Company registration number 03236716 (England and Wales)
CENTRALITY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
CENTRALITY LIMITED
COMPANY INFORMATION
Directors
A Jackson
(Appointed 25 April 2024)
C Sharp
(Appointed 25 April 2024)
Company number
03236716
Registered office
101-114 Holloway Head
Birmingham
West Midlands
B1 1QP
Auditor
Bracey's Accountants (Audit) Limited
Unit 1, The Cam Centre
Wilbury Way
Hitchin
SG4 0TW
Bankers
HSBC Bank PLC
1 Market Place
Hitchin
Herts
SG5 1DR
CENTRALITY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
CENTRALITY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -

The directors present the strategic report for the year ended 30 June 2024.

 

Principal activities

The principal activity of the Company is the delivery of IT support and consultancy services. As a Microsoft Solutions Partner, the Company delivers transformational IT solutions for it’s customers centred around the latest Microsoft technologies.

 

Fair review of the business

During the year, the company recorded revenue of £16,218,392 (2023: 17,041,469), which has fallen year on year due to a reduction in lower margin license sales. This is illustrated by an increase in Gross Profit from £3,804,179 in 2023 to £3,996,816 in 2024. Continued investment in our colleagues to support growth has lowered the operating profit for the year to £991,365 (2023: £1,138,403). The Directors remain focused on continuing to increase revenues, both project related and recurring revenue streams to further increase the resilience of the company. The financial position of the Company remains strong, shown by an increase in net assets to £1,013,817 (2023: £456,702).

 

On the 24 April 2024, the business was acquired by Intercity Technology Limited.

 

Intercity Technology Limited is a leading Technology Services Provider, delivering IT managed services, incorporating IT infrastructure, cloud services, security, hosting and IT professional services, mobility solutions, and unified communications. With particular expertise of delivering award-winning levels of customer service to a range of public and private sector clients by a team providing 'eyes on' national coverage 24 hours a day, 365 days a year. The Group's vision is to be the best technology partner to work for and with, by providing an environment that drives engagement and collaboration for our colleagues and helping our customers to make the right technology decisions for their business to enable them to Do More.

 

The Directors believe strongly in doing business in the right way, with all it’s decisions underpinned by the impact they have on our five main stakeholder groups; our colleagues, customers, suppliers and vendors, the environment and communities in which we operate.

 

CENTRALITY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
Principal risks and uncertainties

 

Strategic Risks

Changes in technology

It is possible that the company may not respond quickly enough to significant changes in the products it offers its customers. Such that the company could fall behind the industry. The company regularly reviews the changing market trends and review the products it offers to mitigate this risk.We carefully control pricing and costs to remain competitive.

Political Uncertainty

The current economic climate poses many challenges for the business, our colleagues, customers, and partners. We have offered various levels of support, including a performance related bonus’ to our colleagues alongside above average pay reviews. We are pleased that the diversification and exceptional financial strength of the business, including the now wider group means we are extremely well placed to grow through this challenging period and beyond.

Financial Risks

Liquidity Risk

The directors aim to ensure the company has sufficient liquid resources to meet its operational requirements. This is closely monitored by the directors with cash forecasts updated weekly monitored by the CFO.

Credit Risk

The credit risk is insignificant due to the exposure being spread across many counterparties and customers.

Operational Risks

Employees

With ever increasing competition in the market for top talent, it is vital the company can continue to retain and attract the top talent required to fulfil customer obligations. The company regularly review employee packages and work with several recruitment partners to attract talent. We pride ourselves on our commitment to workplace engagement, which includes continued support of colleagues through the cost of living crisis and regular review of colleague remuneration and benefits.

Cyber & Information Security

Cyber risk encompasses any risk of financial loss, disruption, or damage to the reputation of the company from some sort of failure of its information technology systems. The increasing complexity of digital technologies and services utilised by the companies’ customers presents both an opportunity and a risk. Given the increasing risks of exposure and attack strategies, no organisation can guarantee it is immune to cyber risk. The company maintains appropriate insurance and has a defined set of information security policies and procedures to mitigate cyber risk. This is closely monitored through the risk committee which report to the directors.

We have multiple thread detection systems across our business that are aligned to industry best practice as defined by Nations Institute of Standards and Technology (NIST). Defences are regularly tested through vulnerability scans and penetration testing and we continue to remain vigilant to security improvements when identified. All our people undertake continual cyber security awareness training to ensure they are fully informed of the risks and how to combat them.

 

On behalf of the board

A Jackson
Director
24 January 2025
CENTRALITY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -

The directors present their annual report and financial statements for the year ended 30 June 2024.

Principal activities

The principal activity of the company continued to be that of computer consultancy.

Results and dividends

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

Ordinary dividends were paid amounting to £447,771. The directors do not recommend payment of a final dividend.

Directors

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

M Davies
(Resigned 25 April 2024)
D Wyness
(Resigned 25 April 2024)
A Jackson
(Appointed 25 April 2024)
C Sharp
(Appointed 25 April 2024)
Future developments

The directors remain focused on continuing to increase revenues, both project related and recurring revenue streams to further increase the resilience of the company. The company is investing heavily in internal capability and the deployment of new service lines to provide a greater breadth of offerings and quality of services to customers, whilst also driving margins and profitability.

Auditor

Bracey's Accountants were appointed as auditor to the company 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.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
A Jackson
Director
24 January 2025
CENTRALITY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2024
- 4 -

 

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CENTRALITY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CENTRALITY LIMITED
- 5 -
Opinion

We have audited the financial statements of Centrality Limited (the 'company') for the year ended 30 June 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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 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:

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

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

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Irregularities including Fraud

Irregularities, including fraud, are instances of non-compliance; acts of omission or commission by the entity, either intentional or unintentional, which are contrary to the prevailing laws and regulations.

 

We obtained an understanding of the legal and regulatory frameworks within which the company (and group) operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 together with the Financial Reporting Standard applicable in the UK and Ireland (FRS 102). In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the company’s (and group’s) ability to operate for example General Data Protection Regulation (GDPR), taxation legislation, and employment legislation.

 

Based on our understanding of the entity, the industry it operates in, and external environment we identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion.

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

Our audit procedures to respond to these risks included, but were not limited to, the following:

 

 

Owing to the inherent limitations of an audit there is an unavoidable risk that we may not have detected some material misstatements within the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. Inherent limitations in the audit procedures described above, as irregularities in relation to fraud, are by nature difficult to detect as it would likely have occurred through deliberate concealment and could involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

 

We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations. A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Emma Fraser FCA as senior statutory auditor
For and on behalf of Bracey's Accountants (Audit) Limited
27 January 2025
Chartered Accountants
Registered Auditors
Unit 1, The Cam Centre
Wilbury Way
Hitchin
Herts
SG4 0TW
CENTRALITY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
16,218,392
17,041,469
Cost of sales
(12,221,576)
(13,237,290)
Gross profit
3,996,816
3,804,179
Administrative expenses
(3,005,451)
(2,665,776)
Operating profit
5
991,365
1,138,403
Interest receivable and similar income
3,511
-
0
Interest payable and similar expenses
8
(11,463)
(13,911)
Exceptional costs
4
(322,100)
-
0
Profit before taxation
661,313
1,124,492
Tax on profit
9
343,573
(236,563)
Profit for the financial year
1,004,886
887,929

The profit and loss account has been prepared on the basis that all operations are continuing operations.

CENTRALITY LIMITED
BALANCE SHEET
AS AT
30 JUNE 2024
30 June 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
148,537
165,773
Current assets
Stocks
12
8,278
8,724
Debtors
13
4,200,542
4,136,414
Cash at bank and in hand
760,554
951,752
4,969,374
5,096,890
Creditors: amounts falling due within one year
14
(4,011,474)
(4,657,366)
Net current assets
957,900
439,524
Total assets less current liabilities
1,106,437
605,297
Creditors: amounts falling due after more than one year
15
(61,319)
(110,319)
Provisions for liabilities
Deferred tax liability
17
31,301
38,276
(31,301)
(38,276)
Net assets
1,013,817
456,702
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
1,013,717
456,602
Total equity
1,013,817
456,702
The financial statements were approved by the board of directors and authorised for issue on 24 January 2025 and are signed on its behalf by:
A Jackson
Director
Company Registration No. 03236716
CENTRALITY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 July 2022
100
74,738
74,838
Year ended 30 June 2023:
Profit and total comprehensive income
-
887,929
887,929
Dividends
10
-
(506,065)
(506,065)
Balance at 30 June 2023
100
456,602
456,702
Year ended 30 June 2024:
Profit and total comprehensive income
-
1,004,886
1,004,886
Dividends
10
-
(447,771)
(447,771)
Balance at 30 June 2024
100
1,013,717
1,013,817
CENTRALITY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
774,431
1,480,652
Interest paid
(11,463)
(13,911)
Income taxes paid
(87,249)
(86,544)
Net cash inflow from operating activities
675,719
1,380,197
Investing activities
Purchase of tangible fixed assets
(48,777)
(79,315)
Interest received
3,511
-
0
Net cash used in investing activities
(45,266)
(79,315)
Financing activities
Exceptional costs
4
(322,100)
-
0
Repayment of bank loans
(49,000)
(49,000)
Payment of finance leases obligations
-
0
(2,983)
Dividends paid
(447,771)
(506,065)
Net cash used in financing activities
(818,871)
(558,048)
Net (decrease)/increase in cash and cash equivalents
(188,418)
742,834
Cash and cash equivalents at beginning of year
948,972
206,138
Cash and cash equivalents at end of year
760,554
948,972
Relating to:
Cash at bank and in hand
760,554
951,752
Invoice discounting facility included in creditors payable within one year
-
0
(2,780)
CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 12 -
1
Accounting policies
Company information

Centrality Limited is a private company limited by shares incorporated in England and Wales. The registered office is 101-114 Holloway Head, Birmingham, West Midlands, B1 1QP.

1.1
Accounting convention

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.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

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.

Revenue 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 revenue 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.

Revenue from contracts for the provision of services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. The application of this recognition policy gives rise to elements of revenue being accrued or deferred on a contract by contract basis having given consideration to the stage of completion of each contract compared to the status of invoicing to the relevant customer.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Plant and machinery
20% straight line
Fixtures, fittings & equipment
20% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 13 -
1.5
Impairment of fixed assets

At each reporting period end date, the company 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).

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.

1.6
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.7
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments and bank overdrafts. Bank overdrafts and any money owing under invoice discounting arrangements are shown within borrowings in current liabilities.

1.8
Financial instruments

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

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

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.

Impairment of financial assets

Financial assets, other than those held at fair value, which are dealt with through profit and loss, are assessed for indicators of impairment at each reporting end date.

CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.

Classification of financial liabilities

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 company after deducting all of its liabilities.

Basic financial 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.

Other financial liabilities

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company 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 company.

1.10
Taxation

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

CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 15 -
Current 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax 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 when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
Employee benefits

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

1.12
Retirement benefits

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

1.13
Share-based payments

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 with reference to both the exercise price and the market value agreed with HMRC at or around the date of grant. The fair value determined at the grant date is, where applicable, 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.

1.14
Leases

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 leases asset are consumed.

1.15
Foreign exchange

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.

CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 16 -
2
Judgements and key sources of estimation uncertainty

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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Fair value of share options

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 with reference to both the exercise price and the market value agreed with HMRC at or around the date of grant. The fair value determined at the grant date is, where applicable, 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.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Computer Consultancy
16,218,392
17,041,469
2024
2023
£
£
Turnover analysed by geographical market
UK
15,592,762
16,841,821
Ireland
358,070
188,676
USA
267,560
10,972
16,218,392
17,041,469
2024
2023
£
£
Other significant revenue
Interest income
3,511
-
4
Exceptional costs

Exceptional costs of £322,100 (2023: £nil) include transaction bonus payments made to employees and professional fees, including non-executive directorship fees and outsourced CFO costs, which are non-recurring in nature. The exceptional costs incurred are non-operational costs.

CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 17 -
5
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
2,682
-
0
Fees payable to the company's auditor for the audit of the company's financial statements
14,950
12,950
Depreciation of owned tangible fixed assets
66,013
64,485
Operating lease charges
128,000
125,000
6
Employees

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

2024
2023
Number
Number
Administration and internal development
15
13
Sales and business development
9
9
Operations and delivery
69
66
Total
93
88

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
4,128,630
3,855,772
Social security costs
464,449
423,324
Pension costs
316,987
167,346
4,910,066
4,446,442
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
12,627
12,406
Company pension contributions to defined contribution schemes
15,676
24,809
Benefits in kind
20,440
18,268
48,743
55,483

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).

CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 18 -
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
11,463
13,911
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
-
0
222,584
Adjustments in respect of prior periods
(135,335)
-
0
Total current tax
(135,335)
222,584
Deferred tax
Origination and reversal of timing differences
(208,238)
13,979
Total tax (credit)/charge
(343,573)
236,563

The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit before taxation
661,313
1,124,492
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.50%)
165,328
230,521
Tax effect of expenses that are not deductible in determining taxable profit
1,418
560
Unutilised tax losses carried forward
201,263
-
0
Adjustments in respect of prior years
(135,335)
-
0
Group relief
11
-
0
Tax relief on share options
(374,995)
-
0
Provisions movement
2,666
(1,518)
Super deduction
-
0
(3,895)
Deferred tax movement
(208,238)
13,979
Tax on net book value movement
4,309
(3,084)
Taxation (credit)/charge for the year
(343,573)
236,563
CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 19 -
10
Dividends
2024
2023
£
£
Interim paid
447,771
506,065
11
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 July 2023
428,916
214,763
643,679
Additions
37,068
11,709
48,777
At 30 June 2024
465,984
226,472
692,456
Depreciation and impairment
At 1 July 2023
274,708
203,198
477,906
Depreciation charged in the year
60,403
5,610
66,013
At 30 June 2024
335,111
208,808
543,919
Carrying amount
At 30 June 2024
130,873
17,664
148,537
At 30 June 2023
154,208
11,565
165,773
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
8,278
8,724
CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 20 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,884,170
1,481,036
Corporation tax recoverable
22,933
22,933
Other debtors
1,433,130
2,050,377
Prepayments
659,046
582,068
3,999,279
4,136,414
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 17)
201,263
-
0
Total debtors
4,200,542
4,136,414

The amount owed by related party is included in other debtors and totals £245,187 (2023: £1,088,467).

 

Included within other debtors is £1,143,054 (2023: £960,144) relating to accrued income.

 

 

14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and ID Facilities
16
49,000
51,780
Trade creditors
1,584,666
2,018,312
Corporation tax
-
0
222,584
Other taxation and social security
303,216
372,570
Other creditors
87,832
87
Accruals and deferred income
1,986,760
1,992,033
4,011,474
4,657,366

The bank loan is secured against the total fixed and floating assets of the company.

 

The company has a Time Finance invoice discounting facility which is secured by way of a debenture.

The amount owed to connected party is included in other debtors and totals £87,832 (2023: £nil).

CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 21 -
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans
16
61,319
110,319

The bank loan is secured against the total fixed and floating assets of the company.

16
Loans and ID facilities
2024
2023
£
£
Bank loans
110,319
159,319
Invoice Discounting facility
-
0
2,780
110,319
162,099
Payable within one year
49,000
51,780
Payable after one year
61,319
110,319
17
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Balances:
£
£
£
£
Accelerated capital allowances
31,301
38,276
-
-
Tax losses
-
-
201,263
-
31,301
38,276
201,263
-
2024
Movements in the year:
£
Liability at 1 July 2023
38,276
Credit to profit or loss
(208,238)
Asset at 30 June 2024
(169,962)
CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 22 -
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
316,987
167,346

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

19
Share-based payment transactions
Liabilities and expenses

In 2020 an EMI scheme was put in place for certain employees of the company which involves options over shares in the parent company, with a second scheme put in place in 2021.

 

In respect of both schemes, each employee had a number of options to acquire shares in the event that the company or business is sold. The options being treated as having vested immediately upon grant. The conditions of the agreement stated that the options could only be exercised on an exit event (subject to some exceptions) where the share price at that date exceeds a certain threshold. The maximum term of the options was 10 years from the grant date.

 

At the beginning of the year options over 870 shares were in existence and during the year no new options were granted, 180 share options were exercised at £0.10 per share and 690 options lapsed. No options remained outstanding at the year end. No charge in profit and loss was recognised during the year with respect to the share options exercised.

 

The fair value of the options awarded was calculated with reference to the market value of the underlying shares as agreed by a valuer external to the company with HMRC (this process itself involved a consideration of prevailing exit multiples for similar companies) at the time of the option awards, and the exercise price associated with the options which was the nominal value of the shares under option.

20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
85
100
85
Ordinary A shares of £1 each
-
5
-
5
Ordinary B shares of £1 each
-
10
-
10
100
100
100
100

All issued classes of share rank pari passu in all respects.

 

On 25 April 2024, the company's Ordinary A and B £0.10 shares were all redesignated to Ordinary £0.10 shares.

 

CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 23 -
21
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
94,500
125,780
Between two and five years
-
0
94,500
94,500
220,280
22
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2024
2023
£
£
Aggregate compensation
364,298
374,088

Under FRS102 section 33.6, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director of the entity.

 

Key management totalled 4 (2023: 4).

Other information

At the balance sheet date the company was owed £245,187 (2023: £1,088,467) by Centrality Management Limited, the immediate parent company. There are no terms of repayment and no interest is charged on this loan.

 

At the balance sheet date the company owed £87,832 (2023: £nil) to Intercity Technology Limited, a connected company by virtue of common control from 25 April 2024. There are no terms of repayment and no interest is charged on this loan.

 

M Davies, a former director provided a personal guarantee in respect of the company's invoice discounting facility until 25 April 2024.

 

During the year the group incurred £60,000 (2023: £60,000) of costs for services received by Onedeploy Limited, a connected company by virtue of common control until 25 April 2024.

 

 

CENTRALITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 24 -
23
Ultimate controlling party

During the year there was a change in ownership of the immediate parent company, Centrality Management Limited, which was acquired by Intercity Technology Limited on 25 April 2024. The ultimate parent company is Intercity Technology Group Holdings Limited, controlled by Alan Jackson and Andrew Jackson.

 

Intercity Technology Holdings Limited is a private company limited by shares and is incorporated in England and Wales. The registered office is 101-114 Holloway Head, Birmingham, United Kingdom, B1 1QP.

24
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
1,004,886
887,929
Adjustments for:
Taxation (credited)/charged
(343,573)
236,563
Finance costs
11,463
13,911
Investment income
(3,511)
-
0
Exceptional costs
322,100
-
0
Depreciation and impairment of tangible fixed assets
66,013
64,485
Movements in working capital:
Decrease in stocks
446
4,387
Decrease in debtors
137,135
66,070
(Decrease)/increase in creditors
(420,528)
207,307
Cash generated from operations
774,431
1,480,652
25
Analysis of changes in net funds
1 July 2023
Cash flows
30 June 2024
£
£
£
Cash at bank and in hand
951,752
(191,198)
760,554
Invoice discounting facility
(2,780)
2,780
-
0
948,972
(188,418)
760,554
Borrowings excluding overdrafts
(159,319)
49,000
(110,319)
789,653
(139,418)
650,235
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