2024 Annual Audited Results

6 May 2025

Maintel Holdings Plc ("Maintel" or the "Company")

Annual audited results for the year ended 31 December 2024

 Significantly improved profitability and underlying organic growth, delivered through continued transformation progress and strategy execution results

Maintel Holdings Plc, a leading provider of cloud and managed communications services, announces its audited results for the 12-month period to 31 December 2024.

Key Financials

Highlights

Operational Highlights

Notes

[1] Adjusted EBITDA is EBITDA of £8.2m (2023: £2.0m), adjusted for exceptional items (note 12) and share based payments (note 27).

[2] Adjusted profit before tax of £7.3m (2023: £5.5m) is basic profit/(loss) before tax adjusted for amortisation of intangibles, exceptional items and share based payments.

[3] Adjusted earnings/(loss) per share is basic earnings per share of 3.6p (2023: loss per share of 37.3p), adjusted for amortisation of acquired intangibles, exceptional items, share based payments and deferred tax items related to fixed assets acquired in prior years (note 10). The weighted average number of shares in the period was 14.4m (2023: 14.4m).

[4] Interest bearing debt (including issue costs of debt and excluding lease liabilities) minus cash. Current year net debt includes £20.0m RCF and £0.8m Term loan.

Commenting on the Group's results, Dan Davies, Chief Executive Officer, said:

"It is an exciting time for Maintel as we progress our business transformation plan, pivoting the Group from a generalist to a highly skilled specialist operating across three high-growth technology segments and we are pleased to report significantly improved profitability and underlying organic growth in 2024, delivered through continued transformation progress and execution of our strategy.

"While, like many, Maintel faces widely publicised macroeconomic headwinds in the coming year, we continue to show resilience in a difficult market due to the mission critical nature of the communications services we provide, alongside our high levels of customer loyalty and contracted recurring revenue. The Board remains confident that it can build on the encouraging progress made across all aspects of the business during 2024 and meet market expectations for 2025 but is again expecting the performance to be weighted towards the second half of the year. The journey from a generalist Managed Service Provider to a highly skilled specialist continues to well-position Maintel for the future."

Publication of annual report/posting and Notice of Annual General Meeting

The Company's 2025 Annual General Meeting will be held at 10.30 am on 3 June 2025 at the offices of Hudson Sandler, 25 Charterhouse Square, London EC1M 6AE.

The 2024 Annual Report and Notice of AGM, together with a form of proxy, will be posted to the Company's shareholders no later than 9 May 2025 and will be available on the Company's website, www.maintel.co.uk/investors .

For further information, please contact:

Notes to editors

Maintel Holdings Plc ("Maintel") is a leading provider of cloud communications, security and connectivity managed communications services to the UK public and private sectors. Its services aim to help its clients create customer experiences, services and workplaces that inspire and empower people, with a focus across three strategic pillars of technology:

· Unified Communications and Collaboration - Making customers' people more effective, efficient, and collaborative with UC&C technology. The core focus of this pillar is the high growth Unified Communications as a Service (UCaaS) market segment.

· Customer Experience - Helping customers to acquire, delight and retain their customers using customer experience technology. The core focus of this pillar is the high growth Contact Centre as a Service (CCaaS) market segment.

· Security & Connectivity - Securely connecting customers' people, partners and guests to their cloud platforms, applications, and data with secure connectivity, and protecting their business from cyber threat. The core focus of this pillar is the high growth Software Defined Wide Area Networking (SD-WAN) and Security Service Edge (SSE) segments.

Maintel combines technology from its strategic, global technology vendor and carrier partners, with its own Intellectual Property, deployed from and managed by its own platforms, to provide seamless solutions that its customers can consume without the need for the internal skillset required to design, deploy and manage the technology themselves.

Maintel serves the whole market, with a particular focus on key verticals of Financial Services, Retail, Public Healthcare, Local Government, Higher Education, Social Housing and Utilities. Its core market constitutes organisations with between 250 and 10,000 employees in the private, public and not-for-profit sectors with headquarters in the UK.

The Company was founded in 1991 and it listed on London's AIM market in 2004 (AIM: MAI).

CHIEF EXECUTIVE OFFICER'S STATEMENT

Introduction

It is an exciting time for Maintel as we progress our business transformation plan, pivoting the Group from a generalist to a highly skilled specialist operating across three high-growth technology segments. This refocused strategy was underpinned by the relaunch of the Maintel brand in November 2024, which successfully framed the strategy for the Company's people, customers and prospects.

The Group is pleased to report significantly improved profitability and underlying organic growth in 2024, delivered through continued transformation progress and execution of our strategy. We made good progress in evolving both our market positioning and offering which, I believe, puts us in an even stronger position to support our customers with their managed service and vital communications needs.

Strategic priorities and growth

Our growth strategy is focused on further establishing Maintel as the best-in-class specialist Managed Service Provider across our three strategic pillars and technology segments of Unified Communications & Collaboration, Customer Experience and Security & Connectivity. In the UK, the market size for these pillars is between £400 million and £1.2 billion and each is forecast to have double-digit compound annual growth rates. These focus pillars sit within wider technology segments that represent around a £7.6 billion opportunity in the UK (market size and CAGR 2022-2026 - Source: Altman Solon 2023).

Our sales and marketing activities are focused on promoting our expertise in these growth technology segments across the Financial Services, Public Sector, Retail and Utilities vertical markets, all of which offer the Group significant growth potential.

Our strong relationships with strategic technology vendor partners and carriers, which form the core of the services we offer our customers, have been complemented by growing Maintel's consultancy and advisory capabilities and proprietary technologies.

In 2024, our first year following the completion of the business review and organisation restructuring, the Group demonstrated its ability to expand revenue streams across our strategic pillars, enhance product offerings, improve the quality and predictability of earnings, drive recurring revenues, enhance adjusted EBITDA margin and lower debt. 

In November 2024, we relaunched the Maintel brand to better reflect our strategic focus and evolved market positioning. It brings our strategy to life for our people, our customers, and our prospects. We are laser-focused on our new purpose which is to use technology to create customer experiences, services and workplaces that empower and inspire people, and to continue delivering Solid Solutions for a Dynamic World.

2024 financial performance

In line with guidance at the half year, the Group's financial performance was weighted towards the second half due to a number of high-value new contract wins closing later in H1 2024 than initially anticipated. The benefits of these multi-year contracts were realised from the end of the first half year, through the second half of the year. The 2024 top line performance also suffered from the slowdown in the sales momentum and pipeline generation following the necessary organisational restructure in 2023.

Total revenue was £97.9 million (2023: £101.3 million). While lower than in 2023 this represents year-on-year underlying organic growth of 8.2%, due to the revenue performance in 2023 being flattered by the unwinding of the order book built up during the period impacted by global semiconductor shortages.

Adjusted EBITDA increased by 15.3% to £10.5 million. This significant improvement was driven by significant new contract wins, which combined amounted to more than £45 million in Total Contract Value (TCV), annualised benefits from the organisational restructuring completed in 2023 and price increases.

Our focus on the quality of earnings, combined with the organisational streamlining and continued tight cost controls, provides the Group with the foundations for sustainable future profitability. As a result, the adjusted EBITDA margin improved to 10.8% (2023: 9.0%).

Our commitment to deleveraging remained a focus during the year. Net Debt (excluding IFRS16 lease liabilities) at 31 December 2024 improved by 8.3% to £16.6 million (2023: £18.1 million), which reflected strong cash generation, with our rigorous working capital management process supporting strong cash conversion, balanced with transformation and investment requirements.

Further details are set out below in the Business Review.

Operational progress

In 2024 the Company maximised the benefits of the organisational transformation work we executed in 2023, whilst building on this with the next phase of our transformation - focussing on building our talent pool, our positioning, brand awareness, operational modernisation and completing the build-out of our renewed marketing and business development engine.

The continued execution of our generalist to specialist strategic pivot has been extremely encouraging, evidenced by key leading indicators such as a high percentage of pipeline and new wins in both our strategic segments and our target industry verticals, the increased quality of those new wins in both technology and margin terms, and increased customer experience scores.

New business wins

It's extremely pleasing to see that our strategic high-growth technology pillars, and the identified target industry verticals where we believe they resonate the strongest, are proving to be a success, with strong wins across each pillar and each vertical. In 2024, significant contracts were secured from both existing and new customers, with 79% of all new sales bookings within our pillars of Unified Communications & Collaboration, Customer Experience and Security & Connectivity, and these wins have contract lengths of two to five years, building our recurring revenues.

New contract wins include a leading housing and care provider, one of Europe's leading credit management companies, one of the UK's largest insurance companies, one of the UK's leading providers of affordable dental care, a global IT and business consulting services company, and the Leeds Teaching Hospital NHS Trust, one of the largest and busiest acute hospital trusts.

Proprietary intellectual property

As we deepen our consultancy and advisory capabilities, we continue to develop our own intellectual property (IP), focused on enhancing the solutions we can offer customers, improving the customer experience and supporting Maintel's operational efficiency.

We launched our innovative Maintel Application Platform in March 2024, which provides a consistent, secure, and rapid platform to develop, deploy and manage the Group's software-based IP. This IP is deployed alongside Vendor Alliance & Carrier Partners services, enhancing the offer from our key technology partners, which differentiates and benefits Maintel and our partners, and it delivers a transformational capability for all Cloud Communications customers. Audiosafe, our first fully productised app delivered through the Maintel Application Platform, provides a centralised call recording archive, legacy migration and playback service, supporting multiple cloud communication platforms and legacy call recording applications. This allows customers to automatically export, archive, search and filter all their call recordings, and retain them for as long as needed.

We launched a new and enriched digital customer portal, Maintel Portal (formerly ICON Portal) in August. This digital customer engagement platform provides customers with a single point for all support and in-life management including monitoring status, support ticketing, analytics and insights, providing a seamless and integrated user experience. The updated version included significant upgrades and enhancements to improve the experience for our customers and streamline our services, including a sleek, modern look and feel, user-friendly layout, focused navigation and the ability to discover new services.

New managed service products

During the year, new Security & Connectivity services powered by Fortinet & Zscaler, and a new Cyber Incident Response service, were launched. Both these broaden the service offering to customers across this strategic pillar and allow us to take a more independent, consultative approach by broadening the partners we work with in this space.

Research and Development

Our R&D capability represents one of our most tangible differentiators. In 2024, we invested £1.6 million (2023: £1.6 million) in research and development activities.

We invest each year to enhance and complement the technologies we utilise from our global software and hardware strategic vendor partners, to create the services we deliver. As a direct benefit for our clients, taking a service based on a particular vendor technology from Maintel will be both different and superior compared to a more standard solution delivered by another provider using same vendor's technology. These innovations include both Apps that enhance our solutions and deliver unique outcomes for our customers, and integrations that tie our solutions tightly into our customers application ecosystems and business workflows. This not only enhances the service we deliver but also encourages customers to stay with Maintel for longer, in order to enjoy the unique benefits that they can only receive by taking their vital digital communications services from us.

The Board

I was pleased to be appointed Chief Executive Officer in February 2025, following a year as Interim Chief Executive Officer, and having previously been Chief Technology Officer and an Executive Director since 2020.

There were a number of Board changes during the year, with Carol Thompson (Executive Chair) and John Booth (Deputy Chair) leaving the Board, and we welcomed both Bob Beveridge and Angus McCaffery to the Board in July 2024. Also, during the year, Clare Bates was appointed as Senior Independent Director.

Our Board now consists of three Non-Executive Directors (two of whom are independent) and two Executive Directors. Together we have an excellent range of skills and experience that will support the future development and growth of the Company, which will be further complemented by the addition of an experienced independent non-executive Chair.

Sustainability approach

Our sustainability strategy is not only about compliance but also about creating long-term value for the business, stakeholders, and society. Our well-structured approach drives innovation, enhances reputation, fosters trust with our stakeholders, and contributes to sustainable development. We are committed to integrating environmental sustainability, social responsibility and strong governance into our operations and culture. Through continuous improvement and transparent reporting, we aim to drive positive change in both our business and the world around us, creating long-term value for our stakeholders and the planet.

Our People

Our people are what have made our achievements this year possible. Our customer-centric approach is fundamental to our strategy, and our people have embraced this ethos and are focused on providing innovative solutions and best-in-class client service which supports organisations to run more efficiently and securely.

Our people inspire me every day. On behalf of the Board, I would like to thank them for their unwavering support and dedication to Maintel and our customers throughout 2024. 

Current Trading and Outlook

The focus in the first quarter of the year has been around the planning and initial execution of the next phase of our transformation, which concentrates on continued pipeline growth across our focus technology pillars, internal process and system efficiency, spend optimisation and operational gearing. Notably, our progress in pipeline growth and sales target coverage are already delivering tangible results.

While, like many, Maintel faces widely publicised macroeconomic headwinds in the coming year, we continue to show resilience in a difficult market due to the mission critical nature of the communications services we provide, alongside our high levels of customer loyalty and contracted recurring revenue. The Board remains confident that it can build on the encouraging progress made across all aspects of the business during 2024 and meet market expectations for 2025 but is again expecting the performance to be weighted towards the second half of the year. The journey from a generalist Managed Service Provider to a highly skilled specialist continues to well-position Maintel for the future.

Dan Davies

Chief Executive Officer

OUR REDEFINED VALUE PROPOSITION

The need to redefine our value proposition

Maintel initiated a full strategic review of the business at the end of 2022 as part of a broader and comprehensive transformation plan. While acquisitions made in previous years, notably Azzurri Communications and Intrinsic Technology, positioned the Group as a generalist Managed Services Provider, this presented several challenges for the Group. The market in which the Group operated continued to evolve, particularly the Group's market offering cut-through and rising competition from larger generalists and more specialised market players.

The thorough strategic review, undertaken with the support of a third-party consultancy in the first quarter of 2023, provided a full analysis of the Group's market opportunity and competitive landscape, and identified strategic options.

Transformation Overview

Our Value Proposition explained

The comprehensive strategic review concluded in early 2023. The Group began to implement the subsequent and ongoing transformation plan, which included a significant organisational restructure and cost reduction programme in 2023/24.

Today, Maintel is a leaner and more focused organisation repositioned from a Managed Services Provider generalist to a highly skilled and focused specialist, positioning it for greater market cut-through. The Group provides mission critical services to our customers, which fundamentally underpin their ability to thrive in a dynamic hybrid working and multi-cloud world. Our strategic pillars are:

· Unified Communications & Collaboration

· Customer Experience

· Security & Connectivity

BUSINESS REVIEW

2024 Results

Following the rebranding of Maintel and the renaming of our products and service lines, the terminology applied for our reporting has aligned with the new branding and provides greater clarity.

In the table, the old names are mapped to the new names:

Revenues decreased by 3.4% to £97.9m (2023: £101.3m) and adjusted EBITDA increased by 15.4% to £10.5m (2023: £9.1m). Recurring revenue as a percentage of total revenue (being all revenue excluding one-off projects) amounted to £73.3m (2023: £75.0m), representing 75% of total revenues (2023: 74%).

Beyond the variance in reported revenue, the Group generated actual underlying growth of 8.2%, taking into account £10.8m of revenue reported in 2023 and deriving from orders originated in 2021 and 2022, delayed due to supply chain shortages during the pandemic. The underlying growth in recurring revenue represented 1.2%, whilst the underlying growth in project revenue amounted to 36.0%.

The growth in recurring revenue was driven by the strong performance in Cloud Communications Services, and a +25.9% increase in the underlying growth in Security and Connectivity Services, supported by new contracts and price increases.

The underlying growth in project revenue of 36.0% resulted from the strong growth in professional services and technology following the new project wins particularly in the Secure Connectivity pillar.

While gross profit for the Group reduced by 1.9% to £30.6m (2023: £31.2m), gross margin improved to 31.3% (2023: 30.9%).

The Group delivered an adjusted profit before tax of £7.3m (2023: £5.5m). Adjusted earnings per share (EPS)(a) increased to 28.2p per share (2023: earnings per share of 23.6p) based on a weighted average number of shares in the period of 14.4m (2023: 14.4m).

On an unadjusted basis, the Group generated a profit before tax of £0.4m (2023: loss of £6.8m) and basic profit per share of 3.6p (2023: basic loss per share of 37.3p). This includes £2.2m of net exceptional costs (2023: net exceptional costs of £7.0m) (refer note 12) and amortisation of acquired intangibles of £4.6m (2023: £5.1m). 

(a) Adjusted EBITDA is EBITDA of £8.2m (2023: £2.0m) adjusted for exceptional items and share based remuneration (note 11)

(b) Adjusted profit after tax divided by weighted average number of shares (note 10)

Cash performance

The Group generated net cash flows from operating activities of £8.5m (2023: £5.0m), resulting in a cash conversion (c) of 102% for the full year (2023: 97%).

(c) calculated as operating cash flow (being adjusted EBITDA plus working capital) to adjusted EBITDA

Review of operations

Maintel's transition to a specialist Managed Services Provider and focus on Unified Communications & Collaboration, Customer Experience and Security & Connectivity, differentiates us amongst our peers and enables us to meet the demands from customers for tailored managed services delivered through both Maintel's own platforms and its established technology partnerships.

We use technology to create customer experiences, services and workplaces that inspire and empower people.

We consult on the design, deploy and manage solid technology solutions. Our services deliver mission critical infrastructure, platforms and applications that ensure our clients' businesses run efficiently and securely, achieving their ambitions, while always being ready to adapt. We become trusted insiders within our clients' organisations and an embedded partner working in close collaboration to deliver their workplace, service and customer experience strategies.

Elements of cloud services revenues are accounted for in both the managed services and technology division (under the Project Revenue line) and the network services division.

The following table shows the performance of the three operating segments of the Group.

Project and on-premise managed services

The project and on-premise managed services segment contains two distinct revenue lines:

· Project revenue: all non-recurring revenues from hardware, software, professional and consultancy services and other non-recurring sales.

· On-premise managed services: all support and managed service recurring revenues for hardware and software located on customer premises. This combines both legacy telephone system (PBX) and Contact Centre systems, which are in a managed decline across the sector as organisations migrate to more effective and efficient cloud solutions, with areas of technology such as Local Area Networking (LAN), WIFI and security, which are still very much current and developing technology areas and therefore enduring sources of revenue.

Services are predominantly provided across the UK, with some customers also having international footprints. The division also supplies and installs project-based technology, professional and consultancy services to our direct clients and through our partner relationships.

(d) Project Revenue includes revenues from hardware, software, professional services and other non-recurring sales 

Project and on-premise managed services revenue was 10.1% lower at £46.9m. This was mainly due to a 13.8% reduction in revenue from our legacy on-premise managed service business to £22.2m, in line with the expected market decline in this space. However, the reduction in on-premise managed services is partially counteracted by new additions within the Group's other higher growth strategic pillars, reflecting the ongoing migration from on-premises solutions to cloud based solutions.

Although the reported Project revenue was 6.4% lower at £24.6m, the underlying growth of this revenue stream was 36.0%, as revenue in 2023 was boosted by £8.2m due to the unwinding of orders delayed from 2021 and 2022. A large proportion of the solid growth in Project Revenue derived from a 55% underlying growth in higher margin professional services, which reflected the newly won contracts to implement large SD-WAN infrastructures and associated managed services. 

Division gross profit decreased at a lower rate than total division revenue (-1.0%), due to the positive revenue mix weighted towards the higher margin technology revenue streams, and particularly thanks to the strong weighting towards professional services. The revenue mix also translated into the expansion of the average gross margin of the division to 26% (2023: 24%).

Network Services division

The Network Services division is made up of three strategic revenue lines:

· Cloud communication services - subscription and managed service revenues from cloud contracts.

· Security and connectivity services - subscription, circuit, co-location and managed service revenues from Wide Area Network (WAN), SD-WAN, internet access and managed security service contracts.

· Voice network services - recurring revenues from legacy PSTN, modern SIP Trunking and inbound calling contracts.

Network Services revenue grew by 5.1% and gross profit reduced by 1.3% to £17.1m, representing a gross margin contraction from 38% to 36%. The division benefited from an 8.1% growth in the Security and Connectivity services and a 7.9% increase in the Cloud Communication services, while the revenues from Voice Network services reduced by -4.2% in the period. The successful growth in the public cloud seats adversely impacted the mix, from higher margin private cloud.

Line rental revenue increased by 2.1%, driven by a slowdown in migration away from the legacy BT based PSTN services, with the deadline for the end of this service having been extended by 13 months to January 2027, and the continued growth of the Group's SIP Trunking and PSTN replacement services. However, Call traffic revenue was £0.5m lower at £2.9m, as a result of the reduction in legacy PSTN calls as customers migrate to new technologies, partly compensated by an increase in SIP Trunking call traffic and line rental revenue.

The reported growth in Security and connectivity services revenue of 8.1% represented underlying growth of 25.9% (the 2023 revenues were boosted by £2.6m of revenue from the 2021-2022 delayed order book). In 2024, Maintel initiated the delivery of an SD-WAN enhanced infrastructure supported by a multi-year managed support contract to one of the largest UK housing associations. The trend is set to continue as we continue to win new contracts.

Cloud Communications revenues grew by 7.9% which reflected continued delivery of the orderbook and further new contract wins, particularly in the Customer Experience space. Overall, 80% (2023: 75%) of the overall cloud seats contracted in 2024 were public cloud based, highlighting the expected growing trend of a preference for public cloud services in many industry verticals. However, the highest value Cloud Communications win in the period was still a private cloud service for an outbound contract centre solution.

Our flagship UC Private+ (formerly ICON Communicate) cloud service sales also continued to perform. Demand for the Virtual Private Cloud service that our Maintel Infrastructure Platform (formerly ICON Platform) offers continues to remain high across the sectors with complex requirements or where an absolute minimum of downtime is required, such as Finance, Insurance, Healthcare and Housing verticals in particular. With the platform providing very high (99.999%) core service availability levels, including hybrid local survivability, guaranteed UK data sovereignty, security ringfenced customer instances, license and handset investment protection and the ability to allow customers to manage platform evolution at their own pace. Increasingly, customers are looking to enjoy these benefits of a private cloud, and overlay it with the advanced collaboration, meeting and customer experience capabilities of the public cloud, in a hybrid deployment. This plays perfectly to Maintel's platforms and integration capabilities.

Our cloud communications and data connectivity services pipeline remain strong, with key wins expected to close in 2025. As previously stated, having long surpassed the inflection point where economies of scale are realised, our focus has now turned to quality of earnings over volume for our cloud communications business.

Mobile division

The Mobile division generates revenue from mobile services and primarily from commissions received as part of its dealer agreement with O2 which scales in line with growth in partner revenues, in addition to value-added services sold alongside mobile such as mobile fleet management and mobile device management.

Mobile division revenue decreased by 11.9% to £3.4m (2023: £3.8m) and gross profits declined by 16.6% to £1.3m.

Since our strategic pivot in 2023, Maintel has been focusing business development towards our focus revenue streams. Recognising these market challenges, Maintel has been proactively resourcing the mobile sales team to focus on customer retention as opposed to new business. Therefore, although customer churn remained low in the period, the lack of new business compounded by downward price pressure on contract renewals drove the negative revenue progression.

The slight contraction of the gross margin to 38.6% from 40.7% resulted from the expected decrease in new customer sign-on bonuses, due to the re-focused business development approach.

Maintel's mobile proposition continues to be multi-faceted and network agnostic and ensuring we can provide competitive and complete coverage for the UK. This enables us to be in a position to cater for our customers' requirements. Our mobile go to market proposition remains focused on the mid-market enterprise space (100 - 2,000 connections).

Other operating income

Other operating income increased by 60% to £0.8m (2023: £0.5m). This relates primarily to research and development credits of £0.4m and supplier commissions, promotions and bonus payments of £0.3m (2023: relates primarily to research and development credits of £0.3m).

Other administrative expenses

Other administrative expenses for the Group decreased by 8.3% to £22.1m (2023: £24.1m).

Administrative expenses mainly comprise costs related to the sales and marketing teams, the support functions and the managerial positions, as well as the associated growth-generating investments and general costs. The net £2.0m reduction mainly reflects the savings from organisational optimisation initiatives and the reduction in variable remuneration.

The overall average headcount in 2024 reduced by 7.7% and now stands at 445 (2023: 482). At 31 December 2024, the overall headcount was 432 compared to 445 at 31 December 2023 as a result of the Group's regular right-sizing of its organisation.

Exceptional items

Exceptional costs of £2.2m (2023: exceptional costs £7.0m) were substantially driven by the business transformation project.

In 2024, business transformation costs of £1.1m (2023: £5.0m) included third-party specialists engaged to support the transformation of support function processes.

£1.0m (2023: £1.5m) of costs relating to staff restructuring were incurred in the period, which principally consisted of redundancy costs.

£50,000 was incurred in relation to the tail end of the Call Media termination; in 2023, a £2.3m impairment charge was expensed in relation to Callmedia.

A minor charge (£2,000) was expensed in relation to the extension of the financing facility; in 2023, fees of £0.4m had been incurred to negotiate with HSBC Bank plc ("HSBC") temporary terms in place during the phase of transformation of the business. 

A minor credit (£25,000) was accounted for as part of exceptional costs in relation to onerous leases; in 2023, a £1.3m exceptional charge had been incurred in relation to the downsizing of the property footprint of the Group.

A full breakdown is shown in note 12.

Interest

The Group's net interest charge was £2.0m in the year (2023: £2.2m).

Taxation

The tax credit in the period of £0.1m is driven by an increase in deferred tax in relation to fixed assets (£0.9m), offset by a charge to deferred tax in relation to tax losses (£0.6m), other temporary taxable timing differences (£0.1m) and a £0.1m adjustment to prior period deferred tax for temporary timing differences.

The prior year tax credit of £1.4m was driven by an increase in deferred tax in relation to tax losses of (£0.6m), fixed assets (£0.6m) and other temporary taxable timing differences (£0.2m).

Dividends and earnings per share

The Board continues to take a prudent approach to the Company's dividend policy. Throughout 2024 the Board has been focused on de-leveraging of the Company and investing in the future growth of the Group's operations. Consequently, it has made the decision not to propose a final dividend for the full year 2024 (2023: nil pence per share). It remains the Board's intention to review returns to shareholders when economic conditions improve and financial performance permits.

Adjusted profit per share is 28.2p, increasing from the adjusted profit per share of 23.6p in 2023. On an unadjusted basis, basic profit per share is at 3.6p (2023: basic loss per share at 37.3p).

Consolidated statement of financial position

Net assets increased by £0.6m in the year to £14.8m at 31 December 2024 (2023: £14.2m) with the key movements explained below.

Trade and other receivables decreased by £0.7m to £24.7m (2023: £25.4m), driven by a decrease in trade receivables, reflecting the consistent strengthening of credit control and collection activities and the timing of billings. Prepayments and accrued income increased to £13.1m (2023: £12.8m), and within this, accrued income increased by £0.7m, due to the timing of billing milestones; prepayments decreased by £0.4m, as the result of a pro-active reduction in upfront payments to suppliers.

Trade and other payables decreased by £1.0m to £43.4m (2023: £44.4m), mainly as a result of the decrease in deferred income by £2.5m following changes in customer contracts. Other payables and accruals increased by £1.5m driven principally by the timing of payments.

Intangible assets decreased by £0.7m as the amortisation charge for the year amounting to £4.6m exceeded the £3.8m of new assets activated in the year.

Inventories reduced by £0.9m in the period to £0.8m (2023: £1.7m) driven by the timing of the delivery of project work accelerated in December 2024.

Borrowings of £20.7m (2023: £22.9m) represent the Group's drawn down debt, consisting of £20.0m Rolling Credit Facility and £0.8m Term loan, net of costs of issue of £0.1m.

Cash flow

As at 31 December 2024, the Group had net debt of £16.6m (2023: £18.1m), equating to a net debt to Adjusted EBITDA ratio of 1.6x (2023: 2.0x). The £1.5m decrease in net debt, is explained below.

The Group generated £8.5m (2023: £5.0m) of cash from operating activities and operating cashflow before changes in working capital of £8.3m (2023: £5.3m). 

Cash conversion(a) in 2024 was 102% (2023: 97%).

Capital expenditure of £4.4m (2023: £3.5m) was mainly incurred in relation to customer projects delivery and to a lesser extent resulting from the ongoing investment in the Maintel Infrastructure Platform and investment in the IT infrastructure.

A more detailed explanation of the working capital movements is included in the analysis of the consolidated statement of financial position. Further details of the Group's revolving credit facilities are given in note 21.

The repayment of borrowings in 2024 was slightly lower than in 2023, as HSBC debited the December 2024 instalment in early January 2025 due to the timing of funds collection by the bank.

(a) calculated as operating cash flow (being adjusted EBITDA plus working capital) to adjusted EBITDA

Risk management

The Board has overall responsibility for setting the risk appetite for the business and for ensuring that the Group's ongoing risk profile aligns with this. The Board is also responsible for identifying the business risks and uncertainties faced by the Group that could have a material adverse effect on the business, most of which are beyond its control, and for determining the appropriate course of action to manage these. It reviews a dynamic risk report quarterly, the process behind which is monitored by the Audit and Risk Committee. The most significant current risks and uncertainties are described below; the extent of the impact of each would naturally depend on the precise nature and duration of the event. This list is not exhaustive and there may be risks and uncertainties of which we are currently unaware, or which we currently believe are immaterial, that could have an adverse effect on the business.

The Group's approach to financial risk management is further explained in note 23 to the financial statements.

FINANCIAL STATEMENTS

Consolidated statement of comprehensive income

for the year-ended 31 December 2024

The notes form part of these consolidated financial statements.

Consolidated statement of financial position

at 31 December 2024

The notes form part of these consolidated financial statements.

Consolidated statement of changes in equity

for the year-ended 31 December 2024

The notes form part of these consolidated financial statements.

Consolidated statement of cash flows

for the year-ended 31 December 2024

Consolidated statement of cash flows

for the year-ended 31 December 2024 (continued)

The following cash and non-cash movements have occurred during the year in relation to financing activities from non-current liabilities:

Reconciliation of liabilities from financing activities

Borrowings (Note 21)

Lease liabilities (Note 22)

The notes form part of these consolidated financial statements.

Notes forming part of the consolidated financial statements

for the year-ended 31 December 2024

Maintel Holdings Plc is a public limited company incorporated and domiciled in the UK, whose shares are publicly traded on AIM. Its registered office and principal place of business is 5th Floor, 69 Leadenhall Street, London, EC3A 2BG.

The principal policies adopted in the preparation of the consolidated financial statements are as follows: 

(a) Basis of preparation

The consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006.

(b) Basis of consolidation

The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the consolidated statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The acquisition related costs are included in the consolidated statement of comprehensive income on an accruals basis. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained.

(c) Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded to the nearest thousand unless otherwise stated.

(d) Going concern

The Group has a sound financial record, including strong operating cash flows derived from a substantial level of recurring revenue across a range of sectors.

At 31 December 2024, the Group benefited from a financing facility in place with HSBC consisting of an RCF of £20m with a £6m term loan on a reducing basis. Repayments of the term loan started in October 2022. At 31 December 2024, £0.8m remained outstanding, which was fully repaid by 24 March 2025 in line with the term of the initial term loan. The key covenants included net leverage ratio and interest cover tests, assessed on a quarterly basis. In December 2024, the facility was extended to 1 January 2026 from the initial term ending on 30 September 2025.

On 28 March 2025, the Group entered into a new financing facility with HSBC, consisting of an RCF of £12m and an £8m term loan repayable over 60 months from 1 May 2025. The facility has been set with a July 2028 initial term, with an optional extension to July 2029. Together with the main financing facility, an authorised overdraft facility of £2m is renewable annually.

As highlighted in the risk management section the Board has put robust business continuity plans in place to ensure continuity of trading and operations. Management believes the pipeline will enable Maintel to deliver upside from the planned revenue, whilst focusing on cost efficiency and margin enhancement.

The Group's forecasts and projection models have been built on a prudent basis, taking into account uncertainty around the impact of supply chain issues with regard to both project delivery and timing of pipeline conversion, which allows for actual performance to exceed management forecasts in terms of revenue expectations. The Board has reviewed the model in detail, taking account of reasonably possible changes in trading performance, including sensitivities in pipeline conversion and renewal risk, together with further mitigating actions it could take such as overhead savings. As a result, the Board believes that the Group has sufficient headroom in its agreed funding arrangements to withstand a greater negative impact on its cash flow than it currently expects.

On this basis, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

(e) Revenue

Revenue is recognised in accordance with IFRS 15 and represents amounts invoiced to customers less value added tax. For each contract, the Group identifies a performance obligation for each of the distinct goods and services the Group has promised to provide to the customer. The consideration is apportioned to each performance obligation based on their relative standalone selling prices, and is recognised as the obligations are satisfied.

The Group has multiple revenue lines across its three divisions. The policies for individual service lines and their performance obligations are outlined below. The Group does not have any material obligations in respect of returns, warranties or refunds.

Project and on-premise managed services

(renamed in FY24 from its previous name of "managed service and technology sales")

This includes the following revenue lines:

On-premise managed services: all support and managed service recurring revenues for hardware and software located on customer premises.

Project revenues: all non-recurring revenues from hardware, software, professional and consultancy services and other non-recurring sales.

Infrastructure and managed services: a combination of the provision of hardware and the ongoing monitoring and maintenance of the hardware and network services to which it is connected.

On-premise managed services

On-premise managed services revenues are recognised over time, over the relevant contract term, on the basis that the customer simultaneously receives and consumes the benefits provided by the Group's performance of the services over the contract term.

Revenue is recognised over time on an output basis. In calculating the revenue to recognise at the reporting date, Management review available output information for each contract, which may include the number of contracted support days completed or services delivered to date, relevant third-party usage or service provision data, customer milestones reached or contract time elapsed.

The consideration for the provision of ongoing support and managed services is payable by the customer over the duration of the contract.

Project revenues

Project revenues for contracts with customers, which include both supply of technology goods and installation services, represent in substance one performance obligation and result in revenue recognition at a point in time, when the Group has fulfilled its performance obligations under the relevant customer contract.

Under these contracts, the Group performs a significant integration service which results in the technology goods and the integration service being one performance obligation. Over the course of the contract, the technology goods, which comprise both hardware and software components, are customised through the integration services to such an extent that the final customised technology goods installed on completion are substantially different to their form prior to the integration service.

Revenue is recognised when the integrated technology equipment and software has been installed and accepted by the customer.

Consideration is payable by the customer when the integrated technology equipment and software has been installed at the customer premises.

Infrastructure and managed services

The Group provides a service to customers of the provision of hardware and the ongoing monitoring and maintenance of the hardware and network services to which it is connected.

Management considers this to be two performance obligations, being the supply of hardware and the provision of ongoing monitoring and maintenance services.

The total transaction price is allocated over those two performance obligations on the basis of their relative stand-alone selling prices, applying an expected cost plus a margin approach, which Management assess on the basis of other customer contracts.

The revenue from the sale of hardware is recognised at a point in time when the hardware goods are delivered to the customer, and the customer has control of the assets.

The revenue from the provision of ongoing and maintenance services is recognised over time on an output basis. In calculating the revenue to recognise at the reporting date, Management review available output information for each contract, which may include the number of contracted support days completed or services delivered to date, relevant third-party usage or service provision data, customer milestones reached or contract time elapsed.

The consideration for the sale of hardware is payable by the customer in line with the agreed contract terms, and may be invoiced upfront or on delivery. The consideration for the provision of ongoing monitoring and maintenance services is payable by the customer over the duration of the contract.

Network services

This includes the following four revenue lines, which may all make up component parts of the same contract with a customer and are deemed to be separate performance obligations:

· Data connectivity services: subscription, circuit, co-location and managed service revenues from Wide Area Network (WAN), SD-WAN, internet access and managed security service contracts.

· Call traffic: recurring revenues from both legacy voice and modern SIP Trunking contracts.

· Line rental: the recurring revenues billed to maintain the connections for the above contracts.

· Cloud services: subscription and managed service revenues from cloud contracts.

Initial connection services are not distinct performance obligations and are therefore combined with the associated service performance obligation.

The total transaction price of a network services customer contract is allocated over the relevant performance obligations (up to four) on the basis of their relative stand-alone selling prices, applying an expected cost plus a margin approach, which Management assess on the basis of other customer contracts.

Revenues are recognised over time, for services provided up to the reporting date, on the basis that the customer simultaneously receives and consumes the benefits provided by the Group's performance of the services over the contract term.

Revenues are recognised over time on an output basis. In calculating the revenue to recognise at the reporting date, Management review available output information for each contract, which may include the number of contracted support days completed or services delivered to date, the available third-party call traffic data, customer milestones reached or contract time elapsed.

Consideration is payable by the customer over the duration of the contract.

Mobile

The Mobile division generates revenue primarily from revenue share received as part of its dealer agreements with mobile network operators which scale in line with growth in partner revenues, in addition to value added services sold alongside mobile such as mobile fleet management and mobile device management.

Where the Group acts as an agent in a transaction, revenue represents the revenue share receivable from mobile network operators.

Connection revenue share received from the mobile network operators on fixed line revenues, are allocated primarily to two separate performance obligations, being:

· The obligation to provide a hardware fund to end users for the supply of handsets and other hardware kit: revenues are recognised under these contracts at a point in time when the hardware goods are delivered to the customer, and the customer has control of the assets; and

· Ongoing service obligations to the customer: revenues are recognised over time on an output basis, being straight-line over the duration of the contract.

The total transaction price of a contract relating to the connection revenue share is allocated over these two performance obligations on the basis of their relative stand-alone selling prices, applying an expected cost plus a margin approach, which Management assess on the basis of other customer contracts.

The consideration for the sale of hardware kit is payable by the customer in line with the agreed contract terms, and may be invoiced upfront or on delivery.

 The consideration for the provision of ongoing service obligations is payable by the customer over the duration of the contract. Customers are invoiced directly by the mobile network operators monthly, and the Group receives the related revenue share on the same basis.

Customer rebates are recognised as a reduction in revenue. These are recognised monthly at a point in time when a customer has earnt the right to said rebate in line with the terms of their mobile contract, based on the available third-party usage data. These are also payable by the network operators on a monthly basis.

Accrued and deferred revenue

Where a performance obligation is completed before the consideration is received, accrued income is recognised.

Where the consideration is received before the completion of a performance obligation, deferred income is recognised.

(f) Other operating income

Other operating income relates primarily to research and development credits and supplier commissions, promotions and bonus payments.

Other operating income is recognised when the Group's right to recognise the income has been established, it is probable that the related economic benefits will flow to the Group, and the related amounts can be measured reliably.

(g) Leased assets

When the Group enters into a lease, a lease liability and a right of use asset is created.

A lease liability shall be recognised at the commencement date of the lease term and will be measured at the present value of the remaining lease payments, discounted using the Groups' incremental borrowing rate. In determining the lease term, hindsight is applied in respect of leases which contain an option to extend or terminate the lease. The lease term is reassessed for such an extension or termination option, or other such significant events, if the option is within the control of the Group and the Group is reasonably certain to exercise the option.

The lease liability is subsequently increased for a constant periodic rate of interest on the remaining balance of the lease liability and reduced for lease payments. Interest on the lease liability is recognised in the income statement.

A right of use asset shall be recognised at the commencement date of the lease term. The right of use asset will be measured at an amount equal to the lease liability. The right of use asset will subsequently be measured at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation for leased property (disclosed as 'Land and buildings' in Note 16), motor vehicles and office and computer equipment is charged to the statement of comprehensive income on a straight-line basis over the shorter of the lease term and the useful economic life of the asset. The useful economic life of a right of use asset is based on that assigned to equivalent owned assets, as disclosed in the 'Property, plant and equipment' policy (o).

Where leases are 12 months or less or of low value, payments made are expensed evenly over the period of the lease.

Rentals receivable under operating leases are credited to the consolidated statement of comprehensive income on a straight-line basis over the term of the lease. The aggregate cost of lease incentives offered is recognised as a reduction of the rental income over the lease term on a straight-line basis.

In addition, the carrying amount of the right-of-use assets and lease liabilities are remeasured if there is a modification, a change in the lease term or a change in the fixed lease payments. The remeasured lease liability (and corresponding right-of-use asset) is calculated using a revised discount rate, based upon a revised incremental borrowing rate at the time of the change.

(h) Employee benefits

The Group contributes to a number of defined contribution pension schemes in respect of certain of its employees, including those established under auto-enrolment legislation. The amount charged in the consolidated statement of comprehensive income represents the employer contributions payable to the schemes in respect of the financial period. The assets of the schemes are held separately from those of the Group in independently administered funds.

The cost of all short-term employee benefits is recognised during the period the employee service is rendered.

Holiday pay is expensed in the period in which it accrues.

(i) Exceptional items

Exceptional items are significant items of non-recurring income or expenditure that have been separately presented by virtue of their nature to enable a better understanding of the Group's financial performance. Non-recurring exceptional items are presented separately in the consolidated statement of comprehensive income.

(j) Interest

Interest income and expense is recognised using the effective interest rate basis.

(k) Taxation

Current tax is the expected tax payable on the taxable income for the year, together with any adjustments to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, except for differences arising on:

· The initial recognition of goodwill

· The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit; and

· Investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits and taxable temporary differences will be available against which the asset can be utilised.

Management judgement is used in determining the amount of deferred tax asset that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The amount of the deferred tax asset or liability is measured on an undiscounted basis and is determined using tax rates that have been enacted or substantively enacted by the date of the consolidated statement of financial position and are expected to apply when the deferred tax assets/liabilities are recovered/settled. 

Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities, and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:

· The same taxable Group company; or

· Different Group entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be settled or recovered.

(l) Dividends

Dividends unpaid at the reporting date are only recognised as a liability at that date to the extent that they are appropriately authorised and are no longer at the discretion of the Company.

Proposed but unpaid dividends that do not meet these criteria are disclosed in the notes to the consolidated financial statements.

(m) Intangible assets

Goodwill

Goodwill represents the excess of the fair value of the consideration of a business combination over the acquisition date fair value of the identifiable assets, liabilities and contingent liabilities acquired; the fair value of the consideration comprises the fair value of assets given. Direct costs of acquisition are recognised immediately as an expense. Goodwill is capitalised as an intangible asset and carried at cost with any impairment in carrying value being charged to the consolidated statement of comprehensive income.

Customer relationships

Customer relationships are stated at fair value where acquired through a business combination, less accumulated amortisation. Customer relationships are amortised over their estimated useful lives of six years to eight years, based on the expected length of the Group's provision of goods and services to the related customer base.

Brands

Brands are stated at fair value where acquired through a business combination less accumulated amortisation. Brands are amortised over their estimated useful lives, being eight years in respect of the ICON brand, based on the expected time the Group will utilise the brand in its sales and marketing materials. All brands acquired through historic business combinations are no longer used by the Group as of 31 December 2024 and therefore have been disposed of during the year.

Product platform

The product platform is stated at cost less accumulated amortisation. Where these have been acquired through a business combination, the cost is the fair value allocated less accumulated amortisation. The product platform is amortised over its estimated useful life of eight years, based on the expected time the Group will utilise the product platform in its operations.

Software (including Microsoft licences and Callmedia)

Software is stated at cost less accumulated amortisation. Where these assets have been acquired through a business combination, the cost is the fair value allocated in the acquisition accounting. Software is amortised over its estimated useful life of three years in respect of the Microsoft licences, based on the expected time the Group will utilise the licenses in its operations.

The net book value of the Callmedia capitalised systems, software and development costs was impaired in the prior year in line with the decision made in 2023 to exit the Callmedia business in 2024. See Note 13 for further information.

Please see Note 3 for further information on capitalised internally generated development costs, which are included within software intangible assets in Note 13.

Licences (third-party subscription licences)

Third-party subscription licences are stated at cost less accumulated amortisation. Where these assets have been acquired through a business combination, the cost is the fair value allocated in the acquisition accounting. Licences are amortised over their estimated useful lives of three years, based on the expected time the Group will utilise the licences in its operations.

Other

Other intangible assets include stock management platforms which is managed by third parties. Other intangibles are amortised over their estimated useful lives, being 5 years, based on the expected time the Group will utilise the stock management platform in its operations.

(n) Impairment of non-current assets

Impairment tests on goodwill are undertaken annually on 31 December. Customer relationships and other assets are subject to impairment tests whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (being the higher of value in use and fair value less costs to sell), the asset is written down accordingly in the administrative expenses line in the consolidated statement of comprehensive income and, in respect of goodwill impairments, the impairment is never reversed.

Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset's cash-generating unit (being the lowest Group of assets in which the asset belongs for which there are separately identifiable cash flows). Goodwill is allocated on initial recognition to each of the Group's cash-generating units that are expected to benefit from the synergies of the combination giving rise to goodwill.

(o) Property, plant and equipment

Property, plant and equipment is stated at cost, less accumulated depreciation and any impairment in value. Depreciation is provided to write off the cost, less estimated residual values, of all tangible fixed assets, other than freehold land, over their expected useful economic lives, at the following rates:

Property, plant and equipment acquired in a business combination is initially recognised at its fair value.

(p) Inventories

Inventories comprise (i) maintenance stock, being replacement parts held to service customers' telecommunications systems, and (ii) stock held for resale, being stock purchased for customer orders which has not been installed at the end of the financial period. Inventories are valued at the lower of cost and net realisable value.

(q) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term deposits with an original maturity of three months or less, held for meeting short term commitments.

(r) Financial assets and liabilities

The Group's financial assets and liabilities mainly comprise cash, borrowings, trade and other receivables, trade and other payables, lease liabilities and derivative financial instruments.

Trade and other receivables are not interest bearing and are stated at their amortised cost as reduced by appropriate allowances for irrecoverable amounts or additional costs required to effect recovery.

The Group reviews the amount of credit loss associated with its trade receivables based on forward looking estimates that take into account current and forecast credit conditions. The Group has applied the Simplified Approach applying a provision matrix based on number of days past due to measure lifetime expected credit losses and after taking into account customer sectors with different credit risk profiles and current and forecast trading conditions.

Trade and other payables are not interest bearing and are stated at their amortised cost.

(s) Borrowings

Interest bearing bank borrowings and overdrafts are initially recorded at the value of the amount received, net of attributable transaction costs. Interest bearing borrowings are subsequently stated at amortised cost with any difference between cost and redemption value being recognised in the consolidated statement of comprehensive income over the period of the borrowing using the effective interest method.

(t) Foreign currency

The presentation currency of the Group is Pound Sterling. All Group companies at 31 December 2024 have a functional currency of Pound Sterling, consistent with the presentation currency of the Group's consolidated financial statements. Transactions in currencies other than Pound Sterling are recorded at the rates of exchange prevailing on the dates of the transactions.

As at 31 December 2024, the Group, did not hold any interest in foreign subsidiaries. In the prior year, the control of Maintel International Limited ("MIL") was transferred to the liquidators of MIL.

On consolidation the results of MIL, which were included in the consolidated statement of comprehensive income up to the transfer of the entity to the liquidators, were translated into Pound Sterling, at rates approximating those ruling when the transactions took place. The monetary assets and liabilities of MIL were translated at the rate ruling at the reporting date. Non-monetary items that were measured at historical cost were translated using rates approximating those ruling at the dates of the initial transactions.

Exchange differences on retranslation of the foreign subsidiary are recognised in other comprehensive income and accumulated in a translation reserve.

(u) Share-based payments

The Group uses the Black-Scholes Model to calculate the appropriate fair value at the date the options are granted to the employee.

Where employees are rewarded using equity settled share-based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee. This fair value is appraised at the grant date.

All equity-settled share-based payments are ultimately recognised as an expense in the income statement with a corresponding credit to reserves.

If vesting periods apply, the expense is allocated over the vesting periods, based on the best available estimate of the number of share options expected to vest. Estimates are revised subsequently 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 year. No adjustment is made to any expense recognised in prior years if share options that have vested are not exercised.

(v) Accounting standards issued

The following amendments to standards were issued and adopted in the year, with no material impact on the financial statements (all effective for annual periods beginning on or after 1 January 2024):

· Amendment to IFRS 16 Leases - Leases on sale and leaseback

· Amendment to IAS 1 Presentation of Financial Statements - Non-current liabilities with covenants

· Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier finance

There were no other new accounting standards issued that have been adopted in the year.

(w) Standards in issue but not yet effective

At the date of authorisation of these financial statements there were amendments to standards which were in issue, but which were not yet effective, and which have not been applied. The principal ones are detailed below:

The Directors do not expect the adoption of these standards or amendments to standards to have a material impact on the financial statements, with the exception of presentational changes as a result of IFRS 18 Presentation and Disclosure in Financial Statements. Given that IFRS 18 is not effective until the period beginning 1 January 2027, the impact assessment of this standard is ongoing and will be considered further in the coming years.

Effective for annual periods beginning on or after 1 January 2025

· Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates - Lack of exchangeability

Effective for annual periods beginning on or after 1 January 2026

· Amendments to IFRS 7 and IFRS 9 Financial Instruments - The classification and measurement of financial instruments

· Annual improvements to IFRS Accounting Standards - Volume 11 (including minor amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 7, IFRS 9, IFRS 10 Consolidated Financial Statements, and IAS 7)

Effective for annual periods beginning on or after 1 January 2027

· IFRS 18 Presentation and Disclosure in Financial Statements

· IFRS 19 Subsidiaries without Public Accountability: Disclosures

In the process of applying the Group's accounting policies, management has made various estimates, assumptions and judgements, with those likely to contain the greatest degree of uncertainty being summarised below.

Management has reviewed these critical accounting estimates and significant judgements, along with the related disclosures, with the Audit Committee.

Critical accounting estimates

Impairment of non-current assets

The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The Group is also required to test other finite life intangible and tangible assets for impairment where impairment indicators are present.

In line with IAS 36 Impairment of Assets, the recoverable amount of assets subject to impairment reviews is calculated as being the higher of their value in use and fair value less cost to sell.

In determining their value in use, the recoverability of the assets is assessed based on whether the carrying value of assets can be supported by the net present value of future cash flows derived from such assets, using cash flow projections which have been discounted at an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of uncertain matters.

In particular, Management exercises estimation in determining assumptions for revenue growth rates and gross margins for future periods which are important components of future cash flows, and also in determining the appropriate discount rates which are used across the Group's cash generating units.

See Note 13 for the carrying amount of goodwill and other intangible assets at the end of the reporting period and for details on the assumptions used to calculate the recoverable amount.

Research and development costs

Management reviews expenditure incurred on research and development activities, including wages and benefits for employees, and applies judgement in assessing whether the expenditure meets the capitalisation criteria set out in IAS 38 Intangible Assets. Development costs are capitalised and recognised as software intangible assets when Management have determined the following criteria have been met:

· It is technically feasible to complete the software so that it will be available for use;

· The Group intends to complete the software and use or sell it to its customers;

· There is an ability to use or sell the software;

· It can be demonstrated how the software will generate probable future economic benefits for the Group;

· Adequate technical, financial and other resources to complete the development and to use or sell the software are available; and

· The expenditure attributable to the software during its development can be reliably measured.

Any research and development costs that do not meet these criteria are expensed to the income statement in the period in which they are incurred.

Management estimates the useful economic life of capitalised development costs by assessing the expected time the Group will utilise and receive economic benefits from the related software developments. In most cases, Management have determined 3 years to be a reasonable estimate based on this assessment.

See Note 13 for details of internally generated development costs that were capitalised in the current and prior year.

Significant judgements

Timing of service revenue recognition

For ongoing support and managed services provided across the Group's divisions, revenue is recognised over time on an output basis.

Determining the revenue to recognise at a reporting date can require judgement. In calculating the revenue to recognise, Management review available output information for each contract, which may include the number of contracted support days completed or services delivered to date, relevant third-party usage or service provision data, customer milestones reached or contract time elapsed.

The allocation of the transaction price against the performance obligations

The transaction price of a customer contract is allocated to the relevant performance obligations on a relative stand-alone selling price basis at contract inception. Determining the standalone selling price can require judgement. Management determines the transaction price from a cost-plus derived price, with reference to the observable price of similar goods and services when sold on a standalone basis by Maintel or a competitor. Discounts are not considered as they are only given in rare circumstances.

Recoverability of the deferred tax asset

The net deferred tax asset mainly arises on the recognition of tax timing differences on property, plant and equipment, as well as prior and current year taxable losses which are expected to be utilised against future year taxable profits. Other items include timing differences in relation to provisions. This is partially offset by a deferred tax liability in relation to tax timing differences on intangible assets.

Management exercises their judgement in recognising the deferred tax asset in relation to prior and current year taxable losses on the basis that it can be measured reliably, and it is probable that it will result in future economic benefits for the Group.

The Board has reviewed the Group forecasts and projection models covering five years from the year end, taking into account reasonably possible changes in trading performance. As a result, the Board determined that the Group will make sufficient profits in the future against which the losses can be utilised. In the current year, the trading subsidiary utilised a significant portion of the prior years' losses, which further supports this assessment. There are no time restrictions on when these taxable losses can be utilised. The deferred tax asset relating to tax losses has therefore been recognised on this basis.

See Note 20 for the deferred tax movements in the year and balance at the year end.

Exceptional items

Exceptional items are significant items of non-recurring income or expenditure that have been separately presented by virtue of their nature to enable a better understanding of the Group's underlying financial performance.

These items may include one-off projects, such as the Group's transformation project, which span over several years and are therefore not contained to a single reporting period but are nevertheless not expected to be recurring events.

Management exercises their judgement in determining the items that are not considered to be part of the Group's recurring income or expenditure incurred as part of carrying out its principal activities.

See Note 12 for details of exceptional items incurred in the current and prior year.

Year-ended 31 December 2024

For management reporting purposes and operationally, the Group consists of three business segments: (i) project and on-premise managed services (renamed in FY24 from its previous name of "managed service and technology sales"), (ii) network services, and (iii) mobile services.

Revenue from on-premise managed services, network services and mobile is recognised over time and project revenue is recognised at a point in time. Each segment applies its respective resources across inter-related revenue streams, which are reviewed by management collectively under these headings. The businesses of each segment and a further analysis of revenue are described under their respective headings in the Strategic Report.

The chief operating decision maker has been identified as the Board, which assesses the performance of the operating segments based on revenue and gross profit.

The Board does not regularly review the aggregate assets and liabilities of its segments and accordingly an analysis of these is not provided.

Revenue is wholly attributable to the principal activities of the Group in the current and prior year.

In 2024 the Group had no customer (2023: None) which accounted for more than 10% of its revenue.