Company registration number 13595200 (England and Wales)
NEBULA TOPCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
NEBULA TOPCO LIMITED
COMPANY INFORMATION
Directors
T J W Burnet
D A Capewell
R Choufani
S J Halstead
B St. Jean
D B Thomas
C Yanchek
A T S Crawford
A Isherwood
(Appointed 1 September 2023)
Company number
13595200
Registered office
25a Market Square
Bicester
Oxfordshire
OX26 6AD
Auditor
Crowe U.K LLP
Aquis House
49-51 Blagrave Street
Reading
RG1 1PL
NEBULA TOPCO LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group statement of financial position
9
Parent company statement of financial position
10
Group statement of changes in equity
11
Parent company statement of changes in equity
12
Group statement of cash flows
13
Parent company statement of cash flows
14
Notes to the group financial statements
15 - 35
NEBULA TOPCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -

The directors present the strategic report for the year ended 31 May 2023.

Review of the business

The Directors consider the trading results of the group to be positive especially given the economic conditions experienced during the year and are confident that the group will continue to build on the achievements of the current financial year. The group further developed its niche secure data infrastructure technology capabilities during the year. The Directors expect the operating results of the group to continue to be profitable in the future.

The group’s customers typically migrate from traditional on-premise data infrastructure to cloud-based data infrastructure. This migration trend has increased dramatically over recent years and is expected to continue. The benefits of migrating to cloud-based data infrastructure for the group's customers are increased business agility, reduced security risks, operating cost savings and a reduction in capital expenditure.

During the year the group continued to focus heavily on its culture and values and hiring exceptional talent into the business. This has been a significant focus for the leadership team, and the workforce is now composed principally of employees. A small proportion of consultants will continue to be utiliised, to meet specific expertise requirements during the development of new capabilities.

As global investment in digital transformation (DX) continues to rise, and DX programmes are increasingly coming to market with wider remits, the group has invested in a deliberate partnering strategy. The Board has directed focus on a small number of the multiple overtures that the group has received, with significant time and resource devoted to formalising those relationships. The group has also continued the development of cloud agnostic and private / public  cloud capabilities,  recognising the rise in hybrid environments as elevated energy prices drive cloud workload costs higher. The group's technology capabilities have been instrumental in supporting AI business solutions in core clients for a number of years, and as AI applications continue to proliferate, these capabilities continue to be enhanced.

Principal risks and uncertainties

The principal commercial risks relate to managed services contracts and digital transformation contracts, where service level agreements and milestones are committed to and where there is a financial and reputational risk if these services and milestones are not met. The group has a robust review and escalation process to ensure that it continually operates within these agreed service levels and milestones are delivered within acceptable timescales, remedial action is taken before any business risk occurs to either the group or customers. There is deemed to be low contractual risk as the group has a strong track record of delivery and high levels of customer satisfaction.

The objective of the group is to carefully monitor and manage financial risk by effective controls and senior management review processes. The financial risks of the business are reviewed at regular Board meetings.

The price risk of the group is effectively managed by the group entering into multi-year fixed resource day rate contracts with key customers. The credit risk of the group is minimised by the group’s focus on public sector customers and well-established enterprises. Liquidity and cash flow risks are managed by entering into long term funding arrangements with the group’s lenders under agreements that contain significant liquidity and covenant headroom to the group.

Key performance indicators

The Directors track various financial and operational KPls. Financial KPls tracked are turnover and operating margins across the business and overall overhead costs. Comparison is made of month-on-month trends and actual results against budget.

The key financial KPIs are as follows:

 

The period to 31 May 2022 was the group’s first reporting period and represents around 8.25 months of trade.

The turnover and operating profit during the year is in line with the Boards expectations with new contract wins.

 

NEBULA TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
Other performance indicators

The operational KPls tracked are number and percentage of milestones delivered on time and customer satisfaction scores.

 

On behalf of the board

S J Halstead
Director
22 September 2023
NEBULA TOPCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 May 2023.

Principal activities

The principal activity continued to be that of a holding company.

 

The principal activity of the group is that of the provision of innovative, ultra-secure, enterprise data capabilities, primarily in the UK.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

No preference dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

T J W Burnet
D A Capewell
R Choufani
S J Halstead
B St. Jean
D B Thomas
C Yanchek
A T S Crawford
A Isherwood
(Appointed 1 September 2023)
Financial instruments

Additional disclosures required under SI 2008/410, Sch. 7 have been made in the strategic report where applicable.

Auditor

The auditor, Crowe U.K LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

NEBULA TOPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 4 -
Statement of directors' responsibilities

The directors are responsible for preparing the annual report 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 group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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 group and company and of the profit or loss of the group for that period.

 

In preparing these financial statements, International Accounting Standard 1 requires that directors:

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

Each director in office at the date of approval of this annual report confirms that:

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

On behalf of the board
S J Halstead
Director
22 September 2023
NEBULA TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NEBULA TOPCO LIMITED
- 5 -
Opinion

We have audited the financial statements of Nebula Topco Limited (the “parent company”) and its subsidiaries (the “group”) for the year ended 31 May 2023 which comprise the group statement of comprehensive income, group and company statement of financial position, group and company statement of changes in equity, group and company statement of cashflows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law UK-adopted international accounting standards.

In our opinion the financial statements:

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 Auditor’s 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 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 contained within the annual report. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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.

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 our audit

NEBULA TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEBULA TOPCO LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 4, 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 is 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.

Auditor's 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 an auditor’s report 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory frameworks within which the group and parent company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 and UK taxation legislation.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of controls by management and revenue recognition. Our audit procedures to respond to these risks included enquires with management about their own identification and assessment of the risk of irregularities, sample testing on the posting of journals and reviewing accounting estimates for biases. Our audit procedures to respond to revenue recognition risks include sample testing revenue across the year and deferred revenue as at year end, agreeing to supporting documentation, and reviewing revenue received either side of the year end to ensure this has been recognised correctly.

Owing to inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

NEBULA TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEBULA TOPCO LIMITED
- 7 -

These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.

A further description of our responsibilities for the audit of the financial statements is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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 an auditor's report 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.

Christine Dobson (Senior Statutory Auditor)
For and on behalf of Crowe U.K LLP
22 September 2023
Chartered Accountants
Statutory Auditor
Aquis House
49-51 Blagrave Street
Reading
RG1 1PL
NEBULA TOPCO LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
Year
Period
ended
ended
31 May
31 May
2023
2022
Notes
£
£
Revenue
5
28,812,819
18,332,186
Operating expenses
(23,961,049)
(15,989,978)
Operating profit
4,851,770
2,342,208
Investment income
11
82,773
809
Finance costs
12
(9,661,702)
(5,240,730)
Loss before taxation
(4,727,159)
(2,897,713)
Income tax income
13
1,542,783
603,733
Loss and total comprehensive expense for the year
(3,184,376)
(2,293,980)
Loss for the financial year is all attributable to the owners of the parent company.
Total comprehensive expense for the year is all attributable to the owners of the parent company.
NEBULA TOPCO LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 MAY 2023
31 May 2023
- 9 -
2023
2022
Notes
£
£
Non-current assets
Goodwill
14
171,795,505
171,795,505
Intangible assets
14
7,964,686
9,110,754
Property, plant and equipment
15
125,700
39,465
179,885,891
180,945,724
Current assets
Trade and other receivables
18
4,638,413
4,147,330
Current tax recoverable
245,024
315,870
Cash and cash equivalents
8,045,286
7,412,514
12,928,723
11,875,714
Current liabilities
Trade and other payables
21
3,003,794
2,236,294
Deferred revenue
23
-
0
325,247
3,003,794
2,561,541
Net current assets
9,924,929
9,314,173
Non-current liabilities
Borrowings
24
84,172,337
80,083,878
Deferred tax liabilities
28
673,201
2,215,984
84,845,538
82,299,862
Net assets
104,965,282
107,960,035
Equity
Called up share capital
31
110,215,105
110,215,105
Other reserves
32
228,533
38,910
Retained earnings
(5,478,356)
(2,293,980)
Total equity
104,965,282
107,960,035
The financial statements were approved by the board of directors and authorised for issue on 22 September 2023 and are signed on its behalf by:
S J Halstead
Director
Company registration number 13595200 (England and Wales)
NEBULA TOPCO LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2023
31 May 2023
- 10 -
2023
2022
Notes
£
£
Non-current assets
Investments
16
112,266,182
112,076,559
Current assets
Trade and other receivables
20
451,517
4,914
Cash and cash equivalents
60,931
216,662
512,448
221,576
Current liabilities
Trade and other payables
22
161,193
138,486
Net current assets
351,255
83,090
Net assets
112,617,437
112,159,649
Equity
Called up share capital
31
110,215,105
110,215,105
Other reserves
32
228,533
38,910
Retained earnings
2,173,799
1,905,634
Total equity
112,617,437
112,159,649

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was £268,165 (2022 - £1,905,634 profit).

The financial statements were approved by the board of directors and authorised for issue on 22 September 2023 and are signed on its behalf by:
22 September 2023
S J Halstead
Director
Company Registration No. 13595200
NEBULA TOPCO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
Share capital
Other reserves
Retained earnings
Total
Notes
£
£
£
£
Balance at 31 August 2021
-
0
-
-
0
-
Period ended 31 May 2022:
Loss and total comprehensive expense
-
-
(2,293,980)
(2,293,980)
Transactions with owners:
Issue of share capital
110,215,105
-
-
110,215,105
Transfer to other reserves
-
38,910
-
0
38,910
Balance at 31 May 2022
110,215,105
38,910
(2,293,980)
107,960,035
Year ended 31 May 2023:
Loss and total comprehensive expense
-
-
(3,184,376)
(3,184,376)
Transactions with owners:
Transfer to other reserves
32
-
189,623
-
0
189,623
Balance at 31 May 2023
110,215,105
228,533
(5,478,356)
104,965,282
NEBULA TOPCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
Share capital
Other reserves
Retained earnings
Total
Notes
£
£
£
£
Balance at 31 August 2021
-
0
-
-
0
-
Period ended 31 May 2022:
Profit and total comprehensive income for the period
-
-
1,905,634
1,905,634
Transactions with owners in their capacity as owners:
Issue of share capital
110,215,105
-
-
110,215,105
Transfer to other reserves
-
38,910
-
38,910
Balance at 31 May 2022
110,215,105
38,910
1,905,634
112,159,649
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
-
268,165
268,165
Transactions with owners in their capacity as owners:
Transfer to other reserves
32
-
189,623
-
189,623
Balance at 31 May 2023
110,215,105
228,533
2,173,799
112,617,437
NEBULA TOPCO LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
37
7,310,812
2,968,503
Interest paid
(5,495,841)
(2,357,806)
Income taxes refunded/(paid)
107,906
(298,500)
Net cash inflow from operating activities
1,922,877
312,197
Investing activities
Purchase of intangible assets
(1,227,031)
(242,611)
Purchase of property, plant and equipment
(126,717)
(42,918)
Purchase of subsidiaries
-
0
(152,703,135)
Interest received
63,643
-
Net cash used in investing activities
(1,290,105)
(152,988,664)
Financing activities
Proceeds from issue of shares
-
110,215,105
Proceeds from borrowings
-
0
77,202,956
Repayment of bank loans
-
0
(27,329,080)
Net cash (used in)/generated from financing activities
-
160,088,981
Net increase in cash and cash equivalents
632,772
7,412,514
Cash and cash equivalents at beginning of period
7,412,514
-
0
Cash and cash equivalents at end of period
8,045,286
7,412,514
NEBULA TOPCO LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
37
(155,731)
116,662
Net cash (outflow)/inflow from operating activities
(155,731)
116,662
Investing activities
Purchase of subsidiaries
-
0
(112,037,649)
Interest received
-
0
1,922,544
Net cash used in investing activities
-
(110,115,105)
Financing activities
Proceeds from issue of shares
-
0
110,215,105
Net cash (used in)/generated from financing activities
-
110,215,105
Net (decrease)/increase in cash and cash equivalents
(155,731)
216,662
Cash and cash equivalents at beginning of period
216,662
-
0
Cash and cash equivalents at end of period
60,931
216,662
NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 15 -
1
Accounting policies
Company information

Nebula Topco Limited is a private company limited by shares incorporated in England and Wales. The registered office is 25a Market Square, Bicester, Oxfordshire, OX26 6AD. The company's principal activities and nature of its operations are disclosed in the directors' report.

 

The group consists of Nebula Topco Limited and all of its subsidiaries.

1.1
Accounting convention

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Reporting period
In the prior period, the group's reporting period was less than one year as these were the first financial statements prepared since the entity incorporated on 31 August 2021. As a result the amounts included in the financial statements are not entirely comparable.
1.3
Business combinations

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Nebula Topco Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 May 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 16 -
1.5
Going concern

The financial statements have been prepared on a going concern basis.true

 

The directors consider there to be no material uncertainties that may cast significant doubt on the group and companys ability to continue to operate as a going concern. The directors have a reasonable expectation that the group and the company have adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from the date when these financial statements are authorised for issue. Accordingly, they continue to adopt the going concern basis in the preparation of these financial statements.

 

The groups business activities, together with the factors likely to affect its future development, performance and position are summarised in the Strategic Report. The principal risks, uncertainties and risk management processes are also described in the Strategic Report. The groups policies and objectives with regards to financial risk management is further described in note 26 and 27 of the financial statements.

1.6
Revenue

Revenue is measured at the fair value of the consideration received or receivable for the rendering of services in the normal course of business, and is shown net of discounts and VAT.

Revenue arises from the provision of technology services.

 

Where these services represent a project, revenue is recognised throughout the performance period of the contract on milestone completion where these milestones are independent of each other. The contract milestones approximate the different performance obligations under the contract where the contractual value assigned to each milestone is representative of the market price of that deliverable.

 

Where the milestones are not independent or there is a service performance obligation, revenue is recognised over the period of service being performed by reference to the stage of completion of the transaction at the end of the reporting period.

 

Revenue is billable on a monthly basis, based on a fixed-price per work unit consumed, or based on monthly fixed fees subject to adjustment mechanisms for volume changes or scope changes. Contracts generally provide for service-level penalties and payment is typically due within 30 days.

 

Recurring services are generally considered to be one single performance obligation, comprised of a series of distinct daily units of service satisfied over time. Contract modifications are recorded on a prospective basis. Revenue on services-based contracts is recognised as rights to bill arise. Service-level penalties or bonuses, if any, are accrued in full in the period when the performance targets are failed or achieved, as appropriate.

1.7
Goodwill

Goodwill represents the excess of the cost of acquisition over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less impairment losses.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not subsequently reversed.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 17 -
1.8
Intangible assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Separately identified intangible assets acquired in a business combination are initially recognised at their fair value (which is regarded as their cost). These assets are subsequently stated at fair value or cost less accumulated amortisation and any accumulated impairment losses.

 

The carrying value of intangible assets are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable.

 

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

 

Software                    33.33% straight line

Development costs            33.33% straight line

Customer relationships            6 months straight line

Capability credentials             5 years straight line

1.9
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Computers
33.33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

1.10
Non-current investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.11
Impairment of tangible and intangible assets

At each reporting end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

1.12
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 18 -
1.13
Financial assets

Financial assets are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

 

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

 

For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.14
Financial liabilities

The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the group’s obligations are discharged, cancelled, or they expire.

1.15
Equity instruments

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 19 -
1.16
Taxation

The tax expense represents the sum of the tax currently payable.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.17
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.18
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.19
Share-based payments

The group operates equity-settled, share-based compensation plans, under which the group receives services from employees as consideration for equity instruments in the designated group company. The awards are granted by the group and the company has no obligation to settle the awards. Equity-settled share-based payments are measured at fair value at the date of grant using the Monte Carlo Model. The fair value determined at the grant date is expensed on a straight-line basis over the expected vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

1.20

Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
2
Adoption of new and revised standards and changes in accounting policies
Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective:

Standard or Interpretation
Effective for annual periods commencing on or after
Amendments to IAS 1: Classification of Liabilities as Current or Non-Current
1 January 2023
Amendments to IAS 1 and IFRS Practice Statements 2: Disclosure of Accounting Policies
1 January 2023
Amendments to IAS 8: Definition of Accounting Estimates
1 January 2023
Amendments to IAS 12: Deferred Tax Related to Assets and Libailities arising from a Single Transaction
1 January 2023
Amendments to IFRS 16: Lease Liability in a Sale and Leaseback
1 January 2024
Amendments to IAS 1: Non-current Liabilities with Covenants
1 January 2024
Amended IFRS 17: Insurance Contracts
1 January 2023

The directors do not expect any material impact as a result of adopting the standards and amendments listed above in the financial year they become effective.

3
Critical accounting estimates and judgements

In the application of the group and company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount 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.

 

The 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.

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Key sources of estimation uncertainty
Impairment of goodwill

At each reporting period end date, the Group reviews the carrying amounts of its goodwill assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
4
Critical accounting estimates and judgements - Company
Key sources of estimation uncertainty
Impairment of Investments

 

At each reporting period end date, the company reviews the carrying amounts of its investments in subsidiaries to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

 

At the balance sheet date the carrying amount of the investment in subsidiaries is £112,266,182 (2022 - £112,076,559).

5
Revenue
2023
2022
£
£
Revenue analysed by class of business
Data services
28,812,819
18,332,186
2023
2022
£
£
Revenue analysed by geographical market
United Kingdom
28,812,819
17,978,868
The Netherlands
-
353,318
28,812,819
18,332,186
6
Operating Profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Research and development costs
257,042
234,998
Depreciation of property, plant and equipment
40,482
3,831
Amortisation of intangible assets
2,373,099
2,918,645
Share-based payments
189,623
38,910
7
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
13,300
8,950
Audit of the financial statements of the company's subsidiaries
32,450
32,500
45,750
41,450
NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 22 -
8
Employees

The average monthly number of persons (including directors) employed by the group during the year was:

2023
2022
Number
Number
Management
8
9
Operations
95
32
Administrative
10
4
Total
113
45

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
8,984,738
3,160,676
Share based payments
189,623
38,910
Social security costs
1,154,084
418,132
Pension costs
87,395
25,584
10,415,840
3,643,302
9
Employees - Company

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Management
2
2

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
90,000
62,077
Social security costs
10,697
7,096
100,697
69,173
NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 23 -
10
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
495,030
337,051
Company pension contributions to defined contribution schemes
-
771
495,030
337,822

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2022 - 1).

Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
152,030
103,462
Company pension contributions to defined contribution schemes
-
771
11
Investment income
2023
2022
£
£
Interest income
Financial instruments measured at amortised cost:
Bank deposits
75,763
-
0
Other interest income on financial assets
7,010
809
Total interest revenue
82,773
809
12
Finance costs
2023
2022
£
£
Interest on loans
8,771,626
4,609,621
Other interest
1,104
2,619
Amortisation of arrangement fees
829,378
576,713
Other finance costs
59,594
51,777
Total interest expense
9,661,702
5,240,730

Included within interest on loans is interest payable of £5,685,603 (2022 - £3,021,251) in respect of Senior Facility Agreement (SFA) loan notes (see note 24). Interest is accrued at a rate of SONIA with a credit adjustment spread plus a current margin of 6.50% (2022 - 6.75%) per annum.

 

Also included within interest on loans is interest payable of £3,086,022 (2022 - £1,588,370) in respect of a payment in kind (PIK) loan (see note 24). Interest is accrued at a rate of SONIA with a credit adjustment spread plus a margin of 10.75%.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 24 -
13
Income tax expense
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
118,818
Deferred tax
Origination and reversal of temporary differences
(1,542,783)
(722,551)
Total tax (credit)
(1,542,783)
(603,733)

The (credit)/charge for the year can be reconciled to the loss per the income statement as follows:

2023
2022
£
£
Loss before taxation
(4,727,159)
(2,897,713)
Expected tax credit based on a corporation tax rate of 20.00% (2022: 19.00%)
(945,561)
(550,565)
Effect of expenses not deductible in determining taxable profit
445,039
1,229,047
Other permanent differences
-
(1,112,812)
Over provided in prior years
-
(186)
Fixed asset difference
(8,041)
(5,748)
Deferred tax not recognised
(906,070)
(152,740)
Remeasurement of deferred tax for changes in tax rates
(128,150)
(136,753)
Other timing differences
-
126,024
Taxation credit for the year
(1,542,783)
(603,733)

Group companies have suffered disallowances of interest of £1,981,781 (2022 - £1,384,643) under the corporate interest restriction rules, which can be carried forward, with an associated deferred tax asset of £495,445 (2022 - £346,161). The potential deferred tax asset on the interest disallowance was not recognised in the prior period accounts due to uncertainty as to whether the asset would be recovered.

 

An increase to the UK corporation tax rate from 19% to 25%, effective from 1 April 2023, has resulted in a blended tax rate of 20% for the year ending 31 May 2023.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
14
Intangible assets
Goodwill
Software
Development costs
Customer relationships
Capability credentials
Total
£
£
£
£
£
£
Cost
At 31 August 2021
-
0
-
0
-
0
-
0
-
0
-
0
Additions
-
55,257
187,354
-
-
242,611
Business combinations
171,795,505
32,650
-
1,477,112
10,277,026
183,582,293
At 31 May 2022
171,795,505
87,907
187,354
1,477,112
10,277,026
183,824,904
Additions
-
34,152
1,192,879
-
-
1,227,031
At 31 May 2023
171,795,505
122,059
1,380,233
1,477,122
10,277,026
185,051,945
Amortisation and impairment
At 31 August 2021
-
0
-
0
-
0
-
-
-
0
Charge for the year
-
0
14,765
13,677
1,477,112
1,413,091
2,918,645
At 31 May 2022
-
0
14,765
13,677
1,477,112
1,413,091
2,918,645
Charge for the period
-
0
38,368
279,326
-
2,055,405
2,373,099
At 31 May 2023
-
0
53,133
293,003
1,477,122
3,468,496
5,291,754
Carrying amount
At 31 May 2023
171,795,505
68,926
1,087,230
-
6,808,530
179,760,191
At 31 May 2022
171,795,505
73,142
173,677
-
8,863,935
180,906,259

Goodwill, customer relationships and capability credentials arose on the acquisition of subsidiaries in the previous period.

15
Property, plant and equipment
Computers
£
Cost
At 31 August 2021
-
0
Additions
42,918
Business combinations
378
At 31 May 2022
43,296
Additions
126,717
At 31 May 2023
170,013
NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
15
Property, plant and equipment
Computers
£
(Continued)
- 26 -
Accumulated depreciation and impairment
At 31 August 2021
-
0
Charge for the year
3,831
At 31 May 2022
3,831
Charge for the year
40,482
At 31 May 2023
44,313
Carrying amount
At 31 May 2023
125,700
At 31 May 2022
39,465
16
Investments - Company
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Investments in subsidiaries
-
0
-
0
112,266,182
112,076,559
Investment in subsidiary undertakings

Details of the company's principal operating subsidiaries are included in note 17. The increase in the company's investments value is as a result of the group share based payment transactions as per note 32.

17
Subsidiaries

Details of the company's subsidiaries at 31 May 2023 are as follows:

Name of undertaking
Address
Class of
% Held
shares held
Direct
Indirect
Ensco 1366 Limited (12558828)
1
Ordinary
0
100.00
Nebula Midco 1 Limited (13590688)
1
Ordinary
100.00
-
Nebula Midco 2 Limited (13590698)
1
Ordinary
0
100.00
Nebula Bidco Limited (13590706)
1
Ordinary
0
100.00
Aker Systems Limited (10161344)
1
Ordinary
0
100.00
Aker Technology Services Limited (14477566)
1
Ordinary
0
100.00

Registered office addresses (all UK unless otherwise indicated):

1
25a Market Square, Bicester, Oxfordshire, Englad, OX26 6AD

The company's subsidiaries Nebula Midco 1 Limited, Nebula Midco 2 Limited, Nebula Bidco Limited, Ensco 1366 Limited and Aker Technology Services Limited are exempt from audit by virtue of S479A of the Companies Act 2006.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 27 -
18
Trade and other receivables
2023
2022
£
£
Trade receivables
2,687,250
3,283,985
VAT recoverable
8,289
-
Other receivables
107,015
62,395
Prepayments and accrued income
1,835,859
800,950
4,638,413
4,147,330

The average credit period on sales is 30 days. No interest is charged on outstanding trade receivables.

19
Trade receivables - credit risk
Fair value of trade receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

No significant receivable balances are impaired at the reporting end date.

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group. In order to minimise credit risk the group has adopted a policy of only dealing with creditworthy counterparties and will obtain sufficient collateral where appropriate to mitigate the risk of financial loss from default. The concentration of credit risk is limited due to the customer base consisting of public sector bodies and blue chip corporates. The group uses publicly available financial information and its own trading records to rate its customers.

 

The group's exposure and its customers creditworthiness is continually monitored so that any potential problems are detected at an early stage.

 

The typical credit period extended to customers is 30 days. Generally, no interest is charged on outstanding receivables. The maximum exposure on trade receivables at the reporting date is their carrying value.

 

The group recognises a loss allowance of 100% for receivables over 330 days past due. In the year ended 31 May 2023 this amount was nil (2022 - nil). 92% of trade receivables at the reporting date were settled by 31 August 2023.

20
Trade and other receivables - Company
2023
2022
£
£
VAT recoverable
1,413
12
Amounts owed by fellow group undertakings
445,530
48
Prepayments
4,574
4,854
451,517
4,914
NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 28 -
21
Trade and other payables
2023
2022
£
£
Trade payables
604,772
1,020,776
Accruals
542,197
599,317
Social security and other taxation
1,720,511
542,029
Other payables
136,314
74,172
3,003,794
2,236,294
22
Trade and other payables - Company
2023
2022
£
£
Trade payables
338
74
Accruals
74,651
79,725
Social security and other taxation
4,014
4,227
Other payables
82,190
54,460
161,193
138,486
23
Deferred revenue
2023
2022
£
£
Arising from data services
-
325,247
All deferred revenues were settled within 12 months from the reporting date.
24
Borrowings
Non-current
2023
2022
£
£
Borrowings held at amortised cost:
Other loans
84,172,337
80,083,878
NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
24
Borrowings
(Continued)
- 29 -

Included within other loans are Senior Facility Agreement (SFA) loan notes totaling £60,000,000, presented net of an arrangement fee of £2,280,000, which is being amortised over four years. During the year ended 31 May 2023 loan fees of £570,000 (2022 - £394,055) were amortised and interest of £5,685,603 (2022 - £3,021,251) accrued on this loan at a rate of SONIA with a credit adjustment spread plus a current margin of 6.50% (2022 - 6.75%) per annum (see note 12), interest is payable quarterly in arrears. Interest accrued at 31 May 2023 on this loan was £1,160,191 (2022 - £877,754). The loan is repayable on 23 September 2028.

 

In consideration and as support for the senior loans provided to Nebula Bidco Limited under the SFA, Nebula Bidco Limited, Aker Systems Limited and Ensco 1366 Limited each granted in favour of the senior lenders an English law all monies guarantee in respect of payment obligations arising under the SFA, English law fixed security over its material assets and English law floating security over substantially all of its assets. In addition Nebula Midco 2 Limited granted limited recourse English law fixed security over its material assets.

 

Also included within other loans is a payment in kind (PIK) loan of £20,000,000, presented net of an arrangement fee of £600,000, which is being amortised over four years. During the year ended 31 May 2023 loan fees of £150,000 (2022 - £103,699) were amortised and interest of £3,086,022 (2022 - £1,588,370) accrued on this loan at a rate of SONIA with a credit adjustment spread plus a current margin of 10.75% per annum (see note 12). At 31 May 2023 £3,973,466 (2022 - £1,111,211) of this interest was capitalised and £700,926 (2022 - £477,158) had been accrued. The loan is repayable on 23 September 2029.

 

In consideration and as support for the PIK loans provided under the PIK facility agreement, the company granted limited recourse English law fixed security over its material assets in favour of the PIK lenders.

 

Also in place is a Revolving Credit Facility £5,000,000 and is undrawn at 31 May 2023. Drawn amounts would bear interest at a rate of SONIA with a credit adjustment spread plus a current margin of 3.25% (2022 - 3.50%) per annum.

25
Fair value of financial liabilities

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 30 -
26
Liquidity risk

The following table outlines the remaining contractual maturity for the groups non-derivative financial liabilities. This is based on the undiscounted cashflows of financial liabilities based on the earliest date on which the group can be required to settle. The table includes both interest and principal cashflows. All interest cashflows based on floating rates and the undiscounted amount is derived from actual interest rates to 31 May 2023 and thereafter interest rate forward curves.

Carrying amount
Less than 1 year
1 - 2 years
2 - 5 years
More than 5 years
Total
£
£
£
£
£
£
At 31 May 2022
Borrowings
80,083,878
5,669,900
7,359,000
21,136,000
132,629,000
166,793,900
Trade and other payables
1,694,265
1,694,265
-
-
-
1,694,265
81,778,143
7,364,165
7,359,000
21,136,000
132,629,000
168,488,165
At 31 May 2023
Borrowings
84,172,337
6,823,500
6,547,600
18,398,700
123,654,300
155,424,100
Trade and other payables
1,283,283
1,283,283
-
-
-
1,283,283
85,455,620
8,106,783
6,547,600
18,398,700
123,654,300
156,707,383
Liquidity risk management

The group manages liquidity risk by maintaining adequate reserves, banking facilities and by continuously monitoring forecast and actual cashflows.

 

In the view of the directors, the key risk to liquidity is in meeting short term cash flow needs. All amounts repayable on demand or within one year are covered by the group’s cash and accounts receivable balances which gives the directors confidence that funds will be available to settle liabilities as they fall due.

27
Market risk
Market risk management

The group is exposed to interest rate risk through the impact of rate changes on interest bearing borrowings. The interest rates and terms of repayment are disclosed in note 24.

 

This risk is measured through the group's budgeting and cash flow forecasting processes. The CFO quantifies the risk and suggests risk mitigation measures to manage the risk in accordance with group policies.

 

Other than outlined in note 24 the group has no other significant interest bearing assets or liabilities.

 

The group does not use any derivative instruments to reduce its economic exposure to changes in interest rates.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
27
Market risk
(Continued)
- 31 -
Sensitivity analysis

It is estimated that a general increase or decrease of 1.8% in interest rates with all other variables held constant would increase or decrease the groups profit after tax and retained earnings by approximately £700,000.

 

This sensitivity analysis has been determined assuming that the change in interest rates occurred steadily throughout the next reporting period and had been applied to the exposure to interest rate risk for the financial instruments in existence at 31 May 2023. The 1.8% increase or decrease represents management’s assessment of the likely maximum change in interest rates over the period until the next reporting date.

28
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period.

Tax losses
Fair value intangible assets
Total
£
£
£
Balance at 31 August 2021
-
-
-
0
Deferred tax movements in prior year
Charge/(credit) to profit or loss
-
(722,551)
(722,551)
Deferred tax on acquisition fair value adjustments
-
2,938,535
2,938,535
Liability at 1 June 2022
-
0
2,215,984
2,215,984
Deferred tax movements in current period
Charge/(credit) to profit or loss
(1,028,932)
(513,851)
(1,542,783)
Liability at 31 May 2023
(1,028,932)
1,702,133
673,201
29
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
87,395
25,584

The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. The balance owed to the scheme as at 31 May 2023 was £25,710 (2022 - £10,054).

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 32 -
30
Share-based payments
2023
2022
£
£
Expenses
Related to equity settled share based payments
189,623
38,910

During the year, an equity-settled share-based payment arrangement was entered into between certain members of the group’s management, the company, an employee benefit trust (EBT), and employees of subsidiaries.

 

Management have granted call options over 5,197 Ordinary C shares granted to them for this purpose as part of the agreements made in the acquisition of Ensco 1366 Limited and Aker Systems Limited by the company and its subsidiaries. The Ordinary C shares are subject to particular ratchet conditions that determine the equity proceeds the holders might receive in an exit or income distribution event.

 

Management of the group are able to recommend the EBT to sell shares to employees of Aker Systems Limited and Aker Technology Services Limited, whereby the trustees are able to exercise the call options and purchase the shares from management, for onward sale to the employees. The directors have determined that this arrangement falls within the scope of IFRS 2 Share-Based Payments.

 

During the year, 1,962 (2022 - 2,274) Ordinary C shares were called upon by the EBT with 1,572 (2022 - 2,201) being transferred to group employees. The Ordinary C shares were transferred at a price of £26.56 (2022 - £25.79) per share.

 

The fair value of the Ordinary C shares at the date of transfer was established using the Monte Carlo model, as this was felt to be the most appropriate given the ratchet conditions that exist over the Ordinary C shares. This resulted in a fair value per share of £148.51 (2022 - £144.20) at the date of issue. The total value of the shares issued is being spread over the estimated time to an exit or income distribution event, which resulted in a charge of £189,623 (2022 - £38,910) in the income statement of the group for the year ended 31 May 2023. The corresponding amount was recognised in equity.

 

As the Ordinary C Shares in Nebula Topco Limited were issued to the employees of Aker Systems Limited and Aker Technology Services Limited, in the individual entity accounts this resulted in a charge in Aker Systems Limited’s profit and loss account with the equity component being a capital contribution directly from Nebula Topco Limited. Nebula Topco Limited recognised a direct investment in Aker Systems Limited and Aker Technology Services Limited, with the corresponding equity component forming an other reserve.

31
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Authorised
A Ordinary of £1 each
58,380
58,380
58,380
58,380
B Ordinary of £1 each
17,388
17,388
17,388
17,388
C Ordinary of £1 each
24,232
24,232
24,232
24,232
100,000
100,000
100,000
100,000
Issued and fully paid
A Ordinary of £1 each
58,380
58,380
58,380
58,380
B Ordinary of £1 each
17,388
17,388
17,388
17,388
C Ordinary of £1 each
24,232
24,232
24,232
24,232
100,000
100,000
100,000
100,000
NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
31
Share capital
(Continued)
- 33 -
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
A Preferred Ordinary of £1 each
84,841,620
84,841,620
84,841,620
84,841,620
B Preferred Ordinary of £1 each
25,273,485
25,273,485
25,273,485
25,273,485
110,115,105
110,115,105
110,115,105
110,115,105
Preference shares classified as equity
110,115,105
110,115,105
Total equity share capital
110,215,105
110,215,105

As at 31 May 2023, the company has three classes of Ordinary shares which carry no right to fixed income. All shares rank pari passu, subject to payments in priority to A, B and then C Ordinary shares. A and B Ordinary shares are entitled to voting rights. Ordinary C shares have no voting rights.

 

The company has two classes of Preference shares which carry no right to fixed income or voting rights. A Preference shares have dividend and capital distribution rights in priority to B Preference shares as well as A and B Ordinary shares.

32
Other reserves
2023
2022
£
£
At the beginning of the year
38,910
-
Additions
189,623
38,910
At the end of the year
228,533
38,910

Other reserves represents the equity component of share based payments (see note 30) where the corresponding debit entry has increased the investment in subsidiary. This reserve is non-distributable.

33
Capital risk management

The group manages its capital to ensure that all group entities will be able to continue as going concerns and to provide sufficient resources for continued growth.

 

The group is subject to externally imposed capital limits under the SFA, refer to note 24 above, through a senior net leverage ratio which cannot be higher than specified quarterly ratio limits.

 

The group manages capital by regularly monitoring its current and expected liquidity requirements and the senior net leverage ratio.

During the year the externally imposed capital limits were complied with.

NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
33
Capital risk management
(Continued)
- 34 -

The capital structure of the group comprises:

 

Equity comprising share capital, other reserves and retained earnings. The total of this capital is £110,215,105 (2022 - £110,215,105).

 

Borrowings which provide the working capital required by the group. The total of this capital is £84,172,337 (2022 - £80,083,878).

34
Related party transactions
Remuneration of key management personnel

In the opinion of the directors key management personnel equate to the directors of the group. Details of their remuneration are set out in note 10.

35
Controlling party

The ultimate controlling party of the group is Abry Nebula Aggregator Limited whose registered office is 200 Aldersgate Street, 11th Floor, London, England, EC1A 4HD.

36
Cash generated from operations
2023
2022
£
£
Loss for the year before income tax
(4,727,159)
(2,897,713)
Adjustments for:
Finance costs
9,661,702
5,240,730
Investment income
(82,773)
(809)
Amortisation and impairment of intangible assets
2,373,099
2,918,645
Depreciation and impairment of property, plant and equipment
40,482
3,831
Equity settled share based payment expense
189,623
38,910
RDEC included within operating profit
(29,972)
(23,993)
Movements in working capital:
Increase in trade and other receivables
(3,561,925)
(2,614,732)
Increase in trade and other payables
3,772,982
106,205
(Decrease)/increase in deferred revenue outstanding
(325,247)
197,429
Cash generated from operations
7,310,812
2,968,503
NEBULA TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 35 -
37
Cash (absorbed by)/generated from operations - Company
2023
2022
£
£
Profit for the year after tax
268,165
1,905,634
Adjustments for:
Investment income
-
(1,922,544)
Movements in working capital:
Increase in trade and other receivables
(446,603)
(4,914)
Increase in trade and other payables
22,707
138,486
Cash (absorbed by)/generated from operations
(155,731)
116,662
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