The directors present the strategic report for the year ended 31 December 2024.
The principal activity of the group continued to be that of software consultancy, development and training services.
The directors are satisfied with the results for the year. The key financial highlights are as follows:
| 2024 £k | 2023 £k | 2022 £k | 2021 £k |
Turnover | 38,058 | 36,398 | 37,125 | 29,159 |
Gross profit | 12,760 | 10,434 | 5,512 | 4,643 |
Operating profit | 2,154 | 2,300 | 2310 | 2343 |
The group’s principal financial instruments comprise bank balances, trade creditors and trade debtors, the main purpose of which is to finance the group’s operations. Due to the nature of these instruments, there is no exposure to price risk.
In respect of bank balances liquidity risk is managed by ensuring that sufficient funds are held on an instant access basis to cover forthcoming cashflow requirements.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the terms of credit offered to customers and regular monitoring of the amounts outstanding for both time and credit limits. Trade creditors’ liquidity risk is managed by ensuring that sufficient funds are available at the bank to meet amounts that will fall due.
The group’s main trading risk is, as every year, the ongoing identification of organisations who wish to consume our services. The group has a dedicated sales team whose main function is of course to address this risk. A further risk is maintaining the ability to attract and retain talented staff capable of delivering our services effectively.
Softwire remains in a good financial position.
The group is committed to providing equality of opportunity to all employees without discrimination and applying fair and equitable employment policies which ensure entry to and progression within the group.
Appointments are determined solely by application of job criteria and competency.
The quality of the environment in which we live is an important concern for the group and its employees and the group aims to minimise adverse impacts on the environment wherever this is practical. The group complies with all laws and regulations relating to the environment, in many cases exceeding their minimum requirements.
The group has budgeted to offset all carbon emissions it was responsible for during 2024 (including allowances for upstream and downstream emissions) as part of its ongoing Net Zero strategy, focussing on high-quality carbon capture schemes to maximise impact.
The group offers employees the option to purchase carbon offsets from their annual profit share, and a matching scheme for offsets purchased in this way. In total, in 2024 the Softwire group (and its employees via the aforesaid scheme) spent £177,268 on high-quality carbon capture in pursuit of our ambitious Net Zero strategy.
During the year the group made charitable donations in a total amount of around £41,625, and additionally provided paid employee volunteering days for charitable purposes at a cost of £226,901. The company also delivered pro bono work with an equivalent cost of £182,000.
2024 saw Softwire continuing to thrive despite poor market conditions, strengthen our brand and capabilities, and invest in expanding our AI and data-driven services and in service offerings for new market verticals.
We been seeing significantly increased demand for our expertise in AI and machine learning and expect this trend to continue.
We are offering AI-based services to many of our clients and have identified high-value AI use-cases for several of them, resulting in increased client revenue and satisfaction.
We are early adopters of AI tools for software development and are actively seeking out and evaluating new tools and use-cases.
Our AI working group is closely monitoring AI advances and analysis across the industry to ensure we are well-positioned to respond to future developments.
Additionally we are seeking in 2025 to expand our geographical reach into other markets.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 12.
Ordinary dividends were paid amounting to £1,750,000. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group continues to be involved in developing innovative technical and business solutions for our clients. Additionally we have invested time in developing solutions that can be sold to, or in conjunction with our clients, and go to market activity will commence in 2025 for a number of these.
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
The board have taken the following steps to engage with the employees of the company during 2024:
Fortnightly drop-in forum for in office and remote employees presenting a transparent view of the commercial position of the company, high-level summary of board concerns, and Q&A session with the managing director
Quarterly report to all staff relating to the status of project delivery, client happiness and team happiness – including KPIs on improvements to happiness metrics
Elected Employee representatives’ system allowing employees a route for bringing issues or questions to management, including anonymity if preferred – monthly meeting between People and Culture team and employee representatives to discuss recent events
Interventions to improve employee happiness and welfare on difficult client projects, by the provision of additional senior management support and training.
Inclusivity Spotlight series educating employees on their colleagues' needs with regards to topics such as religion, and physical and mental health
Quarterly all-hands company meetings summarising quarterly progress and future plans
Monthly "Executive Summaries" email sent by a different member of the Exec each month, detailing changes and new initiatives around the company
Anonymous suggestion box, well used and actively monitored and interacted with by members of senior leadership
Strengthening affinity networks for women and LGBTQ+ communities
Weekly "team happiness" sampling, thrice-yearly "career satisfaction" survey, annual "employee satisfaction survey" plus all-company requests for feedback on key functions such as L&D, Office Management and Helpdesk
Implemented mandatory 360 feedback process as part of all senior promotion cases
Level up training to support women and minority gender identities moving into leadership roles, plus allyship sessions and anti-discrimination training offered to all employees
Softwire’s people and culture department puts significant time, effort and investment into improving employee experience and ensuring that employee interests are represented in decision making.
Examples of Softwire having regard for employees when making decisions in 2024 include:
Employee control over an allocated budget (via elected representatives) to be spent to improve employee wellbeing, happiness and engagement, with support from a dedicated events manager
Elected employee representatives involved in decision making on CSR matters, charity donations, technology choices, and employee happiness
A culture of openness around decision making, with decisions taken and reasoning being explained in company-wide forums, and feedback included in future decisions.
Customer relationships have continued to be key to our success. Our client strategy organised our clients into three distinct but complimentary portfolios, broadly aligned to industry sectors.
We assigned a Director to own each portfolio with the overall responsibility for client success against KPIs of:
Client loyalty – measured quantitively by repeat business and tenure as well as qualitatively by regular feedback
Staff satisfaction – measured, among other things, by anonymous surveys analysed segmented by each client team
Commercial success – measured by forecasted and actual invoiced work, day rate and margin.
Each key client has a governance team of Portfolio Director, Account Manager, and Capability Principal. They meet the client stakeholders regularly. A key goal is to identify further opportunities to solve business problems for our clients.
All of the above inputs feed into our management information from which we make decisions related to sales, cost of sales and resourcing decisions, as well as account management activity.
Softwire makes use of partners to supply specialist resource in support of our services.
2024 saw Softwire continuing to thrive despite poor market conditions, strengthen our brand and capabilities, and invest in expanding our AI and data-driven services and in service offerings for new market verticals.
We have been seeing significantly increased demand for our expertise in AI and machine learning and expect this trend to continue.
We are offering AI-based services to many of our clients and have identified high-value AI use-cases for several of them, resulting in increased client revenue and satisfaction.
We are early adopters of AI tools for software development and are actively seeking out and evaluating new tools and use-cases.
Our AI working group is closely monitoring AI advances and analysis across the industry to ensure we are well-positioned to respond to future developments.
Additionally we are seeking in 2025 to expand our geographical reach into other markets.
Taylor Associates were appointed auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
As above the group has included in its 2025 budget, purchase of high-quality carbon capture offsets for all 2024 emissions (including upstream and downstream).
In 2024 the group’s position was:
1,333 tonnes of CO2 equivalent emitted, up from 812 in 2022. This increase was primarily due to a number of factors; company growth over time, and significant additional business travel. Additionally, the group contracted with an alternative carbon consultant and consequently the group’s methodology for computing emissions changed accordingly.
Of the above amount 17 tonnes of CO2 equivalent are direct emissions (Scope 1), 7.3 tonnes are emitted indirectly as a result of energy consumption (Scope 2) and the vast majority are other indirect emissions, both upstream and downstream (Scope 3)
Emissions intensity ratio of 0.03 (based on tCO2e / revenue), up from 0.02 in 2023.
Calculated using the methodology outlined in https://www.softwire.com/footprint-report-2024/
Health and Safety
There is an ongoing process to manage health and safety risks within the Group, with a nominated board member accountable for this function, delegated to a Health and Safety Manager and per-site safety officers. Health and Safety matters are reviewed by the board monthly via a standing board agenda item. The board is ultimately accountable for health and safety within the group and for the review and efficacy of the health and safety process (although this cannot be an absolute assurance against incidents).
A risk assessment process ensures that company events undergo risk assessment, overseen by the Health and Safety Manager. In relation to health and safety risks associated with BAU practice (e.g. RSI), the group performs regular desk and ergonomic assessments of employee working conditions and operates an accident book system in all locations.
There were no material health and safety incidents in 2024.
We have audited the financial statements of Softwire Technology Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Identifies and assesses the risks of material misstatement of the entity’s financial statements, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence that is sufficient and appropriate to provide a basis for the auditor’s opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Enquiry of management, those charged with governance around actual and potential litigation and claims.
Reviewing minutes of meetings of those charged with governance.
Reviewing internal audit reports.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,879,525 (2023 - £2,296,713 profit).
Softwire Technology Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 1st Floor Gallery Court, 28 Arcadia Avenue, London, N3 2FG.
The group consists of Softwire Technology Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements incorporate those of Softwire Technology Limited and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised on a 'time and materials' basis.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible 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).
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are measured at transaction price including transaction costs.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors are recognised at transaction.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 6 (2023 - 6).
The actual credit for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 31 December 2024 are as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Includes premium on issue of share capital
Includes the exchange effects on opening reserves.
Includes all current and prior period retained profits and losses.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows: