The directors present the strategic report for the year ended 31 December 2024.
The company is an international designer and developer of fully integrated smart airside solutions for the aviation industry, including automated vehicles, systems and software. The company supports some of the world’s leading airports, helping them to become more scalable whilst improving safety, operational efficiencies, passenger experience and sustainability.
The company achieves this through a combination of highly-engineered hardware and proprietary software which works together to help aviation customers transform baggage and cargo handling operations. The company's end-to-end transformation solution principally comprises:
Hardware:
• Auto-DollyTug®: fully autonomous baggage and cargo handling vehicles
• Auto-Cargo®: fully autonomous vehicle for the handling of heavier cargo loads
Software:
• Autonomous Driving Software stack (ADS): in-house software for all our autonomous vehicles
• Auto-Sim®: purpose-built Airport Simulation and modelling, 3D visualisation software tool
• Auto-Connect®: cyber-secure and resilient vehicle fleet SaaS management platform
The company’s solutions have been designed from the ground-up and in collaboration with customers to meet the specific needs of the aviation industry, including improved aircraft turnaround, an important KPI.
This ground-up approach means Artificial Intelligence (AI) and Autonomous Technology are at the heart of each of our products, with each technology being harnessed to maximise effectiveness and results in the airside environment.
In the current year, the company delivered an improved performance across all key financial metrics. In line with the strategic focus on Autonomous vehicles for aviation, the company saw impressive growth in the Autonomous division. Revenue from supply of electrical components in remained broadly consistent at £5.6 million, a 2.0% decrease from £5.7 million in 2023 and revenue from supply of autonomous vehicles grew to £2.2 million, a 925.4% increase from 0.2 million in 2023. Performance was even better than expectations, supported by disciplined and focused approach to cost management notwithstanding the increase in output and an improved gross margin of 37.7% (2023: 18.5%), reflective of the increased mix of Autonomous revenues. As in FY2023, capitalisation of labour costs, alongside the recognition of research and development grants also contributed.
Through the Automotive heritage, the company has an extensive track record of servicing customers within a highly regulated industry characterised by complex supply chains, and it is this experience which is leant on to manage resources in a cost-effective and efficient manner. It is this approach to capital management that saw the company end the year with a net cash position of £0.4m (2023: £0.5m). Cash position was further strengthened following the completion of the funding round in the parent company that closed in January 2025, raising a total of £5.3m gross proceeds, of which £3.5m was received in December 2024.
To gain an understanding of the risk exposure of the company, each area of our business is reviewed annuallyusing a methodology that will assist in measuring, evaluating, documenting and monitoring its risks within all areas of operations.
The risk management process is used to identify, monitor, evaluate and escalate risks as they emerge, enabling management to take appropriate action where possible and enabling the Board to keep risk management continually under review.
The risk factors below are those believed to be the most material and could adversely affect operations, revenue, profit, cashflow or assets and which may prevent the company from achieving strategic objectives. Additional risks and uncertainties currently unknown, or which are currently believed to be immaterial, may also have an adverse effect on the company.
The following summarises the principal risks and uncertainties of the company:
1 Systems Risk
The company accounts are maintained on legacy systems which are becoming outdated. This could result in a lack of pertinent Financial and Non- Financial information as the company expands its operations domestically and globally.
Mitigation
In line with its Financial Position and Prospects Procedures (FPPP) created as part of the initial listing of the ultimate parent company (Aurrigo International plc), the Board has resolved to review current systems with a view to implementing a new robust ERP system across all companies within the company. This is expected to be in place prior to significant growth planned in the Aviation sector over coming years.
2 Environment
Global warming is leading to more extreme weather conditions. There is a risk to employees of high and low temperatures both in the offices and warehouse environment. This also applies to equipment as predicts will be expected to operate in these more extreme conditions.
Mitigation
Employee working conditions, health and safety are reviewed and appropriate action taken as required. Products have already been tested in hot, humid and cold conditions. Further testing and development as required will be undertaken as environments change.
3 Manufacturing at Scale Risk
As its Autonomous products become commercially viable the company will be required to manufacture at scale. There is the risk that a lack of resource and know-how for manufacturing of Autonomous Vehicles at scale will adversely affect its ability to achieve its long term goals.
Mitigation
Product is not yet commercially available and is still in trial and demonstration phases. Current facilities, resources and management skill is expected to facilitate the near term levels of production required to achieve the company's near term forecasts. The Board regularly reviews and questions timescales and options for large-scale production that are expected to be required in coming years.
4 Concentration Risk
The company is currently exposed to a high concentration of sales across its top few customers currently in the Automotive industry. The loss of one of these major customers would significantly impair the company's ability to achieve its short-term revenue and profit forecasts. High concentration also carried the risk that customers can place undue influence on pricing and resources.
Mitigation
The Board is mindful of the Automotive concentration exposure. Senior management regularly reviews its strategy to reduce concentration through the addition of new customers and increasing revenue streams from lower concentration customers. Since Automotive sales are for Special Vehicle variants of OEM manufacture and not mass-produced models, the Board believes that there is a reduced risk of losing a contract to a competitor. The financial standing of key customers is monitored regularly. As the Autonomous sector matures, concentration will continue to reduce for these key customers. Additional contracts won through 2024 and due to be transacted through 2025 has reduced the potential risk of concentration in this segment.
5 Market Acceptance Risk
The company's Autonomous solutions have continued to be developed over the year and have been deployed with additional customers. There exists a risk of low uptake levels given lack of market knowledge of product offerings and what is required to introduce, run and maintain them commercially airsides.
Mitigation
The Board regularly monitors the progress of product development and customer contacts. Multiple vehicle deployments with the lead customer and additional deployments in multiple continents with the new customers gives the Board confidence that products will be accepted and adopted in the medium term.
6 Competition Risk
As the company's focus continues to increases on aviation baggage handling, the potential for increased competition increases.
Mitigation
The Board monitors current and potential competition. The Board believes that it has sufficient IP protection in place to reduce the opportunity for competitors to encroach on the Company's first mover advantage.
7 Cyber Attack Risk
Cyber-attacks such as ransomware are an increasing threat to all businesses, particularly with the continued Ukrainian invasion by Russia and the group’s recent listing which brings with it public visibility. This can cause the temporary or permanent loss of data and IP and/or expose the business to extortion.
Mitigation
The Board believes that the company has a robust infrastructure and Cyber resilience policy in place with secure connection to multiple fire walled local servers. Cyber security is recognised as a continually developing risk and the Board is cognizant of implementing best practices.
8 Supply Chain Restrictions Risk
Issues with supply chain particularly in relation to silicon chip supply starting through the Covid-19 period still exist, albeit that the issue has eased. Supply restrictions expose the business to reduced output and the risk of loss of contract if performance KPIs cannot be met.
Mitigation
The company operates a multiple source strategy for high- risk components including silicon chips. Potential supply shortages are discussed with customers and long-term supply schedules continue to be agreed in order to secure supply.
9 Inflation Risk
With increased global financial uncertainty, including potential trade wars together with UK increases in National Minimum Wage and Employer National Insurance contributions, the risk of inflation on inputs has the potential to increase in the near-term putting pressure on profitability and staff resources.
Mitigation
The company closely monitors spend on all inputs including materials, delivery costs, duty charges and staff costs with a view to minimising the impact of inflationary pressures. Where this cannot be absorbed price increases to customers are considered.
Total revenue for the year was £7.7 million, representing a 31.2% increase from £5.9 million in 2023.
• Supply of electrical components: Revenue remained broadly consistent at £5.6 million, a 2.0% decrease from £5.7 million in 2023.
• Supply of autonomous vehicles: Revenue grew to £2.2 million, a 925.4% increase from 0.2 million in 2023.
The company entered 2025 with strong momentum, particularly in the Autonomous division, supported by a robust sales pipeline and an expanding partner network. The Automotive division continues to provide steady cash generation, underpinning our overall performance. There have been no significant events subsequent to the year end impacting the financial statements.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 13.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
There have been no significant events subsequent to the year end impacting the financial statements.
The company has consolidated its trading position in the year, achieving sales of £7.7m and gross profit of £2.9m. Cash and cash equivalents amount to £385k at the year end.
The Directors have prepared detailed financial cashflow forecasts for the period to June 2026, taking into account the improved financial position following the £5.3 million fundraising, in the parent company, completed in January 2025. These projections are based on the company’s detailed annual business plan. Sensitivity analysis has been performed to model the impact of more adverse trends compared to those included in the financial projections in order to estimate the impact of severe but plausible downside risks.
The key sensitivity assumptions applied include:
Delay in revenues derived from R&D testing of Autonomous vehicles and related simulation.
Increased wage rate inflation.
Increased general inflation on input costs, including goods sold.
Mitigating actions available to the company were applied and the Board challenged the assumptions used. After reviewing the forecasts the Board has formed the judgement at the time of approving the financial statements that there is a reasonable expectation that the company has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements.
In accordance with the company's articles, a resolution proposing that BDO LLP be reappointed as auditor of the company will be put at a General Meeting.
Opinion on the financial statements
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Other Information
The Directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
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 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, or returns adequate for our audit have not been received from branches not visited by us; or
the 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.
Extent to which the audit was 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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
Our understanding of the Company and the industry in which it operates;
Discussion with management and those charged with governance; and
Obtaining an understanding of the Company’s policies and procedures regarding compliance with laws and regulations; and
We considered the significant laws and regulations to be the applicable accounting framework, and UK tax legislation.
The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be the health and safety legislation, employment tax and data protection regulations.
Our procedures in respect of the above included:
Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;
Review of correspondence with tax authorities for any instances of non-compliance with laws and regulations;
Review of financial statement disclosures and agreeing to supporting documentation;
Involvement of tax specialists in the audit; and
Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
Obtaining an understanding of the Company’s policies and procedures relating to:
Detecting and responding to the risks of fraud; and
Internal controls established to mitigate risks related to fraud.
Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;
Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud were management override of controls, capitalisation of intangible assets, and revenue recognition, specifically the manipulation of revenue using fraudulent journals and estimate around percentage of completion of long term revenue contracts.
Our procedures in respect of the above included:
Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation;
Challenging significant accounting estimate and judgements made by management including:
The capitalisation of intangible assets against the requirements of the applicable accounting standards;
Estimates and judgements made by the Directors in their going concern assumption as set out in the Conclusions relating to going concern section of the report above; and
Estimates and judgements made around percentage of completion for revenue recognition on long term revenue contracts.
Reviewing the Group’s accounting policies for compliance with the relevant accounting framework and testing disclosures to supporting documentation;
Assessing the appropriateness of the revenue recognition policies against the requirements of the applicable accounting standards and testing the application of the policies to the samples tested; and
With regards to the risk of fraud in revenue recognition through manipulation of revenue journals, we selected the samples of unusual journals crediting revenue and verified those to the relevant supporting documentation;
With regards to the risk of fraud in revenue recognition on long term contracts, we selected all the contracts during the year and verified revenue recognised under those contracts to the relevant supporting documentation;
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
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.
For and on behalf of
Birmingham, UK
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
The income statement has been prepared on the basis that all operations are continuing operations.
There are no comprehensive income or expenses other than the loss for the current and the preceeding financial
year.
Richmond Design & Marketing Limited is a private company limited by shares incorporated in England and Wales. The registered office is 33, Bilton Industrial Estate, Humber Avenue, Coventry, United Kingdom, CV3 1JL. The company's principal activities and nature of its operations are disclosed in the directors' report.
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.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
presentation of a statement of cash flows and related notes;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment and intangible assets;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
a reconciliation of the number and weighted average exercise prices of share options, how the fair value of share-based payments was determined and their effect on profit or loss and the financial position;
comparative narrative information;
related party disclosures for transactions with the parent or wholly owned members of the group.
Where required, equivalent disclosures are given in the group accounts of Aurrigo International plc. The group accounts of Aurrigo International plc are available to the public and can be obtained from the Registered Office.
The company has consolidated its trading position in the year, achieving sales of £7.7m and gross profit of £2.9m. Cash and cash equivalents amount to £385k at the year end.
The Directors have prepared detailed financial cashflow forecasts for the period to June 2026, taking into account the improved financial position following the £5.3 million fundraising, in the parent company, completed in January 2025. These projections are based on the company’s detailed annual business plan. Sensitivity analysis has been performed to model the impact of more adverse trends compared to those included in the financial projections in order to estimate the impact of severe but plausible downside risks.
The key sensitivity assumptions applied include:
Delay in revenues derived from R&D testing of Autonomous vehicles and related simulation.
Increased wage rate inflation.
Increased general inflation on input costs, including goods sold.
Mitigating actions available to the company were applied and the Board challenged the assumptions used. After reviewing the forecasts the Board has formed the judgement at the time of approving the financial statements that there is a reasonable expectation that the company has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements.
When revenue recognised in respect of a customer contract exceeds amounts received or receivable from a customer at that time a contract asset is recognised. If amounts received or receivable from a customer exceed revenue recognised for a contract, for example if the Company receives an advance payment from a customer, a contract liability is recognised.
Simulation contracts
Contracts for autonomous proof of concept, simulation and demonstration are supplied under contracts which specify deliverables over a specified time period. Revenue is recognised based on the percentage of completion and matched to costs incurred in order to deliver the project.
Contract assets and liabilities
Contract assets and liabilities are presented on the balance sheet to reflect the cumulative revenue recognised in excess of, or short of, amounts billed to customers. The Company assesses recoverability of contract assets periodically to ensure they are not impaired.
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Research expenditure is written off against profits in the year in which it is incurred.
Development costs that are directly attributable to the design and testing of vehicles, systems and software products controlled by the Company are recognised as intangible assets when the following criteria are met:
it is technically feasible to complete the product such that it will be available for use;
management intends to complete the product and use or sell it;
there is an ability to use or sell the product;
it can be demonstrated how the product will generate probable future economic benefits;
adequate technical, financial and other resources to complete the development and to use or sell the product are available; and
the expenditure attributable to the product during its development can be reliably measured.
As a result of the above, costs have only been capitalised from the point at which certain projects became commercially feasible.
Directly attributable costs that are capitalised as part of the vehicle, system or software include employee and contractor costs. Other development expenditures that do not meet these criteria, as well as ongoing maintenance and costs associated with routine upgrades and enhancements, are recognised as an expense, as incurred. Where grant income has been received as part of the development process the whole cost of the asset is capitalised and the associated grant income is deferred and shown within payables.
The depreciable amount of an intangible asset with a finite useful life is allocated on a systematic basis over its useful life. Amortisation begins when the asset is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.
Amortisation 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:
Patents - 20 years straight line
Development costs - 10 years straight line
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
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.
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.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
Basic financial liabilities, including trade and other payables, bank loans, and loans from fellow group companies, 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
The Company's ultimate parent entity has issued equity settled share based payments which are measured at fair value at the date of grant by reference to the fair value of the equity instruments of Aurrigo International Plc granted using the Black-Scholes Model. The fair value is expensed on a straight line basis over the vesting period and recognised as an expense in the income statement with a corresponding increase in reserves.
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.
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
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, if the revision affects only that period, or in the period of the revision and future periods if 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 outlined below.
Autonomous vehicles
The Directors make a judgement as to the appropriate classification of each autonomous vehicle constructed during a period. Where vehicles are constructed for sale, autonomous vehicles are classified as inventory and are measured at the lower of cost and estimated selling price less costs to complete and sell. Where vehicles are intended for use on a continuing basis in the Company's activities they are classified as tangible fixed assets and are measured at depreciated cost.
In addition there are estimation uncertainties around determining labour and overheads absorbed during the construction of vehicles as well as estimating likely selling price less costs to complete and sell.
Key sources of estimation uncertainty
Useful lives and impairment of development costs
Development costs included within intangible fixed assets are amoritsed over their estimated useful life of 10 years, once they are brought into use. The selection of the estimated lives requires the exercise of management judgement. Useful lives are regularly reviewed and should management’s assessment of useful lives shorten or increase then amortisation charges in the financial statements would increase or decrease and carrying amounts of the assets would change accordingly.
The Company is required to consider, on an annual basis, whether indications of impairment relating to such assets exist and if so, perform an impairment test. The recoverable amount is determined based on the higher of value in use calculations or fair value less costs to sell. The use of value in use method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the cash flows. The Directors are satisfied that all recorded assets will be fully recovered from expected future cash flows.
Capitalisation of development costs
As outlined in note 1.4 the Company recognises as intangible fixed assets development costs that are considered to meet the relevant capitalisation criteria. The measurement of such costs and assessment of their eligibility in line with the appropriate capitalisation criteria requires judgement and estimation around the time spent by eligible staff on development, expectations around the ability to generate future economic benefit in excess of cost and the point at which technical feasibility is established. The costs incurred on the intangible fixed assets were the key growth area for the Company's admission to AIM which helps to justify the capitalisation and demonstrates the Company's ability to capitalise these assets.
Share based payments
Share options have been fair valued excluding implied exit probabilities. At each reporting period end the Company makes an assessment of the likelihood of a range of exit routes, including implied probabilities, dates and values for each, and apply this to the outstanding share options yet to be exercised. The share-based payment expense included in the Statement of Comprehensive Income is then adjusted to reflect the straight-line expensing of the underlying fair value through to expected exit.
The Group recognises revenue from certain long-term contracts over time in accordance with IFRS 15 – Revenue from Contracts with Customers, using the input method based on costs incurred to date relative to total estimated contract costs. This approach requires significant estimation and judgement, particularly in assessing the areas of total contract costs, the measurement of progress towards completion and the recovery of contract assets. Due to the inherent uncertainty in estimating future costs and performance outcomes, actual results may differ from those estimates. A significant increase in total estimated costs or a decrease in expected recoveries may materially impact revenue recognition and profit margins on affected contracts.
The Group has used the incremental borrowing rate to calculate the value of the lease liabilities relating to its property lease liabilities recognised under IFRS 16. The discount rate used reflects the estimated risks associated with borrowing against similar assets by the Group, incorporating assumptions for similar terms, security and funds at that time.
The carrying amounts of such liabilities is disclosed within note 17.
As part of the going concern assessment, management has prepared detailed cash flow forecasts for the period to June 2026. The preparation of these forecasts requires the use of significant judgements and estimates, particularly in relation to projected revenue streams, operating costs, working capital requirements, and the timing of future cash inflows and outflows. These estimates are inherently uncertain and sensitive to changes in economic conditions, customer demand, and funding availability. Management has considered a range of scenarios and mitigating actions, including access to existing financing facilities and cost reduction strategies, in concluding that the Company has sufficient resources to continue as a going concern. These forecasts form the basis of the Directors’ assessment that the going concern basis of preparation remains appropriate.
Audit fees in respect of the Company are payable by the ultimate parent company and not recharged.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
In addition to the above, further employee costs (including directors) have been incurred as part of (i) intangible development costs and (ii) autonomous vehicles (property, plant and equipment) during the year, and are shown within additions in notes 9 and 10 respectively. The total employment costs which have been capitalised during the year amounts to £708,839 (2023: £582,903).
The charge for the year can be reconciled to the loss per the income statement as follows:
The UK corporation tax rate rose from 19% to 25% on 1 April 2023. In the comparative year, the tax rate shown of 23.52% is a composite figure and reflects that two different rates were applied during the prior year.
Deferred tax balances at the reporting date are therefore measured at 25% (2023 - 25%), being the substantively enacted rate at the balance sheet date.
Development costs capitalised are in relation to the manufacture of autonomous vehicles, some of which are not in commercial production yet and therefore not currently being amortised. During the current year the autonomous vehicles which have now been brought into production, £5,259,463 (2023: £2,883,130) included within the above cost for development costs as at 31 December 2024, are now being amortised over their estimated useful life of 10 years.
The Directors prepare forecasts which show the projected growth of the business and use of these assets, which forms a key part of the Company’s future strategy. The forecasts include an assessment of the likely commercialisation of the technology based on current demand and anticipated market growth strategies, profiled on a discounted cash flow basis. The Directors do not consider that the impairment review shows sensitivity to any discounted cashflow inputs.
IFRS 16 has been adopted and leased assets are presented above as right of use assets. The right of use assets are depreciated over the shorter of the asset’s useful life and the lease term, on a straight line basis.
The property leases are discounted at the Company’s estimated incremental cost of borrowing at a rate between 5% and 9.24%. This has been derived by using the average borrowing rate for the transportation industry, which the Group is part of, and the average market rates for property leases.
The motor vehicle leases are discounted at the Group’s incremental cost of borrowing at a rate of 6%, using the average borrowing rate for the transportation industry, which the Group is part of, and the average market rates for vehicle leases.
The Company has recognised a total provision of £227,000 (2023 - £152,000) against its inventories.
During the year the company commenced sales which involve multiple performance obligations. Revenue is recognised over time as performance obligations are fulfilled, using the input method. The corresponding asset is recognised as a ‘contract asset’. Please refer to note 3 for further details regarding revenue recognition. The contract asset is expected to be fully recovered during the year ended 31 December 2025.
The Company applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables.
Around 50% of sales made are self-billed by the customers. The average credit period given on self-billed sales is 60 days from the self-billed date. For other sales the average credit period given is 30 days. For autonomous sales specific terms are agreed in advance. The Company has assessed that it has little credit risk and anticipates that all balances will be fully recoverable.
Amounts owed by fellow group undertakings are not subject to a formal loan agreement, are interest free and hence treated as repayable on demand.
The expected credit loss provision for impairment is considered based upon the historic rate of bad debt write off for the historic trading of the Company. There is limited established trading results for the autonomous sales operating segment and hence no credit loss provision for impairment is considered. However, sales are typically of high individual value with customers who have very secure credit ratings, and therefore credit risk is assessed to be minimal.
Overall, the total provision for impairment for all trade receivables, except for any specific provisions required, has been assessed as immaterial and therefore not recognised in the financial statements.
The Company's borrowings are received under the Coronavirus Business Interruption Loan Scheme (“CBILS”) on which undiscounted amounts of £25,000 (2023 - £55,000) are due, and which has an interest rate of 5% - 9.24%. The Company was entitled to a Business Interruption Payment for the first 12 months up to a capped amount to cover payments of the interest.
Of these loans, £nil (2023 - £nil) falls due for repayment in more than 5 years.
Amounts owed to parent undertakings are not subject to a formal loan agreement, are interest free and hence treated as repayable on demand.
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
The Company's right of use asset additions and depreciation charge recognised on leases in the year is shown in note 10 and interest expense in note 7.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Deferred revenues are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
On 31 August 2024 the company acquired the trade and assets of
The Company has taken advantage of the exemption available in FRS 101 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group, which would otherwise be required by IAS 24 'Related party disclosures'.
The immediate parent company is