The director presents the strategic report for the year ended 30 June 2024.
OLR is a leading specialist end-to-end systems integrator providing clients with wide ranging improvements in corporate performance and customer relationship. As a leading Systems Integrator in the UK, OLR provides expertise in Oracle Retail implementations across EMEA and North America and are proud to have been an Oracle Retail partner for over 20 years. With a commitment to delivering innovative solutions and unparalleled service, we aim to capitalize on emerging opportunities while mitigating potential challenges. This strategic report outlines our principal risks and uncertainties, financial key performance indicators, financial risk and operational initiatives to maintain and strengthen our competitive edge.
Results:
Turnover of the group remained constant year on year at £19,334,146 (2023: £19,464,338). Operating profit increased by 50% in the period to £1,431,382 (2023: £714,210).
Exceptional items in the year were £363k (2023: £618k) which relates to legal fees in relation to a particular project. The prior year amount related to a bad debt due to a client entering Chapter 11 in the US and legal fee in relation to the particular project.
In addition, the Company continues to invest in Latin America operations as part of the Company’s strategic growth plan. The Company still regards Latin America as an area for further expansion and has been awarded contracts in the year by new clients.
Net assets of the group have increased to £5,947,222 (2023: £4,893,018).
1. Cybersecurity Threats:
Risk: Increasingly sophisticated cyber threats pose a significant risk to our systems integration projects and the data of our clients.
Mitigation: Implementing robust cybersecurity measures including ISO27001 certifiction, regular security audits, and employee training programs to enhance awareness and readiness against cyber threats.
2. Market Competition:
Risk: Intense competition within the systems integration sector may lead to pricing pressures, loss of market share, or erosion of profit margins.
Mitigation: continued focus on delivering first class, value for money services, enhancing customer experience and building long-term relationships with clients.
3. Dependency on Suppliers and Partners:
Risk: Reliance on specific external suppliers and partners for services or specialized expertise may lead to supply chain disruptions.
Mitigation: Diversification of supplier base, establishing strong contractual agreements and maintaining close relationships with key partners to mitigate risks and ensure continuity of supply.
4. Project Delivery Risks:
Risk: Complex implementation projects may face challenges related to scope creep, budget overruns, or delays in delivery, impacting client satisfaction and financial performance.
Mitigation: Robust project management methodologies, risk assessment frameworks, and proactive communication with clients to manage expectations and address issues promptly.
5. Global Pandemics and Health Risks:
Risk: Outbreaks of global pandemics or health crises may disrupt operations, supply chains, and client engagements, leading to project cancellations or delays.
Mitigation: Developing robust contingency plans, facilitating remote working capabilities, and implementing health and safety protocols to protect employees and mitigate operational disruptions.
By proactively identifying and addressing these principal risks and uncertainties, OLR can enhance resilience, mitigate potential threats, and seize opportunities for sustainable growth and success in the ever-changing landscape of systems integration.
1. Revenue Growth Rate:
Definition – percentage increase or decrease in revenue compared to previous period.
KPI -1%
2. Gross Profit Margin
Definition – percentage of revenue retained after deducting direct costs associated with services sold.
KPI 58%
3. Employee Billing Efficiency
Definition – percentage of employee's billable hours.
KPI 61%
4. Customer Satisfaction Score
Definition – Measure of customer satisfaction based on surveys or feedback.
9 out of 10
1. Revenue Volatility:
Risk: Fluctuations in project demand and client spending patterns can lead to revenue volatility, impacting cash flow and financial stability.
Mitigation: maintaining a robust sales pipeline to mitigate revenue concentration risks and where possible have a mix of long-term contracts and shorter-term projects.
2. Credit Risk:
Risk: Exposure to credit risk arises from clients' have an inability to fulfil payment obligations, leading to potential bad debts and liquidity challenges.
Mitigation: Implementing stringent credit assessment procedures, setting credit limits for clients based on their creditworthiness and establishing clear payment terms.
3. Cost Overruns:
Risk: Projects may incur unexpected costs due to scope changes, supply chain disruptions, or inefficiencies in project execution, impacting profitability and margins.
Mitigation: Rigorous project cost estimation and budgeting, implementing effective project management practices to monitor and control costs and maintaining contingency reserves to address unforeseen expenses can mitigate the risk of cost overruns.
By identifying, assessing, and mitigating these financial risks, OLR can enhance financial resilience and protect shareholder value.
1. Talent Acquisition and Retention:
Difficulty in attracting and retaining skilled talent with Oracle specific expertise may impact project delivery and innovation capabilities. By investing in employee development programs, offering competitive compensation packages, fostering a positive work culture, and implementing succession planning strategies OLR continues to mitigate talent risks.
2. Operational Efficiency:
Streamlined internal processes, workflows and agile working methodologies leading to improved efficiency and reduced costs.
3. Customer Experience
Enhance customer support services to provide proactive assistance and prompt resolution of issues.
Solicit feedback from clients to identify areas for improvement and refine service offerings.
4. Innovation and R&D:
OLR strongly believes in investing for the future and continued investment in research and development opportunities and intellectual property will ensure the Group will not only stay ahead of its competitors but provide improved implementation and customers experience.
This strategic report serves as a roadmap for navigating opportunities and challenges, guiding our efforts to maintain our leadership position and exceed customer expectations in the years to come.
In conclusion, OLR is well-positioned to capitalize on the growing demand for integrated solutions. By leveraging our core competencies, embracing innovation, and fostering strategic partnerships, we are poised for sustainable growth and continued success in the dynamic retail landscape.
On behalf of the board
The director presents his annual report and financial statements for the year ended 30 June 2024.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £10. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
The company has set up a share scheme encouraging the involvement of employees in the company's performance.
In accordance with the company's articles, a resolution proposing that Bryden Johnson Limited be reappointed as auditor of the group will be put at a General Meeting.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of OLR Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2024 which comprise the group profit and loss account, 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 director's 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 director 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 director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's 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 director's 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 director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the parent company or to cease operations, or has 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to taxation, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management override of controls. Audit procedures performed by the engagement team included:
- Reviewing minutes of meetings of those charged with governance;
- Enquiry of management and those charged with governance around actual and potential litigation and claims;
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations, and
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness and testing accounting estimates (because of the risk of management bias).
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentation, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2023 - £0 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
OLR Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Kings Parade, Lower Coombe Street, Croydon, Surrey, CR0 1AA.
OLR Group Limited 'The company' is the parent undertaking of OLR Group Limited and its subsidiaries (together 'The group'). The parent undertaking is the largest and the smallest group for which consolidated accounts have been prepared. Copies of these accounts can be obtained from Companies House, Crown Way, Cardiff CF14 3UZ.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The 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 consolidated group financial statements consist of the financial statements of the parent company OLR Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 June 2024. 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.
At the time of approving the financial statements, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
The following criteria must be met before revenue is recognised.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the cost to complete the contract can be measured reliably.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
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.
Investments in subsidiaries are initially measured at cost less accumulated impairment.
Investment in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
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.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any 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 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.
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.
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 costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Equity-settled share-based payments are measured at fair value at the date of grant. 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.
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.
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.
In the application of the group’s accounting policies, the director is 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.
Legal and professional fees
The group incurred substantial legal and professional fees to ensure that they are in compliance with the relevant laws and regulations governing them in the jurisdiction they trade.
Material bad debt write off
The bad debt arose in the previous year due to a customer being unable to pay the amount due as they are in liquidation.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge/(credit) 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:
Subsidiary undertakings
The following were undertakings of the Group:
Name Class of shares Holding Principal activity Registered Office
- OLR (UK) Limited Ordinary 100% Consultancy UK
- OLR Canada Limited Ordinary 100% Consultancy Canada
- OLR America Inc Ordinary 100% Consultancy America
- OLR India Consulting
Private Limited Ordinary 100% Consultancy India
- OLR Latin America LLC Ordinary 99% Consultancy America
Details of the company's subsidiaries at 30 June 2024 are as follows:
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.
The group operates Approved and unapproved Share Option Schemes under which eligible key personnel who are vital to the operations of the group, may be granted options to acquire shares in the group. The options granted will be for unissued A Ordinary shares with an exercise price equalling the nominal value of the shares, which are only exercisable on an exit event. There is no maximum term allocated to the share options and the method of settlement on such event would either be in cash or equity. These shares are not entitled to dividends until the shares are exercised. Both share schemes have the same arrangements.
No options were either granted, expired or forfeited in the period and no options were exercisable at the period end. The weighted average exercise price is £nil.