TIDMGATC
RNS Number : 3365R
Gattaca PLC
04 November 2021
4 November 2021
Gattaca plc
Unaudited Preliminary Results for the year ended 31 July
2021
Improvement plan complete; well positioned for growth
Gattaca plc ("Gattaca" or the "Group"), the specialist
Engineering and Technology recruitment solutions business, today
announces its unaudited Preliminary Results for the year ended 31
July 2021.
Financial Highlights
Unaudited 2021 Restated 2020
==========================
Continuing Continuing Continuing Continuing Continuing Continuing
Reported underlying(2) Reported underlying(2) Reported underlying(2)
========== ============== ========== ============== ========== ==============
GBPm GBPm GBPm GBPm % %
========== ============== ========== ============== ========== ==============
Revenue 415.7 415.7 534.7 534.7 -22% -22%
========== ============== ========== ============== ========== ==============
Net Fee Income (NFI)(1) 42.1 42.1 52.8 52.8 -20% -20%
========== ============== ========== ============== ========== ==============
Profit from operations 3.3 3.6 3.5 6.2 -7% -41%
========== ============== ========== ============== ========== ==============
Profit before taxation 2.2 3.2 1.3 4.8 68% -32%
========== ============== ========== ============== ========== ==============
Basic earnings per
share 5.5 8.4 2.3 11.7 139% -28%
========== ============== ========== ============== ========== ==============
Diluted earnings
per share 5.5 8.4 2.2 11.7 150% -28%
========== ============== ========== ============== ========== ==============
Dividend per share 1.5 0.0
========== ============== ========== ============== ========== ==============
Net cash at end of
period (excluding
IFRS 16 lease liabilities) 19.9 27.3
========== ============== ========== ============== ========== ==============
Financial Performance
-- Notwithstanding the significant impact of the pandemic
on NFI, strong cost management resulted in continuing
underlying PBT GBP3.2m (2020 restated: GBP4.8m) down
32% on year to 31 July 2020
-- Robust balance sheet:
o Group adjusted net cash position of GBP19.9m at 31
July 2021 (31 July 2020: GBP27.3m net cash). Reported
net cash (including IFRS16 lease liabilities) was
GBP14.1m (2020: GBP19.6m).
o Revolving credit facility ('RCF') repaid in full
o The Group is now covenant free
o GBP4.7m of deferred VAT repaid
-- Dividends restarting at 1.5 pence per share (2020: nil
pence)
Operational Performance(3)
-- The entire reporting period was impacted by the global
pandemic resulting in Group continuing underlying NFI
of GBP42.1m, 20% down on year to 31 July 2020
-- Contract NFI represents 74% of group NFI (2020 restated:
74%) on a continuing basis
o Increased activity from our "RPO" (Permanent Recruitment
Process Outsourcing solutions) clients as the market
recovery has been led by permanent recruitment
o Further improvement to come on the contract front
including in our core infrastructure unit, which will
benefit from strong demand driven by major initiatives
such as UK Fibre investment, HS2 and Offshore 2025
-- UK Engineering, providing STEM skills to crucial engineering
projects, proved resilient. While NFI was down 17% year-on-year,
H2 2021 was up 10% on H1 2021
-- UK Technology NFI was 25% down year-on-year, with H2
2021 flat on H1. Significant investment has been made
in this area, with signs of growth evident post year-end
-- International continuing NFI was 30% lower year-on-year.
During the year, operations in Mexico were closed and
the South Africa business was in the process of being
sold, both are treated as discontinued
Strategic update
-- The successful completion of the Group's Improvement
Plan:
o Group wide restructuring completed to focus on our
eight target industry sectors including Defence and
Infrastructure
o Expansion of our fulfilment function, both in the
UK and via lower cost offshore resource
o Global technology platform live (from April 2021)
o Roll out of targeted marketing approach
-- The Group is now well positioned to grow
o Hiring continues within our sales and fulfilment functions
to support growth
o UK sales headcount up 16% between Jan 21 and July
21
o Over the coming year we will continue to invest in
our people and technology
-- The Group has refreshed its purpose, vision, mission
and values, focused on STEM skills which remain in short
supply
Outlook
Given the current market conditions, our clients are finding it
more challenging to identify and secure specialist talent, which
plays well to Gattaca's expertise in delivering critical skills and
talent for their businesses. With strong demand for STEM skills,
and our investment in our people and technology, we are well
positioned for growth.
Notwithstanding evolving pandemic and macro supply chain
factors, the business continues to trade in line with market
expectations. We continue to invest to ensure sustainable growth
over the long-term in our chosen markets.
Kevin Freeguard, CEO commented:
"Despite the challenges posed by the COVID-19 pandemic during
the financial year, we successfully completed our Group wide
Improvement Plan which included an organisational restructure, the
creation of a core fulfilment function, the establishment of market
sector facing sales structures, and implementing an integrated
global technology platform. Furthermore, we recently refreshed
Gattaca's purpose, vision, mission and values, helping to embed the
right mindset and culture across the Group. With these fundamental
initiatives complete and our markets recovering, we are now in the
right place, with the right tech platform as we invest in people to
support growth.
To support our new operating model, between January and July
2021, we increased sales headcount by 16%. Since July 2021, we have
continued to invest in sales headcount in our core growth STEM
sectors which offer significant long-term sustainable growth
potential. All of our core sectors are now in various stages of
recovery, and I anticipate continued improvement as momentum
builds. Given our confidence in the business, I am pleased that we
are resuming dividends."
The following footnotes apply, unless where otherwise indicated,
throughout these unaudited Preliminary Results:
(1) NFI is calculated as revenue less contractor payroll
costs
(2) Continuing underlying results exclude the NFI and profits /
(losses) before taxation of discontinued businesses predominantly
being operations in Mexico and South Africa (2021: GBP(1.2)m, 2020
: GBP(2.5)m), non-underlying items within administrative expenses
in 2021 primarily related to reversal of restructuring costs
provided for in prior year (2021: GBP(0.2)m, 2020 : GBP1.2m),
amortisation of acquired intangibles (2021: GBP0.5m, 2020:
GBP0.6m), impairment of acquired intangibles (2021: GBP0.0m, 2020:
GBP0.3m) and exchange (losses) / gains from revaluation of foreign
assets and liabilities (2021: GBP(0.7)m, 2020 restated:
GBP(0.8)m).
(3) NFI commentary is on an continuing underlying like for like
constant currency basis
(4) Cooperation with the US Department of Justice continues with
respect to historical transactions in our discontinued
telecommunication infrastructure business
For further information please contact:
Gattaca plc +44 (0) 1489 898989
Kevin Freeguard, Chief Executive Officer
Salar Farzad, Chief Financial Officer
Liberum Capital Limited (Nomad and
Broker) +44 (0) 20 3100 2000
Lauren Kettle
Robert Morton
Euan Brown
Citigate Dewe Rogerson +44 (0) 20 7638 9571
Jos Bieneman
Lucy Eyles
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain .
Chair's Statement
The pandemic had a significant impact on nearly all our clients,
candidates and colleagues throughout the whole of the financial
period. There was a noticeable positive change around mid-year as
many of our clients reassessed their talent requirements. It is
also notable that the STEM skill shortages that we have often
discussed are even more apparent as the economy improves. We are
very quickly moving to a candidate-led market.
We are determined that whilst the pandemic has had an impact on
our operations we will not let it define us. Our leadership team
and colleagues have grown immensely as a result of the challenges
thrown at them and we commend them accordingly. It has allowed us
to re-look at how we operate and we have found that hybrid working,
when done well, can be as productive as working full-time in the
office. This also enables us to recruit our own talent from a wider
pool, with many consultants able to be based closer to their
clients. This is the new 'norm' and we will embrace it.
Overview
The financial year has been a year of two halves. The first six
months remained significantly impacted by the pandemic as clients
were cautious in the search for talent. By mid-year there were
early signs of a recovery and the market for STEM skills had
rebounded. It is not back to the pre-pandemic levels as there are a
number of key markets where the recovery is slower than others, but
it is moving in the right direction. Initially we have seen a step
up in permanent opportunities and we also expect further growth
from our contractor base. The balance has swung in favour of
candidates and indeed in many areas there is a shortage of STEM
skills. This has always been anticipated but the speed of the
change has been surprising. There is no single reason for this and
we look forward to the challenge to support our clients and to be
seen as the STEM partner of choice.
Our leadership team have been exceptional throughout the year,
even though the majority of our people were working from home for
the whole period. They have used the opportunity to reset the
business for the post-pandemic period. The Improvement Plan is now
completed and in the final stages we implemented a revitalised
commission scheme, focused on core delivery for our larger clients,
embraced hybrid working, successfully supported our customers
through IR35 and launched our new systems. At the same time they
have worked tirelessly to support our people to ensure everyone
remains connected. In July we launched our new Purpose, Vision,
Mission and Values which we believe will ensure we deliver a
service that is so trusted that our clients, candidates and
colleagues recommend us without hesitation.
As part of the reset we initially had to make a number of
colleagues redundant during October 2020. This allowed us to keep
our costs under control at the low point of the pandemic cycle but
it has subsequently allowed us to address the balance of skills
required in the business. We have seen our numbers employed in UK
sales gradually increase in the second half (16% from January to
July).
Towards the end of the year we chose to close our operations in
Mexico as recent government legislation prohibiting outsourcing of
workers meant that it would no longer be financially viable to
operate in the market. We also agreed the divestment of our South
African operations to a management buyout. The sales operation in
South Africa was always borderline and we took the decision to
focus on our core support centre in the region who provide delivery
support for our UK and North American operations.
We remain focused on managing our working capital and our net
cash position. We ended the year with GBP19.9m of net cash
(excluding lease liabilities), compared with GBP27.3m at the end of
2020. This is largely due to the repayment of GBP4.7m of deferred
VAT together with a deterioration in debtor days. The latter is
closely monitored and we are cognisant that as our clients emerge
from the pandemic their balance sheets are often stretched.
Following the repayment of our revolving credit facility last
year we no longer have any covenant restrictions. In addition, we
have GBP53.4m liquidity at the year end, being our cash resources
and our undrawn invoice financing facility. Whilst future growth
will see the need for additional working capital we have mitigated
this to some extent by changes in contractor terms and therefore we
expect to maintain a strong balance sheet.
Dividend
When we announced we would not be paying any dividends in 2018,
the decision was not taken lightly. At that time we had net debt of
GBP40m and needed to address our balance sheet. We believe we have
now done so and feel confident that we can manage any challenges
thrown up by the pandemic. Our long-standing objective has been to
achieve a through-the-cycle dividend pay-out of approximately 50%
of profits after tax. The Board believe that this year we should
reinstate the dividend and feel that 1.5p per share is a reasonable
first step fulling towards our objective.
Diversity and inclusion
We recognise that we fell short on the gender balance on the
Board and indeed within our leadership group. We are grateful that
Tracey James joined the Board as a non-executive director with
effect from December 2020. Tracey chairs the Audit Committee and is
a member of the Remuneration Committee. Tracey is a chartered
accountant who has spent 26 years with Grant Thornton, the latter
14 years as an audit partner. As a result David Lawther has moved
over to chair the Remuneration Committee. It is the Board's
intention to appoint a further independent non-executive director
in the near term to address the balance between independent and
non-independent directors.
Below Board level we have also committed to ensuring that by
2024, 40% of our leadership group will be female. We recognise as
an organisation we need to redress the balance within the Group and
Tracey has agreed to provide Board sponsorship with Kevin to chair
our Diversity and Inclusion steering group. This group will look at
the wider aspects of diversity and inclusion.
Outlook
The fundamentals of our business model position us well for the
upswing in the economy. It is well recognised that the demand for
STEM skills will only increase and we are well balanced to fulfil
our role with our clients in finding the talent that they require.
Last year we were cautious regarding the timing and whilst we feel
more confident today we are also aware that this pandemic may well
be wounded but is not yet finished. There may well be twists and
turns over the coming months.
What we do know is that our business is in the best possible
position to exploit any market growth having been focused on our
core markets for over 37 years. We have left behind us Brexit,
IR35, new systems implementation and hopefully the worst of
COVID-19. What lies ahead is a period where the expectation for
major infrastructure projects in the UK is unprecedented and an
optimism amongst our client base that we are entering a growth
phase for STEM skills with a shortage of candidates. We are
therefore hopeful that as the markets return we will see a
significant recovery in the medium-term to our level of
profitability.
Patrick Shanley
Non-Executive Chair
CEO's Statement
Introduction
This has been a challenging year for our clients, candidates and
colleagues as we continued to be significantly impacted by the
effects of the global pandemic. Whilst successfully operating
remotely for a significant part of the year, we focused on ensuring
that we continued to support our clients with their talent
requirements through the challenges posed by the pandemic,
alongside managing operational costs to an appropriate level.
This could not have been achieved without the commitment,
dedication and expertise of our people. I would like to thank them
all as they have continued to focus on our clients, contractors and
candidates whilst managing the complexities of the new environment
that we have all had to adapt to. Each colleague is a valued member
of the Gattaca family.
Some difficult decisions were needed in the early part of the
year whilst the impact of the pandemic continued, namely the reset
of our cost base with a redundancy programme. We ensured the
appropriate operational scale during this time but also proactively
accelerated our plans to align the organisation with the markets
and our client's needs. This included the closure of our Mexico
business and the sale of our trading operations in South
Africa.
We worked extensively with our client and contractor base in the
period leading up to the much delayed IR35 changes in the private
sector which were implemented in April 2021, with relatively little
disruption compared to 2016 when the changes came into force in the
public sector.
Since February we have seen the markets returning to growth
across the majority of our major sectors, which has led to a
candidate short market. We are now in investment mode and in
January embarked on a sales hiring programme to invest in talent
with skill sets aligned to our new operating model. At the end of
the year our people numbers were 512 colleagues compared to 587 the
previous year.
The Group delivered net fee income of GBP42.1m (2020 restated:
GBP52.8m). The pandemic primarily impacted the last quarter of the
prior financial year, whereas it has impacted all of our 2021
results, albeit that we saw sequential growth of 5% in the second
half of the year. The Group is reporting continuing underlying
profits before tax of GBP3.2m (2020 restated: GBP4.8m), exceeding
our expectations at the beginning of the year.
During the year we also accelerated our plans to adjust our
operating model and I am pleased that these foundations are now in
place.
Accelerating the rebuild
The year ended July 2021 has been a significant year of
rebuilding for the Group as together with the senior leaders of the
business we accelerated and implemented a number of key initiatives
which were introduced in our last annual report. Whilst this
investment will be a factor in 2022 profits, it will set the
business up for growth in the medium and long-term.
Through our UK Engineering, Technology and International
businesses, we will be focused on the following market sectors:
-- Defence,
-- Energy,
-- Finance, banking and insurance,
-- Infrastructure,
-- Mobility,
-- Public sector technology,
-- Retail manufacturing and life sciences, and
-- Technology, media and telecoms.
These are sectors that have significant requirement for STEM
skills and that offer long-term sustainable growth potential.
With our focus on STEM skills, our sales activities are now
aligned to market sectors with an agile structure around account
management, account development and new client acquisition and we
have further increased the scale of our centralised delivery
capability.
Following our major systems investment programme we were pleased
to go live with our new technology platform across all businesses
in April. This is the biggest change programme the Group has ever
undertaken. This platform replaced all of our core systems and
whilst such a major change programme did inevitably cause some
brief disruption, we are already seeing substantial benefits. We
now have a holistic view of all our operations with granular
visibility to underlying activity, enabling more efficient and
effective customer delivery capability and deeper business insight
for the Group.
There is an increasing focus on Environmental, Social and
Governance ('ESG') matters and whilst this is an area that has
always been part of Gattaca's DNA we are mindful there is more we
can do.
As such, during the year we started to take a more structured
approach which is covered in more detail later in the strategic
report.
As we emerged from lockdown we have chosen to embrace hybrid
working as a core practice having observed some of the benefits
arising from the working patterns adopted during the pandemic. This
offers greater flexibility to our people which helps retention and
we believe enhances productivity, but also enables access to wider
markets for internal talent.
We have also revised our purpose, vision, mission and values to
ensure it is fully aligned to support the direction of the Group. I
am pleased with progress as we roll out and embed this across the
organisation.
Our vision to be the STEM staffing partner of choice is
underpinned by our four strategic priorities:
-- Sell to a market - growing our customer base and deepening relationships,
Add value by product - innovating and developing products to meet
-- customer needs,
Expert fulfilment by skill - enriching the customer experience and
-- enhancing our service delivery capability, and
Collaborative high performing culture - improving organisational alignment
-- and performance
.
With these changes made, our business model will now be better
positioned to support market demand.
Outlook
The demand for STEM skills remains high and in certain areas
clients are finding it more challenging to identify and secure
specialist talent. This plays well to our core capability which is
all about finding critical skills and expertise for businesses.
We have seen increasing optimism within our clients and
continued significant investment in major infrastructure projects
in the UK. We
continue to invest in sales headcount and expect sustainable
growth over the medium to long term in our chosen markets.
Finally, as part of our increasing confidence in the future we
are pleased to be resuming dividends.
Kevin Freeguard
Chief Executive Officer
Chief Financial Officers Report
Key highlights
-- Continuing underlying profit before tax of GBP3.2m for the year (2020
restated: GBP4.8m) in a period which continued to be significantly
impacted by the pandemic.
-- Adjusted net cash, which excludes IFRS 16 finance lease liabilities,
of GBP19.9m (2020: GBP27.3m).
-- Revolving credit facility ('RCF') repaid in October 2020 leaving the
group covenant free.
-- Completion of our new group-wide technology platform.
-- Investment in our staff adding 16% to our UK sales headcount between
January and July 2021.
Financial performance
On a continuing basis, revenue of GBP415.7m (2020 restated:
GBP534.7m) generated NFI of GBP42.1m (2020 restated: GBP52.8m). We
achieved contract NFI of GBP31.3m (2020 restated: GBP39.3m) at a
margin of 7.5% (2020 restated: 7.3%), and permanent recruitment
fees of GBP10.8m (2020 restated: GBP13.5m).
Underlying profit before tax from continuing operations was
GBP3.2m (2020 restated: GBP4.8m). Statutory profit after tax for
the total group was GBP0.6m (2020: loss of GBP1.8m).
Net cash at 31 July 2021 (excluding lease liabilities) was
GBP19.9m (31 July 2020: GBP27.3m), the reduction in net cash
year-on-year of GBP7.4m predominantly as a result of GBP4.7m
repayments of temporary VAT deferral (outstanding VAT deferral
payment at 31 July 2021: GBP5.6m). Whilst we continued to optimise
working capital including with regard to payment terms for certain
contractors, we had a significant but largely temporary increase in
our DSO ('Day Sales Outstanding').
Continuing underlying results
Continuing underlying results are shown beneath the consolidated
income statement. Continuing underlying profit before tax at
GBP3.2m (2020 restated: GBP4.8m) was GBP1.6m below last year with
the most significant factor being the impact of the COVID-19
pandemic through most of the period.
Whilst we moved to full remote working within days of the
various national restrictions without any interruption to our
operational capability, we saw a significant and relatively sudden
reduction in trading volumes, and having anticipated this, took
early mitigating actions on our cost base, including acceleration
of Improvement Plan efficiencies. We were also able to achieve
significant positive changes in terms of digitalisation and process
optimisation.
Discontinued operations and non-underlying costs
The group-wide Improvement Plan continued at pace during 2021
and drove some of the non-underlying costs below:
GBP'000 Profit before tax
----------------------------------------- -----------------
Continuing underlying profit before
tax 3,227
----------------------------------------- -----------------
Restructuring costs and onerous lease
payments 193
----------------------------------------- -----------------
Operating loss related to discontinued
operations (457)
----------------------------------------- -----------------
Restructuring and closure costs relating
to discontinued operations (693)
----------------------------------------- -----------------
Amortisation of acquired intangibles (548)
----------------------------------------- -----------------
Foreign exchange differences (741)
----------------------------------------- -----------------
Reported statutory profit before tax
for the total group 981
----------------------------------------- -----------------
In October 2020, the Group completed the UK restructure and the
final staff exit costs were lower than anticipated which led to a
GBP0.2m credit to continuing non-underlying costs above. On 30 July
2021, we announced the closure of our Mexican business and sale of
our South African trading operations which were not generating
appropriate returns, allowing us to devote resources to markets
with greater potential. We have retained a team in South Africa to
support our ongoing UK fulfilment and solutions operations.
We continue to co-operate with the US Department of Justice and
there have been no significant new matters in this regard during
the year. Legal fees on this matter were GBP29,000 in the year
(2020: GBP1.4m). As shown in Note 28 to the financial statements,
the Group is not currently in a position to know what the outcome
of these enquiries may be and we are therefore unable to quantify
the potential financial impact, if any.
Cost actions and UK Government Coronavirus Job Retention
Scheme
During the year we claimed GBP0.5m of government grants (2020:
GBP3.8m) with respect to our staff and contractors who were placed
on the Coronavirus Job Retention Scheme. Following the successful
conclusion of our group restructure in October 2020 we ended our
participation in the scheme. The group restructure allowed us to
rebalance resource levels in response to the new levels of demand
as a result of COVID-19. As demand started to return in the UK
recruitment market, we have added sales headcount based on our new
operating model and skill requirements, facing those markets where
we see most opportunity, growing our sales headcount by 16% between
January and July 2021.
Taxation
The Group's reported effective tax rate was 40.7% (2020: 50.5%)
as set out in Note 10. One of the drivers of our reduced rate was
due to a loss carry back claim under the COVID-19 related US Cares
Act enabling additional utilisation of local brought forward
losses. The continuing underlying effective tax rate was 15.7%
(2020 restated: 20.8%), similarly impacted by the same overseas
loss claims.
Earnings per share
Basic earnings per share was 1.8 pence (2020: (5.5) pence), and
on a fully diluted basis was 1.8 pence (2020: (5.5) pence).
Continuing underlying basic earnings per share was 8.4 pence
(2020 restated: 11.7 pence).
Dividends
The Board proposes to pay a final dividend of 1.5 pence (2020:
nil pence), amounting to GBP0.5 million in total. This will be paid
on 17 December 2021 to shareholders on the register as at close of
business on 12 November 2021. The ex-dividend date will be 11
November 2021.
Capital expenditure
Capital expenditure in the period of GBP2.2m (2020: GBP2.5m) was
mainly investment in software related to our Primary Business
Systems initiative where we have replaced our in-house built legacy
systems with fully integrated industry leading third party systems.
This will enhance the data flow and performance management across
the entire group. Following the successful go-live of this
substantial investment program in April 2021, we expect moderate to
more normal levels of capital expenditure in 2022.
Net assets and shares in issue at 31 July 2021
The Group had net assets of GBP40.9m (2020: GBP38.7m) and had
GBP32.3m (2020: GBP32.3m) fully paid ordinary shares in issue.
Cash flow and net cash/net debt
Working capital optimisation continues to be a key focus for the
Group. Net cash at 31 July 2021 was GBP14.1m (2020: GBP19.6m).
Adjusted net cash (net cash excluding IFRS 16 lease liabilities)
was GBP19.9m (2020: GBP27.3m).
During the period, we repaid GBP4.7m of deferred VAT to HMRC and
the outstanding VAT deferral payment as at 31 July 2021 was
GBP5.6m, which will be repaid in full by 31 January 2022. We have
also repaid the outstanding balance on our RCF (31 July 2020:
GBP7.5m) thus eliminating all covenants and significantly reducing
financial risk.
We have continued the roll out of the change to payment terms of
certain contractors from 7 to 28 days which is in alignment with
normal payment cycles for businesses and most company employees.
During the financial year this has resulted in further cashflow
benefit of GBP3.3m.
There was a significant increase in DSO to 43.9 (2020: 35.3)
using the countback methodology. Our high performing pay, bill and
collections team were heavily involved in the go-live of our new
technology platform which was the single biggest change initiative
undertaken in the Group's history, and this inevitably caused some
short term disruption and slightly longer billing times leading to
higher levels of accrued revenue. We estimate that approximately
75% of the increase in DSO was driven by this temporary disruption.
The remainder is largely driven by a change in mix of clients, for
example in infrastructure, where industry custom is for longer
payment terms and more complex, and therefore longer, billing
processes.
Cash used in operating activities was GBP2.4m compared to
GBP57.6m cash generated in 2020. In 2020 cash from operating
activities was significantly positively impacted by the sudden
reduction in trading and therefore receivables balances. In 2021,
our receivables have begun to increase as we return to growth. We
expect our working capital requirement to be lower as we grow, due
to the recent change in certain contractors payment terms from 7 to
28 days.
Banking facilities and interest rate risk
On 27 October 2020, the Group repaid the GBP7.5m remaining
outstanding RCF balance and cancelled the facility. As a result the
Group no longer has any covenant obligations. As of 31 July 2021
the Group had a working capital facility of GBP75m. This facility
includes both recourse and non-recourse facility. Under the terms
of the non-recourse facility, the trade receivables assigned to the
facility are owned by HSBC and so have been derecognised from the
Group's statement of financial position; in addition, the
non-recourse working capital facility does not meet the definition
of loans and borrowings under IFRS. The utilisation of this
facility at 31 July 2021 was GBP9.3m recourse and GBP14.2m
non-recourse with GBP7.1m restricted cash collected from customers
relating to non-recourse facility.
Critical accounting policies
The statement of significant accounting policies is set out in
Note 1 to the financial statements.
Group financial risk management
The board reviews and agrees policies for managing financial
risks. The Group's finance function is responsible for managing
investment and funding requirements including banking and cash flow
monitoring. It seeks to ensure that adequate liquidity exists at
all times, to meet its cash requirements. The Group's financial
instruments comprise borrowings, cash and various items, such as
trade receivables and trade payables that arise from its
operations, and some matching forward foreign exchange contracts.
The Group does not trade in financial instruments. The main risks
arising from the Group's financial instruments are described
below.
Credit risk
The Group seeks to trade only with recognised, creditworthy
third parties. We monitor receivable and unbilled balances on an
ongoing basis and in 2021 have taken a conservative approach to
receivables and unbilled risk and have increased our loss allowance
by GBP0.2m to GBP4.5m.
There are no significant concentrations of credit risk within
the group, with no single debtor accounting for more than 7% (2020:
8%) of total receivables balances at 31 July 2021.
In October 2021 NMCN Plc entered into administration. We first
became aware that this client had some financial difficulties and
had embarked on a refinancing path in February 2021 and since then
we continued to support them to protect our existing receivable
asset in the expectation that the refinancing was likely to be
successful. Our exposure at 31 July 2021 was GBP0.8m (which had
increased to GBP1.4m in total by in October 2021 when the client
went into administration). The July exposure was covered by the
existing expected credit loss provision thus not impacting PBT. We
had increased this provision during the pandemic taking account of
market conditions and the situation of this particular client.
Foreign currency risk
The Group generates 8% of its annualised NFI from continuing
business in international markets. The Group does face risks to
both its reported performance and cash position arising from the
effects of exchange rate fluctuations. The Group manages these
risks by matching sales and direct costs in the same currency and
where appropriate entering into forward exchange contracts to
effect the same where sales and costs are not in the same
currency.
Salar Farzad
Chief Financial Officer
Consolidated Income Statement
For the year ended 31 July 2021
2021 2020
unaudited Restated(1)
Note GBP'000 GBP'000
--------------------------------------------------- ---- ---------- ------------
Continuing operations
--------------------------------------------------- ---- ---------- ------------
Revenue 2 415,726 534,709
--------------------------------------------------- ---- ---------- ------------
Cost of sales (373,646) (481,953)
--------------------------------------------------- ---- ---------- ------------
Gross profit 2 42,080 52,756
--------------------------------------------------- ---- ---------- ------------
Administrative expenses(2) (38,796) (49,218)
--------------------------------------------------- ---- ---------- ------------
Profit from continuing operations 4 3,284 3,538
--------------------------------------------------- ---- ---------- ------------
Finance income 6 56 24
--------------------------------------------------- ---- ---------- ------------
Finance cost 7 (1,136) (2,245)
--------------------------------------------------- ---- ---------- ------------
Profit before taxation 2,204 1,317
--------------------------------------------------- ---- ---------- ------------
Taxation 10 (415) (590)
--------------------------------------------------- ---- ---------- ------------
Profit for the year after taxation from continuing
operations 1,789 727
--------------------------------------------------- ---- ---------- ------------
Discontinued operations
--------------------------------------------------- ---- ---------- ------------
Loss for the year from discontinued operations
(attributable to equity holders of the Company) 11 (1,208) (2,508)
--------------------------------------------------- ---- ---------- ------------
Profit/(loss) for the year 581 (1,781)
--------------------------------------------------- ---- ---------- ------------
Profit/(loss) for the year for 2021 and 2020 are wholly
attributable to equity holders of the Company. The Company has
elected to take the exemption under section 408 of the Companies
Act 2006 from presenting the parent company income statement.
2021 2020
unaudited
Total earnings per ordinary share Note pence pence
------------------------------------------------- ---- ----------- -----------
Basic earnings per share 12 1.8 (5.5)
------------------------------------------------- ---- ----------- -----------
Diluted earnings per share 12 1.8 (5.5)
------------------------------------------------- ---- ----------- -----------
2021 Restated(1)
unaudited 2020
Earnings from continuing operations per ordinary
share Note pence pence
------------------------------------------------- ---- ----------- -----------
Basic earnings per share 12 5.5 2.3
------------------------------------------------- ---- ----------- -----------
Diluted earnings per share 12 5.5 2.2
------------------------------------------------- ---- ----------- -----------
Reconciliation to adjusted profit measure
Underlying profit is the Group's key adjusted profit measure;
profit from continuing operations is adjusted to exclude
non-underlying income and expenditure as defined in the Group's
accounting policy, amortisation and impairment of goodwill and
acquired intangibles, impairment of leased right-of-use assets and
net foreign exchange gains or losses.
2021 2020
unaudited Restated(1)
Note GBP'000 GBP'000
---------------------------------------------------- ---- ---------- ------------
Profit from continuing operations 3,284 3,538
---------------------------------------------------- ---- ---------- ------------
Add
---------------------------------------------------- ---- ---------- ------------
Depreciation of property, plant and equipment,
depreciation of leased right-of-use assets
and amortisation of software and software licences 2 2,467 3,088
---------------------------------------------------- ---- ---------- ------------
Non-underlying items included within administrative
expenses 2,4 (193) 1,248
---------------------------------------------------- ---- ---------- ------------
Amortisation and impairment of goodwill and
acquired intangibles and impairment of leased
right-of-use assets 2 548 1,382
---------------------------------------------------- ---- ---------- ------------
Underlying EBITDA 6,106 9,256
---------------------------------------------------- ---- ---------- ------------
Less
---------------------------------------------------- ---- ---------- ------------
Depreciation and impairment of property, plant
and equipment, leased right-of-use assets and
amortisation of software and software licences (2,467) (3,088)
---------------------------------------------------- ---- ---------- ------------
Net finance costs excluding foreign exchange
gains and losses 6,7 (412) (1,389)
---------------------------------------------------- ---- ---------- ------------
Underlying profit before taxation 3,227 4,779
---------------------------------------------------- ---- ---------- ------------
Underlying taxation 10 (506) (995)
---------------------------------------------------- ---- ---------- ------------
Underlying profit after taxation from continuing
operations 2,721 3,784
---------------------------------------------------- ---- ---------- ------------
1 2020 figures have been restated for the presentation of
discontinued operations as explained in Note 11.
2 Administrative expenses from continuing operations includes
net impairment losses on trade receivables and accrued income of
GBP420,000 (2020 restated: GBP2,554,000).
Consolidated Statement of Comprehensive Income
For the year ended 31 July 2021
2021 2020
unaudited
GBP'000 GBP'000
------------------------------------------------------------ ---------- ------------
Profit/(loss) for the year 581 (1,781)
------------------------------------------------------------ ---------- ------------
Other comprehensive income/(loss)
------------------------------------------------------------ ---------- ------------
Items that may be reclassified subsequently to profit
or loss:
------------------------------------------------------------ ---------- ------------
Exchange differences on translation of foreign operations 281 (1,091)
------------------------------------------------------------ ---------- ------------
Other comprehensive income/(loss) for the year 281 (1,091)
------------------------------------------------------------ ---------- ------------
Total comprehensive income/(loss) for the year attributable
to equity holders of the parent 862 (2,872)
------------------------------------------------------------ ---------- ------------
2021 2020
unaudited Restated(1)
GBP'000 GBP'000
------------------------------------------------------------ ---------- ------------
Attributable to:
------------------------------------------------------------ ---------- ------------
Continuing operations 2,022 507
------------------------------------------------------------ ---------- ------------
Discontinued operations (1,160) (3,379)
------------------------------------------------------------ ---------- ------------
862 (2,872)
------------------------------------------------------------ ---------- ------------
1 2020 figures have been restated for the presentation of
discontinued operations as explained in Note 11.
Consolidated and Company Statement of Changes in Equity
(unaudited)
For the year ended 31 July 2021
A) Consolidated
Share-based Treasury
Share Share Merger payment Translation shares Retained
capital premium reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
At 1 August 2019 as
per
originally presented 323 8,706 28,750 753 944 (140) 2,571 41,907
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Adjustment on initial
application of IFRS
16, net of tax - - - - - - 770 770
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Restated total equity
at
1 August 2019 323 8,706 28,750 753 944 (140) 3,341 42,677
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Loss for the year - - - - - - (1,781) (1,781)
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Other comprehensive
loss - - - - (1,091) - - (1,091)
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Total comprehensive
loss - - - - (1,091) - (1,781) (2,872)
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Deferred tax movement
in respect of share
options - - - - - - (16) (16)
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Reversal of share-based
payments charge (Note
23) - - - (60) - - - (60)
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Share-based payments
reserves transfer - - - (167) - - 167 -
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Issue of treasury shares
to employees - - - - - 43 - 43
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Transactions with owners - - - (227) - 43 151 (33)
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
At 31 July 2020 323 8,706 28,750 526 (147) (97) 1,711 39,772
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
At 1 August 2020 323 8,706 28,750 526 (147) (97) 1,711 39,772
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Profit for the year - - - - - - 581 581
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Other comprehensive
income - - - - 281 - - 281
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Total comprehensive
income - - - - 281 - 581 862
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Deferred tax movement
in respect of share
options - - - - - - 65 65
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Share-based payments
charge
(Note 23) - - - 104 - - - 104
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Share-based payments
reserves transfer - - - (176) - - 176 -
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Issue of treasury shares
to employees - - - - - 60 - 60
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
Transactions with owners - - - (72) - 60 241 229
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
At 31 July 2021 323 8,706 28,750 454 134 (37) 2,533 40,863
------------------------- -------- -------- -------- ----------- ----------- -------- --------- --------
B) Company
Share-based Treasury
Share Share Merger payment shares Retained
capital premium reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
At 1 August 2019 323 8,706 28,526 753 - 2,390 40,698
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Loss and total comprehensive
expense for
the year (Note 9) - - - - - (1,111) (1,111)
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Reversal of share-based payments
charge
(Note 23) - - - (60) - - (60)
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Share-based payments reserves
transfer - - - (167) - 167 -
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Transactions with owners - - - (227) - 167 (60)
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
At 31 July 2020 323 8,706 28,526 526 - 1,446 39,527
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
At 1 August 2020 323 8,706 28,526 526 - 1,446 39,527
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Loss and total comprehensive
expense
for the year (Note 9) - - - - - (866) (866)
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Share-based payments charge
(Note 23) - - - 104 - - 104
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Share-based payments reserves
transfer - - - (176) - 176 -
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Purchase of treasury shares - - - - (16) - (16)
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Transactions with owners - - - (72) (16) 176 88
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
At 31 July 2021 323 8,706 28,526 454 (16) 756 38,749
--------------------------------- -------- -------- -------- ----------- -------- --------- --------
Consolidated and Company Statement of Financial Position
As at 31 July 2021
Group Company
------------------------ --------------------
2021 2020 2021 2020
unaudited restated(1) unaudited
Note GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ---- ---------- ------------ ---------- --------
Non-current assets
-------------------------------- ---- ---------- ------------ ---------- --------
Goodwill and intangible assets 13 13,778 12,877 13 16
-------------------------------- ---- ---------- ------------ ---------- --------
Property, plant and equipment 14 1,578 1,492 - -
-------------------------------- ---- ---------- ------------ ---------- --------
Right-of-use assets 22 5,674 7,338 - -
-------------------------------- ---- ---------- ------------ ---------- --------
Investments 15 - 19 38,463 8,520
-------------------------------- ---- ---------- ------------ ---------- --------
Deferred tax assets 16 - - - -
-------------------------------- ---- ---------- ------------ ---------- --------
Total non-current assets 21,030 21,726 38,476 8,536
-------------------------------- ---- ---------- ------------ ---------- --------
Current assets
-------------------------------- ---- ---------- ------------ ---------- --------
Trade and other receivables 17 63,937 48,862 3,046 101,610
-------------------------------- ---- ---------- ------------ ---------- --------
Corporation tax receivables 818 26 195 275
-------------------------------- ---- ---------- ------------ ---------- --------
Cash and cash equivalents 29,238 34,796 4 -
-------------------------------- ---- ---------- ------------ ---------- --------
Assets classified as held for
sale 11 346 - - -
-------------------------------- ---- ---------- ------------ ---------- --------
Total current assets 94,339 83,684 3,245 101,885
-------------------------------- ---- ---------- ------------ ---------- --------
Total assets 115,369 105,410 41,721 110,421
-------------------------------- ---- ---------- ------------ ---------- --------
Non-current liabilities
-------------------------------- ---- ---------- ------------ ---------- --------
Deferred tax liabilities 16 (524) (277) - -
-------------------------------- ---- ---------- ------------ ---------- --------
Provisions 18 (1,269) (1,587) - -
-------------------------------- ---- ---------- ------------ ---------- --------
Lease liabilities 22 (4,281) (5,746) - -
-------------------------------- ---- ---------- ------------ ---------- --------
Bank loans and borrowings 20 - (7,304) - (7,304)
-------------------------------- ---- ---------- ------------ ---------- --------
Total non-current liabilities (6,074) (14,914) - (7,304)
-------------------------------- ---- ---------- ------------ ---------- --------
Current liabilities
-------------------------------- ---- ---------- ------------ ---------- --------
Trade and other payables 19 (56,121) (46,129) (2,972) (63,590)
-------------------------------- ---- ---------- ------------ ---------- --------
Provisions 18 (464) (1,207) - -
-------------------------------- ---- ---------- ------------ ---------- --------
Current tax liabilities (796) (1,247) - -
-------------------------------- ---- ---------- ------------ ---------- --------
Lease liabilities 22 (1,480) (1,990) - -
-------------------------------- ---- ---------- ------------ ---------- --------
Bank loans and borrowings 20 (9,348) (151) - -
-------------------------------- ---- ---------- ------------ ---------- --------
Liabilities directly associated
with assets classified as held
for sale 11 (223) - - -
-------------------------------- ---- ---------- ------------ ---------- --------
Total current liabilities (68,432) (50,724) (2,972) (63,590)
-------------------------------- ---- ---------- ------------ ---------- --------
Total liabilities (74,506) (65,638) (2,972) (70,894)
-------------------------------- ---- ---------- ------------ ---------- --------
Net assets 40,863 39,772 38,749 39,527
-------------------------------- ---- ---------- ------------ ---------- --------
Equity
-------------------------------- ---- ---------- ------------ ---------- --------
Share capital 23 323 323 323 323
-------------------------------- ---- ---------- ------------ ---------- --------
Share premium 8,706 8,706 8,706 8,706
-------------------------------- ---- ---------- ------------ ---------- --------
Merger reserve 28,750 28,750 28,526 28,526
-------------------------------- ---- ---------- ------------ ---------- --------
Share-based payment reserve 454 526 454 526
-------------------------------- ---- ---------- ------------ ---------- --------
Translation reserve 134 (147) - -
-------------------------------- ---- ---------- ------------ ---------- --------
Treasury shares reserve (37) (97) (16) -
-------------------------------- ---- ---------- ------------ ---------- --------
Retained earnings 2,533 1,711 756 1,446
-------------------------------- ---- ---------- ------------ ---------- --------
Total equity 40,863 39,772 38,749 39,527
-------------------------------- ---- ---------- ------------ ---------- --------
The amount of loss generated by the parent Company was
GBP866,000 for the year ended 31 July 2021 (2020: loss of
GBP1,111,000).
Salar Farzad
Chief Financial Officer
1 Presentation of provisions between current and non-current
liabilities for the year ended 31 July 2020 has been restated as
explained in Note 1.24
Consolidated and Company Cash Flow Statements
For the year ended 31 July 2021
Group Company
-------------------------------------------- ---- --------------------- --------------------
2021 2020 2021 2020
unaudited unaudited
Note GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------- ---- ---------- --------- ---------- --------
Cash flows from operating activities
-------------------------------------------- ---- ---------- --------- ---------- --------
Profit/(loss) after taxation 581 (1,781) (866) (1,111)
-------------------------------------------- ---- ---------- --------- ---------- --------
Adjustments for:
-------------------------------------------- ---- ---------- --------- ---------- --------
Depreciation of property, plant and
equipment and amortisation
of goodwill and intangible assets 4 1,183 1,831 3 4
-------------------------------------------- ---- ---------- --------- ---------- --------
Depreciation of leased right-of-use
assets 4 1,875 2,041 - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Profits from sale of subsidiary, associate
or investment - (304) - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Loss on disposal of property, plant
and equipment 4 8 52 - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Impairment of goodwill and acquired
intangibles 4 - 334 - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Impairment of right-of-use assets 4 183 432 - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Impairment of property, plant and equipment 4 18 - - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Interest income (65) (91) - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Interest costs 1,218 1,936 260 593
-------------------------------------------- ---- ---------- --------- ---------- --------
Taxation expense recognised in income
statement 400 598 (189) (339)
-------------------------------------------- ---- ---------- --------- ---------- --------
(Increase)/decrease in trade and other
receivables (15,384) 47,537 68,992 -
-------------------------------------------- ---- ---------- --------- ---------- --------
Increase /(decrease) in trade and other
payables 10,098 5,453 (60,617) 9,120
-------------------------------------------- ---- ---------- --------- ---------- --------
(Decrease)/increase in provisions (1,064) 1,085 - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Share-based payment charge 23 271 77 - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Cash (used in)/generated from operations (678) 59,200 7,583 8,267
-------------------------------------------- ---- ---------- --------- ---------- --------
Interest paid (320) (1,052) (63) (524)
-------------------------------------------- ---- ---------- --------- ---------- --------
Interest on lease liabilities (156) (214) - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Interest received 65 91 - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Income taxes paid (1,322) (387) - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Cash (used in)/generated from operating
activities (2,411) 57,638 7,520 7,743
-------------------------------------------- ---- ---------- --------- ---------- --------
Cash flows from investing activities
-------------------------------------------- ---- ---------- --------- ---------- --------
Purchase of plant and equipment 14 (332) (191) - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Purchase of intangible assets 13 (1,872) (2,348) - (20)
-------------------------------------------- ---- ---------- --------- ---------- --------
Purchase of investments 15 - (19) - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Proceeds from sale of subsidiary, associate
or investment - 304 - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Cash used in investing activities (2,204) (2,254) - (20)
-------------------------------------------- ---- ---------- --------- ---------- --------
Cash flows from financing activities
-------------------------------------------- ---- ---------- --------- ---------- --------
Lease liability principal repayment (2,355) (1,987) - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Issue from/(purchase of) treasury shares 60 (67) (16) -
-------------------------------------------- ---- ---------- --------- ---------- --------
Working capital facility utilised/(repaid) 9,197 (28,968) - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Finance costs paid - (223) - (223)
-------------------------------------------- ---- ---------- --------- ---------- --------
Repayment of term loan (7,500) (7,500) (7,500) (7,500)
-------------------------------------------- ---- ---------- --------- ---------- --------
Cash used in financing activities (598) (38,745) (7,516) (7,723)
-------------------------------------------- ---- ---------- --------- ---------- --------
Effects of exchange rates on cash and
cash equivalents (345) (1,016) - -
-------------------------------------------- ---- ---------- --------- ---------- --------
(Decrease)/increase in cash and cash
equivalents (5,558) 15,623 4 -
-------------------------------------------- ---- ---------- --------- ---------- --------
Cash and cash equivalents at the beginning
of year 34,796 19,173 - -
-------------------------------------------- ---- ---------- --------- ---------- --------
Cash and cash equivalents at end of
year (1) 29,238 34,796 4 -
-------------------------------------------- ---- ---------- --------- ---------- --------
Net decrease in cash and cash equivalents for discontinued
operations was GBP1,534,000 (2020 restated: decrease of
GBP3,059,000).
1 Included in cash and cash equivalents is GBP7,115,000 of
restricted cash (2020: GBP2,034,000) which meets the definition of
cash and cash equivalents but is not available for use by the
Group. This balance arises from the Group's non-recourse working
capital arrangements, which were entered into in 2020 as explained
in Note 20.
Unaudited Notes Forming Part of the Financial Statements
1 The Group and Company Significant Accounting Policies (unaudited)
1.1 The Business of the Group
Gattaca plc ('the Company') and its subsidiaries (together 'the
Group') is a human capital resources business providing contract
and permanent recruitment services in the private and public
sectors. The Company is a public limited company, which is listed
on the Alternative Investment Market (AIM) and is incorporated and
domiciled in England, United Kingdom. The Company's address is:
1450 Parkway, Solent Business Park Whiteley, Fareham, Hampshire,
PO15 7AF. The registration number is 04426322.
1.2 Basis of preparation of the financial statements
The unaudited financial statements of Gattaca plc have been
prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006.
The information for the year ended 31 July 2021 does not
constitute statutory accounts for the purposes of section 435 of
the Companies Act 2006. A copy of the accounts for the year ended
31 July 2020 was delivered to the Registrar of Companies. The
auditors' report on those accounts was not qualified and did not
contain statements under section 498(2) or 498(3) of the Companies
Act 2006. The audit of the statutory accounts for the year ended 31
July 2021 is not yet complete. These accounts will be finalised on
the basis of the financial information presented by the Directors
in this 'preliminary results' and will be delivered to the
Registrar of Companies following the Company's annual general
meeting.
These financial statements have been prepared under the
historical cost convention. The accounting policies have been
applied consistently to all years throughout both the Group and the
Company for the purposes of preparation of these financial
statements. A summary of the principal accounting policies of the
Group are set out below.
The preparation of financial statements requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements, are
disclosed in Note 1.23.
1.3 Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Strategic Report. The financial position of the
Group, its cash flows and liquidity position mirror those of our
ultimate parent company and can be found in the Chief Financial
Officer's Report of the 2021 annual report for Gattaca plc.
The majority of our staff have now been working remotely for
over twelve months and there has not been any significant impact to
our ability to operate effectively. The initial reduction in
contractor numbers in April 2020, whilst impacting profitability,
has resulted in reduced working capital requirements and has
created further liquidity. The Group has also undertaken other
actions, including an increase to the payment terms of certain
contractors and these actions have created a permanent working
capital benefit, and will reduce our working capital requirements
during growth. We have seen signs of extensions in debtor days as a
result of the pandemic impact on trading at our clients and we
continue to be alert for any sudden changes. There is sufficient
headroom on our working capital facilities to absorb a level of
extensions, but we would also manage supply to the customer if
payment within an appropriate period was not being made. A
significant deterioration in payment terms would significantly
impact the Group's liquidity.
The Directors have prepared detailed cash flow forecasts to July
2024, covering a period of 33 months from the date of approval of
these financial statements. This base case is drawn up with
appropriate regard for the current macroeconomic environment and
the particular circumstances in which the Group operates. This
conservative base case assumes a recovery of the UK business to
100% of pre-COVID-19 contract and permanent NFI by July 2022, with
a further growth to 115% of pre-COVID-19 by July 2023 and 124%
growth of pre-COVID-19 by July 2024 years. Trading has been broadly
in line with this forecast since the year end.
The output of the base case forecasting process has been used to
perform sensitivity analysis on the Group's cash flow to model the
potential effects should principal risks actually occur either
individually or in unison. The sensitivity analysis modelled
scenarios in which the Group incurred a sustained loss of business
arising from a prolonged global downturn as a result of the
COVID-19 pandemic, with a slower recovery scenario considered. The
Group has modelled the impact of a severe but plausible scenario
including a reduction in recovery to 80% of pre-COVID NFI by July
2022, and subsequent slow recovery to 90% of pre-COVID NFI by July
2023, as well as the impact of a subsequent 5 day deterioration in
the recovery of customer receivables.
After making appropriate enquiries and considering the
uncertainties described above, the Directors have a reasonable
expectation at the time of approving these financial statements
that the Group and the Company has adequate resources to continue
in operational existence for the foreseeable future. Following
careful consideration the Directors do not consider there to be a
material uncertainty with regards to going concern and consider it
is appropriate to adopt the going concern basis in preparing the
financial statements.
1.4 New standards and interpretations
The following are new standards or improvements to existing
standards that are mandatory for the first time in the Group's
accounting period beginning on 1 August 2020 and no new standards
have been early adopted. The Group's July 2021 consolidated
financial statements have adopted these amendments to IFRS:
-- Amendment to IFRS 16, 'Leases' - COVID-19 related rent
concessions (effective 1 June 2020)
-- Amendment to IFRS 9, IAS39 and IFRS 7 - Interest rate
benchmark reform (effective 1 January 2020)
-- Amendments to IAS 1 Presentation of Financial Statements
and IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors - Definition of material (effective
1 January 2020)
-- IFRS 3 (amendments) Business Combinations - Definition
of a business (effective 1 January 2020)
-- Revised Conceptual Framework for Financial Reporting
- Various interpretation amendments (effective 1 January
2020)
There have been no alterations made to the accounting policies
as a result of considering all of the other amendments above that
became effective in the year, as these were either not material or
were not relevant to the Group or Company.
New standards in issue, not yet adopted
The Group has not yet adopted certain new standards, amendments
and interpretations to existing standards, which have been
published but which are only effective for the Group accounting
periods beginning on or after 1 August 2021. Forthcoming amendments
are noted below.
The directors continually evaluate the impact of the adoption of
new standards, amendments and interpretations but currently do not
expect them to have a material impact on the Group's or Company's
operations or results.
Forthcoming requirements
The following amendments are required for application for the
Group's year beginning after 1 August 2021 or later:
Effective date (annual
periods beginning
Standard on or after)
---------------------------------------------------------- ----------------------
Classification of liabilities as
IAS 1 Amendments current or non-current 1 January 2022
----------------- --------------------------------------- ----------------------
Property, plant and equipment: proceeds
IAS 16 Amendments before intended use 1 January 2022
----------------- --------------------------------------- ----------------------
Onerous contracts - cost of fulfilling
IAS 37 Amendments a contract 1 January 2022
----------------- --------------------------------------- ----------------------
IFRS 3 Amendments Reference to the conceptual framework 1 January 2022
----------------- --------------------------------------- ----------------------
IFRS Standards Annual improvements on IFRS 9, IFRS
2018-2022 16 and IFRS 1 1 January 2022
----------------- --------------------------------------- ----------------------
1.5 Basis of consolidation
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 over
the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated
from the date on which that control ceases.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair value of the assets transferred, the
liabilities incurred to the former owners of the acquiree, and the
equity interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair value at the
acquisition date. The Group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of the acquiree's identifiable net
assets.
Acquisition-related costs are expensed as incurred.
Intercompany transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated. Where necessary, amounts reported by
subsidiaries have been adjusted to conform to the Group's
accounting policies.
1.6 Revenue
Revenue is measured by reference to the fair value of
consideration received or receivable by the Group for services
provided, excluding VAT and trade discounts.
Temporary placements
Revenue from temporary, or contract placements is recognised at
the point in time when the candidate provides services, upon
receipt of a client-approved timesheet or equivalent proof of time
worked. Timing differences between the receipt of a client-approved
timesheet and the raising of an invoice are recognised as accrued
income. The Group has assessed its use of third party providers to
supply candidates for temporary placements under the agent or
principal criteria and has determined that it is the principal on
the grounds that it retains primary responsibility for provision of
the services.
A number of contractual rebate arrangements are in place in
respect of volume and value of sales; these are accounted for as
variable consideration reducing revenue and estimated in line with
IFRS 15. Variable consideration is calculated on a
contract-by-contract basis and dependent on the volume of candidate
placements in a given period or the achievement of certain pricing
thresholds holds.
Any consideration payable at the start of contracts to customers
is recognised as a prepayment and released to profit or loss over
the terms of the contract it relates to, as a reduction to
revenue.
Permanent placements
Revenue from permanent placements, which is based on a
percentage of the candidate's remuneration package, is recognised
when candidates commence employment which is the point at which the
performance obligation of the contract is considered met. Some
permanent placements are subject to a 'claw-back' period whereby if
a candidate leaves within a set period of starting employment, the
customer is entitled to a rebate subject to the Group's terms and
conditions. Provisions as a reduction to revenue are recognised for
such arrangements if material. In addition, a number of contractual
rebate arrangements are in place in respect of volume and value of
sales; these are accounted for as variable consideration reducing
revenue and estimated in line with IFRS 15.
Other
Other revenue streams are generated from provision of
engineering services and other fees. Revenue for certain
engineering services is measured based on the consideration
specified in a contract and recognised when the Group provides a
service to a customer, taking into account the requirements of IFRS
15 'Revenue from Contracts with Customers'. The requirements
include identifying the different performance obligations within
each contract separately and applying the recognition when the
obligation has been satisfied, taking into account contract
modifications and variable consideration.
1.7 Government grants
Government grants are assistance by government in the form of
transfers of resources to an entity in return for past or future
compliance with certain conditions relating to operating
activities.
Government grants are recognised when there is a reasonable
assurance that the Group will comply with the conditions attached
to it and that the grant will be received. They are recognised in
the consolidated income statement on a systematic basis over the
periods in which the related costs that they compensate are
recognised as expenses.
Grants are either presented as grant income or deducted in
reporting the related expense they compensate in the income
statement.
1.8 Non-underlying items
Non-underlying items are income or expenditure that are
considered unusual and separate to underlying trading results
because of their size, nature or incidence and are presented within
the income statement but highlighted through separate disclosure.
The Group's directors consider that these items should be
separately identified within the income statement to enable a
proper understanding of the Group's business performance.
Items which are included within this category include but are
not limited to:
material restructuring costs including related professional fees and
-- staff costs;
-- costs of acquisitions; and
-- integration costs following acquisitions.
In addition, the Group also excludes from underlying results
amortisation and impairment of goodwill and acquired intangibles,
impairment of leased right-of-use assets and net foreign exchange
gains or losses.
Specific adjusting items are included as non-underlying based on
the following rationale:
Does not
Distorting reflect
due to Distorting in-year
irregular due to operational
nature fluctuating performance
year on nature of continuing
Item year (size) business
------------------------------------------- ---------- ------------ --------------
Material restructuring costs -- --
------------------------------------------- ---------- ------------ --------------
Amortisation and impairment of goodwill and
acquired intangibles -- -- --
------------------------------------------- ---------- ------------ --------------
Impairment of leased right-of-use assets -- -- --
------------------------------------------- ---------- ------------ --------------
Net foreign exchange gains and losses -- --
------------------------------------------- ---------- ------------ --------------
Costs of acquisitions -- -- --
------------------------------------------- ---------- ------------ --------------
Integration costs following acquisitions -- --
------------------------------------------- ---------- ------------ --------------
Tax impact of the above -- -- --
------------------------------------------- ---------- ------------ --------------
1.9 Property, plant and equipment
Property, plant and equipment is stated at cost, net of
depreciation and any provision for impairment.
Depreciation is calculated so as to write off the cost of an
asset, less its estimated residual value, over the useful economic
life of that asset. Annual depreciation rates are as follows:
Motor vehicles 25.0% Reducing balance
Fixtures, fittings and equipment 12.5% to 33.3% Straight line
Leasehold improvements Over the period of the lease term
Straight line
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
1.10 Goodwill
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the fair value of the consideration given
for a business over the Company's interest in the fair value of the
net identifiable assets, liabilities and contingent liabilities of
the acquiree. Goodwill is stated at cost less accumulated
impairment.
Goodwill impairment reviews are undertaken annually, or more
frequently if events or changes in circumstances indicate a
potential impairment. Goodwill is allocated to cash-generating
units, being the lowest level at which goodwill is monitored. The
carrying value of the assets of the cash-generating unit, including
goodwill, intangible and tangible assets and working capital
balances, is compared to its recoverable amount, which is the
higher of value-in-use and fair value less costs to sell. Any
excess in carrying value over recoverable amount is recognised
immediately as an impairment expense and is not subsequently
reversed. Gains and losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity sold.
1.11 Intangible assets
Customer relationships
Customer relationships comprise principally of existing customer
relationships which may give rise to future orders (customer
relationships), and existing order books. They are recognised at
fair value at the acquisition date, and subsequently measured at
cost less accumulated amortisation and impairment. Customer
relationships are determined to have a useful life of ten years and
are amortised on a straight-line basis.
Trade names and trademarks
Trade names and trademarks have either arisen on the
consolidation of acquired businesses or have been separately
purchased and are recognised at fair value at the acquisition date.
They are subsequently measured at cost less accumulated
amortisation and impairment. Trade names and trademarks are
determined to have a useful life of ten years and are amortised on
a straight-line basis.
Software and software licences
Acquired computer software licences are capitalised on the basis
of the costs incurred to acquire and bring into use the specific
software. These costs are amortised using the straight-line method
to allocate the cost of the software licences over their useful
lives of between two and five years. Subsequent licence renewals
are expensed to profit or loss as incurred. Software licences are
stated at cost less accumulated amortisation and impairment.
Internally generated intangible assets
Development costs that are directly attributable to the design
and testing of identifiable and unique software products are
capitalised as part of internally generated software and include
employee costs and professional fees attributable to the
development of the asset. Other expenditure that does not meet
these criteria is recognised as an expense to profit or loss as
incurred. Software development costs recognised as assets are
amortised on a straight-line basis over their estimated useful
lives of between two and ten years.
Expenditure on internally generated brands and other intangible
assets is expensed to profit or loss as incurred.
Other
Other intangible assets acquired by the Group have a finite
useful life between five and ten years and are measured at cost
less accumulated amortisation and accumulated losses.
Amortisation of intangible assets and impairment losses are
recognised in profit or loss within administrative expenses.
Intangible assets are tested for impairment either as part of a
goodwill-carrying cash-generating unit, or when events arise that
indicate an impairment may be triggered. Provision is made against
the carrying value of an intangible asset where an impairment is
deemed to have occurred. Impairment losses on intangible assets are
recognised in the income statement under administrative
expenses.
1.12 Disposal of assets
The gain or loss arising on the disposal of an asset is
determined as the difference between the disposal proceeds and the
carrying amount of the asset and is recognised in the income
statement at the time of disposal.
1.13 Leases
The Group leases office property, motor vehicles and equipment.
Rental contracts range from monthly to seven years.
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. Contracts may contain both lease and non-lease
components, and consideration is allocated in the contract to the
lease and non-lease components based on their relative stand-alone
prices.
Assets and liabilities arising from a lease are initially
measured on a present value basis at the lease commencement date.
Lease liabilities include the net present value of the fixed
payments less any lease incentives receivable, variable lease
payments that are based on an index or a rate, amounts expected to
be payable by the Group under residual value guarantees, the
exercise price of any purchase option if the Group is reasonably
certain to exercise that option, and payments of penalties for
terminating the lease if that option is expected to be taken.
Lease payments to be made under reasonably certain extension
options are also included in the measurement of the liability.
Lease payments are discounted at either the interest rate
implicit in the lease or when this interest rate cannot be readily
determined, the Group's incremental borrowing rate associated with
a similar asset. When calculating lease liabilities, the Group uses
its incremental borrowing rate, being the rate it would have to pay
to borrow the funds necessary to obtain an asset of similar value
in a similar economic climate with similar terms, security and
conditions. This is estimated using publicly available data
adjusted for changes specific to the lease in financing conditions,
lease term, country and currency.
The Group does not have leases with variable lease payments
based on an index or rate.
Extension or termination options are included in a number of the
Group's leases. In determining the lease term, the Group considers
all facts and circumstances that create an economic incentive to
exercise, or not to exercise, an option. Extension options are only
included in the lease term if the lease is reasonably certain to be
extended. The lease term is reassessed if an option is actually
exercised or the Group becomes obliged to exercise (or not to
exercise) it. The assessment of reasonable certainty is only
revised if a significant event or a significant change in
circumstances occurs that is within the control of the Group.
Lease payments are allocated between principal and finance cost.
The finance cost is charged to profit or loss over the lease period
so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the
following:
-- the amount of the initial measurement of lease liability,
any lease payments made at or before the commencement date less any
-- lease incentives received,
-- any initial direct costs, and
-- restoration costs.
Right-of-use assets are depreciated on a straight-line basis
over the term of the lease with depreciation expense recognised in
the income statement.
Lease modifications are a change in scope of a lease that was
not part of the original lease. Any change that is triggered by a
clause already part of the original lease contract is a
reassessment and not a modification. Changes to lease cash flows as
part of a reassessment result in a remeasurement of the lease
liability using an updated discount rate and a corresponding
adjustment to the carrying value of the right-of-use asset.
A lease is deemed to be onerous where the costs required to
fulfil the contract are higher than the economic benefit to be
obtained from the contract. Where leases are deemed to be onerous,
the carrying value of the right-of-use asset is reduced by way of
an impairment charge recognised in the income statement.
Advantage has been taken of the practical expedients for
exemptions provided for leases with less than 12 months to run, for
leases of low value, to account for leases with similar
characteristics as a portfolio with a single discount rate and to
present existing onerous lease provisions against the carrying
value of right-of-use assets. Payments associated with short-term
leases and leases of low value are recognised on a straight-line
basis as an expense in profit or loss.
1.14 Taxation
The tax expense for the year comprises current and deferred tax.
Tax is recognised in the income statement, except to the extent
that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity, respectively.
The current tax charge is calculated on the basis of the tax
laws enacted or substantively enacted at the statement of financial
position date in the countries where the Company and its
subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions, where appropriate, on
the basis of amounts expected to be paid to the tax
authorities.
Deferred income taxes are calculated using the liability method
on temporary differences. Deferred tax is generally provided on the
difference between the carrying amounts of assets and liabilities
and their tax bases. However, deferred tax is not provided on the
initial recognition of goodwill, nor on the initial recognition of
an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit.
Deferred tax liabilities are provided in full, with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the statement of financial position date.
Deferred tax on temporary differences associated with shares in
subsidiaries is not provided for if these temporary differences can
be controlled by the Group and it is probable that reversal will
not occur in the foreseeable future.
Deferred tax assets and liabilities are offset only where there
is a legally enforceable right to the offset and there is an
intention to settle balances on a net basis.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the income statement, except where
they relate to items that are charged or credited directly to
equity (such as share-based payments) in which case the related
deferred tax is also charged or credited directly to equity.
1.15 Pension costs
The Group operates a number of country-specific defined
contribution plans for its employees. A defined contribution plan
is a pension plan under which the Group pays fixed contributions
into a separate entity. Once the contributions have been paid the
Group has no further payment obligations. The contributions are
recognised as an expense when they are due. Amounts not paid are
shown in other creditors in the consolidated statement of financial
position. The assets of the plan are held separately from the Group
in independently administered funds.
1.16 Share-based payments
All share-based remuneration is ultimately recognised as an
expense in the income statement with a corresponding credit to the
share-based payment reserve. All goods and services received in
exchange for the grant of any share-based remuneration are measured
at their fair values. Fair values of employee services are
indirectly determined by reference to the fair value of the share
options awarded. Their value is appraised at the grant date and
excludes the impact of non-market vesting conditions (for example,
profitability and sales growth targets).
If vesting periods or other non-market vesting conditions apply,
the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest.
Estimates are subsequently revised if there is any indication that
the number of share options expected to vest differs from previous
estimates. Any cumulative adjustment prior to vesting is recognised
in the current period. No adjustment is made to any expense
recognised in prior periods if share options ultimately exercised
are different to that estimated on vesting. Upon exercise of share
options, proceeds received net of attributable transaction costs
are credited to share capital and share premium.
The Company is the granting and settling entity in the Group
share-based payment arrangement where share options are granted to
employees of its subsidiary companies. The Company recognises the
share-based payment expense as an increase in the investment in
subsidiary undertakings.
The Group operates two long-term incentive share option plans.
The Zero Priced Share Option Bonus covers all share options issued
with an exercise price of GBP0.01; the Long-Term Incentive Plan
Options have an exercise price above GBP0.01. Grants under both
categories have been made as part of a CSOP scheme, depending on
the terms of specific grants.
The Group also operates a Share Incentive Plan ('SIP'), the
Gattaca plc Share Incentive Plan ('The Plan'), which is approved by
HMRC. The Plan is held by Gattaca plc UK Employee Benefit Trust
('the EBT'), the purpose of which is to enable employees to
purchase company shares out of pre-tax salary. For each share
purchased the Group grants an additional share at no cost to the
employee. The expense in relation to these 'free' shares is
recorded as employee remuneration and measured at fair value of the
shares issued as at the date of grant. The assets and liabilities
of the EBT are included in the Gattaca plc consolidated statement
of financial position.
1.17 Financial instruments
Financial assets
IFRS 9 contains a classification and measurement approach for
financial assets that reflects the business model in which assets
are managed and their cash flow characteristics. Under IFRS 9, all
financial assets are measured at either amortised cost, fair value
through profit and loss ('FVTPL') or fair value through other
comprehensive income ('FVOCI').
Financial assets: debt instruments
The Group classifies its debt instruments in the following
measurement categories depending on the Group's business model for
managing the asset and the cash flow characteristics of the
asset:
(i) those to be measured subsequently at fair value through
other comprehensive income (OCI): Assets that are held for
collection of contractual cash flows and for selling the financial
assets, where the assets' cash flows represent solely payments of
principal and interest, are measured at FVOCI. Movements in the
carrying amount are taken through OCI, except for the recognition
of impairment gains or losses, interest revenue and foreign
exchange gains and losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or
loss previously recognised in OCI is reclassified from equity to
profit or loss and recognised in other gains/(losses). Interest
income from these financial assets is included in finance income
using the effective interest rate method. Foreign exchange gains
and losses are presented in other gains/(losses) and impairment
expenses are presented as separate line item in the income
statement.
(ii) those to be measured subsequently at FVTPL: assets that do
not meet the criteria for amortised cost or FVOCI are measured at
FVTPL. A gain or loss on a debt investment that is subsequently
measured at FVTPL is recognised in profit or loss and presented net
within other gains/(losses) in the year in which it arises.
(iii) those to be measured subsequently at amortised cost:
Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and
interest are measured at amortised cost. Interest income from these
financial assets is included in finance income using the effective
interest rate method. Any gain or loss arising on derecognition is
recognised directly in profit or loss and presented in other
gains/(losses), together with foreign exchange gains and losses.
Impairment losses are presented as a separate line item in the
income statement.
The Group reclassifies debt investments when and only when its
business model for managing those assets changes.
Financial assets: equity instruments
The Group subsequently measures all equity investments at fair
value. Where the Group's management has elected to present fair
value gains and losses on equity investments in OCI, there is no
subsequent reclassification of fair value gains and losses to
profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in profit
or loss as other income when the Group's right to receive payments
is established.
Impairment losses (and reversal of impairment losses) on equity
investments measured at FVOCI are not reported separately from
other changes in fair value.
Impairment of financial assets
IFRS 9 requires the application of the 'Expected Credit Loss'
model (ECL). This applies to all financial assets measured at
amortised cost or FVOCI, except equity investments.
The Group assesses on a forward looking basis the expected
credit losses associated with its debt instruments carried at
amortised cost and FVOCI.
The Group has reviewed each category of its financial assets to
assess the level of credit risk and ECL provision to apply:
-- Trade receivables: the Group has chosen to take advantage of the practical
expedient in IFRS 9 when assessing default rates over its portfolio
of trade receivables, to estimate the ECL based on historical default
rates specific to groups of customers by industry and geography that
carry similar credit risks. Separate ECL's have been modelled for
UK customers in different industries, and customers in the Americas,
Europe, Asia and Africa.
-- Accrued income is in respect of temporary placements where a client-approved
timesheet has been received or permanent placements where a candidate
has commenced employment, but no invoice has been raised. Default
rates have been determined applying consistent method with trade receivables
other than 100% provision for any unbilled amounts over 6 months.
-- Cash and cash equivalents are held with established financial institutions.
The Group has determined that based on the external credit ratings
of counterparties, this financial asset has a very low credit risk
and that the estimated expected credit loss provision is not material.
At each reporting date, the ECL provision will be reviewed to
reflect changes in credit risk and historical default rates and
other economic factors. Changes in the ECL provision are recognised
in profit or loss.
Financial liabilities
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Group becomes a party
to the contractual provisions of the instrument and comprise trade
and other payables and bank loans. Financial liabilities are
recorded initially at fair value, net of direct issue costs and are
subsequently measured at amortised cost using the effective
interest rate method.
A financial liability is derecognised only when the obligation
is extinguished, that is, when the obligation is discharged,
cancelled or expires.
Non-recourse receivables factoring is not recognised as a
financial liability as there is no contractual obligation to
deliver cash; subsequently, the receivables are derecognised and
any difference between the receivable value and amount received
through non-recourse factoring is recognised as a finance cost.
1.18 Cash and cash equivalents
In the consolidated cash flow statement, cash and cash
equivalents include cash in hand, deposits held at call with banks,
other short-term highly liquid investments with original maturities
of three months or less and bank overdrafts. In the statement of
financial position and cash flow statement, bank overdrafts are
netted against cash and cash equivalents where the offsetting
criteria are met.
Cash in transit inbound from, or outbound to, a third party is
recognised when the transaction is no longer reversible by the
party making the payment. This is determined to be in respect of
all electronic payments and receipt transactions that commence
before or on the reporting date and complete within one business
day after the reporting date.
Restricted cash and cash equivalent balances are those which
meet the definition of cash and cash equivalents but are not
available for wider use by the Group. These balances arise from the
Group's non-recourse working capital arrangements.
1.19 Provisions
Provisions are recognised where the Group has a present legal or
constructive obligation as a result of past events; where probable
that an outflow of resources will be required to settle the
obligation; and the amount can be reliably estimated. Provisions
are not recognised for future operating losses.
1.20 Dividends
Dividend distributions payable to equity shareholders are
included in 'other short-term financial liabilities' when the
dividends are approved in general meeting prior to the financial
position date.
1.21 Foreign currencies
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which each entity operates ('the functional
currency'). The consolidated financial statements are presented in
'currency' (GBP), which is the Group's presentation currency.
Transactions in foreign currencies are translated at the
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated at the
rates of exchange ruling at the statement of financial position
date. Non-monetary items that are measured at historical cost in a
foreign currency are translated at the exchange rate at the date of
the transaction. Non-monetary items that are measured at fair value
in a foreign currency are translated using the exchange rates at
the date when the fair value was determined. Income and expenses
are translated at the actual rate.
Any exchange differences arising on the settlement of monetary
items or on translating monetary items at rates different from
those at which they were initially recorded are recognised in the
income statement in the year in which they arise.
The assets and liabilities in the financial statements of
foreign subsidiaries are translated at the rate of exchange ruling
at the statement of financial position date.
The individual financial statements of each group company are
presented in its functional currency. On consolidation, the assets
and liabilities of overseas subsidiaries, including any related
goodwill, are translated to sterling at the rate of exchange at the
balance sheet date. The results and cash flows of overseas
subsidiaries are translated to sterling using the average rates of
exchange during the period. Exchange adjustments arising from the
retranslation of the opening net investment and the results for the
period to the period end rate are accounted for in the translation
reserve in the statement of Comprehensive Income. On divestment,
these exchange differences are reclassified from the translation
reserve to the income statement.
1.22 Equity
Equity comprises the following:
-- 'Share capital' represents the nominal value of equity shares.
-- 'Share premium' represents the excess over nominal value of the fair
value of consideration received for equity shares, net of expenses
of the share issue.
-- 'Merger reserve' represents the equity balance arising on the merger
of Matchtech Engineering and Matchmaker Personnel and to record the
excess fair value above the nominal value of the share consideration
on the acquisition of Networkers International plc.
-- 'Share-based payment reserve' represents equity-settled share-based
employee remuneration until such share options are exercised or lapsed.
-- 'Translation reserve' represents the foreign currency differences
arising on translating foreign operations into the presentational
currency of the Group.
-- 'Treasury shares reserve' represents company shares purchased directly
by the Group to satisfy obligations under the employee share plan.
-- 'Retained earnings' represents retained profits
1.23 Critical accounting judgements and key sources of
estimation uncertainty
In the application of the Group's accounting policies, the
directors are required to make judgments (other than those
involving estimations) that have a significant impact on the
amounts recognised and to make estimates and assumptions about the
carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors,
including anticipated future events and market conditions, that are
considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the year in which the estimate is revised if the revision affects
only that year, or in the year of the revision and future years if
the revision affects both current and future years.
Critical accounting judgements
The directors are of the opinion there are no critical
accounting judgements.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources
of estimation uncertainty at the statement of financial position
date that carry a risk of causing a material adjustment within the
next 12 months are discussed below:
ECL provisions in respect of trade receivables and accrued
income
The Group's policy for default risk over receivables is based on
the ongoing evaluation of the credit risk of its trade receivables
and accrued income. Estimation is used in assessing the ultimate
realisation of these receivables and accrued income, including
reviewing the potential likelihood of default, the past collection
history of each customer, any insurance coverage in place and the
current economic conditions. As a result, expected credit loss
provisions for impairment of trade receivables and accrued income
have been recognised, as discussed in Note 17. The ongoing impact
of COVID-19 has been incorporated into these estimates.
The Group's policy on specifically providing for doubtful debts
reflects a key customer going into administration post year end.
Management have made a judgement as to the trigger point for
specifically providing for balances, which includes where there is
a reasonable possibility that the company may go in to
administration, based on publicly available information. In the
case of the customer in question, the judgement is that the
balances were credit impaired as at 31 July 2021. This judgement
will impact the treatment of revenue and receipts in subsequent
periods.
Valuation of goodwill and intangible assets
Goodwill and intangible assets (including acquired intangibles)
are tested for impairment on an annual basis or otherwise when
changes in events or situations indicate that the carrying value
may not be recoverable. This requires an estimate to be made of the
recoverable amount of the cash-generating unit to which the assets
are allocated, including forecasting future cash flows of each
cash-generating unit and forming assumptions over the discount rate
and long-term growth rate applied. The impact of COVID-19 has been
reflected in the forecast future cash flows. Further details on the
sensitivity of the carrying value of goodwill and intangible assets
to changes in the key assumptions are set out in Note 13.
1.24 Restatement of provisions presentation between current and
non-current liabilities
In July 2020, the Group publicly announced plans for a
significant restructuring of its UK employee base and restructuring
provisions of GBP971,000 were recognised based on the directors'
best estimate of the forecast direct costs arising from the
restructuring. In the financial statements for the year ended 31
July 2020, the GBP971,000 was incorrectly classified as non-current
liabilities. The UK restructure was completed in October 2020, we
have therefore concluded that it is appropriate to change the
presentation of the GBP971,000 provision from non-current to
current liabilities for the year ended 31 July 2020.
The restatement has decreased the total non-current liabilities
from GBP15,885,000 as reported to GBP14,914,000 as restated and
increased total current liabilities from GBP49,753,000 as reported
to GBP50,724,000 as restated.
The restatement has no impact on Group's consolidation results
for the year ended 31 July 2020, total net assets or cash flow
statements as at 31 July 2020, or the consolidated statement of
financial position as at 31 July 2019.
2 Segmental Information
An operating segment, as defined by IFRS 8 'Operating segments',
is a component of the Group that engages in business activities
from which it may earn revenues and incur expenses. The Group is
managed through its three reporting segments: UK Engineering, UK
Technology and International, which form the operating segments on
which the information below is prepared. The Group determines and
presents operating segments based on the information that is
provided internally to the chief operating decision maker, which
has been identified as the board of directors of Gattaca plc.
2021 ( unaudited)
Continuing
All amounts in UK UK underlying Non-underlying Discontinued Group
GBP'000 Engineering Technology International operations items(1) operations total
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Revenue 269,993 135,526 10,207 415,726 - 3,432 419,158
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Gross profit 28,398 10,212 3,470 42,080 - 1,047 43,127
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Operating contribution 17,324 5,163 1,247 23,734 - (213) 23,521
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Depreciation,
impairment and
amortisation (1,424) (781) (262) (2,467) (548) (244) (3,259)
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Central overheads (11,911) (3,812) (1,905) (17,628) 193 (693) (18,128)
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Profit/(loss)
from operations 3,989 570 (920) 3,639 (355) (1,150) 2,134
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Finance cost,
net (412) (668) (73) (1,153)
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Profit/(loss)
before taxation 3,227 (1,023) (1,223) 981
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
2020 Restated
(2)
Continuing
All amounts in UK UK underlying Non-underlying Discontinued Group
GBP'000 Engineering Technology International operations items(1) operations total
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Revenue 347,173 173,648 13,888 534,709 - 4,281 538,990
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Gross profit 34,177 13,602 4,977 52,756 - 1,911 54,667
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Operating contribution 20,913 7,061 1,319 29,293 - (759) 28,534
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Depreciation,
impairment and
amortisation (1,816) (873) (399) (3,088) (1,382) (168) (4,638)
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Central overheads (13,065) (4,773) (2,199) (20,037) (1,248) (1,949) (23,234)
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Profit/(loss)
from operations 6,032 1,415 (1,279) 6,168 (2,630) (2,876) 662
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Finance (cost)/income,
net (1,389) (832) 376 (1,845)
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
Profit/(loss)
before taxation 4,779 (3,462) (2,500) (1,183)
---------------------- ------------ ----------- ------------- ----------- -------------- ------------ ---------
1 Non-underlying items includes non-underlying income and
expenses, amortisation and impairment of goodwill and acquired
intangibles, impairment of right-of-use assets and net foreign
exchange gains or losses.
2 From the 1 August 2020, a reorganisation of the internal
composition of the Group moved the reporting of the Engineering
Technology division from UK Engineering to UK Technology. As
required under IFRS 8, segmental disclosures for the year ended 31
July 2020 have been restated accordingly. In addition, 2020
International figures have been restated for the presentation of
discontinued operations as explained in Note 11.
A segmental analysis of total assets has not been included as
this information is not used by the board; the majority of assets
are centrally held and are not allocated across the reportable
segments.
Geographical information
Total Group revenue Non-current assets
--------------------- --------------------
All amounts in GBP'000 2021 2020 2021 2020
----------------------- --------- ---------- --------- ---------
UK 402,254 515,869 20,204 21,051
----------------------- --------- ---------- --------- ---------
Rest of Europe 2,316 3,469 - 1
----------------------- --------- ---------- --------- ---------
Middle East and Africa 1,685 1,786 551 286
----------------------- --------- ---------- --------- ---------
Americas 12,903 17,534 275 388
----------------------- --------- ---------- --------- ---------
Asia Pacific - 332 - -
----------------------- --------- ---------- --------- ---------
Total 419,158 538,990 21,030 21,726
----------------------- --------- ---------- --------- ---------
Revenue and non-current assets are allocated to the geographical
market based on the domicile of the respective subsidiary.
3 Revenue from Contracts with Customers (unaudited)
Revenue from contracts with customers is disaggregated by major
service line and operating segment, as well as timing of revenue
recognition as follows:
Major service lines - continuing underlying operations
UK Engineering UK Technology International Total
--------------------- --------------------- --------------------- ---------------------
Restated(1) Restated(1) Restated(1) Restated(1)
2021 2020 2021 2020 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- ----------- -------- ----------- -------- ----------- -------- -----------
Temporary placements 260,642 339,004 133,527 171,150 7,976 10,771 402,145 520,925
--------------------- -------- ----------- -------- ----------- -------- ----------- -------- -----------
Permanent placements 6,579 7,886 2,004 2,502 2,231 3,117 10,814 13,505
--------------------- -------- ----------- -------- ----------- -------- ----------- -------- -----------
Other 2,772 283 (5) (4) - - 2,767 279
--------------------- -------- ----------- -------- ----------- -------- ----------- -------- -----------
Total 269,993 347,173 135,526 173,648 10,207 13,888 415,726 534,709
--------------------- -------- ----------- -------- ----------- -------- ----------- -------- -----------
Timing of revenue recognition - continuing underlying
operations
UK Engineering UK Technology International Total
---------------------- ---------------------- ---------------------- ----------------------
Restated(1) Restated(1) Restated(1) Restated(1)
2021 2020 2021 2020 2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
Point in time 267,495 346,890 135,526 173,648 10,207 13,888 413,228 534,426
-------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
Over time 2,498 283 - - - - 2,498 283
-------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
Total 269,993 347,173 135,526 173,648 10,207 13,888 415,726 534,709
-------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
1 From the 1 August 2020, a reorganisation of the internal
composition of the Group moved the reporting of the Engineering
Technology division from UK Engineering to UK Technology. As
required under IFRS 8, segmental disclosures for the year ended 31
July 2020 have been restated accordingly. In addition, 2020
International figures have been restated for the presentation of
discontinued operations as explained in Note 11.
No single customer contributed more than 10% of the Group's
revenue (2020: none). Revenue is wholly recognised in relation to
performance obligations satisfied in the period.
The Group has determined that its contract assets from contracts
with customers are trade receivables, accrued income, and its
contract liabilities are deferred income, which are set out
below:
31 July 31 July
2021 2020
GBP'000 GBP'000
---------------------------- -------- --------
Trade receivables (Note 17) 34,187 27,703
---------------------------- -------- --------
Accrued income (Note 17) 26,742 15,900
---------------------------- -------- --------
Deferred income (Note 19) (880) (1,090)
---------------------------- -------- --------
Accrued income relates to the Group's right to consideration for
temporary and permanent placements made but not billed by the year
end. These transfer to trade receivables once billing occurs. All
accrued income at a given reporting date is billed within the
following financial year and is classified in current assets. A
provision has been recognised against 100% of the value of unbilled
accrued income over 6 months old. Deferred income at a given
reporting date is recognised as revenue in the following financial
year once performance obligations are satisfied and is classified
in current liabilities.
4 Profit/(Loss) from Total Operations
2021 2020
unaudited
GBP'000 GBP'000
------------------------------------------------------ ---------- --------
Profit/(loss) from total operations is stated after
charging/(crediting):
------------------------------------------------------ ---------- --------
Depreciation of plant, property and equipment (Note
14) 213 943
------------------------------------------------------ ---------- --------
Depreciation of right-of-use leased assets (Note 22) 1,875 2,041
------------------------------------------------------ ---------- --------
Amortisation of acquired intangibles (Note 13) 548 616
------------------------------------------------------ ---------- --------
Amortisation of software & software licences (Note
13) 422 272
------------------------------------------------------ ---------- --------
Impairment of plant, property and equipment (Note
14) 18 -
------------------------------------------------------ ---------- --------
Impairment of goodwill and acquired intangibles (Note
13) - 334
------------------------------------------------------ ---------- --------
Impairment of right-of-use leased assets (Note 22) 183 432
------------------------------------------------------ ---------- --------
Loss on disposal of property, plant and equipment 8 52
------------------------------------------------------ ---------- --------
Operating lease costs:
------------------------------------------------------ ---------- --------
- Plant and machinery 14 47
------------------------------------------------------ ---------- --------
- Land and buildings - 192
------------------------------------------------------ ---------- --------
Non-recourse working capital facility bank charges 287 241
------------------------------------------------------ ---------- --------
Share-based payment charges 271 77
------------------------------------------------------ ---------- --------
The aggregate auditors' remuneration was as follows:
2021 2020
unaudited
GBP'000 GBP'000
----------------------------------------------------------- ---------- --------
Fees payable for the audit of the parent company financial
statements 10 10
----------------------------------------------------------- ---------- --------
Fees payable for the audit of the subsidiary company
financial statements 344 294
----------------------------------------------------------- ---------- --------
Total auditors' remuneration 354 304
----------------------------------------------------------- ---------- --------
Non-audit services:
----------------------------------------------------------- ---------- --------
- Taxation - -
----------------------------------------------------------- ---------- --------
- Other services pursuant to legislation - -
----------------------------------------------------------- ---------- --------
Total non-audit services - -
----------------------------------------------------------- ---------- --------
Non-underlying items included within administrative expenses
were as follows:
2021 2020
unaudited
Continuing operations GBP'000 GBP'000
-------------------------------------------------------- ---------- --------
Restructuring costs(1) (284) 1,552
-------------------------------------------------------- ---------- --------
Gain on sale of investment(2) - (304)
-------------------------------------------------------- ---------- --------
Onerous lease payments(3) 91 -
-------------------------------------------------------- ---------- --------
Non-underlying items included in profit from continuing
operations (193) 1,248
-------------------------------------------------------- ---------- --------
2021 2020
unaudited
Discontinued operations GBP'000 GBP'000
----------------------------------------------------------- ---------- --------
Advisory fees(4) 29 1,395
----------------------------------------------------------- ---------- --------
Costs relating to discontinuation of group undertakings(5) 664 554
----------------------------------------------------------- ---------- --------
Non-underlying items included in loss from discontinued
operations 693 1,949
----------------------------------------------------------- ---------- --------
Total non-underlying items 500 3,197
----------------------------------------------------------- ---------- --------
1 A gain of GBP284,000 (2020: cost of GBP1,552,000) was
recognised in 2021 as a result of releasing unutilised provisions
for employee related expenses and professional fees.
2 In November 2019, the Group concluded the sale of its 10%
minority interest investment in Concilium Search Limited for
consideration in cash of GBP304,000. The investment carrying value
was GBPnil, so a profit on sale of investments of GBP304,000 was
recognised, and presented as non-underlying due to its material
value and nature not arising from trading activities.
3 Lease expenses of GBP91,000 were incurred in 2021 in respect
of a UK office building no longer in use by the business.
4 Legal fees incurred in 2021 and 2020 in relation to the
Group's co-operation with certain voluntary enquiries from the US
Department of Justice.
5 Ongoing costs relating to the preparation of entities affected
by the closure of the contract Telecoms Infrastructure business and
operations in China for liquidation, including professional fees
and impairment of certain working capital balances. In addition for
2021, the closure costs also includes Group's operations in Mexico,
including staff termination costs and impairment of certain working
capital balances.
5 Particulars of Employees
The monthly average number of staff employed by the Group,
including executive directors, during the financial year amounted
to:
2021 2020
unaudited
Total operations No. No.
----------------- ---------- ----
Sales 345 482
----------------- ---------- ----
Administration 131 176
----------------- ---------- ----
Directors 7 7
----------------- ---------- ----
Total 483 665
----------------- ---------- ----
UK employees are directly contracted with the ultimate parent
company Gattaca plc and staff costs are paid by the Matchtech Group
(UK) Limited then recharged to fellow UK subsidiaries.
The aggregate payroll costs of the above were:
2021 2020
unaudited
Total operations GBP'000 GBP'000
---------------------- ---------- --------
Wages and salaries 24,269 27,918
---------------------- ---------- --------
Social security costs 2,830 3,394
---------------------- ---------- --------
Other pension costs 791 806
---------------------- ---------- --------
Share-based payments 271 77
---------------------- ---------- --------
Total 28,161 32,195
---------------------- ---------- --------
Amounts due to defined contribution pension providers at 31 July
2021 were GBP138,000 (2020: GBP117,000).
Disclosure of the remuneration of Group's key management
personnel, as required by IAS 24, is detailed below:
2021 2020
unaudited
Total operations GBP'000 GBP'000
------------------------------------------------------ ---------- --------
Short-term employee benefits 1,738 1,687
------------------------------------------------------ ---------- --------
Contributions to defined contribution pension schemes 123 119
------------------------------------------------------ ---------- --------
Share-based payments 106 (62)
------------------------------------------------------ ---------- --------
Total 1,967 1,744
------------------------------------------------------ ---------- --------
6 Finance Income
2021 2020
unaudited Restated(1)
Continuing operations GBP'000 GBP'000
---------------------- ---------- ------------
Interest income 56 24
---------------------- ---------- ------------
Total 56 24
---------------------- ---------- ------------
7 Finance Costs
2021 2020
unaudited Restated(1)
Continuing operations GBP'000 GBP'000
------------------------------------------- ---------- ------------
Bank interest expense 124 1,059
------------------------------------------- ---------- ------------
Interest expense on lease liabilities 148 203
------------------------------------------- ---------- ------------
Amortisation of capitalised finance costs 196 151
------------------------------------------- ---------- ------------
Net losses on foreign currency translation 668 832
------------------------------------------- ---------- ------------
Total 1,136 2,245
------------------------------------------- ---------- ------------
8 2020 figures have been restated for the presentation of
discontinued operations as explained in Note 11.
8 Government Grants
Grant income recognised from government grants recognised in
cost of sales and administrative expenses are as follows:
2021 2020
unaudited
Continuing operations GBP'000 GBP'000
----------------------------------------------------- ---------- --------
UK Government Coronavirus Job Retention Scheme grant
income recognised
in cost of sales for temporary workers 43 2,335
----------------------------------------------------- ---------- --------
UK Government Coronavirus Job Retention Scheme grant
income recognised
in administrative expenses for employees 458 1,471
----------------------------------------------------- ---------- --------
Total 501 3,806
----------------------------------------------------- ---------- --------
As a response to the COVID-19 global pandemic, the Group made
use of the UK Government's Coronavirus Job Retention Scheme (2021:
claim period is from August 2020 to October 2020, 2020: claim
period is from April 2020 to July 2020). Under this scheme, Her
Majesty's Revenue & Customs (HMRC) provided UK companies with a
non-refundable grant equivalent to a portion of wages, National
Insurance contributions and pension contributions for employees and
temporary workers who were retained in employment but placed on
furlough. From 1 August 2021 National Insurance contributions and
pension contributions were no longer eligible for claims. When
considering temporary workers, the contractors employed by
Gattaca's clients that Gattaca provides payroll services to and
whose costs are recognised as cost of sales by Gattaca, were also
considered eligible.
As the scheme was conditional upon the Group retaining its
employees in employment, or the temporary contract workers being
retained by their employers, whilst they are furloughed during the
COVID-19 pandemic, it was designed to compensate companies for
staff or temporary worker costs incurred. As all claims submitted
for the period have been received, the Group considers the scheme
meets the definition of a government grant as set out in IAS 20 and
has accounted for it as such. For grants received for Gattaca's
employees on furlough, the Group has presented the grant income as
a deduction to staff costs presented in administrative expenses in
the income statement; for grants received for temporary contract
workers of Gattaca's clients on furlough, the Group has presented
the grant income as a deduction to cost of sales.
9 Parent Company Loss
2021 2020
unaudited
GBP'000 GBP'000
--------------------------------------------------- ---------- --------
The amount of loss generated by the parent company
was: (866) (1,111)
--------------------------------------------------- ---------- --------
10 Taxation
Continuing Discontinued Continuing Discontinued
---------- ------------ ------------ ------------
2021 2021 2020 2020
unaudited unaudited Restated(1) Restated(1)
Analysis of charge in the year GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------- ---------- ------------ ------------ ------------
Current tax: UK corporation tax 748 (48) 790 (269)
-------------------------- ---------- ------------ ------------ ------------
Overseas corporation
tax (134) 40 92 124
---------------------------------------------- ---------- ------------ ------------ ------------
Adjustments in respect
of prior years (511) - (260) 143
---------------------------------------------- ---------- ------------ ------------ ------------
103 (8) 622 (2)
---------------------------------------------- ---------- ------------ ------------ ------------
Deferred tax (Note Origination and reversal
16): of temporary differences (58) (5) (143) 11
-------------------------- ---------- ------------ ------------ ------------
Adjustments in respect
of prior years 290 (2) 111 (1)
---------------------------------------------- ---------- ------------ ------------ ------------
Changes in tax rate 80 - - -
---------------------------------------------- ---------- ------------ ------------ ------------
312 (7) (32) 10
---------------------------------------------- ---------- ------------ ------------ ------------
Income tax charge/(credit) for the
year 415 (15) 590 8
----------------------------------------------- ---------- ------------ ------------ ------------
1 2020 figures have been restated for the presentation of
discontinued operations as explained in Note 11.
UK corporation tax has been charged at 19% (2020: 19%).
The charge for the year can be reconciled to the profit/(loss)
as per the income statement as follows:
Continuing Discontinued Continuing Discontinued
---------- ------------ ------------ ------------
2021 2021 2020 2020
unaudited unaudited Restated(1) Restated(1)
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------- ---------- ------------ ------------ ------------
Profit/(loss) before tax 2,204 (1,223) 1,317 (2,500)
------------------------------------------- ---------- ------------ ------------ ------------
Profit/(loss) before tax multiplied
by the standard rate of corporation
tax in the UK of 19% (2020: 19%) 419 (232) 250 (475)
------------------------------------------- ---------- ------------ ------------ ------------
Expenses not deductible for tax purposes
and goodwill impairment loss 139 172 21 11
------------------------------------------- ---------- ------------ ------------ ------------
Effect of share-based payments (19) - 70 -
------------------------------------------- ---------- ------------ ------------ ------------
Irrecoverable withholding tax 56 - 38 4
------------------------------------------- ---------- ------------ ------------ ------------
Overseas losses not recognised as deferred
tax assets 46 163 513 387
------------------------------------------- ---------- ------------ ------------ ------------
Difference between UK and overseas
tax rates (85) (116) (153) (61)
------------------------------------------- ---------- ------------ ------------ ------------
Adjustment to tax charge in respect
of previous years (221) (2) (149) 142
------------------------------------------- ---------- ------------ ------------ ------------
Changes in tax rates 80 - - -
------------------------------------------- ---------- ------------ ------------ ------------
Total taxation charge/(credit) for
the year 415 (15) 590 8
------------------------------------------- ---------- ------------ ------------ ------------
Tax (credit)/charge recognised in equity:
2021 2020
unaudited
GBP'000 GBP'000
-------------------------------------------------------- ---------- --------
Deferred tax (credit)/charge recognised directly in
equity (65) 16
-------------------------------------------------------- ---------- --------
Total tax (credit)/charge recognised directly in equity (65) 16
-------------------------------------------------------- ---------- --------
Reconciliation of statutory continuing tax charge to continuing
underlying tax charge:
2021 2020
unaudited Restated(1)
GBP'000 GBP'000
---------------------------------------------------- ---------- ------------
Income tax expense 415 590
---------------------------------------------------- ---------- ------------
Impairment and amortisation of acquired intangibles 43 143
---------------------------------------------------- ---------- ------------
Non-underlying items (37) 280
---------------------------------------------------- ---------- ------------
Foreign currency exchange differences 85 (18)
---------------------------------------------------- ---------- ------------
Underlying income tax expense 506 995
---------------------------------------------------- ---------- ------------
Future tax rate changes
The main UK corporation tax rate of 19% will increase to 25%
from 1 April 2023 and this has been reflected in the consolidated
financial statements.
As these changes of rates have been enacted at the balance sheet
date, the impact of this increase has been reflected in the
deferred tax liability at 31 July 2021.
11 Discontinued Operations
2021
On 30 July 2021, the Group announced the decision to close its
Mexico operations entirely. In addition, the Group also announced a
management buy-out agreement of the South African recruitment
operations which is expected to complete within one year of 31 July
2021. The Fulfilment, Solutions and Group Support functions of the
South African recruitment operations will be retained and
transferred to a new South African entity. As a result, the Group
has reclassified its entire Mexican operations and South African
recruitment operations as discontinued in the consolidated
financial statements for the year ended 31 July 2021.
2020
On 9 March 2020, the Group commenced communications with the
management and employees of its Chinese subsidiary, announcing its
intention to cease its remaining operations in China, having
previously ceased all Telecoms Infrastructure business undertaken
by China already in 2019. As at 31 July 2020, all operations and
staff had been terminated and the Group continued to work with
in-country advisors to commence company closure proceedings. As
this resulted in the Group's withdrawal from all operations in
China, the Group classified its Chinese operations as discontinued
in the consolidated financial statements for the year ended 31 July
2020.
Financial performance and cash flow information
2021 2020
unaudited Restated(1)
GBP'000 GBP'000
------------------------------------------------------ ---------- ------------
Revenue 3,432 4,281
------------------------------------------------------ ---------- ------------
Cost of sales (2,385) (2,370)
------------------------------------------------------ ---------- ------------
Gross profit 1,047 1,911
------------------------------------------------------ ---------- ------------
Administrative expenses(2) (2,197) (4,787)
------------------------------------------------------ ---------- ------------
Loss from operations (1,150) (2,876)
------------------------------------------------------ ---------- ------------
Finance income 39 383
------------------------------------------------------ ---------- ------------
Finance costs (112) (84)
------------------------------------------------------ ---------- ------------
Income from fixed asset investments - 77
------------------------------------------------------ ---------- ------------
Loss before taxation (1,223) (2,500)
------------------------------------------------------ ---------- ------------
Taxation 15 (8)
------------------------------------------------------ ---------- ------------
Loss for the year after taxation from discontinued
operations (1,208) (2,508)
------------------------------------------------------ ---------- ------------
Exchange differences on translation of discontinued
operations 48 (871)
------------------------------------------------------ ---------- ------------
Other comprehensive loss from discontinued operations (1,160) (3,379)
------------------------------------------------------ ---------- ------------
1 2020 figures have been restated for the presentation of
discontinued operations as explained above.
2 Included in administrative expenses are GBP693,000 (2020:
GBP1,949,000) of non-underlying items, as detailed in Note 4. In
addition, it includes net impairment costs on trade receivables
from discontinued operations of GBP80,000 (2020 restated: release
of GBP4,000).
The following assets and liabilities were reclassified as held
for sale in relation to the discontinued South African recruitment
operations as at 31 July 2021:
2021 2020
unaudited
Assets classified as held for sale GBP'000 GBP'000
--------------------------------------------- ---------- --------
Software licences 1 -
--------------------------------------------- ---------- --------
Property, plant and equipment 7 -
--------------------------------------------- ---------- --------
Right-of-use assets 29 -
--------------------------------------------- ---------- --------
Investments 19 -
--------------------------------------------- ---------- --------
Deferred tax assets 9 -
--------------------------------------------- ---------- --------
Trade and other receivables 171 -
--------------------------------------------- ---------- --------
Cash and cash equivalents 110 -
--------------------------------------------- ---------- --------
Total assets of disposal group held for sale 346 -
--------------------------------------------- ---------- --------
2021 2020
Liabilities directly associated with assets classified unaudited
as held for sale GBP'000 GBP'000
--------------------------------------------------------- ---------- --------
Trade and other payables (136) -
--------------------------------------------------------- ---------- --------
Provisions (46) -
--------------------------------------------------------- ---------- --------
Current tax liabilities (27) -
--------------------------------------------------------- ---------- --------
Lease liabilities (14) -
--------------------------------------------------------- ---------- --------
Total liabilities of disposal group held for sale (223) -
--------------------------------------------------------- ---------- --------
2021 2020
unaudited Restated(1)
GBP'000 GBP'000
---------------------------------------------------------- ---------- ------------
Net cash outflow from operating activities (1,348) (2,160)
---------------------------------------------------------- ---------- ------------
Net cash (outflow)/inflow from investing activities (32) 1
---------------------------------------------------------- ---------- ------------
Net cash outflow from financing activities (139) (134)
---------------------------------------------------------- ---------- ------------
Effects of exchange rates on cash and cash equivalents (15) (766)
---------------------------------------------------------- ---------- ------------
Net decrease in cash generated by discontinued operations (1,534) (3,059)
---------------------------------------------------------- ---------- ------------
1 2020 figures have been restated for the presentation of
discontinued operations as explained in Note 11.
12 Earnings per Share
Earnings per share (EPS) has been calculated by dividing the
consolidated profit or loss after taxation attributable to ordinary
shareholders by the weighted average number of ordinary shares in
issue during the year.
Diluted earnings per share has been calculated on the same basis
as above, except that the weighted average number of ordinary
shares that would be issued on the conversion of all the dilutive
potential ordinary shares (arising from the Group's share option
schemes) into ordinary shares has been added to the denominator.
Share options (Note 23) are treated as dilutive when, at the
reporting date, they would be issuable had the performance year
ended at that date.
The Group has dilutive potential ordinary shares, being the LTIP
and Zero-priced share options (Note 23). The number of shares that
could have been acquired at fair value (determined as the average
annual market share price of the Company's shares) is calculated
based on the monetary value of the subscription rights attached to
the outstanding share options.
The effect of potential ordinary shares are reflected in diluted
EPS only when they are dilutive. Potential ordinary shares are
considered dilutive when their inclusion in the calculation would
decrease EPS, or increase the loss per share from continuing
operations in accordance with IAS 33. This is regardless of whether
the potential ordinary shares are dilutive for EPS from total
operations. The effect of potential ordinary shares are considered
to be dilutive for year ended 31 July 2021 and 31 July 2020 and
therefore have been included in the calculation below. The diluted
loss per share is lower than basic loss per share because of the
effect of losses from discontinued operations.
There are no changes to the profit numerator as a result of the
dilution calculation.
2021 2020
unaudited
GBP'000 GBP'000
---------------------------------------- -------- ---------- ------------
Total profit/(loss) attributable
to ordinary shareholders 581 (1,781)
-------------------------------------------------- ---------- ------------
2021 2020
unaudited
Number of shares GBP'000 GBP'000
---------------------------------------- -------- ---------- ------------
Basic weighted average number of
ordinary shares in issue 32,290 32,285
-------------------------------------------------- ---------- ------------
Dilutive potential ordinary shares 68 68
-------------------------------------------------- ---------- ------------
Diluted weighted average number of
shares 32,358 32,353
-------------------------------------------------- ---------- ------------
2021 2020
unaudited
Total earnings per share pence pence
---------------------------------------- -------- ---------- ------------
Earnings per ordinary share Basic 1.8 (5.5)
---------------------------------------- -------- ---------- ------------
Diluted 1.8 (5.5)
------------------------------------------------- ---------- ------------
2021 2020
unaudited Restated(1)
Earnings from continuing operations GBP'000 GBP'000
---------------------------------------- -------- ---------- ------------
Total profit for the year 1,789 727
-------------------------------------------------- ---------- ------------
2021 2020
Total earnings per share for continuing unaudited Restated(1)
operations pence pence
---------------------------------------- -------- ---------- ------------
Earnings per ordinary share from
continuing operations Basic 5.5 2.3
---------------------------------------- -------- ---------- ------------
Diluted 5.5 2.2
------------------------------------------------- ---------- ------------
2021 2020
unaudited Restated(1)
Earnings from discontinuing operations GBP'000 GBP'000
------------------------------------------- -------- ----------- ------------
Total loss for the year (1,208) (2,508)
----------------------------------------------------- ----------- ------------
2021 2020
Total earnings per share for discontinuing unaudited Restated(1)
operations pence pence
------------------------------------------- -------- ----------- ------------
Earnings per ordinary share from
discontinuing operations Basic (3.7) (7.8)
------------------------------------------- -------- ----------- ------------
Diluted (3.7) (7.8)
---------------------------------------------------- ----------- ------------
2021 Restated(1)
unaudited 2020
Earnings from continuing underlying
operations GBP'000 GBP'000
------------------------------------------- -------- ----------- ------------
Total profit for the year 2,721 3,784
----------------------------------------------------- ----------- ------------
2021 2020
Total earnings per share for continuing unaudited Restated(1)
underlying operations pence pence
------------------------------------------- -------- ----------- ------------
Earnings per ordinary share from
continuing underlying operations Basic 8.4 11.7
------------------------------------------- -------- ----------- ------------
Diluted 8.4 11.7
---------------------------------------------------- ----------- ------------
1 2020 figures have been restated for the presentation of
discontinued operations as explained in Note 11.
13 Goodwill and Intangible Assets (unaudited)
Software
Customer Trade and software
Goodwill relationships names Other licences Total
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- --------------------- -------- -------------- -------- -------- ------------- --------
Cost At 1 August 2019 28,739 22,245 5,346 3,809 6,225 66,364
--------------------- -------- -------------- -------- -------- ------------- --------
Additions - - - - 2,348 2,348
-------------------------------------- -------- -------------- -------- -------- ------------- --------
At 31 July 2020 28,739 22,245 5,346 3,809 8,573 68,712
-------------------------------------- -------- -------------- -------- -------- ------------- --------
Additions - - - - 1,872 1,872
-------------------------------------- -------- -------------- -------- -------- ------------- --------
Reclassification to
assets
held for sale - - - - (2) (2)
-------------------------------------- -------- -------------- -------- -------- ------------- --------
At 31 July 2021 28,739 22,245 5,346 3,809 10,443 70,582
-------------------------------------- -------- -------------- -------- -------- ------------- --------
Amortisation
and impairment At 1 August 2019 24,382 19,924 4,951 3,289 2,067 54,613
--------------------- -------- -------------- -------- -------- ------------- --------
Amortisation for the
year - 325 53 238 272 888
-------------------------------------- -------- -------------- -------- -------- ------------- --------
Impairment - 281 53 - - 334
-------------------------------------- -------- -------------- -------- -------- ------------- --------
At 31 July 2020 24,382 20,530 5,057 3,527 2,339 55,835
-------------------------------------- -------- -------------- -------- -------- ------------- --------
Amortisation for the
year - 332 45 171 422 970
-------------------------------------- -------- -------------- -------- -------- ------------- --------
Impairment - - - - - -
--------------------- -------- -------------- -------- -------- ------------- --------
Reclassification to
assets
held for sale - - - - (1) (1)
-------------------------------------- -------- -------------- -------- -------- ------------- --------
At 31 July 2021 24,382 20,862 5,102 3,698 2,760 56,804
-------------------------------------- -------- -------------- -------- -------- ------------- --------
Net book
value At 31 July 2020 4,357 1,715 289 282 6,234 12,877
--------------------- -------- -------------- -------- -------- ------------- --------
At 31 July 2021 4,357 1,383 244 111 7,683 13,778
-------------------------------------- -------- -------------- -------- -------- ------------- --------
Other intangibles comprises candidate databases and non-compete
agreements.
Included in software and software licenses was a cost of
GBP7,684,000 (2020: GBP5,819,000) and a net book value of
GBP7,447,000 (2020: GBP5,819,000) relating to internally generated
intangible assets.
The carrying amount of goodwill allocated to Cash Generating
Unit's (CGU's) is as follows:
2021 2020
GBP'000 GBP'000
----------------------------- -------- --------
UK Engineering 1,712 1,712
----------------------------- -------- --------
Resourcing Solutions Limited 2,645 2,645
----------------------------- -------- --------
Total 4,357 4,357
----------------------------- -------- --------
Impairment testing
Goodwill and intangible assets are reviewed and tested for
impairment on an annual basis or more frequently to determine if
there is an indication of impairment.
If any indication of impairment exists, then the goodwill CGU or
individual asset's recoverable amount is calculated. The
recoverable amounts of the CGU's are determined from value-in-use
calculations.
The key assumptions and estimates used when calculating a CGU's
value-in-use, are as follows:
Cash flows from operations
Cash flows from operations are based on the Group's 2022 budget
as approved by the Group's board of directors plus four years of
forecasts at a CGU level updated for any key changes, which are
prepared using expectations of revenue and operating cost growth
over the next five years. The Group prepares cash flow forecasts
adjusted for allocations of group overhead costs, and extrapolates
cash flows into perpetuity based on long-term growth rates. The
impact of COVID-19 has been incorporated into these forecasts,
based on the time expected for trading to return to pre-pandemic
levels.
Discount rates
The pre-tax rates used to discount the forecast cash flows were
a range from 15.0% to 16.0% (2020: 13.9% to 14.9%) reflecting the
Group's weighted average cost of capital, adjusted for specific
risks associated with the asset's estimated cash flows. The
discount rate is based on the weighted average cost of capital
(WACC). The risk-free rate, based on government bond rates, is
adjusted for equity and industry risk premiums, reflecting the
increased risk compared to an investor who is investing the market
as a whole. Net present values are calculated using pre-tax
discount rates derived from the Group's post-tax WACC of 12.5%
(2020: 11.7%) for CGUs assessed.
Growth rates
The medium-term growth rates are based on management forecasts,
reflecting past experience and economic environment. Long-term
growth rates are based on external sources of an average estimated
growth rate of 2.0% (2020: 2.0%), using a weighted average of
operating country real GDP growth expectations.
As a result of these forecasts, no impairment losses (2020:
GBP334,000) have been recorded in respect of goodwill and acquired
intangible assets within any CGUs (2020 impairment loss in UK
Technology CGU) as follows:
Intangible Intangible
Goodwill assets Total Goodwill assets Total
2021 2021 2021 2020 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- -------- ---------- -------- -------- ---------- --------
UK Technology - - - - 334 334
-------------- -------- ---------- -------- -------- ---------- --------
Total - - - - 334 334
-------------- -------- ---------- -------- -------- ---------- --------
Goodwill and acquired intangibles within the UK Technology, UK
Engineering and International CGU's relate to the Networkers
acquisition. At 31 July 2021, the recoverable amount of the UK
Engineering CGU was GBP6,027,000 (2020: GBP5,075,000) and
GBP13,995,000 (2020: GBP14,603,000) for the Resourcing Solutions
Limited CGU. The UK Technology CGU was full impaired in the prior
year.
Sensitivity analysis has been performed to show the impact of
reasonable or possible changes in key assumptions, in particular
with reference to the economic uncertainty surrounding the impact
of, and future recovery from, the COVID-19 pandemic. An increase in
the discount rate by a factor of 0.2% to 12.7%, or a reduction in
the long-term growth rate to 1.8%, would not trigger a material
impairment for any of the CGU's. A moderate reduction of 10% of
management's forecast growth projection for FY22 and FY23
respectively would not trigger an impairment of goodwill for either
RSL or UK Engineering CGU's.
Trade names
Company GBP'000
---------------------------- -------------------------- -----------
Cost At 1 August 2019 -
-------------------------- -----------
Additions 20
------------------------------------------------------- -----------
At 31 July 2020 20
------------------------------------------------------- -----------
Additions -
-------------------------- -----------
At 31 July 2021 20
------------------------------------------------------- -----------
Amortisation and impairment At 1 August 2019 -
-------------------------- -----------
Amortisation for the year 4
------------------------------------------------------- -----------
Impairment -
-------------------------- -----------
At 31 July 2020 4
------------------------------------------------------- -----------
Amortisation for the year 3
------------------------------------------------------- -----------
Impairment -
-------------------------- -----------
At 31 July 2021 7
------------------------------------------------------- -----------
Net book value At 31 July 2020 16
-------------------------- -----------
At 31 July 2021 13
------------------------------------------------------- -----------
14 Property, Plant and Equipment (unaudited)
Fixtures,
Leasehold fittings
Motor vehicles improvements & equipment Total
Group GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------------------------------- -------------- ------------- ------------ --------
Cost At 1 August 2019 21 4,730 4,632 9,383
--------------------------------- -------------- ------------- ------------ --------
Reclassification of dilapidation
assets - (1,535) - (1,535)
----------------------------------------------------------- -------------- ------------- ------------ --------
Additions - 101 90 191
----------------------------------------------------------- -------------- ------------- ------------ --------
Disposals (37) (204) (1) (242)
----------------------------------------------------------- -------------- ------------- ------------ --------
Effects of movements in
exchange rates - (37) - (37)
----------------------------------------------------------- -------------- ------------- ------------ --------
At 31 July 2020 (16) 3,055 4,721 7,760
----------------------------------------------------------- -------------- ------------- ------------ --------
Additions - - 332 332
----------------------------------------------------------- -------------- ------------- ------------ --------
Disposals 16 (25) - (9)
----------------------------------------------------------- -------------- ------------- ------------ --------
Impairment - (29) (92) (121)
----------------------------------------------------------- -------------- ------------- ------------ --------
Reclassification to assets
held for sale - - (13) (13)
----------------------------------------------------------- -------------- ------------- ------------ --------
At 31 July 2021 - 3,001 4,948 7,949
----------------------------------------------------------- -------------- ------------- ------------ --------
Accumulated depreciation At 1 August 2019 17 1,897 4,177 6,091
--------------------------------- -------------- ------------- ------------ --------
Reclassification of dilapidation
assets - (576) - (576)
----------------------------------------------------------- -------------- ------------- ------------ --------
Charge for the year 5 564 374 943
----------------------------------------------------------- -------------- ------------- ------------ --------
Released on disposal (38) (18) (134) (190)
----------------------------------------------------------- -------------- ------------- ------------ --------
At 31 July 2020 (16) 1,867 4,417 6,268
----------------------------------------------------------- -------------- ------------- ------------ --------
Charge for the year - 58 155 213
----------------------------------------------------------- -------------- ------------- ------------ --------
Released on disposal 16 (17) - (1)
----------------------------------------------------------- -------------- ------------- ------------ --------
Impairment - (29) (74) (103)
----------------------------------------------------------- -------------- ------------- ------------ --------
Reclassification to assets
held for sale - - (6) (6)
----------------------------------------------------------- -------------- ------------- ------------ --------
At 31 July 2021 - 1,879 4,492 6,371
----------------------------------------------------------- -------------- ------------- ------------ --------
Net book value At 31 July 2020 - 1,188 304 1,492
--------------------------------- -------------- ------------- ------------ --------
At 31 July 2021 - 1,122 456 1,578
----------------------------------------------------------- -------------- ------------- ------------ --------
Impairment during the year relates to the closure of the Mexican
operations as disclosed in Note 11.
There were no capital commitments as at 31 July 2021 or 31 July
2020.
15 Investments in Subsidiary Undertakings
Group Company
-------------------- --------------------
2021 2020 2021 2020
unaudited unaudited
Cost and carrying value: GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------ ---------- -------- ---------- --------
Balance at 1 August 19 - 8,520 8,580
------------------------------------------------ ---------- -------- ---------- --------
Purchase of investments - 19 - -
------------------------------------------------ ---------- -------- ---------- --------
Capital contributions to subsidiaries/(reversal
of capital contributions) - - 29,943 (60)
------------------------------------------------ ---------- -------- ---------- --------
Reclassification to assets held for
sale (19) - - -
------------------------------------------------ ---------- -------- ---------- --------
Balance at 31 July - 19 38,463 8,520
------------------------------------------------ ---------- -------- ---------- --------
The movement in investments in group undertakings represents
capitalisation of intercompany receivables due from Matchtech Group
(Holdings) Limited in return for an issue of shares in Matchtech
Group (Holdings) Limited as well as capital contributions made in
Matchtech Group (UK) Limited relating to share-based payments. In
the prior year, a reversal of the capital contribution was recorded
as historical share-based payment charges were reversed due to
vesting performance conditions not being met.
Kula Nathi Investments Proprietary Limited formed a partnership
with Ingenious Equity Proprietary Limited in 2018 to set up Sakha
Sonke Private Equity Fund. Kula Nathi has control over the private
equity fund in line with the criteria of IFRS 10 and therefore
Sakha Sonke Private Equity Fund has been consolidated in the
Group's result until 31 July 2021 before it was classified as held
for sale. Following the announcement of the expected sales of the
South African recruitment operations on 30 July 2021, both Kula
Nathi Investments Proprietary Limited and Sakha Sonke Private
Equity Fund will be sold as part of the deal. As such any assets or
liabilities held in those two entities' balance sheets have been
reclassified as held for sale as at 31 July 2021.
During the 2020 financial year, Sakha Sonke Private Equity Fund
invested a total of GBP19,000 in external minority investments in
accordance with the partnership agreement between Kula Nathi
Investments Proprietary Limited and Ingenious Equity Proprietary
Limited. At 31 July 2021, this investment has been classified as an
asset held for sale as part of the sale of the South African
recruitment operations.
The subsidiary undertakings at the year end are as follows:
Registered
Office Country Share % held % held
Note of Incorporation Class 2021 2020 Main Activities
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Alderwood Education Ltd(1) 1 Kingdom Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Application Services Limited(1) 1 Kingdom Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Barclay Meade Ltd(1) 1 Kingdom Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United
Cappo Group Limited(1) 1 Kingdom Ordinary 100% 100% Holding
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Cappo International Limited(1) 1 Kingdom Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United
Comms Software Limited(2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Comms Resources Limited(1) 1 Kingdom Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Connectus Technology Limited(1) 1 Kingdom Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United
Elite Computer Staff Ltd.(2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United
Gattaca Recruitment Limited(2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Gattaca Solutions Limited(1) 1 Kingdom Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Matchtech Engineering United
Limited(2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Matchtech Group (Holdings) United
Limited(1) 1 Kingdom Ordinary 99.7% 99.7% Holding
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Matchtech Group (UK) Limited(1) 1 Kingdom Ordinary 99.998% 99.998% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Matchtech Group Management United
Company Limited (2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United
Matchtech Limited(2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
MSB Consulting Services United
Limited(2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International United Provision of recruitment
(UK) Limited(1) 1 Kingdom Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International United
Limited(1) 1 Kingdom Ordinary 100% 100% Holding
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International United
Trustees Limited(2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers Recruitment United
Services Limited(2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United
Provanis Limited(2) 1 Kingdom Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Resourcing Solutions Limited(1) 1 Kingdom Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United
The Comms Group Limited(1) 1 Kingdom Ordinary 100% 100% Holding
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Provision of recruitment
Gattaca GmbH 2 Germany Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
MSB International GMBH 13 Germany Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Provision of recruitment
Gattaca BV 3 Netherlands Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Cappo Inc. 5 States Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Matchtech Engineering United
Inc.(4) 4 States Ordinary 0% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United Provision of recruitment
Networkers Inc. 5 States Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International United
LLC 5 States Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International Provision of recruitment
(Canada) Inc. 11 Canada Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Gattaca Mexico Services, Provision of recruitment
S.A. de C.V 6 Mexico Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
NWI Mexico, S. de R.L. Provision of recruitment
de C.V. 6 Mexico Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Kithara Investments Proprietary
Limited 8 South Africa Ordinary 100% 100% Holding
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Kula Nathi Investments
Proprietary Limited 7 South Africa Ordinary 100% 100% Holding
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International Provision of recruitment
Proprietary Limited 7 South Africa Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International
South Africa Provision of recruitment
Proprietary Limited 7 South Africa Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International Provision of recruitment
(China) Co. Limited 9 China Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Comms Resource SDN. BHD 10 Malaysia Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International
(Malaysia) Sdn Bhd 10 Malaysia Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
United
NWKI Consultancy FZ LLC(4) 12 Arab Emirates Ordinary 0% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Cappo Qatar LLC(3) 15 Qatar Ordinary 49% 49% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers Consultancy
(Singapore) PTE. Limited 14 Singapore Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Gattaca Information Technology Provision of recruitment
Services SLU 16 Spain Ordinary 100% 100% consultancy
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Gattaca Recruitment ETT,
SLU 16 Spain Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
Networkers International
(India) PTE 17 India Ordinary 100% 100% Non trading
-------------------------------- ---------- ----------------- -------- ------- ------- ------------------------
1 For the year ended 31 July 2021, Gattaca plc has provided a
legal guarantee dated 4 November 2021 under s479a-s479c of the
Companies Act 2006 to these subsidiaries for audit exemption.
2 These dormant companies are exempt from preparing individual
financial statements by virtue of s394A of Companies Act 2006.
3 Gattaca plc has 100% of the beneficial interest in these
entities, and consolidates them as wholly owned subsidiaries in
line with IFRS 10.
4 These companies were disposed of or liquidated in the year,
with the shareholding remaining the same as per the year ended 31
July 2020 up to the date of disposal or liquidation.
All holdings by Gattaca plc are indirect except for Matchtech
Group (Holdings) Limited, Gattaca GmbH and Matchtech Group
Management Company Limited.
Networkers International (UK) Limited has a branch in Russia
which is consolidated into the Group's result.
The Group's Share Incentive Plan (SIP) is held by Gattaca plc UK
EBT. The Group has control over the EBT and therefore it has been
consolidated in the Group's results.
During the year, Gattaca plc set up a branch for a new Employee
Benefit Trust (the EBT) and appointed Apex Financial Services
Limited as the Trustee and the administrator to this new EBT. The
Company and Group has control over the new EBT and therefore it has
been consolidated in the Group and Company's results.
Registered office addresses
------------------------------------------------------------------------
1 1450 Parkway, Solent Business Park, Whiteley, Fareham, Hampshire,
PO15 7AF, United Kingdom
--------------------------------------------------------------------
2 c/o Grant Thornton, Jahnstrasse 6, 70597, Stuttgart, Germany
--------------------------------------------------------------------
3 Herengracht 124-128, 1015 BT Amsterdam, Netherlands
--------------------------------------------------------------------
4 33 SW Flager Avenue, Stuart, Florida, USA
--------------------------------------------------------------------
5 6400 International Parkway, Suite 1510, Plano TX 75093, USA
--------------------------------------------------------------------
6 Avenida Paseo de la Reforma No. 296 Piso 15 Oficina A, Colonia
Juárez, Delegación Cuauhtémoc,
Código Postal 06600. Ciudad de México, Mexico
--------------------------------------------------------------------
7 201 Heritage House, 20 Dreyer Street, Claremont, 7735, South Africa
--------------------------------------------------------------------
8 6th Floor, 119 Hertzog Boulevard, Foreshre, Cape Town, 8001, South
Africa
--------------------------------------------------------------------
9 B-2701, Di San Zhi Ye Building, No. A1 Shuguang Xili, Chao Yang
District, Beijing, China
--------------------------------------------------------------------
10 Level 8, Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan
PJU 1A/46, 47301 Petaling Jaya,
Selangor, Malaysia
--------------------------------------------------------------------
11 1 Richmond Street West, Suite 902, Toronto, Ontario, M5H 3W4, Canada
--------------------------------------------------------------------
12 Office 3022, Shatha Tower, Dubai Media City, Dubai, United Arab
Emirates
--------------------------------------------------------------------
13 Franlinstr. 48, 60456, Frankfurt, Germany
--------------------------------------------------------------------
14 371 Beach Road, #15-09 Keypoint, Singapore 199597
--------------------------------------------------------------------
15 Suite #204, Office #40 Al Rawabi Street, Muntazah, Doha, State
of Qatar. PO Box 8306
--------------------------------------------------------------------
16 Calle General, Moscardo 6. Espaco Office, Madrid 28020, Spain
--------------------------------------------------------------------
17 3rd Floor, 301 DLF City Court Sikandarpur, Gurgaon-122002 Harayana,
India
--------------------------------------------------------------------
16 Deferred Tax (unaudited)
Impact
Credited/ of transition
(charged) Credited Foreign to IFRS
Asset Liability Net to profit to equity exchange 16
2021 2021 2021 2021 2021 2021 2021
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Share-based payments 146 - 146 60 65 - -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Accelerated capital allowances - (466) (466) (360) - - -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Acquired intangibles - (369) (369) 45 - - -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Other temporary and deductible
differences 174 - 174 (50) - 2 -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Gross deferred tax
assets/(liabilities) 320 (835) (515) (305) 65 2 -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Amounts available for offset (320) 320 -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Reclassification to assets
held for sale - (9) (9)
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Net deferred tax
assets/(liabilities) - (524) (524)
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Impact
Credited/ of transition
(charged) (Charged) Foreign to IFRS
Asset Liability Net to profit to equity exchange 16
2020 2020 2020 2020 2020 2020 2020
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Share-based payments 21 - 21 (68) (16) - -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Accelerated capital allowances - (106) (106) (114) - - -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Acquired intangibles - (414) (414) 142 - - -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Other temporary and deductible
differences 222 - 222 62 - (6) 119
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Gross deferred tax
assets/(liabilities) 243 (520) (277) 22 (16) (6) 119
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Amounts available for offset (243) 243 -
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
Net deferred tax
assets/(liabilities) - (277) (277)
------------------------------------ -------- --------- -------- ---------- ---------- --------- --------------
The movement on the net deferred tax is as shown below:
Group
------------------
2021 2020
GBP'000 GBP'000
----------------------------------------- -------- --------
At 1 August (277) (396)
----------------------------------------- -------- --------
Impact of transition to IFRS 16 - 119
----------------------------------------- -------- --------
Recognised in income (Note 10) (305) 22
----------------------------------------- -------- --------
Recognised in equity 65 (16)
----------------------------------------- -------- --------
Foreign exchange 2 (6)
----------------------------------------- -------- --------
Reclassification to assets held for sale (9) -
----------------------------------------- -------- --------
At end of year (524) (277)
----------------------------------------- -------- --------
2021 2020
GBP'000 GBP'000
-------------------------------------------------- -------- --------
Deferred tax assets reversing within 1 year 248 179
-------------------------------------------------- -------- --------
Deferred tax liabilities reversing within 1 year (84) (232)
-------------------------------------------------- -------- --------
Reclassification of deferred tax assets reversing
within 1 year to assets held for sale (9) -
-------------------------------------------------- -------- --------
At end of year 155 (53)
-------------------------------------------------- -------- --------
2021 2020
GBP'000 GBP'000
------------------------------------------------ -------- --------
Deferred tax assets reversing after 1 year 72 64
------------------------------------------------ -------- --------
Deferred tax liabilities reversing after 1 year (751) (288)
------------------------------------------------ -------- --------
At end of year (679) (224)
------------------------------------------------ -------- --------
Unrecognised deferred tax assets
Group
------------------
2021 2020
GBP'000 GBP'000
----------------------------------------------------- -------- --------
Tax losses carried forward against profits of future
years 1,865 1,640
----------------------------------------------------- -------- --------
Net deferred tax assets 1,865 1,640
----------------------------------------------------- -------- --------
Of the unused tax losses GBP2,071,000 (2020: GBP3,234,000) can
be carried forward indefinitely, GBP817,000 (2020: GBP340,000)
expires within 10 years and GBP3,053,000 (2020: GBP142,000) expires
within 20 years. No deferred tax is recognised on unremitted
earnings of overseas subsidiaries as the Group is in a position to
control the timing of the reversal of temporary differences and it
is probable that such differences will not reverse in the
foreseeable future. The temporary differences associated with the
investments in subsidiaries for which a deferred tax liability has
not been recognised aggregate to GBP3,675,000 (2020: GBP5,345,000).
If the earnings were remitted, tax of GBP45,000 (2020: GBP120,000)
would be payable. The main UK corporation tax rate of 19% will
increase to 25% from 1 April 2023. Deferred tax has been valued
based on the substantively enacted rates at each balance sheet date
at which the deferred tax is expected to reverse.
17 Trade and Other Receivables
Group Company
-------------------- --------------------
2021 2020 2021 2020
unaudited unaudited
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- -------- ---------- --------
Trade receivables from contracts with
customers,
net of loss allowance 34,187 27,703 - -
-------------------------------------- ---------- -------- ---------- --------
Amounts owed by group companies - - 3,046 101,610
-------------------------------------- ---------- -------- ---------- --------
Other receivables 1,619 3,554 - -
-------------------------------------- ---------- -------- ---------- --------
Prepayments 1,389 1,705 - -
-------------------------------------- ---------- -------- ---------- --------
Accrued income 26,742 15,900 - -
-------------------------------------- ---------- -------- ---------- --------
Total 63,937 48,862 3,046 101,610
-------------------------------------- ---------- -------- ---------- --------
The amounts owed by group companies in the company statement of
financial position are considered to approximate to fair value.
Amounts owed by group companies are unsecured, repayable on demand
and accrue no interest.
The directors consider that the carrying amount of trade and
other receivables approximates to the fair value.
Accrued income relates to the Group's right to consideration for
temporary and permanent placements made but not billed at the year
end. These transfer to trade receivables once billing occurs.
Impairment of accrued income
Group
--------------------
2021 2020
unaudited
GBP'000 GBP'000
-------------------------------------- ---------- --------
Gross accrued income 27,807 16,169
-------------------------------------- ---------- --------
Loss allowance (1,065) (269)
-------------------------------------- ---------- --------
Accrued income, net of loss allowance 26,742 15,900
-------------------------------------- ---------- --------
The loss allowance for accrued income was determined as
follows:
More than More than More than
30 days 60 days 90 days
31 July 2021 ( unaudited) Current past due past due past due Total
-------------------------------- ------- --------- --------- --------- ------
Weighted expected loss rate
(%) 2.9% 2.7% 2.6% 23.7%
-------------------------------- ------- --------- --------- --------- ------
Gross carrying amount - accrued
income (GBP'000) 21,455 3,546 1,519 1,287 27,807
-------------------------------- ------- --------- --------- --------- ------
Loss allowance (GBP'000) 624 96 40 305 1,065
-------------------------------- ------- --------- --------- --------- ------
More than More than More than
30 days 60 days 90 days
31 July 2020 Current past due past due past due Total
-------------------------------- ------- --------- --------- --------- ------
Weighted expected loss rate
(%) 0.0% 0.0% 0.0% 38.7%
-------------------------------- ------- --------- --------- --------- ------
Gross carrying amount - accrued
income (GBP'000) 13,858 1,398 218 695 16,169
-------------------------------- ------- --------- --------- --------- ------
Loss allowance (GBP'000) - - - 269 269
-------------------------------- ------- --------- --------- --------- ------
The loss allowance for accrued income at year end reconciles to
the opening loss allowance as per below:
Group
--------------------
2021 2020
unaudited
GBP'000 GBP'000
---------------------------------------------------- ---------- --------
Opening loss allowance at 1 August 269 -
---------------------------------------------------- ---------- --------
Increase in loss allowance recognised in profit and
loss during the year 796 269
---------------------------------------------------- ---------- --------
Closing loss allowance at 31 July 1,065 269
---------------------------------------------------- ---------- --------
Impairment of trade receivables from contracts with
customers
Group
--------------------
2021 2020
unaudited
GBP'000 GBP'000
------------------------------------------------------- ---------- --------
Trade receivables from contracts with customers, gross
amounts 37,636 31,690
------------------------------------------------------- ---------- --------
Loss allowance (3,449) (3,987)
------------------------------------------------------- ---------- --------
Trade receivables from contracts with customers, net
of loss allowance 34,187 27,703
------------------------------------------------------- ---------- --------
Trade receivables are amounts due from customers for services
performed in the ordinary course of business. They are generally
settled within 30-60 days and are therefore all classified as
current.
The Group uses a third party credit scoring system to assess the
creditworthiness of potential new customers before accepting them.
Credit limits are defined by customer based on this information.
All customer accounts are subject to review on a regular basis by
senior management and actions are taken to address debt aging
issues.
Trade receivables are subject to the expected credit loss model.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss
allowance for all trade receivables.
To measure the expected credit losses, trade receivables have
been grouped based on shared credit risk characteristics by
geographical region or customer industry.
The expected loss rates are based on the payment profiles of
sales over a period of 36 months before the relevant year end and
the corresponding historical credit losses experienced within this
period. The historic loss rates are then adjusted to reflect any
relevant current and forward-looking information expected to affect
the ability of customers to settle the receivables. Additionally,
the ongoing impact of COVID-19 and projected post-COVID economic
recovery, based on external reports, forecast data and scenario
analysis, have been taken into account when assessing the credit
risk profiles for specific industries and geographies.
The loss allowance for trade receivables was determined as
follows:
More than More than More than
30 days 60 days 90 days
31 July 2021 (unaudited) Current past due past due past due Total
------------------------------ ------- --------- --------- --------- ------
Weighted expected loss rate
(%) 5.2% 5.0% 18.6% 60.9%
------------------------------ ------- --------- --------- --------- ------
Gross carrying amount - trade
receivables (GBP'000) 33,741 654 743 2,498 37,636
------------------------------ ------- --------- --------- --------- ------
Loss allowance (GBP'000) 1,756 33 138 1,522 3,449
------------------------------ ------- --------- --------- --------- ------
More than More than More than
30 days 60 days 90 days
31 July 2020 Current past due past due past due Total
------------------------------ ------- --------- --------- --------- ------
Weighted expected loss rate
(%) 6.9% 8.8% 10.2% 91.1%
------------------------------ ------- --------- --------- --------- ------
Gross carrying amount - trade
receivables (GBP'000) 19,079 8,941 1,788 1,882 31,690
------------------------------ ------- --------- --------- --------- ------
Loss allowance (GBP'000) 1,307 783 183 1,714 3,987
------------------------------ ------- --------- --------- --------- ------
The loss allowance for trade receivables at year end reconciles
to the opening loss allowance as per below:
Group
------------------
2021 2020
GBP'000 GBP'000
--------------------------------------------------------- -------- --------
Opening loss allowance at 1 August 3,987 2,189
--------------------------------------------------------- -------- --------
(Decrease)/increase in loss allowance recognised in
profit and loss during the year (296) 2,281
--------------------------------------------------------- -------- --------
Receivables written off during the year as uncollectible (242) (483)
--------------------------------------------------------- -------- --------
Closing loss allowance at 31 July 3,449 3,987
--------------------------------------------------------- -------- --------
18 Provisions (unaudited)
2021 2020
------------------------------------------------ ------------------------------------------------
Onerous Onerous
Dilapidation lease Other Dilapidation lease Other
provisions provisions provisions Total provisions provisions provisions Total
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Balance at 1
August 1,710 - 1,084 2,794 1,747 934 - 2,681
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Adjustment on
initial
application of
IFRS
16 - - - - - (934) - (934)
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Restated balance
at
1 August 1,710 - 1,084 2,794 1,747 - - 1,747
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Effects of
movements
in exchange rates - - - - (38) - - (38)
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Provisions made in
the year 74 - 40 114 1 - 1,084 1,085
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Provisions
utilised - - (679) (679) - - - -
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Provisions
released (58) - (392) (450) - - - -
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Provisions
reclassified
to held for sale (46) - - (46) - - - -
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Balance at 31 July 1,680 - 53 1,733 1,710 - 1,084 2,794
------------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
2021 2020 restated(1)
------------------------------------------------ ------------------------------------------------
Onerous Onerous
Dilapidation lease Other Dilapidation lease Other
provisions provisions provisions Total provisions provisions provisions Total
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Non-Current 1,269 - - 1,269 1,587 - - 1,587
------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Current 411 - 53 464 123 - 1,084 1,207
------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
Total 1,680 - 53 1,733 1,710 - 1,084 2,794
------------ ------------ ----------- ----------- -------- ------------ ----------- ----------- --------
1 Presentation of provisions between current and non-current
liabilities for the year ended 2020 has been restated as explained
in Note 1. 24
Dilapidation provisions are held in respect of the Group's
office properties where lease obligations include contractual
obligations to return the property to its original condition at the
end of the lease term, ranging between one and seven years.
Other provisions have been recognised primarily for
restructuring activities, with the remainder in respect of claims
for certain legal matters. In July 2020, the Group publicly
announced plans for a significant restructuring of its UK employee
base and restructuring provisions of GBP971,000 were recognised
based on the directors' best estimate of the forecast direct costs
arising from the restructuring. GBP679,000 of the restructuring
provision was utilised in the year to 31 July 2021 and the
remainder of the provision has been released. As such, there is no
restructuring provision held as at 31 July 2021. Other provisions
held as at 31 July 2021 are primarily in respect of claims for
certain legal matters.
No provisions are held by the parent Company (2020: GBPnil).
19 Trade and Other Payables
Group Company
-------------------- --------------------
2021 2020 2021 2020
unaudited unaudited
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------- ---------- -------- ---------- --------
Trade payables 4,530 1,750 - -
----------------------------------- ---------- -------- ---------- --------
Amounts owed to group undertakings - - 2,972 63,590
----------------------------------- ---------- -------- ---------- --------
Taxation and social security 10,473 15,859 - -
----------------------------------- ---------- -------- ---------- --------
Contractor wages payable 27,209 20,519 - -
----------------------------------- ---------- -------- ---------- --------
Accruals and deferred income 5,158 4,348 - -
----------------------------------- ---------- -------- ---------- --------
Other payables 8,751 3,653 - -
----------------------------------- ---------- -------- ---------- --------
Total 56,121 46,129 2,972 63,590
----------------------------------- ---------- -------- ---------- --------
Amounts owed to group undertakings are unsecured, repayable on
demand and accrue no interest.
20 Loans and Borrowings
Group Company
-------------------- --------------------
2021 2020 2021 2020
unaudited unaudited
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- -------- ---------- --------
Working capital facility 9,348 151 - -
-------------------------------------- ---------- -------- ---------- --------
Bank loans and borrowings due in less
than one year 9,348 151 - -
-------------------------------------- ---------- -------- ---------- --------
Revolving credit facility - 7,500 - 7,500
-------------------------------------- ---------- -------- ---------- --------
Finance costs capitalised - (196) - (196)
-------------------------------------- ---------- -------- ---------- --------
Bank loans and borrowings due in more
than one year - 7,304 - 7,304
-------------------------------------- ---------- -------- ---------- --------
Total bank loans and borrowings 9,348 7,455 - 7,304
-------------------------------------- ---------- -------- ---------- --------
In January 2020, the Group transferred a portion of its recourse
working capital facility to a non-recourse working capital
facility. Under the terms of the non-recourse facility, the trade
receivables assigned to the facility are owned by HSBC and so have
been de-recognised from the Group's statement of financial
position; in addition, the non-recourse working capital facility
does not meet the definition of loans and borrowings under IFRS.
The Group continues to collect cash from trade receivables assigned
to the non-recourse facility on behalf of HSBC which is then
transferred to them periodically each month. Any cash collected
from trade receivables under the non-recourse facility at the end
of reporting period that had not been transferred to HSBC, is
presented as restricted cash included within the Group's cash
balance. At 31 July 2021, the Group had agreed banking facilities
with HSBC totalling GBP75m (31 July 2020: GBP75m) invoice financing
working capital facility (recourse and non-recourse).
The Group's working capital facilities are secured by way of an
all assets debenture, which contains fixed and floating charges
over the assets of the Group. This facility allows certain
companies within the Group to borrow up to 90% of invoiced or
accrued income up to a maximum of GBP75m. Interest is charged on
the recourse borrowings at a rate of 1.75% (31 July 2020: 1.75%)
over the HSBC Bank base rate of 0.1% (2020: 0.1%).
The Group's GBP7.5m revolving credit facility was secured by way
of a fixed and floating charge over assets of the Group. In October
2020, the Group repaid the GBP7.5m revolving credit facility in
full and no longer is required to comply with certain financial
covenants over the revolving credit facility.
21 Financial Assets and Liabilities Statement of Financial
Position Classification
The carrying amount of the Group's financial assets and
liabilities as recognised at the statement of financial position
date of the reporting years under review may also be categorised as
follows:
Financial assets are included in the statement of financial
position within the following headings:
Group Company
-------------------- --------------------
2021 2020 2021 2020
unaudited unaudited
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- ---------- -------- ---------- --------
Trade and other receivables (Note 17)
----------------------------------------- ---------- -------- ---------- --------
- Financial assets recorded at amortised
cost 62,548 47,157 3,046 101,610
----------------------------------------- ---------- -------- ---------- --------
Cash and cash equivalents
----------------------------------------- ---------- -------- ---------- --------
- Financial assets recorded at amortised
cost 29,238 34,796 4 -
----------------------------------------- ---------- -------- ---------- --------
Total 91,786 81,953 3,050 101,610
----------------------------------------- ---------- -------- ---------- --------
Financial liabilities are included in the statement of financial
position within the following headings:
Group Company
-------------------- --------------------
2021 2020 2021 2020
unaudited unaudited
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ ---------- -------- ---------- --------
Borrowings (Note 20)
------------------------------------ ---------- -------- ---------- --------
- Financial liabilities recorded at
amortised cost 9,348 7,455 - 7,304
------------------------------------ ---------- -------- ---------- --------
Leases (Note 22)
------------------------------------ ---------- -------- ---------- --------
- Financial liabilities recorded at
amortised cost 5,761 7,736 - -
------------------------------------ ---------- -------- ---------- --------
Trade and other payables (Note 19)
------------------------------------ ---------- -------- ---------- --------
- Financial liabilities recorded at
amortised cost 45,648 30,270 2,972 63,590
------------------------------------ ---------- -------- ---------- --------
Total 60,757 45,461 2,972 70,894
------------------------------------ ---------- -------- ---------- --------
The amounts at which the assets and liabilities above are
recorded are considered to approximate to fair value.
22 Leases (unaudited)
On 1 August 2019, the Group adopted IFRS 16 Leases, applying a
modified retrospective approach to transition. The consolidated
statement of financial position shows the following amounts related
to leases where the Group is a lessee.
Properties Vehicles Other Total
Right-of-use-assets GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------------------------------- ---------- -------- -------- --------
Cost At 1 August 2019 9,335 336 17 9,688
--------------------------------- ---------- -------- -------- --------
Reclassification of dilapidation
assets 1,535 - - 1,535
----------------------------------------------------------- ---------- -------- -------- --------
Additions 42 12 - 54
----------------------------------------------------------- ---------- -------- -------- --------
Effect of reassessment
of lease term (862) - - (862)
----------------------------------------------------------- ---------- -------- -------- --------
Effect of movement in
exchange rates (46) - (1) (47)
----------------------------------------------------------- ---------- -------- -------- --------
At 31 July 2020 10,004 348 16 10,368
----------------------------------------------------------- ---------- -------- -------- --------
At 1 August 2020 10,004 348 16 10,368
----------------------------------------------------------- ---------- -------- -------- --------
Effect of reassessment
of lease term 416 - 5 421
----------------------------------------------------------- ---------- -------- -------- --------
Effect of movement in
exchange rates 41 - 1 42
----------------------------------------------------------- ---------- -------- -------- --------
Reclassification to assets
held for sale (216) - (14) (230)
----------------------------------------------------------- ---------- -------- -------- --------
At 31 July 2021 10,245 348 8 10,601
----------------------------------------------------------- ---------- -------- -------- --------
Accumulated depreciation At 1 August 2019 - - - -
--------------------------------- ---------- -------- -------- --------
Reclassification of dilapidation
assets 576 - - 576
----------------------------------------------------------- ---------- -------- -------- --------
Depreciation charge 1,858 176 7 2,041
----------------------------------------------------------- ---------- -------- -------- --------
Impairment 432 - - 432
----------------------------------------------------------- ---------- -------- -------- --------
Effect of movement in
exchange rates (19) - - (19)
----------------------------------------------------------- ---------- -------- -------- --------
At 31 July 2020 2,847 176 7 3,030
----------------------------------------------------------- ---------- -------- -------- --------
At 1 August 2020 2,847 176 7 3,030
----------------------------------------------------------- ---------- -------- -------- --------
Depreciation charge 1,749 119 7 1,875
----------------------------------------------------------- ---------- -------- -------- --------
Impairment 183 - - 183
----------------------------------------------------------- ---------- -------- -------- --------
Effect of movement in
exchange rates 40 - - 40
----------------------------------------------------------- ---------- -------- -------- --------
Reclassification to assets
held for sale (190) - (11) (201)
----------------------------------------------------------- ---------- -------- -------- --------
At 31 July 2021 4,629 295 3 4,927
----------------------------------------------------------- ---------- -------- -------- --------
Net book value At 1 August 2020 7,157 172 9 7,338
------------------------- --------------------------------- ---------- -------- -------- --------
At 31 July 2021 5,616 53 5 5,674
----------------------------------------------------------- ---------- -------- -------- --------
At 31 July 2021, included within property right-of-use assets is
costs of GBP1,491,000 (2020: GBP1,577,000) and net book value of
GBP526,000 (2020: GBP802,000) relating to dilapidation assets.
During the year, the Group recognised an impairment of
GBP114,000 in respect of a UK office property that is no longer is
use by the business. The remainder of the GBP69,000 impairment
charge in the year is due to the closure of Mexico operations. In
addition, the lease term for the Canadian office has been extended
to September 2025 which led to additional right-of-use assets as
shown in the disclosure above.
31 July 2021 31 July 2020
---------------------------------------- ----------------------------------------
Properties Vehicles Other Total Properties Vehicles Other Total
Lease liabilities GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ---------- -------- -------- -------- ---------- -------- -------- --------
Current 1,423 55 2 1,480 1,855 132 3 1,990
------------------ ---------- -------- -------- -------- ---------- -------- -------- --------
Non-current 4,268 9 4 4,281 5,696 44 6 5,746
------------------ ---------- -------- -------- -------- ---------- -------- -------- --------
Total 5,691 64 6 5,761 7,551 176 9 7,736
------------------ ---------- -------- -------- -------- ---------- -------- -------- --------
Lease liabilities for properties have lease terms of between one
and seven years.
The discount rates used to measure the lease liabilities at 31
July 2021 range between 1.6% to 10.1% for properties (2020: 2.0% -
10.1%), 4.7% for vehicles (2020: 4.7%) and 10.1% for other leases
(2020: 10.1%).
Reconciliation of lease liabilities movement in the year
Properties Vehicles Other Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- -------- -------- --------
At 1 August 2019 10,260 347 17 10,624
-------------------------------------- ---------- -------- -------- --------
Lease payments (2,011) (183) (7) (2,201)
-------------------------------------- ---------- -------- -------- --------
Interest expense on lease liabilities 201 12 1 214
-------------------------------------- ---------- -------- -------- --------
Effect of reassessment of lease term (862) - - (862)
-------------------------------------- ---------- -------- -------- --------
Effect of movement in exchange rates (37) - (2) (39)
-------------------------------------- ---------- -------- -------- --------
At 31 July 2020 7,551 176 9 7,736
-------------------------------------- ---------- -------- -------- --------
Properties Vehicles Other Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ---------- -------- -------- --------
At 1 August 2020 7,551 176 9 7,736
-------------------------------------- ---------- -------- -------- --------
Lease payments (2,387) (116) (8) (2,511)
-------------------------------------- ---------- -------- -------- --------
Interest expense on lease liabilities 151 4 1 156
-------------------------------------- ---------- -------- -------- --------
Effect of reassessment of lease term 268 - 5 273
-------------------------------------- ---------- -------- -------- --------
Effect of movement in exchange rates 120 - 1 121
-------------------------------------- ---------- -------- -------- --------
Liabilities directly associated with
assets held for sale (12) - (2) (14)
-------------------------------------- ---------- -------- -------- --------
At 31 July 2021 5,691 64 6 5,761
-------------------------------------- ---------- -------- -------- --------
Amounts in respect of leases recognised in the income
statement
2021 2020
GBP'000 GBP'000
--------------------------------------------------- -------- --------
Depreciation expense of right-of-use assets 1,875 2,041
--------------------------------------------------- -------- --------
Impairment of right-of-use assets 183 432
--------------------------------------------------- -------- --------
Interest expense on lease liabilities 156 214
--------------------------------------------------- -------- --------
Expense relating to leases of low-value assets and
short-term leases
(included in administrative expenses) 14 239
--------------------------------------------------- -------- --------
23 Share Capital
Authorised share capital
Company
--------------------
2021 2020
unaudited
GBP'000 GBP'000
--------------------------------------------------------- ---------- --------
40,000,000 (2020: 40,000,000) Ordinary shares of GBP0.01
each 400 400
--------------------------------------------------------- ---------- --------
Allotted, called up and fully paid:
Company
--------------------
2021 2020
unaudited
GBP'000 GBP'000
--------------------------------------------------------- ---------- --------
32,290,400 (2020: 32,290,000) Ordinary shares of GBP0.01
each 323 323
--------------------------------------------------------- ---------- --------
The number of shares in issue in the Company is shown below:
Company
------------------
2021 2020
unaudited
000s 000s
-------------------------- ---------- ------
In issue at 1 August 32,290 32,285
-------------------------- ---------- ------
Exercise of share options - 5
-------------------------- ---------- ------
In issue at 31 July 32,290 32,290
-------------------------- ---------- ------
The Company has one class of ordinary shares. Each share is
entitled to one vote in the event of a poll at a general meeting of
the Company. Each share is entitled to participate in dividend
distributions.
Share Options
The following options arrangements exist over the Company's
shares:
Exercise period
----------------------
2021 2020
unaudited Date of Exercise
'000s '000s grant price pence From To
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus - 1 04/02/2011 1 03/02/2013 04/02/2021
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus - 1 04/02/2011 1 03/02/2014 04/02/2021
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 1 1 31/01/2012 1 30/01/2014 31/01/2022
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 1 1 31/01/2012 1 30/01/2015 31/01/2022
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 1 1 31/01/2013 1 30/01/2015 31/01/2023
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 2 2 31/01/2013 1 30/01/2016 31/01/2023
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 4 4 01/01/2014 1 01/01/2016 01/01/2024
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 32 32 01/01/2014 1 01/01/2017 01/01/2024
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 3 3 28/01/2015 1 28/01/2017 28/01/2025
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 24 24 28/01/2015 1 28/01/2018 28/01/2025
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 231 231 19/12/2018 1 19/12/2021 19/12/2028
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Zero Priced Share Option
Bonus 171 171 19/12/2018 1 19/12/2021 19/12/2028
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Long-Term Incentive
Plan Options 510 510 20/01/2020 1 20/01/2023 20/01/2030
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Long-Term Incentive
Plan Options 194 194 20/01/2020 1 20/01/2023 20/01/2030
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Long-Term Incentive
Plan Options 129 - 01/12/2020 1 01/12/2023 01/12/2030
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Long-Term Incentive
Plan Options 90 - 01/12/2020 1 01/12/2023 01/12/2030
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Long-Term Incentive
Plan Options 63 - 01/12/2020 1 01/12/2023 01/12/2030
------------------------- ---------- ------ ---------- ------------ ---------- ----------
Total 1,456 1,176
------------------------- ---------- ------ ---------- ------------ ---------- ----------
During the year, the Group granted share options under the
Long-Term Incentive Plan for executive directors and senior
management. The share options were granted on 1 December 2020 to
members of staff to be held over a three-year vesting period and
are subject to a cumulative continuing underlying PBT performance
condition. All share options have a life of 10 years from grant
date and are equity settled on exercise.
The movement in share options is shown below:
2021
unaudited 2020
------------------------------- ------------------------------------
Weighted
average Weighted Weighted Weighted
exercise average average average
Number price share price Number exercise share price
'000s (pence) (pence) '000s price (pence) (pence)
------------------------ ------ --------- ------------ ------ -------------- ------------
Outstanding at 1 August 1,176 74.6 - 883 13.1 -
------------------------ ------ --------- ------------ ------ -------------- ------------
Granted 1,106 1.0 - 704 1.0 -
------------------------ ------ --------- ------------ ------ -------------- ------------
Forfeited/ lapsed (826) 1.3 - (406) 27.3 -
------------------------ ------ --------- ------------ ------ -------------- ------------
Exercised - - - (5) 1.0 116.7
------------------------ ------ --------- ------------ ------ -------------- ------------
Outstanding at 31 July 1,456 1.2 1,176 74.6
------------------------ ------ --------- ------------ ------ -------------- ------------
Exercisable at 31 July 69 1.0 69 1.0
------------------------ ------ --------- ------------ ------ -------------- ------------
The numbers and weighted average exercise prices of share
options vesting in the future are shown below.
2021
unaudited 2020
---------------------------------- ----------------------------------
Weighted Weighted
average average
remaining Weighted remaining Weighted
contract average contract average
life Number exercise life Number exercise
Exercise Date (months) '000s price (pence) (months) '000s price (pence)
-------------- ---------- ------ -------------- ---------- ------ --------------
19/12/2021 5 402 1.0 17 402 1.0
-------------- ---------- ------ -------------- ---------- ------ --------------
20/01/2023 18 703 1.0 30 704 1.0
-------------- ---------- ------ -------------- ---------- ------ --------------
01/12/2023 28 219 2.4 - - -
-------------- ---------- ------ -------------- ---------- ------ --------------
31/01/2024 30 60 - - - -
-------------- ---------- ------ -------------- ---------- ------ --------------
Total 1,384 1,106
-------------- ---------- ------ -------------- ---------- ------ --------------
In addition to the share option schemes the Group operated a
Share Incentive Plan (SIP), which is an HMRC approved plan
available to all employees enabling them to purchase shares out of
pre-tax salary. For each share purchased the Company grants an
additional share at no cost. During the year the Company purchased
73,190 shares (2020: 124,912) under this scheme.
The Group's Share Incentive Plan is held by an Employee Benefit
Trust (EBT) for tax purposes. The EBT buys shares with funds from
the Group and any shares held by the EBT are distributed to
employees once vesting conditions are satisfied. The Group has
control over the EBT and therefore it has been consolidated at 31
July 2021 and 31 July 2020. During the year, a new EBT was set up
as the branch of Gattaca plc and Apex Financial Services Limited
was pointed as the Trustee and the administrator to this new
EBT.
As at 31 July 2021, excess funds of GBP28,000 (2020: GBP70,000)
was held by the EBT, which has been included in cash and cash
equivalents.
The following expenses or credits were recognised in the income
statement in relation to share-based payment transactions:
2021 2020
unaudited
Group GBP'000 GBP'000
--------------------------------- ---------- --------
Zero Priced Share Option Bonus - (62)
--------------------------------- ---------- --------
Long-Term Incentive Plan Options 133 2
--------------------------------- ---------- --------
Share Incentive Plan 138 137
--------------------------------- ---------- --------
Total 271 77
--------------------------------- ---------- --------
The key assumptions used in the calculation of fair value per
awards are as follows:
Share
price Risk
on the free
date Exercise Vesting Dividend rate Fair
Date of of grant price Volatility period yield of interest value
grant (GBP) (GBP) (%) (yrs) (%) (%) (GBP)
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/09/2016 SIP 3.87 0.01 N/A 3.00 N/A N/A 3.87
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/10/2016 SIP 3.57 0.01 N/A 3.00 N/A N/A 3.57
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/11/2016 SIP 3.16 0.01 N/A 3.00 N/A N/A 3.16
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/12/2016 SIP 2.95 0.01 N/A 3.00 N/A N/A 2.95
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
16/01/2017 SIP 2.98 0.01 N/A 3.00 N/A N/A 2.98
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Zero Priced Share
31/01/2017 Option Bonus 2.92 0.01 31.6% 3.00 7.9% 0.3% 1.27
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Zero Priced Share
31/01/2017 Option Bonus 2.92 0.01 31.6% 3.00 7.9% 0.3% 1.51
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Zero Priced Share
31/01/2017 Option Bonus 2.90 0.01 31.6% 3.00 7.9% 0.3% 1.23
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Zero Priced Share
31/01/2017 Option Bonus 2.90 0.01 31.6% 3.00 7.9% 0.3% 1.49
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Long Term Incentive
31/01/2017 Plan Options 2.90 0.72 31.6% 3.00 7.9% 0.3% 0.86
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Long Term Incentive
03/02/2017 Plan Options 2.90 1.45 31.6% 3.00 7.9% 0.3% 0.66
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/02/2017 SIP 2.94 0.01 N/A 3.00 N/A N/A 2.94
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/03/2017 SIP 2.94 0.01 N/A 3.00 N/A N/A 2.94
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/04/2017 SIP 3.10 0.01 N/A 3.00 N/A N/A 3.10
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/05/2017 SIP 3.18 0.01 N/A 3.00 N/A N/A 3.18
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/06/2017 SIP 3.28 0.01 N/A 3.00 N/A N/A 3.28
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/07/2017 SIP 3.09 0.01 N/A 3.00 N/A N/A 3.09
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/08/2017 SIP 2.87 0.01 N/A 3.00 N/A N/A 2.87
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/09/2017 SIP 2.99 0.01 N/A 3.00 N/A N/A 2.99
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/10/2017 SIP 3.10 0.01 N/A 3.00 N/A N/A 3.10
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/11/2017 SIP 3.12 0.01 N/A 3.00 N/A N/A 3.12
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/12/2017 SIP 3.05 0.01 N/A 3.00 N/A N/A 3.05
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/01/2018 SIP 3.00 0.01 N/A 3.00 N/A N/A 3.00
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/02/2018 SIP 2.63 0.01 N/A 3.00 N/A N/A 2.63
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/03/2018 SIP 2.31 0.01 N/A 3.00 N/A N/A 2.31
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
12/04/2018 SIP 1.84 0.01 N/A 3.00 N/A N/A 1.84
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/05/2018 SIP 1.40 0.01 N/A 3.00 N/A N/A 1.40
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/06/2018 SIP 1.58 0.01 N/A 3.00 N/A N/A 1.58
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/07/2018 SIP 1.25 0.01 N/A 3.00 N/A N/A 1.25
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/08/2018 SIP 1.50 0.01 N/A 3.00 N/A N/A 1.50
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
10/09/2018 SIP 1.40 0.01 N/A 3.00 N/A N/A 1.40
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/10/2018 SIP 1.30 0.01 N/A 3.00 N/A N/A 1.30
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/11/2018 SIP 1.41 0.01 N/A 3.00 N/A N/A 1.41
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
10/12/2018 SIP 1.14 0.01 N/A 3.00 N/A N/A 1.14
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Zero Priced Share
19/12/2018 Option Bonus 1.07 0.01 N/A 3.00 0.0% N/A 1.08
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Zero Priced Share
19/12/2018 Option Bonus 1.07 0.01 44.9% 3.00 0.0% 0.7% 0.73
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/01/2019 SIP 1.13 0.01 N/A 3.00 N/A N/A 1.13
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/02/2019 SIP 1.17 0.01 N/A 3.00 N/A N/A 1.17
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
11/03/2019 SIP 1.18 0.01 N/A 3.00 N/A N/A 1.18
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/04/2019 SIP 1.39 0.01 N/A 3.00 N/A N/A 1.39
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/05/2019 SIP 1.58 0.01 N/A 3.00 N/A N/A 1.58
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
10/06/2019 SIP 1.53 0.01 N/A 3.00 N/A N/A 1.53
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/07/2019 SIP 1.43 0.01 N/A 3.00 N/A N/A 1.43
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/08/2019 SIP 1.44 0.01 N/A 3.00 N/A N/A 1.44
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/09/2019 SIP 1.28 0.01 N/A 3.00 N/A N/A 1.28
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/10/2019 SIP 1.32 0.01 N/A 3.00 N/A N/A 1.32
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/11/2019 SIP 1.18 0.01 N/A 3.00 N/A N/A 1.18
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/12/2019 SIP 1.10 0.01 N/A 3.00 N/A N/A 1.10
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
10/01/2020 SIP 1.29 0.01 N/A 3.00 N/A N/A 1.29
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
10/02/2020 SIP 0.82 0.01 N/A 3.00 N/A N/A 0.82
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/03/2020 SIP 0.76 0.01 N/A 3.00 N/A N/A 0.76
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
09/04/2020 SIP 0.39 0.01 N/A 3.00 N/A N/A 0.39
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
11/05/2020 SIP 0.44 0.01 N/A 3.00 N/A N/A 0.44
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/06/2020 SIP 0.45 0.01 N/A 3.00 N/A N/A 0.45
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
10/07/2020 SIP 0.45 0.01 N/A 3.00 N/A N/A 0.45
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Long Term Incentive
20/01/2020 Plan Options 1.24 0.01 N/A 3.00 N/A N/A 1.13
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Long Term Incentive
20/01/2020 Plan Options 1.24 0.01 N/A 3.00 N/A N/A 1.13
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
14/08/2020 SIP 0.54 0.01 N/A 3.00 N/A N/A 0.54
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/09/2020 SIP 0.58 0.01 N/A 3.00 N/A N/A 0.58
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/10/2020 SIP 0.54 0.01 N/A 3.00 N/A N/A 0.54
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
10/11/2020 SIP 0.60 0.01 N/A 3.00 N/A N/A 0.60
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/12/2020 SIP 0.82 0.01 N/A 3.00 N/A N/A 0.82
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
11/01/2021 SIP 0.82 0.01 N/A 3.00 N/A N/A 0.82
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
12/02/2021 SIP 0.86 0.01 N/A 3.00 N/A N/A 0.86
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/03/2021 SIP 1.15 0.01 N/A 3.00 N/A N/A 1.15
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
12/04/2021 SIP 1.50 0.01 N/A 3.00 N/A N/A 1.50
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
11/05/2021 SIP 1.49 0.01 N/A 3.00 N/A N/A 1.49
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
08/06/2021 SIP 2.24 0.01 N/A 3.00 N/A N/A 2.24
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
07/07/2021 SIP 2.64 0.01 N/A 3.00 N/A N/A 2.64
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Long Term Incentive
01/12/2020 Plan Options 0.84 0.01 N/A 3.00 N/A N/A 0.84
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
Long Term Incentive
01/12/2020 Plan Options 0.79 0.01 N/A 3.00 N/A N/A 2.32
----------- -------------------- --------- -------- ---------- ------- -------- ------------ ------
For Zero Priced Share Option Bonus grants in 2020 that are
subject to an Earnings per Share (EPS) growth vesting condition, a
Binomial model was used for valuation.
Prior to the 2018 award, the volatility of the Company's share
price on each date of grant was calculated as the average of the
annualised standard deviations of daily continuously compounded
returns on the Company's stock, calculated over five years back
from the date of grant, where applicable. For 2018 onwards, the
volatility of the Company's share price on date of grant was
calculated using the historical daily share price of the Company
over a term commensurate with the expected life of the award. For
all awards the risk-free rate is the yield to maturity on the date
of grant of a UK Gilt Strip, with term to maturity equal to the
life of the option.
24 Transactions with Directors and Related Parties
(unaudited)
During the year the Group made no sales (2020: GBP16,000) to
InHealth Group Ltd and made no purchases (2020: GBP7,400) from
Preventicum UK Limited which were related parties by virtue of the
common directorship of Richard Bradford (resigned as a director of
Gattaca plc on 8 December 2020). During the year the Group made no
sales (2020: GBP87,000) to Tricoya Technologies Limited, a
subsidiary of Accsys Technologies Plc, which were considered as a
related party transaction by virtue of common directorship of
Patrick Shanley (resigned as a director of Accsys Technologies Plc
on 18 September 2020). As at the year end 31 July 2021 and 31 July
2020, there were no balance outstanding for any transactions for
InHealth Group Ltd, Preventicum UK Limited or Tricoya Technologies
Limited. Group policy is for all transactions with related parties
to be made on an arm's length basis and no guarantees have been
given to, or received from, related parties.
There were no other related party transactions with entities
outside of the Group.
During the year Matchtech Group (UK) Limited charged Gattaca plc
GBP525,000 (2020: GBP467,000) for provision of management
services.
The remuneration of key management is disclosed in Note 5.
25 Financial Instruments (unaudited)
The financial risk management policies and objectives including
those related to financial instruments and the qualitative risk
exposure details, comprising credit and other applicable risks, are
included within the Chief Financial Officer's report under the
heading 'Group financial risk management'.
Maturity of financial liabilities
The following table sets out the contractual maturities of
financial liabilities, including interest payments. This analysis
assumes that interest rates prevailing at the reporting date remain
constant:
0 to <1 1 to <2 2 to <5 5 years Contractual
years years years and over cash flows
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- -------- --------- -----------
2021
---------------------------------- -------- -------- -------- --------- -----------
Revolving credit facility - - - - -
---------------------------------- -------- -------- -------- --------- -----------
Invoice financing working capital
facility 9,382 - - - 9,382
---------------------------------- -------- -------- -------- --------- -----------
Lease liabilities 1,494 1,192 2,438 651 5,775
---------------------------------- -------- -------- -------- --------- -----------
Trade payables 40,490 - - - 40,490
---------------------------------- -------- -------- -------- --------- -----------
Total 51,366 1,192 2,438 651 55,647
---------------------------------- -------- -------- -------- --------- -----------
2020
---------------------------------- ------ ----- ----- ------
Revolving credit facility 5,117 88 2,515 - 7,720
---------------------------------- ------ ----- ----- ------
Invoice financing working capital
facility 170 - - - 170
---------------------------------- ------ ----- ----- ------
Lease liabilities 1,990 5,746 - - 7,736
---------------------------------- ------ ----- ----- ------
Trade payables 25,922 - - -25,922
---------------------------------- ------ ----- ----- ------
Total 33,199 5,834 2,515 -41,548
---------------------------------- ------ ----- ----- ------
0 to <1 1 to <2 2 to <5 5 years Contractual
years years years and over cash flows
Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- --------- -----------
2021
-------------------------- -------- -------- -------- --------- -----------
Revolving credit facility - - - - -
-------------------------- -------- -------- -------- --------- -----------
Total - - - - -
-------------------------- -------- -------- -------- --------- -----------
2020
-------------------------- -------- -------- -------- --------- -----------
Revolving credit facility 5,117 88 2,515 - 7,720
-------------------------- -------- -------- -------- --------- -----------
Total 5,117 88 2,515 - 7,720
-------------------------- -------- -------- -------- --------- -----------
Interest rate sensitivity
The directors have calculated that the effect on profit of a 100
basis point increase in interest rates would be an expense of
GBP782,000 (2020: expense of GBP402,000).
Borrowing facilities
The Group makes use of working capital facilities, details of
which can be found in Note 20. The undrawn working capital
facilities available at year end in respect of which all conditions
precedent had been met was as follows:
Group Company
------------------ ------------------
2021 2020 2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- -------- --------
Expiring in one to five years 24,163 23,715 - -
------------------------------ -------- -------- -------- --------
The directors believe that the carrying value of borrowings
approximates to their fair value.
Liquidity Risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group has a robust approach to forecasting
both net debt and trading results on a monthly basis, looking
forward to at least the next 12 months. At 31 July 2021, the Group
had agreed banking facilities with HSBC totalling GBP75m (31 July
2020: GBP82.5m) comprised solely of a GBP75m invoice financing
working capital facility (31 July 2020: GBP75m invoice financing
working capital facility and a GBP7.5m revolving credit facility).
The available financing facilities in place are sufficient to meet
the Group's forecast cash flows.
Foreign Currency Risk
The Group's main foreign currency risk is the short-term risk
associated with the trade debtors denominated in US dollars and
Euros relating to the UK operations whose functional currency is
sterling. The risk arises on the difference between exchange rates
at the time the invoice is raised to when the invoice is settled by
the client. For sales denominated in foreign currency, the Group
ensures that direct costs associated with the sale are also
denominated in the same currency. Further foreign exchange risk
arises where there is a gap in the amount of assets and liabilities
of the Group denominated in foreign currencies that are required to
be translated into sterling at the year end rates of exchange.
Where the risk to the Group is considered to be significant, the
Group will enter into a matching forward foreign exchange contract
with a reputable bank.
Net foreign currency monetary assets are shown below:
Group
------------------
2021 2020
GBP'000 GBP'000
---------- -------- --------
US Dollar 6,436 6,155
---------- -------- --------
Euro 5,224 4,070
---------- -------- --------
The effect of a 25 percent strengthening of the Euro and US
Dollar against sterling at the financial position date on the Euro
and US Dollar denominated trade and other receivables and payables
carried at that date would, all other variables held constant, have
resulted in a net increase in pre-tax profit for the year and
increase of net assets of GBP3,397,000 (2020: GBP2,635,000). A 25
percent weakening in the exchange rates would, on the same basis,
have decreased pre-tax profit and reduced net assets by
GBP2,352,000 (2020: GBP1,734,000).
The company only holds balances denominated in its functional
currency and so is not exposed to foreign currency risk.
26 Capital Management Policies and Procedures
Gattaca plc's capital management objectives are:
- to ensure the Group's ability to continue as a going
concern;
- to provide an adequate return to shareholders; and
- by pricing products and services commensurately with the level
of risk.
The Group monitors capital on the basis of the carrying amount
of equity as presented on the face of the statement of financial
position.
The Group sets the amount of capital in proportion to its
overall financing structure, i.e. equity and financial liabilities.
The Group manages the capital structure and makes adjustments in
the light of changes in economic conditions and risk
characteristics of the underlying assets. Capital for the reporting
year under review is summarised as follows:
Group
--------------------
2021 2020
unaudited
GBP'000 GBP'000
----------------------------------- ---------- --------
Total equity 40,863 39,772
----------------------------------- ---------- --------
Cash and cash equivalents (29,238) (34,796)
----------------------------------- ---------- --------
Capital 11,625 4,976
----------------------------------- ---------- --------
Total equity 40,863 39,772
----------------------------------- ---------- --------
Borrowings 9,348 7,455
----------------------------------- ---------- --------
Lease liabilities 5,761 7,736
----------------------------------- ---------- --------
Overall financing 55,972 54,963
----------------------------------- ---------- --------
Capital to overall financing ratio 21% 9%
----------------------------------- ---------- --------
27 Net Debt and Adjusted Net Debt (unaudited)
Net debt is the total amount of cash and cash equivalents less
interest-bearing loans and borrowings, including finance lease
liabilities. The table below provides the required reconciliation
evaluating the changes in liabilities arising from financing
activities.
Net cash flows include the net drawdown of loans and borrowings
and cash interest paid relating to loans and borrowings.
A reconciliation to adjusted net debt, which excludes lease
liabilities and is the Group's preferred net debt measure is also
shown below.
1 August Net cash Non-cash 31 July
2020 flows movements 2021
2021 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- -------- -------- ---------- --------
Cash and cash equivalents 34,796 (5,558) - 29,238
----------------------------------------- -------- -------- ---------- --------
Interest-bearing term loan (7,500) 7,500 - -
----------------------------------------- -------- -------- ---------- --------
Working capital facilities (151) (9,197) - (9,348)
----------------------------------------- -------- -------- ---------- --------
Lease liabilities (7,736) 2,511 (536) (5,761)
----------------------------------------- -------- -------- ---------- --------
Total net cash 19,409 (4,744) (536) 14,129
----------------------------------------- -------- -------- ---------- --------
Capitalised finance costs 196 - (196) -
----------------------------------------- -------- -------- ---------- --------
Total net cash after capitalised finance
costs 19,605 (4,744) (732) 14,129
----------------------------------------- -------- -------- ---------- --------
Excluding lease liabilities 7,736 (2,511) 536 5,761
----------------------------------------- -------- -------- ---------- --------
Adjusted total net cash excluding lease
liabilities 27,341 (7,255) (196) 19,890
----------------------------------------- -------- -------- ---------- --------
1 August Net cash Non-cash 31 July
2019 flows movements 2020
2020 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- -------- -------- ---------- --------
Cash and cash equivalents 19,173 15,623 - 34,796
----------------------------------------- -------- -------- ---------- --------
Interest-bearing term loan (15,000) 7,500 - (7,500)
----------------------------------------- -------- -------- ---------- --------
Working capital facilities (29,119) 28,968 - (151)
----------------------------------------- -------- -------- ---------- --------
Lease liabilities (10,624) 2,201 687 (7,736)
----------------------------------------- -------- -------- ---------- --------
Total net (debt)/cash (35,570) 54,292 687 19,409
----------------------------------------- -------- -------- ---------- --------
Capitalised finance costs 124 223 (151) 196
----------------------------------------- -------- -------- ---------- --------
Total net (debt)/cash after capitalised
finance costs (35,446) 54,515 536 19,605
----------------------------------------- -------- -------- ---------- --------
Excluding lease liabilities 10,624 (2,201) (687) 7,736
----------------------------------------- -------- -------- ---------- --------
Adjusted total net (debt)/cash excluding
lease liabilities (24,822) 52,314 (151) 27,341
----------------------------------------- -------- -------- ---------- --------
28 Contingent Liabilities (unaudited)
We continue our cooperation with the United States Department of
Justice and in 2021 have incurred GBP29,000 (2020: GBP1.4m) in
advisory fees on this matter. The Group is not currently in a
position to know what the outcome of these enquiries may be and
therefore we are unable to quantify the likely outcome for the
Group.
29 Dividends
2021 2020
unaudited
GBP'000 GBP'000
--------------------------------------------------- ---------- --------
Equity dividends proposed after the year end (not
recognised as a liability) at 1.5 pence per share
(2020: nil pence) 484 -
--------------------------------------------------- ---------- --------
The Group declared an external dividend of 1.5 pence per share
on 4 November 2021.
30 Events After the Reporting Date (unaudited)
The Group has not identified any subsequent events.
31 Availability of Report & Accounts and Notice of AGM
It is expected that the Company's annual report and accounts for
the year ended 31 July 2021 (the "Accounts") will be published
before the end of 5 November 2021 and that copies will be posted to
shareholders and available to download from the Company's website
at www.gattacaplc.com shortly. Accompanying the Accounts will be
notice of Gattaca's 2021 annual general meeting, to be held at
9.30am on 8 December 2021 at The Solent Hotel & Spa, Rookery
Avenue, Whiteley, Hampshire.
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END
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