Company registration number 11347230 (England and Wales)
TALKTALK BUSINESS DIRECT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2024
TALKTALK BUSINESS DIRECT LIMITED
COMPANY INFORMATION
Directors
R Kennedy
S Dance
Company number
11347230
Registered office
Soapworks
Ordsall Lane
Salford
United Kingdom
M5 3TT
Auditor
HW Fisher Audit
Acre House
11-15 William Road
London
United Kingdom
NW1 3ER
Bankers
HSBC Bank Plc
8 Canada Square
London
E14 5HQ
TALKTALK BUSINESS DIRECT LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Directors' responsibilities statement
8
Independent auditor's report
9 - 11
Income statement
12
Statement of financial position
13 - 14
Statement of changes in equity
15
Statement of cash flows
16
Notes to the financial statements
17 - 46
TALKTALK BUSINESS DIRECT LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 1 -

The directors present the strategic report for the period ended 31 December 2024.

Review of the business

The revenue of the Company is generated through the sale of services including telephone, broadband/fibre and ethernet, within the telecommunications B2B market. The costs incurred by the Company are primarily network access costs, directly incurred in generating its revenue and people costs.

Revenue amounted to £67,717k in the 10 months to 31 December 2024, compared with £84,603k in the year to 29 February 2024, representing a marginal decrease on a like-for-like basis. Fibre products continue to grow however, in line with the rest of the industry, there is a reduction in demand for voice products. This, in conjunction with a competition in the market leading to some reduction in revenue between those customers churning and those customers joining or re-contracting.

Gross profit margin has increased a result of higher revenues from higher margin, faster Ethernet products. The Company made a loss before taxation of £12,882k in the period (Feb 2024: £44,071k). The loss in in the prior year was largely due to a £25.5m impairment to Goodwill recognised.

During December 2024, a loan note of £64,424k owed to TalkTalk Communications Limited was converted into Share Premium following the expiry of a conditional clause in the loan agreement that determined the loan was only repayable should TTBD be sold before 30 November 2024.

The Company’s Directors believe that there are no non-financial key performance indicators (in addition to the business review above).

Principal risks and uncertainties

The main financial risks the Directors consider relevant to this Company are credit risk, liquidity risk and interest rate risk. Credit risk is mitigated by the Company’s credit control policies and the Company regularly monitors interest rate risk. Liquidity risk is monitored through regularly assessing the Company’s short-term working capital and long-term funding requirements. The Company does not trade or speculate in any derivative financial instruments.

The Company’s interest rate risk arises primarily from cash, cash equivalents and borrowings, all of which are at either fixed or fixed plus floating rates of interest which expose the Company to cash flow interest rate risk. These floating rates are linked to SONIA. Future cash flows arising from these financial instruments depend on interest rates and periods for each loan or rollover. Interest rates are monitored closely throughout the year.

 

TALKTALK BUSINESS DIRECT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 2 -

High inflation and cost of living pressures may result in financial risks to revenue and an increasing cost base. In addition to financial risk, there are other risks and uncertainties affecting the entity which are managed by the Company. The key risks have been outlined as follows:

Risk and impact

Mitigation

Regulatory compliance

Failure to comply with regulatory obligations may result in negative customer impact and/or significant regulatory fines.

 

The Board has continued to convene throughout the year to monitor the mitigation of operational risks which could give rise to customer complaints and regulatory breaches.

 

Data and cyber security

Security of customer, commercial and colleague data poses increasing reputational and financial risk to all businesses and the gross risk remains high.

 

The Company has continued to focus on actively implementing a programme to build its security capability, including to address the increasing risks around vulnerabilities and third-party vendors.

 

Resilience and business continuity

The Company is reliant on key third party suppliers and partners in order to deliver quality products and services to its customers. Network, system or third-party failure could result in significant disruption to services or business processes, which may have a negative impact on customers and therefore damage customer loyalty or result in complaints.

 

The Company’s network provider has Business Continuity, Crisis Management and Disaster Recovery Plans in place for key sites. Network resilience is assessed and monitored on a regular basis. Continuous monitoring of network availability is also in place to ensure any issues are identified in a timely manner and resilience testing takes place. Where an incident does occur, a robust incident response process is in place and exercised to ensure effective response, followed by a problem management review that is linked to service improvement.

Development and performance

The telecommunications industry is undergoing a once in a generation shift as its infrastructure and its customers transition to Full Fibre. The Company is focused on positioning itself to take full advantage of the opportunities this creates and to provide the best outcomes for its customers. The Directors will continue to monitor both the Company’s key performance indicators, principal risks and uncertainties and develop the Company as opportunities arise.

Key performance indicators

The revenue of the Company is generated through the sale of services including telephone, broadband/fibre and ethernet, within the telecommunications B2B market. The costs incurred by the Company are primarily network access costs, directly incurred in generating its revenue and people costs.

The Company’s Directors believe that the financial key performance indicators of the business are outlined below:

 

10 months ended

31 December 2024

Year ended

29 February 2024

Revenue (£’000)

67,717

84,603

Gross profit (%)

39

36

Profit/(Loss) before taxation (£’000)

(12,882)

(44,071)

 

TALKTALK BUSINESS DIRECT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 3 -
Section 172(1) statement

The success of our business is dependent on the support of all our stakeholders. As part of the Board’s decision-making process, in line with their duties under Section 172 (‘s172’) of the Companies Act 2006, the Board considers the potential impact of decisions on relevant stakeholders and the likely consequences of these decisions in the long term.

 

Illustrations of how a number of s172 factors have been considered and applied by the Board can be found below.

Shareholders and investors

We operate as a private business and our ongoing intention is to behave responsibly towards all shareholders and investors and treat them fairly and equally, so that they too may benefit from the successful delivery of strategic objectives. The Company’s ultimate parent undertaking and controlling party are disclosed in 32.

 

How the Board engages

 

Customers

The demand for faster, more reliable connectivity has never been greater so it is vital that we engage with our customers to ensure we continue to provide great products and services that meet their changing needs.

 

How the Board engages

Suppliers

Our suppliers are fundamental to the quality of our products and services. Engagement with suppliers and maintaining good relationships is therefore critical to ensuring that as a business we meet the high standards we set ourselves;

 

How the Board engages

 

Communities

The Company values its communities and is committed to doing business the right way. Our success depends on strong, active and confident communities, who want to engage with our products and services and trust the Company to respond to their needs and concerns. We are proud to be based in Salford and are committed to supporting the local community in our city to prosper.

 

How the Board engages

TALKTALK BUSINESS DIRECT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 4 -

Government

Government bodies have a key role in setting our operating environment and it is imperative that we listen, understand and respond to relevant Government actions. As a broadband provider, the Government’s ambitions for gigabit-capable coverage, engaged consumers and a safer online experience have shaped our business strategy and operations.

 

How the Board engages

 

Regulators

Ofcom has a high degree of influence over the Company’s commercial and operational environment. It determines many of the prices which we pay, the quality of their wholesale products and requirements around customer service. Regulation is therefore the single most important driver of our cost to serve customers.

 

The ICO (Information Commissioner’s Office) regulates compliance with the Data Protection Act, UK GDPR, the Privacy and Electronic Communications Regulations and the Investigatory Powers Act. Other relevant regulators include:

 

How the Board engages

The primary Board engagement with Ofcom is via the Company’s CEO and on some issues the Executive Chairman. Other than that, members of the Board are informed of developments at Board meetings, whilst having no systematic contacts with Ofcom.

 

Primary Board engagement with the ICO is via the Company’s General Counsel and Company Secretary. In addition to this, the Board is regularly updated on any developments.

 

Employees

The directors acknowledge that the long-term success of the company is intrinsically linked to our ability to attract, develop, and retain talented individuals. We understand that our employees are the cornerstone of our business, and their interests are paramount in our decision-making processes. Whether it involves the workforce as a whole or individual team members, promoting and safeguarding their well-being is a primary consideration. We are committed to fostering a supportive and inclusive work environment that encourages growth, innovation, and collaboration.

On behalf of the board

R Kennedy
Director
7 July 2025
TALKTALK BUSINESS DIRECT LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 5 -

The directors present their annual report and financial statements for the period ended 31 December 2024.

Principal activities

The principal activity of the company continued to be that of provision of telecommunication services to Business customers in the United Kingdom.

Results and dividends

The results for the period are set out on page 12.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

R Kennedy
S Dance
Energy and carbon report

The directors are working with an environmental consultancy to advise on the company’s environmental impact reporting in accordance with the 2019 HM Government Environment Reporting Guidelines, the 2020 HM Government’s conversion factors for company reporting and the Greenhouse Gas (GHG) Protocol Corporate Accounting and Reporting Standard.

 

Our SECR disclosure presents our carbon footprint across scopes 1 and 2, together with appropriate intensity metrics.

31 December 2024
29 February  2024
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Gas combustion
7,134
9,338
- Electricity purchased
120,219
180,327
- Fuel consumed for transport
60,102
65,530
187,455
255,195
TALKTALK BUSINESS DIRECT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 6 -
31 December 2024
29 February  2024
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
1.30
1.71
- Fuel consumed for owned transport
-
1.30
1.71
Scope 2 - indirect emissions
- Electricity purchased
24.89
37.34
24.89
37.34
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the company
14.14
17.57
- Electricity purchased
2.20
3.23
16.34
20.80
Total gross emissions
42.53
59.85
Intensity ratio
tCO2e per square foot
0.0033
0.0046
Quantification and reporting methodology

The general methodology used is the Greenhouse Gas Protocol – Corporate Accounting and Reporting Standard (GHG Protocol, 2011).

 

Specifically:

Carbon Emissions conversions factors – Using the DESNZ 2023 GHG conversion factors found here: https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2024

 

Fuel combustion: stationary (Natural Gas) – Gas usage is devised based on overall gas usage in the building and divided by square foot floor space which TalkTalk Business Direct occupy. The conversion factor is Gaseous Fuels > Natural Gas > kwh (Gross CV).

 

Fuel combustion: mobile – TalkTalk Business Direct do not lease or own any fleet; all data is from expensed car mileage using GHG Conversion factors.

 

Purchased electricity - Electricity is devised based on overall electricity usage in the building and divided by square floor space which TalkTalk Business Direct occupy. This figure includes both electricity consumption (captured in table 3 scope 2) and upstream electricity usage (T&D electricity, captured in table 3 scope 3).

Measures taken to improve energy efficiency

Energy efficiency measures – TalkTalk Business Direct have taken steps to reduce energy usage through behavioural campaigns – encouraging employees to conserve energy in the office. The TalkTalk Business Direct office building also is powered by renewable energy and is installing more electric vehicle charging points.

 

The intensity target is to reduce scope 1 and 2 emissions per square foot in the building by 4.2% per annum.

Strategic report

Certain disclosure requirements of the Directors’ report as required by Large and Medium-sized Companies (Accounts and Reports) Regulations 2008, Sch 7, are set out in the Strategic report; such items have not been repeated in this report as per s414C(11) of the Companies Act 2006. It has done so in respect of the financial risk management objectives and policies of the company as well as future developments and disclosures regarding engagement with suppliers, customers and other in a business relationship with the company.

TALKTALK BUSINESS DIRECT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 7 -
Statement of disclosure to auditor

Each director in office at the date of approval of this annual report confirms that:

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

On behalf of the board
R Kennedy
Director
7 July 2025
TALKTALK BUSINESS DIRECT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 8 -

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 UK-adopted International Accounting Standards. 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, International Accounting Standard 1 requires that directors:

 

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.

TALKTALK BUSINESS DIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TALKTALK BUSINESS DIRECT LIMITED
- 9 -
Opinion

We have audited the financial statements of TalkTalk Business Direct Limited (the 'company') for the period ended 31 December 2024 which comprise the income statement, the statement of financial position, 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 UK adopted international accounting standards.

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:

TALKTALK BUSINESS DIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TALKTALK BUSINESS DIRECT LIMITED (CONTINUED)
- 10 -
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.

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.

As part of our planning process:

The company did not inform us of any known, suspected or alleged fraud;

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

TALKTALK BUSINESS DIRECT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TALKTALK BUSINESS DIRECT LIMITED (CONTINUED)
- 11 -

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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.

Tanya Craft (Senior Statutory Auditor)
For and on behalf of HW Fisher Audit, Statutory Auditor
Chartered Accountants
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
7 July 2025
TALKTALK BUSINESS DIRECT LIMITED
INCOME STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 12 -
Period
Year
ended
ended
31 December 2024
29 February  2024
Notes
£'000
£'000
Revenue
4
67,717
84,603
Cost of sales
5
(41,382)
(53,928)
Gross profit
26,335
30,675
Administrative expenses
5
(28,114)
(62,072)
Operating loss
(1,779)
(31,397)
Investment revenues
9
125
102
Finance costs
10
(11,228)
(12,776)
Loss before taxation
(12,882)
(44,071)
Income tax expense
11
-
-
Loss and total comprehensive income for the period
(12,882)
(44,071)

The accompanying notes on pages 17 to 46 form an integral part of the financial statements.

All results for the current year and prior year arose from continuing activities.
TALKTALK BUSINESS DIRECT LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2024
31 December 2024
- 13 -
31 December 2024
29 February  2024
Notes
£'000
£'000
Non-current assets
Goodwill
13
74,919
74,919
Intangible assets
13
13,629
20,081
Property, plant and equipment
14
453
-
0
89,001
95,000
Current assets
Inventories
15
12
204
Contract assets
17
4,826
4,318
Trade and other receivables
18
9,706
11,089
Cash and cash equivalents
9,412
9,480
23,956
25,091
Current liabilities
Trade and other payables
19
67,949
111,814
Contract liabilities
17
1,076
1,134
Borrowings
21
-
0
64,424
Lease liabilities
22
293
-
0
Deferred revenue
20
5,414
5,360
74,732
182,732
Net current liabilities
(50,776)
(157,641)
Non-current liabilities
Borrowings
21
49,227
-
0
Lease liabilities
22
98
-
0
49,325
-
0
Net liabilities
(11,100)
(62,641)
Equity
Called up share capital
-
0
-
0
Share premium account
29
64,423
-
0
Retained earnings
(75,523)
(62,641)
Total equity
(11,100)
(62,641)

The accompanying notes on pages 17 to 46 form an integral part of the financial statements.

TALKTALK BUSINESS DIRECT LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 DECEMBER 2024
31 December 2024
- 14 -
The financial statements were approved by the board of directors and authorised for issue on 7 July 2025 and are signed on its behalf by:
R Kennedy
Director
Company registration number 11347230 (England and Wales)
TALKTALK BUSINESS DIRECT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 15 -
Share capital
Share premium account
Retained earnings
Total
Notes
£'000
£'000
£'000
£'000
Balance at 1 March 2023
-
-
0
(18,570)
(18,570)
Year ended 29 February 2024:
Loss and total comprehensive income
-
-
(44,071)
(44,071)
Balance at 29 February 2024
-
0
-
0
(62,641)
(62,641)
Period ended 31 December 2024:
Loss and total comprehensive income
-
-
(12,882)
(12,882)
Transactions with owners:
Issue of share capital
-
0
64,423
-
64,423
Balance at 31 December 2024
-
0
64,423
(75,523)
(11,100)

The accompanying notes on pages 17 to 46 form an integral part of the financial statements.

TALKTALK BUSINESS DIRECT LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 16 -
31 December 2024
29 February  2024
Notes
£'000
£'000
£'000
£'000
Cash flows from operating activities
Cash generated from/(absorbed by) operations
33
5,621
(80,978)
Interest paid
(5,876)
-
0
Net cash outflow from operating activities
(255)
(80,978)
Investing activities
Purchase of intangible assets
(986)
-
0
Purchase of property, plant and equipment
(263)
-
0
Interest received
125
102
Net cash (used in)/generated from investing activities
(1,124)
102
Financing activities
Amounts advanced by parent undertakings
2,216
95,000
Amounts repaid to parent undertakings
(51,745)
(4,659)
Proceeds from new bank loans
51,000
-
0
Payment of lease liabilities
(160)
-
0
Net cash generated from financing activities
1,311
90,341
Net (decrease)/increase in cash and cash equivalents
(68)
9,465
Cash and cash equivalents at beginning of year
9,480
15
Cash and cash equivalents at end of year
9,412
9,480

The accompanying notes on pages 17 to 46 form an integral part of the financial statements.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 17 -
1
Accounting policies
Company information

TalkTalk Business Direct Limited is a private company limited by shares incorporated in England and Wales. The registered office is Soapworks, Ordsall Lane, Salford, United Kingdom, M5 3TT. The company's principal activities and nature of its operations are disclosed in the directors' report.

 

The financial statements of TalkTalk Business Direct Limited (“the Company”) for the period ended 31 December 2024 were authorised for issue by the Board of Directors on 7 July 2025 and the balance sheet was signed on the Board’s behalf by Ruth Kennedy.

 

These financial statements have been prepared in accordance with international financial reporting standards(“IFRS”), as issued by the International Accounting Standards Board (“IASB”), and UK-adopted international accounting standards. The financial statements comply with the Companies Act 2006.

1.1
Reporting period

During the period, the reporting period was shortened to 31 December 2024. The reporting period is the period from 1 March 2024 to 31 December 2024 and therefore the comparatives for the year ended 28 February 2024 are not entirely comparable.

1.2
Accounting convention

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

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 £'000.

The financial statements have been prepared under the historical cost convention. The material accounting policies adopted are set out below.

1.3
Going concern

The Directors are required to satisfy themselves that it is reasonable for them to conclude that it is appropriate to prepare the financial statements on a going concern basis. true

The Company is a wholly owned subsidiary of TFP Telecoms Limited. TFP Telecoms have loans with Ares and Shareholders for a term of over 6 years. This has given TFP Telecoms Limited and in turn, the Company, certainty around its long-term funding arrangements. In addition, the Company entered into a new facility with Kartesia in the year for £51m also with a 6 year term, providing the funds for TFP to repay the majority of the more expensive funding from Ares.

The Company has reported a net liability for the year of £11,100k (February 2024: £62,641k). Additionally, the Company has incurred a loss for the year. However the company has positive EBITDA and a positive underlying cashflow, after the one-off interest costs in relation to the refinancing are taken into consideration.

The Company has debt covenants associated with the Kartesia facility and the remaining Ares loan. The Company has been compliant with its debt covenants during the year and expects to remain complaint for at least 12 months following the date of this report.

The Company anticipates achieving a positive EBITDA in the foreseeable future and projects positive cash flows. Based on these forecasts, the Company expects to meet its obligations to suppliers and service interest payments on its facilities moving forward.

On this basis, the Directors have a reasonable expectation that the Company has sufficient resources to continue its operations for the foreseeable future, being a period of not less than twelve months from the date of this report, and accordingly they continue to adopt the going concern basis in preparing these financial statements.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 18 -
1.4
Revenue

Revenue is presented net of VAT and other sales related taxes. Revenue is measured based on the consideration specified in a contract with a customer. The Company recognises revenue when it transfers control over a good or service to a customer.

 

Nature of goods and services

 

The Company’s revenues are earned from the provision of fixed connectivity services. The typical length of a contract for bundled packages is 12–36 months. Contracts often include multiple goods and services, which are generally capable of being separately identifiable or distinct and accounted for as separate performance obligations.

 

For bundled packages, including monthly service fees and activation fees from contract subscribers, the Company accounts for revenue from individual goods and services separately if they are distinct – i.e. if a good or service can be distinguished from other components of the bundled package and if a customer can benefit from it separately. The consideration for the bundled packages comprises cash flows from customers, expected to be received in relation to goods and services delivered over the contract term. The consideration (transaction price) is net of any discounts and credits and is allocated between separate performance obligations in a bundle based on their relative stand-alone selling prices.

 

The Company identifies primary performance obligations as being supply of connectivity services (Broadband, Fibre, Ethernet, etc.), and the supply of hardware (routers, etc.). Stand-alone selling prices for connectivity services and hardware are based on individual pricing where such observable prices exist. Otherwise such prices are defined in reference to their assessed market value or a cost plus a margin approach.

 

The timing of satisfaction of performance obligations is summarised below:

 

Additional services, such as usage, result in revenue recognition only once the customer utilises the service.

 

The level of variable consideration in the form of tiered pricing arrangements and the impact of any financing component within contracts with customers has been assessed and concluded to be immaterial. The Company does not have any material obligations in respect of returns, refunds or warranties.

The probability of collectability is assessed across the Company and where collectability is identified not to be probable, revenue is recognised only when the cash is received from the customer.

 

The recognition of revenue results in the recognition of contract assets (e.g., where more revenue has been recognised upfront in relation to hardware compared to actual cash consideration received for the hardware).

 

Contract assets is unwound over the related contract term.

 

Accrued income is recognised when revenue has been earned but not yet received or invoiced by the end of the accounting period. This typically includes services rendered, such as phone calls take, for which invoice will be raised in future months. Accrued income is assessed for impairment based on lifetime expected credit losses (ECL), in accordance with IFRS 9.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 19 -
1.5
Goodwill

Goodwill arose in the excess of the consideration given over the fair value of the identifiable assets and liabilities acquired. The excess is recognised initially as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

 

Determining whether goodwill is impaired requires estimation of the value in use of the cash generating units (CGUs) to which the Goodwill is allocated. The Company has one CGU being the Direct channel.

 

Goodwill is not subject to amortisation but is tested annually for impairment or whenever there is an indication that the asset may be impaired.

1.6
Intangible assets other than goodwill

Other intangible assets

Intangible assets acquired in a business combination and recognised separately from goodwill are recognised initially at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses.

 

Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

 

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.

 

At each reporting date, the Company reviews the carrying amounts of its 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 to determine the extent of the impairment loss (if any).

 

Customer relationships are amortised over 8 years based on a straight-line basis

 

Assets under construction

Assets under construction (AUC) are intangible assets that are in the process of being built or developed and are not yet ready for their intended use. The Company are in the process of building a new CRM system for use in the business. Costs directly attributable to the construction or development of an asset are capitalised as AUC. These costs include, but are not limited to, invoices for materials, labour, and services directly related to the project. AUC are measured at cost. The cost includes all expenditures directly attributable to bringing the asset to its intended use. Upon completion, AUC are transferred to the appropriate fixed asset category and depreciated over their useful life. The transfer occurs when the asset is ready for its intended use.

1.7
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost, 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:

Right of use asset
Over the life of the lease
Routers
2 years

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.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 20 -
1.8
Impairment of tangible and intangible assets

At each reporting 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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.

1.9
Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises purchase price of the inventory and, where applicable, any costs that have been incurred in bringing the inventories to their present location and condition. Cost is calculated on a FIFO basis. Net realisable value represents the estimated selling price, less all estimated costs to be incurred in marketing, selling and distribution.

 

A provision is made for obsolete items where appropriate, taking into account technical obsolescence and the level of technical supplier support.

1.10
Cash and cash equivalents

Cash and cash equivalents includes cash on hand and deposits held at call with financial institutions.

1.11
Financial assets

Financial assets, in respect of financial instruments, are recognised in the Company balance sheet when the Company becomes a party to the contractual provisions of the instrument. Financial assets are classified into specified categories depending on the nature and purpose of the financial assets.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised costs where the objective is to hold these assets in order to collect contractual cash flows. They arise principally from the provision of services to customers (e.g. trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary. The Company hold no material financial assets that are held as anything other than at amortised cost.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 21 -
Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

 

The Company assess on a forward-looking basis the expected credit loss associated with its financial assets. The impairment methodology depends on whether there has been a significant increase in credit risk. Impairment is determined using an expected credit loss impairment model which is applied to all financial assets measured at amortised cost.

 

As permitted under IFRS 9 Financial instruments, the Company has applied the simplified approach to calculate the expected credit loss allowance for trade receivables and contract assets recognised under IFRS 15 Revenue from Contracts with Customers. Under the simplified approach, the expected credit loss is always equal to the lifetime expected credit loss.

 

The Company recognises lifetime expected credit losses for trade receivables, contract assets and lease receivables where relevant. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. Under the ‘expected credit loss’ model, the Company analyses the risk profile of these financial assets based on past experience and an analysis of the receivable’s current financial position, potential for a default event to occur, adjusted for specific factors, general economic conditions of the industry in which the receivables operate and assessment of both the current and the forecast direction of conditions at the reporting date.

 

The Company writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings. None of the trade receivables that have been written off is subject to enforcement activities.

Derecognition of financial assets

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.

Amounts receivable from suppliers (included within trade and other receivables)

Occasionally, the Company enters into agreements with certain suppliers for rebates on the cost of goods purchased. Rebates are recognised in the appropriate financial year to which they relate.

1.12
Financial liabilities

Financial liabilities at amortised cost

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 liabilities. They are subsequently measured at amortised cost.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the Company’s contractual obligations are extinguished.

1.13
Equity instruments

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.

1.14
Employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

 

Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

 

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 22 -
1.15
Retirement benefits

Payments to defined contribution retirement benefit plans are charged as an expense when employees have rendered service entitling them to the contributions.

1.16
Leases

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.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 23 -
1.17

Contract costs

Contract costs eligible for capitalisation as incremental costs of obtaining a contract comprise sales commissions paid to retail partners and to sales agents which can be directly attributed to an acquired or retained contract,. In all other cases subscriber acquisition and retention costs are expensed when incurred. Contract costs are capitalised in the month of service activation if the Company expects to recover those costs.

 

Costs directly incurred in fulfilling a contract with a customer, which largely comprise the cost of connecting a customer to the Company’s network so that the connectivity services can be provided are recognised as an asset.

 

Capitalised commission and connection costs are amortised on a systematic basis that is consistent with the transfer to the customer of the services when the related revenues are recognised, being the anticipated customer tenure. The Company has determined that average customer tenure (50–88 months for broadband and up to 120 months for Ethernet) is an appropriate period to amortise cost to obtain and fulfil a contract. This reflects the fact that incremental commissions are typically not paid on customer renewals or extensions. Likewise, connection costs support a customer over their tenure and are not required again because a customer renews or goes beyond their minimum contract term. These costs are accounted for on a portfolio basis, and are reviewed for impairment, taking into account the Company’s customer life-time value analysis.

1.18

Contract liabilities

Contract liabilities are recognised where connection revenues received from the customer upfront are deferred over the contract term.

2
Adoption of new and revised standards and changes in accounting policies

In the current year a number of amendments to IFRS issued by the International Accounting Standards Board ("IASB") and endorsed by the UK Endorsement Board became mandatorily effective for an accounting period that begins on or after 1 January 2024, there are no amendments that have a material effect on the financial statements of the Company.

IFRS 16 - Effective 1 January 2024
Sale and leaseback transactions - The amendments introduce a new accounting model for vairance payments and will require seller-leases to reassess and potentially restate sale-and-leaseback transactions entered into since 2019.
IAS 1 - Effective 1 January 2024
Clarifies that classification of liabilities and current or non-current are based on an entity's rights to defer settlement for at least 12 months at the reporting date.
IAS 1 - Effective 1 January 2024
Specifies that only covenants that an entity is required to comply with on or before the end of the reporting period affect the entity's right to defer settlement for at least 12 months after the reporting date.
IAS 7/IFRS 7 - Effective 1 January 2024
Requires an entity to disclose qualitative and quantitative information about its supplier finance arrangements such as terms and conditions, including extended payment terms and security or guarantees provided.
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
2
Adoption of new and revised standards and changes in accounting policies
(Continued)
- 24 -
Standards which are in issue but not yet effective

The following UK-adopted IFRSs have been issued but have not been applied by the Group in these consolidated financial statements. Their adoption is not expected to have a material effect on the financial statements unless otherwise indicated:

 

IAS 21 - Effective 1 January 2025
Lack of Exchangeability – companies will need to provide new disclosures to help users assess the impact of using an estimated exchange rate on the financial statements for currencies that lack exchangeability.

The Group does not yet expect to early adopt any of the above standards, amendments or interpretations. The Group has not yet completed its evaluation of the effect of adopting these standards.

3
Critical accounting estimates and judgements

The preparation of financial statements requires management to exercise judgement in applying the Company’s accounting policies. Estimates and assumptions used in the preparation of the financial statements are continually reviewed and revised as necessary. Whilst every effort is made to ensure that such estimates and assumptions are reasonable, by their nature they are uncertain, and as such changes in estimates and assumptions may have a material impact.

Critical judgements
Recognition of revenue

The application of IFRS 15 requires the Company to make critical judgements that affect the determination of the amount and timing of revenue and costs from contracts with customers. These include:

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
3
Critical accounting estimates and judgements
(Continued)
- 25 -
Key sources of estimation uncertainty
Recognition of revenue

The application of IFRS 15 requires the Company to make certain estimates that affect the determination of the amount and timing of revenue and costs from contracts with customers. These include:

 

Contract costs and customer life-time value analysis

Contract costs are amortised on a systematic basis, consistent with the pattern of transfer of service to which the assets relates. The Company has determined this to be over the expected duration of the customer tenure. The estimate of the expected average duration of customer tenure is based on customer churn relative to the size of the customer base and is currently determined to be 50–120 months depending on the product and channel. However, such rates are subject to fluctuation and may be impacted by future events such as new product launches, an increase in competition in the market or wider macroeconomic factors. A lower average customer tenure would mean that deferred costs are amortised over a shorter period of time and could result in an impairment of the asset in lower profitability channels. A six-month reduction in customer tenure which is considered a reasonably possible movement would not result in an impairment charge, but deferred costs associated with one channel would then have limited headroom and therefore could be subject to impairment at tenures below this. If there were to be a six month reduction in customer tenure, an impairment would be recognised of £9k.

 

Judgement has been applied to determine that the best estimate for the anticipated contract length is based on customer tenure based on churn relative to the size of the customer base, rather than initial contracted term. Initial contracts tend to be between 12-36 months, however, with renewals and contract extensions actual anticipated contract duration is c. 50-120 months. If the costs were to be amortised over the average initial term, the carrying value of the contract costs as at 31 December 2024 would be £2,490k (Feb-2024: £1,776k) compared to £4,559k (Feb-2024: £3,653k) reported in the Statement of financial position. The directors do not consider the initial term to be indicative of the period of time over which the Company would be generating future cashflows, and rather the best estimate for the period these costs are expected to be recovered by generating or enhancing the resources of the entity is over the average customer tenure.

Carrying value of intangible asset

The intangible asset relating to customer relationships arising on the acquisition of the trade and assets of the B2B Direct business from TalkTalk Communications Limited is held on the balance sheet and amortised over its useful economic life of 8 years. Indicators of impairment may result in the performance of impairment testing, where the recoverable amount of the customer relationships will be compared to the value in use of the customers. Value in use is based on projected estimated future cash flows, prepared based on budgets and a terminal value. Key assumptions used to determine value in use represent management’s assessment of future trends and are based on a discounted cash flow approach. The recoverable amount is sensitive to the discount rate used for the discounted cash flow (“DCF”) model as well as the expected future cash inflows and the growth rate used for extrapolation purposes. Where a reduction in estimated future economic benefits occurs, or the expected useful economic life falls below 8 years, both of which require a degree of subjectivity on the part of management, or the WACC increases, it could result in a material impairment charge.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
3
Critical accounting estimates and judgements
(Continued)
- 26 -
Consideration of impairment of goodwill

The impairment of goodwill is evaluated annually using a detailed estimation process. The basis for these consideration estimates includes:

 

1. Value in Use Calculation: This involves projecting future cash flows from the business, derived from profit and loss (P&L) forecasts. These projections are discounted to their present value using an appropriate discount rate.

 

2. Scenario Analysis: To ensure a robust assessment, multiple scenarios are considered:

- Base Case: Reflects the most likely outcome based on current business conditions and forecasts.

- Worst Case: Assumes adverse conditions that could negatively impact the business.

- Best Case: Considers favourable conditions that could enhance business performance.

 

3. Review of transactions data: The present value calculations were reviewed against the demerger value for a reasonableness check. The transaction price point adopted as the Fair Value which aligns to the Value in Use.

 

4. Comparison with Carrying Amount: The calculated value in use is compared with the carrying amount of goodwill on the balance sheet. If the carrying amount exceeds the value in use, an impairment loss is recognised.

 

5. Assumptions and Judgments: Key assumptions and judgments used in the estimation process, such as growth rates, discount rates, and economic conditions, are documented and reviewed to ensure they are reasonable and supportable.

 

This policy ensures that the carrying amount of goodwill is not overstated and provides a comprehensive view of the business’s financial health. Following applying the judgements and estimates as discussed above, an impairment has been recognised in the period of £nil (Feb 2024: £25,542k). For further detail please see Notes 9 and 21.

Recognition and measurement of assets under construction

In preparing these financial statements, management has made significant judgments in recognising and measuring assets under construction. These judgments include determining the point at which an asset is considered to be in the location and condition necessary for it to be capable of operating as intended. Costs directly attributable to the construction, such as materials, labour, and overheads, have been capitalised. Management has also exercised judgment in identifying and excluding costs that do not contribute to bringing the asset to its intended use. Furthermore, impairment assessments are conducted regularly to ensure that the carrying amount of assets under construction does not exceed their recoverable amount.

4
Revenue

All revenue generated by the Company relates to services provided to customers.

 

Revenue streams are analysed as follows

31 December 2024
29 February  2024
£'000
£'000
Revenue analysed by class of business
Broadband
26,569
34,248
Data
30,379
34,958
Voice
10,769
15,397
67,717
84,603

All revenue arises within the UK.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 27 -
5
Expenses
31 December 2024
29 February  2024
£'000
£'000
Cost of sales
Direct costs
41,382
53,928
Administrative expenses
Wages and salaries
8,214
8,711
Social security costs
957
937
Staff pension costs defined contribution
381
434
Redundancy costs - staff
246
39
Directors' remuneration
598
342
Directors' pension costs - defined contribution scheme
21
14
Commissions payable
53
-
TSA
1,226
2,610
Rent re operating leases
215
185
Legal and professional fees
226
-
Non audit remuneration paid to auditors
16
-
Audit fees
120
152
Expected credit loss recognised on trade receivables
335
377
Advertising
1,371
1,105
Other expenses
3,339
5,907
Outsources Telesales
1,382
1,862
Contact Centres
1,778
1,390
Amortisation
7,438
8,925
Depreciation
174
-
Impairment losses
-
25,542
Profit or loss on sale of tangible assets (non exceptional)
24
-
Corporate Recharge
-
2,044
Brands Recharge
-
1,496
28,114
62,072
6
Auditor's remuneration
31 December 2024
29 February  2024
Fees payable to the company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the company
120
152
For other services
Other services
16
-
0
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 28 -
7
Employees

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

31 December 2024
29 February  2024
Number
Number
Administration
51
31
Sales and Customer Management
151
158
Total
202
189

Their aggregate remuneration comprised:

31 December 2024
29 February  2024
£'000
£'000
Wages and salaries
8,812
9,053
Social security costs
957
937
Pension costs
402
448
10,171
10,438

Redundancy payments in the period amount to £246k (Feb 2024: £39k).

8
Directors' remuneration
31 December 2024
29 February  2024
£'000
£'000
Remuneration for qualifying services
598
342
Company pension contributions to defined contribution schemes
21
14
619
356

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (February 2024 - 1).

 

The directors include all key management personnel. There are no key management personnel that are not directors.

Remuneration disclosed above include the following amounts paid to the highest paid director:
31 December 2024
29 February  2024
£'000
£'000
Remuneration for qualifying services
427
271
Company pension contributions to defined contribution schemes
12
14
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 29 -
9
Investment income
31 December 2024
29 February  2024
£'000
£'000
Interest income
Financial instruments measured at amortised cost:
Bank deposits
125
102
Income above relates to assets held at amortised cost, unless stated otherwise.
10
Finance costs
31 December 2024
29 February  2024
£'000
£'000
Interest on bank overdrafts and loans
3,574
-
Interest on lease liabilities
20
-
Other interest payable
7,634
12,776
Total interest expense
11,228
12,776
11
Income tax expense

The principal differences between the tax charge and the amount calculated by applying a blended rate of UK corporation tax of 25% (February 2024: 24.5%) to the profit/(loss) before taxation are as follows:

The charge for the period can be reconciled to the loss per the income statement as follows:

31 December 2024
29 February  2024
£'000
£'000
Loss before taxation
(12,882)
(44,071)
Expected tax credit based on a corporation tax rate of 25.00% (29 February  2024: 24.50%)
(3,221)
(10,797)
Effect of expenses not deductible in determining taxable profit
30
8,442
Group relief
1,040
-
0
Amortisation on assets not qualifying for tax allowances
1,829
-
0
Movement in deferred tax not recognised
301
2,355
Other adjustments
21
-
0
Taxation charge for the period
-
-
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
11
Income tax expense
(Continued)
- 30 -

The blended rate of UK corporation tax in the prior period of 24.5% is comprised of the standard rate of UK corporation tax of 19% up until 31 March 2023 and the standard rate of UK corporation tax of 25% from 1 April 2023.

 

As at 31 December 2024, the Company had unrecognised deferred tax assets of £4,168k in respect of losses (Feb 2024: £3,867k). These have not been recognised as there is insufficient evidence that there will be suitable taxable profits against which these can be recovered.

12
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

31 December 2024
29 February  2024
£'000
£'000
In respect of:
Goodwill
-
0
25,542
Recognised in:
Administrative expenses
-
25,542

Impairment losses have been recognised within the statement of comprehensive income against goodwill. Goodwill is held in the accounts at cost and reviewed annually for impairment. Following a review of the cash flow forecasts, a thorough analysis of the Weighted Average Cost of Capital (WACC) calculations, including the cost of debt, and an assessment of market trends, it was determined that there is an impairment to goodwill. Impairment has been recognised against goodwill of £nil (Feb 2024: £25,542k).

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 31 -
13
Intangible assets
Goodwill
Customer relationship
Assets under construction
Total
£'000
£'000
£'000
£'000
Cost
At 1 March 2023
100,461
71,400
-
0
171,861
At 29 February 2024
100,461
71,400
-
0
171,861
Additions - internally generated
-
0
-
0
986
986
At 31 December 2024
100,461
71,400
986
172,847
Amortisation and impairment
At 1 March 2023
-
0
42,394
-
42,394
Charge for the year
-
0
8,925
-
8,925
Impairment loss
25,542
-
-
25,542
At 29 February 2024
25,542
51,319
-
76,861
Charge for the year
-
0
7,438
-
7,438
At 31 December 2024
25,542
58,757
-
84,299
Carrying amount
At 31 December 2024
74,919
12,643
986
88,548
At 29 February 2024
74,919
20,081
-
95,000
At 28 February 2023
100,461
29,006
-
129,467

More information on impairment movements in the period is given in note 12.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 32 -
14
Property, plant and equipment
Right of use asset
Routers
Total
£'000
£'000
£'000
Cost
At 1 March 2023 and 1 March 2024
-
0
-
0
-
Additions
389
263
652
Disposals
-
0
(27)
(27)
At 31 December 2024
389
236
625
Accumulated depreciation and impairment
At 1 March 2023 and 1 March 2024
-
0
-
0
-
0
Charge for the period
123
51
174
Eliminated on disposal
-
0
(2)
(2)
At 31 December 2024
123
49
172
Carrying amount
At 31 December 2024
266
187
453
15
Inventories
31 December 2024
29 February  2024
£'000
£'000
Finished goods
12
204
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 33 -
16
Financial instruments
The book value of the Company's financial assets and liabilities are as follows:
31 December 2024
29 February  2024
£'000
£'000
Current trade and other receivables
5,001
8,692
Cash and cash equivalents
9,412
9,480
Contract assets
267
665
Financial assets at amortised cost
14,680
18,837
Current trade and other payables
65,110
107,708
Loans from related parties
-
64,424
Bank loans
49,227
-
Financial liabilities at amortised cost
114,337
172,132
17
Contracts with customers
31 December 2024
29 February  2024
29 February  2024
Period end
Period end
Period start
£'000
£'000
£'000
Contracts in progress
Contract assets
267
665
444
Contract costs recoverable
4,559
3,653
2,797
Contract liabilities
(1,076)
(1,134)
(996)

Revenue has been recognised in the statement of comprehensive income for the period which was included within contract liabilities at the beginning of the period of £49k (Feb 2024: £599k).

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 34 -
18
Trade and other receivables
31 December 2024
29 February  2024
£'000
£'000
Trade receivables
4,728
8,588
Expected credit losses
(650)
(858)
4,078
7,730
Amounts owed by fellow group undertakings
545
20
Other receivables
378
352
Prepayments and accrued income
4,705
2,987
9,706
11,089

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

19
Trade and other payables
31 December 2024
29 February  2024
£'000
£'000
Trade payables
3,288
711
Amounts owed to fellow group undertakings
53,911
99,586
Accruals
7,631
6,872
Social security and other taxation
2,839
4,106
Other payables
280
539
67,949
111,814

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

20
Deferred revenue
31 December 2024
29 February  2024
£'000
£'000
Arising from contracts with customers
5,414
5,360
All deferred revenues are expected to be settled within 12 months from the reporting date.
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 35 -
21
Borrowings
Current
Non-current
31 December 2024
29 February  2024
31 December 2024
29 February  2024
£'000
£'000
£'000
£'000
Borrowings held at amortised cost:
Bank loans
-
-
49,227
-
Loans from parent undertakings
53,911
99,586
-
-
Loans from related parties
-
64,424
-
-

Loans from related parties relates to a loan note. No interest is payable on the Loan Note save to the extent agreed from time to time between the Company and the Lender. The Loan Note is repayable and redeemable (in whole or any part) on demand, save as agreed between the Company and the Lender. On 10 December 2024, the Lender released the loan note and issued a single ordinary share fully paid of £1 in the capital of the Company therefore this value was converted to Share Premium. The Lender transferred that share to TFP Telecoms Limited, the entity who purchased the Company during the year.

 

On 9 August 2024, the Company entered into a loan agreement with Kartesia with available facilities of £72,500k. The company have drawndown on one of the available facilities as at 31 December 2024, for £51,000k. Interest is charged on the loan at 5.5% plus the compound reference rate for that day. PIK interest is also payable at 3.5%. The termination date of the loan is 6 years from the date of the agreement, being 8 August 2030. The amount payable at the year end is £49,227k. There are fixed and floating charges over the Company's current and future land and intellectual property owned by the Company in favour of the lenders.

 

On 9 August 2024, the Company entered into a loan agreement with their parent undertakings, TFP Telecoms Limited. The agreement confirmed that all existing intercompany loans and balances outstanding would, with effect from the date of the agreement, be treated as an advance under the facility. Interest shall accrue on the facility as may be agreed in writing between the Company and their parent undertakings. The balance is repayable on demand.

22
Lease liabilities
31 December 2024
29 February  2024
Maturity analysis
£'000
£'000
Within one year
320
-
In two to five years
107
-
Total undiscounted liabilities
427
-
Future finance charges and other adjustments
(36)
-
Lease liabilities in the financial statements
391
-
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
22
Lease liabilities
(Continued)
- 36 -

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:

31 December 2024
29 February  2024
£'000
£'000
Current liabilities
293
-
0
Non-current liabilities
98
-
0
391
-
31 December 2024
29 February  2024
Amounts recognised in profit or loss include the following:
£'000
£'000
Interest on lease liabilities
20
-

The Company entered into lease agreements in the year in relation to office space.

 

For details of the Company's right of use assets arising under the lease agreements in place, please see note 14.

 

Please also see note 34 for summary of the total cash outflows for the leases.

Other leasing information is included in note 28.
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 37 -
23
Market risk
Market risk management

 

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company’s market risk arises from open positions in interest bearing liabilities, to the extend they are exposed to general and specific market movements. Management sets limits on the exposure to interest rate risk that may be acceptable, however, the use of this approach does not prevent losses outside of these limits in the event of more significant market movements.

 

Sensitivities to market risks included below are based on a change in one factor while holding all other factors constant. In practice, this is unlikely to occur, and changes in some of the factors may be correlated.

 

The Company’s exposure to market price risk is comprised mainly of impairment against the Company’s intangible asset, including goodwill, which is inherently difficult to value due to the individual nature of the assets. As a result, judgements are subject to uncertainty. There are no assurances that estimates resulting from the valuation process will reflect any actual sales price.

 

The Company’s activities expose it to market risk (such as currency risk and interest rate risk). The Company does not trade or speculate in any financial instruments.

 

Sensitivities in relation to IFRS 13

Goodwill has been reviewed for impairment through review of discounted cash flow forecasts "DCF". The following sensitivities have been reviewed, comparing headroom on the DCF, or possible impairment:

 

 

Percentage increase/ (decrease)

 

Headroom/ (decrease) in goodwill £’000

 

 

 

 

Increase in WACC (percentage points)

1.3

(£8,000)

Long term growth rate nil

n/a

 

£9,000

No growth in EBITDA in each of the next 3 years

n/a

 

£3,000

 

The fair value measurement is classified as Level 3 (Feb 2024: Level 3), derived from valuation techniques that include inputs for the liability that are not based on observable market data.

 

Foreign exchange risk

TTBD has only a single supplier who bills in foreign currency. These bills are sensitive to movements in foreign exchange rates; this sensitivity can be analysed in comparison to year-end rates. There would be no material impact of a 10% movement in the UK Sterling/Euro or UK Sterling/USD exchange rate on either the income statement or other equity.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
23
Market risk
(Continued)
- 38 -
Interest rate risk

The Company’s interest rate risk arises primarily from cash, cash equivalents and borrowings, all of which are at either fixed or fixed plus floating rates of interest which expose the Company to cash flow interest rate risk. These floating rates are linked to SONIA. Future cash flows arising from these financial instruments depend on interest rates and periods for each loan or rollover.

 

Interest rates on borrowings directly impact the cost of debt for a company. When interest rates rise, the cost of borrowing increases, leading to higher interest expenses. This relationship is crucial because the cost of debt is a significant component of a company’s overall cost of capital.

 

Impact on Weighted Average Cost of Capital (WACC) - When interest rates increase, the cost of debt rises, which in turn increases the WACC. A higher WACC indicates that the company faces higher costs to finance its operations, which can affect investment decisions and overall financial strategy.

 

Goodwill and Other Intangible Asset Impairment - Goodwill and other intangible assets are subject to impairment testing, which involves comparing the carrying value of these assets to their fair value. If the carrying value exceeds the fair value, an impairment loss is recognized.

 

Higher interest rates can affect impairment considerations in several ways:

 

- Discount Rates: Higher interest rates typically lead to higher discount rates used in impairment testing. This can reduce the present value of future cash flows, increasing the likelihood of impairment.

 

- Cost of Capital: As WACC increases due to higher interest rates, the hurdle rate for investments also rises. This can lead to lower valuations for cash-generating units, potentially triggering impairments.

 

- Economic Conditions: Rising interest rates can signal tighter economic conditions, which might reduce expected future cash flows from intangible assets, further increasing impairment risk.

 

The interest rate profile of the Company’s interest bearing financial instruments is as follows:

31 December 2024
29 February  2024
£'000
£'000
Fixed interest-bearing items
Financial assets
9,412
9,480
Financial liabilities
-
-
9,412
9,480
Fixed plus floating interest bearing items
Financial liabilities
103,138
99,586
103,138
99,586
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
23
Market risk
(Continued)
- 39 -

Fair value hierarchy

The fair value hierarchy levels are as follows:

 

Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities

 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

 

Level 3 - Inputs for the assets or liability that are not based on observable market data (unobservable inputs).

 

There have been no transfers between Levels 1, 2 and 3 during the year.

24
Liquidity risk

The following table details the remaining contractual maturity for the company's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the company may be required to pay.

Less than 12 months
5+ years
Total
£'000
£'000
£'000
At 29 February 2024
Trade payables
711
-
711
Accruals
6,872
-
6,872
Other payables
539
-
539
Amounts owed to Group undertakings
99,586
-
99,586
Borrowings
64,424
-
64,424
172,132
-
172,132
At 31 December 2024
Trade payables
3,288
-
3,288
Accruals
7,631
-
7,631
Other payables
280
-
280
Amounts owed to Group undertakings
53,911
-
53,911
Bank loans
-
49,227
49,227
65,110
49,227
114,337
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
24
Liquidity risk
(Continued)
- 40 -
Liquidity risk management

The Company manages its exposure to liquidity risk by regularly reviewing the long and short term cash flow projections for the business against facilities and other resources available to it. Headroom is assessed based on historical experience as well as by assessing current business risks, availability and renewal of future facilities.

 

As of the year-end, the Company had outstanding liabilities of £53,911k (Feb 2024: £99,586k) to its parent company, TFP Telecoms.

 

During the year, the company entered into a new loan with Kartesia, in order to repay a portion of the Ares bridging loan, which carries an interest rate that is 3% lower than the loans held in the parent company. The balance outstanding at the year end being £49,227k.

 

During the year, an amendment and restatement deed was signed between the Company and the shareholders in respect of loans outstanding, and the interest that had been accumulating on shareholder loans has been reduced by 7% (to a margin rate of 10%), with this reduction backdated to the inception of the loan.

 

25
Credit risk

The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the Company's maximum exposure to credit risk. Credit risk is the possibility that the Company may suffer a loss from the failure of one of its counterparties to meet their contractual obligations. The Company's exposure to credit risk is regularly monitored against a reasonable approximation of future changes. Debt is spread amongst banks and shareholder loans, all of which have short- or long-term credit ratings appropriate to TTBD's exposures.

 

Trade receivables primarily comprise balances due from fixed line customers and expected credit losses are made under IFRS 9 for any receivables that are considered irrecoverable. At 31 December 2024, the TTBD's maximum exposure to credit risk arises from the carrying amount of the trade receivables as stated in the statement of financial position. TTBD has no externally imposed capital requirements. Working capital is managed through careful monitoring of short-term cash flow.

Except as detailed below, the carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the company's maximum exposure to credit risk.

Maximum credit risk
31 December
29 February
2024
2024
£'000
£'000
Trade and other receivables
4,729
8,588
Cash and cash equivalents
9,412
9,480

The company does not hold any collateral or other credit enhancements to cover this credit risk.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
25
Credit risk
(Continued)
- 41 -

Impairment losses

The movement in the allowance for impairment losses in respect of trade receivables during the year was as follows:

31 December
29 February
2024
2024
£'000
£'000
At beginning of the year
(858)
(1,021)
Impairment losses recognised
(127)
(858)
Bad debt written off
335
1,021
At end of year
(650)
(858)
26
Capital risk management

The capital structure of the Company consists of debt, which includes bank facilities and shareholder loans. The Company continues to review its funding and capital structure with the objectives of diversifying sources and managing both the average tenor and interest cost. The Company also assesses the risk profile of its trade receivables based upon past experience and an analysis of the receivables, current financial position, adjusted for specific factors, general economic conditions of the industry in which the receivables operate and assessment of both the current and the forecast direction of conditions at the reporting date. The Company has performed the calculation of expected credit loss and rebutted the assumption under IFRS 9 that all debts over 90 days should have a credit allowance.

27
Retirement benefit schemes
31 December 2024
29 February  2024
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
402
448

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.

28
Other leasing information
Lessee

The company had commitments related to short-term leases at the year end of £402,998 (Feb'24: £686,080).

 

As at 31 December 2024 the Company also have short term commitments relating to use of live connection lines on short-term lease. There are no fixed payments but these are based on type of quantity of usage. The expenses in the period relating to this lease was £54,548,186 (Feb'24: £41,828,076).

Information relating to lease liabilities is included in note 22.
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 42 -
29
Share premium account
31 December 2024
29 February  2024
£'000
£'000
At the beginning of the period
-
0
-
0
Issue of new shares
64,423
-
At the end of the period
64,423
-
0

On 10 December 2024, TalkTalk Communications Limited irrevocably released the retained debt loan note of £64,423,448 and issued one fully paid ordinary share of £1 in the Company. Immediately following the issue of the share, the share was transferred to TFP Telecoms Limited, with the retained debt loan note converted to share premium in the Company.

30
Financial commitments, guarantees and contingent liabilities

There are fixed and floating charges over the Company's current and future land and intellectual property owned by the Company, as well as over the undertaking of the Company, in favour of the lenders of the immediate parent company.

 

The company has committed amounts of £3,985k relating to the build of a new CRM system.

31
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel, including directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
31
Related party transactions
(Continued)
- 43 -
Other transactions with related parties

The Company procures network services and transitional services from TalkTalk Communications Limited (which is a related party of the Company as they are ultimately owned by the major shareholders of the ultimate parent company of the Company).

 

During the period the company entered into the following transactions with related parties:

31 December 2024
29 February  2024
£'000
£'000
Transaction income/(expenditure) in the period
Customer management
297
-
Network services
(34,812)
(51,927)
Brand and corporate recharges
-
(5,901)
Interest accrued on intercompany balnace
-
0
(3,531)
Transitional services
(1,505)
(1,601)
(36,020)
(62,960)
Amounts owed at the year end
Receivable
136
-
Payable
(4,203)
(4,336)
Borrowings
-
(64,424)
(4,067)
(68,760)
The company owed amounts to TalkTalk Communications Limited of £nil (Feb 2024: £64,424k), included within borrowings relating to a loan note. The loan note was irrevocably release on 10 December 2024 for the issue of one fully paid ordinary share of £1 in the Company. Immediately following the issue of the share, the share was transferred to TFP Telecoms Limited with the retained debt loan note coverted to share premium in the Company.
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
31
Related party transactions
(Continued)
- 44 -

There are additional related parties for which transactions have entered into in the year. Please see summary below:

31 December 2024
29 February  2024
£'000
£'000
Virtual 1 Limited
Network services
(589)
-
Amounts owed at the year end
Payable
(299)
-
Tipicall Limited
Transaction income/(expenditure) in the period
Network services
(56)
-
Amounts owed at the year end
Payable
(56)
-
TalkTalk Telecom Limited
Transaction income/(expenditure) in the period
Sub-let rent receivable
28
-
Amounts owed at the year end
Receivable
101
-
Payable
(483)
-
(382)
Other information

The Company made repayment of amounts owed to its parent company of £55,525k (Feb 2024: £4,659k), including interest, relating to principal and interest repayment of the loan the parent company holds with Ares and ultimate shareholders. The Company received advances from its parent company for amounts of £2,216k (Feb 2024: £95,000k) in the period. Interest was accrued on the loans of £7,634k (Feb 2024: £7,069k) and arrangement fees of £nil (Feb 2024: £2,176k). At the year end, the Company owed amounts of £53,911k (Feb 2024: £99,586k) to its parent company.

32
Ultimate parent undertaking and controlling party

The company is a direct subsidiary of TFP Telecoms Limited. The ultimate parent undertaking and controlling party is TFP Telecoms Limited, incorporated in England and Wales.

 

The smallest and largest group for which the results of the Company are included in are the consolidated accounts of TFP Telecoms, which are publicly available from Companies House.

 

The principal place of business and registered address of TFP Telecoms Limited is at 146 Freston Road, London, England, W10 6TR.

TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 45 -
33
Cash generated from/(absorbed by) operations
31 December 2024
29 February  2024
£'000
£'000
Loss for the period before taxation
(12,882)
(44,071)
Adjustments for:
Finance costs
11,228
12,776
Investment income
(125)
(102)
Loss on disposal of property, plant and equipment
24
-
Amortisation and impairment of intangible assets
7,438
34,467
Depreciation and impairment of property, plant and equipment
174
-
Movements in working capital:
Decrease/(increase) in inventories
192
(204)
Increase in contract assets
(508)
(1,077)
Decrease/(increase) in trade and other receivables
1,383
(2,788)
(Decrease)/increase in contract liabilities
(58)
138
Decrease in trade and other payables
(1,245)
(80,117)
Cash generated from/(absorbed by) operations
5,621
(80,978)
TALKTALK BUSINESS DIRECT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2024
- 46 -
34
Changes in liabilities arising from financing activities
1 March 2024
Cash flows
Arrangement fees on loan
On initial recognition under IFRS 16
Waive of debt for issue of shares
Income statement - interest payable on balance
Cash flows - principal and interest payments
31 December 2024
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Borrowings excluding overdrafts
(64,424)
-
-
64,424
-
-
-
Obligations under finance leases
-
-
-
(389)
(162)
(20)
180
(391)
Amounts owed to parent undertakings
(99,586)
(2,216)
-
-
-
(7,634)
55,525
(53,911)
Bank loans
-
(51,000)
2,477
-
-
(2,800)
2,096
(49,227)
(164,010)
(53,216)
2,477
(389)
64,262
(10,454)
57,801
(103,529)
1 March 2023
Cash flows
On initial recognition under IFRS 16
New finance leases
Conversion to loan note on sale of business
Income statement - interest payable on balance
Cash flows - principal and interest payments
29 February 2024
Prior year:
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Borrowings excluding overdrafts
-
-
-
-
(64,424)
-
-
(64,424)
Amounts owed to parent undertakings
-
(95,000)
-
-
-
(9,245)
4,659
(99,586)
-
(95,000)
-
-
(64,424)
(9,245)
4,659
(164,010)
2024-12-312024-03-01falsefalseCCH SoftwareCCH Accounts Production 2024.310R KennedyS Dance113472302024-03-012024-12-3111347230bus:Director12024-03-012024-12-3111347230bus:Director22024-03-012024-12-3111347230bus:RegisteredOffice2024-03-012024-12-3111347230bus:Agent12024-03-012024-12-31113472302024-12-3111347230core:ContinuingOperations2024-03-012024-12-31113472302023-03-012024-02-2911347230core:ContinuingOperations2023-03-012024-02-2911347230core:RetainedEarningsAccumulatedLosses2024-03-012024-12-3111347230core:RetainedEarningsAccumulatedLosses2023-03-012024-02-2911347230core:Goodwill2024-12-3111347230core:Goodwill2024-02-2911347230core:IntangibleAssetsOtherThanGoodwill2024-12-3111347230core:IntangibleAssetsOtherThanGoodwill2024-02-29113472302024-02-29113472302024-02-29113472302023-02-2811347230core:CurrentFinancialInstruments2024-12-3111347230core:CurrentFinancialInstruments2024-02-2911347230core:Non-currentFinancialInstruments2024-12-3111347230core:Non-currentFinancialInstruments2024-02-2911347230core:ShareCapital2024-12-3111347230core:ShareCapital2024-02-2911347230core:SharePremium2024-12-3111347230core:SharePremium2024-02-2911347230core:RetainedEarningsAccumulatedLosses2024-12-3111347230core:RetainedEarningsAccumulatedLosses2024-02-2911347230core:SharePremium2023-02-2811347230core:OtherMiscellaneousReserve2023-02-2811347230core:ShareCapital2024-03-012024-12-3111347230core:SharePremium2024-03-012024-12-3111347230core:Goodwill2024-03-012024-12-3111347230core:IntangibleAssetsOtherThanGoodwill2024-03-012024-12-3111347230core:Held-to-maturityFinancialAssets2024-03-012024-12-311134723012024-03-012024-12-311134723012023-03-012024-02-291134723022024-03-012024-12-311134723022023-03-012024-02-291134723032024-03-012024-12-311134723032023-03-012024-02-2911347230core:Goodwill2023-02-2811347230core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2023-02-2811347230core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2023-02-2811347230core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2024-02-2911347230core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2024-02-2911347230core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2024-12-3111347230core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2024-12-3111347230core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2024-03-012024-12-3111347230core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2024-03-012024-12-3111347230core:Goodwill2024-02-2911347230core:Goodwill2023-03-012024-02-2911347230core:LandBuildingscore:LeasedAssetsHeldAsLessee2024-02-2911347230core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2024-02-2911347230core:LandBuildingscore:LeasedAssetsHeldAsLessee2024-12-3111347230core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2024-12-3111347230core:LandBuildingscore:LeasedAssetsHeldAsLessee2024-03-012024-12-3111347230core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2024-03-012024-12-3111347230core:CurrentFinancialInstrumentscore:ValueBeforeAllowanceForImpairmentLoss2024-12-3111347230core:CurrentFinancialInstrumentscore:ValueBeforeAllowanceForImpairmentLoss2024-02-2911347230core:CurrentFinancialInstrumentscore:AllowanceForImpairmentLoss2024-12-3111347230core:CurrentFinancialInstrumentscore:AllowanceForImpairmentLoss2024-02-2911347230core:AllSubsidiariescore:SaleOrPurchaseGoods2024-12-3111347230bus:PrivateLimitedCompanyLtd2024-03-012024-12-3111347230bus:Audited2024-03-012024-12-3111347230bus:FullIFRS2024-03-012024-12-3111347230bus:FullAccounts2024-03-012024-12-31xbrli:purexbrli:sharesiso4217:GBP