Final results for the year ended 31 December 2024

6 May 2025

Facilities by ADF plc

("Facilities by ADF", "ADF", the "Company" or the "Group")

Final results for the year ended 31 December 2024

Facilities by ADF, the leading provider of premium serviced production facilities to the UK film and high-end television industry ("HETV") announces its audited final results for the year ended 31 December 2024 ("FY24").

Financial highlights

Operational highlights

Post period end

Outlook

Commenting, Marsden Proctor, CEO, said:

"As previously communicated, the Group's FY24 performance reflects the slower return to normal levels of market activity following the US Strikes, however we remain positive about the long-term outlook for ADF, underpinned by continued high investment in the UK HETV and film industry. With the recent addition of Autotrak, ADF is now even better positioned to capitalise on the market's return to more typical activity levels."

For further enquiries:

OVERVIEW OF FACILITIES BY ADF PLC

The Facilities by ADF Group is the leading provider of premium serviced production facilities along with location services and ground protection equipment to the UK film and high-end television (HETV) industry.

The Group serves customers in an industry that has experienced, notwithstanding the Strikes in 2023, significant growth in recent years, with additional demand driven by a material rise in the consumption of film and HETV content via streaming platforms such as Netflix, Disney+, Apple TV+ and Amazon Prime. The UK film and TV industry has directly benefited during this growth due to the quality of its production facilities and studios, highly skilled domestic workforce, geography, accessibility to Europe, English language environment and strong governmental support. Major US streaming companies have now set up permanent bases in the UK, with the UK now the film and TV industry's second largest operation after North America.

Facilities by ADF production fleet is made up of more than 700 premium mobile make-up, costume and artiste trailers, production offices, mobile bathrooms, diners, school rooms and technical vehicles.

To strengthen its position as a One-Stop-Shop for the Film and HETV industry, ADF acquired Location One Ltd, the UK's largest TV and film location service provider, in November 2022, and then further expanded in September 2024 by acquiring Autotrak Portable Roadways Ltd, a market leader in portable roadway solutions, diversifying the Group's offerings and customer base.

Chair's Review

Overview

I am pleased to be delivering my first Chair's statement since joining Facilities by ADF plc ("ADF" or the "Group"), in February 2025.

During 2024 the Group achieved operational progress through the acquisition of Autotrak Portable Roadways Limited ("Autotrak") and continued the integration of Location One Ltd ("Location One"), which was acquired in December 2022. These acquisitions provide customers with a much broader offering and offer significant cross selling opportunities

The financial results for the year were however affected by continued project delays following the return to work after the USA Writers (Writers Guild of America (WGA)) and Actors (Screen Actors Guild - American Federation of Television and Radio Artists (SAG- AFTRA)) strikes (the ''Strikes'') . Notwithstanding this, revenue for the year increased by 1.2% on the prior year to £35.2 million (2023: £34.8 million). The acquisition of Autotrak contributed £2.6 million to revenue, with revenue in CAD Services Limited ("CAD Services") broadly flat. Location One revenue fell by 7.9% as a result of a number of planned production start dates being delayed in Q4.

Adjusted EBITDA for the year was £7.2 million (2023: £7.3 million). The Group incurred a loss before tax of £2.8 million (2023: profit £0.6 million) reflecting higher depreciation and amortisation charges, and an increase in exceptional and interest costs.

Cash balances at 31 December 2024 were £2.3 million with net debt amounting to £13.8 million. Debt balances principally relate to hire purchase contracts against the hire fleet; all debt is covenant free.

During the year the Group has implemented new reporting systems, which allow for real time reporting of fleet utilisation. This will allow for improved monitoring of the hire fleet and consequent improvements in both this key metric and Return on Capital Employed over time.

Dividend

The Board is recommending a final dividend of 0.90 pence per share. If approved at the forthcoming Annual General Meeting, the total dividend for the year would be 1.40 pence per share (2023: 1.40 pence). The dividend will be paid on 13 August 2025 to shareholders on the register at close of business on 25 July 2025.

Acquisitions

During the year the Group acquired Autotrak for a maximum consideration of £21.3 million on a cash-free-debt-free basis (£25.8 million gross of acquired Autotrak cash balances), with the initial cash consideration of £13.6 million funded by way of an oversubscribed £10.0 million share placing.

The acquisition of Autotrak marked a significant milestone in our strategy to diversify and expand. This has strengthened our position as a leading provider to the film and high-end TV ("HETV") industry, whilst also providing a new revenue stream in the events sector. The integration of both Autotrak and Location One, which was acquired in November 2022, is progressing well with revenue and cost synergies being realised.

The Group intends to continue to grow organically through further fleet investment and, at the appropriate time, will consider further value enhancing acquisitions. 

Board and People

I was delighted to be appointed Chair of the Board of Facilities by ADF Plc in February 2025.

John Richards and Vinodha Wijeratne resigned as Directors in February 2025, and on behalf of the Board I would like to thank them both for their contribution to the Group. I am pleased to welcome Mark Adams to the Board and as Chair of the Audit and Risk Committee. Mark has over 30 years' experience working in senior finance roles and I look forward to working with him and the Board.

Following my appointment I have visited a number of operational sites, and witnessed our market leading offering, strong management team and excellent industry connections. I have been impressed by our strong customer service ethos and would like to take this opportunity to thank all of our staff for their dedication and efforts over the last year.

Russell Down

Chair of the Board

Chief Executive Officer's Review

Overview

ADF is at a pivotal juncture in its growth journey and whilst the financial performance in FY24 reflects the challenging market following the Strikes, we have continued to execute our strategy to ensure we are poised for growth as activity levels return to more normal levels.

We remain focused on this strategy through ongoing investment and continuous improvements to operations. The combination of a strong pipeline of projects and a number of strategic developments reinforces our confidence in future success.

The Market Opportunity

Although the market has been affected by several challenging factors in the past 18 months, the underlying drivers remain strong, underpinning the long-term growth opportunities for the Group. The UK continues to receive substantial investment with global production companies increasingly choosing the region's state of the art studios and facilities.

The British Film Commission is experiencing high levels of inward investment, and while we're still waiting for the market to reach a 'new normal', there is continued strong support from UK Government, with new enhanced tax credits, a world-class skills base and a UK-wide offer of diverse locations and stage space boasting cutting edge facilities. Additionally, a 40% reduction in business rates for film studios through to 2034 is expected to support new developments, addressing concerns about a shortage of studio space. The UK remains well-placed to see a competitive share of the global production spend.

Delivering Against Growth Strategy

In September 2024, ADF acquired one of the UK's market-leading portable roadway suppliers, Autotrak, for a maximum consideration of £21.3 million on a debt-free-cash-free basis. This acquisition marks a significant step in our strategy to diversify the Group's product offerings and expand our customer base beyond the film and HETV industry.

Autotrak is a long established and well-managed business and will operate as a subsidiary of ADF, whilst sharing our industry contacts and streamlining our operational processes to ensure best practice is adopted across the Group. Joint customer conversations are already well underway. Alongside Location One, this acquisition is enabling us to provide the very best services the industry has to offer under one roof and moves us closer towards becoming a One-Stop-Shop to the UK film and HETV industry.

Competitive strength

We remain the provider of choice for many in the UK for large-scale, high-quality productions, which has supported the business whilst navigating the market challenges during FY24. With the addition of Location One and Autotrak's services, we are now better equipped to support large scale productions as well as new markets, including festivals and outdoor events.

We supported 38 high-profile productions across H1-FY24 including Slow Horses, Silent Witness and Call the Midwife. In the second half we supported a further 49 productions including Adolescence, The Roses, Amandaland and Marvel's Fantastic Four.

We report our Net Promotor Score (NPS) which currently stands at 87, an internationally recognised customer service measurement. Throughout the period our score did not drop below 85 (82 in FY23), a figure which Bain & Company, the creators of NPS, has described as 'world class'.

ESG and People

We help our clients entertain the world with unmatched service from our talented team, whilst doing so sustainably and responsibly. To continue delivering this service, we made key appointments in the year to strengthen our leadership and marketing teams, ensuring we have the right people driving our growth. Tim Kendall joined in December as Group Corporate Development Director, bringing over 20 years of industry experience, and his expertise and connections are already making a difference. We also launched new training programs, including a Driver Academy and Production Base Management course, which will serve as the foundation for additional courses in 2025, all designed to empower and develop our people for the future.

Our ESG strategy, "Eco Set" focuses on four core areas: climate and net zero: innovative client solutions; growth through learning and making ADF a great place to work, and in FY24 we have made excellent progress against these goals.

We have a goal to reach Net Zero by 2050, with a 50% emissions reduction per employee by 2030. Our performance in the year demonstrates that we are well on track, reducing the Group's total operational emissions by 14% compared to FY23 and 29% in the baseline year of FY22. Whilst a portion of the emissions reduction can be attributed to a reduced operating environment because of the Strikes, the reduction demonstrates that there have been underlying improvements in carbon emissions.

Following successful trials in FY23, we now have a fleet of 15 hybrid power units, which have been shown to reduce generator run time by up to 85% and reduce fuel consumption by more than 50%, providing the added benefit of saving productions money as well as reducing their carbon emissions. We increased our hybrid power usage from two productions in FY23 to 20 in FY24, representing 23% of all productions we worked on during the year. Following the launch of our innovative EcoBase initiative in FY23, a sustainable unit base collaboration between ADF and Location One, 5 of these 20 productions operated as a full EcoBase production, bringing a multitude of sustainable initiatives together under one joined up proposition.

In late FY24, we introduced unit base moves powered by Hydrotreated Vegetable Oil ("HVO"), replacing diesel. Four major productions have already adopted this, with more following in FY25 and Location One fully transitioned to HVO by Q4 FY24. Looking ahead, we have partnered with Neptune Sustainability to enhance our ESG strategy. Neptune has helped companies including Netflix, Disney, and the British Film Commission drive environmental change.

Outlook

Whilst the Group's performance in FY24 was impacted by the challenging market conditions across the film and HETV industry, we are extremely grateful to the ADF team for their hard work in securing new business and delivering outstanding service to our customers. We also welcome the team at Autotrak to the Group.

In the first few months of FY25, overall performance has been in line with the Board's expectations despite a slower than expected return to pre-Strike levels of activity, with Autotrak performing particularly well. Frozen budgets, reduced production spend, and rising costs have all combined to present short-term challenges.

The long-term market outlook still remains favourable for ADF, buoyed by sustained high levels of investment in the UK HETV and Film industry. This underpins our aspirations to generate £100 million of annual revenue in the long term. To do this, we will continue to grow organically through continued investment in our revenue-generating fleet and appropriate investment in line with our strategy.

Marsden Proctor

Chief Executive Officer

CFO Review

Summary

The financial results for the 12 months ended 31 December 2024 reflect a challenging year for the business, and the Film and HETV industry in general as it recovered from the Strikes and as activity levels began to normalise. The results for the year are set out below.

*NB Autotrak acquired Sept-24

H1- FY24

The first half of FY24 reflected a resilient performance as the Film and HETV industry began to normalise following the Strikes. Revenues of £15.2 million were recorded, up 17% from H2-FY23 revenues of £13.0 million, but down 30% when compared with H1-FY23 (£21.8 million) which was a period largely unaffected by the Strikes.

Profit margins also improved in H1-FY24 when compared with H2-FY23 (16.7% EBITDA margin in H1-FY24 vs. 11.9% in H2-FY23) as we supported some larger productions, and a higher concentration of work centred around the main London studios and other studios close to our operational hubs in Wales, Manchester and Glasgow, making them more efficient from a transport and mobilisation perspective. We also continued to limit our use of agency HGV drivers, avoiding unnecessary block bookings and fully utilising ADF drivers, all of which contributed to an improved EBITDA margin.

Nevertheless, overall direct labour costs did increase as a percentage of revenue (37% in H1-FY24 vs. 29% in H1-FY23) due to the overall prevailing lower level of production activity, and hence continued market competitiveness, with the effects of price discounting lingering well into the summer. In addition, following the increase in the National Living Wage in April 2024 we increased rates of pay, particularly with our Base staff, to ensure our basic pay was above the National Living Wage.

The senior management team continued to monitor costs closely through the period and limited non-essential expenses to ensure overheads remained tightly controlled. Overall, core overheads were 18.4% of revenue, up on H1-FY23 of 12.3%.

Net interest expense increased from £625k in H1-FY23 to £862k in H1-FY24. The increase is a result of additional hire purchase ("HP") interest from new HP leases to fund further growth of our fleet. Interest rates on HP leases are not variable and are fixed at the date the leases are taken out.

As a result of the above, the loss before tax for H1-FY24 was £0.9 million, (H1-FY23: profit of £2.8 million).

H2-FY24

As the effect of the Strikes continued to recede, ADF's pipeline for H2-FY24 looked set for a return to previous higher levels of activity with an order book stretching out to the year end and beyond. Notwithstanding those positive signs, there remained a very strong focus within the Group, to continue to secure as much work as possible, including some smaller and short productions, and to maintain low operating costs and overheads. ADF also completed the acquisition of Autotrak in H2-FY24, the next step in the delivery of our One-Stop-Shop strategy.

However, alongside this more positive outlook, there were still some market uncertainties, exacerbated by the new Labour Government Budget on 30 October 2024, and likewise the US Elections on 5 November 2024, which caused a number of customers in both geographies to delay production commitment decisions at a critical time of the year ahead of the industry Christmas hiatus. Consequently, a number of productions that ADF had in its sales pipeline for H2-FY24 were then pushed into FY25 (these have all now started production), whilst some did not proceed at all. Consequently, whilst H2-FY24 revenues of £20.0 million were 54% ahead of the Strike effected H2-FY23, revenues and profitability were significantly affected by the production delays.

Acquisition of Autotrak Portable Roadways Limited

On 10th September 2024, ADF acquired 100% of the share capital of Autotrak, one of the market-leading suppliers of portable roadway and largest privately owned supplier of panels to the film and TV sector in the UK. Autotrak also provides services to festivals, outdoor events and construction related industries. The aggregate consideration payable is a maximum of £25.8 million, made up of:-

The acquisition was a key step in the delivery of the Group's vision for ADF as a One-Stop-Shop for film and HETV production, operating across multiple businesses run by talented local management. Autotrak accelerates ADF's diversification of product offering and customer base, including across complementary industries. The acquisition is expected to be significantly earnings per share accretive following integration into the Group. Integration is well advanced with significant progress having already been made in terms of synergies in the management of property, fleet and transport operations, overhead costs, and the development of a co-ordinated group sales function.

EBITDA

The Group measures performance based on EBITDA and Adjusted EBITDA.. We consider EBITDA and Adjusted EBITDA to be useful measures of operating performance, EBITDA approximates the underlying operating cash flow by eliminating depreciation and amortisation. Adjusted EBITDA adds back any non-recurring expenses, impairment of goodwill, gains or losses on deferred consideration and acquisition related fees.. EBITDA and Adjusted EBITDA are not direct measures of our liquidity, which is shown by our cash flow statement, and need to be considered in the context of our financial commitments. Adjusted EBITDA for FY24 was £7.2 million (20.3%) compared to FY23 at £7.3 million (21.0%).

A reconciliation of Adjusted EBITDA is shown below:

The tax charge for FY24 is £0.2 million and is deferred tax only as the Group currently has excess capital allowances and tax losses to cover its taxable profits. Overall, the Group continues to benefit from a very large tax loss carried forward which will mitigate ADF's tax charges for a number of years.

Revenue

The table below shows the revenue analysed between the two main facilities categories, being main packages (pre-agreed before filming) and additional sales (agreed during the course of filming), plus other miscellaneous sales. Revenue for Location One and Autotrak is shown separately.

Uplift % is an important metric being the increase in total facilities sales from the initial main packages. This reduced from 60% in FY23 to 50% in FY24 as we saw a larger proportion of predominantly studio-based productions, and other smaller productions being more cost conscious with their spend.

Revenue Mix

ADF worked on 38 productions in H1-FY24, the same number as in H2-FY23. However, there was a reduction in average revenue per production in H1-FY24 to £304k, a 16% decrease when compared with H1-FY23 (£361k). In the second half of FY24, ADF worked on a further 49 productions (H2-FY23: 38) taking the total for the year to 87 (FY23: 84). Netflix remained the Group's single largest customer in FY24, representing 20.4% of total Group revenues, however the level of diversification across broadcasters increased during the year, with Apple and Amazon significantly increasing their share of the Group's overall revenue. There was a slight reduction in the average revenue per production from £385k in FY23 to £381k in FY24.

The split of productions across the revenue bands is shown below:

Share Based Payments & Non-Recurring Expenses

The share-based payments in FY23 related to certain options granted to the two Executive Directors of Facilities by ADF Plc at the time of the IPO in 2022. These awards expired in FY-24 with £Nil value. Further grants of LTIP options were made in FY24 with a 3-year vesting period for the same directors, alongside three executive directors of Location One Ltd. These are detailed as non-recurring expenses.

Dividend & Earnings Per Share

The Company declared a final dividend of 0.90 pence per share in April 2024 in relation to the year ended 31 December 2023. This took the total dividend for that year to 1.40 pence per share, with the interim dividend of 0.50 pence per share in October 2023.

The Board declared an interim dividend of 0.50 pence per share in respect of the six months ended 30 June 2024 (the "Interim Dividend"). The Interim Dividend was paid on 25 October 2024. The Interim Dividend, over an increased number of ordinary shares in issue following the successful placing approved by shareholders on 9 September 2024, was reflective of the Group's progressive dividend policy. Basic earnings per share for FY24 was a loss of 3.42 pence per share (FY23: Profit of 0.99 pence per share).

Capital Expenditure

During FY24, ADF acquired new equipment with a cost of £5.15 million (£1.27 million included as property, plant, and equipment, and the remaining relating to leased assets of £3.88 million). 28 units were added across the year (FY23: 133 units) taking the total to 728 units at the end of the year (FY23: 703). The average cost of assets purchased in FY24 was £66k (FY23: £72k).

In addition, ADF also held 33 units in the Assets Under Construction heading on the balance sheet, that were not put into service for various operational reasons before the year end. The value of these units at the year-end was £3.06 million (FY23: £1.22 million). These are fully paid for and will transfer to fixed assets as they complete their fit-out stage in FY25.

Cash Flow, Funding & Net Debt

During FY24, ADF financed capex of £4.46 million by hire purchase, and the balance of £0.69 million was paid for out of cash. The majority of the funding was with 2 providers, PACCAR Finance, the in-house finance company for DAF vehicles, and HSBC.

Interest rates on new hire purchase contracts in FY24 continued to slowly decrease in line with the Bank of England base rate and averaged 6.8% across FY24 (FY23: 7.5%). Total hire purchase repayments including interest were £5.96 million. In addition, new property leases with an inception value of £0.3 million and motor vehicles with an inception value of £0.6 million were capitalised under IFRS 16. This included the renewal of the lease for the Location One unit in Chobham, and additional flatbed trucks to bring the transportation of ground protection products within the Location One & Autotrak businesses in house.

Net debt, excluding IFRS 16 leases at the end of FY24 was £13.8 million (FY23: £12.8 million). Hire purchase liabilities reduced from £16.3 million at the end of FY23 to £16.2 million at the end of FY24, and cash reduced from £3.6 million to £2.4 million.

Neil Evans FCA

Chief Financial Officer

Consolidated Statement of Comprehensive Income

All amounts relate to continuing operations.

Consolidated Statement of Financial Position

Company Statement of Financial Position

The Company has elected to take exemption under section 408 of the Companies Act 2006 from presenting the Company statement of comprehensive income. The loss for the Company for the year ended 31 December 2024 was £2,646,301 (2023: profit £1,161,162).

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated Statement of Cashflows

Company Statement of Cashflows

Notes to the Financial Statements

1 Accounting policies

1.1 Basis of preparation

Facilities by ADF Plc (the "Company'') and its subsidiaries (together, the "Group'') is a public company limited by shares, incorporated, domiciled and registered in England and Wales in the UK. The registered number is 13761460 and the registered address is Ground Floor 31 Oldfield Road, Bocam Park, Pencoed, Bridgend, United Kingdom, CF35 5LJ.

The consolidated and Company financial statements are for the year ended 31 December 2024. They have been prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the UK Companies Act 2006. The financial statements have been prepared under the historical cost convention, as modified by the use of fair value for financial instruments measured at fair value. The financial statements are presented in thousands of pounds sterling ("£'000") except where otherwise indicated.

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to both the Company and the Group where applicable. The policies have been consistently applied to all the periods presented, unless otherwise stated.

For the year ended 31 December 2024, the following subsidiaries of the parent company are entitled to take exemptions from audit under Section 479A of the Companies Act 2006 relating to subsidiary companies.

The Company has provided a guarantee for all outstanding debts and liabilities to which the subsidiary companies listed above are subject at the end of the financial year, in accordance with Section 479C of the Companies Act 2006.

1.2 Going concern

The Group has continued to invest in growth throughout the financial year, with the acquisition of Autotrak in September 2024, and the Group have continued to trade throughout this period in a net asset position.

The Directors are aware of the challenges of the film and television industry, whereby the USA Writers (Writers Guild of America (WGA)) and Actors (Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA)) strikes impacted productions around the globe, from July 2023 through to late Autumn 2023. The strikes caused film and TV productions in the UK, on which ADF was engaged, to stop or delay productions that were scheduled to start filming in 2023 and in early 2024. The Directors are confident the Group is in a robust position to capitalise on the opportunity ahead, once previous production levels resume, underpinning confidence in the long-term success of the Group.

The Directors are continuing to identify acquisition opportunities as well as focussing on the continuation of the organic growth experienced in recent years. The Company acquired a new a business in the financial period and significant synergies are expected to continue to be achieved over the coming 12 months.

The current sales pipeline at the time of writing appears robust with visibility of returning seasons of some of our biggest productions including Slow Horses, Trigger Point, Silent Witness, Industry, The Gentlemen and Rivals.

In addition, Management have agreed an extended overdraft facility of £1 million effective from 15th April to provide additional working capital as the business ramps up to the summer season.

The financial statements have been prepared on the going concern basis, which the Directors believe to be appropriate for the following reasons: The Directors have prepared cash flow forecasts for the period from the two year period to 31 December 2026. They have applied a range of sensitivities to these forecasts and such forecasts and analysis have indicated that sufficient funds should be available to enable the Group to continue in operational existence for the foreseeable future by meeting its liabilities as they fall due for payment.

1.3 New standards, amendments, and interpretations

IFRSs applicable to the Financial Statements of the Group have been applied for the year ended 31 December 2024 and for the comparative year which have no material impact on the financial results or presentation.

Standards, amendments and interpretations issued but not yet effective:

The following standards are issued but not yet effective. The Group intends to adopt these standards, if applicable, when they become effective. It is not currently expected that these standards will have a material impact on the Group.

1.4 Basis of consolidation

The consolidated financial statements incorporate the results of the Company and all of its subsidiary undertakings. The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred, and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair value.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group.

Subsidiaries

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group until the date that control ceases.

Transactions eliminated on consolidation

Intra-group balances, and any gains and losses or income and expenses arising from intra-group transactions, are eliminated in preparing the financial information. Losses are eliminated in the same way as gains, but only to the extent that there is no evidence of impairment.

1.5 Revenue recognition

IFRS 15 "Revenue from Contracts with Customers" is a principle-based model of recognising revenue from contracts with customers. It has a five-step model that requires revenue to be recognised when control over goods and services are transferred to the customer.

Revenue includes facilities rental incomes, and fees from the provision of services incidental to facilities. Revenue is measured at the fair value of consideration received or receivable, net of discounts, VAT, and sales taxes.

Revenue from all other services rendered is recognised proportionally over the period in which the facilities are rented out based on the terms of the contract. The stage of completion is assessed on the basis of the actual service provided (number of days of rental in the accounting period).

1.6 Employee benefits: Pension obligations

The Group operates a defined contribution plan 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 in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

1.7 Net finance costs

Finance expense

Finance expense comprises of interest payable and lease interest which are expensed in the period in which they are incurred and reported in finance costs. Debt issue costs are capitalised and amortised over the life of the associated facility.

Finance income

Finance income relates to interest on bank deposits.

1.8 Foreign currency translation

Transactions in foreign currencies are translated to Sterling (the currency of the primary economic environment in which the Group operates) at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the statement of financial position date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign exchange differences arising on translation are recognised in the Statement of Comprehensive Income, within interest receivable and interest payable.

The consolidated and Company financial statements are presented in GBP, which is the Group's and Company's presentational currency. The functional currency of the Company is GBP.

1.9 Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in the consolidated statement of comprehensive income, except that a charge attributable to an item of income or expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the UK where the Group and Company operates and generate taxable income.

Deferred tax balances are recognised in respect of all temporary differences that have originated but not reversed by the balance sheet date, except:

- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

- Where timing differences relate to interests in subsidiaries, associates, branches and joint ventures and the Group and Company can control their reversal and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

1.10 Property plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the reducing balance and straight-line methods. Depreciation is provided on the following basis:

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.

Assets under construction are those that are being built or developed with the intention of being used in the business operations of the Group. These assets are not depreciated until they are completed and ready to be used. Once an asset is completed, it is transferred to a separate class of asset in property, plant and equipment or right-of-use assets and is then subject to depreciation. This transfer is made at the point of time the asset is completed and is ready for use.

The cost of the asset under construction includes all costs directly attributable to bringing the asset to the condition necessary for it to be used for its intended purpose. These costs may include direct labour, direct materials, and other expenses incurred during the construction period.

1.11 Impairment of assets

Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash‑generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non‑financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

1.12 Leased assets

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 at inception of a contract.

To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: an identified physically distinct asset can be identified; and the Group has the right to obtain substantially all of the economic benefits from the asset throughout the period of use and has the ability to direct the use of the asset over the lease term being able to restrict the usage of third parties as applicable.

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

- Leases of low value assets; and

- Leases with a duration of 12 months or less. 

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Group's incremental borrowing rate on commencement of the lease is used.

On initial recognition, the carrying value of the lease liability also includes:

- amounts expected to be payable under any residual value guarantee;

- the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to access that option; and

- any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of the termination option being exercised.

Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

- lease payments made at or before commencement of the lease;

- initial direct costs incurred; and

- the amount of any provision recognised where the Group is contractually required to dismantle, remove, or restore the leased asset.

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.

1.13 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short term highly liquid deposits which are subject to an insignificant risk of changes in value. In order to be classified as short term, the deposit must have a maturity of no more than three months at inception. The bank overdrafts that are repayable on demand and form an integral part of cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement.

1.14 Financial Instruments

Financial instruments are all financial assets and financial liabilities that comprise a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity and are detailed in notes to the accounts.

Financial assets and financial liabilities are recognised when the Group becomes party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable (other than financial assets or liabilities at fair value through profit or loss) are added to or deducted from the fair value as appropriate, on initial recognition.

Financial assets and financial liabilities are offset, and the net amount reported in the consolidated statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Financial assets

The Group and Company's financial assets held at amortised cost comprise trade and other receivables and cash and cash equivalents in the consolidated statement of financial position.

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers (e.g., trade receivables), but also incorporate other types of financial assets where the objective is to hold their assets in order to collect contractual cash flows and the contractual cash flows are solely payments of the principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment of financial assets

Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables.

Impairment provisions for other receivables are recognised based on the general impairment model within IFRS 9. In doing so, the Group follows the 3-stage approach to expected credit losses. Step 1 is to estimate the probability that the debtor will default over the next 12 months. Step 2 considers if the credit risk has increased significantly since initial recognition of the debtor. Finally, Step 3 considers if the debtor is credit impaired, following the criteria under IFRS 9.

The Group's financial liabilities held at amortised cost comprise trade payables and other short-dated monetary liabilities, and other borrowings in the consolidated statement of financial position.

Trade payables and other short-dated monetary liabilities are initially recognised at fair value and subsequently carried at amortised cost using the effective interest rate method.

Other borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective

interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position.

For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Unless otherwise indicated, the carrying values of the Group's and Company financial liabilities measured at amortised cost represents a reasonable approximation of their fair values.

Financial liabilities

The Group and Company measures its financial liabilities at amortised cost. All financial liabilities are recognised in the statement of financial position when the Group and Company becomes a party to the contractual provision of the instrument.

1.15 Share based payments

The Group issues equity-settled share-based incentives to certain employees in the form of share options. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant

date is expensed in the Group's financial statements on a straight-line basis over the estimated vesting period, based on the estimate of shares that will eventually vest.

Employee share scheme

Share options that have been issued by the Group have been reviewed under the Black Scholes model to evaluate any provision that may be required to set against the reserves of the Group. The share-based payment expense has been calculated and detailed per the notes to the financial statements.

Equity-settled share-based payments to employees are measured at the fair value of the equity instrument at the grant date. The fair value determined at grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in the profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves. 

Long-term incentive plan

The Group has a long-term incentive plan.

Long term incentive options that have been issued by the Group have been reviewed under the Monte Carlo model to evaluate any provision that may be required to set against the reserves of the Group. The share-based payment expense has been calculated and detailed per the notes to the financial statements. There are conditions associated with the long-term incentive options issued which requires the fair value charge associated with the options to be allocated over the minimum vesting period.

1.16 Provisions

Provisions are charged as an expense to the Statement of Comprehensive Income in the year that the Group becomes aware of the obligation and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

1.17 Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

1.18 Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker ('CODM'). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of the Group. The Group had three (2023: two) reporting segments, being Facilities by ADF (which represents all revenues and cost of sales generated from Facilities by ADF Plc and CAD Services Limited) , Location One (which represents all revenues and cost of sales generated from Location 1 Group Ltd and Location One Ltd) and Autotrak (which represents all revenues and cost of sales generated from Autotrak Portable Roadways Limited) during the year ending 31 December 2024. All revenues are from the hire of facilities and related services.

1.19 Investments

Investments are stated at their cost less impairment losses.

1.20 Inventories

Inventories are stated at the lower of cost or net realisable value. Net realisable value is the amount that can be realised from the sale of the inventory in the normal course of business after allowing for the costs of realisation. An allowance is recorded for obsolescence and slow-moving items.

Inventories held consist of stored goods to be used in the support of production vehicles and maintenance.

1.21 Intangible assets

Goodwill is recorded as an intangible asset and is the surplus of the cost of acquisition over the fair value of identifiable net assets acquired. Goodwill is reviewed annually for impairment. Any impairment identified as a result of the review is charged in the statement of profit or loss.

Intangible assets acquired on business combinations are capitalised separately from goodwill at fair value on initial recognition. Intangible assets are amortised on a straight-line basis over their useful lives.

Intangible assets, including software, acquired separately from a business are capitalised at cost. They are subsequently accounted for at cost less depreciation and impairment. The useful life of all intangible assets is estimated to be 10 years.

The estimated useful lives, residual values, and depreciation method are reviewed at the end of each period.

2 Critical accounting judgements and estimates

The preparation of the financial information in compliance with IFRS requires the use of certain critical accounting estimates. It also requires the Group management to exercise judgement and use assumptions in applying the Group's accounting policies. The resulting accounting estimates calculated using these judgements and assumptions will, by definition, seldom equal the related actual results but are based on historical experience and expectations of future events. Management believe that the estimates utilised in preparing the financial information are reasonable and prudent critical accounting judgements and estimates.

Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The judgements and key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial information is discussed below:

Key accounting estimates and judgements

The following are the areas requiring the use of estimates and judgements that may significantly impact the financial information.

Judgements

Hire of equipment revenues constitute leases

Any arrangement that is dependent on the use of a specific asset or assets should be accounted for as a lease under IFRS 16. The Directors have concluded that none of the Group contracts with customers include the use of an asset as substantive substitution rights exist throughout the period of use, whereby substitution would be economically beneficial to the Group. All revenues therefore are classified within the scope of IFRS 15.

Customer relationships

During the year, the Group acquired 100% of the issued share capital in Autotrak. On completion, the fair value of the customer relationships was valued by management at £989,482. The customer relationships were valued in line with IFRS 3, Business Combinations using the Multi-period Excess Earnings Method (''MEEM''). Management identified customer relationships as a significant value driver for Autotrak, and the MEEM was deemed the most appropriate valuation technique to reflect their contribution to future cash flows. Customer-related intangible assets, as defined under IFRS 3, encompass customer lists, order or production backlogs, customer contracts, and associated non-contractual customer relationships. These were all considered in the valuation process by management. The MEEM was calculated using key assumption within the valuation process, including the after-tax excess earnings attributable to the customer-related intangible asset. Details of customer relationships are provided in Note 14.

Estimates

Discount rates

IFRS 16 states that the lease payments shall be discounted using the lessee's incremental borrowing rate where the rate implicit in the lease cannot be readily determined. Accordingly, all lease payments have been discounted using the incremental borrowing rate (IBR). The IBR has been determined by management using a range of data including current economic and market conditions, review of current debt and capital within the Group, lease length and comparisons against seasoned corporate bond rates and other relevant data points. Significant changes in IBR would cause changes to both the value of the right-of-use assets and corresponding lease liabilities. Sensitivity analysis has been performed on IBR rates in Note 16 of these financial statements.

Impairment of intangible assets

Following the assessment of the recoverable amount of goodwill allocated to Location 1 Group Ltd to which goodwill of £7,211,397 was allocated on completion of the acquisition in the year ended 31 December 2022, the Directors consider the recoverable amount of goodwill allocated to Location 1 Group Ltd to be most sensitive to the achievement of the Group's long-term budget and projected forecasts. Budgets comprise forecasts of costs, and capital expenditure based on current and anticipated market conditions that have been considered and approved by the Board. Approved budgets cover the next twenty-four months, whilst the forecasted period extends to five years. The recoverable amount of the Location 1 Group Ltd (a singular cash-generating unit) is determined based on a value in use calculation which uses cash flow projections based on the financial budgets and forecasted five-year period, using a pre-tax discount rate of 15 per cent per annum.

The sensitivity analysis in respect of the recoverable amount of Location 1 Group Ltd goodwill is presented in Note 14. The Group recorded an impairment charge of £2,448,784 (2023: £1,019,080) in the current year ended 31 December 2024. The impairment in the current and comparative period was due to the continued uncertainty around Location One's short-term revenue growth due to impacts of the WGA and SAG-AFTRA strikes impacting productions from July 2023 through to late Autumn 2023.

Deferred consideration

During the year, the Group acquired 100% of the issued share capital in Autotrak. On completion of the acquisition contingent consideration was valued at £6,359,007. The contingent consideration value was estimated by management using a range of probabilities to determine the potential payment of earn out over the consideration period and the expected results of Autotrak. If Autotrak meets all earn out criteria the maximum liability to the Group would be £8,162,000 payable over a three-year period in cash. Further, if none of the criteria are met then no payment of consideration would be due, giving no liability to the Company. No payments were made in respect of deferred consideration in the year.

Similarly, contingent consideration relating to the acquisition of 100% of the share capital of Location 1 Group Ltd was valued at £Nil (2023: £60,474) at 31 December 2024. The contingent consideration value was estimated by management using a range of probabilities to determine the potential payment of earn out over the consideration period and the expected results of Location 1 Group Ltd. The maximum value of contingent consideration payable, based on meeting all the earn out criteria, would be a liability due of £2,657,788 (2023: £2,657,788). Further if none of the criteria are met then no payment of consideration would be due, giving no liability to the Company. No payments were made in respect of deferred consideration in the year. The reduction in valuation in the prior year resulted as the deferred consideration is based on a cumulative earn out target, whereby due to the WGA and SAG-AFTRA strikes impacting productions, from July 2023 through to late Autumn 2023, management have estimated it is unlikely that the earn out will be met.

3 Revenue from contracts with customers 

All of the Group's revenue was generated from the provision of services in the UK in the year ended 31 December 2024. The prior year ended 31 December 2023 revenues included amounts totalling £314,323 generated in the European Union. 3 platform customers make up 10% or more of revenue in the year ending 31 December 2024 (2023: 4). During the year management considered revenues derived from one source being the hire of facilities (2023: one).

Revenue from customers[3]

Timing of transfer of goods or services

The following table provides information about contract liabilities with customers, there were no contract assets as at 31 December 2024 (2023: None):

Revenue recognised in the year that was deferred from the previous year was £32,947 (2023: £575,697). The contract liabilities relate to the deferred income in respect of facilities rented. Revenue is being recognised across the actual service provided (number of days of rental in the accounting period).

4 Segmental reporting

The Group has three reporting segments, being Facilities by ADF (which represents all revenues and cost of sales generated from Facilities by ADF Plc and CAD Services Limited), Location One (which represents all revenues and cost of sales generated from Location 1 Group Ltd and Location One Ltd), and Autotrak (which represents all revenues and cost of sales generated from Autotrak Portable Roadways Limited). Autotrak was acquired by the Group on 10 September 2024. Total assets and liabilities are not provided to the CODM in the Group's internal management reporting by segment and therefore are not presented below, information on segments is reported at a gross profit level only. Information about geographical revenue is disclosed in Note 3. All non-current assets are located in the UK.