TIDMCRDL
RNS Number : 6153R
Cordel Group PLC
30 October 2023
30 October 2023
Cordel Group PLC
("Cordel" or the "Company" or the "Group")
Results for the year ended 30 June 2023
Publication of Annual Report and Accounts and Notice of Annual
General Meeting
Cordel Group PLC (AIM: CRDL), the Artificial Intelligence
platform for transport corridor analytics, today announces its
audited results for the twelve months ended 30 June 2023
("FY23").
Financial Highlights
GBP 000's Twelve months Twelve months % Change % Change
to 30 June to 30 June constant
2023 2022 currency
Total Revenue 3,046 2,273 34% 35%
Cost of sales (791) (775) 2% -2%
Total expenses (3,129) (3,300) -5% -6%
Grant Income 372 597 -37% -33%
Other income 36 - - -
Loss before
Income tax (466) (1,205) -61% -69%
*Constant currency reflects the results had the underlying
transactional currencies been constant in both periods reported.
52% of revenue for the twelve months to June 2022 was in Australian
dollars.
Operational and Financial Highlights for the Period
-- Amtrak (USA) key 6 year contract win to supply fully
automated software suite for survey and clearance management,
valued at $6.7 million.
-- Angel Trains (UK) 5 year contract win to install
fully-automated hardware onto passenger trains; delivery milestones
achieved.
-- One Rail Australia ballast profile analysis 12-month contract
win, delivering Cordel's LIDAR-based solutions.
-- Joined Microsoft ISV Success program, working with Microsoft's Rail Industry Sector team.
-- Partnership launched with Ricardo to identify and pursue
opportunities in railway inspection and asset management
-- Total revenue up 34% in reported currency and up 35% in constant currency
-- Total expenses decreased by 5% (6% in constant currency),
with rationalisation of business units to focus on core LiDAR + AI
solution
-- Australian R&D grant reduced due to changes in product mix
-- Oversubscribed equity placing in March 2023 raising GBP1.7 million (gross)
-- Cash balance and trade receivables as at 30 June 2023 was GBP2,692,672
Post Period End Highlights
-- In July 2023, ARTC Australia contract extension to August 2024 awarded
John Davis, CEO of Cordel, commented:
" This year has been seminal for Cordel. We have built on our
momentum from FY22 and have been able to significantly increase
engagement with our target markets in FY23. We achieved a 34%
revenue growth result and critically, we now hold a strong base of
recurring revenue contracts plus a substantial deal pipeline
resulting from continued progress with existing and new
customers.
There has been a great deal to be proud of during FY23: the
Amtrak contract is a vital foundation stone for the growth of
Cordel in the future - our first really meaningful achievement in
the US market. Our relationships with Network Rail and Angel in the
UK and ARTC in Australia remain very strong and both offer us
considerable opportunities moving forward. In addition, we have
strengthened our leadership team, our sales capability and our tech
and product functions. We are extremely well positioned to
accelerate our growth in FY24 and beyond. "
Annual Report
The Annual Report and Accounts are being posted to shareholders
today and will be made available on the Group's website
www.cordel.ai
Key extracts from the report and accounts are presented
below.
The Company also announces that the annual general meeting of
the Company is to be held at the offices of Cordel Group plc,
Salisbury House, London Wall, EC2M 5SQ, United Kingdom at 9.00 am
on Thursday 30 November 2023. A notice of Annual General Meeting
has been posted to shareholders today.
Enquiries:
Cordel Group PLC c/o Zeus
Ian Buddery, Chairman
John Davis, Chief Executive Officer
Zeus Capital Limited Broker
Simon Johnson / Alexandra Campbell-Harris +44 (0)20 3829 5000
Strand Hanson Limited Nominated Adviser
Richard Johnson / James Bellman +44 (0)20 7409 3494
About Cordel
Cordel produces specialist hardware and software for capturing,
analysing and reporting on large datasets within the transport
sector, employing sophisticated artificial intelligence
algorithms.
Further information on the Company is available at:
www.cordel.ai
STRATEGIC REPORT
The directors present their strategic report on the consolidated
entity (referred to hereafter as the 'Group') consisting of Cordel
Group plc (referred to hereafter as 'Cordel', 'the Company' or '
the parent entity') and the entities it controlled at the end of,
or during, the year ended 30 June 2023.
The strategic report includes the following sections:
1. Company Overview
2. Chairman's statement
3. Review of operations by the Chief Executive Officer
4. Principal risks and uncertainties
5. People
Cautionary statement regarding forward-looking statements
This document contains certain forward-looking statements. These
forward-looking statements include references to matters that are
not historical facts or are statements regarding the Company's
intentions, beliefs or current expectations concerning, among other
things, the Group's results of operations, financial condition,
liquidity, prospects, growth, strategies, and the industries in
which the Group operates. Forward-looking statements are based on
the information available to the directors at the time of
preparation of this document and will not be updated subsequent to
the issue of this document. The directors can give no assurance
that these expectations will prove to be correct. Due to inherent
uncertainties, including both economic and business risk factors
underlying such forward-looking information, actual results may
differ materially from those expressed or implied by these
forward-looking statements.
Principal activities
Cordel is a United Kingdom ('UK') incorporated software company
with operations in Australia (main country of operation), USA and
the UK. Cordel produces specialist software and hardware for
capturing, analysing and reporting on large datasets within the
transport sector, employing sophisticated artificial intelligence
algorithms.
1. COMPANY OVERVIEW
Cordel's specialist hardware and cloud-based platforms, used
primarily in the rail and road infrastructure industries, capture
data and turn it into actionable insights to help manage vital
assets, improving safety, efficiency and sustainability for our
customers.
The Cordel Group operates subsidiaries in the UK, Australia and
the USA, delivering products and services for rail and road asset
management. Cordel designs and manufactures LiDAR (Light Detection
And Ranging) sensors optimised and ruggedised for train and other
vehicle data capture applications.
The Group is a leader in infrastructure monitoring through
automation and machine learning. The flagship Cordel solution is
focused on the rail industry predicting and identifying maintenance
needs including issues with vegetation, overhead lines and track
ballast. The solution utilises LiDAR sensors and high-resolution
video cameras, attached to trains and track maintenance vehicles,
to automate the collection of infrastructure data at survey-grade
accuracy. It then employs Artificial Intelligence to analyse the
huge datasets, confirming correct geometry, providing insights and
recommending actions in near real time.
Cordel is seeking to establish a strong business in rail before
expanding into road and energy infrastructure. The Group has key
'anchor' customers for Cordel in Amtrak in the USA, Network Rail in
the UK and the Australian Rail Track Corporation (ARTC) .
The Market
The markets for Cordel solutions are large in size and global in
extent and include the UK, USA, Europe, Middle East and
Australia.
Cordel
Managing infrastructure assets is a major component of the
overall railway management system market, which is projected to
grow strongly. Global Market Insights Inc estimates that the market
surpassed US $ 35 billion in 2019 and is anticipated to grow at
over 8% CAGR between 2020 and 2026 , to reach US$55 billion. Within
this, the growth of support and maintenance spend will be higher
across the same period, at up to 16% CAGR. ( GMI Report, November
2020 ). Technavio is also reporting strong growth in the railway
management system market, at 9% CAGR between 2019 and 2023. (
Technavio Report, February 2019 ). More broadly, The machine
learning market reached a value of about US $1.41 billion in 2020
and is expected to reach US $8.81 billion by 2025, ( 360 Research
Reports 29 March, 2021).
The Cordel offering is a new entrant into this growth
environment and aims to take market share away from older, less
effective approaches to asset infrastructure monitoring, as well as
take advantage of new budgets being allocated, as
innovation-oriented spend grows within the ongoing market
expansion.
Cordel is strongly positioned within its markets with a highly
differentiated offering. It provides a wider range of analytic
outputs than alternative services and can monitor and analyse
infrastructure faster, more often and at lower cost, due in no
small part to the high levels of automation inherent in its
design.
2. CHAIRMAN'S STATEMENT
We are delighted with our achievements in the 2023 Fiscal Year,
including our major breakthrough into the US market and continuing
strength in the UK. We are now positioned and resourced for
accelerated growth. Importantly, we have a rich technology
development roadmap actively in progress, as we begin to reap the
benefits of our leadership in the application of Artificial
Intelligence to railway infrastructure management.
We were successful in raising GBP1.7million in March, to fund
our USA expansion strategy through 2024. At the date of this
report, our plan is ahead of schedule with key hires in the UK
(including a Strategic Growth Director, a Project Delivery Lead and
Marketing personnel), in the US (a Senior Sales / Delivery
Engineer) and in Australia (in Software Engineering, including lead
AI engineers).
The UK and Australian markets continue to embrace our solutions
and we now look forward to faster
progress in the USA. We are reassured by customer feedback that
attests to our technology
advantage, low deployment cost and rapid processing times.
We continue to carefully manage expenditures, operating at or
above cashflow breakeven before expansion strategy costs.
Investment continued in product development, much of which is
focused on increasing automation and new solutions to further
improve our competitive position. We regularly review our structure
and cost base to ensure that our core mission of data capture and
machine learning analysis is foremost.
As always, the Board is grateful for the dedication and hard
work of our people in the UK, United States and Australia. We have
a great team who are committed to customers and the company.
Our purpose is to build a strong and resilient business, growing
shareholder value through the consistent achievement of business
plan targets and the expansion of our recurring revenue customer
base. We have confidence in the long-term outlook and we thank our
shareholders for their continuing support.
_____________________________
Ian Buddery
Chairman
24 October 2023
3. REVIEW OF OPERATIONS BY THE CHIEF EXECUTIVE OFFICER
I was honored to step into the CEO role in March 2023. Having
been a Non-Executive Director of the Group since May 2018, I have
seen first-hand the significant market opportunity that exists for
Cordel in rail. We have been delighted by what we have been able to
achieve in the FY ending June 2023 and look forward with genuine
excitement and optimism to what we can deliver in the next 12-24
months.
This year has been a critical foundation for Cordel. We have
built on our momentum from FY22 and have been able to significantly
increase engagement with our target markets in FY23. In the rail
industry, we do find that customer decision time frames are long
and sometimes unpredictable which has impacted revenue in the
period. Having said that, we achieved a 34% revenue growth result
and critically, we now hold a strong deal pipeline resulting from
the backlog created by some revenue slipping beyond our year
end.
Overview of results
GBP 000's Twelve months Twelve months % Change % Change
to 30 June to 30 June constant
2023 2022 currency
Total Revenue 3,046 2,273 34% 35%
Cost of sales (791) (775) 2% -2%
Total expenses (3,129) (3,300) -5% -6%
Grant Income 372 597 -37% -33%
Other income 36 - - -
Loss before
Income tax (466) (1,205) -61% -69%
Gross margin improved from 66% to 74% as we've increased the
volume of rail miles captured and analysed. Expenses remained
broadly flat despite the growth in revenue.
Strategy
Our plan for the financial year FY23 was focused on achieving
growth with existing and new customers in our key markets of the
UK, United States and Australia, allied with investing time and
effort to expand our partner channel. We have developed our
relationships with Network Rail and Angel in the UK, agreed a
contract extension with ARTC in Australia and critically, won a
multi-year, multimillion dollar contract with Amtrak in the US. We
have also deepened our partnership with D/Gauge (now owned by TUV
Rheinland).
In FY24 our focus continues to be on winning more customer
contracts in our core markets of the UK, United States and
Australia. Having secured a successful capital raise in March 2023,
we are now in a position to grow our sales and business development
capabilities whilst also investing heavily in our engineering and
product development and delivery teams. We see the single biggest
opportunity for growth coming from the United States and our
recruitment is focused on maximising that. Furthermore, more track
miles under management and more products provided to each customer
results in organic growth, in turn leading to margin improvement.
And higher numbers of scanners running continuously on a greater
number of trains will result in a greater proportion of future
revenues being of a recurring nature.
Our products and services already employ Artificial
Intelligence. We see a significant opportunity to develop our
capabilities and propositions to customers in the AI space and
since the end of FY23, we have recruited two new AI engineers who
will help to drive this work. In addition, ongoing Cordel product
development will expand processing and capability across data
capture, data processing and insights generated. The nature of the
machine learning approach means our offering is in a state of
perpetual self-improvement, a virtuous circle in which the datasets
added from each new customer and application refine our solution's
knowledge base and recommended actions.
Ongoing operations
As of 30 June 2023 , the Group had cash of GBP 1,283,463 and
receivables of GBP1,985,957.
T he Group is laser focused on delivering on our recently agreed
vision to 'Create safer, more efficient and sustainable railways
around the world' We operate from offices in Newcastle, Australia
while staff in the UK and USA have been working from home offices.
After the FY23 year closed, we took a small office in Moorgate,
London to enable the growing UK team to have a permanent base. We
will continue to recruit new employees as part of expanding the
business and management will ruthlessly focus on maintaining a
strong and committed team whilst ensuring efficient and careful use
of available resources.
We work very hard as a team to meet the challenges created by
operating in multiple time zones. At the very heart of this is our
focus on exceptional communications - which are facilitated by a
range of technology solutions. As well as honing our vision, we
have also recently revitalised our core values which are unity,
humility, integrity, curiosity, excellence and ambition. To support
the company and its aims, we have further enhanced our robust
systems and processes for financial management, customer support
and product development management , in preparation for scaling the
Company.
Outlook
We are confident of continuing or exceeding our current growth
trend in FY24, acquiring new customers for Cordel and providing new
services to our existing customer base. We look forward to
delivering further growth in value for our shareholders.
_____________________________
John Davis
Chief Executive Officer
24 October 2023
4. PRINCIPAL RISKS AND UNCERTAINTIES
The management of the business and the execution of the Group's
growth strategies are subject to a number of risks which could
adversely affect the Group's future development. The following is
not an exhaustive list or explanation of all risks and
uncertainties associated with the Group but those considered by
management to be the principal risks:
Risks relating to the Group and the industry in which it
operates:
Dependence on major clients
The Group's future growth relies on new sales to rail and road
network owners in multiple countries. These owners typically have
complex procurement arrangements which include product trials and
competitive tenders. This risk is mitigated by increasing sales and
business development teams in order to broaden the pool of
opportunities and entering into partnership agreements with
Engineering Consulting firms, such as Holland LLP in the USA.
Business strategy
Although the Group has a clearly defined strategy, there can be
no guarantee that its objectives will be achieved or that the Group
will achieve the level of success that the Company's directors
expect. Therefore, the Group may decide to change aspects of its
strategy as needed. The Group's ability to implement its business
strategy successfully may be adversely impacted by factors that the
Group cannot currently foresee, such as unanticipated market
forces, costs and expenses or technological factors. Should it be
unsuccessful in implementing its strategy or should it take longer
than expected to implement, the future financial results of the
Group could be negatively impacted. This risk is mitigated by the
continual review of the business performance to its plan and that
changes are made to ensure the Group has sufficient liquidity to
pursue its current plan.
Technological changes
Generally, product markets are exposed to rapid technological
change, changes in use, changes to customer requirements and
preferences; and services employing new technologies and the
emergence of new industry standards and practices. The Group
operates in a market with such changes which have the potential to
render the Group's existing technology and products competitively
impaired.
To successfully remain competitive, the Group will ensure
continued product improvement and the development of new markets
and capabilities to maintain a pace congruent with changing
technology. This added strain may stretch the Group's capital
resources which may adversely impact the revenues and profitability
of the Group. The Group's success is dependent on the ability to
effectively respond and adapt to technological changes and changes
to customer preferences. There can be no assurance that the Group
will be able to effectively anticipate future technological changes
or changes in customer preferences. Furthermore, there is also no
assurance that the Group will have sufficient financial resources
to effectively respond in a timely manner if such a change is
anticipated.
Competition
There is no guarantee against new entrants or current
competitors providing superior technologies, products or services
to the market. There is no certainty that new entrants or current
competitors will not provide equivalent products for a lower price.
The Group may be forced to make changes to one or more of its
products or to its pricing strategy to effectively respond to
changes in customer preferences in order to remain competitive.
This may impact negatively on the Group's financial performance.
The Group will continue to review its competitive position and
adjust its business plan to maintain relevance to its customers'
requirements.
Inability to contract with customers on the most favourable
terms to the Group
The Group contracts with a wide variety of companies and
partners, many of which are in strong negotiating positions and
have greater financial resources than the Group. The Group may in
the future have limited scope for negotiation of the price or
contract terms with some of its major clients.
The Group's software may not perform as expected and the Group
could be at risk of defects which adversely affect its
customers
There is no guarantee that the Group's software will perform as
intended. Costs spent on developing the software may therefore not
be recouped and this may result in reduced profitability for the
Group. As the software is complex, it may contain defects or
vulnerabilities which may not be detected until after deployment to
major customers. To mitigate this risk the Group has implemented
applicable internal code review and testing processes. The software
is then subject to customer acceptance testing and an ongoing high
level of technical support.
Data security and data privacy
The Group is subject to data and privacy regulations,
particularly General Data Protection Regulation ('GDPR') and its
equivalents in the US and other markets in which we intend to
operate. Failure to comply with legal or regulatory requirements
relating to data security or data privacy in the course of the
Group business activities, results in reputational damage, fines or
other adverse consequences, including criminal penalties and
consequential litigation, adverse impact on the Group's financial
results or unfavourable effects on the Group's ability to do
business. To mitigate this risk the Group has implemented policies
and processes to ensure data is held securely and privacy is
maintained. The Group also holds ISO27001: Information Security
Management Systems certification.
Dependence on key executives and personnel
The Group is dependent on a small number of key executives. In
addition, the future performance of the Group will, to some extent,
be dependent on its ability to retain the services and personal
connections or contacts of key executives and to attract, recruit,
motivate and retain other suitably skilled, qualified and industry
experienced personnel to form a high calibre management team. Such
key executives are expected to play an important role in the
development and growth of the Group in particular, by maintaining
good business relationships with regulatory and governmental
departments and essential partners, contractors and suppliers. The
failure to appoint or retain such people could adversely affect the
Group.
Ability to recruit and retain skilled personnel
The Group believes that it has the appropriate incentive
structures to attract and retain the calibre of employees necessary
to ensure the efficient management and development of the Group.
However, any difficulties encountered in hiring appropriate
employees and the failure to do so, or a change in market
conditions that renders current incentive structures ineffective,
may have a detrimental effect upon the trading performance of the
Group. The ability to attract new employees with the appropriate
expertise and skills cannot be guaranteed.
Financial controls and internal reporting procedures
The Group's future growth and prospects will depend on its
ability to manage growth and to continue to maintain, expand and
improve operational, financial and management information systems
on a timely basis, whilst at the same time maintaining effective
cost controls. Any damage to, failure of or inability to maintain,
expand and upgrade effective operational, financial and management
information systems and internal controls in line with the Group's
growth, could have a material adverse effect on the Group's
business, financial condition and results of operations. The Group
mitigates this through the implementation of internal controls as
well as the review of monthly financial performance by the
Board.
Economic uncertainty
Any economic downturn either globally or locally in any area in
which the Group operates may have an adverse effect on demand for
the Group's products. A more prolonged downturn may lead to an
overall decline in sales. Economic uncertainty might have an
adverse impact on the Group's operations and business results. To
mitigate this risk the Group will monitor both the Group's
performance and general market conditions on a monthly basis. The
Group will also maintain adequate liquidity to sustain short term
fluctuations in market conditions.
5. PEOPLE
Equal opportunity
The Group is committed to an active equal opportunities policy.
It is the Group's policy to promote an environment free from
discrimination, harassment and victimisation, where everyone
receives equal treatment regardless of gender, colour, ethnic or
national origin, disability, age, marital status, sexual
orientation or religion. Employment practices are applied which are
fair, equitable and consistent with the skills and abilities of the
employees and the needs of the Group.
Disabled employees
Applications for employment by disabled persons are always fully
considered, bearing in mind the aptitudes of the applicant
concerned. In the event of members of staff becoming disabled,
every effort is made to ensure that their employment with the Group
continues and that appropriate re-training is arranged. It is the
policy of the Group that the training, career development and
promotion of disabled persons should, as far as possible, be
identical with that of other employees.
This report is made in accordance with a resolution of
directors.
On behalf of the directors
_____________________________
Ian Buddery
Chairman
24 October 2023
CORPORATE GOVERNANCE
The Directors acknowledge the importance of high standards of
corporate governance and intend, given the Group's size and the
constitution of the Board, to comply with the principles set out in
the QCA Corporate Governance Code published by the Quoted Companies
Alliance in April 2019 (the 'QCA Code') and, where it does not
comply with any of its recommendations, to explain the reasons
therefor.
In the Board's opinion, the Group currently complies with the
ten principles of the QCA Code which, together, are designed to
deliver growth, maintain a dynamic management framework and build
trust. As the Group expands, the Board will review its corporate
governance framework and will consider adoption of additional
principles and practices including from the UK Corporate Governance
Code 2018 published by the Financial Reporting Council (the 'UK
Corporate Governance Code').
Read more in our Corporate Governance Statement of Compliance
with the QCA Corporate Governance Code at the following website
link:
https://cordel.ai/wp-content/uploads/2023/02/Cordel-Statement-of-QCA-compliance-2023.pdf
On behalf of the Directors
_____________________________
Ian Buddery
Chairman
24 October 2023
DIRECTORS' REPORT
The Directors present their report, together with the financial
statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of Cordel Group plc (referred to hereafter
as the 'Company' or 'parent entity') and the entities it controlled
during the year ended 30 June 2023.
Directors
The following persons were Directors of Cordel Group plc up to
the date of this report, unless otherwise stated:
Ian Buddery Non-Executive Chairman
John Davis Executive Director and CEO (appointed CEO 1 March 2023)
Jonathan Macleod Independent Non-Executive Director
Nicholas McInnes Independent Non-Executive Director
Aaron Hoye Executive Director and Chief Technology Officer
Thouraya Walker Executive Director, Company Secretary and Chief
Financial Officer (appointed 3 May 2023)
Nicholas Smith Executive Director) resigned 1 March 2023)
Robert Lojszczyk Executive Director, Company Secretary and Chief
Financial Officer (resigned 31 July 2023)
Ian Buddery, aged 66 - Non-Executive Chairman
Ian has extensive public company experience and a long
background in the telecommunications and financial services
industries in both international and local markets. Ian has founded
multiple companies; obtained venture capital and angel funding,
performed two IPOs, six acquisitions and two significant trade
sales. Ian was the founder, CEO and Executive Chair of eServGlobal,
founded in 1991 and listed on the Australian Securities Exchange
('ASX') in 2000 and the AIM in 2004. (LSE: ESG).
Ian was appointed a Director of Cordel Group plc Ltd on 6
December 2017.
John Davis, aged 53 - Executive Director and Chief Executive
Officer
John has been working with banks and SMBs for more than 20
years. Based in London, John was the Marketing and Product Director
for Barclays Business from 2005-2010 before setting out on an
entrepreneurial career as the co-owner and Managing Director of
Business Centric Services Group Limited, an award winning, high
growth business, helping banks and telecommunication companies to
enhance their digital engagement with and propositions for small
and medium sized businesses. He also
acted as Chair and co-owner of two other London based FinTech
start-ups. John completed the sales of all three of these companies
during 2016 and 2018.
John was appointed a Director of Cordel Group plc on 4 May 2018
and CEO on 1 March 2023.
Jonathan Macleod, aged 66 - Independent Non-Executive
Director
Jonathan is a practicing Chartered Accountant and Financial
Adviser with over 30 years of experience in the Financial Services
and Software industries in both NZ and Australia. He has held
senior executive positions within the National Bank of NZ and
Rabobank Australia/NZ. Jonathan was the Chief Financial Officer of
ASX listed company eServGlobal from 2008 to 2010.
Jonathan was appointed a Director of Cordel Group plc on 4 May
2018.
Nicholas McInnes, aged 68 - Independent Non-Executive
Director
Nick McInnes has been a United Kingdom diplomat through much of
his career, focusing on international trade and investment in such
key positions as the British Consul General, Sydney and Director
General
Trade & Investment for Australia and New Zealand; and
Director Trade & Investment USA and Deputy Consul General New
York.
Nicholas was appointed a Director of Cordel Group plc on 13
March 2020.
Aaron Hoye, aged 41 - Executive Director, Chief Technology
Officer
Aaron co-founded Cordel in 2012 and has extensive technology
experience of both hardware and software across a range of
settings, covering remote sensor technologies, including LiDAR and
photogrammetry, data fusion & data processing, machine learning
and UI design. He has a degree in Computer Science and Mathematics
from the University of Newcastle, New South Wales.
Aaron was appointed a Director of Cordel Group plc on 14 April
2022.
Thouraya Walker , aged 44 - Executive Director, Chief Financial
Officer and Company Secretary
Thouraya's background includes roles at Mazars LLP, Standard
Chartered Bank and Oliver Wyman Limited. She is a Fellow of the
Association of Chartered Certified Accountants and holds a degree
in Mathematics from the University of York.
Thouraya was appointed as Chief Financial Officer on 1 April
2023 and a Director on 3 May 2023.
Nicholas Smith , aged 37 - Executive Director and Chief
Executive Officer (resigned 1 March 2023)
Results focused with an outstanding record of founding, growing
and scaling technical businesses, Nick has a demonstrated ability
to lead and manage geographically dispersed teams while maintaining
the culture of the organisation.
Nicholas stepped down as a director and Chief Executive Officer
on 1 March 2023. He was immediately appointed to the role of Vice
President Europe & Middle East.
Robert Lojszczyk , aged 65 - Executive Director, Chief Financial
Officer and Company Secretary (resigned 31 July 2023)
Robert is a widely experienced senior finance executive with a
blue chip organisational and commercial background.
Robert retired and as a result resigned as a Director on 31 July
2023.
Principal activities
Information on the Group's principal activities are disclosed in
the strategic report.
Results and dividends
The loss for the Group after providing for income tax and
non-controlling interest amounted to GBP598,150 (30 June 2022:
GBP1,200,693).
No dividend has been paid during the financial year and the
directors do not recommend a final dividend in respect of the year
ended 30 June 2023 (30 June 2022: GBPNil).
Further commentary on the financial results are disclosed in the
financial review by the Chief Financial Officer within the
strategic report.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and financial
position are given in the strategic review and this directors'
report. In addition, the notes to the financial statements include
details on the Group's borrowing facilities and its objectives,
policies and processes for managing its capital; its financial risk
management objectives; and its exposures to credit risk and
liquidity risk.
The Group has considerable financial resources together with a
member base split across different geographic areas. The Group's
forecasts and projections, taking into account reasonably possible
changes in trading performance and the newly acquired business,
show that the Group should be able to operate for the foreseeable
future with the current working capital. As a consequence, the
directors believe that the Group is well placed to manage its
business risks successfully.
The directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence for
the foreseeable future. Thus, they continue to adopt the going
concern basis of accounting in preparing the financial
statements.
Likely future developments
Information on likely future developments of the Group are
disclosed in the strategic report.
Financial instruments
Information on the Group's financial instruments are disclosed
in the strategic report and note 25 to the financial
statements.
Charitable and political donations
No charitable or political donations were made during the
financial year.
Disabled employees
Due to the size of the Group, no formal policy for the
employment of disabled persons has been established. However, the
Group gives full consideration to employment applications from
disabled persons where the candidate's particular aptitudes and
abilities are consistent with adequately meeting the requirements
of the job.
Indemnity of directors
The Company has indemnified the directors of the Company for
costs incurred, in their capacity as a director, for which they may
be held personally liable, except where there is a lack of good
faith.
Substantial shareholdings
The substantial shareholders in the Company as at 30 June 2023
were as follows:
Nicholas Smith 12.83%
Aaron Hoye 12.83%
Disclosure of information to the auditors
So far as each person who was a director at the date of
approving this report is aware, there is no relevant audit
information, being information needed by the auditor in connection
with preparing its report, of which the auditor is unaware. Having
made enquiries of fellow directors and the Group's auditor, each
director has taken all the steps that they are obliged to take as a
director in order to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that
information.
Auditor
Oury Clark was appointed in an earlier financial year and
pursuant to section 487 of the Companies Act 2006 will be deemed to
be re-appointed and therefore continue in office.
On behalf of the directors
_________________
Ian Buddery
Chairman
24 October 2023
DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the strategic
report, directors' report and the financial statements in
accordance with applicable law and regulation.
UK Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have elected to prepare the Group financial statements in
accordance with International Financial Reporting Standards
('IFRS') as adopted by the United Kingdom and financial statements
of the Company in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and
applicable law) including FRS 101 'Reduced Disclosure Framework'.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and the
profit or loss of the Group for that year.
In preparing these financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRS as adopted by the United
Kingdom and applicable United Kingdom Accounting Standards have
been followed for the Group and the Company respectively, subject
to any material departures disclosed and explained in the financial
statements; and
-- prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The directors confirm they have complied with all the above
requirements in preparing the financial statements.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and
Company's transactions and disclose with reasonable accuracy at any
time, the financial position of the Group and Company and enable
them to ensure that the financial statements comply with the
Companies Act 2006 and, as regards the Group financial statements,
Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Group and Company and hence for
taking reasonable steps for the prevention and detection of fraud
and other irregularities.
_________________
Ian Buddery
Chairman
24 October 2023
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF CORDEL GROUP PLC
Opinion
We have audited the group financial statements of Cordel Group
PLC (the 'group') for the year ended 30 June 2023 which comprise
the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, the Consolidated Statement of Financial
Position, the Consolidated Statement of Changes in Equity, the
Consolidated Statement of Cash Flows and Notes to the Statement of
Cash Flows and Notes to the Consolidated Financial Statements,
including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the United Kingdom and as applied
in accordance with the provisions of the Companies Act 2006.
In our opinion, the group financial statements:
- give a true and fair view of the state of the group's affairs
as at 30 June 2023 and of its loss for the year then ended;
- have been properly prepared in accordance with IFRSs as
adopted by the United Kingdom;
- have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditors' responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
- the directors' use of the going concern basis of accounting in
the preparation of the financial statements is not appropriate;
or
- the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the group's ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months
and one day from the date when the financial statements are
authorised for issue.
Overview of our audit approach
Key audit matters
1. Goodwill valuation
2. Revenue recognition
3. Inventory valuation
4. Management override
Audit scope
1. We performed an audit of the parent company and the consolidated entity.
2. We did not audit the components located in Australia, though
our consolidated audit included direction of those component
audits, a review of the procedures and work undertaken on these by
the local authorised auditors together with an assessment of those
auditors.
3. We did not audit the component located in America. This
component did not need a local audit. We undertook audit work in
relation to elements that were material to the group, utilising
local expertise where needed.
4. We did not audit the 100% UK subsidiary, as this was not
required to be audited. However, we did undertake audit work on the
elements that were material to the group financial statements.
Materiality
1. Overall group materiality was GBP61,000. This represents 2%
of the group's turnover for the year.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements, as a whole, and in our opinion
thereon, and we do not provide a separate opinion on these
matters.
Goodwill valuation
Risk
1. The group recorded losses in the year and the subsidiaries also continued to generate losses.
2. There is a risk that the Goodwill stated in the group
financial statements is overstated if the subsidiaries no longer
provide this level of value.
Our response to the risk
1. We reviewed management's assessment and challenged the
assumptions provided through discussions.
2. We reviewed plans going forwards and worked to understand the
status of the subsidiaries in light of operational changes within
the group.
3. We assessed whether the original value arising on acquisition is still held.
4. We concluded that the Goodwill arising on initial acquisition
is still appropriate and that no impairment was required.
Revenue recognition
Risk
1. The group has a number of large value contracts.
2. There is a risk that revenue is recognised too early or too
late.
Our response to the risk
1. We, or our component auditors as appropriate, obtained a
sample of contracts for customers in the year and reviewed
invoicing schedules alongside evidence of stage of completion at
the year end.
2. We reviewed the pipeline for new revenue as part of our going
concern review without noting any contracts omitted from revenue in
the year.
3. We concluded that revenue has been appropriately recognised
in the period.
Inventory valuation
Risk
1. The group holds inventory at the year end in relation to
hardware sales.
2. There is a risk that this inventory value is not
recoverable.
Our response to the risk
1. We obtained an inventory listing detailing all inventory
items at the year end.
2. We reviewed after date sales evidence in respect of a sample
of items to confirm the inventory value was less than the future
selling price.
3. We discussed with management possible provisions and
reasonableness of these in respect of slow moving or obsolete items
at the year end.
4. We concluded that the inventory value was not materially
overstated.
Management override Risk
1. In accordance with the ISAs (UK), management override is
considered to be a significant risk.
2. There is a risk that management make inappropriate entries
into the financial ledgers in order to gain a benefit for either
themselves or the company.
Our response to the risk
1. We, or our component auditors as appropriate, obtained
nominal ledger detail for the transactions of the group in the
year.
2. We, or our component auditors as appropriate, reviewed these
for reasonableness and evidence of any management override,
including but not limited to, a review of journals made on
weekends, journals with unusual narrative and round-sum
journals.
3. We, or our component auditors as appropriate, did not note
any management override in the period.
Key observations communicated to the audit committee
1. Based on our audit procedures and discussions with management
we agreed that an impairment of the intercompany receivables
balance from Corridor Holdings Pty Limited in the individual
financial statements of Cordel Group PLC was appropriate. This has
no impact upon the figures reported at a group level.
2. Based on our audit procedures and discussions with management
we determined that the inventory value is not materially misstated,
but that inventory should be reviewed more frequently, and
provisions made as appropriate, for possible slow moving or
obsolete inventory items.
An overview of the scope of our audit
Our assessment of audit risk, our evaluation of materiality and
our allocation of performance materiality determine our audit scope
for each entity within the group. Taken together, this enables us
to form an opinion on the consolidated financial statements. We
take into account size, risk profile, the organisation of the group
and effectiveness of group-wide controls, changes in the business
environment and other factors such as recent internal audit results
when assessing the level of work to be performed at each
entity.
In assessing the risk of material misstatement to the group
financial statements, and to ensure we had adequate quantitative
coverage of significant accounts in the financial statements, we
selected all components covering entities within Australia, United
States of America and the United Kingdom, which represent the
principal business units within the Group.
Of all the components selected, we performed an audit of the
complete financial information of the UK parent entity. We reviewed
the work undertaken by component auditors of the Australian
entities. We also performed audit testing on the material elements
of the United States of America entity, utilising experts where
needed and the UK subsidiary entity.
The reporting components where we performed audit procedures or
reviewed component auditor procedures undertaken accounted for 100%
of the Group's loss before tax, 100% of the Group's revenue and
100% of the Group's total assets.
Our application of materiality
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of the financial statements.
Materiality provides a basis for determining the nature and extent
of our audit procedures.
We determined materiality for the Group to be GBP61,000 (2022:
GBP60,000) which is 2% of the turnover for the year (2022: 5% of
the loss for the year). We believe that turnover is now the most
appropriate basis for materiality as the group has matured, revenue
has grown and the nature of contracts being entered into has
improved. During the course of the audit, we reassessed initial
materiality as required and updated this to the turnover basis as
we determined from the contract reviews for going concern that the
business maturity now rendered revenue the most appropriate measure
of materiality.
Performance materiality
The application of materiality at the individual account or
balance level. It is set at an amount to reduce to an appropriately
low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the Group's overall control environment, our
judgement was that performance materiality was 75% (2022: 75%) of
our final materiality, being GBP45,750 (2022: GBP45,000). We have
set performance materiality at this level as we consider this to be
commensurate with the overall control environment and the assessed
audit risk.
Reporting threshold
The amount below which identified misstatements are considered
as being clearly trivial.
It was decided that we would report all audit differences in
excess of GBP1,000 (2022: GBP2,500), which is set as less than 5%
of materiality, as well as differences below that threshold that,
in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in light
of other relevant qualitative considerations in forming our
opinion.
Other information
The directors are responsible for the other information. The
other information comprises the information set out in pages 4 to
16, but does not include the financial statements and our Report of
the Auditors thereon.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is inconsistent with the
financial statements, or our knowledge obtained in the audit or
otherwise appears to be misstated. If we identify such
inconsistencies or apparent misstatements, we are required to
determine whether there is a material misstatement in the financial
statements or a misstatement of the other information. If, based on
the work we have performed, we conclude that there is a
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, the part of the directors' remuneration report
to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
- the information given in the Group Strategic Report and the
Report of the Directors for the financial year for which the group
financial statements are prepared is consistent with the group
financial statements; and
- the Group Strategic Report and the Report of the Directors has
been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
its environment obtained in the course of the audit, we have not
identified any matters in the Strategic Report or the Report of the
Directors that are inconsistent with our overall view of the
financial statements.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
- certain disclosures of directors' remuneration specified by
law are not made; or
- we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors'
Responsibilities set out on page 16, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine necessary to enable
the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the group financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue a Report
of the Auditors that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these group
financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
Identifying and assessing potential irregularities, including
fraud
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance with
laws and regulations, our procedures included the following:
1. Considering the nature of the industry, sector, control
environment and current business activities, including possible
performance targets and subsequent remuneration;
2. Enquiring of management concerning policies and procedures
relating to:
- complying with laws and regulations and whether there were any
instances of non-compliance; and
- mitigating, detecting and responding to fraud risk and whether
there has been any actual or possible instances of fraud;
3. Discussing with the engagement team and internal specialists
where necessary, regarding how and where fraud may occur in the
financial statements along with the possible indicators of fraud.
We identified the following areas most likely to be susceptible to
fraud:
- management override;
- revenue recognition.
4. Discussing with the engagement team and internal specialists
where necessary, the legal and regulatory framework in which the
group operates and in particular those which would have an impact
on the financial statements. The key laws and regulations
considered were the Companies Act 2006, tax legislation, employment
law and AIM Rules for Companies.
Audit response to the risks identified
As noted above, we identified management override and revenue
recognition as the matters that would most likely be susceptible to
fraud. Our procedures to respond to these risks included the
following:
- Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
- Detailed review of journal entries in the period;
- Review of contracts and stage of completion to confirm revenue
not recognised too early.
Further, we also identified compliance with the Companies Act
2006, tax legislation, employment law and AIM Rules for Companies
as key areas where there may be possible non-compliance. Our
procedures to respond to these risks included the following:
- Review the financial statement disclosures and testing to
supporting documentation to assess compliance with the Companies
Act 2006;
- Reviewing expenses codes for any items not allowable for the
tax computations;
- Being cognisant of any potential indicators of employment
disputes;
- Review of correspondence between the entity and the AIM.
The above matters and identified laws and regulations and
potential fraud risks were communicated to all engagement team
members and internal specialists where necessary, in order to
enable the team to have the ability to identify such risks. The
whole team remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described
above and the risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at www.frc.org.uk/auditorsresponsibilities. This
description forms part of our Report of the Auditors.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
a Report of the Auditors and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we
have formed.
Rachel Lockwood (Senior Statutory Auditor)
for and on behalf of Oury Clark Chartered Accountants
Statutory Auditors
Herschel House
58 Herschel Street
Slough
Berkshire
SL1 1PG
Date: 22 October, 2023
Notes:
1. The maintenance and integrity of the Cordel Group PLC website
is the responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the financial statements since they were
initially presented on the website.
2. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF CORDEL GROUP PLC
Opinion
We have audited the financial statements of Cordel Group PLC
(the 'parent company') for the year ended 30 June 2023 which
comprise the parent company Statement of Financial Position, the
parent company Statement of Changes in Equity and Notes to the
parent Company Financial Statements, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
United Kingdom Accounting Standards, including FRS101 "Reduced
Disclosure Framework" (United Kingdom Generally Accepted Accounting
Practice).
In our opinion, the parent company financial statements:
- give a true and fair view of the state of the parent company's
affairs as at 30 June 2023;
- have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditors' responsibilities for the audit of the parent company
financial statements section of our report. We are independent of
the parent company in accordance with the ethical requirements that
are relevant to our audit of the parent company financial
statements in the UK, including the FRC's Ethical Standard as
applied to listed public entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
- the directors' use of the going concern basis of accounting in
the preparation of the parent company financial statements is not
appropriate; or
- the directors have not disclosed in the parent company
financial statements any identified material uncertainties that may
cast significant doubt about the parent company's ability to
continue to adopt the going concern basis of accounting for a
period of at least twelve months and one day from the date when the
parent company financial statements are authorised for issue.
Overview of our audit approach
Key audit matters
1. Investment valuation
2. Recoverability of intercompany balances
3. Management override
Audit scope
1. We performed an audit of the parent company.
Materiality
1. Parent company materiality was GBP61,000. This represents 2%
of the group's turnover for the year. Ordinarily we would have
assessed the individual entity based on 5% net assets but
restricted this to group materiality.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements, as a whole, and in our opinion
thereon, and we do not provide a separate opinion on these
matters.
Investment valuation
Risk
1. The group recorded losses in the year and the subsidiaries also continued to generate losses.
2. There is a risk that the investment in subsidiaries stated in
the parent company financial statements is overstated if the
subsidiaries no longer provide this level of value.
Our response to the risk
1. We reviewed management's assessment and challenged the
assumptions provided through discussions.
2. We reviewed plans going forwards and worked to understand the
status of the subsidiaries in light of operational changes within
the group.
3. We assessed whether the original value paid when acquiring
from a third party on acquisition is still an expected minimum
market value.
4. We concluded that the Investment value is still appropriate
and that no impairment was required.
Recoverability of intercompany balances
Risk
1. There is a risk that intercompany balances due from
subsidiaries are not recoverable.
Our response to the risk
1. We reviewed any intercompany debtor balances and considered
the entities ability to repay.
2. In one instance we concluded the balance did not appear to be
recoverable. We discussed with management who made an adjustment to
provide for this debt.
Management override
Risk
1. In accordance with the ISAs (UK), management override is
considered to be a significant risk.
2. There is a risk that management make inappropriate entries
into the financial ledgers in order to gain a benefit for either
themselves or the company.
Our response to the risk
1. We obtained nominal ledger detail for the transactions of the
company in the year.
2. We reviewed these for reasonableness and evidence of any
management override, including but not limited to, a review of
journals made on weekends, journals with unusual narrative and
round-sum journals.
3. We did not note any management override in the period.
Key observations communicated to the audit committee
1. Based on our audit procedures and discussions with management
we agreed that an impairment of the intercompany receivables
balance from Corridor Holdings Pty Limited was appropriate.
An overview of the scope of our audit
Our assessment of audit risk, our evaluation of materiality and
our allocation of performance materiality determine our audit
scope. We take into account size, risk profile, the organisation of
the entity and effectiveness of controls, changes in the business
environment and other factors such as recent internal audit results
when assessing the level of work to be performed.
Our application of materiality
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of the financial statements.
Materiality provides a basis for determining the nature and extent
of our audit procedures.
We determined materiality for the company to be GBP61,000 (2022:
GBP60,000) which is 2% of the group turnover for the year (2022: 5%
of the loss for the year). We restricted the individual entity
materiality to group materiality. We believe that turnover is now
the most appropriate basis for group materiality as the group has
matured, revenue has grown and the nature of contracts being
entered into has improved. During the course of the audit, we
reassessed initial group materiality as required and updated this
to the turnover basis as we determined from the contract reviews
for going concern that the business maturity now rendered revenue
the most appropriate measure of materiality. Consequently, we
updated the parent company materiality accordingly as the revised
level was below what it would have been at 5% of net assets which
we would have applied otherwise.
Performance materiality
The application of materiality at the individual account or
balance level. It is set at an amount to reduce to an appropriately
low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the company's overall control environment, our
judgement was that performance materiality was 75% (2022: 75%) of
our final materiality, being GBP45,750 (2022: GBP45,000). We have
set performance materiality at this level as we consider this to be
commensurate with the overall control environment and the assessed
audit risk.
Reporting threshold
The amount below which identified misstatements are considered
as being clearly trivial.
It was decided that we would report all audit differences in
excess of GBP1,000 (2022: GBP2,500), which is set as less than 5%
of materiality, as well as differences below that threshold that,
in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in light
of other relevant qualitative considerations in forming our
opinion.
Other information
The directors are responsible for the other information. The
other information comprises the information set out in the Report
of the Directors but does not include the parent company financial
statements and our Report of the Auditors thereon.
Our opinion on the parent company financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the parent company financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
inconsistent with the parent company financial statements, or our
knowledge obtained in the audit or otherwise appears to be
misstated. If we identify such inconsistencies or apparent
misstatements, we are required to determine whether there is a
material misstatement in the parent company financial statements or
a misstatement of the other information. If, based on the work we
have performed, we conclude that there is a misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
- the information given in the Report of the Directors for the
financial year for which the parent company financial statements
are prepared is consistent with the parent company financial
statements; and
- the Report of the Directors has been prepared in accordance
with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the parent
company and its environment obtained in the course of the audit, we
have not identified any matters in the Report of the Directors that
are inconsistent with our overall view of the parent company
financial statements.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
- the parent company financial statements are not in agreement
with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by
law are not made; or
- we have not received all the information and explanations we
require for our audit; or
- the directors were not entitled to take advantage of the small
companies' exemption from the requirement to prepare a Strategic
Report or in preparing the Report of the Directors.
Responsibilities of directors
As explained more fully in the Statement of Directors'
Responsibilities set out on page 16, the directors are responsible
for the preparation of the parent company financial statements and
for being satisfied that they give a true and fair view, and for
such internal control as the directors determine necessary to
enable the preparation of parent company financial statements that
are free from material misstatement, whether due to fraud or
error.
In preparing the parent company financial statements, the
directors are responsible for assessing the parent company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
parent company or to cease operations, or have no realistic
alternative but to do so.
Auditors' responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the parent company financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
a Report of the Auditors that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these parent
company financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
Identifying and assessing potential irregularities, including
fraud
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance with
laws and regulations, our procedures included the following:
1. Considering the nature of the industry, sector, control
environment and current business activities, including possible
performance targets and subsequent remuneration;
2. Enquiring of management concerning policies and procedures
relating to:
- complying with laws and regulations and whether there were any
instances of non-compliance; and
- mitigating, detecting and responding to fraud risk and whether
there has been any actual or possible instances of fraud;
3. Discussing with the engagement team and internal specialists
where necessary, regarding how and where fraud may occur in the
parent company financial statements along with the possible
indicators of fraud. We identified the following areas most likely
to be susceptible to fraud:
- management override.
4. Discussing with the engagement team and internal specialists
where necessary, the legal and regulatory framework in which the
parent company operates and in particular those which would have an
impact on the parent company financial statements. The key laws and
regulations considered were the Companies Act 2006, tax
legislation, employment law and AIM Rules for Companies.
Audit response to the risks identified
As noted above, we identified management override as the matter
that would most likely be susceptible to fraud. Our procedures to
respond to this risk included the following:
- Performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
- Detailed review of journal entries in the period.
Further, we also identified compliance with the Companies Act
2006, tax legislation, employment law and AIM Rules for Companies
as key areas where there may be possible non-compliance. Our
procedures to respond to these risks included the following:
- Review the financial statement disclosures and testing to
supporting documentation to assess compliance with the Companies
Act 2006;
- Reviewing expenses codes for any items not allowable for the
tax computations;
- Being cognisant of any potential indicators of employment
disputes;
- Review of correspondence between the entity and the AIM.
The above matters and identified laws and regulations and
potential fraud risks were communicated to all engagement team
members and internal specialists where necessary, in order to
enable the team to have the ability to identify such risks. The
whole team remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described
above and the risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment.
A further description of our responsibilities for the audit of
the parent company financial statements is located on the Financial
Reporting Council's website at
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our Report of the Auditors.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
a Report of the Auditors and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we
have formed.
Rachel Lockwood (Senior Statutory Auditor)
for and on behalf of Oury Clark Chartered Accountants
Statutory Auditors
Herschel House
58 Herschel Street
Slough
Berkshire
SL1 1PG
Date: 22 October, 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEARED 30 JUNE 2023
Note
2023 2022
GBP GBP
Revenue from contracts with customers 3 3,046,496 2,272,683
Other income 4 408,756 596,765
Interest revenue calculated using the effective
interest method 46 12
Expenses
Hosting fees and other direct costs (791,668) (775,290)
Employee benefits expense 5 (2,367,385) (2,191,308)
Occupancy expense (34,411) (29,338)
Depreciation and amortisation expense (117,302) (166,797)
Other expenses (593,297) (897,103)
Finance costs (16,819) (14,398)
------------ ------------
Loss before income tax expense (465,584) (1,204,774)
Income tax expense 8 (132,566) 4,081
------------ ------------
Loss after income tax expense for
the year (598,150) (1,200,693)
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss
Share option reserve 54,601 59,048
Foreign currency translation (17,257) (77,879)
------------ ------------
Other comprehensive income for the
year, net of tax 37,344 (18,831)
------------ ------------
Total comprehensive income for the
year (560,806) (1,219,524)
============ ============
Loss for the year is attributable
to:
Non-controlling interest - -
Owners of Cordel Group plc (598,150) (1,200,693)
------------ ------------
(598,150) (1,200,693)
============ ============
Total comprehensive income for the
year is attributable to:
Non-controlling interest - -
Owners of Cordel Group plc (560,806) (1,219,524)
(560,806) (1,219,524)
============ ============
Pence Pence
Basic earnings per share 10 (0.30) (0.70)
Diluted earnings per share 10 (0.30) (0.70)
The above consolidated statement of profit or loss and other
comprehensive income should be read in conjunction with the
accompanying notes
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2023
Note 2023 2022
GBP GBP
Non-current assets
Goodwill 11 1,223,403 1,223,403
Right of use asset 12 28,858 98,843
Property, plant and
equipment 13 73,872 132,478
Deferred tax asset 84,069 234,842
------------- -------------
Total non-current assets 1,410,202 1,689,566
------------- -------------
Current assets
Inventories 15 143,781 246,940
Trade and other receivables 16 1,985,957 1,309,395
Cash and cash equivalents 1,283,463 339,665
Total current assets 3,413,201 1,896,000
------------- -------------
Non-current liabilities
Lease Liabilities 22 - 62,392
Deferred tax 2,031 5,151
Total non-current liabilities 2,031 67,543
------------- -------------
Current liabilities
Trade and other payables 17 662,160 580,240
Employee benefits 194,146 157,584
Unearned Income 133,290 -
Lease Liabilities 22 32,700 44,927
Total current liabilities 1,022,296 782,751
------------- -------------
Net current assets 2,390,905 1,113,249
------------- -------------
Total assets less current
liabilities 3,801,107 2,802,815
------------- -------------
Net assets 3,799,076 2,735,272
============= =============
Equity
Share capital 18 1,994,886 1,704,272
Share premium account 18 10,856,854 9,525,617
Other reserves 19 2,437,108 2,399,764
Accumulated losses (11,489,772) (10,894,381)
Total equity 3,799,076 2,735,272
============= =============
The above consolidated balance sheet should be read in
conjunction with accompanying notes
The financial statements of Cordel Group plc (company number
11098701 (England and Wales)) were approved by the Board of
Directors and authorised for issue on 24 October 2023.
They were signed on its behalf by:
___________________________ ___________________________
Ian Buddery John Davis
Chairman Director
24 October 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2023
Share Share premium Other Accumulated Total equity
capital account reserves losses
GBP GBP GBP GBP GBP
Balance at 1 July
2021 1,687,661 9,520,634 2,418,596 (9,784,991) 3,841,900
Loss after income
tax expense for the
year - - - (1,200,693) (1,200,693)
Other comprehensive
income for the year,
net of tax - - (18,832) 4,330 (14,502)
Prior year adjustment 86,973 86,973
--------- ------------- --------- ------------ --------------
Total comprehensive
income for the year - - (18,832) (1,109,390) (1,128,222)
Share issue 16,611 4,983 - - 21,594
--------- ------------- --------- ------------ --------------
Balance at 30 June
2022 1,704,272 9,525,617 2,399,764 (10,894,381) 2,735,272
========= ============= ========= ============ ==========
v The share premium account is used to recognise the difference
between the issued share capital at nominal value and the capital
received, net of transaction costs.
Share Share premium Other Accumulated Total equity
capital account reserves losses
GBP GBP GBP GBP GBP
Balance at 1 July
2022 1,704,272 9,525,617 2,399,764 (10,894,381) 2,735,272
Loss after income
tax expense for the
year - - - (598,150) (598,150)
Other comprehensive
income for the year,
net of tax - - 37,344 2,759 40,103
Total comprehensive
income for the year - - 37,344 (595,391) (558,047)
Share issue 290,614 1,331,237 - - 1,621,851
Balance at 30 June
2023 1,994,886 10,856,854 2,437,108 (11,489,772) 3,799,076
========= ============= ========= ============ ============
The above consolidated statement of changes in equity should be
read in conjunction with the accompanying notes
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2023
Note 2023 2022
GBP GBP
Cash flows from operating activities
Loss before income tax expense for the year (465,584) (1,204,774)
Adjustments for:
Depreciation and amortisation 117,302 166,797
Loss/(Gain) on disposal of equipment (36,423) 11,880
Foreign exchange differences 15,136 (5,436)
Share option reserve 57,360 65,378
Interest received (46) (12)
Interest and other finance costs 16,819 14,398
(295,436) (951,769)
Change in operating assets and liabilities:
Decrease/(increase) in inventories 103,159 (56,787)
Decrease/(increase) in trade and other receivables (676,561) (277,663)
(Decrease)/increase in trade and other payables 81,920 240,056
(Decrease)/increase in other liabilities 169,852 20,346
----------- ---------------
(617,066) (1,025,817)
Interest received 46 12
Interest and other finance costs paid (12,133) (3,464)
Net cash used in operating activities (629,153) (1,029,269)
----------- ---------------
Cash flows from investing activities
Proceeds from disposal of fixed asset 69,422 12,491
Payments for plant and equipment (60,809) (160,240)
Net cash used in investing activities 8,613 (147,748)
----------- ---------------
Cash flows from financing activities
Proceeds from issue of shares 1,725,066 21,595
Cash payments for leases (37,650) (50,732)
Interest on lease payments (4,685) (10,934)
Transaction costs on issue of shares (103,214) -
Net cash from financing activities 1,579,517 (40,071)
----------- ---------------
Net (decrease)/increase in cash and cash
equivalents 958,977 (1,217,088)
Cash and cash equivalents at the beginning of
the financial year 339,665 1,538,150
Effects of exchange rate changes on cash and cash
equivalents (15,179) 18,603
Cash and cash equivalents at the end of the financial
year 1,283,463 339,665
=========== ===============
The above consolidated statement of cash flows should be read in
conjunction with the accompanying notes
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. GENERAL INFORMATION
Cordel Group plc is a public company, registered in England and
Wales and listed on the Alternative Investment Market ('AIM'). The
company's registered number and registered office can be found on
the General Information page.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of Cordel Group plc have been prepared
in accordance with UK adopted International Accounting Standards
and with requirements of the Companies Act 2006 as applicable to
companies reporting under those standards. The financial statements
have been prepared under the historical cost convention, with the
exception of financial instruments as set out below, and are
presented in pound sterling, which is also the company's functional
currency.
The following principal accounting policies have been applied
consistently in dealing with items which are considered material in
relation to the financial statements. These policies have been
consistently applied to all the years presented, unless otherwise
stated.
The preparation of the consolidated financial statements
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's and Company's accounting policies. The areas
involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 3.
Going concern
The financial statements have been prepared assuming the Group
will continue as a going concern. Under the going concern
assumption, an entity is ordinarily viewed as continuing in
business for the foreseeable future.
The directors have considered the Group's existing working
capital, contracted revenue and pipeline of opportunities and are
of the opinion that the Group has adequate resources to undertake
its planned programme of activities for the 12 months and one day
from the date of approval of these financial statements.
Principles of consolidation
The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of Cordel Group plc as at the
balance sheet dates presented and the results of all subsidiaries
for the year then ended.
Subsidiaries are all those entities over which the Group has
control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are
fully consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on
transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the
Group.
The acquisition of common control subsidiaries is accounted for
at book value. The acquisition of other subsidiaries is accounted
for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for
as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the
non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises
the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation
differences recognised in equity. The Group recognises the fair
value of the consideration received and the fair value of any
investment retained together with any gain or loss in profit or
loss.
Operating segments
Operating segments are presented using the 'management
approach', where the information presented is on the same basis as
the internal reports provided to the Chief Operating Decision
Makers ('CODM'). The CODM is responsible for the allocation of
resources to operating segments and assessing their
performance.
Foreign currency translation
The consolidated financial statements are presented in Pound
Sterling, which is Cordel Group plc's functional currency.
Foreign currency transactions
Foreign currency transactions are translated into Pound Sterling
using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
financial year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated
into Pound Sterling using the exchange rates at the reporting date.
The revenues and expenses of foreign operations are translated into
Pound Sterling
using the average exchange rates, which approximate the rates at
the dates of the transactions, for the period. All resulting
foreign exchange differences are recognised in other comprehensive
income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss
when the foreign operation or net investment is disposed of.
Revenue recognition
Revenue is recognised at an amount that reflects the
consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each
contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates
of variable consideration and the time value of money; allocates
the transaction price to the separate performance obligations on
the basis of the relative stand-alone selling price of each
distinct good or service to be delivered; and recognises
revenue
when or as each performance obligation is satisfied in a manner
that depicts the transfer to the customer of the goods or services
promised.
Variable consideration within the transaction price, if any,
reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the
customer and any other contingent events. Such estimates are
determined using either the 'expected value' or 'most likely
amount' method. The measurement of variable consideration is
subject to a constraining principle whereby revenue will only be
recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised
will not occur.
The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently
resolved. Amounts received that are subject to the constraining
principle are recognised as a refund liability. Revenue is not
recognised in line with when the revenue is received. Revenue is
received prior to the delivery of a good or service.
Grants from government
Grants from government are recognised at their fair value where
there is a reasonable assurance that the grant will be received,
and the Group will comply, with all attached conditions. Government
grants which
represent compensation for expenses or losses already incurred
are included in other income in the profit or loss statement in the
year in which the expenses or losses were incurred.
Interest income
Interest income is recognised as interest accrues using the
effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest
income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other income
Other income is recognised when it is received or when the right
to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax
payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in
deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for
prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary
differences at the tax rates expected to be applied when the assets
are recovered or liabilities are settled, based on those tax rates
that are enacted or substantively enacted, except for:
-- When the deferred income tax asset or liability arises from
the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the
time of the transaction, affects neither the accounting nor taxable
profits; or
-- When the taxable temporary difference is associated with
interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary
differences and losses.
The carrying amount of recognised and unrecognised deferred tax
assets is reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable
that future taxable profits will be available for the carrying
amount to be recovered. Previously unrecognised deferred
tax assets are recognised to the extent that it is probable that
there are future taxable profits available to recover the
asset.
Deferred tax assets and liabilities are offset only where there
is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred
tax liabilities; and they
relate to the same taxable authority on either the same taxable
entity or different taxable entities which
intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the balance sheet based
on current and non-current classification.
An asset is classified as current when: it is either expected to
be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of
trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless
restricted from being exchanged or used to settle a liability for
at least 12 months after the reporting period. All other assets are
classified as non-current.
A liability is classified as current when: it is either expected
to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled
within 12 months after the reporting
period; or there is no unconditional right to defer the
settlement of the liability for at least 12 months after the
reporting period. All other liabilities are classified as
non-current.
Deferred tax assets and liabilities are always classified as
non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less
that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and
subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Trade
receivables are generally due for settlement within 30 days.
The Group has applied the simplified approach to measuring
expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables
have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any
allowance for expected credit losses.
Contract assets
Contract assets are recognised when the Group has transferred
goods or services to the customer but where the Group is yet to
establish an unconditional right to consideration. Contract assets
are treated as financial assets for impairment purposes.
Plant and equipment
Equipment is stated at historical cost less accumulated
depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line/diminishing value
basis to write off the depreciable amount of each item of equipment
over their expected useful lives as follows:
Office equipment 2 years straight line
Furniture and fixtures 2 years straight line
Leasehold improvements 4 years straight line
Flight equipment 2 years straight line
Motor vehicles 8 years diminishing value
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date.
Equipment under leases are depreciated over the unexpired period
of the lease or the estimated useful life of the assets, whichever
is shorter.
An item of equipment is derecognised upon disposal or when there
is no future economic benefit to the Group. Gains and losses
between the carrying amount and the disposal proceeds are taken to
profit or loss.
Inventories
Inventories are measured at the lower of cost and net realisable
value. The cost of manufactured products includes direct part
costs. Net realisable value is estimated selling price in the
ordinary course of business, less estimated costs of completion and
the estimated costs necessary to make the sale.
Intangible assets
Intangible assets acquired as part of a business combination,
are initially measured at their fair value at the date of the
acquisition. Intangible assets acquired separately are initially
recognised at cost. Finite life intangible assets are subsequently
measured at cost less amortisation and any impairment. The gains or
losses recognised in profit or loss arising from the derecognition
of intangible assets are measured as the difference between net
disposal proceeds and the carrying amount of the intangible asset.
The amortisation method and useful lives of finite life intangible
assets are reviewed annually. Changes in the expected pattern of
consumption or useful life are accounted for prospectively by
changing the amortisation method or period.
An annual impairment review is conducted to assess whether the
goodwill recognised in respect of acquisition accounting is in need
of impairment. The Directors have reviewed and endorsed a Strategic
Business and Financial Plan prepared by the Management Team for the
next 2-3 years. Based on those assumptions and forecasts, the
Directors believe that at this stage the Goodwill from the Corridor
Holdings acquisition (previously Airsight Holdings) has an
indefinite life.
Software
Significant costs associated with purchased software are
deferred and amortised on a reducing balance basis over the period
of their expected benefit, being their finite useful life of two
years.
Research and development
Research costs are expensed in the period in which they are
incurred. Development costs are capitalised when it is probable
that the project will be a success considering its commercial and
technical feasibility; the Group is able to use or sell the asset;
the Group has sufficient resources; and intent to complete the
development and its costs can be measured reliably. Capitalised
development costs are amortised on a straight-line basis over the
period of their expected benefit. Amortisation commences when the
asset is available for use, i.e. when it is in the location and
condition necessary for it to be capable of operating in the manner
intended by management.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised at the amount
by which the asset's carrying amount exceeds its recoverable
amount.
Recoverable amount is the higher of an asset's fair value less
costs of disposal and value-in-use. The value-in-use is the present
value of the estimated future cash flows relating to the asset
using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not
have independent cash flows are grouped together to form a
cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured
at amortised cost and are not discounted. The amounts are unsecured
and are usually paid within 30 days of recognition.
Contract liabilities
Contract liabilities represent the Group's obligation to
transfer goods or services to a customer and are recognised when a
customer pays consideration, or when the Group recognises a
receivable to reflect its unconditional right to consideration
(whichever is earlier) before the Group has transferred the goods
or services to the customer.
Employee benefits
Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme.
Contributions payable to the company's pension scheme are charged
to profit or loss in the period to which they relate.
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary
benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured
at the amounts expected to be paid when the liabilities are
settled.
Share-based payments
Equity-settled share-based compensation benefits are provided to
employees.
Equity-settled transactions are awards of shares, or options
over shares, that are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions is measured at fair
value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that
takes into account the exercise price, the term of the option, the
impact of dilution, the share price at grant date and expected
price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option,
together with non-vesting conditions that do not determine whether
the Group receives the services that entitle the employees to
receive payment. No account is taken of any other vesting
conditions.
The cost of equity-settled transactions is recognised as an
expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based
on the grant date fair value of the award, the best estimate of the
number of awards that are likely to be exercised after allowing for
forfeiture rates, and the expired portion of the vesting period.
The amount recognised in profit or loss for the period is the
cumulative amount calculated at each reporting date less amounts
already recognised in previous periods.
Market conditions are taken into consideration in determining
fair value. Therefore, any awards subject to market conditions are
considered to vest irrespective of whether or not that market
condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense
is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting
period, for any modification that increases the total fair value of
the share-based compensation benefit as at the date of
modification.
If the non-vesting condition is within the control of the Group
or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the
Group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the
remaining vesting period, unless the award is forfeited.
If an equity-settled award is cancelled, it is treated as if it
has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is
substituted for the cancelled award, the cancelled and new award is
treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is
measured at fair value for recognition or disclosure purposes, the
fair value is based on the price that would be received to sell an
asset or paid to transfer a
liability in an orderly transaction between market participants
at the measurement date; and assumes that the transaction will take
place either: in the principal market; or in the absence of a
principal market, in the most advantageous market.
Fair value is measured using the assumptions that market
participants would use when pricing the asset or liability,
assuming they act in their economic best interests. For
non-financial assets, the fair value measurement is based on its
highest and best use. Valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified
into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements.
Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest
level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements,
external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant.
External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an
asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs
applied in the latest valuation and a comparison, where applicable,
with external sources of data.
Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
shares are shown in equity as a deduction, net of tax, from the
proceeds.
Dividends
Dividends are recognised when declared during the financial
year.
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to the owners of Cordel Group plc, excluding any costs
of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the financial
year, adjusted for bonus elements in ordinary shares issued during
the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary
shares.
Value-Added Tax ('VAT')/Goods and Services Tax ('GST') and other
similar taxes
Revenues, expenses and assets are recognised net of the amount
of associated VAT/GST, unless the VAT/GST incurred is not
recoverable from the tax authority. In this case it is recognised
as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of
VAT/GST receivable or payable. The net amount of VAT/GST
recoverable from, or payable to, the tax authority is included in
other receivables or other payables in the balance sheet.
Cash flows are presented on a gross basis. The VAT/GST
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax
authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of
VAT/GST recoverable from, or payable to, the tax authority.
Leases
The Group assesses at contract inception whether a contract is,
or contains, a lease, that is if the contract conveys the right to
control the use of an identified asset for a period of time in
exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach
for all leases, except for short-term leases and leases of
low-value assets. The Group recognises lease liabilities to make
lease payments and right-of-use assets representing the right to
use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commitment date
of the lease (i.e. the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for
any measurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments
made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the lease term and
estimated useful life of the assets, as follows:
Property 10 years
If ownership of the leased asset transfers to the Group at the
end of the lease term or the cost reflects the exercise of a
purchased option, depreciation is calculated using the estimated
useful life of the asset.
Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating the lease, if
the lease terms reflects the Group exercising the option to
terminate. Variable lease payments that do not depend on an index
or a rate are recognised as expenses (unless they are incurred to
produce inventories) in the period in which the event or condition
that triggers the payment occurs.
In calculating the present value of lease payments, the Group
uses the interest rate implicit in the lease. After the
commencement date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in
the lease term, a change in the lease payments (e.g., changes to
future payments resulting from a change in an index or rate used to
determine such lease payments) or a change in the assessment of an
option to purchase the underlying asset.
The Group's lease liabilities are presented separately in the
statement of financial position.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
its short-term leases of machinery and equipment (i.e., those
leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to
leases of office equipment that are considered to be of low value.
Lease payments on short-term leases and leases of low-value assets
are recognised as an expense on a straight-line basis over the
lease term.
A depreciation charge for the leased asset and an interest
expense on the lease liability is recognised in the profit and loss
in accordance with IFRS 16. For classification within the statement
of cash flows, the lease payments are separated into both a
principal (financing activities) and interest (either operating or
financing activities) component.
Cashflow statement
The cash flow statement is prepared under the indirect
method.
Critical accounting estimates and judgements
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to
assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including
expectations of future events, management believes to be reasonable
under the circumstances. The resulting accounting judgements and
estimates will seldom equal the related actual results.
The accounting judgements, estimates and assumptions that have a
significant risk of causing an adjustment to the carrying amounts
of assets and liabilities (refer to the respective notes) within
the next financial year are discussed below.
a) Revenue recognition where contracts are in progress
In accordance with the revenue recognition policy detailed in
note 2, in measuring revenue relating to fixed agreements the Group
measures the stage of completion with reference to costs incurred
and the total costs estimated for each contract. The total
estimated costs for each contract are reviewed monthly to ascertain
the current stage of completion and requires reasonable judgments
to be made. Judgement includes allocating transaction prices to
each of the performance obligations.
b) Share-based payment transactions
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined
by using the Binomial or Black-Scholes model taking into account
the terms and conditions upon which the instruments were granted.
The accounting estimates and assumptions relating to equity-settled
share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period
but may impact profit or loss and equity. Refer to note 32 for
valuation model inputs.
NOTE 3. REVENUE
Segmental analysis
Identification of reportable operating segments
The Group operates in one segment being provision of data
integration and analytic services. This operating segment is based
on the internal reports that are reviewed and used by the Board of
Directors (who are identified as the Chief Operating Decision
Makers ('CODM')) in assessing performance and in determining the
allocation of resources.
The operating segment information is the same information as
provided throughout the consolidated financial statements and are
therefore not duplicated. Given the research and development
expenditure for all types of product, the board have determined
that reportable operating segments would be too difficult to
determine.
Major customers
There are 3 customers contributing external revenue of more than
10% amounting to GBP1,123,449, GBP968,782 and GBP576,671 (2022: 3
customers amounting to GBP468,343, GBP460,240 and GBP392,951).
Revenue by geographical area
Revenue from the principal activities of the Group is
attributable to the following geographical areas:
2023 2022
GBP GBP
United Kingdom 1,545,453 976,650
Australia/New Zealand 318,412 937,852
United States of America 1,182,631 135,542
Canada - 51,741
Asia - 170,898
Total revenue 3,046,496 2,272,683
========= =========
Contract revenue by product
2023 2022
GBP GBP
Airsight - 329,343
Nextcore 117,867 438,197
Cordel 2,928,629 1,505,143
3,046,496 2,272,683
========= =========
NOTE 4. OTHER INCOME
2023 2022
GBP GBP
Government grants and rebates 372,172 587,934
Other income 36,584 8,831
------- -------
408,756 596,765
======= =======
NOTE 5. STAFF COSTS AND KEY MANAGEMENT PERSONNEL
Total staff costs were as follows:
2023 2022
GBP GBP
Wages 2,098,081 1,899,045
Social security costs 68,477 88,503
Other pension costs 143,468 138,383
Share-based payments 57,359 65,377
--------- ---------
2,367,385 2,191,308
========= =========
Included in other creditors at the period end there was unpaid
pension costs of GBP9,465 (2022: GBP10,853).
The average number of employees during the year was as follows: 2023 2022
Sales and marketing 4 5
Technical 17 23
Finance and administration 6 3
---- ----
Average number of employees 27 31
==== ====
Details of directors' remuneration is set out below:
The total remuneration in respect of the year ended 30 June 2023
and paid to each director who held office during the year as
follows:
Share
Salary option Post-employment
and fees charge Bonus benefits 2023 2022
GBP GBP GBP GBP GBP GBP
Non-Executive
Directors:
Ian Buddery 67,039 - - - 67,039 66,264
Jonathan Macleod 32,612 - - 4,546 37,158 35,946
Nicholas McInnes 35,750 - - - 35,750 38,195
Executive Directors:
Aaron Hoye 89,188 - - 9,365 98,553 17,549
Nicholas Smith 67,415 - - - 67,415 112,423
John Davis 57,664 1,347 - 1,397 60,408 39,140
Robert Lojszczyk 56,924 - - 5,977 62,901 88,651
Thouraya Walker 22,500 397 - 1,125 24,022 -
Total directors'
remuneration 429,092 1,744 - 22,410 453,246 398,168
=============== ============ ========= ===================== ============= =============
Number of directors accruing benefits under money purchase schemes
in respect of qualifying services were four (2022: four).
No directors exercised share options in the year ended 30 June
2023 (2022: one).
NOTE 6. EBITDA RECONCILIATION (EARNINGS BEFORE INTEREST EXPENSE,
TAXATION, DEPRECIATION AND AMORTISATION) 2023 2022
GBP GBP
EBITDA reconciliation
Loss before income tax (465,584) (1,204,774)
Less: Interest revenue (46) (12)
Add: Interest expense 16,819 14,398
Add: Depreciation and amortisation 117,302 166,797
--------- -------------
EBITDA (331,509) (1,023,591)
========= =============
Underlying EBITDA represents EBITDA adjusted for significant,
unusual and other one-off items.
2023 2022
GBP GBP
Underlying EBITDA reconciliation
EBITDA and Underlying EBITDA (331,509) (1,023,591)
========= ===========
The financial statements include both the statutory financial
statements and additional performance measures of EBITDA and
Underlying EBITDA. The directors believe these additional measures
provide useful information on the underlying trend in operational
performance going forward without these unusual and other one-off
items.
NOTE 7. LOSS BEFORE TAX
Loss before income tax stated after charging/(crediting):
2023 2022
GBP GBP
Depreciation - owned assets 84,824 118,976
Depreciation - right of use assets 32,478 47,821
Profit/loss on disposal of property, plant
and equipment (36,423) 8,465
Fees attributable to the auditors of the parent
company
- audit of the group 72,000 40,000
- other services 1,819 6,896
NOTE 8. INCOME TAX
2023 2022
GBP GBP
Income tax expense
Adjustment recognised for prior periods - -
Aggregate income tax expense 132,566 4,081
Numerical reconciliation of income tax expense
and tax at the statutory rate
Loss before income tax expense (465,584) (1,204,774)
Tax at the statutory tax rate of 23% (2022: 23%) (86,161) (270,330)
Tax effect amounts which are not deductible/(taxable)
in calculating taxable income:
Research and development expenditure, net of
tax credits 115,025 180,546
Income not taxable - (8,952)
Capital allowances in excess of depreciation (2,533) (3,688)
Other items 8,209 11,325
Current year tax losses not recognised 98,026 87,018
Income tax expense 132,566 (4,081)
========= ===========
Tax at the statutory tax rate represents the effective rate of
income tax across the jurisdictions in which each of the Group
entities are domiciled.
The tax rates of the main jurisdictions are Australia 25% (2022:
25%), United Kingdom 19.0% (2022: 19.0%), United States of America
21.0% (2022: 21.0%).
2023 2022
GBP GBP
Tax losses not recognised
Unused tax losses for which no deferred tax asset
has been recognised 3,013,644 2,334,006
--------- ---------
Potential deferred tax asset at domestic tax rates
applicable in the countries concerned 572,592 443,461
--------- ---------
The above potential tax benefit for tax losses has not been
recognised in the balance sheet due to a lack of certainty as to
when the losses will reverse. A deferred tax asset has been
recognised on losses which are expected to reverse of
GBP101,148.
There are no other deferred tax assets/liabilities other than
losses mentioned above.
NOTE 9. DIVIDS
There were no dividends paid, recommended or declared during the
current or prior financial years.
NOTE 10. EARNINGS PER SHARE
2023 2022
GBP GBP
Loss after income tax (598,150) (1,200,693)
Non-controlling interest - -
Loss after income tax attributable to the owners
of Cordel Group plc (598,150) (1,200,693)
========= ===========
Number Number
Weighted average number of ordinary shares used in
calculating basic earnings per share 199,488,614 170,427,186
Weighted average number of ordinary shares used in
calculating diluted earnings per share 199,488,614 170,427,186
=========== ===========
Pence Pence
Basic earnings per share (0.30) (0.70)
Diluted earnings per share (0.30) (0.70)
NOTE 11. GOODWILL
2023 2022
GBP GBP
Goodwill 1,223,403 1,223,403
1,223,403 1,223,403
========== ===============
The goodwill was recognised in the year ended 30 June 2020 and
no impairments have been recognised to date.
NOTE 12. RIGHT TO USE ASSET
2023 2022
GBP GBP
Right of Use Assets 168,937 212,111
Less: Accumulated depreciation (140,079) (113,268)
28,858 98,843
========== ==========
The GBP168,937 right of use assets represents the costs of prior
year assets brought forward, additions of GBP1,991 and disposals of
GBP45,165. The GBP140,079 depreciation represents accumulated
depreciation brought forward, GBP32,478 of depreciation charged in
the year, accumulated depreciation disposed of GBP12,975, and an
exchange rate difference of GBP7,308.
Right-of-use assets related to leased properties that do not
meet the definition of investment property are presented as
property, plant and equipment.
The Group leases premises with a lease term of 5 years ending 29
May 2024. There is no option to purchase and there are no variable
payments.
Cost Depreciation Depreciation Eliminated Exchange Carrying
b/fwd Additions Disposals b/fwd amount
c/fwd
212,111 1,991 (45,165) (113,268) (32,478) 12,975 (7,308) 28,858
--------- -------------- -------------- ------------------- ------------------- ---------------- -------------- -----------------
NOTE 13. PROPERTY, PLANT AND EQUIPMENT
Leasehold Office Furniture
and Motor Flight R&D
improvements equipment fixtures Vehicles equipment assets Total
GBP GBP GBP GBP GBP GBP GBP
Balance at 30
June 2022 10,571 23,128 43,400 7,741 44,154 3,484 132,478
Additions 2,105 4,699 - - 43,224 8,790 58,818
Disposals - (16,620) (657) (10,376) (157,554) (5,956) (191,163)
Exchange
differences (398) (379) 1,511 (224) (269) (256) (15)
Depreciation
disposed - 14,178 60 7,398 132,037 4,905 158,578
Depreciation
expense (5,542) (11,228) (30,433) (1,291) (32,095) (4,235) (84,824)
Balance at 30
June 2023 6,736 13,778 13,881 3,248 29,497 6,732 73,872
============= ========== ========== ========= ========== ======== ==========
Non-current assets by geographical location
All property plant and equipment is located in Australia other
than office equipment with a net book value of GBP1,035 and Cordel
units of GBP9,655 which are located in the United Kingdom and
equipment with a net book value of GBP2,060 and Cordel units of
GBP2,176 which are located in the United States of America.
NOTE 14. INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets,
liabilities and results of the following subsidiaries held by the
Company in accordance with the accounting policy described in note
2:
Address and country Holding
Name of incorporation %
2/2 Frost Drive, Mayfield
Maestrano Pty Ltd West NSW 2304, Australia 100%
10 John Street, London
Cordel Limited WC 1N 2EB United Kingdom 100%
1734 E. Boston Street,
Suite 103, Gilbert AZ
85295, United States
Cordel Technology Inc. of America 100%
Corridor Holdings Pty 2/2 Frost Drive, Mayfield
Ltd West NSW 2304, Australia 100%
2/2 Frost Drive, Mayfield
Cordel Pty Ltd West NSW 2304, Australia 100%
Airsight Australia Pty 2/2 Frost Drive, Mayfield
Ltd West NSW 2304, Australia 100%
NOTE 15. INVENTORIES
2023 2022
GBP GBP
Inventories 143,781 246,940
143,781 246,940
======= =======
The amount of inventories expensed during the period was
GBP284,524 (2022: GBP400,694).
NOTE 16. TRADE AND OTHER RECEIVABLES
2023 2022
GBP GBP
Trade receivables 1,389,987 640,598
R&D tax offset refundable 332,021 554,413
Prepayments 242,250 114,384
Other receivables 21,698 -
1,985,956 1,309,395
========= =========
Allowance for expected credit losses
The Group has recognised a loss of GBPnil (2022: GBPnil) in
profit or loss in respect of the expected credit losses for the
year ended 30 June 2023. The ageing of the receivables and
allowance for expected credit losses provided for above are as
follows:
Expected credit Allowance for expected
loss rate Carrying amount credit losses
2023 2022 2023 2022 2023 2022
% % GBP GBP GBP GBP
Not overdue - - 1,314,566 540,280 - -
0 to 3 months overdue - - 75,421 100,318 - -
3 to 6 months overdue - - - - - -
Over 6 months overdue - - - - - -
1,389,987 640,598 - -
========= ======= =========== ===========
The Company has virtually no experience of bad debts and credit
losses and the directors do not expect any future credit losses to
arise as contracts come to termination and as a result no expected
credit loss provision was recorded as it was deemed immaterial.
NOTE 17. TRADE AND OTHER PAYABLES
2023 2022
GBP GBP
Trade payables 240,697 386,381
Accrued expenses 314,960 151,498
Other payables 106,503 42,361
662,160 580,240
======= =======
Refer to note 21 for further information on financial
instruments.
There were no contract liabilities as at 30 June 2023 or 30 June
2022.
The carrying amounts of trade and other receivables and trade
and other payables approximate their fair values due to their
short-term nature.
Capital risk management
The Group's objectives when managing capital is to safeguard its
ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to
maintain an optimum capital structure to reduce the cost of
capital.
Capital is regarded as total equity, as recognised in the
balance sheet, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents. If net debt is negative,
then the net debt adjustment is limited to zero.
In order to maintain or adjust the capital structure, the Group
may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce
debt.
The Group would look to raise capital when an opportunity to
invest in a business or company is seen as value adding relative to
the current Company's share price at the time of the investment.
The Group is not actively pursuing additional investments in the
short term as it continues to integrate and grow its existing
businesses in order to maximise synergies.
The Group is not subject to any financing arrangement covenants
and there have been no events of default on the financing
arrangements during the financial year.
The capital risk management policy remains unchanged throughout
the periods presented.
NOTE 18. CALLED UP SHARE CAPITAL
2023 2022 2023 2022
Shares Shares GBP GBP
Ordinary shares of GBP0.01 each
- issued and fully paid 199,488,614 170,427,186 1,994,886 1,704,272
=========== =========== ========= =========
During the year the company issued 29,061,428 ordinary GBP0.01
shares with a total nominal value of GBP290,614. Total
consideration of GBP1,624,851 was received which resulted in a
share premium of GBP1,331,237.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends
and the proceeds on the winding up of the Company in proportion to
the number of and amounts paid on the shares held. The Company does
not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person
or by proxy shall have one vote and upon a poll each share shall
have one vote.
NOTE 19. RESERVES
Accumulated losses represent the total losses incurred by the
group to date.
Share premium is the premium paid on shares purchased in the
company.
Other reserves in the balance sheet comprise the following:
2023 2022
GBP GBP
Foreign currency reserve 361,471 378,728
Share option reserve 185,797 131,196
Capital reorganisation reserve 1,889,840 1,889,840
2,437,108 2,399,764
========= =========
Foreign currency reserve
The reserve is used to recognise exchange differences arising
from the translation of the financial statements of foreign
operations to Pound sterling.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits
provided to employees and directors as part of their remuneration,
and other parties as part of their compensation for services.
Capital reorganisation reserve
The Group is a continuation of the original Maestrano Pty
Limited group. Cordel Group plc has therefore recorded the net
assets of Maestrano Pty Limited group at their historic carrying
value at the date of acquisition as a capital reorganisation. The
reserve is used to recognise the difference between the shares
issued to affect the transaction (GBP200,000) and the share capital
acquired (GBP2,089,840).
NOTE 20. SHARE-BASED PAYMENTS
A share option plan has been established by the Group and
approved by shareholders at a general meeting, whereby the Group
may, at the discretion of the Board of Directors, grant options
over equity settled ordinary shares in the Company to certain key
management personnel of the Group. The options are issued for nil
consideration and are granted in accordance with performance
guidelines established by the Board of Directors.
All options vest over a period no longer than five years and may
have other vesting conditions. Options expire when an employee
ceases to be employed or contracted by a Group company unless the
Board in its discretion allows the employee to retain all or some
of their options. Options do not have a fixed expiry date.
The share-based payment expense for the financial year was
recorded as GBP57,359 (2022: GBP65,378).
The fair value of the options granted was calculated using the
Black Scholes Model with the below inputs:
Weighted
average Risk-free
Date Fair share Exercise Expected interest Vesting
granted value price price volatility rate period
GBP GBP GBP years
01/07/2019 0.00369 0.01 0.013 50% 1.0% 2
01/07/2019 0.00449 0.01 0.013 50% 1.0% 3
13/03/2020 0.00863 0.01 0.020 80% 0.5% 2
17/04/2020 0.00563 0.01 0.018 80% 0.5% 1
04/05/2020 0.00979 0.01 0.019 80% 0.5% 3
03/11/2020 0.04879 0.01 0.100 75% 0.5% 3
24/11/2020 0.04879 0.01 0.100 75% 0.5% 3
10/08/2021 0.03922 0.01 0.125 45% 1.0% 3
30/11/2021 0.04416 0.01 0.125 50% 1.0% 3
20/07/2022 0.00150 0.01 0.125 35% 2.0% 2
20/07/2022 0.00590 0.01 0.083 35% 2.0% 4.5
11/11/2022 0.01770 0.01 0.070 47% 3.0% 2
17/03/2023 0.02760 0.01 0.083 47% 3.0% 5
03/04/2023 0.02680 0.01 0.063 45% 3.0% 5
26/04/2023 0.02300 0.01 0.0675 45% 3.0% 3
24/05/2023 0.02000 0.01 0.060 45% 3.0% 3
The volatility was calculated using the entity's share price
over the previous 12 months and the valuations were undertaken by
an independent organisation.
The following table summarises the movements in share options
during the year:
2023 2022
No. of Weighted No. of Weighted
options average options average
exercise exercise
price price
Outstanding at beginning
of year 11,703,611 0.041 12,964,722 0.038
Granted 4,120,000 0.077 400,000 0.125
Exercised (490,000) 0.018 (1,661,111) 0.012
Forfeited (333,333) 0.010 - -
------------ ---------------- ------------ ----------
Outstanding at end of
year 15,000,278 0.035 11,703,611 0.041
------------ ---------------- ------------ ----------
Exercisable at end of
year 11,202,539 0.021 9,487,629 0.041
------------ ---------------- ------------ ----------
The weighted average remaining contractual life of options
outstanding at the end of the financial year was 2.30 (2022: 1.77
years).
There is no agreement in place between the Company and its
employees for the Company to pay taxes on behalf of its employees.
The company will be liable for employer's National Insurance
due.
NOTE 21. FINANCIAL INSTRUMENTS
Financial risk management objectives
The Group's activities expose it to a variety of financial
risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's
overall risk management program focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects
on the financial performance of the Group. The Group uses different
methods to measure different types of risk to which it is exposed.
These methods include sensitivity analysis in the case of interest
rate and foreign exchange risks and ageing analysis for credit
risk.
Risk management is carried out by senior finance executives
('finance') under policies approved by the Board of Directors ('the
Board'). These policies include identification and analysis of the
risk exposure of the Group and appropriate procedures, controls and
risk limits. Finance identifies and evaluates financial risks
within the Group's operating units. Finance reports to the Board on
a regular basis.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign
currency and is exposed to foreign currency risk through foreign
exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions
and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional
currency. The risk is measured using sensitivity analysis and cash
flow forecasting.
The Group had net assets denominated in foreign currencies of
GBP1,271,982 as at 30 June 2023 (2022: GBP972,548). Based on this
exposure, had the Pound sterling weakened by 10% / strengthened by
10% against these foreign currencies with all other variables held
constant, the Group's profit before tax for the year would have
been GBP127,198 lower / GBP127,198 higher (2022: GBP97,255 lower /
GBP97,255 higher). The actual foreign exchange loss for the year
ended 30 June 2023 was GBP15,136 (2022: gain of GBP5,436).
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group is not exposed to any significant interest rate risk.
Most of the cash and cash equivalents are held in banks in the UK
where the current interest rate is negligible and unlikely to
fluctuate in the foreseeable future.
Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. The Group has a strict code of credit and setting
appropriate credit limits. The maximum exposure to credit risk at
the reporting date to recognised financial assets is the gross
carrying amount, as disclosed in the balance sheet and notes to the
financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in
estimating expected credit losses to trade receivables through the
use of a provisions matrix using fixed rates of credit loss
provisioning. These provisions are considered representative across
all customers of the Group based on recent sales experience,
historical collection rates and forward-looking information that is
available.
Generally, trade receivables are written off when there is no
reasonable expectation of recovery. Indicators of this include the
failure of a debtor to engage in a repayment plan, no active
enforcement activity and a failure to make contractual payments for
a period greater than 1 year.
Except for cash and cash equivalents, the Group has no other
concentration of credit risk exposure as at 30 June 2023 and 2022.
No expected credit loss is recorded for cash and cash equivalents
as the Group and Company only deal with at least "A" rated
financial institutions.
Liquidity risk
Vigilant liquidity risk management requires the company to
maintain sufficient liquid assets (mainly cash and cash
equivalents) to be able to pay debts as and when they become due
and payable.
The Group manages liquidity risk by maintaining adequate cash
reserves by continuously monitoring actual and forecast cash flows
and matching the maturity profiles of financial assets and
liabilities.
Remaining contractual maturities
The following tables detail the Group's remaining contractual
maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both
interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from
their carrying amount in the balance sheet.
Between Between Remaining
1 year 1 and 2 2 and 5 Over 5 contractual
or less years years years maturities
2023 GBP GBP GBP GBP GBP
Non-derivatives
Non-interest bearing
Trade payables 240,697 - - - 240,697
Other payables 106,503 - - - 106,503
Total non-derivatives 347,200 - - - 347,200
-------- -------- -------- ------ ------------
Between Between Remaining
1 year 1 and 2 2 and 5 Over 5 contractual
or less years years years maturities
2022 GBP GBP GBP GBP GBP
Non-derivatives
Non-interest bearing
Trade payables 386,381 - - - 386,381
Other payables 15,518 - - - 15,518
Total non-derivatives 401,899 - - - 401,899
-------- -------- -------- ------ ------------
The cash flows in the maturity analysis above are not expected
to occur significantly earlier than contractually disclosed above.
The Group has more than adequate cash reserves to meet the
remaining contractual maturities.
The fair value of financial liabilities is estimated by
discounting the remaining contractual maturities at the current
market interest rate that is available for similar financial
liabilities.
NOTE 22. LEASES
Lease liabilities
The following non-cancellable lease commitments existed at the
period end:
2023 2022
GBP GBP
0-1 Year 32,700 44,927
1-5 Years - 62,392
32,700 107,319
======= ========
Included within current liabilities is a lease liability of
GBP32,700 (2022: GBP44,927). Included within non-current
liabilities is a lease liability of GBPNil (2022: GBP62,392).
As at 30 June 2023 the Group had not committed to any further
lease liabilities that had not yet commenced.
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for
short-term leases (leases of expected term of 12 months or less) or
for leases of low value assets. Payments made under such leases are
expensed on a straight-line basis.
The total cash outflow in respect of leases in the year was
GBP37,650 and the interest expense for leasing arrangements was
GBP4,685 (2022: GBP10,934).
NOTE 23. RELATED PARTY TRANSACTIONS
Ultimate controlling party
There is no ultimate controlling party.
Key management personnel
Disclosures relating to key management personnel are set out in
note 5.
Transactions with related parties
Ian Buddery was remunerated through his personal service company
during the year. Total amounts paid during the year ended 30 June
2023 were GBP67,039 (2021: GBP66,264) and these amounts are
included within the directors' remuneration shown in note 5.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to
related parties at the current and previous reporting dates.
Loans to/from related parties
There were no loans to or from related parties at the current
and previous reporting dates.
NOTE 24. EVENTS AFTER THE REPORTING PERIOD
No matter of circumstance has arisen since 30 June 2023 that has
significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state
of affairs in future financial years.
COMPANY BALANCE SHEET
AS AT 30 JUNE 2023
Note 2023 2022
GBP GBP
Non-current assets
Investments 2 1,058,993 986,419
------------- ------------
Total non-current assets 1,058,993 986,419
------------- ------------
Current assets
Trade and other receivables 3 2,513,599 2,990,349
Cash and cash equivalents 1,116,178 5,546
Total current assets 3,629,777 2,995,895
------------- ------------
Current liabilities
Trade and other payables 4 2,154,892 113,000
Total current liabilities 2,154,892 113,000
------------- ------------
Net current assets 1,474,885 2,882,895
------------- ------------
Total assets less current
liabilities 2,533,878 3,869,314
------------- ------------
Net assets 2,533,878 3,869,314
============= ============
Equity
Share capital 5 1,994,886 1,704,272
Share premium account 5 10,856,854 9,525,617
Other reserves 6 241,209 229,760
Accumulated losses 6 (10,559,071) (7,590,335)
Total equity 2,533,878 3,869,314
============= ============
The Company has taken advantage of the exemption under Section
408 of the Companies Act from presenting its own profit and loss
account. The loss for the year to 30 June 2023 amounted to
GBP2,971,495 (2022: GBP524,407).
The financial statements of Cordel Group plc (company number
11098701 (England and Wales)) were approved by the Board of
Directors and authorised for issue on 24 October 2023.
They were signed on its behalf by:
Ian Buddery John Davis
Chairman Director
24 October 2023 24 October 2023
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2023
Share Share premium Other Accumulated Total equity
capital account reserves losses
GBP GBP GBP GBP GBP
Balance at 1 July
2021 1,687,661 9,520,634 31,769 (7,072,258) 4,167,806
Loss after income
tax expense for the
year - - - (524,407) (524,407)
Foreign currency
translation - - 138,943 - 138,943
Share option charge - - 59,048 6,330 65,378
--------- ------------- -------- ----------- --------------
Total comprehensive
income for the year - - 197,991 (518,077) (320,086)
Share issue 16,611 4,983 - - 21,594
--------- ------------- -------- ----------- --------------
Balance at 30 June
2022 1,704,272 9,525,617 229,760 (7,590,335) 3,869,314
========= ============= ======== =========== ==========
Share Share premium Other Accumulated Total equity
capital account reserves losses
GBP GBP GBP GBP GBP
Balance at 1 July
2022 1,704,272 9,525,617 229,760 (7,590,335) 3,869,314
Loss after income
tax expense for the
year - - - (2,971,495) (2,971,495)
Foreign currency
translation - - (43,151) - (43,151)
Share option charge - - 54,600 2,759 57,359
--------- ------------- -------- ------------ --------------
Total comprehensive
income for the year - - 11,449 (2,968,736) (2,957,287)
Share issue 290,614 1,331,237 - - 1,621,851
--------- ------------- -------- ------------ --------------
Balance at 30 June
2023 1,994,886 10,856,854 241,209 (10,559,071) 2,533,878
========= ============= ======== ============ ==========
NOTES TO THE COMPANY FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
The parent company financial statements of Cordel Group plc have
been prepared in accordance with the Financial Report Standard 101
'Reduced Disclosure Framework' (FRS 101) and the Companies Act
2006.
FRS 101 enables the financial statements of the Parent Company
to be prepared in accordance with IFRS but with certain disclosure
exemptions. As permitted by FRS 101, the Company has taken
advantage of all of the disclosure exemptions available to it,
including (where applicable): statement of cash flows, new
Accounting Standards not yet mandatory, presentation of comparative
information for certain assets, impairment of assets, capital risk
management, financial instruments, fair value measurement, key
management personnel, related party transactions, business
combinations and share-based payments.
The accounting policies adopted for the parent company are
otherwise consistent with those used for the group which are set
out on pages 35 to 44.
NOTE 2. INVESTMENT IN SUBSIDIARY
Investment in subsidiary
Investment in subsidiary is shown at initial cost plus any
subsequent contributions, less accumulated impairment.
In a Group reorganisation, initial cost is measured at the
carrying amount of the Company's share of the equity items shown in
the separate financial statements of the original parent at the
date of the reorganisation. If the original parent has net
liabilities, the initial cost is recognised as nil.
The difference between the capital contributed to effect the
transaction and the initial cost recognised as the investment in
subsidiary is reflected as an adjustment directly to the capital
reorganisation reserve in equity.
2023 2022
GBP GBP
Investment in Corridor Holdings Pty Ltd - 100% of
issued capital held 1,001,249 986,419
Investment in Cordel Ltd - 100% of issued capital
held 5,570 -
Investment in Cordel Technology Inc. - 100% of issued
capital held 52,174
--------- -------
1,058,993 986,419
========= =======
A full list of the subsidiaries controlled by the Company is
disclosed in note 14 to the consolidated financial statements.
NOTE 3. TRADE AND OTHER RECEIVABLES
2023 2022
GBP GBP
Receivable from controlled entities 2,453,772 2,947,426
Prepayments 47,773 37,866
Other receivables - representing VAT/GST 12,054 5,057
2,513,599 2,990,349
========= =========
Interest is being charged on loans between the Australian
entities at 5%. Loans between other group entities and between
Australian and non-Australian group entities are interest free. The
receivables from controlled entities are repayable on demand. A
receivable balance of GBP2,462,581 due from Corridor Holdings Pty
Ltd was written off in the year. Corridor Holdings Pty Ltd remains
operationally essential to the ongoing growth of the Group as a
whole but is not expected to be significantly cash generating in
its own right in the medium term. No expected credit loss provision
is recorded on the remaining receivable from the controlled
entities as directors believe the receivable from controlled
entities will be fully recovered from cash generated from revenue
and operations.
NOTE 4. TRADE AND OTHER PAYABLES
2023 2022
GBP GBP
Trade payables 63,096 23,000
Payable to controlled entities 1,972,281 -
Accrued expenses 119,515 90,000
2,154,892 113,000
========= =======
NOTE 5. SHARE CAPITAL
2023 2022 2023 2022
Shares Shares GBP GBP
Ordinary shares of GBP0.01 each
- issued and fully paid 199,488,614 170,427,186 1,994,886 1,704,272
=========== =========== ========= =========
During the year the company issued 29,061,428 ordinary GBP0.01
shares with a total nominal value of GBP290,614. Total
consideration of GBP1,624,851 was received which resulted in a
share premium of GBP1,331,237.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends
and the proceeds on the winding up of the Company in proportion to
the number of and amounts paid on the shares held. The Company does
not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person
or by proxy shall have one vote and upon a poll each share shall
have one vote.
NOTE 6. OTHER RESERVES
Accumulated losses represent the total losses incurred by the
company since to date its incorporation.
Share premium is the premium paid on shares purchased in the
company.
Other reserves in the balance sheet comprise the following:
2023 2022
GBP GBP
Foreign currency reserve 55,413 98,564
Share option reserve 185,796 131,196
241,209 229,760
======= =======
NOTE 7. RELATED PARTY TRANSACTIONS
The following balances are outstanding at the reporting date in
relation to loans with related parties:
2023 2022
GBP GBP
Current receivables:
Loans to commonly controlled entity 4,916,353 2,947,426
Amounts written off in the year (2,462,581) -
---------------- ---------
2,453,772 2,947,426
Current payables:
Loans from commonly controlled entity 1,972,281 -
Interest is being charged between the Australian entities at 5%.
Loans between other group entities and between Australian and
non-Australian group entities are interest free. The receivables
from controlled entities are repayable on demand. Details of
related party transactions are provided in note 23 to the
consolidated financial statements.
A receivable balance of GBP2,462,581 due from Corridor Holdings
Pty Ltd was written off in the year. Corridor Holdings Pty Ltd
remains operationally essential to the ongoing growth of the Group
as a whole but is not expected to be significantly cash generating
in its own right in the medium term.
NOTE 8. SHARE-BASED PAYMENTS
A share option plan has been established by the Group and
approved by shareholders at a general meeting, whereby the Group
may, at the discretion of the Board of Directors, grant options
over equity settled ordinary shares in the Company to certain key
management personnel of the Group. The options are issued for nil
consideration and are granted in accordance with performance
guidelines established by the Board of Directors.
All options vest over a period no longer than five years and may
have other vesting conditions. Options expire when an employee
ceases to be employed or contracted by a Group company unless the
Board in its discretion allows the employee to retain all or some
of their options. Options do not have a fixed expiry date.
The share-based payment expense for the financial year was
recorded as GBP34,274 (2022: GBP37,220). An adjustment has been
made in the current year resulting in a credit to the share-based
payment expense of GBP49,485 and debit to investments in
subsidiaries for the same amount. This is due to the fact that all
share option charges were recognised in the parent entity, Cordel
Group plc, but are now appropriately recognised within the
different entities where the relevant employees are employed.
NOTE 9. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party.
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FR DZMZGNNFGFZM
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