Final results for the year ended 31 July 2024

About this update from Gattaca Plc

[{"type":"text","content":"\n \n 24 October 2024 \n   \n Gattaca plc \n (\"Gattaca\" or the \" Group\") \n Final results for the year ended 31 July 2024 \n \"Resilient performance with underlying PBT slightly ahead of market expectations\" \n Gattaca plc, the specialist staffing business, announces its audited financial results for the year ended 31 July 2024. \n   \n Financial Highlights \n   \n \n \n \n \n \n \n \n 2024 \n   \n £m \n \n \n 2023 \n restated 3 \n £m \n \n \n \n \n Continuing operations \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n 389.5 \n \n \n 382.1 \n \n \n \n \n Net Fee Income (NFI) 1 \n \n \n 40.1 \n \n \n 42.2 \n \n \n \n \n EBITDA \n \n \n 2.6 \n \n \n 5.0 \n \n \n \n \n Profit before tax - reported \n \n \n 1.7 \n \n \n 4.4 \n \n \n \n \n Profit before tax - underlying 2 \n \n \n 2.9 \n \n \n 3.7 \n \n \n \n \n Profit after tax \n \n \n 0.8 \n \n \n 3.4 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Losses from discontinued operations after tax \n \n \n (0.6) \n \n \n (2.2) \n \n \n \n \n Group reported profit after tax \n \n \n 0.2 \n \n \n 1.2 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic and diluted earnings per share \n \n \n 0.6p \n \n \n 3.8p \n \n \n \n \n Basic underlying continuing earnings per share \n \n \n 6.0p \n \n \n 8.0p \n \n \n \n \n Ordinary dividend per share \n \n \n 2.5p \n \n \n 2.5p \n \n \n \n \n Special dividend per share \n \n \n 0.0p \n \n \n 2.5p \n \n \n \n \n Net cash \n \n \n 20.7 \n \n \n 21.6 \n \n \n \n \n   \n ·      Group NFI of £40.1m, down 5 % year on year (\"YoY\"). \n o Contract NFI up 3% YoY, with 8% increase in contractors over the last 6 months to 31 July 2024 (\"H2\"). \n o Gattaca Projects Statement of Work (\"SoW\") business achieved 35% YoY NFI growth.   \n o The Group's two largest sectors showed positive trends, with Defence up 10% YoY on a like-for-like basis 4 , whilst Infrastructure grew by 14% in H2. \n o Permanent NFI down 33% YoY in challenging market. \n o Contract vs SoW vs Perm split 74% / 7% / 19% of Group NFI (FY23: 68% / 5% / 27%).  \n ·      Group continuing underlying profit before tax of £2.9m (FY23 restated: £3.7m ), in a year of NFI decline as a result of margin enhancements and rebalancing of costs. \n ·      Group net cash of £20.7m as at 31 July 2024 (31 July 2023: £21.6m). \n ·      Full year dividend of 2.5 pence per share (FY23: 5.0 pence per share including a special dividend). \n   \n Operational Highlights \n   \n Continued delivery and emphasis on developing the four identified Strategic Priorities as the Group's focus remains on achieving sustained growth: \n   \n External Focus \n ·      Built and deployed the new Business Development team as part of the Group's investment in front-line sales capability and doubled the Energy sales team with a focus on Renewables, increasing efforts in the core markets (Infrastructure, Defence, Mobility, Energy and TMT). \n ·      Implemented two new Solutions accounts and 100% success rate in rebids for Solutions accounts \n ·      Continued emphasis on client and candidate service feedback surveys, with increased survey responses and ratings of 8.8 and 9.0 (out of 10) respectively for FY24, vs 7.7 and 8.5 in FY23. \n   \n Culture \n ·      Winner of two Business Culture awards; Best Transformation and Leading with Purpose. \n ·      People engagement levels remain solid at 8.1 in FY24 (FY23: 8.1) and attrition has improved to 31% (FY23: 33%, and FY22: 40%). \n   \n Operational Performance \n ·      US-based operations exited. \n ·      11% growth in average NFI per total headcount and 13% growth in average NFI per sales head. \n ·      Externally focused improvements in the Group's technology stack driving an improved candidate and contractor journey. \n ·      Reset of operational leadership structure. \n   \n Cost Rebalancing \n ·      Optimisation of the UK property portfolio now completed, with property footprint reduced by over 60% across two UK locations. \n ·      Restructure of Group Board and Leadership teams resulting in a more agile, lower cost structure. \n ·      Implementation of a single billing entity arrangement, consolidating client billing from nine to two entities in FY24. \n   \n Outlook \n   \n The Board remain mindful of the macro-economic headwinds, which continue to impact demand and candidate sentiment. It is seeing permanent recruitment remaining subdued and is continuing its focus on contractor growth, which takes longer to reflect in NFI. For FY25, it is expected that profitability will be weighted to the second half of the year and FY25 continuing underlying PBT will be in line with previous guidance of £3.0m. \n   \n Despite the current market conditions, the Board are optimistic about the future for the Group. The proactive measures that have been taken, including increased market focus, cost control initiatives and operational streamlining, have delivered results and positioned Gattaca favourably. The Group is actively pursuing growth opportunities only in sectors, services, and geographies where it believes it can be a dominant provider and the strategic investments will aim to enhance its capability in those markets. \n   \n   \n Matthew Wragg, Chief Executive Officer of Gattaca, commented: \n   \n \"The Group has delivered underlying PBT slightly ahead of expectations in challenging markets, we have entered FY25 with momentum in our contractor base and expect the permanent market will remain tough in the next financial year. We believe that the sectors in which we operate and the STEM skillsets that we provide have the right long-term fundamentals for success. We are improving as a business week-on-week and expect to continue to grow market share as we make further progress next year. I am very excited about the direction we are going and what that means for all our stakeholders for the years to come.\" \n   \n   \n The following footnotes apply, unless where otherwise indicated, throughout these Final Results: \n   \n 1.     NFI is equivalent to gross profit, being revenue less direct costs. \n 2.     Continuing underlying results exclude losses before taxation of discontinued operations (2024: £(0.6)m, 2023 restated: £(2.2)m), non-underlying items within administrative expenses relating to restructuring costs (2024: £(0.5)m, 2023 restated: £(0.2)m), gains associated with exiting properties (2024: £nil, 2023: £0.6m) and other items (2024: £(0.6)m, 2023: £(0.2)m), amortisation of acquired intangibles (2024: £(0.1)m, 2023: £(0.1)m), and net foreign exchange (losses)/gains (2024: £(0.1)m loss, 2023 restated: £0.5m gain). \n 3.     2023 results have been restated for the presentation of discontinued operations, principally the Group's US based operations. \n 4.     This excludes £1.4m NFI associated with a large permanent Recruitment Process Outsourcing (RPO) client which we decided to exit in 2023. \n   \n The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. \n   \n For further information, please contact: \n   \n \n \n \n \n Gattaca plc \n \n \n +44 (0) 1489 898989 \n \n \n \n \n Matthew Wragg, Chief Executive Officer \n Oliver Whittaker, Chief Financial Officer \n \n \n \n \n \n \n \n Panmure Liberum (Nomad and Broker) \n \n \n +44 (0) 20 3100 2000 \n \n \n \n \n Richard Lindley Will King \n \n \n \n \n \n \n \n IFC Advisory (Financial PR and IR) \n Tim Metcalfe \n Graham Herring \n Florence Chandler \n \n \n +44 (0) 203 934 6630 \n \n \n \n \n   \n \n \n \n \n \n \n \n   \n   \n   \n   \n \n \n \n Chair's Statement \n A simpler, more focused business \n I am pleased to report to you for the first time as Gattaca's Chair. Having been a Non-Executive Director until 2020, it is clear how much progress the business has made since I was last on the Board. Over recent months I have met people from across the Group and carefully reflected upon our strategy and objectives. While there remains much to do, I am optimistic about the Group's potential. \n   \n Strategy is fundamentally about making choices, such as the sectors you want to serve, and then backing those decisions wholeheartedly. This requires a deep understanding of how to scale and become the go-to player in your markets. Great people are essential for competing effectively, supported by the technology, culture and working environment to flourish. Gattaca is on this journey, the actions to date show promise. \n   \n Being able to respond to unexpected events is a key test of a group's culture and management. As Matt Wragg discusses in his Chief Executive's Statement, we tragically lost two of our people in the year, including a long-standing member of the senior team. The leadership and the Group responded in an exemplary way in highly emotional circumstances, which is a tribute to the values that underpin the Group. \n   \n Performance and Returns to Shareholders \n As with most companies that provide workforce solutions and recruitment services, the external environment has not been helpful to us over the last 12 months. We were successful in growing market share and increasing our contractor base, which typically generates around 70% of our NFI each year. This enabled us to meet our underlying profit expectations for FY24 and propose a final dividend of 2.5 pence per share. Subject to shareholder approval, this will be paid on 13 December 2024 to shareholders on the register at 1 November 2024. Going forward, our objective is to maintain dividend payouts, targeted to be approximately 50% of profits after tax. \n   \n We also returned £0.5m to shareholders through a share buyback programme in the year, our second in two years. Our strategy prioritises organic growth, followed by bolt-on acquisitions. If we have any excess funds, we will look at further returns to shareholders. \n   \n The Board \n As previously reported, several important changes to the Board took effect after the AGM on 6 December 2023. Patrick Shanley stepped down after eight years as Chair, allowing me to take up the role. George Materna, our founder and still our largest shareholder, retired after nearly 40 years, including 15 years as a Non-Executive Director. His decision reflected his confidence in the Board and leadership team and the progress with rebuilding the business. George's retirement meant the Board had fewer non-independent directors and we therefore decided to further refine the Board's composition, with Ros Haith also stepping down. \n   \n The Board has five members, with me as Independent Non-Executive Chair, two Independent Non-Executive Directors and two Executive Directors. The streamlined and lower-cost Board reflects our current position and approach. \n   \n Looking Ahead \n With much of the transformation plan now complete, the Board's priority is to see this reflected in our numbers. We have a simpler, more focused Group with a reduced cost base, which will allow more of the benefits of growth to drop through to the bottom line. In the absence of improving markets, we have the opportunity to continue to drive our productivity, grow market share and move our key performance ratios in the right direction. Leveraging our digital technology will be central to this. We also recognise the benefits of our ESG commitments, which can drive the top line through growth in green jobs, help us attract and retain talented people and further improve our efficiency. \n   \n In conclusion, the Group is well placed to outperform its markets and I look forward to reporting to you on our progress. \n   \n Richard Bradford \n Independent Non-Executive Chair \n   \n   \n Chief Executive's Statement \n Highlights \n •   Delivered underlying profit before tax of £2.9m, as a result of executing our planned strategic initiatives for FY24 \n •   Maintained target levels for our people engagement score and retention \n •   Successfully retained all Solutions accounts we rebid for and added two new Solutions accounts \n   \n Excited about the momentum we're building \n Gattaca is now in its 40th year and in many respects, we have entered a new era. This reflects both the Board changes in FY24 and the vast amount of work we have done to set the business up for success. We now have a great environment, clear focus on market sectors where we are or can become the dominant player, and we are hugely excited by our digital capabilities. The early stages of our rebuild demanded maximum effort for few immediate gains. However, we are now realising the results of our early efforts. We are leveraging our digital investments to continually improve the way we work, delivering returns that far outweigh the effort required. \n   \n Since the start of the calendar year, our new Chair has challenged and validated our strategic focus and our operational targets. With the right plan in place and an energised and motivated team, we are confident of delivering our objectives over the coming years. \n   \n Performance \n Our progress has enabled us to deliver a robust performance in FY24, in the face of very difficult markets. We outperformed many of our peers, are now winning back market share, growing contract momentum and delivered underlying profit before tax of £2.9m (2023 restated: £3.7m), ahead of our expectations. \n   \n Although the number of contractors across the market was flat, our focus delivered market share gains that grew our contractor base organically for the first time in eight years. This was our top priority for FY24, so it is pleasing to have delivered, with the contractor base growing by 8% in the second half of the financial year and representing 74% of our NFI (2023: 68%). \n   \n Our Gattaca Projects business outperformed targets in FY24, growing NFI by 35% year on year and diversifying into new client offerings and building a trusted specialist brand. We also successfully retained all major Solutions account retention tenders we underwent in FY24, a testament to our valued customer service and deep relationship with those clients over the years. \n   \n The permanent market has been hit by the UK economic recession across all markets, skills and sectors that we serve. The technology sector was hit earliest and has stayed tough the longest. Our Barclay Meade business, which provides professional skills for STEM companies, has also been affected. The slow market has largely been down to candidates lacking confidence to move, with customer demand to fill roles remaining stronger than our performance suggests. Crucially, we achieved our profit target for the year without cutting our sales capacity, so we will be ready to take advantage as soon as markets turn. \n   \n Strategy \n We continued to make good progress with all aspects of our strategy in FY24, as we built positive momentum in the business. \n   \n External Focus \n Gattaca is a much simpler business than two years ago. We have consciously focused on fewer sectors and territories and doubled down on STEM skill focus. Our aim is to be the top player in all our marketplaces, with a multi-service offering that ranges from supporting customers with a single hire through to designing and running a complete talent programme or delivering outcome-based subcontracted services. While organic growth is our first choice, we will consider bolt-on acquisitions that strengthen our market position and deliver faster growth. \n   \n Our organic growth investments in FY24 included a dedicated business development team, which helped us achieve our contractor number and is now building a multi-year pipeline. We have also recruited a seasoned professional to lead our marketing team. While market conditions meant we controlled our investment in sales headcount, we have doubled our Energy sales team. We have focused on renewable energy generation and the opportunity associated with upgrading the UK transmission and distribution network in the coming years. We have also invested in our rapidly growing Statement of Work business, Gattaca Projects. \n   \n Client and candidate service feedback has continued to improve, with average ratings of 8.8 and 9.0 out of ten respectively (2023: 7.7 and 8.5). High service levels helped us to renew two major accounts that retendered and we also successfully implemented two new major Solutions accounts. \n   \n Culture \n Culture is an obsession for us. Our Purpose, Vision, Mission and Values are well embedded, our engagement levels remain stable at 8.1 (2023: 8.1) and attrition has improved to 31% (2023: 33%). We were pleased to win two Business Culture awards in the year, for Best Transformation and Leading with Purpose. \n   \n Further delayering the leadership has enabled us to move at even greater speed and created opportunities for the new generation of leadership that we have developed through. We have now had a full year of our performance scorecards, which allow us to reward the right people and manage underperformance. This links to the continued reduction in people leaving us within 12 months, through our focus on hiring well and providing an environment where people can be more successful. \n   \n In what has been a very emotional year, the hardest year of my career, our resilience has been truly tested and the strength of our culture fully felt. We lost two fantastic cultural characters and key team members this year. \n   \n Shanaz Tambe was our first hire in our successful Workforce Solutions support function in Cape Town. She was an incredible human being, never allowing me to get in the office before her on my visits, always a gift in hand for my daughter on my departure and was an incredible team leader for so many. Sadly, Shanaz lost her long, stoic battle with cancer in March. \n   \n Grahame Carter was a key member of my senior leadership team, as well as my best man and friend. His tragic accident in February was a devasting loss for the Group and wider industry. The outpouring of love was testament to the quality of the man. It is devasting that Grahame, our greatest cheerleader, won't be alongside us as we continue our progressive journey. However, he would be chuffed in how he continues to be remembered and an inspiration across the business. \n I am sure that his \"can do, will do\", winning mentality has rubbed off on many of us across the business and his legacy is woven into the fabric of the Company and will continue to be a motivation and inspiration to myself, and I am sure many others. \n   \n Personally, I cannot thank the business and our wider network enough for the support they afforded me and each other during this tough year. I am incredibly proud of how they have all responded to these very challenging times. \n   \n Operational Performance \n Our digital platforms are at the heart of our ongoing operational improvements. Developments in the year have enhanced contractor onboarding, increased the stability of our contractor book, improved our customer platforms and added automations to streamline our processes. \n   \n This helped us to grow average NFI per sales head by 13% year on year. Our sales productivity target for FY24 was £92k per total heads and we achieved £90k, up 11% on FY23. Continuing to leverage our technology stack, including more external-facing automations, will support further productivity improvements. \n   \n Towards the end of FY24, we exited our US-based operations, due to persistent loss-making results. We continue to support our route to market in the US from our UK-based sales force, primarily in our Energy sector. \n   \n Cost Rebalancing \n Our work to streamline the business in FY24 included rationalising the UK payroll and billing entities, completing our review of the UK property portfolio, simplifying the Group's corporate structure further and slimming down the Board, all helping to reduce our cost base. Our sales to support staff mix was 68:32, as we move towards our 80:20 target. \n   \n Environmental, Social and Governance \n FY24 has seen us continuing to integrate sustainability into the way we work, day to day. Our approach has now become integrated and authentic to us, as our business sees the advantages of taking the lead. We have a good understanding of where we can make the most difference, whether that is our Gender Equity Programme, inclusive recruitment practices, workplace ED&I and wellbeing awareness or making progress on our journey to Net Zero. This in turn helps us to win and retain business, with customers giving us top scores on ESG criteria and valuing our ED&I insights, and being a catalyst for change in the sectors we serve. Our digital investments also enhance our internal controls, underpinning our strong governance. \n   \n Outlook \n We have entered FY25 with momentum in our contractor base and while we expect the permanent market will remain tough in the next financial year, we are confident that we will capitalise when the market does turn. We are improving as a business week on week and we expect to continue to take market share as we make further progress next year. I am very excited about the direction we are now going and what that means for all our stakeholders for the years to come. \n   \n Matt Wragg \n Chief Executive Officer \n   \n   \n Chief Financial Officer's Report \n Highlights \n •   Delivered continuing underlying profit before tax ahead of market expectation \n •   Net cash of £20.7m (2023: £21.6m) \n •   Ordinary dividend of 2.5 pence per share proposed \n •   Share buyback of £0.5m completed in the year \n •   Improved operational productivity, average NFI per head grew +11% year on year \n   \n Financial Performance \n On a continuing basis, revenue of £389.5m (2023 restated: £382.1m) generated NFI of £40.1m (2023 restated: £42.2m). We achieved contract NFI of £29.6m (2023 restated: £28.7m) at a margin of 8.0% (2023 restated: 7.9%), permanent recruitment fees and other NFI of £7.7m (2023: £11.4m) and Statement of Work (SoW) gross profit of £2.8m (2023: £2.1m). SoW services are all delivered though contract labour provision on long term projects where the Group takes responsibility for assignment deliverables. In the year contract NFI represented 74% (2023: 68%) of Group NFI as we consciously shifted our focus to contract. \n   \n The greatest impact of the market conditions on NFI was seen in permanent recruitment, which was down -33% on the prior year, partly as a result of us exiting a large RPO client in 2023, and also driven by continuing industry-wide client and candidate challenges. We strived to control our administration costs and achieved a year on year saving of £1.0m, particularly pleasing in an inflationary UK environment. Control of staff costs was a key driver of this as headcount was reduced in the year. \n   \n Underlying profit before tax from continuing operations was £2.9m (2023 restated: £3.7m). Statutory profit after tax for the total Group was £0.2m (2023: £1.2m). \n   \n Net cash at 31 July 2024 was £20.7m (31 July 2023: £21.6m), a decrease of £0.9m in net cash year on year after dividends of £1.6m and share buybacks and treasury share purchases of £0.8m. The optimisation of the working capital remains a key focus and throughout the year the Group maintained its improved DSO seen last year through strong collection performance and renegotiated trading terms. \n   \n FY23 results have been restated for the presentation of discontinued operations as explained in Note 10 of the consolidated Financial Statements. \n   \n Discontinued operations and non-underlying costs \n During the year the Group withdrew from its operations in the USA. Despite investment in the US business since our acquisition of Networkers International in 2015, US trading losses became unsustainable due to market conditions, particularly in permanent recruitment, and we remained a small player in an extremely large and competitive market. \n   \n The loss from discontinued operations includes trading losses of £0.7m, £0.3m of non-underlying restructuring costs relating to the closure of US operations and £0.4m of impairments. \n   \n FY23 results have been restated throughout the Annual Report and Accounts to present results from the US operation comparably, in accordance with IFRS. \n   \n Non-underlying costs from continuing business are presented in line with the Group's accounting policy. \n   \n   \n Reconciliation of profit before tax for the total Group \n The table below reconciles continuing underlying profit before tax to reported statutory profit before tax for the total Group: \n   \n \n \n \n \n £'000 \n \n \n Profit before tax \n \n \n \n \n Continuing underlying profit before tax \n \n \n 2,918 \n \n \n \n \n Restructuring costs in continuing business 1 \n \n \n (467) \n \n \n \n \n Cost relating to ongoing closure of group undertakings 2 \n \n \n (609) \n \n \n \n \n Cost associated with exiting properties \n \n \n (16) \n \n \n \n \n Reversal of impairment of right-of-use leased assets \n \n \n 42 \n \n \n \n \n Operating loss relating to discontinued operations \n \n \n (725) \n \n \n \n \n Closure of US operations \n \n \n (278) \n \n \n \n \n Impairment of cash and cash equivalents 3 \n \n \n (408) \n \n \n \n \n Amortisation of acquired intangibles \n \n \n (69) \n \n \n \n \n Net foreign exchange gains \n \n \n 678 \n \n \n \n \n Profit before tax for the total Group \n \n \n 1,066 \n \n \n \n \n   \n 1    Restructuring costs arose primarily from employee rationalisation programmes in the UK. \n 2    Costs associated with the ongoing closure of subsidiaries whose operations were discontinued in prior periods, primarily Mexico, Malaysia, Singapore, Qatar and Russia, are classified as continuing operations in the current year and are reported within non-underlying items in line with the Group's accounting policy. We will continue to incur costs associated with discontinued legacy operations as the legal wind down of those entities is concluded. \n 3    Cash on deposit in Russia was impaired due to the increased credit risk associated with the financial and regulatory sanctions imposed on and by Russia. \n   \n Taxation \n The Group's reported effective tax rate was 82.6% (2023: 45.0%), driven by overseas losses not recognised as deferred tax assets, and non-deductible expenses arising from the corporate restructuring fees and streamlining of the Group. Further detail is set out in Note 9 of the Financial Statements. The continuing underlying effective tax rate was 35.2% (2023 restated: 29.9%). \n   \n Earnings per share \n Basic earnings per share was 0.6 pence (2023: 3.8 pence), and on a fully diluted basis was 0.6 pence (2023: 3.8 pence). Continuing underlying basic earnings per share was 6.0 pence (2023 restated: 8.0 pence). \n   \n Dividends and share buyback \n Our long-standing objective has been to achieve a through-the-cycle dividend payout of approximately 50% of profits after tax. The Board has proposed to pay a final ordinary dividend of 2.5 pence per share (2023: 2.5 pence). The final dividend, which amounts to approximately £0.8m, will be subject to shareholder approval at the 2024 Annual General Meeting. It will be paid on 13 December 2024 to shareholders on the register on 1 November 2024. \n   \n On 21 August 2023 the Board announced a share buyback which concluded on 29 November 2023 and returned £0.5m to shareholders. \n   \n Given the Group's sustained liquidity and recognising shareholder returns in the previous year, the Board remain committed to returning capital to shareholders. \n   \n Net assets and shares in issue at 31 July 2024 \n The Group had net assets of £28.3m (2023: £30.8m) and had 31.5m (2023: 31.9m) fully paid ordinary shares in issue. \n   \n Group net cash at 31 July 2024 was £20.7m (31 July 2023: £21.6m), a decrease of £0.9m in a year where the Group returned cash to shareholders of £1.6m via dividends, £0.5m via share buyback and used £0.3m for the purchase of shares for its Employee Benefit Trusts. \n   \n We saw a strong performance in the Group's days sales outstanding (DSO) at 31 July 2024 of 43.0 days, consistent with the prior year (31 July 2023: 43.2 days). This was driven by maintaining high levels of cash collection and improved payment terms mix. Trade receivables and accrued income balances, net of expected credit loss allowances, have increased to £51.1m (31 July 2023: £47.2m) due to the growth of our contractor book during FY24. \n   \n Net bank interest received was £0.7m (2023: £0.3m) as a result of the positive net cash balance maintained throughout the year. \n   \n As at 31 July 2024, the Group had an invoice financing working capital facility of £50m. Under the terms of the non-recourse facility, the trade receivables are assigned to, and owned by, HSBC and so have been derecognised from the Group's Statement of Financial Position. In addition, the non-recourse working capital facility does not meet the definition of loans and borrowings under IFRS. \n   \n At 31 July 2024, utilisation of the recourse facility was nil and utilisation of the non-recourse facility was £2.3m, with unutilised facility headroom after restrictions of £29.9m. \n   \n Parent Company investments \n Gattaca plc, the Company, held investments in subsidiary undertakings of £31.7m at 31 July 2024 (2023: £38.6m), following a £7.1m impairment charge recorded in the Parent Company as a result of the year-end impairment review. \n   \n The valuation of the investment, calculated based upon a value-in-use discounted cash flow, is sensitive to changes in key assumptions, largely due to current economic headwinds. Accounting Standards permit for a subsequent reversal of the impairment in the future if the value of the underlying asset increases. \n   \n Critical accounting policies \n The statement of significant accounting policies is set out in Note 1 to the Financial Statements. \n   \n Group financial risk management \n The Board reviews and agrees policies for managing financial risks. The Group's finance function is responsible for managing investment and funding requirements including banking and cash flow monitoring. It seeks to ensure that adequate liquidity exists at all times, to meet its cash requirements. The Group's financial instruments comprise cash, borrowings and various items, such as trade receivables and trade payables that arise from its operations. The Group does not trade in financial instruments. The main risks arising from the Group's financial instruments are described below. \n   \n Credit risk \n The Group seeks to trade only with recognised, creditworthy third parties. During the period we reviewed our expected credit loss allowance for trade receivables and accrued income and removed industry specific provisions which we have held since 2020 against certain industries we considered high risk. As a result of the changes to loss allowance rates, and combined with the increase in trade receivables and accrued income, our loss allowance decreased by £0.5m to £1.6m. \n   \n There are no significant concentrations of credit risk within the Group, with no single debtor accounting for more than 9% (2023: 8%) of total receivables balances at 31 July 2024. \n   \n Foreign currency risk \n The Group generates 2% of its annualised NFI from continuing business in international markets. The Group does face risks to both its reported performance and cash position arising from the effects of exchange rate fluctuations. The Group manages these risks by matching sales and direct costs in the same currency and where appropriate entering into forward exchange contracts to effect the same where sales and costs are not in the same currency. \n   \n Outlook \n The Group's performance during FY24 was resilient in the face of challenging market conditions. It was pleasing to see the contractor base in growth, and this sets the Group up to grow NFI into 2025. We will continue to invest where we see opportunity for growth whilst maintaining a keen focus on our cost base and operational efficiency. \n   \n Oliver Whittaker \n Chief Financial Officer \n   \n   \n Consolidated Income Statement \n For the year ended 31 July 2024 \n \n \n \n \n \n \n \n Note \n \n \n 2024 \n £'000 \n \n \n Restated 1 \n 2023 \n £'000 \n \n \n \n \n Continuing operations \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Revenue \n \n \n 2 \n \n \n 389,533 \n \n \n 382,095 \n \n \n \n \n Cost of sales \n \n \n \n \n \n (349,454) \n \n \n (339,875) \n \n \n \n \n Gross profit \n \n \n 2 \n \n \n 40,079 \n \n \n 42,220 \n \n \n \n \n Administrative expenses 2 \n \n \n \n \n \n (38,999) \n \n \n (38,703) \n \n \n \n \n Operating profit from continuing operations \n \n \n 4 \n \n \n 1,080 \n \n \n 3,517 \n \n \n \n \n Finance income \n \n \n 6 \n \n \n 784 \n \n \n 966 \n \n \n \n \n Finance cost \n \n \n 7 \n \n \n (180) \n \n \n (90) \n \n \n \n \n Profit before taxation \n \n \n \n \n \n 1,684 \n \n \n 4,393 \n \n \n \n \n Taxation \n \n \n 9 \n \n \n (916) \n \n \n (1,004) \n \n \n \n \n Profit for the year after taxation from continuing operations \n \n \n \n \n \n 768 \n \n \n 3,389 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Discontinued operations \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Loss for the year from discontinued operations (attributable to equity holders of the Company) \n \n \n 10 \n \n \n (582) \n \n \n (2,160) \n \n \n \n \n Profit for the year \n \n \n \n \n \n 186 \n \n \n 1,229 \n \n \n \n \n   \n Profit for the year is wholly attributable to equity holders of the Company. The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the parent company Income Statement. \n   \n \n \n \n \n Total earnings per ordinary share \n \n \n Note \n \n \n 2024 \n pence \n \n \n 2023 \n pence \n \n \n \n \n Basic earnings per share \n \n \n 11 \n \n \n 0.6 \n \n \n 3.8 \n \n \n \n \n Diluted earnings per share \n \n \n 11 \n \n \n 0.6 \n \n \n 3.8 \n \n \n \n \n   \n \n \n \n \n Earnings per share from continuing operations \n \n \n Note \n \n \n 2024 \n pence \n \n \n Restated 1 \n 2023 \n pence \n \n \n \n \n Basic earnings per share \n \n \n 11 \n \n \n 2.4 \n \n \n 10.5 \n \n \n \n \n Diluted earnings per share \n \n \n 11 \n \n \n 2.4 \n \n \n 10.5 \n \n \n \n \n   \n 1     FY23 results have been restated for the presentation of discontinued operations as explained in Note 10. \n 2     Administrative expenses from continuing operations includes net impairment releases on trade receivables and accrued income of £320,000 (2023: £334,000). \n   \n Reconciliation to adjusted profit measure \n Underlying profit is the Group's key adjusted profit measure; profit from continuing operations is adjusted to exclude non-underlying income and expenditure as defined in the Group's accounting policy, amortisation and impairment of goodwill and acquired intangibles, impairment of leased right-of-use assets and net foreign exchange gains or losses. \n \n \n \n \n \n \n \n Note \n \n \n 2024 \n £'000 \n \n \n Restated 1 \n 2023 \n £'000 \n \n \n \n \n Operating profit from continuing operations \n \n \n \n \n \n 1,080 \n \n \n 3,517 \n \n \n \n \n Add: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-underlying items included within administrative expenses \n \n \n 4 \n \n \n 1,092 \n \n \n (245) \n \n \n \n \n Reversal of impairment of leased right-of-use assets \n \n \n 4 \n \n \n (42) \n \n \n - \n \n \n \n \n Amortisation of acquired intangible assets \n \n \n 4 \n \n \n 69 \n \n \n 68 \n \n \n \n \n Depreciation of property, plant and equipment, leased right-of-use assets and amortisation of software and software licences \n \n \n 2 \n \n \n 1,533 \n \n \n 1,422 \n \n \n \n \n Underlying EBITDA \n \n \n \n \n \n 3,732 \n \n \n 4,762 \n \n \n \n \n Less: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Depreciation of property, plant and equipment, leased right-of-use assets and amortisation of software and software licences \n \n \n 2 \n \n \n (1,533) \n \n \n (1,422) \n \n \n \n \n Net finance income excluding foreign exchange gains and losses \n \n \n 2 \n \n \n 719 \n \n \n 329 \n \n \n \n \n Underlying profit before taxation from continuing operations \n \n \n \n \n \n 2,918 \n \n \n 3,669 \n \n \n \n \n Underlying taxation \n \n \n \n \n \n (1,026) \n \n \n (1,096) \n \n \n \n \n Underlying profit after taxation from continuing operations \n \n \n \n \n \n 1,892 \n \n \n 2,573 \n \n \n \n \n   \n \n \n \n \n Earnings per share from continuing underlying operations \n \n \n Note \n \n \n 2024 \n pence \n \n \n Restated 1 \n 2023 \n pence \n \n \n \n \n Basic earnings per share \n \n \n 11 \n \n \n 6.0 \n \n \n 8.0 \n \n \n \n \n Diluted earnings per share \n \n \n 11 \n \n \n 5.9 \n \n \n 7.9 \n \n \n \n \n   \n 1     FY23 results have been restated for the presentation of discontinued operations as explained in Note 10. \n   \n   \n Consolidated Statement of Comprehensive Income \n For the year ended 31 July 2024 \n \n \n \n \n \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \n \n \n \n \n Profit for the year \n \n \n 186 \n \n \n 1,229 \n \n \n \n \n Other comprehensive income/(loss) \n \n \n \n \n \n \n \n \n \n \n Items that may be reclassified subsequently to profit or loss: \n \n \n \n \n \n \n \n \n \n \n Exchange differences on translation of foreign operations \n \n \n 174 \n \n \n (243) \n \n \n \n \n Reclassification adjustment on disposal of foreign operations (Note 10) \n \n \n (713) \n \n \n - \n \n \n \n \n Other comprehensive loss for the year \n \n \n (539) \n \n \n (243) \n \n \n \n \n Total comprehensive (loss)/income for the year attributable to equity holders of the parent \n \n \n (353) \n \n \n 986 \n \n \n \n \n   \n \n \n \n \n \n \n \n 2024 \n £'000 \n \n \n Restated 1 2023 \n £'000 \n \n \n \n \n Attributable to: \n \n \n \n \n \n \n \n \n \n \n Continuing operations \n \n \n 925 \n \n \n 3,269 \n \n \n \n \n Discontinued operations \n \n \n (1,278) \n \n \n (2,283) \n \n \n \n \n \n \n \n (353) \n \n \n 986 \n \n \n \n \n   \n 1     FY23 results have been restated for the presentation of discontinued operations as explained in Note 10. \n   \n   \n Consolidated and Company Statements of Financial Position \n As at 31 July 2024 \n \n \n \n \n \n \n \n \n \n \n Group \n \n \n Company \n \n \n \n \n \n \n \n Note \n \n \n 31 July 2024 \n £'000 \n \n \n 31 July 2023 \n £'000 \n \n \n 31 July 2024 \n £'000 \n \n \n 31 July 2023 \n £'000 \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 Goodwill 1 \n \n \n 12 \n \n \n 1,712 \n \n \n 1,712 \n \n \n - \n \n \n - \n \n \n \n \n Intangible assets 1 \n \n \n 13 \n \n \n 120 \n \n \n 250 \n \n \n - \n \n \n 8 \n \n \n \n \n Property, plant and equipment \n \n \n 14 \n \n \n 702 \n \n \n 1,024 \n \n \n - \n \n \n - \n \n \n \n \n Right-of-use assets \n \n \n 22 \n \n \n 2,128 \n \n \n 1,873 \n \n \n - \n \n \n - \n \n \n \n \n Investments \n \n \n 15 \n \n \n - \n \n \n - \n \n \n 31,668 \n \n \n 38,550 \n \n \n \n \n Deferred tax assets \n \n \n 16 \n \n \n 342 \n \n \n 440 \n \n \n - \n \n \n - \n \n \n \n \n Total non-current assets \n \n \n \n \n \n 5,004 \n \n \n 5,299 \n \n \n 31,668 \n \n \n 38,558 \n \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 Trade and other receivables \n \n \n 17 \n \n \n 53,016 \n \n \n 52,168 \n \n \n 523 \n \n \n 1,357 \n \n \n \n \n Corporation tax receivables \n \n \n \n \n \n 379 \n \n \n 534 \n \n \n 322 \n \n \n 145 \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n 22,817 \n \n \n 23,375 \n \n \n 38 \n \n \n 8 \n \n \n \n \n Total current assets \n \n \n \n \n \n 76,212 \n \n \n 76,077 \n \n \n 883 \n \n \n 1,510 \n \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 assets \n \n \n \n \n \n 81,216 \n \n \n 81,376 \n \n \n 32,551 \n \n \n 40,068 \n \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 Deferred tax liabilities \n \n \n 16 \n \n \n (12) \n \n \n (101) \n \n \n - \n \n \n - \n \n \n \n \n Provisions \n \n \n 18 \n \n \n (396) \n \n \n (366) \n \n \n - \n \n \n - \n \n \n \n \n Lease liabilities \n \n \n 22 \n \n \n (1,217) \n \n \n (964) \n \n \n - \n \n \n - \n \n \n \n \n Total non-current liabilities \n \n \n \n \n \n (1,625) \n \n \n (1,431) \n \n \n - \n \n \n - \n \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 Trade and other payables \n \n \n 19 \n \n \n (49,323) \n \n \n (46,895) \n \n \n - \n \n \n (2,742) \n \n \n \n \n Provisions \n \n \n 18 \n \n \n (425) \n \n \n (1,046) \n \n \n - \n \n \n - \n \n \n \n \n Current tax liabilities \n \n \n \n \n \n (686) \n \n \n (330) \n \n \n - \n \n \n - \n \n \n \n \n Lease liabilities \n \n \n 22 \n \n \n (853) \n \n \n (857) \n \n \n - \n \n \n - \n \n \n \n \n Total current liabilities \n \n \n \n \n \n (51,287) \n \n \n (49,128) \n \n \n - \n \n \n (2,742) \n \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 (52,912) \n \n \n (50,559) \n \n \n - \n \n \n (2,742) \n \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 28,304 \n \n \n 30,817 \n \n \n 32,551 \n \n \n 37,326 \n \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 Share capital \n \n \n 23 \n \n \n 315 \n \n \n 319 \n \n \n 315 \n \n \n 319 \n \n \n \n \n Share premium \n \n \n \n \n \n 8,706 \n \n \n 8,706 \n \n \n 8,706 \n \n \n 8,706 \n \n \n \n \n Capital redemption reserve \n \n \n \n \n \n 8 \n \n \n 4 \n \n \n 8 \n \n \n 4 \n \n \n \n \n Merger reserve \n \n \n \n \n \n 224 \n \n \n 224 \n \n \n - \n \n \n - \n \n \n \n \n Share-based payment reserve \n \n \n \n \n \n 265 \n \n \n 334 \n \n \n 265 \n \n \n 334 \n \n \n \n \n Translation reserve \n \n \n \n \n \n 157 \n \n \n 696 \n \n \n - \n \n \n - \n \n \n \n \n Treasury shares reserve \n \n \n 23 \n \n \n (601) \n \n \n (331) \n \n \n (442) \n \n \n (244) \n \n \n \n \n Retained earnings \n \n \n \n \n \n 19,230 \n \n \n 20,865 \n \n \n 23,699 \n \n \n 28,207 \n \n \n \n \n Total equity \n \n \n \n \n \n 28,304 \n \n \n 30,817 \n \n \n 32,551 \n \n \n 37,326 \n \n \n \n \n   \n 1     Goodwill and intangible assets for FY23 have been adjusted to report these separately, where they were previously presented combined. \n   \n The amount of loss generated by the Parent Company was £2,641,000 for the year ended 31 July 2024 (2023: £588,000).                     \n   \n The accompanying notes form part of these Financial Statements. \n   \n The Financial Statements were approved by the Board of Directors on 23 October 2024 and signed on its behalf by                             \n   \n Oliver Whittaker \n Chief Financial Officer \n   \n   \n Consolidated and Company Statements of Changes in Equity \n For the year ended 31 July 2024 \n   \n A)   Consolidated \n \n \n \n \n \n \n \n Share \n capital \n £'000 \n \n \n Share \n premium \n £'000 \n \n \n Capital \n redemption \n reserve \n £'000 \n \n \n Merger \n reserve \n £'000 \n \n \n Share-based \n payment \n reserve \n £'000 \n \n \n Translation \n reserve \n £'000 \n \n \n Treasury \n shares \n reserve \n £'000 \n \n \n Retained \n earnings \n £'000 \n \n \n Total \n £'000 \n \n \n \n \n At 1 August 2022 \n \n \n 323 \n \n \n 8,706 \n \n \n - \n \n \n 224 \n \n \n 350 \n \n \n 1,137 \n \n \n (147) \n \n \n 19,860 \n \n \n 30,453 \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 \n - \n \n \n 1,229 \n \n \n 1,229 \n \n \n \n \n Other comprehensive loss \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (243) \n \n \n - \n \n \n - \n \n \n (243) \n \n \n \n \n Total comprehensive income \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (243) \n \n \n - \n \n \n 1,229 \n \n \n 986 \n \n \n \n \n Share-based payments credit (Note 23) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (64) \n \n \n - \n \n \n - \n \n \n - \n \n \n (64) \n \n \n \n \n Share-based payments reserves transfer \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 48 \n \n \n - \n \n \n - \n \n \n (48) \n \n \n - \n \n \n \n \n Deferred tax movement in respect of share options \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 126 \n \n \n 126 \n \n \n \n \n Purchase of treasury shares \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (184) \n \n \n - \n \n \n (184) \n \n \n \n \n Purchase and cancellation of own shares 1 (Note 23) \n \n \n (4) \n \n \n - \n \n \n 4 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (500) \n \n \n (500) \n \n \n \n \n Translation reserve movements on disposal of foreign operations \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (198) \n \n \n - \n \n \n 198 \n \n \n - \n \n \n \n \n Transactions with owners \n \n \n (4) \n \n \n - \n \n \n 4 \n \n \n - \n \n \n (16) \n \n \n (198) \n \n \n (184) \n \n \n (224) \n \n \n (622) \n \n \n \n \n \n \n \n \n \n \n \n \n \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 July 2023 \n \n \n 319 \n \n \n 8,706 \n \n \n 4 \n \n \n 224 \n \n \n 334 \n \n \n 696 \n \n \n (331) \n \n \n 20,865 \n \n \n 30,817 \n \n \n \n \n \n \n \n \n \n \n \n \n \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 August 2023 \n \n \n 319 \n \n \n 8,706 \n \n \n 4 \n \n \n 224 \n \n \n 334 \n \n \n 696 \n \n \n (331) \n \n \n 20,865 \n \n \n 30,817 \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 \n - \n \n \n 186 \n \n \n 186 \n \n \n \n \n Other comprehensive loss \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (539) \n \n \n - \n \n \n - \n \n \n (539) \n \n \n \n \n Total comprehensive loss \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (539) \n \n \n - \n \n \n 186 \n \n \n (353) \n \n \n \n \n Share-based payments charge (Note 23) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 201 \n \n \n - \n \n \n - \n \n \n - \n \n \n 201 \n \n \n \n \n Share-based payments reserves transfer \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (270) \n \n \n - \n \n \n - \n \n \n 201 \n \n \n (69) \n \n \n \n \n Deferred tax movement in respect of share options \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 46 \n \n \n 46 \n \n \n \n \n Treasury shares issued to employees on exercise of LTIP share options (Note 23) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 69 \n \n \n - \n \n \n 69 \n \n \n \n \n Purchase of treasury shares \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (339) \n \n \n - \n \n \n (339) \n \n \n \n \n Purchase and cancellation of own shares 1 (Note 23) \n \n \n (4) \n \n \n - \n \n \n 4 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (502) \n \n \n (502) \n \n \n \n \n Dividends paid in the year (Note 29) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1,566) \n \n \n (1,566) \n \n \n \n \n Transactions with owners \n \n \n (4) \n \n \n - \n \n \n 4 \n \n \n - \n \n \n (69) \n \n \n - \n \n \n (270) \n \n \n (1,821) \n \n \n (2,160) \n \n \n \n \n \n \n \n \n \n \n \n \n \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 July 2024 \n \n \n 315 \n \n \n 8,706 \n \n \n 8 \n \n \n 224 \n \n \n 265 \n \n \n 157 \n \n \n (601) \n \n \n 19,230 \n \n \n 28,304 \n \n \n \n \n   \n 1     Gattaca plc undertook a public share buyback in both the current and prior year, and a capital redemption reserve was created as a result of the subsequent cancellation of these shares, as discussed in Note 23. \n       \n   \n B) Company     \n \n \n \n \n                 \n \n \n Share \n capital \n £'000 \n \n \n Share premium \n £'000 \n \n \n Capital redemption reserve \n £'000 \n \n \n Share-based payment reserve \n £'000 \n \n \n Treasury shares reserve \n £'000 \n \n \n Retained earnings \n £'000 \n \n \n Total \n £'000 \n \n \n \n \n At 1 August 2022 \n \n \n 323 \n \n \n 8,706 \n \n \n - \n \n \n 350 \n \n \n (107) \n \n \n 29,343 \n \n \n 38,615 \n \n \n \n \n Loss and total comprehensive loss for the year (Note 8) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (588) \n \n \n (588) \n \n \n \n \n Share-based payments credit (Note 23) \n \n \n - \n \n \n - \n \n \n - \n \n \n (64) \n \n \n - \n \n \n - \n \n \n (64) \n \n \n \n \n Share-based payments reserves transfer \n \n \n - \n \n \n - \n \n \n - \n \n \n 48 \n \n \n - \n \n \n (48) \n \n \n - \n \n \n \n \n Purchase of treasury shares \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (137) \n \n \n - \n \n \n (137) \n \n \n \n \n Purchase and cancellation of own shares 1 (Note 23) \n \n \n (4) \n \n \n - \n \n \n 4 \n \n \n - \n \n \n - \n \n \n (500) \n \n \n (500) \n \n \n \n \n Transactions with owners \n \n \n (4) \n \n \n - \n \n \n 4 \n \n \n (16) \n \n \n (137) \n \n \n (548) \n \n \n (701) \n \n \n \n \n \n \n \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 July 2023 \n \n \n 319 \n \n \n 8,706 \n \n \n 4 \n \n \n 334 \n \n \n (244) \n \n \n 28,207 \n \n \n 37,326 \n \n \n \n \n \n \n \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 August 2023 \n \n \n 319 \n \n \n 8,706 \n \n \n 4 \n \n \n 334 \n \n \n (244) \n \n \n 28,207 \n \n \n 37,326 \n \n \n \n \n Loss and total comprehensive loss for the year (Note 8) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (2,641) \n \n \n (2,641) \n \n \n \n \n Share-based payments charge (Note 23) \n \n \n - \n \n \n - \n \n \n - \n \n \n 201 \n \n \n - \n \n \n - \n \n \n 201 \n \n \n \n \n Share-based payments reserves transfer \n \n \n - \n \n \n - \n \n \n - \n \n \n (270) \n \n \n - \n \n \n 201 \n \n \n (69) \n \n \n \n \n Treasury shares issued to employees on exercise of LTIP share options (Note 23) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 69 \n \n \n - \n \n \n 69 \n \n \n \n \n Purchase of treasury shares \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (267) \n \n \n - \n \n \n (267) \n \n \n \n \n Purchase and cancellation of own shares 1 (Note 23) \n \n \n (4) \n \n \n - \n \n \n 4 \n \n \n - \n \n \n - \n \n \n (502) \n \n \n (502) \n \n \n \n \n Dividends paid in the year (Note 29) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1,566) \n \n \n (1,566) \n \n \n \n \n Transactions with owners \n \n \n (4) \n \n \n - \n \n \n 4 \n \n \n (69) \n \n \n (198) \n \n \n (1,867) \n \n \n (2,134) \n \n \n \n \n \n \n \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 July 2024 \n \n \n 315 \n \n \n 8,706 \n \n \n 8 \n \n \n 265 \n \n \n (442) \n \n \n 23,699 \n \n \n 32,551 \n \n \n \n \n   \n 1     Gattaca plc undertook a public share buyback in both the current and prior year, and a capital redemption reserve was created as a result of the subsequent cancellation of these shares, as discussed in Note 23. \n   \n   \n Consolidated Cash Flow Statement \n For the year ended 31 July 2024 \n \n \n \n \n \n \n \n \n \n \n Group \n \n \n \n \n \n \n \n Note \n \n \n 2024 \n £'000 \n \n \n 2023 \n £'000 \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 Profit for the year \n \n \n \n \n \n 186 \n \n \n 1,229 \n \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 Depreciation of property, plant and equipment and amortisation of intangible assets, software and software licences \n \n \n 4 \n \n \n 588 \n \n \n 591 \n \n \n   \n \n \n \n \n Depreciation of leased right-of-use assets \n \n \n 4 \n \n \n 1,030 \n \n \n 952 \n \n \n   \n \n \n \n \n Loss on disposal of property, plant and equipment \n \n \n 4 \n \n \n 24 \n \n \n 17 \n \n \n   \n \n \n \n \n Loss on disposal of software and software licences \n \n \n 4 \n \n \n - \n \n \n 8 \n \n \n   \n \n \n \n \n Reversal of impairment of right-of-use assets \n \n \n 4 \n \n \n (42) \n \n \n - \n \n \n   \n \n \n \n \n Impairment of cash and cash equivalents \n \n \n 4 \n \n \n 408 \n \n \n - \n \n \n   \n \n \n \n \n Profit on reassessment of lease term \n \n \n 22 \n \n \n - \n \n \n (672) \n \n \n   \n \n \n \n \n Profit on reassessment of dilapidation asset \n \n \n 22 \n \n \n - \n \n \n (58) \n \n \n   \n \n \n \n \n Interest income \n \n \n 6 \n \n \n (784) \n \n \n (328) \n \n \n   \n \n \n \n \n Interest costs \n \n \n 7 \n \n \n 65 \n \n \n 87 \n \n \n   \n \n \n \n \n Taxation expense recognised in the Income Statement \n \n \n 9 \n \n \n 880 \n \n \n 1,007 \n \n \n   \n \n \n \n \n (Increase)/decrease in trade and other receivables \n \n \n \n \n \n (940) \n \n \n 6,243 \n \n \n   \n \n \n \n \n Increase in trade and other payables \n \n \n \n \n \n 2,428 \n \n \n 476 \n \n \n   \n \n \n \n \n Decrease in provisions \n \n \n 18 \n \n \n (616) \n \n \n (285) \n \n \n   \n \n \n \n \n Share-based payment charge/(credit) \n \n \n 23 \n \n \n 201 \n \n \n (64) \n \n \n   \n \n \n \n \n Foreign exchange (gains)/losses \n \n \n \n \n \n (420) \n \n \n 37 \n \n \n   \n \n \n \n \n Cash generated from operations \n \n \n \n \n \n 3,008 \n \n \n 9,240 \n \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 paid \n \n \n 7 \n \n \n (2) \n \n \n (19) \n \n \n   \n \n \n \n \n Interest paid on lease liabilities \n \n \n 7 \n \n \n (63) \n \n \n (68) \n \n \n   \n \n \n \n \n Interest received \n \n \n 6 \n \n \n 784 \n \n \n 328 \n \n \n   \n \n \n \n \n Income taxes received \n \n \n \n \n \n 789 \n \n \n 61 \n \n \n   \n \n \n \n \n Income taxes paid \n \n \n \n \n \n (1,117) \n \n \n - \n \n \n   \n \n \n \n \n Cash generated from operating activities \n \n \n \n \n \n 3,399 \n \n \n 9,542 \n \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 Purchase of property, plant and equipment \n \n \n 14 \n \n \n (162) \n \n \n (178) \n \n \n   \n \n \n \n \n Sublease rent receipts \n \n \n \n \n \n 131 \n \n \n 130 \n \n \n   \n \n \n \n \n Cash used in investing activities \n \n \n \n \n \n (31) \n \n \n (48) \n \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 Lease liability principal repayments \n \n \n \n \n \n (1,084) \n \n \n (1,200) \n \n \n   \n \n \n \n \n Purchase of treasury shares \n \n \n \n \n \n (339) \n \n \n (184) \n \n \n   \n \n \n \n \n Purchase of own shares for cancellation \n \n \n \n \n \n (502) \n \n \n (500) \n \n \n   \n \n \n \n \n Working capital facility repaid \n \n \n \n \n \n - \n \n \n (1,801) \n \n \n   \n \n \n \n \n Dividends paid \n \n \n \n \n \n (1,566) \n \n \n - \n \n \n   \n \n \n \n \n Cash used in financing activities \n \n \n \n \n \n (3,491) \n \n \n (3,685) \n \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-cash movements \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Effects of exchange rates on cash and cash equivalents \n \n \n \n \n \n (27) \n \n \n (202) \n \n \n   \n \n \n \n \n Impairment of cash and cash equivalents \n \n \n 4 \n \n \n (408) \n \n \n - \n \n \n   \n \n \n \n \n Total non-cash movements \n \n \n 27 \n \n \n (435) \n \n \n (202) \n \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)/increase in cash and cash equivalents \n \n \n \n \n \n (558) \n \n \n 5,607 \n \n \n   \n \n \n \n \n Cash and cash equivalents at the beginning of the year \n \n \n \n \n \n 23,375 \n \n \n 17,768 \n \n \n   \n \n \n \n \n Cash and cash equivalents at end of year 1 \n \n \n 27 \n \n \n 22,817 \n \n \n 23,375 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n   \n 1     Cash and cash equivalents as at 31 July 2024 and 31 July 2023 includes restricted cash balances, for further details please refer to Note 27. \n   \n Net decrease in cash and cash equivalents from discontinued operations was £849,000 (2023 restated: £743,000).                               \n   \n   \n Notes Forming Part of the Financial Statements \n   \n 1      The Group and Company Material Accounting Policies \n 1.1     The Business of the Group \n Gattaca plc (the Company) and its subsidiaries (together the Group) is a human capital resources business providing contract and permanent recruitment services in the private and public sectors across the UK, Europe and North America regions. The Company is a public limited company, which is listed on the Alternative Investment Market (AIM) and is incorporated and domiciled in England, United Kingdom. The Company's address is 1450 Parkway, Solent Business Park, Whiteley, Fareham, Hampshire, PO15 7AF. The registration number is 04426322. \n   \n 1.2      Basis of preparation of the Financial Statements \n The consolidated Financial Statements of Gattaca plc have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The Company's Financial Statements have been prepared in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and the Companies Act 2006. \n   \n As permitted by Section 408 of the Companies Act 2006, the Company's Income Statement has not been presented. The Company, as permitted by FRS 101, has taken advantage of the disclosure exemptions available under that standard in relation to: \n   \n •    Cash Flow Statement and related notes; \n •    Financial instruments; \n •    Disclosures in respect of transactions with wholly owned subsidiaries; \n •    The effects of new but not yet effective IFRSs; \n •    Disclosures in respect of the compensation of Key Management Personnel; and \n •    Disclosures of transactions with a management entity that provides key management personnel services to the Company. \n   \n As the consolidated Financial Statements of Gattaca plc include the equivalent disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the following disclosures: \n   \n •    IFRS 2 Share-Based Payments in respect of group settled share-based payments; and \n •    Certain disclosures required by IAS 36 Impairment of assets in respect of the impairment of goodwill and indefinite life intangible assets. \n   \n These Financial Statements have been prepared under the historical cost convention. The accounting policies have been applied consistently to all years throughout both the Group and the Company for the purposes of preparation of these Financial Statements. A summary of the principal accounting policies of the Group is set out below. \n   \n The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated Financial Statements, are disclosed in Note 1.22. \n   \n 1.3     Going concern \n The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report. The financial position of the Group, its cash flows and liquidity are described in the Chief Financial Officer's Report. \n   \n At the year-end the Group reported a strong balance sheet with statutory net cash of £20.7m (2023: £21.6m). The Group ensures the availability of working capital through close management of customer payment terms. There is sufficient headroom on our working capital facilities to absorb a level of customer payment term extensions, but we would also manage supply to the customer if payment within an appropriate period was not being made. Whilst there is no evidence that it would occur, a significant deterioration in average payment terms has the potential to impact the Group's liquidity. \n   \n The Directors have prepared detailed cash flow forecasts, covering a period of at least 12 months from the date of approval of these Financial Statements. The forecasts are prepared with appropriate regard for the current macroeconomic headwinds and particular circumstances in which the Group operates, including demand and candidate sentiment across the UK recruitment sector and the economic outlook for STEM markets in the UK in which our customers operate. The forecasts assume sustained growth in NFI and cost rebalancing aligned with the Group's strategic priorities. \n   \n We continue to see permanent recruitment remaining subdued, in line with our peers, and our focus remains on contractor growth, which takes longer to reflect in NFI. As such we expect profitability will be weighted to second half of the year. Strong contract pipelines in Defence and Mobility sectors, combined with increasing customer demand for Statement of Work contracts, underpin the Group's Net Fee Income expectations for FY25 and beyond. \n   \n The output of the forecasting process has been used to perform sensitivity analysis on the Group's cash flows to the potential effects should principal risks actually occur. The sensitivity analysis modelled a severe but plausible scenario including: \n   \n •    Reduced NFI growth of 2% per annum; \n •    Increased operating costs by 1% per annum; and \n •    Customer payment terms extended by five days. \n   \n The effects of commercial mitigating actions that the Directors would implement in response to adverse changes in the Group's profitability and liquidity were excluded. \n   \n Given the nature of the temporary and contract recruitment business, significant working capital inflows typically arise in periods of severe downturn, thus protecting short-term liquidity, as was the case during the COVID-19 pandemic. The sensitised forecasts illustrate that the Group's liquidity is resilient to adverse changes in profitability and customer payment terms. The sensitised forecasts show a 60% reduction in net cash at 31 July 2025, to £6.6m. \n   \n A key assumption in preparing the cash flow forecasts is the continued availability of Group's invoice financing facility throughout the forecast period. The unutilised facility headroom at 31 July 2024 was £29.9m (2023: £27.6m). The current £50m facility has no contractual renewal date; the Directors remain confident that the facility will remain available.   \n   \n After making appropriate enquiries and considering key judgements and assumptions described above, the Directors have a reasonable expectation at the time of approving these Financial Statements that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. Following careful consideration the Directors do not consider there to be a material uncertainty with regards to going concern and consider it is appropriate to adopt the going concern basis in preparing these financial statements. \n   \n 1.4     New standards and interpretations \n The following are new standards or improvements to existing standards that are mandatory for the first time in the Group's accounting period beginning on 1 August 2023 and no new standards have been early adopted. The Group's July 2024 consolidated Financial Statements have adopted these amendments to IFRS: \n   \n •    IFRS 17, 'Insurance contracts' as amended in December 2021 \n •    Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies \n •    Amendments to IAS 8 - Definition of Accounting Estimates \n •    Amendments to IAS 12 - Deferred Tax relating to Assets and Liabilities arising from a Single Transaction \n •    Amendments to IAS 12 - International Tax Reform - Pillar Two Model Rules \n   \n There have been no alterations made to the accounting policies as a result of considering all of the amendments above that became effective in the year, as these were either not material or were not relevant to the Group or Company. \n   \n New standards in issue, not yet adopted \n The Group has not yet adopted certain new standards, amendments and interpretations to existing standards, which have been published but which are effective for the Group accounting periods beginning on or after 1 August 2024. These new pronouncements are listed as follows: \n   \n •    Amendments to IAS 1 - Classification of Liabilities as Current or Non-current (effective 1 January 2024) \n •    Amendments to IAS 1 - Non-current Liabilities with Covenants (effective 1 January 2024) \n •    Amendments to IAS 7 and IFRS 7 - Supplier Finance (effective 1 January 2024) \n •    Amendments to IFRS 16 - Lease Liability in a Sale and Leaseback (effective 1 January 2024) \n   \n The Directors are currently evaluating the impact of the adoption of all other standards, amendments and interpretations but do not expect them to have a material impact on the Group's operations or results. \n   \n 1.5     Basis of consolidation \n Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are  consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date on which that control ceases. The results of all subsidiaries, including those with non-coterminous reporting dates, are consolidated in line with the Group's financial reporting period. \n   \n The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree, and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangements. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred. \n   \n Intercompany transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated. Where necessary, amounts reported by subsidiaries have been adjusted to conform to the Group's accounting policies. \n   \n 1.6     Revenue \n Revenue is measured by reference to the fair value of consideration received or receivable by the Group for services provided, excluding VAT and trade discounts. \n   \n The Group is the principal for both its temporary and permanent placements and as such presents its revenue gross, being the whole amount collected from its customers, and then presents Net Fee Income as gross profit. \n   \n Contractual rebate arrangements in respect of volume and value of sales are variable consideration reducing revenue and are estimated at the most likely amount of consideration based on forecasts of customer activity informed by historical experience. \n   \n Temporary placements \n For FY24, the Group has changed its accounting policy in connection with the timing of revenue recognition for temporary placements. Revenue reported in the Consolidated Income Statement and contract assets and liabilities reported in the Consolidated Statement of Financial Position are unaffected by this change, for more details refer to Note 3. \n   \n Revenue from temporary (contract) placements, which represents amounts billed for the services of temporary workers including the salary costs of those workers, is recognised over time in line with when the temporary worker provides services, typically over a weekly or monthly timesheet period. Customers are invoiced in arrears following receipt of an approved timesheet; timing differences between the provision of services and invoicing are recognised as accrued income. Customer credit terms are between 30 and 60 days. \n   \n The Group has assessed its use of third party providers to supply temporary workers under the agent or principal criteria and has determined that it is the principal because it retains primary responsibility for provision of the services. \n   \n Permanent placements \n Revenue from permanent placements on non-retained assignments, which is typically based on a percentage of the candidate's remuneration package, is recognised at a point in time when the candidate commences employment. For retained assignments, revenue is recognised in line with completion of defined stages of work. Customers are invoiced in arrears following commencement of the candidate's employment; timing differences between the provision of services and invoicing are recognised as accrued income. Customer credit terms are between 30 and 60 days. \n   \n Some permanent placements are subject to a claw-back period whereby if a candidate leaves within a defined period of starting employment, the customer is entitled to a rebate subject to the Group's terms and conditions. Provisions as a reduction to revenue are recognised for such arrangements if considered probable. \n   \n Revenue cut-off: temporary and permanent placements \n Revenue is recognised in the financial year to which it relates, to the extent that the Group has, within two months of the year-end date, received confirmation that the contractual performance obligation has been satisfied; either through receipt of a client-approved timesheet or confirmation of commencement of employment (for permanent placements). \n   \n Other \n Other revenue includes the provision of engineering management services through Statement of Work packages and other fees. \n   \n Revenue from the provision of engineering management services, where the customer benefits from the services provided as the Group performs those services, is recognised over time. Progress against long-term contractual performance obligations is estimated using an input method, by reference to the proportion of costs incurred to date compared with total expected costs for the contract. This is considered to best reflect the benefit the customer receives from the Group's performance. \n   \n Other fees mainly relate to the management of our recruitment process outsourcing services. Revenue from other fees is recognised either at a point in time if we have agreed a fee per placement or over time if we have agreed a fee for managing the recruitment process during \na certain period. \n   \n 1.7     Non-underlying items \n Non-underlying items are income or expenditure that are considered unusual or separate to underlying trading results because of their size, nature or incidence and are presented within the Consolidated Income Statement but highlighted through separate disclosure. The Directors consider that these items should be separately identified within the Income Statement to enable a proper understanding of the Group's business performance. \n   \n Items which are included within this category include but are not limited to: \n   \n •    material restructuring costs, including related professional fees and staff costs, and costs relating to disposal and closure of discontinued business; \n •    costs of acquisitions; \n •    lease exit costs; and \n •    integration costs following acquisitions. \n   \n In addition, the Group also excludes from underlying results amortisation of acquired intangibles, impairments (excluding expected credit loss allowances for trade receivables and accrued income) and net foreign exchange gains or losses. \n   \n Specific adjusting items are included as non-underlying based on the following rationale: \n \n \n \n \n Item \n \n \n Distorting due to irregular nature year on year \n \n \n Distorting due to fluctuating nature (size) \n \n \n Does not reflect in-year operational performance of continuing business \n \n \n \n \n Material restructuring costs \n \n \n x \n \n \n x \n \n \n x \n \n \n \n \n Lease exit costs \n \n \n x \n \n \n x \n \n \n x \n \n \n \n \n Amortisation of acquired intangibles \n \n \n \n \n \n \n \n \n x \n \n \n \n \n Impairment of goodwill and acquired intangibles \n \n \n x \n \n \n x \n \n \n x \n \n \n \n \n Impairment of right-of-use leased assets \n \n \n x \n \n \n x \n \n \n x \n \n \n \n \n Impairment of cash and cash equivalents \n \n \n x \n \n \n x \n \n \n x \n \n \n \n \n Net foreign exchange gains and losses \n \n \n \n \n \n x \n \n \n x \n \n \n \n \n Tax impact of the above \n \n \n x \n \n \n x \n \n \n x \n \n \n \n \n   \n 1.8     Property, plant and equipment \n Property, plant and equipment is stated at cost, net of depreciation and any provision for impairment. \n   \n Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset in terms of annual depreciation as follows: \n   \n \n \n \n \n Fixtures, fittings and equipment \n \n \n 12.5% to 33.3% \n \n \n Straight-line \n \n \n \n \n Leasehold improvements \n \n \n Over the period of the lease term \n \n \n Straight-line \n \n \n \n \n   \n The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. \n   \n An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. \n   \n 1.9     Goodwill \n Goodwill arising on business combinations represents the excess of the fair value of the consideration given for a business over the Company's interest in the fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree. Goodwill is stated at cost less accumulated impairments. \n   \n Goodwill impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment. Goodwill is allocated to cash-generating units (CGUs), being the lowest level at which goodwill is monitored. The carrying value of the assets of the CGU, including goodwill, intangible and tangible assets, leased right-of-use assets and working capital balances, is compared to its recoverable amount, which is the higher of value in use and fair value less costs to sell. Any excess in carrying value over recoverable amount is recognised immediately as an impairment expense and is not subsequently reversed. Gains and losses on the disposal of a business are reported net of the carrying amount of any corresponding goodwill. \n   \n 1.10   Intangible assets \n Customer relationships \n Customer relationships comprise principally of existing customer relationships which may give rise to future orders, and existing order books. They are recognised at fair value at the acquisition date and subsequently measured at cost less accumulated amortisation and impairment. Customer relationships are determined to have a useful life of ten years and are amortised on a straight-line basis. The remaining amortisation period of customer relationships is one year. \n   \n Trade names and trademarks \n Trade names and trademarks, acquired as part of a businesses or separately purchased, are initially recognised at fair value at the acquisition date and subsequently measured at cost less accumulated amortisation and impairment. Trade names and trademarks are determined to have a useful life of ten years and are amortised on a straight-line basis. Trade names and trademarks have been fully amortised in the current year. \n   \n Software and software licences \n Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software. Software and software licences are determined to have a useful life of between two and five years and are amortised on a straight-line basis. Subsequent licence renewals are expensed to profit or loss as incurred. \n   \n Costs incurred for the development of software code that enhances or modifies, or creates additional capability to existing on premise systems and meets the definition of and recognition criteria for an intangible asset are recognised as intangible software assets and amortised over \na useful life of between two and ten years. The remaining amortisation period of software and software licences is between one and eight years. \n   \n Software-as-a-Service arrangements \n Software-as-a-Service (SaaS) arrangements are service contracts providing the Group with the right to access the cloud provider's application software over the contract period. In most cases, these will not meet the definition of an intangible asset under IAS 38. Implementation costs relating to cloud-based software under SaaS arrangements are either recognised as an intangible asset under IAS 38 if they meet the relevant capitalisation criteria or, more likely, are expensed to the Income Statement; as incurred, where implementation services are distinct from access to the software, or otherwise recognised as an expense over the period of the service contract. \n   \n Other \n Other intangible assets acquired by the Group have a finite useful life between five and ten years and are measured at cost less accumulated amortisation and impairment losses. Other intangibles have been fully amortised. \n   \n Intangible assets are tested for impairment either as part of a goodwill-carrying cash-generated unit, or when events arise that indicate an impairment may be triggered. An impairment loss is recognised for the amount by which the carrying value of intangible assets exceeds the recoverable amount. The recoverable amount is the higher of the assets' fair value less costs of disposal and value in use. \n   \n Amortisation of intangible assets and impairment losses are recognised in the Income Statement within administrative expenses. \n   \n 1.11   Investments \n Investments in subsidiary undertakings are initially recognised at cost and subsequently carried at cost less accumulated impairment. \n   \n Investments are tested for impairment at the reporting date if events arise that indicate an impairment may be triggered. An impairment loss is recognised for the amount by which the carrying amount of the investment exceeds its recoverable amount. The recoverable amount \nis the higher of fair value less costs of disposal and value in use. Impairment losses on investments are recognised in the Income Statement in administrative expenses. \n   \n 1.12   Leases \n The Group leases office property, motor vehicles and equipment. Rental contracts typically range from monthly to five years. \n   \n At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. \n   \n Assets and liabilities arising from a lease are initially measured at present value at the lease commencement date. Lease liabilities include the net present value of the fixed payments less any lease incentives receivable, variable lease payments that are based on an index or a rate, amounts expected to be payable by the Group under residual value guarantees, the exercise price of any purchase option if the Group is reasonably certain to exercise that option, and payments of penalties for terminating the lease if that option is expected to be taken. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. \n   \n Lease payments are discounted at either the interest rate implicit in the lease or when this interest rate cannot be readily determined, the Group's incremental borrowing rate is associated with a similar asset. When calculating lease liabilities, the Group uses its incremental borrowing rate, being the rate it would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic climate with similar terms, security and conditions. This is estimated using publicly available data adjusted for changes specific to the lease in financing conditions, lease term, country and currency. \n   \n The Group does not have leases with variable lease payments based on an index or rate. \n   \n Extension or termination options are included in a number of the Group's leases. In determining the lease term, the Group considers all facts and circumstances that create an economic incentive to exercise, or not to exercise, an option. Extension options are only included in the lease term if the lease is reasonably certain to be extended. The lease term is reassessed if an option is actually exercised or the Group becomes obliged to exercise (or not to exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs that is within the control of the Group. \n   \n Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. \n   \n Right-of-use assets are measured at cost comprising the following: \n   \n •    the amount of the initial measurement of lease liability; \n •    any lease payments made at or before the commencement date less any lease incentives received; \n •    any initial direct costs; and \n •    restoration costs. \n   \n Right-of-use assets are depreciated on a straight-line basis over the term of the lease with depreciation expense recognised in the Income Statement. \n   \n Right-of-use assets are tested for impairment either as part of a goodwill-carrying cash-generated unit, or when events arise that indicate an impairment may be triggered. An impairment loss is recognised for the amount by which the carrying value of right-of-use assets exceeds the recoverable amount. The recoverable amount is the higher of the asset's fair value less costs of disposal and value in use. Impairment losses on right-of-use assets are recognised in the Income Statement in administrative expenses. \n   \n Lease modifications are a change in scope of a lease that was not part of the original lease. Any change that is triggered by a clause already part of the original lease contract is a reassessment and not a modification. Changes to lease cash flows as part of a reassessment may result in a remeasurement of the lease liability using an updated discount rate where required by the standard. \n   \n Advantage has been taken of the practical expedients for exemptions provided for leases with less than 12 months to run, for leases of low value assets, and to account for leases with similar characteristics as a portfolio with a single discount rate. Payments associated with short-term leases and leases of low value are recognised on a straight-line basis as an expense in profit or loss. \n   \n Sublease of office space at certain of the Group's leased properties is accounted for in accordance with IFRS 16; the right-of-use asset relating to the head lease is derecognised to the extent that control of the asset (or a proportion thereof) is transferred to the sublessee, and the net investment in the sublease is recognised as a net finance lease receivable. The lease liability relating to the head lease, representing future lease payments due to the head lessor, is unaffected by the sublease arrangement. \n   \n 1.13   Taxation \n The tax expense for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. \n   \n The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities. \n   \n Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. \n   \n Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the reporting date. \n   \n Deferred tax on temporary differences associated with shares in subsidiaries is not provided for if these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. \n   \n Deferred tax assets and liabilities are offset only where there is a legally enforceable right to the offset and there is an intention to settle balances on a net basis. \n   \n Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Income Statement, except where they relate to items that are charged or credited directly to equity (such as share-based payments) in which case the related deferred tax is also charged or credited directly to equity. \n   \n 1.14   Pension costs \n The Group operates a number of country-specific defined contribution plans for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in other creditors in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds. \n   \n 1.15   Share-based payments \n All share-based remuneration is ultimately recognised as an expense in the Income Statement with a corresponding credit to the share-based payment reserve. All goods and services received in exchange for the grant of any share-based remuneration are measured at their fair values. Fair values of employee services are indirectly determined by reference to the fair value of the share options awarded. Their value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example, profitability and sales growth targets). \n   \n If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting. Upon exercise of share options, proceeds received net of attributable transaction costs are credited to share capital and share premium. \n   \n The Company is the granting and settling entity in the Group share-based payment arrangement where share options are granted to employees of its subsidiary companies. The Company recognises the share-based payment expense as an increase in the investment in subsidiary undertakings. \n   \n The Group operates a Long-Term Incentive Plan (LTIP) share options scheme for Executive Directors and senior management. Options have exercise prices at or above £0.01. Grants have been made as part of a CSOP scheme, depending on the terms of specific grants. \n   \n The Group also operates a Share Incentive Plan (SIP), the Gattaca plc Share Incentive Plan (The Plan), which is approved by HMRC. The Plan is held by Gattaca plc UK Employee Benefit Trust (the SIP EBT), the purpose of which is to enable employees to purchase Company shares out of pre-tax salary. For each share purchased the Group grants an additional share at no cost to the employee. The expense in relation to these 'matched' shares is recorded as employee remuneration and measured at fair value of the shares issued as at the date of grant. The assets and liabilities of the SIP EBT are included in the Consolidated Statement of Financial Position. \n   \n 1.16   Financial instruments \n Financial assets \n IFRS 9 contains a classification and measurement approach for financial assets that reflects the business model in which assets are managed and their cash flow characteristics. Under IFRS 9, all financial assets are measured at either amortised cost, fair value through profit and loss (FVTPL) or fair value through other comprehensive income (FVOCI). \n   \n Financial assets: debt instruments \n The Group's debt instruments are initially recognised at fair value, including transaction costs that are directly attributable to their acquisition of issue, and are subsequently measured at amortised cost. \n   \n Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses), together with foreign exchange gains and losses. \n   \n The Group holds unclaimed aged sales ledger credits on the balance sheet that arise in the course of normal trading operations due to the high volume of timesheet invoices and customer receipts. Unclaimed sales ledger credits are released to the Income Statement after all reasonable steps have been taken to return funds to the customer and two years have elapsed since receipt of the funds. If a customer were to legitimately seek reimbursement of unclaimed sales ledger credits after its release, the Group would endeavour to settle this. \n   \n Impairment of financial assets \n IFRS 9 requires the application of the Expected Credit Loss model (ECL). This applies to all financial assets except equity investments. \n   \n The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments. \n   \n The Group has reviewed each category of its financial assets to assess the level of credit risk and ECL allowance to apply: \n   \n •    Trade receivables: the Group has chosen to take advantage of the practical expedient in IFRS 9 when assessing default rates over its portfolio of trade receivables, to estimate the ECL allowance based on historical default rates specific to groups of customers by industry and geography that carry similar credit risks. \n •    Accrued income is in respect of temporary placements where a candidate has provided services or permanent placements where a candidate has commenced employment, but no invoice has been raised. Default rates have been determined by reference to historical data. \n •    Cash and cash equivalents are held with established financial institutions. The Group has determined that based on the external credit ratings of counterparties, this financial asset has a very low credit risk and that the estimated expected credit loss allowance is not material. During FY24, the Group impaired its cash on deposit in Russia due to the increased credit risk associated with the financial and regulatory sanctions imposed on and by Russia. \n   \n The Company assesses credit risk and ECL allowance over amounts due from Group undertakings in the context of subsidiary trading results and net assets. At each reporting date, the ECL allowance is reviewed to reflect changes in credit risk and historical default rates and other economic factors. Changes in the ECL allowance are recognised in the Income Statement within administrative expenses. \n   \n Financial liabilities \n Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument and comprise trade and other payables and bank borrowings. Financial liabilities are recorded initially at fair value, net of direct issue costs and are subsequently measured at amortised cost using the effective interest rate method. \n   \n A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged, cancelled or expires. \n   \n Non-recourse receivables factoring is not recognised as a financial liability as there is no contractual obligation to deliver cash; subsequently, the receivables are de-recognised and any difference between the receivable value and amount received through non-recourse factoring \nis recognised as a finance cost. \n   \n 1.17   Cash and cash equivalents \n In the Consolidated Cash Flow Statement, cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the Statement of Financial Position and Cash Flow Statement, bank overdrafts are netted against cash and cash equivalents where the offsetting criteria are met. \n   \n Cash in transit inbound from, or outbound to, a third party is recognised when the transaction is no longer reversible by the party making the payment. This is determined to be in respect of all electronic payments and receipt transactions that commence before or on the reporting date and complete within one business day after the reporting date. \n   \n Restricted cash and cash equivalent balances are those which meet the definition of cash and cash equivalents but are not available for wider use by the Group. These balances arise from the Group's non-recourse working capital arrangements as well as from balances for which the Group cannot access the accounts and hence cannot withdraw funds, but is still the legal owner. \n   \n 1.18   Provisions \n Provisions are recognised where the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. \n   \n 1.19   Dividends \n Dividend distributions payable to equity shareholders are included in 'other short term financial liabilities' when the dividends are approved in a general meeting prior t...

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