Final Results for the 12 Months ended 31 Dec.22

About this update from Microlise Group Plc

[{"type":"text","content":"\n \n \n 30 March 2023 \n \n \n   \n \n \n \n MICROLISE GROUP PLC \n \n \n \n   \n \n \n (\"Microlise\", \"the Company\" or \"the Group\") \n \n \n   \n \n \n \n Final Results for the 12 Months ended 31 December 2022 \n \n \n \n \n   \n \n \n \n \n Strong organic ARR growth and cash generation \n \n \n \n \n   \n \n \n \n Microlise Group plc (AIM: SAAS), a leading provider of transport management software to fleet operators, announces its results for the 12 months ended 31 December 2022. \n \n \n   \n \n \n \n Financial Overview \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Calendar Year Results (1) \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Statutory Results \n(Audited) \n \n \n \n \n \n \n \n \n Audited  12 months \nDec-22 \n \n \n \n \n \n \n Unaudited 12 months \nDec-21 (1) \n \n \n \n \n \n \n Change \n(12 months) \n% \n \n \n \n \n \n \n FY21 \n18-months \nto Dec-21 \n \n \n \n \n \n \n \n \n Financial \n \n \n \n \n \n \n Revenue \n \n \n \n \n \n \n 63.2 \n \n \n \n \n \n \n 60.3 \n \n \n \n \n \n \n 5% \n \n \n \n \n \n \n 88.2 \n \n \n \n \n \n \n \n \n Recurring Revenue \n \n \n \n \n \n \n 40.5 \n \n \n \n \n \n \n 36.7 \n \n \n \n \n \n \n 10% \n \n \n \n \n \n \n 54.0 \n \n \n \n \n \n \n \n \n Gross Profit \n \n \n \n \n \n \n 37.6 \n \n \n \n \n \n \n 34.5 \n \n \n \n \n \n \n 9% \n \n \n \n \n \n \n 50.5 \n \n \n \n \n \n \n \n \n Gross Profit Margin % \n \n \n \n \n \n \n 60% \n \n \n \n \n \n \n 57% \n \n \n \n \n \n \n 3% \n \n \n \n \n \n \n 57% \n \n \n \n \n \n \n \n \n Adjusted EBITDA (2) \n \n \n \n \n \n \n 8.2 \n \n \n \n \n \n \n 7.8 \n \n \n \n \n \n \n 6% \n \n \n \n \n \n \n 11.4 \n \n \n \n \n \n \n \n \n Adjusted EBITDA % \n \n \n \n \n \n \n 13% \n \n \n \n \n \n \n 13% \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 13% \n \n \n \n \n \n \n \n \n Adjusted Profit/(loss) before tax (3) \n \n \n \n \n \n \n 2.7 \n \n \n \n \n \n \n 2.6 \n \n \n \n \n \n \n 3% \n \n \n \n \n \n \n 3.4 \n \n \n \n \n \n \n \n \n Profit/(loss) before tax \n \n \n \n \n \n \n 1.4 \n \n \n \n \n \n \n (0.8) \n \n \n \n \n \n \n 280% \n \n \n \n \n \n \n (0.0) \n \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n \n 16.7 \n \n \n \n \n \n \n 13.2 \n \n \n \n \n \n \n 27% \n \n \n \n \n \n \n 13.2 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n Non Financial \n \n \n \n \n \n \n ARR run rate (4) \n \n \n \n \n \n \n 42.6 \n \n \n \n \n \n \n 38.9 \n \n \n \n \n \n \n 10% \n \n \n \n \n \n \n 38.9 \n \n \n \n \n \n \n \n \n Number of like-for-like subscriptions (5) \n \n \n \n \n \n \n 599,000 \n \n \n \n \n \n \n 551,000 \n \n \n \n \n \n \n 9% \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n Long-term contract customer churn by value \n \n \n \n \n \n \n 0.4% \n \n \n \n \n \n \n 0.1% \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n 1.  To assist users of the accounts with understanding the underlying business trading, the Group is presenting a set of unaudited calendar year results on a like-for-like basis for the comparative period covering the 12 months ended 31 December 2021 (CY21). \n \n \n 2.  Adjusted EBITDA excludes exceptional costs in relation to the IPO, exceptional costs in relation to acquisitions, depreciation, amortisation, share of loss of associate, interest, tax and share based payments. \n \n \n 3.  Adjusted Profit / (loss) before taxation excludes IPO costs of £3.4m (CY21), exceptional costs in relation to acquisitions of £0.2m (FY22), share based payments and loss of share of associate. \n \n \n 4.  ARR run rate change figure and % compare the annualised recurring revenue figure for December 2022 with the annualised recurring revenue figure for December 2021. \n \n \n 5.  Like-for-like subscriptions change figure and % compare the subscriptions as at 31 December 2022 with the subscriptions as at 31 December 2021 \n \n \n   \n \n \n \n Financial and Operating Highlights \n \n \n \n   \n \n \n · \n Against the backdrop of component shortages, the Group has driven an increase in revenue to £63.2m (5%) for the 12 months ended 31 December 2022 (CY21: £60.3m). \n \n \n · \n Recurring revenue +10% to £40.5m for the 12 months ended 31 December 2022, supported by the renewal of several major customer contracts and new customer wins (CY21: £36.7m). \n \n \n · \n Increased gross profit +9% to £37.6m (CY21: £34.5m), at a gross profit margin of 60% (CY21 57%) due to increased proportion of high margin SaaS revenues and also improved non-recurring margins. \n \n \n · \n Adjusted EBITDA +6% to £8.2m (CY21: £7.8m), ahead of guidance. \n \n \n · \n Cash and Cash equivalents of £16.7m, an increase of 27% (CY21: £13.2m) together with a £20.0m undrawn Revolving Credit Facility. \n \n \n · \n Subscriptions rose 9%, driven by continued growth in our existing customers together with new customer wins, despite component shortages and inflationary headwinds (CY21: 551,000). \n \n \n · \n Annual recurring revenue (ARR) run rate of £42.6m at period end, growing 10% in last 12 months. \n \n \n · \n The Group added over 250 new customers in the 12 months ended 31 December 2022 and long-term contract customer churn rate by value remained very low at 0.4%. \n \n \n · \n UK business obtained Great Place To Work accreditation, with Microlise listed as one of the UK's Best Workplaces™ for Wellbeing in 2023 by Great Place to Work™, placing 29th in Great Place to Work's ranking of 'Large Organisations'. \n \n \n \n   \n \n \n \n   \n \n \n \n Current Trading and Outlook \n \n \n \n   \n \n \n · \n Entered the financial year in a strong position, with the continued growth in ARR providing good visibility on sustainable profitable growth. \n \n \n · \n Positive start to the year together with pipeline gives the board confidence in delivering the full year numbers. \n \n \n · \n Microlise currently have a very strong pipeline with both direct and OEM customers, therefore directing investment into our global sales force to enable us to capitalise on the many opportunities that are being presented to us. \n \n \n · \n Recent acquisition of Transportation Management System (TMS) provider, Vita Software, to support the Group's strategy to expand its value proposition further into medium sized fleets, with an enriched product offering. \n \n \n · \n Well-funded to continue to deliver on our value accretive acquisition strategy with a healthy number of M&A opportunities in the pipeline. \n \n \n   \n \n \n \n   \n \n \n \n \n Nadeem Raza, CEO of Microlise, \n \n said: \"We are pleased to report another strong year of growth for Microlise, together with significant operational enhancements. We continued to strengthen our business through international growth, numerous major customer renewals and new contract signings, alongside several innovative new product launches. All of which has ensured we start the year with a record order book and healthy pipeline of opportunities across all the markets in which we operate.\" \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n For further information, please contact: \n \n \n \n \n   \n \n \n \n \n \n \n \n \n Microlise Group plc \n \n \n \n \n \n c/o SEC Newgate \n \n \n \n \n \n \n Nadeem Raza, CEO / Bill Wynn, CFO \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Singer Capital Markets (NOMAD & Broker) \n \n \n \n \n \n Tel: +44 20 7496 3000 \n \n \n \n \n \n \n Steve Pearce / James Moat / Harry Gooden \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n SEC Newgate (Financial Comms) \n \n \n \n \n \n Tel: 020 3757 6880 \n \n \n \n \n \n \n Bob Huxford / Molly Gretton / Harry Handyside \n \n \n \n \n Email: [email protected] \n \n \n \n \n \n \n \n   \n \n \n \n   \n \n \n \n About Microlise \n \n \n \n   \n \n \n Microlise Group Plc is a leading provider of transport management software to fleet operators helping them to improve efficiency, safety, and reduce emissions. These improvements are delivered through reduced fuel use, reduced mileage travelled, improved driver performance, fewer accidents, elimination of paperwork and delivery of an enhanced customer experience. \n \n \n   \n \n \n Established in 1982, Microlise is an award-winning business with over 400 enterprise clients. With 463 employees based at the Group's headquarters in Nottingham in the UK, the Company also has offices in France, Australia, and India, with a total global staff base of over 670.  \n \n \n Microlise is listed on the AIM market of the London Stock Exchange (AIM: SAAS) and qualifies for the London Stock Exchange's Green Economy Mark. \n \n \n   \n \n \n \n \n \n \n Chairman's Statement \n \n \n \n \n   \n \n \n \n I am delighted to report that Microlise delivered a strong performance for the full year 2022. The Company achieved 5% Revenue growth to £63.2m for the 12-month period ended 31 December 2022 (CY21 [1] : £60.3m), and 10% Annual Recurring Revenue growth to £42.6m for the 12-month period ended 31 December 2022 (CY21: £38.9m). The Company also achieved record profitability and cash generation, with cash 18% ahead of market expectations, up 27% to £16.7m. \n \n \n   \n \n \n This strong performance was even more admirable given the enduring multiple headwinds effecting the markets in which we operate. These include the global component shortages, high inflation, continuing war in Ukraine and general economic uncertainty. \n \n \n   \n \n \n The global component shortages were a particular issue Microlise had to navigate during the period, which consumed substantial time and resources for the Company. These supply issues also reduced the availability of new vehicles for our customers, which, along with driver shortages and economic uncertainty, led to delays in customer projects and spending. Although we expect inflation and an unpredictable macro-economic environment will continue to present challenges, we do expect component shortages to ease in the second half of 2023. \n \n \n   \n \n \n Despite market difficulties, Microlise made strong operational and strategic progress during the year. In addition, we recorded our highest sales to original equipment manufacturers. We also generated record international revenue after securing important new customers in France and Australia, alongside renewing valuable contracts with some of our largest customers. We also successfully integrated TruTac, our Fleet Compliance and Tachograph Management solution, at both the product and organisational levels. \n \n \n   \n \n \n Our strategic focus for the year ahead is on ensuring our customers benefit through the broader use of our comprehensive integrated product range. In addition, we will forge ahead with our international expansion, with a particular focus on France and Australasia, where we are seeing an increasing number of exciting opportunities. \n \n \n   \n \n \n We remain committed to profitable growth and will continue to review acquisition opportunities that complement our product and customer strategy across the jurisdictions we operate. We were pleased to announce the acquisition of Vita Software, a Transportation Management System, post year end on 14 March 2023. We will continue to search for additional M&A opportunities, with the right combination of value, product, and geography, and intend to use our significant cash resources to make additional suitable acquisitions at the appropriate time. \n \n \n   \n \n \n I would like to express my heartfelt thanks to the Microlise team who have been hard-working, resourceful, and innovative in overcoming the many challenges they faced during the year. As a result, Microlise is now a more efficient business which is better positioned to deliver sustainable, long-term growth as the economy stabilises and component shortages ease. \n \n \n   \n \n \n I would like to take this opportunity to thank our CFO Bill Wynn for his significant contributions to Microlise. His dedication, expertise and leadership have been critical in the growth and development of the company. We are deeply grateful for as many years of service, and I wish him all the best in his well-deserved retirement. We are confident that the foundation he helped build will continue to support Microlise's success in many years to come. I also look forward to working with his newly appointed successor, Nick Wightman, as we look to develop the business into new markets and grow globally. \n \n \n   \n \n \n \n John Lee, Non-Executive Chairman \n \n \n \n \n   \n \n \n \n \n 1 The 2021 financial year comprised 18 months. To assist users of the accounts with understanding the underlying business trading, the Group is presenting a set of unaudited calendar year results on a like-for-like. \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n CEO's Statement \n \n \n \n   \n \n \n We are pleased to report another strong year of growth for Microlise, along with significant operational enhancements. We continued to strengthen our business through international growth, numerous major renewals and new contract signings, as well as launched several innovative new products. All of which has ensured we start the year with a record order book and healthy pipeline of opportunities across all the markets in which we operate. \n \n \n   \n \n \n This year's performance was set against another challenging period for the transport and logistics industry caused by global supply chain shortages combined with inflation and staff shortages. We successfully navigated a course around the ongoing issues through the introduction of various initiatives. These included replacing or designing-out difficult to source or expensive components, sometimes to the extent of redesigning a whole product, all made possible due to our in-house hardware and procurement teams. \n \n \n   \n \n \n This demonstrates the ingenuity and hard-working nature of our development team as well as the agile and flexible nature of Microlise as a business. However, with the team being engaged in adapting existing products to mitigate supply issues, there has been less time dedicated to hardware innovation. We are seeing improvement, and are confident that the supply chain issues will return to near normal from the second half of 2023 and expect to increasingly return our focus to the creation of new innovative products as the year progresses. \n \n \n   \n \n \n It is the trends in microchip availability witnessed over the past year that gives rise to our confidence in a return to normal supply conditions during the second half of 2023. This time last year we were experiencing approximately 20 supplier delivery decommits per month; in the second half of 2022 this fell to 10, and currently we are at four. Our customers ability to purchase vehicles has also followed a similar trend with a lead time of 12 -14 months a year ago, falling to 6 months at the end of 2022 and now standing at 4-5 months. \n \n \n   \n \n \n These are clear, established trends, and reports from suppliers as well as other leading bodies, such as KPMG and the Global Semi-Conductor Alliance, further support our expectations. \n \n \n   \n \n \n I would like to take a moment to express our sincere gratitude to Bill Wynn, for his outstanding service and valuable contributions to our company during his tenure as CFO. Bill's extensive financial and management experience, gained over 25 years at board level in various industry sectors, has been instrumental in shaping Microlise into the successful and thriving business it is today. We thank him for his dedication and wish him a happy and fulfilling retirement. \n \n \n   \n \n \n At the same time, we are excited to welcome Nick Wightman as our new CFO, previously Finance Director of the Group. Nick has worked at Microlise for over 10 years and has been a driving force in the growth and structure of the company. He has played a pivotal role in many significant accomplishments, including the successful completion of our IPO, the successful completion of two acquisitions, and the creation of Microlise subsidiaries in France, Australia, and India. Nick has also been instrumental in implementing a global ERP system, which has improved our efficiency and effectiveness. \n \n \n   \n \n \n We are confident that Nick's extensive financial knowledge and experience, will serve us well as we continue to grow and evolve. We excited see the impact that Nick will bring to the Microlise group as our new CFO, and look forward to working with him closely as we continue to drive the business forward. \n \n \n   \n \n \n \n Financial Performance \n \n \n \n \n   \n \n \n \n The Group delivered a strong full year performance, particularly given the environment in which we were operating. Record levels of OEM sales were recorded, which impacted sales mix and resulted in a positive working capital effect. This was achieved by prioritising shipments to OEMs, who had large order books, while still ensuring we could supply other customers. As a result of the change in sales mix, our Annual Recurring Revenues grew by 10% to £42.6m for the 12-month period ended 31 December 2022, a faster rate than revenue, such that recurring revenues now represent 64% of the total (CY21: 61%). \n \n \n   \n \n \n We continued to see extremely low customer churn (0.4%) alongside winning more than 250 new customers, resulting in a record order book as we enter the new financial year. This pays testament to the loyalty of our customers as well as the quality of our product offerings. \n \n \n   \n \n \n Microlise has carefully managed the supply chain disruption, improving its cost controls and the efficiency of the business, such that margins have improved with EBITDA slightly ahead of market expectations. These improved efficiencies better position us to benefit as the component supply problems ease, as expected in the second half of 2023. \n \n \n   \n \n \n   \n \n \n \n A Growing Business \n \n \n \n \n   \n \n \n \n We continue to work closely with our customers to review and enhance our product offering, ensuring we are always offering best-in-class products and services that promote an efficient, safe, cost-effective, sustainable and compliant environment. \n \n \n   \n \n \n In order to maintain our market leading position as provider of the best-in-class solution, we invested in several new products and services during the period, that provide even greater value to our loyal and new customers. \n \n \n   \n \n \n Most notably, we successfully on-boarded our first customer to our new IIoT (Industrial Internet of Things) platform, which provides a secure connection to remote assets for users to view operational information. This represents our first expansion into transport-adjacent markets. \n \n \n   \n \n \n The platform is providing Parking Facilities Limited (PFL), a manufacturer of automated gates and barriers, with a live view of its products including utilisation data. The two-way system enables the gates to be controlled from anywhere, even allowing for faults to potentially be fixed remotely. \n \n \n   \n \n \n Built on a modern system architecture, the platform provides OEM customers with the potential to drive productivity and efficiency while redefining the way manufacturers interact with their customers, distributors, and suppliers. Developing this new platform is a key part of the Company's long-term strategy, where we can enable other assets in the depot, warehouse or factory to communicate with each other and with the fleet of vehicles. \n \n \n   \n \n \n The Group also increased investment into sales and product development to capture the growing opportunity in international markets, with the recent acquisition post period another addition to the product suite. We have expanded our teams in France, Australia and New Zealand and have successfully accommodated regional differences into our products which we continue to tailor to these markets. We have also developed bespoke marketing approaches to each region. \n \n \n   \n \n \n This is beginning to have a positive effect. Growth in Australia was particularly strong and included a five-year renewal with Coles. Significant new customers were also signed in France, including Aryzta, and Foodstuffs in New Zealand. \n \n \n   \n \n \n \n   \n \n \n \n \n Our People \n \n \n \n \n   \n \n \n \n Our progress during the year was only made possible by the talent, expertise and passion of our team who have delivered ever greater service and products to our customers. Their commitment to ensuring our transport management software remains the market leader has not wavered, despite the many hurdles presented by the markets in the past year, and I would like to thank all our staff for their continued hard work. \n \n \n   \n \n \n During the period, we focused on attracting and retaining staff through the development and implementation of our Employee Engagement strategy. As part of this we ensured market rate alignment for salary roles; introduced numerous cross-company social events and team collaboration events, introduced employee engagement initiatives, increased staff training; introduced a share option scheme for staff; and have retained hybrid working, allowing staff to work at home where preferred. \n \n \n   \n \n \n We were also delighted be awarded the 'Great Place to Work' accreditation, a reliable and globally respected recognition for excellent employee experience, trust-based work culture, and commitment to building a great workplace. This award recognises our commitment to providing a supportive and inclusive workplace for employees and we will endeavour to maintain this standard across the business. \n \n \n   \n \n \n   \n \n \n \n Strategic Focus \n \n \n \n \n   \n \n \n \n The Group's immediate focus is on continued positive performance, continuing to steer a course through inflation and the ongoing global supply chain challenges. With supply chain issues expected to ease during the second half of 2023, leading to materials becoming more readily available, we anticipate an associated increased focus on hardware development. \n \n \n   \n \n \n Microlise is also investing further into the security requirements of our blue-chip customer base. As technology develops, our customers are demanding ever improving assurance. We are focussed on providing this and on remaining at the forefront of the security landscape within our industry. \n \n \n   \n \n \n M&A plays an important role in our strategy, having raised money at IPO to enable us to acquire companies that can add technological capabilities and increase our geographic reach. Post year end on 14th March 2023 we announced the acquisition of Vita Software, for a total consideration of £2.06M. A initial consideration of £1.86M cash payment and a deferred consideration of £0.2 million after 12 months subject to any claims. \n \n \n   \n \n \n Vita Software is a TMS (Transportation Management System) software company based in Hull in the United Kingdom. Established in 2012, Vita Software has a strong reputation in the industry, with its software already in use by several Microlise customers. \n \n \n   \n \n \n Vita Software's TMS adds the key capabilities of resource and transport costing, subcontractor management, and invoicing, which, alongside Microlise's order intake and planning solutions, will enable the Company to offer customers a full end-to-end Order-to-Cash solution. \n \n \n   \n \n \n The acquisition provides upsell and cross-sell opportunities, embedding Microlise even further into its customers' operations. A number of opportunities have already been identified within the current customer base, where the new TMS would be a welcome addition to our existing services. The TMS is also applicable to fleets of all sizes, supporting our strategy to expand into smaller fleets. \n \n \n   \n \n \n In terms of this strategic initiative, we have developed a lighter product for smaller fleets during the period. We are also developing offerings for smaller vehicles having launched Tru-Van during the year, a compliance product for vans. We are currently expanding footprint with customers that have the large fleets of vans and have doubled the size of the sales team that is focussed on these customers within the UK. \n \n \n   \n \n \n ESG considerations are central to all strategic decisions we make as a Company and this has been recognised by third party organisations with which we work through the granting of numerous awards. We are also Grade A by Unicorn investor, as well as the Green Mark by London Stock Exchange. \n \n \n   \n \n \n This was in part due to the contribution our software products make to improving sustainability, such as reducing our customers' fuel use. In our newest products we have also extended support for gas powered vehicles; increased the number of features for electric vehicles, including improved data collection and reporting; and introduced support for hydrogen powered vehicles. \n \n \n   \n \n \n \n   \n \n \n \n \n Outlook \n \n \n \n \n   \n \n \n \n The outlook for Microlise is positive and we have entered FY23 in a strong position, with the Group trading in line with Board expectations since the start of the new financial year. We have significant market share, a proven offering and loyal customers in multiple geographies, helping us to drive growth in revenue and profits. \n \n \n   \n \n \n We believe the transport and logistics market is becoming more accustomed to the benefits of integrated and tailored transport management solutions and this presents a supportive market backdrop as we release new offerings to the market and increase our sales activities. \n \n \n   \n \n \n The Group is fully focussed on its long-term strategic priorities and we continue to successfully manage inflationary pressures and component supply issues and expect components to become more readily available in the second half of 2023. \n \n \n   \n \n \n We are therefore confident of an improving performance for the year ahead and believe that our innovative solutions, strong balance sheet, leading market position and talented team will drive positive change and deliver long-term value to shareholders. \n \n \n   \n \n \n \n Nadeem Raza, Chief Executive Officer \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n CFO's Statement \n \n \n \n \n   \n \n \n \n The financial results for the twelve-month period to 31 December 2022 reflect another period of profitable growth for Microlise despite the challenges widely reported across all industry sectors. \n \n \n   \n \n \n \n Key Performance Indicators \n \n \n \n \n   \n \n \n \n The following key performance indicators for the 12-month period to 31 December 2022 include a comparison to the audited statutory results for the 18-months to 31 December 2021 as well as a comparison to the unaudited results for the calendar year to 31 December 2021 (CY21). \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Calendar Year Results (1) \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Statutory Results \n(Audited) \n \n \n \n \n \n \n \n \n Audited  12 months \nDec-22 \n \n \n \n \n \n \n Unaudited 12 months \nDec-21 (1) \n \n \n \n \n \n \n Change \n(12 months) \n% \n \n \n \n \n \n \n FY21 \n18-months \nto Dec-21 \n \n \n \n \n \n \n \n \n Financial \n \n \n \n \n \n \n Revenue \n \n \n \n \n \n \n 63.2 \n \n \n \n \n \n \n 60.3 \n \n \n \n \n \n \n 5% \n \n \n \n \n \n \n 88.2 \n \n \n \n \n \n \n \n \n Recurring Revenue \n \n \n \n \n \n \n 40.5 \n \n \n \n \n \n \n 36.7 \n \n \n \n \n \n \n 10% \n \n \n \n \n \n \n 54.0 \n \n \n \n \n \n \n \n \n Gross Profit \n \n \n \n \n \n \n 37.6 \n \n \n \n \n \n \n 34.5 \n \n \n \n \n \n \n 9% \n \n \n \n \n \n \n 50.5 \n \n \n \n \n \n \n \n \n Gross Profit Margin % \n \n \n \n \n \n \n 60% \n \n \n \n \n \n \n 57% \n \n \n \n \n \n \n 3% \n \n \n \n \n \n \n 57% \n \n \n \n \n \n \n \n \n Adjusted EBITDA (2) \n \n \n \n \n \n \n 8.2 \n \n \n \n \n \n \n 7.8 \n \n \n \n \n \n \n 6% \n \n \n \n \n \n \n 11.4 \n \n \n \n \n \n \n \n \n Adjusted EBITDA % \n \n \n \n \n \n \n 13% \n \n \n \n \n \n \n 13% \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 13% \n \n \n \n \n \n \n \n \n Adjusted Profit/(loss) before tax (3) \n \n \n \n \n \n \n 2.7 \n \n \n \n \n \n \n 2.6 \n \n \n \n \n \n \n 3% \n \n \n \n \n \n \n 3.4 \n \n \n \n \n \n \n \n \n Profit/(loss) before tax \n \n \n \n \n \n \n 1.4 \n \n \n \n \n \n \n (0.8) \n \n \n \n \n \n \n 280% \n \n \n \n \n \n \n (0.0) \n \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n \n 16.7 \n \n \n \n \n \n \n 13.2 \n \n \n \n \n \n \n 27% \n \n \n \n \n \n \n 13.2 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n Non Financial \n \n \n \n \n \n \n ARR run rate (4) \n \n \n \n \n \n \n 42.6 \n \n \n \n \n \n \n 38.9 \n \n \n \n \n \n \n 10% \n \n \n \n \n \n \n 38.9 \n \n \n \n \n \n \n \n \n Number of like-for-like subscriptions (5) \n \n \n \n \n \n \n 599,000 \n \n \n \n \n \n \n 551,000 \n \n \n \n \n \n \n 9% \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n Long-term contract customer churn by value \n \n \n \n \n \n \n 0.4% \n \n \n \n \n \n \n 0.1% \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n 1.  To assist users of the accounts with understanding the underlying business trading, the Group is presenting a set of unaudited calendar year results on a like-for-like basis for the comparative period covering the 12 months ended 31 December 2021 (CY21). \n \n \n 2.  Adjusted EBITDA excludes exceptional costs in relation to the IPO, exceptional costs in relation to acquisitions, depreciation, amortisation, share of loss of associate, interest, tax and share based payments. \n \n \n 3.  Adjusted Profit / (loss) before taxation excludes IPO costs of £3.4m (CY21), exceptional costs in relation to acquisitions of £0.2m (FY22), share based payments and loss of share of associate. \n \n \n 4.  ARR run rate change figure and % compare the annualised recurring revenue figure for December 2022 with the annualised recurring revenue figure for December 2021. \n \n \n 5.  Like-for-like subscriptions change figure and % compare the subscriptions as at 31 December 2022 with the subscriptions as at 31 December 2021 \n \n \n \n   \n \n \n \n \n Group Results \n \n \n \n \n   \n \n \n \n \n Revenue \n \n \n \n \n   \n \n \n \n Total Revenue for the 12 months ended 31 December 2022 (FY22) was £63.2m, an increase of 5% from 31 December 2021 (CY21). The Group has delivered record levels of OEM sales which benefited both non recurring and recurring revenue and positively impacted working capital. Recurring revenues showed strong growth following an increase in win rate with over 250 new customers in the FY22. Recurring SaaS revenues in the Period were £40.5m, an increase of 10% compared to £36.7m in CY21. New customer wins, strong OEM growth, together with growth in our existing customer's fleets resulted in 10% growth in ARR to £42.6m as at 31 December 2022 from £38.9m on 31 December 2021. Recurring revenues now represent 64.1% of total revenue (CY21 60.9%). \n \n \n   \n \n \n Non-recurring revenue for the 12 months ended 31 December 2022 reduced 4% to £22.7m (CY21: £23.6m) reflecting the challenges our direct customers have experienced with delivery lead times on new vehicles. This has impacted the Group's ability to deploy customer projects which has resulted in lower professional services and installation revenues in the period. These reductions are offset by hardware revenues that have increased in the period by 6.1% as a result of record level of OEM sales. \n \n \n   \n \n \n In addition to winning new business and deepening existing accounts, the Group successfully maintained an extremely low rate of customer churn by value at 0.4% (CY21: 0.1%). This reflects the mission critical importance of Microlise's software solutions in our customers' operations. \n \n \n   \n \n \n \n Gross Profit \n \n \n \n \n   \n \n \n \n Gross profit for the 12 months ended 31 December 2022 increased by 9% to £37.6m (CY21 £34.5m) with gross margin % increasing to 60% (CY21 57%). The Group has benefited from the increased proportion of high margin SaaS revenues and also improved non-recurring margins despite cost inflationary pressures and the ongoing challenges with microchip shortages resulting in premium pricing. \n \n \n   \n \n \n \n Adjusted Administrative Expenses (1) \n \n \n \n \n \n   \n \n \n \n \n The Group has continued to invest in product development, operations, and sales & marketing. \n \n \n   \n \n \n Adjusted administrative expenses, in the 12-month period ended 31 December 2022 increased 13% to £31.1m (CY21: £27.4m). This cost represents employee costs, premises costs, marketing costs, research & development (net of capitalised costs), finance charges, and other central costs. \n \n \n   \n \n \n The 6% increase in staff costs in the 12 months ended 31 December 2022 to £25.8m (CY21: £24.3m) reflected our increase in headcount in line with our growth as well as annual pay awards and increased commissions/bonuses reflecting the increased new customer win rate and the Group's strong EBITDA performance. Average headcount in the Period was 661 (CY21: 618) overall, with 31 of the increase within operations and development and a further 11 in sales and distribution. The increase in operations includes additional engineering resource to support the strategy of bringing more installation work in-house. \n \n \n   \n \n \n Marketing costs increased during the period by £0.7m due to the return (after a 3 year absence) of the Microlise Transport Conference. The Group has continued focus on international growth with targeted marketing spend in key strategic geographies. \n \n \n   \n \n \n Administration costs increased during the period by £0.8m. This is a result of the full year impact of costs to support the Group's listed status including increases in audit fees, banking and broker fees. The Group is investing further in its security posture to ensure it can continue to provide its customers with ever increasing levels of assurance. \n \n \n   \n \n \n Capitalised research & development costs in the period were £1.8m (CY21: £1.3m), whilst amortisation of capitalised development costs in the period ended 31 December 2022 was £0.8m (CY21: £0.5m). \n \n \n   \n \n \n \n Adjusted(1) EBITDA & Profit Before Tax \n \n \n \n \n   \n \n \n \n The growth in revenue, alongside careful management of costs, have results in an increase in adjusted EBITDA in the 12 months ended 31 December 2022 of 6% to £8.2m for the year (CY21: £7.8m), with adjusted EBITDA margin being maintained at 13% (CY20: 13%). To provide a better guide to the underlying business performance, adjusted EBITDA excludes IPO costs and acquisition costs. \n \n \n   \n \n \n The adjusted profit before taxation includes an amortisation charge of £2.1m (CY21: £2.1m) as a result of business combinations. Profit before taxation in the period increased to £2.7m (CY21: £2.6m) \n \n \n   \n \n \n \n EPS and Dividend \n \n \n \n   \n \n \n The Group made a reported profit after taxation in the period of £1.4m. In the 18 months ended 31 December 2021 the Group reported a small loss before tax of £5k due to exceptional costs and a taxation charge of £2.2m. \n \n \n   \n \n \n As a result, the reported basic and diluted earnings per share was 1.17p for the 12 months period ended 31 December 2022 compared to a reported basic and diluted loss per share of 2.09p for the 18 months period ended 31 December 2021 (FY21). The Board does not feel it appropriate at this time to commence paying dividends and continues to invest in its growth strategy. \n \n \n \n   \n \n \n \n \n Group Statement of Financial Position \n \n \n \n \n   \n \n \n \n The Group had net assets of £73.5m at 31 December 2022 (FY21: £71.5m). Current assets increased by £5.1m, primarily due to an increase in debtors driven by higher revenues in the year combined with increased cash balances. Total liabilities increased by £2.9m due to an increase in deferred income and trade payables. The Group typically invoices for software subscriptions monthly, quarterly, annually or for the life of the subscription in advance which drives a strong balance sheet with significant cash balances. Revenue is recognised in the month the service is provided with deferred income disclosed as contract liabilities in current and non current liabilities. As at the end of December total Trade and other payables was £46.1m (FY21: £43.1m) of this balance £33.3m (FY21: £31.5m) is deferred income and relates to future contracted revenue recognition. \n \n \n   \n \n \n \n Cashflow (2) & Net Cash \n \n \n \n   \n \n \n The Group ended the 12-month period to 31 December 2022 with cash and cash equivalents of £16.7m, 18% higher than the Board's expectations and a 27% increase on FY21 (FY21: £13.2m). Adjusted(2) cash flows generated from operations(2) was £9.9m in the period, this represents a cash conversion rate of 121% (FY21: 111%). \n \n \n   \n \n \n During the period, the Group invested a further £1m into TrakM8 by way of a convertible loan note to assist with the working capital required to complete their strategic refocus. Overall net cash inflow for the period was £3.5m (FY21: £3.2m). \n \n \n   \n \n \n \n Banking Facility \n \n \n \n \n   \n \n \n \n The Group agreed a £20.0m committed revolving cash flow facility with HSBC Bank PLC upon IPO. The Group has not utilised any of this facility to date. The Group's gross cash of £16.7m (FY21: £13.2m) and the undrawn £20.0m facility gives the Group £36.7m of cash, which the Directors believe provides ample headroom for Microlise to deliver against its strategic goals. The existing facility runs until July 2024. Given the level of headroom in the business forecasts the board consider it appropriate to prepare the financial statements on the going concern basis.  Details of the board's going concern assessment is provided in the basis of preparation note in the financial statements on page 80. \n \n \n   \n \n \n \n Additional Notes \n \n \n \n \n   \n \n \n \n \n 1.  Adjusted administrative expenses and adjusted EBITDA excludes exceptional costs in relation to the 2021 IPO and exceptional costs in relation to acquisitions, depreciation, amortization and share based payments charges. \n \n \n \n 2.  \n \n Adjusted cash flow generated from operations adds back exceptional costs in relation to the IPO and exceptional costs in relation to acquisitions. \n \n \n \n \n   \n \n \n \n \n Bill Wynn, Chief Financial Officer \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Consolidated Statement of Comprehensive Income \n \n \n \n For the twelve months period ended 31 December 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year \n \n \n \n \n ended \n31 December \n \n \n \n \n \n \n 18 month \n \n \n \n \n period ended \n31 December \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Note \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n Revenue \n \n \n \n \n \n 1 \n \n \n \n \n 63,211 \n \n \n \n \n 88,168 \n \n \n \n \n \n \n Cost of sales \n \n \n \n \n \n \n \n \n \n \n \n (25,577) \n \n \n \n \n (37,690) \n \n \n \n \n \n \n Gross profit \n \n \n \n \n \n \n \n \n \n \n \n 37,634 \n \n \n \n \n 50,478 \n \n \n \n \n \n \n Other operating income \n \n \n \n \n 3 \n \n \n \n \n 876 \n \n \n \n \n 1,143 \n \n \n \n \n \n \n \n Exceptional IPO related costs \n \n \n \n \n \n \n   \n \n \n \n \n \n \n - \n \n \n \n \n \n \n (3,415) \n \n \n \n \n \n \n \n \n Other administrative expenses \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (36,326) \n \n \n \n \n \n \n (47,246) \n \n \n \n \n \n \n \n Total administrative expenses \n \n \n \n \n \n \n \n \n \n \n \n (36,326) \n \n \n \n \n (50,661) \n \n \n \n \n \n \n \n   \n \n \n \n \n Operating profit \n \n \n \n \n \n 3 \n \n \n \n \n 2,184 \n \n \n \n \n 960 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest income \n \n \n \n \n 5 \n \n \n \n \n 45 \n \n \n \n \n 72 \n \n \n \n \n \n \n Interest expense \n \n \n \n \n 6 \n \n \n \n \n (312) \n \n \n \n \n (905) \n \n \n \n \n \n \n Share of loss of associate net of tax \n \n \n \n \n 11 \n \n \n \n \n (478) \n \n \n \n \n (132) \n \n \n \n \n \n \n   \n \n \n \n Profit/(loss) before taxation \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n 1,439 \n \n \n \n \n (5) \n \n \n \n \n \n \n Taxation \n \n \n \n \n 7 \n \n \n \n \n (86) \n \n \n \n \n (2,213) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit/(loss) for the year/period \n \n \n \n \n \n \n \n \n \n \n \n \n 1,353 \n \n \n \n \n (2,218) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Other comprehensive income for the year/period \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Currency translation differences \n \n \n \n \n \n \n \n \n \n \n \n 6 \n \n \n \n \n (71) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total comprehensive income/(expense) for the year/period attributable to the equity shareholders of Microlise Group plc \n \n \n \n \n \n \n \n \n \n \n \n \n 1,359 \n \n \n \n \n (2,289) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic earnings/(loss) per share (pence) \n \n \n \n \n \n 8 \n \n \n \n \n 1.17 \n \n \n \n \n (2.09) \n \n \n \n \n \n \n \n Diluted earnings/(loss) per share (pence) \n \n \n \n \n \n 8 \n \n \n \n \n 1.17 \n \n \n \n \n (2.09) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n Consolidated Statement of Financial Position \n \n \n \n as at 31 December 2022 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31 December \n \n \n \n \n \n \n 31 December \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Note \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Property, plant and equipment \n \n \n \n \n 9 \n \n \n \n \n 8,292 \n \n \n \n \n 8,573 \n \n \n \n \n \n \n Intangible assets \n \n \n \n \n 10 \n \n \n \n \n 75,031 \n \n \n \n \n 75,987 \n \n \n \n \n \n \n Investments in associate \n \n \n \n \n 11 \n \n \n \n \n 1,368 \n \n \n \n \n 1,846 \n \n \n \n \n \n \n Loan to associate \n \n \n \n \n 11 \n \n \n \n \n 1,000 \n \n \n \n \n - \n \n \n \n \n \n \n Trade and other receivables \n \n \n \n \n 14 \n \n \n \n \n 3,078 \n \n \n \n \n 2,710 \n \n \n \n \n \n \n \n Total non-current assets \n \n \n \n \n \n \n   \n \n \n \n \n \n 88,769 \n \n \n \n \n 89,116 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n \n \n 13 \n \n \n \n \n 2,635 \n \n \n \n \n 2,941 \n \n \n \n \n \n \n Trade and other receivables \n \n \n \n \n 14 \n \n \n \n \n 16,760 \n \n \n \n \n 15,143 \n \n \n \n \n \n \n Corporation tax recoverable \n \n \n \n \n \n \n \n \n \n \n \n 1,289 \n \n \n \n \n 932 \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n 15 \n \n \n \n \n 16,683 \n \n \n \n \n 13,210 \n \n \n \n \n \n \n \n Total current assets \n \n \n \n \n \n \n \n \n \n \n \n \n 37,367 \n \n \n \n \n 32,226 \n \n \n \n \n \n \n \n   \n \n \n \n \n Total assets \n \n \n \n \n \n \n \n \n \n \n \n \n 126,136 \n \n \n \n \n 121,342 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Lease liabilities \n \n \n \n \n 16 \n \n \n \n \n (821) \n \n \n \n \n (717) \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n 17 \n \n \n \n \n (29,183) \n \n \n \n \n (25,780) \n \n \n \n \n \n \n \n Total current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n (30,004) \n \n \n \n \n (26,497) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Lease liabilities \n \n \n \n \n 16 \n \n \n \n \n (926) \n \n \n \n \n (994) \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n 17 \n \n \n \n \n (16,898) \n \n \n \n \n (17,312) \n \n \n \n \n \n \n Deferred tax \n \n \n \n \n 12 \n \n \n \n \n (4,840) \n \n \n \n \n (4,991) \n \n \n \n \n \n \n \n Total non current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n (22,664) \n \n \n \n \n (23,297) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n (52,668) \n \n \n \n \n (49,794) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net assets \n \n \n \n \n \n \n \n \n \n \n \n \n 73,468 \n \n \n \n \n 71,548 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Issued share capital \n \n \n \n \n 20 \n \n \n \n \n 116 \n \n \n \n \n 116 \n \n \n \n \n \n \n Share premium account \n \n \n \n \n \n \n \n \n \n \n \n 17,630 \n \n \n \n \n 17,630 \n \n \n \n \n \n \n Retained earnings \n \n \n \n \n \n \n \n \n \n \n \n 55,722 \n \n \n \n \n 53,802 \n \n \n \n \n \n \n \n Total equity \n \n \n \n \n \n \n \n \n \n \n \n \n 73,468 \n \n \n \n \n 71,548 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n Consolidated Statement of Changes in Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share Capital \n \n \n \n \n \n \n Share Premium Account \n \n \n \n \n \n \n Merger Reserve \n \n \n \n \n \n \n Retained earnings \n \n \n \n \n \n \n Total Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n At 30 June 2020 \n \n \n \n \n \n \n 44 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 55,172 \n \n \n \n \n \n \n 848 \n \n \n \n \n \n \n 56,064 \n \n \n \n \n \n \n \n \n Comprehensive income for the 18 month period to 31 December 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Loss for the period \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (2,218) \n \n \n \n \n (2,218) \n \n \n \n \n \n \n Other comprehensive expense \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (71) \n \n \n \n \n (71) \n \n \n \n \n \n \n \n Total comprehensive expense for the period \n \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (2,289) \n \n \n \n \n (2,289) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share based payment (note 21) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 129 \n \n \n \n \n 129 \n \n \n \n \n \n \n Bonus issue of shares (note 20) \n \n \n \n \n 55,172 \n \n \n \n \n - \n \n \n \n \n (55,172) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n \n \n Reduction of share capital (note 20) \n \n \n \n \n (55,114) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 55,114 \n \n \n \n \n - \n \n \n \n \n \n \n Shares issued in the period (note 20) \n \n \n \n \n 14 \n \n \n \n \n 17,630 \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 17,644 \n \n \n \n \n \n \n \n Total transactions with owners \n \n \n \n \n \n 72 \n \n \n \n \n 17,630 \n \n \n \n \n (55,172) \n \n \n \n \n 55,243 \n \n \n \n \n 17,773 \n \n \n \n \n \n \n \n   \n \n \n \n \n At 31 December 2021 \n \n \n \n \n \n \n 116 \n \n \n \n \n \n \n   \n \n \n \n \n 17,630 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 53,802 \n \n \n \n \n \n \n 71,548 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Comprehensive income for the year to 31 December 2022 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the year \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 1,353 \n \n \n \n \n 1,353 \n \n \n \n \n \n \n Other comprehensive income \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 6 \n \n \n \n \n 6 \n \n \n \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 1,359 \n \n \n \n \n 1,359 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share based payment (note 21) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 561 \n \n \n \n \n 561 \n \n \n \n \n \n \n \n Total transactions with owners \n \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 561 \n \n \n \n \n 561 \n \n \n \n \n \n \n \n   \n \n \n \n \n At 31 December 2022 \n \n \n \n \n \n \n 116 \n \n \n \n \n \n \n   \n \n \n \n \n 17,630 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 55,722 \n \n \n \n \n \n \n 73,468 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n Company Statement of Financial Position \n \n \n \n as at 31 December 2022 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31 December \n \n \n \n \n \n \n 31 December \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Note \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Property, plant and equipment \n \n \n \n \n 9 \n \n \n \n \n 4,838 \n \n \n \n \n 4,940 \n \n \n \n \n \n \n Investments  \n \n \n \n \n 11 \n \n \n \n \n 79,192 \n \n \n \n \n 79,943 \n \n \n \n \n \n \n Loan to associate \n \n \n \n \n \n \n \n \n \n \n \n 1,000 \n \n \n \n \n - \n \n \n \n \n \n \n Deferred tax \n \n \n \n \n 12 \n \n \n \n \n 111 \n \n \n \n \n - \n \n \n \n \n \n \n \n Total non-current assets \n \n \n \n \n \n \n   \n \n \n \n \n \n 85,141 \n \n \n \n \n 84,883 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other receivables \n \n \n \n \n 14 \n \n \n \n \n 26 \n \n \n \n \n 253 \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n 15 \n \n \n \n \n 69 \n \n \n \n \n 1,090 \n \n \n \n \n \n \n \n Total current assets \n \n \n \n \n \n \n \n \n \n \n \n \n 95 \n \n \n \n \n 1,343 \n \n \n \n \n \n \n \n   \n \n \n \n \n Total assets \n \n \n \n \n \n \n \n \n \n \n \n \n 85,236 \n \n \n \n \n 86,226 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n 17 \n \n \n \n \n (17,928) \n \n \n \n \n (18,298) \n \n \n \n \n \n \n \n Total current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n (17,928) \n \n \n \n \n (18,298) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n 17 \n \n \n \n \n - \n \n \n \n \n (1,000) \n \n \n \n \n \n \n \n Total non current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n (1,000) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n (17,928) \n \n \n \n \n (19,298) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net assets \n \n \n \n \n \n \n \n \n \n \n \n \n 67,308 \n \n \n \n \n 66,928 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Issued share capital \n \n \n \n \n 20 \n \n \n \n \n 116 \n \n \n \n \n 116 \n \n \n \n \n \n \n Share premium account \n \n \n \n \n \n \n \n \n \n \n \n 17,630 \n \n \n \n \n 17,630 \n \n \n \n \n \n \n Retained earnings \n \n \n \n \n \n \n \n \n \n \n \n 49,562 \n \n \n \n \n 49,182 \n \n \n \n \n \n \n \n Total equity \n \n \n \n \n \n \n \n \n \n \n \n \n 67,308 \n \n \n \n \n 66,928 \n \n \n \n \n \n \n \n   \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n Company Statement of Changes in Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share Capital \n \n \n \n \n \n \n Share Premium Account \n \n \n \n \n \n \n Merger Reserve \n \n \n \n \n \n \n Retained earnings \n \n \n \n \n \n \n Total Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n At 30 June 2020 \n \n \n \n \n \n 44 \n \n \n \n \n - \n \n \n \n \n 55,172 \n \n \n \n \n (595) \n \n \n \n \n 54,621 \n \n \n \n \n \n \n \n Comprehensive income for the 18 month period to 31 December 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Loss for the period \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (5,466) \n \n \n \n \n (5,466) \n \n \n \n \n \n \n Other comprehensive income \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n \n \n \n Total comprehensive expense for the period \n \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (5,666) \n \n \n \n \n (5,666) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share based payment (note 21) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 129 \n \n \n \n \n 129 \n \n \n \n \n \n \n Bonus issue of shares (note 20) \n \n \n \n \n 55,172 \n \n \n \n \n - \n \n \n \n \n (55,172) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n \n \n Reduction of share capital (note 20) \n \n \n \n \n (55,114) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 55,114 \n \n \n \n \n - \n \n \n \n \n \n \n Shares issued in the period (note 20) \n \n \n \n \n 14 \n \n \n \n \n 17,630 \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 17,644 \n \n \n \n \n \n \n \n Total transactions with owners \n \n \n \n \n \n 72 \n \n \n \n \n 17,630 \n \n \n \n \n (55,172) \n \n \n \n \n 55,243 \n \n \n \n \n 17,773 \n \n \n \n \n \n \n \n   \n \n \n \n \n At 31 December 2021 \n \n \n \n \n \n \n 116 \n \n \n \n \n \n \n   \n \n \n \n \n 17,630 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 49,182 \n \n \n \n \n \n \n 66,928 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Comprehensive income for the year to 31 December 2022 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Loss for the year \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (182) \n \n \n \n \n (182) \n \n \n \n \n \n \n Other comprehensive income \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n \n \n \n Total comprehensive expense for the year \n \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n (182) \n \n \n \n \n (182) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share based payment (note 21) \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 561 \n \n \n \n \n 561 \n \n \n \n \n \n \n \n Total transactions with owners \n \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n At 31 December 2022 \n \n \n \n \n \n \n 116 \n \n \n \n \n \n \n   \n \n \n \n \n 17,630 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 49,561 \n \n \n \n \n \n \n 67,307 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n   \n \n \n \n \n Consolidated Statement of Cash Flows \n \n \n \n for the year ended 31 December 2022 \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Year ended \n31 December \n \n \n \n \n \n \n 18 month \n \n \n \n \n period ended \n31 December \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n  Note \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash generated from operations \n \n \n \n \n   A \n \n \n \n \n 9,719 \n \n \n \n \n 9,132 \n \n \n \n \n \n \n Tax (paid)/received \n \n \n \n \n \n \n \n \n \n \n \n (34) \n \n \n \n \n 660 \n \n \n \n \n \n \n \n Net cash generated from operating activities \n \n \n \n \n \n \n   \n \n \n \n \n \n 9,685 \n \n \n \n \n 9,792 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Purchase of property, plant and equipment \n \n \n \n \n \n \n \n \n \n \n \n (979) \n \n \n \n \n (1,499) \n \n \n \n \n \n \n Additions to intangible assets \n \n \n \n \n \n \n \n \n \n \n \n (2,080) \n \n \n \n \n (2,166) \n \n \n \n \n \n \n Loan advanced to associate \n \n \n \n \n \n \n \n \n \n \n \n (1,000) \n \n \n \n \n - \n \n \n \n \n \n \n Purchase of subsidiaries, deferred consideration paid \n \n \n \n \n \n \n \n \n \n \n \n (1,000) \n \n \n \n \n (1,000) \n \n \n \n \n \n \n Interest received \n \n \n \n \n \n \n \n \n \n \n \n 45 \n \n \n \n \n - \n \n \n \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n \n   \n \n \n \n \n \n (5,014) \n \n \n \n \n (4,665) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Issue of share capital \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n 1 \n 8,600 \n \n \n \n \n \n \n Share issue expenses paid \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n ( \n 956) \n \n \n \n \n \n \n Interest paid \n \n \n \n \n \n \n \n \n \n \n \n (283) \n \n \n \n \n (676) \n \n \n \n \n \n \n Lease liability payments \n \n \n \n \n \n \n \n \n \n \n \n (915) \n \n \n \n \n (1,219) \n \n \n \n \n \n \n Repayment of bank loans \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n (16,975) \n \n \n \n \n \n \n Repayment of other loans \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n (729) \n \n \n \n \n \n \n \n Net cash generated used in financing activities \n \n \n \n \n \n \n   \n \n \n \n \n \n (1,198) \n \n \n \n \n (1,955) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net increase in cash and cash equivalents \n \n \n \n \n \n \n   \n \n \n \n \n \n 3,473 \n \n \n \n \n 3,172 \n \n \n \n \n \n \n Cash and cash equivalents at beginning of year/period \n \n \n \n \n \n \n \n \n \n \n \n 13,210 \n \n \n \n \n 10,061 \n \n \n \n \n \n \n Foreign exchange losses \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n (23) \n \n \n \n \n \n \n \n Cash and cash equivalents at end of year/period \n \n \n \n \n \n \n  B \n \n \n \n \n \n 16,683 \n \n \n \n \n 13,210 \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n Notes to the cash flow statements \n \n \n \n \n   \n \n \n \n \n A. Cash generated from operations \n \n \n \n The reconciliation of profit/(loss) for the period to cash generated from operations is set out below: \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Year ended \n31 December \n \n \n \n \n \n \n 18 month \n \n \n \n \n period ended \n31 December \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n Profit/(loss) for the period \n \n \n \n \n \n \n \n \n \n \n \n 1,353 \n \n \n \n \n (2,218) \n \n \n \n \n \n \n Adjustments for: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Depreciation \n \n \n \n \n \n \n \n \n \n \n \n 2,212 \n \n \n \n \n 3,085 \n \n \n \n \n \n \n Amortisation \n \n \n \n \n \n \n \n \n \n \n \n 3,036 \n \n \n \n \n 3,803 \n \n \n \n \n \n \n Share based payments \n \n \n \n \n \n \n \n \n \n \n \n 561 \n \n \n \n \n 129 \n \n \n \n \n \n \n Foreign exchange movement \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n (23) \n \n \n \n \n \n \n Net interest costs \n \n \n \n \n \n \n \n \n \n \n \n 267 \n \n \n \n \n 833 \n \n \n \n \n \n \n Share of loss of associate \n \n \n \n \n \n \n \n \n \n \n \n 478 \n \n \n \n \n 132 \n \n \n \n \n \n \n Tax charge \n \n \n \n \n \n \n \n \n \n \n \n 86 \n \n \n \n \n 2,213 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 7,993 \n \n \n \n \n \n \n 7,954 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Decrease in inventories \n \n \n \n \n \n \n \n \n \n \n \n 306 \n \n \n \n \n 663 \n \n \n \n \n \n \n Increase in trade and other receivables \n \n \n \n \n \n \n \n \n \n \n \n (2,545) \n \n \n \n \n (110) \n \n \n \n \n \n \n Increase in trade and other payables \n \n \n \n \n \n \n \n \n \n \n \n 3,965 \n \n \n \n \n 625 \n \n \n \n \n \n \n \n Cash generated from operations \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 9,719 \n \n \n \n \n \n \n 9,132 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n B. Analysis of net funds/(debt) \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n At 1 January \n \n \n \n \n \n \n Cash flow \n \n \n \n \n \n \n Non-cash changes \n \n \n \n \n \n \n At \n31 December \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Lease liabilities \n \n \n \n \n (1,711) \n \n \n \n \n 979 \n \n \n \n \n (1,015) \n \n \n \n \n (1,747) \n \n \n \n \n \n \n Liabilities arising from financing activities \n \n \n \n \n (1,711) \n \n \n \n \n 979 \n \n \n \n \n (1,015) \n \n \n \n \n (1,747) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n 13,210 \n \n \n \n \n 3,473 \n \n \n \n \n - \n \n \n \n \n 16,683 \n \n \n \n \n \n \n \n Net funds \n \n \n \n \n \n 11,499 \n \n \n \n \n 4,452 \n \n \n \n \n (1,015) \n \n \n \n \n 14,936 \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n At 1 July \n \n \n \n \n \n \n Cash flow \n \n \n \n \n \n \n Non-cash changes \n \n \n \n \n \n \n At \n31 December \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n £'000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Bank loans \n \n \n \n \n (16,839) \n \n \n \n \n 16,975 \n \n \n \n \n (136) \n \n \n \n \n - \n \n \n \n \n \n \n Other loans \n \n \n \n \n (729) \n \n \n \n \n 729 \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n \n \n Lease liabilities \n \n \n \n \n (1,369) \n \n \n \n \n 1,291 \n \n \n \n \n (1,633) \n \n \n \n \n (1,711) \n \n \n \n \n \n \n Liabilities arising from financing activities \n \n \n \n \n (18,937) \n \n \n \n \n 18,995 \n \n \n \n \n (1,769) \n \n \n \n \n (1,711) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n 10,061 \n \n \n \n \n 3,172 \n \n \n \n \n (23) \n \n \n \n \n 13,210 \n \n \n \n \n \n \n \n Net (debt)/funds \n \n \n \n \n \n (8,876) \n \n \n \n \n 22,167 \n \n \n \n \n (1,792) \n \n \n \n \n 11,499 \n \n \n \n \n \n \n \n   \n \n \n \n \n Major non cash items \n \n \n \n £951,000 of additions to right of use assets and lease liabilities are included in non cash movements in the year ended 31 December 2022 (2021: £1,506,000). The remaining non cash movements relate to the unwinding of the discount on other payables. \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n Summary Of Significant Accounting Policies \n \n \n \n \n   \n \n \n \n \n General information  \n  \n \n \n \n \n \n \n Microlise Group plc is a holding and management services company. Its subsidiaries are telematics businesses providing technological transport solutions that enable customers to reduce costs and environmental impact by maximising the efficiency of their transportation. The company is a public limited company, traded on the Alternative Investment Market (\"AIM\") of the London Stock Exchange, and incorporated and domiciled in England. The address of the registered office is Farrington Way, Eastwood, Nottingham, NG16 3AG. \n \n \n   \n \n Accounting policies \n \n \n \n \n A.  Basis of preparation \n \n \n \n The financial information for the year ended 31 December 2022 and the year ended 31 December 2021 does not constitute the company's statutory accounts for those years. \n \n \n The statutory accounts for the year ended 31 December 2022 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. \n \n \n The auditors' reports on the accounts for 31 December 2022 and 31 December 2021 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. \n \n \n The financial statements have been prepared in accordance with the historical cost convention and UK International Accounting Standards ('UK IFRS'). The stated accounting policies have been consistently applied to all periods presented. \n \n \n The parent company financial statements have been prepared under applicable United Kingdom Accounting Standards (FRS101). The following FRS 101 disclosure exemptions have been taken in respect of the parent company only information: \n \n \n · \n IAS 7 Statement of cash flows; \n \n \n · \n IFRS 7 Financial instruments disclosures; and \n \n \n · \n IAS 24 Key management remuneration. \n \n \n   \n \n \n The financial statements including the notes are presented in thousands of pounds sterling ('£'000'), the functional and presentation currency of the Group, except where otherwise indicated. \n \n \n   \n \n \n The principal accounting policies adopted in preparation of the financial statements are set out below. The policies have been consistently applied to all periods presented, unless otherwise stated. \n \n \n   \n \n \n Judgements made by the Directors in the application of the accounting policies that have a significant effect on the historical financial information and estimates with significant risk of material adjustment in the next year are discussed in note C. \n \n \n   \n \n \n \n Going concern \n \n \n \n   \n \n \n The directors have considered working capital forecasts prepared for the period to December 2024. The Group had cash balances of £16.7m at the year end, no borrowings and a £20m undrawn working capital facility. The Group also has a significant recurring income base with inflationary clauses in the main contracts. \n \n \n A range of sensitivities have been run on the working capital model, and the directors consider a scenario in which the business will face liquidity issues is remote. As part of the sensitivity analysis the directors have considered the impact of a reduction in turnover from their principal customer and the impact on working capital as well as cost and supply issues that might arise in the context of the current events in Ukraine and are satisfied that the Group has sufficient resources to respond to reasonably foreseeable scenarios. The Directors conclude that a scenario that would result in the need for the Group to require additional funding to be remote. \n \n \n Based on the forecasts, the Directors are satisfied that the Group can meet its day-to-day cash flow requirements and operate within the terms of its working capital banking facilities if required. Accordingly, the financial statements have been prepared on a going concern basis. \n \n \n   \n \n \n   \n \n \n \n B.  Accounting policies \n \n \n \n \n Consolidation \n \n \n \n The consolidated financial statements include the results of Microlise Group plc and its subsidiary undertakings. The results of the subsidiary undertakings are included from the date that effective control passed to the company. \n \n \n   \n \n \n On acquisition, all the subsidiary undertakings' assets and liabilities at that date of acquisition are recorded under purchase accounting at fair value, having regard to condition at the date of acquisition. All changes to those assets and liabilities and the resulting gains and losses that arise after the company gained control are included in the post-acquisition results. Sales, profits and balances between group companies are eliminated on consolidation. \n \n \n   \n \n \n The Group has taken advantage of the exemption not to disclose transactions between wholly owned entities in the group. \n \n \n \n   \n \n \n \n \n Associates \n \n \n \n Entities in which the Group holds a participating interest and over whose operating and financial policies the group exercises a significant influence are treated as associates. In the Group financial statements, associates are accounted for using the equity method. \n \n \n \n   \n \n \n \n \n Revenue recognition \n \n \n \n Revenue comprises revenue recognised by the Group in respect of goods and services supplied during the year, based on the consideration specified in a contract, exclusive of Value Added Tax and trade discounts. \n \n \n   \n \n \n The Group enters into the sale of multi-element contracts, which combine separate performance obligations including hardware, installation, managed service contracts (software-as-a-service or SaaS), software licences, professional services (which includes bespoke software development, project management (incorporating activities including project and installation planning, managing change control and stage boundaries and project reporting),  consultancy, training), and support and maintenance services relating to these products.  In accordance with IFRS 15, these are considered to be distinct.  \n \n \n   \n \n \n Each performance obligation is allocated a transaction price based on the stand-alone selling prices.  Where stand-alone prices are not directly observable, they are based on expected cost plus margin. \n \n \n Revenue is recognised depending upon the revenue stream to which it relates, as follows: \n \n \n · \n The fair value of hardware and installation revenue is recognised at a point in time when control is transferred to the customer on despatch and/or upon installation; \n \n \n · \n Revenue from the SaaS arrangement is recognised over a period of time, based on the term of the contract on a straight line basis.  Revenue recognition over time is considered appropriate based on provisions of IFRS 15 paragraph 35 as the customer simultaneously receives and consumes the benefits provided by the Group.  The contractual term for average SaaS agreements are approximately 5 years; \n \n \n · \n Professional services typically include implementation, configuration, training and other similar services to create optimised interfaces between the Group's software and customers systems.  Revenue from professional services is recognised over a period of time using the input method as professional services are being performed, as this best depicts the timing of how the value is transferred to the customer; and  \n \n \n · \n Support and maintenance turnover is deferred at the point of sale and recognised in the Statement of Comprehensive Income over a period of time of the contractual life, utilising the output method, generally on a straight line basis as the customer simultaneously receives and consumes the benefits provided by the Group. \n \n \n Invoicing for all revenue streams is undertaken in accordance with the terms of the agreement with the customer.  When an invoice is due for payment at the statement of financial position date but the associated performance obligations have not been fulfilled the amounts due are recognised as trade receivables and a contact liability is recognised for the sales value of the performance obligations that have not been provided.  If payment is received in advance of the delivery of the associated performance obligation a contract liability is recognised. When an invoice is not due for payment at the statement of financial position date and the associated performance obligation has not been fulfilled no amounts are recognised in the financial statements. \n \n \n In cases where customers pay for the goods and services over an agreed period, the fair value of the consideration is determined by discounting future receipts using an imputed rate of interest.  The difference between the fair value and the nominal amount of the consideration is recognised as finance income over the payment period. \n \n \n   \n \n \n \n Contract costs \n \n \n \n Under IFRS 15, the Group capitalises commission fees as costs of obtaining a contract when they are incremental and, if they are expected to be recovered, it amortises them consistently with the pattern of revenue for the related contract.  If the expected amortisation period is one year or less, then the commission is expensed when incurred.  Contract costs are capitalised to trade and other receivables, due within and after one year. \n \n \n   \n \n \n The Group in certain circumstances incurs costs to deliver its services and fulfil specific contracts.  These costs may include process mapping and design, scoping and configuration. Contract fulfilment costs are divided into costs that deliver an asset and costs that are expensed as incurred. \n \n \n   \n \n \n Under IFRS 15, the Group capitalises these contract fulfilment costs when they directly relate to a specifically identifiable contract or anticipated contract, will enhance or generate resources used to satisfy future performance obligations and they are expected to be recovered.  Where capitalised, it amortises them consistently with the pattern of revenue for the related contract.  \n \n \n   \n \n \n At each reporting date, the Group determines whether or not the contract assets are impaired by comparing the carrying amount of the asset to the remaining amount of consideration that the Group expects to receive less the costs that relate to providing services under the relevant contract. \n \n \n \n   \n \n \n \n \n Employee benefits \n \n \n \n The Group operates a defined contribution pension scheme. Contributions are recognised in the Statement of Comprehensive Income in the year in which they become payable in accordance with the rules of the scheme. \n \n \n   \n \n \n Short term employee benefits including holiday pay are recognised as an expense in the period in which the service is rendered. \n \n \n \n   \n \n \n \n \n Share based payment \n \n \n \n The Group operates an equity-settled share based compensation plan in which the Group receives services from directors and certain employees as consideration for share options. The fair value of the services is recognised as an expense over the estimated vesting period, determined by reference to the fair value of the options granted. \n \n \n   \n \n \n Taxation \n \n \n The taxation expense or credit comprises current and deferred tax recognised in the profit for the financial period or in other comprehensive income or equity if it arises from amounts recognised in other comprehensive income or directly in equity. Current tax is provided at amounts expected to be paid (or recovered) in respect of the taxable profits for the period using tax rates and laws that have been enacted or substantively enacted by the reporting date. Microlise, as a large company from 1 July 2020 for tax R&D purposes, qualifies for the large company RDECs which are included as grant income within other operating income.  \n \n \n \n   \n \n \n \n Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. \n \n \n   \n \n \n Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered.  \n \n \n   \n \n \n Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset and where the deferred tax balances relate to the same taxation authority. \n \n \n \n   \n \n \n \n \n Exceptional items \n \n \n \n The Group classifies certain one-off charges or credits that have a material impact on the financial results as 'exceptional items'. These are disclosed separately to provide further understanding of the financial performance of the group. \n \n \n   \n \n \n \n Government grants \n \n \n \n Grants are accounted under the accruals model, and grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.  Government grants relate to the receipt of Coronavirus Job Retention Scheme income, innovation grants and large company research and development expenditure credits ('RDEC' s). \n \n \n \n   \n \n \n \n \n Foreign exchange \n \n \n \n Transactions denominated in foreign currencies are translated into sterling at the rates ruling on the date of the transaction. Monetary assets or liabilities denominated in foreign currencies at the Statement of Financial Position date are translated at the rate ruling on that date and all translation differences are charged or credited in the Statement of Comprehensive Income. \n \n \n   \n \n \n On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place.  All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date.  Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income. \n \n \n   \n \n \n \n Intangible assets \n \n \n \n Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the fair value of the net assets acquired at the acquisition date. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment in the investee. \n \n \n   \n \n \n Intangible assets acquired separately from a business are recognised at cost. Intangible assets acquired as part of an acquisition are recognised separately from goodwill if the fair value can be measured reliably on initial recognition. Intangible assets created within the business are not recognised, other than for qualifying development expenditure, and expenditure is charged against profits in the year in which it is incurred. \n \n \n   \n \n \n Subsequent to initial recognition, intangible assets are stated at cost less accumulated recognised and accumulated impairment. Intangible assets are amortised on a straight line basis within administrative expenses over their estimated useful lives as follows: \n \n \n   \n \n \n Asset class  Amortisation period \n \n \n Brands    15 years  \n \n \n Customer relationships    11 to 16 years \n \n \n Technology assets    5 to 10 years \n \n \n Software  3-5 years \n \n \n   \n \n \n Intangible assets are tested for impairment when an event that might affect asset values has occurred. Any such impairment in carrying value is written off to the Statement of Comprehensive Income immediately. \n \n \n \n   \n \n \n \n \n Research and development expenditure \n \n \n \n An internally generated intangible asset arising from development (or the development phase) of an internal project is recognised if, and only if, all of the following have been demonstrated: \n \n \n   \n \n \n · \n It is technically feasible to complete the development such that it will be available for use, sale or licence; \n \n \n · \n There is an intention to complete the development; \n \n \n · \n The method by which probable future economic benefits will be generated is known; \n \n \n · \n There are adequate technical, financial and other resources required to complete the development; and \n \n \n · \n There are reliable measures that can identify the expenditure directly attributable to the project during its development. \n \n \n   \n \n \n The amount recognised is the expenditure incurred from the date when the project first meets the recognition criteria listed above.  Expenses capitalised as \"Technology\" within intangible assets consist of employee costs incurred on development. Where the above criteria are not met, development expenditure is charged to the consolidated statement of comprehensive income in the period in which it is incurred. The expected life of internally generated intangible assets varies based on the anticipated useful life, currently ranging from five to seven years. \n \n \n   \n \n \n Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and impairment losses. Amortisation is charged on a straight-line basis over the estimated useful life in which the intangible asset has economic benefit and is reported within administrative expenses in the consolidated statement of comprehensive income. \n \n \n   \n \n \n Research expenditure is recognised as an expense in the period in which it is incurred. \n \n \n   \n \n \n Research and development expenditure tax credits arise in the UK. Those relevant to a large company for tax purposes are credited to other operating income as a grant.  \n \n \n \n   \n \n \n \n \n Financial assets \n \n \n \n Financial assets, including trade and other receivables, cash and cash equivalent balances are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method. Cash and cash equivalents comprise cash held at bank which is available on demand. \n \n \n The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables.  The group measures loss allowances at an amount equal to lifetime ECL, which is estimated using past experience of the group's historical credit losses experienced over the three year period prior to the period end. Historical loss rates are then adjusted for current and forward-looking information on macroeconomic factors affecting the group's customers, such as inflation rates. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. \n \n \n To measure expected credit losses on a collective basis, trade receivables and contract assets are grouped based on similar credit risk and aging.  The contract assets have similar risk characteristics to the trade receivables for similar types of contracts. \n \n \n The group recognises loss allowances for expected credit losses (ECLs) on financial assets measured at amortised cost to the extent that these are material.  The group has determined that there is no material impact of ECLs on the historical financial information. \n \n \n \n   \n \n \n \n \n Financial liabilities \n \n \n \n Financial liabilities, including trade and other payables, lease liabilities and bank borrowings are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. \n \n \n   \n \n \n Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method. \n \n \n \n   \n \n \n \n Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. \n \n \n \n   \n \n \n \n Borrowings are initially stated at the fair value of the consideration received after deduction of wholly attributable issue costs. Borrowings are subsequently stated at amortised cost using the effective interest method. \n \n \n   \n \n \n Right-of-use assets and lease liabilities \n \n \n Under IFRS 16, leases are recognised as right-of-use assets, presented as a separate category within property, plant and equipment included in the consolidated statement of financial position, and with a corresponding lease liability from the date at which the leased asset is available for use by the Group. This has been adopted and applied on a full retrospective basis. \n \n \n   \n \n \n Assets and liabilities arising from a lease are initially measured at the present value of the lease payments and payments to be made under the terms of the lease.  Reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, or the incremental borrowing rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. \n \n \n   \n \n \n Lease payments are allocated between principal, presented as a separate category within liabilities, and finance cost. The finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability, any lease payments made at or before the commencement date less any lease incentives received and any initial direct costs. Leasehold dilapidations are recognised in relation to the estimated cost of returning a leasehold property to its original state at the end of the lease in accordance with the lease terms.  \n \n \n   \n \n \n Depreciation is charged on a straight line basis over the period of the lease and assets are subject to impairment reviews where circumstances indicate their value may not be recoverable of if they are not being utilised. \n \n \n   \n \n \n Payments associated with short-term leases of property, plant and equipment and leases of low-value assets continue to be recognised on a straight-line basis as an expense. Short-term leases are leases with a lease term of 12 months or less. \n \n \n   \n \n \n Property, plant and equipment \n \n \n Property, plant and equipment assets are stated at cost less depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is provided on all property, plant and equipment assets at rates calculated to write off the cost of each asset on a straight line basis over its expected useful life, as follows: \n \n \n   \n \n \n Asset class  Depreciation method rate \n \n \n Freehold property    2% straight line \n \n \n Leasehold improvements  Over the period of the lease \n \n \n Equipment, fixtures and fittings  20-33% straight line basis \n \n \n   \n \n \n Investments \n \n \n   \n \n \n Investments in subsidiaries are stated at cost or at the fair value of shares issued as consideration less provision for any impairment. Investments in associates are stated at fair value through the profit and loss. \n \n \n   \n \n \n Inventories \n \n \n Inventories are valued at the lower of purchase cost and net realisable value, after due regard for any slow moving items.  Net realisable value is based on selling price less anticipated costs to completion and selling costs.  Cost is based on the cost of purchase on a weighted average basis.  Work in progress and finished goods include labour and attributable overheads. \n \n \n   \n \n \n At each reporting date, inventories are assessed for impairment.  If inventory is impaired, the carrying amount is reduced to its net realisable value.  The impairment loss is recognised immediately in the consolidated statement of comprehensive income. \n \n \n   \n \n \n Share capital and reserves \n \n \n Financial instruments issued by the company are treated as equity only to the extent that they do not meet the definition of a financial liability. The parent company's ordinary shares are classified as equity instruments. \n \n \n   \n \n \n The share premium account represents the amount by which the issue price of shares exceeds the nominal value of the shares less any share issue expenses. \n \n \n   \n \n \n The merger reserve represents the difference between the fair value of the shares issued as part of the consideration for Microlise Holdings Limited and the nominal value of the shares issued. \n \n \n   \n \n \n Retained earnings comprises opening retained earnings and total comprehensive income for the year, net of dividends paid. \n \n \n \n   \n \n \n \n \n New or revised accounting standards and interpretations \n \n \n \n IFRS interpretations and amendments issued but not yet applicable by the Group in these financial statements have been reviewed and assessed. All IFRS effective at the reporting date of 31 December 2022 have been applied. \n   \n \n \n   \n \n \n There are no other new standards, interpretations and amendments which are not yet effective in these financial statements, expected to have a material effect or to be relevant to the Group's future financial statements. \n \n \n   \n \n \n \n C. \n \n   Critical accounting estimates and assumptions \n \n \n \n   \n \n \n \n \n Critical judgements in applying the accounting policies \n \n \n \n The preparation of the financial statements under IFRS requires the use of certain critical accounting assumptions and requires management to exercise its judgement and to make estimates in the process of applying the Company's and Group's accounting policies. Management bases its estimates on historical experience and on various other assumptions that management believes to be reasonable in the circumstances. The key estimates used in the preparation of these financial statements that could result in a material change in the carrying value of assets or liabilities within the next twelve months are as follows: \n \n \n   \n \n \n \n Estimates and assumptions \n \n \n \n   \n \n \n \n Useful economic lives of intangible assets \n \n \n \n The annual amortisation charge for intangible assets is sensitive to changes in the estimated useful economic lives of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments and economic utilisation. \n \n \n   \n \n \n There is no current indication that the Group's businesses will not continue to trade profitably and hence the life may differ or be longer than the estimates used to amortise intangible assets. \n \n \n   \n \n \n \n Capitalisation of development expenditure \n \n \n \n Management have used their judgement in respect of the capitalisation of development costs against the criteria in the policy.  The viability of the new technology and know-how is supported by the results of testing and by forecasts for the overall value and margins from future sales to support the approach taken.  \n \n \n \n   \n \n \n \n \n Impairment of intangible assets including goodwill and investments \n \n \n \n Investments made by the Company and intangible assets acquired in a business combination capitalised with goodwill by the Group are subject to annual impairment tests and other intangibles amortised over their estimated useful lives subject to an assessment of impairment. \n \n \n Subsequent impairment tests for investments and intangible assets are based on risk adjusted future cash flows discounted using appropriate discount rates. These future cash flows are based on forecasts which include estimated factors and are inherently judgemental. Future events could cause the assumptions to change which could have an adverse effect on the future results of the Group. Further detail including sensitivities is given in note 10. \n \n \n \n   \n \n \n \n \n Right-of-use assets and lease liabilities \n \n \n \n In respect of right-of-use leased assets key estimates are a combination of the incremental borrowing rate used to discount the total cash flows and the term of the leases where breaks or extensions fall within the Group's control. These are used to derive both the opening asset value and lease liability as well as the consequential depreciation and financing charges. A 1% change in the discount rate used would increase interest charges and decreased depreciation by approximately £10,000 a year with an immaterial impact on assets...

View stock analysis, news, and events for Microlise Group Plc