IXICO plc
Annual Report and Accounts 2024
Company registration number 03131723
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Addresses and Advisers
IXICO plc
Registered office:
4th Floor, Griffin Court
15 Long Lane
London, EC1A 9PN
Tel: +44 (0)20 3763 7499
Website: www.IXICO.com
Registered number: 03131723
Domiciled in the United Kingdom
Registered in England and Wales
Statutory auditors
Moore Kingston Smith LLP
Statutory Auditors
6th Floor, 9 Appold Street,
London EC2A 2AP
Tel: +44 (0)20 4582 1000
Website: www.mooreks.co.uk
Nominated adviser and broker
Cavendish Capital Markets Limited
1 Bartholomew Close
London, EC1A 7BL
Tel: +44 (0)20 7220 0500
Website: www.cavendish.com
Registrar
Equiniti Registrars Limited
Aspect House
Spencer Road
Lancing
West Sussex, BN99 6DA
Tel: +44 (0)871 384 2030
Website: www.equiniti.com
Legal advisers
Bristows LLP
100 Victoria Embankment
London, EC4Y 0DH
Tel: + 44 (0)20 7400 8000
Website: www.bristows.com
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Contents
............................................................................................................................................................................................ 1
Addresses and Advisers .................................................................................................................................................. 2
Strategic report .................................................................................................................................................................. 4
Chair’s Statement ............................................................................................................................................................................. 4
Chief Executive’s statement ............................................................................................................................................................. 6
Business update ............................................................................................................................................................................. 10
Stakeholder engagement ................................................................................................................................................................ 17
Our ESG journey ............................................................................................................................................................................ 20
Financial review .............................................................................................................................................................................. 23
Risk management ........................................................................................................................................................................... 26
Corporate Governance Report ....................................................................................................................................... 32
Statement of Directors’ Responsibilities ......................................................................................................................................... 32
Audit Committee Report ................................................................................................................................................................. 34
The Board of Directors .................................................................................................................................................................... 35
Board activities and timeline ........................................................................................................................................................... 36
Directors’ Report ............................................................................................................................................................................. 38
Directors’ Remuneration Report ..................................................................................................................................................... 42
Financial Statements ...................................................................................................................................................... 44
Independent Auditor’s Report to the members of IXICO PLC ........................................................................................................ 44
Consolidated Statement of Comprehensive Income ...................................................................................................................... 51
Consolidated Statement of Financial Position ................................................................................................................................ 52
Company Statement of Financial Position ...................................................................................................................................... 53
Consolidated Statement of Changes in Equity ............................................................................................................................... 54
Company Statement of Changes in Equity ..................................................................................................................................... 55
Consolidated Statements of Cash Flows ........................................................................................................................................ 56
Notes to the financial statements .................................................................................................................................................... 57
IXICO plc
Strategic Report for the year ended 30 September 2024
4
Strategic report
Chair’s Statement
I am delighted to present this statement on behalf of the Board of IXICO plc, a leader in neuroscience imaging, using AI
to drive advanced therapy research in neurological and neurodegenerative disorders.
The Board has been resolutely focused on strengthening the foundations of the Group to create value for IXICO’s
shareholders. The opportunity for IXICO’s innovative AI-driven platform in the rapidly growing multi-billion-dollar
neuroscience imaging market has never been more relevant. During the year there has been significant progress made
towards returning the Group to growth. In the second half of the year, revenues have grown 27% compared to H1, the
order book has expanded to £15.3 million exceeding 2023 levels, and the pipeline of new contract opportunities is growing.
Growth strategy
IXICO already has established repeat customer partnerships with global biopharmaceutical companies and contract
research organisations in Phase I, II and III clinical trials. However, until now, due to a focussed effort to make progress
in a selective number of disease areas, the Group has not fully exploited the value of its technology. Extensive
development of novel AI-driven algorithms during the year has delivered a platform now capable of scale – not only across
a broader array of neurological diseases, but also in new areas of revenue such as clinical decision making and precision
medicine.
In the last quarter of the year, the Board has undertaken two specific initiatives to capitalise on an expanding market
opportunity:
•
The appointment of Bram Goorden as CEO. An experienced leader in BioPharma and precision medicine, Bram has
updated the Group’s strategy with three pillars; Innovate, Lead and Scale. We are seeing immediate results from the
execution of this optimised strategy across operations, product development and commercial momentum.
•
The completion of a substantially oversubscribed £4 million capital raise concluded in October 2024, putting the
Group on a firm financial footing. The fundraise provides resource certainty to execute the Innovate, Lead and Scale
strategy at pace.
I am confident that these actions, together with additional operational and commercially focussed activities the Group has
undertaken in the last twelve months, are a solid foundation for sustainable growth.
Financial performance
As previously reported, the macro-economic backdrop during this trading year has been challenging. However, the
sophistication of the Group’s technology, the continued broadening and deepening of its product offering, together with a
dedicated commercial effort has resulted in financial resilience. Latterly, as reported in the Trading Update on 14 August
2024, the revenue outlook for IXICO is positive with new contract wins driving revenue growth across the second half of
the year. The Board are pleased to report, as outlined in these year-end results, this trend to growth continues. Through
the activities of the Audit Committee, the Board, and the Leadership Team, the Group continues to implement and
maintain robust financial controls and reporting.
Organisation
Our people, as ever, remain critical to our success. IXICO is a dynamic collaborative place to work where innovation
thrives. This is demonstrated by a continued ability to create commercially attractive proprietary technology while
leveraging broader industry advances in AI and imaging. During the year we broadened the Board with the appointment
of Dr Dipti Amin as an Independent Non-Executive Director. Dr Amin is a medically trained senior executive with extensive
commercial, leadership and operational experience, in medicine, pharmacology and the highly regulated healthcare and
research sectors. I would like to thank our people for their hard work, passion, and dedication which has been instrumental
in driving us forward.
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Strategic Report for the year ended 30 September 2024
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Governance
As an AIM-quoted company the Board remains committed to high standards of corporate governance that ensures the
Group operates in a transparent and ethical way that delivers value for employees, shareholders and stakeholders. During
the year the activities of the Board, highlighted above, have aimed to secure the financial stability, minimise risk, and
optimise the organisational structure of IXICO.
Outlook
With the new skillsets within the team, and the operations of the business appropriately resourced, we are now seeing
financial performance improving and anticipate a period of sustained commercial momentum. I would like to extend my
gratitude to all our shareholders, partners, and customers for their trust and support. Together, we are poised to achieve
a differentiated leading position across the neurological imaging market, at scale.
Always with the end goal in mind, such activity can deliver a deeper understanding of neurological diseases, and
consequently, lead to the discovery and development of new medicines to improve the lives of patients around the world.
Mark Warne
Non-Executive Chair
3 December 2024
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Chief Executive’s statement
Executive Summary
As incoming CEO, joining towards the end of our 2024 financial year, I made it my priority to complete the year on a high
for the Group and for our customers. Together with the excellent IXICO team, we increased commercial momentum,
enacted actions to strengthen the balance sheet, all whilst freeing up resources for innovation and future expansion in
novel areas for our AI-driven precision medicine platform in neurology.
Two of my initial observations and drivers to join the Group have been strengthened during these first few months of my
tenure:
1. IXICO’s science and global operations teams are excellent, and the technology is groundbreaking as confirmed
by customers, key opinion leaders and the numerous partners with which our Group is collaborating; and
2. The platform and footprint have the potential for significantly more impact in terms of customer numbers, patient
reach and shareholder value.
The Group is preparing to celebrate its 20th anniversary, which is a testament to the heritage and early involvement in
helping change the course of clinical development in the area of neurodegenerative diseases. With many of the pioneering
scientists and technology experts still part of today’s IXICO team, the face of the Group has changed a great deal across
recent years. Particularly, the next generation of our proprietary platform TTNx has been completed and is now enabled
with the latest technological advances in neuroimaging analytics, as well as guaranteeing future-proof levels of security,
regulatory compliance, scale and user friendliness.
IXICO’s leading position in Huntington’s Disease (HD) remains unparalleled. This has been proven by important contracts
and collaborations, including the long-term contract with a US based Pharma announced in August 2024, and our place
in the increasingly influential Huntington’s Disease Imaging Harmonization Consortium (HD-IH). Based on more than
6,000 data sets, we witness how the insights derived from the work of the HD-IH consortium will create long term value
to the biopharmaceutical partners and support them and the broader HD research community.
Novel algorithms powered by our proprietary IXIQ.Ai platform in the areas of Alzheimer’s Disease (AD) and Parkinson’s
Disease (PD) enable the Group to continue to play a prominent role in those two fields, where we have long-standing
expertise in MRI, PET and other imaging analytics. As a result, we supported seven major global AD programmes and
we further strengthened the collaboration with the Global Alzheimer’s Platform (GAP). This builds on the previous year’s
completion of an initial 1,000 participant trial, notable for achieving a secondary recruitment target requiring a minimum
of 20% of the study participants to be from traditionally underrepresented populations. This enabled IXICO to report on
initial findings on differences between racial and ethnic groups at the CTAD opening symposium (Boston, October 2023).
During 2024, IXICO was awarded the Bio-Hermes 2 trial, extending the program into Tau PET and MRI and further
strengthening the partnership with GAP.
Operationally, we delivered seamlessly for our clients, providing services to more than 35 neurology trials, broadening
our offering across therapeutic indications whilst improving our service level metrics to exceed our clients’ expectations.
Our next generation TrialTracker platform went live and enabled by the IXIQ.Ai system, we saw the first benefits of this
powerful new platform. I look forward to reporting more progress in 2025 and properly introducing TTNx to the market.
I am convinced that IXICO can play an even bigger role in the development of the next generation of treatments for
neurodegenerative diseases. This has resulted in the “Innovate / Lead / Scale” strategy that sets out to accelerate the
development of novel algorithms on our platform to increase our reach and penetration in the global arena. Important
scientific themes such as neuromelanin as a proxy for dopamine loss in PD and identification of the vascular fingerprint
in Dementia / AD, will define the course of breakthrough innovation the coming years. IXICO was part of some of the initial
biomarker discovery work in these areas and we are determined to now play a major role in helping biopharma sponsors
with the technology and expertise to equip their trials with these latest analytics.
These are exciting times as we are part of generating increased understanding of neurodegenerative diseases whilst
seeing important regulatory approvals come through for drugs such as Eisai’s Lecanemab and Eli Lilly's Donanemab.
Several major biopharma companies have expressed heightened focus and investments in the areas which IXICO has
been supporting since its inception. We are convinced that this will positively impact our ability to deliver on our purpose
of harnessing medical imaging data to advance human health, strengthening our position as a platform for neuroscience
imaging data analytics, and importantly scaling these efforts to grow our share in the market of the clinical trials industry.
2024 has been a year of transition for IXICO with lower revenues in the first half of the year, but an initial trend reversal
in the subsequent six months, thanks to some major contract wins. This trend continues as we build up a healthier growth
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Strategic Report for the year ended 30 September 2024
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trajectory going into 2025. To accelerate this trend and allow the above-mentioned innovation to act as a driver for
revenues, we went to existing and new investors and successfully concluded a capital raise of £4 million. The interactions
with our key investors, both institutional and retail and the strong confidence they showed in IXICO (resulting in a
significant oversubscription of the fundraising) were important indicators for me personally confirming my view that IXICO
is poised to play a bigger role in the current positive innovation landscape, an area which the Group has called home for
20 years.
We enter our financial year 2025 with an order book of signed contracts valued at £15.3 million and a stronger pipeline of
client opportunities, with visibility of new contracts to provide a platform for double digit revenue growth in 2025 and
beyond. In addition, I expect to report the results from our strategy to develop the role of our TTNx platform as an enabler
in areas such as post marketing surveillance (PMS) and clinical decision making, potentially bringing our solutions closer
to patients and their care.
The IXICO team is a highly motivated group of scientists and technology experts and it is quite the privilege to be leading
this team of innovators, serving some of the most important development programs in solving what’s rapidly becoming
society’s biggest healthcare challenge: helping patients with neurodegenerative diseases lead more healthy and fulfilling
lives. As I look forward, 2025 will be a year where we solidify the role of our Group in supporting this while exploring
additional new avenues for increased revenue generation.
Revenues
IXICO’s FY24 revenues were £5.8 million. We expect improved conditions for the biopharmaceutical industry supporting
revenue growth in FY25. As shown in the chart below, IXICO has historically demonstrated its ability to grow quickly,
delivering strong growth in the 30-40% range between 2017 and 2020 following the win of a large phase III trial. As we
have built out the diversity of our order book following the cancellation of that large trial, we are now in a good position to
win further such studies and return to revenue growth.
Growth strategy & Corporate outlook
Ambition
I have set the target of growing revenues towards £20 million+ in the medium term based upon the Innovate / Lead /
Scale strategy, with an expectation of a return to revenue growth over 2025 and an initial target beyond this of reaching
£10 million revenues on the back of the recent capital raise. Key targets to drive revenue growth are:
-
Increase the serviceable market to £65m+ by increasing traction in the AD and PD clinical trial markets.
-
Expanding the commercial footprint and pipeline, particularly in the US.
-
Improving the pipeline to order book conversion success rate by increased differentiation in our analysis offerings.
Future revenues will be supported by expansion of the AI-driven platform into new revenue streams with a particular focus
on moving into post-market assessments and clinical practice, targeting the large market opportunities beyond the current
contract research organisation model.
Revenues and revenue growth
Source: Company data. Cavendish estimates
(30%)
(20%)
(10%)
0%
10%
20%
30%
40%
50%
0.0m
2.0m
4.0m
6.0m
8.0m
10.0m
12.0m
2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A 2023A 2024A
Revenues
growth
IXICO plc
Strategic Report for the year ended 30 September 2024
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In addition, we plan to extend the use of our next-generation AI-powered imaging biomarker platform, TTNx. TTNx is a
full redevelopment of the Group’s TrialTracker platform, making use of Microsoft Azure cloud technology and has been
the subject of significant investment over the past few years. This platform is validated and is regulatory compliant and
provides the Group with the opportunity to further strengthen its position in the market. We strongly believe we are well
positioned to capitalise on the latent value held within this platform and unique data assets through the application of our
proven advanced IXIQ.Ai analytics platform.
Over the medium term, the Board has identified opportunities to tap into new future revenue streams using TTNx by
bridging R&D and clinical practice, facilitating the consolidation of analytics, and supporting clinical decision making via
Software as a Service, licensing or strategic co-development models. This opportunity arises as TTNx, using Microsoft
Azure technologies, is highly extensible and scalable. This then enables the augmentation of the platform’s capabilities
in response to specific opportunities such as the potential to support clients and clinicians as drugs showing efficacy in
neurological conditions achieve market approval and move into post market assessment and clinical practice.
The Innovate / Lead / Scale strategy
Innovate
We aim to differentiate IXICO through novel biomarker analytics, enabling the Group to better penetrate new and larger
key disease areas such as AD and PD, thereby increasing the Group’s serviceable market by an estimated factor of three.
In the next 6-12 months, we will seek to further differentiate our offering through the application of our proven IXIQ.Ai
analytics platform in AD and PD with three new MRI-driven biomarkers to analyse a subject’s vascular “fingerprint”,
neuromelanin accumulation and inflammatory processes.
More accurate assessment of vascular pathology in AD trials can support targeted trial recruitment, specifically in
populations with an increased level of vascular pathology as has been shown for some traditionally underrepresented
populations. Furthermore, it allows more informed treatment decisions and can potentially help identify subjects at risk for
Amyloid-related imaging abnormalities (ARIA) which is important both in clinical trials and post market assessment.
Neuromelanin analysis is used in PD trials as a proxy for dopamine loss and is considered a potential alternative to
currently used dopamine SPECT / PET biomarkers. MRI-based quantification of inflammatory processes can support both
AD and PD trials as inflammation plays a role in disease hypotheses across both indications and is increasingly relevant
as a treatment target. The additions of these three biomarkers to our analysis offering is expected to activate a significantly
enhanced pipeline. In focussing on next generation AI powered biomarkers services, the Group seeks to address a larger
proportion of the global neuroimaging clinical trials market, valued at $13.5 billion in 2022.
Lead
IXICO is focused on solidifying its presence and impact in the CNS precision medicine space by reinforcing its medical
key opinion leadership. We are investing in medical thought leadership to become even more visible on the global stage
by increasing interaction with key opinion leaders (“KOLs”) in the neurology space. We want to give visibility to the work
in collaboration with KOLs that aligns with and showcases our leading technology. We intend to build on our existing
partnerships to validate and position our technology in AD and PD, such as Global Alzheimer’s Platform Foundation
(GAP), the Critical Path For Alzheimer's Disease (CPAD) and the Critical Path for Parkinson’s disease (CPP). GAP seeks
to accelerate the delivery of innovative therapies to individuals living with AD and PD and conducts natural history trials
to assess techniques that support the accurate and cost-effective identification of individuals with AD. IXICO has provided
the imaging services to this platform since 2020. CPAD is a consortium of commercial and charitable organisations that
work together to support drug development in AD. CPP is the equivalent consortium focussed on PD.
In 2025 we will increase our conference engagement and demonstrate thought leadership and engagement, building
upon recent success at the Alzheimer's Association International Conference (AAIC), the Alzheimer's & Parkinson's
Diseases Conference (ADPD) and the Clinical Trials on Alzheimer's Disease (CTAD) conference. We have shown
success of this approach in HD, specifically through the Huntington’s Disease Imaging Harmonization (HD-IH) consortium,
where our team is analysing over 6,000 datasets in partnership with the CHDI foundation and several biopharmaceutical
companies. This project validates IXICO’s analysis capabilities, with KOLs publishing and presenting on the results from
this consortium. A consequence of this, we have further cemented our position as being the leading provider of image
analysis services in HD.
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Strategic Report for the year ended 30 September 2024
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Scale & Execute
Rapid change in the design and execution of clinical trials requires global commercial reach for clinical trial neuroimaging
services, particularly into North America.
The significance of the North American market cannot be understated: 83, or 44%, of current AD clinical trials are
exclusively conducted in North America. The region is home to a significant proportion of key neurological imaging
decision makers, including those employed by Biogen, Roche, Lilly, Takeda, and Janssen. Furthermore, North America
is the centre for key scientific collaborations and consortia, including the Global Alzheimer's Platform Foundation (GAP),
CHDI Foundation, Alzheimer’s Disease Neuroimaging Initiative (ADNI) and CPAD amongst others. As a result, we believe
that increased focus on the North American market will drive the Group’s exposure to key industry players, widen IXICO’s
geographic reach in line with changing client needs, and expand the Group’s addressable market. We are not starting
from scratch with our focus on North America. 14 of the 26 projects that are currently in the Group’s orderbook are US
based (or US focused) projects. This equates to c.45% of the Group’s orderbook by value and US based projects have
contributed c.40% of the Group’s 2024 revenues. It is a focus on accelerating this growth further, that is a key strut in the
Group’s strategy.
To scale our operations effectively, we plan to grow our global pipeline and revenue potential through increased access
to client and large Contract Research Organisation (CRO) decision-makers, driving business development. We aim to
increase our serviceable market by an estimated factor of three, expand our commercial pipeline by a factor of four, and
improve our pipeline-to-order book conversion success rate.
In the medium term, IXICO will focus on accelerating growth by actively pursuing new addressable markets beyond the
traditional CRO model, through extending our technology platform into post market assessment and, in partnership with
others, investigate utility in clinical decision support. This reflects the extensibility IXICO has built into its TTNx platform
which enables us, via partnership opportunities, to support the provision of multi-biomarker platforms and/or bring closer
the interactions and seamless communication of data with large scale CROs, analysis groups, imaging providers and/or
providers of electronic health records (EHR). We have identified these as opportunities to leverage our TTNx platform into
areas that require highly resilient, secure but bespoke technologies to underpin the collection, collation and analysis of
large-scale data. TTNx has been developed to enable the delivery of post marketing assessment studies, the potential of
which has been shown, albeit on a relatively small scale.
Bram Goorden
Chief Executive Officer
3 December 2024
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Strategic Report for the year ended 30 September 2024
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Business update
Market overview
IXICO operates within the attractive imaging AI-driven precision medicine market, and we believe we can further establish
ourselves as a partner of choice for biopharmaceutical companies developing neurological disease therapies both within
clinical trials and in the clinic, as these drugs move into post market assessments and clinical use. IXICO is implementing
a strategy of diversifying and broadening its customer base expanding the potential to work with clients on the subsequent
higher value later stage trials, while reducing the risk associated with any single client or asset. As previously reported,
there has been a slow-down in clinical trial initiations, but we have built a solid foundation from which to grow as the
market returns to more normal activity levels and new sources of revenue are being explored through strategic
partnerships and collaborations.
Alongside the significant morbidity and mortality effects on patients, neurological conditions are placing an increasing
pressure on many economies. The Alzheimer’s Association estimates that Alzheimer’s disease and other dementias cost
the US $345bn in 2023, while the Parkinson’s Foundation estimates the direct and indirect costs of Parkinson’s disease
will amount to $52bn per year. As such, there is a growing need for better treatments for such conditions, a trend we
believe the biopharmaceutical industry is positively reacting to. This pressing health concern is reflected in the projected
growth of the global neurology clinical trials market, which according to Grand View Research, is expected to increase
from $5.2 billion in 2022 to $7.6 billion by 2030, expanding at a CAGR of 5.6%. Concurrently, the neuroimaging market,
valued at $13.5 billion in 2022, is anticipated to reach $22.99 billion by 2032, also growing at a CAGR of 5.6%. As the
demand for imaging biomarkers, advancements in imaging technology, personalised medicine, and precision imaging in
neurological disorders rises, IXICO is well positioned to capitalise upon these market dynamics.
As a global specialist operator in the neuroimaging data analysis sector, IXICO expects to benefit from the positive trends
we see in the broad CNS precision medicine market and particularly in the Alzheimer’s and Parkinson’s disease clinical
trial market. IXICO has been operating in this market for many years, which has allowed it to develop strong relationships
within the neurological ecosystem. The Group has worked with five of the top 10 pharmaceutical companies in the past
five years and has established partnerships with several therapy area consortia, which often bring together academic and
industry players to accelerate the progress of drug development.
As per the most recent Alzheimer’s disease clinical pipeline review from Cummings et al.1 there are 127 drugs being
tested across 164 clinical trials in the Alzheimer’s pipeline. Within this there are 90 phase 2 trials and 26 phase 1 trials, a
combined 116 trials, indicating the opportunity for IXICO to grow. Similarly, for Parkinson’s disease, the latest review by
K. McFarthing et al.2 indicates there are 139 clinical trials in the Parkinson’s disease therapy area as of 2023, of which 47
were in phase 1 and 72 in phase 2, for a total 119 early-stage trials in this therapy area. The scale of the drug pipelines
for Alzheimer’s and Parkinson’s diseases reflects the high level of interest in these markets and neurological conditions
in general. We believe recent FDA approvals of anti-amyloid therapies targeting Alzheimer’s disease, including Biogen’s
Leqembi, has renewed interest in, and provided encouragement for, the industry development by biopharma of
neurological drugs.
AD pipeline
Alzheimer’s disease is believed to affect more than 55 million people globally, a figure projected to reach 78 million by
2030 (Roche). While having a significant clinical burden on patients and care-givers, the disease also has a significant
economic impact, estimated to be c$2.8tr per year by 2030.
As per the 2024 review3 for which the information was assessed in January 2024, there were 127 (2023: 141) drugs in
development for Alzheimer’s disease (phase 1 to 3) undergoing 164 (2023: 187) clinical trials. We expect the decline in
numbers from January 2023 to January 2024 reflects the difficult biopharma funding environment discussed previously.
While much focus in recent years has been on targeting amyloid plaques and tau tangles in the brain, of the current 96
disease-modifying therapies in development, 25 are targeting inflammation versus 23 targeting amyloid and 11 targeting
tau.
1 Cummings et al. Alzheimer’s Dement. 2024;10:e12465
2 K. McFarthing et al. Journal of Parkinson’s Disease 13 (2023) 427–439
3 Cummings J, et al. Alzheimer’s disease drug development pipeline: 2024. Alzheimer’s Dement. 2024;10:e12465.
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Strategic Report for the year ended 30 September 2024
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Through the years, the highest number of development agents are at the phase 2 stage, while the number of therapies in
phase 1 and phase 3 has remained relatively stable, as shown in the chart below, though noting the general decline in
the 2024 data set. We assume this reflects the rapid progression from phase 1 to phase 2 due to shorter phase 1 trials
followed by multiple, longer phase 2 trials which likely carry a higher failure rate than the phase 1 stage.
This chart in particular highlights the importance of IXICO’s strategy to work with companies at the phase 1 stage with a
view to moving with the therapy into phase 2. Clearly, gaining access to the phase 2 development stage offers a significant
opportunity for the company.
Trial distribution, by region
The chart below shows the distribution of clinical trials by region in which they are conducted, defined as being conducted
in North America only, conducted only outside of North America (ex N America) and conducted in both North American
and non–North American sites (N America & RoW).
Across all trials, 77% have trial sites based in North America. 85% of phase 3 trials have sites in North America. This
clearly indicates the importance of being present in North America for companies operating in the Alzheimer’s disease
clinical trials market. This is one of IXICO’s core strategies which will be accelerated in 2025.
Total agents in development, by phase
Source: Cummings J, et al. Alzheimer’s disease drug development pipeline. Data taken from yearly review publications.
Global AD trial distribution, by site
Source: Cummings J, et al. Alzheimer’s disease drug development pipeline: 2024. Alzheimer’s Dement. 2024;10:e12465
0
10
20
30
40
50
60
70
80
90
100
2016
2017
2018
2019
2020
2021
2022
2023
2024
Phase 1
Phase 2
Phase 3
0
10
20
30
40
50
60
70
80
All trials
Phase 3
Phase 2
Phase 1
N America only
ex N America
N America & RoW
No data
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PD pipeline
Parkinson’s disease is the second most prevalent neurodegenerative condition after Alzheimer’s disease. The Parkinson’s
Foundation states almost one million people are living with Parkinson’s in the US and expect this figure to rise to 1.2
million by 2030. Globally, the foundation estimate that more than 10 million people are living with the disease.
As per the latest review for which the information was assessed in January 20244, there are 136 (2023: 139) clinical trials
underway for Parkinson’s disease (phase 1 to 3).
-
There were 16 (2023: 20) phase 3 trials and 79 (2023: 72) phase 2 trials.
-
60 (2023: 63) therapies were classified as disease-modifying therapies (DMTs).
-
51 trials were being performed with therapies classified as ‘novel’ while 52 trials were testing ‘repurposed’ drugs.
Huntington’s Disease (HD) and Orphan and Rare Diseases
HD is a relatively rare neurodegenerative disease caused by a faulty gene. Although there have been recent setbacks in
the progress of drug development for this indication, the genetic nature of HD means that patients can be reliably identified
earlier in the disease pathway, long before symptoms are apparent. This may enable earlier intervention and raises the
possibility of gene therapies, supporting the continued growth of the HD development pipeline. IXICO is a leader in
neuroimaging in HD, having supported many HD studies in the past decade and has strengthened its leadership position
through its close collaboration with the CHDI Foundation and the HD-IH consortium (see page 15).
Initiatives by the EU EMA and US FDA such as orphan drug designation, and the increasing use of genomic sequencing
technology to screen newborns and to investigate early childhood development disorders, have encouraged significant
investment into a wide range of rare diseases. In the past five years a new wave of rare disease neurological treatments,
including dozens with orphan designation, have been approved. Our expertise in imaging and biomarker development,
has allowed successful adaptation of many biomarkers for rare neurodegenerative diseases to support a wide range of
studies in rare indications such as Friedreich’s Ataxia, Multiple System Atrophy and Progressive Supranuclear Palsy.
Operational review
During 2024, initiatives to further enhance our service provision and highlight more overtly the value we bring to our clients
have been primary. The Group adjusted the structure of its operations team during the year, dividing the team into the
three specialist areas of Project Management, Image Management and Operations Services, each led by an individual
with significant experience and expertise in supporting and delivering neurodegenerative trials.
We present clients with a global team of highly qualified and experienced individuals who work in close proximity to each
other across imaging science and imaging operations all with a specific CNS focus. We believe that this promotes rapid,
efficient and productive interactions that place the client’s project first and foremost and benefit from the broad shared
expertise that exists within operations and the wider Group.
4 K. McFarthing et al. Journal of Parkinson’s Disease 14 (2024) 899–912
Number of clinical trials for Parkinson’s disease
Source: K. McFarthing et al. / Parkinson’s Drug Development Review / Journal of Parkinson’s Disease. Data taken from yearly review
publications
0
10
20
30
40
50
60
70
80
90
2020
2021
2022
2023
2024
Phase 1
Phase 2
Phase 3
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Strategic Report for the year ended 30 September 2024
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We focus on quality, we believe in what we are delivering and why we are delivering it, and seek to promote a can-do,
will-do, attitude with our clients that generates partnerships rather than transactions. Neurodegenerative trials are
extremely challenging and small improvements can make big differences when it comes to data analysis and trial read-
out. Promoting the highest levels of consistent quality is the cornerstone of our operational mindset.
We understand that the quality of imaging data analysis, originates from the quality of the images acquired at imaging
sites across the globe. Developing strong relationships with these sites has long been a tenet of our approach and making
them feel like IXICO is there to support them, irrespective of their geographic location is the key focus for our site facing
teams.
KPIs for average site response times showed further improvement across 2024, with average times at close to a business
day, materially ahead of those provided by our larger competitors. In addition, the times required to support global sites
set up imaging scanners and apply trial-specific protocols have all shortened in the year, to a level where we are confident
we provide the global benchmark for the industry. Our network of expert radiologists continues to meet, and often exceed,
the short safety read turnaround times agreed with our clients, ensuring rapid and important feedback can be provided to
trial participants. Our data management team deliver high-quality transfers of trial data to our clients and their partners
as part of our services. Across the year we have maintained study data in a transfer-ready state, enabling the satisfaction
of unplanned, early or ad-hoc transfer requests from our clients at short notice.
Investing in our project management function and continuing to limit the numbers of projects allocated to individual project
managers, means our clients continue to provide feedback that we are easy to do business with, proactive and reactive
to their needs, and able to accommodate the inevitable adjustments to what are often complex trial protocols efficiently.
We have completed over 43,000 image analysis endpoints across the year, utilising leading analysis capabilities such as
IXIQ.Ai, whilst continuing to support established cornerstone technologies that enable longitudinal consistency
comparisons for long-running trials. Achieving this requires a breadth of techniques and approaches from the fully
automated to the fully manual. We discuss and advise our clients on the optimum pipelines for their trials and can deploy
a broad range of neurodegenerative biomarker analysis measures within a single trial. We put the science first, such that
we are able to deliver protocols that other providers cannot or are unwilling to accommodate.
Across the year we supported 35 studies, across a broad range of neurodegenerative indications, supporting all phases
of clinical research from small early phase studies to large-scale global Phase 3 trials.
As we move into our new financial year, we are actively supporting 25 studies, split across therapeutic indications and
clinical trial phases as outlined in the graphs below. This compares favourably compared to recent years and reflects a
diversification and growing number of the projects we are supporting.
Number of clinical trials by Phase weighted by GBP value
Number of clinical trials by TA weighted by GBP value
£5.2m
£4.8m
£2.9m
£1.6m
£0.7m
1
2
3
NH
Other
£2.9m
£7.9m
£0.8m
£3.8m
AD
HD
PD
Other
IXICO plc
Strategic Report for the year ended 30 September 2024
14
As we look forward, we have the personnel and expertise to scale the business. Our book of contracts at 30 September
2024 provides good visibility of revenues for the coming periods (with over 75% of our forecast revenues for the year
covered by contracts already in place at the start of the year).
Conversion of orderbook to revenue in future years (%)
As we expand our serviceable market, via investment in analysis innovations, specifically in the therapeutic indications
of AD and PD, our ability to scale quickly, both through expansion within our existing operations structure and
leveraging the cutting edge technology we have at our disposal, we are well positioned to continue to define what is
meant by leading services levels in our market.
Technology review
2024 is a significant year in IXICO’s history, not only is it 20 years since the Group was incorporated, it is also over 15
years since the Group launched is innovative image data capture and analysis platform TrialTracker. This year, we
launched our next generation TrialTracker platform (‘TTNx’) and started using it to deliver client trials. As
neurodegenerative clinical trials become more complex (increasingly assessing combinatorial approaches in seeking
disease modifying outcomes), so the need increases to have a technology platform that can coordinate multiple and
bespoke workflows that enable robust, secure and controlled capture and analysis of brain scans from sites worldwide.
The Group has built TTNx in Microsoft’s azure cloud environment, using microservices and APIs plus a
Kubernetes/Docker driven scalable workflow engine that supports multiple levels of activity to operate in parallel (and
enables the use of both the latest and established analysis technologies). This enables extensibility of capability both
within a clinical trial delivery and well beyond this.
We are entering a ‘precision medicine’ era of multi-modal approaches to drug development and clinical diagnosis and
prescription, increasingly focussed on the individual and how a potential drug works within targeted sub-populations.
This requires multiple streams of activity at scale. The logistical and quality challenges surrounding this are substantial
but the progress in technological innovation mean they are surmountable.
TTNx is a case in point, a platform that can scale with the cloud, that can adjust to the bespoke needs of a trial whilst
standardising the associated data pathways to mitigate data loss, duplication, misallocation etc. We have built this
platform to deliver clinical trial services in a regulatory compliant manner at scale and with increased efficiency. This is
important for IXICO and IXICO’s stakeholders but is only part of the strategy for what has been the single biggest
investment of the Group in recent years.
Now that TTNx is ‘live’ and as we focus on the deployment of this platform on increasing numbers of clinical trials, we
are looking to the future, to how we can integrate this platform beyond clinical trials, into post market assessments and
the clinical space. In a complex and as yet nascent market, establishing strong partnerships with organisations who
have the scale, but not the technology to capture the significant potential in these areas is critical, and would create a
transformational impact on the market size that the Group is able to address, as well as introducing new and repeating
revenue streams.
FY25
FY26
FY27
FY28
FY29
FY30
IXICO plc
Strategic Report for the year ended 30 September 2024
15
The technology team constitutes a team of expert Azure developers and testers, led by a highly experienced platform
architect who, together, operate to a fully agile development model enabling the swift development, testing and
deployment of new features as required by our clients and/or partners such that we are able to provide bespoke
workflows that support specific study protocols at an attractive price. The team is led by our VP Technology who holds
relevant experience and expertise in both TrialTracker (as its original architect) and the services the Group seeks to
address. This enables a small team to deliver well-designed and relevant technology capabilities to the existing and
ever changing requirements of the market.
Science review
Significant progress was made across 2024 in further developing, validating and positioning IXICO’s clinical trial product
portfolio across therapeutic indications. In addition, the Group made further progress in developing core technology to
‘bridge’ into new markets in clinical applications as the field is experiencing significant momentum in the approval of new
therapies, specifically in AD. Throughout 2024, IXICO has actively participated in the scientific discussion across core
therapeutic areas as demonstrated by the attendance at ten conferences and the (co-) presentation of 15 posters and
(invited) talks. IXICO has furthermore, hosted three scientific webinars with key opinion leaders in AD, PD, and MS.
During 2024, IXICO has continued to develop its core analysis capabilities in MRI and PET across key therapeutic
indications and has taken steps towards translation of capabilities to clinical applications.
IXICO has released an updated quantitative PET analysis solution that allows flexible deployment across amyloid and tau
PET analysis. The tool provides standardized uptake value ratio (SUV-R) across both tracer families. In amyloid analysis,
the tool can flexibly provide centiloid analysis, providing harmonization across different amyloid PET tracers. In the space
of tau PET analysis, IXICO continue its engagement with the C-Path CPAD consortium on the harmonization of tau PET
analysis across different tau PET tracers. With the recently awarded Bio-Hermes 002 program, IXICO now delivers visual
read and quantitative Tau PET analysis across the widely used tau tracers Flortaucipir (Avid/Lilly), MK-6240
(Cerveau/Lantheus), PI-2620 (Life Molecular Imaging). The Group has further strengthened its PET tracer supply offering
as illustrated by the announcement of a master supply arrangement with Life Molecular Imaging.
Building on the R&D license to GAP’s Bio-Hermes 001 program as well as other MRI and PET datasets, IXICO has started
deploying it’s AI platform to develop combinatorial biomarkers for patient selection in clinical trials and with a potential
application for clinical diagnostic applications. As part of the ongoing work, IXICO was invited to present results on a 2-
stage screening process using amyloid PET in conjunction with blood-based biomarkers at the high-impact CTAD (Clinical
Trials in Alzheimer’s Disease) conference, held in Madrid, Spain, between 29 October and 1 November 2024. Selection
by the organising committee for an oral presentation highlights the importance of the work performed for the AD
community and provided a significant opportunity for IXICO to demonstrate cutting edge scientific and technical
capabilities in AD PET imaging to participating pharma sponsors and academic researchers.
Advancing deployment of the IXIQ.Ai analysis platform into emerging applications in Parkinson’s disease (PD), IXICO has
continued its R&D program on markers from Quantitative Susceptibility Mapping (QSM) MRI and has started a new
program on the development of imaging markers from neuromelanin sensitive MRI. The two MRI sequences are getting
increasing attention in PD clinical trials and pioneering markers in those areas will help IXICO to strengthen its footprint
in this important therapeutic indication. Both markers are expected to be deployed in upcoming clinical trials during 2025.
Huntington’s disease continues to be a key market for IXICO, and good progress was made during 2024 to further
underline the Group’s leading position by progressing the IXICO-initiated HD Imaging Harmonization (HD-IH) consortium.
HD-IH was founded in 2022 by IXICO, the CHDI Foundation Inc. (CHDI) and pharma partners uniQure and PTC
Therapeutics and has onboarded Asklepios BioPharmaceutical, Inc. as third pharma partner in 2023 to conduct an
unprecedented harmonization analysis of more than 6,000 participant-visit magnetic resonance images (MRIs) acquired
from over 2,000 research participants. During 2024, the project has completed more than 50% of the planned analysis
and has secured the onboarding of a fourth pharma partner. The company presented results of its ongoing analysis at
the 19th Huntington’s Disease Therapeutics Conference (HDTC) held in Palm Springs, California, from 26-29 February
2024 in a poster entitled "Association between regional volume change and clinical change in Huntington's disease HD-
ISS Stage 2 and Stage 3 participant". The presentation provides further evidence for the use of brain volume changes
measured with IXIQ.Ai as an alternative trial endpoint to traditional clinical outcomes (surrogate endpoint).
IXICO plc
Strategic Report for the year ended 30 September 2024
16
Further steps were taken in the development of an extended offering for demyelinating disorders. The Group has
continued development of its automated lesion quantification tools as shown through the presentation of a poster
describing the analysis pipeline at the 10th conference by the European Committee for Treatment and Research in MS,
ECTRIMS, held in Copenhagen, Denmark, from 18-20 September 2024. Complementing its in-house developed MRI
biomarkers, IXICO has furthermore signed a collaboration agreement with specialist provider Imeka to provide IXICO’s
pharma sponsors access to Imeka's suite of services for white matter imaging deployed in Alzheimer's Disease (AD) and
Multiple Sclerosis (MS).
The Group continues an active R&D program exploring opportunities to develop its core clinical trial analytics technology
for applications that support treatment-related decision-making in new post-market applications. In short, 2024 has been
a pivotal year for IXICO during which novel algorithms were moved from proof-of-concept phase to commercialisation.
IXICO plc
Strategic Report for the year ended 30 September 2024
17
Stakeholder engagement
The Board recognises that effective stakeholder engagement enables improved, impactful decision-making. It is
committed to further strengthening its relationships across all stakeholders impacted by the Group’s activities.
The principal strategic decision made during the year was appointment of a new CEO with a clear vision for the targeted
development of the Group’s market in the areas of Alzheimer’s disease and Parkinson’s disease and how this would be
achieved via specific actions within the areas of innovation, scientific, technological and commercial leadership.
This included initiating and delivering a capital raise for just over £4 million underpinned by a clearly articulated set of
investments designed to drive the growth and development of the Group in both the short and medium term.
The Board prioritised this to ensure that the Group enhances its accessible market size, whilst increasing the visibility of
the scientific and technology assets that the Group has built over the last few years. This decision supports IXICO’s
offering to neurological clinical trials, as well as extending it closer to the clinical and post-market assessment markets.
Our stakeholders
Employees
IXICO employs highly qualified employees in a range of scientific, technical, operational, and
supporting roles
What’s important to them
How we engage
Employee engagement is critical to employee happiness,
wellbeing and retention. One of the primary topics of
engagement is emphasising the Group’s purpose and
societal benefit arising from its activities. Additionally,
employees need to understand their opportunities for
development, and how their roles contribute directly and
indirectly to the Group’s successes. Collaboration and idea
sharing along with communication to, within and between
teams is crucial.
The Group holds regular Townhalls with employees to
communicate material matters and topics including
strategic, scientific, operational, commercial and financial.
Development and training plans are defined as part of
annual performance reviews to support personal growth as
well as a wider contribution to the Group. These plans are
reviewed and revisited each year by line managers and
their direct reports.
The leaders in the Group meet to discuss strategy,
challenges and opportunities to ensure alignment and
encourage experience and idea sharing.
Impact of key strategic decision
A new CEO automatically brings with them modifications to the culture and ethos of a company. In this instance, the
CEO has clearly articulated his ambition for the Group, the areas he sees that the Group must improve on and how the
wider employee base will contribute to this. This has been inspiring and motivational for employees to hear as initial
communications are being rapidly converted into tangible actions.
Shareholders
IXICO has a strong list of institutional and individual shareholders
What’s important to them
How we engage
Engagement with shareholders focusses on the Group’s
purpose and its strategy for delivering this. Shareholders
want to see a return to growth and to have confidence that
the Group’s management are making decisions that place
the Group in the best possible position to capitalise on
market opportunities as they arise. This includes
responding to challenges in a measured and rational
manner.
Shareholders are communicated to via LSE RNS, IXICO’s
website, investor presentations and social media. The
Group
delivers
twice-yearly
results
briefings
to
communicate developments to, and receive feedback
from, shareholders.
Our Executive Directors, Non-Executive Chairman and
other Non-Executive Directors make themselves available
to meet with shareholders as appropriate.
IXICO plc
Strategic Report for the year ended 30 September 2024
18
Impact of key strategic decision
The Group’s successful capital raise which included follow-on investments from the Group’s existing institutional
shareholders and investments by new institutions and individuals reflects an across-the-board alignment of
shareholders with the strategy being pursued by the Group. The Group’s shareholders will now expect the Group to
deliver on the strategy it laid out.
Pharmaceutical and biotech clients
Clients rely on data analytics services to support critical decisions in their clinical development
programs
What’s important to them
How we engage
Clients expect high levels of quality assurance, with
consistent and reliable service levels. They seek more
efficient ways to run trials, alongside new product
development and innovation. Scientific leadership and
consultancy are highly valued, and IXICO’s clients look to
IXICO as the imaging science voice on their studies.
Each project has a dedicated project manager
accountable for service delivery, where weekly project
calls are standard practice. Our science team is closely
involved in projects enabling clients to take advantage of
the latest advances in the IXICO analysis portfolio and
expertise.
The Group supports all client audit requirements, and
operates
under
a
Quality
Management
System,
accredited to ISO 13485. It also uses state of the art
technology to ensure the security, resilience and reliability
of data flows into, within and out of IXICO’s platform.
Impact of key strategic decision
The Group’s strategy, supported by a capital raise, will provide clients with further enhancement and differentiation of
the Group’s analysis capabilities which will enhance the value brought to their trials, increasing sensitivity and accuracy
of conclusions drawn around patient eligibility, safety and drug efficacy.
Scientific Partners
IXICO is a member of several scientific consortia and scientific partnerships
What’s important to them
How we engage
These partners require scientific, technology and
operational capabilities, with a focus on investment in
innovation. It’s important to develop relationships that
support the community’s wider purpose of advancing
human health.
IXICO is engaged in scientific collaborations and
contributes at conferences dedicated to specific disease
areas. The Group provides discounted and/or in-kind
services to collaborations designed to advance knowledge
of neurological diseases. We are also increasingly
engaging with potential partners to extend the utilisation of
our next generation TrialTracker platform.
Impact of key strategic decision
Partners will benefit from IXICO’s accelerating strategy in imaging biomarker evolution. By collaborating, partners can
extend their pre-clinical, clinical or post market ambitions as the Group delivers on its strategic enhancements of its
capabilities across the full breadth of the drug development and clinical markets.
IXICO plc
Strategic Report for the year ended 30 September 2024
19
Imaging Centres
Imaging centres perform brain scans on participants involved in clinical trials. The centres upload
images to IXICO’s systems for analysis
What’s important to them
How we engage
The centres used by IXICOs clients require training and
qualification of their personnel to deliver accurate imaging
data. During a project, technical support and timely issue
resolution is critical in successfully delivering for our mutual
client.
Our online imaging-centre-support model enables centres
to receive training and qualification at a time that suits
them. Access to support is also managed through an
online helpdesk.
Impact of key strategic decision
The Group continues to provide the highest levels of support for the qualification of new imaging centres, thereby
accelerating centre onboarding to a trial and reducing the burden on scarce healthcare resources. Positive feedback
from sites continues to indicate that the superior service levels provided by IXICO separate it its competition.
Participants
Our clients recruit participants to take part in the clinical trials of their drug candidates
What’s important to them
How we engage
Participants
rely
on
IXICO
to
provide
objective
measurement of the impact of trial drugs on the brain. A
participant’s confidence in the safety of enrolling in a
clinical trial is of the highest importance and they rely on
accurate and timely radiological readings to ensure this.
Whilst we do not directly communicate with trial
participants, we engage with patient representatives to
understand the challenges of living with neurological
diseases.
Impact of key strategic decision
The Group’s planned analytical capability developments in Alzheimer’s and Parkinson’s disease will further improve
the statistical power and sensitivity of clinical trials and ensure patients are more likely to benefit from effective drug
candidates as well as having increased confidence that they are being enrolled onto the right trial for them and their
medical condition.
S172(1) statement:
As required by Section 172 of the Companies Act 2006, a director of a company must act in the way he or she considers,
in good faith, would most likely promote the success of the company for the benefit of its shareholders. In so doing, the
director must have regards, amongst other matters, to the:
•
Likely consequences of any decision in the long term;
•
Interests of the Group’s employees;
•
Need to foster the Group’s business relationships with suppliers, customers and others;
•
Impact of the Group’s actions on the community and environment;
•
Desirability of the Group maintaining a reputation for high standards of business conduct; and
•
Need to act fairly between members of the Group.
The Directors continue to consider specific stakeholder groups (as outlined in more detail within the governance section).
This includes the regularity and means by which the Group engages with its stakeholders.
IXICO plc
Strategic Report for the year ended 30 September 2024
20
Our ESG journey
IXICO’s purpose is to advance medicine and human health by converting clinical-
trial imaging data into clinically meaningful information. IXICO’s values are key to
the delivery of its purpose but also provide an important basis upon which to
deliver ESG goals.
In order to deliver its purpose, it is essential that IXICO adopts high standards of
governance and compliance whilst making a positive impact on society and this
principle forms the basis of IXICO’s ESG framework.
In 2023, the Group developed its ESG framework and the material topics which
we considered to be essential in achieving sustainable business growth. As part
of this it calculated baseline carbon emissions figures. In 2024 the Group has
scrutinised this data to achieve a better understanding of our emissions. In
particular, a key objective is to improve the accuracy of the data measurement of
our Scope 3 (supplier emissions) calculation, which is our emissions hotspot, and
bring these emission levels down. We have made significant inroads in this area
during 2024 and this work will continue into 2025 to further reduce our footprint
by working with suppliers and feeding their progress in reducing carbon
emissions into our calculations.
In 2025, we will also be looking to improve how we incorporate and embed
environmental and social issues in our strategy and risk management models as
well as how we identify and manage climate-related risks. This will enable us to
form KPIs which will aid our reporting on targets in our material topics.
ESG Progress and Targets
ENVIRONMENTAL
Impact on environment
Commitment
To reduce the Group’s carbon footprint by lowering reliance on fossil fuel generated
power where possible and economically viable and more broadly limit the
environmental impact of Group employees and business operations.
2024 progress and priorities
In scrutinising the calculation of our 2023 baseline figures, we have significantly
reduced our Scope 2 emissions owing to the use of renewable energy. Furthermore,
by further analysing our Scope 3 emissions, we have halved our carbon output in this
area. Therefore, the outcome of our 2024 annual calculation of estimated carbon
dioxide emissions for Scopes 1,2 and 3 is as follows:
-
Scope 1: approximately 5 tons of CO2
-
Scope 2: 100% of Scope 2 emissions came from renewable sources
-
Scope 3: approximately 550 tons of CO2 representing an over 50%
decrease in Scope 3 emissions compared to 2023
IXICO plc
Strategic Report for the year ended 30 September 2024
21
PEOPLE AND SOCIETY
IXICO requires a diverse and skilled workforce that is aligned to the Group’s purpose of advancing medicine and human health.
This includes attracting and retaining talented individuals, with the primary aim of benefitting society as a whole.
Diversity, equity and inclusion
Talent retention and development
Engagement
Societal benefit & impact
Commitment
To always promote and support diversity
and inclusion within the workforce.
Commitment
To develop appropriate tools, resources
and policies to attract and retain talent.
Commitment
To implement appropriate channels of
engagement for two-way communication.
Commitment
To promote the purpose of the Group in
supporting the development of drugs to
address the high unmet medical need of
neurological disease.
2024 progress and priorities
Sponsorship of overseas employee visa
requirements to attract specific skills into
the Group.
New appointments to the IXICO Board
thus broadening its knowledge,
experience and skill set.
2024 progress and priorities
Supporting staff in their continued
professional education and development
via value driven objective setting and
performance review.
A second cohort of leadership training
was rolled out encouraging development
of the leaders within the business and
encouraging cross-team development
and collaboration.
Shareholder approval received for the
adoption and implementation of IXICO’s
2024 EMI Share Option Plan, an
incentive scheme for employees.
2024 progress and priorities
Conducting a programme of cross
organisation communication via staff
meetings and newsletters.
Held staff engagement events which will
continue into 2025.
2024 progress and priorities
Continued growth of the HD-IH
consortium with the onboarding of an
additional bio-pharma partner. The
expanding partnership has made
significant progress in applying IXIQ.Ai to
more than 6,000 MRI scans available to
the consortium and generating the data
required to demonstrate the utility of the
obtained biomarker measurements as
clinical trial endpoints.
Preliminary findings were presented at
the annual HD-TC conference
in February 2024 providing further
evidence for the use of brain volume
changes measured with IXIQ.Ai as an
alternative trial endpoint to traditional
clinical outcomes.
IXICO plc
Strategic Report for the year ended 30 September 2024
22
RESPONSIBLE BUSINESS
IXICO provides services to the biopharmaceutical sector, which is one of the world’s most closely regulated industries.
As a Group quoted on AIM, we strive to comply with the QCA governance code . IXICO’s statement of compliance with the Quoted Companies Alliance (QCA) Corporate
Governance Code can be accessed here: IXICO plc QCA statement. The primary commitment is to have transparent and effective governance processes to provide
reassurance to all its stakeholders.
Stakeholder engagement
Data Governance
Innovation
Zero tolerance to misconduct and fraud
Commitment
To engage with all stakeholders, and
adapt the Group’s strategies towards
delivering common themes and
priorities.
Commitment
To capture, process, store, analyse and
report data in a controlled, secure
resilient manner and in compliance with
data protection regulations and
stakeholder expectations.
Commitment
To provide neurological disease
biomarker analysis that supports the
development of new medicines
designed to address the high unmet
medical need within neurological
disease.
Commitment
To establish policies and procedures to
encourage an open environment for risk
management, corporate responsibility, fraud
mitigation and whistleblowing.
2024 progress and priorities
Program of well attended webinars
subscribed to by IXICO’s stakeholders
and presented by IXICO’s Science
team on a range of topics in
collaboration with industry experts.
Ongoing conference participation
including poster submissions, which
enables IXICO to present its findings in
collaboration with its clients as well as
sharing imaging and biomarker insights
with the CNS community.
Regular communication between Board
members and the Group’s
shareholders via in person meetings,
video conferences and investor
presentations.
2024 progress and priorities
IXICO is compliant with ISO 13845,
undertakes several client audits each
year and is compliant with GCP and 21
CFR Part 11.
GDPR training and subsequent
refresher training is a mandatory part of
the HR induction programme.
Continued investments in IXICO’s
infrastructure and data governance
program.
The Group expects to obtain ISO
270001 certification during 2025.
2024 progress and priorities
Development and launch of the
Group’s next generation highly scalable
AI-powered imaging biomarker platform
which makes use of Microsoft Azure
cloud technology and is GCP and 21
CFR Part 11 compliant.
Investment into differentiated biomarker
measures that increase the sensitivity
and accuracy of measurement of
biomarkers that indicate the efficacy
and safety of drug candidates.
2024 progress and priorities
Mandatory Anti-bribery training forms part of the
HR induction programme.
Ongoing department-through-to-Board risk
review, assessment and monitoring program.
IXICO plc
Strategic Report for the year ended 30 September 2024
23
Financial review
Right sizing the Group for future growth.
In late 2024, IXICO raised just over £4.0 million (£3.7 million net) to deliver the next phase of the Group’s strategy. This
strategy is focussed on leveraging the significant latent value the Group has developed within its science and technology
platform. It is anticipated that the investments made subsequent to this capital raise will return the Group to revenue
growth which will, over the medium term, return improved margins, profitability and cash generation.
The capital raise was completed at a relatively challenging time in the clinical trials and financial markets and reflects
the depth of existing and new shareholder interest, conviction and enthusiasm for the strategy laid out by the Group.
Looking to 2025, a strengthening of the clinical trials market is anticipated, reflecting a return to 2022 investment levels
in drug development. The capital raise concluded in October 2024, in addition to cost management decisions executed
earlier in the year mean the Group is well placed to leverage this market improvement by investing in a clearly defined
set of strategic priorities.
This review includes a comparison of the financial KPIs used to compare performance to the prior year, a summary of
which is shown below:
KPI
2024 result
2023 result
Movement
Revenue
£5.8m
£6.7m
£0.9m↓
Gross profit
£2.7m
£3.3m
£0.6m↓
Gross margin
47.0%
49.1%
210bps↓
EBITDA loss
(£1.7m)
(£0.8m)
£0.9m↓
Operating loss
(£2.2m)
(£1.4m)
£0.8m↓
Loss per share
(4.14p)
(2.44p)
1.70p↓
Order book
£15.3m
£14.8m
£0.5m↑
Net assets
£9.5m
£11.4m
£1.9m↓
Cash
£1.8m
£4.0m
£2.2m↓
Non-current asset investments
£0.5m
£1.9m
£1.4m↓
Revenue
Revenue for the year of £5.8 million (2023: £6.7 million) represents a year-on-year contraction of 13%. This contraction
was caused by the weak market conditions across the clinical trials market throughout 2023 and the first half of 2024
resulting in lower levels of contract wins during this period. As 2024 progressed, a material uptick in the number and
value of contracts wins has resulted in a £0.5 million increase in the value of the order book at the end of the year (£15.3
million) as compared to the same timepoint in the prior year (£14.8 million). Growth in the orderbook is an important
metric for the Group, as this provides a strong lead indicator of future revenues.
Gross profit
The Group reports gross profit of £2.7 million for the year (2023: £3.3 million). This equates to a gross margin of 47.0%
(2023: 49.1%). Whilst this is a strong gross margin, the reduction on the prior year reflects the reduction in revenues
and the relatively fixed cost base of the Group.
Gross profit is driven by both the revenue volume itself as well as the mix of revenues being delivered. Across 2024,
approximately 60% of the Group’s revenues have been from phase I and phase II clinical trials (which tend to be lower
margin than later phase trials). Positively, this portfolio provides a strong base for future revenue growth, as those trials
which successfully move from early to late phase provide the Group with the opportunity to continue providing services
as these trials transition to larger, later phase, more profitable trials.
IXICO plc
Strategic Report for the year ended 30 September 2024
24
Earnings before interest, tax, depreciation, and amortisation (‘EBITDA’)
The Group delivered an EBITDA loss of £1.7 million in the year (2023: £0.8 million). This reflects the reduction in
revenues, tighter margins, a couple of non-recurring items that supressed profitability in 2024 and a reduced level of
cost capitalisation. These negative impacts have then been partially offset by careful cost management including the
completion of a headcount reduction exercise that removed 12% of salary costs between 2023 and 2024.
2024
£000
2023
£000
Profit attributable to equity holders
(2,001)
(1,178)
Depreciation of fixed assets
239
400
Amortisation of fixed assets
236
225
Interest on lease liabilities
21
29
Other interest payable
3
-
Interest on cash held at bank
(85)
(105)
Taxation
(93)
(183)
EBITDA
(1,680)
(812)
Operating profit
Operating expenditure in the year reflected careful cost management alongside targeted investment, specifically:
•
research and development expenses of £1.3 million (2023: £0.9 million) included the development of new
algorithms to support image analysis in new and existing therapeutic indications. In addition, the Group
capitalised £0.3 million of internal development expenditure primarily in respect of its next generation Trial
Tracker platform (2023: £1.2 million);
•
sales and marketing expenses of £1.4 million (2023: £1.3 million) reflecting the investment in sales executives
and marketing and product capabilities as well as £0.1 million of one-time costs related to commercial
consultancy; and
•
general and administrative expenses of £2.9 million (2023: £2.9 million) reflecting savings in headcount
following a restructure at the start of the year, offset by additional one-time expenditure of approximately
£0.3million relating to CEO succession.
Operating losses totalled £2.2 million (2023: £1.4 million) equated to an operating loss margin of 37% (2023: 22%).
Order book
The Group grew its contracted order book during the year. On 30 September 2024 this totalled £15.3 million (2023:
£14.8 million), which takes account of £5.8 million of revenues delivered during the financial year, £8.9 million of new
and expanded multi-year contracts secured during the year and £2.7 million of trial descopes due to client trial failures
and minor foreign exchange movement in the year. This net growth in the order book reflects the improvements in the
clinical trials market in the latter part of 2024.
Growth in orderbook provides a leading indicator of future growth. The orderbook increase is 3% across the year, with
an increase of 20% since the half-year reflecting the marked increase in new contract wins in this latter part of the year.
Looking forward, the Group aims to report accelerated growth in orderbook on an annual basis such that a sustainable
level of greater than 10% revenue growth is achieved.
New contracts won were with 11 clients with contract extensions with 15 clients.
2024
£000
2023
£000
Opening orderbook
14,753
16,019
New wins
8,947
8,030
Revenue
(5,766)
(6,665)
Net descoping, inflation and FX
(2,674)
(2,631)
Closing orderbook
15,260
14,753
IXICO plc
Strategic Report for the year ended 30 September 2024
25
Cash
The Group reported a cash balance on 30 September 2024 of £1.8 million (2023: £4.0 million). The reduction in cash
reflects operating cash outflows after tax receipts of £1.7 million in the year (2023: £0.3 million cash inflow), £0.4 million
(2023: £1.9 million) of capitalised investment in data and technology assets designed to support future scalability and
£0.1 million (2023: £0.2 million) of lease payments on the Group offices.
The Group completed a successful capital raise of just over £4.0 million (£3.7 million after fees) soon after the close of
the 2024 financial year.
Non-current asset investments
The Group capitalised £0.5 million of non-current assets in the year to 30 September 2024 (2023: £1.9 million). This
decrease in non-current assets investment reflects that the Group’s next generation TrialTracker platform was
completed and ready for use early in the financial year and consequently saw a reduced level of capital expenditure
invested during 2024. 2025 capitalised investment in its platform to deliver additional functionality is expected to be
approximately the same level as 2024.
The next generation TrialTracker platform, equipped with the Group’s leading analysis algorithms, positions the Group
to further enhance its services into clinical trials as well as providing opportunities to penetrate adjacent markets such
as post-market and clinical safety assessments in a robust, secure and regulatory-compliant centralised manner. The
platform utilises Microsoft Azure’s cloud infrastructure and technologies.
Net assets
The Group’s net asset position decreased by £1.9 million to £9.5 million across the year (2023: £11.4 million). This
reflects losses reported, partially offset by the investments made in technology assets to underpin long-term future
growth aspirations and market demands.
This net asset position was enhanced soon after the financial year on the successful completion of a £4.0 million capital
raise (£3.7 million after fees).
Loss per share
The Group reports a loss per share of 4.14p (2023: 2.44p).
Grant Nash
Chief Financial Officer
3 December 2024
IXICO plc
Strategic Report for the year ended 30 September 2024
26
Risk management
The Board holds responsibility for monitoring risks to which the Group is exposed, and for reviewing and assessing the
effectiveness of the internal control framework used by the Group to manage those risks.
The Group has designed its internal controls with the aim of providing a proportionate level of assurance for the
organisation, taking account of its size, stage of development and risk exposure.
In assessing the risks faced by the Group, a detailed risk identification and control framework is adopted. It is the
responsibility of each department leader within the Group to update the risk and control matrix for their department and
each matrix is reviewed by management on a quarterly basis. The Board receives a summary of the consolidated risk
and control matrices every six months. The matrix sets out the status of controls in place to manage identified risks and
ranks the risks by their likelihood of occurrence and the potential impact of this on the Group’s operations. This matrix
also details actions which are identified to further manage such risks. The Board reviews, discusses and challenges this
risk and control matrix with the Executive Directors.
Principal risks and uncertainties
The following table presents the principal risks and uncertainties that the Board considers could have a material impact
on the Group’s operational results, financial condition and prospects. This is not an exhaustive list of risks and is intended
to provide visibility of those risks the Board considers the most material based on the information it currently has
available to it.
These risks and uncertainties reflect the business environment within which the Group operates, together with risks in
the execution of its business strategy. The risks are separated into four specific risk areas being Strategic, Operational,
Financial, and Legal, Compliance & Regulatory.
IXICO plc - Strategic Report for the year ended 30 September 2024
27
Operational Risks
Principal Risks
Context
Mitigation
Risk Change
Commercial Risk
Risk Score
High
Failure to understand market trends or build client relationships
may result in lost client opportunities and reduced financial returns.
Clinical trials have long sales cycles and failure to build a pipeline
of opportunities will impact on future sales performance.
A significant turnover of employees within the commercial function
may impact short term commercial momentum.
A tightening of the funding environment has impacted the number
of clinical trials initiated in 2024, particularly in the biotech sector.
This will impact the rate of growth in revenues achieved by the
Group
-
Early indications of a strengthening of the clinical trials
market, supported by high profile successes in the area
of AD, point to increased commercial opportunities for the
Group as we move into 2025.
-
Investments made, and being made, in Product
Management, Marketing and Business Development
resources to accelerate lead generation and qualification.
-
Alignment of Science resource with commercial strategy
including
the
development
of
Science
focused
partnerships resulting in increased Consortia and Grant
activity.
-
Program of well received webinars as well as conference
participation enabling the Group to share its imaging and
biomarker insights with its stakeholders.
ó
Threat of cyber
attacks
Risk Score
High
Any successful cyber-attack may create operational, financial
and/or reputational risk for the Group. This risk will remain a high-
level risk owing to geopolitical issues including the conflicts in
Eastern Europe and the Middle East and the success of
ransomware attacks across the globe.
Increased incidence of cyber-attack has impacted insurer risk
appetite for this risk meaning the ability to secure cyber cover at
sensible premiums (or at all) has become more difficult.
-
Continued investment in IT infrastructure, including use
of cloud services, implementation of new and upgraded
systems and equipment.
-
Ongoing review of potential vulnerabilities and installation
of certain software increased internal system segregation
and monitoring capabilities to reduce the risks of
ransomware attacks.
-
Cyber security training for all employees
-
Deployment of security enhancements on remote access
endpoints.
-
Independent penetration tests undertaken to assess
system security.
ó
IXICO plc - Strategic Report for the year ended 30 September 2024
28
Principal Risks
Context
Mitigation
Risk Change
Employee
retention
Risk Score
Medium
A failure to attract and retain talent within the business may result
in a shortage or loss of key skills.
A reduction in headcount during the year results in increased
reliance on specific individuals within the Group.
-
New CEO appointed and onboarded following retirement
of existing CEO.
-
Framework in place to support employees with the
achievement of personal and company objectives in line
with IXICO’s 4As values.
-
Shareholder approval obtained for the 2024 IXICO EMI
Share Option Plan.
-
Training in place to support and develop newly promoted
line managers.
-
Initiatives to enhance employee engagement are in
place, such as monthly ‘townhall’ meetings.
ó
IT Infrastructure
Risk Score
Medium
The Group deploys its services via its technology infrastructure.
Any failure in this infrastructure would risk impacting the Group’s
financial and/or operational performance.
In a rapidly evolving technology environment, accompanied by
increased scrutiny and focus on cyber security, it may be difficult to
ensure sufficient levels of IT investment to address all IT systems-
related risks.
-
Development and launch of the Group’s next generation
data capture and analysis cloud-based platform.
-
Continuing investments in infrastructure to update and
improve security and resilience.
-
All production servers are hosted in built for purpose
production data centres with geographically separated
back-up giving strong system resilience.
-
External independent penetration tests designed to
identify areas for increased intention.
ò
IXICO plc - Strategic Report for the year ended 30 September 2024
29
Financial Risks
Principal Risks
Context
Mitigation
Risk Change
Termination of
client clinical
trials
Risk Score
Medium
The Group’s client clinical trial contracts bear a risk of early
termination. These normally result from a client’s interim data
review demonstrating no material benefit of the trial drug, or
adverse safety events caused by the client’s trial drug.
This risk has been evidenced by the early termination of several
Group client clinical trials across recent years and is expected to
occur in the future.
The increased diversification of the Group’s contracted orderbook
mean the loss of any single trial will have a lower impact that was
the case previously.
-
A focus on diversification by the commercial team in
developing the Group’s client and project pipelines to
reduce the reliance by the Group on any single, or small
number of, clinical trials.
-
Commercial contracts can include up-front non-
refundable payments, close-out cost recovery and
termination notice clauses.
-
The Group builds a level of trial cancellation into its
budgets and forecasts in recognition that the risk of early
cancellation is particularly high in neurological clinical
trials.
-
Client
governance
meetings
and
stakeholder
engagement with the Group’s commercial, operational
and science teams to ensure visibility of the progress and
challenges of assets the Group is supporting.
-
Continued investment in the Group’s commercial team to
ensure engagement with clients on drug development
reviews.
ó
Cash reserves
Risk Score
Medium
The Group is currently loss making and it therefore utilises cash.
The Group must ensure that cash reserves are sufficient to sustain
the Group as it delivers its strategy to achieve sustainable
profitability.
-
The Group undertakes detailed budgets and forecasts,
as well as sensitivity analysis, to ensure prudent
investment decision making.
-
The Group seeks to negotiate up-front payments with
clients where it can, improving its cashflows and
reducing risk in the event of trial failure.
-
The Group is agile allowing it to react rapidly to any
unexpected changes in circumstances.
-
The Group undertook a £4 million fundraise in October
2024 which will enable it to execute its “Innovate, Lead,
Scale” strategy thus allowing it to operate efficiently and
generate value for the Group.
ò
IXICO plc - Strategic Report for the year ended 30 September 2024
30
Principal Risks
Context
Mitigation
Risk Change
Liquidity, credit
and currency
Risk Score
Medium
The Group is exposed to financial risks typical of all commercial
companies. These include the risks of a cash shortfall, experiencing
a significant client payment delay, exposure to a foreign currency
rate fluctuation which is against the interests of the Group and/or
the Group fails to plan for tax and therefore is exposed to tax
liabilities beyond the level necessary.
-
Standard controls are applied around these risks.
-
The Group’s cash position has been strengthened by a
successful fundraise together with a client portfolio which
includes large, well-funded organisations.
-
Most contracts are denominated in GBP and currency
levels are forecast and reviewed monthly with currency
hedges utilised where appropriate.
-
The Group utilises deposit accounts with its banking
partner to ensure it achieves a return on its existing cash
reserves.
ò
Strategic Risks
Principal Risks
Context
Mitigation
Risk Change
Failure to exploit
commercial
opportunities
Risk Score
Medium
The Board sets strategic initiatives that it expects will deliver
increased market penetration and new market opportunities for the
Group. The nature of any strategic initiative is that it includes a
degree of judgement risk.
Further, the Group may not execute on its strategic plans as
effectively or efficiently as possible, or its strategic plans may not
be the most optimal, thereby failing to maximise the commercial
opportunity available to the Group.
-
Change in CEO in the year has resulted in a clear
strategy being presented to investors as to how the
Group is able to grow its market and financial returns.
-
Annual review by the Board of Group strategy and
budget priorities as well as progress against strategy.
-
Monthly leadership review of delivery of specific
strategic initiatives.
-
Board appraisal of significant investments before funds
are committed and subsequent review of each
investment’s delivery and performance.
-
External expertise and advice sought to inform strategic
initiatives.
-
Detailed
qualification
of
client
opportunities
and
engagement across various functions and stakeholders
to understand client requirements.
-
Exploration of new revenue streams including from the
Group’s next generation data capture and analysis cloud-
based platform.
ò
IXICO plc - Strategic Report for the year ended 30 September 2024
31
Legal, compliance and regulatory risk
The Strategic Report was approved by the Board on 3 December 2024 and signed by order of the Board by:
Bram Goorden
Chief Executive Officer
3 December 2024
Principal Risks
Context
Mitigation
Risk Change
Data Protection
Risk Score
Low
The Group captures personal data from clinical trial subjects
thereby exposing it to data security risks (and associated
reputational risks in the event of a data leak).
-
Data captured from client sites is pseudonymised on
receipt into the Group’s TrialTracker platform which has
been developed specifically for managing the flow of data
in clinical trials electronically and delivering regulatory
compliance.
-
The Group has established computerised systems
compliance policies and procedures to meet the
regulatory requirements of GCP, 21 CFR Part 11 and EU
GMP Annex 11. Its policies and procedures as well the
systems under operation are under continual review and
improvement to ensure the systems remain in a validated
state and the IT infrastructure qualified in order to
maintain the integrity and security of sensitive or critical
information.
-
Data protection legislation requirements (such as GDPR)
are integrated within the Group’s processing activities
and practices
-
All employees undergo GDPR training and annual
refresher training.
ó
IXICO plc
Corporate Governance Report for the year ended 30 September 2024
32
Corporate Governance Report
The Board has adopted, and strives towards compliance with the Quoted Companies Alliance (‘QCA’) Corporate
Governance Code (‘Code’). The Code comprises ten principles, with which companies undertake to comply as part of
their corporate governance arrangements. The Board conducts itself in a manner which places IXICO’s values and the
principles of the Code at the core of the Group’s culture.
IXICO has published a statement on the Group website that sets out, in broad terms, how the Group complies with the
Code at the date of this report. The Board provides annual updates about compliance with the Code. The Board is
responsible for ensuring that IXICO is managed for the long-term benefit of all shareholders, through effective and
efficient decision-making. Corporate governance is an important part of the Board’s role by providing oversight and
guidance to help manage risk and build long-term value.
IXICO’s statement of compliance with the Quoted Companies Alliance (QCA) Corporate Governance Code can be
accessed here: IXICO plc QCA statement.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial year. The
Directors are required by the AIM Rules of the London Stock Exchange to prepare Group financial statements in
accordance with UK-adopted International Accounting Standards (“IAS”) as adopted by the United Kingdom (“UK”) and
have elected under company law to prepare the Company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice FRS 101 (United Kingdom Accounting Standards).
The financial statements are required by law and IFRS adopted by the UK to present fairly the financial position of the
Group and Company and the financial performance of the Group; the Companies Act 2006 provides in relation to such
financial statements that reference in the relevant part of that Act to financial statements giving a true and fair view are
references to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that
period. In preparing each of the Group and Company financial statements, the Directors are required to:
–
select suitable accounting policies and then apply them consistently;
–
make judgements and accounting estimates that are reasonable and prudent;
–
for the Group financial statements, state whether they have been prepared in accordance with IAS adopted by
the UK, and for the Company financial statements, state whether applicable UK Accounting Standards have
been followed, subject to any material departures disclosed and explained in the Company financial statements;
and
–
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Group’s and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Group and the Company and enable them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
IXICO plc
Corporate Governance Report for the year ended 30 September 2024
33
Statement of Directors’ Responsibilities continued
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on
the IXICO plc website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
By order of the Board of Directors
______________________________
Mark Warne
Non-Executive Chair
3 December 2024
IXICO plc
Corporate Governance Report for the year ended 30 September 2024
34
Audit Committee Report
The Audit Committee is charged with monitoring the integrity of the Group’s financial statements and the application of
accounting policies. The Committee also assesses the effectiveness of the internal control and risk management
systems. Risk management discussions take place bi-annually and are included within the agenda of Board meetings.
The Committee is chaired by Kate Rogers; Dipti Amin is a member of the Committee. Additional attendees are invited
to join by the Committee where appropriate. In the year ended 30 September 2024, this included the Chief Financial
Officer, Group Financial Controller, General Counsel, and senior representatives of the Group’s auditor. Following a
detailed tender process, the Group’s audit was transitioned from Grant Thornton UK LLP to Moore Kingston Smith LLP
(‘MKS’) as announced on 15 December 2023.
Financial year 2024 Audit Committee agenda items
During the 2024 financial year, the Audit Committee met three times, with a variety of agenda items discussed. These
are set out below.
NOVEMBER 2023
MAY 2024
SEPTEMBER 2024
External audit
Reviewed external audit findings
report with Grant Thornton.
Reviewed and approved accounting
approach to areas of judgement or
those deemed to be of higher risk.
Confirmation of MKS’ appointment as
the new auditor of the Group on
completion of the 2023 financial year
audit.
Full year results
Review of full year preliminary results
announcement and draft Annual
Report ahead of recommending them
for approval by the Board.
Other
Completed annual review of the Audit
Committee Terms of Reference and
accompanying checklist to ensure
appropriate actions had been taken
during the course of the year to fulfil
the duties of the Audit Committee.
External audit
Reviewed interim review report for
the half year unaudited results with
MKS.
Reviewed
and
approved
accounting approach to areas of
judgement or those deemed to be of
higher risk.
Interim results
The interim results and associated
announcement were reviewed ahead
of recommending them for approval
by the Board.
Internal control
The
Group’s
internal
control
framework was reviewed and agreed
fit for purpose.
External audit
Reviewed the audit plan for the 2024
financial
year
with
MKS
with
particular
focus
on
areas
of
judgement or those deemed to be of
higher risk.
Anti-Bribery and Corruption
The
Group’s
Anti
Bribery
and
Corruption policies were reviewed
and agreed fit for purpose.
Going concern
The consolidated financial statements are prepared on a going concern basis after considering the Group’s and the
Company’s current cash position, and in reviewing the cash flow forecasts and budgets for a period of 12 months
following the approval of these consolidated financial statements.
The Audit Committee are satisfied with the going concern basis through obtaining a sensitised cashflow forecast which
consisted of several adjustments which are not in the ordinary course of business. These included but were not limited
to:
•
Increasing the level of expected cancellations and delays on clinical trials beyond the level that would normally
be expected in this environment; and
•
Reducing the number of new contracts expected to sign during the next 12 months.
Other mitigating factors in the event of a significant downturn in business include careful cost management and
opportunities to raise additional financial capital.
In addition, the Audit Committee reviewed a reverse stress test based on the Group’s existing cash and current
receivable position, considering the plausibility of these assets being insufficient to enable the Group to continue to trade
for twelve months from date of approval of the consolidated financial statements. Based on its review the Committee
concluded that it is appropriate that the Group continue to report as a going concern.
IXICO plc
Corporate Governance Report for the year ended 30 September 2024
35
The Board of Directors
Bram Goorden
Chief Executive Officer
Bram has over 20 years of leadership in BioPharma and precision medicine. He held C-
level roles at Eagle Genomics and SOPHiA Genetics, enhancing platform innovation and
US presence. As VP at Foundation Medicine, he expanded its global precision medicine
platform. As CEO of Prometheus Laboratories, he integrated it into Nestle Health Science
and served as Head of Brain Health. Earlier, he held senior roles at UCB Pharma and Eli
Lilly, launching CNS medicines globally. Bram’s board experience includes Mantis
Photonics and Cerecin Inc. He is passionate about patient care and values diverse teams.
His strategic vision and leadership have consistently driven growth and shareholder value.
External appointments
Oncobit AG, Director
Mantis Photonics AB, Chairman
Zetta Genomics, Non-Executive Director
Virdis Group, Advisor
Grant Nash
Chief Financial Officer &
Company Secretary
Grant has worked in the life sciences sector for over 20 years. In his executive director
role, Grant leads the Company's Finance, Legal and IT functions. Grant joined IXICO from
UK Biobank, an international health research data resource, where he had been Finance
Director since 2014. Previous to this, he qualified as a Chartered Accountant at PwC and
was SVP Finance at Evotec, the early stage drug discovery CRO. Grant is a member of
the Share Transaction Committee and also acts as Secretary to the Board and its
subcommittees.
External appointments
None
Mark Warne
Non-Executive Director
Chair
Mark is Chief Executive Officer of CHEMAI Ltd and is an advisor to Angelini Ventures. He
is widely recognised in the UK and international life sciences sector, having spent almost
10 years at IP Group Plc, a leading intellectual property commercialisation company,
where he led the Healthcare team.
External appointments
CHEMAI Ltd, Chief Executive Officer
Angelini Ventures, Advisor
Business owner of Innovista Consulting Limited
Kate Rogers
Non-Executive Director
Kate is the CEO of the Follicular Lymphoma Foundation which she joined in 2022 following
a 20-year career with Glaxo SmithKline (GSK). At GSK, Kate led the transformation of
GSK’s global finance organisation, having previously worked as CFO for Laboratoire
Glaxo SmithKline SaS (GSK France) and other senior finance roles within GSK. Kate is
qualified as a chartered accountant and holds a Bachelor of Science degree in
Engineering from Oxford University. Kate chairs the Audit Committee and is a member of
the Remuneration Committee.
External appointments
Follicular Lymphoma Foundation, Chief Executive Officer
Dipti Amin
Non-Executive Director
Dipti is an experienced non-executive director. She currently sits on the Board of Lineage
Cell Therapeutics, a US based biotechnology company, having previously sat on the
Boards of companies in both the private and public sector. Before this, Dipti spent over
20 years of her executive career at IQVIA occupying senior positions in compliance, drug
safety and medical affairs. Dipti is medically trained and is a Fellow of the Faculty of
Pharmaceutical Medicine. Dipti is Chair of the Remuneration and Share Transaction
Committees and a member of the Audit Committee.
Dipti joined the Board on 1 October 2023.
External appointments
Lineage Cell Therapeutics, Non-Executive Director
Appraiser for GMC Medical revalidation for IQVIA
IXICO plc
Corporate Governance Report for the year ended 30 September 2024
36
Board activities and timeline
The Board and its subcommittees
The Board meets at least four times per year in accordance with a pre-determined meeting calendar. The Board is
supported by three subcommittees: the Audit Committee, the Remuneration Committee and the Share Transaction
Committee. The subcommittees discharge responsibilities on behalf of the Board and are entitled to such internal or
external advice as is required to allow them to fulfil their duties.
The Board and its subcommittees receive appropriate and timely information prior to each meeting including a formal
agenda. Any Director may challenge Group proposals. Decisions are taken democratically after appropriate discussion.
Specific actions arising from Board meetings are agreed by the Board or relevant subcommittee and are then followed
up by the Executive Directors.
The Board and subcommittees all operate against terms of reference which are summarised on the Group website
(https://ixico.com/investors/governance/).
Board and sub-committee responsibilities
Board meetings
The Board is responsible to shareholders for the proper management of the Group. It
comprises the Non-Executive Chair, two Executive Directors and three Non-Executive
Directors, one of whom acts as Senior Independent Director.
The Board is chaired by Mark Warne. Mark, Kate Rogers and Dipti Amin are Non-
Executive Directors and are considered to be independent of the Executive Directors and
free from any relationship which could materially affect the exercise of their independent
judgement. Non-Executive Directors receive a fee for their services.
The Board has agreed items that are reserved for its consideration including the Group’s
strategy, budgets, financial reporting, and internal controls, together with the monitoring of
the progress to achieve its goals.
Remuneration
Committee
The terms of reference of the Remuneration Committee include the following
responsibilities:
•
determine and agree with the Board the framework or broad policy for the
remuneration of the Executive Directors and other such members of the executive
management as it is designated to consider;
•
approve the design of, and determine targets for, any performance-related pay
schemes and approve the total annual payments made under such schemes;
•
approve all long-term incentive scheme structures and option schemes;
•
approve all option grants for ratification by the Board; and
•
within the terms of the agreed policy, determine the total individual remuneration
package of each Executive Director including, where appropriate, bonuses,
incentive payments and share options.
Remuneration Committee meetings are held at least twice per financial year.
Audit Committee
The terms of reference of the Audit Committee include the following responsibilities:
•
monitor the integrity of the Group’s financial statements and application of
accounting policies;
•
review the effectiveness of the Group’s internal control and risk management
systems; and
•
oversight of the Group’s external auditors, including assessment of their
independence from the Group.
Audit Committee meetings are held at least twice per financial year.
The Group auditor only provides audit services to the Group.
IXICO plc
Corporate Governance Report for the year ended 30 September 2024
37
Share Transaction
Committee
The terms of reference of the Share Transaction Committee include the following
responsibilities:
•
review, consider and, where appropriate, approve the exercise of share options by
option holders of the Group and the issuance of shares in connection with such
exercises; and
•
review, consider and approve the request to transact shares by employees or other
individuals closely related to the Group in accordance with the relevant policies of
the Group, applicable law and any directions of the Group’s nominated adviser.
The Share Transaction Committee meetings are held on an ad hoc basis as required.
Board and sub-committee meetings in the 2024 financial year
Board meeting
Audit
Committee
Remuneration
Committee
Share
Transaction
Committee
Number of meetings
16
4
3
-
B Goorden
2
Member
G Nash
16
Member
K Rogers (NED)
14
Member
4
Chair
3
Member
M Warne (NED)
4
Member
12
Chair
2
Member
2
Chair
D Amin (NED)
11
Member
4
Member
2
Member
1
Chair
G Cerroni – resigned
August 2024
13
Member
C Spicer (NED) –
resigned January 2024
4
Chair
Attendance
percentage
98.7%
100.0%
100.0%
N/A
Note: Giulio Cerroni and Charles Spicer resigned from the Board during the year.
IXICO plc
Directors’ Report for the year ended 30 September 2024
38
Directors’ Report
The Board of Directors of IXICO plc (registered in England and Wales: 03131723) presents its report together with the
audited consolidated Group and Company financial statements for the year ended 30 September 2024.
Principal activities
The Group provides specialist data analytics services to the global biopharmaceutical industry. The services include the
collection, analysis, management and reporting on data generated in the course of a clinical study. The outputs from
the data analysis are used to improve patient selection, monitor drug safety and assess clinical efficacy of the drug
under development.
Results and dividends
The Group achieved a net loss after tax of £2.0 million for the year (2023: £1.2 million).
The Board of Directors does not recommend the payment of a dividend.
Financial risk management
The financial risk management and objectives of the Group are set out in note 23 of the consolidated financial
statements. Specific financial risks are set out on page 29 to 30 of the Strategic Report.
Political donations
The Group made no political donations during the period (2023: £nil).
Charitable donations
The Group made £nil in charitable donations during the period (2023: £1,000).
Directors
The Directors of the Company, who served during the period and up to the date of this report, unless otherwise indicated,
are as follows:
Director
Capacity
Appointed date
Resignation date
Giulio Cerroni
Chief Executive Officer (resigned)
6 February 2017
19 August 2024
Bram Goorden
Chief Executive Officer
19 August 2024
Grant Nash
Chief Financial Officer
Company Secretary
21 August 2019
31 May 2019
Charles Spicer
Non-Executive Chair (resigned)
14 October 2013
30 January 2024
Mark Warne
Non-Executive Chair
16 September 2016
Kate Rogers
Non-Executive Director
21 January 2022
Dipti Amin
Non-Executive Director
05 October 2023
Biographical details of IXICO plc’s Directors are shown on page 35.
Directors’ remuneration and share options
Details of the Directors’ remuneration and share options are set out in the Directors’ Remuneration Report on page 42
and 43.
IXICO plc
Directors’ Report for the year ended 30 September 2024
39
Re-election of Directors
At the 2024 AGM, in accordance with the Company’s Articles of Association, Dipti Amin was elected as a Non-Executive
Director and Mark Warne was re-elected as a Non-Executive Director of the Company.
In accordance with section 992 of the Companies Act 2006, the Directors disclose that the rules regarding the
appointment and replacement of Directors are contained in the Company’s Articles of Association, which may be
amended with shareholder approval in accordance with relevant legislation. The powers of the Directors are contained
in the Company’s Articles of Association or in accordance with the provisions of the Companies Act 2006. The
Companies Act 2006 provides that Directors may issue and buy back the Company’s shares on behalf of the Company,
subject to authority being given to the Directors by shareholders in a general meeting. No authority to buy back the
Company’s ordinary shares of 1 pence per share has been sought.
Directors’ interests
At 3 December 2024, the table below sets out the interests in the Company’s shares of Directors who served during the
period and their connected persons:
Ordinary shares
of 1 pence
Ordinary shares
of 1 pence
Director
2024
2023
Giulio Cerroni (resigned 19 August 2024)
-
491,333
Bram Goorden
526,315
-
Grant Nash
505,263
200,000
Charles Spicer (resigned 30 January 2024)
-
333,196
Dipti Amin
105,263
-
Mark Warne
72,335
19,650
Kate Rogers
52,631
-
The Directors’ interests are beneficially held by each Director unless otherwise stated. Apart from these interests and
share options (as disclosed on pages 42 and 43), no Director had any further interest in the period in the share capital
of the Company or other Group companies.
Directors’ indemnities
The Group had in place for the whole of the period, and at the date of signing the consolidated financial statements,
qualifying third-party indemnity insurance for all Directors and officers.
Going concern
Following the completion of a £4 million oversubscribed capital raise in October 2024, the Group is well capitalised to
deliver on its strategic goals. This capital raise was supported by both existing and new institutional investors confirming
strong alignment to the Group’s strategy. In addition, the commercial traction of the Group, following a challenging
eighteen-month period, improved materially during the second half of the 2024 financial year, resulting in a larger
orderbook (book of signed contracts) compared to twelve months previous.
The Group has a strong balance sheet for its size with financial year end net assets of £9.5 million, a £1.8 million cash
balance that was subsequently bolstered by a capital raise in October 2024. During the year the Group secured £8.9
million of new contracts providing it with good visibility of future revenues across a diversified portfolio of clients and
projects.
In assessing going concern, management has prepared detailed sensitised forecasts which consider different scenarios
through to December 2025. These include the risk to current projects and expected future sales pipelines. The Directors
have considered these forecasts, alongside the Group’s strong balance sheet and cash balance as well as the ability
for the Group to mitigate costs if necessary. After due consideration of these forecasts, the Directors concluded with
confidence that the Group has adequate financial resources to continue in operation for the foreseeable future.
IXICO plc
Directors’ Report for the year ended 30 September 2024
40
Structure of the Company’s capital
The Company’s share capital comprises a single class of ordinary shares of 1 pence per share, each carrying 1 voting
right and all ranking equally with each other. At 30 September 2024, 48,351,373 (2023: 48,351,373) shares were allotted
and fully paid. Note 21 of the consolidated financial statements provides full details of movements in the Company’s
share capital.
After the year end, the Company completed a share capital raise, and at 3 December 2024 92,668,598 shares were
allotted and fully paid. Further details are provided in note 25.
Holders of ordinary shares are entitled to receive all shareholder documents, to attend, speak and exercise voting rights,
either in person or by proxy, on resolutions proposed at general meetings and participate in any distribution of income
or capital. There are no restrictions on the transfer of shares in the Company or in respect of voting rights attached to
the shares. None of the shares carries any special rights with regard to the control of the Company.
Participants in employee share option schemes have no voting or other rights in respect of the shares which are subject
to their awards until the options are exercised, at which time the shares rank pari passu in all respects with shares
already in issue. Details of employee share option schemes are set out in note 22 of the consolidated financial
statements.
Authority to issue shares
At the general meeting held on 25 January 2024, shareholders authorised the Directors to allot relevant securities up to
an aggregate nominal value of £161,155 (representing 33.33% of the issued share capital) and to allot for cash equity
securities having a nominal value not exceeding in aggregate £48,351 (representing 10.0% of the issued share capital).
These authorities expire at the close of business on 24 January 2025, or if earlier, the conclusion of the next AGM. At
the 2024 AGM, similar authorities will be sought from shareholders, and the Company does not intend to seek authority
for a fully pre-emptive rights issue.
At a general meeting held after the year end on 25 October 2024, shareholders authorised the Directors to allot securities
equivalent to an aggregate nominal value of £447,368.42 as a result of the Group’s successful capital raise.
Substantial shareholdings
At 3 December 2024, the Company had received notification from the following financial institutions of their and their
clients’ interest in the following disclosable holdings, which represent 3% or more of the voting rights of the issued share
capital of the Company.
Number of
% of issued
Shareholders having a major interest
shares held
Shares
Octopus Investments
16,850,400
18.2
Gresham House Asset Management
16,428,100
17.7
BGF Investment Management
12,887,000
13.9
Amati Global Investors
8,606,300
9.3
Canaccord Genuity Asset Management
7,471,000
8.1
River Merchant Capital Limited
3,857,566
4.2
Unicorn Asset Management
3,586,000
3.9
AGM
The notice convening and giving details of the 2025 AGM will be posted to shareholders on or before 20 December
2024. The 2025 AGM of the Company will be held at the Company’s registered office on Friday 24 January 2025.
IXICO plc
Directors’ Report for the year ended 30 September 2024
41
Other matters
Matters required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports)
Regulations 2008 which have not been covered in the Directors’ Report have been included in the Strategic Report in
accordance with Section 414c(11) of the Companies Act 2006.
In October 2024, the Company completed a share capital raise. The company issued 42,621,508 new Ordinary shares
for a total contribution of £4,050,000. Included in this, certain Directors of the Company have subscribed for an
aggregate of 789,472 Ordinary shares for a total contribution of £75,000.
Disclosure of information to auditors
The Directors confirm that:
•
So far as each Director is aware, there is no relevant audit information of which the Group’s auditors are unaware;
and
•
The Directors have taken all steps that they ought to have taken as Directors in order to make themselves aware of
any relevant audit information and to establish that the Group’s auditors are aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies
Act 2006.
On behalf of the Board of Directors
______________________________
Mark Warne
Non-Executive Chair
3 December 2024
IXICO plc
Directors’ Remuneration Report
42
Directors’ Remuneration Report
Remuneration policy for Executive Directors
The remuneration policy and practice are intended to align the remuneration of Executive Directors with the Group’s
business model and achievement of the Group’s strategy. The policy seeks to strike an appropriate balance between a
base salary and a discretionary, performance-related element.
Base salary
The Remuneration Committee approves the base salary of Executive Directors, having regard to the individual role and
responsibilities.
Pension contribution
The Group operates a money purchase Group personal pension plan for all employees. The Group contributes to the
scheme 8% of base salary in respect of the Chief Financial Officer. Separately, the Group contributes to a private
pension 15.3% of base salary in respect of The Chief Executive Officer.
Performance-related bonus
The Group operates a discretionary bonus scheme that takes account of the underlying financial performance of the
Group, meeting KPIs and achieving strategic objectives, specifically focussed on revenue and contract wins. All
performance targets are set by the Remuneration Committee. The award of bonus payments to employees, including
Executive Directors, are subject to the Remuneration Committee’s review and approval. For the year to 30 September
2024, the Remuneration Committee determined that bonus criteria related KPIs were not met, and that no bonus should
be paid in respect of the year.
Bonus payments are not pensionable.
IXICO EMI Share Option Plans 2014 and 2024
No share options were granted to Executive Directors during the year. Those share options that have been previously
awarded to Executive Directors were granted in accordance with the rules of the IXICO EMI Share Option Plan 2014.
The share options include performance-related vesting criteria related to the achievement of strategic goals or a
significant corporate development transaction. The exercise of share options is subject to the Remuneration
Committee’s review, and approval, of whether such performance targets have been achieved.
After the year end, at a General Meeting held on 25 October 2024, the IXICO EMI Share Option Plan was renewed
following the expiry of the 2014 plan in May 2024. This new plan ‘The IXICO EMI Share Option Plan 2024’ will apply to
share options awarded subsequent to 25 October 2024. Those share options issued under the 2014 plan will remain
subject to the rules of that plan.
Share dilution limits
The aggregate number of new ordinary shares which may be issued on the realisation of the EMI Share Option Plan
2024 in any 10-year period may not exceed 20% of the number of ordinary shares in issue.
At 30 September 2024, and assuming satisfaction of all performance conditions, the total number of the Company’s
shares issuable under awards made under the EMI Share Option Plan 2014 (and including any awards already
exercised) was 4,623,935 or 9.6% of the number of ordinary shares in issue at that date.
Other benefits
The Chief Financial Officer is part of a Group Life Assurance scheme and a private medical insurance scheme that is
maintained and paid for by the Group for all UK employees.
The Chief Executive Officer is part of a Group Life Assurance scheme that is maintained and paid for by the Group.
Income protection insurance are not provided.
Executive Directors’ service contracts and termination provisions
The service contracts of Executive Directors are approved by the Remuneration Committee and then the Board. The
service contracts may be terminated by either party giving notice to the other as set out below:
Date of contract
Notice period
Bram Goorden
19 August 2024
6 months
Grant Nash
29 April 2019
6 months
IXICO plc
Directors’ Remuneration Report
43
Non-Executive Directors
The Non-Executive Directors have letters of appointment with the Company. Fees paid to the Non-Executive Directors
are determined by the Board, giving due consideration to market rates and comparative businesses. The Non-Executive
Directors do not receive pension contributions and do not participate in any discretionary bonus or Company share
option schemes. Current contracts together with notice periods are as follows:
Date of contract
Notice period
Mark Warne
16 September 2016
3 months
Kate Rogers
21 January 2022
3 months
Dipti Amin
01 October 2023
3 months
Directors’ remuneration (audited)
Year ended 30 September 2024
Year ended 30 September 2023
Salary
Pension
Salary
Pension
and fees
Bonus
contributions
and fees
Bonus
contributions
£000
£000
£000
£000
£000
£000
Executive
Giulio Cerroni
407
-
-
328
-
-
Bram Goorden
39
-
5
-
-
-
Grant Nash
205
-
16
200
-
16
651
-
21
528
-
16
Non-Executive
Charles Spicer
18
-
-
53
-
-
Mark Warne
47
-
-
31
-
-
Kate Rogers
31
-
-
31
-
-
Dipti Amin
31
-
-
-
-
-
127
-
-
115
-
-
Aggregate emoluments
778
-
21
643
-
16
No Directors waived emoluments in the year ended 30 September 2024 (2023: £nil). Due to the former CEO, Giulio
Cerroni, being on garden leave, that portion of his salary relating to the period 30 September 2024 to his retirement date
of 20 December 2024 has been accrued in the year and is included in the salary and fees disclosed for the year ended
30 September 2024.
Directors’ options
Details of options over shares in the Company held by Directors who served during the period, all of which have been
granted at no cost to the Directors, are set out below:
Number of options
At 30
September
2023
Granted
during
the year
Exercised
during
the year
Lapsed
during
the year
At 30
September
2024
Exercise
price
Date of
grant
Vesting
date
Giulio Cerroni
584,525
-
-
-
584,525
£0.010 4-Jun-18
3-Jun-21
584,525
-
-
-
584,525
£0.010 4-Jun-18
3-Jun-22
163,334
-
-
-
163,334
£0.010 5-Dec-19
4-Dec-22
163,334
-
-
-
163,334
£0.010 5-Dec-19
4-Dec-23
1,495,718
-
-
-
1,495,718
Grant Nash
200,000
-
-
-
200,000
£0.010 5-Dec-19
4-Dec-23
200,000
-
-
-
200,000
Total
1,695,718
-
-
-
1,695,718
During the year ended 30 September 2024, the Company’s share price ranged from £0.06 to £0.19.
Further details of the share option schemes are set out in note 22 of the consolidated financial statements.
IXICO plc
Independent auditor’s report to the members of IXICO plc
44
Financial Statements
Independent Auditor’s Report to the members of IXICO PLC
Opinion
We have audited the financial statements of IXICO plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 30 September 2024 which comprise the Consolidated Statement of Comprehensive Income, the
Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements of Changes
in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been applied in the preparation of the group financial
statements is applicable law and UK adopted International Accounting Standards. The financial reporting framework
that has been applied in the preparation of the Parent Company financial statements is applicable law and United
Kingdom Accounting Standards, including FRS 101 Reduced Disclosure Framework (United Kingdom Generally
Accepted Accounting Practice).
In our opinion:
•
the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs
as at 30 September 2024 and of the Group’s loss for the year then ended;
•
the Group financial statements have been properly prepared in accordance with UK adopted International
Accounting Standards;
•
the parent Company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice and
•
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the
financial statements section of our report. We are independent of the Group in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to
listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
An overview of the scope of our audit
Our Group audit adopted a risk-based approach based after obtaining an understanding of the Group and its
environment, including the Group’s system of internal control, and assessing the risks of material misstatement in the
financial statements. We conducted individual statutory audits on the significant components included in the
consolidation being IXICO PLC and IXICO Technologies Limited, which were audited to their own individual materiality
by the respective group and component audit teams.
For the components within the group audit team’s scope, we evaluated the controls in place by performing walkthroughs
over the financial reporting systems identified as part of our risk assessment. We also reviewed the accounts production
process and addressed critical accounting matters. We then undertook substantive testing on significant classes of
transactions, account balances and disclosures.
For non-significant components that were not subject to their own statutory audit., we performed sufficient substantive
analytical review and other procedures as considered necessary to enable us to express our opinion on the Group
financial statements.
We performed analytical procedures on the financial information of IXICO Technologies Inc. There were no changes to
scope of the group audit from the prior year.
We also addressed the risk of management override of internal controls across the entities within the scope of our audit,
including assessing whether there was evidence of bias by the directors that may have represented a risk of material
misstatement.
IXICO plc
Independent auditor’s report to the members of IXICO plc
45
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
A description of each matter is included below:
Description
How our scope addressed this matter
Revenue recognition- Group – note 6
Revenue is a significant item in the Group’s
consolidated
Statement
of
Comprehensive
Income and impacts several key performance
indicators, strategic measures, and management
judgments.
For the year ended 30 September 2024, the
Group reported total revenue of £5.8 million
(2023: £6.7 million). Auditing standard ISA (UK)
240 requires auditors to presume that there is a
risk of fraud in revenue recognition. We therefore
identified revenue recognition as a key audit
mater
Our audit work included, but was not restricted
to:
•
Reviewing of the revenue accounting
policy and ensuring this is in compliant
with IFRS 15 and appropriate given the
contractual terms with customers and
the contained performance obligations.
•
Where a contract contains multiple
performance obligations, reviewing how
management
have
determined
the
respective value for each performance
obligation and confirming to supporting
documentation.
•
Obtained details from management of
their principal v agent considerations
and
reviewed
this
against
the
requirements of IFRS 15 and contractual
terms to ensure appropriately reflected
in the financial statements
•
For each revenue accounting stream
ensuring that for a sample of items these
had been reflected in accordance with
the accounting policy and that the
service has been delivered to the
customer.
•
For revenue recognised around the year
end, ensuring that there is evidence to
support performance of the respective
obligation in the reporting period.
•
Reviewing any credit notes issued
during or after the reporting period to
ensure they are appropriately recorded
and reflect legitimate adjustments.
Key observations
Based on the results of our audit procedures, we
did not identify any material misstatements in
revenue recognition. We concluded that revenue
was recognised in accordance with IFRS 15,
appropriately reflected in the Group’s financial
statements and that there was not a material
misstatement
arising
from
fraudulent
misstatement of revenue
IXICO plc
Independent auditor’s report to the members of IXICO plc
46
Description
How our scope addressed this matter
Valuation and impairment of Intangible
Assets – Group – note 15
At the reporting date, the Group reported
intangible assets of £6.4million (2023: £6.1
million), making this a significant component of
the Consolidated Statement of Financial Position.
The majority of the Group’s intangible assets
comprise internally generated development
costs, which require significant judgement by
management to:
•
Determine the classification of project
phases
as
research
(expense)
or
development (capitalise);
•
Assess the viability of projects, including
future economic benefits and alignment
with technical feasibility criteria; and
•
Identify directly attributable costs for
capitalisation in line with IAS 38.
The
most
material
balance
relates
to
TrialTracker Next Generation (TTNx), now
classified as ready for use during the reporting
period, with amortisation commencing in the
year. As the Group incurred a loss this year,
management have performed an impairment
review
for
the
development
costs.
Given the significance of these judgements to the
financial statements, we identified valuation of
intangible assets as a key audit matter.
Our audit work included, but was not restricted
to:
•
Reviewing
management’s
documentation on the capitalisation
policy to confirm it aligns with IAS 38.
•
Understanding the recognition criteria
management
uses
to
differentiate
between research and development
phases, especially for TTNx and related
projects.
•
Reviewing a sample of capitalised costs
to
ensure
they
are
appropriately
classified as development rather than
research expenses.
•
Verifying that capitalised costs are
directly attributable to the development
phase by reconciling these costs with
payroll records, project documentation,
and time-tracking systems.
•
Assessing
the
reasonableness
of
management’s judgements regarding
the future economic benefits of the
respective developments.
•
Assessing the amortisation policy and
considering if this is appropriate by
reference to nature of asset and
accounting requirements. Reperforming
calculation based on activity in the year.
•
Reviewing
and
challenging
management’s assessment of whether
an indicator of impairment for TTNx
exists and confirming to supporting
documentation.
•
Critically assessing the impairment
review performed by management and
agree key assumptions to supporting
documentation.
•
Reviewing
management’s
sensitivity
analysis and considered the accuracy of
disclosures in the financial statements
Key observations
Based on our audit work, we concluded that
intangible assets are not materially misstated at
the reporting date and that management’s
assessment that no impairment was required
was appropriate and had been performed in
accordance with relevant financial reporting
requirements.
IXICO plc
Independent auditor’s report to the members of IXICO plc
47
Description
How our scope addressed this matter
Valuation of investments in subsidiaries and
amounts due from group – note 16
At the reporting date, the carrying values of
investments in subsidiaries and amounts due
from subsidiary undertaking are £5.9million
(2023: £5.9million) and £2.2million (2023:
£2.5million)
respectively,
making
them
a
significant component of the Company Statement
of Financial Position.
Given the significance of this area, we identified
valuation of these items as a key audit matter.
Our audit work included, but was not restricted
to:
•
Agreeing cost of investments and
amounts due to subsidiary undertakings
to supporting documents.
•
Reviewing
and
challenging
management’s impairment review and
confirming
key
assumptions
to
supporting documentation.
•
Reviewing
management’s
sensitivity
analysis and considered the accuracy of
disclosures in the financial statements
•
Considering the classification of the
amounts due to the Group based on the
likely timing of cash receipt from
subsidiary undertakings.
Key observations
Based on our audit work, we concluded that
investments in subsidiaries and amounts due
from Group undertaking are not materially
misstated at the reporting date and that
management’s assessment that no impairment
was required was appropriate. However, we
noted that the classification of the amounts due
from subsidiary undertaking in 2024 was
inconsistent with the prior period and challenged
management
if
this
was
appropriate.
Management
subsequently
amended
the
classification to non-current to match the
expected realisation of the balance and have
restated the Company statement of financial
position as at 30 September 2023
Our application of materiality
The scope and focus of our audit was influenced by our assessment and application of materiality. We define materiality
as the magnitude of misstatement that could reasonably be expected to influence the readers and the economic
decisions of the users of the financial statements. We use materiality to determine the scope of our audit and the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and on the
financial statements as a whole.
Due to the nature of the Group, we considered revenue to be the main focus for the users of the financial statements,
accordingly this consideration influenced our judgement of materiality. Based on our professional judgement, for the
Group, we determined materiality to be £86k, which represents 1.5% of revenue. For the Parent Company, we
determined materiality to be £52k, based on 1.5% of gross assets as gross assets are the focus of stakeholders.
On the basis of our risk assessment, together with our assessment of the overall control environment, our judgement
was that performance materiality (i.e. our tolerance for misstatement in an individual account or balance) for the Group
and Parent Company was 50% of materiality, namely £43k and £26k respectively.
We agreed to report to the Audit Committee all audit differences in excess of £4k for the Group and £3k for the Parent
Company, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We
also reported to the Audit Committee on disclosure matters that we identified when assessing the overall presentation
of the financial statements.
IXICO plc
Independent auditor’s report to the members of IXICO plc
48
Component materiality
For the purposes of our Group audit opinion, we set materiality for the other significant component of the Group as 90%
of Group materiality based on the size and our assessment of the risk of material misstatement of that component.
Component materiality was therefore set at £77.4k. In the audit of that component, we further applied performance
materiality levels of 50% of the component materiality to our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group
and Parent Company’s abilities to continue to adopt the going concern basis of accounting included, but was not limited
to:
•
Obtaining cash flow projections running up to 31 December 2025, and comparing projected performance to
historically achieved results and obtaining explanations for significant variances;
•
Confirming projected revenue by reference to signed contracts or other evidence to support inclusion;
•
Comparing costs incurred to historic levels and against committed development projects;
•
Reviewing management’s sensitivity analysis to identify key variables and consideration of any further
plausible downside scenarios that could impact the going concern assessment;
•
Assessing management's ability to prepare accurate forecasts by comparing the forecast prepared for the
2023/24 financial period and comparing it to the actual results for the financial period ending 30 September
2024; and
•
Considering adequacy of disclosures around the adoption of the going concern basis of accounting given the
findings of the work performed above.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group and Parent Company's ability to continue as a
going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and
our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the financial statements themselves. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
IXICO plc
Independent auditor’s report to the members of IXICO plc
49
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which the
financial statements are prepared is consistent with financial statements; and
•
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and their environment obtained
in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
•
the Parent Company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities statement set out on page 32 to 33, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the FRC’s website at https://www.frc.org.uk/library/standards-
codes-policy/audit-assurance-and-ethics/auditors-responsibilities-for-the-audit/
This description forms part of our auditor’s report.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
IXICO plc
Independent auditor’s report to the members of IXICO plc
50
The objectives of our audit in respect of fraud are; to identify and assess the risks of material misstatement of the
financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material
misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to
respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary
responsibility for the prevention and detection of fraud rests with both management and those charged with governance
of the company.
Our approach was as follows:
•
We obtained an understanding of the legal and regulatory requirements applicable to the Group and considered
that the most significant are the Companies Act 2006, UK adopted International Accounting Standards, UK
Accounting Standards, the rules of the Alternative Investment Market, and UK taxation legislation;
•
We obtained an understanding of how the Group complies with these requirements by discussions with
management and those charged with governance;
•
We assessed the risk of material misstatement of the financial statements, including the risk of material
misstatement due to fraud and how it might occur, by holding discussions with management and those charged
with governance;
•
We inquired of management and those charged with governance as to any known instances of non-compliance
or suspected non-compliance with laws and regulations, and reviewed minutes of the meetings of the Board
and the various Committees; and
•
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-
compliance with laws and regulations. This included making enquiries of management and those charged with
governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the attention of the
Company’s members those matters which we are required to include in an auditor’s report addressed to them. To the
fullest extent permitted by law, we do not accept or assume responsibility to any party other than the Company and
Company’s members as a body, for our work, for this report, or for the opinions we have formed.
Colin Turnbull (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP, Statutory Auditor
6 Floor
9 Appold Street
London
EC2A 2AP
3 December 2024
IXICO plc
Financial Statements for the year ended 30 September 2024
51
Consolidated Statement of Comprehensive Income
for the years ended 30 September 2024 and for 30 September 2023
30-Sep-24
30-Sep-23
Notes
£000
£000
Revenue
6
5,766
6,665
Cost of sales
(3,055)
(3,395)
Gross profit
2,711
3,270
Other income
8
781
393
Operating expenses
Research and development expenses
(1,337)
(925)
Sales and marketing expenses
(1,396)
(1,321)
General and administrative expenses
(2,913)
(2,854)
Total operating expenses
11
(5,646)
(5,100)
Operating loss
(2,154)
(1,437)
Finance income
85
105
Finance expense
(25)
(29)
Loss on ordinary activities before taxation
11
(2,094)
(1,361)
Taxation
12
93
183
Loss attributable to equity holders for the period
(2,001)
(1,178)
Other comprehensive income/(expense):
Items that will be reclassified subsequently to profit or loss
Foreign exchange translation differences
(2)
(21)
Movement in fair value of cash flow hedges
23
32
111
Cash flow hedges recycled to revenue
23
(5)
(27)
Total other comprehensive income
25
63
Total comprehensive expense attributable
to equity holders for the period
(1,976)
(1,115)
Loss per share (pence)
Basic loss per share
13
(4.14)
(2.44)
Diluted loss per share
13
(4.14)
(2.44)
IXICO plc
Financial Statements for the year ended 30 September 2024
52
Consolidated Statement of Financial Position
as at 30 September 2024 and 30 September 2023
30-Sep-24
30-Sep-23
Notes
£000
£000
Assets
Non-current assets
Property, plant and equipment
14
313
518
Intangible assets
15
6,374
6,147
Commission assets
17
9
39
Total non-current assets
6,696
6,704
Current assets
Trade and other receivables
17
2,213
1,706
Current tax receivables
12
492
549
Cash and cash equivalents
1,787
4,031
Total current assets
4,492
6,286
Total assets
11,188
12,990
Liabilities and equity
Non-current liabilities
Trade and other payables
18
-
2
Lease liabilities
19
150
275
Total non-current liabilities
150
277
Current liabilities
Trade and other payables
18
1,410
1,142
Derivative financial liabilities
23
-
27
Lease liabilities
19
164
112
Total current liabilities
1,574
1,281
Total liabilities
1,724
1,558
Equity
Ordinary shares
21
484
484
Share premium
21
84,802
84,802
Merger relief reserve
21
1,480
1,480
Reverse acquisition reserve
21
(75,308)
(75,308)
Cash flow hedge reserve
21,23
-
(27)
Foreign exchange translation reserve
21
(97)
(95)
Capital redemption reserve
21
7,456
7,456
Accumulated losses
21
(9,353)
(7,360)
Total equity
9,464
11,432
Total liabilities and equity
11,188
12,990
The financial statements on pages to 51 to 82 were approved by the Board of Directors and authorised for issue
on 3 December 2024 and were signed on its behalf by:
______________________________
Grant Nash
Chief Financial Officer
3 December 2024
IXICO plc, Registered number: 03131723
IXICO plc
Financial Statements for the year ended 30 September 2024
53
Company Statement of Financial Position
as at 30 September 2024 and 30 September 2023
30-Sep-24
30-Sep-23
Restated1
Notes
£000
£000
Assets
Non-current assets
Investments in Group undertakings
16
5,865
5,857
Trade and other receivables
17
2,224
2,450
Total non-current assets
8,089
8,307
Current assets
Trade and other receivables
17
39
31
Cash and cash equivalents
681
1,469
Total current assets
720
1,500
Total assets
8,809
9,807
Liabilities and equity
Current liabilities
Trade and other payables
18
45
60
Total current liabilities
45
60
Equity
Ordinary shares
21
484
484
Share premium
21
84,802
84,802
Merger relief reserve
21
1,480
1,480
Capital redemption reserve
21
7,456
7,456
Accumulated losses
21
(85,458)
(84,475)
Total equity
8,764
9,747
Total liabilities and equity
8,809
9,807
1See note 3
Parent Company Income Statement
As permitted by Section 408 of the Companies Act 2006, the income statement of the Company is not presented as
part of these financial statements. The Company’s loss for the financial year was £991,000 (2023: £707,000).
The financial statements on pages 51 to 82 were approved by the Board of Directors and authorised for issue
on 3 December 2024 and were signed on its behalf by:
______________________________
Grant Nash
Chief Financial Officer
3 December 2024
IXICO plc, Registered number: 03131723
IXICO plc
Financial Statements for the year ended 30 September 2024
54
Consolidated Statement of Changes in Equity
for the years ended 30 September 2024 and 30 September 2023
Foreign
Cash
Merger
Reverse
exchange
flow
Capital
Ordinary
Share
relief
acquisition
translation
hedge
redemption
Accumulated
shares
premium
reserve
reserve
reserve
reserve
reserve
Losses
Total
£000
£000
£000
£000
£000
£000
£000
£000
£000
Balance at 1 October 2022
482
84,802
1,480
(75,308)
(74)
(111)
7,456
(6,234)
12,493
Total comprehensive income
Loss for the year
-
-
-
-
-
-
-
(1,178)
(1,178)
Other comprehensive income/(expense)
Foreign exchange translation
-
-
-
-
(21)
-
-
-
(21)
Movement in fair value of cash flow
-
-
-
-
-
111
-
-
111
Cash flow hedges recycled to revenue
-
-
-
-
-
(27)
-
-
(27)
Total comprehensive income/(expense)
-
-
-
-
(21)
84
-
(1,178)
(1,115)
Transactions with owners
Charge in respect of share options
-
-
-
-
-
-
-
52
52
Exercise of share options
2
-
-
-
-
-
-
-
2
Total transactions with owners
2
-
-
-
-
-
-
52
54
Balance at 30 September 2023
484
84,802
1,480
(75,308)
(95)
(27)
7,456
(7,360)
11,432
Total comprehensive income
Loss for the year
-
-
-
-
-
-
-
(2,001)
(2,001)
Other comprehensive income/(expense)
Foreign exchange translation
-
-
-
-
(2)
-
-
-
(2)
Movement in fair value of cash flow
-
-
-
-
-
32
-
-
32
Cash flow hedges recycled to revenue
-
-
-
-
-
(5)
-
-
(5)
Total comprehensive income/(expense)
-
-
-
-
(2)
27
-
(2,001)
(1,976)
Transactions with owners
Charge in respect of share options
-
-
-
-
-
-
-
8
8
Total transactions with owners
-
-
-
-
-
-
-
8
8
Balance at 30 September 2024
484
84,802
1,480
(75,308)
(97)
-
7,456
(9,353)
9,464
IXICO plc
Financial Statements for the year ended 30 September 2024
55
Company Statement of Changes in Equity
for the years ended 30 September 2024 and 30 September 2023
Capital
Ordinary
Share
Merger relief
redemption
Accumulated
shares
premium
reserve
reserve
losses
Total
£000
£000
£000
£000
£000
£000
Balance at 1 October 2022
482
84,802
1,480
7,456
(83,820)
10,400
Loss and total comprehensive expense for the year
-
-
-
-
(707)
(707)
Transactions with owners
Charge in respect of share options
-
-
-
-
52
52
Exercise of share options
2
-
-
-
-
2
Total transactions with owners
2
-
-
-
52
54
Balance at 30 September 2023
484
84,802
1,480
7,456
(84,475)
9,747
Loss and total comprehensive expense for the year
-
-
-
-
(991)
(991)
Transactions with owners
Charge in respect of share options
-
-
-
-
8
8
Total transactions with owners
-
-
-
-
8
8
Balance at 30 September 2024
484
84,802
1,480
7,456
(85,458)
8,764
IXICO plc
Financial Statements for the year ended 30 September 2024
56
Consolidated Statements of Cash Flows
for the years ended 30 September 2024 and 30 September 2023
30-Sep-24
30-Sep-23
£000
£000
Cash flows from operating activities
Loss for the financial year
(2,001)
(1,178)
Finance income
(85)
(105)
Finance expense
25
29
Taxation
(93)
(183)
Depreciation of fixed assets
239
400
Amortisation of intangibles
236
225
Research and development expenditure credit
(405)
(355)
Impairment of intangible assets
-
14
Share option charge
8
52
(2,076)
(1,101)
Changes in working capital
(Increase)/decrease in trade and other receivables
(559)
1,290
Increase/(decrease) in trade and other payables
351
(327)
Cash (used in)/generated from operations
(2,284)
(138)
Taxation received
553
456
Taxation paid
(1)
(16)
Net cash generated from operating activities
(1,732)
302
Cash flows from investing activities
Purchase of property, plant and equipment
(34)
(100)
Purchase of intangible assets including staff costs capitalised
(437)
(1,863)
Finance income
94
99
Net cash used in from investing activities
(377)
(1,864)
Cash flows from financing activities
Issue of shares
-
2
Repayment of lease liabilities
(134)
(158)
Net cash used in from financing activities
(134)
(156)
Movements in cash and cash equivalents in the period
(2,243)
(1,718)
Cash and cash equivalents at start of year
4,031
5,769
Effect of exchange rate fluctuations on cash held
(1)
(20)
Cash and cash equivalents at end of year
1,787
4,031
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
57
Notes to the financial statements
1.
Presentation of the financial statements
a.
General information
IXICO plc (the ‘Company’) is a public limited company incorporated in England and Wales and is admitted to trading on
the AIM market of the London Stock Exchange under the symbol IXI. The address of its registered office is 4th Floor,
Griffin Court, 15 Long Lane, London EC1A 9PN.
The Company is the parent of the subsidiaries detailed in note 16, together referred to throughout as ‘the Group’. The
Group is an established provider of technology-enabled services to the global biopharmaceutical industry. The Group’s
services are used to select participants for clinical trials and assess the safety and efficacy of new drugs in development
within the field of neurological disease.
b.
Basis of preparation
The consolidated financial statements have been prepared on a going concern basis and in accordance with
international accounting standards in conformity with the requirement of the Companies Act 2006.
The consolidated financial statements comprise a Statement of Comprehensive Income, a Statement of Financial
Position, a Statement of Changes in Equity, a Statement of Cash Flows, and accompanying notes. These financial
statements have been prepared under the historical cost convention modified by the revaluation of certain financial
instruments.
The consolidated financial statements are presented in Great British Pounds (‘£’ or ‘GBP’) and are rounded to the
nearest thousand unless otherwise stated. This is the predominant functional currency of the Group, and is the currency
of the primary economic environment in which it operates. Foreign currency transactions are accounted in accordance
with the policies set out below.
The Company has elected to use Financial Reporting Standard – ‘The Reduced Disclosure Framework’ (FRS101). In
preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS
101. Therefore, these financial statements do not include:
•
A statement of cash flows and related notes;
•
The requirement to produce a statement of financial position at the beginning of the earliest comparative period;
•
The requirements of IAS 24 ‘Related Party Disclosures’ to disclose related party transactions entered in to
between two or more members of the group as they are wholly owned within the group;
•
The effect of future accounting standards not adopted;
•
Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based payment’ (details of the number and weighted average
exercise prices of share options, and how the fair value of goods or services received was determined);
•
Paragraphs 91 to 99 of IFRS 13, ‘Fair value measurement’ (disclosure of valuation techniques and inputs used
for fair value measurement of assets and liabilities).
•
Disclosures in relation to impairment of assets
•
IFRS 7, ‘Financial instruments: Disclosures’.
c.
Basis of consolidation
The consolidated financial statements incorporate the accounts of the Company and its subsidiary companies adjusted
to eliminate intra-Group balances and any unrealised gains and losses or income and expenses arising from intra-Group
transactions. The Company’s subsidiaries are detailed in note 16. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies.
The Group controls a subsidiary when the Group is exposed to, or has rights to, variable returns from its involvement
with a subsidiary and has the ability to affect those returns through its power over a subsidiary. In assessing control,
potential voting rights that are currently exercisable or convertible are taken into account.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
58
1.
Presentation of the financial statements continued
The results of subsidiary companies are included in the consolidated financial statements from the date that control
commences until the date that control ceases. The assets and liabilities of foreign operations are translated into GBP at
exchange rates prevailing at the end of the reporting period. Income statements and cash flows of foreign operations
are translated into GBP at average monthly exchange rates which approximate foreign exchange rates at the date of
the transaction. Foreign exchange differences arising on retranslation are recognised directly in a separate translation
reserve.
d.
Going concern
Following the completion of a £4 million oversubscribed capital raise in October 2024, the Group is well capitalised to
deliver on its strategic goals. This capital raise was supported by both existing and new institutional investors confirming
strong alignment to the Group’s strategy. In addition, the commercial traction of the Group, following a challenging
eighteen-month period, improved materially during the second half of the 2024 financial year, resulting in a larger
orderbook (book of signed contracts) compared to twelve months previous.
The Group has a strong balance sheet for its size with financial year end net assets of £9.5 million, a £1.8 million cash
balance that was subsequently bolstered by a capital raise in October 2024. During the year the Group secured £8.9
million of new contracts providing it with good visibility of future revenues across a diversified portfolio of clients and
projects.
In assessing going concern, management has prepared detailed sensitised forecasts which consider different scenarios
through to December 2025. These include the risk to current projects and expected future sales pipelines. The Directors
have considered these forecasts, alongside the Group’s strong balance sheet and cash balance as well as the ability
for the Group to mitigate costs if necessary. After due consideration of these forecasts, the Directors concluded with
confidence that the Group has adequate financial resources to continue in operation for the foreseeable future.
2.
New and amended accounting standards and interpretations
a.
Adoption of new accounting standards for the year ended 30 September 2024
The Group has adopted all new and amended accounting standards and interpretations issued by the International
Accounting Standards Board (‘IASB’) that are mandatory for the current reporting period.
There was no impact on the Group’s financial statements as a result of adopting these standards.
b.
Accounting developments affecting financial statements in subsequent periods
At the date of authorisation of these financial statements, several new, but not yet effective, standards and amendments
to existing standards and interpretations have been published by the IASB. The standards and amendments that are
not yet effective and have not been adopted early by the Group include:
•
Classification of liabilities as current or non-current (Amendments to IAS 1)
•
Deferred Tax related to Assets and Liabilities arising from a Single Transaction
•
Definition of Accounting Estimates
•
Disclosure of Accounting Policies
The Directors anticipate, based on current business processes, that the introduction of the above standards and
amendments will not have a material impact on the Group and Company financial statements and therefore the impact
of these changes on the financial statements has not been assessed.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
59
3.
Prior period adjustment
The Company has reclassified amounts due from subsidiary undertakings to non-current assets based on the likelihood
of this being repaid in the following 12 months, this is in line with the assessment of the subsidiary undertaking. Following
this assessment, the Company reassessed the classification of this in the previous financial year. The Company has
determined the available information in the previous year would lead to this same conclusion and has so restated this
comparative information in the current year.
The impact on the Company’s Financial Statements is limited to the non-current and current asset lines with no effect
on loss for the financial year or net assets, as restated in the Company balance sheet and note 17.
4.
Material accounting policies
4.1 Revenue
Revenue is principally derived from service revenue. Revenue comprises the transaction price, being the amount of
consideration the Group expects to be entitled to in exchange for transferring promised goods or services to a customer
in the ordinary course of business net of value-added tax, returns, rebates and discounts and after eliminating sales
within the Group.
In determining whether to recognise revenue, the Group follows a 5-step process:
1. Identifying the contract with a client;
2. Identifying the performance obligations;
3. Determining the transaction price;
4. Allocating the transaction price to the performance obligations; and
5. Recognising revenue when/as performance obligation(s) are satisfied.
All services provided to clients are agreed at the inception of a project through contracts, wherein the transaction price
is determined and agreed for each performance obligation in the schedule of work. The transaction price agreed at the
outset is not variable or subject to any refunds or warranties, and this is consistent across all revenue streams. A critical
part of the contract is a detailed schedule of work that provides the list of services to be provided by the Group. Under
the requirements of IFRS 15 - Revenue from Contracts with Customers, the Group is required to identify individual and
distinct performance obligations within each contract. This represents a judgement, and the Group has considered
whether each individual service provided meets these requirements in its own right and in the context of the contract,
by assessing in particular the level of interrelationship between each type of service and the nature of the contract
entered in to with clients.
The Group has identified performance obligations within each of the revenue streams as set out below. The transaction
price associated to each performance obligation is allocated based on their relative stand-alone selling price. Revenue
is recognised once the performance obligation is met for each distinct service. Deferred income and advanced payments
are recognised where consideration is received before all performance considerations have been completed. They are
then released in line with contractual terms which dictate which performance obligations they relate to. In some instances
the Group invoices in advance of work being completed, a corresponding contract liability is therefore created to account
for this. The Group also invoices on completion of contractual milestone. In these instances accrued income is
recognised until the invoices are issued to reflect the Group’s right to compensation for these completed but not invoiced
performance obligations.
Revenue types
The Group’s contracts comprise a variety of performance obligations. These obligations are all considered streams of
a single revenue type, being service revenue. Most of the Group’s revenue is recognised at a point in time; the Group
recognises this revenue once control is passed to the client, or once the service has been delivered on behalf of the
client.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
60
4.1 Revenue continued
The Group’s most significant streams of service revenue are outlined below and have the respective recognition criteria:
Service type
Performance obligations
Revenue recognition policy
Project & site set up
Training materials
and delivery
Scientific reports
This service type includes the initial project set up
documentation, such as scientific protocols and operational
guides, and close out activities such as scientific reports.
Where a tangible product is created, the performance
obligation is met once the item is transferred to the client.
In respect of training, materials are prepared in advance and
provided to clients as tools for site training. Site training is
provided either through live online training or through a self-
paced training module. The performance obligation is met
once each individual site has completed the training.
Revenue for this service is
recognised at a point in time
once the Group has delivered
the relevant material on behalf
of the client.
For training materials and
delivery, revenue is recognised
at the point in time when a site
has completed its training.
Project management
Site management
Each contract requires various project management
activities. These services are provided throughout the
duration of a contract. Site management services are
provided throughout the duration of a site being operational
and would typically be shorter than the project management
cycle. For both activities, the costs and time spent delivering
these services are generally spread evenly over the project
lifetime. As such the performance obligation is met when the
specific service is provided each month.
The services provided for
project and site management
represents
a
provision
of
ongoing services. As the fee is
charged monthly to the client
over the duration for which
management
services
are
provided, revenue for these
items is recognised over a
series of points in time across
the contract.
TrialTracker
configuration and
access
The
TrialTracker
platform
delivers
a
robust
and
comprehensive set of centralised imaging services designed
to efficiently manage the complex imaging workflow,
including image upload, quality control, reading and analysis.
The platform also allows for reporting and data transfer. This
involves the initial configuration and deployment of
TrialTracker, and access granted to client trial sites for
upload of clinical information.
Due to the lack of interrelationship between the two distinct
services provided, each are recognised independently. The
performance obligations for each are:
•
The performance obligation for deployment is met
over a period of time during the configuration and
development of TrialTracker.
•
The performance obligation for ongoing access to
TrialTracker for the upload of data by client trial sites
is recognised over the duration of the project once
TrialTracker is deployed.
The
deployment
of
TrialTracker is recognised over
time
as
the
platform
is
configured for the customer.
This is because an asset is
being created that has no
alternative use for the Group
and there is an enforceable
entitlement to receive payment
for the work completed to date.
The ongoing access fee is
charged monthly to the client
and so revenue is recognised
over a series of points in time
across the contract.
Data management
and quality control
Ensuring data are managed appropriately and that the data
are of a high quality is critical in the delivery of the Group’s
service. The data management and imaging teams work in
collaboration to ensure ongoing integrity of data.
The data will go through a series of quality control reviews
prior to being used in the Group’s performance of reading
and analysis. Therefore, the performance obligation is met
once the data is quality checked.
In respect of data quality
control,
revenue
will
be
recognised at the point in time
when data is quality checked.
The services provided for data
management
represents
a
provision of ongoing services.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
61
Data management
and quality control
(continued)
Data management is an ongoing service performed
throughout the duration of a project whilst data is being
received and managed on a project. The respective costs
and time spent delivering this service is generally spread
evenly over the duration in which data is being managed and
as such the performance obligation is met when the specific
service is provided each month.
As the fee is charged monthly
to the client over the duration
for which data management is
required, revenue for these
items is recognised over a
series of points in time across
the contract.
Data reading and
analysis
The Group provides data analysis services across a range of
biomarkers, providing high-quality, clinically meaningful data.
The performance obligation for these services is met once
the analysis is completed.
Revenue from reading and
analysis of clinical data is
recognised at the point in time
when the work is complete.
Licence revenue
Revenue relating to licencing is entirely attributable to
TrialTracker. Each agreement will grant the user rights to
access the software for their own use and receive associated
technical support during the licence period.
The granting of the licence and its associated support are
distinct performance obligations and are met on a straight-
line basis over the contract term.
Revenue for both the licencing
and support are recognised on
a straight-line basis over the
duration of the contract and is
therefore recognised over time.
Licence revenue in the current
year is not material.
Change orders
Throughout the duration of a contract, the client may request additional services or service changes to be made. For
revenue recognition purposes, the Group treats a change order or contract modification to a client agreement as a
separate contract, if both:
•
the scope changes due to the addition, or reduction, of ‘distinct’ services; and
•
the price change reflects the services stand-alone selling prices (‘SSP’) under the circumstances of the modified
contract.
The revenue recognition for the change order is applied in the same way as the original contract, as detailed above,
with the original client agreement remaining unchanged.
The Group has determined that it acted as an agent in no material contracts in the year. The Group charges a
management fee and recognises this as revenue. This contract delivered £nil (2023: £13,000) of revenues in the year.
4.2 Other income
Government grants and assistance
A government grant is recognised only when there is reasonable assurance that the Group will comply with any
conditions attached to the grant and the grant will be received. The grants are recognised as income over the period
necessary to match them with the related costs, for which they are intended to compensate, on a systematic basis. The
Group recognises grant income as an item of other income.
Research and Development Expenditure Credit (‘RDEC’)
The Group has elected to take advantage of the RDEC introduced in the Finance Act 2013. A company may surrender
corporation tax losses on research and development expenditure incurred on or after 1 April 2013 for a corporation tax
refund. Relief is given as a taxable credit on 13% of qualifying research and development expenditure, with the rate
increasing to 20% for expenses incurred from 1 April 2024. The Group recognises research and development
expenditure credit as an item of other income, taking advantage of the ‘above the line’ presentation, and is recognised
in the year for which the research and development relates.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
62
4.3 Research and development expenditure
In all instances across the Group, research expenditure is expensed through the income statement. For development
expenditure, items will be expensed where the recognition criteria for internally generated intangible assets is not met.
The main criteria used to assess this, as required under IAS 38 – Intangible Assets, are:
-
Demonstrating technical feasibility of completing the intangible asset;
-
Intention to complete the asset;
-
Ability to use or sell the asset in order to generate future economic benefit;
-
Availability of adequate technical or other resources to complete development; and
-
Ability to measure reliably the expenditure attributable to the asset.
It was determined that the Group continued to meet the above criteria in respect of specific developments to its
TrialTracker platform and data analytics service offering. As a result, associated development costs are capitalised in
the year and an intangible asset is recognised as set out in note 15.
4.4 Share-based payments
Equity-settled share-based payments are measured at the fair value of the equity instruments at the grant date. The fair
value determined at the grant date of the equity-settled share-based payment is expensed on a straight-line basis over
the performance period, based on the Group’s estimate of equity instruments that will eventually vest. At each reporting
date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of any
non-market-based performance conditions.
Any changes that impact the original estimates, for example the effect of employees who have left the Group in the year
and have forfeited their options, is recognised in the Consolidated Statement of Comprehensive Income such that the
cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserves.
Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 22 of
the consolidated financial statements.
4.5 Employee benefits
All employee benefit costs are recognised in the Consolidated Statement of Comprehensive Income as they are
incurred. These principally relate to holiday pay and contributions to the Group defined contribution pension plan.
The assets of the Group pension scheme are held separately from those of the Group in independently administered
pension funds. The Group does not offer any other post-retirement benefits.
4.6 Leased assets
A lease is defined as a contract that gives the Group the right to use an asset for a period of time in exchange for
consideration. The Group identifies from the contract the total length and cost of the lease contract, and determines
whether it meets the definition of a right-of-use asset. Recognition of a right-of-use asset is met if it is longer than 12
months and of a high value. For those leases that do not meet these criteria, the rental charge payable under these
leases are charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over the lease
term.
The initial recognition and subsequent measurement of right-of-use asset leases are:
Initial recognition
At the commencement date, the Group measures the lease liability at the present value of future lease payments,
discounted using the Group’s incremental borrowing rate. The Group also recognises a right-of-use asset which is
measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs and an
estimate of any costs to reinstate the asset to its original condition.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
63
4.6 Leased assets continued
Subsequent measurement
The lease liability is reduced for payments made and increased for interest accrued, and is remeasured for any
modifications made to the lease. The right-of-use asset is depreciated on a straight-line basis over the expected lease
term. The asset is also assessed for impairment when such indicators exist.
On the statement of financial position, right-of-use assets are included in property, plant and equipment and lease
liabilities are shown separately. Please see note 19 for more information.
4.7 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and, where appropriate, less provisions
for impairment. The initial recognition and subsequent measurement of property, plant and equipment are:
Initial recognition
Property, plant and equipment is initially recognised at acquisition cost, including any costs directly attributable to
bringing the assets to the location and condition necessary for them to be capable of operating. In most circumstances,
the cost will be its purchase cost, together with the cost of delivery.
Subsequent measurement
An asset will only be depreciated once it is ready for use. Depreciation is charged so as to write off the cost of property,
plant and equipment, less its estimated residual value, over the expected useful economic lives of the assets.
Depreciation is charged on a straight-line basis as follows:
-
Office buildings
over expected lease term
-
Leasehold improvements
shorter of 5 years or the lease term
-
Fixtures and fittings
3 years
-
Equipment
3 years
The disposal or retirement of an asset is determined by comparing the sales proceeds with the carrying amount. Any
gains or losses are recognised within the Consolidated Statement of Comprehensive Income.
4.8 Intangible assets
Acquired intangibles
Intangible assets that are acquired through business combinations are recognised as intangible assets if they are
separable from the acquired business or arise from contractual or legal rights. These assets will only be recognised if
they are also expected to generate future economic benefits and their fair value can be reliably measured.
Initial recognition
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired
in a business combination is their fair value at the date of acquisition.
Subsequent measurement
Following capitalisation, the intangible assets are carried at cost less any accumulated amortisation, and where
appropriate, less provisions for impairment.
Intangible assets are amortised using the straight-line method over their estimated useful economic life as follows:
-
Intangibles acquired through business combinations 5 years
-
Computer software
3 years
-
Data acquisition
5 years
Amortisation is charged to the Consolidated Statement of Comprehensive Income and is included within cost of sales
for those items directly related to project activities, or otherwise within general and administrative expenses.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
64
4.8 Intangible assets continued
Internally generated intangible assets
Intangible assets that are capitalised internally are deemed to have met the recognition criteria set out in IAS 38. These
items relate to research and development costs and are considered in note 4.3.
Initial recognition
Internally generated intangible assets are initially recognised at cost once the recognition criteria of IAS 38 are met.
Subsequent measurement
Any assets that are not yet ready for use will be capitalised as assets under construction and will not be amortised.
Once the asset is ready for use, amortisation will begin. The amortisation rates adopted are based on the expected
useful economic life of the projects to which they relate, with the charges recognised in accordance with how the Group
receives the benefit from the technology. The assets useful economic life is as follows:
-
Internally generated technology
3 - 5 years
-
Proprietary clinical trial platform
15 years based on revenue generated by the asset
4.9 Impairment of non-current assets
Each category of non-current assets is reviewed for impairment annually when under construction or when there is an
indication that an asset may be impaired, being when events or changes in circumstances indicate that the carrying
value may not be recoverable. An impairment loss is recognised in the Consolidated Statement of Comprehensive
Income for the amount by which the asset’s carrying value exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less cost to sell and value in use. Non-financial assets,
other than goodwill, which have suffered an impairment are reviewed for possible reversal of the impairment at each
reporting date.
4.10 Investments in Group undertakings
Investments in Group undertakings are initially recognised at cost and subsequently measured at cost less any
impairment provision. Investments are subject to an annual impairment review, with any impairment charge being
recognised through the Consolidated Statement of Comprehensive Income. Additions to investments are amounts
relating to share options for the services performed by employees of the subsidiaries of the Company and are classified
as capital contributions within note 16.
4.11 Trade and other receivables
Trade and other receivables are initially recognised at fair value and subsequently stated at amortised cost using the
effective interest method, less any expected credit losses. The Group makes use of a simplified approach in accounting
for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit
losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point
during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators and
forward-looking information to calculate the expected credit losses.
The Group assess impairment of trade receivables on an individual basis as they possess individual credit risk
characteristics based on each client. Refer to note 17 for further information on aging of trade receivables and an
analysis of any expected credit losses.
The Group recognises commission payments as incremental costs from obtaining a contract. Those that are paid
immediately are capitalised under IFRS 15 and amortised over 3 years (2023: 3 years), being the average length of
contracts entered into by the Group, as opposed to using a tailored time period for each project. Management reviews
this assessment annually to determine that there are no material variances. Those not paid immediately are accrued
over a period of time as this element of the commission payment requires the respective employee to remain in service
for a specific period. Commission assets.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
65
4.12 Taxation
Current tax
Current tax represents amounts recoverable within the United Kingdom and is provided at amounts expected to be
recovered using the tax rates and laws that have been enacted at the Statement of Financial Position date.
Research and development credits
The benefit associated with UK-based research and development is recognised under the UK’s Research and
Development Expenditure Credit scheme. Details of the recognition are set out in note 4.2.
Deferred taxation
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements in accordance with IAS 12 –
Income taxes. Deferred tax liabilities are recognised for all taxable temporary differences. A deferred tax asset is
recognised only to the extent that it is probable that sufficient taxable profit will be available in future years to utilise the
temporary difference. Deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a
transaction, other than a business combination, that at the time of the transaction affects neither the accounting, nor
taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the
Statement of Financial Position date and are expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
Deferred tax assets and liabilities are offset only when there is a legally enforceable right to set off current tax assets
against current tax liabilities, they relate to income taxes levied by the same taxation authority and the Group intends to
settle these on a net basis.
Deferred tax assets are recognised to the extent it is probable that the underlying tax loss or deductible temporary
difference will be utilised against future taxable income. This is assessed based on the Group’s forecast of future
operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused
tax loss or credit. As such, the Group does not recognise any deferred tax assets, see note 20.
4.13 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand with original maturities at inception of 3 months or less.
4.14 Foreign currency translation
Transactions denominated in foreign currencies are translated into Great British Pounds at actual rates of exchange
prevailing at the date of transaction. Monetary assets and liabilities expressed in foreign currencies are translated into
Great British Pounds at rates of exchange prevailing at the end of the financial year. All foreign currency exchange
differences are taken to the Consolidated Statement of Comprehensive Income in the year in which they arise.
Non-monetary items are not retranslated at year end and are measured at historical cost (translated using the exchange
rates at the transaction date), except for non-monetary items measured at fair value which are translated using the
exchange rates at the date when fair value was determined.
4.15 Trade and other payables
Trade and other payables are non-interest-bearing, unless significantly overdue, and are initially recognised at fair value
and subsequently stated at amortised cost.
4.16 Provisions, contingent assets and contingent liabilities
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it
is probable that an outflow of economic resources will be required from the Group and amounts can be estimated
reliably. The timing of such outflows may still be uncertain. Such provisions are measured at the estimated expenditure
required to settle the present obligation based on the most reliable estimate available at the reporting date, discounted
to the present value where material.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
66
4.16 Provisions, contingent assets and contingent liabilities continued
Any reimbursement that the Group is virtually certain to collect from a third party in relation to the related provision will
be recognised as a separate asset.
Liabilities are not recognised where the outflow of economic resources is not probable, but are instead disclosed as
contingent liabilities.
4.17 Equity instruments
Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
4.18 Financial instruments
Financial assets and financial liabilities are recognised on the Consolidated Statement of Financial Position when the
Group or the Company becomes a party to the contractual provisions of the instrument. Debt and equity instruments
are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.
The Group utilises one type of derivative financial instrument – forward contracts used for the purposes of hedging.
These are designated as cash flow hedges and held at fair value with changes held in the cash flow hedge reserve. On
crystallisation the gain or loss is recycled to revenue to reflect the risks being hedged. The ineffective portion of the
hedging instrument is recognised in the profit or loss account immediately.
Further information relating to financial instruments and the policies adopted by the Group to manage risk is found in
note 23.
5.
Significant management judgement in applying accounting policies and estimation uncertainty
When preparing the consolidated financial statements, the Directors make a number of judgements, estimates and
assumptions about the recognition and measurement of assets, liabilities, income and expenses.
Significant management judgements
The following are significant management judgements in applying the accounting policies of the Group that have the
most significant effect on the consolidated financial statements.
Capitalisation of internally developed software
Distinguishing the research and development phases of a new software product and determining whether the
requirements for the capitalisation of development costs are met requires judgement. Management will assess whether
a project meets the recognition criteria as set out in IAS 38 based on an individual project basis. More detail is included
in note 4.3 as to the specific considerations given to each project when determining whether to capitalise internally
developed software. Where the criteria are not met, the research and development expenditure will be expensed in the
Consolidated Statement of Comprehensive Income. Where the recognition criteria are met, the items will be capitalised
as an intangible asset.
During the year ended 30 September 2024, research and development expenses totalled £1,659,000 (2023:
£2,152,000). Of this amount, £322,000 (2023: £1,211,000) was capitalised as an intangible asset relating to employee
costs. The balance of expenditure being £1,337,000 (2023: £925,000) is recognised in the Consolidated Statement of
Comprehensive Income as an expense.
Recovery of deferred tax assets
Deferred tax assets have not been recognised for deductible temporary differences and tax losses. The Directors
consider that there is not sufficient certainty that future taxable profits will be available to utilise those temporary
differences and tax losses. Further information on the Group’s deferred tax asset can be found in note 20 of the
consolidated financial statements.
Estimation uncertainty
Information about estimates and assumptions that have the most significant effect on recognition and measurement of
assets, liabilities, income and expenses is provided below. Changes to these estimations may result in substantially
different results for the year.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
67
5.
Significant management judgement in applying accounting policies and estimation uncertainty continued
Share-based payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value of the options granted is measured using an option
valuation model, taking into account the terms and conditions upon which the options were granted. Details of the
estimations used in determining the fair value of the options in issue are detailed in note 22. In line with IAS 2,
management assess whether non-market conditions will be achieved and adjusts appropriately.
Useful lives of depreciable assets
The useful lives of depreciable assets are determined by management at the date of purchase based on the expected
useful lives of the assets. These are subsequently monitored and reviewed annually and where there is objective
evidence of changes in the useful economic lives, these estimates are adjusted. Any changes to these estimates may
result in significantly different results for the period.
Useful lives of depreciable assets continued
The Group amortises its newly developed proprietary clinical trial platform (TTNx) in accordance with its anticipated
usage pattern. The platform’s useful life has been estimated at 15 years. Amortisation is applied on an escalating basis,
aligned with the increasing utilisation of the platform as additional clinical trials are deployed on the platform. Once the
platform reaches an equivalent operational capacity to the existing platform, defined as accommodating the number of
trials supported by the previous platform, a straight-line amortisation method will be adopted for the remainder of its
useful life.
6.
Revenue
An analysis of the Group’s revenue by type is as follows:
2024
2023
£000
£000
Service revenue
5,766
6,665
All material revenue streams derived by the Group relate to the delivery of services in support of clinical trials. As such,
all revenue is deemed to belong to one stream, being service revenue.
Revenue derived from services provided over time do not constitute a material portion of revenue and therefore
disclosure distinguishing between revenue recognised at a point in time versus over time is not made.
For the year ended 30 September 2024, revenue includes £22,000 (2023: £214,000) held in contract liabilities within
trade and other payables at the beginning of the period. This amount also includes performance obligations relating to
advance payments that were not yet complete at the end of the prior year. Advance payments are charged to clients to
de-risk start-up activities and are recognised at a point in time once an activities performance obligation is met. At 30
September 2024, £532,000 (2023: £343,000) of advanced payments were recognised on the balance sheet.
7.
Segmental information
The Board considers there to be only one core operating segment for the Group’s activities. This is based on the Group’s
development, commercial and operational delivery teams operating across the entirety of the Group, which is primarily
based in the United Kingdom. The projects undertaken by the Group are managed by project managers, who receive
inputs for each project from other team members. Performance information is reported as a single business unit to the
management team.
The information gathered for each project is subsequently reported to the Group’s Chief Executive Officer, who is
considered to be the chief operating decision-maker. This information is used for resource allocation and assessment
of performance. Therefore, the entirety of the Group’s revenue and assets can be attributed wholly to this operating
segment with reference to the Consolidated Statement of Comprehensive Income and Consolidated Statement of
Financial Position.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
68
7.
Segmental information continued
During the year ended 30 September 2024, the Group had three clients (2023: five clients) that exceeded 10% of total
revenue. In 2024, the individual percentage revenue associated with these clients was 13% (£771,000), 13% (£742,000)
and 13% (£729,000). In 2023, the individual percentage revenue associated with the five largest clients 14% (£966,000),
14% (£949,000), 13% (£862,000), 12% (£792,000) and 10% (£699,000).
Geographical information
The Group’s revenue can be categorised by country, based on the location of the contracting client. Sometimes clients
of the Group, which include global biopharmaceutical companies with offices in multiple locations across the world,
request the Group to contract directly with their regional offices in the United Kingdom or European locations. In such
circumstances the associated revenues are reported as being based in the contracting location even though much of
the operational execution of the contract will include entities or partners of the client based elsewhere in the world.
2024
2023
£000
£000
United States of America
2,365
3,053
United Kingdom
1,330
952
Netherlands
742
862
Ireland
557
689
Switzerland
500
816
Other - Europe
272
293
Revenue
5,766
6,665
As the Group is domiciled in the United Kingdom, the entirety of the revenue originates from this location.
8.
Other income
Items of other income principally relate to government grants received. Grants are recognised as income over the period
required to match them with the related costs, for which they are intended to compensate, on a systematic basis.
The Group also recognises Research and Development Expenditure Credit (‘RDEC’) as other income.
2024
2023
£000
£000
Grant income
376
38
RDEC
405
355
Other income
781
393
9.
Auditor’s remuneration
2024
2023
£000
£000
Audit services
- Group and Parent Company
51
56
- subsidiary companies
34
37
Total audit fees
85
93
Audit-related assurance services
8
8
Total auditor’s remuneration
93
101
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
69
10. Employees and Directors
The average monthly number of persons (including Executive and Non-Executive Directors) employed by the Group
was:
2024
2023
Number
Number
Administration
15
14
Operations, research and development
66
75
Average total persons employed
81
89
The aggregate remuneration of employees in the Group was:
2024
2023
£000
£000
Wages and salaries
5,474
5,944
Social security costs
671
702
Other pension costs
279
303
Share-based payments charge
8
52
Total remuneration for employees
6,432
7,001
Employee costs capitalised
(322)
(1,211)
Net employee costs
6,110
5,790
The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held
separately from those of the Group in independently administered funds. The amounts outstanding at 30 September
2024 in respect of pension costs were £40,000 (2023: £46,000).
The remuneration of the Group’s Directors is set out in the Directors’ Remuneration Report on pages 42 and 43, as well
as in note 24 under related party transactions.
The Company did not directly employ any staff and therefore there is no cost recognised in respect of staff costs.
11. Loss on ordinary activities before taxation
The Group’s loss on ordinary activities before taxation has been achieved after charging:
2024
2023
£000
£000
Research and development expenses
1,304
903
Research and development related impairment
-
14
Research and development related amortisation
33
8
Sales and marketing expenses
1,347
1,262
Amortisation of commission assets
49
59
Expenses relating to lease of low-value assets
1
1
Depreciation of tangible assets
239
400
Amortisation of intangible assets
15
24
Foreign exchange (gain) / loss
52
85
Administrative expenses
2,606
2,344
Total operating expenses
5,646
5,100
Interest income from cash held at bank
(85)
(105)
Interest incurred on finance leases
22
29
Interest due on overdue taxation
3
-
5,586
5,024
There is a further amortisation charge of £188,000 (2023: £193,000) recognised in cost of sales for those items directly
related to project activities. The total amortisation charge for the year is £236,000 (2023: £225,000).
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
70
12. Taxation
The tax charge for each period can be reconciled to the result per the Consolidated Statement of Comprehensive Income
as follows:
2024
2023
£000
£000
Loss on ordinary activities before taxation
(2,094)
(1,361)
Loss before tax at the effective rate of corporation tax
in the United Kingdom of 25% (2023: 22%)
(524)
(299)
Effects of:
Expenses not deductible for tax purposes
(13)
(17)
Origination and reversal of temporary differences
(51)
(291)
Research and development uplifts net of losses surrendered for tax credits
520
406
Overseas taxation
1
16
Prior period adjustment
(26)
2
Tax credit for the period
(93)
(183)
The tax credit for each period can be reconciled as follows:
2024
2023
£000
£000
Small or medium enterprise research and development credit
(172)
(276)
Deduction for corporation tax on RDEC
104
75
Overseas taxation
1
16
Prior period adjustment
(26)
2
Tax credit for the period
(93)
(183)
The Group has elected to take advantage of the RDEC, introduced in the Finance Act 2013 whereby a company may
surrender corporation tax losses on research and development expenditure incurred on or after 1 April 2013 for a
corporation tax refund.
The following is a reconciliation between the tax charge and the tax receivable within the Consolidated Statement of
Financial Position:
2024
2023
£000
£000
Current tax receivable at start of period
549
453
Current period credit
497
552
Corporation tax repayment
(554)
(456)
Current tax receivable at end of period
492
549
The tax credit for each period can be reconciled to the current period credit recognised in tax receivable within the
Consolidated Statement of Financial Position in each period as follows:
2024
2023
£000
£000
Tax credit for the year
93
183
RDEC gross of corporation tax deduction
405
355
Overseas taxation
(1)
15
Tax recoverable
-
(1)
Current period credit
497
552
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
71
13. Earnings per share
The calculation of basic and diluted earnings per share (‘EPS’) of the Group is based on the following data:
2024
2023
Earnings
Earnings for the purposes of basic and diluted EPS, being net profit
attributable to the owners of the Company (£000)
(2,001)
(1,178)
Number of shares
Weighted average number of shares for the purposes of basic EPS
48,309,181
48,309,181
Weighted average number of shares for the purposes of diluted EPS
48,309,181
48,309,181
Basic earnings per share is calculated by dividing earnings attributable to the owners of the Company by the weighted
average number of shares in issue during the year. The diluted EPS is calculated by dividing earnings attributable to
the owners of the Company by the weighted average number of shares in issue taking into account the share options
outstanding during the year. For the year ended to 30 September 2024, there was no dilutive effect as the share options
in issue would have decreased the loss per share.
The basic and diluted earnings per share for the Group and Company is:
2024
2023
Basic earnings per share
(4.14p)
(2.44p)
Diluted earnings per share
(4.14p)
(2.44p)
14. Property, plant and equipment
Group
Office
Leasehold
Fixtures and
building
improvement
fittings
Equipment
Total
Cost
£000
£000
£000
£000
£000
At 1 October 2022
777
185
5
1,117
2,084
Additions
-
7
-
94
101
Disposals
-
-
-
(20)
(20)
At 30 September 2023
777
192
5
1,191
2,165
Additions
-
3
1
30
34
Disposals
-
-
-
(10)
(10)
At 30 September 2024
777
195
6
1,211
2,189
Accumulated depreciation
At 1 October 2022
379
157
5
726
1,267
Charge for the period
102
19
-
279
400
Disposals
-
-
-
(20)
(20)
At 30 September 2023
481
176
5
985
1,647
Charge for the period
101
14
0
124
239
Disposals
-
-
-
(10)
(10)
At 30 September 2024
582
190
5
1,099
1,876
Net book value
At 30 September 2023
296
16
-
206
518
At 30 September 2024
195
5
1
112
313
The tangible right-of-use asset is held within the office building category. At 30 September 2024, the carrying amount
of the right-of-use asset was £195,000 (2023: £296,000).
Company
At 30 September 2024 and 30 September 2023, the Company had no property, plant and equipment.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
72
15. Intangible assets
Group
Right-of-use
asset
Other acquired
intangibles
Other Internally
developed
technology
Next generation
TrialTracker
platform
Total
£000
£000
£000
£000
£000
Cost
At 1 October 2022
-
221
710
4,111
5,042
Additions
-
121
89
1,589
1,799
Impairment
-
-
(14)
-
(14)
At 30 September 2023
-
342
785
5,700
6,827
Additions
39
-
20
404
463
Disposals
-
(32)
(218)
-
(250)
At 30 September 2024
39
310
587
6,104
7,040
Accumulated amortisation
At 1 October 2022
-
141
314
-
455
Amortisation
-
47
178
-
225
At 30 September 2023
-
188
492
-
680
Amortisation
2
52
163
19
236
Disposals
-
(32)
(218)
-
(250)
At 30 September 2024
2
208
437
19
666
Net book value
At 30 September 2023
-
154
293
5,700
6,147
At 30 September 2024
37
102
150
6,085
6,374
Amortisation is charged to the Consolidated Statement of Comprehensive Income and is included within cost of sales
for those items directly related to project activities, research and development for those items directly related to the
research activities of the company or otherwise within general and administrative expenses.
Internally developed technology
The Group has capitalised research and development costs during the year in relation to the development of its
proprietary TrialTracker software. Development includes TrialTracker platform upgrades as well as additional algorithm
development. The costs capitalised include time and expenses in relation to staff costs. In recognising these assets, the
Group has applied the recognition criteria of IAS 38 relating to internally generated intangible assets, where costs in
relation to the development phase must be capitalised under certain circumstances. More information in relation to this
is included in the accounting policies of the Group in notes 4 and 5.
Assets under construction
Assets that are still under construction undergo an annual impairment test which is carried out at the end of the reporting
period. This impairment test considers the carrying amount of the asset and compares it with its recoverable amount,
with an impairment being recognised if the recoverable amount is lower than the carrying amount. Management have
determined the recoverable amount as being the value-in-use, which is calculated using management expectations of
future revenues, discounted at an applicable rate. Whilst the asset remains under construction, amortisation is not
charged.
Company
At 30 September 2024 and 30 September 2023, the Company had no intangible assets.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
73
16. Investments
The consolidated financial statements of the Group as at 30 September 2024 and at 30 September 2023 include:
Name of subsidiary
Class of
share
Country of
incorporation
Principal activities
Directly held:
IXICO Technologies Limited
Ordinary
United Kingdom
Data collection and analysis of neurological
diseases
Indirectly held:
IXICO Technologies Inc.
Ordinary
United States
Sales and marketing
The Company and Group has no investments other than the holdings in the above subsidiaries that are all 100%
owned. The carrying amounts of the investments in subsidiaries for the Company are:
2024
2023
£000
£000
Investments in subsidiary undertakings
At beginning of the period
5,857
5,805
Capital contribution
8
52
Total investments at end of the period
5,865
5,857
The capital contribution represents the charge in the year for share-based awards issued by the Company to employees
of IXICO Technologies Limited and IXICO Technologies Inc.
17. Trade and other receivables
Group
Company
2024
2023
2024
2023
Restated
Current receivables
£000
£000
£000
£000
Trade receivables
1,634
945
-
-
Less provision for bad and doubtful debts
-
-
-
-
Net carrying amount of trade receivables
1,634
945
-
-
Other taxation and social security
-
40
15
6
Prepayments and accrued income
518
684
22
20
Commission assets
24
27
-
-
Other receivables
37
10
2
5
Current receivables
2,213
1,706
39
31
Non-current receivables
Commission assets
9
39
-
-
Amounts due from subsidiary undertakings
-
-
2,224
2,450
Total trade and other receivables
2,222
1,745
2,263
2,481
All amounts are classified as short-term and are expected to be received within one year. The average credit period
granted to clients ranges from 30 to 90 days (2023: 30 to 90 days).
A provision for expected credit losses is made when there is uncertainty over the ability to collect the amounts outstanding
from clients. This is determined based on specific circumstances relating to each individual client. The Directors consider
that there are immaterial credit losses (2023: immaterial credit losses) due to the calibre of customers the Group has and
so the carrying amount of trade and other receivables approximates their fair value.
Within the Company, there are expected to be immaterial credit losses (2023: immaterial credit losses) from subsidiary
companies due to the level of cash available in the subsidiaries and expected future earnings. The amounts due from
subsidiary undertakings was reclassified to a non-current asset in the year as the Group does not expect to recover these
balances within the next 12 months.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
74
17. Trade and other receivables continued
As at the year-end, the ageing of trade receivables which are past due but not impaired is as follows:
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Amounts not past due
1,486
864
-
-
Past due:
Less than 30 days
69
81
-
-
Between 31 – 60 days
8
-
-
-
Between 61 – 90 days
18
-
-
-
More than 90 days
52
-
-
-
Total trade receivables
1,634
945
-
-
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed
in note 23.
18. Trade and other payables
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Current liabilities
Trade payables
83
86
2
-
Other taxation and social security
180
58
-
-
Contract liabilities
591
529
-
-
Accrued expenses
553
464
43
60
Other payables
3
5
-
-
1,410
1,142
45
60
Non-current liabilities
Accrued expenses
-
2
-
-
Total trade and other payables
1,410
1,144
45
60
Trade payables and accrued expenses principally comprise amounts outstanding for trade purchases and ongoing costs.
No interest is charged on the trade payables. The Group’s policy is to ensure that payables are paid within the pre-agreed
credit terms and to avoid incurring penalties and/or interest on late payments.
The fair value of trade and other payables approximates their current book values.
Reconciliation of liabilities arising from financing activities
The only liabilities affecting financing activities arise solely from the recognition of the lease liability:
£000
Lease liability as at 1 October 2022
516
Cash-flow: Repayment of lease
(158)
Non-cash: Interest charge
29
Lease liability as at 30 September 2023
387
Leases acquired in the year
39
Cash-flow: Repayment of lease
(134)
Non-cash: Interest charge
22
Lease liability as at 30 September 2024
314
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
75
19. Leases
All lease liabilities are presented in the statement of financial position as follows:
2024
2023
£000
£000
Current
164
112
Non-current
150
275
314
387
The Group uses leases throughout the business for office space and IT equipment. With the exception of short-term
leases and leases of low value, each lease is reflected on the balance sheet as a right-of-use asset in property, plant and
equipment and a lease liability.
Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to
another party, the right-of-use asset can only be used by the Group. For leases over office buildings, the Group must
keep those properties in a good state of repair.
The Group has identified one lease relating to the office building, and one lease relating to a software licence that meet
the definition of a right-of-use asset. There is no option to purchase on either lease and payments are not linked to an
index. The remaining lease terms range between 24 - 34 months (2023: 36 months). The office building lease has the
ability to be extended at the end of this term.
The Group has elected to not recognise a lease liability for short-term leases, being 12 months or less, or for leases of
low value. Payments for these are expensed on a straight-line basis.
Right-of-use asset and lease liability
Additional information on the right-of-use asset is as follows:
The various elements recognised in the financial statements are as follows:
2024
2023
£000
£000
Statement of Comprehensive Income
Depreciation charge in the year
101
102
Amortisation charge in the year
2
-
Interest expense on lease liability
22
29
Low value leases expensed in the year
1
1
Statement of Cash Flows
Capital repayments on lease agreements
134
158
Asset Depreciation
Carrying
amount
2024
£000
£000
£000
Office building
777
(582)
195
Software licence
39
(2)
37
816
(584)
232
Asset Depreciation
Carrying
amount
2023
£000
£000
£000
Office building
777
(481)
296
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
76
19. Leases continued
The undiscounted maturity analysis of lease liabilities for the office building is as follows:
Within 1 year
1 - 2 years
2 - 3 years
Total
30 September 2024
Lease payments
181
144
12
337
Finance charges
(17)
(6)
-
(23)
Net present values
164
138
12
314
30 September 2023
Lease payments
132
166
127
425
Finance charges
(20)
(14)
(4)
(38)
Net present values
112
152
123
387
At 30 September 2024, the Group’s commitment to short-term and low-value leases was £nil (2023: £nil).
20. Deferred tax
Deferred tax asset (unrecognised)
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Tax effect of temporary differences:
Tax allowances in excess of depreciation
1,615
1,581
(1)
(1)
Accumulated losses
(17,963)
(17,618)
(3,579)
(3,331)
Losses on financial instruments debited to equity
1
5
-
-
Accelerated commission charge
1
14
-
-
Deductible temporary differences
(2)
(13)
-
-
Deferred tax asset (unrecognised)
(16,348)
(16,031)
(3,580)
(3,332)
The unrecognised deferred tax asset predominantly arises due to unused tax losses carried forward that have originated
but not reversed at the Consolidated Statement of Financial Position date and from transactions or events that result in
an obligation to pay more tax in the future or a right to pay less tax in the future.
The unrecognised deferred tax asset is measured on an undiscounted basis at the tax rates that are expected to apply in
the periods in which temporary differences will reverse. Based on tax rates and laws enacted or substantively enacted at
the latest balance sheet date, the rate when the above temporary differences are expected to reverse is currently 25%
(2023: 25%).
21. Issued capital and reserves
Ordinary shares and share premium
The Company has one class of ordinary shares. The share capital issued has a nominal value of £0.01 and each share
carries the right to one vote at shareholders’ meetings and all shares are eligible to receive dividends. Share premium is
recognised when the amount paid for a share is in excess of the nominal value.
The Group and Company’s opening and closing share capital and share premium reserves are:
Group and Company
Ordinary
Share
Share
shares
capital
premium
Number
£000
£000
Authorised, issued and fully paid
At 30 September 2023 and at 30 September 2024
48,351,373
484
84,802
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
77
21. Issued capital and reserves continued
Exercise of share options
During the year, no share options were exercised.
Other reserves
Accumulated losses
This reserve relates to the cumulative results made by the Group and Company in the current and prior periods.
Merger relief reserve
In accordance with Section 612 ‘Merger Relief’ of the Companies Act 2006, the Company issuing shares as consideration
for a business combination, accounted at fair value, is obliged, once the necessary conditions are satisfied, to record the
share premium to the merger relief reserve.
Reverse acquisition reserve
Reverse accounting under IFRS 3 ‘Business Combinations’ requires that the difference between the equity of the legal
parent and the issued equity instruments of the legal subsidiary, pre-combination, is recognised as a separate component
of equity.
Capital redemption reserve
This reserve holds shares that were repurchased and cancelled by the Company.
Foreign exchange translation reserve
This reserve represents the impact of retranslation of overseas subsidiaries on consolidation.
Cash flow hedge reserve
This reserve represents the movement in designated hedging instruments in the year that have not yet crystallised.
22. Share-based payments
Certain Directors and employees of the Group hold options to subscribe for shares in the Company under share option
schemes. All share options relate to a single scheme outlined in the EMI Share Option Plan 2014.
The scheme is open, by invitation, to both Executive Directors and employees. Participants are granted share options in
the Company which contain vesting conditions. These are subject to the achievement of individual employee and Group
performance criteria as determined by the Board. The vesting period varies by award and the conditions approved by the
Board. Options are usually forfeited if the employee leaves the Group before the options vest.
Total share options outstanding have a range of exercise prices from £0.01 to £0.70 per option and the weighted average
contractual life is 5.5 years (2023: 6.7 years). The total charge for each period relating to employee share-based payment
plans for continuing operations is disclosed in note 10 of the consolidated financial statements.
Details of the share options under the scheme outstanding during the period are as follows:
2024
2023
Number
Weighted
average exercise
price
Number
Weighted
average exercise
price
Outstanding at start of the period
3,529,681
£0.15
4,490,931
£0.18
Exercised
-
-
(200,000)
£0.01
Lapsed
(495,176)
£0.34
(761,250)
£0.29
Outstanding at end of the period
3,034,505
£0.12
3,529,681
£0.15
Exercisable at end of the period
2,459,504
£0.10
1,949,680
£0.08
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
78
23. Financial risk management
In common with all other areas of the business, the Group is exposed to risks that arise from the use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those risks and the methods
used to measure them.
The main risks arising from the Group’s financial instruments are liquidity, interest rate, foreign currency and credit risk.
The Group’s financial instruments comprise cash and various items such as trade receivables and trade payables, which
arise directly from its operations.
Categories of financial instruments
2024
2023
£000
£000
Financial assets held at amortised cost
Trade and other receivables excluding prepayments
1,845
1,795
Cash and cash equivalents
1,787
4,031
3,632
5,826
Financial liabilities held at amortised cost
Trade and other payables excluding statutory liabilities
745
1,144
Lease liabilities
314
387
1,059
1,531
Financial liabilities held at fair value
Forward contracts held at fair value (Level 2)
-
27
-
27
Fair value of financial assets and liabilities
There is no material difference between the fair values and the carrying values of the financial instruments held at
amortised cost because of the short maturity period of these financial instruments or their intrinsic size and risk.
Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its obligations as they fall due through having insufficient
resources. The Group monitors its levels of working capital to ensure that it can meet its liabilities as they fall due. Ultimate
responsibility for liquidity risk management rests with the Board, which has built an appropriate framework for the
management of the Group’s short-, medium- and long-term funding and liquidity requirements.
The principal current asset of the business is cash and cash equivalents and is therefore the principal financial instrument
employed by the Group to meet its liquidity requirements. The Board ensures that the business maintains surplus cash
reserves to minimise any liquidity risk.
The financial liabilities of the Group and Company are due within 3 months (2023: 3 months) of the Consolidated
Statement of Financial Position date, with the exception of the lease liability. Further analysis of the lease liability is
provided in note 19. All other non-current liabilities are due between 1 to 3 years after the period end. The Group does
not have any borrowings or payables on demand which would increase the risk of the Group not holding sufficient reserves
for repayment.
Market risk
Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rate. The Group operates an interest rate policy designed to minimise interest costs and reduce volatility
in reported earnings.
The Group holds all cash and cash equivalents with institutions with a recognised high credit rating. Interest rates on
current accounts are floating. Changes in interest rates may increase or decrease the Group’s finance income.
The Group does not have any committed interest-bearing borrowing facilities and consequently there is no material
exposure to interest rate risk in respect of financial liabilities.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
79
23. Financial risk management continued
Foreign currency risk management
Foreign currency risk is the risk that the fair value of future cash flows of a foreign currency exposure will fluctuate because
of changes in foreign exchange rates.
The Group’s exposure to the risk of changes in foreign exchange rates relates to the Group’s overseas operating activities,
primarily denominated in US Dollars, Euros and Swiss Francs. There is also an investment by the Company in a foreign
subsidiary. The Group’s exposure to foreign currency changes for all other currencies is not material. The Group seeks
to minimise the exposure to foreign currency risk by matching local currency income with local currency costs where
possible. The Group utilises US Dollar forward contracts to mitigate the risk of US Dollar fluctuations on client contracts.
It agrees forward contracts based on forecasts of its US Dollar inflows and applies hedge accounting to minimise currency
risk.
The Group enters into forward contracts to sell US Dollars at regular intervals and applies hedge accounting to these
contracts. Under hedge accounting, unrealised gains or losses are recognised in other comprehensive income and the
cash flow hedge reserve, with the ineffective portion being recognised in the profit and loss as soon as they occur. The
gains or losses arising on these are allocated to revenue on settlement. The item hedged was a portion of highly probable
forecast US Dollar inflows. The hedged item is the receipt of US Dollars, and the hedging instrument is the sale of a
portion of these. The Group has determined that a 1:1 ratio exists between the instrument and items as the underlying
risks of both are the same – the exchange rate of USD:GBP. The Group uses the dollar offset method to monitor
effectiveness, which compares the change in fair value of the underlying derivative and the change in fair value of future
cash flows. Ineffectiveness can arise due to the counterparties credit risk and inaccurate forecasting, which could leave
the Group over hedged. In the year some ineffectiveness arose where the Group’s actual inflows were below that of the
hedging instrument. This ineffective portion was recognised in general and administrative expenses.
At year end the Group had no contracts to sell (2023: $750,000), these hedges are designated as effective under IFRS 9
and hence the fair value of these is recognised in other comprehensive income. These balances are removed from the
Group’s US Dollar exposure as there is deemed to be no foreign exchange exposure. At 30 September 2024 there were
no hedges (2023: $750,000 hedged to period of March 2024, at an average rate of 1.2785). The contracts are valued
based on observable market exchange rates.
The hedging transactions in the year had the following effect on the Group’s results:
Without
hedge
accounting
Hedging
movements
2024
£000
£000
£000
Statement of Comprehensive Income
Revenue
5,761
5
5,766
Gross profit
2,706
5
2,711
General and administrative expenses
(2,881)
(32)
(2,913)
Profit for the year
(1,974)
(27)
(2,001)
Total other comprehensive expense
(2)
27
25
Total comprehensive income attributable to equity holders for the period
(1,976)
-
(1,976)
Statement of financial position
Accumulated losses
(9,353)
-
(9,353)
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
80
23. Financial risk management continued
Without
hedge
accounting
Hedging
movements
2023
£000
£000
£000
Statement of Comprehensive Income
Revenue
6,638
27
6,665
Gross profit
3,243
27
3,270
General and administrative expenses
(2,743)
(111)
(2,854)
Profit for the year
(1,094)
(84)
(1,178)
Total other comprehensive expense
(21)
84
63
Total comprehensive income attributable to equity holders for the period
(1,115)
-
(1,115)
Statement of financial position
Derivative financial liabilities
27
-
27
Cash flow hedge reserve
-
(27)
(27)
Accumulated losses
(7,387)
27
(7,360)
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities as at 30
September are as follows:
2024
2023
US Dollar exposure
USD’000
USD’000
Balance at end of period
Monetary assets
587
14
Monetary liabilities
(16)
(27)
Total exposure
571
(13)
2024
2023
Euro exposure
EUR’000
EUR’000
Balance at end of period
Monetary assets
37
156
Monetary liabilities
(73)
(13)
Total exposure
(37)
143
2024
2023
Swiss Franc exposure
CHF’000
CHF’000
Balance at end of period
Monetary assets
58
33
Monetary liabilities
(22)
-
Total exposure
35
33
The Company had no foreign currency exposure at the year end (2023: nil).
Foreign currency sensitivity analysis
As at 30 September 2024, the sensitivity analysis assumes a +/-10% change of the USD/GBP, EUR/GBP and CHF/GBP
exchange rates, which represents management’s assessment of a reasonably possible change in foreign exchange rates
(2023: 10%). The sensitivity analysis was applied on the fair value of financial assets and liabilities.
2024
2023
10% weaker¹
10% stronger
10% weaker
10% stronger
£000
£000
£000
£000
US Dollar
(43)
43
1
(1)
Euro
3
(3)
(12)
12
Swiss Franc
(3)
3
(3)
3
(43)
43
(14)
14
1 10% weaker relates to the Great British Pound strengthening against the currency and therefore the Group would be in
a weaker monetary position.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
81
23. Financial risk management continued
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group’s financial assets are cash and cash equivalents and trade and other receivables. The carrying value
of these assets represents the Group’s maximum exposure to credit risk in relation to financial assets.
The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the Consolidated
Statement of Financial Position are net of allowances for any expected credit losses, estimated by the Group’s
management based on prior experience and their assessment of the current economic environment, and any specific
criteria identified in respect of individual trade receivables. An allowance for expected credit losses is made where there
is an identified loss event, which, based on previous experience, is evidence of a reduction in the recoverability of future
cash flows. There are no outstanding expected credit losses identified at 30 September 2024 (2023: nil).
Prior to entering into an agreement to provide services, the Group makes appropriate enquiries of the counterparty and
independent third parties to determine creditworthiness. The Group has not identified any significant credit risk exposure
to any single counterparty or Group of counterparties as at the period end.
The Group and Company continually reviews client credit limits based on market conditions and historical experience.
Any provision for impairment, as well as the ageing analysis of overdue trade receivables, is set out in note 17.
The Group and Company’s policy is to minimise the risks associated with cash and cash equivalents by placing these
deposits with institutions with a recognised high credit rating.
Capital risk management
The Group considers capital to be shareholders’ equity as shown in the Consolidated Statement of Financial Position, as
the Group is primarily funded by equity finance and is not yet in a position to pay a dividend. The Group had no borrowings
at 30 September 2024 (2023: £nil).
The objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to
provide returns for shareholders and for other stakeholders. In order to maintain or adjust the capital structure the Group
may return capital to shareholders or issue new shares.
24. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note.
Remuneration and transactions of Directors and key management personnel
Key management remuneration:
2024
2023
£000
£000
Short-term employee benefits
1,147
1,113
Post-employment benefits
28
29
Other long-term benefits
(24)
(44)
Share-based payments
(7)
19
Total remuneration
1,144
1,117
Key management includes Executive Directors, Non-Executive Directors and senior management who have the
responsibility for managing, directly or indirectly, the activities of the Group.
The aggregate Directors’ remuneration, including employers’ National Insurance and share-based payments’ expense,
was £875,000 (2023: £687,000) and aggregate pension of £21,000 (2023: £16,000). Further detail of Directors’
remuneration is disclosed in the Directors’ Remuneration Report on page 42 and 43.
IXICO plc
Financial Statements for the year ended 30 September 2024
Notes to the financial statements
82
24. Related party transactions continued
Transactions with group companies
The Company is responsible for financing and setting Group strategy. The Company’s subsidiaries carry out the Group’s
research and development strategy, employ all employees, including the Executive Directors, and manage the Group’s
intellectual property. As a result, a management charge is made between the subsidiaries and the Company for the
services provided by the subsidiaries on behalf of the Company. Similarly, as share options are issued in the Company
for employees of the subsidiaries, a charge is made between the Company and its subsidiaries.
Intercompany balances are unsecured and are interest bearing at 6%, with no fixed date of repayment but are repayable
on demand. The intercompany balance also includes specific funding provided by the Company, which attracts a 0%
interest rate.
Outstanding balances related to subsidiary undertakings are disclosed in note 17. During the year, the following
transactions occurred with related parties:
2024
2023
£000
£000
Charges from subsidiaries:
Management recharge from subsidiaries
625
530
Net interest charged
(125)
(100)
Charges to subsidiaries:
Share option charge
8
52
25. Post balance sheet events
In October 2024, the Company completed a share capital raise. The company issued 42,621,508 new Ordinary shares
for a total contribution of £4,050,000. Included in this, certain Directors of the Company have subscribed for an aggregate
of 789,472 Ordinary shares for a total contribution of £75,000.