The directors present the strategic report for the year ended 31 December 2023.
FY2023 saw further growth in line with our business plan. Specifically, in FY2023 we again saw approximately fifty percent year over year growth in our GAAP revenues as a result of adding three hundred and sixty-five new customers in the year, through the continued high levels of retention rates from customers whose contracts expired in 2023, through strong repeat license growth from our customer base and also through the renewal of customers on third party leases back onto our own book.
Headcount in the 2023 year increased from 215 at the end of 2022 to 225 at the end of 2023. This is up from 130 heads at the beginning of 2021 and this demonstrates our continuing commitment and investment in growing our customer base and in enhance support for our existing customers.
To accommodate this growth, we moved into larger office space at the end of 2023. This provides further headroom for the growth of the business as well as providing substantially higher quality amenities and collaboration space for our team.
Previous Significant Changes
On 26 January 2021, BigChange Topco Ltd (“BigChange Group” or “BigChange”) was incorporated.
On 4 February 2021, BigChange Bidco Ltd, a subsidiary company, acquired the entire share capital of BigChange Group Ltd. and its subsidiaries (BigChange Limited and BigChange France SA) from the point of acquisition.
On 4 February 2021, Great Hill Partners, a Boston-based US Private Equity Fund, acquired a majority shareholding of the BigChange Group, including BigChange Limited (“The Company”).
Overview
The principal activity of the Group is the development and supply of field management software. Our SaaS platform provides our customers with a complete operational foundation on which to run their businesses improving their visibility, control, efficiency, profitability, and sustainability and therefore enabling them to accelerate their growth. The platform brings together a range of powerful functions in one simple-to-use and easy-to-integrate platform, including (but not limited to):
CRM
Job Scheduling
Live Tracking
Route Optimisation
Field Resource Management
Financial Management
Business Intelligence (Including DAAS)
AI Functionality (support functionality)
The Group’s platform now serves over 2,080 clients spanning more than twenty industries, from plant hire to drainage and waste, and social housing to food service.
All identified risks are monitored and addressed by Senior Management on a regular basis.
The Group is exposed to several notable business risks, including the possible loss of staff. To mitigate this, in 2023, it launched a new employee engagement survey process alongside a further number of initiatives in respect of Culture, CSR, New Benefits, Well Being support and continued with its already well-established programme of Learning and Development.
Operational Risks
The Group has several operational risks which are reduced by segregation of duties, four-eyes principles, and the maintenance of delivery of appropriate operational and information security systems, evidenced by maintaining ISO9001 and ISO27001 certifications. Additionally, weekly KPI and Monthly Business Reviews are completed by the Executive team, in person, covering the salient metrics to understand/ manage the direction and performance of the Group.
Inflation Risk
The Group has exposure to the inflationary effect in the UK and other countries in which it operates. This exposure could affect the cost and/or investment base as its cost base is exposed to the inflation rates increasing against the goods and services it uses and changes in payroll taxes. During 2023 the Group was again exposed to some additional COLA increases, which it was felt were needed to support its teams with increasing inflation both in the UK and France. However, in other areas it was able to continue to mitigate the impact of this increase through review and adjustment to its overall cost base and efficiency, meaning that costs were contained at similar levels to those incurred in FY2022 on a comparative basis.
Brexit
Brexit has had negligible discernible impact to the operations of the Group and this continues to be the case. The Group currently sees no indication of a notable change in this position in the coming years.
The key performance indicators of the Group consist of revenue, operating profit/ (loss), adjusted EBITDA, cash, and net assets.
Number of customers at end of the year
Sales lead conversion
Customer Retention
NPS (Net Promoter) Score
Weekly Management KPI’s
Monthly Business Review
Staff Attrition
System Resilience - Uptime
System Security Testing
Retention of ISO certification
Cash Reserves
2023 was another growth year for the Group following the investment and restructuring across its teams completed in 2021 and 2022. This investment in Research and Technology, Support Services, Sales, and Other Administration areas has allowed the Group to continually consider and reconfigure its people and systems structure for scalable resilient growth; and the foundational work to support that which was mostly completed during the 2022 year, has resulted in the Group continuing to perform well and again demonstrate significant growth in 2023.
At the current time, the Group is confident of continuing to build upon its successes from 2023 to deliver this continued growth in line with its forecasts in its 5-year plan for future years.
There have been no noteworthy events which have occurred since the end of the financial year.
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 9.
No interim 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 auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
We have audited the financial statements of BigChange Topco Limited (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.
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 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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias; and,
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
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 £9,790,276 (2022 - £9,050,906 loss).
BigChange Topco Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is Suite 1, 7th Floor, 50 Broadway, London, SW1H 0BL.
The group consists of BigChange Topco Limited 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 £1.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the disclosure exemptions of Section 33.1A of FRS 102 which permit it to not present details of its transactions with members that are wholly owned.
The consolidated group financial statements consist of the financial statements of the parent company BigChange Topco Limited 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.
Notwithstanding a monetary loss for the year ended 31 December 2023, the financial statements of the Group have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons.
The Directors have prepared a 5-year plan and cash flow forecasts to assess going concern. These indicate that even taking account of possible anticipated downsides and based on consideration of the Group’s current performance against its forecasts, the Group will have sufficient capacity to meet its liabilities as they fall due during the going concern assessment period.
Consequently, the Directors are confident that the Group will continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements (“the going concern period”) and therefore have prepared the financial statements on a going concern basis.
Turnover is recognised at the fair value of the consideration received or receivable for goods and 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.
Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), The amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Research and development expenditure is written off against profits in the year in which it is incurred.
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.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
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 company 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 (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.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. 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.
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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. 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, loans from fellow group companies and preference shares 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
Irredeemable preference shares bare a fixed coupon rate. As the company is obliged to pay a dividend, a contractual obligation exists and therefore the instrument includes either a financial liability element or is a financial liability in its entirety. The liability element is calculated as the present value of the future contractual cash flows, discounted at a market rate of interest for a similar liability that does not have the associated equity component. Any remaining balance is included in equity.
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.
For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At the balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.
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 using the Monte Carlo model. 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.
The expense in relation to options over the parent company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
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.
The group accounts consolidate overseas subsidiaries whose local accounts are maintained in currencies other than Sterling. Any differences arising on reserves as a result of movements between local currencies and Sterling are recognised as currency differences upon consolidation, and are taken directly to retained earnings through other comprehensive income
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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Employees of the company have subscribed to shares in the new ultimate parent company, BigChange Topco Limited. These shares provide a preferential share of profits to shareholders in the event that an exit event occurs past certain hurdles, subject to ongoing employment by those individuals. These are accounted for as a share-based payment. This requires the company to determine the fair value of the options at the date of grant.
The company also operates a shadow bonus scheme, where employees receive a number of units. The value of each is matched to an exit value achieved on the new ultimate parent company, BigChange Topco Limited, shares. This is a cash-settled share option scheme and is accounted for at fair value at each year end.
Both these schemes involve a high degree of estimation uncertainty linked to the determination of the fair values mentioned above. Further details are provided in note 24.
Goodwill and Customer relationship intangibles were recognised as a result of the reorganisation in the period ending 31 December 2021. Under FRS102, the directors were required to separate the acquired intangible asset parts, and based on a detailed review of the business determined that the customer relationships value was material and therefore reflected separately from Goodwill on the balance sheet.
Using forecasts of future revenue streams less costs, anticipated growth rates in light of market conditions, along with the group's weighted average cost of capital, the directors were able to determine the fair value relevant to the customer relationships. This intangible was valued using the multi-period excess earnings method.
Using contractual terms and the factors that impacted the recognition of these assets, useful lives have been determined for each asset, as disclosed within the group's accounting policies.
The intangible assets and goodwill are subject to an annual impairment review. The directors have budgeted or several years ahead and considered the underlying value created within the business since the Goodwill and intangible was recognised, and no impairment to the carrying value of the intangible assets was required.
The group establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors have considered factors such as the aging of the receivables, past experience of recoverability, and the credit profile of individual or groups of customers.
In 2021 the company was acquired by Great Hill Partners L.P. As a result of the acquisition a new group structure was introduced along with a change in financing arrangements. This re-organisation resulted in these exceptional costs.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
During the year retirement benefits were accruing to 2 directors in respect of defined contribution pension schemes.
The actual (credit)/charge 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:
The UK corporation tax rate increased from 19% to 25% from April 2023.
Deferred tax balances at the reporting date are therefore measured at 25% (2022 - 25%).
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Registered Offices
1/3 - 3175 Century Way, Thorpe Park, Leeds LS15 8ZB
2 - 141 Av. des Grésillons, 92230 Gennevilliers, France
4/5 - Suite 1, 7th Floor 50 Broadway, London, SW1H 0BL
Included in other borrowings is a €50,000 unsecured loan from the French government.
The accruals represent amounts due on the group's cash-settled share based payment scheme, details of which are provided in note 24.
The long-term loans are secured by fixed and floating charges over the assets of the company.
The loan facility of £25,000,000 was entered into on the 22 December 2021 (closing date). The capital on the facility is repayable at the 5th anniversary of the closing date referred to as the termination date. Interest is calculated at a rate of LIBOR plus 6% per annum. Interest is due for repayment in six monthly intervals. Any interest not paid at the six monthly interval is capitalised to the loan. Capitalised interest not settled in the payment intervals throughout the term of the facility is payable with the capital at the termination date.
Preference shares are irredeemable. They have no voting rights and bear a fixed 8% coupon rate.
Other loans relate to unsecured loan notes that bear an 8% coupon rate and are repayable on an exit event or transaction, and are otherwise not repayable before 3 February 2024. Due to the uncertainty of the timing of an exit event, the loan notes have been recognised as payable within one year.
Finance lease payments represented rentals payable by the company or group for certain items of plant and machinery. Leases included purchase options at the end of the lease period, and no restrictions were placed on the use of the assets. The average lease term was 3 years. All leases were on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. No leases remain outstanding at the year end.
The onerous contract provision relates to contracts that were entered into by the acquired subsidiary, BigChange Limited, prior to the acquisition. Revenue for these contracts has been recognised prior to the acquisition and as such the associated expected costs of servicing these contracts has been recognised as an onerous contract upon consolidation in the period ended 31 December 2021. It is expected to unwind over the next 5 years following that period.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Losses incurred by the Group for which no deferred tax asset has been recognised amount to £31,105,942. If deferred tax assets were recognised in respect of these balances, it would increase the net assets of the Group by approximately £7,790,293.
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.
Equity-settled share-based payments
On 3 February 2021, certain employees of the company subscribed for Ordinary B shares in the company. These shares provide a preferential share of profits to shareholders of the Ordinary B shares in the event that an exit event occurs past certain hurdles, subject to ongoing employment by those individuals. This means that the Ordinary B shares represent sweet equity and are to be accounted for as a share-based payment.
As BigChange Limited has the benefit of ongoing employment of these individuals, it has recognised an expense in its profit and loss account of £873,227 (2022 - £873,227), with an associated capital contribution reserve recognised in respect of this transaction. Bigchange Topco Limited has recognised a cost of investment in BigChange Limited, and a share based payment reserve.
The sweet equity was granted such that it takes the form of a fixed 15% of proceeds beyond hurdles. The scheme was valued using a Monte-Carlo model, the inputs for which were as follows:
Grant date 3 February 2021
Vesting period 5 years
Expected award life 5 years
Acquisition price £0.01
Equity value £106,994,766
Expected volatility 41.57%
Expected dividend yield 0%
Risk-free rate 0.21%
Hurdle £158,708,174
In addition, a second scheme was implemented on 31 December 2021 which added a number of additional persons to the scheme, however this did not change the overall value of the scheme as this remains fixed at 15%. As such no further expense has been recognised for this in the period.
Cash-settled share-based payments
In addition to the above, the company also operates a shadow bonus scheme, incepted on 3 February 2021, where employees receive a number of units, and the value of each is matched to an exit value achieved on each of the Ordinary A shares of BigChange Topco Limited. As this is a cash-settled scheme it is accounted for at fair value at each year end, with an appropriate adjustment made for the percentage vested compared to expectations of a potential sale date, and with a provision for anticipated leavers prior to the exit date. This is recognised as an expense to the profit and loss account, with this recognised as a fair value through profit and loss liability.
The above bonus scheme has a total fair value as at 31 December 2023 of £313,202 (2022 - £313,202). This has resulted in an expense of £45,589 (2022 - £45,589) for the year, and a further expense of £6,861 (2022 - £6,624) in respect of Employer's NI accruals on this liability.
Ordinary A2 and A3 shares rank pari passu to the ordinary A1 shares. The B shares carry no voting rights but bear a discretionary 15% dividend.
The irredeemable preference shares have no voting rights and bear a fixed 8% coupon rate. Similar to the loan notes, the irredeemable preference shares bear a coupon rate of 8%, therefore, the whole value of irredeemable preference shares have been recognised as a liability.
Retained earnings are reserves created as a result of the performance of the business.
The capital contribution reserve represents additional amounts transferred to the parent company in respect of preference share issues, where such amounts are in excess of contractual amounts paid for the shares. Such monies are not due for contractual repayment and therefore have been treated as a gift from shareholders, with the receipt recognised directly within equity.
The share-based payment reserve represents amounts expensed by the group in respect of equity-settled share-based payment schemes, which have not yet exercised. Details of the schemes are provided in note 24.
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:
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date: