The directors present the strategic report for the year ended 31 December 2023.
The principal activities of the group continued to be the provision of workforce management software to the healthcare industry.
Overall revenue has increased 7% to £6,054,124 (2022: £5,662,906) as the business continued its growth plan. The directors report an EBITDA loss of £1,503,039 compared with £1,477,963 in 2022.
The directors and management team work closely together to anticipate risks from economic factors and plan accordingly.
We remain confident in our business prospects as we continue to maintain and expand our dominant market share.
Turnover
For the year under review, turnover increased to £6,054,124 compared to £5,662,906 in the previous year due primarily to an increased volume of business.
Operating loss
For the year under review, the operating loss was £4,093,492 (2020: £3,360,102). This reflects the investment in future growth particularly in our Technology, Operations and Sales divisions.
Headcount
The headcount increased from an average of 89 in the previous year to 90 in the year under review.
Shareholders’ funds
Shareholders’ funds have decreased to £1,568,829 from £3,823,330 in the previous year. This is a reflection of raising additional capital as an extension of a previous round less the movement in the P&L reserves.
The directors have assessed the main risks facing the group as being liquidity risk, employee retention and regulation / Industry changes.
Liquidity risk
Liquidity risk is managed on a day-to-day basis by the Finance Team who are regularly reviewing cash flow, financial performance and projections. This forms a key part of Board discussions, with the business looking at both short term and long term liquidity on an ongoing basis.
Retention
The Company’s performance and growth is dependent on the ability to hire and retain the right people with the mix of skills and experience to serve our customers, attract new ones and develop our product.
Regulation / Industry Changes
The company operates within the Healthcare sector which is highly regulated. Any changes to regulations could impact the way in which we provide services.
Lantum’s vision is to be a leading provider of workforce management software in healthcare and radically improve how workforces connect to healthcare organisations via “Connected Scheduling”.
For the year under review, turnover increased to £6,054,124 compared to £5,662,906 in the previous year, as Lantum grew its market share. Lantum will continue to grow its market share through expanding its product offering.
Financial Instruments
The group only has basic financial instruments and does not enter into any foreign currency forward contracts or formal hedging activities.
Going concern
The directors have prepared detailed budgets and cash flow forecasts having considered all available information and future strategies of the group. During June 2024 the group received £800,000 in the form of new convertible loan notes from existing shareholders and completed a restructuring exercise that significantly reduced the ongoing cost base and cash burn rate on a month to month basis. During August 2024 the business drew an additional £1m of bank debt. These factors combined are projected to give the business cash runway into the early part of 2025.
In light of the above the directors are now in the planning phase for a new funding round to ensure the business has sufficient cash flow for the medium term to enable it to achieve its growth targets in its core primary care market.
On the basis of an expectation that the business manages its cash flow appropriately and completes a successful funding round in the coming months, the directors have a reasonable expectation that the group will have adequate resources to continue in operational existence for the foreseeable future, being a period of 12 months from the date of approval of these financial statements. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The Board and management confidently look forward to a successful future for the benefit of all stakeholders.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 8.
No ordinary or preference dividends were paid in the year.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Kingswood LLP were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Lantum Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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).
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 and parent company 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.
Material uncertainty related to going concern
We draw attention to Note 1.4 in the financial statements, which indicates that at the year ended 31 December 2023 the group’s going concern assessment includes the reliance on a funding round to be undertaken towards the end of 2024 or early into 2025, the timing of which may require interim short term funding pending completion of the full funding round. We therefore highlight the short and medium term going concern status of the group as being dependent on raising further funding, short term or otherwise, in the near future. These conditions indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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 course of 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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the 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:
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.
As explained more fully in the directors' responsibilities statement, 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 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 parent company or to cease operations, or have no realistic alternative but to do so.
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:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non‑compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the company's 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 group, including the Companies Act 2006, taxation legislation Covid-19 support legislation, data protection, anti‑bribery, employment, environmental and health and safety legislation;
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 remained alert to instances of non‑compliance throughout the audit.
We assessed the susceptibility of the group’s financial statements to material 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 journal entries 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;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators including the group’s legal advisors.
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.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.
The group Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
The notes on pages 14 to 30 form part of these financial statements.
The notes on pages 14 to 30 form part of these financial statements.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £3,814,090 (2022 - £1,734,306 loss).
The notes on pages 14 to 30 form part of these financial statements.
The notes on pages 14 to 30 form part of these financial statements.
The notes on pages 14 to 30 form part of these financial statements.
The notes on pages 14 to 30 form part of these financial statements.
Lantum Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 1 Mark Square, 4th Floor, London, EC2A 4EG.
The group consists of Lantum Ltd and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. 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.
The consolidated group financial statements consist of the financial statements of the parent company Lantum Ltd together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 December 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.
The directors have prepared detailed budgets and cash flow forecasts having considered all available information and future strategies of the group. During June 2024 the group received £800,000 in the form of new convertible loan notes from existing shareholders and completed a restructuring exercise that significantly reduced the ongoing cost base and cash burn rate on a month to month basis. During August 2024 the business drew an additional £1m of bank debt. These factors combined are projected to give the business cash runway into the early part of 2025.
In light of the above the directors are now in the planning phase for a new funding round to ensure the business has sufficient cash flow for the medium term to enable it to achieve its growth targets in its core primary care market.
On the basis of an expectation that the business manages its cash flow appropriately and completes a successful funding round in the coming months, the directors have a reasonable expectation that the group will have adequate resources to continue in operational existence for the foreseeable future, being a period of 12 months from the date of approval of these financial statements. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for the services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
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 profit and loss account.
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 group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period 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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets are assessed for indicators of impairment at each reporting end date. If an asset is impaired, the impairment loss is recognised in profit or loss. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
The component parts of compound instruments issued by the group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing 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 profit and loss account, 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 if, and only if, there is 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.
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 stock or fixed 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 company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The assessment of the useful economic life and residual value of the group's intangible fixed assets involves a significant amount of judgement based on historical experience with similar assets as well as anticipation of future events which may impact their useful life, such as changes in technology. The group undertakes a review of the remaining useful lives of each class of intangible fixed assets at the end of each reporting period and will adjust the remaining useful lives, or impairment where necessary.
The group's turnover is wholly generated in the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
At 31 December 2023 tax losses carried forward by the company amounted to £15,278,191 (2022: £12,157,402). The company has not recognised deferred tax asset in respect of these losses.
UK Finance Act 2021 was substantially enacted on 24 May 2021, which included the increase in the main rate of UK corporation tax from 19% to 25%, effective 1 April 2023. This will increase the company’s future current tax charge accordingly. The company’s deferred tax assets and liabilities at 31 December 2023 have been calculated at 25%.
Details of the company's subsidiaries at 31 December 2023 are as follows:
The registered office of the above companies is 1 Mark Square, 4th Floor, London, EC2A 4EG.
Bank loans includes amounts related to an invoice finance facility totalling £3,934,222 (2022: £3,787,991)
The bank loans are secured by fixed charges over the group's assets.
The amounts payable after one year represents bank loans, repayable by equal instalments within the next five years.
In October 2023, the company issued £3,500,000 convertible loan notes at par with no interest payable, convertible into shares of the company at the election of the Lender or repayable 1.95 times of the principal amount in October 2026.
The net proceeds received from the issue of the convertible loan notes have been considered for split between the financial liability element and an equity component, representing the fair value of the embedded option to convert the financial liability into equity. On the basis that the effective rate of cost of the convertible loan is considered to approximate the company's borrowing rate, equity element recognised is deemed to be £nil.
The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at the date of issue and the amount reported in the Balance Sheet represents the effective interest rate.
The effective rate of interest is 24.93%.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. At the year ended 31 December 2023 total amounts payable to the scheme included in current liabilities amounted to £25,787 (2022: £19,889).
The Company operates an approved share option schemes for key personnel to incentivise performance through equity participation. Exercise of any share options under the scheme is subject to contractual agreements.
The options outstanding at 31 December 2023 had an exercise price of 10p per share, and a remaining contractual life of 10 years.
During the current and previous year, no expense has been recognised in relation to share based payment transactions due to the fair value of the options being commensurate with the strike price.
With exception to the Deferred shares, all share classes carry normal voting rights. The dividends and capital rights attached to each class of shares are varied and are detailed in the company's Articles of Associations.
During the year 1,034,523 Ordinary shares of 0.1p each were issued for an aggregate consideration of £964,691.
The company also issued 301,956 Series B shares of 0.1p each for an aggregate consideration of £875,000.
Retained earnings comprise all current and prior years retained profits and losses less dividends paid .
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
At 31 December 2023 and 31 December 2022 the group and company had no contingent liabilities.
Group and company
The company has taken advantage of the exemption available under FRS 102 chapter 33 not to disclose transactions or balances with its parent company and wholly owned subsidiaries.
In September 2023, the group provided a loan facility to one of the directors. The loan is repayable after 24 months and the interest rate applicable is 2.25%. As at 31 December 2023, the outstanding balance was £80,498.
The following wholly owned subsidiary has taken advantage of the available exemption from audit under section 479a of the Companies Act 2006:
Locum Organiser Limited (registered number: 06905012, England & Wales)
Locum Organiser UK Limited (registered number: 07519933. England & Wales)
Lantum Ltd have provided guarantee under section 479C in respect of these companies.