TIDM4GBL
RNS Number : 3239H
4GLOBAL PLC
27 July 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMED. ON PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
27 July 2023
4GLOBAL PLC
("4GLOBAL" or the "Company")
Final Results
4GLOBAL, a UK-based data, services and software company focused
on major sporting events and the promotion and measurement of
physical activity, is pleased to announce its audited final results
for the year ended 31 March 2023.
Headline results for the year to 31 March 2023
Audited Audited Change
2023 2022
GBP'000 GBP'000
Revenue 5,586 3,640 +53%
Gross profit 4,136 2,616 +58%
Adjusted profit before taxation 1,230 573 +115%
Statutory profit / (loss) before tax 519 (1,889)
Earnings per share 2.4p (7.1)p
Net cash 1,138 3,051
Financial highlights
-- Revenue increased to GBP5.6m (2022: GBP3.6m) up 53%
-- Consultancy services revenue GBP2.3m and data (ARR) revenue
GBP3.3m, up 114%
-- Significant revenue (GBP2.5m) carried over into new financial
-- year, providing good forward visibility
Significantly improved operating profit at GBP1.2m (2022:
GBP573k) up 115%
Profit before tax of GBP520k against a loss for the prior
year of GBP1.9m
-- Earnings per share of 2.4p compared to a loss of (7.1)p
in 2022
Post period highlights
-- Strategic partnership to exploit a multi-million US dollar
opportunity with Jonas Fitness Inc, part of Jonas Software,
a worldwide Constellation Software company
-- Strategic partnership agreement for a multi-million-pound
opportunity with the fitness equipment and digital health
provider Technogym to work with their existing and mutual
-- clients to enhance their data insight solutions
Continued strong financial performance in first quarter
of new financial year, with confidence in continued strong
financial performance. The Company remains focused on
continuing to grow its data and insight products revenue,
due to revenue visibility and higher margin profile.
Eloy Mazon, Chief Executive Officer of 4GLOBAL commented:
" We completed our first full year as an AIM quoted company and
are in a strong financial position - profitable and with a sound
balance sheet - the business has an excellent foundation on which
to build in the current financial year and the future .
"Demand for our data and insight products continues to grow. The
many significant challenges faced in our sector due to the
uncertain global economic outlook, will, we believe, drive our
customers to seek ever more business-critical insight and this is
the very strong message we are getting from our customers.
"We are encouraged by the prospects for the rest of the
financial year and beyond as we seek to increase our penetration in
the European and North American markets and develop new revenue
streams associated with our data."
For further information please contact:
4GLOBAL c/o IFC Advisory
Eloy Mazon (CEO)
Spark Advisory Partners - Nominated Adviser
Neil Baldwin 0203 368 3554
Canaccord Genuity Limited - Broker
Bobbie Hilliam 020 7523 8000
IFC Advisory
Graham Herring / Zach Cohen 0203 934 6630
A copy of these results is available on the Company's website
www.4global.com . In addition, the Report & Accounts will be
available on the Company's website and sent to shareholders by, at
which point a further notification will be made.
CHAIRMAN'S STATEMENT
I am very pleased to announce our results for the year ended 31
March 2023. We have built on the foundations of the previous year
and have established deep long-term partnerships with key clients
that have resulted in the robust performance being announced today.
Clients are seeing the benefits of our data and the provision of
insights that our data provides which allows them to make, and
continue to make, insightful business decisions.
Results
The financial results for the year ended 31 March 2023 reflect
the hard work by Eloy Mazon (CEO) and his team. Revenue for the
year ended 31 March 2023 was GBP5.6m, up 53% on the previous year.
As per our strategy, we continue to grow our data products and
platforms and increasingly our other services rely on our unique
data sets as part of the offering, we will identify our revenues as
being generated from our unique data set. We have shown in our
segmental analysis the split between Consultancy and Data. Moving
forward, we will migrate our clients to new contracts that will
reflect the fact that we supply services in a data rich
environment. The result of which will be higher ARR and forward
visibility.
Our alternative reporting results for the year ended 31 March
2023 was an adjusted earnings before interest tax depreciation and
amortisation of GBP1.23m (2022: GBP0.573m) an increase of 115%.
Board and People
I would like to thank my fellow Board members for their
continued support and contribution to the Group. I would also like
to thank Roger Taylor who stepped down from the Board in October
2022 after assisting in guiding us through the IPO process and wish
him well for the future.
I must thank our colleagues within the business for their
continued hard work and professionalism and their vital support in
delivering these results. We are a dynamic business and our
colleagues have produced exceptional work for and on behalf of
clients.
Annual General Meeting
The Annual General Meeting will be held on 27 September 2023 at
the Company's offices, 5th Floor, Building 7 Chiswick Park, 566
Chiswick High Road, Chiswick, London, W4 5YG.
Outlook
We have established partnerships with our client base that are
deep rooted and will continue to supply data products and platforms
that our clients use in their everyday business decision making and
insights. The Board is confident about the Group's current
prospects.
Ian James
Chairman
26 July 2023
CHIEF EXECUTIVE'S STATEMENT
In our first full year as a quoted company, we continue to build
a reputation with all our stakeholders for delivering great
products and platforms from our unique data set and for delivering
strong financial results for the business.
Our revenue for the financial year ended 31 March 2023 showed a
year-on-year growth of 53% up from GBP3.6m to GBP5.6m. We produced
a statutory profit before tax of GBP0.5m (2022: Loss (GBP1.9m)) and
an adjusted EBTIDA of GBP1.23m against GBP0.573 m for the previous
year, a 115% increase.
This achievement was made possible thanks to the enormous
efforts of everyone at 4GLOBAL over the years during which we have
established an incredible reputation in our sector worldwide and
developed a unique data set and insight products that are
recognised as having transformed our customers businesses.
A key priority for us over the years has been to ensure that
4GLOBAL was built on a robust foundation with solid business
principles around revenue, profitability and sustainable growth.
This has allowed us to successfully navigate the turbulent
macro-economic climate of the past year, continuing to deliver
strong growth and a solid financial position.
Our growth strategy is underpinned by four pillars;
international expansion, " land & expand " clients, acquisition
strategy and data commercialisation . The reporting year to 31
March 2023 was the second year in our five-year strategic cycle and
we continually review and measure the performance we have made
against each of our strategic pillars.
-- International expansion - we have seen strong demand from
international markets especially the middle east where our
partnership model is developing business opportunities.
Our initial expansion into the North American and European
markets is going well and we have signed commercial partnerships
with key players in these markets such as Jonas, Technogym
and IHRSA from which we will develop revenue generating
opportunities in the near future.
-- " Land and expand " clients - we continue to land new clients,
17.6% of revenue was generated from new client relationships
in the financial year. We were also able to expand relationships
with existing clients. The current need for data and insight
to navigate complex strategic, operational and investment
challenges has generated strong demand for our data and
insight products and services and this has been reflected
in the recurring revenue growth compared to last year.
-- Acquisition strategy - we are constantly evaluating opportunities
for acquisition. Our focus is to ensure that any company
we acquire is aligned to our core business values and financial
criteria of profitability, cash generation and annual recurring
revenues so that they are accretive to the overall value
of 4GLOBAL. Reviewing the market for potential acquisitions
continues to be an opportunity for our growth strategy.
-- Data commercialisation - we have built one of the biggest
and unique databases of how individuals consume sport. We
believe that our strength is a data company and not a software
company, therefore we believe in providing our customers
with the option of using our data - under the same data
user agreements signed with the data controllers - irrespective
of the software platform they might want to use to draw
the unique insights that only our data provides. This allows
us to open up new customer types who have other software
products embedded in their organisation but that without
our data would not deliver the sort of insights we can provide.
Overall, excellent progress has been made in executing our
strategy and we are pleased with the results it is generating.
During the financial year we released updated editions of
CitiHub 2.0; Social Value Calculator ("SVC") 3.0; SVC Canada 1.0;
Demand Modelling Tool 1.0 and European DataHub 1.0.
CitiHub integrates physical activity and participation
programmes with additional data to provide insight and activity
trends and assists in the planning of interventions to address
physical inactivity and related health issues.
SVC was designed to give leisure operators a way of measuring
and providing evidence for the Social Value created from investment
in sport and physical activity.
Our Demand Modelling Tool provides a clear set of demand
projections in terms of unique users and weekly participation for a
range of facility types, as well as benchmarking this against
sector averages, understanding membership numbers and how much
social value that could be generated.
The tool allows users to model a range of investment scenarios
and identify the optimal facility mix should investment be made,
whether this is through the development of new sites or
redevelopment at existing facilities.
This gives the ability to measure the potential impact and
outputs can be used to drive the commercial model for investment
into a site.
We are taking our DataHub into Europe where we have established
a partnership with the trade association, EuropeActive, with the
intention of developing a central database for physical activity
participation data across Europe.
Our data asset grew significantly in this period, currently we
have 3.5 billion data points and processing significant amounts of
data on a daily basis; in England alone we are processing in excess
of 1million data points per day. This growth in our data assets
solidifies our position in the market, increases entry barriers and
allows us to provide even more valuable and unique insights.
By integrating data analytics capabilities, technology
implementation, and strategic consulting we offer our clients
end-to-end solutions. With our data asset as the foundation, our
unique data-driven decision-making approach enables us to empower
clients with intelligence and actionable insights aligned to their
strategic objectives and business priorities, giving us a
distinctive edge in the market.
Summary and Outlook
We completed our first full year as an AIM quoted company and
are in a strong financial position - profitable and with a sound
balance sheet - the business has an excellent foundation on which
to build in the current financial year and the future .
Demand for our data and insight products continues to grow. The
many significant challenges faced in our sector due to the
uncertain global economic outlook, will, we believe, drive our
customers to seek ever more business-critical insight and this is
the very strong message we are getting from our customers.
We are encouraged by the prospects for the rest of the financial
year and beyond as we seek to increase our penetration in the
European and North American markets and develop new revenue streams
associated with our data.
As predicted, the line between service and technology revenue is
becoming harder to differentiate as the majority of our
relationships with customers are annual recurring or repeatable ("
ARR") type of relationships. It is for this reason that in the
financial year ending 31 March 2024 we plan to start the migration
of all existing customers and new customers to this type of
contracting, accelerating this way the transition that began some
years ago from a service revenue business to a data and technology
revenue business.
We believe this change in approach to our contractual
relationship with our customers will better represent the nature of
the business and its value, at the same time that it will drive a
number of operational efficiencies.
I would like to thank all our staff for their efforts in 2022 /2
3 to realise the true potential of 4GLOBAL and growth
capabilities.
Eloy Mazon
Chief Executive Officer
26 July 2023
FINANCIAL REVIEW
The Group has shown significant growth in the last financial
year with revenues and profits up year on year. The Group uses a
number of key indicators to monitor the Group's performance. The
statutory results for the year ended 31 March 2023 with the
comparatives for the previous year are presented in the following
table. Together with a reconciliation to the presentation of the
Headline Results.
To arrive at a Headline profit before tax the Directors feel it
appropriate to make the financial numbers comparable at earnings
before interest, tax, depreciation and amortisation, share based
payment expense and exceptional items.
At the time of the IPO a new share option scheme was
implemented: a total of 1,755,072 options were issued at 91p and
550,800 options were issued at 35.6p. A net charge of GBP338,455
(2022: GBP169,550) has been taken to the share-based payment
reserve on the balance sheet. 275,400 options that were issued at
35.6p lapsed during the year.
Reconciliation of statutory to Headline profit before
taxation:
Year ended Year ended
31 March 2023 31 March 2022
GBP GBP
Statutory profit/(loss) before
taxation 496,921 (1,888,693)
Separately disclosed items:
Depreciation and amortisation 372,717 196,756
Share based payment expense 338,455 169,550
Exceptional items - 2,071,781
Finance cost (net) 22,271 23,905
-------------- --------------
Headline profit before taxation 1,230,364 573,299
-------------- --------------
Group revenue, for the year ended 31 March 2023, has increased
by 53% to GBP5.6m from GBP3.6m. Gross profit has increased from
GBP2.6m to GBP4.1m, up 58%.
The Group analyses revenue into two streams of consultancy and
Data revenues. Consultancy revenues constitute services provided to
clients for major sporting events and Data revenues is made of two
elements; one is fees from setting up a client on a product
platform, Project Set Up ("PSU") fees. The second is a licence fee
for the use of the platform and any advice fees for analysis
requested by the client. In the future, as our consultancy services
increasingly rely on the data and data platforms, we will migrate
our consultancy clients to contracts that identify revenues as
being derived from data engagement. Therefore, the directors expect
the majority of our future revenue to be recurring in nature as
they are derived from our data set and platforms. Where there is a
pure consultancy service we will continue to identify that revenue
separately.
Analysis of revenue Year ended 31 Year ended 31
by category March March 2022
2023
GBP % GBP %
Consultancy 2,264,844 40% 2,087,249 57%
Data platforms 3,320,903 60% 1,552,681 43%
---------- ----------
5,585,747 3,639,930
---------- ----------
Revenues increased by 53% from GBP3.6m to GBP5.6m. The mix of
revenue was weighted to the use of data and data dashboards we sell
on our platforms. The growth in data revenue reflects execution of
the Company's strategy to focus on higher margin, recurring
revenue.
During the current financial year no costs were identified as
exceptional items. The table below discloses the exceptional items
incurred in the year ended 31 March 2022 and included:
Year ended Year ended
31 March 31 March
2023 2022
GBP GBP
IPO costs 874,650
Cash settlement of historic
option contracts - 1,114,080
Legal settlement of contract
dispute - 70,000
Pension contributions for
prior years - 13,051
Total exceptional items - 2,071,781
---------- ----------
Exceptional items includes the IPO costs incurred at the time of
the Group's IPO on 7 December 2021 and shown in the financial year
ended 31 March 2022 GBP0.9m.
The Group had issued share options to individuals during 2020.
The options represented 38% of the then issued share capital of
4GLOBAL Consulting Ltd and were to reward these individuals for the
work and development of that company that they had made over
previous years. The potential overhang and dilutive effect of these
options on the issued share capital, after taking advice, was seen
as detrimental to the company's prospects of completing a
successful IPO. The individuals agreed to waive their options for a
cash settlement of GBP1.0m in addition a provision was made for
employers' National Insurance contributions.
The directors had identified two amounts as exceptional because
of their nature and relating to events in previous periods. One was
a legal dispute with a client which was settled post the year end
and the other was a provision for adjustments to pension
contribution that have an impact on the previous year's results.
This has affected the opening reserves for the 1 April 2020 and a
charge being made in the accounts for the year ended 31 March 2022
and a charge in the year ended 31 March 2021. The total provision
for the three years is GBP41,509. A provision of GBP13,052 has been
made in this current reporting year and prior year adjustment of
GBP12,272 made in the year ended 31 March 2021. The opening
reserves for the year ended 31 March 2021 have been adjusted by the
prior adjustment by GBP16,184.
The Headline Adjusted Profit from Operations is GBP1.2 m (2022:
GBP0.6 m), an increase of 115%.
Tax
The Group has historic losses which have been calculated and
offset against any potential charge for corporation tax. The Group,
also, benefits from research and development expenditure for which
the Group can claim enhanced relief of 230% of the expenditure
incurred.
Earnings per share
The statutory earnings per share for the year ended 31 March
2023 was 2.4 pence (2022: loss per share of 7.1 pence), and a
diluted profit per share of 2.2 pence, as the Group made a loss in
the previous year there was no dilution (2022: 7.1 pence).
Cash Flow
The Group utilised GBP1.9m (2022: GBP1.1m) from operations in
the year. The utilisation for the year ended 31 March 2023 is a
factor of the increased working capital within both accounts
receivable and contract assets. These, over time, should be
converted into cash. The utilisation in the year ended 31 March
2022 was due to the settlement of exceptional items which included
IPO costs of GBP0.9m and the cash settlement of share options
GBP1.1m.
As at 31 March 2023 the Group held cash and cash equivalents of
GBP1.1m (2022: GBP3.1m).
Statement of financial position
The Group's statement of financial position shows net assets
totalled GBP4.5m (2022: GBP3.5m). Most of the statement of
financial position is made up of liquid assets of trade and other
receivables and cash and cash equivalents. Working capital was
GBP3.8m (2022: GBP3.1m). Our trade and other receivables increased
from GBP1.8m to GBP4.2m. This increase is due to the second half
year performance in revenues where we generated GBP4.2m in revenues
in the second six months of the year ended 31 March 2023 which
represented 75% of the annual turnover. The trade and other
receivables have increased from GBP0.7m to GBP1.4m and contract
assets increased from GBP0.5m to GBP2.1m. Since year end we have
collected GBP0.9m.
The total gross assets of the Group increased from GBP5.2m to
GBP6.3m reflecting the positive performance for the year ended 31
March 2023.
The strategic report on was approved by the Board of Directors
on 26 July 2023 and was signed on its behalf by:
Keith Sadler
Chief Financial Officer
26 July 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2023
Note Year Year ended
ended 31 March
31 March 2022
2023
GBP GBP
Revenue 6 5,585,747 3,639,930
Cost of sales (1,449,008) (1,024,175)
Gross profit 4,136,739 2,615,755
Administrative expenses (2,919,874) (2,043,103)
Other operating income 7 14,000 647
------------ ------------
Analysed as:
Adjusted profit from
operations(1) 1,230,365 573,299
Depreciation and amortisation (372,717) (196,756)
Share based payment
expense (338,456) (169,550)
Exceptional items 8 - (2,071,782)
Profit/(loss) from
operations 8 519,192 (1,864,789)
Finance income 1,772 73
Finance cost 11 (24,043) (23,977)
Profit/(loss) before
tax 3 496,921 (1,888,693)
Tax credit 12 145,133 242,581
Profit/(loss) for
the year 642,054 (1,646,112)
Other comprehensive
income
Exchange differences on translation
of foreign operations (3,053) (11,058)
Other comprehensive income for
the year (3,053) (11,058)
Total comprehensive income/(loss)
for the year 639,001 (1,657,170)
Total comprehensive income/(loss)
attributable to:
Owners of the Parent
Company 639,001 (1,657,170)
------------ ------------
Basic profit/(loss) (7.1)
per share 13 2.4p p
------------ ------------
Diluted profit/(loss) (7.1)
per share 13 2.2p p
------------ ------------
Note 1. Adjusted profit from operations is calculated as
earnings before interest, taxation, depreciation, amortisation of
intangible assets and right of use charge, any impairment costs
relating to non-current assets, share based payments and
exceptional items.
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note As at As at
31 March 31 March
2023 2022
GBP GBP
Assets
Non-current assets
Property, plant and equipment 14 34,401 28,870
Right-of-use assets 14 595,601 382,490
Intangible assets 15 392,180 -
Deffered Tax 190,647 43,386
---------- ----------
1,212,829 454,746
Current assets
Trade and other receivables 16 3,977,947 1,721,096
Cash and cash equivalents 17 1,138,093 3,050,948
---------- ----------
5,116,040 4,772,044
Total assets 6,328,869 5,226,790
---------- ----------
Equity and Liabilities
Equity
Share capital 18 263,451 263,451
Share premium 20 3,390,330 3,390,330
Merger reserve 676,310 676,310
Share option reserve 19,20 388,245 139,080
Share warrant reserve 188,266 188,266
Currency translation
reserve (35,376) (32,323)
Retained earnings 20 (389,980) (1,121,325)
Total equity 4,481,246 3,503,789
---------- ------------
Non-current liabilities
Borrowings 22 108,832 158,823
Lease liability 23 194,060 -
302,892 158,823
---------- ------------
Current liabilities
Borrowings 22 50,000 121,814
Trade and other
payables 21 1,122,746 1,088,553
Lease liability 23 371,985 353,811
Total current liabilities 1,544,731 1,564,178
---------- ------------
Total liabilities 1,847,623 1,723,001
---------- ------------
Total equity and
liabilities 6,328,869 5,226,790
---------- ------------
The notes form an integral part of the financial statements.
The financial statements were approved by the Board of Directors
on 26 July 2023 and were signed on its behalf by
Keith Sadler
Chief Financial Officer
Registered number 13523846
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital Currency
Share redemption Share Merger Share Share translation Retained Total
option warrant
capital reserve premium reserve reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
As at 31 March
2021 1,097 105 894,491 - 31,773 - (21,264) 485,205 1,391,407
------- ---------- --------- ------- -------- ------- ----------- ------------- -------------
Loss for the
year - - - - - - - (1,646,112) (1,646,112)
Other
comprehensive
income -
translation
differences - - - - - - (11,058) - (11,058)
Total
comprehensive
income for
the year - - - - - - (11,058) (1,646,112) (1,657,170)
------- ---------- --------- ------- -------- ------- ----------- ------------- -------------
Transactions
with
owners:
Issue of
shares, net
of costs 262,354 (105) 2,684,105 676,310 - - - - 3,622,664
Deferred tax
on share
options 1,259 1,259
Share-based
expense - - - - 169,550 - - - 169,550
Share options
cancelled
fair value
adjustment - - - - - - - (23,921) (23,921)
Share options
waived - - - - (62,243) - - 62,243 -
Issue of
warrants - - (188,266) - - 188,266 - - -
262,354 (105) 2,495,839 - 107,307 188,266 - (39,851) 3,769,552
------- ---------- --------- ------- -------- ------- ----------- ------------- -------------
As at 31 March
2022 263,451 - 3,390,330 676,310 139,080 188,266 (32,323) (1,121,325) 3,503,789
------- ---------- --------- ------- -------- ------- ----------- ------------- -------------
Profit for the
year - - - - - - - 642,054 642,054
Other
comprehensive
charges -
translation
differences - - - - - - (3,053) - (3,053)
Total
comprehensive
income for
the year - - - - - - (3,053) 642,054 639,001
------- ---------- --------- ------- -------- ------- ----------- ------------- -------------
Transactions
with
owners:
Movement on
lapsed
share options - - - - (89,291) - - 89,291 -
Share based
expense - - - - 338,456 - - - 338,456
--------
- - - 249,165 - - 89,291 338,456
------- ---------- --------- ------- -------- ------- ----------- ------------- -------------
As at 31 March
2023 263,451 - 3,390,330 676,310 388,245 188,266 (35,376) (389,980) 4,481,246
------- ---------- --------- ------- -------- ------- ----------- ------------- -------------
CONSOLIDATED STATEMENT OF CASH FLOWS
Note Year ended Year ended
31 March 31 March
2023 2022
GBP GBP
Cash flows from operating
activities
Profit/(loss) before income tax
for year 496,921 (1,888,693)
Adjustments to reconcile (loss)/profit
before tax to net cash flows:
Depreciation of tangible
assets 14 366,461 196,723
Amortisation 15 6,256 -
Loss/(profit) on disposal
of fixed assets 1,077 (9,894)
Finance income (1,772) -
Finance cost 11 24,043 23,977
Equity-settled share-based expense/warrants 8 338,456 169,550
(Increase)/decrease in trade and
other receivables (2,256,890) 390,838
(Decrease)/increase in trade and
other payables 36,093 63,587
Tax received (3,989) -
Net cash flows - operating activities (993,344) (1,053,912)
Cash flows from investing activities
Purchase of tangible
assets 14 (22,768) (23,773)
Development costs
capitalised 14 (398,436) -
Interest received 1,772 73
Net cash - investing
activities (419,432) (23,700)
Cash flows from financing activities
Issue of ordinary
share capital - 3,612,662
Repayment of shareholder loan (50,400) -
- principal
Repayment of shareholder loan (22,194) -
- interest
Repayment of borrowings (50,000) (41,168)
Lease liability principal
payment 23 (351,642) (186,470)
Interest elements of lease
payments (8,958) (10,780)
Interest paid (15,521) (9,445)
Net cash flows - financing activities (498,715) 3,364,799
Net (decrease)/increase
in cash (1,911,491) 2,287,187
Effects of exchange rate changes
on cash (1,364) (11,581)
Cash at beginning
of year 3,050,948 775,342
Cash at the end of
year 17 1,138,093 3,050,948
------------ ------------
Comprising:
Cash and cash equivalents 1,138,093 3,050,948
Cash at end of year 16 1,138,093 3,050,948
---------- ----------
NOTES TO THE FINANCIAL STATEMENTS
1. Corporate information
4Global PLC is a public limited company incorporated and
domiciled in England and Wales. The registered office address and
principal place of business is located at 5th Floor, Building 7
Chiswick Park, 566 Chiswick High Road, London, W4 5YG.
The 4GLOBAL Group's principal activity is the provision of
advisory services in the sporting sector at a local, national and
international level.
2. Basis of preparation
The financial statements have been prepared in accordance with
the requirements of the AIM Rules for Companies, UK Adopted
International Accounting Standards.
The financial statements have been prepared on the historical
cost basis, unless accounting standards require an alternative
measurement basis. Where there are assets and liabilities
calculated on a different basis, this fact is disclosed in either
the relevant accounting policy or in the notes to the financial
information.
The preparation of the financial statements in compliance with
UK Adopted International Accounting Standards requires the use of
certain critical accounting estimates and judgements. It also
requires management to exercise judgement of the most appropriate
application in applying the 4GLOBAL Group's accounting policies.
The areas where significant judgements and estimates have been made
in preparing the financial information and their effect are
disclosed in Note 4.
3. Going concern
The financial statements have been prepared on the going concern
basis. The Group made a profit for the year to 31 March 2023. The
Group has cash resources of GBP1.1m. The cash flow for the group
fluctuates based on monthly revenue collections and this is managed
within the cash and overdraft facilities which the group has. The
group has a GBP100,000 agreed overdraft facility and a further
GBP100,000 informal facility. The Directors have reviewed the
4GLOBAL Group's overall position and outlook and are of the opinion
that the 4GLOBAL Group is sufficiently well funded to be able to
operate as a going concern for at least the next twelve months from
the date of approval of these financial statements.
4. Critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial statements in conformity with UK
Adopted International Financial Reporting Standards requires
management to make estimates and judgements that affect the
reported amounts of assets and liabilities as well as the
disclosure of contingent assets and liabilities at the year-end
date and the reported amounts of revenues and expenses during the
reporting year.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. The significant judgements made by management in
applying the 4GLOBAL Group's accounting policies and the key
sources of estimation uncertainty were:
4.1 Consultancy revenue
For contracts spanning the year end the 4GLOBAL Group uses
judgement determining the amount of revenue to recognise in each
period. This requires estimation of the stage of completion of the
project, taking into account time spent during the period and the
likely time required to complete the project.
4.2 Bad debts
The group currently calculates a "bad debt" provision on trade
receivables and contract assets which are past due date and are not
specifically provided for. Under IFRS 9 this assessment is required
to be calculated based on a forward-looking expected credit loss
('ECL') model, for which a simplified approach will be applied. The
method uses historic customer data, alongside future economic
conditions to calculate expected loss on receivables. See Note
15.
4.3 Deferred tax
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the combined statement
of financial position differs from its tax base.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
4.4 Share options and warrants
Where equity settled share options are awarded to employees, the
fair value of the options at the date of grant is charged to the
consolidated statement of comprehensive income over the vesting
period as an employment expense.
The fair value of the options is measured at the grant date and
spread over the vesting period. The fair value is measured based on
an option pricing model taking into account the terms and
conditions upon which the instruments were granted.
4.5 Development costs
The Group develops a number of products and platforms for its
portfolio of offerings to clients. These are internally generated
from the technical, staff, and external resources. The products and
platforms are identified separately and the staff time is allocated
to the programmes for development. Only direct costs are allocated
to these products and platforms as required by IAS 38. The economic
performance of the product and platforms is assessed to ensure they
can be carried on the balance sheet. Once the product or platform
is commercially ready for market it is amortised over the
anticipated life. The initial products have been allocated a 36
month amortisation life span. At the end of each year the products
are reviewed for impairment.
5. Summary of significant accounting policies
5.1 Basis of consolidation
The financial statements incorporate the financial information
of the 4GLOBAL Group. Control is achieved when a company is
exposed, 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. Where necessary, adjustments are made to
the financial information of subsidiaries to bring the accounting
policies used into line with those used by other members of the
4GLOBAL Group. All significant inter-company transactions and
balances between 4GLOBAL Group entities are eliminated on
consolidation.
Subsidiary companies
4GLOBAL PLC's subsidiaries are as follows:
Proportion
of
Country Nature of voting rights
of and
Name of company incorporation business Interest shares held
Provision
of data and
consultancy
services
to the sports
4GLOBAL Consulting England participation
Ltd ("4GLOBAL Consulting") and Wales market 100% 100%
Provision
of data and
consultancy
services
to the sports
participation
4GLOBAL Inc USA market 100% 100%
Provision
4Global Danismanlik of services
Ve Yazilim Hiz. LTD.STI on behalf
("4Global Turkey") Turkey of parent 100% 100%
The registered office address and principal place of business of
4GLOBAL Consulting is 5th Floor, Building 7, Chiswick Business
Park, 566 Chiswick High Road, London, W4 5YG.
4GLOBAL Inc. It is anticipated to begin trading in the early
part of the financial year ending 31 March 2024. The principal
place of business is Venture X, Downtown Doral, 8350 NW 52nd
Terrace Suite 301, Miami, FL 33166, United States.
The registered office address and principal place of business of
4Global Turkey is Istasyon Yolu Sok. No: 3 Altintepe, Maltepe,
Istanbul.
The Company's subsidiary in Turkey has a year end of 31 December
which was set when the company was set up and is a normal year end
for Turkish companies. The preparation of the financial information
for the Group accounts has therefore been based on the management
accounts for that company to 31 March. The Group is liaising with
local advisers to attempt to amend the year end to 31 March.
In applying merger accounting when preparing these Consolidated
Financial Statements, to the extent the carrying value of the
assets and liabilities acquired under merger accounting is
different to the cost of investment, the difference is recorded in
equity within the merger reserve. Under merger accounting the
results of the Group entities are combined from the beginning of
the comparative period before the merger occurred. Comparatives are
restated on a combined basis and adjustments made as necessary to
achieve consistency of accounting principles.
5.2 Revenue
Consultancy services
Consultancy services are provided under fixed-price contracts
and contracts specifying an hourly fee. Revenue from providing
services is recognised based on the actual service provided to the
end of the reporting period as a proportion of the total services
to be provided because the customer receives and uses the benefits
simultaneously. This is determined based on the actual hours spent
relative to the total expected hours.
In the case of fixed-price contracts, the customer pays the
fixed amount based on a payment schedule. If the services rendered
exceed the payment, a contract asset is recognised. If the payments
exceed the services provided then a contract liability is
recognised.
If the contract includes an hourly fee, revenue is recognised in
the amount to which the 4GLOBAL Group has a right to invoice.
Customers are invoiced on a monthly basis and consideration is
payable when invoiced.
Subscriptions
Subscriptions for access to the Datahub are provided under
fixed-price contracts. Customers pay in advance on a monthly,
quarterly or annual basis and consideration is payable when
invoiced. Where access to the Datahub has been invoiced but not
paid at the end of the reporting period a trade receivable is
created. Where services have been provided but not invoiced a
contract asset is created. A contract liability is recognised in
respect of the services not yet provided. Revenue is recognised on
a straight-line basis over the term of the subscription.
5.3 Research expenditure
The Group undertakes research into future development of
products and platforms utilising the data sources that the Group
curates. This is separately identified and recorded. The Group
makes a claim for enhanced tax relief on this expenditure through
HMRC. The expenditure is separately identified in the income
statement notes.
5.4 Foreign currency translation
Functional and presentational currency
Items included in the financial statements of each of the
4GLOBAL Group's entities are measured using the currency of the
primary economic environment in which the entity operates ('the
functional currency'). The financial statements are presented in
pounds sterling, which is 4Global Group's functional and
presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the spot exchange rates at the dates of the
transactions.
At each year end foreign currency monetary items are translated
using the closing rate. Non monetary items measured at historical
cost are translated using the exchange rate at the date of the
transaction and non monetary items measured at fair value are
measured using the exchange rate when fair value was
determined.
Foreign exchange gains and losses resulting from the settlement
of transactions and from the translation at year end exchange rates
of monetary assets and liabilities denominated in foreign
currencies are recognised in the statement of comprehensive
income.
Foreign exchange gains and losses that relate to borrowings and
cash and cash equivalents are presented in the statement of
comprehensive income within 'administrative expenses'. All other
foreign exchange gains and losses are presented in the statement of
comprehensive income under the heading to which they relate.
4GLOBAL Group Companies
The results and financial position of foreign operations (none
of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
-- assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance
sheet
-- income and expenses for each statement of profit or loss and
statement of comprehensive income are translated at monthly
exchange rates throughout the period, and
-- all resulting exchange differences are recognised in other
comprehensive income.
Taxation
Taxation expense for the year comprises current and deferred tax
recognised in the reporting year. Tax is recognised in the
statement of comprehensive income.
Current tax
Current tax is the amount of tax payable in respect of the
taxable profit for the year or prior years. Tax is calculated on
the basis of tax rates and laws that have been enacted or
substantively enacted by the year end.
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 tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit or loss.
Deferred tax assets are recognised for deductible temporary
differences that exist only where it is probable that taxable
profits will be generated against which the carrying value of the
deferred tax asset can be recovered.
Deferred tax liabilities are recognised for all taxable
temporary differences except in respect of taxable temporary
differences associated with investments in subsidiaries, associates
and interests in joint operations where the timing of the reversal
of the temporary difference can be controlled and it is probable
that the temporary difference will not reverse in the foreseeable
future.
A deferred tax asset or liability is not recognised if a
temporary difference arises on initial recognition of an asset or
liability in a transaction that is not a business combination and,
at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss.
5.5 Warrants
The 4GLOBAL Group issued warrant certificate to advisers at the
time of the IPO and measures the fair value of the equity settled
transactions with the advisers at the grant date of the warrant
instruments. The fair value is calculated using an appropriate
valuation model and requires assumptions regarding dividend yields,
risk-free interest rates, share price volatility and expected life
of the warrant. The resulting amount is charged to the share
premium account and credited to the share warrant reserve.
5.6 Property plant and equipment
Property, plant and equipment is recorded at cost less
accumulated depreciation and accumulated impairment losses. The
initial cost of an asset comprises its purchase price and any costs
attributable to bringing the asset into the location and condition
necessary for it to be capable of operating in the manner intended
by management. Expenditures for routine maintenance and repairs are
expensed as incurred, while additions and improvements are
capitalised. A right-of-use asset is recognised at the commencement
date of the lease. The right-of-use asset is measured at cost,
which comprises the initial amount of the lease liability, adjusted
for, as applicable, any lease payments made at or before the
commencement date, any initial direct costs incurred and an
estimate of costs expected to be incurred for restoring the site or
asset.
Property, plant and equipment is depreciated using the
straight-line method over the estimated useful lives or, in the
case of certain leased right-of-use assets, the shorter of the
expected lease term and estimated useful life:
- Office equipment - 4 years
- Right of use - over the term of the lease
An item of property, plant and equipment is derecognised upon
disposal or when no further economic benefits are expected to arise
from the use of that asset. Any gain or loss arising on
de-recognition of the asset is included in the statement of
comprehensive income when the asset is derecognised.
5.7 Intangible assets
The intangible assets are the internally developed products and
platforms that the group has generated. The assets are separately
identifiable and are capitalised costs of direct resources used to
develop the products and platforms, which comprises any external
purchase costs and the costs of individuals costs attributable to
bringing the asset into the location and condition necessary for it
to be capable of operating in the manner intended by
management.
Once the product or platform is ready for commercial use it is
then amortised using the straight-line method over the estimated
useful lives which the management have identified as 36 months.
An intangible asset is derecognised upon disposal or when no
further economic benefits are expected to arise from the use of
that asset. Any gain or loss arising on de-recognition of the asset
is included in the statement of comprehensive income when the asset
is derecognised.
5.8 Leasing
The 4GLOBAL Group applies a single recognition and measurement
approach for all leases except for short-term leases and leases of
low-value assets. At commencement of a lease, the 4GLOBAL Group as
lessee recognises a liability to make lease payments and an asset
representing the right to use the underlying asset during the lease
term. The amount of the lease liability recognised is on a
discounted basis. The discount rates used on transition were
incremental borrowing rates as appropriate for each lease based on
factors such as the lease term and payment terms. Where the rate
implicit in the lease cannot readily be determined the 4GLOBAL
Group used the 4GLOBAL Group's incremental borrowing rate. The
4GLOBAL Group does not have any leases where the 4GLOBAL Group is a
lessor.
The 4GLOBAL Group takes advantage of the practical expedient
which allows an exemption from recognition for leases with terms of
12 months or less and low value leases.
Lease liabilities are recognised at the present value of future
lease payments and subsequently carried at amortised cost using the
effective interest method.
5.9 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks and other short-term highly liquid investments
in debt securities with original maturities of three months or
less.
5.10 Financial instruments
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial instruments are classified into one of the categories
discussed below in accordance with IFRS 9, with reference to the
business model for that instrument and the contractual cash flow
characteristics.
Financial assets and liabilities are offset and the net amount
reported in the financial statements if there is a currently
enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis, or to realise the assets
and settle the liabilities simultaneously.
The accounting policy for each category is as follows:
Financial assets
Financial assets comprise cash and cash equivalents and
receivables.
Receivables primarily consist of trade and other receivables.
These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market.
These assets are initially recognised at transaction price plus
transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, adjusted for change in
expected credit losses.
Impairment of financial assets
The IFRS 9 impairment model requires the recognition of
'expected credit losses'. Therefore, it is not necessary for a
credit event to have occurred before credit losses are recognised.
The impairment model applies to the 4GLOBAL Group's financial
assets.
For trade receivables the 4GLOBAL Group has applied the
simplified approach permitted by IFRS 9 in calculating expected
credit losses. This approach requires expected lifetime losses to
be recognised from initial recognition of the receivables.
Financial liabilities
Financial liabilities include trade and other payables,
borrowings and lease liabilities.
Trade and other payables
Trade and other payables are initially recognised at fair value
and subsequently carried at amortised cost using the effective
interest method.
Borrowings
Borrowings are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest
method.
Derecognition
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled, or expires. When an
existing financial liability is replaced by another from the same
lender on substantially different terms or the terms of an existing
liability are substantially modified, such an exchange is treated
as the de-recognition of the original liability and the recognition
of a new liability. When the modification is not substantial the
difference between the carrying amount of the liability before the
modification and the present value of the cash flows after
modification is recognised in profit or loss.
Classification of financial instruments issued by the 4GLOBAL
Group
Financial instruments issued by the 4GLOBAL Group are treated as
equity only to the extent that they meet the following two
conditions:
-- they include no contractual obligations upon the 4GLOBAL
Group to deliver cash or other financial assets or to exchange
financial assets or financial liabilities with another party under
conditions that are potentially unfavourable to the Group; and
-- where the instrument will or may be settled in the 4GLOBAL
Group's own equity instruments, it is either a non-derivative that
includes no obligation to deliver a variable number of the 4GLOBAL
Group's own equity instruments or is a derivative that will be
settled by the 4GLOBAL Group exchanging a fixed amount of cash or
other financial assets for a fixed number of its own equity
instruments.
5.11 Related party transactions
The 4GLOBAL Group discloses transactions with related parties
which are not wholly owned within the same group. It does not
disclose transactions with members of the same group that are
wholly owned. Transactions of a similar nature are aggregated
unless, in the opinion of the Directors separate disclosure is
necessary to understand the effect of the transactions on the
financial statements.
Mr Mazon, through a controlled company, EMH Limited, invoiced
the Group during the year ended 31 March 2023 GBPnil for
professional and consultancy services (2022: GBP137,940). GBPnil
was outstanding at 31 March 2023 (2022: GBP4,840). Mrs E Mazon,
trading as Family Paws, invoiced the Group for secretarial and
coaching services during the year GBP30,000 (2022: GBP15,000).
GBPNil was outstanding at 31 March 2023 (2022: GBPNil).
A loan of GBP50,400 was made by Mr Eloy Mazon. The loan was
drawn down between December 2013 and September 2014 and bore
interest at 5% plus the Bank of England base rate, which had been
accrued with the loan. The loan was repaid in June 2022 and the
balance outstanding at 31 March 2023 was GBPnil (2022:
GBP70,805).
Mr James, through a controlled company, Fluency Media Limited,
invoiced the Group during the year ended 31 March 2023 GBPnil
including VAT (2022: GBP168,000). GBPnil was outstanding at 31
March 2023 (2022: GBPnil).
5.12 Standards, amendments and interpretations to existing
standards that are not yet effective and have not been early
adopted by the 4GLOBAL Group
The following standards and interpretations relevant to the
Group are in issue but are not yet effective and have not been
applied in the financial statements.
-- Amendments to IAS 1: Presentation of Financial
Statements.
-- Amendments to IAS 8: Accounting policies, Changes in
Accounting Estimates and Errors.
-- Amendments to IAS 12: Income taxes - Deferred Tax related to
Assets and Liabilities arising from a single transaction.
The above standards are not expected to materially impact the
Group.
5.13 Segment information
The chief operation decision-maker ("CODM") is considered to be
the Board of Directors of the Group. The CODM allocates resources
and assesses the performance of the business and other activities
at the operating segment level.
The CODM has determined that the 4GLOBAL Group has one operating
segment, the provision of advisory services to the sporting
industry at a local, national and international level.
6. Analysis of revenue
Analysis of revenue by category Year ended Year ended
31 March 31 March
2023 2022
GBP GBP
Consultancy 2,264,844 2,087,249
Data 3,320,903 1,552,681
5,585,747 3,639,930
---------- ----------
Analysis of revenue by geography Year ended Year ended
31 March 31 March
2023 2022
GBP GBP
Europe 3,218,496 2,351,970
Americas 447,207 890,608
Middle East 1,828,108 362,383
Other 91,936 34,969
5,585,747 3,639,930
---------- ----------
During the year ended 2023, the 4GLOBAL Group had one (2022:
two) customer whose revenues accounted for more than 10%, making up
30.2% (2022: 14.7% and 14.2% respectively).
The 4GLOBAL Group has determined that the 4GLOBAL Group has one
operating segment and therefore all revenue above is attributable
to that segment.
Outstanding balances at year end are unsecured, interest free
and settlement occurs in cash.
Included within trade and other receivables are contract assets
as follows:
As at 31 March 2023 2022
GBP GBP
Contract assets 2,136,404 463,696
--------- -------
Contract assets are included within "Trade and other
receivables" on the face of the statement of financial position.
They arise when the Group has performed services in accordance with
the agreement with the relevant client and has obtained right to
consideration for these services but such income has not been
invoiced at the balance sheet date. Significant changes in contract
assets have arisen due to timing differences in the issue of
invoices between periods.
Included within trade and other payables are contract
liabilities as follows:
As at 31 March 2023 2022
GBP GBP
( 167,544
Contract liabilities ) (226,696)
--------- ---------
All contract liabilities are recognised as revenue in the
subsequent reporting period.
7. Other operating income
Other operating income comprises:
2023 2022
GBP GBP
Training grant 14,000 -
Business Interruption receipt - 647
14,000 647
------ ----
Additionally, the 4GLOBAL Group took a loan under the
Coronavirus Business Interruption Loan Scheme ("CBILS") (see note
21). Under the scheme, the government made a Business Interruption
Payment ("BIP") to cover the interest charge for the first 12
months of the loan term.
8. Profit from operations and auditor's remuneration
Profit from operations is stated after charging/(crediting):
31 March 2023 2022
GBP GBP
Fees payable to the company's
auditors:
- Audit fees 57,000 47,500
- Other services - reporting
accountant services at the IPO - 125,500
Depreciation of property, plant
and equipment 14,471 5,833
Depreciation of right-of-use
assets 351,990 190,890
Amortisation of intangible assets 6,256 -
Research expenditure 793,658 640,342
Equity settled share-based
expense 338,455 169,550
Net loss on foreign
currency translation 3,053 11,581
Short-term lease expense 34,016 -
------- ---------
The Alternative Performance Measures used by management are
shown below:
31 March 2023 2022
GBP GBP
Profit/(loss) from operations 519,192 (1,864,789)
Depreciation and amortisation
expense 372,717 196,756
Share based option charge 338,455 169,550
Exceptional items - 2,071,782
Adjusted EBITDA 1,230,364 573,299
--------- -----------
Exceptional items which have been identified because of their
size or the nature of the expense being one-off in nature are as
follows:
31 March 2023 2022
GBP GBP
IPO costs - 874,650
Cash settlement of historic
option contracts - 1,114,080
Legal settlement of contract
dispute - 70,000
Provision for adjustment to
pension contributions - 13,052
Total exceptional items - 2,071,782
------------ -----------
9. Employees
Staff costs, including Directors' remuneration, were as
follows:
31 March 2023 2022
GBP GBP
Wages and salaries 1,708,588 1,401,895
Social security costs 214,900 275,425
Pension costs 47,166 35,501
Share based payment
expense 338,455 169,550
Cash settlement of
share options - 1,000,000
Employee benefits 3,878 23,604
2,312,987 2,905,975
--------- ---------
The average number of employees, including the Directors, during
the year was as follows:
31 March 2023 2022
Number Number
Directors 6 3
Administrative staff 2 2
Technical staff 22 23
30 28
------ ------
10. Directors' remuneration
The Directors' aggregate remuneration in respect of qualifying
services were:
Salary Pension Benefits Bonus Total Remuneration Total Remuneration
2023 2022
GBP GBP
E Mazon 225,000 6,750 - - 231,750 155,379
K Sadler 120,000 3,300 - - 123,300 112,067
I James 60,000 1,700 - - 61,700 42,423
S Clarke 40,000 1,600 - - 41,600 28,104
A Orlando 40,000 - - - 40,000 19,122
R Taylor 30,642 600 - - 31,242 20,400
31 March 2023 2022
GBP GBP
Invoices in year 30,000 260,800
------ -------
Outstanding at year
end - 4,840
------ -------
The remuneration of the highest paid Director was as follows:
31 March 2023 2022
GBP GBP
Wages and salaries 225,000 28,748
Bonus - 12,500
Social security costs 31,370 87,784
Cash settlement of
share options - 620,000
Pension costs 6,750 1,175
Share-based payments
charges - 43,155
263,120 793,362
------- -------
Key management who comprise the senior management team; the
chief operating officer; chief product officer, chief customer
officer and global head of services received compensation is shown
in the table below, which includes the directors.
31 March 2023 2022
GBP GBP
Wages and salaries 1,024,403 544,102
Social security costs 131,270 206,440
Cash settlement of
share options - 1,000,000
Pension costs 28,530 15,055
Benefits - 20,698
Bonus - 25,000
Fees - 85,241
1,184,203 1,896,536
--------- ---------
11. Finance income and costs
31 March 2023 2022
GBP GBP
Lease liability interest 6,789 10,780
Interest on Shareholder loan 789 2,512
Interest on CBILS loan 7,330 7,153
Interest on Grant - 647
Other interest 9,135 2,885
Finance cost recognised in the
income statement recognised 24,043 23,977
------ ------
12. Taxation
31 March 2023 2022
GBP GBP
Current tax charge
UK Corporation tax (193,004)
Adjustments in respect
of prior periods (43,459)
Foreign tax on income
for the year 2,128 5,445
Total current tax (2,128) (231,018)
Adjustments in respect
of prior period (228,846)
Movement on temporary
differences 81,585 (11,563)
Income tax credit (145,133) (242,581)
Factors affecting tax credit for the year
The tax credit for the year can be reconciled to the loss per
the statement of comprehensive income as follows:
31 March 2023 2022
GBP GBP
Profit/(loss) before tax 496,921 (1,888,693)
Profit/(loss) before tax multiplied
by the
UK corporate tax rate of 19% 94,415 (358,852)
Effects of:
Amounts not taxable/deductible
for tax purposes 69,230 72,112
Depreciation - plant and machinery
super-deduction - (1,357)
Enhanced research and development
relief (98,414) (98,804)
Higher rate taxes on overseas
earnings 304 1,247
Losses carried forward 8,379 178,956
Deferred tax on share options - 3,568
Deferred tax on right of use
asset - 7,170
Deferred tax at higher rate 9,798 (3,162)
Adjustments in respect of prior
periods (228,846) (43,459)
Income tax credit (145,133) (242,581)
Factors affecting future tax charges
An increase in the UK corporation tax rate from 19% to 25% for
the financial year beginning 1 April 2023 was substantively enacted
on 24 May 2021. As IFRS requires deferred tax to be measured at tax
rates that have been subsequently enacted at the reporting date,
the Group's deferred tax balances have been re-measured accordingly
and the impact has been reflected within the consolidated financial
statements.
The following deferred tax assets have been recognised:
31 March 2023 2022
GBP GBP
At beginning of
period 43,386 30,564
Movement on temporary timing
differences 147,261 12,822
At end of period 190,647 43,386
------- ------
The above deferred tax assets comprise temporary differences
on the following items:
31 March 2023 2022
GBP GBP
Staff costs - 30,564
Share based payments 7,803 15,199
Right of use asset - (7,170)
Pensions deductible as
paid 13,627 7,887
Interest on shareholder
loan - 4,067
Losses carried forward
- from prior year 228,846 -
Losses carried forward
- from current year 45,766 -
Capitalised development costs (98,045)
Accelerated capital allowances (7,350) (7,161)
Deferred tax asset 190,647 43,386
-------- -------
13. Earnings per share
31 March 2023 2022
Net profit/(loss) attributable to
ordinary shareholders (GBP) 642,054 (1,646,112)
---------- -----------
Basic weighted average number of shares
in issue (Number) 26,344,994 23,314,706
---------- -----------
Basic profit/(loss) per share
(pence per share) 2.4p (7.1)p
As at 31 March 2023 2022
Net profit/(loss) attributable to
ordinary shareholders (GBP) 642,054 (1,646,112)
Diluted weighted average number of
shares in issue (Number) 28,895,722 24,165,128
Diluted profit/(loss) per share (pence
per share) 2.2p (7.1)p
To prepare the Company for its listing a 200:1 share split took
place during the year ended 31 March 2022 which increased the
number of shares in issue from 109,692 shares as at 1 April 2021 to
21,938,400 at the time of the share split. The Company listed on
the AIM market on 7 December 2021 and a further 4,406,594 shares
were issued.
Shares in issue 2023 2022
Shares in issue at 1 April 2021 - 109,692
----------- ------------
Share for share exchange 200:1 - 21,938,400
Shares issued - 4,406,594
----------- ------------
Shares in issue 31 March 26,344,994 26,344,994
----------- ------------
Weighted average number of shares used as the denominator
Share for share exchange 200:1 - 21,938,400
Weighted number of shares issued in
the year - 1,376,306
----------- ------------
The weighted average number of shares
used as the denominator in basic earnings
per share 26,344,994 23,314,706
Adjustments for calculation of diluted
earnings per share:
Options 2,133,752 720,190
Warrants 416,971 130,232
28,895,717 24,165,128
----------- ------------
IAS 33 contains a requirement to restate the average number of
shares in issue in prior periods for events that change the number
of shares without a corresponding change in resources. For this
purpose, it has been assumed that the share split from GBP1.00 per
share to GBP0.01 per share took place prior to 1 April 2020.
14. Property, plant and equipment
Right of Office Total
Use Asset equipment
Cost GBP GBP GBP
At 1 April 2021 411,571 49,475 461,046
Disposal of lease (411,571) - (411,571)
Additions in year 470,487 23,773 494,260
Exchange differences - (710) (710)
---------- ---------- ---------
As at 31 March 2022 470,487 72,538 543,025
---------- ---------- ---------
Disposals (439,987) (1,077) (441,064)
Additions in year 565,101 22,768 587,869
Exchange differences - (1,459) (1,459)
As at 31 March 2023 595,601 92,770 688,371
---------- ---------- ---------
Depreciation
As at 1 April 2021 137,190 38,786 175,976
Charge for year 190,890 5,833 196,723
Disposals (240,083) - (240,083)
Exchange differences - (951) (951)
As at 31 March 2022 87,997 43,668 131,665
--------- ------ ---------
Charge for year 351,990 14,471 366,461
Disposals (439,987) - (439,987)
Exchange differences - 230 230
As at 31 March 2023 - 58,369 58,369
--------- ------ ---------
Net book value
As at 31 March 2022 382,490 28,870 411,360
------- ------ -------
Net book value
As at 31 March 2023 595,601 34,401 630,002
------- ------ -------
Right of use assets included in the above comprise all land and
buildings assets.
15. Intangible assets
Database
platforms
Cost GBP
At 1 April 2021 and 31 -
March 2022
Capitalised costs in the
year for internally generated
platforms 398,436
As at 31 March 2023 398,436
-----------------
Amortisation GBP
As at 1 April 2021 and -
31 March 2022
Amortisation charge in
the year 6,256
-----------------
6,256
-----------------
Net Book Value
As at 31 March 2022 -
-----------------
As at 31 March 2023 392,180
-----------------
16. Trade and other receivables
As at the year ended 31 March 2023 2022
GBP GBP
Current
Trade receivables 1,436,966 753,245
Contract assets 2,136,404 459,086
Other receivables 214,957 259,475
Current tax receivables 189,620 249,290
3,977,947 1,721,096
--------- ---------
Trade receivables and contract assets do not contain a
significant financing component. These financial assets have been
reviewed at each year end the following provision for expected
credit losses is considered necessary:
As at the year ended 31 2023 2022
March
GBP GBP
Gross carrying amount -
trade receivables 3,609,741 766,186
Loss allowance (36,371) (12,941)
--------- --------
3,573,370 753,245
--------- --------
The loss allowances for trade receivables as at 31 March
reconcile to the opening loss allowances as follows:
2023 2022
GBP GBP
Opening loss allowance at
1 April 12,941 2,712
Increase in loss allowance recognised
in profit or loss 23,430 10,229
Closing loss allowance at
31 March 36,371 12,941
------ ------
Other receivables include amounts due for sales taxes,
prepayments and security deposits held for leases.
The maximum exposure to credit risk at the reporting date is the
carrying value of each class of receivable mentioned above. The
4GLOBAL Group does not hold any collateral as security.
17. Cash and cash equivalents
As at the year ended 31 2023 2022
March
GBP GBP
Cash at bank and on hand 1,121,147 3,050,948
Credit card account 16,946 -
--------- ---------
Total Cash and cash equivalents 1,138,093 3,050,948
--------- ---------
Cash at bank and on hand does not earn interest.
18. Issued share capital
2023 2023 2022
No. GBP No.
GBP0.01 Ordinary shares
As at 1 April 26,344,994 263,451 109,692
Share transfer on PLC incorporation - - 21,828,708
Issued on IPO - - 4,406,594
As at 31 March 26,344,994 263,451 26,344,994
---------- ------- ----------
Fully paid ordinary shares carry one vote per share and the
right to dividends and to distributions on winding up.
The issued share capital as at 1 April 2021 was the share
capital for 4GLOBAL Consulting Limited which was exchanged for
shares in the 4GLOBAL PLC on 11 November 2021.
The Company undertook an IPO on 7 December 2021 and issued
4,406,594 shares to shareholders.
19. Equity share-based payments
The 4GLOBAL Group bears the expense of equity settled share
options granted to employees and consultants of the 4GLOBAL Group.
Share options were awarded over the shares in 4GLOBAL Consulting
Limited to Ian James and Utku Toprakseven. Ian James was appointed
a director of 4GLOBAL Consulting Limited on 11 February 2021 and
Utku Toprakseven on 1 April 2015.
The movements of share options during the year were as
follows:
Number of Weighted
Share options average
share
price
4GLOBAL PLC
Outstanding as at 31 March
2022 2,305,872 78p
Granted during the year - -
Lapsed during the year (275,400) 36p
Outstanding as at 31 March
2023 2,030,472 83p
-------------- --------
Options outstanding at 31 March 2023 had an exercise price of
35.6p - 91.0p. The outstanding options vest upon certain conditions
including a change in ownership of 4GLOBAL PLC.
The number of options exercisable as at 31 March 2023 is
1,755,072.
The vesting period ranges from 7 December 2021 to 7 December
2023.
The fair value of share options was estimated using the
Black-Scholes option-pricing model. The estimated fair values of
options granted are based on the following weighted average
assumptions:
As at the year ended 31 March 2023 2022
Weighted average fair value GBP0.39 GBP0.42
(GBP per option)
Weighted average remaining contractual
life - years 8.8 9.7
---------- ----------
The estimated fair values of options granted are based on the
following weighted average assumptions:
As at 31 March 2023 2022
Weighted average share price
at date of grant 78p 78p
Weighted average exercise price 83p 78p
Expected life (years) 5 5
Expected volatility (%) 44.0 44.0
Risk free interest rate (%) 0.76 0.76
---- ----
The volatility assumption, measured at the standard deviation of
expected share price returns, is based on the volatility of a
comparable listed company. The charge for equity-settled
share-based payments in the relevant years is shown in Note 8.
20. Reserves
Share premium
Share premium records the amount above the nominal value
received for shares sold, less transaction costs.
Share option reserve
The share-based payment reserve arises on share options issued
by the 4GLOBAL Group to employees of the 4GLOBAL Group.
Merger reserve
The merger reserve arose on the group reconstruction when a
share for share reconstruction took place and is the difference
between the issue price and the nominal value of shares issued as
consideration for the acquisition of subsidiary undertaking.
Warrant reserve
The warrant reserve arises on the warrants issued by the 4GLOBAL
Group to certain advisers of the 4GLOBAL Group.
Capital redemption reserve
The capital redemption reserve arises on the repurchase of
shares.
Currency translation reserve
The currency translation reserve arises on the currency
translation of subsidiaries where the functional currency differs
from the functional currency of the 4GLOBAL Group.
Retained earnings
The retained earnings reserve represents gains and losses
recognised in the consolidated statement of comprehensive
income.
21. Trade and other payables
As at 31 March 2023 2022
GBP GBP
Current
Trade payables 148,331 204,113
Contract liabilities 365,772 216,696
Payroll taxes, pension
& social security 344,504 268,398
Other payables 264,139 399,347
1,122,746 1,088,554
--------- ---------
The carrying values of the trade and other payables approximate
to their fair value as at the year-end date. Other payables include
accruals for general expenses incurred in the normal course of
business that are expected to be settled within 12 months.
22. Borrowings
As at 31 March 2023 2022
GBP GBP
Non-current
Borrowings 108,832 158,823
------- -------
Current
Borrowings 50,000 121,814
------- -------
Borrowings includes a loan obtained in May 2020 under the
Coronavirus Business Interruption Loan Scheme ("CBILS") of
GBP250,000. The loan is repayable in monthly instalments by April
2026. The rate of interest applicable to the loan is 3.05% plus the
Bank of England base rate. Under the scheme, the government has
given a grant of the amounts of interest that would arise on the
loan for the first 12 months (see note 7). This amount has been
recognised in Other Operating Income. The Company has granted a
fixed and floating charge over its assets in respect of this loan.
A partial guarantee has been provided by the government.
In the year ended 31 March 2022 borrowings included a loan of
GBP50,400 from Eloy Mazon, a director and shareholder of the
Company. The loan was drawn down between December 2013 and
September 2014 and bore interest at 5% plus the Bank of England
base rate, which has been accrued with the loan. Interest was
charged on the capital and outstanding interest. The balance
outstanding at 31 March 2023 was GBPnil (2022: GBP69,293). The loan
was repaid in June 2022.
The carrying value of borrowings approximates to their fair
value as at the year-end date.
23. Lease liabilities
2023 2022
GBP GBP
As at 1 April 353,811 281,676
Additions 566,045 439,987
Interest expense 6,782 10,780
Payment of interest (8,951) (10,780)
Payment of principal (351,642) (186,470)
Disposal - (181,382)
As at 31 March 566,045 353,811
--------- ---------
The 4GLOBAL Group has lease contracts for land and buildings.
The 4GLOBAL Group does not have any leases where the 4GLOBAL Group
is a lessor. The weighted average remaining term of all leases is
disclosed below. The lease agreements do not impose any covenants
other than the security interests in the leased assets that are
held by the lessor. Leased assets may not be used as security for
borrowing purposes. The Right of Use leases have been discounted at
the 4GLOBAL Group's incremental borrowing rate of 6.2%.
The 4GLOBAL Group has identified four leases with lease terms of
12 months or less. The 4GLOBAL Group applies the short-term lease
recognition exemption for these leases. The expense recognised in
respect of these leases is disclosed in Note 8.
2023 2022
GBP GBP
Maturity analysis of
leases
Current 371,985 353,811
1 to 2 years 194,060 -
566,045 353,811
--------- ---------
As at As at
31 March 31 March
2023 2022
Years years
Weighted average remaining
term 1 1
--------- ---------
24. Financial instruments
The 4GLOBAL Group's treasury policy is to avoid transactions of
a speculative nature. In the course of trade the 4GLOBAL Group is
exposed to a number of financial risks that can be categorised as
market, credit and liquidity risks. The Board has identified the
risks within each category and considers the impact on the
activities of the 4GLOBAL Group as part of their regular meeting
routine.
Principal financial instruments
The principal financial instruments used by the 4GLOBAL Group,
from which financial instrument risk arises, are as follows:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Borrowings
Lease liabilities
A summary of the financial instruments held by category is
provided below:
As at As at
31 March 31 March
2023 2022
GBP GBP
Financial assets at amortised
cost
Cash and cash equivalents 1,138,093 3,050,948
Trade and other receivables 3,787,215 1,012,720
Total financial assets 4,925,308 4,063,668
--------- ---------
The fair value of short-term deposits and other financial assets
approximates to the carrying amount.
2023 2022
Financial liabilities at
amortised cost
Borrowings 158,832 280,637
Trade and other payables 412,470 588,535
Lease liabilities 566,045 353,811
1,137,347 1,222,983
--------- ---------
The Directors consider that the carrying amounts of all
financial assets and financial liabilities recognised in the
financial information approximate their fair values (due to their
nature and short times to maturity).
Currency risk
The 4GLOBAL Group's financial risk management objective is
broadly to seek to make neither profit nor loss from exposure to
currency or interest rate risks. The 4GLOBAL Group is exposed to
transactional foreign exchange risk and takes profits and losses as
they arise, as in the opinion of the Directors, the cost of hedging
against fluctuations would be greater than the related benefit from
doing so.
The 4GLOBAL Group has no trade and other payables denominated in
the currencies other than pounds sterling.
The trade and other receivables balances held by the 4GLOBAL
Group in currencies other than pounds sterling are as follows:
As at As at
31 March 31 March
2023 2022
GBP GBP
Euro 106,871 1,241
New Zealand Dollar 2,931 11,425
Saudi Arabian Riyal 1,102 -
United States Dollar 143,257 70,653
254,161 83,319
--------- ---------
The cash balances held by the 4GLOBAL Group in currencies other
than pounds sterling are as follows:
As at As at
31 March 31 March
2023 2022
GBP GBP
Saudi Arabian Riyal 21 10,655
Euro 48,079 14,182
US Dollar 84,737 3,339
Turkish Lira 27,961 18,974
160,798 47,150
--------- ---------
Foreign currency sensitivity analysis
A 10% movement in the relevant foreign currency exchange rates
would increase/(decrease) net assets as shown below. This analysis
assumes that all other variables, in particular interest rates,
remain constant.
TRY USD EUR SAR
As at 31 March 2022 GBP GBP GBP GBP
Effect on net assets:
GBP strengthened by 10% (1,725) (295) (1,321) (975)
GBP weakened by 10% 2,108 381 1,537 1,176
------- ----- ------- -----
NZD TRY USD EUR SAR
As at 31 March GBP GBP GBP GBP GBP
2023
Effect on net assets:
GBP strengthened
by 10% (266) (2,542) (20,727) (14,086) (102)
GBP weakened by
10% 326 3,107 25,333 17,217 125
----- ------- -------- -------- -----
Credit risk
Credit risk is the risk that a customer or counterparty to a
financial instrument will fail to perform or fail to pay amounts
due causing financial loss to the 4GLOBAL Group. Credit risk within
the 4GLOBAL Group arises from cash and cash equivalents, and trade
and other receivables. The maximum exposure to credit risk is the
carrying amount of these financial instruments.
The 4GLOBAL Group is subject to concentrations of credit risk
from cash deposits in excess of insured limits. The 4GLOBAL Group
places its cash in financial institutions which are considered high
quality financial institutions by management. At times, such cash
deposits may be in excess of insured limits. The 4GLOBAL Group does
not enter into any derivatives to manage credit risk.
The 4GLOBAL Group calculates expected loss allowances based on
the maximum contractual year over which the 4GLOBAL Group is
exposed to credit risk. Financial assets are considered to be
credit-impaired when there is reasonable and supportable evidence
that one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.
The 4GLOBAL Group also applies a rebuttable presumption that an
asset is credit-impaired when contractual payments are more than 30
days past due. The 4GLOBAL Group has made an assessment of whether
trade receivables are credit-impaired as each of the years in
question. The 4GLOBAL Group has taken into account the current
financial position of counterparties and expected future cash flows
together with actual and forecast financial information, in order
to estimate the probability of default of each of these financial
assets as well as the loss upon default. No provision for expected
credit losses has been made.
The contractual cash flows on these financial assets have not
been modified or renegotiated in the current or prior year.
If there is evidence that there is no reasonable expectation of
recovery and the counterparty is in severe financial difficulties,
the financial asset will be written off.
The following table provides an analysis of trade receivables
and contract assets that were due, but not impaired, at each
financial year end. The Group believes that the balances are
ultimately recoverable based on a review of past impairment history
and the current financial status of customers.
As at As at
31 March 31 March
2023 2022
GBP GBP
Current 1 - 30 days 1,772,340 412,666
30 - 60 days 661,793 162,935
61 - 90 days 400,825 110,483
91 + days 774,783 80,102
Provision for impairment
of trade receivables (36,371) (12,941)
Total trade receivables and contract
assets - net 3,573,370 753,245
--------- ---------
The Directors are unaware of any factors affecting the
recoverability of outstanding balances at 31 March 2023 and,
consequently, no further provisions have been made for bad and
doubtful debts.
The allowance for bad debts has been calculated using a 12-month
lifetime expected credit loss model, as set out below, in
accordance with IFRS 9.
As at As at
31 March 31 March
2023 2022
GBP % GBP GBP % GBP
Current 1 -
30 days 1,772,340 0% - 412,666 0% -
31 - 60 days 661,793 0% - 162,935 0% -
61 - 90 days 400,825 0% - 110,483 0% -
91 - 120 days 203,210 0% - 74,423 0% -
121+ days 535,202 2% 10,704 5,679 0% -
--------- ------ --------- ---
Credit Quality of Financial Assets
As at As at
31 March 31 March
2023 2022
Past due not impaired GBP GBP
Current 1,772,340 412,666
31 - 90 days 1,062,618 273,418
Over 91 days - no impairment 738,412 67,161
Total past due not impaired 3,573,370 753,245
--------- ---------
Liquidity risk
The 4GLOBAL Group is exposed to liquidity risk as part of its
normal trading cycle. The 4GLOBAL Group's policies ensure
sufficient liquidity is available to meet foreseeable needs through
the preparation of short and long-term forecasts. The 4GLOBAL
Group's requirements are constant throughout the year and relate
largely to working capital which is managed through the use of
surplus cash.
The table below summarises the maturity profile of the 4GLOBAL
Group's financial liabilities, based on contractual, undiscounted
payments:
Less than More than
1 year 2 to 5 5 years Total
years
Year ended 31 March 2022 GBP GBP GBP GBP
Borrowings 121,814 158,823 - 280,637
Trade and other payables 588,535 - - 588,535
Lease liabilities 353,811 - - 353,811
1,064,160 158,823 - 1,222,983
--------- -------- --------- ---------
Less than More than
1 year 2 to 5 5 years Total
years
Year ended 31 March 2023 GBP GBP GBP GBP
Borrowings 50,000 108,832 - 158,832
Trade and other payables 412,470 - - 412,470
Lease liabilities 371,985 194,060 - 566,045
834,455 302,892 - 1,137,347
--------- -------- --------- ---------
Capital risk
The Directors define capital as the total equity of the company.
The Directors' objectives when managing capital are to safeguard
the 4GLOBAL Group's ability to continue as a going concern in order
to provide returns for stockholders and benefits for other
stakeholders and to maintain an optimal structure to reduce the
cost of capital. In order to maintain an optimal capital structure,
the Directors may adjust the amount of dividends paid to
shareholders, return capital to shareholders and issue new shares
to reduce debt.
Net funds reconciliation
As at As at
31 March 31 March
2023 2022
GBP GBP
Cash and cash equivalents 1,138,093 3,050,948
Borrowings - repayable
within one year 50,000 121,814
Borrowings - repayable
after one year 108,832 158,823
--------- ---------
Net funds 1,296,925 3,331,585
--------- ---------
Cash and liquid investments 1,138,093 3,050,948
Gross debt - variable interest
rates 158,832 280,637
Net funds 1,296,925 3,331,585
--------- ---------
Commitments
The 4GLOBAL Group has identified a lease contract, which begins
on 1 April 2023 that has been accounted for in the Consolidated
Statement of Financial Position as a right of use asset and relates
to the offices the company occupies in Chiswick, London. No other
lease contracts have been identified and not yet commenced as at
the end of each year. Consequently, the 4GLOBAL Group has not
identified any other material commitments.
Ultimate controlling party
As at 31 March 2023, the ultimate controlling party of the
4GLOBAL Group is Eloy Mazon by virtue of his 50.5% shareholding in
4GLOBAL PLC.
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END
FR FZGZNNVFGFZM
(END) Dow Jones Newswires
July 27, 2023 02:00 ET (06:00 GMT)
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