per share.
Directly attributable transaction costs associated with the issue
of equity investments are accounted for as a reduction from the
share premium account.
Treasury
shares
The returned shares are held in treasury and
attract no voting rights. The return of shares has been accounted
for in accordance with IAS 32 'Financial instruments: Presentation'
such that the instruments have been deducted from equity with no
gain or loss recognised in profit or loss. The balance on this
reserve represents the cost to the Group of the treasury shares
held.
Share option
reserve
This reserve arises as a result of amounts
being recognised in the consolidated statement of comprehensive
income relating to share-based payment transactions granted under
the Group's share option scheme. The reserve will fall as share
options vest and are exercised over the life of the
options.
Capital
redemption reserve
This reserve arises as a result of keeping with
the doctrine of capital maintenance when the Company purchases and
redeems its own shares. The amounts transferred into/out from this
reserve from a purchase/ redemption is equal to the amount by which
share capital has been reduced/increased, when the purchase/
redemption has been financed wholly out of distributable profits,
and is the amount by which the nominal value exceeds the proceeds
of any new issue of share capital, when the purchase/redemption has
been financed partly out of distributable profits.
Foreign
exchange reserve
This reserve comprises of gains and losses
arising on retranslating the net assets of overseas operations into
sterling.
Other
reserve
This reserve arises as a result of the
difference between the fair value and the nominal value of
consideration shares issued on acquisition for which merger relief
is taken under S612 of the Companies Act 2006.
Retained
earnings
The retained earnings reserve records the
accumulated profits and losses of the Group since inception of the
business. Where subsidiary undertakings are acquired, only profits
and losses arising from the date of acquisition are
included.
Consolidated
statement of cash flow
Year ended 30 November 2023
|
Note
|
2023
£'000
|
Restated
2022
£'000
|
Loss for the
year
|
|
(7,902)
|
(4,193)
|
Adjusted for:
|
|
|
|
Taxation
|
8
|
(2,931)
|
(3,295)
|
Financial expense
|
7
|
253
|
295
|
Financial income
|
|
(12)
|
(14)
|
Depreciation and amortisation
|
10,12,15
|
7,753
|
6,943
|
Share based payments
|
|
915
|
1,121
|
Share of loss of associate
|
11
|
198
|
254
|
Operating cash
(outflow)/ inflow before changes in working
capital
|
|
(1,726)
|
1,111
|
Increase in trade and other
receivables
|
|
1,131
|
2,799
|
Increase in trade and other payables
|
|
4,584
|
1,351
|
Decrease in accruals
|
|
(635)
|
(1,942)
|
Increase/(decrease) in contract
liabilities
|
|
4,012
|
(1,125)
|
Decrease in provisions
|
|
(81)
|
(438)
|
Net cash
inflow from operations before taxation
|
|
7,285
|
1,756
|
Taxation received
|
|
1,272
|
711
|
Net cash
inflow from operations
|
|
8,557
|
2,467
|
Cash flows
from investing
Interest received
|
|
12
|
14
|
Acquisition of property, plant and
equipment
|
12
|
(509)
|
(506)
|
Acquisition of intangible assets
|
10
|
(8,575)
|
(8,046)
|
Net cash
outflow from investing
|
|
(9,072)
|
(8,538)
|
Cash flows
from financing
|
|
|
|
Interest paid
|
|
(241)
|
(286)
|
Lease liabilities paid
|
20
|
(1,800)
|
(2,356)
|
Issue of shares
|
|
-
|
10
|
Net cash
outflow from financing
|
|
(2,041)
|
(2,632)
|
Net decrease
in cash and cash equivalents
|
|
(2,556)
|
(8,703)
|
Opening cash and cash equivalents
|
22
|
4,922
|
13,456
|
Exchange (losses)/gains on cash and cash
equivalents
|
|
(118)
|
169
|
Closing cash
and cash equivalents
|
22
|
2,248
|
4,922
|
Deferred income and trade debtors
have been restated see Note 26 of the financial
statements.
Notes to the Consolidated Financial
Statements
1.
General Information
Pulsar Group Plc ('the Company') (formerly
Access Intelligence PLC) and its subsidiaries (together the
'Group') provides advanced tools and human insight to give brands,
agencies and organisations the power to anticipate, react and
adapt.
The Company is a public limited company under
the Companies Act 2006 and is listed on the AIM market of the
London Stock Exchange and is incorporated and domiciled in the UK.
The address of the Company's registered office is provided in the
Directors and Advisers page of this Annual Report.
In May 2024 the Group rebranded from Access
Intelligence Plc to Pulsar Group Plc. The Pulsar brand has long
been highly regarded as the leading technology offering in the
growing audience intelligence market, which has driven the
rebrand.
The financial information set out in this
document does not constitute the Group's statutory accounts for the
years ended 30 November 2022 or 2023. Statutory accounts for
the years ended 30 November 2022 and 30 November 2023, which were
approved by the Directors on 23 May 2024, have been reported on by
the Independent Auditors. The Independent Auditor's Reports
on the Annual Report and Financial Statements for each of 2022 and
2023 were unqualified, did not draw attention to any matters by way
of emphasis, and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006.
Statutory accounts for the year ended 30
November 2022 have been filed with the Registrar of
Companies. The statutory accounts for the year ended 30
November 2023 will be delivered to the Registrar of Companies in
due course and will be posted to shareholders shortly, and
thereafter will be available from the Company's registered office
at The Johnson Building, 79 Hatton Garden, London EC1N 8AW and from
the Company's website: www.pulsargroup.com
The financial information set out in these
results has been prepared using the recognition and measurement
principles of International Accounting Standards, International
Financial Reporting Standards and Interpretations in conformity
with the requirements of the Companies Act 2006. The
accounting policies adopted in these results have been consistently
applied to all the years presented and are consistent with the
policies used in the preparation of the financial statements for
the year ended 30 November 2023, except for those that relate to
new standards and interpretations effective for the first time for
periods beginning on (or after) 1 December 2021. There are
deemed to be no new standards, amendments and interpretations to
existing standards, which have been adopted by the Group, that have
had a material impact on the financial statements.
2. Accounting
policies
The principal accounting policies applied in
the preparation of these financial statements are set out below.
These policies have been applied consistently to all the years
presented, unless otherwise stated.
Basis of
preparation
The financial statements have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006. The consolidated
financial statements have been prepared under the historical cost
convention and on a going concern basis.
The preparation of financial statements in
conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its
judgement in the process of applying the Group's accounting
policies.
Going
concern
The Strategic Report and opening pages to the
annual report discuss Pulsar Group's business activities and
headline results, together with the financial statements and notes
which detail the results for the year, net current liability
position and cash flows for the year ended 30 November
2023.
The Board has further considered three year
financial forecasts, which included detailed, sensitised, 19-month
cash flow forecasts from the date of signing the accounts. The
sensitised forecasts contained adverse assumptions around new
business and upsell being reduced by 15% and renewal rates also
decreasing by 3 percentage points compared to expected levels,
whilst additional cost reduction initiatives were not assumed.
These adverse assumptions have been modelled and, if they were to
crystallise, the forecasts confirm that the Group would still be
able to continue to operate for at least 12 months from the date of
this report. The Board considers the assumptions and plausible
downside scenarios that have been modelled to test going concern to
be reasonable and reflective of the long-term 'software as a
service' contracts and contracted recurring revenue.
The Group meets its day to day working capital
requirements through its cash balance which was £2,248,000 at 30
November 2023. It did not have a debt facility or bank overdraft at
the year end but during 2024 has entered into a £3,000,000
overdraft facility and a £3,000,000 loan facility which are both in
place at the date of signing the accounts. The £3,000,000 debt
facility is in place for a period of 18 months whilst the overdraft
is repayable on demand.
As at the date of this report, the directors
have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the financial
statements.
Significant
judgements in applying the Group's accounting
policies
The areas where the Board has made critical
judgements in applying the Group's accounting policies (apart from
those involving estimations which are dealt with separately below)
are:
A)
Recognition of deferred tax assets
Judgement is applied in the assessment of
deferred tax assets in relation to losses to be recognised in the
financial statements. As the Board has forecasted a taxable profit
in APAC in the next two years, a deferred tax asset in excess of
deferred tax liabilities has been recognised in respect of this
region. No deferred tax asset in excess of deferred tax liabilities
has been recognised in respect of the EMEA region. At 30 November
2023, the Group recognised a deferred tax asset of £6,808,000
(2022: £4,345,000) and a deferred tax liability of £5,057,000
(2022: £5,404,000). See Note 19 for further detail.
B)
Capitalisation of development costs
Management applies judgement when determining
the value of development costs to be capitalised as an intangible
asset in respect of its product development programme. Judgements
include the technical feasibility, intention and availability of
resources to complete the intangible asset so that the asset will
be available for use or sale and assessment of likely future
economic benefits. During the year, the Group capitalised
£8,498,000 (2022: £7,986,000) of development costs. See Note 10 for
further detail.
C)
Identification of cash generating units for goodwill impairment
testing
Judgement is applied in the identification of
cash-generating units ("CGUs"). The Directors have judged that the
primary CGUs used for impairment testing should be: EMEA & NA,
comprising AIMediaData Limited, Access Intelligence Media and
Communications Limited, ResponseSource Ltd, Vuelio Australia Pty
Limited, Fenix Media Limited and Face US Inc; and APAC, comprising
the acquired Isentia entities. See Note 10 for further
detail.
D)
Non-recurring administrative expenses
Due to the Group's activity in recent years,
there are a number of items which require judgement to be applied
in determining whether they are non-recurring in nature. In the
current year these relate largely to: restructuring costs,
duplicate software costs and non-recurring business rates. See Note
5 for further detail.
E) Control of
associates
The Group holds a 21.4% stake in Track Record
Holdings Limited. Management has applied judgement in assessing
that the Group has significant influence over this Company and it
is therefore appropriate to treat Track Record Holdings Limited as
an associate. On the basis that the Group has appointed a director
to the board of Track Record Holdings Limited, it has been assessed
that the Group has significant influence but not control over the
Company and therefore it is appropriate to treat Track Record
Holdings Limited as an associate.
Significant
estimates in applying the Group's accounting
policies
The areas where the Board has made significant
estimates and assumptions in applying the Group's accounting
policies which could have a material impact on the financial
statements are:
A) Carrying
value of goodwill
The Group uses forecast cash flow information
and estimates of future growth to assess whether goodwill is
impaired. Key assumptions include the EBITDA margin allocated to
each CGU, the growth rate to perpetuity and the discount rate. If
the results of an operation in future years are adverse to the
estimates used for impairment testing, impairment may be triggered
at that point. Further details, including sensitivity testing, are
included within Note 10.
B) Time spent
on capitalisable activities
The determination of the value of capitalised
development costs associated with employee salaries and related
expenses is based on an estimation of the time allocated by
employees to activities that fulfil the criteria specified in IAS
38.
New standards
and interpretations
The adoption of the following mentioned
amendments in the current year have not had a material impact on
the Group's/Company's financial statements.
·
Amendments to IFRS 3 : Reference to the Conceptual Framework
(1 January 2022)
·
Amendments to IAS 16 : Proceeds before Intended Use (1
January 2022)
·
Amendments to IAS 37 : Onerous Contracts - Cost of Fulfilling
a Contract (1 January 2022)
·
Annual Improvements to IFRS Standards 20182020 (1 January
2022)
·
IFRS 17 Insurance Contracts (Amendment): Initial Application
of IFRS 17 and IFRS 9 - Comparative Information
·
IFRS 17 Insurance Contracts and Amendments to IFRS
17
·
Amendments to IAS 1 and IFRS Practice Statement 2 :
Disclosure of Accounting Policies (1 January 2023)
·
Amendments to IAS 8 : Definition of Accounting Estimates (1
January 2023)
·
Amendments to IAS 12 : Deferred Tax related to Assets and
Liabilities arising from a Single Transaction (1 January
2023)
New standards,
amendments and interpretations issued but not yet
effective
At the date of authorisation of the financial
statements, the Company has not early adopted the following
amendments to Standards and Interpretations that have been issued
but are not yet effective:
·
Amendments to IAS 1 : Classification of liabilities as
current or non-current (1 January 2024)
·
Amendments to IFRS 16 : Lease Liability in a Sale and
Leaseback (1 January 2024)
·
Amendments to IAS 1 : Non-current Liabilities with Covenants
(1 January 2024)
These Standards and amendments are effective
from accounting periods beginning on or after the dates shown
above. The directors do not expect any material impact as a result
of adopting the standards and amendments listed above in the
financial year they become effective.
Basis of
consolidation
The Group financial statements comprise the
financial statements of the Company and all of its subsidiary
undertakings made up to the financial year end. Subsidiaries are
entities that are controlled by the Group. The Company controls an
investee if all three of the following elements are present: power
over the investee, exposure to variable returns from the investee,
and the ability of the investor to use its power to affect those
variable returns. Control is reassessed whenever facts and
circumstances indicate that there may be a change in any of these
elements of control. The financial statements of subsidiaries are
included in the consolidated financial statements from the date
that control commences until the date that control
ceases.
The results of subsidiary undertakings acquired
or disposed of in the year are included in the Group statement of
comprehensive income from the effective date of acquisition or to
the effective date of disposal. Accounting policies are
consistently applied throughout the Group. Inter-company balances
and transactions have been eliminated. Material profits from
intercompany sales, to the extent that they are not yet realised
outside the Group, have also been eliminated.
Where the Group has the power to participate in
(but not control) the financial and operating policy decisions of
another entity, it is classified as an associate. Investments in
associates are accounted for using the equity method of accounting
after initially being recognised at cost.
Under the equity method of accounting, the
Group's investments in associates are initially recognised at cost
and adjusted thereafter to recognise the Group's share of
post-acquisition profits and losses and other comprehensive income
in the consolidated statement of profit and loss and other
comprehensive income.
Dividends received or receivable from
associates are recognised as a reduction in the carrying amount of
the investment.
When the Group's share of losses in an
equity-accounted investment equals or exceeds its interest in the
entity, including any other unsecured long-term receivables, the
Group does not recognise further losses unless it has incurred
obligations or made payments on behalf of the other
entity.
Unrealised gains on transactions between the
Group and its associates are eliminated to the extent of the
Group's interest in these entities. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
Accounting policies of equity accounted
investees have been changed where necessary to ensure consistency
with the policies adopted by the Group.
Foreign
currency translation
The individual financial statements of each
Group company are presented in the currency of the primary economic
environment in which it operates (its functional
currency).
In preparing the financial statements of the
individual companies, transactions in currencies other than the
entity's functional currency (foreign currencies) are recorded at
the rates of exchange prevailing on the dates of the
transactions.
At each reporting date, monetary assets and
liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing at that date. Non-monetary
items that are measured in terms of historical cost in a foreign
currency are not retranslated.
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, including goodwill arising on
the acquisition of those 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
over-
seas operations at actual rate are recognised
in other comprehensive income and accumulated in the foreign
exchange reserve.
Exchange differences arising on the settlement
of monetary items, and on the retranslation of monetary items, are
charged to the consolidated statement of comprehensive
income.
Business
combinations
In accordance with IFRS 3 "Business
Combinations", the fair value of consideration paid for a business
combination is measured as the aggregate of the fair values at the
date of exchange of assets given and liabilities incurred or
assumed in exchange for control.
The assets, liabilities and contingent
liabilities of the acquired entity are measured at fair value as at
the acquisition date. When the initial accounting for a business
combination is determined, it is done so on a provisional basis
with any adjustments to these provisional values made within 12
months of the acquisition date and are effective as at the
acquisition date.
Where a business combination agreement provides
for an adjustment to the cost of a business acquired contingent on
future events, the Group accrues the fair value of the additional
consideration payable as a liability at acquisition date. This
amount is reassessed at each subsequent reporting date with any
adjustments recognised in the consolidated statement of
comprehensive income.
Transaction costs are expensed to the statement
of comprehensive income as incurred. Acquisition-related employment
costs are accrued over the period in which the related services are
received and are recorded as exceptional costs.
Revenue
Revenue represents the amounts derived from the
provision of services, stated net of Value Added Tax. The
methodology applied to income recognition is dependent upon the
services being supplied.
In respect of income relating to annual or
multi-year service contracts and/or hosted services which are
invoiced in advance, it is the Group's policy to recognise revenue
on a straight-line basis over the period of the contract. This is
considered a faithful depiction of the transfer of services to the
customer because they are provided access to the Group's software
for the duration of the contract period. The full value of each
sale is credited to contract liabilities when invoiced to be
released to the statement of comprehensive income in equal
instalments over the contract period.
During the course of a customer's relationship
with the Group, their system may be upgraded. These upgrades can be
separated into two distinct types:
·
Specific upgrades, i.e. moving from an old legacy system to
one of the Group's latest products. This would require the
migration of the customer's data from the old system and the set-up
of their new system; and
·
Non-specific upgrades, i.e. enhancements to customers'
systems as a result of internal development effort to improve the
stability or functionality of the platform for all
customers.
Customers do not have a contractual right to
non-specific upgrades and therefore, the provision of these
non-specific upgrades are accounted for as part of the related
service contract as explained above.
For specific upgrades, customers are required
to purchase these separately through signing a new contract which
sets out the one-off professional service fee for the upgrade to
cover migration costs and any increase in their annual subscription
fee. The provision of this specific upgrade is therefore, accounted
for as a separate service contract as explained above.
The Group does not have any further obligations
that it would have to provide for under the subscription
arrangements.
In respect of income derived from the provision
of research and insights projects, which are based on fixed price
contracts with specified performance obligations and for which
customers are invoiced based on a payment schedule over the term of
the contract, it is the Group's policy to recognise revenue to
reflect the benefit received by the customer. The proportion of
revenue recognised is based on the output method using milestones
completed, such as the delivery of insight reports to a
customer.
The Group does not have any further obligations
that it would have to provide for under its arrangements
for
provision of research and insights
projects.
Cost of
sales
Cost of sales comprises third party costs
directly related to the provision of services to
customers.
Non-IFRS Key
performance indicators
The Group uses EBITDA and Adjusted EBITDA as
the Directors believe the disclosure provides additional
information on the core operational performance of the Group. For
more information and definition, please the Strategic Report within
the annual report.
Leases
All leases are now considered under IFRS 16. A
right of use asset and lease liability are recognised in
the
Consolidated Statement of Financial Position.
The right of use asset is amortised on a straight-line basis to the
consolidated statement of comprehensive income. Lease liabilities
increase as a result of interest charged at a constant rate on the
balance outstanding and are reduced for lease payments made. The
interest expense is recognised in the consolidated statement of
comprehensive income. Where leases are modified the right of use
asset and lease liability are remeasured at the date of
modification to account for the modification.
Finance income
and finance expenses
Finance income and finance expenses are
recognised in profit or loss as they accrue, using the effective
interest method. Finance income relates to interest income on the
Group's bank account balances.
Interest payable comprises interest payable or
finance charges on loans classified as liabilities.
Dividend
distributions
Dividend distributions are recognised as
transactions with owners on payment when liability to pay is
established.
Intangible
assets - Goodwill
Goodwill represents amounts arising on
acquisition of subsidiaries. Goodwill represents the difference
between the cost of the acquisition and the fair value of the net
identifiable assets and contingent liabilities
acquired. Identifiable intangible assets are
those which can be sold separately or which arise from legal rights
regardless of whether those rights are separable.
Goodwill on acquisition of subsidiaries is
included in intangible assets. Goodwill is allocated to cash
generating units and is not amortised but is tested annually for
impairment.
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 profit or
loss.
Intangible
assets - research and development expenditure
Research costs are expensed as incurred.
Development expenditures on an individual project are recognised as
an intangible asset when the Group can demonstrate:
· the
technical feasibility of completing the intangible asset so that
the asset will be available for use or sale;
· its
intention to complete and its ability and intention to use or sell
the asset;
· how
the asset will generate future economic benefits;
· the
availability of resources to complete the asset; and
· the
ability to measure reliably the expenditure during
development.
Following initial recognition of the
development expenditure as an asset, the asset is carried at cost
less any accumulated amortisation and accumulated impairment
losses.
Amortisation of the asset begins from the date
development is complete and the asset is available for use, which
may be before first sale. It is amortised over the period of
expected future benefit. Amortisation
is charged to the consolidated statement of
comprehensive income. During the period of development, the asset
is tested for impairment annually.
In 2023 there were twenty-three (2022:
Thirty-one) capitalised development projects. The projects
undertaken in the current and prior year relate to the development
of new functionality within the Vuelio and Pulsar platforms. The
directors assessed the capitalisation criteria of its internally
generated material intangible assets through a review of the output
of the work performed, the specific costs proposed for
capitalisation, the likely completion of the work and the likely
future benefits to be generated from the work. The directors assess
the useful life of the completed capitalised development projects
to be five years from the date of the first sale or when benefits
begin to be realised and amortisation will begin at that
time.
Intangible
assets - database
On acquisition of businesses in prior years, a
fair value was calculated in respect of the PR and media contacts
databases acquired. Subsequent expenditure on maintaining this
database is expensed as incurred.
Amortisation is calculated on a straight-line
basis over the estimated useful economic life of the database. It
is the directors' view that this useful economic life is three
years based on the level of ongoing investment required to maintain
the quality of data in the database.
Intangible
assets - customer relationships
On acquisition of businesses in the current and
prior years, a fair value was calculated in respect of the customer
relationships acquired. Amortisation is calculated on a
straight-line basis over the estimated useful economic life of the
customer relationships. It is the directors' view that this useful
economic life is up to 14 years, based on known and forecast
customer retention rates.
Intangible
assets - brand value
Acquired brands, which are controlled through
custody or legal rights and could be sold separately from the rest
of the Group's businesses, are capitalised where fair value can be
reliably measured. The Group applies a straight-line amortisation
policy on all brand values.
The conclusion is that a realistic life for the
brand equity would be up to a 'generation' or 20 years. Where there
is an indication of impairment, the directors will perform an
impairment review by analysing the future discounted cash flows
over the remaining life of the brand asset to determine whether
impairment is required.
Software
licences
Software licences include software that is not
integral to a related item of hardware. These items are stated at
cost less accumulated amortisation and any impairment. Amortisation
is calculated on a straight-line basis over the estimated useful
economic life. Although perpetual licences are maintained under
support and maintenance agreements, a useful economic life of five
years has been determined.
Impairment of
non-financial assets
An impairment loss is recognised whenever the
carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in the profit
or loss within non-recurring admin expenses.
Impairment losses recognised in respect of
cash-generating units are allocated first to the carrying amount of
the goodwill allocated to that cash-generating unit and then to the
carrying amount of the other assets in the unit on a pro rata
basis, applied in priority to non-current assets ahead of more
liquid items. A cash-generating unit is the smallest identifiable
group of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of
assets.
Financial
instruments
Financial
assets
Financial assets are measured at amortised
cost, fair value through other comprehensive income (FVTOCI) or
fair value through profit or loss (FVTPL). The measurement basis is
determined by reference to both the business model for managing the
financial asset and the contractual cash flow characteristics of
the financial asset. The Group's financial assets comprise of trade
and other receivables and cash and cash equivalents.
Trade
receivables
Trade receivables are measured at amortised
cost and are carried at the original invoice amount less allowances
for expected credit losses.
Expected credit losses are calculated in
accordance with the simplified approach permitted by IFRS 9, using
a provision matrix applying lifetime historical credit loss
experience to the trade receivables.
The expected credit loss rate varies depending
on whether, and the extent to which, settlement of the trade
receivables is overdue and it is also adjusted as appropriate to
reflect current economic conditions and estimates of future
conditions. For the purpose of determining credit loss rates,
customers are classified into groupings that have similar loss
patterns. The key drivers of the loss rate are the aging of the
debtor, the geographic location and the Company sector (public vs
private). When a trade receivable is determined to have no
reasonable expectation of recovery it is written off, firstly
against any expected credit loss allowance available and then to
the statement of comprehensive income. Subsequent recoveries of
amounts previously provided for or written off are credited to the
statement of comprehensive income. Long-term receivables are
discounted where the effect is material.
Cash and cash
equivalents
Cash held in deposit accounts is measured at
amortised cost.
Financial
liabilities
The Group's financial liabilities consist of
trade payables, loans and borrowings, and other financial
liabilities. Trade payables are non-interest bearing. Trade
payables initially recognised at their fair value and subsequently
measured at amortized cost. Loans and borrowings and other
financial liabilities, which include the liability component of
convertible redeemable loan notes, are initially measured at fair
value, net of transaction costs, and are subsequently measured at
amortised cost using the effective interest rate method. Interest
expense is measured on an effective interest rate basis and
recognised in the statement of comprehensive income over the
relevant period.
Provisions
Provisions are recognised when there is a
present obligation (legal or constructive) as a result of a past
event, it is probable that the obligation will be required to be
settled, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best
estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account
the risks and uncertainties surrounding the obligation. Provisions
are discounted when the time value of money is material.
Deferred
income
The Group's customer contracts include a
diverse range of payment schedules dependent upon the nature and
type of services being provided. The Group often agrees payment
schedules at the inception of long-term contracts under which it
receives payments throughout the term of contracts. These payment
schedules may include progress payments as well as regular monthly
or quarterly payments for ongoing service delivery. Payments for
transactional services may be at delivery date, in arrears or in
advance.
A contract liability is the obligation to
transfer goods or services to a customer for which the Group has
received consideration (or an amount of consideration is due) from
the customer. If a customer pays consideration before the Group
transfers goods or services to the customer, a contract liability
is recognised when the payment is made or the payment is due
(whichever is earlier). Contract liabilities are recognised as
revenue when the Group performs under the contract. The aggregate
amount is disclosed in Note 16.
Current and
deferred income tax
The tax expense for the year comprises current
and deferred tax. Tax is recognised in the consolidated statement
of comprehensive income except to the extent that it relates to
items recognised directly in equity, in which case it is recognised
in equity.
Current tax is the expected tax payable on the
taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to
tax payable in respect of previous years.
Deferred tax is provided on temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation
purposes. The following temporary differences are not provided for:
the initial recognition of goodwill; the initial recognition of
assets or liabilities that affect neither accounting nor taxable
profit other than in a business combination, and differences
relating to investments in subsidiaries to the extent that they
will probably not reverse in the foreseeable future. The amount of
deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at
the reporting date.
The recognition of deferred tax assets is based
upon whether it is more likely than not that sufficient and
suitable taxable profits will be available in the future, against
which the reversal of temporary differences can be deducted.
Recognition, therefore, involves judgement regarding the future
financial performance of the particular legal entity or tax group
in which the deferred tax asset has been recognised. Historical
differences between forecast and actual taxable profits have not
resulted in material adjustments to the recognition of deferred tax
assets.
Share-based
payments
The Group issues equity-settled share-based
payments to certain employees. These equity-settled share-based
payments are measured at fair-value at the date of the grant. The
fair value as determined at the grant date is expensed on a
straight-line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest. Fair value is
measured by use of the Monte Carlo method. The charges to profit or
loss are recognised in the subsidiary employing the individual
concerned.
Employee
benefits
Individual subsidiaries of the Group operate
defined contribution pension schemes for their employees. The
assets of the schemes are not managed by the Group and are held
separately from those of the Group. The annual contributions
payable are charged to the statement of comprehensive income when
they fall due for payment.
3.
Revenue
The Group's revenue is primarily derived from
the rendering of services. The Group's revenue was generated from
the following territories:
|
2023
£'000
|
2022
£'000
|
United Kingdom
|
22,353
|
20,659
|
North America
|
2,875
|
2,586
|
Europe excluding UK
|
2,129
|
1,844
|
Australia and New Zealand
|
26,530
|
30,876
|
Asia
|
8,010
|
8,797
|
Rest of the world
|
505
|
948
|
TOTAL
|
62,402
|
65,710
|
4. Segment
reporting
Segment information is presented in respect of
the Group's operating segments which are based upon the Group's
management and internal business reporting. Segment results, assets
and liabilities include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly head office expenses.
No single customer generates more than 10% of
the Group's revenue. The Group operating segments have been decided
upon according to the geographic markets in which they operate
being the information provided to the Chief Executive Officer and
the Board, given both regions provide the same products and
services
EMEA & NA covers the United Kingdom, Europe
and North America. APAC covers Australia, New Zealand and Southeast
Asia.
The segment information for the year ended 30
November 2023, is as follows:
|
EMEA & NA
|
APAC
|
Total
|
2023
|
£'000
|
£'000
|
£'000
|
External
revenue
|
28,193
|
34,209
|
62,402
|
Adjusted
EBITDA
|
471
|
6,792
|
7,263
|
Non-recurring costs
|
(2,692)
|
(6,296)
|
(8,988)
|
Share of loss of associate
|
(198)
|
-
|
(198)
|
Share-based payments
|
(764)
|
(151)
|
(915)
|
Depreciation and amortisation
|
(3,916)
|
(3,838)
|
(7,754)
|
Financial income
|
10
|
2
|
12
|
Financial expense
|
784
|
(1,037)
|
(253)
|
Taxation
|
238
|
2,693
|
2,931
|
(Loss) After
Tax
|
(6,067)
|
(1,835)
|
(7,902)
|
Reportable segment assets
|
46,032
|
44,657
|
90,689
|
Reportable segment liabilities
|
22,634
|
18,369
|
41,003
|
Other information: Additions to intangible
assets
|
5,309
|
3,266
|
8,575
|
Other information: Additions to property, plant
and equipment
|
76
|
433
|
509
|
Other information: Investment in associate -
equity method
|
264
|
-
|
264
|
The segment information for the year ended 30
November 2022, is as follows:
|
EMEA & NA
|
APAC
|
Total
|
2022
|
£'000
|
£'000
|
£'000
|
External
revenue
|
26,462
|
39,248
|
65,710
|
Adjusted
EBITDA
|
(113)
|
2,440
|
2,327
|
Non-recurring costs
|
(1,920)
|
705
|
(1,215)
|
Share of loss of associate
|
(254)
|
-
|
(254)
|
Share-based payments
|
(925)
|
(196)
|
(1,121)
|
Depreciation and amortisation
|
(3,281)
|
(3,663)
|
(6,944)
|
Financial income
|
10
|
4
|
14
|
Financial expense
|
731
|
(1,026)
|
(295)
|
Taxation
|
685
|
2,610
|
3,295
|
(Loss)/profit
After Tax
|
(5,067)
|
874
|
(4,193)
|
Reportable segment assets (restated)
|
47,209
|
46,467
|
93,676
|
Reportable segment liabilities
(restated)
|
19,015
|
14,287
|
33,302
|
Other information: Additions to intangible
assets
|
4,191
|
3,855
|
8,046
|
Other information: Additions to property, plant
and equipment
|
116
|
390
|
506
|
Other information: Investment in associate -
equity method
|
462
|
-
|
462
|
Deferred income and
trade debtors have been restated see Note 26 of the financial
statements
5. Operating
loss
Operating loss is stated after
charging:
|
2023
|
2022
|
|
£'000
|
£'000
|
Employee benefit expenses before capitalised
costs
|
34,344
|
38,801
|
Depreciation of property, plant and
equipment
|
524
|
746
|
Depreciation charge
|
1,526
|
2,140
|
Amortisation of development costs
|
3,573
|
1,687
|
Amortisation of acquired software
platforms
|
1,013
|
1,213
|
Amortisation of brand values
|
212
|
217
|
Amortisation of software licences
|
66
|
58
|
Amortisation of database
|
-
|
5
|
Amortisation of customer list
|
840
|
878
|
Loss on disposal of property, plant and
equipment
|
20
|
-
|
(Profit) /Loss on foreign currency
translation
|
89
|
(106)
|
Non-recurring items (see below)
|
8,988
|
1,215
|
Auditor's remuneration (see below)
|
589
|
549
|
Research and development and other
technical
|
646
|
2,289
|
expenditure (a further £8,498,000 (2022:
£7,986,000) was capitalised)
|
|
|
Increase/(decrease) in expected credit loss
provision
|
120
|
(190)
|
Non-recurring
items
The non-recurring costs are made up of the
following:
|
|
|
Non-recurring salary costs - integration and
restructuring
|
7,231
|
3,715
|
Non-recurring duplicated technology
costs
|
1,888
|
-
|
Non-recurring copyright related
expense/(income)
|
528
|
(2,703)
|
Non-recurring expense - other
|
321
|
203
|
Non-recurring income - business rates
overprovision
|
(980)
|
-
|
TOTAL
|
8,988
|
1,215
|
Auditor's remuneration is further analysed
as:
|
|
|
|
|
|
Fees payable to the Company's auditor for the
audit of the Company's annual accounts
|
241
|
287
|
The audit of the Company's subsidiaries,
pursuant to legislation
|
348
|
262
|
TOTAL
|
589
|
549
|
6. Particulars
of employees
The average number of persons (including
directors) employed by the Group during the year was:
|
2023
|
2022
|
Technical and support
|
168
|
263
|
Commercial
|
777
|
757
|
Finance and administration
|
83
|
81
|
|
1,028
|
1,101
|
The average number of persons (including
directors) employed by the Group during the year was:
Costs incurred in respect of these
employees were:
|
2023
£'000
|
2022
£'000
|
Wages and salaries costs
|
27,994
|
32,126
|
Social security costs
|
1,656
|
2,361
|
Pension costs
|
1,978
|
1,608
|
Health insurance
|
219
|
196
|
Employee benefits
|
1,575
|
2,486
|
Compensation for loss of office
|
926
|
24
|
|
34,348
|
38,801
|
The compensation for loss of office charge of
£926,000 (2022: £24,000) relates to 66 employees (2022: 4) who were
made redundant during the year.
The reportable key management personnel are
considered to be comprised of the Company directors, the
remuneration for whose services during the year is detailed
below.
Directors'
remuneration
|
Salaries
£
|
Fees
£
|
2023
£
|
2022
£
|
Executive Directors
|
|
|
|
|
J Arnold
|
400,000
|
-
|
400,000
|
360,876
|
M Fautley
|
250,000
|
-
|
250,000
|
250,000
|
Non-Executive
Directors
|
|
|
|
|
C Satterthwaite
|
-
|
80,000
|
80,000
|
80,000
|
C Pilling
|
-
|
40,000
|
40,000
|
40,000
|
K Puris
|
-
|
16,667
|
16,667
|
40,000
|
L Gilbert
|
-
|
40,000
|
40,000
|
40,000
|
S Vawda
|
-
|
50,625
|
50,625
|
47,500
|
M Jackson
|
-
|
-
|
-
|
18,205
|
TOTAL
|
650,000
|
227,292
|
877,292
|
876,581
|
K Puris resigned on the 03 March
2023.
J Arnold received payments into a personal
retirement money purchase pension scheme during the year of £40,000
(2022: £42,348).
M Fautley received health insurance benefits
during the year of £992 (2022: £788). M Fautley received payments
into a personal retirement money purchase pension scheme during the
year of £18,750 (2022: £25,000) and pension allowance of £5,490
(2022: £Nil). No other directors received any other benefits other
than those detailed above.
The directors who have served during the year
and details of their interests, including family interests, in the
Company's ordinary 5p shares at 30 November 2023 are disclosed
below:
|
30 Nov 23
Beneficial No.
|
Share options
granted
|
30 Nov 23
Options No.
|
30 Nov 22
Beneficial
No.
|
Share
options
granted
|
30 Nov 22
Options
No.
|
J Arnold
|
754,281
|
-
|
1,600,000
|
754,281
|
-
|
1,600,000
|
M Fautley
|
94,596
|
-
|
39,603
|
94,596
|
-
|
39,603
|
C Satterthwaite
|
79,811
|
-
|
400,000
|
79,811
|
-
|
400,000
|
C Pilling
|
50,000
|
-
|
19,801
|
50,000
|
-
|
19,801
|
K Puris
|
-
|
-
|
-
|
-
|
-
|
19,801
|
L Gilbert
|
-
|
-
|
19,801
|
-
|
-
|
19,801
|
S Vawda**
|
16,666
|
-
|
19,801
|
16,666
|
-
|
19,801
|
TOTAL
|
995,354
|
-
|
2,099,006
|
995,354
|
-
|
2,118,807
|
7. Financial
expense
|
|
|
2023
£'000
|
2022
£'000
|
Interest charge in respect of lease
liabilities
|
229
|
278
|
Other interest
|
24
|
17
|
Total
financial expense
|
253
|
295
|
8.
Taxation
|
2023
£'000
|
2022
£'000
|
Current income
tax
|
|
|
UK corporation tax credit for the
year
|
92
|
-
|
Adjustment in respect of prior year
|
5
|
(583)
|
Double Taxation Relief
|
(92)
|
-
|
Foreign taxation
|
150
|
181
|
Adjustment in respect of prior periods (foreign
tax)
|
22
|
-
|
Total current income tax credit
|
177
|
(402)
|
Deferred tax
(Note 21)
|
|
|
Origination and reversal of temporary
differences
|
(3,110)
|
(2,833)
|
Adjustments in respect of prior
periods
|
2
|
(60)
|
Total deferred
tax
|
(3,108)
|
(2,893)
|
Total tax
credit
|
(2,931)
|
(3,295)
|
As shown below the tax assessed on the loss on
ordinary activities for the year is lower than (2022: lower than)
the standard rate of corporation tax in the UK of 23% (2022:
19%).
The differences are explained as
follows:
|
2023
|
2022
|
Factors
affecting tax credit
|
£'000
|
£'000
|
Loss on ordinary activities before
tax
|
(10,833)
|
(7,488)
|
Loss on ordinary activities multiplied by
effective rate of tax
|
(2,492)
|
(1,423)
|
Items not deductible for tax
purposes
|
767
|
(976)
|
Adjustment in respect of prior years
|
(1,086)
|
(476)
|
Additional R&D claim CTA 2009
|
(149)
|
(240)
|
Deferred tax not recognised
|
29
|
(180)
|
Total tax
credit
|
(2,931)
|
(3,295)
|
Factors that may affect future tax expenses The
corporation tax rate was increased from 19% to 25% on 1 April 2023.
The corporation tax rate of 25% remains the same from 1 April
2024.Notes to the consolidated financial statements
9. Earnings
per share
In 2023 and 2022 potential ordinary shares from
the share option schemes have an anti-dilutive effect due to the
Group being in a loss making position. As a result, dilutive loss
per share is disclosed as the same value as basic loss per share.
This has been computed as follows:
Numerator
|
2023
£'000
|
2022
£'000
|
Loss for the year and earnings used in basic
EPS
|
(11,603)
|
(1,766)
|
Earnings used in diluted EPS
|
(11,603)
|
(1,766)
|
Denominator
|
|
|
Weighted average number of shares used in basic
EPS ('000)
|
127,699
|
127,643
|
Effects
of:
|
|
|
Dilutive effect of options
|
N/A
|
N/A
|
Dilutive effect of loan note
conversion
|
N/A
|
N/A
|
Weighted average number of shares used in
diluted EPS ('000)
|
127,699
|
127,643
|
Basic loss per
share (pence)
|
(9.09)
|
(1.38)
|
Diluted loss
per share for the year (pence)
|
(9.09)
|
(1.38)
|
The total number of options or warrants granted
at 30 November 2023 of 6,893,987 (2022: 7,037,524), would generate
£3,757,862 (2022: £3,849,181) in cash if exercised. At 30 November
2023, 1,806,045 options (2022: 294,130) were priced above the
mid-market closing price of 57p per share (2022: 87.5p per share)
and 5,087,942 (2022: 6,743,394) were below. Of the 6,893,987
options and warrants at 30 November 2023, 3,578,654 (2022:
3,600,654) staff options and 1,390,481 (2022: 1,390,481) warrants
were eligible for exercising. The warrants are priced at 27.5p per
share held by Elderstreet VCT plc and other individuals consequent
to an initial investment in the Company in October
2008.
10. Intangible
fixed assets
|
Brand value
|
Goodwill
|
Development
costs and
acquired
software platforms
|
Software Licenses
|
Database
|
Customer relationships
|
Total
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Cost
|
|
|
|
|
|
|
|
At 30 November
2021
|
2,945
|
37,897
|
18,712
|
509
|
1,290
|
12,007
|
73,360
|
Capitalised during the year
|
-
|
-
|
7,986
|
60
|
-
|
-
|
8,046
|
Foreign exchange movement
|
34
|
1,319
|
266
|
-
|
-
|
440
|
2,059
|
At 30 November
2022
|
2,979
|
39,216
|
26,964
|
569
|
1,290
|
12,447
|
83,465
|
Capitalised during the year
|
-
|
-
|
8,498
|
77
|
-
|
-
|
8,575
|
Foreign exchange movement
|
(55)
|
(2,122)
|
(712)
|
(9)
|
-
|
(724)
|
(3,622)
|
At 30 November
2023
|
2,924
|
37,094
|
34,750
|
637
|
1,290
|
11,723
|
88,418
|
Amortisation
and impairment
|
|
|
|
|
|
|
|
At 30 November
2021
|
957
|
|
6,090
|
402
|
1,285
|
1,392
|
10,126
|
Charge for the year
|
217
|
-
|
2,901
|
57
|
5
|
878
|
4,058
|
Foreign exchange movement
|
1
|
-
|
5
|
-
|
-
|
6
|
12
|
At 30 November
2022
|
1,175
|
|
8,996
|
459
|
1,290
|
2,276
|
14,196
|
Charge for the year
|
212
|
-
|
4,586
|
66
|
-
|
840
|
5,704
|
Foreign exchange movement
|
(13)
|
-
|
13
|
(10)
|
-
|
(93)
|
(103)
|
At 30 November
2023
|
1,374
|
-
|
13,595
|
515
|
1,290
|
3,023
|
19,797
|
Net Book
Value
|
|
-
|
|
|
|
|
|
At 30 November
2023
|
1,550
|
37,094
|
21,156
|
121
|
-
|
8,700
|
68,621
|
At 30 November
2022
|
1,804
|
39,216
|
17,968
|
110
|
-
|
10,171
|
69,269
|
Acquisition related intangibles Brand value,
Goodwill, Database, Customer relation- ships and acquired software
platforms are acquisition related intangibles. Of the £4,586,000
(2022: £2,901,000) amortisation charge on Development costs and
acquired software platforms, £1,013,000 (2022: £1,213,000) relates
to acquired software platforms, bringing the total amortisation on
acquisition related intangibles to £2,065,000 (2022: £2,313,000).
Amortisation on internally generated intangibles totals £3,639,000
(2022: £1,745,000).
The carrying value and remaining amortisation
period of individually material intangible assets are as
follows:
|
Carrying amount
|
Remaining amortisation
period
|
Brand
|
2023
£'000
|
2022
£'000
|
2023
Years
|
2022
£
|
Access Intelligence Media and
Communications
|
420
|
480
|
7
|
8
|
ResponseSource
|
228
|
243
|
15
|
16
|
Pulsar
|
383
|
407
|
17
|
17
|
Isentia
|
520
|
640
|
5
|
6
|
Development
costs and acquired software platforms
|
|
|
|
|
AIMediaData - Vuelio Platform
Development
|
4,976
|
4,348
|
3
|
3
|
ResponseSource - Platform
Development
|
-
|
401
|
-
|
1
|
Pulsar - Platform Development
|
5,415
|
3,299
|
4
|
3
|
Isentia - Platform Development
|
10,765
|
9,920
|
6
|
7
|
Customer
relationships
|
|
|
|
|
ResponseSource - Acquired Customer
Relationships
|
490
|
614
|
4
|
5
|
Isentia - Acquired Customer
Relationships
|
8,210
|
9,558
|
6
|
7
|
For the purposes of impairment testing,
goodwill is allocated to the Group's CGUs which are the lowest
level within the Group at which goodwill is monitored.
The carrying value of goodwill allocated to
CGUs within the Group is:
|
2023
|
2022
|
Goodwill
|
£'000
|
£'000
|
EMEA & NA
|
7,740
|
7,740
|
APAC
|
29,354
|
31,476
|
At the reporting date, impairment tests were
undertaken by comparing the carrying values of CGUs with their
recoverable amounts. The recoverable amounts of the CGUs are based
on value-in-use calculations. These calculations use pre-tax cash
flow projections covering a five-year period based on approved
budgets and forecasts in the first three years, followed by
applying specific growth rates for which the key assumptions in
respect of annual revenue growth rates of 7.5% in years 3 to 5 and
2.5% thereafter.
The key assumptions used for value-in-use
calculations are those regarding revenue growth rates and discount
rates over the forecast period. Growth rates are based on past
experience, the anticipated impact of the CGUs significant
investment in research and development, and expectations of future
changes in the market.
The pre-tax discount rates used for both the
EMEA & NA and APAC CGUs was 14%, based on an assessment of the
Group's cost of capital and on comparison with other listed
technology companies.
The terminal growth rate used for the purposes
of goodwill impairment assessments was 2.5%. The Board considered
that no impairment to goodwill is necessary based on the
value-in-use reviews of EMEA & NA or APAC as the value-in-use
calculations exceeded the carrying values of goodwill relating to
those companies. Sensitivity analysis has been performed on
reasonably possible changes in assumptions upon which recoverable
amounts have been estimated. Based on the sensitivity analysis, a
reduction of 54.5% in EBITDA delivered by EMEA & NA would
result in the carrying value of its CGU being equal to the
recoverable amount. For APAC, a 18.2% reduction in EBITDA would
result in the carrying value of its CGU being equal to the
recoverable amount.
For EMEA & NA, a 36.2% percentage point
increase in the discount rate would result in the carrying value of
its CGU being equal to the recoverable amount. For APAC, a 3.1%
percentage point increase in the discount rate would result in the
carrying value of its CGU being equal to the recoverable
amount.
Other
impairments
Other intangible assets are tested for
impairment if indicators of an impairment exist. Such indicators
include performance falling short of expectation.
The directors considered that there were no
indicators of impairment relating to the intangible fixed assets at
30 November 2023.
11. Investment
in associate
|
2023
£'000
|
2022
£'000
|
Cost
|
|
|
At 1 December
|
1,872
|
1,872
|
Additions
|
-
|
-
|
At 30 November
|
1,872
|
1,872
|
Share of loss of associate and
impairment
|
|
|
At 1 December
|
1,410
|
1,156
|
Share of loss of associate
|
198
|
254
|
At 30 November
|
1,608
|
1,410
|
Net Book Value
|
|
|
At 1
December
|
462
|
716
|
At 30
November
|
264
|
462
|
As part of the consideration for the disposal
of AITrack Record Limited, the Group received a 20% shareholding in
TrackRecord Holdings Limited, a company registered in England and
Wales. The fair value of this shareholding based on the funding
raised by TrackRecord Holdings Limited was £625,000.
In the prior year, the Group invested a further
£887,000 in TrackRecord Holdings Limited, as part of a £3,000,000
fundraising round. This increased the Group's overall shareholding
in TrackRecord Holdings Limited to 21.4%.
The shareholding in TrackRecord Holdings
Limited is treated as an investment in associate as the Group is
not able to exercise control over the Company, but is able to
exercise significant influence over the Company by way of its 21.4%
shareholding and through J Arnold being the Group's representative
on the board of Track- Record Holdings Limited.
During the year, the Group's share of the loss
of TrackRecord Holdings Limited was £198,000 (2022: £254,000). As
the Group applies the equity method of accounting for its
investment in TrackRecord Holdings Limited, the carrying value of
investments in associates is reduced by this share of loss at the
year end.
During the year ended 30 November 2019, the
Group made available a loan facility of £100,000 to Track- Record
Holdings Limited on an unsecured basis. The final repayment date of
the facility is November 2029 and interest is payable at a rate of
10% on any amount drawn down. The full £100,000 of this loan
facility was drawn down in 2020. The loan has been treated as an
addition to the Group's investment in TrackRecord Holdings
Limited.
As part of the agreement, TrackRecord Holdings
Limited paid the Group a commitment fee of £2,000 in November 2019.
The total value drawn down by Track-Record Holdings Limited at 30
November 2023 was £100,000 (2022: £100,000).
An impairment assessment has been carried out
in accordance with IAS 28 paragraphs 41A - 41C to deter- mine
whether there is any objective evidence that the net investment in
the associate is impaired. Based on two year forecasts, we have
assessed revenue growth, recurring revenue and increases in costs
of sales, using an appropriate discount rate, and performed
sensitivity analysis on these forecasts based on past performance
against prior year forecasts. Under these sensitised forecasts, we
have determined that the business's discounted cash flow exceeds
both the Group's and Company's investment carrying values at 30
November 2023, and therefore no impairment is required, although
this will be reviewed again at 30 November 2024.
Summarised
financial information for associate
The tables below provide summarised financial
information for TrackRecord Holdings Limited, an associate which is
considered material to the Group. The information disclosed
reflects the amounts presented in the financial statements of
TrackRecord Holdings Limited and not Pulsar Groups Plc's (formerly
Access Intelligence PLC) share of those amounts.
|
TrackRecord Holdings
Limited
|
TrackRecord Holdings
Limited
|
2023
|
2022
|
£'000
|
£'000
|
Total current assets
|
807
|
1,417
|
Total non-current assets
|
762
|
778
|
Total current liabilities
|
(1,980)
|
(1,681)
|
Net
assets
|
(411)
|
514
|
Pulsar Group
Plc share of net assets (21.4%)
|
(88)
|
110
|
|
TrackRecord Holdings
Limited
|
TrackRecord Holdings
Limited
|
2023
|
2022
|
Reconciliation
to carrying amounts
|
£'000
|
£'000
|
Opening net assets on 1 December
|
514
|
1,701
|
Loss for the period
|
(925)
|
(1,187)
|
Issue of new share capital
|
-
|
-
|
Net
assets
|
(411)
|
514
|
|
2023
|
2022
|
Summarised
statement of comprehensive income
|
£'000
|
£'000
|
Revenue
|
2,581
|
2,238
|
Loss for the period
|
(925)
|
(1,187)
|
Other comprehensive income
|
-
|
-
|
Total
comprehensive income
|
(925)
|
(1,187)
|
|
|
|
|
12. Property,
plant and equipment
|
Fixtures, fitting and
equipment
|
Leasehold improvements
|
Total
|
£'000
|
£'000
|
£'000
|
Cost
|
|
|
|
At 1 December
2021
|
1,334
|
787
|
2,121
|
Additions
|
348
|
158
|
506
|
Disposals
|
(364)
|
(220)
|
(584)
|
Foreign exchange movement
|
125
|
37
|
162
|
At 30 November
2022
|
1,443
|
762
|
2,205
|
Additions
|
186
|
323
|
509
|
Disposals
|
-
|
(628)
|
(628)
|
Foreign exchange movement
|
(22)
|
(82)
|
(104)
|
At 30 November
2023
|
1,607
|
375
|
1,982
|
Depreciation
and impairment
|
|
|
|
At 1 December
2021
|
587
|
454
|
1,041
|
Charge for the year
|
433
|
314
|
747
|
Disposals
|
(364)
|
(220)
|
(584)
|
Foreign exchange movement
|
111
|
29
|
140
|
At 30 November
2022
|
767
|
577
|
1,344
|
Charge for the year
|
363
|
161
|
524
|
Disposals
|
-
|
(608)
|
(608)
|
Foreign exchange movement
|
(1)
|
(70)
|
(71)
|
At 30 November
2023
|
1,129
|
60
|
1,189
|
Net Book Value
|
|
|
|
At 30 November
2023
|
478
|
315
|
793
|
At 30 November
2022
|
676
|
185
|
861
|
13. Trade and
other receivables
|
|
|
2023
£'000
|
Restated
2022
£'000
|
Current
assets
|
|
|
Trade receivables
|
5,318
|
6,280
|
Less: provision for impairment of trade
receivables
|
(265)
|
(304)
|
Trade receivables - net
|
5,053
|
5,976
|
Prepayments
|
2,256
|
2,999
|
Commission prepayments
|
1,700
|
1,280
|
Other receivables
|
756
|
641
|
|
9,765
|
10,896
|
|
|
|
|
|
|
Deferred income
and trade debtors have been restated see Note 26 of the financial
statements.
All trade receivables are reviewed by
management and are considered collectable. The ageing of trade
receivables which are past due and not impaired is as
follows:
|
2023
£'000
|
2022
£'000
|
Days outstanding
|
|
|
31-60 days
|
868
|
330
|
61-90 days
|
409
|
138
|
91-180 days
|
564
|
357
|
|
1,841
|
825
|
Movements on the Group provision for impairment
of trade receivables are as follows:
|
|
|
|
2023
£'000
|
2022
£'000
|
At 1 December
|
304
|
637
|
Increase/(decrease) in provision
|
120
|
(190)
|
Write-offs in year
|
(159)
|
(143)
|
At 30 November
|
265
|
304
|
As in the prior year, the Group applies the
IFRS 9 simplified approach to measuring expected credit losses
using a lifetime expected credit loss provision to reflect the risk
of default on trade receivables. Default is defined as a situation
in which a customer does not pay amounts that it owes to the Group
and may occur due to a number of reasons, including the financial
health of the customer or where the customer disputes the amount
owed and it is not considered to be economical to recover the
amount through a legal process.
To calculate the credit loss provision, trade
receivables have been split into different categories along three
lines: region, aging and public/private sector. The expected loss
rates applied to these categories are as follows;
·
Region - 0.7% to 8.5%
·
Aging - 0.5% to 10%
·
Public/Private - 0.8%/1.8%
The expected loss rates are based on the
Group's historical credit losses experienced over the three year
period prior to the period end. The historical loss rates are then
adjusted for current and forward-looking information on
macroeconomic factors affecting the Group's customers.
The creation and release of a provision for
impaired receivables has been included in 'administrative expenses'
are generally written off, where there is no expectation of
recovering additional cash.
The other asset classes within trade and other
receivables do not contain impaired assets.
The maximum exposure to credit risk at the
reporting date is the carrying value of each class of receivable
mentioned above together with our cash deposits totalling
£2,248,000 (2022: £4,922,000). The Group does not hold any
collateral as security.
Credit risk is a judgement made by management
based on sector and necessary allowances are made when needed by
assessing changes in our customers' credit profiles and credit
ratings.
14. Trade and
other payables
|
|
Due within one
year
|
2023
£'000
|
2022
£'000
|
Trade and other payables
|
10,304
|
8,079
|
Other taxes and social security
costs
|
1,496
|
537
|
VAT payable
|
1,733
|
329
|
|
13,533
|
8,945
|
15.
Leases
Group as a lessee
The Group leases a number of properties in the
jurisdictions from which it operates.
Set out below are the carrying amounts of
right-of-use assets recognised and the movements during the
period:
Right-of-use
assets
|
Land & buildings
£'000s
|
|
At 1 December
2021
|
3,538
|
|
Additions
|
65
|
|
Depreciation charge
|
(2,140)
|
|
Disposals
|
(16)
|
|
Effect of modification to lease
terms
|
377
|
|
Foreign exchange movements
|
72
|
|
At 30 November
2022
|
1,896
|
|
Additions
|
1,899
|
|
Depreciation charge
|
(1,526)
|
|
Foreign exchange movements
|
(79)
|
|
At 30 November
2023
|
2,190
|
|
Set out below are the carrying amounts of lease
liabilities and the movements during the period:
|
|
|
Lease
liabilities
|
Land & buildings
£'000s
|
|
At 1 December
2021
|
4,371
|
|
Accretion of interest
|
286
|
|
Effect of modification to lease
terms
|
377
|
|
Additions
|
64
|
|
Reversal of lease liabilities
|
(17)
|
|
Lease payments
|
(2,642)
|
|
Foreign exchange movements
|
78
|
|
At 30 November
2022
|
2,517
|
|
Accretion of interest
|
229
|
|
Additions
|
1,899
|
|
Lease payments
|
(2,029)
|
|
Foreign exchange movements
|
(83)
|
|
At 30 November
2023
|
2,533
|
|
|
|
|
Lease
liability maturity analysis - undiscounted contractual cash
flows
|
2023
£'000
|
2022
£'000
|
Less than one year
|
1,388
|
1,718
|
Between one and five years
|
1,370
|
976
|
More than five years
|
-
|
-
|
|
2,578
|
2,694
|
|
|
|
|
|
The following are the amounts to be recognised
in profit or loss:
|
2023
£'000
|
2022
£'000
|
Depreciation charge
|
1,526
|
2,140
|
Interest expense on lease
liabilities
|
229
|
286
|
Total amount recognised in profit or
loss
|
1,755
|
2,426
|
The Group had total cash outflows for leases of
£2,029,000 in 2023 (2022: £2,642,000). The Group also had non-cash
additions to right-of-use assets of £308,000 (2022: £65,000) and
lease liabilities of £308,000 in 2023 (2022: £64,000).
There are no leases that have not yet commenced
to be disclosed. There were no short-term leases or low value
leases taken out in the year.
16. Contract
Liabilities
|
2023
£'000
|
Restated
2022
£'000
|
At 1 December
|
11,019
|
12,144
|
Invoiced during the year
|
66,414
|
64,585
|
Revenue recognised during the year
|
(62,402)
|
(65,710)
|
At 30
November
|
15,031
|
11,019
|
All Contract liabilities are expected to be
recognised within one year.
17. Financial
instruments
The Group's treasury activities are designed to
provide suitable, flexible funding arrangements to satisfy the
Group's requirements. The Group uses financial instruments
comprising borrowings, cash, liquid resources and items such as
trade receivables and payables that arise directly from its
operations. The main risks arising from the Group financial
instruments relate to the maintaining of liquidity across the
Group's entities and debt collection. The Board reviews policies
for managing each of these risks and they are summarised below. The
Group finances its operations through a combination of cash
resources, loan notes and equity. Short term flexibility is
provided by moving resources between the individual
subsidiaries.
Exposure to interest rate fluctuations is
minimal as all borrowings are at fixed rates of interest. The Group
also has various deposit facilities on which 0.01% - 2.40% interest
was being earned throughout 2023 (2022: 0.01% - 2.4%) and will be
optimising the use of these accounts going forward. The Group's
exposure to interest rate risk is not significant and therefore no
sensitivity analysis has been performed. Foreign exchange risk
arises when individual Group entities enter into transactions
denominated in a currency other than their functional
currency.
The Group's policy is, where possible, to allow
Group entities to settle liabilities denominated in their
functional currency with the cash generated from their own
operations in that currency. Where Group entities have liabilities
denominated in a currency other than their functional currency (and
have insufficient reserves of that currency to settle them), cash
already denominated in that currency will, where possible, be
transferred from elsewhere within the Group.
At 30 November 2023 the Group had £Nil
borrowings (2022 £Nil).
There is no material difference between the
fair values and book values of the Group's financial instruments.
Short term trade receivables and payables have been excluded from
the above disclosures.
The objectives of the Group's treasury
activities are to manage financial risk, secure cost-effective
funding where necessary and minimise the adverse effects of
fluctuations in the financial markets on the value of the Group's
financial assets and liabilities, on reported profitability and on
the cash flow of the Group. Interest income is sought wherever
possible and in 2023 produced £12,000 (2022: £14,000) of
income.
The Group's principal financial instruments for
fundraising are through share issues.
Financial
instruments by category
|
|
|
2023
£'000
|
Restated
2022
£'000
|
Financial
assets
|
|
|
Trade and other receivables excluding
prepayments
|
5,809
|
6,617
|
Cash and cash equivalents
|
2,248
|
4,922
|
|
8,057
|
11,539
|
Financial
assets
|
|
|
Trade and other payables
|
10,304
|
8,079
|
Lease liabilities
|
2,533
|
2,517
|
|
12,837
|
10,596
|
Undiscounted
contractual maturity of financial liabilities
|
|
|
Amounts due within one year
|
11,692
|
9,797
|
Amounts due between one and five
years
|
1,370
|
976
|
|
13,062
|
10,773
|
|
|
|
Less: future interest charges
|
(225)
|
(177)
|
Financial liabilities carrying value
|
12,837
|
10,596
|
The liquidity risk relating to the contractual
liabilities listed above is managed on a local basis through their
day to day cash management. The Group is liquid with £2,248,000
(2022: £4,922,000) available cash resources against a liability
payable within the next 12 months of £11,692,000 (2022:
£9,797,000). Management monitor cash balances weekly. However,
should any subsidiary, or the Company, find that it does not have
the liquidity to pay a debt as it becomes due an inter-company cash
transfer will be made available by another member of the
Group.
Foreign exchange risk is managed by assessing
the value of non-sterling revenue against the value of non-sterling
costs in each currency. Currently no hedging is considered
necessary due to the natural offset of revenues and costs in each
currency.
18. Financial
and operational risk management
The Group's activities expose it to a variety
of financial risks which are managed by the Group and subsidiary
management teams as part of their day-to-day responsibilities. The
Group's overall risk management policy concentrates on those areas
of exposure most relevant to its operations. These fall into six
categories:
Economic or political disruption risk - that
disruption may affect demand for our products and services or our
ability to maintain operations or on the cost of our delivery of
services; Competitive risk - that our products are no longer
competitive or relevant to our customers; Treasury and liquidity
risk - that we run out of the cash required to run the business;
Information security risk - the impacts that could occur due to
threats and vulnerabilities associated with the operation and use
of information systems and the environments in which those systems
operate; Key personnel risk - that we cannot attract and retain
talented people; and Capital risk - that we do not have an optimal
structure to allow for future acquisition and growth.
19. Deferred
tax assets and liabilities
The following are the major deferred tax assets
and liabilities recognised by the Group and the movements thereon
during the current year and the prior year:
|
Tax losses
|
Fixed asset timing
differences
|
IFRS 16 ROU
asset
|
IFRS 16 lease
liability
|
FV of intangible
assets
|
Total
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
At 1 December 2021 (restated)
|
(2,052)
|
727
|
385
|
(437)
|
5,386
|
4,009
|
Charge to profit or loss
|
(2,200)
|
(72)
|
(144)
|
146
|
(623)
|
(2,893)
|
Arising on business combination
|
(57)
|
-
|
-
|
-
|
-
|
(57)
|
At 1 November
2022 (restated)
|
(4,309)
|
655
|
241
|
(291)
|
4,763
|
1,059
|
Charge to profit or loss
|
(3,020)
|
93
|
(145)
|
187
|
(223)
|
(3,108)
|
Change due to FX
|
298
|
-
|
-
|
-
|
-
|
298
|
At 1 November
2023
|
(7,031)
|
748
|
96
|
(104)
|
4,540
|
(1,751)
|
The prior year
numbers have been restated within each category
At the reporting date the Group had unused tax
losses of approximately £19,680,000 (2022: £15,420,000) available
for offset against future profits. The tax losses do not have any
expiry date.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred tax
assets and liabilities relate to income taxes levied by the same
taxation authority on either the taxable entity or different
taxable entities where there is an intention to settle the balances
on a net basis.
£1,751,000 (2022: £nil) of deferred tax losses
are recognised in excess of the associated deferred tax liabilities
in Australia where future forecasted profits are considered
sufficient to utilise the excess losses. Deferred tax assets
totalling £4,920,000 (2022: £3,855,000) arising in respect of
losses have not been included in the statement of financial
position due to uncertainties in regard to their
recoverability.
The aggregate amounts of deferred tax balances
in each Group entity, after allowable offset, for financial
reporting purposes are:
|
2022
£'000
|
2021
£'000
|
Deferred tax assets
|
6,808
|
4,345
|
Deferred tax liabilities
|
(5,057)
|
(5,404)
|
Total
|
1,751
|
(1,059)
|
20. Share
Capital
Equity: Ordinary shares of 5p each
|
2023
£'000
|
2022
£'000
|
Allotted, issued and fully paid
130,524,386 ordinary shares of 5p each (2021: 130,524,386 ordinary
shares of 5p each)
|
6,526
|
6,528
|
|
2023
|
2022
|
Number of shares at 1
December
|
130,524,386
|
75,146,515
|
Share options exercised in
year
|
-
|
55,377,871
|
Number of shares at 30 November
|
130,524,386
|
130,524,386
|
At 1 December 2021, the Company had 2,927,315
5p shares held in treasury. During 2021, 101,669 of these shares
were allotted, with the number of shares held in treasury at the
year end being 2,825,646. The shares held in treasury have no
voting rights, or rights to dividends and so total issued share
capital for voting and dividend purposes at the year end was
127,698,740 (2022: 127,698,740).
On 14 June 2022, 53,351 shares were allotted
out of treasury at a price of 56.0p per share due to an exercise of
employee share options. Gross proceeds were £30,000.
On 14 July 2022, 48,318 shares were allotted
out of treasury at a price of 56.0p per share due to an exercise of
employee share options. Gross proceeds were £27,000. In November
2022 and November 2023, the Company's total share capital was
130,524,386 and the total issued share capital for voting and
dividend purposes, excluding shares held in treasury, was
127,698,740.
Transaction costs associated with share issues
in the year amounted to £Nil (2022: £47,237). Transaction costs are
accounted for as a reduction from the share premium
account.
21.
Equity-settled share-based payments
Date of grant
|
Exercise price
|
No
of shares
|
Exercisable between
|
23 October 2008
|
27.5p
|
1,390,481
|
No time limit
|
18 February 2019
|
56.0p
|
3,233,682
|
Feb 2022-Feb 2029
|
24 October 2019
|
54.5p
|
366,972
|
Oct 2022-Oct 2029
|
31 July 2020
|
65.0p
|
1,633,452
|
Jul 2023-Jul 2030
|
19 May 2021
|
134.0p
|
294,130
|
May 2024-May 2031
|
01 October 2021
|
0.05p
|
118,807
|
Oct 2024-Oct 2031
|
|
|
7,037,524
|
|
Details of the movements in the weighted
average exercise price ("WAEP") and number of share options during
the current and prior year are as follows:
|
At
start of year
|
Granted
|
Exercised
|
Forfeited
|
At
end of year
|
WAEP 2022 (p)
|
55.0
|
-
|
56.0
|
64.2
|
54.7
|
WAEP 2023 (p)
|
54.7
|
-
|
-
|
63.6
|
54.5
|
Options 2022
|
7,329,687
|
-
|
(101,669)
|
(190,494)
|
7,037,524
|
Options 2023
|
7,037,524
|
-
|
-
|
(143,537)
|
6,893,987
|
The range of prices at which options and
warrants can be exercised is 27.5p to 134.0p.
During 2023, no options were
granted.
The total charge arising on issue of the
options was £Nil, with the 2022 charge being £Nil. 143,537 options
were cancelled in the year (2021: 190,494).
During the year, Nil share options were
exercised. Further details of share options exercisable at the year
end are provided in Note 21.
There are no market, non-market or service
conditions as part of the share option scheme. The only condition
existing is that employees must still be in employment with the
Company at the point they exercise the options.
Long Term
Value Creation Plan ("LTVCP")
On 2 October 2021 the Board approved the LTVCP
which is intended to assist with the retention and motivation of
key employees of the Company with the aim of incentivising and
rewarding exceptional levels of performance over a four year
period. The LTVCP will provide the potential for rewards only if
shareholders benefit from sustained growth in shareholder value
over a four-year period.
The details of the awards for the initial LTVCP
participants are set out below:
Under the LTVCP, the Board has granted certain
eligible employees a right ("Participation Right") to receive a
proportion of the shareholder value created above a hurdle ("Hurdle
Rate"). The Hurdle Rate has been set at a 12.5 per cent. compound
annual growth rate.
For the purposes of the LTVCP, shareholder
value created is defined as the growth in the Company's market
capitalisation including net equity cashflows to shareholders and
adjusting for any share issues during the Performance
Period.
Awards under the LTVCP comprise three equal
tranches, with measurement dates on the second, third and fourth
anniversaries of the performance start date (each a "Performance
Period").
The shareholder value created at each
measurement date will be calculated with reference to the average
market capitalisation of the Company over the three months
immediately preceding and ending on each anniversary.
Where value is created above the Hurdle Rate,
initial LTVCP participants will share 10 per cent. of the
shareholder value created above the hurdle ("LTVCP
Pool").
Should the aggregate nominal value of Shares to
be issued or then capable of being issued in respect of each
Performance Period exceed 7 per cent. of the nominal value of the
ordinary share capital in issue of the Company at that time, the
LTVCP Pool will be scaled back as required so that the 7 per cent.
threshold is not exceeded.
To the extent that performance does not exceed
the hurdle over each Performance Period, the relevant tranche will
lapse in full.
For the initial participants, the performance
start date to measure each Performance Period has been determined
as the date of the announcement of the Isentia acquisition, being
15 June 2021. The base value for the purposes of the calculation of
growth in shareholder value has been set at c.£153.1 million (being
calculated by reference to the total number of Ordinary Shares with
voting rights following completion of the Isentia acquisition and
the placing price of 120p for the equity raise announced on 15 June
2021).
At the end of each Performance Period, the
Participation Right will convert into an award in the form of an
option to acquire Ordinary Shares at a price per Ordinary Share
equal to the nominal value of an Ordinary Share, being
5 pence per Ordinary Share ("Award"). The
number of Ordinary Shares to be issued pursuant to each Award will
be calculated by reference to the Company's share price at the
relevant time.
Awards are subject to a Holding Period ending
on the first anniversary of the end of each Performance Period in
respect of which the relevant Award was granted, unless the Board
determines that another period shall be specified in relation to
any Award.
The Board has discretion to vary the outcome
applying to a Participation Right where it considers that the level
at which it would convert into an Award: does not reflect the
Board's assessment of overall performance during the Performance
Period; is not appropriate in the context of circumstances that
were unexpected or unforeseen at the grant date; or any other
appropriate reason.
Joanna Arnold and Mark Fautley have each been
granted Participation Rights under the LTVCP. Joanna Arnold's
Participation Percentage has been set at 22% and Mark Fautley's
Participation Percentage has been set at 11%. In aggregate, initial
LTVCP participants Participation Percentages equate to a total of
73% of the available Participation Rights. The unallocated
Participation Rights have been set aside to provide the Company the
flexibility to award further Participation Rights to eligible
employees during the performance period. No further awards will be
granted to Joanna Arnold and Mark Fautley under the LTVCP prior to
the end of the four-year performance under the initial
award.
The option movements detailed above resulted in
a share-based payment charge for the Group of £915,000 (2022:
£1,121,000).
22. Cash and
cash equivalents
The Group monitors its exposure to liquidity
risk based on the net cash flows that are available. The following
provides an analysis of the changes in net funds:
|
As at 30
November 2022
£'000
|
Cash outflow
£'000
|
As at 30
November 2023
£'000
|
Cash and cash equivalents
|
4,922
|
(2,674)
|
2,248
|
|
As at 30
November 2021
|
Cash outflow
|
As at 30
November 2022
|
|
£'000
|
£'000
|
£'000
|
Cash and cash equivalents
|
13,456
|
(8,534)
|
4,922
|
23. Capital
commitments, provisions and contingent
liabilities
Capital
commitments
The Group had no capital commitments at the end
of the financial year or prior year.
Provisions and
contingent liabilities
|
Long Service Leave
Provision
|
Leasehold
dilapidations
|
Total
|
|
£'000
|
£'000
|
£'000
|
At 1 December 2022
|
61
|
410
|
471
|
Additions
|
-
|
13
|
13
|
Released in the year
|
(6)
|
(75)
|
(81)
|
Foreign exchange movement
|
-
|
(13)
|
(13)
|
At 30 November 2023
|
55
|
335
|
390
|
Due within one year
|
-
|
217
|
217
|
Due after more than one year
|
55
|
118
|
173
|
Leasehold dilapidations relate to the estimated
cost of returning a leasehold property to its original state at the
end of the lease in accordance with the lease terms. The main
uncertainty relates to estimating the cost that will be incurred at
the end of the lease.
The earliest point at which it is considered
that this amount may become payable is July 2024 for the Group's
leasehold property.
Employees in Australia are entitled to two
months of long service leave upon the completion of 10 years
service under The Long Service Leave Act 1955. The Long service
leave provision relates to the expected cost of this
leave.
24. Related
party transactions
Two (2022: two) of the directors have received
a proportion of their remuneration through their individual service
companies during the year. The payments represent short term
employee benefits. In all cases the directors are responsible for
their own taxation and national insurance liabilities.
The amounts involved are as follows and relate
to activities within their responsibilities as
directors:
|
|
|
2023
£'000
|
2022
£'000
|
L Gilbert
|
40,000
|
40,000
|
K Puris
|
16,667
|
40,000
|
|
|
On the 03 March 2023 Katie Puris resigned as a
director. Previously they received their remuneration, £16,667
(2022: £40,000) through a service company. At the year end, an
amount of £3,333 (2022: £3,333) was due to Lisa Gilbert.
During the year, the Group recognised a
share-based payment charge of £147,836 (2022: £150,657) in respect
of key management personnel.
During the year ended 30 November 2019, the
Group made available a loan facility of £100,000 to Track Record
Holdings Limited on an unsecured basis. The final repayment date of
the facility is November 2029 and interest is payable at a rate of
10% on any amount drawn down from the facility. A non-utilisation
fee of 1% of any amount of the facility not drawn down is also
payable. See note 12 for further details.
25. Pension
commitments
Individual subsidiaries of the Group operate
defined contribution pension schemes for their employees. The
assets of the schemes are held separately from those of the
Group.
The annual contributions payable are charged to
the consolidated statement of comprehensive income when they fall
due for payment.
During the year £1,978,000 (2022: £1,608,000)
was contributed by the Group to individual pension schemes. At 30
November 2023 £Nil pension contributions were outstanding (2022:
£Nil).
Breakdown of
Pension Scheme Amounts
|
FY23
£
|
FY22
£
|
Pulsar Group PLC
|
2
|
12
|
AIMediaData Limited
|
365
|
339
|
Fenix Media Limited
|
115
|
96
|
Face US
|
22
|
26
|
ResponseSource Limited
|
6
|
17
|
Isentia Pty (Aus)
|
939
|
1,101
|
Isentia Ltd (NZ)
|
37
|
40
|
Isentia Library (MY)
|
146
|
-
|
Isentia Brandtology
|
131
|
-
|
Isentia Jakarta (ID)
|
14
|
7
|
Isentia Manila (PH)
|
136
|
(30)
|
Isentia Vietnam (VN)
|
60
|
-
|
Isentia Bangkok (TH)
|
8
|
-
|
Total
|
1,981
|
1,608
|
26.
Restatement in respect of deferred income
Following the change in auditor in the current
year it was identified that where advance billing of customers was
not due at the year end and no services had commenced the
requirements to recognise the contract asset and the corresponding
deferred revenue under IFRS 15 had not been adequately satisfied.
As a result, both accounts had been overstated by £2,799,000 and
hence have been restated. The resulting adjustment of these
accounts has had no impact on the statement of comprehensive income
or the net current assets of the Group.
In respect of the opening position for 1
December 2021 the adjustment to reduce accounts receivable and
deferred income would have been £2,539,000. Whilst material, the
Group have not considered it necessary to produce a full third
balance sheet as the Directors consider this would not be
qualitatively necessary to assist the users of the financial
statements.
27. Events
after the reporting date
In January 2024, the Company entered into an
authorised £3,000,000 overdraft facility with its bankers. The
overdraft is available until 30 November 2024 or such later date as
may be advised by the bank, who have the right to terminate the
overdraft facility at any time.
In May 2024, the Company entered into a
£3,000,000 debt facility agreement. The debt facility has been made
available to the Company for a period of 18 months from the date of
signing the agreement.
There are no covenants applicable to either the
overdraft or debt facility.
28.
Availability of Annual Report
Copies of the Report and Accounts
will be posted to shareholders where requested and the document
will be available from the Company's website
(www.pulsargroup.com) later
today.