The Directors present the strategic report of the StorMagic Group (the “Group”) for the year ended 31 March 2025. The Group consists of StorMagic Limited (the “Company”) and its two subsidiaries; StorMagic Inc and StorMagic Canada Inc.
During the year to 31 March 2025, the Group intentionally invested in long term growth initiatives to capture future market opportunities. These were created in part by market disruption following Broadcom’s acquisition of VMware in November 2023.
At the time of its acquisition, VMware held approximately 43% of the virtualization market, which underpins one of the Group’s core products, SvSAN. The subsequent changes to go-to-market strategy, product offerings, and the substantial price increases introduced by Broadcom created significant uncertainty for VMware customers.
This disruption created a major opportunity for the Group, as customers and prospects began actively seeking alternatives to VMware. Leveraging this shift in sentiment, and responding to the clear demand for an affordable, right-sized, and simple solution for SMB and edge environments, the Group launched SvHCI, a full-stack hyperconverged infrastructure platform in July 2024.
To fund the development of SvHCI, related products, and go-to-market initiatives, the Group secured £3 million of loan funding from Palatine GC Holdings Limited in June 2024. Together with cash generated in the prior year, this provided the resources to expand product and development headcount and to invest in the go-to-market team and marketing for this new product line.
As a result, the Group’s qualified pipeline grew by 600%, positioning it strongly for accelerated growth in the year ending 31 March 2026 and beyond. Turnover for the year was £7,802,041, an increase of 4% compared with the prior period, reflecting the longer lead times typical of infrastructure sales and the need to create market awareness for the new SvHCI software before it could be sold. However, with an increasing sales pipeline, turnover is expected to grow rapidly in future years.
The investment made during the year had a planned impact on profitability, with an EBITDA margin of -19% compared to 7% in the prior period. This represented an EBITDA loss of £1,442,964 versus a profit of £509,481 in the previous year, and resulted in net operating cash outflows of £388,221, reflecting the Group’s strategic decision to invest in the new product. Nonetheless, the Group remains committed to optimising its cost structure and managing cash effectively, with the clear objective of returning to EBITDA profitability and positive cash flow in the medium term.
The Group’s industry recognition remained exceptional. Over the year, 9 press releases were issued, 244 press articles were published mentioning StorMagic, and the Group engaged in 104 analyst interactions. Coverage focused on product launches, enterprise edge, and the Group’s positioning as a VMware alternative. StorMagic also received significant external recognition, winning four industry awards, including SDC’s Storage Software / Management Innovation of the Year for SvHCI.
The Group’s solutions offer a distinct competitive advantage rooted in resource efficiency, delivering both financial and environmental benefits to its customers. Unlike competitors' overprovisioned, hardware-based offerings, the software-defined architecture of StorMagic technology achieves high availability starting from just two servers instead of the industry-standard three. This lean infrastructure model reduces hardware as well as energy consumption, directly lowering customer Capex and Opex by approximately 33%. Being hardware agnostic, the Group’s solutions also eliminate vendor lock-in and the need for costly hardware stockpiling. This commitment to efficiency is a core tenet of the Group’s strategy, underscored by its own SBTi-approved targets to maintain zero Scope 1 and 2 emissions and actively reduce Scope 3 emissions.
The Group measures various financial KPIs to manage and develop the business to achieve the Group’s stated strategic growth objectives. KPIs include Bookings, Turnover, EBITDA, ARR, and Cash. The most important of these are Turnover and Cash.
In the period to 31 March 2025, Group Turnover increased by 4% to £7,802,041 (2024: £7,509,657). The Group’s cash at bank balance as the balance sheet date was £2,355,991 (2024: £2,066,461).
The Group’s principal risks and uncertainties relate to:
● The rapid pace of change in the technology sector and the evolving competitive landscape, including challenges around attracting and retaining skilled staff, as well as delivering new products and capabilities in line with market demand;
● Exposure to global macroeconomic conditions and geopolitical tensions that may impact customer demand and supply chains; and
● Effective management of the Group’s cash position to maintain the right balance between investing for growth and achieving profitability.
Notwithstanding these risks and uncertainties, the directors believe the Group is well placed to continue to grow and realise its strategic goals.
The Group’s principal financial risks are those relating to funding, liquidity and foreign exchange. The aim of the Group’s financial risk management policies are to optimise the financial performance by managing and mitigating those risks in the most cost-effective manner.
During the financial year, the Group utilised (£388,221) through operations, and generated £289,530 after considering investing and financing activities. The cash generated, as well as the Group’s cash position ensures that it is adequately funded to execute on its strategy.
The Group is potentially exposed to short term liquidity risk. This risk is partially mitigated through the Group’s invoicing methodology, as customers pay in full at the point of sale, subject to agreed credit terms (which are typically net 30 days). Additionally, the Group monitors its cash flow through rolling 12-week and 18-month forecasts.
The Group has international operations and is therefore exposed to fluctuations in foreign exchange rates. To the extent practicable, the Group employs natural hedges to manage its exposure, matching costs to economic activity.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2025.
The group's pre-tax loss for the year was £1,533,566 (2024: loss £629,267).
No dividends were paid during the year (2024: £nil).
In August 2024, a decision was made to streamline the size of the Board, reflecting the newly increased size of the management team. Susan Odle joined as CGO in July 2024 and transitioned into the CEO role on 1 April 2025, with Dan Beer (the then incumbent CEO) stepping into a non-executive role.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The ongoing development of product and software platforms is crucial to the success of the group and is regarded as part of the group's fixed assets. Accordingly, development costs amounting to £1,367,146 (2024: £745,694) were capitalised during the year.
We have audited the financial statements of StorMagic Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 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 entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity 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 entity 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;
Reviewing 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 entity through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing 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 £689,668 (2024 - £956,629 loss).
StorMagic Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is The Quadrant Aztec West, Almondsbury, Bristol, BS32 4AQ.
The group consists of StorMagic Limited and all of its subsidiaries.
The company's and group's principal activities and nature of its operations are disclosed in the strategic report.
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, including the provisions of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated financial statements incorporate those of StorMagic Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the prior year were consolidated using the purchase method and results were incorporated from the date that control passed.
All financial statements are made up until the 31 March 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those other 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 has taken advantage of the exemption available under section 33 of FRS 102 and has not disclosed details of transactions or balances with wholly-owned group companies.
During the year, the group made a loss before tax of £1,533,566 (2024: £629,267) and at the year end it was in a net liability position of £4,384,467 (2024: £3,595,328).
On 28th June 2024, the group secured £3m of loan funding with Palatine GC Holdings Limited ("Palatine"). The amount less transaction costs was £2,806,219. The amount was drawn in full and partly used to repay the existing facility with Claret European Specialty Lending Company II SARL ("Claret") in full. Additionally, the net inflow of funds allows the group to continue its investment in technology and growth for the next 12-18 months as the business continues executing on its strategic plans.
The directors believe that the business has sufficient prospect of trade and cash reserves to continue to trade for a period of no less than twelve months from the approval of these accounts. Given the position of the group at the year end and since then, together with the group's business plans, the directors have prepared these accounts on a going concern basis, and are satisfied that the group will be able to meet its cash out-flows as they fall due for a period of no less that 12 months from approval of these financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts.
Turnover from the sale of software licences is recognised when: the significant risks and rewards of ownership of the goods have passed to the buyer (usually on delivery of the licence); the amount of turnover can be measured reliably and it is probable that 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.
Turnover from contracts for the provision of maintenance and support services is recognised over the term of the contract. Typically, consideration for the services is received in advance. This is recognised as deferred income and released to the statement of comprehensive income on a straight line basis over the contract term.
When a sale is made through a reseller, turnover is recognised at the fair value of the net consideration received, being the royalty receivable from the reseller. Resellers are deemed to control the relationship with the end user, resulting in them acting as the principal in the transaction.
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 credited or charged to profit or loss.
In the separate accounts of the company, interest 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 profit or loss.
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.
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 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 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.
Basic financial liabilities, including creditors, bank loans and other loans 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. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Financial liabilities are derecognised when, and only when, the group's contractual obligations are discharged, cancelled, or they expire.
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. Equity instruments issued by the group are recorded at the fair value of 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. For the time being the group has no plans to pay dividends.
The tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets are recognised when tax paid exceeds the tax payable.
The tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets are recognised when tax paid exceeds the tax payable.
Current and deferred tax is charged or credited to profit or loss, except where it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income, or equity.
Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on the net basis or to realise the asset and settle the liability simultaneously.
Current tax is based on taxable profit for the year. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates that have been enacted or subsequently enacted by the reporting date.
Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements. Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.
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.
For defined contribution schemes the amount charged to profit or loss is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments.
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 the Black-Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
The expense in relation to options over the parent company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
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.
Transactions in currencies other than functional currency (foreign currency) are recorded at the rates of exchange prevailing at the dates of the transactions.
Monetary assets and liabilities that are denominated in foreign currencies are translated at the rate of exchange ruling at the reporting end date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction, or, if the asset or liability is measured at fair value, the rate when that fair value was determined.
All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.
Assets and liabilities of overseas subsidiaries (including goodwill and fair value adjustments in relation to overseas subsidiaries) are translated into the group's presentation currency at the rate ruling at the reporting date. Income and expenses of overseas subsidiaries are translated at the average rate for the year as the directors consider this to be reasonable approximation to the rate on the transaction date. Translation differences are recognised in other comprehensive income and accumulated in equity.
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.
Where turnover is generated through a reseller arrangement, the group recognises the net amount receivable, being the royalty receivable. Management have reviewed the contracting arrangements with resellers and considered the guidance in the accounting standards. The judgement reached by management is that the reseller is the principal in their relationship with the user of the product. A key factor is the reseller is deemed to control the relationship with the user of the software. Accordingly, the net revenue receivable from the reseller (being the royalty payable) is recognised as revenue in the accounts of the group.
The directors have performed detailed forecast analysis of the recoverability of the group's deferred tax assets. Based on the consideration of all positive and negative evidence, the directors concluded that it was more likely than not that some of the group's deferred tax assets will be realised as a result of future projected income and debt considerations. Accordingly, deferred tax assets of £1,300,410 (2024: £731,412) have been recognised on the balance sheet as at 31 March 2025. Further details are given in note 21.
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.
The recoverable amount of intangible assets is based on value in use which requires estimates in respect of the allocation of intangible assets to cash generating units, the future cash flows and an appropriate discount rate. The key inputs to the value in use calculations are the discount rate and future earnings growth. Impairment test carried out have resulted in impairment charges of £Nil (2024: £Nil) against intangible assets.
The assessment of useful economic lives, residual values and the method of amortising intangible assets requires judgement. Amortisation is charged to profit or loss based on the economic life selected, which requires an estimation of the period over which the group expects to consume the future economic benefits embodied in the assets. At the year end, the carrying value of the group's intangible assets was £2,276,022 (2024: £2,004,657). Further details are given in note 13.
The fair value of share-based payments is measured using the Black-Sholes model which inherently makes use of significant estimates and assumptions concerning the future. Such estimates and assumptions include the expected life of the options and the number of employees that will achieve the vesting conditions. In particular, the expected life of the options or expected term to exercise is an assumption which involves significant uncertainty and has a significant impact on the share-based payment charge. If a 25% probability was assigned to a 4 year expected exercise term, this would equate to a £29k reduction in the share-based payment charge for the year. Further details of the share option scheme are given in note 24.
The group and company capitalise development expenditure as an intangible asset when they are able to demonstrate all of the following: technical feasibility of completing the development; the intention and ability to sell or use the developed product; that the development will generate probable future economic benefits; and the ability to reliably measure the development expenditure.
There is judgement and estimation involved in assessing which costs meets the above requirements of development. In particular, the majority of development costs relate to a proportion of the costs for specific staff members, and there is estimation involved in determining the specific proportion of time spent on development. The amount capitalised as development costs during the year was £1,367,146 (2024: £745,694).
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2024 - 2).
During the year, the group incurred research and development costs of £1,367,146 (2024: £745,694).
The actual (credit)/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:
Impairment tests have been performed, resulting in an impairment in respect of intellectual property and development costs (see note 13) of £nil (2024: £nil) in the group, of which £nil (2024: £nil) relates to the company. The charge has been recognised within administration expenses.
In the company, an impairment of £138,167 (2024: £254,472) in respect of investments (see note 15) was recognised.
Amounts of £138,167 (2024: £259,796) were recognised as a net increase to the cost of investments in respect of equity settle share based payments granted to employees of StorMagic Canada Inc, however an impairment of £138,167 (2024: £254,472) was recognised against this.
Amounts of £36,086 (2024: £nil) were recognised as a net decrease to cost of investments in respect of equity settled share based payment expense credits relating to StorMagic Inc employees.
Details of the company's subsidiaries at 31 March 2025 are as follows:
Amounts owed by group undertakings incur an interest rate of 7.5% (2024: 7.5%) and are repayable at terms agreed between the group entities.
Amounts owed by group undertakings incur an interest rate of 7.5% (2024: 7.5%) and are repayable at terms agreed between the group entities.
The long-term loans are secured by fixed and floating charges over all assets of the company.
The company's brought forward balance represents the amount owed to Claret European Specialty Lending Company II SARL ("Claret") under a £2,000,000 loan facility extension agreed 27th September 2021. Interest was being charged at 10.5% per annum. The loan was repaid in full on 28 June 2024 following the refinancing with Palatine GC Holdings as noted below.
The company's current loan facility represents the amount owed to Palatine GC Holdings under a £3,000,000 loan agreed on 28th June 2024. The loan is repayable over four years with the first instalment falling due on 30th September 2025. Interest is charged at 11.5% per annum and payable quarterly on the accruals basis. Effective December 2024, the rate of interest reduced to 11% per annum through the achievement of an ESG ratchet clause.
The facility agreement contains financial covenants based on annual recurring revenue leverage ratio and minimum liquidity requirements. The company was in full compliance with all covenants at the reporting date and expects to continue to comply with them for at least 12 months from the date of approval of these financial statements.
The company issued a total of 120,000 warrant shares at a subscription price of £3.00 per share under the current loan facility. A further 253,594 warrants shares were issued under previous facilities, 153,594 at a subscription price of £0.10 per share and 100,000 at a subscription price of £2.40 per share. As at 31 March 2025, no warrants have been exercised.
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 is expect to reverse within three years and relates to short term timing differences.
Deferred tax assets have been recognised to the extent that there are sufficient future profits forecast, or that there are deferred tax liabilities to offset them. To the extent that deferred tax assets and liabilities relate to the same tax jurisdiction, they have been offset where appropriate.
At the year end, the company had total deferred tax assets of £1,626,350 (2024: £1,959,611) arising from losses and other deductions and timing differences. Of these total deferred tax assets £1,145,167 (2024: £793,661) have been recognised and offset against deferred tax liabilities arising from fixed asset timing differences. Due to uncertainty of utilisation, the remaining deferred tax assets of £1,072,950 (2024: £1,165,950) have not been recognised,
The company's subsidiary, StorMagic Inc, has recognised deferred tax assets of $967,915 (£747,010) (2024: $556,077 (£440,512) with respect to short term timing differences. Deferred tax assets and liabilities are calculated at 25%.
In additions, at the year end, the company's other subsidiary StorMagic Canada Inc had non-capital losses of CA$5,339,603 (£2,880,347) (2024: CA$5,678,587 (£3,321,588) available to carry forward against future profits. Due to uncertainty of utilisation, no deferred tax asset has been recognised in respect of these losses.
Deferred income is included in the financial statements as follows:
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. At the end of the year, pension contributions of £46,743 (2024: 27,655) were included in other creditors (note 18).
The number of directors who exercised share options during the year was 0 (2024: 0).
Ordinary shares carry full rights to vote, receive distributions and to the return of capital on winding up. All shares rank equally.
No ordinary shares were issued during the year.
Share premium Consideration received for shares issued above their nominal value net of transaction costs.
Share-based payment reserve The cumulative share-based payment expense on shares of the group issued to employees of the group.
Profit and loss reserves Cumulative profit and loss net of distribution to owners.
Other reserves The other reserve within the company only reflects the cumulative share-based payment expense on shares of the company issued to employees of other group companies.
At the reporting end date the group had no outstanding commitments for future minimum lease payments.