The directors present the strategic report for the year ended 30 June 2024.
The company continues to operate as the Ultimate Beneficial Owner of an international group. The principal activity of its subsidiaries remains selling enterprise asset management software products, including Software as a Service and the performance of associated services such as consulting, programming and hosting for our clients across Australia, Canada, Hong Kong, Macau, Malaysia, New Zealand, Singapore, United Kingdom, Europe and the USA. Our personnel base has increased to include additional group subsidiaries who are targeted to deliver to group companies.
The year ended June 2024 saw the group continue expansion via targeted M&A. The group has increased the product offering with the inclusion of owned IP solutions with Enterprise Asset Management (EAM) SaaS solutions retained and enhanced. The main KPIs are benchmarked as Recurring Revenues, EBITDA and Free Cash Flow. The targeted acquisitions have increased group turnover and interest payable alongside increased values for fixed assets.
Revenue continues to grow at a healthy clip organically and the revenue mix continues to improve towards more recurring revenue through our Cloud offering and Own IP products. At the same time we continue to make heavy investments into our Cloud offering and Product Development teams which has a negative impact on margin expansion in the current year, but we expect to see this come through over time as the recurring revenue continues to scale.
The continued growth in recurring revenue which is largely charged annually upfront is resulting in an increase in deferred revenue balance as cash is being collected ahead of revenue being recognized in the profit and loss.
The expanded group now has a variety of products and services across the globe and as anticipated, the various teams continue their collaborative efforts to optimise these. The year to June 2024 saw positive growth of ARR revenues, demand for services remains strong, with some regions delivering above target during the period.
The focus on Security and Quality to date has been rewarded: the group has widened the footprint for ISO27001, added SOC1 accreditation during the period. Part of the group has achieved very recent success with further ISO 9001 accreditation to ensure that the group has a consistent approach to process delivery across the board. The business will continue to build out this baseline for group standards as our activities continue to synergise. Due to the targeted acquisition of companies with owned IP solutions, Product Development remains critical to delivering solution USP.
The Company continues to provide strategic direction for the group, manage M&A activities and relationships with key suppliers and debt providers.
Business Environment
EAM solutions remain business critical with continual advances in technical delivery of solutions. IBM products continue to perform well and the Group continues to invest in IBM Products as part of their add-value solutions. Business Partners remain core to the IBM overall strategy seeing continued investment to support the delivery of IBM products across all market sectors.
Strategy
The Group’s success is dependent upon the collaboration of the subsidiaries, maintenance of our various country relationships with IBM and other key partners and retaining any Partner Programme Status levels achieved. Early and flexible adoption of licensing models to meet client needs is supported along with development of complimentary own IP to increase functionality and simplify offerings is a key strategy for the Group and will be supported by the new streamlined catalogue and brand identity.
The principal risks to the business remain constant: changes to the IBM Business Partner program, timing of project award, purchases, long-term client projects, changing compliance requirements within industry sectors, maintaining adequate levels of skilled software technicians and currency fluctuations within operational territories. Group debt adds the management of interest rate and cashflows associated with repayment schedules to the risk review profile.
The Group continues to offer flexible, hybrid working arrangements across most of the territories in compliance with and respectful of any local laws and accepted practices. The on-going situation in the Ukraine remains under review and management will continue to monitor any developments.
The Group revenues comes from a variety of industry sectors and the Group manages cross guarantees on specific operating leases between certain subsidiaries as well as debt covenants. The rigorous monthly and quarterly reporting regime delivers financial results and budget tracking data for all parts of the business to monitor their performance. It also ensures the business can manage its going concern position effectively.
To this end, the Group regularly completes a range of forecasts that factors in the impact of various risks on the group’s liquidity and ultimately its ability to continue as a going concern. There is always a credit risk associated with the Groups debtor book, but this is reviewed and managed and so the directors have assessed that their customers are also in good financial health and that the risk remains diversified.
Based on the above, the directors are confident that Group activities and strategies mitigate business threats as they arise and that the Group will review and adapt processes as necessary to meet this requirement. The directors consider that all risks considered, there is nothing at this time that affects the group’s ability to continue as a going concern.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2024. On the 7th April 2025 the group announced a rebranding programme intended to unify all of the companies acquired to date. As part of this process, the company changed its name to Naviam Acquisition Corp Limited on 13th May 2025 to support and strengthen the new brand identity.
The results for the year are set out on page 10.
The loss for the period, after taxation and minority interests, amounted to £13,019,809 (2023: £4,062,100).
During the year non-cash dividends of £1,110,934 (2023: £979,990) were allocated to shareholders.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The directors regularly review the risks to the group associated with movements in interest rates with a view to consider whether hedging or other risk controls are appropriate. They also review both company and group cashflows to ensure there is adequate liquidity across the group. The monthly reporting regime supports the review schedule. The group does not use any non-basic financial instruments.
In general there is a good amount of natural currency hedging in the business as the group have staff delivering services in-country in most geographies. The group generates a sizeable portion of revenue in USD and therefore a portion of the debt is nominated in USD to ensure currency exposure is managed.
In October 2024 there was a secondary share transaction at the ultimate group parent company where roughly £20m shares traded hands among existing shareholders. As part of this a new CSOP Scheme to selected employees was implemented. The uptake was positive and the required notice was made to HMRC to register the scheme which is now active.
On 23rd October 2024 the group acquired a US subsidiary that resulted in additional financing. Initially the group used the revolving facility which was repaid in full when the funding exercise completed in January 2025. The cross guarantees between the group companies remain in place.
Further to the M&A Activities in July 2021 and across the year, earnout payments of circa £2.6m were completed in January & February 2025.
In December 2024, the group completed additional software purchases of approx. £1.4m financed over 2 years at normal commercial terms.
On 21st May 2025, the group acquired a US subsidiary. On 22nd May 2025, the group acquired a Dutch subsidiary, these acquisitions resulted in additional financing. The cross guarantees between the group companies remain in place. The original £5.9m and $19m USD loan terms were extended to expire in 2028.
The group recognises that future prospects may be influenced by developments in the Eurozone and beyond and will continue to monitor this closely. We will continue to drive growth in the US, move forward with targeted M&A in compatible markets and improve and promote our Cloud offerings.
Going concern
The group and company's directors consider the forecasts and facilities of the wider group when considering going concern due to cross guarantees.
The directors have reviewed detailed projections that have been produced to identify any potential impact of high inflation, high interest rates, changes in company taxes and the cost of living crisis on the future financial performance of the business up to and including December 2026.
The financial information reviewed by the Board includes a detailed profit and loss as well as cash flow forecasts together with the level of liquid resources available to the Group. The projections have also been shared with lenders under the terms of the Group banking arrangement. As part of this process detailed forecasts have been stress tested based on a further reduction in revenue with potential cost reduction mitigations also considered. The forecasts have been reviewed against the covenant requirements currently in place for the next 12 months and the business has sufficient levels of headroom against its covenants. The cash position of the business is also expected to be sufficient over the forecast period.
The directors have over 12 months available on their main borrowing facilities and revolving credit facility both of which expire during July 2028. The group has management loan notes which expire in the next 12 months. The group has engaged specialist advisors to assist with securing suitable borrowing facilities for the medium term in advance of the expiry of the management loan facilities. The refinancing also aims to reduce the borrowing rate of the current facilities and provide additional facilities for future acquisitions. The directors are confident in completing the new financing in December 2025 as discussions are advanced with several credit approved offers being available.
The group and the parent company are dependent on successfully refinancing the existing loan facilities, which is not guaranteed. This indicates the existence of a material uncertainty which may cast significant doubt on the group’s and the company’s ability to continue as a going concern and, therefore, the group and the parent company may be unable to realise their assets and discharge their liabilities in the normal course of business.
The directors have a reasonable expectation that refinancing will be successful and therefore it is appropriate to prepare the financial statements of the group and the parent company on a going concern basis, which assumes that the group and the parent company will continue in operation for a period of at least 12 months from the date of approval of the financial statements.
These financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.
The auditors, BDO LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
Basis for opinion
Material uncertainty related to going concern
We draw attention to note 1.4 to the financial statements, which indicates that the group and the parent company are dependent on successful refinancing of the existing loan facilities, which is not guaranteed.
As stated in note 1.4, these events or conditions, along with other matters as set forth in note 1.4 indicates that a material uncertainty exists that may cast significant doubt on the group and the parent company’s ability to continue as a going concern. The financial statements do not include any adjustments that would result if the group or parent company were unable to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Other information
Other Companies Act 2006 reporting
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Based on:
Our understanding of the group and the industry in which it operates;
Discussion with management and those charged with governance; and
Obtaining and understanding of the group policies and procedures regarding compliance with laws and regulations.
We considered the significant laws and regulations to be the applicable accounting framework and tax legislation.
The group is also subject to laws and regulations where the consequence of noncompliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be the health and safety legislation.
Our procedures in respect of the above included:
Enquiry of those charged with governance for any instances of non-compliance with laws and regulations;
Review of financial statement disclosures and agreeing to supporting documentation;
Correspondence with tax authorities for any instances of non-compliance with laws and regulations; and
Review of legal expenditure accounts to understand the nature of expenditure incurred.
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
Obtaining an understanding of the group policies and procedures relating to:
Detecting and responding to the risks of fraud; and
Internal controls established to mitigate risks related to fraud.
Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
Based on our risk assessment, we considered the areas most susceptible to fraud to be in relation to management override of controls, manual journal postings to revenue, cut off and accrued and deferred revenue.
Our procedures in respect of the above included:
Testing and challenging the key estimates and judgements made by management in preparing the financial statements for indications of bias or management override when presenting the results and financial position of the group;
Testing the appropriateness of certain journal entries, and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business;
Testing a sample of journal entries throughout the the year, year, which met a defined risk criteria, by agreeing to supporting documentation; Consideration of revenue recognition around the year end.
Performing targeted procedures on a sample basis in regard to cut off, accrued and deferred revenue.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The notes on pages 17 to 45 form part of these financial statements.
The notes on pages 17 to 45 form part of these financial statements.
The notes on pages 17 to 45 form part of these financial statements.
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 £979,641 (2023 - £1,091,853 loss).
The notes on pages 17 to 45 form part of these financial statements.
The notes on pages 17 to 45 form part of these financial statements.
The notes on pages 17 to 45 form part of these financial statements.
Naviam Acquisition Corp Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .
The group consists of Naviam Acquisition Corp Ltd 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 unless otherwise specified within these accounting policies.
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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated group financial statements consist of the financial statements of the parent company Naviam Acquisition Corp Ltd 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 30 June 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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The group and company's directors consider the forecasts and facilities of the wider group when considering going concern due to cross guarantees.
The directors have reviewed detailed projections that have been produced to identify any potential impact of high inflation, high interest rates, changes in company taxes and the cost of living crisis on the future financial performance of the business up to and including December 2026.
The financial information reviewed by the Board includes a detailed profit and loss as well as cash flow forecasts together with the level of liquid resources available to the Group. The projections have also been shared with lenders under the terms of the Group banking arrangement. As part of this process detailed forecasts have been stress tested based on a further reduction in revenue with potential cost reduction mitigations also considered. The forecasts have been reviewed against the covenant requirements currently in place for the next 12 months and the business has sufficient levels of headroom against its covenants. The cash position of the business is also expected to be sufficient over the forecast period.
The directors have over 12 months available on their main borrowing facilities and revolving credit facility both of which expire during July 2028. The group has management loan notes which expire in the next 12 months. The group has engaged specialist advisors to assist with securing suitable borrowing facilities for the medium term in advance of the expiry of the management loan facilities. The refinancing also aims to reduce the borrowing rate of the current facilities and provide additional facilities for future acquisitions. The directors are confident in completing the new financing in December 2025 as discussions are advanced with several credit approved offers being available.
The group and the parent company are dependent on successfully refinancing the existing loan facilities, which is not guaranteed. This indicates the existence of a material uncertainty which may cast significant doubt on the group’s and the company’s ability to continue as a going concern and, therefore, the group and the parent company may be unable to realise their assets and discharge their liabilities in the normal course of business.
The directors have a reasonable expectation that refinancing will be successful and therefore it is appropriate to prepare the financial statements of the group and the parent company on a going concern basis, which assumes that the group and the parent company will continue in operation for a period of at least 12 months from the date of approval of the financial statements.
These financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.
Revenue is generated either through the sale of software products including software as a service, cloud or through the performance of associated services such as consulting, programming and hosting. Revenue contracts are assessed to determine whether revenue should be recognised by the company as a principal or agent. The company has determined, via inspection of indicators, that it acts as principal in all revenue streams.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the group has transferred the significant risks and rewards of ownership to the buyer;
the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably, and
the costs incurred and the costs to complete the contract can be measured reliably.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
All borrowing costs are recognised in the consolidated statement of comprehensive income in the year in which they are incurred.
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.
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 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.
The component parts of compound instruments issued by the group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.
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 for the year comprises current and deferred tax. Tax is recognised in the consolidated statement of comprehensive income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company and the group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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.
The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the group in independently administered funds.
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Functional and presentation currency
The group trades in the local currency of the country in which it operates. The functional currency, therefore consists of UK Sterling, Australian Dollar, Canadian Dollar, New Zealand Dollars and US Dollars. The presentation currency is UK Sterling (GBP). The reason for the difference is that the largest trading company and the group parent company are registered and operate in the UK and US.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
Research and development
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Interest income
Interest income is recognised in the consolidated statement of comprehensive income using the effective interest method.
Finance costs
Finance costs are charged to the group statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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.
Determine whether leases entered into by the group either as a lessee are operating or finance leases. These decisions depend on the assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
Determine whether there indicators of impairment of the group's tangible and intangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a large cash-generating unit, the viability and expected future performance of that unit.
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.
Tangible and intangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
Preference shares are entitled to a 7% dividend with no conversion clause. The directors have reviewed the articles of association and class preference share as equity as the board has the discretion on when a dividend is paid and when the shares are redeemed.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The company has no employees other than the directors, who did not receive any remuneration (2023: £Nil).
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
Please see related parties note for directors who receive a consultancy fee.
There is interest of £921,258 (2023: £487,777) relating to management's loan notes in the figures above. There is £0 (2023: £173,553) related to the unwinding of contingent consideration.
The actual charge 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:
Non-Cash Preference Share Dividends of £1,110,934 (2023 £979,990) were allocated to preference shareholders during the year.
The company acquired BPD Global Group Limited and subsidiaries, Galanthus Partners Limited, Lexco Limited and Projetech Inc in the year ended 30 June 2022. See the 2022 financial statements for additional details.
The group acquired Peacock Engineering Limited, EAM Swiss companies and Interpro Solutions LLC in the year ended 30 June 2024. Refer to note 26 for additional details.
Details of the company's subsidiaries at 30 June 2024 are as follows:
Bank borrowings securities are discussed in note 19.
Net obligations under finance leases and hire purchase contracts are secured over the assets to which they relate.
There is £0 (2023: £278,779) held in escrow in other debtors and creditors.
Bank loans
Bank borrowings are secured by a fixed and floating charge over all of the assets of the group and a first legal charge over the freehold properties owned by the group. Amounts incur interest at 3% over UK base rates, and have monthly repayments of £3,256, which expire in 2026.
Other loans
Other loans represent amounts due to a funding partner. There is a parental company guarantee in place as security. Interest is charged at 3.5-5%.
Loan notes
The group retains loan notes of £5.9m GBP and $19m USD from Bain Capital in relation to acquisitions in February 2022. Interest is paid on a quarterly basis thus accrued interest is negligible. The loans have a 5 year term being repayable in February 2027. Post year end this was extended to July 2028. Interest is payable at approximately an 8% margin over the inter-bank lending rates.
In July 2023, 100% of the share capital of Peacock Engineering was acquired by Galanthus Group Holdings Ltd which resulted in further refinancing. The Group borrowed £19,000,000 from Bain Capital, repayable in July 2028. In April 2024 the Group acquired Interpro Solutions LLC in the US which resulted in further refinancing and an additional $12,500,000 USD was borrowed from Bain Capital, repayable in 2028.
The group’s financing also includes a revolving credit facility of $4,000,000 to cover working capital and M&A activities. Interest is charged at 8.0% over the inter-bank lending rate on the drawn-down amount. A commitment fee of 0.5% is charged on the undrawn amount. This facility was not utilised in the year but was used and repaid post year end as outlined in note 28.
Fees of £1,205,846 (2023: £Nil) were paid in relation to the additional loans which have been capitalised against the loan. An amount of £347,034 (2023: £123,965) has been released in the year with a balance of £1,602,601 (2023: £743,789) remaining at 30 June 2024.
Management loan notes
Secured loan notes of £3,500,000 were issued to the previous shareholders of Peacock Engineering Limited when acquired by Galanthus Group Holdings Limited in July 2023. Interest of £347,034 has accrued in the year with £3,733,589 owed at 30 June 2024.
The balance of secured loan notes in addition to the above including interest that remains outstanding to the remaining former management team members at 30 June 2024 is £3,664,636 GBP and $5,872,757 USD.
Security
A fixed and floating charge is in place with Bain Capital Credit, LP and George Lightfoot as Security Trustee.
The company and the group have cross guarantees for funding that are reflected in notes 17, 18 and 19, some of which are held at subsidiary level.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The group operates or contributes to various defined contribution pension schemes. The assets of the schemes are held separately from those of the group in independently administered funds. The pension cost charge represents contributions payable by the group to the funds and amounted to £1,240,153 (2023: £537,248).
The company has 3 classes of share capital. All classes rank pari passu except for the following:
Preference shares, of which each class are pari passu, are entitled to a 7% dividend with no conversion clause. The directors have reviewed the articles of association and class preference shares as equity as the board has discretion on when a dividend is paid and when the shares are redeemed. Preference shares have no voting rights.
During July 2023, the company issued 62,500,527,675 Preference shares and 625,012 Ordinary shares of £0.00001 each for a total of £2,000,000. This resulted in a share premium of £1,374,986 on the Ordinary shares issued.
Also at this time, shares were issued as a roll over on the acquisition of Peacock Engineering Limited of 62,500,527,675 Preference shares and 625,012 Ordinary shares of £0.00001 each for a total of £2,000,000. This resulted in a merger relief reserve of £1,374,986 on the Ordinary shares issued.
During April 2024, shares were issued as a roll-over on the acquisition of Interpro Solutions LLC of 62,062,066,037 Preference shares and 619,776 Ordinary shares of £0.00001 each for a total of £2,016,500. This resulted in a merger relief reserve of £1,395,873 on the ordinary shares issued.
During the year, an EMI scheme was initiated. This involved 2 employees having options on purchasing 535,724 shares with a value of £0.00001 each at an exercise price of £2.20 per ordinary share.
The profit and loss reserves represent the accumulated profits and losses on the activities of the company and the group, less dividends paid.
Foreign exchange reserve
The foreign exchange reserve arises on the translation of the foreign subsidiary brought forward reserves and alignment with the previous year translation to GBP. The movement in the foreign currency exchange rates gives rise to the foreign exchange reserve.
Acquisition of Peacock Engineering Limited
During July 2023, the group acquired 100% of Peacock Engineering Limited (PEL), a UK based company with a subsidiary in India. PEL sell software solutions and associated services. The company paid £27,239,341, the composition of which is discussed further below.
The acquisition has been accounted for under the acquisition method. In calculating the goodwill arising on acquisition, the fair value of net assets of Peacock Engineering Limited have been assessed and adjustments from book value have been made where necessary.
Recognised amounts of identifiable assets acquired and liabilities assumed
The Group incurred acquisition-related expenditure of £654,617 on legal fees, due diligence and other costs directly related to the acquisition. These costs have been capitalised.
The useful economic life of goodwill has been estimated to be 5 years. Included within goodwill are intangible assets that do not require separate recognition.
Since the acquisition date, Peacock Engineering Limited has contributed £8,020,718 to group turnover and losses of (£730,057).
Acquisition of EAM Maas Ag, EAM Swiss GmbH, EAM Swiss International GmbH
During January 2024, the group acquired 100% of EAM Maas Ag and EAM Swiss GmbH, companies based in Switzerland with a subsidiary in Austria (“the EAM Group” ). The EAM Group sell software solutions and associated services. The company paid £2,403,652, the composition of which is discussed further below.
The acquisition has been accounted for under the acquisition method. In calculating the goodwill arising on acquisition, the fair value of net assets of the EAM Group have been assessed and adjustments from book value have been made where necessary.
Recognised amounts of identifiable assets acquired and liabilities assumed
The Group incurred acquisition-related expenditure of £181,116 on legal fees, due diligence and other costs directly related to the acquisition. These costs have been capitalised.
The useful economic life of goodwill has been estimated to be 10 years. Included within goodwill are intangible assets that do not require separate recognition.
Since the acquisition date, the EAM Group has contributed £912,951 to group turnover and profits of £52,312.
Acquisition of Interpro Solutions LLC
During April 2024, the group acquired 100% of the member’s interest of Interpro Solutions LLC. Interpro Solutions LLC sell software solutions and associated services. The company paid £15,554,001 the composition of which is discussed further below.
The acquisition has been accounted for under the acquisition method. In calculating the goodwill arising on acquisition, the fair value of net assets of Interpro Solutions LLC have been assessed and adjustments from book value have been made where necessary.
Recognised amounts of identifiable assets acquired and liabilities assumed
The Group incurred acquisition-related expenditure of £363,709 on legal fees, due diligence and other costs directly related to the acquisition. These costs have been capitalised.
The adjustments in cash at hand and in bank reflect the concluded completion adjustments. The useful economic life of goodwill has been estimated to be 10 years. Included within goodwill are intangible assets that do not require separate recognition.
Since the acquisition date, Interpro Solutions LLC has contributed £1,432,853 to group turnover and profits of £184,976.
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:
In October 2024 there was a secondary share transaction at the ultimate group parent company where roughly £20m shares traded hands among existing shareholders. As part of this a new CSOP Scheme to selected employees was implemented. The uptake was positive and the required notice was made to HMRC to register the scheme which is now active.
On 23rd October 2024 the group acquired a US subsidiary that resulted in additional financing. Initially the group used the revolving facility which was repaid in full when the funding exercise completed in January 2025. The cross guarantees between the group companies remain in place.
Further to the M&A Activities in July 2021 and across the year, earnout payments of circa £2.6m were completed in January & February 2025.
In December 2024, the group completed additional software purchases of approximately £1.4m financed over 2 years at normal commercial terms.
On 21st May 2025, the group acquired a US subsidiary. On 22nd May 2025, the group acquired a Dutch subsidiary, these acquisitions resulted in additional financing. The cross guarantees between the group companies remain in place. The original £5.9m and $19m USD loan terms were extended to expire in 2028.
Group
During the year amounts of £18,394 (2023: £16,907) and £20,111 (2023: £16,907) were paid to other directors.
During the year additional loan notes of £19,000,000 GBP (2023: £0) and $12,500,000 USD (2023: $0) were raised with Bain Capital Credit LP who are the Security and Administrative agent for the funds that hold shares and provide debt services to the Group. At the year end the balances owed to the funds managed by Bain Capital Credit LP were GBP £24,970,149 (2023: £5,970,149) and USD $31,500,000 (2023: $19,000,000).
As noted in the creditors note certain directors and funders have shareholdings in the company. The loan fees are disclosed in the creditors and loan notes.
Company
The company took advantage of the exemption available in Section 33.1A of FRS102 to not disclose transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
Non-cash movements relate to:
Foreign exchange losses on cash at bank and in hand
Obligations under finance leases: during the year the group entered into new other loans in respect of assets with a total value at the inception of the leases of £370,316.
Loan notes of £3,500,000 were issued in the year on acquisitions. Other non cash movements were £998,550.
There are no restrictions over the use of the cash and cash equivalents balances which comprises cash at bank and in hand, and bank overdrafts.