The directors present the strategic report for the year ended 31 December 2024.
The results for the year and the financial position at the year-end were considered satisfactory by the directors who expect continued revenue growth in the foreseeable future.
The group continues to invest in the business - attracting new customers, enhancing technology and transitioning to in-house capabilities, with less utilisation of third parties. These investments are paying off with continued revenue growth and gross profit enhancement supporting the group's plans to profitability.
The group measures its performance against several key performance indicators (KPIs):
KPIs | 2024 £000 | 2023 £000 |
Revenue | 29,161 | 25,358 |
Gross Profit | 10,527 | 8,966 |
GP % | 36.10% | 35.36% |
EBITDA profits/(losses) | 1,453 | (99) |
Revenue for the year increased by 15% to £29.2m reflecting high customer retention, the roll out of new payrolls from customers acquired in prior years along with additional revenue streams. The group expects this growth to continue having had a very successful 2024, winning new customers and expanding its footprint with existing customers.
As expected, the group has been profitable throughout the year at the EBITDA level. The total loss before tax for the year was £5.3m (2023: £5.5m). These were planned losses with significant growth expenditure being expensed.
Description of principal risks and uncertainties
The group's business is subject to a number of risks and uncertainties. The directors consider the following to be the key risks and uncertainties:
Funding and liquidity risk
The business manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the business has sufficient liquid resources to meet the operating needs of the business.
Interest rate cash flow risk
The business is exposed to potential upward movements in EUR Libor rate. With inflation now under control within the European Union and Euribor rates beginning to decline, the business does not expect to see any material growth in interest expense over the coming year.
Competition
The business operates in a highly competitive environment. To date, the business has been very successful in growing and retaining its customer base. The directors expect continued competitive pressures given advancements in technology and efficiencies.
Credit risk
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts, where necessary.
Foreign currency risk
The business’s principal foreign currency exposures arise from trading with overseas entities and operating within a EUR debt facility agreement. The risk is minimised through partial hedging, with traded currencies (receipts and payments) limited as far as possible to GBP, USD and EUR.
Data protection risk
The business is responsible to its customers for ensuring that customer data is adequately protected. The business has developed robust infrastructure and follows industry accepted policies and procedures as required under the certification of ISO 27001 and SOC 1. Our certification audits in 2024 highlighted no material deviations. The business has outsourced its data centre operations to third parties who operate at industry recognised standards. A material data breach would have an adverse financial impact.
Technology risk
The business has built its own robust, proprietary technology that has been in operation for a number of years with frequent upgrades and new functionality. Business continuity plans have been developed and tested to ensure that the business will continue to operate under various scenarios.
The directors consider the following factors to be key in analysing the development and performance of the business.
- Revenue growth;
- Gross profit improvement;
- EBITDA growth; and
- Value of new contracts won.
Part of the business's activities are directed towards R&D. In its widest sense, R&D encompasses the use of scientific or technological knowledge in order to produce new or substantially improved materials, devices, products or services to install new processes and systems prior to the commencement of commercial production or application, or to improve substantially materials, devices, products or services already produced or installed.
The directors consider that the development of new software applications and other advancements being developed fall within this definition.
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 8.
No ordinary dividends were paid. 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's policy is to consult and discuss with employees 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.
Information relating to post reporting date events is given in the notes to the financial statements.
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
We have audited the financial statements of Ibidem Capital 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.
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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the group, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the group is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the group that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Review of minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the group through enquiry and inspection with a specific focus on compliance with GDPR and other legislation relevant to data protection given the nature of the group's activities and the volume of potentially sensitive personal data held and specific considerations in relation to compliance with the company's FCA requirements and regulation;
Review of financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and
Performance of audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. 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.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £5,473,653 (2023 - £25,901 profit).
Ibidem Capital Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Festival House, Jessop Avenue, Cheltenham, Gloucestershire, United Kingdom, GL50 3SH.
The group consists of Ibidem Capital 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: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 26 ‘Share based Payment’: Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23; and
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Ibidem Capital Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The group made losses in both 2023 and 2024 and had net liabilities at 31 December 2024. These were planned losses with significant growth investment expensed each year. During 2022, the group successfully refinanced its existing external debt to a new lender with a €20,000,000 facility agreed which was subsequently extended to €23,000,000 and fully drawn down in the current year.
During the current year, the group then entered into an arrangement with this third-party lender whereby all amounts owed under the amended facility as described above were novated from the subsidiary, Integrated International Payroll Limited ("iiPay") to the parent company, Ibidem Capital Limited ("Ibidem"), in return for iiPay owing the same amount to Ibidem. Teakwood Capital, the group’s majority investor since February 2016, also provided further financing of $3,000,000 to the group before the current year end.
On 27 February 2025, TeakiiPay Holdings, LLC, the parent of the group entered into an Equity Purchase Agreement whereby its entire equity interest in the group has been sold to a third party, subject to FCA regulatory approval. The acquisition is on a debt-free and cash-free basis and on completion all third-party debt shall be repaid in full. Completion is expected in the second quarter of 2025.
Notwithstanding this, the directors have prepared forecasts for a period in excess of 12 months from the approval of the financial statements taking into consideration reasonable cash flow sensitivities. Looking towards the remainder of 2025 and beyond, the directors are confident that the group can meet its liabilities as they fall due using its available cash resources and with the ongoing operational and financial support of Teakwood Capital and the companies within the group. These companies have confirmed their ongoing operational and financial support for each other for a period of at least 12 months from approval of these financial statements.
At the time of approving the financial statements, the directors therefore have a reasonable expectation that the group has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements and thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is measured at the fair value of consideration received or receivable and represents amounts for services provided to third parties in the normal course of business during the period, net of value added tax and any discounts, and results from the principal activity of the group.
Each element of turnover (described below) is recognised only when:
Provision of services has occurred;
The consideration received is fixed or determinable;
There are no significant vendor obligations remaining; and
Collection of the amount due from the customer is reasonably assured.
Income from payroll processing and any related support, maintenance and unit based licencing arrangements is recognised rateably over the initial term of the related customer contract.
Any income arising from pure consultancy work is recognised in profit or loss on a time and materials basis.
Services that have been provided at the end of a financial period, but which have not been invoiced at the time, are recognised as turnover in profit or loss and shown within prepayments and accrued income on the balance sheet.
Implementation and set-up fees in connection with the provision of payroll processing services are deferred until such initial work is considered complete and is then recognised rateably over the remaining term of the related customer contract.
Advance payments from customers or advance invoicing at the end of the financial period are included within accruals and deferred income on the balance sheet. Such amounts are recognised in profit or loss when the services are provided to the customer in accordance with the points set out above.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
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.
In the parent company financial statements, interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in or .
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial 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, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using an option pricing model considered appropriate by the directors. The fair value determined at the grant date is expensed over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Deferred costs
Costs in respect of implementation and set-up fees are deferred until such initial work is considered complete and are then recognised rateably over the remaining term of the related customer contract. Deferred costs are included within prepayments and accrued income on the balance sheet.
Related parties
The company has taken advantage of exemption under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' not to disclose related party transactions with wholly owned subsidiaries within the group.
Exceptional items
Exceptional items are those which are separately identified by virtue of their size or nature to allow a full understanding of the underlying performance of the group or company.
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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The company determines whether amounts receivable from group undertakings require impairment or whether a provision against the amounts is required. Determining whether the amounts receivable are impaired is based on the ability of the group entities to generate sufficient cash in the future to enable repayment of the debt. Where expected cash generated is lower than the amounts due to the company, an impairment loss may arise, or a provision may be required to reflect the risk that the full amount is not recovered. After reviewing the business environment and the company's expected future cash flows, management concluded that there was no impairment of amounts due from group undertakings at the current year end.
The company conducts impairment reviews of investments in subsidiaries whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable or tests for impairment annually in accordance with the relevant accounting standards. Determining whether an asset is impaired requires an estimation of the recoverable amount which requires the company to estimate the value in use which is based on future cash flows and a suitable discount factor in order to calculate the present value. Where the actual cash flows are less than expected, an impairment loss may arise. After reviewing the business environment and the company's strategies and past performance of its cash generating units, management concluded that there was no impairment of investments in subsidiaries at the current year end.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Income generated from implementation and set-up fees for work performed on new customer contracts is deferred and released rateably over the remaining term of the customer contract when work is considered complete. The related costs are also deferred and released rateably over the same period. The value of costs deferred are a combination of an estimated allocation of internal staff costs and associated overhead costs, and actual third-party costs incurred.
Deferred tax assets are required to be recognised to the extent that it is probable (i.e. more likely than not) that sufficient future taxable profits will be available against which the deductible temporary difference or unused tax losses or credits can be recovered or utilised.
Deferred tax assets are reviewed at each reporting date. In considering their recoverability, the company assesses the likelihood of these being recovered within a reasonably foreseeable timeframe, being typically a minimum of two years, taking into account the future expected profit profile and business model of each relevant company or country, and any potential legislative restrictions on use. Short-term timing differences are generally recognised ahead of losses and other tax attributes as being likely to reverse more quickly.
The consideration on whether to recognise a deferred tax asset therefore requires management to make judgements on whether future financial performance will allow previously accumulated taxable losses to be utilised against forecast taxable profits.
In making this judgement, management have considered the future financial performance of the business as part of its normal forecasting cycle and have therefore recognised a deferred tax asset of £2,500,000 accordingly, using a rate of 25%.
The estimate takes account of the inherent uncertainties constraining the expected level of profit as appropriate. Changes in these estimates will affect future profits and therefore the recoverability of the deferred tax assets.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
The number of directors who are entitled to receive shares under long-term incentive schemes during the year was 2 (2023 - 2).
There are no key management personnel other than directors and therefore the group has taken advantage of the exemption available under FRS 102 section 33.7A not to disclose this amount.
Group
Current year
Exceptional items of £73,843 in the current year include £12,840 employee severance costs, £42,948 professional fees and other exceptional costs of £18,055 incurred outside of the normal course of business.
Prior year
Exceptional items of £959,548 in the current year include an impairment to an intangible fixed asset of £719,943, £106,551 employee severance costs, £46,143 professional fees incurred outside of the normal course of business and £86,911 accrued in relation to unpaid taxes and interest on an employee share scheme.
Company
Exceptional items in the current year of £5,358,579 for the company relate to a provision for impairment of the investment held in relation to a subsidiary undertaking. This reverses on consolidation and has no impact on the results of the group.
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Losses have been incurred for UK tax purposes and are available for use against future taxable profits. A deferred tax asset has not been recognised in full as the group does not anticipate all of these losses to be utilised in the immediate future. The approximate value of the total unrecognised deferred tax asset measured at a standard rate of 25% (2023: 25%) is £4,720,000 (2023: £4,005,000).
Factors that may affect future tax charges
The main rate of UK Corporation Tax increased from 19% to 25% with effect from 1 April 2023.
Included within Development costs is an individual asset with a carrying amount of £489,306 and a remaining useful life of 36 months, and another individual asset with a carrying amount of £222,754 and a remaining useful life of 24 months.
Intangible fixed assets held are pledged as security for the borrowings of the group under fixed and floating charges.
The amortisation charge is included in Administrative expenses in the Group Statement of Comprehensive Income.
Tangible fixed assets held are pledged as security for the borrowings of the group under fixed and floating charges.
The depreciation charge is included in Administrative expenses in the Group Statement of Comprehensive Income.
Fixed asset investments held are pledged as security for the borrowings of the group under fixed and floating charges.
Details of the company's subsidiaries at 31 December 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
IIPROLL MEXICO, S.A DE C.V is effectively a wholly-owned subsidiary of Ibidem Capital Limited.
Debtors held are pledged as security for the borrowings of the group under a fixed and floating charge.
Amounts owed by group undertakings are unsecured, interest free, have no fixed repayment date and are repayable on demand.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset set out above relates to the utilisation of tax losses against future expected profits.
Amounts owed to group undertakings are unsecured, interest free, have no fixed repayment date and are repayable on demand.
Other loans are secured by fixed and floating charges over all the property and undertakings of the group. The subsidiary undertakings Integrated International Payroll Limited and Integrated International Payroll (Holdings) Limited are guarantors over this loan facility.
Other loans are repayable by monthly interest payments, with a full capital repayment due on the maturity date, 30 June 2026.
Interest was charged on other loans at a rate of 17% + EURIBOR per annum to June 2023 and is then charged at a rate of 17% + EURIBOR thereafter to the maturity date.
The group entered an arrangement prior to the current balance sheet date whereby these other loans were novated from the subsidiary undertaking, Integrated International Payroll Limited ("iiPay) to the parent company, Ibidem Capital Limited ("Ibidem") in return for the iiPay owing the same amount to Ibidem.
Transaction costs directly attributable to the loan have been prepaid on a group basis at the balance sheet date and will be released to the profit and loss account over the remaining loan term.
The group has a Management Incentive Plan (the "Incentive Plan") to award Management Incentive Units ("MIUs") to key employees and independent contractors of the group. The Incentive Plan is administered by the Board of the parent company, TeakiiPay Holdings LLC, and is subject to termination, at any time, as determined by the Board. As of 31 December 2024, 20,442 (2023: 20,661) Class C MIUs have been issued. These MIUs vest, conditional upon a contingent event, and in accordance with the terms of the Incentive Plan.
Class C MIUs are authorised under the parent company's Company Agreement, do not have an exercise price and do not expire until the parent company is dissolved. The Class C MIUs represent non-voting interest. Members holding Class C MIUs are subject in all respects to the parent company's Operating Agreement, including provisions relating to the distributions of such profits, information rights with respect to the parent company, competition and confidentiality.
No expense was recognised by the group in the year ended 31 December 2024 or 31 December 2023 in relation to these MIUs.
There is a single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses.
During the prior year, the company allotted 1,255,735 Ordinary 10p shares at their nominal value for total consideration of £4,319,727.
Profit and loss reserves include 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:
Future minimum lease payments under non-cancellable operating leases noted above relate to premises.
On 27 February 2025, Teakiipay Holdings LLC, the immediate parent of Ibidem Capital Ltd ("Ibidem"), entered into an Equity Purchase Agreement whereby its entire equity interest in Ibidem has been sold to a third party, subject to FCA regulatory approval. The acquisition is on a debt-free and cash-free basis and on completion all third-party debt shall be repaid in full. Completion is expected in the second quarter of 2025.
Neither the company nor the group had any capital commitments at the balance sheet date (2023: £Nil).
As at the prior balance sheet date, the company had given a guarantee in respect of borrowings in a subsidiary undertaking of £19,222,927. This guarantee was secured by fixed and floating charges over all the assets, property and undertakings of the company. During the current year, these borrowings were novated to the company. Refer to note 21.
The group had no contingent liabilities at the balance sheet date (2023: £Nil).
Other non-cash movements in debt relate to payment-in-kind (PIK) interest accrued and not paid in cash during the year and therefore added to the closing balance of the relevant borrowings.