REGISTERED NUMBER: 02444909 (England and Wales) |
Group Strategic Report, Report of the Directors and |
Consolidated Financial Statements for the Year Ended 31 May 2023 |
for |
Datel Group plc |
REGISTERED NUMBER: 02444909 (England and Wales) |
Group Strategic Report, Report of the Directors and |
Consolidated Financial Statements for the Year Ended 31 May 2023 |
for |
Datel Group plc |
Datel Group plc (Registered number: 02444909) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 May 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 5 |
Consolidated Income Statement | 8 |
Consolidated Other Comprehensive Income | 9 |
Consolidated Balance Sheet | 10 |
Company Balance Sheet | 11 |
Consolidated Statement of Changes in Equity | 12 |
Company Statement of Changes in Equity | 13 |
Consolidated Cash Flow Statement | 14 |
Notes to the Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Financial Statements | 16 |
Datel Group plc |
Company Information |
for the Year Ended 31 May 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
17-19 Park Street |
Lytham |
Lancashire |
FY8 5LU |
Datel Group plc (Registered number: 02444909) |
Group Strategic Report |
for the Year Ended 31 May 2023 |
The directors present their strategic report of the company and the group for the year ended 31 May 2023. |
PRINCIPAL OBJECTIVES AND STRATEGIES |
The principal activity of the group is the sale of business management software systems and associated implementation and support services through Datel Computing, and the provision of managed services and private cloud solutions through Datel Advansys. |
Datel remains the UK's leading provider of business management systems to medium sized enterprises and is Sage's largest business partner. Businesses across a diverse cross-section of markets and industries have chosen Datel to deliver critical software solutions. |
PERFORMANCE REVIEW |
We achieved high levels of customer retention and satisfaction, helped by an increasingly broad portfolio of products and services that we are able to offer to maximise the benefits that customers derive from their business management systems. |
Given the difficult market due to various geo-political factors, we still experienced strong demand from existing and new customers, and low churn of annual support, maintenance and subscription contracts. |
On 1st May Datel Computing completed the purchase of the X3 business of Percipient, another Sage business partner, further strengthening our market position for this product. |
In the latter half of the year we also invested time and resource in migrating our legacy accounting system to a new hosted solution with Sage Intacct; this successfully went live at the beginning of June 2023. |
Turnover grew 11% from last year to £34.2m (2022: £30.7m). Recurring margins continued to grow, and now stand at £15.0m, over 65% of our total margin. Whilst our cost base expanded, this was done in a controlled manner. Profit before tax therefore strengthened to £4.4m (2022: £3.5m). |
The company generated strong cash flows during the period, and so even with some significant ad hoc payments, still finished the year with cash funds of £9.3m (2022: £6.9m) and no debt (2022: £nil). |
Our headcount grew in the year, finishing at 226, compared to 213 last year. |
As we exit the year, we have a strong order book, and we see activity levels still climbing, so have a degree of confidence that 23/24 will still be a strong one, despite various market challenges. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The company maintains a strategy of strong management, leadership and training. This strategy enables the company to react quickly to changes in the business environment, as we have seen with recent geo-political crises. In addition, our recurring revenue streams afford us a degree of protection when our variable revenue streams come under pressure, which gives us time and space to respond in a controlled and orderly manner. |
Accordingly, the company is well-placed to react to any future risks or uncertainties arising out of the business environment, including the ongoing war in Ukraine, high inflation and widespread supply chain issues. |
Datel Group plc (Registered number: 02444909) |
Group Strategic Report |
for the Year Ended 31 May 2023 |
KEY PERFORMANCE INDICATORS |
Datel Computing uses a number of metrics to track performance. |
- Recurring margin from Support and Subscription contracts is critical to our success. We have seen this figure increase strongly in both absolute and relative terms, and now stands at 60% (2022: 57%) |
- Customer satisfaction measures for our support customers are still tracking at over 98% (2022: 98%) |
- We continue to grow the value of our own Fusion product range, developed in-house, currently generating revenues of £1.5m (2022 £1.4m) |
- Chargeability for our service teams averaged 66%, slightly down on last year (67%) |
We also continue to invest in our research and development activity, identifying technologies which may enhance our future offering. Total expenditure incurred on the R&D team in the year was over £0.6m. |
Datel Advansys also uses a number of similar metrics to track performance. |
- Recurring revenue from annuity contracts (primarily PaaS) are critical to our success. We continue to have seen good growth of 17% (2022: 22%) annual revenues over last year, accounting for 81% (2022: 84%) of overall turnover. The slight reduction in overall percentage is due to higher one-off sales of hardware and software (£563K in 2023, up from £334K in 2022) |
- Our customer satisfaction metrics continue to provide excellent results, currently tracking at 97% (2022 92%). |
The continued move to a more flexible working environment for many of our customers has continued to highlight the benefit of our Platform as a Service offering, being located in remote data centres, and accessible from any remote location. |
FUTURE DEVELOPMENTS |
We continue to develop and invest in our Platform as a Service offering as we attract new customers and upgrade existing customers to later technologies. Therefore we envisage further growth in our core business areas in the coming year. |
ON BEHALF OF THE BOARD: |
Datel Group plc (Registered number: 02444909) |
Report of the Directors |
for the Year Ended 31 May 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 May 2023. |
DIVIDENDS |
Interim dividend payments were made during the year. The directors recommend that no final dividend be paid. Total distribution of dividends for the year ended 31 May 2023 will be £3,050,000. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 June 2022 to the date of this report. |
DISCLOSURE IN THE STRATEGIC REPORT |
The strategic report on the preceding page provides information regarding the performance, developments, and risks and uncertainties of the company. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
The auditors, Ashworth Treasure Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Datel Group plc |
Opinion |
We have audited the financial statements of Datel Group plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 May 2023 and of the group's profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Report of the Independent Auditors to the Members of |
Datel Group plc |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Our approach to identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable and regulations; |
- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the business sector; |
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including legislation such as Companies Act, taxation legislation, environmental and health and safety legislation etc. |
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and |
- identified laws and regulations were communicated within the audit team regularly and the team maintained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the company's financial statements to misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;and |
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls, we: |
- performed analytical procedures to identify any unusual or unexpected relationships; |
- tested journals to identify unusual transactions; |
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and |
- investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- enquiring of management as to actual and potential litigation and claims; |
- reviewing correspondence with HMRC etc |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Datel Group plc |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditors |
17-19 Park Street |
Lytham |
Lancashire |
FY8 5LU |
Datel Group plc (Registered number: 02444909) |
Consolidated Income Statement |
for the Year Ended 31 May 2023 |
2023 | 2022 |
Notes | £'000 | £'000 | £'000 | £'000 |
TURNOVER | 3 | 34,239 | 30,743 |
Cost of sales | 11,325 | 10,199 |
GROSS PROFIT | 22,914 | 20,544 |
Distribution costs | 12,037 | 11,074 |
Administrative expenses | 6,511 | 5,962 |
18,548 | 17,036 |
OPERATING PROFIT | 5 | 4,366 | 3,508 |
Interest receivable and similar income | 66 | 4 |
4,432 | 3,512 |
Interest payable and similar expenses | 6 | 1 | 19 |
PROFIT BEFORE TAXATION | 4,431 | 3,493 |
Tax on profit | 7 | 938 | 754 |
PROFIT FOR THE FINANCIAL YEAR |
Profit attributable to: |
Owners of the parent | 3,493 | 2,739 |
Datel Group plc (Registered number: 02444909) |
Consolidated Other Comprehensive Income |
for the Year Ended 31 May 2023 |
2023 | 2022 |
Notes | £'000 | £'000 |
PROFIT FOR THE YEAR | 3,493 | 2,739 |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
3,493 |
2,739 |
Total comprehensive income attributable to: |
Owners of the parent | 3,493 | 2,739 |
Datel Group plc (Registered number: 02444909) |
Consolidated Balance Sheet |
31 May 2023 |
2023 | 2022 |
Notes | £'000 | £'000 | £'000 | £'000 |
FIXED ASSETS |
Intangible assets | 10 | 3,566 | 3,887 |
Tangible assets | 11 | 1,176 | 1,015 |
Investments | 12 | - | - |
4,742 | 4,902 |
CURRENT ASSETS |
Stocks | 13 | 3 | 2 |
Debtors | 14 | 8,889 | 7,589 |
Cash at bank and in hand | 9,286 | 6,941 |
18,178 | 14,532 |
CREDITORS |
Amounts falling due within one year | 15 | 20,089 | 17,046 |
NET CURRENT LIABILITIES | (1,911 | ) | (2,514 | ) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
2,831 |
2,388 |
CAPITAL AND RESERVES |
Called up share capital | 18 | 51 | 51 |
Capital redemption reserve | 19 | 11 | 11 |
Retained earnings | 19 | 2,769 | 2,326 |
SHAREHOLDERS' FUNDS | 2,831 | 2,388 |
The financial statements were approved by the Board of Directors and authorised for issue on 22 November 2023 and were signed on its behalf by: |
Mr A K Simpson - Director |
Datel Group plc (Registered number: 02444909) |
Company Balance Sheet |
31 May 2023 |
2023 | 2022 |
Notes | £'000 | £'000 | £'000 | £'000 |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
Investments | 12 |
CURRENT ASSETS |
Debtors | 14 |
CREDITORS |
Amounts falling due within one year | 15 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Capital redemption reserve | 19 |
Retained earnings | 19 |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 3,050 | 2,051 |
The financial statements were approved by the Board of Directors and authorised for issue on |
Datel Group plc (Registered number: 02444909) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 May 2023 |
Called up | Capital |
share | Retained | redemption | Total |
capital | earnings | reserve | equity |
£'000 | £'000 | £'000 | £'000 |
Balance at 1 June 2021 | 51 | 1,659 | 11 | 1,721 |
Changes in equity |
Dividends | - | (2,072 | ) | - | (2,072 | ) |
Total comprehensive income | - | 2,739 | - | 2,739 |
Balance at 31 May 2022 | 51 | 2,326 | 11 | 2,388 |
Changes in equity |
Dividends | - | (3,050 | ) | - | (3,050 | ) |
Total comprehensive income | - | 3,493 | - | 3,493 |
Balance at 31 May 2023 | 51 | 2,769 | 11 | 2,831 |
Datel Group plc (Registered number: 02444909) |
Company Statement of Changes in Equity |
for the Year Ended 31 May 2023 |
Called up | Capital |
share | Retained | redemption | Total |
capital | earnings | reserve | equity |
£'000 | £'000 | £'000 | £'000 |
Balance at 1 June 2021 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - |
Balance at 31 May 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - |
Balance at 31 May 2023 |
Datel Group plc (Registered number: 02444909) |
Consolidated Cash Flow Statement |
for the Year Ended 31 May 2023 |
2023 | 2022 |
Notes | £'000 | £'000 |
Cash flows from operating activities |
Cash generated from operations | 1 | 7,107 | 4,444 |
Interest paid | (1 | ) | (19 | ) |
Tax paid | (775 | ) | (764 | ) |
Net cash from operating activities | 6,331 | 3,661 |
Cash flows from investing activities |
Purchase of intangible fixed assets | (500 | ) | - |
Purchase of tangible fixed assets | (503 | ) | (546 | ) |
Write off of tangible fixed assets | 1 | (102 | ) |
Interest received | 66 | 4 |
Net cash from investing activities | (936 | ) | (644 | ) |
Cash flows from financing activities |
Loan repayments in year | - | (1,036 | ) |
Equity dividends paid | (3,050 | ) | (2,072 | ) |
Net cash from financing activities | (3,050 | ) | (3,108 | ) |
Increase/(decrease) in cash and cash equivalents | 2,345 | (91 | ) |
Cash and cash equivalents at beginning of year |
2 |
6,941 |
7,032 |
Cash and cash equivalents at end of year | 2 | 9,286 | 6,941 |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 31 May 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£'000 | £'000 |
Profit before taxation | 4,431 | 3,493 |
Depreciation charges | 1,164 | 1,148 |
(Profit)/loss on disposal of fixed assets | (1 | ) | 1 |
Finance costs | 1 | 19 |
Finance income | (66 | ) | (4 | ) |
5,529 | 4,657 |
Decrease in stocks | - | 12 |
Increase in trade and other debtors | (1,200 | ) | (805 | ) |
Increase in trade and other creditors | 2,778 | 580 |
Cash generated from operations | 7,107 | 4,444 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 May 2023 |
31.5.23 | 1.6.22 |
£'000 | £'000 |
Cash and cash equivalents | 9,286 | 6,941 |
Year ended 31 May 2022 |
31.5.22 | 1.6.21 |
£'000 | £'000 |
Cash and cash equivalents | 6,941 | 7,032 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.6.22 | Cash flow | At 31.5.23 |
£'000 | £'000 | £'000 |
Net cash |
Cash at bank and in hand | 6,941 | 2,345 | 9,286 |
6,941 | 2,345 | 9,286 |
Total | 6,941 | 2,345 | 9,286 |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 May 2023 |
1. | STATUTORY INFORMATION |
Datel Group plc is a private company , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page. |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Basis of consolidation |
The consolidated financial statements incorporate the financial statements of the company and all group undertakings, together with the group's share of the net assets and results of associated undertakings. |
The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken over reduced disclosure available and no cash flow statement has been presented for the company. |
Significant judgements and estimates |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
Impairment of assets |
The carrying value of those assets recorded in the balance sheet, at amortised cost, could be materially reduced where circumstances exist which might indicate that an asset has been impaired and an impairment review is performed. Impairment reviews consider the fair value and or value in use of the potentially impaired asset or assets and compares that with the carrying value of the asset or assets in the balance sheet. Any reduction in value arising from such a review would be recorded in the statement of comprehensive income. Impairment reviews involve the significant use of assumptions. Consideration has to be given as to the price that could be obtained for the asset or assets, or in relation to a consideration of value in use, estimates of the future cash flows that could be generated by the potentially impaired asset or assets, together with a consideration of an appropriate discount rate to apply to those cash flows. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Turnover represents net invoiced sales of goods, excluding value added tax, except in respect of service contracts where turnover is recognised when the company obtains the right to consideration. |
Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable. |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
2. | ACCOUNTING POLICIES - continued |
Goodwill |
Goodwill arises on business acquisitions and represents the excess of the cost of the acquisition over the company's interest in the net amount of the identifiable assets, liabilities and contingent liabilities of the acquired business. |
Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. It is amortised on a straight-line basis over its useful life. Where a reliable estimate of the useful life of goodwill or intangible assets cannot be made, the life is presumed not to exceed five years. |
Amortisation |
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that assets as follows: |
Goodwill - straight line basis over 5-10 years |
If there is an indication that there has been significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Tangible fixed assets |
Improvements to property | - |
Fixtures and fittings | - |
Computer equipment | - |
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. |
An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss. |
Stocks |
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition. |
Financial instruments |
A financial asset or a financial liability is recognised only when the entity becomes a party to the contractual provisions of the instrument. |
Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. |
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. |
Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised. |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
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. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Long term contracts |
When the outcome of an individual contract can be foreseen with reasonable certainty and can be estimated reliably, margin is recognised by reference to the stage of completion, based on the lower of the percentage margin earned to date and that prudently forecast at completion. This is after the deduction of any foreseeable losses and applicable payments on account. |
Operating profit is stated after attributable profit on long term contracts completed and amounts recoverable on contracts uncompleted, the latter also being included within debtors due within one year. |
Provisions |
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. |
Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises. |
Impairment of fixed assets |
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. |
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. |
For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units. |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
2023 | 2022 |
£'000 | £'000 |
Sale of goods | 11,386 | 9,268 |
Rendering of services | 22,853 | 21,475 |
34,239 | 30,743 |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£'000 | £'000 |
Wages and salaries | 13,362 | 12,379 |
Social security costs | 1,302 | 1,432 |
Other pension costs | 544 | 497 |
15,208 | 14,308 |
The average number of employees during the year was as follows: |
2023 | 2022 |
Sales, distribution and programming | 191 | 186 |
Office and management | 23 | 23 |
2023 | 2022 |
£ | £ |
Directors' remuneration | 1,431,849 | 1,670,013 |
Directors' pension contributions to money purchase schemes | 37,527 | 33,800 |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 4 | 4 |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc | 637,768 | 602,585 |
Pension contributions to money purchase schemes | 15,906 | 11,683 |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£'000 | £'000 |
Depreciation - owned assets | 342 | 339 |
(Profit)/loss on disposal of fixed assets | (1 | ) | 1 |
Goodwill amortisation | 821 | 810 |
Auditors' remuneration | 10 | 10 |
Auditors' remuneration for non audit work | 18 | 28 |
Stock recognised as an expense | 920 | 875 |
Impairment of trade debtors | 30 | 47 |
Operating leases | 273 | 248 |
Research and development expenditure | 192 | 204 |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£'000 | £'000 |
Other interest | 1 | 19 |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£'000 | £'000 |
Current tax: |
UK corporation tax | 1,039 | 715 |
Corporation tax - prior year | - | (25 | ) |
Total current tax | 1,039 | 690 |
Deferred tax | (101 | ) | 64 |
Tax on profit | 938 | 754 |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£'000 | £'000 |
Profit before tax | 4,431 | 3,493 |
Profit multiplied by the standard rate of corporation tax in the UK of 25 % (2022 - 19 %) |
1,108 |
664 |
Effects of: |
Expenses not deductible for tax purposes | 76 | 155 |
Depreciation in excess of capital allowances | 51 | 19 |
Adjustments to tax charge in respect of previous periods | - | (2 | ) |
R&D expenditure | (58 | ) | (51 | ) |
associate |
Enhanced capital allowances | (239 | ) | (31 | ) |
Total tax charge | 938 | 754 |
8. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
9. | DIVIDENDS |
2023 | 2022 |
£'000 | £'000 |
A Ordinary shares of £0.0125 each |
Interim | 3,000 | 2,000 |
B Ordinary shares of £0.0125 each |
Interim | 50 | 72 |
3,050 | 2,072 |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
10. | INTANGIBLE FIXED ASSETS |
Group |
Goodwill |
£'000 |
COST |
At 1 June 2022 | 11,233 |
Additions | 500 |
At 31 May 2023 | 11,733 |
AMORTISATION |
At 1 June 2022 | 7,346 |
Amortisation for year | 821 |
At 31 May 2023 | 8,167 |
NET BOOK VALUE |
At 31 May 2023 | 3,566 |
At 31 May 2022 | 3,887 |
11. | TANGIBLE FIXED ASSETS |
Group |
Improvements | Fixtures |
to | and | Computer |
property | fittings | equipment | Totals |
£'000 | £'000 | £'000 | £'000 |
COST |
At 1 June 2022 | 119 | 505 | 1,677 | 2,301 |
Additions | - | 22 | 481 | 503 |
Disposals | - | - | (487 | ) | (487 | ) |
At 31 May 2023 | 119 | 527 | 1,671 | 2,317 |
DEPRECIATION |
At 1 June 2022 | 30 | 239 | 1,017 | 1,286 |
Charge for year | 8 | 37 | 297 | 342 |
Eliminated on disposal | - | - | (487 | ) | (487 | ) |
At 31 May 2023 | 38 | 276 | 827 | 1,141 |
NET BOOK VALUE |
At 31 May 2023 | 81 | 251 | 844 | 1,176 |
At 31 May 2022 | 89 | 266 | 660 | 1,015 |
12. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£'000 |
COST |
At 1 June 2022 |
and 31 May 2023 |
NET BOOK VALUE |
At 31 May 2023 |
At 31 May 2022 |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
12. | FIXED ASSET INVESTMENTS - continued |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiaries |
Registered office: Cinnamon Park, Warrington, WA2 0XP |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Cinnamon Park, Fearnhead, Warrington, Cheshire, WA2 0XP |
Nature of business: |
% |
Class of shares: | holding |
13. | STOCKS |
Group |
2023 | 2022 |
£'000 | £'000 |
Stocks | 3 | - |
Raw materials and consumables | - | 2 |
3 | 2 |
14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£'000 | £'000 | £'000 | £'000 |
Trade debtors | 3,994 | 3,173 |
Other debtors | 205 | 252 |
Deferred tax asset | 275 | 175 | - | - |
Prepaid maintenance costs | 4,188 | 3,760 |
Prepayments | 227 | 229 |
8,889 | 7,589 |
Deferred tax asset |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£'000 | £'000 | £'000 | £'000 |
Accelerated capital allowances | (72 | ) | (72 | ) |
Deferred tax | 347 | 247 | - | - |
275 | 175 |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£'000 | £'000 | £'000 | £'000 |
Trade creditors | 2,581 | 2,902 |
Amounts owed to group undertakings | 1 | - |
Corporation tax | 483 | 219 |
Social security and other taxes | 697 | 561 |
VAT | 84 | 117 | - | - |
Other creditors | 873 | 694 |
Deferred income | 12,987 | 10,634 |
Accrued expenses | 2,383 | 1,919 |
20,089 | 17,046 |
16. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Non-cancellable operating | leases |
2023 | 2022 |
£'000 | £'000 |
Within one year | 273 | 248 |
Between one and five years | 682 | 869 |
955 | 1,117 |
17. | DEFERRED TAX |
Group |
£'000 |
Balance at 1 June 2022 | (175 | ) |
Accelerated capital allowances | (101 | ) |
Balance at 31 May 2023 | (276 | ) |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £'000 | £'000 |
A Ordinary | £0.0125 | 50 | 50 |
B Ordinary | £0.0125 | 1 | 1 |
51 | 51 |
19. | RESERVES |
Group |
Capital |
Retained | redemption |
earnings | reserve | Totals |
£'000 | £'000 | £'000 |
At 1 June 2022 | 2,326 | 11 | 2,337 |
Profit for the year | 3,493 | 3,493 |
Dividends | (3,050 | ) | (3,050 | ) |
At 31 May 2023 | 2,769 | 11 | 2,780 |
Datel Group plc (Registered number: 02444909) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 May 2023 |
19. | RESERVES - continued |
Company |
Capital |
Retained | redemption |
earnings | reserve | Totals |
£'000 | £'000 | £'000 |
At 1 June 2022 | 522 |
Profit for the year |
Dividends | ( |
) | ( |
) |
At 31 May 2023 | 522 |
20. | RELATED PARTY DISCLOSURES |
Group |
Datel Computing Ltd and Datel Advansys Limited are subsidiaries of Datel Group plc. |
At the balance sheet date Datel Computing Limited owed Datel Advansys Limited an amount of £850,000 (2022: £850,000). |
Company |
At the balance sheet date, Datel Group plc owed Datel Computing Limited £4,661,119 (2022 £4,666,119). |
Key management personnel |
Key management are the directors, total remuneration paid is detailed in note 4. |
21. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party is Mr A K Simpson. |
22. | EMPLOYEE BENEFITS |
Defined contribution plans |
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £543,747 (2022: £496,709). The amount outstanding at the year end was £40,524. |