The directors present the strategic report for the year ended 31 December 2023.
Sparta Global Limited (“Sparta Global”) is a B-Corp certified provider of technology and business consulting services to public and private sector organisations, including the finance, insurance, public sector, media, retail, technology, legal and telco industries. Sparta Global is headquartered in London, and trains new Spartans from across the UK. In addition, Condor Topco is the ultimate holding company of a number of other subsidiary businesses including Sparta Global Technology Services AB (“Sparta AB”) in Sweden and Sparta Global Inc in north America (together the “Sparta Group”).
Sparta Group hires recent graduates and other suitably skilled individuals, who are taken through an intensive development programme through one of our dedicated academies to train or upskill them in areas such as Software Development, DevOps, Data Engineering, Testing, Business analysis and Project Management. After successful completion of this initial training, they become technology consultants known as ‘Spartans’ and are assigned to work on projects with Sparta Global clients across the UK. During this time Sparta Global provides further learning and development pathways to develop the Spartans and create their first steps in a successful and long career in technology.
At the heart of this business is a mission to be the partner of choice with our clients in the provision of graduate/ early careers programmes with diversity and inclusion at the very centre of this. In the UK we are also very proud to be a Living Wage Employer and in 2023 achieved the Inclusive Employers Standard and became Youth Group Verified. In addition, we have been selected as a winner of the following awards which help to demonstrate our commitment to graduate employment, diversity and inclusion and our own diverse and inclusive workforce:
Top 20 Employer – Employer Index 2023 – Social Mobility Foundation
Women In Tech Employers Awards 2023– Best Tech Employer
Adding to the list of awards we have received in previous years:
Top 20 Employer – Employer Index 2022 – Social Mobility Foundation
Princess Royal Training Award 2021
Women In Tech Employers Awards 2020– Best Tech Employer
Women in Tech Excellence Awards 2020 – Diversity and Inclusion Rising Star of the Year
Booking.com Technology Playmaker Awards 2020 – Best Employer
Sparta Global holds ISO9001, ISO14001, ISO27001, ISO22301, BS10012 and ISO27701, Cyber Security and Cyber Security Plus quality and security accreditations.
Despite the ongoing uncertainty in the global economy Sparta Group was able to react to the market with its agile business model and minimise impacts to earnings before interest, tax, depreciation and amortisation (“EBITDA”).
Revenues in the year ended 31 December 2023 stayed relatively flat at £40.0m due to a continued move away from associate revenues and despite increased Spartan revenue. Gross profit also remained flat at £21.2m and Gross profit margin increased slightly to 52.9 % (2022: 52.5%). EBITDA for the year was £7.1m (2022: £7.8m) and is stated after charging training costs (cost of the Spartan in training up until assignment) of £2.7m (2022: £3.2m).
Business environment
The challenging macro-economic backdrop that started to impact client budget and hiring decisions in the later part of 2022 has continued through 2023, delaying the assignment of Spartans into clients against previously expected levels. Our agile business processes allow us to adapt to market demand changes quickly with training quickly aligned to pipeline changes to minimise cost impact. However, this did lead to a net reduction in Spartans on assignment by the end of 2023 compared to the start, as clients continued to take advantage of the option to convert the Spartans to their employees at the end of the two year programme, in combination with returns to bench due to customer budget constraints.
Throughout this period however, companies have reassessed their buying channels and with a clear understanding of the benefits of Sparta Global's services to them have undertaken procurement strategies that have resulted in Sparta Global being awarded new master service agreements with many new blue chip clients from a range of sectors. These new client wins plus the unlocking of budgets in our existing clients will allow us to return to a growth in Spartans on assignment numbers.
A continued shortage of skilled technology workers in the UK combined with the high demand for technology services, further accelerated by the need for digital transformation during and after the pandemic and still creates significant growth opportunities for Sparta Global even with a period of macro-economic pressures, as the budgets of our clients unlock.
Our model of delivering high skilled and dynamic technology professionals at a low cost and high ROI for our clients compared to traditional contractor or employee resource gives us an appealing proposition to most businesses who are seeing their IT spend balloon and need ways to control it, especially in this environment.
Strategy
The company's success is dependent on the quality, pricing and utilisation of its Spartan consultants in the rapidly advancing technology space. Sparta Group must attract and retain the best graduates from its target universities and ensure training at our academies meet the high standards expected by our clients. In order to achieve this, we are investing in new technologies, our people across all the business, marketing and talent attraction in order to generate the supply and continuously support the highly skilled Spartan's our clients require in high demand areas.
We have made significant progress throughout the year in relation to key elements of our strategy.
The Board monitors the progress of the Sparta Group by reference to the following KPls:
| YE 31 Dec 2023 £’m | YE 31 Dec 2022 £’m | Movement
|
Turnover | 40.0 | 40.2 | -0.2 |
Gross Profit | 21.2 | 21.1 | +0.1 |
Gross Profit % | 52.9% | 52.5% | +0.4pp |
|
|
|
|
EBITDA | 7.1 | 7.8 | -0.6 |
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|
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Spartans trained in the period | 372 | 667 | -295 |
Spartans assigned at period end | 456 | 646 | -190 |
The process of risk acceptance and risk management is addressed through a framework of policies,
procedures and internal controls. All policies are subject to Board approval and ongoing review by
management, risk management and internal audit. Compliance with regulation, legal and ethical standards is a high priority for the Company and the compliance team and finance department take on an Important oversight role in this regard.
The principal risks from our business arise from:
Inability to attract enough graduate talent into the academy and so have insufficient supply of resource to meet demand
Changes in client business requirements such that training content does not meet the needs of the client.
Unutilised Spartan resource resulting in bench cost that reduces profitability.
To mitigate these risks we have invested in our operations team and marketing strategy to attract graduate talent and work closely with our clients to understand their business needs in order to ensure our course content remains relevant. We are also able to provide specialist upskilling to our Spartans in order to ensure we meet any specific client need where it Is deemed required. Our bench cost is managed carefully to ensure Its impact on profitability is minimised by a careful resource planning process.
The Sparta Group does not consider it is currently exposed to any financial risks such as exchange rate or interest rate risk due to its business being conducted primarily in GBP and relatively simple debt arrangements.
Liquidity risk is the risk of not being able to make payments as they become due because there is insufficient cash or availability of financial facilities. The company seeks to mitigate and minimise any liquidity risk through the operation of credit facilities with its bank with limits agreed to provide sufficient headroom for the company’s cash requirements. These facilities and related working capital needs are managed on a continuous basis and the company works closely with the bank to ensure facilities meet its needs.
Future developments
Sparta Group continues to invest in its people and systems across the business to support the ongoing growth strategy.
The directors consider, both individually and together that they have acted in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
the likely consequences of any decisions in the long term
The directors prepare a long term business plan to guide decision making and against which actual results are regularly reviewed. The company reviews its strategy in detail each year and updates its business plan accordingly.
the interests of the company’s employees;
As a people business, the interests of the company’s employees are at the heart of what we do. This includes, but is not limited to, the support of diversity and inclusion initiatives throughout the company, support for the wellbeing of all staff through the adoption of physical and mental health programmes, ongoing training and upskilling programmes to enhance employees professional development throughout their employment at Sparta Global and regular Town Halls and events to engage with employees.
the need to foster the company’s business relationships with suppliers, customers and others;
Sparta Global works as a technology and talent partner with its customers, providing services that enable its clients to meet their own business goals, with alignment of core objectives, whilst delivering the skills and talent needed. This requires consistent and ongoing co-ordination and understanding built through the fostering of strong and deep relationships in the organisations.
the impact of the company’s operations on the community and the environment;
Delivery of the company’s services whilst considering the environmental, social and governance (“ESG”) implications of our operations is a fundamental part of the business as demonstrated by the B Corp certification achieved.
the reputation for a high standard of business conduct;
The directors and the company are committed to high standards of business conduct which are reflected in the company’s policies and procedures. The company utilises the support and guidance of suitably qualified advisor to ensure standards are maintained and best practice followed in order to protect and maintain its reputation.
And the need to act fairly as between members of the company.
The company is a wholly owned subsidiary of Condor Bidco Limited, a company incorporated in England. The ultimate parent company is Condor Topco Limited, a company incorporated in England.
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 10.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end were equivalent to 25 day's purchases, based on the average daily amount invoiced by suppliers during the year.
In accordance with the company's articles, a resolution proposing that Saffery LLP be reappointed as auditor of the company will be put at a General Meeting.
As the company is a subsidiary undertaking of a parent entity that includes a group energy and carbon report, the company is not required to report on its individual emissions, energy consumption or energy efficiency activities.
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and financial risk management.
We have audited the financial statements of Sparta Global Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity 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 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for 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 company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information 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 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 the 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.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through 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.
Sparta Global Limited is a private company limited by shares incorporated in England and Wales. The registered office is 125 London Wall, London, EC2Y 5AS.
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 £.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
Additional comparative information as per IAS 1 Presentation of Financial Statements paragraph 38 in respect of:
- a reconciliation of the number of shares outstanding at the start and end of the
prior period; and
- reconciliations of the carrying amounts of property, plant and equipment and intangibles
assets the start and the end of the prior period.
a Statement of Cash Flows and related disclosures
a statement of compliance with IFRS (a statement of compliance with FRS 101 is provided instead)
additional comparative information for narrative disclosures and information, beyond IFRS requirements
disclosures in relation to the objectives, policies and process for managing capital
disclosure of the effect of future accounting standards not yet adopted
the remuneration of key management personnel
related party transactions with two or more wholly owned members of the group
certain disclosures required under IFRS 15 Revenue from Contracts with Customers, including disaggregation of revenue, details of changes in contract assets and liabilities, and details of incomplete performance obligations
the maturity analysis of lease liabilities, as required by paragraph 58 of IFRS 16 Leases, has not been disclosed separately as details of indebtedness required by Companies Act has been presented separately for lease liabilities.
In addition, and in accordance with FRS 101, further disclosure exemptions have been applied because equivalent disclosures are included in the consolidated financial statements of Condor Topco Limited. These financial statements do not include certain disclosures in respect of:
Financial Instrument disclosures as required by IFRS 7 Financial Instruments: Disclosures
The financial statements contain information about Sparta Global Limited as an individual company and do not contain consolidated financial information. The company has taken advantage of the exemption conferred by s400 of the Companies Act 2006 not to produce consolidated financial statements.
Where required, equivalent disclosures are given in the group accounts of Condor Topco Limited. The group accounts of Condor Topco Limited are available to the public and can be obtained from 125 London Wall, London, England, EC2Y 5AS. This is smallest set of consolidated accounts the company's results are included in.
Revenue recognised in respect of services performed for which no invoice has yet been raised at the balance sheet date is recognised as an other receivable. The extent of other receivables at a given point in time reflects unbilled revenue for services provided in the ordinary course of business.
Revenue is recognised over time and is calculated based on the number of days worked by Spartans and contractors, which is based on timesheets provided to the entity. This method depicts the satisfaction of obligations by the entity to fulfil its contracts with customers.
The transaction price for a given contract is the fixed amounts of consideration stated in the contract and excludes VAT.
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:
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 credited or charged to the profit and loss.
The company has an investment in a subsidiary which is reviewed for impairment every year.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
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 (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) 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.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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.
The company recognises financial debt when the company 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, 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.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.
The tax expense represents the sum of the tax currently payable and deferred tax.
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
In the application of the 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 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.
Intercompany loans are considered to be repayable on demand and so held at cost. Consideration is made as to whether the owing entity is able to clear the debt should it be recalled. The Directors review the cashflows of the corresponding entities to assess for any indication of impairment. This can be based on future events which cannot always be readily predicted. The main assumptions are as alluded to above, the future performance of the group and the demand and profitability of the company.
The balances as at the end of the period are disclosed in the notes to the financial statements.
At the initial recognition date, the directors had made a judgement that they expected the lease break clause to be exercised at the first available opportunity. As such, the lease liability and depreciation period had been calculated up to this point. In the prior year, the directors made the decision to not exercise the break clause and so the right of use asset was modified to reflect the additional period to the end of the lease in March 2025. This is the directors' best estimate as to when they are likely to no longer require the properties. Likewise, the dilapidations provision has been estimated for the right of use workings as the expected amounts payable on termination of the lease. This assumes no other major works or damage occurs to bring the property back to condition as stipulated by the lease.
The balances as at the end of the period are disclosed in the notes to the financial statements.
Where the interest rate implicit in the lease cannot be readily determined, lease liabilities are discounted at the lessee’s incremental borrowing rate. This is the rate of interest that the lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. This involves assumptions and estimates, which would affect the carrying value of the lease liabilities and the corresponding right-of-use assets.
To determine the incremental borrowing rate the company uses recent third-party financing as a starting point, and adjusts this for conditions specific to the lease such as its term and security.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
On 1 April 2023 the corporation tax rate for the UK increased from 19% to 25%.
The charge for the year can be reconciled to the profit per the income statement as follows:
Included in the right of use asset category is the IFRS adjustment required to bring long term leases onto the balance sheet. No other assets included within this category.
Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Amounts owed by group undertakings are considered repayable on demand and do not bear any interest.
An unlimited multilateral guarantee has been given by Sparta Global Limited, Sparta Global Group Limited.
Within the accruals and deferred income balance, there is a £243,000 (2022: £243,000) dilapidations provision for amounts expected to be paid on the cessation of a property lease. This is a best estimate made by the management team at year end and best represents the expected cost of returning the office space to the condition as stipulated in the lease. There remains some uncertainty around what the final balance may be given there are unknown future events.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
The ordinary shares carry a right to vote (one vote per shareholder). They do not carry the right to a dividend or to participate in a distribution (including on winding up). The shares are not redeemable.
FRS 101 exempts preparers from the requirements of para. 17 and 18A of IAS 24, meaning that FRS 101 accounts do not disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned within the group. All transactions are with wholly owned companies within the group.