THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
27 July 2023
4GLOBAL PLC
("4GLOBAL" or the "Company")
Final Results
4GLOBAL, a UK-based data, services and software company focused on major sporting events and the promotion and measurement of physical activity, is pleased to announce its audited final results for the year ended 31 March 2023.
Headline results for the year to 31 March 2023
| | Audited | Audited | Change |
| | 2023 | 2022 |
|
| | £'000 | £'000 |
|
| | | | |
| Revenue | 5,586 | 3,640 | +53% |
| Gross profit | 4,136 | 2,616 | +58% |
| Adjusted profit before taxation | 1,230 | 573 | +115% |
| Statutory profit / (loss) before tax | 519 | (1,889) | |
| Earnings per share Net cash | 2.4p 1,138 | (7.1)p 3,051 | |
Financial highlights
| • | Revenue increased to £5.6m (2022: £3.6m) up 53% |
| • | Consultancy services revenue £2.3m and data (ARR) revenue £3.3m, up 114% |
| • • | Significant revenue (£2.5m) carried over into new financial year, providing good forward visibility Significantly improved operating profit at £1.2m (2022: £573k) up 115% Profit before tax of £520k against a loss for the prior year of £1.9m |
| • | Earnings per share of 2.4p compared to a loss of (7.1)p in 2022 |
Post period highlights
| • | Strategic partnership to exploit a multi-million US dollar opportunity with Jonas Fitness Inc, part of Jonas Software, a worldwide Constellation Software company |
| •
• | Strategic partnership agreement for a multi-million-pound opportunity with the fitness equipment and digital health provider Technogym to work with their existing and mutual clients to enhance their data insight solutions Continued strong financial performance in first quarter of new financial year, with confidence in continued strong financial performance. The Company remains focused on continuing to grow its data and insight products revenue, due to revenue visibility and higher margin profile. |
Eloy Mazon, Chief Executive Officer of 4GLOBAL commented:
"We completed our first full year as an AIM quoted company and are in a strong financial position - profitable and with a sound balance sheet - the business has an excellent foundation on which to build in the current financial year and the future.
"Demand for our data and insight products continues to grow. The many significant challenges faced in our sector due to the uncertain global economic outlook, will, we believe, drive our customers to seek ever more business-critical insight and this is the very strong message we are getting from our customers.
"We are encouraged by the prospects for the rest of the financial year and beyond as we seek to increase our penetration in the European and North American markets and develop new revenue streams associated with our data."
For further information please contact:
| 4GLOBAL Eloy Mazon (CEO) | c/o IFC Advisory |
|
Spark Advisory Partners - Nominated Adviser Neil Baldwin |
0203 368 3554 |
|
Canaccord Genuity Limited - Broker Bobbie Hilliam |
020 7523 8000 |
|
IFC Advisory Graham Herring / Zach Cohen |
0203 934 6630
|
A copy of these results is available on the Company's website www.4global.com. In addition, the Report & Accounts will be available on the Company's website and sent to shareholders by, at which point a further notification will be made.
CHAIRMAN'S STATEMENT
I am very pleased to announce our results for the year ended 31 March 2023. We have built on the foundations of the previous year and have established deep long-term partnerships with key clients that have resulted in the robust performance being announced today. Clients are seeing the benefits of our data and the provision of insights that our data provides which allows them to make, and continue to make, insightful business decisions.
Results
The financial results for the year ended 31 March 2023 reflect the hard work by Eloy Mazon (CEO) and his team. Revenue for the year ended 31 March 2023 was £5.6m, up 53% on the previous year. As per our strategy, we continue to grow our data products and platforms and increasingly our other services rely on our unique data sets as part of the offering, we will identify our revenues as being generated from our unique data set. We have shown in our segmental analysis the split between Consultancy and Data. Moving forward, we will migrate our clients to new contracts that will reflect the fact that we supply services in a data rich environment. The result of which will be higher ARR and forward visibility.
Our alternative reporting results for the year ended 31 March 2023 was an adjusted earnings before interest tax depreciation and amortisation of £1.23m (2022: £0.573m) an increase of 115%.
Board and People
I would like to thank my fellow Board members for their continued support and contribution to the Group. I would also like to thank Roger Taylor who stepped down from the Board in October 2022 after assisting in guiding us through the IPO process and wish him well for the future.
I must thank our colleagues within the business for their continued hard work and professionalism and their vital support in delivering these results. We are a dynamic business and our colleagues have produced exceptional work for and on behalf of clients.
Annual General Meeting
The Annual General Meeting will be held on 27 September 2023 at the Company's offices, 5th Floor, Building 7 Chiswick Park, 566 Chiswick High Road, Chiswick, London, W4 5YG.
Outlook
We have established partnerships with our client base that are deep rooted and will continue to supply data products and platforms that our clients use in their everyday business decision making and insights. The Board is confident about the Group's current prospects.
Ian James
Chairman
26 July 2023
CHIEF EXECUTIVE'S STATEMENT
In our first full year as a quoted company, we continue to build a reputation with all our stakeholders for delivering great products and platforms from our unique data set and for delivering strong financial results for the business.
Our revenue for the financial year ended 31 March 2023 showed a year-on-year growth of 53% up from £3.6m to £5.6m. We produced a statutory profit before tax of £0.5m (2022: Loss (£1.9m)) and an adjusted EBTIDA of £1.23m against £0.573 m for the previous year, a 115% increase.
This achievement was made possible thanks to the enormous efforts of everyone at 4GLOBAL over the years during which we have established an incredible reputation in our sector worldwide and developed a unique data set and insight products that are recognised as having transformed our customers businesses.
A key priority for us over the years has been to ensure that 4GLOBAL was built on a robust foundation with solid business principles around revenue, profitability and sustainable growth. This has allowed us to successfully navigate the turbulent macro-economic climate of the past year, continuing to deliver strong growth and a solid financial position.
Our growth strategy is underpinned by four pillars; international expansion, "land & expand" clients, acquisition strategy and data commercialisation. The reporting year to 31 March 2023 was the second year in our five-year strategic cycle and we continually review and measure the performance we have made against each of our strategic pillars.
| • | International expansion - we have seen strong demand from international markets especially the middle east where our partnership model is developing business opportunities. Our initial expansion into the North American and European markets is going well and we have signed commercial partnerships with key players in these markets such as Jonas, Technogym and IHRSA from which we will develop revenue generating opportunities in the near future.
|
| • | "Land and expand" clients - we continue to land new clients, 17.6% of revenue was generated from new client relationships in the financial year. We were also able to expand relationships with existing clients. The current need for data and insight to navigate complex strategic, operational and investment challenges has generated strong demand for our data and insight products and services and this has been reflected in the recurring revenue growth compared to last year.
|
| • | Acquisition strategy - we are constantly evaluating opportunities for acquisition. Our focus is to ensure that any company we acquire is aligned to our core business values and financial criteria of profitability, cash generation and annual recurring revenues so that they are accretive to the overall value of 4GLOBAL. Reviewing the market for potential acquisitions continues to be an opportunity for our growth strategy.
|
| • | Data commercialisation - we have built one of the biggest and unique databases of how individuals consume sport. We believe that our strength is a data company and not a software company, therefore we believe in providing our customers with the option of using our data - under the same data user agreements signed with the data controllers - irrespective of the software platform they might want to use to draw the unique insights that only our data provides. This allows us to open up new customer types who have other software products embedded in their organisation but that without our data would not deliver the sort of insights we can provide. |
Overall, excellent progress has been made in executing our strategy and we are pleased with the results it is generating.
During the financial year we released updated editions of CitiHub 2.0; Social Value Calculator ("SVC") 3.0; SVC Canada 1.0; Demand Modelling Tool 1.0 and European DataHub 1.0.
CitiHub integrates physical activity and participation programmes with additional data to provide insight and activity trends and assists in the planning of interventions to address physical inactivity and related health issues.
SVC was designed to give leisure operators a way of measuring and providing evidence for the Social Value created from investment in sport and physical activity.
Our Demand Modelling Tool provides a clear set of demand projections in terms of unique users and weekly participation for a range of facility types, as well as benchmarking this against sector averages, understanding membership numbers and how much social value that could be generated.
The tool allows users to model a range of investment scenarios and identify the optimal facility mix should investment be made, whether this is through the development of new sites or redevelopment at existing facilities.
This gives the ability to measure the potential impact and outputs can be used to drive the commercial model for investment into a site.
We are taking our DataHub into Europe where we have established a partnership with the trade association, EuropeActive, with the intention of developing a central database for physical activity participation data across Europe.
Our data asset grew significantly in this period, currently we have 3.5 billion data points and processing significant amounts of data on a daily basis; in England alone we are processing in excess of 1million data points per day. This growth in our data assets solidifies our position in the market, increases entry barriers and allows us to provide even more valuable and unique insights.
By integrating data analytics capabilities, technology implementation, and strategic consulting we offer our clients end-to-end solutions. With our data asset as the foundation, our unique data-driven decision-making approach enables us to empower clients with intelligence and actionable insights aligned to their strategic objectives and business priorities, giving us a distinctive edge in the market.
Summary and Outlook
We completed our first full year as an AIM quoted company and are in a strong financial position - profitable and with a sound balance sheet - the business has an excellent foundation on which to build in the current financial year and the future.
Demand for our data and insight products continues to grow. The many significant challenges faced in our sector due to the uncertain global economic outlook, will, we believe, drive our customers to seek ever more business-critical insight and this is the very strong message we are getting from our customers.
We are encouraged by the prospects for the rest of the financial year and beyond as we seek to increase our penetration in the European and North American markets and develop new revenue streams associated with our data.
As predicted, the line between service and technology revenue is becoming harder to differentiate as the majority of our relationships with customers are annual recurring or repeatable ("ARR") type of relationships. It is for this reason that in the financial year ending 31 March 2024 we plan to start the migration of all existing customers and new customers to this type of contracting, accelerating this way the transition that began some years ago from a service revenue business to a data and technology revenue business.
We believe this change in approach to our contractual relationship with our customers will better represent the nature of the business and its value, at the same time that it will drive a number of operational efficiencies.
I would like to thank all our staff for their efforts in 2022/23 to realise the true potential of 4GLOBAL and growth capabilities.
Eloy Mazon
Chief Executive Officer
26 July 2023
FINANCIAL REVIEW
The Group has shown significant growth in the last financial year with revenues and profits up year on year. The Group uses a number of key indicators to monitor the Group's performance. The statutory results for the year ended 31 March 2023 with the comparatives for the previous year are presented in the following table. Together with a reconciliation to the presentation of the Headline Results.
To arrive at a Headline profit before tax the Directors feel it appropriate to make the financial numbers comparable at earnings before interest, tax, depreciation and amortisation, share based payment expense and exceptional items.
At the time of the IPO a new share option scheme was implemented: a total of 1,755,072 options were issued at 91p and 550,800 options were issued at 35.6p. A net charge of £338,455 (2022: £169,550) has been taken to the share-based payment reserve on the balance sheet. 275,400 options that were issued at 35.6p lapsed during the year.
Reconciliation of statutory to Headline profit before taxation:
| | | Year ended 31 March 2023 | | Year ended 31 March 2022 |
| | | £ | | £ |
| Statutory profit/(loss) before taxation | | 496,921
|
| (1,888,693) |
| Separately disclosed items: |
|
|
| |
| Depreciation and amortisation |
| 372,717 |
| 196,756 |
| Share based payment expense |
| 338,455 |
| 169,550 |
| Exceptional items |
| - |
| 2,071,781 |
| Finance cost (net) |
| 22,271 |
| 23,905 |
| Headline profit before taxation | | 1,230,364 | | 573,299 |
Group revenue, for the year ended 31 March 2023, has increased by 53% to £5.6m from £3.6m. Gross profit has increased from £2.6m to £4.1m, up 58%.
The Group analyses revenue into two streams of consultancy and Data revenues. Consultancy revenues constitute services provided to clients for major sporting events and Data revenues is made of two elements; one is fees from setting up a client on a product platform, Project Set Up ("PSU") fees. The second is a licence fee for the use of the platform and any advice fees for analysis requested by the client. In the future, as our consultancy services increasingly rely on the data and data platforms, we will migrate our consultancy clients to contracts that identify revenues as being derived from data engagement. Therefore, the directors expect the majority of our future revenue to be recurring in nature as they are derived from our data set and platforms. Where there is a pure consultancy service we will continue to identify that revenue separately.
|
| Analysis of revenue by category | | Year ended 31 March 2023 | | Year ended 31 March 2022 | |||
|
|
| | | £ | % | | £ | % |
|
|
| | |
|
|
| | |
|
| Consultancy |
|
| 2,264,844 | 40% |
| 2,087,249 | 57% |
|
| Data platforms |
|
| 3,320,903 | 60% |
| 1,552,681 | 43% |
|
|
| | | 5,585,747 | | | 3,639,930 | |
Revenues increased by 53% from £3.6m to £5.6m. The mix of revenue was weighted to the use of data and data dashboards we sell on our platforms. The growth in data revenue reflects execution of the Company's strategy to focus on higher margin, recurring revenue.
During the current financial year no costs were identified as exceptional items. The table below discloses the exceptional items incurred in the year ended 31 March 2022 and included:
| | |
|
| Year ended 31 March 2023 |
| Year ended 31 March 2022
|
| | |
|
| £ |
| £ |
| | IPO costs |
|
|
|
| 874,650 |
| | Cash settlement of historic option contracts |
|
| - |
| 1,114,080 |
| | Legal settlement of contract dispute |
|
| - |
| 70,000 |
| | Pension contributions for prior years |
|
| - |
| 13,051 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
| Total exceptional items |
|
| - |
| 2,071,781 |
Exceptional items includes the IPO costs incurred at the time of the Group's IPO on 7 December 2021 and shown in the financial year ended 31 March 2022 £0.9m.
The Group had issued share options to individuals during 2020. The options represented 38% of the then issued share capital of 4GLOBAL Consulting Ltd and were to reward these individuals for the work and development of that company that they had made over previous years. The potential overhang and dilutive effect of these options on the issued share capital, after taking advice, was seen as detrimental to the company's prospects of completing a successful IPO. The individuals agreed to waive their options for a cash settlement of £1.0m in addition a provision was made for employers' National Insurance contributions.
The directors had identified two amounts as exceptional because of their nature and relating to events in previous periods. One was a legal dispute with a client which was settled post the year end and the other was a provision for adjustments to pension contribution that have an impact on the previous year's results. This has affected the opening reserves for the 1 April 2020 and a charge being made in the accounts for the year ended 31 March 2022 and a charge in the year ended 31 March 2021. The total provision for the three years is £41,509. A provision of £13,052 has been made in this current reporting year and prior year adjustment of £12,272 made in the year ended 31 March 2021. The opening reserves for the year ended 31 March 2021 have been adjusted by the prior adjustment by £16,184.
The Headline Adjusted Profit from Operations is £1.2 m (2022: £0.6 m), an increase of 115%.
Tax
The Group has historic losses which have been calculated and offset against any potential charge for corporation tax. The Group, also, benefits from research and development expenditure for which the Group can claim enhanced relief of 230% of the expenditure incurred.
Earnings per share
The statutory earnings per share for the year ended 31 March 2023 was 2.4 pence (2022: loss per share of 7.1 pence), and a diluted profit per share of 2.2 pence, as the Group made a loss in the previous year there was no dilution (2022: 7.1 pence).
Cash Flow
The Group utilised £1.9m (2022: £1.1m) from operations in the year. The utilisation for the year ended 31 March 2023 is a factor of the increased working capital within both accounts receivable and contract assets. These, over time, should be converted into cash. The utilisation in the year ended 31 March 2022 was due to the settlement of exceptional items which included IPO costs of £0.9m and the cash settlement of share options £1.1m.
As at 31 March 2023 the Group held cash and cash equivalents of £1.1m (2022: £3.1m).
Statement of financial position
The Group's statement of financial position shows net assets totalled £4.5m (2022: £3.5m). Most of the statement of financial position is made up of liquid assets of trade and other receivables and cash and cash equivalents. Working capital was £3.8m (2022: £3.1m). Our trade and other receivables increased from £1.8m to £4.2m. This increase is due to the second half year performance in revenues where we generated £4.2m in revenues in the second six months of the year ended 31 March 2023 which represented 75% of the annual turnover. The trade and other receivables have increased from £0.7m to £1.4m and contract assets increased from £0.5m to £2.1m. Since year end we have collected £0.9m.
The total gross assets of the Group increased from £5.2m to £6.3m reflecting the positive performance for the year ended 31 March 2023.
The strategic report on was approved by the Board of Directors on 26 July 2023 and was signed on its behalf by:
Keith Sadler
Chief Financial Officer
26 July 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2023
| | | | | Note | | | Year ended 31 March 2023 | | Year ended 31 March 2022 |
| |
| | | | | | £ | | £ |
| |
|
|
|
|
|
|
|
|
|
| Revenue | |
| | 6 |
|
| 5,585,747 |
| 3,639,930 |
| | |
| |
|
|
|
|
| |
| Cost of sales |
|
| |
|
|
| (1,449,008) |
| (1,024,175) |
| | |
| |
|
|
|
|
| |
| | |
| |
|
|
|
|
| |
| Gross profit | | | | | | | 4,136,739 | | 2,615,755 |
| | |
| |
|
|
|
|
| |
| | |
| |
|
|
|
|
| |
| | |
| |
|
|
|
|
| |
| | |
| |
|
|
|
|
| |
| Administrative expenses | |
| |
|
|
| (2,919,874) |
| (2,043,103) |
| Other operating income | |
| | 7 |
|
| 14,000 |
| 647 |
|
| |
| |
|
|
|
|
|
|
| | |
| |
|
|
|
|
|
|
| Analysed as: |
| | | | | |
| | |
| Adjusted profit from operations1 |
| | | | | | 1,230,365 | | 573,299 |
| |
| | | | | |
| | |
| Depreciation and amortisation |
| | | | | | (372,717) | | (196,756) |
| Share based payment expense |
| | | | | | (338,456) | | (169,550) |
| Exceptional items |
| | | 8 | | | - | | (2,071,782) |
| |
| | | | | |
| | |
| |
| | | | | |
| | |
| Profit/(loss) from operations |
| | | 8 | | | 519,192
| | (1,864,789) |
| | |
| |
|
|
|
|
| |
| Finance income | |
| |
|
|
| 1,772 |
| 73 |
| Finance cost |
|
| | 11 |
|
| (24,043) |
| (23,977) |
| | |
| |
|
|
|
|
| |
| | |
| |
|
|
|
|
| |
| Profit/(loss) before tax | | | | 3 | | | 496,921 | | (1,888,693) |
| | |
| |
|
|
|
|
| |
| Tax credit |
|
| | 12 |
|
| 145,133 |
| 242,581 |
| | |
| |
|
|
|
|
| |
| | |
| |
|
|
|
|
| |
| Profit/(loss) for the year |
| | | | | | 642,054
| | (1,646,112) |
|
|
|
| |
|
|
|
|
|
|
| Other comprehensive income |
|
| |
|
|
|
|
|
|
| |
|
| |
|
|
|
|
|
|
| Exchange differences on translation of foreign operations | |
|
|
| (3,053) |
| (11,058) | ||
|
| |
|
|
|
|
| | ||
|
| |
|
|
|
|
| | ||
| Other comprehensive income for the year | |
|
| | (3,053) | | (11,058) | ||
| | |
| |
|
|
|
|
| |
| | |
| |
|
|
|
|
| |
| Total comprehensive income/(loss) for the year | |
|
|
| 639,001 |
| (1,657,170) | ||
| | |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Total comprehensive income/(loss) attributable to: | |
|
|
|
|
|
| ||
| Owners of the Parent Company |
| | | | | | 639,001
| | (1,657,170) |
| | | | |
|
|
|
|
| |
| | | | |
|
|
|
|
| |
| Basic profit/(loss) per share
|
| | | 13 | | | 2.4p | | (7.1) p |
| | | | | | | |
| | |
| Diluted profit/(loss) per share |
| | | 13 | | | 2.2p | | (7.1) p |
| | | | |
|
|
|
|
|
|
Note 1. Adjusted profit from operations is calculated as earnings before interest, taxation, depreciation, amortisation of intangible assets and right of use charge, any impairment costs relating to non-current assets, share based payments and exceptional items.
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| | | | Note | | | As at 31 March 2023 | | As at 31 March 2022 |
|
|
| | | | | £ | | £ |
| Assets |
| | | | | | | |
| Non-current assets |
| | | | | | | |
| Property, plant and equipment |
| | 14 |
|
| 34,401 |
| 28,870 |
| Right-of-use assets |
| | 14 |
|
| 595,601 |
| 382,490 |
| Intangible assets |
| | 15 |
|
| 392,180 |
| - |
| Deffered Tax |
| | |
|
| 190,647 |
| 43,386 |
|
|
| |
|
|
|
|
| |
|
|
| |
|
|
|
|
| |
| | | |
|
|
| 1,212,829 |
| 454,746 |
|
|
| |
|
|
|
|
| |
|
|
| |
|
|
|
|
| |
| Current assets | | |
|
|
|
|
| |
| Trade and other receivables |
| | 16 | |
| 3,977,947 |
| 1,721,096 |
| Cash and cash equivalents |
| | 17 |
|
| 1,138,093 |
| 3,050,948 |
|
|
| |
|
|
|
|
| |
|
|
| |
|
|
|
|
| |
|
|
| |
|
|
| 5,116,040 |
| 4,772,044 |
|
|
| |
|
|
|
|
| |
|
|
| |
|
|
|
|
| |
| |
| |
|
|
|
|
| |
| Total assets |
| | | | | 6,328,869 | | 5,226,790 |
| | | |
|
|
|
|
|
|
| Equity and Liabilities |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Equity | |
|
|
|
|
|
|
|
| Share capital |
|
| 18 |
|
| 263,451 |
| 263,451 |
| Share premium |
|
| 20 |
|
| 3,390,330 |
| 3,390,330 |
| Merger reserve |
|
| |
|
| 676,310 |
| 676,310 |
| Share option reserve |
|
| 19,20 |
|
| 388,245 |
| 139,080 |
| Share warrant reserve |
|
|
|
|
| 188,266 |
| 188,266 |
| Currency translation reserve |
|
|
|
|
| (35,376) |
| (32,323) |
| Retained earnings |
|
| 20 |
|
| (389,980) |
| (1,121,325) |
| | |
|
|
|
|
|
| |
| | |
|
|
|
|
|
| |
| Total equity | |
| | | | 4,481,246 | | 3,503,789 |
| | |
|
|
|
|
|
|
|
| Non-current liabilities | |
|
|
|
|
|
|
|
| Borrowings | |
| 22 |
|
| 108,832 |
| 158,823 |
| Lease liability | |
| 23 |
|
| 194,060 |
| - |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
| | |
|
|
|
| 302,892 |
| 158,823 |
| | |
|
|
|
|
|
| |
| Current liabilities | |
|
|
|
|
|
| |
| Borrowings | |
| 22 |
|
| 50,000 |
| 121,814 |
| Trade and other payables | |
| 21 |
|
| 1,122,746 |
| 1,088,553 |
| Lease liability | |
| 23 |
|
| 371,985 |
| 353,811 |
| | |
|
|
|
|
|
| |
| | |
|
|
|
|
|
| |
| Total current liabilities | |
|
|
|
| 1,544,731 |
| 1,564,178 |
| | |
|
|
|
|
|
|
|
| Total liabilities | |
| | | | 1,847,623 | | 1,723,001 |
| | |
|
|
|
|
|
| |
| | |
|
|
|
|
|
| |
| | |
|
|
|
|
|
| |
| Total equity and liabilities | |
| | | | 6,328,869 | | 5,226,790 |
| | |
|
|
|
|
|
|
|
The notes form an integral part of the financial statements.
The financial statements were approved by the Board of Directors on 26 July 2023 and were signed on its behalf by
Keith Sadler
Chief Financial Officer
Registered number 13523846
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| | | | Capital | | | | | | | | | | Currency | | | | |
| | Share | | redemption | | Share | | Merger | | Share option | | Share warrant | | translation | | Retained | | Total |
| | capital | | reserve | | premium | | reserve | | reserve | | reserve | | reserve | | earnings | | equity |
| | £ | | £ | | £ | | £ | | £ | | £ | | £ | | £ | | £ |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As at 31 March 2021 | 1,097 | | 105 | | 894,491 | | - | | 31,773 | | - | | (21,264) | | 485,205 | | 1,391,407 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss for the year | - |
| - |
| - |
| - | | - | | - | | - |
| (1,646,112) |
| (1,646,112) |
| Other comprehensive income - translation differences |
- |
|
- |
|
- |
|
- | |
- | |
- | |
(11,058) |
|
- |
|
(11,058) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the year |
- | |
- | |
- | |
- | |
- | |
- | |
(11,058) | |
(1,646,112) | |
(1,657,170) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Transactions with owners: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issue of shares, net of costs | 262,354 |
| (105) |
| 2,684,105 |
| 676,310 | | - | | - | | - |
| - |
| 3,622,664 |
| Deferred tax on share options | |
| |
| |
| | | | | | | |
| 1,259 |
| 1,259 |
| Share-based expense | - |
| - |
| - |
| - | | 169,550 | | - | | - |
| - |
| 169,550 |
| Share options cancelled fair value adjustment |
- |
|
- |
|
- |
|
- | |
- | |
- | |
- |
|
(23,921) |
|
(23,921) |
| Share options waived | - |
| - |
| - |
| - | | (62,243) | | - | | - |
| 62,243
|
| -
|
| Issue of warrants | - |
| - |
| (188,266) |
| - | | - | | 188,266 | | - |
| - |
| - |
| |
|
| |
| |
| | | | | | | |
| |
| |
|
| 262,354 | | (105) | | 2,495,839 | | - | | 107,307 | | 188,266 | | - | | (39,851) | | 3,769,552 |
| | | | | | | | | | | | | | | | | | |
| As at 31 March 2022 | 263,451 | | - | | 3,390,330 | | 676,310 | | 139,080 | | 188,266 | | (32,323) | | (1,121,325) | | 3,503,789 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Profit for the year | - |
| - |
| - |
| - |
| - |
| - |
| - |
| 642,054
|
| 642,054 |
| Other comprehensive charges - translation differences |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(3,053) |
|
- |
|
(3,053) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total comprehensive income for the year |
- | |
- | |
- | |
- | |
- | |
- | |
(3,053) | |
642,054 | |
639,001
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Transactions with owners: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Movement on lapsed share options | - |
| - |
| - |
| - |
| (89,291) |
| - |
| - |
| 89,291 |
| - |
| Share based expense | - |
| - |
| - |
| - |
| 338,456 |
| - |
| - |
| - |
| 338,456 |
| | - |
| - |
| - |
|
|
| 249,165 |
| - |
| - |
| 89,291 |
| 338,456 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As at 31 March 2023 | 263,451 |
| - |
| 3,390,330 |
| 676,310 |
| 388,245 |
| 188,266 |
| (35,376) |
| (389,980) |
| 4,481,246 |
CONSOLIDATED STATEMENT OF CASH FLOWS
| | | | | Note | | | Year ended 31 March 2023 | | Year ended 31 March 2022 |
| | | | | | | | £ | | £ |
| Cash flows from operating activities |
| | | | | |
| | |
| |
| | | | | |
| | |
| Profit/(loss) before income tax for year |
|
|
|
| 496,921 |
| (1,888,693) | ||
| |
|
|
|
|
|
|
|
|
|
| Adjustments to reconcile (loss)/profit before tax to net cash flows: |
|
|
|
|
|
| | ||
| Depreciation of tangible assets |
|
|
| 14 |
|
| 366,461 |
| 196,723 |
| Amortisation |
|
|
| 15 |
|
| 6,256 |
| - |
| Loss/(profit) on disposal of fixed assets |
|
|
|
|
|
| 1,077 |
| (9,894) |
| Finance income |
|
|
|
|
|
| (1,772) |
| - |
| Finance cost |
|
|
| 11 |
|
| 24,043 |
| 23,977 |
| Equity-settled share-based expense/warrants |
| 8 |
|
| 338,456 |
| 169,550 | ||
| (Increase)/decrease in trade and other receivables |
|
|
|
| (2,256,890) |
| 390,838 | ||
| (Decrease)/increase in trade and other payables |
|
|
|
| 36,093 |
| 63,587 | ||
| Tax received |
|
|
|
|
|
| (3,989) |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash flows - operating activities | | | | | (993,344) | | (1,053,912) | ||
| | | | | | | |
| | |
| | |
|
|
|
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
|
|
|
| ||
| Purchase of tangible assets |
|
|
| 14 |
|
| (22,768) |
| (23,773) |
| Development costs capitalised |
|
|
| 14 |
|
| (398,436) |
| - |
| Interest received |
|
|
|
|
|
| 1,772
|
| 73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash - investing activities | | | | | | | (419,432) | | (23,700) |
|
|
|
|
|
|
|
|
|
|
|
| | |
|
|
|
|
|
|
|
|
| Cash flows from financing activities |
|
|
|
|
|
|
| ||
| Issue of ordinary share capital |
|
|
|
|
|
| - |
| 3,612,662 |
| Repayment of shareholder loan - principal | | | | | (50,400) | | - | ||
| Repayment of shareholder loan - interest |
|
|
|
| (22,194) |
| - | ||
| Repayment of borrowings |
|
|
|
|
|
| (50,000) |
| (41,168) |
| Lease liability principal payment |
|
|
| 23 |
|
| (351,642) |
| (186,470) |
| Interest elements of lease payments |
|
|
|
|
| (8,958) |
| (10,780) | |
| Interest paid |
|
|
|
|
|
| (15,521) |
| (9,445) |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
| Net cash flows - financing activities | |
| | | (498,715) | | 3,364,799 | ||
|
|
| | | | | |
| | |
|
|
| | | | | |
| | |
| Net (decrease)/increase in cash |
| | | | | | (1,911,491) | | 2,287,187 |
|
|
|
|
|
|
|
|
|
| |
| Effects of exchange rate changes on cash
|
|
|
|
| (1,364) |
| (11,581) | ||
|
|
|
|
|
|
|
|
|
| |
| Cash at beginning of year |
|
|
|
|
|
| 3,050,948 |
| 775,342 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
| | |
| Cash at the end of year |
| | | 17 | | | 1,138,093 | | 3,050,948 |
|
|
| | |
|
|
|
|
|
|
| Comprising: |
| | |
|
|
|
|
|
|
| Cash and cash equivalents |
| | |
|
|
| 1,138,093 |
| 3,050,948 |
|
|
| | |
|
|
|
|
| |
|
|
| | |
|
|
|
|
| |
| Cash at end of year |
| | | 16 | | | 1,138,093 | | 3,050,948 |
|
|
| | |
|
|
|
|
|
|
NOTES TO THE FINANCIAL STATEMENTS
1. Corporate information
4Global PLC is a public limited company incorporated and domiciled in England and Wales. The registered office address and principal place of business is located at 5th Floor, Building 7 Chiswick Park, 566 Chiswick High Road, London, W4 5YG.
The 4GLOBAL Group's principal activity is the provision of advisory services in the sporting sector at a local, national and international level.
2. Basis of preparation
The financial statements have been prepared in accordance with the requirements of the AIM Rules for Companies, UK Adopted International Accounting Standards.
The financial statements have been prepared on the historical cost basis, unless accounting standards require an alternative measurement basis. Where there are assets and liabilities calculated on a different basis, this fact is disclosed in either the relevant accounting policy or in the notes to the financial information.
The preparation of the financial statements in compliance with UK Adopted International Accounting Standards requires the use of certain critical accounting estimates and judgements. It also requires management to exercise judgement of the most appropriate application in applying the 4GLOBAL Group's accounting policies. The areas where significant judgements and estimates have been made in preparing the financial information and their effect are disclosed in Note 4.
3. Going concern
The financial statements have been prepared on the going concern basis. The Group made a profit for the year to 31 March 2023. The Group has cash resources of £1.1m. The cash flow for the group fluctuates based on monthly revenue collections and this is managed within the cash and overdraft facilities which the group has. The group has a £100,000 agreed overdraft facility and a further £100,000 informal facility. The Directors have reviewed the 4GLOBAL Group's overall position and outlook and are of the opinion that the 4GLOBAL Group is sufficiently well funded to be able to operate as a going concern for at least the next twelve months from the date of approval of these financial statements.
4. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with UK Adopted International Financial Reporting Standards requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the year-end date and the reported amounts of revenues and expenses during the reporting year.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The significant judgements made by management in applying the 4GLOBAL Group's accounting policies and the key sources of estimation uncertainty were:
4.1 Consultancy revenue
For contracts spanning the year end the 4GLOBAL Group uses judgement determining the amount of revenue to recognise in each period. This requires estimation of the stage of completion of the project, taking into account time spent during the period and the likely time required to complete the project.
4.2 Bad debts
The group currently calculates a "bad debt" provision on trade receivables and contract assets which are past due date and are not specifically provided for. Under IFRS 9 this assessment is required to be calculated based on a forward-looking expected credit loss ('ECL') model, for which a simplified approach will be applied. The method uses historic customer data, alongside future economic conditions to calculate expected loss on receivables. See Note 15.
4.3 Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the combined statement of financial position differs from its tax base.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.
4.4 Share options and warrants
Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income over the vesting period as an employment expense.
The fair value of the options is measured at the grant date and spread over the vesting period. The fair value is measured based on an option pricing model taking into account the terms and conditions upon which the instruments were granted.
4.5 Development costs
The Group develops a number of products and platforms for its portfolio of offerings to clients. These are internally generated from the technical, staff, and external resources. The products and platforms are identified separately and the staff time is allocated to the programmes for development. Only direct costs are allocated to these products and platforms as required by IAS 38. The economic performance of the product and platforms is assessed to ensure they can be carried on the balance sheet. Once the product or platform is commercially ready for market it is amortised over the anticipated life. The initial products have been allocated a 36 month amortisation life span. At the end of each year the products are reviewed for impairment.
5. Summary of significant accounting policies
5.1 Basis of consolidation
The financial statements incorporate the financial information of the 4GLOBAL Group. Control is achieved when a company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by other members of the 4GLOBAL Group. All significant inter-company transactions and balances between 4GLOBAL Group entities are eliminated on consolidation.
Subsidiary companies
4GLOBAL PLC's subsidiaries are as follows:
| | | | | | Proportion of |
| | | Country of | Nature of | | voting rights and |
| | Name of company | incorporation | business | Interest | shares held |
| | | | | | |
| | 4GLOBAL Consulting Ltd ("4GLOBAL Consulting") | England and Wales | Provision of data and consultancy services to the sports participation market | 100% | 100% |
| | 4GLOBAL Inc | USA | Provision of data and consultancy services to the sports participation market | 100% | 100% |
| | 4Global Danismanlik Ve Yazilim Hiz. LTD.STI ("4Global Turkey") | Turkey | Provision of services on behalf of parent | 100% | 100% |
The registered office address and principal place of business of 4GLOBAL Consulting is 5th Floor, Building 7, Chiswick Business Park, 566 Chiswick High Road, London, W4 5YG.
4GLOBAL Inc. It is anticipated to begin trading in the early part of the financial year ending 31 March 2024. The principal place of business is Venture X, Downtown Doral, 8350 NW 52nd Terrace Suite 301, Miami, FL 33166, United States.
The registered office address and principal place of business of 4Global Turkey is Istasyon Yolu Sok. No: 3 Altintepe, Maltepe, Istanbul.
The Company's subsidiary in Turkey has a year end of 31 December which was set when the company was set up and is a normal year end for Turkish companies. The preparation of the financial information for the Group accounts has therefore been based on the management accounts for that company to 31 March. The Group is liaising with local advisers to attempt to amend the year end to 31 March.
In applying merger accounting when preparing these Consolidated Financial Statements, to the extent the carrying value of the assets and liabilities acquired under merger accounting is different to the cost of investment, the difference is recorded in equity within the merger reserve. Under merger accounting the results of the Group entities are combined from the beginning of the comparative period before the merger occurred. Comparatives are restated on a combined basis and adjustments made as necessary to achieve consistency of accounting principles.
5.2 Revenue
Consultancy services
Consultancy services are provided under fixed-price contracts and contracts specifying an hourly fee. Revenue from providing services is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided because the customer receives and uses the benefits simultaneously. This is determined based on the actual hours spent relative to the total expected hours.
In the case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services provided then a contract liability is recognised.
If the contract includes an hourly fee, revenue is recognised in the amount to which the 4GLOBAL Group has a right to invoice. Customers are invoiced on a monthly basis and consideration is payable when invoiced.
Subscriptions
Subscriptions for access to the Datahub are provided under fixed-price contracts. Customers pay in advance on a monthly, quarterly or annual basis and consideration is payable when invoiced. Where access to the Datahub has been invoiced but not paid at the end of the reporting period a trade receivable is created. Where services have been provided but not invoiced a contract asset is created. A contract liability is recognised in respect of the services not yet provided. Revenue is recognised on a straight-line basis over the term of the subscription.
5.3 Research expenditure
The Group undertakes research into future development of products and platforms utilising the data sources that the Group curates. This is separately identified and recorded. The Group makes a claim for enhanced tax relief on this expenditure through HMRC. The expenditure is separately identified in the income statement notes.
5.4 Foreign currency translation
Functional and presentational currency
Items included in the financial statements of each of the 4GLOBAL Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in pounds sterling, which is 4Global Group's functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each year end foreign currency monetary items are translated using the closing rate. Non monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of comprehensive income within 'administrative expenses'. All other foreign exchange gains and losses are presented in the statement of comprehensive income under the heading to which they relate.
4GLOBAL Group Companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
• income and expenses for each statement of profit or loss and statement of comprehensive income are translated at monthly exchange rates throughout the period, and
• all resulting exchange differences are recognised in other comprehensive income.
Taxation
Taxation expense for the year comprises current and deferred tax recognised in the reporting year. Tax is recognised in the statement of comprehensive income.
Current tax
Current tax is the amount of tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the year end.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences that exist only where it is probable that taxable profits will be generated against which the carrying value of the deferred tax asset can be recovered.
Deferred tax liabilities are recognised for all taxable temporary differences except in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint operations where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
A deferred tax asset or liability is not recognised if a temporary difference arises on initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
5.5 Warrants
The 4GLOBAL Group issued warrant certificate to advisers at the time of the IPO and measures the fair value of the equity settled transactions with the advisers at the grant date of the warrant instruments. The fair value is calculated using an appropriate valuation model and requires assumptions regarding dividend yields, risk-free interest rates, share price volatility and expected life of the warrant. The resulting amount is charged to the share premium account and credited to the share warrant reserve.
5.6 Property plant and equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price and any costs attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management. Expenditures for routine maintenance and repairs are expensed as incurred, while additions and improvements are capitalised. A right-of-use asset is recognised at the commencement date of the lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date, any initial direct costs incurred and an estimate of costs expected to be incurred for restoring the site or asset.
Property, plant and equipment is depreciated using the straight-line method over the estimated useful lives or, in the case of certain leased right-of-use assets, the shorter of the expected lease term and estimated useful life:
- Office equipment - 4 years
- Right of use - over the term of the lease
An item of property, plant and equipment is derecognised upon disposal or when no further economic benefits are expected to arise from the use of that asset. Any gain or loss arising on de-recognition of the asset is included in the statement of comprehensive income when the asset is derecognised.
5.7 Intangible assets
The intangible assets are the internally developed products and platforms that the group has generated. The assets are separately identifiable and are capitalised costs of direct resources used to develop the products and platforms, which comprises any external purchase costs and the costs of individuals costs attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management.
Once the product or platform is ready for commercial use it is then amortised using the straight-line method over the estimated useful lives which the management have identified as 36 months.
An intangible asset is derecognised upon disposal or when no further economic benefits are expected to arise from the use of that asset. Any gain or loss arising on de-recognition of the asset is included in the statement of comprehensive income when the asset is derecognised.
5.8 Leasing
The 4GLOBAL Group applies a single recognition and measurement approach for all leases except for short-term leases and leases of low-value assets. At commencement of a lease, the 4GLOBAL Group as lessee recognises a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. The amount of the lease liability recognised is on a discounted basis. The discount rates used on transition were incremental borrowing rates as appropriate for each lease based on factors such as the lease term and payment terms. Where the rate implicit in the lease cannot readily be determined the 4GLOBAL Group used the 4GLOBAL Group's incremental borrowing rate. The 4GLOBAL Group does not have any leases where the 4GLOBAL Group is a lessor.
The 4GLOBAL Group takes advantage of the practical expedient which allows an exemption from recognition for leases with terms of 12 months or less and low value leases.
Lease liabilities are recognised at the present value of future lease payments and subsequently carried at amortised cost using the effective interest method.
5.9 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments in debt securities with original maturities of three months or less.
5.10 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial instruments are classified into one of the categories discussed below in accordance with IFRS 9, with reference to the business model for that instrument and the contractual cash flow characteristics.
Financial assets and liabilities are offset and the net amount reported in the financial statements if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
The accounting policy for each category is as follows:
Financial assets
Financial assets comprise cash and cash equivalents and receivables.
Receivables primarily consist of trade and other receivables. These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These assets are initially recognised at transaction price plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, adjusted for change in expected credit losses.
Impairment of financial assets
The IFRS 9 impairment model requires the recognition of 'expected credit losses'. Therefore, it is not necessary for a credit event to have occurred before credit losses are recognised. The impairment model applies to the 4GLOBAL Group's financial assets.
For trade receivables the 4GLOBAL Group has applied the simplified approach permitted by IFRS 9 in calculating expected credit losses. This approach requires expected lifetime losses to be recognised from initial recognition of the receivables.
Financial liabilities
Financial liabilities include trade and other payables, borrowings and lease liabilities.
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
Borrowings
Borrowings are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms or the terms of an existing liability are substantially modified, such an exchange is treated as the de-recognition of the original liability and the recognition of a new liability. When the modification is not substantial the difference between the carrying amount of the liability before the modification and the present value of the cash flows after modification is recognised in profit or loss.
Classification of financial instruments issued by the 4GLOBAL Group
Financial instruments issued by the 4GLOBAL Group are treated as equity only to the extent that they meet the following two conditions:
• they include no contractual obligations upon the 4GLOBAL Group to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and
• where the instrument will or may be settled in the 4GLOBAL Group's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the 4GLOBAL Group's own equity instruments or is a derivative that will be settled by the 4GLOBAL Group exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
5.11 Related party transactions
The 4GLOBAL Group discloses transactions with related parties which are not wholly owned within the same group. It does not disclose transactions with members of the same group that are wholly owned. Transactions of a similar nature are aggregated unless, in the opinion of the Directors separate disclosure is necessary to understand the effect of the transactions on the financial statements.
Mr Mazon, through a controlled company, EMH Limited, invoiced the Group during the year ended 31 March 2023 £nil for professional and consultancy services (2022: £137,940). £nil was outstanding at 31 March 2023 (2022: £4,840). Mrs E Mazon, trading as Family Paws, invoiced the Group for secretarial and coaching services during the year £30,000 (2022: £15,000). £Nil was outstanding at 31 March 2023 (2022: £Nil).
A loan of £50,400 was made by Mr Eloy Mazon. The loan was drawn down between December 2013 and September 2014 and bore interest at 5% plus the Bank of England base rate, which had been accrued with the loan. The loan was repaid in June 2022 and the balance outstanding at 31 March 2023 was £nil (2022: £70,805).
Mr James, through a controlled company, Fluency Media Limited, invoiced the Group during the year ended 31 March 2023 £nil including VAT (2022: £168,000). £nil was outstanding at 31 March 2023 (2022: £nil).
5.12 Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the 4GLOBAL Group
The following standards and interpretations relevant to the Group are in issue but are not yet effective and have not been applied in the financial statements.
• Amendments to IAS 1: Presentation of Financial Statements.
• Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors.
• Amendments to IAS 12: Income taxes - Deferred Tax related to Assets and Liabilities arising from a single transaction.
The above standards are not expected to materially impact the Group.
5.13 Segment information
The chief operation decision-maker ("CODM") is considered to be the Board of Directors of the Group. The CODM allocates resources and assesses the performance of the business and other activities at the operating segment level.
The CODM has determined that the 4GLOBAL Group has one operating segment, the provision of advisory services to the sporting industry at a local, national and international level.
6. Analysis of revenue
| | Analysis of revenue by category | | | | | Year ended 31 March 2023 | | Year ended 31 March 2022 | |
| | | | | | | | £ | | £ |
| | | | | | | | | | |
| | Consultancy | | | | | | 2,264,844 | | 2,087,249 |
| | Data | | | | | | 3,320,903 | | 1,552,681 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | 5,585,747 | | 3,639,930 |
| | | | | | | | | | |
| | Analysis of revenue by geography | | | Year ended 31 March 2023 | | Year ended 31 March 2022 | |||
| | | | | | | | £ | | £ |
| | | | | | | | | | |
| | Europe | | | | | | 3,218,496 | | 2,351,970 |
| | Americas | | | | | | 447,207 | | 890,608 |
| | Middle East | | | | | | 1,828,108 | | 362,383 |
| | Other | | | | | | 91,936 | | 34,969 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | 5,585,747 | | 3,639,930 |
During the year ended 2023, the 4GLOBAL Group had one (2022: two) customer whose revenues accounted for more than 10%, making up 30.2% (2022: 14.7% and 14.2% respectively).
The 4GLOBAL Group has determined that the 4GLOBAL Group has one operating segment and therefore all revenue above is attributable to that segment.
Outstanding balances at year end are unsecured, interest free and settlement occurs in cash.
Included within trade and other receivables are contract assets as follows:
| | As at 31 March | | | | | 2023 | | 2022 |
| | | | | | | £ | | £ |
| | | | | | | | | |
| | Contract assets | | | | | 2,136,404 | | 463,696 |
| | | | | | | | | |
Contract assets are included within "Trade and other receivables" on the face of the statement of financial position. They arise when the Group has performed services in accordance with the agreement with the relevant client and has obtained right to consideration for these services but such income has not been invoiced at the balance sheet date. Significant changes in contract assets have arisen due to timing differences in the issue of invoices between periods.
Included within trade and other payables are contract liabilities as follows:
| | As at 31 March | | | | | 2023 | | 2022 |
| | | | | | | £ | | £ |
| | | | | | | | | |
| | Contract liabilities | | | | | (167,544) | | (226,696) |
All contract liabilities are recognised as revenue in the subsequent reporting period.
7. Other operating income
Other operating income comprises:
| | | | | 2023 | | 2022 | |
| | | | | | £ | | £ |
| | | | | | | | |
| Training grant | | | | | 14,000 | | - |
| Business Interruption receipt | | | | - | | 647 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | 14,000 | | 647 |
Additionally, the 4GLOBAL Group took a loan under the Coronavirus Business Interruption Loan Scheme ("CBILS") (see note 21). Under the scheme, the government made a Business Interruption Payment ("BIP") to cover the interest charge for the first 12 months of the loan term.
8. Profit from operations and auditor's remuneration
Profit from operations is stated after charging/(crediting):
|
| 31 March |
|
|
|
|
| 2023 |
| 2022 |
|
|
|
|
|
|
|
| £ |
| £ |
|
|
| | | |
|
|
|
| |
|
| Fees payable to the company's auditors: |
|
|
|
|
| | ||
|
| - Audit fees |
|
|
| 57,000 |
| 47,500 | ||
|
| - Other services - reporting accountant services at the IPO |
|
|
|
- |
|
125,500 | ||
|
| Depreciation of property, plant and equipment |
|
|
| 14,471 |
| 5,833 | ||
|
| Depreciation of right-of-use assets |
|
|
| 351,990 |
| 190,890 | ||
|
| Amortisation of intangible assets |
|
|
| 6,256 |
| - | ||
|
| Research expenditure
|
|
|
| 793,658 |
| 640,342 | ||
|
| Equity settled share-based expense |
|
|
|
| 338,455 |
| 169,550 | |
|
| Net loss on foreign currency translation |
|
|
|
|
| 3,053 |
| 11,581 |
|
| Short-term lease expense |
|
|
|
|
| 34,016 |
| - |
The Alternative Performance Measures used by management are shown below:
|
| 31 March |
|
|
|
| 2023 |
| 2022 | |||||
|
|
| | | | | | £ | | £ | ||||
|
|
| | | |
|
|
|
| | ||||
| | Profit/(loss) from operations |
| |
|
|
| 519,192
|
| (1,864,789) | ||||
| | Depreciation and amortisation expense |
|
|
|
|
| 372,717 |
| 196,756 | ||||
| | Share based option charge |
|
|
|
|
| 338,455 |
| 169,550 | ||||
| | Exceptional items |
|
|
|
|
| - |
| 2,071,782 | ||||
|
|
|
|
|
|
|
|
|
| | ||||
|
|
|
|
|
|
|
|
|
| | ||||
|
| Adjusted EBITDA |
|
|
|
|
| 1,230,364 |
| 573,299 | ||||
Exceptional items which have been identified because of their size or the nature of the expense being one-off in nature are as follows:
|
| |
|
|
|
|
|
| |
| ||||
|
| 31 March |
|
|
|
| 2023 |
| 2022 |
| ||||
|
|
| | | | | | £ | | £ | ||||
|
|
| | | |
|
|
|
| | ||||
| | IPO costs |
| |
|
|
| - |
| 874,650 | ||||
| | Cash settlement of historic option contracts |
|
|
|
|
| - |
| 1,114,080 | ||||
| | Legal settlement of contract dispute |
|
|
|
|
| - |
| 70,000 | ||||
| | Provision for adjustment to pension contributions |
|
|
| - |
| 13,052 | ||||||
|
|
|
|
|
|
|
|
|
| | ||||
|
|
|
|
|
|
|
|
|
| | ||||
|
| Total exceptional items |
|
|
|
|
| - |
| 2,071,782 | ||||
9. Employees
Staff costs, including Directors' remuneration, were as follows:
| | 31 March |
| | | | | 2023 | | 2022 |
| | | | | | | | £ | | £ |
| | | | | | | | | | |
| | Wages and salaries | | | | | | 1,708,588 | | 1,401,895 |
| | Social security costs | | | | | | 214,900 | | 275,425 |
| | Pension costs | | | | | | 47,166 | | 35,501 |
| | Share based payment expense | | | | | | 338,455 | | 169,550 |
| | Cash settlement of share options | | | | | | - | | 1,000,000 |
| | Employee benefits | | | | | | 3,878 | | 23,604 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | 2,312,987 | | 2,905,975 |
|
| The average number of employees, including the Directors, during the year was as follows: |
| | 31 March |
| | | | | 2023 | | 2022 |
| | | | | | | | Number | | Number |
| | | | | | | | | | |
| | Directors | | | | | | 6 | | 3 |
| | Administrative staff | | | | | | 2 | | 2 |
| | Technical staff | | | | | | 22 | | 23 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | 30
| | 28 |
10. Directors' remuneration
The Directors' aggregate remuneration in respect of qualifying services were:
|
| Salary | Pension | Benefits | Bonus | Total Remuneration 2023 £ | Total Remuneration 2022 £ |
| E Mazon | 225,000 | 6,750 | - | - | 231,750 | 155,379 |
| K Sadler | 120,000 | 3,300 | - | - | 123,300 | 112,067 |
| I James | 60,000 | 1,700 | - | - | 61,700 | 42,423 |
| S Clarke | 40,000 | 1,600 | - | - | 41,600 | 28,104 |
| A Orlando | 40,000 | - | - | - | 40,000 | 19,122 |
| R Taylor | 30,642 | 600 | - | - | 31,242 | 20,400 |
|
| | | | | | |
| | 31 March |
| | 2023 | | 2022 |
| | | | | £ | | £ |
| | | | | | | |
| | Invoices in year | | | 30,000 | | 260,800 |
| | | | | | | |
| | Outstanding at year end | | | - | | 4,840 |
|
| The remuneration of the highest paid Director was as follows: |
| | 31 March |
| | 2023 | | 2022 |
| | | | | £ | | £ |
| | | | | | | |
| | Wages and salaries | | | 225,000 | | 28,748 |
| | Bonus | | | - | | 12,500 |
| | Social security costs | | | 31,370 | | 87,784 |
| | Cash settlement of share options | | | - | | 620,000 |
| | Pension costs | | | 6,750 | | 1,175 |
| | Share-based payments charges | | | - | | 43,155 |
| | | | | | | |
| | | | | | | |
| | | | | 263,120 | | 793,362 |
Key management who comprise the senior management team; the chief operating officer; chief product officer, chief customer officer and global head of services received compensation is shown in the table below, which includes the directors.
| | 31 March |
| | | | | 2023 | | 2022 |
| | | | | | | | £ | | £ |
| | | | | | | | | | |
| | Wages and salaries | | | | | | 1,024,403 | | 544,102 |
| | Social security costs | | | | | | 131,270 | | 206,440 |
| | Cash settlement of share options | | | | | | - | | 1,000,000 |
| | Pension costs | | | | | | 28,530 | | 15,055 |
| | Benefits | | | | | | - | | 20,698 |
| | Bonus | | | | | | - | | 25,000 |
| | Fees | | | | | | - | | 85,241 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | 1,184,203 | | 1,896,536 |
11. Finance income and costs
| | 31 March | | | 2023 | | 2022 |
| | | | £ | | £ | |
| | Lease liability interest | | | 6,789 | | 10,780 |
| | Interest on Shareholder loan | | | 789 | | 2,512 |
| | Interest on CBILS loan | | | 7,330 | | 7,153 |
| | Interest on Grant | | | - | | 647 |
| | Other interest
| | | 9,135 | | 2,885 |
| | | | | | | |
| | Finance cost recognised in the income statement recognised | | | 24,043 | | 23,977 |
12. Taxation
| 31 March | | 2023 | 2022 |
| | | £ | £ |
| Current tax charge | |
| |
| UK Corporation tax | |
| (193,004) |
| Adjustments in respect of prior periods | |
| (43,459) |
| Foreign tax on income for the year | | 2,128 | 5,445 |
| | |
| |
| | |
| |
| Total current tax | | (2,128) | (231,018) |
| | |
| |
| Adjustments in respect of prior period | | (228,846) | |
| Movement on temporary differences | | 81,585 | (11,563) |
| | |
| |
| | |
| |
| Income tax credit | | (145,133) | (242,581) |
| | Factors affecting tax credit for the year |
|
| The tax credit for the year can be reconciled to the loss per the statement of comprehensive income as follows: |
| 31 March | | 2023 | 2022 |
| | | £ | £ |
| | |
| |
| Profit/(loss) before tax | | 496,921 | (1,888,693) |
|
Profit/(loss) before tax multiplied by the | |
| |
| UK corporate tax rate of 19% | | 94,415 | (358,852) |
| | |
| |
| Effects of: | |
| |
| Amounts not taxable/deductible for tax purposes | | 69,230 | 72,112 |
| Depreciation - plant and machinery super-deduction | | - | (1,357) |
| Enhanced research and development relief | | (98,414) | (98,804) |
| Higher rate taxes on overseas earnings | | 304 | 1,247 |
| Losses carried forward | | 8,379 | 178,956 |
| Deferred tax on share options | | - | 3,568 |
| Deferred tax on right of use asset | | - | 7,170 |
| Deferred tax at higher rate | | 9,798 | (3,162) |
| | |
| |
| Adjustments in respect of prior periods | | (228,846) | (43,459) |
| Income tax credit | | (145,133) | (242,581) |
Factors affecting future tax charges
An increase in the UK corporation tax rate from 19% to 25% for the financial year beginning 1 April 2023 was substantively enacted on 24 May 2021. As IFRS requires deferred tax to be measured at tax rates that have been subsequently enacted at the reporting date, the Group's deferred tax balances have been re-measured accordingly and the impact has been reflected within the consolidated financial statements.
The following deferred tax assets have been recognised:
| | 31 March | | | | | | 2023 | | 2022 |
|
| | | | | | | | £ | | £ |
|
| | | | | | | | | | |
|
| | At beginning of period | | | | | | 43,386 | | 30,564 |
|
| | | | | | | | | | |
|
| | Movement on temporary timing differences | | | | | 147,261 | | 12,822 | | |
| | | | | | | | | | |
|
| | | | | | | | | | |
|
| | At end of period | | | | | | 190,647 | | 43,386 |
|
| | | | | | | | | | |
|
|
| The above deferred tax assets comprise temporary differences on the following items: |
| | 31 March | | | | | | 2023 | | 2022 |
| | | | | | | | £ | | £ |
| | | | | | | | | | |
| | Staff costs | | | | | - | | 30,564 | |
| | Share based payments | | | | | 7,803 | | 15,199 | |
| | Right of use asset | | | | | - | | (7,170) | |
| | Pensions deductible as paid | | | | | 13,627 | | 7,887 | |
| | Interest on shareholder loan | | | | | - | | 4,067 | |
| | Losses carried forward - from prior year | | | | | 228,846 | | - | |
| | Losses carried forward - from current year | | | | | 45,766 | | - | |
| | Capitalised development costs | | | (98,045) | | | |||
| | Accelerated capital allowances | | | | | (7,350) | | (7,161) | |
| | | | | | | | | | |
| | | | | | | | | | |
| | Deferred tax asset | | | | | | 190,647 | | 43,386 |
| | | | | | | | | | |
|
| |
13. Earnings per share
| | 31 March |
| | | | | 2023 | | 2022 |
| | | | | | | | | | |
| | Net profit/(loss) attributable to ordinary shareholders (£) | | | 642,054
| | (1,646,112) | |||
| | Basic weighted average number of shares in issue (Number) | | | 26,344,994 | | 23,314,706 | |||
| | Basic profit/(loss) per share (pence per share) | | | | 2.4p | | (7.1)p | ||
| | | | | | | | | | |
| | As at 31 March |
| | | | | 2023 | | 2022 |
| | | | | | | | | | |
| | Net profit/(loss) attributable to ordinary shareholders (£) | | | 642,054
| | (1,646,112) | |||
| | | | | | | | | | |
| | | | | | | | | | |
| | Diluted weighted average number of shares in issue (Number) | | | 28,895,722 | | 24,165,128 | |||
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | Diluted profit/(loss) per share (pence per share) | | | 2.2p | | (7.1)p | |||
| | | | | | | | | | |
To prepare the Company for its listing a 200:1 share split took place during the year ended 31 March 2022 which increased the number of shares in issue from 109,692 shares as at 1 April 2021 to 21,938,400 at the time of the share split. The Company listed on the AIM market on 7 December 2021 and a further 4,406,594 shares were issued.
| | Shares in issue | | | | | 2023 | | 2022 | ||
| | | | | | | | | | | |
| | | | | | | | | | | |
| | Shares in issue at 1 April 2021 | | | - | | 109,692 | ||||
| | Share for share exchange 200:1 | | | - | | 21,938,400 | ||||
| | Shares issued | | | - | | 4,406,594 | ||||
| | | | | | | | ||||
| | Shares in issue 31 March | | | 26,344,994 | | 26,344,994 | ||||
| Weighted average number of shares used as the denominator | ||||||||||
| | Share for share exchange 200:1 | | | - | | 21,938,400 | ||||
| | Weighted number of shares issued in the year | | | - | | 1,376,306 | ||||
| | The weighted average number of shares used as the denominator in basic earnings per share | | | 26,344,994 | | 23,314,706 | ||||
| | Adjustments for calculation of diluted earnings per share:
| | | | | | ||||
| | Options | | | | | | 2,133,752 | | 720,190 | |
| | Warrants | | | | | | 416,971 | | 130,232 | |
| | | | | | | | | | | |
| | | | | | | | 28,895,717 | | 24,165,128 | |
| | | | | | | | | | | |
IAS 33 contains a requirement to restate the average number of shares in issue in prior periods for events that change the number of shares without a corresponding change in resources. For this purpose, it has been assumed that the share split from £1.00 per share to £0.01 per share took place prior to 1 April 2020.
14. Property, plant and equipment
| | | | | | Right of Use Asset | | Office equipment | | Total |
| | Cost | | | | £ | | £ | | £ |
| | | | | | | | | | |
| | At 1 April 2021 | | | | 411,571 | | 49,475
| | 461,046 |
| | | | | | | | | | |
| | Disposal of lease | | | | (411,571) | | - | | (411,571) |
| | Additions in year | | | | 470,487 | | 23,773 | | 494,260 |
| | Exchange differences | | | | - | | (710) | | (710) |
| | | | | | | | | | |
| | As at 31 March 2022 | | | | 470,487 | | 72,538 | | 543,025 |
| | | | | | | | | | |
| | Disposals | | | | (439,987) | | (1,077) | | (441,064) |
| | Additions in year | | | | 565,101
| | 22,768 | | 587,869 |
| | Exchange differences | | | | - | | (1,459) | | (1,459) |
| | | | | | | | | | |
| | | | | | | | | | |
| | As at 31 March 2023 | | | | 595,601
| | 92,770 | | 688,371 |
| | Depreciation | | | | | | | | |
| | As at 1 April 2021 | | | | 137,190 | | 38,786 | | 175,976 |
| | | | | | | | | | |
| | Charge for year | | | | 190,890 | | 5,833 | | 196,723 |
| | Disposals | | | | (240,083) | | - | | (240,083) |
| | Exchange differences | | | | - | | (951) | | (951) |
| | | | | | | | | | |
| | As at 31 March 2022 | | | | 87,997 | | 43,668 | | 131,665 |
| | | | | | | | | | |
| | Charge for year | | | | 351,990 | | 14,471 | | 366,461 |
| | Disposals
| | | | (439,987) | | - | | (439,987) |
| | Exchange differences | | | | - | | 230 | | 230 |
| | | | | | | | | | |
| | As at 31 March 2023 | | | | - | | 58,369 | | 58,369
|
| | | | | | | | | | |
| | Net book value | | | | | | | | |
| | As at 31 March 2022 | | | | 382,490 | | 28,870 | | 411,360 |
| | | | | | | | | | |
| | Net book value | | | | | | | | |
| | As at 31 March 2023 | | | | 595,601 | | 34,401 | | 630,002 |
|
| Right of use assets included in the above comprise all land and buildings assets. |
15. Intangible assets
| | | | Database platforms |
| | Cost | | £ |
| | | | |
| | At 1 April 2021 and 31 March 2022 | | - |
| | | | |
| | Capitalised costs in the year for internally generated platforms | | 398,436 |
| | | | |
| | | | |
| | As at 31 March 2023 | | 398,436 |
| | | | |
| | | | |
| | Amortisation | | £ |
| | | | |
| | As at 1 April 2021 and 31 March 2022 | | - |
| | | | |
| | Amortisation charge in the year | | 6,256 |
| | | | |
| | | | 6,256 |
| | | | |
| | Net Book Value | | |
| | | | |
| | As at 31 March 2022 | | - |
| | | | |
| | As at 31 March 2023 | | 392,180 |
16. Trade and other receivables
| As at the year ended 31 March | | | | | 2023 | | 2022 |
| | | | | | £ | | £ |
| | | | | | | | |
| Current | | | | | | | |
| Trade receivables | | | | | 1,436,966 | | 753,245 |
| Contract assets | | | | | 2,136,404 | | 459,086 |
| Other receivables | | | | | 214,957 | | 259,475 |
| Current tax receivables | | | | | 189,620 | | 249,290 |
| | | | | | | | |
| | | | | | | | |
| | | | | | 3,977,947 | | 1,721,096 |
| | | | | | | | |
Trade receivables and contract assets do not contain a significant financing component. These financial assets have been reviewed at each year end the following provision for expected credit losses is considered necessary:
| As at the year ended 31 March | | | | | 2023 | | 2022 |
| | | | | | £ | | £ |
| | |
| | | | | |
| Gross carrying amount - trade receivables | | | | | 3,609,741 | | 766,186 |
| | | | | | | | |
| Loss allowance | | | | | (36,371) | | (12,941) |
| | | | | | 3,573,370 | | 753,245 |
| | | | | | | | |
The loss allowances for trade receivables as at 31 March reconcile to the opening loss allowances as follows:
| | | | | | 2023 | | 2022 |
| | | | | | £ | | £ |
| | | | | | | | |
| Opening loss allowance at 1 April | | | | | 12,941 | | 2,712 |
| Increase in loss allowance recognised in profit or loss | | | 23,430 | | 10,229 | ||
| | | | | | | | |
| | | | | | | | |
| Closing loss allowance at 31 March | | | | | 36,371 | | 12,941 |
| | | | | | | | |
Other receivables include amounts due for sales taxes, prepayments and security deposits held for leases.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The 4GLOBAL Group does not hold any collateral as security.
| 17. | Cash and cash equivalents |
| | As at the year ended 31 March | | | | | 2023 | | 2022 |
| | | | | | | £ | | £ |
| | | | | | | | | |
| | Cash at bank and on hand | | | | | 1,121,147 | | 3,050,948 |
| | Credit card account | | | | | 16,946 | | - |
| | Total Cash and cash equivalents | | | | | 1,138,093 | | 3,050,948 |
Cash at bank and on hand does not earn interest.
18. Issued share capital
| | | | 2023 | | 2023 | | 2022 |
| | | | No. | | £ | | No. |
| £0.01 Ordinary shares | | | | | | | |
| As at 1 April | | | 26,344,994 | | 263,451 | | 109,692 |
| Share transfer on PLC incorporation | | | - | | - | | 21,828,708 |
| Issued on IPO | | | - | | - | | 4,406,594 |
| | | | | | | | |
| | | | | | | | |
| As at 31 March | | | 26,344,994 | | 263,451 | | 26,344,994 |
| | | | | | | | |
Fully paid ordinary shares carry one vote per share and the right to dividends and to distributions on winding up.
The issued share capital as at 1 April 2021 was the share capital for 4GLOBAL Consulting Limited which was exchanged for shares in the 4GLOBAL PLC on 11 November 2021.
The Company undertook an IPO on 7 December 2021 and issued 4,406,594 shares to shareholders.
19. Equity share-based payments
The 4GLOBAL Group bears the expense of equity settled share options granted to employees and consultants of the 4GLOBAL Group. Share options were awarded over the shares in 4GLOBAL Consulting Limited to Ian James and Utku Toprakseven. Ian James was appointed a director of 4GLOBAL Consulting Limited on 11 February 2021 and Utku Toprakseven on 1 April 2015.
The movements of share options during the year were as follows:
| | | | | | | Number of Share options | | Weighted average share price |
| | 4GLOBAL PLC | | | | | | | |
| | Outstanding as at 31 March 2022 | | | | | 2,305,872 | | 78p |
| | Granted during the year | | | | | - | | - |
| | Lapsed during the year | | | | | (275,400) | | 36p |
| | | | | | | | | |
| | | | | | | | | |
| | Outstanding as at 31 March 2023 | | | | | 2,030,472 | | 83p |
Options outstanding at 31 March 2023 had an exercise price of 35.6p - 91.0p. The outstanding options vest upon certain conditions including a change in ownership of 4GLOBAL PLC.
The number of options exercisable as at 31 March 2023 is 1,755,072.
The vesting period ranges from 7 December 2021 to 7 December 2023.
The fair value of share options was estimated using the Black-Scholes option-pricing model. The estimated fair values of options granted are based on the following weighted average assumptions:
| | As at the year ended 31 March | | | 2023 | | 2022 | |||
| | | | | | | | |||
| | Weighted average fair value (£ per option) | | | £0.39 | | £0.42 | |||
| | Weighted average remaining contractual life - years | | 8.8 | | 9.7 | ||||
| | | | | | | | | | |
The estimated fair values of options granted are based on the following weighted average assumptions:
|
| As at 31 March | | | | | 2023 | | | 2022 |
| | Weighted average share price at date of grant | | | | | 78p | | | 78p |
| | Weighted average exercise price | | | | | 83p | | | 78p |
| | Expected life (years) | | | | | 5 | | | 5 |
| | Expected volatility (%) | | | | | 44.0 | | | 44.0 |
| | Risk free interest rate (%) | | | | | 0.76 | | | 0.76 |
| | | | | | | | | | |
The volatility assumption, measured at the standard deviation of expected share price returns, is based on the volatility of a comparable listed company. The charge for equity-settled share-based payments in the relevant years is shown in Note 8.
20. Reserves
Share premium
Share premium records the amount above the nominal value received for shares sold, less transaction costs.
Share option reserve
The share-based payment reserve arises on share options issued by the 4GLOBAL Group to employees of the 4GLOBAL Group.
Merger reserve
The merger reserve arose on the group reconstruction when a share for share reconstruction took place and is the difference between the issue price and the nominal value of shares issued as consideration for the acquisition of subsidiary undertaking.
Warrant reserve
The warrant reserve arises on the warrants issued by the 4GLOBAL Group to certain advisers of the 4GLOBAL Group.
Capital redemption reserve
The capital redemption reserve arises on the repurchase of shares.
Currency translation reserve
The currency translation reserve arises on the currency translation of subsidiaries where the functional currency differs from the functional currency of the 4GLOBAL Group.
Retained earnings
The retained earnings reserve represents gains and losses recognised in the consolidated statement of comprehensive income.
21. Trade and other payables
| | As at 31 March | | | | | 2023 | | 2022 |
| | | | | | | £ | | £ |
| | Current | | | | | | | |
| | Trade payables | | | | | 148,331 | | 204,113
|
| | Contract liabilities | | | | | 365,772 | | 216,696 |
| | Payroll taxes, pension & social security | | | | | 344,504 | | 268,398 |
| | Other payables | | | | | 264,139
| | 399,347
|
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | 1,122,746 | | 1,088,554 |
| | | | | | | | | |
The carrying values of the trade and other payables approximate to their fair value as at the year-end date. Other payables include accruals for general expenses incurred in the normal course of business that are expected to be settled within 12 months.
22. Borrowings
| | As at 31 March | | | | | 2023 | | 2022 |
| | | | | | | £ | | £ |
| | Non-current | | | | | | |
|
| | Borrowings | | | | | 108,832 | | 158,823 |
| | | | | | | | | |
| | | | | | | | | |
| | Current | | | | | | | |
| | Borrowings | | | | | 50,000 | | 121,814 |
| | | | | | | | | |
| | | | | | | | | |
Borrowings includes a loan obtained in May 2020 under the Coronavirus Business Interruption Loan Scheme ("CBILS") of £250,000. The loan is repayable in monthly instalments by April 2026. The rate of interest applicable to the loan is 3.05% plus the Bank of England base rate. Under the scheme, the government has given a grant of the amounts of interest that would arise on the loan for the first 12 months (see note 7). This amount has been recognised in Other Operating Income. The Company has granted a fixed and floating charge over its assets in respect of this loan. A partial guarantee has been provided by the government.
In the year ended 31 March 2022 borrowings included a loan of £50,400 from Eloy Mazon, a director and shareholder of the Company. The loan was drawn down between December 2013 and September 2014 and bore interest at 5% plus the Bank of England base rate, which has been accrued with the loan. Interest was charged on the capital and outstanding interest. The balance outstanding at 31 March 2023 was £nil (2022: £69,293). The loan was repaid in June 2022.
The carrying value of borrowings approximates to their fair value as at the year-end date.
23. Lease liabilities
| | | | | | | 2023 | | 2022 |
| | | | | | | £ | | £ |
| | | | | | | | | |
| | As at 1 April | | | | | 353,811 | | 281,676 |
| | | | | | | | | |
| | Additions | | | | | 566,045 | | 439,987 |
| | Interest expense | | | | | 6,782 | | 10,780 |
| | Payment of interest | | | | | (8,951) | | (10,780) |
| | Payment of principal | | | | | (351,642) | | (186,470) |
| | Disposal | | | | | - | | (181,382) |
| | | | | | | | | |
| | | | | | | | | |
| | As at 31 March | | | | | 566,045 | | 353,811 |
| | | | | | | | | |
| | | | | | | | | |
The 4GLOBAL Group has lease contracts for land and buildings. The 4GLOBAL Group does not have any leases where the 4GLOBAL Group is a lessor. The weighted average remaining term of all leases is disclosed below. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. The Right of Use leases have been discounted at the 4GLOBAL Group's incremental borrowing rate of 6.2%.
The 4GLOBAL Group has identified four leases with lease terms of 12 months or less. The 4GLOBAL Group applies the short-term lease recognition exemption for these leases. The expense recognised in respect of these leases is disclosed in Note 8.
| | | | | | | 2023 | | 2022 |
| | | | | | | £ | | £ |
| | | | | | | | | |
| | Maturity analysis of leases | | | | | | | |
| | Current | | | | | 371,985 | | 353,811 |
| | 1 to 2 years | | | | | 194,060 | | - |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | 566,045 | | 353,811 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | As at 31 March 2023 | | As at 31 March 2022 |
| | | | | | | Years | | years |
| | | | | | | | | |
| | Weighted average remaining term | | | | | 1 | | 1 |
| | | | | | | | | |
| | | | | | | | | |
24. Financial instruments
The 4GLOBAL Group's treasury policy is to avoid transactions of a speculative nature. In the course of trade the 4GLOBAL Group is exposed to a number of financial risks that can be categorised as market, credit and liquidity risks. The Board has identified the risks within each category and considers the impact on the activities of the 4GLOBAL Group as part of their regular meeting routine.
Principal financial instruments
The principal financial instruments used by the 4GLOBAL Group, from which financial instrument risk arises, are as follows:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Borrowings
Lease liabilities
A summary of the financial instruments held by category is provided below:
| | | | | | | As at 31 March 2023 | | As at 31 March 2022 |
| | | | | | | £ | | £ |
| | Financial assets at amortised cost | | | | | | | |
| | | | | | | | | |
| | Cash and cash equivalents | | | | | 1,138,093 | | 3,050,948 |
| | Trade and other receivables | | | | | 3,787,215 | | 1,012,720 |
| | | | | | | | | |
| | | | | | | | | |
| | Total financial assets | | | | | 4,925,308 | | 4,063,668 |
| | | | | | | | | |
| | | | | | | | | |
|
|
The fair value of short-term deposits and other financial assets approximates to the carrying amount. |
| | | | | | | 2023 | | 2022 |
| | Financial liabilities at amortised cost | | | | | | | |
| | | | | | | | | |
| | Borrowings | | | | | 158,832 | | 280,637 |
| | Trade and other payables | | | | | 412,470 | | 588,535 |
| | Lease liabilities | | | | | 566,045 | | 353,811 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | 1,137,347 | | 1,222,983 |
| | | | | | | | | |
| | | | | | | | | |
The Directors consider that the carrying amounts of all financial assets and financial liabilities recognised in the financial information approximate their fair values (due to their nature and short times to maturity).
Currency risk
The 4GLOBAL Group's financial risk management objective is broadly to seek to make neither profit nor loss from exposure to currency or interest rate risks. The 4GLOBAL Group is exposed to transactional foreign exchange risk and takes profits and losses as they arise, as in the opinion of the Directors, the cost of hedging against fluctuations would be greater than the related benefit from doing so.
The 4GLOBAL Group has no trade and other payables denominated in the currencies other than pounds sterling.
The trade and other receivables balances held by the 4GLOBAL Group in currencies other than pounds sterling are as follows:
| | | | | | | As at 31 March 2023 | | As at 31 March 2022 |
| | | | | | | £ | | £ |
| | Euro | | | | | 106,871 | | 1,241 |
| | New Zealand Dollar | | | | | 2,931 | | 11,425 |
| | Saudi Arabian Riyal | | | | | 1,102 | | - |
| | United States Dollar | | | | | 143,257 | | 70,653 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | 254,161 | | 83,319 |
| | | | | | | | | |
| | | | | | | | | |
|
| The cash balances held by the 4GLOBAL Group in currencies other than pounds sterling are as follows: |
| | | | | | | As at 31 March 2023 | | As at 31 March 2022 |
| | | | | | | £ | | £ |
| | Saudi Arabian Riyal | | | | | 21 | | 10,655 |
| | Euro | | | | | 48,079 | | 14,182 |
| | US Dollar | | | | | 84,737 | | 3,339 |
| | Turkish Lira | | | | | 27,961 | | 18,974 |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | 160,798 | | 47,150 |
| | | | | | | | | |
| | | | | | | | | |
Foreign currency sensitivity analysis
A 10% movement in the relevant foreign currency exchange rates would increase/(decrease) net assets as shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
| | | TRY | | USD | | EUR | | SAR |
| As at 31 March 2022 | | £ | | £ | | £ | | £ |
| Effect on net assets: | | | | | | | | |
| GBP strengthened by 10% | | (1,725) | | (295) | | (1,321) | | (975) |
| GBP weakened by 10% | | 2,108 | | 381 | | 1,537 | | 1,176 |
| | | | | | | | | |
| | | | | | | | | |
| | | NZD | | TRY | | USD | | EUR | | SAR |
| As at 31 March 2023 | | £ | | £ | | £ | | £ | | £ |
| Effect on net assets: | | | | | | | | | | |
| GBP strengthened by 10% | | (266) | | (2,542) | | (20,727) | | (14,086) | | (102) |
| GBP weakened by 10% | | 326 | | 3,107 | | 25,333 | | 17,217 | | 125 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due causing financial loss to the 4GLOBAL Group. Credit risk within the 4GLOBAL Group arises from cash and cash equivalents, and trade and other receivables. The maximum exposure to credit risk is the carrying amount of these financial instruments.
The 4GLOBAL Group is subject to concentrations of credit risk from cash deposits in excess of insured limits. The 4GLOBAL Group places its cash in financial institutions which are considered high quality financial institutions by management. At times, such cash deposits may be in excess of insured limits. The 4GLOBAL Group does not enter into any derivatives to manage credit risk.
The 4GLOBAL Group calculates expected loss allowances based on the maximum contractual year over which the 4GLOBAL Group is exposed to credit risk. Financial assets are considered to be credit-impaired when there is reasonable and supportable evidence that one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. The 4GLOBAL Group also applies a rebuttable presumption that an asset is credit-impaired when contractual payments are more than 30 days past due. The 4GLOBAL Group has made an assessment of whether trade receivables are credit-impaired as each of the years in question. The 4GLOBAL Group has taken into account the current financial position of counterparties and expected future cash flows together with actual and forecast financial information, in order to estimate the probability of default of each of these financial assets as well as the loss upon default. No provision for expected credit losses has been made.
The contractual cash flows on these financial assets have not been modified or renegotiated in the current or prior year.
If there is evidence that there is no reasonable expectation of recovery and the counterparty is in severe financial difficulties, the financial asset will be written off.
The following table provides an analysis of trade receivables and contract assets that were due, but not impaired, at each financial year end. The Group believes that the balances are ultimately recoverable based on a review of past impairment history and the current financial status of customers.
| | | | | | | As at 31 March 2023 | | As at 31 March 2022 |
| | | | | | | £ | | £ |
| | | | | | | | | |
| | Current 1 - 30 days
| | | | | 1,772,340 | | 412,666 |
| | 30 - 60 days
| | | | | 661,793 | | 162,935 |
| | 61 - 90 days
| | | | | 400,825 | | 110,483 |
| | 91 + days
| | | | | 774,783
| | 80,102 |
| | Provision for impairment of trade receivables
| | | | | (36,371) | | (12,941) |
| | | | | | | | | |
| | | | | | | | | |
| | Total trade receivables and contract assets - net | | | 3,573,370 | | 753,245 | ||
| | | | | | | | | |
| | | | | | | | | |
The Directors are unaware of any factors affecting the recoverability of outstanding balances at 31 March 2023 and, consequently, no further provisions have been made for bad and doubtful debts.
The allowance for bad debts has been calculated using a 12-month lifetime expected credit loss model, as set out below, in accordance with IFRS 9.
| | | As at 31 March 2023 | | | | As at 31 March 2022 | | |
| | | £ | % | £ | | £ | % | £ |
| | | | | | | | | |
| | Current 1 - 30 days
| 1,772,340 | 0% | - | | 412,666 | 0% | - |
| | 31 - 60 days
| 661,793 | 0% | - | | 162,935 | 0% | - |
| | 61 - 90 days
| 400,825 | 0% | - | | 110,483 | 0% | - |
| | 91 - 120 days
| 203,210 | 0% | - | | 74,423 | 0% | - |
| | 121+ days | 535,202 | 2% | 10,704 | | 5,679 | 0%
| - |
| |
| | | | | | | |
| | | | | | | | | |
Credit Quality of Financial Assets
| | | | | | | As at 31 March 2023 | | As at 31 March 2022 |
| | Past due not impaired | | | | | £ | | £ |
| | | | | | | | | |
| | Current
| | | | | 1,772,340 | | 412,666 |
| |
| | | | | | | |
| | 31 - 90 days
| | | | | 1,062,618 | | 273,418 |
| | Over 91 days - no impairment
| | | | | 738,412 | | 67,161 |
| | | | | | | | | |
| | | | | | | | | |
| | Total past due not impaired | | | | | 3,573,370
| | 753,245 |
| | | | | | | | | |
| | | | | | | | | |
Liquidity risk
The 4GLOBAL Group is exposed to liquidity risk as part of its normal trading cycle. The 4GLOBAL Group's policies ensure sufficient liquidity is available to meet foreseeable needs through the preparation of short and long-term forecasts. The 4GLOBAL Group's requirements are constant throughout the year and relate largely to working capital which is managed through the use of surplus cash.
The table below summarises the maturity profile of the 4GLOBAL Group's financial liabilities, based on contractual, undiscounted payments:
| | | | Less than 1 year
| |
2 to 5 years | | More than 5 years | |
Total |
| | Year ended 31 March 2022 | | £ | | £ | | £ | | £ |
| | Borrowings | | 121,814 | | 158,823 | | - | | 280,637 |
| | Trade and other payables | | 588,535 | | - | | - | | 588,535 |
| | Lease liabilities | | 353,811 | | - | | - | | 353,811 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | 1,064,160 | | 158,823 | | - | | 1,222,983 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | Less than 1 year
| |
2 to 5 years | | More than 5 years | |
Total |
| | Year ended 31 March 2023 | | £ | | £ | | £ | | £ |
| | Borrowings | | 50,000 | | 108,832 | | - | | 158,832 |
| | Trade and other payables | | 412,470 | | - | | - | | 412,470 |
| | Lease liabilities | | 371,985 | | 194,060 | | - | | 566,045 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | 834,455 | | 302,892 | | - | | 1,137,347 |
| | | | | | | | | | |
| | | | | | | | | | |
Capital risk
The Directors define capital as the total equity of the company. The Directors' objectives when managing capital are to safeguard the 4GLOBAL Group's ability to continue as a going concern in order to provide returns for stockholders and benefits for other stakeholders and to maintain an optimal structure to reduce the cost of capital. In order to maintain an optimal capital structure, the Directors may adjust the amount of dividends paid to shareholders, return capital to shareholders and issue new shares to reduce debt.
Net funds reconciliation
| | | | | | | As at 31 March 2023 | | As at 31 March 2022 |
| | | | | | | £ | | £ |
| | Cash and cash equivalents | | | | | 1,138,093 | | 3,050,948 |
| | Borrowings - repayable within one year | | | | | 50,000 | | 121,814 |
| | Borrowings - repayable after one year | | | | | 108,832 | | 158,823 |
| | | | | | | | | |
| | Net funds | | | | | 1,296,925 | | 3,331,585 |
| | | | | | | | | |
| | | | | | | | | |
| | Cash and liquid investments | | | | | 1,138,093 | | 3,050,948 |
| | Gross debt - variable interest rates | | | | | 158,832 | | 280,637 |
| | | | | | | | | |
| | | | | | | | | |
| | Net funds | | | | | 1,296,925 | | 3,331,585 |
| | | | | | | | | |
| | | | | | | | | |
Commitments
The 4GLOBAL Group has identified a lease contract, which begins on 1 April 2023 that has been accounted for in the Consolidated Statement of Financial Position as a right of use asset and relates to the offices the company occupies in Chiswick, London. No other lease contracts have been identified and not yet commenced as at the end of each year. Consequently, the 4GLOBAL Group has not identified any other material commitments.
Ultimate controlling party
As at 31 March 2023, the ultimate controlling party of the 4GLOBAL Group is Eloy Mazon by virtue of his 50.5% shareholding in 4GLOBAL PLC.
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