itim Group
itim Group plc

itim Group plc share price, company news, analysis and interviews

itim Group plc (LON:ITIM) is a SaaS-based technology company that enables store-based retailers to optimise their businesses to improve financial performance and effectively compete with online competitors.

itim adds retail value by helping multi-channel retailers optimise their business and their stores.

The company offers a complete set of retail software solutions including:

Single Sales Platform

Consumers expect the same offer from a retailer no matter how they shop with you. They want to have access to the same product information, inventory, promotions and pricing. 

itim has developed a single platform that provides all the selling capability you need covering POS, website, mobile apps and in store service all with the ability to switch between shopping globally or just a specific store.

Single View of Customer

Retailers need a central repository of all customer information including profile information, preferences, wish lists, reviews, order history, contact history and more.

itim can manage this information and make it instantly available to all customer touch-points including POS, tablets, browser, website and third-party applications. 

Cross Channel Promotions

Many retailers have to maintain promotions for different channels separately, often having to cope with differences in capability between channels. itim provides a highly sophisticated promotions engine that can cope with the most complex promotional mechanics and which can be used to drive all of your selling channels from a single source.

itim group

Single View of Stock

When customers build a basket of products, they want to know whether you have the stock either owned or with 3rd parties and when/where they can have the products.

itim provides a real time stock engine that tracks every stock movement within your business and understands the fulfilment capabilities so that it can present a customer with a list of when and where they can receive their products along with how much it will cost for each option.

Optimised Order Routing

Once a customer has placed on order, the retailer needs to identify the most profitable way to fulfil that order while meeting the customer promise.

The itim order routing engine will identify the optimal way to fulfil an order and will execute processes to manage, track and trace progress. When the store is part of the process this includes apps for picking, packing, dispatch and collection. 

Last Mile Delivery

Utilising store stock for online orders allows retailers to increase availability and deliver more rapidly than their competitors. New fulfilment options are appearing all the time.

itim has developed a local courier integration capability to make adding new delivery partners quick and easy.

itim group

Price Optimisation

A product is worth the price a customer is prepared to pay for it no matter what you bought it for. What is key for retailers is the managing of stock turn and price is the key lever for ensuring that product is sold through at the required rate.

itim provides an advanced AI based engine to optimise price that ensure the maximum profitability is achieved for the desired sell through.

Stock Optimisation

Retailers need to maximise the return on investment in the stock they have bought. This means ensuring products are in the best locations for meeting customer demand at the best possible margin.

itim provides an AI based optimisation capability for determining the optimal range to hold in each store or fulfilment location. 

Supplier Integration

Key to reduce costs and serving customer more effectively is the ability to collaborate with suppliers.

itim provides solutions to enable the automation of these processes. Behind this is their market leading capability for invoice matching along with managing to agreed terms such as retros and overriders.

stock optimisation itim (ITIM)

Merchandising

Merchandising teams in many retailers spend much of their time executing inefficient processes just to operate the business. This leaves them with little time to thing about how to trade their categories more effectively.

By providing efficient processes for merchandising processes such as store grading, ranging, purchase ordering, demand forecasting, replenishment and allocation, supplier management and stock management, itim frees up Merchandisers time to focus on how to increase sales and margin.

Retail ERP

For a retailer to be able to take advantage of advanced multi-channel capability, while keeping costs low, they need an efficient ERP that is designed specifically for retail. With a history of only working with retailers.

itim is able to meet the needs of retailers in areas such as supplier management, purchase order and stock management rapidly with minimal configuration. Their solutions are optimised for automation for retail, this reducing the demands on your people and the need for headcount.

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itim Group Powers Back to Profitability with Major Retail Wins and Soaring Margins in FY Results

itim Group plc (LON:ITIM), a SaaS based technology company that enables store-based retailers to optimise their businesses to improve financial performance, has announced its audited results for the year ended 31 December 2024.

Financial Highlights

·      Group revenues increased by 11% to ÂŁ17.9 million (2023: ÂŁ16.1 million) 
·      Annual recurring revenue (“ARR”) is ÂŁ13.0 million (2023: ÂŁ13.2 million) 
·      Group Adjusted EBITDA* up 260% to ÂŁ2.5 million (2023: ÂŁ0.7 million)  
·      Adjusted EBITDA* margin increased by 10 percentage points (“PPT”) to 14% (2023: 4%) 
·      Profit before tax for the year is ÂŁ0.2m compared to a loss in 2023 of ÂŁ1.1m 
·      Adjusted Earnings per share** 0.64 pence (2023: -2.86 pence) 
·      Closing cash balances were ÂŁ3.8 million up from ÂŁ1.9 million at 31 December 2023 

* EBITDA has been adjusted to exclude share-based payment charges, exceptional items, along with depreciation, amortisation, interest and tax from the measure of profit.

** The profit measure has been adjusted to exclude exceptional items and share option charge

CFO Ian Hayes outlines how the company’s dual revenue strategy has delivered a 260% surge in adjusted EBITDA, driven by a 31% jump in services revenue. With heavyweight retail brands like Majestic and The Entertainer signing long-term contracts, and a major £10 billion retailer choosing itim over global giants, the company’s market perception is shifting fast. Add to that a record sales pipeline and growing demand from retailers battling rising costs, and it’s clear itim’s momentum is only just beginning.

https://vimeo.com/1083773590

Ali Athar, Chief Executive, commented: “I’m pleased to share itim’s full year results, which reflect meaningful progress across the business. Revenue growth of 11% and a significant improvement in adjusted EBITDA demonstrate the impact of our focus on commercial execution. Our improved margins and strengthened cash position underline a more resilient financial foundation.

“We continue to invest in innovation and product excellence, underpinned by our unified retailing platform, ‘UNIFY.’ The strides we’ve made this year are a direct reflection of the commitment and talent of our team, as well as the continued trust placed in us by our customers. Our ability to deliver cost-effective solutions in a complex retail environment is driving growing interest in our platform and reinforcing our reputation as a valued partner. As we look ahead, the Board remains cautiously optimistic that our focus on margin enhancement and efficiency will support continued momentum and long-term value creation. I look forward to providing further updates in due course.”

Copies of the Annual Report and Accounts for FY2024 with the notice of annual general meeting have been posted to shareholders today and are available on the Company’s website www.itim.com. The Company intends to hold its annual general meeting at the offices of the Company, 2nd Floor, Atlas House, 173 Victoria Street, London SW1E 5NA on 13th June 2025 at 10.30 a.m.

CHAIRMAN’S STATEMENT

I am delighted to deliver my first annual report as Non-Executive Chairman and I proud to reflect on a noteworthy period of growth and achievement for the Company. Our performance over the past year has been especially strong, underscoring the resilience of our business model, the dedication of our team, and the continued trust placed in us by our customers and shareholders.

As highlighted in our trading update in February 2025, we were extremely pleased to report numbers that were significantly ahead of market expectations at the time. This achievement is a testament to the hard work of our team and the value we continue to deliver to our customers. The cost efficiencies we offer to the retail industry have driven increased demand for our products, reinforcing our position as a trusted partner in the sector.

We were especially proud of the strategic milestones reached in 2024. We secured a five-year multi-million-pound contract with AssaĂ­ Atacadista, Brazil’s largest wholesaler, which leveraged our UNIFY Price & Promotions Optimisation solution powered by Profimetrics AI to enhance its pricing strategies. Additionally, we signed a five-year contract extension with toy retailer The Entertainer, as it expanded its use of our Unify Platform to support its partnership with Tesco and also renewed our long-standing partnership with Majestic Wine, the UK’s largest specialist wine retailer, for another five years. This subscription renewal for our UNIFY platform covered a wide range of operations, from EPOS and e-commerce to stock management and business intelligence, reinforcing our commitment to providing comprehensive, integrated solutions.

We are also pleased to welcome Dennis Layton as Non-Executive Director to the Board. Dennis brings a wealth of experience in management consulting and organisational transformation, and his insights will undoubtedly strengthen our strategic direction.

As we look ahead, we remain mindful of the broader market backdrop and potential challenges. However, our continued investment in innovation, operational excellence, and customer-centricity gives us confidence in our long-term prospects. Our focus remains on delivering sustainable growth, expanding our client relationships, and providing best-in-class solutions that empower retailers to thrive.

I would like to take this opportunity to extend my heartfelt gratitude to my predecessor, Michael Jackson, for his exceptional leadership and unwavering support during his tenure as Chairman.

Finally, I would also like to express my sincere gratitude to our shareholders for their continued trust, to our customers for their partnership, and to our employees for their dedication.

Colin Price

Chairman

12th May 2025

CHIEF EXECUTIVE’S REVIEW

I am pleased to present our Annual Report for 2024, the most pivotal year for itim since our IPO. We have successfully returned the business to profitability, with EBITDA increasing by 260%, transforming a ÂŁ0.9m loss in 2023 into a ÂŁ0.2m profit in 2024. This strong financial performance was further reinforced by a significant year-end cash balance of ÂŁ3.8m, positioning us well for future growth and investment.

As we reflect on another year, we are proud of the substantial progress we have made in shaping the retail technology landscape. Over the past two decades, itim has made a substantial investment in the continuous development of our UNIFY platform, which has become the cornerstone of our ability to deliver end-to-end solutions for retailers.

We live in a competitive world, with well-established players such as SAP, Oracle, and Microsoft competing at the large end of the market, and hundreds of best-of-breed vendors targeting niche components of the retail value chain at the smaller end. Against this backdrop, our mission is clear: to differentiate ourselves by focusing on delivering tangible business outcomes for our customers.

Despite ongoing investment in technology, we consider many UK retailers have lacked significant productivity improvements and with the current Government imposed cost increases, profitability is declining. Recent research by itim of 120 mid-sized UK retailers revealed that 85% of retailers are reporting profits under 5% of turnover. We believe this highlights the pressing need for solutions that go beyond mere software and directly address the fundamental challenge of profitability.

As experts in retail, we firmly believe that technology should do more than simply automate processes, it must drive measurable business outcomes. Our focus on helping retailers increase revenues, reduce costs, improve margins, and optimise working capital is what truly sets itim apart. The UNIFY platform is not just about enhancing operational efficiency; it is designed to empower our clients to thrive in an increasingly complex and competitive retail environment. By aligning technology with tangible business goals, we enable our customers to not only meet today’s challenges but to seize new opportunities for growth and profitability.

Historically many companies turn to management consultancies to guide them through business transformation and help them put together their technology platforms by integrating best of breed software vendors with ERP systems. We recognise that such engagement is often very expensive and beyond the reach of many retailers. This is where itim can provide significant value. Our solution is designed to ensure that our customers can navigate today’s challenges without the prohibitive costs traditionally associated with digital transformation. By offering both a sophisticated fully integrated technology platform and the expertise to drive real business outcomes, we believe we are one of the few players capable of helping retailers succeed in a rapidly evolving market.

A core aspect of our strategy in 2024 was to increase our focus on services revenue. By helping our customers maximise the value of our platform, we are not only improving their profitability but also strengthening our own financial position. Services revenue create a strong pipeline for future growth which allows us to further solidify customer relationships and generate references which we believe is the best route for acquiring new customers. As we acquire new customers, we are confident these will not only translate into increased subscription revenues which strengthens our long-term future but also provide services revenues in the short term as newly acquired customers continue to maximise their use of our platform as we deliver proven success.

As we look to the future, we are excited about the opportunities that lie ahead. In the current economic environment, the need for retail technology that can drive profitability and business transformation is greater than ever. With a strong pipeline of new customers and a solid track record of delivering superior outcomes, we are well-positioned for continued success. Our commitment to providing both cutting-edge technology and business results ensures that itim remains a trusted partner to retailers striving to stay ahead of the curve.

In closing, we are confident that our strategy, rooted in a commitment to delivering business outcomes, driving profitability, and offering an affordable path to transformation for our customers will continue to set us apart in the marketplace. We remain deeply committed to helping our customers succeed, and we look forward to the next chapter of growth and innovation at itim.

Ali Athar          

Chief Executive officer

12th May 2025

CHIEF FINANCIAL OFFICER’S REVIEW

Income Statement

Overview

 In the 2023 Annual report, the Board set out itim’s strategic shift in business focus from subscription growth to prioritising profitability and cashflow through driving services revenues to adapt to global uncertainties and market conditions.

I am pleased to report strong progress in the first year of our strategic shift, with EBITDA increasing significantly to ÂŁ2.5m from ÂŁ0.7m in 2023. Notably, the business has delivered a positive swing from a ÂŁ0.9m loss in 2023 to a ÂŁ0.2m profit in 2024, a clear indication of the effectiveness of our strategy and the resilience of our operating model.

Revenue

Our revenue streams are split between subscription revenues generated from contracts which provide long term growth, sustainability and stability to the business, and short-term services project revenues which drive profitability and cash. Revenues for the year were ÂŁ17.9m up from ÂŁ16.1m in 2023, an increase of 11%. With subscription revenues remaining relatively steady during the year, the increase was largely due to an increase in project revenues which rose by 34%.

Despite the shift towards driving services revenues, the quality and certainty of recurring revenues as a percentage of total turnover remained high at 75% (2023: 79%).

Gross profit

With increased focus on project revenues, whilst ensuring an appropriate cost base to deliver those projects, the gross profit margin increased to 40.1% up from 31.2% in 2023.

Furthermore, with excess capacity in our hosting environment, as new subscription revenues are on boarded to the hosting infrastructure, these will contribute to improving margins without incurring additional costs to the Company.

Administrative expenses

As anticipated, the administrative cost base increased by 8% over 2023 due to bonuses paid to the performing proposition teams. As a percentage of sales, administrative expenses have decreased from 27% in 2023 to 26% in 2024 and we only anticipate large fluctuations in overhead costs due to increased marketing spend.

Foreign exchange rates

With 30% of ARR denominated in foreign currencies at the year end, and with sterling at a three year high against the Euro and the Brazilian Real at 31st December 2024, it is inevitable that ARR decreased due to the impact of foreign exchange movements as Sterling strengthened by 25% against the Real representing 17% of our ARR and 5% against the Euro representing 8% of the year end balances.  

The table below sets out the percentage of annual contracts in the foreign currencies in which we trade and its impacts.

FX Rates 31-Dec-23 31-Dec-24 2024 2023 Average 2024 Average 2024
(% of ARR at year end) FX rate FX rate Variance % FX rate FX rate Variance %
ÂŁGBP/Euro (ARR 8%) 1.153 1.210 5% 1.149 1.165 1%
ÂŁGBP/BRL (ARR 17%) 6.180 7.744 25% 6.209 6.139 -1%
ÂŁGBP/USD (ARR 5%) 1.273 1.252 -2% 1.243 1.263 2%

Despite the substantial strengthening of Sterling at the year end, foreign exchange rates remained relatively static during the year with minimal volatility on the P&L.

Taxation

The Group continues to take advantage of R&D tax credits as it continues to innovate its technology offering. The current year tax credit is made of up of a net current tax credit of ÂŁ0.22m (2023: ÂŁ0.34m) and a deferred tax charge of ÂŁ0.19m (2023: ÂŁ0.13m).

Earnings/(Loss) per share

Basic EPS for the year was 0.64p (2023: -2.86p) and the diluted EPS was 0.57p (2023: -2.86p).

On an adjusted profit basis after adjusting for exceptional items and the share option charge the adjusted earnings basic EPS was 1.09p (2023: -2.86p) and the adjusted earnings diluted EPS was 0.98p (2023: -2.86p).

Dividend

The Board does not propose to pay a dividend in respect of the financial year (2023: ÂŁnil).

Group Statement of Financial position

The Group had net assets of ÂŁ11.6m at 31st December 2024 (2023: ÂŁ11.5m) an increase of ÂŁ0.1m attributable to the total comprehensive income for the year.

Cash flow and working capital

The Group ended the year with a cash balance of ÂŁ3.8m (2023: ÂŁ1.9m).

Cash generated from operating activities for the year amounted to ÂŁ4.18m (2023: ÂŁ0.53m). There were no further inflows from investing activities during the year (2023: ÂŁnil). Cash expended on capitalised product development was ÂŁ1.66m (2023: ÂŁ1.95m) payment of interest, lease liabilities and equipment amounted to ÂŁ0.64m (2023: ÂŁ0.54m). No loans were made in the year (2023: ÂŁnil). Which taken together with our opening cash balance of ÂŁ1.9m gives the closing cash balance at the year-end.

Equity

There were no changes in equity during the year.

Ian Hayes        

Chief Financial Officer 

12th May 2025

Consolidated Statement of Changes in Equity

For the year ended 31 December 2024

Share Capital Foreign Retained
Share Share options redemption exchange profits/
capital premium reserve reserve reserve (losses) Total
ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000
At 1 January 2023 1,561 7,398 513 1,103 150 1,752 12,477
Comprehensive income for the year (892) (892)
Foreign exchange movement (56) (56)
Total comprehensive income (56) (892) (948)
Share option charge
At 31 December 2023 1,561 7,398 513 1,103 94 860 11,529
Comprehensive income for the year 200 200
Foreign exchange movement (113) (113)
Total comprehensive income (113) 200 87
At 31 December 2024 1,561 7,398 513 1,103 (19) 1,060 11,616

The notes form part of these financial statements.

Consolidated Statement of Financial Position

 As at 31 December 2024

Note       2024      ÂŁ’000       2023      ÂŁ’000
Non-current assets
Intangible assets 12 11,229 11,109
Plant and equipment 13 254 476
Right-of-use assets 19 770 1,058
Deferred tax 10 13
Total non-current assets 12,253 12,656
Current assets
Trade and other receivables 15 3,636 5,385
Cash and cash equivalents 3,795 1,930
Total current assets 7,431 7,315
Total assets 19,684 19,971
Current liabilities
Trade and other payables 16 (6,273) (6,398)
Right-of-use liability 19 (284) (287)
Total current liabilities (6,557) (6,685)
Non-current liabilities
Trade and other payables due in more than one year 17 (183) (347)
Right-of-use liability 19 (535) (795)
Deferred tax 10 (793) (615)
Total non-current liabilities (1,511) (1,757)
Total liabilities (8,068) (8,442)
Net assets 11,616 11,529
Capital and reserves
Called up share capital 21 1,561 1,561
Share premium account 22 7,398 7,398
Share options reserve 22 513 513
Capital redemption reserve 22 1,103 1,103
Foreign exchange reserve 22 (19) 94
Retained profit 22 1,060 860
Shareholders’ funds 11,616 11,529

These financial statements were approved and authorised for issue by the Board of Directors on 12th May 2025.

Signed on behalf of the Board of Directors       

I D Hayes

Director

The notes form part of these financial statements.

Company Statement of Financial Position

As at 31 December 2024

Note       2024ÂŁ’000 2023ÂŁ’000
Non-current assets
Intangible assets 12 300 350
Plant and equipment 13 104 374
Investments 14 5,071 5,071
Right-of-use assets 19 401 551
Trade and other receivables due in more than one year 15 1759
Total non-current assets 7,635 6,346
Current assets
Trade and other receivables 15 14,396 15,491
Cash and cash equivalents 178 140
Total current assets 14,574 15,631
Total assets 22,209 21,997
Current liabilities
Trade and other payables 16 (792) (827)
Deferred tax 10 (17) (72)
Right-of-use liability 19 (144) (131)
Total current liabilities (953) (1,030)
Non-current liabilities
Trade and other payables due in more than one year 17 (148) (347)
Right-of-use liability 19 (271) (414)
Total non-current liabilities (419) (761)
Total liabilities (1,372) (1,791)
Net assets 20,837 20,186
Capital and reserves
Called up share capital 21,24 1,561 1,561
Share premium account 22,24 7,398 7,398
Share options reserve 22,24 513 513
Capital redemption reserve 22,24 1,103 1,103
Retained profit 22,24 10,262 9,611
Shareholders’ funds 20,837 20,186

These financial statements were approved and authorised for issue by the Board of Directors on 12th May 2025.            

Signed on behalf of the Board of Directors

I D Hayes         

Director

The notes form part of these financial statements.

Consolidated Cash Flow Statement

Year ended 31 December 2024

Note 2024ÂŁ’000 2023ÂŁ’000
Cash flows from operating activities
Profit/(Loss) after taxation 200 (892)
 
Adjustments for:
Taxation 10 (25) (205)
Other interest on leases 19 96 41
Amortisation and depreciation 12,13,19 2,056 1,740
Cash flows from operations before changes in working capital 2,327  684 
Movement in trade and other receivables 15 1,528 (1,297)
Movement in trade and other payables 16 (55) 678
Cash generated from operations 3,800 65
Corporation tax 377 462
Net cash flows from operating activities 4,177 527
 
Cash flows from investing activities
Capital expenditure on intangible assets 12 (1,601) (1,870)
Purchase of plant and equipment 13 (61) (77)
Stamp duty on ROU lease renewal (6)
Net cash flows from investing activities (1,662) (1,953)
Interest repayments 18 (50) (16)
Payment of lease liabilities 19 (589) (528)
Net cash flows from financing activities (639) (544)
         
Net decrease in cash and cash equivalents 1,876 (1,970)
Cash and cash equivalents at beginning of year  1,930 3,922
Exchange (losses)/gains on cash and cash equivalents (11) (22)
Cash and cash equivalents at end of year 3,795 1,930

The notes form part of these financial statements.

Company Cash Flow Statement

Year ended 31 December 2024

2024ÂŁ’000 2023ÂŁ’000
Cash flows from operating activities
Profit after taxation 651 924
Adjustments for:
Taxation 10 (55) (12)
Amortisation and depreciation 12,13,19 470 273
Finance costs 58 18
Finance income (49) (49)
Cash flows from operations before changes in working capital 1,075 1,154
Movement in trade and other receivables 15 (615) (2,016)
Movement in trade and other payables 16 11 190
Cash generated from operations 471 (672)
Net cash flows from operating activities 471 (672)
Cash flows from investing activities
Stamp duty on ROU lease renewal (6)
Net cash flows from investing activities (6)
Cash flows from financing activities
Interest paid 18 (50) (16)
Payment of lease liability (383) (207)
Net cash flows from financing activities (433) (223)
Net decrease increase in cash and cash equivalents 38 (901)
Cash and cash equivalents at beginning of year 140 1,041
Cash and cash equivalents at end of year 178 140

The notes form part of these financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.   Corporate Information

The consolidated financial statements of ITIM Group plc and its subsidiaries (collectively, the Group) for the year ended 31 December 2024 were authorised for issue in accordance with a resolution of the directors on 12th May 2025. itim Group plc (“the Company”) is a public limited company incorporated and domiciled in the UK. The nature of the operations and principal activities of the Company and its subsidiary undertakings (the “Group”) are set out in the Strategic Report on pages 3 to 11 and the Directors’ report on pages 26 to 27.

2.   Basis of preparation

The consolidated financial statements of the Group are prepared under IFRS and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 applicable to companies reporting under IFRS.

The Company’s financial statements have been prepared under IFRS and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 and as permitted by section 408 of the Companies Act 2006, no income statement is presented for the company. The Company made a profit of ÂŁ650,823 for the year ended 31 December 2024 (2023: ÂŁ923,983)

The financial statements are presented in GBP, which is also the company’s functional currency.

Amounts are rounded to the nearest thousand, unless otherwise stated.

The financial statements have been prepared on the going concern basis.

3.   Summary of significant accounting policies

Basis of consolidation

The Group financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December each year. The results of subsidiaries acquired or sold are consolidated for the periods from or to the date on which control passed. Acquisitions are accounted for under the acquisition method.

Subsidiaries

Subsidiaries are all entities over which the Group has the ability to exercise control and are accounted for as subsidiaries. The results of subsidiaries are included in the Group income statement from the date of acquisition until the date that such control ceases. Intercompany transactions and balances between Group companies are eliminated upon consolidation.

Revenue recognition

Revenue was recognised to the extent that it was probable that the economic benefits would flow to the Group and the revenue could be reliably measured.

Revenue represents the amounts (excluding value added tax) derived from the provision of goods and services to third party customers during the year by the group. Revenue is derived from the Group’s principal activity and excludes VAT.

The Group derives revenue from two principal sources as noted below:

Recurring revenue

1.   Recurring revenue consists of:

·   Subscriptions – revenue from subscriptions derive from the Group’s hosted software-as-a-service subscription application, which allows customers to use hosted software over the contract period without taking possession of the software. Revenue is recognised over the contract period, commencing on the date of the service go live which gives the customer the right-to-use and access the platform.

·     Support and maintenance – derive from support services and software upgrades offered to customers using the Group’s software products. Revenue is recognised over the contract period, commencing on the go-live date of the implementation which gives the customer the right to access support services and the right to receive upgrades.

2.   One off revenue

One off revenue consists of:

·      Licences – the performance obligation for the provision of licences is considered to be satisfied when the agreement is signed by the customer and they are given access to the related software intellectual property (“IP”) without any requirement to provide updates. It is recognised in full at the transaction price and over the period of implementation before the go live date of the implementation.

·      Services – Services revenue relate to design and implementation services for each customer. Services enhance an asset that the customer controls and the Group creates specific fit for purpose assets which cannot be used elsewhere. The transaction price is the amount determined by fixed price contracts or on a time and materials basis where the Group has a right for consideration for work performed to date. Under the terms of the contracts, the Group has a right to invoice at the achievement of various milestones in the contract.

·      Services are recognised over time and management consider the time spent as a proportion of total time expected is the most appropriate basis for recognition of this revenue stream as staff time is the main input into the delivery of the service. Any differences to the revenue measured by the above method and the amounts invoiced are included in the balance sheet. Further information on the contracts assets or contract liabilities are included in note 4.

Intangible assets – Goodwill

Goodwill is not amortised but tested for impairment annually and whenever impairment indicators require. In most cases the Group identified its cash generating units as one level below that of an operating segment. Cash flows at this level are substantially independent from other cash flows and this is the lowest level at which goodwill is monitored. A goodwill impairment loss is recognised in the Statement of Comprehensive Income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit’s recoverable amount, which is the greater of value in use and fair value less cost to sell.

Negative goodwill relating to intangible fixed assets requires immediate recognition in the Statement of Comprehensive Income. 

In calculating goodwill, the total consideration, both actual and deferred, is taken into account. Where the deferred consideration is contingent and dependent upon future trading performance, an estimate of the present value of the likely consideration payable is made. This contingent consideration is re-assessed annually.  The difference between the present value and the total amount payable at a future date gives rise to a finance charge which is charged to the Statement of Comprehensive Income and credited to the liability over the period in which the consideration is deferred.  The discount used approximates to market rates.

Intangible assets – research and development expenditure

Research expenditure is written off as incurred. Internally generated development expenditure is also written off, except where the directors are satisfied as to the technical, commercial and financial viability of individual projects. In such cases, the identifiable expenditure is capitalised and amortised over the period during which the group is expected to benefit. This period is seven years. Provisions are made for any impairment.

Intangible assets – other

Other intangible assets recognised in these financial statements consist of Customer contracts and relationships and Intellectual Property Rights acquired on the acquisition of EDI Plus Limited along with the purchase of the intellectual property rights of software.

Amortisation is calculated to write off their cost or valuation less any residual value over their estimated useful lives as follows:

Customer contracts and relationships  – straight line over 10 years

Intellectual Property Rights – straight line over 10 years

Intellectual property rights of software – straight line over 7 years

The amortisation of intangible fixed assets is shown as a separate line in the Consolidated Statement of Comprehensive Income.

The carrying values of intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable.

Impairment non-current assets

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit.

Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

Foreign currencies

Transactions denominated in a foreign currency are translated into sterling at the rate of exchange ruling at the date of the transaction.  At the balance sheet date, monetary assets and liabilities denominated in foreign currency are translated at the rate ruling at that date.  All exchange differences are dealt with in the Statement of Comprehensive Income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary measured at fair value is treated in line with the recognition of gain or loss on change in fair value in the item.

For consolidation purposes, the assets and liabilities of overseas subsidiary undertakings are translated at the functional currency at the rate of exchange ruling at the reporting date.  Profit and loss accounts of such undertakings are consolidated at the average rate of exchange during the year.  Exchange differences arising are included in a separate component of equity.

Plant and equipment

Plant and equipment is carried at cost less accumulated depreciation and any recognised impairment in value. Cost comprises the aggregate amount paid to acquire asset and includes costs directly attributable to making the asset capable of operating as intended.

Depreciation of plant and equipment is calculated to write off their cost or valuation less any residual value over their estimated useful lives as follows:

Computer equipment – straight line over 3 years

Office equipment  – straight line over 3 years

Fixtures and fittings – straight line over 3 years

The assets’ residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate on an annual basis. An asset is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the period that the asset is derecognised. The carrying values of tangible fixed assets are reviewed for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable.

Fixed asset investments

Subsidiaries are measured at cost less impairment.

Investments are reviewed for impairment at the end of the first full financial year following the acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable. Provision is made for any impairment.

Trade and other receivables

Trade and other receivables are initially stated at their fair value plus transaction costs, then subsequently at amortised cost using the effective interest method if applicable, less impairment losses. Provisions against trade and other receivables are made when there is objective evidence that the Group will not be able to collect all amounts due to them in accordance with the original terms of those receivables. The amount of the write down is determined as the difference between the asset’s carrying amount and the present value of estimated future cash flows.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and short-term deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of cash management are included as components of cash and cash equivalents for the purposes of the cash flow statement.

Trade and other payables

Trade and other payables are recognised at original cost.

Loans and borrowings

Loans and borrowings are recorded at amortised cost using the effective interest method, with interest-related charges recognised as an expense in finance cost in the statement of comprehensive income.

Leases – as a lessee

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of fixed lease payments. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset with similar terms, security and conditions.

Lease payments are allocated between principal and finance costs. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the initial measurement of lease liability, any lease payments made at or before the commencement date less any lease incentives received, and any initial direct costs.

Right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.

Payments associated with low-value items and leases of a duration less than 1 year are recognised as an expense in profit or loss on a straight-line basis.

Income taxes

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities based on the tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date. Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.  Deferred tax is calculated on an undiscounted basis at the tax rates that are expected to apply in the period when the liability is settled based on the tax rates and tax laws enacted or substantively enacted by the balance sheet date.

Deferred tax liabilities are recognised for all taxable temporary differences, except when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Finance costs

Finance costs comprise interest payable on loans from directors and third parties and are recognised on an accruals basis.

Share-based payments

The group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the group’s estimate of shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions

Fair value is measured by use of the Black Scholes Model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

Pension contributions

The company operates a defined contribution scheme for its employees.  Contributions are charged to the Statement of Comprehensive Income in the year they are payable. The assets of the scheme are held separately from those of the group.

Financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred.

A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Use of assumptions and estimates

The Group makes judgements, estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities, income and expenses. The resulting accounting estimates calculated using these judgements and assumptions will, by definition, seldom equal the related actual results but are based on historical experience and expectations of future events. 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 if the revision effects only that period, or in the period of revision and future periods if the revision effects both current and future periods.

The judgements and key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are discussed below.

Useful economic lives of intangible assets

Intangible assets are amortised over their useful lives. Useful lives are based on management’s estimates, which are periodically reviewed for continued appropriateness. Changes to estimates can result in variations in the carrying values and amounts charged to the statement of comprehensive income in specific periods.

Change in accounting policies

(a) New and amended standards adopted by the Company

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1st January 2024. The Group has assessed their impact and adopted the relevant changes in its financial statements for the year ended 31 December 2024.

Key amendments that have had a material impact include:

Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current (effective 1 January 2024) – These amendments clarify the criteria for classifying liabilities and address how covenants affect classification.

(b) New standards, interpretations, and amendments not yet effective

A number of standards, amendments to standards, and interpretations have been issued by the IASB that are effective in future accounting periods but have not been early adopted by the Group. These include:

Amendments to IFRS 9 – Financial Instruments: Contractual Cash Flow Characteristics (effective 1 January 2025) – This clarifies how to assess contractual terms of financial assets for classification purposes.

Amendments to IFRS 17 – Initial Application of IFRS 17 and IFRS 9 – Comparative Information (effective 1 January 2025) – These amendments provide transition relief for insurers when first applying IFRS 17.

Lack of Exchangeability – Amendments to IAS 21 (effective 1 January 2025) – These amendments clarify the criteria for determining whether a currency is exchangeable and how to estimate an appropriate exchange rate when exchangeability is lacking. The Group is currently assessing the impact of these amendments on its foreign currency transactions and financial statement presentation.

The Group is currently assessing the potential impact of these new standards and amendments on future financial statements.

4.   Segmental reporting

The chief operating decision maker (“CODM”) for the purpose of IFRS 8 is the Board. Segments are determined by reference to the internal reports reviewed by the Board. The group’s operations relate to the provision of technology solutions to help clients drive revenues and profit.

The Group measures the performance of its operating segments through a measure of segment profit or loss which is referred to as EBITDA. This measure is reported to the CODM for the purposes of resource allocation and assessment of performance. The measure is the same as reported in the historic financial information.

Information about geographic location by key segments

Year ended 31 December 2024
UK Portugal Total
ÂŁ’000 ÂŁ’000 ÂŁ’000
Revenue 13,055 4,853 17,908
Non-current assets 10,219 2,034 12,253

Year ended 31 December 2023
UK Portugal Total
ÂŁ’000 ÂŁ’000 ÂŁ’000
Revenue 11,650 4,480 16,130
Non-current assets 10,608 2,094 12,702

Information about major customers

Transactions with a single customer exceeding 10% of total revenue amounted to ÂŁ6,243K in the year (2023: ÂŁ5,381K) and related to 2 customers (2023: 2).

5.   Revenue

The analysis of the Group’s revenue by geographical destination is set out below.

2024 2023
ÂŁ’000 ÂŁ’000
United Kingdom 12,462 11,179
Europe 231 385
Rest of World 5,215 4,566
17,908 16,130

A breakdown of revenue by the two revenue streams as detailed in accounting policies is shown below:

2024 2023
ÂŁ’000 ÂŁ’000
Recurring revenue  13,441 12,732
One off revenue 4,467 3,398
17,908 16,130

Revenue is either recognised at a point in time or over the period of the contract in line with the accounting policy (note 2).

The following table provides information on contract assets and contract liabilities from contracts with customers:

2024 2023
ÂŁ’000 ÂŁ’000
Contract assets 214 287
Contract liabilities 3,023 3,031

Contract assets (“accrued income”) are recognised where there are excess of revenues earned over billings. Contracts are classified assets when only the act of invoice is pending, there is an unconditional right to receive cash and only the passage of time is required as per contractual terms.

Contract liabilities (“deferred income”) are recognised when there are billings in excess of revenues. Contracts are classified as liabilities when there is an obligation to transfer goods or services to a customer for which the Group has received consideration from the customer (or the payment is due) but the transfer has not yet completed. These arise based on the billing cycle of the Group’s revenues and all are expected to be reversed in under one year.

6.   Profit/(Loss) on operating activities before taxation

Loss on ordinary activities before taxation is stated after charging:

2024 2023
ÂŁ’000 ÂŁ’000
Exceptional Items 141
Deprecation of owned tangible fixed assets 62 49
Depreciation of leased assets 594 545
Amortisation of intangible assets 1,400 1,146
Auditors’ remuneration (see note 7) 70 70

Exceptional items relate to costs incurred in relation to the staff restructuring and redundancies

7.   Auditors’ remuneration

The analysis of auditors’ remuneration is as follows:

 2024
ÂŁ’000
 2023
ÂŁ’000
Fees payable to the company’s auditors for the audit of the company’s annual accounts 36 37
Fees payable to the company’s auditors and their associates for other services to the group
•     The audit of the company’s subsidiaries pursuant to legislation 29 28
•     Tax compliance services 5 5
Total other services 70 70

8.   Employee information

Their aggregate emoluments were:

 2024
ÂŁ’000
 2023
ÂŁ’000
Wages and salaries 8,509 8,701
Social security costs 1,223 1,263
Other pension costs 294 307
Other benefits 351 338
10,377 10,609

The average monthly number of employees (including directors) during the year for the group was as follows:

2024
No.
2023
No.
Selling and administration 28 29
Technical 138 144
166 173

9.   Directors’ emoluments

    2024
ÂŁ’000
 2023
ÂŁ’000
Aggregate emoluments 1,094 970
Pension contributions (money purchase schemes) 40 39
1,134 1,009

Directors’ emoluments disclosed above include the following payments to the highest director:

     2024
ÂŁ’000
 2023
ÂŁ’000
Aggregate emoluments 396 347
Pension contributions (money purchase schemes) 17 17
413 364

2024
No.
2023
No.
Number of directors to whom relevant benefits are accruing under:
Money purchase schemes 2 2

The above is equivalent to total key management personnel compensation. There were no other key management personnel other than the Directors.

Further details of Directors remuneration can be found in the remuneration report on pages 24 to 25.

Share based compensation

The Group operates an equity-settled share based compensation plan for Directors and executives. In accordance with IFRS 1, the Group has elected to implement the measurement requirements of IFRS 2 in respect of only those equity-settled share options that were granted after 7 November 2002 and that had not vested as at 1 January 2005. The fair value of the employee services received in exchange for the grant of options is recognised as an expense over the vesting period. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted at the grant date.

At each year end date, the Group revises its estimate of the number of options that are expected to vest. It recognises the impact of the revision of original estimates, if any, in the Statement of Consolidated Income, and a corresponding adjustment to equity over the remaining vesting period. When share options are cancelled the Group accounts for the cancellation as an acceleration of vesting and therefore recognises immediately the amount that otherwise would have been recognised for services received over the remainder of the vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. The fair value of share options has been assessed using the Black Scholes Model.

250,000 share options were granted to Directors in the period (2023 – Nil).

Included on the face of the Statement of Comprehensive Income, is a total charge for share based payments of ÂŁNil (2023: ÂŁNil) which arises wholly from transactions accounted for as equity settled share-based payments.

10.  Taxation

(a)  Taxation charge:

 2024
ÂŁ’000
2023
ÂŁ’000
Total current income tax credit charged in the income statement
Research and development tax creditPortugal corporate tax (220)15 (400)19
Adjustment in respect of prior years (11) 40
Total current income tax (217) (341)
Deferred tax expense
Current year 191 136
191 136
Total income tax (25) (205)

(b)  Taxation reconciliation:

The current income tax credit for the year is explained below:

2024
ÂŁ’000
2023
ÂŁ’000
Loss before tax 175 (1,097)
Loss at the standard UK income tax rate of 19% (2023: 19%) 33 (208)
Effects of:
Expenses not deductible for tax purposes 181 153
Capital allowances in excess of depreciation 46 44
Tax losses utilised as part of research and development tax credit (220) (400)
Unrelieved tax losses and other deductions arising in the year (13) 98
B/fwd losses relieved (213) (96)
Adjustment in respect of earlier year (11) 40
Difference in overseas tax rates and temporary GAAP differences (19) 28
Other deferred tax timing differences 191 136
Total income tax credited in the income statement (25) (205)

c)  Deferred tax

The movements in the Group’s deferred tax assets and liabilities during the year are as follows:

  Group Company
Deferred tax asset   2024 2023 2024 2023
  ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000
Category:
Acceleration capital allowances on PPE – UK (15)
Accelerated capital allowances on development costs – UK (734)
Tax losses available for carry forward – UK 760
Other timing differences – UK 2
At 31 December 13

Group Company
Deferred tax liability 2024 2023 2024 2023
ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000
Category:
Acceleration capital allowances on PPE – UK (40) (71) (20) (71)
Acceleration capital allowances on development costs – UK (796)
Tax losses available for carry forward – UK 551
Other timing differences – UK 6 (1) 3 (1)
Arising on business combinations – UK (137) (161)
Acceleration capital allowances on development costs  – Portugal (379) (382)
Other timing differences – Portugal 2
At 31 December (793) (615) (17) (72)

  Group Company
Deferred tax movement   2024 2023 2024 2023
  ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000
The movement on the deferred tax balance during the year is as follows:
Deferred Tax Asset 13
Deferred Tax Liability (793) (615) (17) (72)
Net Deferred Tax Balance (793) (602) (17) (72)
Charged to profit or loss 191 134 (55) (12)

Unrecognised Deferred Tax Assets

The Group has unrecognised deferred tax assets relating to tax losses carried forward. These have not been recognised due to uncertainty regarding the timing and probability of their recovery against future taxable profits.

The deferred tax balances have been measured using the enacted tax rates in each jurisdiction Uk 19% (2023: 19%), Portugal 21% (2023: 21%)

11.  Earnings/(Loss) per share

Basic and diluted loss per share is calculated by dividing the profit attributable to owners of the parent by the weighted average number of ordinary shares in issue during the period. For the avoidance of doubt the deferred shares have been excluded as they have no rights to profits or capital. Additionally, the Company’s ordinary shares were subject to a share consolidation where 5 ordinary shares were converted into 1 ordinary share. The comparative period weighted average number of shares has been adjusted for this to aid comparison. The Company’s share options have a dilutive effect over the two-year period.

2024 2023
ÂŁ’000 ÂŁ’000
Profit/(Loss) after tax for the year 200 (892)
Share option chargeExceptional items                                                                                                                                                                          –            141
Adjusted profit/loss after tax for the year 341 (892)
Weighted average number of shares:
Basic – 000 31,211 31,211
Potentially dilutive share options – 000 3,657 3,657
Diluted average number of shares – 000 34,868 34,868
Profit/(Loss) per share:
Basic – pence on continuing operations 0.64 (2.86)
Diluted – pence on continuing operations 0.57 (2.86)
Adjusted earnings/(loss) – Basic – pence on continuing operations 1.09 (2.86)
Adjusted Diluted – pence on continuing operations 0.98 (2.86)

12.  Intangible assets

 Group

Purchase of software  Development cost  Goodwill Acquired intellectual property rights Customer contracts  Total
ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000 ÂŁ’000
Cost
At 1 January 2024 350 17,488 8,712 300 1,000 27,850
Foreign exchange differences (161) (161)
Additions 1,593 1,593
At 31 December 2024 350 18,920 8,712 300 1,000 29,282
Amortisation
At 1 January 2024 11,527 4,759 105 350 16,741
Foreign exchange differences (88) (88)
Charge for the period 50 1,220 30 100 1,400
At 31 December 2024 50 12,659 4,759 135 450 18,053
Net book value
At 31 December 2024 300 6,261 3,953 165 550 11,229
At 31 December 2023 350 5,961 3,953 195 650 11,109

Goodwill arising prior to 1 January 2020 relates to acquisition prior to the date of transition to IFRS of 1 January 2015 and therefore the exemption for business combinations completed before that date has been applied and the amounts not restated.

The Board consider that there is only one Cash Generating Unit.  In accordance with the accounting policy, goodwill is tested annually for impairment, Management have used a fair value less cost of sales methodology supported by offers for the Group and consider that the value supports the carrying value of goodwill at each period end.

Company

              Purchase of software Development
costs
 Total
ÂŁ’000 ÂŁ’000 ÂŁ’000
Cost
At 1 January 2024 350 13 363
Additions
At 31 December 2024 350 13 363
Amortisation
At 1 January 2024 13 13
Charge for the period 50
At 31 December 2024 50 13 63
 
Net book value
At 31 December 2024 300 300
At 31 December 2023 350 350

13.  Plant and equipment

Group

Fixtures and equipment  Total
ÂŁ’000 ÂŁ’000
Cost
At 1 January 2024 1,937 1,937
Foreign exchange differences (4) (4)
Additions 61 61
Additions – HP assets 49 49
At 31 December 2024 2,043 2,043
Depreciation
At 1 January 2024 1,461 1,461
Foreign exchange differences (4) (4)
Charge for the period owned assets 62 62
Charge for the period – HP assets 270 270
At 31 December 2024 1,789 1,789
Net book value
At 31 December 2024 254 254
At 31 December 2023 476 476

Company

Fixtures and equipment Total
ÂŁ’000 ÂŁ’000
Cost
At 1 January 2024 837 837
Additions
At 31 December 2024 837 837
Depreciation
At 1 January 2024 463 463
Charge for the period 270 270
At 31 December 2024 733 733
Net book value
At 31 December 2024 104 104
At 31 December 2023 374 374

14.  Investments

The principal subsidiaries of itim Group plc, all of which have been included in these consolidated financial statements, are as follows:

Company

Shares in group undertaking Other investments Total
ÂŁ’000 ÂŁ’000 ÂŁ’000
Cost
At 1 January 2024 and at 31 December 2024 8,005 46 8,051
Provision for impairment
 
At 1 January 2024 and at 31 December 2024 2,934 46 2,980
Net book value
At 31 December 2024 5,071 5,071
At 31 December 2023 5,071 5,071

The company holds more than 20% of the share capital of the following companies:

Subsidiary undertakings Country of
Incorporation
Percentage holding Class of share Principal activity Profit/
(loss)ÂŁ’000
Net assets/
(liabilities)ÂŁ’000
ITIM Limited England and Wales 100% Ordinary ‘A’
Ordinary
Deferred
Software consultancy and supply (767) (11,273)
EDI Plus Limited England andWales 100% Ordinary Data exchange services 253 1,432
Profimetrics Software Solutions S.A Portugal 100% Ordinary
Preferred
Development and distribution of software 169 2,116

The registered address of ITIM limited and EDI Plus Limited are same as ITIM Group Plc.

EDI Limited is exempt from the requirements relating to the audit of accounts under section 479A of the Companies Act 2006. EDI Limited’s registered number is 10199381.

The registered address of Profimetrics Software Solutions S.A. is R. Lionesa 446, Edifício C Loja L, 4465-671 Leça do Balio, Portugal.

15.  Trade and other receivables

Due within one year

    Group Company
  2024ÂŁ’000 2023ÂŁ’000 2024ÂŁ’000 2023ÂŁ’000
Trade receivables 2,544 4,075
Corporation tax 337 502
Amounts owed by group undertakings due within one year 14,244 13,537
Amounts owed by group undertakings due in greater than one year 1,842
Other receivables due within one year 62 12 46
Other receivables due in greater than one year 46 46
Prepayments and accrued income 693 750 106 66
3,636 5,385 14,396 15,491

Due in greater than one year

    Group Company
  2024ÂŁ’000 2023ÂŁ’000 2024ÂŁ’000 2023ÂŁ’000
Amounts owed by group undertakings due in greater than one year 1,759
1,759

16.  Trade and other payables

   Group Company
2024ÂŁ’000 2023ÂŁ’000 2024ÂŁ’000 2023ÂŁ’000
Trade payables 869 1,189 115 199
Amounts owed by group undertakings due within one year 54 101
Other taxation and social security 856 870 66 4
Other payables 251 232 199 195
Loans and borrowings (see note 19 below) 252 302 252 302
Accruals 1,022 774 106 26
Deferred income 3,023 3,031
6,273 6,398 792 827

17.  Trade and other payables due in more than one year

  Group Company
2024ÂŁ’000 2023ÂŁ’000 2024ÂŁ’000 2023ÂŁ’000  
 
Other payables 183 347 148 347  
 
183 347 148 347  

Net obligations              under finance leases are secured by fixed charges on the assets concerned.

18.  Loans and borrowings

  Group Company
2024ÂŁ’000 2023ÂŁ’000 2024ÂŁ’000 2023ÂŁ’000
Accrued interest 252 302 252 302
252 302 252 302

Analysis of maturity of loans and borrowings

  Group Company
  2024ÂŁ’000 2023ÂŁ’000 2024ÂŁ’000 2023ÂŁ’000
Amounts payable
Within one year 252 302 252 302
252 302 252 302

Accrued interest relates to interest due on fully repaid Director loans.

19.  Leases

The Group leases five units within properties from which it operates and leases computer equipment for the hosting centre. Lease payments are fixed throughout the contract period.

Group

Right-of-use – PropertyÂŁ’000 Right-of-use – EquipmentÂŁ’000  Total
ÂŁ’000
Cost
At 1 January 2024 1,142 203 1,345
Foreign exchange differences (12) (12)
Additions 47 47
Disposals
At 31 December 2024 1,177 203 1,380
Depreciation
At 1 January 2024 142 145 287
Foreign exchange differences (1) (1)
Charge for the year 283 41 324
   
At 31 December 2024 424 186 610
Net book value
At 31 December 2024 753 17 770
At 31 December 2023 1,000 58 1,058

Lease liabilities:

2024   ÂŁ’000 2023   ÂŁ’000
At 1 January 1,082 498
Foreign exchange movement (11) (10)
Interest expense 83 23
Lease payments (382) (321)
Additions 47 892
At 31 December 2024 819 1,082

Amounts payable are as follows:

2024   ÂŁ’000 2023   ÂŁ’000
Due within 1 year 284 287
Due 2-5 years 535 785
Due over 5 years 10
Total 819 1,082

The Group’s right of use assets consists of the Company’s premises, data centres and sundry office equipment.  The expiry of the leases varies between 1 and 6 years.

Company

Right-of-use –
PropertyÂŁ’000
 Total
ÂŁ’000
Cost
At 1 January 2024 551 551
Additions
At 31 December 2024 551 551
Depreciation
At 1 January 2024
Charge for the year 150 150
At 31 December 2024 150 150
Net book value
At 31 December 2024 401 401
At 31 December 2023 551 551

Lease liabilities:

2024   ÂŁ’000 2023   ÂŁ’000
At 1 January 545
Interest expense 46
Lease payments (176)
Additions 545
                         
At 31 December 415 545

Amounts payable are as follows:

2024   ÂŁ’000 2023   ÂŁ’000
Due within 1 year 144 131
Due 2-5 years 271 414
Due over 5 years
Total 415 545

20.  Financial instruments

Financial risk factors

The Group’s financial assets comprise cash and cash equivalents, trade receivables and accrued income. These are all measured at amortised cost. The financial liabilities comprise loans and borrowings, trade payables and accruals, lease liabilities and deferred consideration payable for acquisitions of subsidiaries.  These are measured at amortised cost.

The majority of the financial instruments arise directly from the operations with the exception of loans and borrowings and lease liabilities which have been used to finance the operations.

Fair values of financial instruments

For the following financial assets and liabilities: trade and other payables, trade and other receivables and cash at bank and in hand, the carrying amount approximates the fair value of the instrument due to the short-term nature of the instrument. The Directors consider that there is no material difference between book value and fair value for any of the financial instruments held.

Financial risk management

The Group’s activities expose the Group to a number of risks including capital management risk, interest rate risk, foreign exchange risk, credit risk and liquidity risk.

It is the Group’s policy that no trading in financial instruments should be undertaken.

There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group’s finance function. The Board receives monthly reports from the Finance Department through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility. Further details regarding these policies are set out below:

Interest rate risk

There is no interest rate risk as there are no borrowings in the Group.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The Group’s largest financial assets are the cash balances held in banks and it is exposed to credit risk on those balances. It is the Group’s policy only to make deposits with banks with an acceptable credit rating.

The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit risk of new customers before entering contracts. Such credit ratings are taken into account by local business practices. An ageing analysis of trade receivables is detailed below:

 2024 TotalÂŁ’000 CurrentÂŁ’000 30-60 daysÂŁ’000 > 60 daysÂŁ’000
Trade and other receivables 2,544 1,569 794 181
Contract assets 214 214
2,758 1,783 794 181
2023 TotalÂŁ’000 CurrentÂŁ’000 30-60 daysÂŁ’000 > 60 daysÂŁ’000
Trade and other receivables 4,075 1,898 1,629 548
Contract assets 287 287
4,362 2,185 1,629 548

Trade receivables are recognised initially at the transaction price. They are subsequently measured less any provision for impairment in relation to expected credit losses. At each reporting date the Group assesses the expected credit losses and changes in credit risk since initial recognition of the receivable and a provision for impairment is recognised when considered necessary. The Group considers the ageing to be reasonable and has no history of significant bad debts. No provisions have been made in in these financial statements. The Board do not consider the credit risk to be significant for the financial assets currently held.

Foreign exchange risk

Foreign exchange risk arises when individual Group entities enter into transactions denominated in a currency other than their functional currency. The Group’s policy is, where possible, to allow Group entities to settle liabilities denominated in their functional (currency). Where Group entities have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that currency to settle them), cash already denominated in that currency will, where possible, be transferred from elsewhere within the Group.

The Group’s main exposure to foreign currency risk is on the trade receivables in the Portuguese subsidiary which are not held in Euros. The Directors have considered the balances at year end and based on the level of foreign currency balances and the expected timing of settlement of those amounts that the foreign exchange risk is not material.

Liquidity risk

Liquidity risk is the risk that ITIM Group may encounter difficulty in meeting its obligations associated with the financial liabilities that are settled by delivering cash or other financial assets.  The Group actively maintains a mixture of long-term and short-term debt finance that is designed to ensure the Group has sufficient available funds for operations and planned expansions.

The Group would normally expect that sufficient cash is generated in the operating cycle to meet the contractual cash flows through effective cash management. The maturity analysis of the financial liabilities is included below:

 As at 31 December 2024 Carrying amountÂŁ’000 1 year or lessÂŁ’000 1<2 years ÂŁ’000 2-5years ÂŁ’000 5 years ÂŁ’000
Trade and other payables 2,325 2,142 183
Right of use liability 819 284 258 277
Other loans and borrowings 252 252
3,396 2,678 441 277

 As at 31 December 2023 Carrying amountÂŁ’000 1 year or lessÂŁ’000 1<2 years ÂŁ’000 2-5years ÂŁ’000 5 years ÂŁ’000
Trade and other payables 2,541 2,194 347
Right of use liability 1,082 287 271 514 10
Other loans and borrowings 302 302
3,925 2,783 618 514 10

Capital management risk

The Group’s main objective when managing capital is to protect returns to shareholders by ensuring the Group will continue to trade for the foreseeable future. The Group also aims to optimise its capital structure of debt and equity so as to minimise its cost of capital. The Group in particular reviews its levels of borrowing and the repayment dates, setting these out against forecast cash flows and reviewing the level of available funds.

21.  Share capital

2024ÂŁ’000 2023ÂŁ’000
Authorised:
37,949,651 Ordinary shares of 5p each 1,898 1,898
1,898 1,898

   2024ÂŁ’000 2023ÂŁ’000
Allotted, called up and fully paid:
31,210,607 Ordinary shares of 5p each 1,561 1,561
1,561            1,561

A summary of the rights of the different classes of share is given below:

Voting

All Ordinary shares are entitled to one vote each. The holders of deferred shares are not entitled to receive notice of, to attend, to speak or to vote at any general meeting of the Company.

Dividends         

The profits of the Company available for distribution shall be used to pay dividends to the holders of Ordinary Shares a dividend equivalent to such amounts as the Directors may determine and as is approved by the Ordinary Shareholders in general meeting.

22.  Reserves

Share premium

This reserve records the amount above the nominal value received for shares sold, less transaction costs.

Share options reserve

The share options reserves represent the fair value of equity-settled share options granted using the Black Scholes model.

Capital redemption reserve

This reserve arises on the purchase of the company’s own shares.

Foreign exchange reserve

This reserve includes any exchange differences arising on the retranslation of foreign subsidiaries on consolidation.

Retained earnings

This balance represents the cumulative profit and loss made by the Group net of distributions to owners.

23.  Share-based payments

Share options

The Company has a share option scheme for certain employees of the Group. Options are granted with a fixed exercise price. The vesting period varies from vesting immediately to vesting over 2 years from the date of grant. If the options remain unexercised after a period of ten years from the date of grant the options expire. Options are forfeited if the employee leaves the Group before the options vest.

Details of equity settled share options outstanding during the year are as follows:

Year ended 31 December 2024

Grant date Outstanding at 1 January 2024 Granted Exercised Lapsed Outstanding at 31 December 2024 Exercise period Exercise price
14/04/2015 150,000 150,000 10 years 7.975p
10/04/2017 2,615,000 2,615,000 10 years 15.000p
31/03/2021 400,000 400,000 10 years 70.000p
19/04/2021 492,041 (250,000) 242,041 10 years 70.000p
09/09/2024 250,000 250,000 10 years 34.000p
3,657,041 250,000 (250,000) 3,657,041

Year ended 31 December 2023

Grant date Outstanding at 1 January 2023 Granted Exercised Lapsed Outstanding at 31 December 2023 Exercise period Exercise price
14/04/2015 150,000 150,000 10 years 7.975p
10/04/2017 2,615,000 2,615,000 10 years 15.000p
31/03/2021 400,000 400,000 10 years 70.000p
19/04/2021 492,041 492,041 10 years 70.000p
3,657,041 3,657,041

Details of the share options and weighted average exercise price (WAEP) during the years are as follows:

31 December 2024 31 December 2023
Number WAEP Number WAEP
Outstanding at the beginning of the year 3,657,041 28.13p 3,657,041 28.13p
Share consolidation
Granted during the year 250,000 34.00p
Exercised during the year
Lapsed during the year (250,000) (70.00)p
Forfeited during the year
3,657,041 25.67p 3,657,041 28.13p

The weighted average contractual life of share options outstanding as at 31 December 2024 was 3 years (31 December 2023: 4 years).

ITIM recognises equity settled share-based payment expenses based on the fair value determined by the Black Scholes model. The model is internationally recognised as being appropriate to value employee share options schemes. The inputs into any new option issues were as follows:

Year ended
31 December 2024 
Year ended
31 December 2023 
ÂŁ’000 ÂŁ’000
Share price 78p 78p
Exercise price 69p 69p
Expected volatility 25% 25%
Expected life 10 years 10 years
Risk free rate 0.5% 0.5%

Risk-free rate

The risk-free interest rate is based on the Bank of England’s base rate.

Volatility

The measure of volatility is based management’s estimate after considering the historical volatility of guideline companies operating within the same industry as ITIM Group, over a 10-year time period.

24.  Company statement of changes in equity

   Share capitalÂŁ’000 Share premiumÂŁ’000 Share optionsreserveÂŁ’000 CapitalRedemptionReserveÂŁ’000 Retained lossesÂŁ’000   TotalÂŁ’000
At 1 January 2023 1,561 7,398 513 1,103 8,687 19,262
Total comprehensive income for the year 924 924
Share option charge                      –
At 1 January 2024 1,561 7,398 513 1,103 9,611 20,186
Total comprehensive income for the year 651 651
At 31 December 2024 1,561 7,398 513 1,103 10,262 20,837

The profit for the year dealt with in the financial statements of the parent company is shown above. As permitted by section 408 of the Companies Act 2006, no separate income statement is presented in respect of the parent company.

25.  Pension commitments

The group makes contributions to individual pension schemes (money purchase).  The amount paid during the year was ÂŁ293,791 (2023: ÂŁ307,243). Outstanding contributions at the balance sheet date amounted to ÂŁ37,771 (2023: ÂŁ37,846).

26.  Related party transactions

The Group has taken advantage of the exemption available under IAS 2 Related Party Disclosures not to disclose details of transactions between Group undertakings which are eliminated on consolidation.

27.  Supporting statement for cash flows

Year ended 31 December 2024  Brought forwardÂŁ’000 Cash
FlowÂŁ’000
Non
CashÂŁ’000
Carried forwardÂŁ’000
Loans and borrowings      (302) 50      (252)
Leases (1082) 382 (119) (819)

Year ended 31 December 2023  Brought forwardÂŁ’000 Cash
FlowÂŁ’000
Non
CashÂŁ’000
Carried forwardÂŁ’000
Loans and borrowings      (318) 16      (302)
Leases (498) 321 (905) (1,082)

28.  Controlling party

            There is no single ultimate controlling party.

Notice of Annual General Meeting

Registered number: 03486926

ITIM GROUP PLC

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting of itim Group plc (the “Company”) will be held at the offices of the Company, 2nd Floor, Atlas House, 173 Victoria Street, London SW1E 5NA on 13th June 2025 at 10.30 a.m. to consider and, if thought fit, to pass the following resolutions, of which resolutions 1 to 5 (inclusive) will be proposed as ordinary resolutions and resolutions 6 and 7 will be proposed as special resolutions. Resolutions 6 to 7 (inclusive) are items of special business.

ORDINARY RESOLUTIONS

1.   To receive the Company’s annual accounts for the financial year ended 31 December 2024 together with the directors’ report, the directors’ remuneration report and the auditors’ report on those accounts.

2.   To re-appoint RPG Crouch Chapman LLP as auditors of the Company to hold office until the conclusion of the next annual general meeting of the Company to be held in 2026 and to authorise the directors to fix their remuneration.

3.   To re-elect Colin Price as a director.

4.   To re-elect Dennis Layton as a director.

5.   That, in substitution for any equivalent existing and unexercised authorities and powers, the directors of the Company be and they are hereby generally and unconditionally authorised for the purpose of section 551 of the Companies Act 2006 (the “Act“) to exercise all or any of the powers of the Company to allot shares of the Company or to grant rights to subscribe for, or to convert any security into, shares of the Company up to an aggregate nominal value of ÂŁ523,593 to such persons at such times and generally on such terms and conditions as the directors may determine (subject always to the articles of association of the Company), provided that this authority shall, unless previously renewed, varied or revoked by the Company in general meeting, expire at the conclusion of the next annual general meeting of the Company to be held in 2026 or, if earlier, 13 September 2026, save that the directors of the Company may, before the expiry of such period, make an offer or agreement which would or might require such securities to be allotted after the expiry of such period and the directors of the Company may allot such securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired.

SPECIAL RESOLUTIONS

6.   That, subject to and conditional upon the passing of resolution 5 and in substitution for any equivalent existing and unexercised authorities and powers, the directors of the Company be and are hereby empowered pursuant to sections 570 and 573 of the Act to allot equity securities (as defined in section 560(1) of the Act) for cash pursuant to the authority conferred upon them by resolution 5 and/or where the allotment constitutes an allotment of equity securities by virtue of section 560(3) of the Act, as if section 561 of the Act did not apply to any such allotment provided that this authority and power shall be limited to the allotment of equity securities up to an aggregate nominal amount of ÂŁ78,539 (representing approximately 5 per cent. of the current issued share capital of the Company) provided that this authority shall, unless previously renewed, varied or revoked by the Company in general meeting, expire at the conclusion of the next annual general meeting of the Company to be held in 2026 or, if earlier, 13 September 2026, save that the directors of the Company may, before the expiry of such period, make an offer or agreement which would or might require such securities to be allotted after the expiry of such period and the directors of the Company may allot such securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired.

7.   That the Company be and is hereby generally and unconditionally authorised for the purpose of section 701 of the Act to make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares in the capital of the Company (“Ordinary Shares“) provided that:

a.   the maximum aggregate number of Ordinary Shares which may be purchased is 3,141,560 (representing approximately 10 per cent. of the Company’s existing issued share capital);

b.   the minimum price (exclusive of expenses) which may be paid for each Ordinary Share is ÂŁ0.05 (being its nominal value);

c.   the maximum price (exclusive of expenses) which may be paid for each Ordinary Share is the higher of: (i) an amount equal to 105 per cent. of the average of the middle market quotations for an Ordinary Share as derived from the Daily Official List of the London Stock Exchange plc for the 5 business days immediately preceding the day on which the Ordinary Share in question is purchased; and (ii) the value of an Ordinary Share calculated on the basis of the higher of the price quoted for the last independent trade of an Ordinary Share and the highest current independent bid for an Ordinary Share as derived from the London Stock Exchange Trading System;

d.   unless previously renewed, revoked or varied, the authority hereby conferred shall expire at the conclusion of the next annual general meeting of the Company to be held in 2026 or, if earlier, 13 September 2026; and

e.   the Company may make a contract or contracts to purchase Ordinary Shares under the authority hereby conferred prior to the expiry of such authority which contract or contracts will or may be executed wholly or partly after the expiry of such authority, and may make a purchase of Ordinary Shares in pursuance

BY ORDER OF THE BOARD

Ian Hayes

Secretary

Date: 13th May 2025

Registered office: 2nd Floor Atlas House, 173 Victoria Street, London, SW1E 5NH

NOTES:

1.  Pursuant to the Company’s Articles of Association, a member of the Company entitled to attend and vote at the meeting convened by this notice is entitled to appoint one or more proxies to exercise any of his rights to attend, speak and vote at that meeting on his behalf.

2.  If a member appoints more than one proxy, each proxy must be entitled to exercise the rights attached to different shares. If you submit more than one valid proxy appointment in respect of the same shares, the appointment received last before the latest time for the receipt of proxies will take precedence.

3.  A proxy may only be appointed using the procedures set out in these notes and the notes to the form of proxy. To validly appoint a proxy, a member must complete, sign and date the enclosed form of proxy and deposit it at the office of the Company’s registrars, Neville Registrars, at Neville House, Steelpark Road, Halesowen, West Midlands B62 8HD, by 10.30 a.m. on 11 June 2025 (or, in the event that the meeting is adjourned, not less than 48 hours, excluding non-working days, before the time fixed for the holding of the adjourned meeting). Any power of attorney or any other authority under which the form of proxy is signed (or a duly certified copy of such power or authority) must be enclosed with the form of proxy.

4.  In order to revoke a proxy appointment, a member must sign and date a notice clearly stating his intention to revoke his proxy appointment and deposit it at the office of the Company’s registrars, Neville Registrars, at Neville House, Steelpark Road, Halesowen, West Midlands B62 8HD prior to commencement of the meeting. If the revocation is received after the time specified, the original proxy appointment will remain valid unless the member attends the meeting and votes in person.

5.  Pursuant to the Articles of Association, any corporation which is a member of the Company may authorise one or more persons (who need not be a member of the Company) to attend, speak and vote at the meeting as the representative of that corporation. A certified copy of the board resolution of the corporation appointing the relevant person as the representative of that corporation in connection with the meeting must be deposited at the office of the Company’s registrars, Neville Registrars, at Neville House, Steelpark Road, Halesowen, West Midlands B62 8HD prior to the commencement of the meeting. If the revocation is received after the time specified, the original corporate representative appointment will remain valid unless the member attends the meeting and votes in person.

6.  In the case of joint holders, where more than one of the joint holders purports to appoint a proxy in respect of the same shares, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the first named being the most senior).

7.  The right to vote at the meeting shall be determined by reference to the register of members of the Company. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 (as amended), only those persons whose names are entered on the register of members of the Company at 6.00 p.m. on 11 June 2025 (or, in the event of any adjournment, at 6.00 p.m. on the date which is two business days prior to the adjourned meeting) shall be entitled to attend and vote in respect of the number of shares registered in their names at that time. Changes to entries on the register of members after that time shall be disregarded in determining the rights of any person to vote at the meeting.

8.  CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual (available via 

itim Group CFO Ian Hayes on 260% EBITDA Growth and Future Prospects (Video)

CFO Ian Hayes breaks down the key factors behind this impressive growth, including new contract wins, strong cash performance, and the impact of a major five-year deal with The Entertainer

Question & Answers

itim group

itim Group product excellence in platform delivery outcomes (LON:ITIM)

Itim Group plc (LON:ITIM) Founder and Chief Executive Officer Ali Athar caught up with DirectorsTalk for an exclusive interview to discuss highlights from their interim results, how it helps its customers, product development, helping customers during macroeconomic headwinds and what we can expect from the Group going forward.

Q1: itim Group released interim results this morning, can you just talk us through the highlights?

A1: The highlights are that we are making steady progress. Our fundraising last year was done to allow us to hire more people and invest more in our platforms to make us more attractive to our customers. The results are just a reflection of the fact that we’ve been investing aggressively in trying to achieve that.

Our goal this year is to increase our contracted ARR by ÂŁ3 million, from ÂŁ11 million last year to ÂŁ14 million by the end of this year, and we announced in our previous trading update that we’d already secured ÂŁ2 million of that by April this year. I’m still confident with a bit of fair wind that we’ll achieve our targets by year end.

Q2: Can you just remind investors of what the company does and how it actually helps its customers?

A2: So, we provide an end to end omnichannel SaaS-based platform for retailers. We genuinely believe that through omnichannel excellence, retailers can drive sales and increase profits and compete more effectively against pure play online competitors. We believe we are having success in demonstrating that as most of our retailers are opening more stores.

At the heart of proposition is the idea that retailers can engage better with their customers if they turn their stores into omnichannel points of service, because in most national retailers, 85% of customers live within 15 minutes of their stores. So, that means they can offer same day home delivery, 30 minute click and collect, and easier points of returns, and of course better services through staff and stores. We also believe that the platform allows them to become marketplaces themselves in the same way that Amazon has done.

So, we are helping them enable this transformation to omnichannel excellence, whilst helping them reduce costs and increasing productivity with a minimum capital outlay.

Q3: Now, during the period, the Group continued to invest significant sums in product development. What does it mean and how would it add to the group?

A3: We look at every aspect of retail processes to see what we can do to either drive more sales or drive more profits for a retailer. Our goal is to sell better business outcomes so for example, the innovations we’re doing are focused on the following teams:

  • Greater personalisation and personal shopping services to existing customers through better CRM and mobile engagement
  • Aligning retailers to sell more to existing customers.
  • Allowing retailers to optimise stock so they can sell more without increasing stock investments
  • Allowing retailers to optimise pricing and promotions so they can maximize cash margin
  • Help retailers become marketplaces through better digital supply integration and that will enable them to increase sales.

We’ve just released a smart route application, which we believe will reduce the cost of home delivery as they dispatch from stores. We’re also investing in things like self-checkout technologies to improve in store efficiency.

So, those are some of the themes where a lot of our R&D investment in product development is going.

Q4: Now, although the macroeconomic predictions for the next 12 months are largely negative, but the Group’s technology is designed to help retailers weather that storm. What does the company have in place to help its customers during this kind of time?

A4: So, basically, every retailer is now focused on trying to drive more sales because they are all concerned that inflation, cost price increases, energy prices going up, are going to constrain consumer spending. So, what they’re trying to do is drive more sales, and in the short term, that means they need to focus on the needs of their existing customers.

Secondly, every retailer is under cost pressure so they have to decide their price positioning. They have to optimise pricing and decide how much they’re going to try and pass on to their customers and how much they’re not so they can retain sales.

Thirdly, every retailer has cash tied up in stock, so they have to decide how best to drive sales through and how to optimise that stock.

Retailers, in the next 12 months, have to look for quick wins and we have so many elements of our platform that helps retailers do that and so, as I said, our goals are to help retailers drive sales and drive for improvements in EBITDA by improving productivity across everything they do.

We see technology as a means to an end and the end is really clear in terms of what we need to help retailers achieve.

Q5: Just looking forward, what else can we expect to see from itim Group for the rest of the year?

A5: I think, fundamentally, staying true to our mission which means obviously continuing to do what we’ve done well over the last three years, in the way we service in supporter customers. Obviously, we’re focused on sales and trying to achieve about targets.

Ultimately, we are playing a long game and the long game, ultimately for companies like us, is all about product excellence in terms of the outcomes our platforms deliver for retailers. So, in that sense, it’s very much business as usual, we need to continue to stay focused on our principal mission and make sure we deliver to it.

Analyst Notes & Comments

itim group

itim Group results in line with WH Ireland recently adjusted forecasts

itim Group Plc (LON:ITIM)is a disruptive software-as-a-service (SaaS) platform that empowers traditional retailers with an Omni-channel solution, enabling them to effectively compete against online-only players. The company has recently released its full-year results for the period ending December 31, 2022. The reported revenues and earnings align with WH Ireland adjusted forecasts and demonstrate positive growth in Annual Recurring Revenue (ARR).

Although the conversion of contracts has been slower than anticipated during this period, itim Group’s revenue has increased by 4% compared to the previous year, reaching ÂŁ14.0m (FY21: ÂŁ13.5m). However, the company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) has decreased from ÂŁ2.2m in FY2021 to ÂŁ0.2m, and Earnings Per Share (EPS) has decreased from 3.75p to -2.0p. These declines can be attributed to wage cost inflation and investments in expanding the workforce to support future sales growth.

The ARR for the year has shown significant growth, increasing by 19% to ÂŁ13.2m (FY21: ÂŁ11.1m). Looking ahead, itim Group emphasizes its focus on cash management, reducing customer incentives, and relaunching their consultancy business. They also plan to introduce new applications to their platform. The company maintains a healthy cash balance of ÂŁ3.9m at year-end (FY21: ÂŁ6.2m).

Considering the slower contract conversion, we have previously adjusted our forecasts, and we maintain those unchanged at this time.

The modest revenue growth reflects the impact of investments made during the period. itim Group experienced delays in decision-making and project delivery by retailers due to ongoing economic uncertainty. Despite this, the company has managed to achieve a 19% increase in ARR, with recurring revenue now constituting 84% of total turnover. The reported total revenue of ÂŁ14.0m for FY22 aligns with our expectations. However, the significant increase in sales staff ahead of revenue growth plans, combined with wage cost inflation, has negatively affected profitability. The company’s EBITDA has decreased to ÂŁ0.2m, and EPS stands at -2.0p, down from 3.75p in FY2021. itim Group’s net cash position at the end of the year remains healthy at ÂŁ3.9m (FY21: ÂŁ6.2m).

itim Group is actively focusing on conserving cash and improving profitability. They are implementing strategies such as reducing customer incentives and relaunching their consultancy business. Additionally, the introduction of new products, including a payment hub, expands their retail offering and has the potential to increase revenues from new and existing customers.

In our view, while the retail market remains challenging, itim Group’s proprietary Omni-channel platform for store-based retailers is well-positioned to benefit from industry trends. Considering the current implied FY23 EV/Revenue multiple, which represents a more than 50% discount compared to the peer group average, we believe there is potential for the company’s shares to recover once the contract pipeline is successfully executed.

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