The directors present the strategic report for the year ended 31 December 2024.
The Company was incorporated on 12 November 2013 by TEOCO Corporation ('TEOCO'), a company incorporated in the State of Delaware in the United States of America. TEOCO is a leading provider of Engineering and Analytics solutions to communication service providers (CSPs) worldwide. TEOCO Corporation leverages its expertise in big-date and real-time capabilities to analyse and optimise operational efficiency, profitability and customer experience. TEOCO Corporation supports over 150 of the largest service providers in the world, located in over 80 countries, in running their networks and businesses more efficiently and effectively by delivering solutions.
The Company is currently serving as a holding company for its subsidiaries.
The service assurance business was sold to AMDOCS on 30 June 2023 for a total consideration of $90m, plus adjustments for net working capital and cash. The total amount paid to Teoco Corporation in respect of these adjustments was $9.68m.
Of the total consideration, £9m is being held for a period of 15 months as security against potential breaches of representations and warranties. This holdback amount is divided between the buyer, retaining $5m and the Company retaining £4m. In addition to this, the agreement with the buyer provides for a potential contingent payment (earn-out) subject to specified development and revenue milestones.
Proceeds from the sale of the Business were utilised to pay down related party loans.
During 2024, (2023 - $26,243,013) the Company received no dividends from its subsidiaries.
Financial position
The results of the Company's operations for the year are set out on pages 8,9 and 10.
The management of the business and the execution of the company's strategy are subject to a number of risks. Risks are reviewed by the board of directors and managers of the wider TEOCO enterprise, and appropriate processes put in place to monitor and mitigate them. If more than one event were to occur it is possible that the overall effect of such events would compound the possible adverse effects on the company.
The key business risks affecting the company's subsidiaries are set out below:
Growth of sales
The company remains confident that there are opportunities in the markets in which it operates to enable an increase in sales. The company is however exposed to market conditions outside its control that impact the customer base.
CSP Environment
CSPs are under intense pressure as the disconnection between network capacity and service revenue continues to widen. Mobile data traffic is exploding, but network capacity and wireless spectrum are limited. Increasing competitive threats and pressuring CSPs to introduce new services, while optimising the customer experience. Theses factors contribute to a delay in investment decisions and a reluctance to upgrade existing technology.
Business environment
The Company is now fully integrated into the TEOCO group structure. TEOCO's solutions provide CSPs with unique insights into business, customer, and network and device metrics by harnessing big data analytics. TEOCO is a trusted partner to many of the world's leading CSPs who rely on its mission-critical solutions. The TEOCO solutions model and measure network and non-network related data from various perspectives to:
Quickly identify and resolve service and networks faults;
Automate business processes;
Smoothly integrate new technologies from multiple vendors;
Significantly improve service quality and availability, while reducing operating expenses; and
Enhance customer experience and exploit monetisation opportunities.
These solutions have been selected by leading CSPs based on scalability and flexibility advantages, have innovative correlation, problem detection and analytics algorithms and have the opportunity to displace ageing, home-grown solutions.
The TEOCO RAN Solutions include an extensive planning and optimisation portfolio. The planning products cover radio, backhaul and capacity planning across a wide range of technologies, and provide dedicated functionality for Wi-Fi and small cells. The optimisation products are multi-technology and multi-vendor, delivering best-in-class gee-location algorithms with automation and Self-Organizing Network (SON) capabilities to enhance operational efficiencies.
Strategy
The key elements of the company's strategy include:
Maintaining market leadership and innovation through development and exploiting synergies within company products to enhance product offerings.
Striving to generate strong operating cash flows to support working capital growth requirements.
Exploiting the growth opportunities arising from a quality and unrivalled international customer base spanning all major geographic territories, working within a matrix organization with executive sponsored lines of business.
| 2024 | 2023 | Change |
Profit/(loss) before tax | 5,946,427 | 88,894,965 | -93% |
Number of employees | 2 | 2 | None |
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.
Ordinary dividends were paid amounting to $30,951,313. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The company has a normal level of response to price, credit, liquidity and cash flow risks arising from trading activities which are largely conducted in USD. The company does not enter into any formally designated hedging arrangements. The company's operations are financed by a mixture of equity funding and group company short term borrowings. Working capital requirements are met out of operational cash flows. In addition, various financial instruments such as trade debtors and trade creditors arise directly from the company's operations.
The company's future strategy and developments are shown in the strategic report.
The auditor, Hampden, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
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.
We have audited the financial statements of Teoco UK Limited (the 'company') for the year ended 31 December 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 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.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows;
we ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.
we identified the laws and regulations applicable to the company through discussion with directors and other management, and from our commercial knowledge and experience of this business sector.
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence. and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance through the audit.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HM Revenue and Customs, relevant regulators and company legal advisors.
There are inherent limitations in our audit procedures described above. The more removed those laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatement that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Teoco UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Pascal Place, Randalls Research Park, Randalls Way, Leatherhead, Surrey, KT22 7TW.
The financial statements are prepared in United States dollar, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest $.
This 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:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
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’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; 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 financial statements of the company are consolidated in the financial statements of the ultimate parent company Teoco Corporation. These consolidated financial statements are available from its registered office address 12150 Monument Drive, Suite 700, Fairfax, VA 22033.
The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Teoco UK Limited results are included in the consolidated financial statements of Teoco Corporation the ultimate parent company.
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 are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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 company 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 company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company 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 company.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised 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 average monthly number of persons (including directors) employed by the company during the year was:
Details of the company's subsidiaries at 31 December 2024 are as follows:
Registered office addresses
In accordance with FRS102 paragraph 33.1A, the company is exempt from reporting related party transactions as it is a wholly owned subsidiary of Teoco Corporation (the ultimate parent company).