23 May 2024
Eneraqua Technologies plc
("Eneraqua", the "Company" or the "Group")
Full Year Results
Macro-economic backdrop led to challenges in the year
but demand remains strong with the market beginning to stabilise
Eneraqua Technologies plc, a specialist provider of energy and water efficiency solutions, is pleased to announce its audited full year results for the year ended 31 January 2024.
Financial Highlights
| | FY to Jan 2024 | FY to Jan 2023 |
| Revenue | £53.8m | £55.1m |
| EBITDA | (£5.2m) | £11.7m |
| Adjusted EBITDA1 | (£3.3m) | £11.8m |
| Adjusted EBITDA margin | (6.2%) | 21.5% |
| Adjusted PBT | (£6.0m) | £10.1m |
| Adjusted diluted EPS | (18.98p) | 25.25p |
| Cash generated from operations | £7.7m | (£3.4m) |
| Gross Cash | £6.4m | £3.2m |
| Net Cash/(Debt) | £1.2m | £(3.0)m |
| ROCE | (31.1%) | 33.0% |
| Dividend per share | 0 | 1.2p |
Operational Highlights
| · | Group faced operational headwinds in both Energy and Water in FY24 with project delays impacting financial performance. | |
| | o | Energy - Some domestic projects delayed due to inflationary pressures on client budgets, with domestic energy sector normalising. No clients lost with projects deferred into FY25 and FY26. |
| | o | Water - In August 2023, UK Government announced its intention to change legislation governing development in nitrate-sensitive areas, causing a hiatus in work, since resolved. Policy now stabilised. |
| · | Continued to make progress in the year despite challenges, with headwinds now easing. | |
| | o | Energy - Successes in non-domestic energy projects with first major NHS Trust contract won: £11.3m contract with Kingston NHS Trust, and saw growth in non-domestic sector more generally. |
| | o | Energy - Won new contracts for domestic Energy projects, including a £12.7m contract with Royal Borough of Kensington & Chelsea. |
| | o | Water - Won first nutrient neutrality contract with Ashford Borough Council, Kent. Will see patented Control Flow HL2024® products installed in 5,000 existing homes which unlocks a new 1,000 house development that had stalled for over 18 months. |
| | o | Water - Continued to see demand increase internationally, with expansion across a wide range of markets in Spain and India where a 3,000 home pilot is underway to demonstrate benefits of Control Flow HL2024. |
| · | International expansion continued with revenue growth of 138% to £1.3m. | |
| · | Revenue split: 77% public bodies and 23% private. | |
| · | Rightsizing of the business led to annualised cost savings of c. £1.0m. | |
| · | Completion of production facility in Toledo, Spain, with Group starting to see benefits flow through in the form of reduced manufacturing costs and improvements in quality assurance. | |
Post period end
| · | Following the acquisition of Vriend in the Netherlands and its successful integration within the Group, it is on course to double turnover in first 12 months post-acquisition. |
| · | Secured 4 appointments by the London Borough of Islington, the Royal Borough of Kingston upon Thames, Cardiff Council and Ceredigion County Council under 4-year contracts to reduce the carbon emissions from their public buildings. These four contracts involve work with a contract value of £14.8m in FY25 with further works in later years. |
Current trading and outlook
| · | Local authority domestic Energy clients continue to see impacts of inflation affecting budgets and as a result a return to normal levels is not anticipated until FY26. |
| · | Non-domestic Energy sector projects are an exciting new growth area for the Group. |
| · | Water continues to grow strongly as demand for solutions, across a wide range of applications, increases.
|
Commenting on the results, Eneraqua Technologies CEO, Mitesh Dhanak, said: "FY24 was one of the most difficult years for the Group, in which it had to navigate challenging market conditions as inflationary pressure on client budgets and policy decisions in the UK impacted the Group's project delivery timelines. Notwithstanding these challenges, demand for the Group's solutions remained strong, with no customers or projects being lost with project timelines being extended into FY25 and FY26."
"Clients both in the UK and internationally recognise the need for and benefits derived from our solutions. We have diversified our business over the last year in terms of clients, non-domestic sector and international expansion and we are confident we have the solutions, people, relationships and strategy in place to service this demand and drive growth across both Energy and Water."
An overview of the results is available to watch here: https://bit.ly/ETP_FY24_Overview
Investor Presentation
A presentation to retail investors will be hosted at 11am this morning. Investors are invited to sign up for the presentation via the PI World platform using the following link: https://bit.ly/ETP_FY24_results_webinar
Questions can be submitted during the presentation.
| For further information please contact:
Eneraqua Technologies plc Mitesh Dhanak, Chief Executive Officer Iain Richardson, Chief Financial Officer |
Via Alma
|
|
Liberum (Nomad and Joint Broker) Edward Mansfield John More Anake Singh |
Tel: 0203 100 2000 |
|
Singer Capital Markets (Joint Broker) Sandy Fraser Asha Chotai |
Tel: 020 7496 3000 |
|
Justine James Andy Bryant Will Ellis Hancock Emma Thompson |
Tel: 020 3405 0205 eneraqua@almastrategic.com |
Notes to editors
Eneraqua Technologies (AIM:ETP) is a specialist in energy and water efficiency. The Group operates in two markets, energy and water. Energy is the larger, with the Company focused on clients with end of life gas, oil or electric heating and hot water systems. The Group provides turnkey retrofit district or communal heating systems based either on high-efficiency gas or ground/air source heat pump solutions that support Net Zero and decarbonisation goals.
Water is a growing service offering focused on water efficiency upgrades for utilities and non-domestic clients including hotels, hospitals and care homes.
The Group's activities are underpinned by the Company's wholly-owned intellectual property, the Control Flow HL2024® family of products which reduce water wastage and improve the performance of heating and hot water systems.
The Group's main country of operation is the United Kingdom. The Group's head office is based in London with additional offices in Leeds, Washington (Sunderland), India, Spain and the Netherlands. The Group has 206 employees, with the majority employed within the UK.
To find out more, please visit: www.eneraquatechnologies.com
Chairman's statement
The year ended 31 January 2024, the Company's second year quoted on AIM, was a most challenging one.
Turnover dipped only slightly relative to the previous year but a combination of lower margins and increased overheads meant that the Company reported an adjusted loss before tax of £6.0 million compared with an adjusted profit before tax of £10.1 million in the previous year.
Despite the significant loss in the year our balance sheet remained sound with net cash of £1.2m at the year end (2023: £3.0m net debt).
Energy
The main challenge was in our domestic Energy business in which to a large extent our customers are public bodies or funded, directly or indirectly, by public expenditure. As the year progressed our clients' expenditure plans were progressively disrupted by rising costs.
The general level of inflation in the economy affected our clients' operations but the greatest impact was on our clients' capital plans, where the cost of key activities, such as cladding, increased by far more than the rate of general inflation.
This inflation materially impacted capital programmes where budgets are fixed at the outset of each financial year. In response to these inflationary pressures clients were required to curtail their programmes to focus on essential works, for example those directly required by legislation.
As a consequence, Eneraqua experienced project deferrals reducing revenue which materially impacted profitability given the nature of the Group's cost base and the associated operational leverage due to lower levels of utilisation and associated efficiency.
An important point is that the projects we had expected to win, and in some cases had already won, are still required and are being rescheduled within clients' programmes in line with their budgets. There therefore remains a strong pipeline of available work.
Water
In our Water business the challenges we faced were of a different nature. Eneraqua's Control Flow HL2024® technology reduces water wastage and also associated nitrate emissions from existing homes. These emissions are a major issue in the U.K. and elsewhere which are blocking many new building projects. Fitting our technology to existing homes enables new homes to be built with no net increase in nitrate emissions.
The Company made good progress with pilot schemes which successfully demonstrated the effectiveness of its technology and had expected to be able to win more significant projects during the year to 31 January 2024. This progress was halted when the Government announced in August 2023 a review of its plans to achieve reductions in nitrate pollution, resulting in a hiatus in project work.
The UK Government has since clarified its position and the Company believes the latest Government guidance will likely have a positive effect on the industry and will enable the Company to develop its Water business albeit having caused a material delay in the Company's progress during the last financial year.
International
Our international activities continued to perform well. In Spain our factory which makes the Control Flow HL2024® products successfully started production. All of the Control Flow HL2024® products for the European market are now made in Spain and we are also making progress in selling our products in Spain especially in the Hotel and Student Accommodation markets.
In the Netherlands we acquired Vriend providing the Company with the necessary regulatory certificates to operate and an insight into the market to enable the Company to sell in the Netherlands and more widely across the EU. We have increased the strength of our Dutch sales capability and expect to make further progress this year.
Our Indian operation is a key element of the future of the Group. In addition to a sales and operating capability, we carry out high value research and development work at our subsidiary in Kolkata. We have applied for a number of patents in India based on our work there which will create new applications for our Control Flow HL2024® technology. There is very significant potential in India for the application of our technology both in the supply of drinking water and in agriculture and we have already secured contracts to deliver additional zero-carbon irrigation solutions and to undertake trials of Control Flow HL2024® in 3,000 homes.
People
The very challenging market conditions during the year impacted all of those who worked at Eneraqua. We had to reduce the size and scope of our operations in the UK to reflect the reduced activity which resulted in a number of redundancies, which we greatly regret, but could not sensibly be avoided. Our workforce has shown both resilience and loyalty in continuing to deliver high quality work for our customers throughout the year.
This year we appointed Bill Tame as our Senior Independent Non-Executive Director. Bill has been an effective and diligent board member since his appointment shortly prior to IPOand he brings a wealth of experience to the Group.
Dividend
The board recognises the importance of dividend income to shareholders but concluded that in light of the loss made in the year to 31 January 2024 it would not be appropriate to propose a dividend for that year. The board will keep the payment of dividends under review as we return to profit.
Outlook
After a bruising year to 31 January 2024 we have started the current year with cautious optimism.
The need for the products and services which Eneraqua provides, as the world moves towards net zero carbon emissions and grapples with growing shortages and pollution of water, remains in place; the requirement for action grows rather than diminishes as each year passes.
In the UK, while there remains pressure on public sector domestic capital budgets, there is more stability in the non-domestic sector including hospitals, offices and schools. Stability is the key requirement for our clients to proceed with their expenditure plans, of which what Eneraqua provides is part. The improving financial stability as well as certainty in policy underpinning our Water business in the UK means that we expect the projects which we had won or were well placed to win last year to start to be realised. The continued growth in Water is in line with our expectation that this will become the predominant part of the Group in the coming years.
Internationally, we signed a Memorandum of Understanding with the highly respected The Energy and Resources Institute (TERI) which sets out a framework for collaboration across a wide spectrum of water projects in India, where we expect to see substantial growth in the coming years.
The potential size of the markets we serve remains far greater than the scale of those markets today. We believe that through its unique technology and the skills of its people Eneraqua can grasp a significant share of the markets in which we operate.
Our plans for the current year are for significant growth in activity and a return to profitability and we are determined to deliver on those plans.
Finally, I would like to thank Iain Richardson, who served as a director of the Company and its Chief Financial Officer from before the Company's flotation on AIM and who steps down as a director on 31 May 2024, for his service to the Company. We all wish him well.
Guy Stenhouse
Chairman
22 May 2024
CEO statement
FY24 was one of the most difficult years for the Group, in which it had to navigate challenging market conditions as inflationary pressure on client budgets and policy decisions in the UK impacted the Group's project delivery timelines. Notwithstanding these challenges, demand for the Group's solutions remained strong, with no customers or projects being lost with project timelines being extended into FY25 and FY26.
Following the delays to domestic energy projects and the subsequent impact on the Group's performance, we responded by right-sizing the business, and we remain confident in the structural drivers for our business, demand for our services and the role Eneraqua will play in supporting the transition to net-zero both in the UK and internationally. The delayed domestic projects remain in the pipeline for FY25 and FY26.
As a result of the challenges faced by some of our clients in the domestic sector, we have been focused on diversifying our client base, the sectors we sell into and international expansion. Importantly, our non-domestic energy projects have not been impacted in the same way as domestic energy projects, and we see strong opportunity for growth in this area. Our appointment by Kingston NHS Trust has been followed up this year with 4-year appointments by the London Borough of Islington, the Royal Borough of Kingston upon Thames, Cardiff Council and Ceredigion County Council to reduce the carbon emissions from their public buildings. These four contracts involve work with a contract value of £14.8m in FY25 with further works in later years.
Clients both in the UK and internationally recognise the need for and benefits derived from our solutions. We have diversified our business over the last year in terms of clients, non-domestic sector and international expansion and we are confident we have the solutions, people, relationships and strategy in place to service this demand and drive growth across both Energy and Water.
Financial performance
In the year, the Group delivered revenues of £53.8m (FY23: £55.1m) and an adjusted LBT of (£6.0m) (FY23: PBT £10.1m).
With positive collection of receivables through the second half of the year, coupled with tight cost control, the Group closed the year with a stronger than anticipated cash position of £6.4m (FY23: £3.2m), representing a net cash position of £1.2m (FY23: net debt of £3.0m). We have a healthy order book of £101.7m of which 88% is expected to be delivered during FY25.
Over the year, and as previously disclosed, as part of our focus on rightsizing the business we identified a number of cost reduction opportunities which have resulted in c. £1m of annualised operating cost being taken out of the business. We remain focused on effective cost control while ensuring we are in the best position to grow as the market continues to normalise.
Operational and strategic progress
Despite the challenges during the year, we have continued to deliver key projects for our customers and we continued to see good progress in both energy and water. Whilst domestic energy is not expected to return fully to normal until FY26, the non-domestic sector offers significant growth opportunities. This has seen a rise in work and pipeline opportunities for non-domestic Energy projects and continued growth in Water.
A core reason for our listing over two years ago was to facilitate the buyout of the full intellectual property behind the technology which underpins our products. This technology led approach continues to differentiate our offering and its effectiveness is evidenced by the way we have successfully broadened our range of services and grown our customer base in the UK and overseas.
Our confidence in the Group's outlook reflects the stabilisation we are seeing across our target markets coupled with the intrinsic need for and ever-growing awareness around our products to meet net-zero and water-stress targets.
As well as optimising our operating costs through the year, we also continue to look at ways of driving down the costs of our solutions. Since completion of our production facility in Toledo, Spain we are starting to see the benefits flow through with manufacturing of key components commencing in Q4 of FY24. Through FY25 we expect to see a reduction in the manufactured costs of our products, as well as improvements in quality assurance, delivering both a financial payback and even higher client satisfaction scores.
Energy
In Energy, we continue to be committed to ensuring that our domestic-sector customers feel supported as we work with them to find solutions to the inflationary and other cost pressures on their budgets. Thanks to the hard work and flexibility of our team we did not lose any contracts during this challenging period, with projects instead being deferred into FY25 and FY26. Not only did this strengthen our existing customer relationships but it raised our profile as a trusted and capable partner.
While the domestic Energy sector has not yet returned to normal, during FY24 we continued to secure significant contracts including a £12.7m contract with the Royal Borough of Kensington & Chelsea for the replacement of an end-of-life gas fired district heating system with a low-carbon heat-pump based system. Our turnkey retrofit district and communal heating systems, including ground and air source heat pump solutions, are an important tool for clients in meeting their sustainability and net zero goals. We have continued to see a diversification of clients and growth in the non-domestic sector with new wins including local authorities, the NHS, education and public buildings.
We see continued and growing awareness of and demand for cleaner heating solutions to meet net-zero targets and reduce energy costs, both of which are core aspects of our growth strategy.
At the time of the Mathewson acquisition, we outlined the opportunity it opened in the NHS and I am delighted that we secured our first NHS contract, worth £11.3m with the Kingston NHS Trust. This project is on course with the client increasing the scope of works by an additional £1.1m reflecting the quality of service provided to date.
We were also awarded a £7.2m contract with a world-class museum, art gallery and leisure complex, again for the replacement of an old gas-fired system again with a new low-carbon heat pump solution.
The non-domestic sector provides substantial opportunities for growth. This year we have secured 4-year appointments with the London Borough of Islington, the Royal Borough of Kingston upon Thames, Cardiff Council and Ceredigion County Council to reduce the carbon emissions from their public buildings. These four contracts involve work with a contract value of £14.8m FY25 with further works in later years as the drive to meet Net Zero intensifies.
As mentioned, we continue to make progress internationally and see scope for growth across our key target geographies. Since our acquisition of Vriend in the Netherlands, we have been focused on integrating it within the business. Vriend adds a particular speciality in designing and installing hybrid gas/heat pump heating systems. We are on course to double revenues within a year of the acquisition, which reinforces our confidence in further growth in Europe.
Water
There is increasing global awareness of the risks from water scarcity in the UK and elsewhere together with the need to mitigate the impacts of nitrate pollution. While certain projects were impacted in FY24 by the UK government's policy review on net nutrient neutrality, this has since stabilised and opportunities are coming back on stream, underpinning our confidence for Water moving forward. Our Water offering is based on our patented Control Flow HL2024®technologies which reduce water wastage and improve the efficiency of heating and hot water systems. Clients include water companies, developers, hotels, schools and leisure centres, with the products installed in both domestic and commercial applications.
We signed our first nutrient neutrality contract with Ashford Borough Council, Kent, which will see Control Flow HL2024® products installed in some 5,000 existing homes which unlocks a new development of 1,000 homes that had been stalled for over 18 months.
International expansion continues with successes both in Europe and in India. In Spain we continue to see demand growing across a range of industries with installation of Control Flow HL2024® in four hospitals and a number of student accommodation and care home sites. We have a healthy pipeline of new projects with interested parties in a variety of sectors.
In India, we are undertaking residential pilots for water efficiency as part of that government's plans to improve urban water supply. We see the use of our technology in a domestic setting as a positive step and we are encouraged by the prospect of expanding these trials as the results come out.
The next steps in both residential and agritech in India are now not anticipated until H2 FY2025 as a result of the current General Elections which run until June.
Acquisition strategy
The Group is already seeing material benefits from the acquisition of both Vriend in the Netherlands and Mathewson in the UK. We approach our M&A activity with discipline and focus and the successes we are seeing since these two businesses became part of the group come as a result of this approach.
We continue to focus on the integration of these two businesses into the Group and to drive growth in each.
Technologies and R&D
Our technologies and focus on innovation to develop and protect our IP is a key part of our strategy. R&D spend last year was £2.1m and we are expecting similar levels of spend in FY25. Our focus for the R&D during the year was towards enhancing our existing products as well as building the roadmap for new ones and has resulted in applications for new patents in India and Europe.
In the year we also signed a Memorandum of Understanding with The Energy and Resources Institute ("TERI") in India. This agreement is focused on introducing some of their technologies into Europe as well as working with them in India and while at the early stages, we look forward to exploring this avenue further.
Market
The underlying market drivers for our products remain stronger than ever as the climate crisis intensifies and the need for green energy solutions becomes more urgent. COP28 was the best attended climate conference in history, reflecting the increasing momentum and global recognition of climate change. The commitment to transitioning away from fossil fuels assumes doubling the annual rate of energy efficiency improvements by 2030 as these are more cost-effective solutions for many buildings.
At the same time water scarcity continues to be a growing global challenge. Directives and investment plans are in place in the EU and the UK to increase spending on water wastage and treatment, and governments and private companies around the world are increasingly recognising the need to focus spending on water infrastructure.
Our technologies offer proven solutions that can improve the efficiency of energy systems as well as reduce water wastage. These place us in a strong position to grow as we help our clients meet their goals.
ESG
ESG remains at the heart of our business and runs through the core of our strategy. We are a carbon neutral company and our technologies have saved the equivalent of 681 Olympic size swimming pools of water.
The environmental benefits derived from our technologies are clear and we are committed to protecting the environment across our operations.
In FY24 the Group saved over 325,000 tCO2e through our Control Flow HL2024® technology and renewable heating solutions designed to deliver our clients net carbon zero strategies. This is an increase of 56% on the previous year and represents a significant saving, more than offsetting the level of carbon generated by the Group in its Scope 1 and 2 activities.
As an AIM quoted company, we align with the QCA Corporate Governance code, which sets out our commitment to ethical values and behaviours, including our responsibilities to our stakeholders, the environment, and society.
Strong governance is at the core of everything we do and is central to our ESG and wider business practices. Our governance framework is designed to promote ethical conduct, accountability, and transparency across our operations.
People
In a difficult year our people have been instrumental in in delivering for our customers, and I would like to thank each and every one of our team for their hard work and dedication. It is thanks to them that our clients were able to mitigate their problems and tailor their work with us to suit their needs in the face of challenging macro headwinds.
Unfortunately, the challenges in-year and project delays meant that we had to let go of some of our teams in order to right-size the business. This was a difficult but unavoidable decision given the delays in projects. I would like to thank those individuals for their contributions and to wish them success in the future.
With Iain Richardson stepping down as CFO, the search for his successor is underway and James Lamb, Group Financial Controller, will take over the role of interim CFO while we run the process to appoint a permanent successor.
Outlook
The first months of the current year have progressed as we planned and we are expecting a significant volume of work with a return to profit in H2. Our cash position is robust and we have returned to a revenue growth trajectory.
Our local authority domestic Energy clients continue to see the impacts of inflation and other cost pressures affecting capital budgets. Some have been able to navigate these issues, with others continuing to face challenges and while we continue to secure new wins, we do not expect activity in this area to return to normal levels until FY26.
In the non-domestic Energy sector we have secured several important new clients and projects and we expect to see continuing growth through the year. While margins are lower than for domestic projects, client capital budgets in this sector have stabilised and are likely to grow in the coming period.
Water continues to perform strongly as clients better understand and appreciate the benefits of the Control Flow HL2024® technologies. This is in both mitigating water stress as well as unlocking development held up by water and nutrient neutrality concerns. We see Control Flow HL2024® becoming one of the standard solutions for addressing these types of issues in the future.
Internationally we see strong growth in the Netherlands as we expand our energy offering and introduce our water solutions. In Spain and India we continue to see growth through our Control Flow HL2024® products and the diversification into residential as well as agricultural and non-domestic projects.
Overall, following a challenging year, we are confident in the capability of the business and encouraged by the traction we are now starting to see.
Mitesh Dhanak
CEO
22 May 2024
CFO Statement
2024 was a challenging year with the Group being affected by a number of adverse macro-economic factors.
Strategy
Despite the challenges of 2024, the Group's strategy continues to be focused on developing and delivering profitable solutions and products which help our clients reduce their carbon consumption and improve their water efficiency.
KPIs
The Group's financial Key Performance Indicators, which are aligned with its growth strategy, are revenue growth, adjusted EBITDA, adjusted EBITDA margin, R&D spend, cash conversion and ROCE. These are consistent with how the Group measures trading and cash generative performance and how these are reported to the Board.
Cash conversion improved significantly from 2023 as the business benefited from the unwind of the increased levels of accrued income at the end of H2 2023 and stringent working capital management as the business managed the impact of inflation and cost pressures on the capital budgets of certain clients.
| | 2024 | 2023 |
| Revenue | £53.8m | £55.1m |
| Revenue growth | -2% | 52% |
| EBITDA1 | (£5.2m) | £11.7m |
| Adjusted EBITDA2 | (£3.3m) | £11.8m |
| Adjusted EBITDA margin3 Adjusted PBT4 | (6.2%) (£6.0m) | 21.5% £10.1m |
| R&D spend | £2.1m | £1.8m |
| Net Cash/(Debt)5 | £1.2m | £(3.0m) |
| ROCE6 | (31.1%) | 33.0% |
1 Operating profit prior to depreciation of property, plant and equipment, depreciation of right-of-use assets and amortisation of intangible assets.
2 Operating profit prior to exceptional costs, share based payment charges, depreciation of property, plant and equipment, depreciation of right-of-use assets and amortisation of intangible assets.
3 Adjusted EBITDA as a percentage of revenue
4 Profit before tax prior to exceptional costs and share based payment charges.
5 Excluding IFRS16 Liabilities.
6 Operating profit as a percentage of total assets less current liabilities.
Revenue
Group revenues decreased by 2% to £53.8m, (FY23: £55.1m). UK revenues decreased by 4% to £52.6m (2023: £54.5m). International revenues grew by 138% to £1.3m in 2024.
Profits
The unexpected delay on certain contracts and the impact of potential new legislation, resulted in revenues declining, and these, together with decline in gross margin and increase in headcount ahead of the expected start of delayed contracts, adversely impacted profitability. The adjusted EBITDA loss2 was £3.3m, (2023: £11.8m profit), with Adjusted EBITDA margins3 of -6.2% (2023: 21.5%). Adjusted PBT was a loss of £6.0m (2023: £10.1m profit).
Statutory operating loss was £7.2m (2023: £10.3m profit) and statutory loss before tax was £7.9m (FY23: £9.9m profit).
Acquisitions
On 3 April 2023, the Group acquired Installatiebedrijf Vriend B.V. ("Vriend"). The total consideration for the acquisition, was €0.5m. The acquisition is the first part of our geographic growth strategy and now gives the Group delivery capabilities in the Netherlands. For the period following acquisition, Vriend recorded revenues of £0.6m and an operating loss of £0.2m.
Further information on acquisitions can be found in note 26.
Adjusting and Exceptional Items
The total pre-tax adjusting items, excluding depreciation and amortisation, in the year were £1.9m. These were £0.3m of charges for share-based payments (2023: £0.1m) and £1.6m of exceptional costs. Of these exceptional costs £1.4m are in respect of salary and redundancy costs following the headcount reduction exercise undertaken by the Group, which included the breakup and cessation of the low-carbon solutions delivery team for private, domestic customers. The remaining £0.1m is in respect of those rectification costs incurred by the business, outside the normal course of operations, on one contract, where certain key components failed to perform to specified manufacturers standards.
Earnings per share
Basic earnings were (18.98p) (2023: 25.50p) and diluted earnings per share were (18.98p) (2023: 25.25p).
Dividends
For the financial year ended 31 January 2024, the Board is not proposing a dividend for the year (2023: 1.2p per share).
Headcount
The Group's full time equivalent (FTE) employees at 31 January 2024 were 221 (FY23: 168). Due to the disappointing result for the year, the Group commenced a restructuring exercise during January and February 2024, which resulted in the disbanding of the low carbons services team and a reduction in headcount of 23.
Share capital & share options
Share options issued during the year under the Long-Term Incentive Plan were 748,595 with the total share options in issue at the year-end 1,081,268.
Cash flow & net cash
Cash conversion improved significantly from last year with a cash inflow from operations of £7.7m (FY23: £3.4m outflow). This was as a result of the unwind of the heavy 2023 Q4 project delivery during 2024 which has seen a reduction in the level of trade and other receivables at the year end (FY24: £21.5m, FY23: 28.6m), together with an increased focus on supplier management and a reduction in the volume and value of key components which needed to be bulk purchased ahead of the start of project, all of which positively impacted working capital.
Total capital expenditure on property, plant and equipment amounted to £0.5m (FY23: £0.9m). In addition there was a further outflow of £0.4m for the acquisition of Vriend.
The Group ended the year with net cash (excluding IFRS 16 liabilities) of £1.2m compared with £3.0m of net debt at 31 January 2023.
Iain Richardson
CFO
22 May 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 January 2024
| |
Note |
2024 | 2023 |
| Continuing operations | | | |
| Revenue | 4 | 53,818 | 55,074 |
| Cost of sales | | (41,591) | (31,995) |
| Gross profit | | 12,227 | 23,079 |
| Administrative expenses | | (17,865) | (12,774) |
| Exceptional costs | 5 | (1,594) | - |
| Operating (loss) / profit | 6 | (7,232) | 10,305 |
| Interest payable and other similar expenses | 10 | (667) | (370) |
| (Loss) / Profit before taxation | | (7,899) | 9,935 |
| Income tax | 11 | 1,560 | (1,420) |
| (Loss) / profit for the year from continuing operations | | (6,339) | 8,515 |
| Total profit for the year attributable to equity holders of the parent | | (6,339) | 8,515 |
| Items that will or may be reclassified to profit or loss | |||
| Exchange losses arising on translation of foreign operations | | (680) | (398) |
| Other comprehensive income | | (680) | (398) |
| Total comprehensive (loss) / profit for the year attributable to equity holders of the parent | | (7,019) | 8,117 |
| | | | |
| Basic (loss)/earnings per share from continuing operations - pence | 12 | (18.98) | 25.50 |
| Diluted (loss)/earnings per share from continuing operations - pence | 12 | (18.98) | 25.25 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 January 2024
| GROUP | Note | 2024 | 2023 |
| Non-current assets | | | |
| Intangible assets | 13 | 9,122 | 8,703 |
| Property, plant and equipment | 14 | 2,991 | 3,441 |
| Right-of-use assets | 19 | 1,152 | 1,213 |
| Deferred tax asset | 20 | 720 | - |
| Total non-current assets | | 13,985 | 13,357 |
| Current assets | | | |
| Inventory | 16 | 3,349 | 2,557 |
| Contract assets | 17 | 1,493 | 459 |
| Trade and other receivables | 17 | 21,526 | 28,622 |
| Current tax asset | | 701 | 145 |
| Cash and cash equivalents | 18 | 6,364 | 3,224 |
| Total current assets | | 33,433 | 35,007 |
| TOTAL ASSETS | | 47,418 | 48,364 |
| Equity attributable to owners of the parent | | | |
| Called up share capital | 21 | 332 | 332 |
| Share premium account | 21 | 10,113 | 10,113 |
| Merger reserve | 22 | (5,490) | (5,490) |
| Other reserves | 22 | 784 | 104 |
| Retained earnings | | 13,226 | 19,956 |
| Total equity | | 18,965 | 25,015 |
| Current liabilities | | | |
| Borrowings | 24 | 1,913 | 1,469 |
| Trade and other payables | 25 | 21,756 | 13,632 |
| Current tax liability | | - | 1,522 |
| Lease liabilities | 19 | 487 | 543 |
| Total current liabilities | | 24,156 | 17,166 |
| Non-current liabilities | | | |
| Borrowings | 24 | 3,288 | 4,732 |
| Lease liabilities | 19 | 1,009 | 1,183 |
| Deferred tax liability | 20 | - | 268 |
| Total non-current liabilities | | 4,297 | 6,183 |
| Total liabilities | | 28,453 | 23,349 |
| TOTAL EQUITY AND LIABILITIES | | 47,418 | 48,364 |
CONSOLIDATED STATEMENT OF CASHFLOWS
For the year ended 31 January 2024
| GROUP | Note | 2024 | 2023 |
| Cash flow from operating activities | | | |
| (Loss) / profit for the financial year | | (6,339) | 8,515 |
| Adjustments for: | | | |
| Amortisation of intangible assets | 13 | 788 | 573 |
| Depreciation of property, plant and equipment | 14 | 824 | 655 |
| Depreciation on right-of-use assets | 19 | 412 | 196 |
| Interest payable | | 535 | 313 |
| Lease liability finance charge | 19 | 132 | 57 |
| Taxation (credit) / charge | 11 | (1,560) | 1,420 |
| Corporation tax (paid) / received | | (1,299) | 25 |
| Foreign exchange | | 318 | 113 |
| Share based payment charge | 23 | 279 | 117 |
| Changes in working capital: | | | |
| Increase in inventory | | (792) | (1,371) |
| Decrease / (increase) in trade and other receivables | | 5,505 | (16,837) |
| Increase in trade and other payables | | 8,124 | 3,685 |
| Net cash inflow / (outflow) from operating activities | | 6,927 | (2,539) |
| Cash flow from investing activities | | | |
| Purchase of intangible assets | | (852) | (713) |
| Purchase of property, plant and equipment | | (541) | (882) |
| Sale of property, plant and equipment | | - | 3 |
| Acquisition of businesses - net of cash acquired | | (378) | (1,681) |
| Net cash outflow from investing activities | | (1,771) | (3,273) |
| Cash flows from financing activities | | | |
| Proceeds from borrowings | | 427 | 7,249 |
| Repayment of borrowings | | (1,001) | (1,369) |
| Reduction of share capital | | - | (12) |
| Interest paid | | (535) | (313) |
| Repayment of lease liabilities | | (516) | (261) |
| Dividends paid | | (391) | (328) |
| Net cash (outflow) / inflow from financing activities | | (2,016) | 4,966 |
| Net increase / (decrease) in cash and cash equivalents | | 3,140 | (846) |
| Cash and cash equivalents at beginning of period | | 3,224 | 4,070 |
| Cash and cash equivalents at the end of the period | 18 | 6,364 | 3,224 |
STATEMENT OF CHANGES IN EQUITY
As at 31 January 2024
| GROUP | Share Capital | Share Premium | Merger Reserve | Foreign Exchange Reserve | Retained Earnings |
| Total Equity |
| | £'000 | £'000 | £'000 | £'000 | £'000 |
| £'000 |
|
| | | | | | | |
| At 1 February 2022 | 344 | 10,113 | (5,490) | (294) | 11,769 | | 16,442 |
| Profit for the year | - | - | - | - | 8,515 | | 8,515 |
| Total comprehensive income for the year attributable to equity holders of the parent | - | - | - | - | 8,515 | | 8,515 |
| Reduction in share capital | (12) | - | - | - | - | | (12) |
| Dividends paid1 | - | - | - | - | (328) | | (328) |
| Exchange differences arising on translation of foreign operations | - | - | - | 398 | - | | 398 |
| Total transaction with owners | (12) | - | - | 398 | (328) | | 58 |
| Balance at 31 January 2023 | 332 | 10,113 | (5,490) | 104 | 19,956 | | 25,015 |
|
| | | | | | | |
| At 1 February 2023 | 332 | 10,113 | (5,490) | 104 | 19,956 | | 25,015 |
| Loss for the year | - | - | - | - | (6,339) | | (6,339) |
| Total comprehensive income for the year attributable to equity holders of the parent | - | - | - | - | (6,339) | | (6,339) |
| Reduction in share capital | - | - | - | - | - | | - |
| Dividends paid | - | - | - | | (391) | | (391) |
| Exchange differences arising on translation of foreign operations | - | - | - | 680 | - | | 680 |
| Total transaction with owners | - | - | - | 680 | (391) | | 289 |
| Balance at 31 January 2024 | 332 | 10,113 | (5,490) | 784 | 13,226 | | 18,965 |
1Prior to the payment of Eneraqua's dividend amounting to £328,000 in September 2022 (1.0p per share), the directors reviewed the level of distributable reserves available for that payment. When making their assessment of the distributable reserves position the directors noted that Cenergist Limited, the Company's wholly owned trading subsidiary, had declared a dividend of £1,700,000 on 10 June 2022. The directors were satisfied that there were distributable reserves in Eneraqua Technologies from which the dividend could properly be made.
When making this dividend payment the Company had not filed its interim accounts for the six-month period ended 31 July 2022. These accounts were subsequently filed on 24 January 2024.
Details of Other Reserves can be found in note 22.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 January 2024
1 GENERAL INFORMATION
Eneraqua Technologies plc ("the Company") was incorporated and registered in England and Wales on 19 August 2021 as a private limited company Eneraqua Technologies Limited with its registered office at 2 Windmill Street, Fitzrovia, London, W1T 2HX. On 8 November 2021 the company was re-registered as a public limited. The Company's registered number is 13575021.
The Group's principal activities are the provision of turnkey solutions for water efficiency and decarbonisation, the latter through district heating and ground source heat pump systems for social housing, commercial clients, and the residential sector. These activities are underpinned by our proprietary water savings technology, Control Flow HL2024, which improves the efficiency of heating and water systems for customers across the UK and Europe.
The consolidated financial information was approved for issue by the Board of Directors on 15 May 2024.
2 ACCOUNTING POLICIES
IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users, that are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.
2.1 Basis of preparation
The consolidated and company financial statements are for the year ended 31 January 2024. The consolidated financial statements have been prepared in accordance with International accounts standards in conformity with the requirements of the Companies Act 2006 (UK-adopted IAS). The company financial statements were prepared in accordance with the Companies Act 2006 as applicable to companies using Financial Reporting Standard 101 'Reduced Disclosure Framework' ("FRS 101"). The Company applies the recognition, measurement and disclosure requirements of IFRS, but makes amendments where necessary in order to comply with Companies Act 2006.
The financial statements have been prepared under the historical cost convention as modified by financial assets at fair value through profit or loss, and the recognition of net assets acquired under the reverse acquisition at fair value.
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. The areas involving a higher degree of judgment or complexity, or areas where assumptions or estimates are significant to the financial statements, are disclosed in note 2.25.
In preparing the company financial statements together with the Group financial statements, the Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual statement of profit and loss and related notes that form part of these approved financial statements.
The Company has applied the following exemptions in the preparation of its financial statements:
· Disclosures in respect of new standards and interpretation that have been issued but which are not yet effective have not been provided;
· Disclosures in respect of transactions with wholly-owned subsidiaries have not been made;
· Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instruments have not been provided; and
· Disclosures in respect of share based payments as required by IFRS 2 Share-based Payments have not been provided.
The principal accounting policies are set out below and have, unless otherwise stated, been applied consistently in the financial statements. The consolidated financial statements are prepared in Pounds Sterling, which is the Group's functional and presentation currency, and presented to the nearest £'000.
2.2 Basis of consolidation and acquisitions
The financial statements consolidate the financial information of the Group and companies controlled by the Group (its subsidiaries) at each reporting date. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity, has the rights to variable returns from its involvement with the investee and has the ability to use its power to affect its returns. The results of subsidiaries acquired or sold are included in the financial information from the effective date of acquisition or up to the effective date of disposal, as appropriate. Acquisition costs expensed to the Statement of Comprehensive Income are included within exceptional costs.
Where necessary, adjustments are made to the results of acquired subsidiaries to bring their accounting policies into line with those used by the Group. All intra-Group transactions, balances, income and expenses are eliminated on consolidation. The financial statements of all Group companies are adjusted, where necessary, to ensure the use of consistent accounting policies.
The Company's shares were admitted to trading on AIM, a market operated by the London Stock Exchange, on 22 November 2021. Prior to the reorganisation Cenergist Limited ("Cenergist") was the ultimate holding company of the subsidiaries, (collectively the "Cenergist Group"). The transaction was accounted for as a capital reorganisation since it did not meet the definition of a business combination under IFRS 3. In a capital reorganisation, the consolidated financial statements of the Group reflect the predecessor carrying amounts of the Cenergist Group with comparative information of the Cenergist Group presented for all periods since no substantive economic changes have occurred. The difference arising on acquisition has been accounted for with the recognition of a merger reserve on the balance sheet following the reorganisation of the share capital of the Group at the point of completion of the transaction.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, 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. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.
Acquisition-related costs are expensed as incurred.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated.
2.3 New standards, amendments and interpretations
The following new and amended Standards and Interpretations have been issued and are effective for the current financial period for the Group:
· Amendments to IAS 1: Presentation of Financial Statements: Disclosure of Accounting Policies
The IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, providing guidance to help entities meet the accounting policy disclosure requirements. The amendments aim to make accounting policy disclosures more informative by replacing the requirement to disclose 'significant accounting policies' with 'material accounting policy information'.
The company has adopted the amendments to IAS 1 for the first time in the current year.
· Amendments to IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors
The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". The definition of a change in accounting estimates was deleted.
The effect of these new and amended Standards and Interpretations has not had any material impact on the disclosures or on the amounts reported in these financial statements.
2.4 New standards and interpretations not yet adopted
Standards and amendments to standards that have been issued that are applicable for the Group but are not effective for 2024 and have not been early adopted are:
· Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as Current or Non-current
· Amendments to IAS 1: Presentation of Financial Statements: Non-current Liabilities with Covenants
· Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback
The effect of these new and amended Standards and Interpretations which are in issue but not yet mandatorily effective is not expected to be material.
2.5 Going concern
The Group's business activities, together with factors likely to affect its future development, performance and position are set out in the Strategic Report of the Annual Report.
The Group had a cash inflow from operating activities of £6,927,000 in the year (2023: £2,539,000 outflow), largely due to a reduction in trade receivables and increased payables due to timing of project accruals.
The Group has prepared financial forecasts and projections for a period of 12 months from the date of approval of this financial information (the "going concern assessment period"). These forecasts show that the Group will have sufficient levels of financial resources available both to meet its liabilities as they fall due for that period and comply with requirements on its working capital facilities. In addition, the Group had headroom on its banking facilities at the year end and throughout the forecast period.
The order book remains strong with revenues remaining second-half weighted reflecting client procurement processes. While wider market inflationary and cost pressures have affected the capital budgets of clients leading them to focus on priority projects, it is important to note no contracts have been cancelled, with delivery of other planned projects moving out.
Consequently, the Directors are confident that the Group and Company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of this financial information and therefore have prepared the financial statements on a going concern basis.
2.6 Foreign currency translation
(i) Functional and presentation currency
Items included in the financial information for each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial information is presented in £ Sterling, which is the Company's presentation and functional currency. The individual financial statements of each of the Company's wholly owned subsidiaries are prepared in the currency of the primary economic environment in which it operates (its functional currency). IAS 21 The Effects of Changes in Foreign Exchange Rates requires that assets and liabilities be translated using the exchange rate at period end, and income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the dates of the transactions (i.e. the average rate for the period). The foreign exchange differences on translation are recognised in other comprehensive income.
(ii) Transactions and balances
Transactions denominated in a foreign currency are translated into the functional currency at the exchange rate at the date of the transaction. Assets and liabilities in foreign currencies are translated to the functional currency at rates of exchange ruling at the date of the Statement of Financial Position. Gains or losses arising from settlement of transactions and from translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income for the period.
(iii) Group companies
The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of the Statement of Financial Position;
- income and expenses for each Statement of Comprehensive Income are translated at the average exchange rate; and
- all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to shareholders' equity. When a foreign operation is partially disposed or sold, exchange differences that were recorded in equity are recognised in the Statement of Comprehensive Income as part of the gain or loss on sale.
2.7 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The segments for this purpose are geographical segments. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.
2.8 Impairment of non-financial assets
Non-financial assets and intangible assets not subject to amortisation are tested annually for impairment at each reporting date and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment review is based on discounted future cash flows, using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. If the expected discounted future cash flow from the use of the assets and their eventual disposal is less than the carrying amount of the assets, an impairment loss is recognised in profit or loss and not subsequently reversed.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash flows (cash generating units or 'CGUs').
In the case of the Europe CGU, and it's acquisition of HGP, management judgement based on factors such as market potential, and customer interest are also used to form the basis for assessing the recoverable amount.
2.9 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, and demand deposits with banks and other financial institutions and bank overdrafts.
2.10 Financial instruments
IFRS 9 requires an entity to address the classification, measurement and recognition of financial assets and liabilities.
a) Classification
The Group classifies its financial assets in the following measurement categories:
· those to be measured at amortised cost.
The classification depends on the Group's business model for managing the financial assets and the contractual terms of the cash flows.
The Group classifies financial assets as at amortised cost only if both of the following criteria are met:
· the asset is held within a business model whose objective is to collect contractual cash flows; and
· the contractual terms give rise to cash flows that are solely payment of principal and interest.
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the Statement of Comprehensive Income.
d) Impairment
The Group assesses, on a forward-looking basis, the expected credit losses associated with any debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
In response to increased risk of credit losses due to the impact of the current cost of living crisis, the Group has included the following procedures:
- Performing credit checks on existing, new or prospective customers
- Maintaining regular dialogue with senior staff of existing customers to discuss payments of invoices.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Group's most significant clients are public or regulated industry entities which generally have high credit ratings or are of a high credit quality due to the nature of the client. These customers are not considered to have been significantly impacted by Covid.
Expected credit losses are assessed on an individual customer basis, based on the historical payment profiles of the customers, the current and historic relationship with the customer, and the industry in which the customer operates. There have been no impairments of trade receivables in the periods.
2.11 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour and other direct costs. It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised.
The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period in which the write-down or loss occurs.
2.12 Leases
Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
- Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
- Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date;
- Amounts expected to be payable by the Group under residual value guarantees;
- The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
- Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. In all instances the leases were discounted using the incremental borrowing rate.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period. Right-of-use assets are measured at cost which comprises the following:
- The amount of the initial measurement of the lease liability;
- Any lease payments made at or before the commencement date less any lease incentives received;
- Any initial direct costs; and
- Restoration costs.
Right-of-use assets are depreciated over the shorter of the asset's useful life and the lease term on a straight line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.
Payments associated with short-term leases (term less than 12 months) and all leases of low-value assets (generally less than £5k) are recognised on a straight-line basis as an expense in profit or loss.
2.13 Equity
Share capital is determined using the nominal value of shares that have been issued.
The Share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from the Share premium account, net of any related income tax benefits.
Other reserves include share based payment and foreign currency reserves.
For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at the exchange rates prevailing at the balance sheet date and items of income and expenditure are translated at the average exchange rate for the period. Exchange differences arising are recognised in other comprehensive income and accumulated in the Foreign Currency Reserve within equity.
Retained losses includes all current and prior period results as disclosed in the Statement of Comprehensive Income other than those transferred to the Reverse Acquisition reserve.
2.14 Revenue
Under IFRS 15, Revenue from Contracts with Customers, five key points to recognise revenue have been assessed:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the contract; and
Step 5: Recognise revenue when (or as) a Group entity satisfies a performance obligation.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Group, and specific criteria have been met for each of the Group's activities, as described below.
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.
The Group bases its estimates on all available information including historical results and experience taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Where the Group makes sales relating to a future financial period, these are deferred and recognised under 'accrued expenses and deferred income' in the Statement of Financial Position.
The Group derives revenue from the transfer of goods and services over time or at a particular point in time in the major product and service lines detailed below.
Energy and water efficiency contract services
The Group designs, supplies and installs energy and water efficiency systems for clients. The Group delivers these services over the term of a contract which vary in length, but are typically 6, 9 or 12 months. Revenue is recognised for these services over time as the benefit is transferred to the client, in line with the provisions of IFRS 15 para 35 (b) as the work performed creates an asset that the customer controls as the asset is created. The Group uses certified valuations to measure progress. The value of work certified is then applied to the total expected contract revenue to determine the revenue to be recognised up to a particular date.
Third party funded services
In some circumstances, external third parties provide funding in return for the transfer of certain economic benefits arising from works undertaken on behalf of the Group's clients. Where this occurs, the Group contracts with the third parties for the sale of the related economic benefits and, separately, passes agreed amounts to the Group's clients either in the form of a discounted contract price or a direct contribution. The revenue to the Group from these contracts is recognised once the third party is in a position to take ownership of the economic benefits being transferred; associated costs for amounts due to the Group's client are recognised at the same time.
Energy and water efficiency products
Energy and water efficiency products can be sold direct to a customer, outside of contract services and in these circumstances the Group recognises revenue at the time it delivers these products to the customer.
Contract assets and liabilities
Contract assets represent amounts for which the Group has a conditional right to consideration in exchange for goods or services that the Group has transferred to the customer. Contract liabilities represent the obligation to transfer goods or services to a customer for which consideration has been received, or consideration is due, from the customer.
Payment terms are set out in the contract and reflect the timing and performance of service delivery. For substantially all contracts the payment terms are broadly in line with satisfaction of performance obligations, and therefore recognition of revenue, such that each contract has either a contract asset or contract liability, however these are not overly material in the context of the contract.
2.15 Exceptional costs
Exceptional costs are defined as expenses that arise from events or transactions that are clearly distinct from the normal activities of the Group and therefore are not expected to recur frequently or regularly.
Exceptional costs are those of significant size and of a non-recurring nature that require disclosure in order that the underlying business performance can be identified.
In determining whether an item should be presented as exceptional, the group considers items that are significant, because of, either, their size or nature and that are non-recurring. In order for an item to be presented as exceptional, it should, typically, meet at least one of the following criteria:
· It is a significant item, which may cross more than one accounting period.
· It has been directly incurred as a result of either an acquisition or divestment, or arises from a major business change or restructuring programme.
· It is unusual in nature or outside the normal course of business.
The separate reporting of items, which are presented as exceptional within the relevant category in the consolidated statement of comprehensive income, helps provide an indication of the group's trading performance in the normal course of business.
2.16 Taxation
The taxation expense for the year comprises current and deferred tax and is recognised in the Statement of Comprehensive Income except to the extent that it relates to items recognised in other comprehensive income, or directly in equity, in which case the tax expense is also recognised in other comprehensive income or directly in equity.
Current tax is the amount of income tax payable in respect of the taxable profit for the current or past reporting periods. It is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Statement of Financial Position date.
Deferred tax represents the future tax consequences of transactions and events recognised in the financial statements of current and previous periods, and arises from 'temporary differences'. Deferred tax is recognised in respect of all temporary differences, except that unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the Statement of Financial Position date that are expected to apply to the reversal of the temporary differences.
2.17 Property, plant and equipment
Tangible fixed assets are stated at cost, less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price plus any further costs directly attributable to bringing the asset to its working condition for its intended use.
Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their estimated useful lives as follows:
Buildings - 2% straight line
Fixtures and fittings - 20% straight line
Office equipment - 33% straight line
Plant and machinery - 20% straight line
Motor vehicles - 33% straight line
Asset residual values and useful lives are reviewed at the end of each reporting period, and adjusted if appropriate. The effect of any change is accounted for prospectively.
2.18 Intangible assets
Intangible assets acquired as part of a business combination or asset acquisition, other than goodwill, are initially measured at their fair value at the date of acquisition. Intangible assets acquired separately are initially recognised at cost.
Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. The gains and losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset.
Intangible asset impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.
Intangible assets with an estimated useful life are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation charges are included within administration expenses in the Statement of Comprehensive Income and are provided on all intangible assets with a definite life so as to write off the cost of an asset over its estimated useful life as follows:
| Development assets (note 2.23) | 20% straight line |
| Customer relationships | 10% straight line |
| Licences | 20% straight line |
| Patents | 15 years straight line |
Asset residual values and useful lives are reviewed at the end of each reporting period and adjusted if appropriate. The effect of any change is accounted for prospectively.
As the business has grown significantly and become more established, the business has gained larger and longer contracts. With effect from 1 February 2022, the estimated useful life of patents was extended to 15 years straight line to better reflect the higher value and more complex nature of the benefits of such patents.
2.19 Borrowings and borrowing costs
Borrowings are recognised initially at fair value, net of transaction costs. Borrowings are subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of Comprehensive Income over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are capitalised as a prepayment for liquidity services and amortised over the period of the loan to which it relates.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability or at least 12 months after the end of the reporting period.
Borrowing costs are recognised in the income statement in the period in which they are incurred.
2.20 Government grants
Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
2.21 Investments in subsidiaries
In the Company Statement of Financial Position, investments in subsidiaries are measured at cost less accumulated impairment losses.
2.22 Distributions to equity holders
Dividends and other distributions to the Company's shareholders are recognised as a liability in the financial statements in the period in which the dividends and other distributions are approved by the shareholders. These amounts are recognised in the Statement of Changes in Equity.
2.23 Research and development
Research and development expenditure in the United Kingdom is written off to the Statement of Comprehensive Income in the period in which it is incurred.
Development costs that are directly attributable to the design and testing of identifiable and unique products controlled by the Group are recognised as intangible assets where the following criteria are met:
· It is technically feasible to complete the asset so that it will be available for use;
· Management intends to complete the asset and use or sell it;
· There is an ability to use or sell the asset;
· It can be demonstrated how the asset will generate probable future economic benefits;
· Adequate technical, financial and other resources to complete the development and to use or sell the asset are available; and
· The expenditure attributable to the asset during its development can be reliably measured.
Development expenditure incurred by the Group's subsidiaries in the United Kingdom, Netherlands, Spain and India is capitalised and amortised in accordance with intangible asset policy (note 2.18).
2.24 Employee benefits
Short-term benefits
Short-term benefits, including holiday pay and other similar non-monetary benefits are recognised as an expense in the period in which the employee's entitlement to the benefit accrues.
Defined contribution pension plan
The Company operates a defined contribution pension plan for its employees. Contributions are recognised as an expense when they fall due. Amounts due but not yet paid are included within creditors on the Statement of Financial Position.
The assets of the plan are held separately from the Company in independently administered funds.
Share-based payments
The Group provides share-based payment arrangements to certain employees. Equity-settled arrangements are measured at fair value at the date of the grant. To the extent material, the fair value (excluding the effect of non-market based vesting conditions) is expensed on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares that are expected to vest.
Where equity-settled share-based payments are modified, and are of benefit to the employee, the incremental fair value is recognised over the period from the date of modification to the date of vesting. Settlements and cancellations are treated as an acceleration of vesting and the unvested amount is recognised immediately in the Statement of Comprehensive Income.
The company has no cash-settled arrangements.
2.25 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, which are described in note 3, the Directors are required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Key sources of estimation uncertainty
Accounting estimates, by definition, will seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:
Carrying value of intangible assets - determining whether goodwill, development costs, customer relationships, patents or licences are impaired requires estimation of the value in use of the cash generating units to which the assets relate. The value in use calculation requires the entity to estimate the value and timing of future cash flows expected to arise from each cash generating unit and apply a suitable discount rate, in order to calculate the present value of the present value of those future cash flows. Calculations use cash flow projections based on financial budgets approved by management which are built 'bottom up' for the next three years. The annual discount rate applied to the cash flows is 12% (2023: 12%); this is based on an average of rates used by similar listed businesses.
The carrying amount of the development costs, patents and licences is £1,586,000, £549,000 and £283,000 respectively. See note 13 for further detail.
Other estimates include the fair value of intangible assets acquired on acquisitions, depreciation and asset impairments (for example provisions against stock and debtors). Other than the carrying value of intangible assets, none of the estimates made in the preparation of the financial information are considered to carry significant estimation uncertainty, nor to bear significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
2.26 Subsidiary Companies audit exemption
With the exception of Cenergist Limited, the Company's active subsidiaries detailed in note 15 are exempt from the requirements of the Companies Act 2006 relating to the audit of their individual accounts by virtue of section 479A of the Companies Act 2006.
3. SEGMENT REPORTING
The following information is given about the Group's reportable segments:
The Chief Operating Decision Maker is the Board of Directors. The Board reviews the Group's internal reporting in order to assess performance of the Group. Management has determined the operating segment based on the reports reviewed by the Board.
The Board considers that during the year ended 31 January 2024 the Group operated in the three business segments according to the geographical location of its operations, those being:
- United Kingdom,
- Europe; and
- India.
| 2024 |
| United Kingdom | Europe | India |
| 2024 | ||
|
|
| £'000 | £'000 | £'000 |
| £'000 | ||
| Revenue | | 52,561 | 675 | 581 | | 53,818 | ||
| Cost of sales | | (41,204) | (322) | (65) | | (41,591) | ||
| Gross profit | | 11,357 | 354 | 516 | | 12,227 | ||
| Administrative expenses | | (14,971) | (2,409) | (485) | | (17,865) | ||
| Exceptional costs | | (1,594) | - | - | | (1,594) | ||
| Operating profit/(loss) | | (5,208) | (2,055) | 31 | | (7,232) | ||
| Interest receivable and similar income | | - | - | - | | - | ||
| Interest payable and similar expenses | | (335) | (333) | 1 | | (667) | ||
| Profit/(Loss) before tax | | (5,543) | (2,388) | 32 | | (7,899) | ||
| Taxation | | 1,538 | 28 | (6) | | 1,560 | ||
| Profit/(Loss) after tax | | (4,005) | (2,360) | 26 | | (6,339) | ||
| | | | | | | | ||
| Net Assets | | | | | | | ||
| Assets: | | 35,998 | 11,060 | 360 | | 47,418 | ||
| Liabilities | | (18,105) | (10,054) | (294) | | (28,453) | ||
| Net assets | | 17,893 | 1,006 | 66 | | 18,965 | ||
| | | | | | | |
| |
4. REVENUE
| |
| 2024 | 2023 |
| United Kingdom | | 52,562 | 54,546 |
| Europe | | 675 | 77 |
| Rest of the World | | 581 | 451 |
| | | 53,818 | 55,074 |
Within the sales revenue, there were two customers in the United Kingdom that accounted for greater than 10% of total revenue of the Group contributing £32,573,000 (2023: 1 customer - £20,197,000).
5. EXCEPTIONAL COSTS
| |
| 2024 | 2023 |
| Restructuring costs | | 1,449 | - |
| Rectification costs | | 145 | - |
| | | 1,594 | - |
Exceptional costs are those of significant size and of a non-recurring nature that require disclosure in order that the underlying business performance can be identified. The exceptional costs in these financial statements include restructuring costs of £1,449,000 (2023: £nil), in respect of salary and redundancy costs following the headcount reduction exercise undertaken by the Group, which included the breakup and cessation of the low-carbon solutions delivery team for private, domestic customers. The rectification costs of £145,000 (2023: £nil) were incurred by the business, outside the normal cause of operations, on one contract, where certain key components failed to perform to specified manufacturers' standards.
6. OPERATING LOSS / PROFIT
Operating loss / profit from continued operations is stated after charging:
| |
|
| 2024 | 2023 |
| | | | | |
| Depreciation of property, plant and equipment | | 14 | 824 | 655 |
| Depreciation of right-of-use assets | | 19 | 412 | 196 |
| Amortisation of intangible assets | | 13 | 788 | 573 |
| Share based payments | | 23 | 279 | 117 |
7. AUDITORS' REMUNERATION
Fees payable to the Company's auditors in respect of the audit of the financial statements and for other services provided to the Company are as follows:
|
|
| 2024 | 2023 |
| Fees payable to the company's auditor for the audit of the parent company and the group's consolidated financial statements | | 42 | 37 |
| Fees payable to the company's auditor for the audit of the subsidiary accounts | | 52 | 45 |
| | | 94 | 82 |
No other services were provided by the Company's auditors.
8. EMPLOYEES
Staff costs, including directors' remuneration is set out below:
| Group |
| 2024 | 2023 |
| Wages and salaries | | 9,300 | 7,009 |
| Social security costs | | 1,122 | 851 |
| Share based payments (note 23) | | 279 | 117 |
| Cost of defined contribution scheme | | 307 | 209 |
| | | 11,008 | 8,186 |
The average monthly number of employees, including the Directors, during the year was as follows:
| Group
|
| Group 2024 | Group 2023 |
| |
| No. | No. |
| Administrative | | 186 | 143 |
9. DIRECTORS' REMUNERATION
| |
| 2024 | 2023 |
| Directors' emoluments | | 687 | 827 |
| Company contributions to defined contribution scheme | | 17 | 17 |
| Employers' national insurance on Directors' remuneration | | 87 | 105 |
| Amounts paid to directors in respect of third party services | | - | - |
| | | 791 | 949 |
Directors are considered to be the key management personnel.
During the year retirement benefits were accruing to 3 Directors (2023: 3) in respect of defined contribution pension schemes.
The highest paid Director received remuneration of £294,000 (2023: £342,000)
The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £1,761 (2023: £1,761).
Directors are considered to be the key management personnel of the Company. A detailed breakdown of the Director's total emoluments is included within the Remuneration Committee report.
10. INTEREST PAYABLE AND SIMILAR EXPENSES
| |
| 2024 | 2023 |
| Interest payable | | (535) | (313) |
| Lease liability finance charge | | (132) | (57) |
| | | (667) | (370) |
11. TAXATION
| |
| 2024 | 2023 |
| The credit / (charge) for year is made up as follows: | | | |
| Corporation tax | | | |
| Corporation taxation on the results for the year | | 919 | (1,317) |
| Adjustments in respect of previous periods | | - | - |
|
| | 919 | (1,317) |
| Deferred tax | | | |
| Origination and reversal of temporary differences | | 641 | (183) |
| Changes to tax rates | | - | - |
| Adjustments in respect of previous periods | | - | 80 |
|
| | 641 | (103) |
| Taxation credit/(charge) on profits on ordinary activities | | 1,560 | (1,420) |
Factors affecting tax credit/(charge) for the year
The tax assessed for the year is lower than (2023: lower than) the standard rate of corporation tax in the UK of 24% (2023: 19%). The differences are explained below:
|
| | 2024 | 2023 |
| (Loss) / profit on ordinary activities before tax | | (7,899) | 9,935 |
| Tax on ordinary activities at the standard rate of corporation tax in the UK of 24% (2023: 19%) | | 1,896 | (1,888) |
| Effects of: | | | |
| Expenses not deductible for tax purposes | | (194) | 164 |
| Additional R&D tax relief | | 310 | 371 |
| Adjustments to tax charges in respect to prior periods1 | | (47) | 77 |
| Losses carried forward not recognised | | (186) | (79) |
| Difference in tax rate between current and deferred tax | | (219) | - |
| Tax rate changes | | - | (65) |
| Taxation credit/(charge) on profits on ordinary activities | | 1,560 | (1,420) |
There are total tax losses of £2,668,000 available for carry forward against future tax liabilities in the UK and overseas (2023: £1,053,000).
1Primarily relates to the effect of a prior year R&D tax claim.
12. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is calculated by dividing the profit or loss for the year by the weighted average number of ordinary / diluted ordinary shares in issue during the period, except when there is a loss, in which case the basic measure is used.
| |
| 2024 | 2023 |
| (Loss) / profit for the year from continuing operations - £'000 | | (6,339) | 8,515 |
| Weighted number of ordinary shares in issue | | 33,388,788 | 33,388,788 |
| Weighted number of fully diluted ordinary shares in issue | | 33,985,502 | 33,721,461 |
| Basic (loss) / earnings per share from continuing operations - pence | | (18.98) | 25.50 |
| Diluted (loss) / earnings per share from continuing operations - pence | | (18.98) | 25.25 |
Further information on ordinary shares can be found in note 21.
13. INTANGIBLE ASSETS
|
| Goodwill | Development Costs | Customer Relationships £'000 | Patents | Licences |
| Total £'000 |
| Cost | | | | | | | |
| At 31 January 2022 | 4,369 | 1,647 | 671 | 334 | 747 | | 7,768 |
| Additions | 1,184 | 444 | 161 | 269 | - | | 2,058 |
| Disposals | - | - | - | - | - | | - |
| At 31 January 2023 | 5,553 | 2,091 | 832 | 603 | 747 | | 9,826 |
| Additions | 306 | 523 | 102 | 174 | 155 | | 1,260 |
| Disposals | - | - | - | (53) | - | | (53) |
| At 31 January 2024 | 5,859 | 2,614 | 934 | 724 | 902 | | 11,033 |
| Amortisation | | | | | | | |
| At 31 January 2022 | - | 190 | - | 41 | 319 | | 550 |
| Charge for the year | - | 356 | - | 67 | 150 | | 573 |
| At 31 January 2023 | - | 546 | - | 108 | 469 | | 1,123 |
| Charge for the year | - | 482 | 89 | 67 | 150 | | 788 |
| At 31 January 2024 | - | 1,028 | 89 | 175 | 619 | | 1,911 |
| Net book value | | | | | | | |
| 31 January 2023 | 5,553 | 1,545 | 832 | 495 | 278 | | 8,703 |
| 31 January 2024 | 5,859 | 1,586 | 845 | 549 | 283 |
| 9,122 |
Amortisation of patents commence once they are granted.
Goodwill additions relates to goodwill generated through one acquisition in the current year (refer Note 26)
- Acquisition of Installatiebedrijf Vriend B.V. ("Vriend"). (April 2023) = £0.3m.
During the year, the group incurred research and development costs of £2,119,709 (2023: £1,756,000) of which £523,000 were capitalised (£2023: £444,000).
Impairment testing
Goodwill arising on business combinations is assessed separately under IFRS 3 in the period of acquisition.
The Group allocates goodwill to groups of CGU's based on their operating segment as set out in note 3. The operating segments therefore represent the lowest level at which goodwill is monitored by the Board.
Goodwill has been assessed as follows:
| |
| 2024 | 2023 |
| United Kingdom | | 1,521 | 1,521 |
| Europe | | 4,338 | 4,032 |
| | | 5,859 | 5,553 |
Under IAS 36 the Group is required to test goodwill for impairment at least annually or more frequently if indicators of impairment exist.
The recoverable amount of a CGU has been calculated with reference to its value in use, using financial forecasts approved by the Board covering a 5 year period with the final period taken into perpetuity.
In each case the key assumption is the rate of growth of gross profit (primarily driven by volume growth). In the case of the UK CGU and its two acquisitions, Welltherm Drilling Limited and Mathewson Holdings Limited, the company has assumed a 5% growth rate throughout the 5 year period. In the case of the European CGU and its Dutch acquisition, HaGePe International B.V., in which in certain markets the absolute sales volumes were very low, and therefore percentage increases can be misleading, the company made an assessment to arrive at specific growth targets in each of the years.
The Board considers these growth rates to be prudent. In all cases a nil growth rate assumption has been made on the terminal value in the impairment calculation.
Each of the CGUs has headroom under the annual impairment review. The Directors believe that no reasonable change in any of the above key assumptions would cause the carrying value of the unit to materially exceed its recoverable amount.
14. PROPERTY, PLANT AND EQUIPMENT
|
| Land & Buildings £'000 | Plant & machinery £'000 | Motor vehicles £'000 | Fixtures & fittings £'000 | Office equipment £'000 |
| Total £'000 |
| Cost | | | | | | | |
| At 31 January 2022 | 48 | 3,773 | 228 | 113 | 120 | | 4,282 |
| Additions | 147 | 480 | 118 | 42 | 95 | | 882 |
| Disposals | - | - | (6) | - | - | | (6) |
| Exchange impact | 4 | 142 | - | 1 | (4) | | 143 |
| At 31 January 2023 | 199 | 4,395 | 340 | 156 | 211 | | 5,301 |
| Additions | 12 | 105 | 177 | 63 | 184 | | 541 |
| Disposals | (5) | (59) | (136) | - | - | | (200) |
| Exchange impact | - | - | - | - | - | | - |
| At 31 January 2024 | 206 | 4,441 | 381 | 219 | 395 | | 5,642 |
| Depreciation | | | | | | | |
| At 31 January 2022 | 6 | 1,010 | 71 | 34 | 66 | | 1,187 |
| Charge for the year | 34 | 475 | 86 | 22 | 38 | | 655 |
| Disposals | - | - | (4) | - | - | | (4) |
| Exchange impact | 2 | 19 | - | 1 | - | | 22 |
| At 31 January 2023 | 42 | 1,504 | 153 | 57 | 104 | | 1,860 |
| Charge for the year | 48 | 549 | 61 | 47 | 119 | | 824 |
| Disposals | - | (8) | (25) | - | - | | (33) |
| Exchange impact | - | - | - | - | - | | - |
| At 31 January 2024 | 90 | 2,045 | 189 | 104 | 223 | | 2,651 |
| Net book value | | | | | | | |
| At 31 January 2023 | 157 | 2,891 | 187 | 99 | 107 | | 3,441 |
| At 31 January 2024 | 116 | 2,396 | 192 | 115 | 172 |
| 2,991 |
15. INVESTMENTS
| Company only |
| 2024 £'000 | 2023 £'000 |
| Opening balance |
| 254 | 254 |
| Additions during the year |
| - | - |
| Closing balance |
| 254 | 254 |
Company subsidiary undertakings
As at 31 January 2024, the Company owned interests in the following subsidiary undertakings, which are included in the consolidated financial statements.
| Name | Holding 2024 | Holding 2023 | Business Activity | Country of Incorporation | Registered Address |
| Direct subsidiary undertaking | |||||
| Cenergist Limited | 100% | 100% | Trading Company | England & Wales | 8 Bede House, Glover Industrial Estates, Washington, Tyne & Wear, NE37 2SH |
| Indirect subsidiary undertakings | |||||
| GS Drilltech Ltd | 100% | 100% | Trading Company | England & Wales | Unit 13, Millshaw Park Avenue, Leeds, |
| Welltherm Drilling Ltd | 100% | 100% | Trading Company | England & Wales | 8 Bede House, Glover Industrial Estates, Washington, Tyne & Wear, NE37 2SH |
| Mathewson Holdings Limited | 100% | 100% | Holding Company | England & Wales | 8 Bede House, Glover Industrial Estates, Washington, Tyne & Wear, NE37 2SH |
| Mathewson Limited | 100% | 100% | Trading Company | England & Wales | 8 Bede House, Glover Industrial Estates, Washington, Tyne & Wear, NE37 2SH |
| LCS Renewables Limited | 100% | 100% | Trading Company | England & Wales | 8 Bede House, Glover Industrial Estates, Washington, Tyne & Wear, NE37 2SH |
| Luxe Lights Ltd | 100% | 100% | Dormant | England & Wales | 7 Bede House, Glover Industrial Estates, Washington, Tyne & Wear, NE37 2SH |
| Control Flow Technologies Limited | 100% | 100% | Trading Company | England & Wales | 7 Bede House, Glover Industrial Estates, Washington, Tyne & Wear, NE37 2SH |
| Cenergist Scotland Limited | 100% | 100% | Dormant | Scotland | Brodies Llp Capital Square, 58 Morrison Street, Edinburgh, United Kingdom, EH3 8BP |
| Energy Water Services Ltd | 100% | 100% | Trading Company | England & Wales | 8 Bede House, Glover Industrial Estates, Washington, Tyne & Wear, NE37 2SH |
| Installatiebedrijf Vriend B.V. | 100% | - | Trading Company | Netherlands | Constructieweg 21 A, 8305AA Emmeloord, Netherlands |
| Cenergist BV | 100% | 100% | Trading Company | Netherlands | Huizermaatweg 15, Kantoor 6, 1273NA Huizen, Netherlands |
| Cenergist Spain SL | 100% | 100% | Trading Company | Spain | Calle Juan De Mena, 10-Piso 1IZ, Madrid 28014, Spain |
| HGP International BV | 100% | 100% | Holding Company | Netherlands | Huizermaatweg 27, 1273NA Huizen, Netherlands |
| HL2024 Shop BV | 100% | 100% | Trading Company | Netherlands | Huizermaatweg 16, 1271NM Huizen, Netherlands |
| HGP Exploitatie BV | 100% | 100% | Trading Company | Netherlands | Huizermaatweg 27, 1273NA Huizen, Netherlands |
| Cenergist Energy Private Ltd | 100% | 100% | Trading Company | India | 30 New Road, Kolkata 700 027, India. |
16. INVENTORY
| Group |
| 2024 | 2023 |
| Finished goods and goods for resale | | 3,349 | 2,557 |
| | | 3,349 | 2,557 |
No impairment loss was recognised in cost of sales during the year (2023: £nil). The stock provision at the year-end totalled £nil (2023: £nil), as the Group increased inventory levels in order to satisfy expected orders in financial year 2025.
17. TRADE AND OTHER RECEIVABLES AND CONTRACT ASSETS
Trade and other receivables
| Group |
| 2024 | 2023 |
| Trade receivables | | 4,491 | 3,492 |
| Other debtors | | 2,039 | 2,352 |
| Prepayments and accrued income | | 14,997 | 22,778 |
| | | 21,526 | 28,622 |
| Group |
| 2024 | 2023 |
| Due within one year | | 18,206 | 26,019 |
| Due after more than one year | | 3,320 | 2,603 |
| | | 21,526 | 28,622 |
Included in prepayments and accrued income are retention balances of £1,870,000 (2023: £1,153,000).
Trade and other receivables are stated at amortised cost. Details of any expected credit losses on trade and other receivables are provided in note 27.
Contract assets
Contract assets represent revenue in excess of amounts billed and at 31 January 2024 amounted to £1,493,000 (2023: £459,000).
Significant changes in contract assets during the year are as follows:
| |
| £'000 |
| At 31 January 2022 |
| - |
| Increase due to work done not transferred from contract assets | | 459 |
| At 31 January 2023 | | 459 |
| Transfers from contract assets recognised at the beginning of the year to trade receivables | | (459) |
| Increase due to work done not transferred from contract assets | | 1,493 |
| At at 31 January 2024 |
| 1,493 |
The Group typically satisfies performance obligations in line with contractually agreed milestones and through acceptance by the customer of agreed upon work performed which will create an obligation for payment.
18. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and short term deposits held with banks with a A-1+ rating. The carrying value of these approximates to their fair value. Cash and cash equivalents included in the cash flow statement comprise the following statement of financial position amounts.
| Group |
| 2024 | 2023 |
| Cash and cash equivalents | | 6,364 | 3,224 |
| | | 6,364 | 3,224 |
19. LEASES
The Group had the following lease assets and liabilities:
| Group |
| 2024 | 2023 |
| Right-of-use assets | | | |
| Properties | | 487 | 656 |
| Motor vehicles | | 640 | 535 |
| Office equipment | | 25 | 22 |
| | | 1,152 | 1,213 |
| Lease liabilities | | | |
| Current | | 487 | 543 |
| Non-current | | 1,009 | 1,183 |
| | | 1,496 | 1,726 |
| |
| 2024 | 2023 |
| Maturity on the lease liabilities are as follows: | | | |
| Current | | 580 | 544 |
| Due between 1-2 years | | 435 | 798 |
| Due between 2-5 years | | 586 | 420 |
| Due beyond 5 years | | - | - |
| | | 1,601 | 1,762 |
Right-of-use assets
A reconciliation of the carrying amount of the right-of-use asset is as follows:
| |
| 2024 | 2023 |
| Properties | | | |
| Opening balance | | 656 | 205 |
| Additions | | 49 | 692 |
| Disposals | | - | (97) |
| Depreciation | | (218) | (144) |
| | | 487 | 656 |
| Motor vehicles | | | |
| Opening balance | | 535 | 38 |
| Additions | | 287 | 541 |
| Depreciation | | (182) | (44) |
| | | 640 | 535 |
| Office equipment | | | |
| Opening balance | | 22 | - |
| Additions | | 15 | 30 |
| Depreciation | | (12) | (8) |
| | | 25 | 22 |
| | | 1,152 | 1,213 |
Lease liabilities
A reconciliation of the carrying amount of the lease liabilities is as follows:
| |
| 2024 | 2023 |
| Opening balance | | 1,726 | 191 |
| Additions | | 339 | 1,263 |
| Adjustments | | (185) | 482 |
| Payment made | | (516) | (261) |
| Finance charge | | 132 | 51 |
| | | 1,496 | 1,726 |
The Group also incurred the following expenses during the year of £9,000 (2023: £66,000) which related to property leases that were either short term in nature (12 months of less) or of low value in nature (less than £2,000 per annum), thus being excluded from treatment under IFRS 16: Leases.
20. DEFERRED TAX
| Group | 2024 | 2023 |
| Deferred tax asset / (liability) | | |
| Other temporary differences net of tax losses 1 | 720 | (268) |
| Net recognised in Statement of Financial Position | 720 | (268) |
1 Other temporary differences predominantly includes temporary differences arising on property, plant and equipment.
| |
| 2024 | 2023 |
| Movement in net deferred tax liabilities in the year: | | | |
| Income statement - other | | 641 | (104) |
| Tax related to items credited outside statement of financial performance | | - | (22) |
| | | 641 | (126) |
1 Other temporary differences predominantly includes temporary differences arising on property, plant and equipment.
| |
| 2024 | 2023 |
| Movement in net deferred tax asset in the year: | | | |
| Income statement - other | | 151 | - |
| | | 151 | - |
21. SHARE CAPITAL
|
|
| Number of Shares | Share Capital | Share Premium |
|
|
|
| £'000 | £'000 |
| Ordinary Shares | | | | |
| As at 1 February 2022 | | | | |
| TOTAL ORDINARY AND DEFERRED SHARES | | 34,438,730 | 344 | 10,113 |
| Deferred Shares | | | | |
| Cancellation of deferred shares | | (1,216,600) | (12) | - |
| TOTAL ORDINARY AND DEFERRED SHARES |
| 33,222,130 | 332 | 10,113 |
| As at 1 February 2023 | | | | |
| TOTAL ORDINARY AND DEFERRED SHARES | | 33,222,130 | 332 | 10,113 |
| TOTAL ORDINARY AND DEFERRED SHARES |
| 33,222,130 | 332 | 10,113 |
22. RESERVES
Share premium account
The share premium account represents the premium arising on the issue of shares, net of issue costs.
Merger reserve
Reserve created in accordance with the acquisition of the Cenergist Limited Group on 5 October 2021.
Other reserves
Other reserves include share based payments, foreign exchange and other items.
Retained earnings
Retained earnings represents cumulative profits and losses net of dividends and other adjustments.
23. SHARE BASED PAYMENTS
The Group has in place an LTIP whereby the options are expected to be settled by physical delivery of shares.
| Group and Company | Date of grant | Employees entitled | Number of shares granted | Principal vesting conditions | Contractual life | |
| Long Term Incentive Pan | November 2021 | Selected senior employees | Nil | Service during vesting period EPS performance hurdle | 3 years | |
| Long Term Incentive Pan | July 2023 | Selected senior employees | Nil | Service during vesting period EPS performance hurdle | 3 years | |
| | Weighted average exercise price (pence) | Number | Weighted average exercise price (pence) | Number |
| | 2024 | 2024 | 2023 | 2023 |
| Outstanding at beginning of year | - | 332,673 | - | 332,673 |
| Granted on Admission during the year - LTIP scheme | - | 748,595 | - | - |
| Outstanding at the end of the year | - | 1,081,268 | - | 332,673 |
Under the LTIP the participants are offered the opportunity to acquire shares in Eneraqua Technologies Plc at nil cost subject to achieving the principal vesting conditions.
The vesting period for the LTIP is 3 years. Executive Directors have a two year post vest holding period for awards under this scheme.
The fair value of these LTIP share options being amortised over the vesting period.
| |
| 2024 | 2023 |
| Charge for the year - LTIP Scheme | | 279 | 117 |
| | | 279 | 117 |
24. BORROWINGS
|
|
| 2024 | 2023 |
| Current | | 1,913 | 1,469 |
| Non-current | | 3,288 | 4,732 |
| | | 5,201 | 6,201 |
Analysis of maturity of loans is given below:
| |
| 2024 | 2023 |
| Amounts falling due within one year | | | |
| Other loans | | 1,913 | 1,469 |
| Amounts falling due 1-2 years | | | |
| Other loans | | 2,348 | 1,821 |
| Amounts falling due 2-5 years | | | |
| Other loans | | 940 | 2,911 |
| | | 5,201 | 6,201 |
Other loans relate to a £6,000,000 facility provided by HSBC to Cenergist Limited, a €1,500,000 facility provided to Cenergist Spain SL by Instituto De Finanzas De Castilla-La Mancha S.A.U. ("CLM") and a €500,000 facility provided to Cenergist Spain SL by BankInter SA ("Bank Inter") and are secured by fixed and floating charges over the assets of the Company and by cross guarantees from the Company's subsidiary undertakings.
Interest on the HSBC facility is at an all-in-rate of 3.450% over the Bank of England Base Rate with the repayment period being 48 months from date of individual tranche drawdown.
Interest on the CLM facility is at an all-in-rate of 3.50% with the repayment period being 84 months from date of individual tranche drawdown.
Interest on the Bank Inter facility is at a rate of 8.77% with the repayment period being 18 months from date of individual tranche drawdown.
25. TRADE AND OTHER PAYABLES
| Group |
| 2024 | 2023 |
| Trade creditors | | 5,818 | 7,584 |
| Other taxation and social security | | 2,239 | 728 |
| Other creditors | | 114 | 104 |
| Deferred consideration | | 66 | 366 |
| Accruals and deferred income | | 13,519 | 4,850 |
| | | 21,756 | 13,632 |
26. BUSINESS COMBINATION
Acquisition of Installatiebedrijf Vriend B.V. ("Vriend")
On 3 April 2023 Cenergist Spain SL acquired all of the share capital of Installatiebedrijf Vriend B.V. ("Vriend"). Vriend provides low carbon solutions to customers in the Netherlands.
Background and Rationale
Vriend is a renowned multidisciplinary installer of sustainable energy solutions with a focus on residential and commercial projects. The acquisition represents the Group's first step on their European acquisition strategy, providing the necessary accreditations and foundations to expand the Group offering into Northern Europe.
Consideration
The total consideration for the acquisition was €0.522 million. The consideration was structured as follows:
· Initial consideration, payable in cash on completion of €0.485 million; and
· Working capital adjustment of €0.037 million, paid within three months of acquisition.
The initial estimates of the fair value of the assets acquired and liabilities assumed of Vriend at the date of acquisition are as follows:
| |
| £'000 |
| Tangible assets | | 50 |
| Inventory | | 68 |
| Cash at bank | | 70 |
| Other receivables | | 56 |
| Trade and other payables | | (117) |
| Total identifiable net assets acquired | | 127 |
| Fair value adjustments | | (87) |
| Customer relationships | | 102 |
| Goodwill | | 306 |
|
| | 448 |
| Consideration | | |
| Initial consideration | | 416 |
| Working capital adjustment | | 32 |
| Total consideration | | 448 |
| | | |
Goodwill relates to the accumulated "know how" and expertise of the business and its staff. The acquisition will significantly enhance the customer service offering provided by the Group, and helping the Group expand into new markets. None of the goodwill is expected to be deducted for income tax purposes.
Fair value adjustments include provisions for significantly aged retentions, accrued income, inventories and tangible fixed assets.
The net cash outflow of £378,000 in the year reported in the statement of cashflow represents total consideration of £448,000 less cash at bank of £70,000.
27. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Capital Risk Management
The Company manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders. The overall strategy of the Company and the Group is to minimise costs and liquidity risk.
The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued share capital, foreign exchange reserves and retained earnings as disclosed in the Consolidated Statement of Changes of Equity.
The Group is exposed to a number of risks through its normal operations, the most significant of which are interest, credit, foreign exchange, and liquidity risks. The management of these risks is vested to the Board of Directors.
Credit Risk
Credit risk arises on financial instruments such as trade receivables and short-term bank deposits.
Policies and procedures exist to ensure that customers have an appropriate credit history. The Group's most significant clients are public or regulated industry entities which generally have high credit ratings or are of a high credit quality due to the nature of the client.
Short-term bank deposits are made only with UK ring-fenced banks.
Counterparty exposure positions are monitored regularly so that credit exposures to any one counterparty are within acceptable limits.
At the Statement of Financial Position date there were no significant concentrations of credit risk.
Trade and other receivables and contract assets included in the Statement of Financial Position are stated net of expected credit loss (ECL) provisions which have been estimated on a customer-by-customer basis, based on the relationship with the customer and its historical payment profile. There are no provisions held against trade and other receivables or contract assets at the Statement of Financial Position date.
| 2024 |
| Gross £000 | Provision | Net |
| Current | | 3,484 | - | 3,484 |
| 31-60 days from invoice | | 86 | - | 86 |
| 61-90 days from invoice | | 188 | - | 188 |
| 90+ days | | 733 | - | 733 |
| | | 4,491 | - | 4,491 |
The Group's maximum exposure to credit by class of individual financial instrument is shown in the table below:
| Group | 2024 Carrying Value | 2024 Maximum Exposure | 2023 Carrying Value | 2023 Maximum Exposure |
|
| £'000 | £'000 | £'000 | £'000 |
| Cash and cash equivalents | 6,364 | 6,364 | 3,224 | 3,224 |
| Trade receivables | 4,491 | 4,491 | 3,492 | 3,492 |
| | 10,855 | 10,855 | 6,716 | 6,716 |
Currency Risk
The Group operates in a global market with income and costs possibly arising in a number of currencies and is exposed to foreign currency risk primarily in respect of entities within the Group entering into commercial transactions arising from sales or purchases in currencies other than the Companies' functional currency. Currency exposures are reviewed regularly.
The Group is also exposed to adverse foreign currency movements on translation of net assets and income statements of foreign subsidiaries. It is not the Group's policy to hedge through the use of derivatives the translation effect of exchange rate movements on the income statements or statements of financial positions of overseas subsidiaries.
The Group has a limited level of exposure to foreign exchange risk through their foreign currency denominated cash balances and a portion of the Group's costs being incurred in Euro Dollars and Indian Rupee. Accordingly, movements in the Sterling exchange rate against these currencies could have a detrimental effect on the Group's results and financial condition. Such changes are not considered likely to have a material effect on the Group's financial position at 31 January 2024.
Currency risk is managed by maintaining some cash deposits in currencies other than Sterling. The table below shows the currency profiles of cash and cash equivalents:
| |
| 2024 | 2023 |
| Cash and cash equivalents | | | |
| Sterling | | 6,007 | 3,040 |
| Euro | | 437 | 239 |
| Indian Rupee | | (80) | (55) |
| | | 6,364 | 3,224 |
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
The Group seeks to manage liquidity risk by regularly reviewing cash flow budgets and forecasts to ensure that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Group deems there is sufficient liquidity for the foreseeable future.
The Group had cash and cash equivalents at period end as below:
| |
| 2024 | 2023 |
| Cash and cash equivalents | | 6,364 | 3,224 |
| | | 6,364 | 3,224 |
The following are the contractual maturities of financial instruments, including estimated interest payments and excluding the effect of netting arrangements:
|
|
| Contractual cash flows | |||||
| 2024 | Carrying amount £'000 | Total £'000 | 1 month or less £'000 | 1-3 months £'000 | 3-12 months £'000 | 1-2 years £'000 | 2-5 years £'000 |
| Financial Liabilities | | | | | | | |
| Trade payables | 5,818 | 5,818 | 5,227 | 564 | 26 | - | - |
| Secured bank loans | 5,201 | 5,534 | 147 | 294 | 1,538 | 2,768 | 787 |
| Lease liabilities | 1,496 | 1,601 | 52 | 103 | 425 | 435 | 586 |
| Deferred consideration | 66 | 66 | - | 33 | 33 | - | - |
| | 12,581 | 13,019 | 5,426 | 994 | 2,022 | 3,203 | 1,373 |
| | | Contractual cash flows | |||||
| 2023 | Carrying amount £'000 | Total £'000 | 1 month or less £'000 | 1-3 months £'000 | 3-12 months £'000 | 1-2 years £'000 | 2-5 years £'000 |
| Financial Liabilities | | | | | | | |
| Trade payables | 7,584 | 7,584 | 7,405 | 128 | 50 | - | - |
| Secured bank loans | 6,201 | 6,684 | 142 | 284 | 1,280 | 2,276 | 2,702 |
| Lease liabilities | 1,726 | 1,762 | 50 | 95 | 399 | 798 | 420 |
| Deferred consideration | 366 | 366 | - | 75 | 225 | 66 | - |
| | 15,877 | 16,396 | 7,597 | 582 | 1,954 | 3,140 | 3,122 |
As disclosed in Note 24 the Group has a secured bank loan that contains loan covenants. A future breach of covenant may require the Group to repay the loan earlier than indicated in the above table. Under the agreement, the covenant is monitored on a regular basis to ensure compliance with the agreement.
The interest payments on variable interest rate loans in the table above reflect interest rates at the reporting date and these amounts may change as market interest rates change.
Interest Rate Risk
The Group is exposed to interest rate risk whereby the risk can be a reduction of interest received on cash surpluses held and an increase in interest on borrowings the Group may have. The maximum exposure to interest rate risk at the reporting date by class of financial asset was:
| Variable rate instruments |
| 2024 | 2023 |
| Bank balances | | 6,364 | 3,224 |
| Financial liabilities | | (3,777) | (4,778) |
| | | 2,587 | (1,554) |
| Fixed rate instruments |
| 2024 | 2023 |
| Financial liabilities | | (1,423) | (1,423) |
| | | (1,423) | (1,423) |
Sensitivity analysis
An increase of 25 basis points in interest rates throughout the period would have affected the statement of profit and loss by the amounts shown below. This calculation assumes that the charge occurred at all points in the period and had been applied to the average risk exposures throughout the period:
|
|
| 2024 | 2023 |
| Profit or loss decreases or increases | | 37 | 12 |
28. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
| 2024 - Group | |
| Financial assets at amortised cost | Financial liabilities at amortised cost | Total |
| Financial assets / liabilities | |
| £ | £ | £ |
| | | | | | |
| Trade and other receivables and contract assets | | | 23,019 | - | 23,019 |
| Cash and cash equivalents | | | 6,364 | - | 6,364 |
| Trade and other payables | | | - | (21,756) | (21,756) |
| Lease liabilities (current and non-current) | | | - | (1,496) | (1,496) |
| Borrowings | | | - | (5,201) | (5,201) |
| | | | 29,383 | (28,453) | 930 |
| 2023 - Group | |
| Financial assets at amortised cost | Financial liabilities at amortised cost | Total |
| Financial assets / liabilities | |
| £ | £ | £ |
| | | | | | |
| Trade and other receivables and contract assets | | | 29,226 | - | 29,226 |
| Cash and cash equivalents | | | 3,224 | - | 3,224 |
| Trade and other payables | | | - | (9,938) | (9,938) |
| Lease liabilities (current and non-current) | | | - | (1,726) | (1,726) |
| Borrowings | | | - | (6,201) | (6,201) |
| | | | 32,450 | (17,865) | 14,585 |
29. RECONCILIATION OF MOVEMENT IN NET DEBT
| 2024 | At 1 February 2023 | Non-cash changes | Cashflow | At 31 January |
| | £'000 | £'000 | £'000 | £'000 |
| Cash at bank | 3,224 | - | 3,140 | 6,364 |
| Borrowings - current | (1,469) | 427 | (871) | (1,913) |
| Borrowings - non-current | (4,732) | - | 1,445 | (3,287) |
| Lease liabilities - current & non-current | (1,726) | 745 | (516) | (1,497) |
| Net Debt | (4,703) | 1,172 | 3,198 | (333) |
| 2023 | At 1 February 2022 | Non-cash changes | Cashflow | At 31 January |
| | £'000 | £'000 | £'000 | £'000 |
| Cash at bank | 4,070 | - | (846) | 3,224 |
| Borrowings - current | - | (321) | (1,148) | (1,469) |
| Borrowings - non-current | - | - | (4,732) | (4,732) |
| Lease liabilities - current & non-current | (191) | (1,274) | (261) | (1,726) |
| Net Debt | 3,879 | (1,595) | (6,987) | (4,703) |
30. PENSION COMMITMENTS
The Group operates a defined contribution scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £306,000 (2023: £209,000). £39,000 (2023: £21,000) was payable to the fund at the Statement of Financial Position date and is included with creditors.
31. CAPITAL COMMITMENTS
There were no capital commitments at 31 January 2024 or 31 January 2023.
32. CONTINGENT LIABILITIES
There were no contingent liabilities at 31 January 2024 or 31 January 2023.
33. RELATED PARTY TRANSACTIONS
No Related Party transactions other than trading within the Group took place in the year.
The Executive and Non-Executive Directors are the Key Management and as such there are no other Related Parties disclosures.
34. PRIOR YEAR ADJUSTMENT
The impact of the prior year restatement in respect of total equity in the Company only, is as follows:
|
|
| 1 Feb 2022 As Presented £000 | Restatement | 1 Feb 2022 As restated |
| Share premium account | | 11,375 | (1,262) | 10,113 |
| Trade and other payables | | 16 | 1,262 | 1,278 |
This restatement aligns the share premium account in the Company account with the consolidated accounts. This arose as a result of share issue costs being settled in the subsidiary due to the timing of the opening of the Plc's bank account and the linked intercompany adjustment not being processed. There was no impact to the Statement of Comprehensive Income and as the amounts were non-cash items the Cash Flow Statement was not impacted either.
35. CONTROL
In the opinion of the Directors as at the year end and the date of the financial information there is no single ultimate controlling party.
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