The directors present the strategic report for the year ended 30 April 2025.
Client Server is a respected recruitment consultancy, specialising in both permanent and contract recruitment of staff within the technology space across an intentionally diverse range of client companies.
The group maintains a good reputation with both our clients and candidates.
We continue to target growth, whilst ensuring we maintain our position as the preferred choice of recruitment partner for many of our existing clients.
Despite the sustained recruitment market downturn and, specifically a reduction in recruitment activity by technology companies in FY 2024, the directors remained positive for FY 2025 and projected improved recruitment spending across the technology sector.
During FY 2025, the group experienced a marginal improvement in performance, and costs were carefully controlled, but the global uncertainty has, to a large degree, hindered our recovery efforts.
With the notable exception of investment in the AI sphere, the technology sector continued experiencing some difficulty in sourcing funding. As a result, many of our smaller client companies maintained a very cautious approach towards recruitment during the year and even recruitment at larger, more established companies was delayed or suspended.
FY 2025 has again been a particularly challenging year for Client Server, in some respects more challenging than 2024, with the recruitment industry as a whole continuing to suffer from uncertainty both across the European/global economic market and within the UK.
While the group managed an improvement in turnover across FY 2025, this was still below target. While staff overheads were prudently managed, increased taxation and supplier costs meant the benefits from the improved turnover did not fully translate into an improvement in profit.
Towards the end of the financial year, we did start to see an improvement in trading conditions which has positively impacted the start of FY 2026. The group increased turnover from £11,815,678 in FY 2024 to £13,618,266 in FY 2025. This increase was due to a mixture of new client business coupled with a minor upswing in demand from existing clients. Gross profit improved from £6,331,968 in 2024 to £6,387,029, resulting in a decrease in losses for the group from £938,211 in FY2024 to losses of £1,165,359 in FY 2025.
Gross profit margin decreased from 53.6% to 46.9%, reflecting an increase in contract business compared to permanent placements. Administrative expenses increased to £7,462,479 from £7,425,854 in FY 2024, compared to £8,541,420 in FY 2023.
The directors use performance (booked new revenue gross margin) against target as a core KPI when measuring performance. During FY 2025, we achieved 86.9%, which is a significant improvement compared to FY 2024.
Financial Year | 2025 | 2024 | 2023 | 2022 |
Booked New Revenue* | £6,265,799 | £5,350,806 | £8,572,488 | 9,058,179 |
Booked New Revenue Gross Margin Vs Target | 86.9% | 57% | 98% | 139% |
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*Booked New Revenue is the measure of business done at the point a candidate has accepted a role.
During FY 2025 our average permanent placement fee increased marginally. We believe this increase was the result of continued strong salary offers by employers to attract the best talent. As noted in previous years, the increase in counter offers (for employees to not leave) also continued, resulting in high salary awards for top quality candidates.
Client Server continues to differentiate itself from competitors by offering a more thorough, transparent, and higher quality service.
The group continues to focus on its employees to maintain and develop this quality service. This is achieved by our extensive induction and ongoing training programmes.
The market to attract and retain quality staff continues to be a challenge across all industries, and the recruitment market itself is prone to this. Following the decision in mid-2024 to decrease the number of our consultants, we traded successfully with a smaller staffing level. The decision to carefully increase the number of consultants was taken towards the end of FY 2025 as we look forward to a better year ahead.
Following the strengthening of our management structure and training capability, we have seen a noticeable positive impact, improving our ability to attract and train staff in a very competitive market.
With our pipeline for additional recruitment also on track, we are on target to achieve our forecasted numbers of consultants for FY 2026.
As a group, we remain committed to the recruitment and training of quality employees. Employee reward and recognition continue to be reviewed and enhanced. Following an extensive review, we committed to a wholesale change of our commission scheme which we implemented at the start of FY 2026. The new scheme better rewards those employees who make a difference to all facets of our business, ensuring a fairer reward for high performance in this challenging market. Our employee share option scheme continues to be an attractive benefit to our staff, with the number of employees participating in this scheme increasing.
Recruitment Market Challenges
At the beginning of FY 2025 we noticed a small improvement in recruitment sentiment across the technology market, which we anticipated would lead to an increase in demand for recruitment services. However, global economic events appeared to stall this recovery, which continued throughout the year. Overall, the market improvement appears to have been marginal, with recruitment remaining subdued and with limited signs of an impending significant recovery.
We anticipate that this trend will continue for an extended period. However, ongoing technology advances, particularly the use and rise of AI, the challenges of increasing cyber threats, together with the need for enhanced security relating to information data, all contribute to the need to increase the use of technology across businesses. This strongly suggests the technology recruitment market will steadily improve over the near to medium-term future.
Despite changes across larger technology businesses, particularly in the US, most companies in the technology space continue to experience difficulty sourcing and retaining technology staff. While we are expecting some improvement in demand within the technology recruitment market, we are mindful that this could be affected by any further economic downturn. However, we are confident that diversity in our client base across many sectors will help to protect us.
We continue to monitor both our number of active clients and the number of vacancies to provide the best possible visibility of market demand and enable us to capitalise on opportunities as and when they arise.
The UK’s relationship with the EU, continues to have serious implications for the UK technology market, particularly in terms of immigration and the visa system. The UK’s comparatively expensive and complex visa process appears to be less attractive to many companies and potential candidates. Other EU countries appear less restrictive, which exacerbates the ongoing shortage of available talent and applicants for roles based in the UK. As a result, companies are often faced with either paying inflated salaries to attract and retain talent in the UK, or moving to an offshore model and building technology centres outside of the UK – although reports suggest this does appear to come with its own managerial challenges.
We have also seen a consistently higher proportion of candidates receiving multiple competing offers, including counter offers from their own employer to not leave. This has resulted in an increased percentage of candidates accepting counter offers to remain at their existing employer.
A continuing concern for 2026 and beyond remains the shortage of available talent. The UK has long been at the centre of technology innovation, making it an attractive place to work. This, in turn, creates a desire for companies to invest and make use of this pool of technologists. While we remain a reasonably strong technology centre, there are worrying signs of the continued rise of the attractiveness of overseas locations as alternative centres for technology. To mitigate this for our business, we aim to continue to grow our overseas operations where demand is strong.
The group has policies and procedures in place to mitigate the following financial risks:
Liquidity Risk: During FY 2024, the Board took the decision to undertake in the use of an invoice discounting facility, to help reduce liquidity risk.
The group had sufficient headroom in cash at bank and financing agreements to mitigate this risk. Losses over FY2025 eroded reserves to such an extent, a larger invoice discounting facility has been sourced to ensure cash reserves are strong both now and for at least the next 12 months.
Cashflow Risk: The Board manages and forecasts cashflows across the year which allow for early action in the case of potential issues being identified. The cash headroom also provides mitigation against the risks posed.
Interest Risk: The remaining balance of the 2021 CBILS loan is repayable over the next 1.5 years at a fixed interest rate. The group began using an invoice discounting debt finance facility during the year which has increased exposure to interest risk.
Credit Risk: Strong credit control procedures are used to mitigate the risk of bad debts.
Currency Risk: The current size of operations in overseas territories means the company is not significantly exposed to currency risk. As we continue to increase our overseas business, this is something we are prepared for with offerings of lower exchange rate charges and better exchange rates from various suppliers.
Client Server as a business is well-structured, with strong processes, management systems, and succession planning to allow for the continued growth of the group. The recent periods have presented opportunities for further strengthening of, and improvements to, these processes and systems. During FY 2025, we successfully implemented an ambitious project to update, strengthen, and improve our own IT infrastructure, allowing full employee flexibility whilst improving security of both candidate, client and our own data. We expect to continue with further incremental improvement projects, which are forecasted to be borne out of cashflow without the need for finance.
As a business, we frequently review the mix of our clients to intentionally continue our low reliance on any one sector or size of business. Our clients range from newly formed start-ups to large multi-national corporations, across a wide range of business domains and industries, such that we consider our risk of exposure to a particular market sector to be minimal. In addition, we carefully monitor our business concentration, with our three largest clients amounting to less than 16% of turnover.
Future opportunities and outlook
The ongoing challenge of sourcing, recruiting and the retention of talented individuals in the technology arena continues. In light of this, while we expect FY 2026 to be challenging, we intend to deliver solid results. Our goal for FY 2026 is to return the company to profitability.
There are a number of factors which could potentially have an impact:
The number of active live roles across our clients increased during the second half of FY 2025. Whilst the number of live roles has not risen back to our ideal position, we believe the number is relatively stable. We are working to increase this number across both existing and new clients, while carefully monitoring for any adverse indicators or actual decline in order to review and potentially adjust our cost base, as necessary.
Due to the ongoing uncertainties within our market and the need to be able to react swiftly to potential market changes, we have made the decision to move to a more flexible office model, which is predicted to result in substantial savings.
The UK continues to be attractive to companies due to the number of talented technologists and the unique innovation we deliver; therefore, the number of companies looking for key talented individuals continues to rise. However, as previously noted, other countries are promoting their own technology opportunities, threatening the UK’s position as a leader in this space. In response, we created a new ‘Europe’ team in 2021, and this has continued to grow our overseas offering. Our intention is to further capitalize on this opportunity, continuing the expansion of our services to clients based in Europe and beyond.
The decline previously observed in the number of overseas candidates available or interested in coming to the UK (as their own countries became more attractive due to increasing local salaries and more interesting or varied work) has seemingly stabilized, resulting in a lower number of overseas candidates who can work without the need for complex visa applications. We did see a slight increase in the number of both candidates and clients prepared to face the challenges and costs associated with the UK’s visa process, but with the current flat market, the requirement for doing this has stalled. When the appetite for recruitment returns, we forecast this will commence again to a limited degree..
Our focus on growing our contract offering started to deliver solid results over FY 2025 with a small, but noticeable, increase. Our strategy for the future is to continue to increase this service.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 April 2025.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £120,000 (2024: £560,000). The directors do not recommend payment of a further dividend.
No preference dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The directors have chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management and future developments.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Client Server Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 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
Material uncertainty related 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. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
We draw attention to the Statement of Comprehensive Income and Balance Sheet in the financial statements, which indicates that the company incurred a net loss of £1,165,359 during the year ended 30 April 2025 and, as of that date, the company’s current liabilities exceeded its total assets by £948,566. As stated in note 1.2, these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In planning and designing our audit tests, we identify and assess the risks of material misstatements within the financial statements, whether due to fraud or error. Our assessment of these risks includes consideration of the nature of the industry and sector, the control environment and the business performance along with the results of our enquiries of management, about their own identification and assessment of the risks of irregularities. We are also required to perform specific procedures to respond to the risk of management override.
As a result of this assessment, we considered the opportunities and incentives that may exist within the company and group for fraud and identified that the greatest area of risk was in relation to management override, completeness of income and going concern.
We have obtained an understanding of the legal and regulatory frameworks that the company and group operates in from discussions with the directors and our knowledge of the company and group and its industry sector. We have focused on the provisions of those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, local tax legislation and employment law.
We performed the following audit procedures after consideration of the above risks which included the following:
enquiry of management of actual and potential litigation and claims;
testing that sales invoices have been fully and properly included within turnover in the financial statements, and review of sales recorded after the balance sheet date for possible income that has been incorrectly excluded from the period;
review of customer invoices and after date receipts;
review of forecasts and discussions with management;
reviewing correspondence with HMRC;
reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
The engagement partner has assessed that all engagement team members were made aware of the relevant laws and regulations and potential fraud risks and were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
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. The 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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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 £719,569 (2024 : £617,661 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Client Server Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit C Thames Mews, Portsmouth Road, Esher, Surrey, KT10 9AD.
The group consists of Client Server Group Limited and all of its subsidiaries.
The company's and the group's principal activities and nature of its operations are disclosed in the Directors' 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.
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 Client Server Group 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).
All financial statements are made up to 30 April 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the group.
All intra-group transactions and balances 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 financial statements have been prepared on a going concern basis. The group has incurred significant losses in recent years and is currently in a net liability position as at the balance sheet date. These conditions indicate the existence of a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern.
While the group reported a net liability position at the balance sheet date, this is being managed through strict working capital management, including the successful negotiation of a larger factoring arrangement since the year end. However, In assessing the group's ability to continue as a going concern, the directors have prepared detailed forecasts covering a period of at least 12 months from the date of approval of the financial statements. These forecasts project a return to profitability and improved cash flows, supported by trading performance since the year end which has been in line with expectations.
Based on these forecasts, the directors have a reasonable expectation that the group will have adequate resources to meet its obligations as they fall due. Accordingly, the financial statements have been prepared on a going concern basis.
Turnover in respect of temporary placements is recognised when the service has been rendered and accepted by the client. Turnover excludes value added tax.
Turnover in respect of permanent placement fees is recognised when the group has fulfilled its contractual obligations in accordance with the underlying contracts. This is typically the start date of the candidate's employment.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the separate accounts of the company, interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in 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.
Undertakings in which the group has significant influence (i.e. the power to participate in the financial and operating policy decisions but not control or joint control over those policies) are classified as associates. The group’s share of the results, other comprehensive income and equity of associates are accounted for using the equity method based on the associate’s financial statements to 30 April.
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.
All unrealised profit or losses on transactions with the associate are eliminated to the extent of the group’s interest, except where unrealised losses provide evidence of an impairment. Where necessary, adjustments are made to bring the accounting policies of the associate into line with those used by the group.
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.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Trade, group and other debtors which are receivable within one year and which do not constitute a financing transaction are initially measured at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled and any impairment losses.
Where the arrangement with a debtor constitutes a financing transaction, the debtor is initially measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument and subsequently measured at amortised cost.
A provision for impairment of trade debtors is established when there is objective evidence that the amounts due will not be collected according to the original terms of the contract. Impairment losses are recognised in profit or loss for the excess of the carrying value of the trade debtor over the present value of the future cash flows discounted using the original effective interest rate. Subsequent reversals of an impairment loss that objectively relate to an event occurring after the impairment loss was recognised, are recognised immediately 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.
Trade, group, other creditors payable and bank loans within one year that do not constitute a financing transaction are initially measured at the transaction price and subsequently measured at amortised cost, being transaction price less any amounts settled. Where the arrangement with a creditor constitutes a financing transaction, the creditor is initially measured at the present value of future payments discounted at a market rate of interest for a similar instrument and subsequently measured at amortised cost.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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 other creditors.
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 Balck-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.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than the functional currency (foreign currency) are initially recorded at the exchange rate prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting 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.
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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Provisions are made in respect of dilapidations and bad debts, and are made based on management's best estimate of cost using industry averages for dilapidations and past experience for bad debts.
In determining the charge to the Statement of Comprehensive Income, the directors have used the Black-Scholes model which makes assumptions about future performance, retention and timescales and is therefore a best estimate. For the share options in issue with performance based vesting criteria the directors have made an estimate as to the probability of performance-based share options meeting the vesting conditions attached to them. The directors have estimated this to be 67% for options issued under this scheme.
The directors have reviewed the carrying amount of the investment in its subsidiary in accordance with FRS 102 Section 27. Indicators of impairment were identified due to the subsidiary’s continued trading losses. The recoverable amount has been determined based on value in use, using cash flow projections derived from management’s forecasts. These projections reflect the expected future benefits from the subsidiary’s operations, including retention of key customers and the value of established client relationships.
Key assumptions include revenue growth, cost control measures, discount rates reflective of current market conditions, and the anticipated longevity of the customer base. Based on this assessment, the directors have concluded that an impairment provision of £847,340 is necessary in the parent company's accounts as the recoverable amount exceeds the carrying value. The directors will continue to monitor the position and reassess if circumstances change.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge/(credit) for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
At the balance sheet date, the group has trading losses available for carry forward against future taxable profits. These losses have arisen from prior periods and remain unutilised. The total carried forward losses are £909,450 (2024: £78,071). No deferred tax asset has been recognised in respect of these losses due to uncertainty over the timing of future taxable profits.
Details of the company's subsidiaries at 30 April 2025 are as follows:
Client Server (Pty) Limited was closed during the year.
Details of associates at 30 April 2025 are as follows:
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
Amounts due to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
The bank loan of £283,333 (2024 - £483,333) is secured by a fixed and floating charge over the assets of the company. The loan is repayable 6 years after its drawdown in 2020, during the year interest has been fixed at a rate of 2.89%. This facility is supported by the Coronavirus Business Interruption Loan Scheme.
The group has entered into a debt factoring arrangement under which trade debtors are financed to a factor. The company retains the credit risk associated with these receivables. The liability owed to the factor at the year end of £765,273 (2024: £508,258) is included in other borrowings. At the year end, the carrying amount of trade receivables factored is £1,249,047 (2024: £829,032).
The discounting facility has maximum limit of £1,000,000 with an advance rate of 75% of approved receivables and a discount charge of 2.15% over the base lending rate.
Invoice factoring facilities are secured by a fixed charge over all freehold and leasehold land and buildings and all fixed plant and machinery.
The dilapidations provision relates to expected expenditure for re-instating the premises a subsidiary rents to its original condition.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
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. Contributions totalling £7,767 (2024 - £12,386) are payable to the fund at the year end and are included in creditors.
There were no contributions outstanding in the company.
The group operates five employee share schemes under an approved Enterprise Management Scheme.
The 2019 scheme’s position at the year end is 1,934 options (2024: 2,580) outstanding with nil (2024: nil) being exercisable.
Options under the 2019 scheme become exercisable and will vest once a significant event has taken place. The options have a maximum term of 10 years which ends in 2029. The average exercise price is £1.53 (2024: £1.53)
The 2020 scheme’s position at the year end is 1,073 (2024: 1,771) options outstanding with 1,771 (2024: nil) being exercisable.
The options have a maximum term of 10 years which ends in 2030. The average exercise price is £1.53 (2024: £1.53). No options have been exercised in the year.
The 2021 scheme's position at the year end is 1,465 (2024: 1,996) options outstanding with 1,996 (2024: nil) being exercisable. No options have been exercised in the year.
The options have a maximum term of 10 years which ends in 2031. The average exercise price is £1.53 (2024: £1.53).
The 2022 scheme's position at the year end is 33,153 (2024: 34,725) options outstanding with 34,725 (2024: nil) being exercisable.
Options under the 2022 scheme become exercisable and will vest once a significant event has taken place, the number of options available to vest are also subject to company performance targets included within the share option agreements. The options have a maximum term of 10 years which ends in 2032. The average exercisable price is £1.53 (2024: £1.53). No options were exercised in the year.
The 2023 scheme's position at the year end is 4,830 (2024: 5,615) options outstanding with 5,615 (2024: nil) being exercisable.
The options have a maximum term of 10 years which ends in 2032. The average exercise price is £1.53.
There were no new share options in the year.
Using the Black-Scholes model the directors have calculated a charge of £43,532 (2024: £57,755) for the current year. In addition, an adjustment of £40,484 relating to leavers during the year was transferred out of the share option reserve. The model makes assumptions about future performance, and it therefore is a best estimate.
A Ordinary shares carry rights to dividends and full voting rights.
First and second preference shares carry no dividend rights and no voting rights. On a return of capital on a liquidation or otherwise the surplus assets of the company after the payment of its liabilities shall be applied first to the holders of first preference shares, secondly to holders of the second preference shares and thereafter the holders of the 'A' ordinary shares.
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:
Client Server BV was newly incorporated in the year, however since the year end it is in the process of being closed. The company has never traded so this has no affect to future results.
The directors are considered to be the only key management personnel of the company.
At the year end the company owed £28,339 (2024 - £56,645) to an associated undertaking, in respect of called up share capital not paid and a loan. These amounts can be recalled at any time. The group made purchases of £12,000 (2024 - £12,000) from them during the year.
The group and company has taken advantage of the exemptions provided by Section 33 under FRS102 'Related Party Disclosures' and has not disclosed transactions entered into between two or more members of a group, provided that any subsidiary undertaking which is party to the transaction is wholly owned by a member of that group.