Final Results

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.

30 April 2025

Skillcast Group PLC

("Skillcast", the "Group" or the "Company")

Results for the twelve months ended 31 December 2024. Strong growth in recurring revenues, return to profitability, dividend increased.

Skillcast (AIM: SKL), the Governance, Risk and Compliance ("GRC") software and e-learning provider, is pleased to announce its audited results for the twelve months ended 31 December 2024. 

Highlights

· Total revenues up 17% at £13.2 million (2023: £11.3 million)

o  Revenue increase was all driven by strong growth in recurring subscription revenues, up 29% at £11.0 million (2023: £8.6 million).

o  Annualised recurring revenue (ARR)* up 25% to £11.6 million (December 2023: £9.3 million) predominantly from new client acquisitions.

o  Subscription revenues +110% in the three years since IPO in December 2021 and ARR has doubled.

o  Recurring subscriptions contributed to 83% of total revenues (2023: 76%).

o  Non-strategic professional services revenues declined 18% to £2.3 million (2023: £2.8 million).

· Gross margin increased by 3.9 ppts to 73.6% (2023: 69.7%).

· EBITDA of £0.5 million (2023: -£0.6 million)

o  Overhead growth rate continues to reduce, increasing by £0.7m/9% on the prior year (2023: £1.3 million/18%).

o  Headcount increased by 2% to 120 (2023: 118) at 31 December 2024.

o  Research and development is fully expensed.

· Strong net cash position at 31 December 2024: £9.1 million (31 December 2023: £7.2 million), representing c. 10 pence per ordinary share in the Company.

o  Up-front payments on increased subscription revenues and higher creditors.

o  Free cash flow* of £2.0 million (2023: -£0.3 million).

· Basic EPS 0.572 pence per share (2023: LPS -0.733 pence).

· Total dividend of 0.517 pence per share (2023: 0.447 pence).

o  Final dividend proposed: 0.349 pence (2023: 0.279 pence).

o  Interim dividend paid: 0.168 pence (2023: 0.168 pence).

· Operational highlights

o  Total client numbers grew 11% to 1,331 (2023: 1,249).

o  Net retention of 101% supported by price rises and two new subscription plans.

§ Premium offer representing 6% of ARR at December 2024.

§ Core compliance e-commerce self-serve offer, representing 1 % of ARR at December 2024.

o  Churn of 11% (2023: 7%).

o  AI digital assistant (Aida) developed in house for launch in 2025.

o  Recruited Head of Marketing to drive marketing activity, rebrand and new website launched March 2025, Advisory Board launched.

o  Maintained excellent customer service records (Feefo Platinum Service Award 4.9/5.0).

o  Enhanced trust and security with SOC Type 2 and Cyber Essentials Plus accreditation achieved and Trustcentre launched.

o  Professional services team reduced to reflect lower demand.

o  Rolled out new standard terms of service incorporating auto-renewal.

Current trading and outlook

We have had a solid start to the new financial year and have continued to trade in line with expectations. Our ARR is up more than 20% year on year, rising above £12m by March 2025. Non-strategic Professional Services revenues have started well though continue to have limited visibility.

We continue to drive brand awareness and innovation. Our Annual Summit in January aimed at L&D managers and Compliance Officers was a sell-out. The event included a demonstration of our AI-powered compliance assistant trialled by 87 customers and due to be launched this year.

The market demand for our GRC content and software is resilient and growing, and we have not experienced any impact of the recent political and global economic events on demand for our services. We remain confident in our ability to continue to grow and enhance margins.

Vivek Dodd, Chief Executive Officer of Skillcast, said:

"We are delighted with the continued growth in ARR to £11.6m at the end of FY 2024, +25% up on the prior year and double the pre-IPO level three years ago. This has led to higher subscription revenues of £11.0m, in line with the guidance given at IPO, and a return to profitability as expected.

"I am particularly pleased with the growth of our all-inclusive Premium plan, which reached 6% of total ARR within the first year of launch, and the take-up of CoreCompliance, our pre-configured, self-serve offering for small businesses. We are excited about the performance of Aida - our AI-powered compliance assistant launching this year, and how it has been received by clients and prospects. We expect it to support the sales of both Premium plan and CoreCompliance in the coming years.

"We are confident that our product and exceptional customer service will allow us to continue scaling up our ARR and revenues, and our operational gearing will allow us to continue improving our EBITDA margin."

*Further details on the calculation of adjusted EBITDA, ARR and free cash flow are set out in the Financial Review below

Enquiries:

Chairman's Statement

Introduction

This statement reports on the third full year of trading since Skillcast floated on the Stock Exchange in December 2021. I am pleased to report that not only is the Group reporting a strong set of results from the last twelve months, but when combined with the two previous years, it has delivered consistently on the plan that was set out to shareholders at the time of the IPO. The Board remains excited about the next stage in Skillcast's development, which we enter with an innovative GRC product portfolio, a proven business model and a talented and highly motivated team.

Results and Dividend

The business achieved a strong set of results for the year ended 31 December 2024, with progress made in key strategic areas. Most importantly, after two years of investment following the IPO, in 2024 the business returned to profitability, with adjusted EBITDA of £0.5 million (2023: loss of £0.6 million). This was achieved primarily through a growth in recurring subscription revenues of 29%. The results are a demonstration of the strength of our business model, as with a net retention of 101% of prior year subscriptions, a gross margin of around 75% and a relatively stable cost base following the expansion of 2022 and 2023, a very significant proportion of new sales revenue is now dropping straight through to the bottom line.

The Group retains a robust balance sheet, with net cash at 31 December 2024 of £9.1 million (2023: £7.2 million). Given this and the return to profitability, the Board has, as indicated previously, reviewed the dividend policy. We see dividends as an important financial discipline for a business with repeatable revenues that provide strong cash generation. Accordingly, at the AGM on 24 June 2025, the Board will propose a final dividend per share of 0.349p per share, up 25% on the 0.279p paid as the final dividend for 2023. Taken in combination with an interim dividend per share of 0.168p that was paid in October 2024, this will result in a full year dividend per share of 0.517p (2023: 0.447p) an increase of 16%. The Board's policy for the foreseeable future will be to increase dividends broadly in line with future increases in subscription revenue levels.

Strategy

Skillcast's overall strategy remains unchanged. Our purpose is to enable companies to build ethical and resilient workplaces and our vision is to be the leading provider of digital training and technology for workplace compliance. We are undertaking this against a market backdrop that is broadly helpful, with generally increasing regulation albeit macro-economic conditions are of course challenging and the attractions of our core market mean that it is increasingly competitive. Strategically we are focussed on the organic growth of our recurring subscription revenue stream and in ensuring that this delivers attractive margins and returns for shareholders.

Whilst we can reflect positively on the achievements against these goals over the last three years, the Board is very much aware of the challenges that face us moving forward and are adapting the strategy accordingly. As we grow bigger so maintaining the same percentage growth rate becomes an increasing challenge. Medium term, we are seeking to maintain growth rates of subscription revenues in the 20% range whilst driving margins to a similar level and hence achieve the "Rule of 40" (as explained in further detail below) by which world class SaaS businesses are measured. As set out in Vivek Dodd's CEO Report, we aim to achieve this through a mixture of on-going product innovations and efficiency initiatives and through targeting our marketing activities to areas and businesses where the simplicity of our offer and its ability to be customised to suit medium sized operations will most likely resonate. 

Given the growth in our cash reserves, we continue to view bolt-on acquisitions as an important potential accelerator of growth and strategy. We seek content-based acquisitions where we can leverage our existing technology stack to offer the wider content to our existing customers and conversely offer our technology and existing content to the acquired customers. In this regard, progress in 2024 has been challenging. We have found, unsurprisingly, that price expectations amongst private companies are considerably in excess of those we are experiencing in the public markets. We are mindful of our growing cash balance and will continue to seek ways to deploy the capital, albeit will only do so when we are comfortable with the returns it will offer to our shareholders.

Shareholder Engagement

I would like to thank investors for their support over the last twelve months. The fact that the business has doubled in size since we came to Market but that our valuation remains the same is a matter of frustration for both the Board and, we know, our shareholders. The Board recognises that this frustration is not confined to Skillcast but reflects challenges generally with the small cap London market. We continue to follow shareholders' advice to focus on running the business although we plan to be more proactive in the coming year with investor relations activity. 

We have enjoyed meeting with investors over the last twelve months at both formal meetings and investor conferences and events and have had wide ranging discussions on product development, M&A plans and dividend policy. We welcome the opportunity to speak with existing and prospective investors and look forward to welcoming shareholders to our AGM on 24 June. 

People and Organisation

During the year, James Saralis joined us an independent NED and Chair of the Remuneration Committee. We are delighted to have him on board and are benefiting from his counsel as an incumbent CEO of another listed business.

In line with our previously set out plans, headcount growth over the last twelve months has slowed, as we essentially completed the expansion investment in 2023. However, it is worth noting that headcount is now around 50% higher than it was when we floated. But importantly, despite that growth, the culture of the organisation has not changed, and it is to the credit of the senior team that they have managed to maintain that during the period of expansion. The results that have been delivered over the last twelve months are testament to the efforts of the whole staff and I want to express the thanks of the Board for their achievements in this regard.

Current Trading and Outlook

We have had a solid start to the new financial year and have continued to trade in line with expectations. Our ARR is up more than 20% year on year, rising above £12m by March 2025. Non-strategic Professional Services revenues have started well though continue to have limited visibility.

We continue to drive brand awareness and innovation. Our Annual Summit in January aimed at L&D managers and Compliance Officers was a sell-out. The event included a demonstration of our AI-powered compliance assistant trialled by 87 customers and due to be launched this year.

The market demand for our GRC content and software is resilient and growing, and we have not experienced any impact of the recent political and global economic events on demand for our services. We remain confident in our ability to continue to grow and enhance margins.

Richard Amos

Non-Executive Chairman

29 April 2025

CEO's Review

I am pleased to report another successful year for Skillcast in 2024. This year, we can see the results of a disciplined programme of investment in our talent, product and marketing we undertook following our IPO in December 2021. Our subscription revenues have more than doubled over three years since the IPO, and we've returned to profitability. The ARR at the end of the year was £11.6 million, +25% up on the year. Total revenue grew 18% and overheads by 9%, generating £0.5m of EBITDA, a £1.1 million improvement over 2023. Our EBITDA margin should continue to grow further in the coming periods due to our operational gearing.

However, the financials only tell a part of our story. Even more encouraging are the teams we've built at all levels in the Company, the robust procedures we've put in place for performance, financial control and governance, and the product and service improvements we've made for our customers. All of these should support our goal to sustain our ARR and revenue growth in the future.

Purpose and vision

Skillcast has supported businesses in the UK and beyond to build ethical and resilient workplaces and make compliance simple. Our comprehensive GRC solutions equip companies with the tools to strengthen their team and protect their reputation.

We are a leading provider of corporate compliance portals and digital courseware in the UK. This gives us access to a growing market with resilient demand. Our critical mass of over 1,300 clients gives us insights into compliance challenges and emerging needs that feed into our product development. Our experienced workforce and passion for customer service result in long-lasting relationships with clients, enabling us to innovate and drive down their compliance costs.

Our values and culture

We prioritise developing and promoting our existing talent to build knowledge and experience within our organisation. In 2024, we revisited our four values and strive to achieve our purpose by embedding and living them across the organisation:

· Care: we pay attention to detail, act responsibly, and truly care for our customers

· Collaboration: we're supportive, helpful, and respectful, working with businesses to achieve a common goal

· Transparency: we're open and honest and offer full transparency to everyone we work with

· Continuous Improvement: we're curious about new ideas and are always looking for ways to do things better

Our Chief People Officer leads our people and culture initiatives within our Executive Management Committee. All employees are eligible to receive additional remuneration above their base pay linked to their performance and demonstrating our values. Employees use Skillcast's compliance portal and tools to read and attest to policies and receive compliance training.

We undertake several initiatives to promote our values and culture, including quarterly virtual town halls, employee surveys, and various employee-led initiatives.

Our market

Skillcast serves companies predominantly in the UK that face an increasingly complex regulatory environment. To meet their obligations, companies must educate staff, maintain accurate records, and monitor and analyse employee conduct. As a result, many are turning to digital platforms like Skillcast to manage compliance efficiently and demonstrate accountability to regulators, customers, and stakeholders.

We estimate the Total Addressable Market (TAM) in the UK for platforms such as the Skillcast Portal to exceed £1.6 billion. This estimate is based on company size data from the UK Department for Business and Trade and Skillcast's pricing across relevant business segments. The current serviceable market is estimated at £0.5 billion by the global market research and advisory firm, Technavio (Corporate Compliance Training Market Analysis, Size and Forecast 2024-2028 by Technavio).

Around half of this market consists of small businesses (fewer than 50 employees), which Skillcast serves with our CoreCompliance solution. The remainder comprises mid-sized and large enterprises, which Skillcast serves with various plans for Managed Portal Services and Remote Services.

Business model

Skillcast offers innovative GRC solutions to make compliance simple. We enable companies to digitise and automate their compliance training, record-keeping, monitoring and other processes. By consolidating these functions onto a single platform, Skillcast streamlines operations and minimises the risk of compliance oversights, ensuring our clients have a more efficient and secure compliance framework. We aim to reduce operational costs while enhancing employees' compliance experience.

We are the sector leaders in staff compliance training with comprehensive coverage of corporate regulations. Our Essentials and Compliance Bites libraries cover all the key topics for general compliance in the UK. Our FCA Compliance and Insurance Compliance libraries cover all the key topics in the FCA Handbook for UK financial services firms. Our Global Compliance and Global Risk libraries cater to the needs of multinational corporations that need jurisdiction-neutral, multilingual training. Our off-the-shelf courses can be customised easily to meet every client's unique needs and risk perceptions.

Skillcast Portal is our technology platform, which features a learning management system (LMS) and various tools designed to facilitate compliance management. These tools include a Policy Hub for delivering corporate policies and gathering employee attestations, Anonymous Surveys for honest employee feedback, Staff Declarations for self-reported disclosures, Compliance Registers for documenting various compliance-related activities such as gifts & hospitality, and other features for managing and recording in-person training and events. This integrated platform ensures a uniform user and administrator experience, consolidates data by breaking down silos, and reduces the risk of compliance failures.

We offer three plan levels for our Managed Portal Services: Standard, Enhanced and Premium. All these plans are available through annual subscriptions, simplifying procurement and allowing businesses to deploy training and compliance resources on time and with minimal effort.

Skillcast Standard suits companies of all sizes that are getting started with staff compliance and want to build a compliance portal for their staff. Although this is the least expensive plan, it still comes with full corporate branding, dashboard reporting, and platinum-rated customer service with a designated Customer Success Manager (CSM). Additionally, clients can choose the e-learning libraries they need and additional tools for their compliance programme.

Skillcast Enhanced includes all the features of Standard and our innovative learning features: Aida- our AI compliance assistant, fast track completion options for experienced employees, diagnostics for automatic competency-based assignments, and nudge learning - combining our microlearning library with the question-of-the-day to make compliance programmes more effective.

Skillcast Premium includes all the features of Enhanced plus our suite of tools to make compliance management simple, including staff declarations, compliance registers, anonymous surveys, Policy Hub and Training 360 to track offline training and other activities.

We also provide e-learning courses for our customers to deploy on third-party portals. We now have an improved offering for such clients, called Skillcast Remote Services, which can enhance the functionality of the customers' portals along with the content provision. For small businesses, we offer CoreCompliance, a preconfigured, self-serve, e-commerce staff compliance e-learning solution. Clients can effortlessly set up their employees with access to 150+ engaging compliance courses, assign mandatory training and monitor all activity from intuitive administrator dashboards.

High-quality recurring subscription revenues

Staff compliance is a non-discretionary cost for many companies, especially in regulated sectors like financial services. This provides Skillcast with the potential to grow in even stagnant economic environments.

Subscriptions to our technology and content are the key drivers in our growth strategy. These subscriptions constitute a book of high-quality annual recurring revenues (ARR) contracts, which grew organically at 25% to £11.6 million in December 2024 (2023 growth 37% to £9.3 million in December 2023).

In 2024, 83% (2023: 76%) of our revenues came from such subscriptions, with the rest from professional services, which include bespoke content development and customisation of OTS courses and were lower at £2.3 million (2023: £2.8 million) as demand for large bespoke work fell. While not core to our growth strategy, we remain committed to our professional services, which are critical for helping our clients make compliance more relevant and engaging for their staff.

Our total revenue increased by 17% to £13.2 million (2023: £11.3 million), and EBITDA increased by £1.1 million to £0.5 million (2023: LBITDA of £0.6 million) as the benefits of our post-IPO investments started to become evident. With a break-even H1 2024, all our EBITDA was generated in H2 2024. Our free cash flow was £2.0 million (2023: £-0.3 million).

We typically enter into annual contracts for our subscriptions and invoice upfront. This gives us healthy cash flows from operations and high revenue visibility over the coming twelve months.

Strategic and operational progress in 2024

Our focus in 2024 remained on growing the subscription business, as measured by our ARR book, and on return to profitability as we neared the end of our post-IPO investment phase. We believe Skillcast has a tremendous growth opportunity to help companies simplify compliance as they seek to digitise their staff compliance to reduce costs, improve employee experience and reduce the risk of breaches in the face of ever-growing regulations.

Our business model of recurring annual subscriptions provides a stable base we can build upon with product upsells and new customer acquisitions.

Here are some of the highlights of the work done on our strategic objectives in 2024:

· Restructured the marketing team to drive data-driven decisions, refreshed the brand and rebuilt our website, which launched in March 2025.

· Attained Cyber Essentials Plus accreditation from the National Cyber Security Centre, achieved SOC 2 Type 2 compliance and launched our Trust Centre (trust.skillcast.com) to enhance our commitment to data security.

· Launched our Sandbox environment, which enables prospects to try out features in a live working environment to aid sales of our digital compliance solutions to clients.

· Launched our Advisory Board comprising pre-eminent compliance industry experts to provide strategic direction and endorse our proposition.

· Launched Skillcast Premium, our all-inclusive service product bundle that accounted for 6% of our total ARR by December 2024.

· Launched Skillcast CoreCompliance, our self-serve, cost-effective e-learning solution for small businesses, which accounted for 1% of ARR by December 2024.

· Rolled out new standard terms of service to our annual subscription contracts with automatic renewals, with nearly 95% acceptance of clients coming up for renewal accepting the new terms.

· Migrated customer support to a new platform to enable faster response times, chat-based support, as well as insights to drive further customer experience and productivity improvements.

· Developed Aida, the compliance assistant that helps employees engage with and clarify compliance concepts - undergone client trials in Q1 2025 with a launch planned for Q2.

· Started Partnership programmes to drive sales through referrals, resellers and platform integrations

· Improved employee benefits plan to sustain our high employee retention rate.

· Reduced the size of the professional services team in light of lower market demand for such services and implemented changes to refocus our bespoke development offering on areas of core strengths.

ESG

We are committed to promoting inclusivity, sustainability, and integrity, and fostering diversity, well-being, and personal growth within our organisation.

Environmental, Social, and Governance (ESG) is inherent in our products and services, not only in staff compliance that we promote but also in digitisation that helps lower waste and carbon footprint. We are equally focused on minimising our own environmental and social impact and reaching net-zero by 2050. In 2024, 100% renewable energy was sourced for our UK office. We also maintained our status as a Living Wage Employer, enhanced mental health and well-being and employee benefits. We continue to monitor risks and enhance our risk management framework. We have developed and reviewed all our policies and used our Policy Hub tool to raise staff awareness efficiently and effectively.

Vivek Dodd

Chief Executive Officer

29 April 2025

Financial Review

A third successful year post-IPO with revenues growing 17% on the year and overhead investment growth rate halving to 9% on the year. This has led to a return to profitability in the second half of the year as planned. By ending the year with a 25% increase in ARR, we remain well-placed for further revenue growth and improvement in profit margin growth in 2025.

Revenues for the year ended 31 December 2024 increased by 17% to £13.2 million (2023: £11.3 million), driven by new subscription customers, with ARR* growing 25% on the year to £11.6 million (2023: £9.3 million). In contrast, overheads increased by £0.7m/9% as the post-IPO investment phase ended and the Group returned to profitability. EBITDA increased £1.1m on the year to £0.5m (2023 LBITDA: £0.6m). Net cash at year-end of £9.1 million was 26% above last year (2023: £7.2 million), with free cash flow of £2.0 million (2023: -£0.3million).

Key Performance Indicators

Key performance indicators (KPIs) tracked through monthly reviews against targets approved by the Board

* defined later in the financial report in Alternative Performance Measures section

Revenue

61% of total revenue were derived from clients in the financial services industries, consistent with the previous year. 78% of total revenues were derived from the UK (2023: 79%), 11% from the EU (2023: 9%) and 11% from elsewhere (2023: 13%). The top 10 customers accounted for 15% of total revenues (2023: 23%).

Subscription revenues typically accrue from twelve-month contracts, invoiced up front, for our compliance e-learning libraries and compliance technology. During 2024, subscription revenue growth helped grow the proportion of revenues from subscriptions to 83% (2023: 76%) of total revenues.

Subscription ("SaaS") revenues grew 29% to £11.0 million (2023: £8.5 million). The growth was driven by a combination of new clients, product upsells and increased users at existing clients.

Subscription revenue growth was supported by the launch of several new products. In January 2024, Skillcast Premium was launched, an all-inclusive service bundle that includes e-learning and all our compliance management "regtech" products to support upsells. Customers on our Premium Plan accounted for 6% of our ARR by the end of December 2024.

In December 2023, we released Skillcast Core Compliance, our self-serve, cost-effective compliance e-learning solution for small businesses with up to 50 users. We started marketing this product in February 2024 and by December 2024 it accounted for 1% of ARR.

Annual recurring revenue (ARR*), our key performance indicator to measure subscription sales progress, grew by 25% to £11.6 million over the past 12 months (December 2023: £9.3 million). Average ARR per client increased 10% on the previous year and the number of subscription clients increased 14% to 1,328 (2023: 1,168). New sales lifted ARR by 23% from December 2023 and net retention rate was 101% (2023: 105%), which included 11% churn (2023: 7%). 2023 net retention was boosted by a standard 7% price rise on new business and renewals throughout the year. Since the IPO in December 2021, ARR has doubled to £11.6m at 31 December 2024 (31 December 2021: £5.8m).

Revenue from Professional Services was £2.3 million, which was 18% below the same period last year (2023: £2.8 million). The reduction reflected a lower 4% average spend per client and 15% fewer clients as increased economic uncertainty impacted client budgets for bespoke e-learning solutions.

Gross profit

Gross Profit Margin increased by 3.9 percentage points to 73.6% (2023: 69.7%). The increase was primarily due to greater productivity within the content team and a reduction in the Professional Services team in response to falling demand for bespoke Professional Services.

In addition, the prior year included one-off transitional higher cloud computing costs incurred during the migration of all clients to Microsoft Azure, which was completed in March 2023.

Gross Margin from our SaaS revenues increased to 80.1% (2023: 73.9%) through operational gearing while in our Professional Services business Gross Margins fell to 41.7% (2023: 56.5%).

Overheads

The rate of overhead growth reduced to 9% (2023: 18%) as the planned post-IPO investment phase was largely complete.

In absolute terms, overheads were £9.5 million in the period, an increase on the prior year of £0.7 million (2023: £1.3 million). 74% of overheads are employee-related (2023: 78%), and £0.2 million of the increase in the year was from higher employee costs. A further £0.2 million was incurred in consultancy costs as we switched to outsourcing our sales operations function. Marketing activity increased by £0.2 million on the prior year following the hire of our first Head of Marketing in January 2024. The remaining increase was derived from £0.1 million higher subscription costs and professional fees.

Overheads excluding depreciation and amortisation as a percentage of ARR fell during the year and represented 40% of ARR in H2 2024, 4 percentage points below H2 2021 (excluding IPO costs). The graph below demonstrates how this measure temporarily increased due to planned investments primarily in the commercial and organisational infrastructure to support ARR growth and is now falling back to lower than pre-IPO levels.

Headcount

On 31 December 2024, the total headcount had increased to 120 (31 December 2023: 118). Total average headcount increased in 2024 by 5% to 121 (2023: 115). The largest growth area was in the client services function, with an increase of seven heads during the period. Total staff costs increased 5% to £9.5 million (2023: £9.0 million), with average salary increases of 5% awarded in January 2024. In April 2024, the Company offered all employees private medical insurance, life assurance and employer pension contributions of 4% of basic salary. Prior to this time only UK employees benefitted from a stakeholder pension plan.

EBITDA

As a consequence of operational gearing in the business, increasing gross margin and slower overhead growth, the Group returned to sustained profitability and delivered a £1.1 million improvement in EBITDA* to £0.5 million for FY 2024 (2023: -£0.6 million).

The Rule of 40*** was 29% in the period, 3 percentage points below the prior year (2023: 32%).

Depreciation and amortisation

The Group incurred £0.3 million in depreciation and amortisation (December 2023: £0.3 million) relating to office and IT equipment and leases for its two offices in London and Malta. The Group does not capitalise any research or development costs.

Interest receivable

£0.3 million of bank interest was received on cash balances during the year (2023: £0.3 million) as the Group benefited from the interest rates and putting surplus cash on deposit.

Tax

The Group reported a profit before tax of £0.5 million (2023: loss of £0.6 million).

The taxation charge for the Group in 2024 was £0.1 million. No taxes are due in the UK for the current year as the Group intends to utilise losses from prior years.

Corporation tax of £0.1 million was paid during the year in relation to prior year UK corporation tax liabilities. This was an effective tax rate of 7% reduced by losses brought from previous years and the recognition of a deferred tax asset. Now the Group has returned to profitability it expects to be able to utilise this asset in future years.

Earnings per share (EPS)

The basic earnings per share for the period was 0.572 pence on 89.5 million shares (2023: -0.733 pence). On a diluted basis, on 89.7 million shares EPS was 0.570 pence (2023: not applicable).

Dividends

With a business backed by strong ARR growth supporting future recurring revenues that provide strong cash generation, the Board is committed to paying dividends. In light of the return to profitability the Board has updated its dividend policy and for the foreseeable future will increase dividends broadly in line with future increases in subscription revenue levels.

Accordingly, at the AGM on 24 June 2025, the Board will propose a final dividend per share of 0.349p up 25% on the 0.279p paid as the final dividend for 2023. Taken in combination with an interim dividend per share of 0.168p that was paid in October 2024 this will result in a full year dividend per share of 0.517p (2023: 0.447p) an increase of 16%. The final dividend will be paid on 25 July 2025 to shareholders on the register on 4 July 2025.

Balance sheet and cash flow

Net assets at 31 December 2024 were £5.8 million (31 December 2023: £5.7 million). The £0.1 million increase in the year was due to the £0.5 million in comprehensive income in the year less £0.4 million of dividend payments.

Non-current assets of £0.7 million at 31 December 2024 (31 December 2023: £0.8 million) reduced by a net £0.1 million as reducing office lease liabilities in accordance with IFRS 16. The Group does not capitalise any intellectual property additions to its products' content or technology, and costs are expensed as they are incurred.

Current assets, excluding cash, were £4.3 million at 31 December 2024 (31 December 2023: £4.2 million). This predominantly includes trade receivables which grew only 3% to £3.1 million at 31 December 2024 (31 December 2023: £3.0 million) despite the 17% growth in revenue on the year through improved cash collection. As a consequence, debtor days at 31 December 2024 were 54 (31 December 2023: 67). Debtors more than 60 days overdue represented 11% of trade receivables at 31 December 2024 (31 December 2023: 14%). There was small immaterial reduction in the allowance for expected credit losses in the year. A further £0.6 million of trade receivables is due from the Maltese tax authorities relating to withholding tax rebates on dividends declared from subsidiary companies.

Total liabilities at 31 December 2024 of £8.3 million increased by £1.7 million on the year (31 December 2023: £6.6 million). The biggest contributor to the increase was a £1.2 million increase in unrecognised revenue from subscription revenue signed contracts, representing a 27% increase on the year.

The Group has no bank debt and at 31 December 2024 held cash of £9.1 million (31 December 2023: £7.2 million). Free cash flow** during the year was £2.0 million (2023: -£0.3 million) as the Group generated cash from a return to profitability of £0.5 million (2023: -0.6 million), and up front payments from a growing contractual book of £1.8 million (2023: £1.4 million).

Alternative Performance Measures

The Group elects to report certain financial measures not defined or recognised under IFRS, including EBITDA. See note 3 of the Group Consolidated Accounts, Annual Recurring Revenue (ARR) and Free Cash Flow defined below.

*Annual Recurring Revenue (ARR)

ARR is also used to assess the performance and the trend of subscription revenue. ARR is calculated by multiplying the Monthly Recurring Revenue ("MRR") by twelve. MRR is defined as the subscription revenue recognised in a month, excluding any retrospective upward adjustments arising at the end of the contract where there have been more subscribers than a client originally contracted for, less any contract losses (Churn) or downward adjustments arising on contract renewal. The Directors consider that the ARR, derived from software-as-a-service (SaaS) sales, is a key measure of the performance of the business. The ARR increased by 37% in the year to £9.3 million at 31 December 2024.

** Free cash flow

Free Cash Fow is calculated as net cash flows from operations less capital expenditure and lease costs.

*** Rule of 40

The Rule of 40 is a defined as the addition of the EBITDA percentage margin in the year and the ARR percentage growth on the previous year.

Richard Steele

Chief Financial Officer

29 April 2025

Notes to the consolidated financial statements 

The aggregate amount of research and development expenditure recognised as expenses during the period is £1,291,200 (2023: £1,230,999).