Powering the
personalised
marketing
revolution.
Annual Report & Accounts 2023
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
An outstanding
year of growth
Delivered by our exceptional team, creating value
for some of the biggest brands globally.
CONTENTS
Overview
01
02
03
07
08
Financial Highlights
Operational Highlights
At a Glance
Strategic Framework
Powered by People
Strategic Report
09
12
26
28
34
Chairman’s Statement
Chief Executive Officer’s Statement
Environmental Social Governance (ESG)
Financial Review
Principal Risks and Uncertainties
Governance
39
41
46
48
59
61
Board of Directors
Corporate Governance Statement
Section 172 Statement
Remuneration Committee Report
Directors’ Report
Statement of Directors’ Responsibilities
Financial Statements
62
68
Independent Auditor’s Report
Consolidated Statement of Profit or Loss and
Total Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
69
70
72
73
102
103
104 Notes to the Company Financial Statements
Other Information
110
114
Notice of Annual General Meeting
Company Information
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
Overview
Financial Highlights
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
FINANCIAL HIGHLIGHTS
Eagle Eye’s outstanding
performance in FY23
demonstrates we have the right strategy, offering and team in place to
support our continued strong growth as an increasingly international business.
Group Revenue
£43.1m
FY 2022: £31.7m
+36%
(29% organic)
Recurring revenue
(subscription fees and transactions)
Annual Recurring Revenue1
(ARR)
Net Revenue Retention2
Adjusted EBITDA3
80%
FY 2022: 76%
EBITDA margin
20%
FY 2022: 20%
£33.3m
FY 2022: £23.9m
+40%
137%
FY 2022: 137%5
+4ppts
£8.8m
FY 2022: £6.5m
+36%
Profit after tax
£1.2m
FY 2022: £0.6m
Closing net cash4 position
£9.3m
FY 2022: £3.6m
+156%
+114%
Read our Financial Review on page 28
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
1
Period End Annual Recurring
Revenue is defined as period exit
rate for recurring AIR subscription
and transaction revenue plus any
professional services contracted for
more than 12 months hence and
secured new wins, excluding any
seasonal variations and lost contracts.
2 Net retention rate is defined as
the improvement in recurring AIR
revenue excluding new wins in the
last 12 months.
3 EBITDA has been adjusted for the
exclusion of share-based payment
charges along with depreciation,
amortisation, interest and tax from
the measure of profit. 2023 EBITDA
figure has also been adjusted to
exclude costs associated with the
acquisition of Untie Nots.
4 Net cash is defined as cash and cash
equivalents less financial liabilities.
5 Excluding Covid-19 recovery impact.
01
Contents Generation – Sub Page Operational Highlights
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
OPERATIONAL HIGHLIGHTS
An exceptional year:
Delivering on
our opportunity
Significant
international
revenue expansion
Successful
acquisition
Continued
investment in
innovation
Positive outlook
for FY24
and beyond
Driven by North America
and APAC expansion,
including first Singapore
customer
Accelerated entry into
France and enhanced
Group’s AI capabilities
Increasing our
competitive strength
and expanding our
opportunity
Significant long-term
growth potential
Read our Chief Executive Officer's Statement on page 12
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
02
Contents Generation – Sub PageContents Generation - Section At a Glance
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
AT A GLANCE
We are problem solvers
It’s in our
DNA
We exist to solve the biggest problems facing
the world’s leading customer-centric businesses
We create value by ensuring our customers are able to deliver
better, more personalised marketing, which is simpler for
their teams to execute and cheaper for them to run.
Our digital customer engagement platform, AIR
Our cloud-native, API-first, composable architecture enables
us to solve the primary business problems facing our
customers. It is the world’s most flexible platform to deliver
omnichannel personalisation at scale.
AIREnterprise ready
Security
Stability
Speed
Scalability
Support
CLOUD NATIVE
Our top priority
Invest +5% of
revenues back
into best-in-class
security
+99.9%
availability
Trusted to deliver
a stable service for
-5000m POS
We are
real-time
200ms to
adjudicate a
basket. 10k API
TPS 365 days
No one
does more
Execute +750m
personalised
offers every week
Here for you
24/7/365
Delivers a
customer
retention rate
of +99%
API-FIRST
COMPOSABLE
OMNICHANNEL
REAL-TIME
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
03
Contents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
AT A GLANCE CONTINUED
How we
make
money
C
A
S
N
A
R
T
.
3
E E
N F
TIO
1. IM
P
L
E
01
03
M
E
N
T
A
T
I
O
N
F
E
E
• One off implementation fee
• Transaction fee
02
• Recurring licence fee for
access to Eagle Eye AIR
• Per issuance X pence – linked
to value
• Per redemption 3–5 times
issuance or interaction fees
(earn and burn of points)
for loyalty services replaces
issuance and redemption
SaaS business
model
2. LICENC E F E E
Our Core Products
To deliver against our vision of powering the personalised marketing revolution globally, we offer four core products which enable
our customers to personalise their customers’ experiences in a myriad of ways
01
Real-Time
Loyalty
02
Omnichannel
Promotions Engine
03
Gifting &
Top-Up
04
Personalised
Challenges
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
04
Contents Generation – PageContents Generation – Sub PageContents Generation - Section
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
AT A GLANCE CONTINUED
We have a global presence, with offices and customers around the world
Manchester
London
Guildford
Paris
Frankfurt
San Francisco
Toronto
Jacksonville
Tried, tested
and proven
The best-in-class loyalty
and promotions platform
for leading omnichannel
retailers globally.
+750m
personalised offers weekly
+200m
loyalty members
0.2%
customer churn
Singapore
Melbourne
Auckland
Eagle Eye locations
Solving the personalisation problem for leading businesses all over the world
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
05
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
AT A GLANCE CONTINUED
We believe in following the
RULE
The golden rule in action:
Treating people as they would
like to be treated
This sits at the very heart of personalisation
and underpins everything we do. We believe
this is what drives our performance for all of
our constituent groups.
End Consumers
We are powering
personalisation
Powered
+3.5bn
personalised shopping
trips last year
Our Customers
We win with our
customers
Customer retention
rate of
+99%
Our Employees
We are a great
place to work
eNPS
+65
(Vs. an industry
benchmark of 35+)
Our Shareholders
We are an AIM
Awards winner
Rule of 40+
NRR
+137%
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
06
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Strategic Framework
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
STRATEGIC FRAMEWORK
Win, Transact,
Deepen
Innovation
International
Growth
Better, Simpler,
Cheaper
Mergers and
Acquisitions
To develop new
products to provide
further upsell
opportunities across
our customer base
and strengthen our
competitive positioning
Progress
• Developing a new
AI-based offering,
Eagle AI
• £6.9m product
spend +33%
• Servicing 90,000
outlets up +15% Y-o-Y
• 60 new features
To win new customers,
transact through our
platform, deepen with
additional products
from our portfolio
Progress
• Win
Notable wins in UK,
Canada, Australia
and Singapore
• Transact
Volumes +98% 3.3bn
(FY22: 1.7bn)
• Deepen
NRR 137%
Key initiatives with
the John Lewis
Partnership, Pret,
Staples and Mitchells
& Butlers
To enter new
Geographies
To run the business
Better, Simpler,
Cheaper
Progress
• Strong international
year-on-year revenue
growth
• New regional
directors appointed
in Germany and
Singapore
• First new customer
win in Singapore
Progress
• Better
Invested in our people,
training, technology
and tooling
• Simpler
Moved to Terraform
and Deployed
Financial Force both
delivering more
standardised and
structured processes
across the business
• Cheaper
Migrated to PubSub
for our messaging
service and continue
to become more
efficient and resilient
by the use of cloud-
native tooling
To asses
complementary
acquisition
opportunities as
they arise
Progress
• Successful
acquisition of Untie
Nots
• First new customer
win in Singapore
with Fairprice
• Combined sales and
marketing function
is bearing fruit for
both businesses
• Provides the
blueprint for future
acquisitions
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
07
Contents Generation – Sub PageContents Generation - Section Powered by People
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
POWERED BY PEOPLE
All the value we create is thanks to our
Purple
people
who deliver exceptional results for our customers.
“ We have an exceptional team at
Eagle Eye who are dedicated to
creating value for our customers
through building and delivering
great technology to some of
the world’s biggest businesses
and best loved brands. Their
energy fuels the momentum
in the business. We, in turn, are
committed to providing them
with fantastic opportunities to
accelerate their careers.”
Tim Mason
Eagle Eye CEO
How we do what we do is what really makes us unique.
Our Values
Integrity
Earning trust
Excellence
Maintaining trust,
building loyalty
Innovation
Keeping things fresh
Passion
Enjoying the ride
Teamwork
Passing purple on
Kindness
Bonding us together
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
08
Contents Generation – Sub PageContents Generation - Section Strategic Report
Chairman’s Statement
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHAIRMAN’S STATEMENT
Another year of
strong growth
beating our initial expectations
I am delighted to again be reporting
to shareholders on another year of
outperformance by the Eagle Eye team,
delivering growth ahead of the Board’s
initial expectations. These results clearly
demonstrate the business can deliver
sustained high levels of organic growth
and successfully complete complementary
acquisitions, as evidenced by the
acquisition of Untie Nots.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
09
Contents Generation – Sub Page OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHAIRMAN’S STATEMENT CONTINUED
This will be my last Chairman’s statement, and
as I look back on my time with Eagle Eye, it is
remarkable the extent to which the business
has evolved in recent years – considerably
expanding its offering, customer base, financial
strength and geographic reach – becoming the
established leading provider of personalised
digital marketing capabilities to tier 1 retailers,
globally. When I joined as a Non-Executive
Director in 2014, taking on my role as Chairman
in 2016, it was clear that the future of Eagle Eye
was an exciting one. It has been a pleasure to
be part of the Group’s journey on the public
markets and I am confident there is the right
Board and team in place to take the business
to its next stage of growth.
“ It is remarkable the extent
to which the business has
evolved in recent years –
considerably expanding its
offering, customer base,
financial strength and
geographic reach – becoming
the established leading
provider of personalised
digital marketing capabilities
to tier 1 retailers, globally.”
Importantly in these times, the business has
also proven its ability to successfully navigate
challenging economic backdrops, such as
the COVID-19 pandemic and the current
inflationary environment, while maintaining
strategic focus. With its incredible customer
base and underlying growth drivers, the future
for Eagle Eye is brighter than ever.
Eagle Eye has a clear vision, mission and
purpose, and our unique ‘Purple’ way of
working is in large part made up by our
values which are celebrated on a daily basis
throughout the organisation. Our team are
passionate about our customers, passionate
about our offering and is setting the standard
for service levels globally.
Momentum is strong at Eagle Eye, with
the Group delivering across all areas of the
customer strategy, underpinned by supportive
market drivers.
One recent trend worth noting that will have a
significant impact on the industry is the rapid
advancement of Artificial Intelligence (AI).
We believe Eagle Eye will be a key enabler
for AI-driven personalisation in the coming
years as we continue to play a central role in
executing omnichannel personalisation at scale
for the world’s leading retailers. In addition to
that, the Group is also planning to expand into
the data and analytics space by launching an
AI-based promotion personalisation offering,
EagleAI, in 2024. This is incredibly exciting and
is expected to significantly increase Eagle Eye’s
addressable market in the coming years.
Financial results
The Group enjoyed strong trading momentum
throughout the Year, delivering revenue growth
of 36% to £43.1m (FY22: £31.7m) and underlying
organic revenue growth of 29%, excluding the
contribution from Untie Nots. Adjusted EBITDA
increased by 36% to £8.8m (FY22: £6.5m) and
profit after taxation increased by 114% to £1.2m
(FY22: £0.6m). This growing level of profits has
driven strong cash generation and the Group
closed the year with a net cash position of
£9.3m at 30 June 2023 (30 June 2022: £3.6m),
providing the business with the continued
ability to invest to support future growth.
The Group continues to benefit from high
levels of recurring revenue, providing a strong
basis for continued positive performance, with
growth in Annual Recurring Revenues of 40%
to over £33m at 30 June 2023 (2022: £23.9m).
ESG
As a Board and business, we are committed
to high standards within all areas of ESG
and made good progress against our stated
objectives during the Year, building on our
existing foundation of responsible business
practice. Measuring our progress against set
KPIs, which we commenced in FY21, and our
focus on how we can make Eagle Eye a better
business has provided us with a clearer picture
as to where to commit our efforts.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
10
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHAIRMAN’S STATEMENT CONTINUED
As a ‘Virtual First’ business and outsourcing
the running of our infrastructure to key
suppliers, our carbon emissions as a business
are naturally low, although we have seen an
increase in air travel following the lifting of lock
down and the increasing geographic spread
of the business, as we support customers
and continue sales and marketing activities
globally. This has, as in previous years, been
offset by the planting of trees. We also ensure
our key suppliers monitor and have targets
around their environmental impact.
Central to everything we do at Eagle Eye is our
belief in following the Golden Rule – treating
people as they would like to be treated. This
is at the very heart of personalisation with the
AIR platform being used by retailers globally
to help them follow the Golden Rule when
engaging with their own customers. Internally,
this manifests itself in our people-first culture
where the business places the success and
happiness of its people at its heart. On behalf
of the Board, I would like to thank all the team
for their commitment to creating exceptional
value for our customers, always working in
accordance with our stated values.
We fully recognise the importance and value
of high standards of corporate governance and
always look to maintain our strong corporate
governance framework, following the
principles of the QCA Corporate Governance
Code. After more than 12 years with the
Company, long-standing Non-Executive
Director and founding external shareholder,
Bill Currie, retired from the Board in March
2023. We are incredibly grateful for all the
support and guidance he provided in his time
with Eagle Eye and wish him the very best. We
were delighted to welcome Charlotte Stranner
to the Board as an Independent Non-Executive
Director in May 2023, who brings a wealth
of experience in both the listed technology
company arena and the adjacent world of
digital advertising. As notified in September
2023, I will also be stepping down from the
Board at the forthcoming AGM, following nine
years with the Company. In Anne de Kerckhove,
my successor, the Board has found a highly
experienced and driven individual who I am
sure will be a fantastic steward of the business
for all stakeholders.
To read more about our response to ESG
and the expertise of our Board, go to page 26
Opportunity
The market in which Eagle Eye operates is
expanding, as retailers globally develop their
omnichannel capabilities to address the rapidly
changing consumer shopping behaviours,
particularly in the current cost-conscious
climate. Eagle Eye expects the shift towards
digitisation and personalisation to continue to
accelerate and for Eagle Eye to be a beneficiary
of that acceleration, as retailers globally
continue to recognise the strategic importance
of real-time delivery of personalised offers.
How to harness the power of AI is a key topic
of debate across all retailers and we believe
the lead we have in this area, through the
Untie Nots acquisition and the AIR platform’s
ability to deliver hyper personalised messages
to consumers at speed and scale, places us in
the ideal position to be a key enabler of these
advancements.
Eagle Eye is an ambitious business with a
passionate team. With such a considerable
opportunity ahead, we will continue to invest
in order to innovate and grow, building on our
position as the digital marketing platform of
choice for tier one retailers globally.
This ambition, together with the Group’s
growing ARR, profitability and cash generation,
means the Board looks to the future with
confidence.
Malcolm Wall
Non-Executive Chair
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
11
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Chief Executive Officer’s Statement
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT
An outstanding
year
delivering against all areas of our strategy
This has been another outstanding year for Eagle
Eye. We successfully delivered across all areas of
our customer strategy in every target geography,
while also completing the acquisition of Untie
Nots, a rapidly growing, AI-powered gamification
promotions company, bringing new capabilities,
customers, and talented team members into
the Group.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
12
Contents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Revenue growth of
+36%to £43.1m
FY 2022: £31.7m (29% organic)
ARR growth of
+40%
to £33.3m
FY 2022: £23.9m
These successes led to strong revenue growth
in the Year, achieving an increase of 36% to
£43.1m and an increase in adjusted EBITDA of
36% to £8.8m. This growing level of earnings is
flowing through into positive cash generation,
providing us with the ability to invest to
support our future growth. Profitable growth is
an important measure for the Group, reflecting
the discipline with which we invest in the
business.
The strength of our SaaS business model is
once again evidenced by our strong metrics,
with ARR up 40% to £33.3m, NRR strong at
137% and churn low at 0.2%, providing a strong
basis for continued expansion.
We have an exceptional team at Eagle Eye
who are dedicated to creating value for our
customers through building and delivering
great technology to some of the world’s
biggest businesses and best loved brands.
Their energy fuels the momentum in the
business. We, in turn, are committed to
providing them with fantastic opportunities
to accelerate their careers.
We have continued to invest, to support our
increasingly international customer base, drive
our win rate and strengthen our position as
a leader in personalised digital engagement
for tier-1 retail. Core areas of investment
include the expansion of our operational team,
increased investment into sales and marketing,
and our continued investment into the
scalability and flexibility of our technology.
We continue to expand across all key
geographies, with particularly strong growth in
the US and Australia in the Year, as we deepen
our engagements with key customers in these
regions. Our strategic partnership with Google
continues to deepen, and we are already
seeing this generate new sales and additional
opportunities for the Group.
Our strong performance over the last
12 months across all key territories reflects
the growing relevance of our loyalty and
promotions platform at a time when digital
engagement with consumers has never been
more important.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
13
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Market opportunity and
competitive strength
The overarching competitive strength of the
AIR platform is its ability to deliver real-time
loyalty and customer engagement initiatives,
enabling retailers to treat each of their
customers in the way they would like to be
treated – as individuals. The platform can scale
to deliver any type of personalised marketing
message to any customer across any channel
securely and at enterprise scale. This ability is
resonating with retailers around the world, as
they become increasingly aware that data-
driven, personalised promotions and rewards
are one of the most effective ways to drive
increased trade and retain customer loyalty.
Personalisation at scale is becoming
increasingly more important
In this cost-conscious climate, customer
engagement propositions are key ways for
retailers to be able to deliver tangible value to
their customers. In a recent global loyalty study
conducted by Eagle Eye, 84% of consumers
felt that more personalised offers would
enable them to access additional value to help
them save at the shelf but almost a third of
global loyalty programme managers surveyed
admitted that delivering personalised offers
was one of their biggest challenges.1
1
Grocery's Great Loyalty Opportunity.
This clearly demonstrates the need
for retailers globally to develop their
omnichannel capabilities to address
the rapidly changing consumer shopping
behaviours, and the opportunity for
Eagle Eye to solve those retailers’ challenges
by offering a platform that is flexible,
scalable and one that seamlessly integrates
into their existing marketing ecosystem.
We are seeing retailers across the globe
launch new, sophisticated customer
engagement initiatives to deliver additional
value to customers. This has been done
through member pricing, personalised pricing,
subscription schemes and more. There has
been significant innovation in this space
across sectors, from Liberty’s ‘Beauty Drop’
subscription to Pret a Manger’s ‘Club Pret’
and Woolworths Australia’s ‘Everyday Extra’
subscription, as well as the flurry of activity
in the UK grocery sector regarding member
pricing, creating an expanding market
opportunity for Eagle Eye.
“There’s a mega
trend going on globally
right now and it’s
primarily enabled through
apps and capabilities like
Eagle Eye.”
Brad Banducci
Woolworths Group CEO
“Loyalty is a
lifeline during
the inflation
crisis.”
Mary Pilecki
Principal Analyst at Forrester
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
14
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
AI needs AIR
The development in the
field of AI represents an
enormous opportunity
for the future of scaling
Eagle Eye. I am particularly
pleased that, at this early
stage, we have three tangible
areas for progression.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
15
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
#C Using AI to enhance
our tech stack and
development capabilities
Internally, we are exploring how AI can be
applied to our own internal projects, processes
and tools to continue to the run the business in
a Better, Simpler, Cheaper way. It is in its early
stages, but we believe this will be an important
way of reducing toil whilst maximising the
time we can spend on innovation and product
development. We expect AI to be the capability
that enables further efficiencies within Eagle
Eye which in turn could drive higher margins to
allow us to reinvest into the business to support
our continued growth.
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
#A Continue to be the leading
enabler of advanced
analytics and AI
Recent developments in AI across the retail
industry demonstrate that personalisation
is going to be easier for all types of retailers
globally to adopt, which presents an exciting
opportunity for Eagle Eye’s AIR platform.
Working with some of the biggest and most
advanced retailers in the world, we have always
worked closely with data analytics firms and,
more recently, AI technologies and businesses,
which help our client base understand
what the next best message to send to
each customer is, and when to send it. This
personalised marketing is then executed at
scale, across all channels, via our AIR platform.
As retailers all over the world enhance their
data science and AI capabilities, the market
opportunity for Eagle Eye will increase as these
businesses will need the technology in place
to enable them to execute against the insights
that they are now able to generate. We believe
that we are the only platform in the world
that can deliver personalised marketing at
the required speed and scale to keep up with
AI-led personalisation which will be powering
more engaging and more relevant experiences
for the end customer. As a result, we look
forward to working with more businesses
across more geographies and verticals to act as
the execution platform to deliver omnichannel
personalisation at scale.
#B Launching our own
AI-powered offering for
retailers globally – EagleAI
Through the acquisition of Untie Nots we
gained great new customers, an increased
geographical reach and a fantastic team,
many of whom have deep experience using
and developing AI solutions for retailers.
Untie Nots’ AI-based SaaS solution which
powers personalised and gamified continuity
promotions or ‘Challenges’, has been a great
addition to our product portfolio.
To further capitalise on the exceptional AI talent
we now have within our business, Eagle Eye’s
sales and marketing executives and Untie Nots’
development teams have been working together
to build a new offering, EagleAI, which uses AI
to autonomously create the right personalised
offers to send to the right customers. By using
our AI offering rather than traditional data science
techniques, retailers will be able to create one-
to-one experiences for each of their customers
using a fully automated stack of AI algorithms
to optimise product affinity, stretch and reward
levels for each individual customer. EagleAI
is unique in that it has been built specifically
for retailers, a sector both teams understand
deeply. We believe that EagleAI could be sold
as both a standalone offer picking product or
in conjunction with AIR, whereby the EagleAI
decisioning would feed into the AIR platform,
enabling the AI-derived personalised offers to be
executed in real time across all channels.
We are currently working on a pilot and believe
this offering can open up a considerable
additional addressable market for Eagle Eye,
following its launch in 2024.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
16
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Delivering
against our
five strategic
pillars for
growth
Win, Transact, Deepen
Customer strategy:
Win, Transact, Deepen
We continued to successfully deliver across the
three areas of our customer strategy in the Year
– Win, Transact and Deepen.
•
•
•
‘Win’: bring more customers on to the Eagle
Eye AIR platform;
‘Transact’: drive higher redemption and
interaction volumes through the platform;
and
‘Deepen’: encourage our customers to
adopt more of our product portfolio as they
become more adept at digital marketing.
Win
Each new win adds substantial additional value
given our high level of customer retention, and
revenue from our largest revenue-generating
customers typically increases by a multiple of
over three times by the end of their third year on
the AIR platform, through both increased use of
the platform and the addition of new services.
The Group delivered a steady level of 'Win'
related revenue for the Year, which included
extending our reach into new territories.
New customer highlights include a multi-year
contract with Morrisons to provide promotion
and loyalty services, a multi-year loyalty contract
with Hudson’s Bay Company in Canada and
IKEA Taiwan, our second IKEA subsidiary.
We also facilitated Untie Nots’ entry into the
Singapore market, securing a multi-year
contract with Singapore’s largest retailer, NTUC
FairPrice Co-Operative Ltd ('FairPrice').
We have introduced a range of initiatives to
increase our future win rate, including: the
acquisition of Untie Nots, which provides a
quicker ‘win’ product, with several positive joint
conversations already underway; a partnership
with Google Cloud, providing an additional
source of leads; and increased investment in
our marketing activity. As a result, we are seeing
an improved level of leads in the pipeline and
have entered FY24 with a strong new business
pipeline. Wins post year end include a three-year
contract with an Australian retailer, increasing
our presence in the region.
Partnerships provide additional strength
and access to potential customers
We have a clear and considered strategy to
work with other ‘Best in Class’ partners within
the marketing ecosystem to provide a digitally
connected experience across the shopping
journey both at home and in-store from the
shelf to the register. Our strategy enables us
to engage and partner with several relevant
businesses, where we are able to extend our
sales and marketing reach and ultimately bring
more customers on to the AIR platform.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
17
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Win, Transact, Deepen continued
In the Year, we deepened our strategic
partnership with Google, firstly through our
Google Cloud Partner Advantage accreditation
in H1, giving us access to Google’s training, co-
marketing and technical resources. Importantly,
we also launched Eagle Eye on Google
Marketplace, making it easier and more cost
effective for enterprise Google users to discover,
purchase and deploy Eagle Eye AIR. In the
first six months of launching, we have already
transacted our first two enterprise deals, being
Morrisons and FairPrice. We have engaged
with the Google sales teams in each of our key
regions and in June 2023 our senior team were
invited to meet senior Google executives at
Google’s offices in California.
We also deepened our relationships with key
partners across the spectrum of the marketing
ecosystem including rolling out our Oracle
Simphony integration to a number of other
brands internationally and new partnerships
with Salesforce. We continue to partner with
Neptune Retail Solutions ('NRS'), with whom
we are targeting the vibrant and highly active
Consumer Packaged Goods ('CPG') digital
coupons market in North America. Together
with NRS we are working closely to deliver
for two of our major clients in the US which
continues to progress well. We remain focused
on revitalising and modernising how CPG
companies can engage shoppers digitally
through personalised promotions.
Transact
Chargeable AIR redemption and loyalty
interaction volumes, a key measure of usage
of Eagle Eye AIR, increased by 98% to 3.3bn
(2022: 1.7bn). We continue to benefit from the
accelerated ability to take these customers live
into the Transaction phase.
Growth in transaction and subscription revenue
was driven by the Woolworths Group contract
in Australia reaching full-scale, the full go-live
of a large grocer in the U.S., and the national
rollout of Asda’s loyalty programme, Asda
Rewards. Eagle Eye AIR powers Asda Rewards,
operating the offer and reward management
within the app – which was number one in the
UK app store for six weeks post-launch2, the
membership card, star products, missions, and
cashpot as well as the creation and redemption
of vouchers through its integration with Asda’s
point-of-sale systems. Nearly five million
customers now use the Asda Rewards app every
month and have been growing their cashpots
to help reduce their grocery bills. In June 2023,
Asda announced that more than £100m had
already been earned into cashpots during the
first half of the year3.
Deepen
A key part of our strong performance has been
the considerable increase in use of the AIR
platform by our existing customers, as reflected
our strong NRR of 137%.
2 https://www.statista.com/statistics/700093/leading-iphone-
shopping-apps-in-great-britain-by-downloads/#:~:text=In%20
September%202022%2C%20Asda%20Rewards,iPhone%20users%20
in%20Great%20Britain
3 https://corporate.asda.com/newsroom/2023/06/08/asda-customers-
earn-over-100m-through-popular-rewards-app
This is due to the significant increase in interest
in our promotion and loyalty offerings as retailers
look to enhance the way they retain and reward
their customers, particularly with the cost-of-
living crisis continuing to tighten household
budgets. The new capabilities and cross-sale
capability from our acquisition of Untie Nots have
provided increased opportunities to deepen our
contractual relationships with existing customers.
Pleasingly, our long-term contract customer
churn rate by value remains very low at below 1%,
with good levels of renewals taking place.
Key deepen successes include a new five-year
contract with The John Lewis Partnership, a
new pan-partnership loyalty project launching
in 2024 alongside dunnhumby. This brings
together Eagle Eye’s existing relationships with
John Lewis, first announced in 2017 to improve
John Lewis’s digital marketing capabilities, and
with Waitrose, subsequently announced in 2019.
We also significantly deepened our relationship
with Pret a Manger in the period, supporting
them in relaunching their coffee subscription as
‘Club Pret’. In this new model, Eagle Eye enables
Pret to offer their subscribers 10% off all products
and five barista made beverages a day for the
monthly cost of £30. This re-launch was swiftly
followed by the Eagle Eye-powered Pret ‘Gold
Card’, available for all employees to manage their
team member discount.
Further customer expansions include Staples
US retail and the deepening of our partnership
with Mitchells & Butlers through the launch of
its Staff Rewards app as well as an app targeting
suppliers, providing discounts at venues across
the UK.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
18
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Innovation
Innovation sits at the heart of everything we
do at Eagle Eye. As one of six core company
values, we pride ourselves on innovating both
with and for our customers to deliver value
which ultimately helps the businesses we
work for better delight their end customers.
Innovation has enabled us to continually deliver
new solutions to the market in the Year which
differentiate us and enable us to provide added
value to our core enterprise customer base.
Innovation is in our DNA and we will continue
to celebrate our teams for delivering new
capabilities as it is critical to our future success.
During the Year, we have grown significantly,
onboarding new customers in new geographies
and Deepening the services we provide to
them. We are now servicing more than 90,000
unique outlets globally, up 15% vs. the prior year.
From a platform point of view, this has meant
a continued focus in the period on ensuring
we can match this fantastic growth, delivering
against the needs of our current, new and future
customers all over the world when it comes to
our product’s speed, scale and flexibility.
Extending the digital marketing toolkit
Eagle Eye AIR provides retailers with a
comprehensive digital marketing toolkit, but we
continue to innovate in this space to enable us
to deliver an even more flexible and extensive
set of use cases to our customers to power
their leading customer engagement initiatives.
In the period, we have deployed more than
60 new features, including new promotion
types (e.g. quest campaigns), extensions to
existing product capabilities (e.g. message at
till), delivered new ways for retailers to reward
their customers (e.g. social and behavioural
rewards), and have packaged up a number of
new, enterprise ready direct-to-consumer APIs
(e.g. delivering digital and mobile services to our
customers). In addition to this, we have built new
features that will support us as we enter new
verticals and geographies (e.g. pending points
and a set of mobile ready APIs which enable
easier integration).
Continuing to lead with personalisation,
speed and scale
As we extend our toolkit, we also innovate to
ensure that we can meet the needs of our
growing customer base when it comes to speed
and scale. We currently have more customers
than ever transacting more than ever through
our platform and so we are continually working
to improve performance to ensure that we can
deliver more, faster. Currently, in an average
month, we issue more than 2.5 billion offers to
customers worldwide, distribute more than
185 billion loyalty points into millions of unique
wallets and process more than 6.7 billion API
calls across the AIR platform. We continue to
make use of the best technologies the cloud
has to offer, significantly improving the overall
performance of our AIR platform and to scale
the overall running of the platform, maintain
lightning response times whilst we build
more and more capability. As a result of our
investment into this area of the business, we are
able to process these ever-increasing volumes at
ever-faster speeds.
In the Year we have applied hundreds of new
rules and permutations to our cloud-based
adjudication engine, POS Connect. This
enables retailers to achieve levels of individual
personalisation with their customers that has
never been seen before, at an unprecedented
speed and scale.
Delivering value faster
This year we were excited to launch our Eagle
Eye Academy across the world. This bespoke
training platform gives our customers the
ability to get up to speed more quickly on how
to get the most value out of Eagle Eye AIR.
The Academy contains a full array of courses
available to take online, with learning paths for
different parts of our platform. Initial feedback,
both from our internal teams and from
customers, has been fantastic. This, coupled with
best practice guides for integration, enabling our
API documentation to be available online and
automating the configuration of the platform
means that customers can start to get value
from AIR from day one.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
19
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
International Growth
The benefits of our investment into international
expansion are evident, with the deepening
of our clients’ engagements in the US and
Australia, as mentioned above, and initial
customers secured in Southeast Asia. As a result,
we have seen significant revenue growth from
the US (+129%) and APAC (+56%) in the Year. 35%
of the Group’s total revenue now comes from
the US (2022: 21%). We now have a much broader
international footprint, adding France, Germany
and Singapore following a year of expansion,
providing a wider funnel for opportunities
going forward.
International marketing activities
We made initial investments into Singapore
and Germany as well as additional direct sales
resource in North America, targeting the
considerable US promotions and loyalty market
and, as a result, marketing activities stepped
up to support the sales resource investment
in these regions. We plan to further increase
our sales and marketing activities throughout
FY24, with a particular focus on investing into
North America and France, in line with our
strategy to invest as we ‘Win’.
Investment has been made into lead
generation campaigns to drive more inbound
leads into the sales pipeline as well as an
events programme that included the Tech
For Retail Show in France, Groceryshop in the
US, breakfast briefings with major retailers
in Singapore, Thailand and Malaysia, and
NRF, the most influential retail conference
in the US. Eagle Eye also joined key trade
associations including GS1 Switzerland,
California Grocers Association, FMI, Australian
Loyalty Association and NRF to raise
awareness amongst loyalty professionals and
increase networking opportunities. These
activities led to a considerable increase in
leads compared to FY22 with converted leads
up 61%.
We are also encouraged by the initial
marketing activities being carried out
with Untie Nots, individually and jointly,
building the pipeline both in the UK but
predominantly internationally. Untie Nots
is leveraging our more extensive sales and
marketing expertise and strong customer
network which has led to encouraging
conversations. Untie Nots’ contract win with
NTUC FairPrice Co-Operative Ltd in Singapore
demonstrates the benefit to Untie Nots of
Eagle Eye’s international marketing reach,
and we look forward to continuing building a
promising joint international sales pipeline.
North America
+129%
APAC
+56%
EMEA
+7%
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
20
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Availability
99.97%
NPS
+66vs. industry benchmark of +35
Our people and beliefs
Firstly, I’d like to take this opportunity to thank
Malcolm Wall, who will retire as Chair following
this year’s AGM. Malcolm has been an incredible
support to me and this business over the past
nine years and his importance cannot be
overstated. He has provided significant guidance
since Eagle Eye joined AIM and we have all
benefitted from his extensive experience and
knowledge. On behalf of the whole Company,
we thank him for his service and wish him all the
very best for the future. Our new Chair, Anne de
Kerckhove, who will join the Board in October
as Non-Executive Director before assuming
the Chair role at the close of the AGM, brings a
wealth of experience in the technology, media
and entertainment industries and high growth,
international businesses and we look forward to
working with her. I’d also like to thank our long-
standing Non-Executive Director, Bill Currie, who
after 12 years on the Eagle Eye Board stepped
down following the Group’s interim results in
March 2023. We are incredibly grateful for all the
support and guidance he has provided in his
time with Eagle Eye and wish him the very best.
Read more about the Board on page 39
Better, Simpler,
Cheaper
As a business we strive to maximise our
productivity and efficiency and look for ways
to benefit from our increasing scale as we
continue to invest in innovation and growing the
business. We have developed a proven business
model to grow our EBITDA margin, whilst also
investing, as we ‘Win’, in sales & marketing and
enhancements to the product to generate new
opportunities for growth.
On the ‘Better’ side we have invested in new
tooling to help us manage the AIR platform
more effectively, as described above, resulting in
availability of 99.97%. We continue to upskill our
staff and have again invested in our technical
staff to achieve Google Cloud Certifications as
well as building an internal library of resources
and collateral, and launching our Eagle Eye
Learning Academy internally and externally.
We successfully recertified our ISO 27001 across
all our offices globally, as well as continuing our
SOC2 Type II certification.
As ever, we have continued to look at how better
to onboard our clients and the volume and
speed of new clients in the Year shows the great
work done in this area with more to come in
the new financial year. Security is always a huge
focus for the Group, and we continue to invest in
this area by moving to a continuous assurance,
always on monitoring, backed by expert third
parties who monitor our platforms and the dark
web for possible threats 24/7.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
21
+129%
+56%
+7%
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Better, Simpler, Cheaper continued
The central tenet of Eagle Eye is to create
value for our customers. This drives what
we do, and we believe it is key to making a
successful business. All the value we create is
thanks to our brilliant employees.
Integration with the Untie Nots team has
been smooth, as we are aligned with in both
our values and culture, and now we have an
even larger team of people who are dedicated
to developing market leading technology that
delivers value to some of the biggest industry
names around the world.
At Eagle Eye we have a clear vision, mission,
and purpose, and a unique ‘Purple’ way of
working that we curated and follow because
we believe it influences our lives and the world
for the better. Our Purple Playbook, introduced
last year and given to every member of our
team, celebrates the evolution of Eagle Eye and
explains our belief that by following the ‘Purple
Method’, we will continue to grow together.
Our commitment to our ethos, purpose
and Purple Method helps us deliver value
to clients, which we track through our NPS
score. We are incredibly proud of our latest
score of +66 which is significantly higher
than the Technology Industry benchmark
of +35. We celebrate the contribution of
our people both at our Annual Company
Conference and throughout the Year
through our Purple Values Awards.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
22
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Better, Simpler, Cheaper continued
Last year we launched our ‘Purple Pathways’
career development programme, which supports
employees in developing their careers at Eagle
Eye and advancing into new roles. Pathways is an
interactive tool which employees navigate, which
shows the critical skills required for progression
and the type of experiences or training that
could be provided. It is fantastic to see our team
members already reaping the benefits of the
programme, with more than 52% of employees
now having a formal development pathway in
place. In addition, we designed and implemented
our bespoke Purple Leaders training – focusing
on eight core modules essential for existing and
aspiring managers as part of their Pathways. We
believe that having a great boss is one of the most
important ingredients for workplace happiness
and success and are therefore thrilled that 100%
of our current managers have already taken part
in this training programme.
As part of our onboarding process, we run a
bespoke programme called Life Skills for all
new starters. This introduction to cognitive
behavioural therapy is an investment into our
new starters to help them become the best
version of themselves.
In the Year we launched our new Wellbeing
policy which is underpinned by our value of
Passion. Our vision statement is that we are
“passionate about your mental and physical
health, and we place your wellbeing at the heart
of our culture” and as part of the new policy we
have delivered a range of initiatives to achieve
this vision, including mental health training,
fitness sessions and risk assessments to ensure
safe working at home.
As part of our ongoing commitment to charity
work and to create a positive and engaged work
environment, we continue our partnership with
52 Lives, a charity built around the concept of
‘kindness’ who find individuals who need help
and then deliver it. Every month, we recognise
the individual that our efforts have helped and
during the course of the Year, run a series of
employee-generated fundraising events.
Our ‘Purple Women’ initiative continues to
effect positive change in the workplace and
champions policies that offer parents more
flexible working patterns, enhanced leave
packages, and additional support on their return
to work; together with education and support
of health-related issues impacting employees.
During Pride month in June 2023, we also
launched a ‘Purple Pride’ initiative that aims
to create a safe workspace for all employees,
celebrating our individuality and encouraging
everybody to be themselves. Looking ahead
we will continue to evolve our employee
development programmes, succession planning
and diversity and inclusion efforts. We remain
committed to continuous improvement and
investment in our employees and making Eagle
Eye a great place to work.
Of the many ‘Simpler’ initiatives across the
teams, a few notable successes include the move
to Terraform which allows us to standardise and
control our environments globally in a more
structured way, and the use of Financial Force
now rolled out across our Delivery teams
to help us manage their effectiveness and
project allocation.
In terms of running the business ‘Cheaper’,
our KPI of Google Cloud Platform spend
percentage against recurring revenue is the
indicator we have been using to monitor
our Google Cloud spend. This year we have
averaged 20.5% by closely monitoring and
taking on initiatives to drive us forward
in our goal to become more cloud native
and serverless. We successfully migrated
to PubSub for our messaging service, and
we continue in our drive to become more
efficient and resilient by the use of cloud
native tooling.
The acquisition of Untie Nots provides
immediate synergies, such as cloud hosting
costs and the ability to offer them our
extensive sales and marketing expertise, as
described above. We now have the combined
sales and marketing efforts of our two
companies in our arsenal, enabling us to
streamline our efforts and reduce costs.
Our people costs represent 65% of the
operating costs of the business in the Year
(FY22: 65%) and we recognise they are our
biggest asset. Our business model continues
to allow us to use remuneration as one of the
levers to reward and retain our best people.
Continued investment into the new year is
built into our plan each year, in line with the
model we have developed. We continue
to review average industry wages and are
comfortable that we are well placed to
manage any rises in the year ahead.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
23
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Mergers and
Acquisitions
We successfully completed the acquisition of
Untie Nots in January 2023, a rapidly growing
SaaS company enabling retailers to deliver
AI-powered, personalised spend-stretch
challenges to customers at scale which are
profitable by design. The acquisition provides
us with accelerated entry into the French
market, brings some of Europe’s largest
grocers into the Group, adds to our growing
roster of US clients and provides a wealth of
cross-sale opportunities for both businesses.
Importantly, the Untie Nots team have
been able to benefit from becoming part
of our more advanced sales and marketing
organisation, considerably expanding the
reach for their innovative technology. The
Untie Nots team also bring additional
capabilities and deep experience of using
and developing AI solutions for retailers.
In just a few months post-acquisition, we
are already seeing the benefits of working
together. Introduced by Eagle Eye, Untie
Nots secured a contract with FairPrice,
Singapore’s largest supermarket chain,
in May 2023. This was the first win for the
Group in the region and demonstrates
the benefit to Untie Nots of Eagle Eye’s
international marketing reach, and the
speed of the sales cycle for the Untie Nots
offering. It is also testimony to the benefit
of our own investment into international
expansion and we continue to build a
promising international sales pipeline,
alongside Untie Nots.
The success of the acquisition and mutual
benefit to both businesses provides us
with a blueprint for further acquisitions,
and we continue to assess the market for
new opportunities.
Our assessment so far
No complexity introduced – oversight
from and reporting to Tim & Lucy
Sales and marketing bearing fruit – strong
and growing pipeline from introductions
both ways
First 'new' customer won within months –
FairPrice in Singapore, introduced by
Eagle Eye
AI capabilities are phenomenal and proven
in the field
Strong cultural alignment – generating
great ideas and excitement
A valuable addition to the Group
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
24
Contents Generation – PageContents Generation – Sub PageContents Generation - Section
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
We have a growing addressable market, high
profile customers in multiple geographies, an
outstanding team and a high-quality business
model driving growth in revenue, profits and
cash generation. Alongside this, developments
within AI and the clear demand from our
customer base and wider retail sector, means we
are very excited about the future of Eagle Eye.
Tim Mason
Chief Executive Officer
Outlook
We have entered FY24 in a strong position with a
growing pipeline and considerable momentum
across the Group. Trading in FY24 to date has
been in line with the Board’s expectations.
In the current difficult economic environment,
retailers are turning to data-driven, personalised
promotions and rewards as one of the most
effective ways to drive increased trade and
retain customer loyalty. Meanwhile, advances in
technology, such as generative AI, are making
personalisation more accessible for a wider
range of retailers. Eagle Eye’s central position
as the technology that enables the execution
of these programmes means we are becoming
increasingly relevant, providing further growth
opportunities.
The Group continues to successfully manage
inflationary pressures and the underlying growth
and flexibility of the Company’s business model
mean that we can invest into the business
and people with confidence to support future
growth. The successful acquisition of Untie Nots
demonstrates the benefit we can bring to other
businesses looking to scale, and we continue
to assess the market for earnings enhancing
acquisition opportunities.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
25
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Environmental Social Governance (ESG)
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ENVIRONMENTAL SOCIAL GOVERNANCE (ESG)
We are committed to
high standards of ESG
focused on materiality and making a difference
The Group remains committed to high standards of ESG as set out in the table below:
Everything we do is
underpinned by our belief
in following The Golden Rule
As a Board we are committed to high standard
of Environmental Social Governance (‘ESG’)
with a focus on change that makes Eagle Eye
a better business. We made good progress
against our stated objectives during the
Year, building on our existing foundation
of responsible business practice. Key to any
policy is benchmarking and data, and we are
measuring our progress through KPIs and
comparing them to the market median to
allow focus on areas of improvement.
We will continue in the year ahead to build on
the work to date.
Energy consumption MWh/£m
CO2 production tonnes/£m
Water consumption m3/£m
Environmental statement
Employee T/O
Employee NPS
Median Gender Gap
Discrimination policy
Community outreach
Ethics Policy
% Women on Board
% Independent Directors*
CEO pay as x of median
CEO & Chairman split
QCA
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
* Deemed appropriate with the knowledge and skills of the Board overall.
FY22
7.08
2.78
0.16
Yes
16%
56
17%
Yes
Yes
Yes
14%
29%
X 11
Yes
Yes
FY23 Better than median
4.21
2.49
0.13
Yes
14%
66
19%
Yes
Yes
Yes
29%
43%
X 14
Yes
Yes
X
26
Contents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
ENVIRONMENTAL SOCIAL GOVERNANCE (ESG) CONTINUED
E
S
Environmental
• Our environmental footprint is low – we eliminate paper
with our digital solution
• Key tech suppliers take environmental targets seriously
‘Virtual First’ reduces our carbon footprint from travel –
•
planted trees to offset
Social
• Our goal is to make this a great place to work – our people
are our greatest asset
• Continued our charity partnership with 52 Lives helping
individuals and families in need. Raised nearly £40k in FY23
• Purple Women – an ERG who seek to effect positive
change in the workplace
• Purple Pride: launched during Pride month in June 2023,
Purple Pride is an initiative that aims to create a safe
workspace for all employees, celebrating our individuality
and encouraging everybody to be themselves
To read more about how we support our people, go to page 22
Governance
G
• Strong governance framework – QCA code followed
• Board level ownership – Malcolm Wall sponsors the ESG
initiative and Lucy Sharman-Munday is the executive owner
• KPIs to assess and monitor key aspects of ESG
• The Group remains committed to high standards of ESG as
set out in the table on page 26
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
27
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Financial Review
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
FINANCIAL REVIEW
Strong growth
across the board
Revenue, profits and cash flow
Revenue
£43.1m
FY 2022: 31.7m
Profit after tax
£1.2m
FY 2022: £0.6m
Closing net cash position
£9.3m
FY 2022: £3.6m
+36%
+114%
+156%
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
28
Contents Generation – Sub PageContents Generation - Section Strong growth
across the board
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
FINANCIAL REVIEW CONTINUED
Key Performance Indicators
Financial
Revenue
Subscription and transaction revenue:
AIR licence revenue
AIR transaction revenue
Untie Nots licence & transaction revenue
SMS transaction revenue
Total subscription and transaction revenue
AIR annual recurring revenue
Net revenue retention rate
Adjusted EBITDA1
Adjusted EBITDA1 margin
Profit after tax
Net cash2
Cash and cash equivalents
Borrowings
Non-financial
Chargeable AIR redemption & interaction volumes
Long-term contract customer churn by value
£14.1m
£15.7m
£2.2m
£2.4m
£34.5m
£12.2m
£9.7m
–
£2.1m
£24.0m
FY23
£m
43.1
32%
37%
5%
6%
80%
33.3
137%
8.8
20.4%
1.2
9.3
10.6
(1.3)
FY23
3,350m
0.2%
FY22
£m
31.7
39%
30%
–
7%
76%
23.9
145%
6.5
Var
36%
16%
63%
–
12%
44%
40%
-8ppt
36%
20.5%
-0.1ppt
0.6
3.6
3.6
–
FY22
1,693m
0.2%
114%
156%
192%
N/A
98%
0ppt
1 Adjusted EBITDA excludes costs associated with the acquisition of Untie Nots SAS, share-based payment charges along with depreciation, amortisation, interest and tax from the
measure of profit and is reconciled to the GAAP measure of profit before taxation in Note 21.
2 Net cash is cash and cash equivalents less borrowings.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
29
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
FINANCIAL REVIEW CONTINUED
Group results
Revenue
Revenue growth for the Group was 36% for the
Year (FY22: 39%), with the contribution to H2
from Untie Nots building on top of the strong
organic growth in revenue of 29%.
The Group’s Annual Recurring Revenue1 ('ARR'),
which is our period exit rate for recurring AIR
and Untie Nots subscription and transaction
revenue, plus any professional services
contracted for more than 12 months hence
and secured new wins, excluding any seasonal
variations and lost contracts, increased by 40%
to £33.3m (FY22: £23.9m). The growth rate in
ARR is higher than the overall revenue growth
due to subscription and transaction revenue
increasing to 80% of total revenue (FY22: 76%)
as the use of our services increases with our
largest Tier 1 clients across the globe, as well as
benefitting from the impact of the acquisition
of Untie Nots. The increased use of the
platform can particularly be seen from the 63%
increase in AIR transactional revenue to £15.7m
(FY22: £9.7m).
Professional services revenue increased by
12% to £8.6m (FY22: £7.6m). Under IFRS 15, a
SaaS business will typically recognise revenue
(including implementation revenue from
professional services) over time. In some cases,
this means implementation revenue is now
recognised over the period the service is live.
Therefore, during the period of implementation
for a new client, which is typically between two
and six months, no revenue will be recognised,
although directly attributable associated costs
are also spread over the same period, matching
revenue and costs. Revenue from professional
services that has been deferred into future
periods, but delivered and billed, was £5.8m at
30 June 2023 (30 June 2022: £3.0m).
in particular for loyalty transactions where we
have seen key customers such as Woolworths
moving through their contract cycle with
volumes from the Everyday Extra subscription
increasing within their existing licence and
transection fee charging bands.
In addition to winning new business, including
Morrisons, IKEA Taiwan and Hudson's Bay
Company, a substantial Canadian retailer, and
deepening existing relationships, the Group
successfully maintained an extremely low
rate of long-term contract customer churn by
value at 0.2% (FY22: 0.2%). This reflects the scale
and breadth of the AIR platform’s offering in
meeting our customers’ needs.
The Group has maintained a strong Net
Revenue Retention ('NRR') rate, which is
the improvement in recurring AIR revenue
excluding new wins in the last 12 months. In
FY22 our NRR benefitted from the recovery in
the Food & Beverage sector from the impact
of Covid-19. Excluding the Covid-19 recovery
impact NRR for FY22 was 137%; in FY23 this has
been maintained due to continued successful
deepening of existing accounts, including
increased transactional revenue.
Chargeable AIR redemption and loyalty
interaction volumes, a key measure of usage
of the AIR platform, increased by 98% to
3.3bn (FY22: 1.7bn), ahead of the growth in
recurring subscription and transaction revenue,
reflecting increasing transactional usage of the
platform by all our international grocery clients,
ARR1
£33.3m
FY 2022: £23.9m
+40%
Net Revenue Retention2
137%
FY 2022: 137%3
1 Period End Annual Recurring Revenue is defined as period exit rate
for recurring AIR subscription and transaction revenue plus any
professional services contracted for more than 12 months hence
and secured new wins, excluding any seasonal variations and lost
contracts.
2 Net retention rate is defined as the improvement in recurring AIR
revenue excluding new wins in the last 12 months.
3. Excluding Covid-19 recovery impact.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
30
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
FINANCIAL REVIEW CONTINUED
SMS messaging revenue increased from the
prior year, despite strong cost headwinds in
this commoditised market, to £2.4m (FY22:
£2.2m). This reflected inflationary increases
with volumes of messages sent down 1% to
65.3m (FY22: 68.3m) driven by those clients
who recognise the benefit of an omnichannel
strategy and which have integrated their
High Street stores and their eCommerce
offering, including JD Sports and Pets at
Home. Consistent with previous guidance,
SMS is expected to continue to represent a
decreasing proportion of the Group’s revenue
in future years.
Gross profit
Gross profit grew 38% to £41.0m (FY22: £29.6m),
with gross margin at 95% (FY22: 94%) as the
contribution to revenue from the lower margin
SMS business continues to reduce.
Costs of sales includes the cost of sending SMS
messages, revenue share agreements and
outsourced, bespoke development work. All
internal resource costs are recognised within
operating costs, net of capitalised development
and contract costs.
Adjusted operating expenses
Adjusted operating costs increased 39% in
line with the growth in gross profit to £32.2m
(FY22: £28.9m) as the business has invested
in line with our planned growth investment
model. These operating expenses, which
exclude costs of £1.3m associated with the
acquisition of Untie Nots SAS, represent sales
and marketing, product development (net of
capitalised costs), operational IT, general and
administration costs.
The 39% increase in staff costs to £26.1m (FY22:
£18.8m) primarily reflected an increase in
average headcount for the Year which was up
36% to 222 (FY22: 162), including the impact
of the acquisition of Untie Nots. In addition,
reflecting the inflationary pressures seen in
all territories, we had built into our operating
model increased annual pay awards which
were made in January 2023. We continue to
invest in developing our products, and in sales
and marketing to support our growth plan;
within staff costs, gross expenditure on product
development increased to £6.9m (FY22: £5.2m)
and sales and marketing spend was £4.8m
(FY22: £3.7m).
IT Infrastructure costs grew at a slower rate
than recurring revenue growth by 23% to £8.1m;
representing 23% of recurring revenue (FY22:
£6.5m; 27% of recurring revenue) as the Group
benefitted from investment in infrastructure
for its overseas regions in FY22 in advance of
the significant increases in volumes seen in
FY23, with work continuing to optimise the
efficiency of our infrastructure as we continue
to grow. Capitalised product development
costs increased to £2.6m (FY22: £2.2m), whilst
amortisation of capitalised development
costs was £2.5m (FY22: £2.3m). Contract costs
(including costs to obtain contracts and
contract fulfilment costs), recognised as assets
under IFRS 15, increased to £2.8m (FY22: £2.7m),
reflecting the high level of new wins during the
Year, and amortisation of contract costs was
£1.7m (FY22: £1.3m).
Gross margin
95%
FY 2022: 94%
+1ppt
Gross expenditure on
product development
£6.9m
FY 2022: £5.2m
+33%
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
31
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
FINANCIAL REVIEW CONTINUED
Adjusted EBITDA and profit/(loss) before tax
The strong revenue performance and
continued controlled investment spend have
resulted in continued growth in organic
adjusted EBITDA margin to 21% (FY22: 20%).
Reflecting its earlier stage of growth, EBITDA
margin for Untie Nots was 4%, resulting in an
adjusted EBITDA margin for the Group of 20%,
in line with the prior year. The acquisition of
Untie Nots and the timing of inflationary pay
awards and investment for growth meant
that Group EBITDA margin fell to 18% in H2 23
compared to 23% in H1 23. Adjusted EBITDA
was up 36% at £8.8m (FY22: £6.5m) for the Year.
To provide a better guide to the underlying
business performance, adjusted EBITDA
excludes the costs of the acquisition of Untie
Nots along with share-based payment charges,
depreciation, amortisation, interest and tax
from the measure of profit. The GAAP measure
of operating loss before interest and tax was
£(0.6)m (FY22: profit of £0.7m) reflecting the
increased amortisation as a result of intangibles
recognised under IFRS 3 on the acquisition of
Untie Nots of £1.3m and the increased non-
cash share-based payment charge of £2.4m
(FY22: £1.9m), reflecting the successful revenue
and EBITDA performance this year and the
strong position the Group continues to be in
to deliver increased revenue and profits, which
are reflected in future, performance-related,
vesting assumptions, offset by the EBITDA
earnt in the Year.
The Group aims to manage the business to at
least achieve the Rule of 40 (Revenue growth
+ Adjusted EBITDA margin = 40), with an
expectation that the Adjusted EBITDA margin
achieved for the Group will be at least c20% on
an annualised basis. In FY23 our result versus
this metric was 56 (FY22: 59).
The loss before tax for FY23 was £(0.8)m (FY22:
profit of £0.7m), reflecting the reduction in
operating loss before interest and tax. Net
finance expense increased to £0.14m (FY22:
£0.05m) reflecting the partial utilisation of the
Group’s revolving loan facility towards funding
the acquisition of Untie Nots, along with the
higher interest rates seen during the Year.
Profit after tax, EPS and dividend
The improvement in underlying profitability
during the Year, in particular in the UK, has
allowed the Group to forecast the recovery
of taxable losses brought forward from prior
years with more certainty which has resulted
in an additional deferred tax asset of £1.6m,
reflecting historic losses brought forward now
being recognised. Along with the continued
successful R&D tax credit claims in the UK and
France, this has resulted in an overall tax credit
of £1.9m in FY23 (FY22: charge of £(0.1)m).
As a result, the Group’s profit after taxation
increased to £1.2m (FY22: £0.6m) and reported
basic earnings per share improved to 4.25p
(FY22: 2.12p) with diluted earnings per share of
3.79p (FY22: 1.86p).
No dividend is proposed this year (FY22: £nil)
as the Group continues to invest in a managed
way to pursue our growth strategy.
Group Statement of Financial Position
The Group had net assets of £24.0m at 30
June 2023 (30 June 2022: £8.6m), including
capitalised intellectual property of £5.3m (30
June 2022: £3.5m). The movement in net assets
reflects the acquisition of Untie Nots along with
improved EBITDA performance in the Year and
the exercise of share options during the Year.
Current assets increased by £8.3m primarily
due to revenue growth, aligned with an
improvement in debtor days to 49 (FY22: 61
days) and higher EBITDA, generating cash in
the Year, along with an increased current tax
receivable, primarily due to the French R&D tax
credit. Liabilities increased by £9.0m primarily
due to increased deferred income arising
from the treatment of billed revenue for new
implementation fees and professional services
under IFRS 15, along with higher bonus and
commission accruals, reflecting the revenue
and EBITDA growth in the period, the term
debt acquired with Untie Nots which is used
to manage Euro working capital requirements,
and the deferred and contingent consideration
due on the acquisition of Untie Nots.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
32
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
The Group continues to hold a £5.0m revolving
loan facility with HSBC Innovation, with an
additional £2.5m accordion facility available,
subject to credit approval at the time. This
provides the business with security and
flexibility over its financing options to deliver
on its growth aspirations. The Group’s gross
cash of £10.6m (FY22: £3.6m) and the £4.0m
undrawn portion of its £5.0m facility (FY22:
£5.0m undrawn), less £0.3m debt of Untie Nots,
gives the Group £14.3m of headroom, which,
allied to growing levels of profitability and
organic cash generation, the Directors believe
is sufficient to support the Group’s current
organic growth plans.
Lucy Sharman-Munday
Chief Financial Officer
FINANCIAL REVIEW CONTINUED
Cash flow and net cash
The Group ended the Year with net cash of
£9.3m (30 June 2022: £3.6m), exceeding the
Board’s prior expectations. Excluding costs
associated with the acquisition of Untie Nots,
the underlying net cash inflow for the Year was
£7.0m (FY22: £2.8m). Overall net cash inflow for
the Year was £5.7m.
The main components to the net cash inflow
were:
• the operating cash inflow of £12.3m (FY22:
£7.4m), reflecting the EBITDA profit
(unadjusted for the acquisition of Untie
Nots) of £7.5m (FY22: £6.5m), a working
capital inflow of £3.9m (FY22: £1.5m
outflow) and net tax receipts of £0.9m
(FY22: net payments of £0.6m). The £2.4m
improvement in working capital primarily
arose as a result of increased income
deferred under IFRS 15 and enhanced focus
on reducing debtor days;
• net proceeds from the issue of equity
during the Year, primarily in relation to the
acquisition of Untie Nots, of £7.1m;
• offset by capital investment in the AIR
platform and other infrastructure of £2.6m
(FY22: £2.4m), as well as contract costs
capitalised under IFRS 15 of £2.8m (FY22:
£2.7m);
• payments in respect of leases of £0.2m
(FY22: £0.1m); and
• £6.3m consideration and costs paid for the
acquisition of Untie Nots, net of cash and
debt acquired.
Banking facility
The Group has remained comfortably within its
banking covenants which relate to the Group’s
debt ratio and adjusted EBITDA performance.
During the Year, the Group’s primary banker
at the time, Silicon Valley Bank, encountered
financial difficulties and US financial regulators
closed SVB US, subsequently selling it to First
Citizens Bank, while SVB UK was purchased
by HSBC and subsequently renamed HSBC
Innovation Bank. As a result of successful
mitigating actions at the time, the Group
maintained access to sufficient liquidity to
support the Group’s ongoing working capital
requirements and to deliver the Group’s
stated growth strategy throughout the period
of uncertainty. Following the respective
acquisitions, no Eagle Eye funds were at risk
of loss. However, the Group has subsequently
revised its treasury policy such that exposure to
the failure of one bank is minimised.
In light of the economic environment, and
our increasingly global customer base, we
have taken the step of hedging elements of
our foreign currency net receipts to ensure
that the Group is protected from significant
and sudden adverse movements in foreign
currency exchange rates. There were no open
hedges at 30 June 2023 (30 June 2022: none).
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
33
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Principal Risks and Uncertainties
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
PRINCIPAL RISKS AND UNCERTAINTIES
Evolution of the market
Technological changes could overtake the
products being developed by the Group
Protection of intellectual property
Description
Description
Description
The Group operates in an evolving market and
there is a possibility that the rate of growth in
loyalty and personalised solutions will not match
independent predictions or that users of mobile
devices will change their behaviour with respect to
mobile commerce. The Group’s services are new
and continually evolving and it is difficult to predict
the future growth rates, if any, and the size of these
markets. Even if the market for the Group’s products
develops as anticipated, the Group may face severe
competition from other businesses offering similar
products and services and there can therefore
be no assurance that the Group will be able to
secure customers for its products and services on
acceptable terms and conditions, or successfully
adjust the Group’s strategy to meet the changing
market dynamics.
The Group is in and continues to enter new
international markets and not all of these markets
may be at the same stage of development. The
Group may face competition from other local
businesses in those territories offering similar
products and services and there can therefore be
no assurance that the Group will be able to secure
customers for its services on acceptable terms
and conditions, or successfully adjust the Group’s
strategy to meet the different dynamics, languages
and cultures of these new markets.
Mitigation
These risks are mitigated by continued investment
in the product, based on customer needs and
requirements, to stay ahead of the competition
and by the strength and experience of the Group’s
management team, including through retention of
key management in international acquisitions.
The Group’s business is dependent upon technology
which could be superseded by superior technology,
more competitively priced technology or a shift in
retail practices which could affect both the potential
profitability and the saleability of the Group’s
product offering. Staying abreast of technological
changes may require substantial investment. The
Group’s existing software products need to develop
continually in order to meet customer requirements.
The Group may encounter delays and incur
additional development and production costs and
expenses, over and above those expected by the
Directors, in order to develop suitable technologies
and products. The technology used in the Group’s
products continues to evolve, for instance with the
further development of AI capabilities, and is highly
complex and may change rapidly. Research and
development by other companies may render any
of the Group’s products in development, or currently
available, obsolete.
Mitigation
This risk is primarily mitigated by the quality of the
technical staff recruited, investment in defining
and refining the product roadmap and the use
of the agile development methodology. Our
business model allows for investment for growth;
an important pillar of that investment is into the
product.
The Group’s success and ability to compete
effectively are in large part dependent upon
exploitation of proprietary technologies and
products that the Group has developed internally
(including through the acquisition of Untie Nots), the
Group’s ability to protect and enforce its intellectual
property rights so as to preserve its exclusive rights
in respect of those technologies and products, and
its ability to preserve the confidentiality of its know-
how. No assurance can be given that the Group will
develop further technologies or products which are
patentable, that patents will be sufficiently broad
in their scope to provide protection for the Group’s
intellectual property rights against third parties,
or that patents will have been granted in all new
territories which the Group enters.
Patents pending or future patent applications may
not be granted and the lack of any such patents may
have a material adverse effect on the Group’s ability
to develop and market its proposed products. Where
patents have been granted the Group may not have
the resources to protect any such issued patent
from infringement. There is a significant delay
between the time of filing of a patent application
and the time its contents are made public, and
others may have filed patent applications for subject
matter covered by the Group’s pending patent
applications without the Group being aware of those
applications. The Group’s patent applications may
not have priority over patent applications of others
and its pending patent applications may not result
in issued patents. Even if the Group obtains patents,
they may not be valid or enforceable against others.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
34
Contents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Protection of intellectual property continued
Product risk
Infrastructure risk
Description
Description
Description
Moreover, even if the Group receives patent
protection for some or all of its products, those
patents may not give the Group an advantage over
competitors with similar products. Furthermore, the
Group cannot patent much of the technology that is
important to its business. If the Group fails to obtain
adequate access to, or protection for, the intellectual
property required to pursue its strategy, the Group’s
competitors may be able to take advantage of the
Group’s research and development efforts.
Once granted, a patent can be challenged both in
the patent office and in the courts by third parties.
Third parties can bring material and arguments
which the patent office granting the patent may not
have seen. Therefore, issued patents may be found
by a court of law or by the patent office to be invalid
or unenforceable or in need of further restriction.
Mitigation
These risks are mitigated by enforcement of the
Group’s pending and granted patents under
applicable patent laws and non-disclosure
agreements to protect its intellectual property rights.
The Group’s business involves providing customers
with highly reliable software and services. If the
software or services contain undetected defects
when first introduced or enhanced, the Group
may fail to meet its customers’ performance
requirements or otherwise satisfy the contract
specifications. As a result, it may lose customers
and/or may become liable to them for damages.
Additionally, the Group is committed to developing
products for its customers on a set timeline.
However, the pace of progress of the development
projects may not be as expected and the Group
could fail to meet its customers’ timing or
performance requirements which may lead to it
becoming liable to those customers for damages
and suffering damage to its reputation.
Mitigation
These risks are mitigated by the Group managing
its product delivery using an agile methodology,
having liability insurance in place and endeavouring
to negotiate limitations on its liability in its
customer contracts.
The Group has service level commitment obligations
with some of its customers in which it provides
various guarantees regarding levels of service.
The Group may not be able to meet these levels
of service due to a variety of factors, both inside
and outside the Group’s control. If the Group fails
to provide the levels of service required by the
agreements, such customers may be entitled to
terminate their contracts or may choose not to enter
into new work orders with the Group and this may
also damage the Group’s reputation and reduce the
confidence of the Group’s customers in its software
and services, impairing its ability to retain existing
customers and attract new customers.
Mitigation
To mitigate against this risk, the Group has service
level agreements in place with key suppliers and has
multiple suppliers and operates its services in the
cloud to ensure continuity of service to its customers.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
35
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Reliance on key suppliers
Online security breaches,
data loss and fraud
Dependence on key customers and sectors
Description
Description
Description
The Group is dependent on a small number of key
suppliers for the hosting of its IT infrastructure and
delivery of messaging services. A disruptive event
affecting any one of these suppliers could mean that
the Group is unable to meet its customers’ timing or
performance requirements. As a result of these risks,
the Group may lose customers, may become liable
to those customers for damages and may suffer
damage to its reputation.
Mitigation
To mitigate against this risk, the Group has service
level agreements in place with these key suppliers
and has multiple suppliers/sites, including live
disaster recovery sites, to ensure continuity of service
to its customers.
The Group is dependent on a number of key
contracts and partner relationships for its current
and future growth and development. A limited
number of clients account for a large percentage
of the Group’s revenue, although this reliance is
being diluted as new enterprise clients are won,
aided by the continuing low rate of client churn
and high levels of annual recurring revenue. Whilst
the Group endeavours to enter and renew long
term agreements with its clients, there can be no
assurance that clients will continue to be secured on
acceptable terms and conditions.
The Group is also focused on the Grocery, Food and
Beverage and Retail sectors. Although a downturn
in each of these sectors can result in increased
demand for the Group’s services, as discounts and
offers are used to encourage footfall, a long term
downturn could have a negative impact on the
Group’s growth prospects and revenues.
Mitigation
This risk is mitigated by the Group’s focus on
revenue growth diluting the dependency on key
clients, aided by the Group’s geographical spread,
continued refinement of its products for entry into
new sectors and use of new technologies.
Security breach and fraud remain key concerns in
the online world and any security breach or fraud
event might deter consumers from purchasing
goods via online voucher and offer content or using
a Digital Wallet. Any move away from using the
mobile channel whilst purchasing goods could have
a negative impact on the Group’s growth prospects
and revenues.
Security breach and fraud may also lead to
regulatory investigations, sanctions (including
fines) and litigation with clients and consumers.
Any regulatory investigation or litigation may be
costly and may divert efforts and attention of the
Group’s key management and other personnel and
resources, may cause wider reputational damage
to the Group and may result in existing clients
terminating contracts and deter potential new
clients from becoming actual clients.
Any compromise of the Group’s systems, security
breaches or data loss may result in the temporary
inability of the Group to operate its services and
clients’ mobile sites and applications and therefore
may have a detrimental impact on the Group’s
revenues, both directly through the inability of
the Group’s clients to trade or of the Group to
authenticate offers, and indirectly through loss of
confidence in the security of the Group’s platform.
Mitigation
In line with its ISO 27001 accredited and SOC 1
compliant procedures, the Group uses third party
security and data compliance services to monitor
and mitigate against this risk, in addition to client
specific security testing, and has robust business
continuity procedures in place.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
36
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Employee recruitment and retention
Changes in applicable laws and regulations
Exchange rate risk
Description
Description
Description
Laws and regulations governing internet and
cloud-based services, related communication
services and information technology, e-commerce,
the processing of personal data, the processing of
payment card data and mobile commerce in the
United Kingdom and other territories continue
to evolve and, depending on the evolution
of such regulations, may adversely affect the
Group’s business.
Mitigation
This risk is mitigated for the Group by the
Compliance Manager who is responsible for
ensuring that all applicable laws and regulations
related to the digital services provided by the Group
are understood and addressed.
As the Group’s international operations continue
to grow, exchange rate fluctuations could have a
material effect on the Group’s profitability or the
price competitiveness of its services.
Mitigation
The Group continues to review its exposure to such
fluctuations and assesses the appropriateness of its
strategies to mitigate this risk on a continual basis.
During the year the Group has started to hedge
future foreign currency cash flows to reduce the
exposure to adverse movements. However, there can
be no assurance that the Group would be able to
compensate or hedge against such adverse effects
and therefore negative exchange rate movements
could have a material adverse effect on the Group’s
business, prospects and financial performance.
The ability to continue to attract and retain
employees with the appropriate expertise and
skills cannot be guaranteed. Finding and hiring top
talent can be costly and might require the Group to
grant significant equity awards or other incentives,
which could adversely impact its financial results.
The Group’s future development and prospects
depend to a significant degree on the experience,
performance and continued service of its senior
management team. Effective product development
and innovation, upon which the Group’s success is
dependent, is in turn dependent upon attracting
and retaining talented technical and marketing
employees, who represent a significant asset and
serve as the source of the Group’s technological
and product innovations. In addition, to continue to
expand the Group’s customer base, increase sales
and achieve growth generally, the Group will need
to hire additional qualified sales personnel as well as
in administrative and operational support functions.
If the Group is unable to hire, train and retain such
talent in a timely manner an undue burden could
be placed on existing employees, the development
and introduction of the Group’s products could
be delayed and its ability to sell its products and
otherwise to grow its business could be impaired,
which may have a detrimental effect upon the
overall performance of the Group.
Mitigation
To mitigate against these risks, the Group
benchmarks salaries and has developed a
remuneration policy which rewards loyalty, including
through the use of a Growth Plan, and has the
culture and people of the business at its heart.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
37
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
Integration of acquisitions
Employee involvement
Description
Description
During the year, the Group acquired Untie Nots, a
rapidly growing SaaS company enabling retailers
to deliver AI-powered, personalised challenges to
customers at scale. Although a positive start has been
made to the integration of the Untie Nots business
into the wider Group, focus on the integration
may divert efforts and attention of the Group’s key
management and other personnel and resources.
Mitigation
This risk is mitigated by the due diligence performed
in advance of the acquisition and the retention of the
key management of Untie Nots within the Group.
The Group recognises and seeks to encourage
the involvement of its employees, with the aim
being the recruitment, motivation and retention
of quality employees throughout the Group. The
Group encourages employee performance through
employee remuneration packages, including
by granting share options, and by promoting its
core values to employees. The Group ensures that
employees are fully aware of financial and economic
factors affecting its performance.
By order of the board
James Esson
Company Secretary
5 New Street Square
London
EC4A 3TW
18 September 2023
The Group’s employment policies, including the
commitment to equal opportunity, are designed to
attract, retain and motivate employees regardless of
sex, race, religion or disability. Equality of treatment
includes full and fair assessment of applications
and extends to training and continuing career
development.
The Group is committed to ensuring and
communicating the requirements for a safe and
healthy working environment for all employees,
consistent with health and safety legislation and,
where practicable, gives full consideration to
applications for employment from disabled persons.
The Group’s Section 172 report can be
found on pages 46 to 47
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
38
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Governance
Board of Directors
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
BOARD OF DIRECTORS
Malcolm Wall
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Non Executive Chairman –
Chief Executive Officer
Founder and Chief Information Officer
Chief Financial Officer
Malcolm joined the Group as a Non-executive
Director in 2014, taking the role of Chairman
in September 2016. He was previously CEO,
and then advisor to the board, of Abu Dhabi
Media Company. He is also the former Chief
Executive, Content for Virgin Media where he
ran Virgin’s television proposition, the Virgin
Media portal and their television channel
groups. Malcolm joined Virgin from United
Business Media, where he was Chief Operating
Officer. He has also worked in senior executive
roles for a number of ITV companies, including
Granada, Anglia and Southern. Malcolm
is currently Chairman of Dock10 Limited,
River Media Partners Ltd and the Harlequin
Foundation. He also sits on the Welsh Rugby
Union and United Rugby Championship
Boards.
Tim joined as Chairman in January 2016, later
moving to CEO in September 2016. Tim has
over 30 years’ experience within the grocery
and retail industries, with a strong background
in strategic marketing and customer loyalty.
Previously Tim was a managing director at
Sun Capital Partners and is currently a Non-
Executive Director at Gousto. Prior to that he
was Deputy CEO at Tesco from January 2010
to December 2012. He held a number of other
roles within the Tesco Group including CMO
for Tesco and CEO of Fresh & Easy LLC. Whilst
at Tesco, Tim was instrumental in the creation
of Clubcard, Express, Personal Finance and
Tesco.com. In September 2023, the second
edition of Tim’s book, “Omnichannel Retail-
How to Build Winning Stores in a Digital
World” was published, providing an updated
guide for retail marketers navigating an
increasingly complex marketplace.
Lucy joined the Group in 2014, her prior
experience being in the technology sector. Her
core role encompasses finance, governance
and strategic growth, in addition she set up
and is an ambassador of the ‘Purple Women’
initiative. She is also currently Non-Executive
Director at Microlise Group Plc. Prior to joining
Eagle Eye, she was the CFO of the 5one Group,
helping retailers achieve a customer centric
strategy through analytics and software. She
also worked for Adapt Group Ltd, a managed
services company, and in 2006 iSOFT plc was
an integral part of the turnaround team that
successfully sold the business to IBA Health
Group at the end of 2007. Lucy began her
career at KPMG in 1999 and is a member of the
Institute of Chartered Accountants in England
and Wales.
Fuelled by a deep-seated passion for retail
technology, Steve founded the Eagle Eye
Group in 2003 to revolutionise the way retailers
connect with their customers. Committed to
the principle that people should be treated
as they wish to be treated, Steve’s aim is to
build technology which enables businesses
to craft personalised customer experiences
that are both respectful and seamless. He
is the visionary force behind the product’s
development, and is focused on leveraging
cutting-edge technology to deliver exceptional
customer interactions.
Before launching the Eagle Eye Group,
Steve founded Eagle Eye Technology
Limited, another landmark in his journey of
technological innovation. His background
also includes a formative role at Consult
Hyperion, serving as a developer and technical
consultant with a focus on both the payment
and media industries.
Educated with a B. Eng in Electrical and
Electronic Engineering from the University
of Leicester, Steve’s professional journey
began with training as a software engineer at
Ericsson, setting the stage for a career devoted
to creating meaningful and ethical technology
solutions.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
39
Contents Generation – Sub Page OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
BOARD OF DIRECTORS CONTINUED
Charlotte Stranner
Sir Terry Leahy
Robert Senior
Non Executive Director –
Non Executive Director
Non Executive Director –
Charlotte joined the Group as an Independent
Non-Executive Director in May 2023. Charlotte
is a chartered accountant and was previously
a Corporate Finance Director at finnCap and
a partner at TMT investor MXC Capital. She is
currently CFO of AIM-quoted Dianomi Plc, a
native advertising technology company and is
also an Independent Non-Executive Director
of Elixirr International Plc.
Sir Terry joined the Group as a Non-Executive
Director in 2011. He became a Senior advisor
to the CD&R funds in 2011 and serves as
Chairman of BUT International and a Director
of Motor Fuel Group. In his 32-year career at
Tesco plc, Sir Terry helped to transform the
company into the third-largest retailer in the
world, serving in a number of senior positions
including CEO from 1997 to 2011. During his
CEO tenure, Tesco quadrupled both sales and
profits, and expanded into new products, store
formats, lines of business, and geographies.
Sir Terry was chancellor of UMIST, his alma
mater, from 2002 until 2004, when he
became a co-chancellor of the newly-formed
University of Manchester. He was honoured
with a doctorate of Science from Cranfield
University in June 2007. He holds various Chair
and Executive Committee memberships
which also include Chairman of the board for
Morrisons and Mobilux.
Robert joined the Group as a Non-Executive
Director in 2018. He was previously Worldwide
CEO of Saatchi & Saatchi. Robert is a partner at
Redrice Ventures, Chairman of Boys & Girls, a
Dublin based independent advertising agency
and is Chairman of the Durham University
Campaign Board. He is on the speaker circuit
and sits on the Castore sportswear board.
Board Committee Membership
Audit Committee
Remuneration Committee
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
40
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Corporate Governance Statement
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CORPORATE GOVERNANCE STATEMENT
Principles of Corporate Governance
The Directors recognise the importance of
sound corporate governance and confirm
that the Group is complying with the QCA
Corporate Governance Code (as devised
by the QCA in consultation with a number
of significant institutional small company
investors). The QCA Code is constructed
around ten broad principles and a set of
disclosures. The QCA has stated what it
considers to be appropriate arrangements for
growing companies and asks companies to
provide an explanation about how they are
meeting the principles through the prescribed
disclosures. The Directors have explained how
each principle is applied below. The Directors
consider that the Group does not depart from
any of the principles of the QCA Code.
Establish a strategy and business model
which promote long-term value for
shareholders
The Group’s strategy is reviewed by the Board
on an annual basis at a full day strategy event.
The Group’s strategy is to drive long-term value
for shareholders, whilst addressing the risks
highlighted on pages 34 to 38, from:
• Continued development of the Group’s
product offering;
• Revenue growth from both new and
existing accounts;
• Realising opportunities in relevant new
sectors and geographies both organically
and through acquisitions; and
• Scaling the cost base efficiently with the
• Employees: The Group operates a
objective of growing EBITDA in a controlled
manner allowing for investment to drive
revenue growth and generating cash in line
with management expectations.
Seek to understand and meet shareholder
needs and expectations
In addition to shareholders being welcomed
and provided the opportunity to speak to
the Directors at the Annual General Meeting,
the Group has a series of events designed to
educate and listen to shareholders as set out
below.
• Private investor sessions held twice per year
for significant shareholders;
• Roadshows held twice per year for
institutional investors;
• Annual event held covering general
developments in the market and our
business; and
• Equity analyst and sell-side briefings held
throughout the year for broader investor
insight.
Take into account wider stakeholder and
social responsibilities and their implications
for long-term success
The Group’s key stakeholders are its
shareholders (see “Seek to understand and
meet shareholder needs and expectations”
above), employees, customers and suppliers.
Each has their own communication and
interaction strategy:
weekly video-conference 'town hall' for all
employees that provides a business update
and a forum to celebrate success and for
employees to ask questions. There are also
additional quarterly briefings to update
employees on Company performance in the
previous quarter and objectives for the next
quarter. This is supplemented by an annual
‘Company Week’ which is attended by all
employees, providing strategic direction
and Company objectives for the year ahead,
a look back at progress and performance
in the year and a recognition of those
employees who have best demonstrated
the Group’s values. As part of the Group’s
values, we encourage employees to 'get
involved'. The Group’s clubs and societies
such as netball, golf, theatre and hackathons
all provide opportunities to do good and
benefit society. The Group also has a
charity committee which is responsible
for organising events and identifying
opportunities where the Group and its
employees can assist those in need. The
Group has chosen 52 Lives as its partner
charity, supporting employee efforts in
raising funds through various events. The
Group has encouraged the formation of
Employee Resource Groups and these
include: mental health first aiders who are
responsible for encouraging employee
wellbeing and others promoting racial
diversity and equality (our 'Purple Women'
and 'Purple Pride' groups).
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
41
Contents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CORPORATE GOVERNANCE STATEMENT CONTINUED
Principles of Corporate Governance
continued
• Customers: All customer accounts have an
assigned account management team who
meet regularly with their respective clients
to understand their business needs and
how the Group can assist them in meeting
their objectives. The Group regularly issues
an NPS (Net Promoter Score) survey and
a working committee ensures that key
take outs from the survey are acted upon.
The Group holds a number of differently
themed webinars during the year which
give customers a flavour of what is on the
product roadmap and examples of real-
life uses of the Group’s products. This is
supplemented by an email newsletter sent
to all customers.
• Suppliers: The Group’s largest suppliers
are for hosting and recruitment services.
The relationships for suppliers in these
categories are owned by the Chief Operating
Officer/Chief Information Officer and Chief
People Officer respectively. It is their role to
meet the key suppliers on a timely basis to
communicate the Group’s business needs
and the supplier’s performance against
expectations. A number of the Group’s
suppliers are also invited to join and present
during customer webinars.
Embed effective risk management,
considering both opportunities and threats,
throughout the organisation
The Directors are responsible for the Group’s
system of internal controls and reviewing its
effectiveness.
Although, no system of internal control can
completely eliminate the risk of failure to
achieve business objectives or provide absolute
assurance against material misstatement
or loss, the Group’s controls are designed
to provide reasonable assurance over the
reliability of financial information and the
Group’s assets.
The key controls are as follows:
• The Executive Directors and Senior
Leadership Team have a close involvement
with the day to day operations and, with the
involvement of staff, identify business risks
and monitor controls;
• There is a comprehensive process of
financial reporting based on the annual
budget that is approved by the Board.
Monthly financial results are reported
with analysis of key variances against
expectations;
• The Corporate risk register is owned by the
executive leadership team and is reviewed
by the Board on a quarterly basis. The risk
register considers the impact, probability,
controls in place and any mitigating factors
to be considered for each risk. Where
applicable, it also sets out the risk treatment
plan;
In addition, the key risks are, where
applicable, reflected in the Group’s ISO
27001 statement of applicability which
is monitored by the Group’s Security
Management Team and Information
Security Committee; and
•
• Employees are encouraged to report any
new risks through the Group’s internal
reporting procedures.
The Group’s principal risks and uncertainties are set
out on pages 34 to 38
There is currently no internal audit function
as the Board and Audit Committee considers
that given the Group’s current stage of
development it is not necessary, but this will be
reviewed annually as the Group evolves.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
42
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CORPORATE GOVERNANCE STATEMENT CONTINUED
Principles of Corporate Governance
continued
Maintain the Board as a well-functioning,
balanced team led by the Chair and ensure
that between them, the Directors have the
necessary up-to-date experience, skills and
capabilities
The Board is responsible to shareholders
for the proper management of the Group.
A statement of Directors’ responsibilities
is set out on page 61 and the interests and
experience of the Board are set out on pages
39 to 40. The Non-Executive Directors have
a particular responsibility to ensure that the
strategies proposed by the Executive Directors
are fully considered.
The Board recognises that having a
diverse Board with a blend of genders,
skills, experiences, perspectives, ages
and other characteristics leads to a more
robust understanding of, and challenge of,
opportunities, issues and risks and as a result,
more informed decision making.
The Board comprises of the Non-Executive
Chairman, who was independent at the time
of appointment, three Executive Directors and
three other Non-Executive Directors. Of the
Non-Executive Directors, the Board considered
three to be independent Directors (Robert
Senior, Malcolm Wall and Charlotte Stranner).
The Non-Executive Directors have retail, media,
advertising and technology business expertise.
The executive leadership team includes three members of the Board, the Chief Executive Officer
(who has a retail background), the Chief Information Officer (who has a technology background)
and the Chief Financial Officer (who has a finance in technology businesses background). The
skills and capabilities of the Board are kept up to date through annual training sessions.
The Board holds regular meetings and is responsible for formulating, reviewing and approving
the Group’s strategy, budgets and corporate actions and overseeing the Group’s progress towards
its goals. Each year, the Non-Executive Directors are required to attend 9–12 Board and Board
committee meetings as well as a whole day offsite strategy session, which helps to shape the
Group’s strategy for the coming year and beyond.
Board Committees
The Board has two Committees with clearly defined terms of reference which are set by the
Board. The role, work and members of the Committees are outlined on page 45.
Meetings of the Board and its Committees held during the year and the attendance of the
Directors are summarised below:
Board meetings
Audit Committee
Remuneration Committee
Possible
Attended
Possible
Attended
Possible
Attended
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Bill Currie
Sir Terry Leahy
Robert Senior
Malcolm Wall
Charlotte Stranner
12
12
12
8
12
12
12
2
12
11
12
8
8
10
12
2
–
–
–
2
–
–
2
–
–
–
–
2
–
–
1
–
–
–
–
–
–
4
4
–
–
–
–
–
–
4
4
–
43
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CORPORATE GOVERNANCE STATEMENT CONTINUED
Principles of Corporate Governance
continued
The Board has a schedule of regular business,
financial and operational matters and each
Board Committee has compiled a schedule
of work to ensure that all areas for which
the Board has responsibility are addressed
and reviewed during the course of the year.
Board and committee papers are circulated
to Directors prior to meetings. The Company
Secretary provides minutes of each meeting
and every Director is aware of the right to
have any concerns minuted and to seek
independent advice at the Group’s expense
where appropriate.
Evaluate Board performance based on clear
and relevant objectives, seeking continuous
improvement
The Board carries out an annual 360º Board
assessment that assesses the objectives,
strategy and remit of the Board, performance
management, risk management and the
experience, skills and capabilities of the
Directors to manage the business. This
assessment is owned by the Chairman who
uses the feedback to improve reporting
processes and oversight. The executive
leadership team has objectives that are fed
from the Group’s annual strategy session.
Appraisals are held quarterly and are discussed
at the Remuneration Committee.
Promote a corporate culture that is based
on ethical values and behaviours
The Group has six core values that employees
are recruited by (as well as skill) and are
remunerated by (as well as achievement of
objectives). These are:
• Excellence
Innovation
•
Integrity
•
• Passion
• Kindness
• Teamwork
Excellence encapsulates what the Group calls
'the Purple Standard' and is what is looked
for on a day-to-day basis from the Group’s
employees and suppliers.
The Board believes that a culture based on
these values provides a competitive advantage
and is consistent with fulfilment of the
Group’s strategy. The culture is monitored
through the biannual employee appraisal
process and through the use of a satisfaction
and engagement survey which is performed
annually. The executive leadership team
reviews the key findings of the survey and
determines whether any action is required.
Maintain governance structures and
processes that are fit for purpose and
support good decision-making by the Board
In addition to the Board and its committees
referred to under “Maintain the Board as a well-
functioning, balanced team led by the Chair
and ensure that between them, the Directors
have the necessary up-to-date experience, skills
and capabilities” and set out in more detail
below, the Group operates a number of sub-
boards, each of which has a Chairman and an
Executive Director sponsor and are attended by
a wider cross-section of key senior managers
from across the business.
• The executive leadership team reviews the
day-to-day operations against the business
objectives set within the Group’s strategy;
• The Sales and Operations Board monitors
the sales, strategic partnerships and project
delivery required to achieve the targeted
revenue growth;
• The Product Board monitors the product
delivery against the roadmap and takes
customer and market feeds to drive the
innovation of the product that is discussed,
debated and prioritised within this forum;
and
• The People Board discusses all employee-
related matters, including reward and
benefits, talent attraction and retention
strategy, employee relations and recruitment.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
44
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CORPORATE GOVERNANCE STATEMENT CONTINUED
Principles of Corporate Governance
continued
Remuneration Committee
The Remuneration Committee is currently
chaired by Robert Senior and consists of two
Non-Executive Directors, Robert Senior and
Malcolm Wall. The Committee is expected
to meet no less than twice a year. Executive
Directors may attend meetings at the
Committee’s invitation.
The Remuneration Committee is responsible
for determining and agreeing with the Board
the broad policy for the remuneration and
employment terms of the Executive Directors,
Chairman and other senior executives and, in
consultation with the Chief Executive Officer,
for determining the remuneration packages
of such other members of the executive
management of the Group as it is designated to
consider. The Committee is also responsible for
the review of, and making recommendations
to the Board in connection with, share option
plans and performance-related pay and their
associated targets, and for the oversight of
employee benefit structures across the Group.
The remuneration of Non-Executive Directors
is a matter for the Board. No Director may
be involved in any decision as to their own
remuneration. This Remuneration Committee
report includes a summary of the remuneration
policy and the Annual Report on Remuneration.
Audit Committee
The Audit Committee is chaired by Charlotte
Stranner, who took over from Bill Currie during
the year, and consists of two Non-Executive
Directors, Charlotte Stranner and Malcolm Wall.
The Audit Committee meets formally not
less than twice every year and otherwise as
required. The external auditors are invited to
each meeting and the Chief Executive Officer
and Chief Financial Officer (together with
members of the finance team as appropriate)
attend by invitation.
• reviews the effectiveness of financial
controls and systems. The Group does not
have an internal audit function and the
Committee continues to be of the view that
the Group is not yet of a size and complexity
to warrant the establishment of such a
function; and
The Committee assists the Board in meeting
its responsibilities in respect of corporate
governance, external financial reporting and
internal controls, including, amongst other
things, reviewing the Group’s annual financial
statements, reviewing and monitoring the
extent of the non-audit services undertaken by
external auditors, advising on the appointment
of external auditors and reviewing the
effectiveness of the Group’s internal controls
and risk management systems.
In fulfilment of these objectives the
Committee:
• reviews the Group’s financial statements and
finance-related announcements, including
compliance with statutory and listing
requirements. Compliance is reviewed each
year with the Chief Financial Officer and
enhancements are made as appropriate;
• considers whether these statements and
announcements provide a fair, balanced and
understandable view of the Group’s strategy
and performance, and of the associated
risks. Further consideration of these matters
is also provided by the Board as a whole;
• considers the appropriateness of accounting
policies and significant accounting
judgements and the disclosure of these in
the financial statements;
• oversees the relationship with and
performance of the external auditors.
Communicate how the Group is governed
and is performing by maintaining a dialogue
with shareholders and other relevant
stakeholders
Communications with shareholders are set out
above under “Seek to understand and meet
shareholder needs and expectations”. Meetings
with analysts and institutional shareholders are
held following the interim and full year results
and on an ad-hoc basis. These meetings are
usually held by the CEO and the CFO. There is
an opportunity at the Annual General Meeting
for individual shareholders to raise general
business matters. Notice of the Annual General
Meeting is provided at least 21 days in advance
of the meeting being held.
Additionally, communications with other
relevant stakeholders are set out above under
“Take into account wider stakeholder and
social responsibilities and their implications for
long-term success”. The Group’s informative
website contains information to be of interest
to new and existing investors. In addition, the
Group retains the services of a financial PR
consultancy, providing an additional contact
avenue for investors.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
45
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Section 172 Statement
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
SECTION 172 STATEMENT
The Directors are aware of their duty under Section 172 of the Companies Act 2006 to act in the way which they consider, in good faith, would be
most likely to promote the success of the Company for the benefit of its members as a whole and, in doing so, to have regard (amongst other
matters) to the:
likely consequences of any decisions in the long term;
interests of the Company’s employees;
•
•
• need to foster the Company’s business relationships with suppliers, customers and others;
•
• Company’s reputation for high standards of business conduct; and
• need to act fairly as between members of the Company.
impact of the Company’s operations on the community and environment;
The ways in which these duties are addressed is set out below:
Stakeholders
How we engage
Significant events
Employees
See “Take into account wider stakeholder
and social responsibilities and their
implications for long-term success” on page
41 of the Corporate Governance Statement.
Shareholders
See “Seek to understand and meet
shareholder needs and expectations”
on page 41 of the Corporate Governance
Statement.
Following Covid-19, we moved to a ‘virtual first’ method of working, allowing
employees more flexibility in where they work from, whilst monitoring output
to ensure appropriate levels of productivity. We also hold an annual company
conference allowing our teams from around the world to gather in person.
Management have maintained high levels of communication to employees to
keep them abreast of Company updates.
Employee driven initiatives to look after the wellbeing of our staff include a variety
of Employee Resource Groups covering mental health, 'Purple Pride' and 'Purple
Women', making Eagle Eye a great place to work for women.
We were delighted to retain our ‘World Class’ recognition by Best Companies.
The Group holds face to face and video conferencing meetings to communicate
with shareholders and interim and preliminary results presentations are recorded
and published on the website.
The business continues to review and revise its objectives on a quarterly basis,
which is shared with the Board, to address the rapidly changing environment in
which the Group operates and to ensure that investment is made where it will
have the biggest return.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
46
Contents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
SECTION 172 STATEMENT CONTINUED
Stakeholders
How we engage
Significant events
Customers
Suppliers
Community
See “Take into account wider stakeholder
and social responsibilities and their
implications for long-term success” on page
41 of the Corporate Governance Statement.
See “Take into account wider stakeholder
and social responsibilities and their
implications for long-term success” on page
41 of the Corporate Governance Statement.
The Group has a Charity Committee which
is responsible for organising events and
identifying opportunities where the Group
and its employees can assist those in need.
The Group engages with its landlords and
neighbouring businesses to address local
issues and share successes.
Retailers’ move to digital has continued and our customers need a relevant digital
marketing solution. Therefore we continue to invest c15% of our revenue into the
product in order to maximise value for our customers.
Our supplier code of conduct continues to ensure our key suppliers operate with
an appropriate level of social and environmental care.
We continued to partner with 52 Lives during the Year, a charity built around
the concept of 'kindness' who find people who need help and then deliver it.
The funds raised in our partnership have continued to exceed our expectations,
allowing more people to benefit.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
47
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Remuneration Committee Report
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT
Directors’ remuneration policy
The Group’s remuneration policy is formulated
to attract and retain high-calibre executives
and motivate them to develop and implement
the Group’s business strategy in order to
optimise long-term shareholder value. It is
the intention that this policy should conform
to best practice standards and that it will
continue to apply for 2023 and subsequent
years, subject to ongoing review as appropriate.
The policy is framed around the following key
principles:
• total rewards will be set at levels that are
sufficiently competitive to enable the
recruitment and retention of high-calibre
executives;
• total incentive-based rewards will be earned
through the achievement of performance
conditions consistent with shareholder
interests;
• the design of long-term incentives will be
•
prudent and will not expose shareholders to
unreasonable financial risk;
in considering the market positioning of
reward elements, account will be taken of
the performance of the Group and of each
individual Executive Director; and
• reward practice will conform to best practice
standards as far as reasonably practicable.
When formulating the quantum and
structure of remuneration, the Remuneration
Committee takes account of a number of
different factors including market practice
and external market data of the level of
remuneration offered to Directors of similar
role and seniority in other companies whose
activities and size are similar, as well as
the experience and performance of both
the Executive Directors and the Group. In
addition, the pay and employment conditions
of employees are also considered when
determining Directors’ remuneration. The
Remuneration Committee may also seek
advice from external consultants where
appropriate. No Director was involved in
deciding the level and composition of their
own remuneration.
The Executive Directors receive an amount
of fixed pay made up of a base salary, and in
some cases a benefits package and pension
contribution.
Short term performance for senior executives
is incentivised using an annual bonus scheme
based on the achievement of profitability,
revenue and personal strategic goals. Long
term performance is incentivised by way of a
long term incentive plan (‘LTIP’) based on the
achievement of performance goals aligned
to the Company’s business strategy and
measured over a three-year period.
Employees of the Group are rewarded for
excellent performance by the award of EMI
options. Vesting of these options is based on
the achievement of certain revenue and profit
targets to be achieved three years after the
grant of the options.
During the year, a Growth Plan was introduced
following extensive shareholder consultation by
the Remuneration Committee. The Committee
considers that the introduction of the Growth
Plan will drive long term sustainable value on
our ambition to be a £1bn market capitalisation
business, whilst enabling the retention and
motivation of significant core talent and senior
leaders of the Group.
These various schemes provide the Board
with tools to help it to continue to strengthen
the alignment of employee and shareholder
interests.
As a company listed on AIM, the Company is
not required by the Companies Act 2006 to
prepare a Directors’ Remuneration Report. The
following parts of the Directors’ remuneration
report are not subject to audit.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
48
Contents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
Executive Directors’ remuneration for 2023
2023 base salaries
The Executive Directors’ base salaries were increased in the year effective from 1 January 2023 by an average 12.15%. Salary is considered as well as
the overall remuneration packages of the Executive Directors, their relative responsibilities and the performance of the Group during the previous
12 months.
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Salary 1 January
2022
£000
Salary 1 January
2023
£000
368
213
213
414
245
245
2023 Annual bonus
The Executive Directors have a maximum annual bonus opportunity of 100% of salary with performance measured on both personal objectives
linked to the strategic direction of the business (maximum opportunity 25% of annual salary) and revenue and EBITDA achievement (maximum
opportunity 75% of annual salary, split equally between revenue and EBITDA). The combined target bonus opportunity is 50% of salary. The delta
between the target (50%) and the maximum (100%) represents the stretch target.
The revenue target range was between £35.4m and £40.8m; the outturn being £40.9m and the EBITDA target range between £7.1m and £8.2m
with the outturn being £8.7m, excluding the contribution of Untie Nots. This resulted in a combined payout of 75% (out of a maximum of 75%) for
all Executive Directors. Personal objectives are set and monitored on a quarterly basis. These are based both on KPIs and objectives linked to the
strategic focus of the business in the areas of responsibility for each Director.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
49
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
Executive Directors’ remuneration for 2023 continued
The total bonus payable to the Executive Directors in respect of both the financial (revenue and EBITDA) and personal objective performance in
FY23 was determined as set out below:
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Maximum performance
Actual performance
Actual
bonus payable
100% of salary payable
99% of salary payable
£409,509
100% of salary payable
100% of salary payable
£244,672
100% of salary payable
100% of salary payable
£244,672
LTIP awards granted in FY2023
FY25 performance
On 4 April 2023 LTIP awards were granted as nominal cost options under the Eagle Eye LTIP Share Option Scheme to the Executive Directors
subject to the following performance targets to be met during the performance period of three financial years ending 30 June 2025.
FY25 Performance targets for FY23 LTIP awards
Performance measures
Threshold vesting
Target vesting
Stretch vesting
Revenue – 50% of award
Adjusted EBITDA – 50% of award
1. There is linear vesting in between each of the vesting points.
35% of salary (35% of max) 62.5% of salary (62.5% of max)
100% of salary (100% of max)
£53.0m
£11.9m
£61.1m
£13.4m
£69.2m
£15.2m
2. The Committee may scale back the level of vesting if it considers at the time of vesting that the formulaic level of vesting does not reflect the overall underlying performance of the Company or investor experience taking
into account, among other matters, share price.
3. There was no award made for superstretch performance following the issue of the Growth Plan.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
50
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
LTIP awards granted in FY2023 continued
Growth Plan
On 4 April 2023 a Growth Plan was launched which the Committee considers will drive long-term sustainable growth and build shareholder value,
whilst enabling the retention and motivation of significant core talent and senior leaders of the Group. The Growth Plan, a one-off award of B shares
in Eagle Eye Solutions Holdings Limited, an intermediate holding company of the Group, which are convertible on exercise into ordinary shares of
Eagle Eye Solutions Group plc, is designed to focus solely on creating shareholder value through a series of distinct, stretching share price hurdles,
as listed below. The awards under the Growth Plan will vest on the third anniversary of grant and unless converted into ordinary shares, expire after
ten years from grant. The key terms of the Growth Plan are summarised below:
Hurdle Eagle Eye share price
Implied market cap2
% of value created available for distribution
Hurdle 1
Hurdle 2
Hurdle 3
Maximum
855.0p
£250m
3%
1,198.0p
£350m
4%
1,711.0p
3,422.0p
£500m
£1.0bn
5%
5%
Cumulative award size as at the date of the performance condition being achieved¹
£2.5m
£7.3m
£16.7m
£41.7m
Implied shareholder value created over term of plan
Cumulative dilution1,2
£83.4m
£183.4m
£333.4m
£833.4m
1.0%
2.1%
3.2%
4.0%
1. Assuming all vested shares are awarded and subsisting.
2. Calculated using the hurdle Eagle Eye share price based on Eagle Eye’s current issued share capital.
Awards under the Growth Plan of B shares have been made to the following Directors for £0.001 per B share as follows:
Director/PDMR
Role
Number of B shares subscribed for
Maximum potential award under the
Growth Plan for reaching an implied
market cap of in excess of £1.0bn
% of existing issued ordinary share
capital of Eagle Eye on full vesting
Tim Mason
Chief Executive Officer
Steve Rothwell
Chief Information Officer
Lucy Sharman-Munday Chief Financial Officer
1,720
1,290
1,290
£7.2m
£5.4m
£5.4m
0.69%
0.52%
0.52%
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
51
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
LTIP awards granted in FY2023 continued
FY23 performance
On 4 April 2023, further LTIP awards were granted as nominal cost options under the Eagle Eye LTIP Share Option Scheme to the Executive
Directors in regard to the FY21 LTIP awards with performance period ending in FY23. At date of grant in FY21 the LTIP award had a value of 100%
of the salary at that time, linked to the achievement of the stretch target performance. At the date of grant of that LTIP as previously disclosed the
Company also set super-stretch performance targets but to manage dilution through share awards, the Company had the option to satisfy super-
stretch performance with either cash or shares. The Company has chosen to satisfy super-stretch performance via the grant of further LTIP options
based on performance targets set out below:
FY23 Performance targets for FY23 LTIP awards
Performance measures
Revenue – 50% of award
Adjusted EBITDA – 50% of award
1. There is linear vesting in between each of the vesting points.
Threshold
vesting
Super-stretch vesting
0% of salary (0% of max) 50% of salary (100% of max)
£33.3m
£6.7m
£35.3m
£7.1m
2. The Committee may scale back the level of vesting if it considers at the time of vesting that the formulaic level of vesting does not reflect the overall underlying performance of the Company or investor experience taking
into account, among other matters, share price.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
52
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
LTIP awards with performance period ending in FY23
The LTIP awards granted in 2021 as nominal cost options, along with the super-stretch LTIP awards granted in 2023 with performance period
ending in FY23 will vest as set out in the table below, to the extent the targets set were met during the performance period of three financial years
ending 30 June 2023.
Performance targets
Revenue (50% of award)
Adjusted EBITDA (50% of award)
£5.8m
£6.3m
£6.7m
£7.1m
£8.7m
Threshold
performance
Target
performance
Stretch
performance
Superstretch
performance
Actual
performance
% of award
vesting
£29.6m
£31.4m
£33.3m
£35.3m
£40.9m
50%
50%
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Date of grant
Maximum
number of shares
Number of shares
vesting
Total value of LTIP
award vesting1
8 April 2021
142,662
142,662
£780,540
8 April 2021
8 April 2021
4 April 2023
4 April 2023
4 April 2023
82,412
82,412
71,331
41,206
41,206
82,412
£450,897
82,412
£450,897
71,331
£390,270
41,206
£225,448
41,206
£225,448
1. Value of award uses three-month average share price to 30 June 2023 of £5.481 and nominal cost exercise price of £0.01 per share as the share price on the actual date of vesting is not known.
The Committee has reviewed and is comfortable with the underlying performance of the Company and considers that no scale back of vesting
levels is necessary.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
53
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
Outstanding LTIP awards
FY
Date of grant
Type of award
Number
of shares
granted
Exercise
price
£
Vested
during the
year
Exercised
during the
year
Lapsed
during
the year
Vested
unexercised
Total 30 June
2023
Performance
period ends
Tim Mason
2016
4 January 2016
LTIP 443,165
2017 21 September 2016
LTIP appointment award 221,388
2018
9 November 2017
LTIP appointment award 221,679
2018
9 November 2017
LTIP
83,871
2019
2019
8 January 2019
LTIP appointment award 221,679
8 January 2019
LTIP 472,500
0.01
0.01
0.01
0.01
0.01
0.01
–
–
–
–
–
–
– 334,470 334,470
–
–
–
–
153,606
153,606
153,808
153,808
62,408
62,408
221,679
221,679
– 240,345
240,345
LTIP 188,775
0.01
188,775
188,775
188,775
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2020
13 February 2020
2021
2022
2023
8 April 2021
8 February 2022
4 April 2023
Steve Rothwell 2017 21 September 2016
2018
9 November 2017
2019
8 January 2019
2020
13 February 2020
2021
2022
2023
8 April 2021
8 February 2022
4 April 2023
–
–
–
188,775
LTIP 142,662
LTIP 64,547
LTIP 138,174
LTIP 96,242
LTIP
47,527
LTIP 267,750
0.01
0.01
0.01
0.01
0.01
0.01
–
–
–
61,497
35,365
119,971
LTIP 109,050
0.01
109,050
38,167
LTIP
82,412
LTIP
37,287
LTIP
79,819
0.01
0.01
0.01
–
–
–
–
–
–
109,050 255,000
–
–
–
–
–
–
–
142,662 30 June 2023
64,547 30 June 2024
138,174 30 June 2025
– 1,355,091
1,700,474
–
–
–
–
–
–
–
–
–
–
–
–
16,225
16,225
70,883
70,883
N/A
N/A
N/A
N/A
–
–
–
82,412 30 June 2023
37,287 30 June 2024
79,819 30 June 2025
87,108
286,626
–
–
–
–
–
–
–
–
–
–
–
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
54
Contents Generation – PageContents Generation – Sub PageContents Generation - Section
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
Outstanding LTIP awards continued
FY
Date of grant
Type of award
Number
of shares
granted
Exercise
price
£
Vested
during the
year
Exercised
during the
year
Lapsed
during
the year
Vested
unexercised
Total 30 June
2023
Performance
period ends
Lucy Sharman-
Munday
2015
17 July 2014
2015
3 November 2014
2016
12 January 2016
2017 21 September 2016
2018
9 November 2017
2019
8 January 2019
2020
13 February 2020
2021
2022
2023
8 April 2021
8 February 2022
4 April 2023
EMI
62,500
EMI
62,500
LTIP 39,383
LTIP
91,582
LTIP
47,527
LTIP 267,750
1.55
1.55
0.01
0.01
0.01
0.01
–
–
–
–
–
–
LTIP 109,050
0.01
109,050
LTIP
82,412
LTIP
37,287
LTIP
79,819
0.01
0.01
0.01
–
–
–
7,500
62,500
–
–
–
–
–
–
–
–
109,050 70,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
39,383
39,383
58,520
58,520
35,365
35,365
136,196
136,196
109,050
109,050
N/A
N/A
N/A
N/A
N/A
N/A
N/A
–
–
–
82,412 30 June 2023
37,287 30 June 2024
79,819 30 June 2025
378,514
578,032
Performance targets for LTIP awards granted in FY22 with performance period ending in FY24
Performance measures
Threshold vesting
Target vesting
Stretch vesting
Super Stretch vesting
35% of salary (23.3% of max) 62.5% of salary (41.6% of max)
100% of salary (66.6% of max)
150% of salary
Revenue – 50% of award
Adjusted EBITDA – 50% of award
1. There is linear vesting in between each of the vesting points.
£34.5m
£6.9m
£37.8m
£7.6m
£41.1m
£8.2m
£44.4m
£8.9m
2. The Committee may scale back the level of vesting if it considers at the time of vesting that the formulaic level of vesting does not reflect the overall underlying performance of the Company or investor experience taking
into account, among other matters, share price.
3. The LTIP award has a value at the date of grant of 100% of salary. To manage dilution through share awards, achievement of the Super Stretch target is likely to be satisfied with cash with no link to share price movement
from the date of grant.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
55
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
Company Chairman and Non-Executive Directors
The Non-Executive Directors’ fees were reviewed with effect from 1 January 2023 with no changes being made. The fee for the Company Chairman was
held at £60,000, the Non-Executive Directors’ base fee at £30,000 with additional fees for chairing the Remuneration Committee and Audit Committee
at £5,000.
Total Directors’ Remuneration
The table below sets out the total remuneration payable to the Directors:
30 June 2023
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Malcolm Wall
Robert Senior
Terry Leahy
Bill Currie
Charlotte Stranner
Salary
and fees
£000
409
229
229
60
35
30
25
6
Annual
bonus1
£000
444
261
267
–
–
–
–
–
1,023
972
Other
benefits2
£000
Pension
£000
5
3
5
–
–
–
–
–
13
–
10
10
–
–
–
–
–
20
Long-term
incentives
£000
–
1,403
377
–
–
–
–
–
Total
£000
858
1,906
888
60
35
30
25
6
1,780
3,808
1 The annual bonus shown in the table above for FY23 is in respect of performance for FY23 (and is paid in FY24).
2 Benefits represent allowances payable, including car allowance.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
56
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
Total Directors’ Remuneration continued
30 June 2022
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Malcolm Wall
Robert Senior
Terry Leahy
Bill Currie
Salary
and fees
£000
356
206
207
60
35
30
35
929
Annual
bonus1
£000
368
212
213
–
–
–
–
793
Other
benefits2
£000
Pension
£000
Long term
incentive gains
£000
16
–
19
–
–
–
–
35
–
9
6
–
–
–
–
15
–
1,130
–
–
–
–
–
Total
£000
740
1,557
445
60
35
30
35
1,130
2,902
1 The annual bonus shown for FY22 is in respect of performance for FY22 and was paid in FY23.
2 Benefits represent allowances payable, including car allowance.
Application of remuneration policy for FY24
Base salaries
The Executive Directors base salaries will be reviewed by the Remuneration Committee during the course of the year with any increases effective
from 1 January 2024.
Annual bonus
The Executive Directors annual bonus opportunity will follow the same format as FY23 with a maximum annual bonus opportunity of 100% of
salary with performance measured both on personal objectives linked to the strategic direction of the business (maximum opportunity 25% of
annual salary) and revenue and EBITDA achievement (maximum opportunity 75% of annual salary, split equally between revenue and EBITDA). The
combined target bonus opportunity is 50% of salary. The delta between the target (50%) and the maximum (100%) represents the stretch target.
LTIP awards
The Committee intends to grant LTIP awards to the Executive Directors over shares with a value equivalent to up to 150% of salary, subject to
achievement of stretching Revenue and EBITDA targets measured over three financial years to 30 June 2026. The targets will be determined prior
to awards being granted and will be disclosed in the FY24 Remuneration Report.
Company Chairman and Non-Executive Directors
The fees for the Company Chairman and Non-Executive Directors will be reviewed during the course of the year with any increases effective from
1 January 2024.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
57
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
REMUNERATION COMMITTEE REPORT CONTINUED
Shares held by Directors
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Malcolm Wall
Robert Senior
Bill Currie
Terry Leahy
Charlotte Stranner
Beneficially
owned shares
30 June
2022
Beneficially
owned shares
30 June
2023
Unvested subject
to performance
targets
30 June
2022
Unvested subject
to performance
targets
30 June
2023
Vested
unexercised
30 June
2022
Vested
unexercised
30 June
2023
318,534
328,534
395,984
415,383
1,166,316
1,355,091
1,355,913
1,355,913
39,982
37,529
27,190
3,413,322
92,572
41,132
31,694
–
2,420,970
2,457,006
–
–
228,749
228,749
199,518
199,518
233,058
339,464
87,108
378,514
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
58
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Directors’ Report
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
DIRECTORS’ REPORT
The Directors present their Annual Report and
the audited consolidated financial statements
for the year ended 30 June 2023.
Directors
Tim Mason
Principal activities, business review and
future developments
The principal activity of the Group is enabling
businesses to create digital connections
enabling personalised real-time marketing,
through the provision of its marketing
technology software as a service solution. The
review of the business performance and future
developments, including those since the end of
the year ended 30 June 2023, are set out in the
Strategic Report on pages 9 to 38.
Corporate status
Eagle Eye Solutions Group plc ('the Company’)
is a public limited company domiciled in
the United Kingdom and was incorporated
in England & Wales with company number
8892109 on 12 February 2014. The Company
has its registered office at 5 New Street
Square, London EC4A 3TW. The principal
places of business of the Group are its offices
in Guildford, Manchester and London and it
also operates in Canada, France, Australia, New
Zealand and the USA.
Steve Rothwell
Lucy Sharman-Munday
Bill Currie (resigned 14 March 2023)
Sir Terry Leahy
Robert Senior
Charlotte Stranner (appointed 15 May 2023)
Malcolm Wall
Substantial shareholdings
At 18 September 2023, the Directors have been
notified of the following beneficial interests
in excess of 3% of the issued share capital of
the Company (excluding those shares held in
treasury).
Canaccord
Total shares
5,197,556
Sir Terry Leahy *
2,457,006
Liontrust
2,093,015
Andrew Sutcliffe *
1,593,133
The Company has agreed to indemnify its
Directors against third party claims which may
be brought against them and has put in place
a Directors’ and officers’ insurance policy.
Bill Currie *
Julian Reiter
Steve Rothwell
The market price of the Company’s shares at
the end of the financial year was £5.15 and the
range of the market price during the year was
between £5.01 and £6.05.
Christopher Gorell
Barnes
1,434,560
1,360,029
1,355,913
1,344,866
%
17.76
8.40
7.15
5.45
4.90
4.65
4.63
4.60
*
Includes shares held by family members.
Research and development
Details of the Group’s policy for the recognition
of expenditure on research and development of
its Eagle Eye AIR platform and other products
are set out in Note 1 of the consolidated
financial statements. The activities involved in
the research and development are described in
the Strategic Review on page 19.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
59
Contents Generation – Sub PageContents Generation - Section
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
DIRECTORS’ REPORT CONTINUED
Risk management objectives and
policies
Details of the Group’s financial risk
management objectives and policies are set
out in Note 16 of the consolidated financial
statements. The key non-financial risks that the
Group faces are set out on pages 34 to 38 of the
Strategic Report.
Related party transactions
Details of the Group’s transactions and year
end balances with related parties are set
out in Note 20 of the consolidated financial
statements.
Dividends
The Directors do not recommend the payment
of a dividend (2022: £nil).
Strategic report
The Company has chosen in accordance with
Companies Act 2006, section 414C (11) to set out
in the Company’s Strategic Report on pages 9
to 38 information required to be contained in
the Directors’ Report by Large and Medium-
sized Companies and Groups (Accounts and
Reports) Regulations 2008, Sch. 7, where not
already disclosed in the Directors’ Report.
Events after the reporting period
There are no events after the end of the
reporting period which need to be reported.
Statement as to disclosure of
information to the auditor
The Directors who were in office on the date
of approval of these financial statements have
confirmed that, as far as they are aware, there
is no relevant audit information of which the
auditor is unaware. Each of the Directors have
confirmed that they have taken all the steps
that they ought to have taken as Directors
in order to make themselves aware of any
relevant audit information and to establish that
it has been communicated to the auditor.
Auditor
RSM UK Audit LLP were appointed for the year
ended 30 June 2023 and have indicated their
willingness to continue in office.
By order of the board
James Esson
Company Secretary
5 New Street Square
London
EC4A 3TW
18 September 2023
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
60
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Statement of Directors’ Responsibilities
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
Group’s website.
Legislation in the United Kingdom governing
the preparation and dissemination of financial
statements may differ from legislation in other
jurisdictions.
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 have elected
under company law and AIM Rules of the
London Stock Exchange to prepare Group
financial statements in accordance with UK-
adopted International Accounting Standards
and have elected under company law to
prepare the Company financial statements
in accordance with United Kingdom
Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and
applicable law).
The Group financial statements are required by
law and UK-adopted International Accounting
Standards to present fairly the financial
position and performance of the Group. The
Companies Act 2006 provides in relation to
such financial statements that references
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
and the Company for that period.
In preparing each of the Group and Company
financial statements, the Directors are required
to:
a. select suitable accounting policies and then
apply them consistently;
b. make judgements and accounting
estimates that are reasonable and prudent;
c. for the Group financial statements, state
whether they have been prepared in
accordance with UK-adopted International
Accounting Standards and for the Company
financial statements state whether
applicable UK accounting standards; and
d. prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
and the Company 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.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
61
Contents Generation – Sub PageContents Generation - Section Financial Statements
Independent Auditor’s Report
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EAGLE EYE SOLUTIONS GROUP PLC
Opinion
We have audited the financial statements of Eagle Eye Solutions Group
Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year
ended 30 June 2023 which comprise consolidated statement of profit
or loss and total comprehensive income, consolidated and company
statements of financial position, consolidated and company statements
of changes in equity, 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 Financial Reporting Standard 102 “The Financial
Reporting Standard applicable in the UK and Republic of Ireland”
(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 June 2023 and of
the group’s profit for the year then ended;
• the group financial statements have been properly prepared in
Scope
accordance with UK-adopted International Accounting Standards;
Materiality
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.
Summary of our audit approach
Key audit matters
Group
• Revenue recognition
• Acquisition accounting
No key audit matters are identified in respect
of the parent company
Group
• Overall materiality: £451k (2022: £362k)
• Performance materiality: £338k (2022:
£271k)
Parent Company
• Overall materiality: £45k (2022: £52k)
• Performance materiality: £33.7k (2022: £39k)
Our audit procedures covered 93% of revenue,
96% of total assets
• 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 and the parent company 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
Key audit matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the group 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 group financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these
matters. We determined that there are no parent company key audit
matters to communicate in our report.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
62
Contents Generation – Sub Page OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EAGLE EYE SOLUTIONS GROUP PLC CONTINUED
Key audit matters continued
Revenue recognition
Key audit
matter
description
(Refer to page 75 regarding the accounting policy in respect of revenue recognition, page 81 in respect of critical judgements and
estimates applied by the Directors and note 3 to the financial statements on page 82).
Appropriate and accurate revenue recognition in accordance with the requirements of IFRS 15 “Revenue from Contracts with
Customers” is required to be applied by the Directors to ensure that revenue is fairly stated in the financial statements. There are
risks that customer contracts and the inherent performance obligations and their transaction prices are not appropriately identified
and/or that revenue recognised in the period does not reflect the stage of service delivery. These risks could result in material errors
in the revenue recognised.
The audit team itself also spent considerable time and effort to obtain sufficient evidence over this area. As such revenue
recognition considered a key audit matter.
How the
matter was
addressed in
the audit
We have performed detailed testing on revenue taking into consideration the required revenue recognition for different contract
performance obligations. A sample of sales recognised in the period were compared to the underlying contracts and sales invoices.
The revenue recognised was then evaluated with regard to the terms in the contracts, the completed performance obligations
and the invoiced amounts to determine if/whether it had been recognised in line with the Group’s accounting policies and the
requirements of IFRS 15.
The recognition and measurement of accrued and deferred income applying the principles of IFRS 15 and the group’s accounting
policies was considered and tested as was the treatment of sales commissions and set-up costs to determine whether they had
been treated appropriately.
Significant modifications to existing contracts were separately reviewed to determine if revenue recognition was in accordance with
IFRS 15 as per the Group’s stated accounting policies.
Data analytics testing was utilised to identify any transactions that did not fall into the expected sales cycle. This covered 100% of
transactions affecting the relevant sales cycle.
We tested the completeness of revenue by carrying out a reperformance of the monthly reconciliations that occur between the
sales reporting system (Salesforce) and the secured revenue spreadsheet, and also traced through a sample of opportunities from
Salesforce back to the revenue listing.
Key
observations
The distinction as to the nature of development services and resulting conclusion as to whether a separate performance obligation
exists in relation to these services is noted as a key judgement as disclosed on page 81.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
63
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EAGLE EYE SOLUTIONS GROUP PLC CONTINUED
Key audit matters continued
Business combinations
Key audit
matter
description
(Refer to page 76 regarding the accounting policy in respect of recognition of goodwill arising on business combinations and page
77 regarding recognition of acquired intangible assets.)
There has been one acquisition within the period being audited. The fair values assigned to the net assets at the acquisition date,
particularly the fair values assigned to separately identifiable intangibles, requires a significant degree of management estimation
and judgement.
Furthermore, the acquisitions have elements of deferred consideration and contingent consideration. The recognition of which
requires significant estimations and assumptions from management.
How the
matter was
addressed in
the audit
The fair value assigned to net assets as at the acquisition date and the assumptions used within the valuation of these assets have
been scrutinised to determine whether they are reasonable.
Assumptions in relation to deferred consideration and contingent consideration recognised have been assessed to determine
whether they have been reflected in the workings at an appropriate value within the recognition of each acquisition. In respect of
the contingent consideration, sensitivities were applied to the key assumptions in the model. No sensitivities applied resulted in a
material movement in the contingent consideration valuation. As part of the assessment, we engaged our internal valuations expert
to evaluate the reasonableness of the model adopted.
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of our audit
procedures. When evaluating whether the effects of misstatements, both individually and on the financial statements as a whole, could reasonably
influence the economic decisions of the users we take into account the qualitative nature and the size of the misstatements. Based on our
professional judgement, we determined materiality as follows:
Overall materiality
£451k (2022: £362k)
Group
Parent company
£45k (2022: £52k)
Basis for determining overall materiality 6% of EBITDA
1% of total assets (Restricted to £45k)
Rationale for benchmark applied
EBITDA is considered to be the key indication
of the performance of the business by its major
stakeholders
Total assets in the non-trading parent company is
considered to be the key indication of the value of
trading subsidiary companies
Performance materiality
£338k (2022: £271k)
75% of overall materiality
£33.7k (2022: £39k)
75% of overall materiality
Basis for determining performance
materiality
Reporting of misstatements to the
Audit Committee
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
64
Misstatements in excess of £22,500 and
misstatements below that threshold that, in our
view, warranted reporting on qualitative grounds.
Misstatements in excess of £2,250 and
misstatements below that threshold that, in our
view, warranted reporting on qualitative grounds.
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EAGLE EYE SOLUTIONS GROUP PLC CONTINUED
An overview of the scope of our audit
Below Eagle Eye Solutions Group Plc, sit 8 components. Three are based
in the UK, two are based in North America, two in Australasia and one in
France.
The coverage achieved by our audit procedures was:
Revenue
EBITDA
Full scope
Analytic procedures
Specified audit procedures
Full scope statutory audits were performed for two components, full
scope component audits were performed on three components,
specified procedures on revenue were performed on one component
and analytical procedures at group level for the remaining 3
components.
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’s and parent company’s ability
to continue to adopt the going concern basis of accounting included
review of the reasonableness of financial forecasts prepared by the
directors covering at least 12 months from the signing of the accounts,
assessment and challenge of management assumptions utilised in
those forecasts and applying appropriate sensitivities to assess the
availability of adequate headroom within the Group’s banking facilities
to support the going concern basis.
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’s or the 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 this gives rise to 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.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
65
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EAGLE EYE SOLUTIONS GROUP PLC CONTINUED
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 the 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 in relation
to which 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 61, 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 the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these
financial statements.
The extent to which the audit was considered capable of
detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations.
The objectives of our audit are to obtain sufficient appropriate audit
evidence regarding compliance with laws and regulations that have a
direct effect on the determination of material amounts and disclosures
in the financial statements, to perform audit procedures to help identify
instances of non-compliance with other laws and regulations that may
have a material effect on the financial statements, and to respond
appropriately to identified or suspected non-compliance with laws and
regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess
the risk 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 and to respond appropriately
to fraud or suspected fraud identified during the audit.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
66
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EAGLE EYE SOLUTIONS GROUP PLC CONTINUED
The extent to which the audit was considered capable of
detecting irregularities, including fraud continued
However, it is the primary responsibility of management, with the
oversight of those charged with governance, to ensure that the entity’s
operations are conducted in accordance with the provisions of laws and
regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of
irregularities, including fraud, the group audit engagement team and
component auditors:
•
• obtained an understanding of the nature of the industry and sector,
including the legal and regulatory framework that the group and
parent company operate in and how the group and parent company
are complying with the legal and regulatory framework;
inquired of management, and those charged with governance, about
their own identification and assessment of the risks of irregularities,
including any known actual, suspected or alleged instances of fraud;
• discussed matters about non-compliance with laws and regulations
and how fraud might occur including assessment of how and where
the financial statements may be susceptible to fraud.
The most significant laws and regulations were determined as follows:
Legislation/
Regulation
Additional audit procedures performed by the Group audit engagement team
included:
IFRS/ FRS102
and Companies
Act 2006
Review of the financial statement disclosures and
testing to supporting documentation.
Completion of disclosure checklists to identify areas of
non-compliance
The areas that we identified as being susceptible to material
misstatement due to fraud were:
Risk
Audit procedures performed by the audit engagement team:
Risk
Audit procedures performed by the audit engagement team:
Management
override of
controls
Testing the appropriateness of journal entries and
other adjustments;
Assessing whether the judgements made in making
accounting estimates are indicative of a potential bias;
and
Evaluating the business rationale of any significant
transactions that are unusual or outside the normal
course of business.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
http://www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor’s report.
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 so that we might state to the
company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
ALASTAIR JOHN RICHARD NUTTALL (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Ninth Floor, Landmark
St Peter’s Square
1 Oxford Street
Manchester
M1 4PB
Revenue
recognition
Please refer to key audit matters section of the audit
report for further details on the testing performed on
this key audit matter
18 September 2023
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
67
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Consolidated Statement of Profit or Loss and
Contents Generation – Sub Page
Total Comprehensive Income
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND TOTAL COMPREHENSIVE INCOME
for the year ended 30 June 2023
Continuing operations
Revenue
Cost of sales
Gross profit
Operating expenses
Other income
Adjusted EBITDA1
Acquisition costs
Share-based payment charge
Depreciation and amortisation
Operating (loss)/profit
Finance income
Finance expense
(Loss)/profit before taxation
Taxation
Profit after taxation for the financial
year
Foreign exchange adjustments
Total comprehensive profit
attributable to the owners of the
Parent for the financial year
Notes
2023
£000
2022
£000
Notes
2023
£000
2022
£000
3
43,074
31,667
(2,091)
(2,037)
40,983
29,630
(41,725)
(28,896)
122
–
Earnings per share
from continuing operations
Basic
Diluted
8
8
4.25p
3.79p
2.12p
1.86p
1 Adjusted EBITDA excludes share-based payment charge, depreciation and amortisation from the
measure of profit. 2023 EBITDA figure has also been adjusted to exclude costs associated with the
acquisition of Untie Nots.
4
6
6
7
8,789
(1,298)
(2,426)
(5,685)
(620)
30
(170)
(760)
1,948
1,188
(410)
6,476
–
(1,851)
(3,891)
734
1
(50)
685
(131)
554
582
778
1,136
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
68
Contents Generation - Section Consolidated Statement of Financial Position
Contents Generation – Sub Page
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2023
Notes
2023
£000
2022
£000
Notes
2023
£000
2022
£000
Equity attributable to owners of the
Parent
Share capital
Share premium
Merger reserve
Share option reserve
Retained losses
Total equity
17
17
17
293
264
29,925
17,685
3,278
7,291
3,278
5,549
(16,747)
(18,209)
24,040
8,567
These financial statements were approved by the Board on
18 September 2023 and signed on its behalf by:
L Sharman-Munday
Director
T Mason
Director
Non-current assets
Intangible assets
Contract fulfilment costs
Property, plant and equipment
Deferred taxation
Current assets
Trade and other receivables
Current tax receivable
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Current tax payable
Financial liabilities
Non-current liabilities
Other payables
Financial liabilities
Total liabilities
Net assets
9
10
11
15
12
16
13
14
13
14
19,458
2,562
1,444
1,626
6,663
1,433
684
131
25,090
8,911
11,085
762
10,615
22,462
47,552
9,853
718
3,632
14,203
23,114
(17,338)
(12,185)
(74)
(1,102)
–
–
(18,514)
(12,185)
(4,801)
(2,362)
(197)
–
(4,998)
(2,362)
(23,512)
(14,547)
24,040
8,567
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
69
Contents Generation - Section
Consolidated Statement of Changes in Equity
Contents Generation – Sub Page
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2023
Balance at 1 July 2021
261
17,503
3,278
3,997 (19,644)
5,395
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Share
option
reserve
£000
Retained
losses
£000
Total
£000
Profit for the financial year
Other comprehensive income
Foreign exchange adjustments
Transactions with owners recognised in equity
Exercise of share options
Fair value of share options exercised in the year
Share-based payment charge
–
–
–
3
–
–
3
–
–
–
182
–
–
182
–
–
–
–
–
–
–
–
–
–
–
554
554
582
582
1,136
1,136
–
185
(299)
299
–
1,851
1,552
–
1,851
299
2,036
Balance at 30 June 2022
264
17,685
3,278
5,549 (18,209)
8,567
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
70
Contents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONTINUED
for the year ended 30 June 2023
Balance at 30 June 2022
264
17,685
3,278
5,549 (18,209)
8,567
Share
capital
£000
Share
premium
£000
Merger
reserve
£000
Share
option
reserve
£000
Retained
losses
£000
Total
£000
Profit for the financial year
Other comprehensive income
Foreign exchange adjustments
Transactions with owners recognised in equity
Issue of share capital
Issue costs
Exercise of share options
Fair value of share options exercised in the year
Share-based payment charge
–
–
–
–
–
–
22
12,148
–
7
–
–
(285)
377
–
–
29
12,240
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,188
1,188
(410)
778
(410)
778
–
–
–
12,170
(285)
384
–
(684)
684
2,426
1,742
–
2,426
684
14,695
Balance at 30 June 2023
293
29,925
3,278
7,291
(16,747) 24,040
Included in Retained losses is a cumulative foreign exchange profit of £103,000 (2022: profit £513,000).
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
71
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Consolidated Statement of Cash Flows
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2023
2023
£000
2022
£000
Cash flows from operating activities
Cash flows from financing activities
(Loss)/profit before taxation
(760)
685
Net proceeds from issue of equity
2023
£000
7,097
2,000
2022
£000
185
900
(1,627)
(1,800)
(217)
(31)
4
(113)
(185)
(29)
1
(21)
(949)
Proceeds from borrowings
Repayment of borrowings
Capital payments in respect of leases
Interest paid in respect of leases
Interest received
Interest paid
Net cash flows from financing activities
7,113
Net increase in cash and cash equivalents
in the year
Foreign exchange adjustments
Cash and cash equivalents at beginning
of year
7,393
(410)
1,337
582
3,632
1,713
Cash and cash equivalents at end of year
10,615
3,632
Adjustments for:
Depreciation
Amortisation
Share-based payment charge
Finance income
Finance expense
Increase in trade and other receivables
Increase in trade and other payables
Income tax paid
Income tax received
487
5,198
2,426
(30)
170
(3)
3,850
(56)
960
320
3,570
1,851
(1)
50
(3,659)
5,155
(785)
221
Net cash flows from operating activities
12,242
7,407
Cash flows from investing activities
Payments to acquire property, plant and
equipment
Payments to acquire intangible assets and
contract fulfilment costs
Acquisition of Untie Nots, net of cash and
cash equivalents acquired
(171)
(178)
(5,444)
(4,943)
(6,347)
–
Net cash flows used in investing activities
(11,962)
(5,121)
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
72
Contents Generation – Sub PageContents Generation - Section Notes to the Consolidated Financial Statements
Contents Generation – Sub Page
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 Accounting policies
General information
Eagle Eye Solutions Group plc ('the Company’) is a public limited
company domiciled in the United Kingdom and was incorporated in
England & Wales with company number 8892109 on 12 February 2014.
The Company has its registered office at 5 New Street Square, London
EC4A 3TW. The principal places of business of the Group are its offices
in Guildford, Manchester and London and it also operates in France,
Canada, Australia, New Zealand and the USA.
Basis of preparation
These consolidated financial statements have been prepared on
a going concern basis under the historical cost convention, and in
accordance with UK-adopted International Accounting Standards and
the International Financial Reporting Interpretations Committee (IFRIC)
interpretations issued by the International Accounting Standards Board
(IASB) that are effective or issued and early adopted as at the date of
these financial statements and in accordance with the provisions of the
Companies Act 2006.
Adjusted EBITDA (see Note 21) is presented in the income statement
as the Directors consider this performance measure provides a more
accurate indication of the underlying performance of the Group and is
commonly used by City analysts and investors.
The preparation of financial statements requires management to
exercise its judgement in the process of applying accounting policies.
The areas involving a higher degree of judgement, or areas where
assumptions and estimates are significant to the financial information,
are disclosed in Note 2.
The presentational and functional currency of the Group is Sterling. Results
in these financial statements have been prepared to the nearest £1,000.
New standards, amendments and interpretations issued but not
effective for the financial year beginning 1 July 2022 and not early
adopted
The IASB and IFRIC have issued the following relevant standards and
interpretations with effective dates as noted to the right.
Standard
Key requirements
IFRS 17, ‘Insurance
contracts’ as
amended in June
2020 by amendments
to ‘IFRS 17, Insurance
Contracts’
The standard establishes principles
for the recognition, measurement,
presentation and disclosure of
insurance contracts issued. No
impact is expected on the results of
the Group.
Effective date
(for annual
periods beginning
on or after)
1 January
2023
Amendments to
IAS 8 Accounting
Policies, Changes in
Accounting Estimates
and Errors: Definition
of Accounting
Estimates
Amendments to
IAS 1 Presentation
of Financial
Statements and IFRS
Practice Statement
2: Disclosure of
Accounting Policies
Amendments to IFRS
1 Presentation of
Financial Statements
Amendments to IAS
7 Statement of Cash
Flows and IFRS 7
Financial Instruments
The standard introduces a new
definition for accounting estimates.
No impact is expected on the results
of the Group.
1 January
2023
The standard makes it clear that
accounting policies governing
material balances are not necessarily
themselves material. Therefore
the quantity of accounting policy
disclosures may reduce.
1 January
2023
The standard clarifies that the
classification of liabilities as current
or non-current should be based
on rights that exist at the end of
the reporting period. No impact is
expected on the results of the Group.
The standard requires an entity to
provide additional disclosures about
its supplier finance arrangements.
Therefore, the quantity of accounting
policy disclosures may increase,
although no impact is expected on
the results of the Group.
1 January
2024
1 January
2024
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
73
Contents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
New standards, amendments and interpretations issued but not
effective for the financial year beginning 1 July 2022 and not early
adopted continued
There are no other IFRSs, IFRIC interpretations or amendments that are
not yet effective that would be expected to have a material impact on
the Group.
Going concern
As part of their going concern review the Directors have followed
the guidelines published by the Financial Reporting Council entitled
“Guidance on the Going Concern Basis of Accounting and Reporting on
Solvency and Liquidity Risks – Guidance for directors of companies that
do not apply the UK Corporate Governance Code”.
The Directors have prepared detailed financial forecasts and cash
flows looking three years from the date of these consolidated financial
statements. In developing these forecasts, the Directors have made
assumptions based upon their view of the current and future economic
conditions that will prevail over the forecast period.
On the basis of the above projections, the Directors are confident
that the Group has sufficient working capital and available funds to
honour all of its obligations to creditors as and when they fall due. In
reaching this conclusion, the Directors have considered the forecast
cash headroom, including the impact of the revolving credit facility
with HSBC Innovation Bank and the covenants associated with it, the
resources available to the Group and the potential impact of changes in
forecast growth and other assumptions, including the potential to avoid
or defer certain costs and to reduce discretionary spend as mitigating
actions in the event of such changes. Accordingly, the Directors continue
to adopt the going concern basis in preparing these consolidated
financial statements.
Basis of consolidation
The consolidated financial statements consolidate those of the
Company and its subsidiary undertakings drawn up to 30 June each
year. Subsidiaries are entities where the Company has: power over the
entity; exposure, or rights, to variable returns from its involvement with
the entity; and the ability to use its power over the entity to affect the
amount of its returns. The Group generally obtains and exercises control
through voting rights.
The results of subsidiaries acquired are consolidated from the date on
which control passed under the acquisition method. This involves the
recognition at fair value of the assets, liabilities and contingent liabilities
of the subsidiary at the acquisition date. These fair values are also used
as the bases for subsequent measurement in accordance with the
Group’s accounting policies.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Foreign currencies
Transactions in foreign currencies are initially recorded at the functional
currency rate for the relevant legal entity prevailing at the date of the
transactions. The assets and liabilities of entities with a non-Sterling
functional currency are expressed in Sterling using exchange rates
prevailing at the reporting date and the profit or loss for each such
entity is expressed in Sterling using exchange rates prevailing at the
date of the transaction.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
74
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable from contracts with customers for the provision of the Group’s services,
excluding any applicable sales taxes, and is recognised at the point that the performance obligations to the customer have been satisfied, as set
out below.
Products and Services
Nature and timing of satisfaction of performance obligations and significant payment terms
Development and set up fees
Subscription fees
The Group uses an Agile methodology in its development. When delivering services to certain clients the nature of
this development is that the exact form and functionality of the final solution is agreed through consultation with
the client as the development progresses. In these circumstances, the development phase of the project which is
not integral to the provision of the basic Software as a Service (SaaS) solution is a separate performance obligation,
which is delivered over the period of development, with revenue recognised based on the number of hours worked.
In other cases, where the client has purchased the Group’s standard product, there is a single performance
obligation – the delivery of a SaaS solution. In these circumstances, the development and set up fees will be
recognised over the period from when the SaaS solution is launched to the client to the end of the contract period.
Subscription fees covering, inter alia, licences, hosting and support services, form part of the SaaS performance
obligation and are recognised over time from when the SaaS solution is made available to the end of the
contract period. Generally for the provision of a SaaS solution, such revenue is recognised on a straight line basis.
Subscription fees are invoiced on a monthly, quarterly, bi-annual or annual basis. Where invoices are raised
in advance of the performance obligation being satisfied, a portion is recognised in deferred income in the
Statement of Financial Position.
Transactional fees
Transactional fees are linked to transactional volumes and are recognised as the transactions occur, due to the
inherent unpredictability of their timing and volume.
Where the services provided to a client represent a single performance obligation the entire transaction price is allocated to that performance
obligation. In determining the transaction price, consideration is given to any amounts collected on behalf of third parties, which are not included
within the transaction price, and whether there is any financing component. The Group’s credit terms offered to its clients mean that there is no
finance component to amounts charged to clients.
Where a contract covers multiple performance obligations, such as where the development phase of a project and the delivery of the SaaS solution
represent separate performance obligations, the transaction price for each individual performance obligation will be determined by considering a
number of factors including the stand alone selling price for the services provided to satisfy the performance obligation, any variable consideration
and the properties of any associated licences.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
75
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Cost of sales
The Group’s cost of sales includes costs directly attributable to distinct
sales including the cost of sending SMS messages, revenue share
agreements and outsourced bespoke development work.
Operating profit
Operating profit comprises the Group’s revenue for the provision of
services, less the costs of providing those services and administrative
overheads, including depreciation and amortisation of the Group’s
non-current assets.
Property, plant and equipment
Purchased property, plant and equipment is stated at cost less
accumulated depreciation and any provision for impairment losses.
Cost includes the original purchase price of the asset and the costs
attributable to bringing the asset to its working condition for its
intended use. Depreciation is charged so as to write off the costs of
assets over their estimated useful lives, on the following bases:
Right of use assets
In line with term of lease
Computer equipment
Two to three years, straight-line
Office furniture and fittings
Three to five years, straight-line
The economic lives of assets are reviewed by the Directors on at least an
annual basis and are amended as appropriate.
•
Costs to obtain contracts
The Group recognises the incremental costs of obtaining contracts with
customers as an asset if those costs are expected to be recoverable, and
records them in ‘intangible assets’ in the Consolidated Statement of
Financial Position. Incremental costs of obtaining contracts are those
costs that the Group incurs to obtain a contract with a customer that
would not have been incurred if the contract had not been obtained
and are amortised over the expected initial period of the client
relationship. The Group does not reinstate costs previously expensed
should the recognition criteria be met in a later period.
Internally-generated development intangible assets
An internally-generated development intangible asset arising from the
Group’s product development is recognised as intellectual property if,
and only if, the Group can demonstrate all of the following:
• the technical feasibility of completing the intangible asset so that it
will be available for use or sale;
its intention to complete the intangible asset and use or sell it;
its ability to use or sell the intangible asset;
•
•
• how the intangible asset will generate probable future economic
benefits;
• the availability of adequate technical, financial and other resources
to complete the development and to use or sell the intangible asset;
and
its ability to measure reliably the expenditure attributable to the
intangible asset during its development.
Intangible assets
Goodwill
Goodwill arising on business combinations represents the difference
between the consideration for a business acquisition and the fair
value of the net identifiable assets acquired, less any accumulated
impairment losses. The consideration for a business acquisition
represents the fair value of assets given and equity instruments issued in
return for the assets acquired. Goodwill is not amortised but is subject to
an impairment review which is performed at least annually.
Internally-generated development intangible assets are amortised in
the statement of comprehensive income on a straight-line basis over
their estimated useful lives of three years.
Where no internally-generated intangible asset can be recognised,
research and development expenditure is recognised as an expense in
the period in which it is incurred.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
76
Contents Generation – PageContents Generation – Sub PageContents Generation - Section
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Contract fulfilment costs
The Group recognises the costs incurred in fulfilling future performance
obligations for contracts with customers, where those costs are directly
associated with the contract, as an asset if those costs are expected to
be recoverable, and records them in ‘other assets’ in the Consolidated
Statement of Financial Position. Costs associated with fulfilment of
future performance obligations are amortised over the period that those
specific performance obligations are performed.
Acquired intangible assets
On acquisition, specific intangible assets are identified and recognised
separately from goodwill and then amortised over their estimated
useful lives. These include items such as customer contracts and
intellectual property.
Impairment of non-current assets
The Group reviews the carrying amounts of its assets annually to
determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of
the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset
belongs. An intangible asset with an indefinite useful life is tested for
impairment at least annually and whenever there is an indication that
the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and
value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is
estimated to be less than its carrying amount, the carrying amount of
the asset (or cash-generating unit) is reduced to its recoverable amount.
In the case of a cash-generating unit, any impairment loss is charged
first to any goodwill in the cash-generating unit and then pro rata to the
other assets of the cash-generating unit.
Financial instruments
Financial assets and financial liabilities are recognised in the
consolidated Statement of Financial Position when the Group becomes
party to the contractual provisions of the instrument. Financial assets
are de-recognised when the contracted rights to the cash flows from
the financial asset expire or when the contracted rights to those
assets are transferred. Financial liabilities are de-recognised when the
obligation specified in the contract is discharged, cancelled or expired.
Financial assets
(a) Trade and other receivables
Trade and other receivables are recognised initially at their fair value and
then at amortised cost using the effective interest method. Appropriate
provisions for estimated irrecoverable amounts are recognised in the
statement of comprehensive income when there is objective evidence
that the assets are impaired. The impairment methodology applied
depends on whether there has been a significant increase in credit
risk. For trade receivables, the Group applies the simplified approach
permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
(b) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits held on call with banks. The Group does not consider cash
received on behalf of and due to the Group’s clients as cash and cash
equivalents. These amounts are held within other debtors.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
77
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Financial liabilities and equity
(c) Trade and other payables
Trade payables are recognised initially at their fair value and then
amortised cost.
(d) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs
incurred. Borrowings are subsequently measured at amortised cost.
(e) Lease liabilities
Lease liabilities are initially recognised at the present value of the lease
payments and then at amortised cost.
(f) Equity instruments
An equity instrument is any contract that evidences a residual interest
in the assets of an entity after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds
received, net of issue costs.
Leases
At inception of a contract, the Group assesses whether a contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract is a lease, the
Group assesses whether:
• The contract involves the use of an identified asset;
• The Group has the right to obtain substantially all of the economic
benefits from use of the asset throughout the period of use; and
• The Group has the right to direct the use of the asset. The Group
has this right when it has the decision-making rights that are most
relevant to changing how and for what purpose the asset is used.
At inception or on reassessment of a contract that contains a lease
component, the Group allocates the consideration in the contract to
each lease component on the basis of their relative stand-alone prices.
The Group recognises a right-of-use asset and a lease liability at the
lease commencement date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date,
plus any initial direct costs incurred.
The right-of-use asset is subsequently depreciated using the straight-
line method from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are determined on the same
basis as those of property, plant and equipment.
The lease liability is initially measured at the present value of the lease
payments, discounted using the interest rate implicit in the lease, or
if that rate cannot be readily determined, the Group’s incremental
borrowing rate. Lease payments included in the measurement of the
lease liability comprise the contracted fixed payments.
The lease liability is measured at amortised cost using the effective
interest method. It is remeasured when there is a change in future
lease payments arising from a change in an index or rate or if the Group
changes its assessment of whether it will exercise an extension or
termination option. When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the right-
of-use asset or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to £nil.
Short term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases that have a minimum lease term of 12
months or less and leases of low-value assets which the Group considers
to be any lease for an asset with a cost of less than £5,000. The Group
recognises the lease payments associated with these leases as an
expense on a straight-line basis over the lease term.
Employee benefits
The Group operates a defined contribution auto-enrolment personal
pension scheme for employees of the Group. The assets of the scheme
are held separately from those of the Group in an independently
administered fund. The pension costs charged in the income statement
are the contributions payable to the scheme in respect of the
accounting period.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
78
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Current and deferred income tax
Current tax
The tax currently payable is based on taxable profit or loss for the year
in each territory. Taxable profit or loss differs from the profit or loss for
the financial year as reported in the statement of total comprehensive
income because it excludes items of income or expense that are taxable
or deductible in other years and it further excludes items that are never
taxable or deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted by the
reporting date.
The UK Research & Development tax credit is accounted for under the
SME tax credit scheme, with the credit due being deducted from the tax
expense for the period.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities in
the consolidated financial statements and the corresponding tax bases
used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that
it is probable that future taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition (other than
in a business combination) of other assets and liabilities in a transaction
that affects neither the taxable profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in
the period when the liability is settled or the asset is realised based on
tax laws and rates that have been enacted or substantively enacted at
the reporting date. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited in other
comprehensive income, in which case the deferred tax is also dealt with
in other comprehensive income.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same
taxation authority and the Group intends to settle its current tax assets
and liabilities on a net basis.
Share-based payments
The Company issues equity-settled share-based remuneration to certain
employees as consideration for services. Equity-settled share-based
payments are measured at fair value at the date of grant by reference
to the fair value of the equity instruments granted calculated using
the Black-Scholes or Monte Carlo models as appropriate. The fair value
determined at the grant date of equity-settled share-based payments
is recognised as an expense over the vesting period on a straight-line
basis, based on the Group’s estimate of the number of instruments
that will eventually vest with a corresponding adjustment to equity.
The expected life used in the valuation, based on the Directors’ best
estimate, takes account of the effect of non-transferability, exercise
restrictions, and behavioural considerations.
Non-vesting and market vesting conditions are taken into account
when estimating the fair value of the options at grant date. Service and
non-market vesting conditions are taken into account by adjusting the
number of options expected to vest at each reporting date.
When the options are exercised the Company issues new shares. The
proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments, has
been identified as the Board of Directors that makes strategic decisions.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
79
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Equity
Equity comprises the following:
• Share capital, representing the nominal value of issued shares of the
Company;
• Share premium, representing the excess over the nominal value of
the fair value of consideration received for shares, net of expenses of
the share issue;
• Merger reserve, representing the excess of the Company’s investment
over the nominal value of Eagle Eye Solutions Limited’s shares
acquired using the principles of merger accounting;
• Share option reserve, representing the cost of equity-settled share-
based payments until such share options are exercised or lapse; and
• Retained losses.
2 Critical accounting estimates and judgements
The preparation of these consolidated financial statements requires
the Directors to make judgements and estimates that affect the
reported amounts of assets and liabilities at each reporting date and the
reported amounts of revenue during the reporting periods. Estimates
and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances. Actual
results could differ from these estimates. Information about such
judgements and estimations are contained in individual accounting
policies. The key judgements and sources of estimation uncertainty
that could cause an adjustment to be required to the carrying amount
of assets or liabilities within the next accounting period are outlined to
the right.
Capitalisation of internally-generated intangible assets
Careful judgement by the Directors is applied when deciding whether
the recognition requirements as defined within IAS 38 Intangible
Assets for development costs have been met. This is necessary as the
economic success of any product development is uncertain until such
time as technical viability has been proven and commercial supply
agreements are likely to be achieved. Judgements are based on the
information available at each reporting date which includes contracts
signed, pipeline conversations and results of QA testing. In addition, all
internal activities related to research and development of new products
are continuously monitored by the Directors through the Product
Board. The Directors exercise judgement in determining the costs to be
capitalised and will use estimates to determine the useful economic life
to be applied to the asset.
Impairment of internally-generated intangible assets
The Group reviews the carrying value of its assets annually to determine
whether there is any indication that those assets have suffered
an impairment loss. If any such indication exists a review of the
recoverable value of the asset is performed. This review involves the use
of judgement to consider the future projected income streams that
will result from the aforementioned costs. The expected future cash
flows are modelled and discounted over the estimated expected life
of the assets in order to test for impairment. In the years represented
in these consolidated financial statements no impairment charge was
recognised as a result of these reviews. The carrying value of internally
generated intangible assets at 30 June 2023 is £7.0 million (2022: £5.4
million).
Recognition of acquired intangible assets
Careful judgement by the Directors is applied when deciding whether
the recognition requirements as defined within IFRS 3 Business
Combinations have been met. As provided for under IFRS 3, the fair
value adjustments arising on acquisition, including the recognition of
acquired intangible assets, are provisional at this time. The carrying
value of acquired intangible assets at 30 June 2023 is £8.9 million
(2022: £nil).
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
80
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2 Critical accounting estimates and judgements continued
Impairment of goodwill
The Group determines whether goodwill arising on acquisitions is
impaired at least on an annual basis. This requires an estimation of
the ‘value in use’ of the cash-generating units to which the goodwill
is allocated. Estimating a value in use amount requires the Directors
to make an estimate of the expected future cash flows from the cash-
generating unit and also to choose a suitable discount rate in order to
calculate the present value of those cash flows.
The Group’s patented, proprietary technology and service offering are
unique and there are therefore no direct competitors against whom
forecast growth and discount rates can be compared. Therefore the
growth and discount rates are selected based on comparison with
those of the Group’s partners and those companies that the Group is
compared with by City analysts and investors.
The actual cash flows may be different from the Directors’ estimates,
which could impact the carrying value of the goodwill and therefore
operating results negatively. The carrying value of goodwill at 30 June
2023 is £6.1 million (2022: £2.7 million).
Revenue recognition
Revenue is measured based on the consideration specified in a contract
with a client and is recognised when the performance obligations
specified in a contract are transferred to a client, which may be at a
point in time or over time.
For the Group’s largest clients, the initial stage of engagement will often
include scoping and rescoping of the solution, working in consultation
with our clients under an agile methodology. In this case revenue for
the implementation services will be recognised as the scoping and
development of the solution is completed. Otherwise, the performance
obligation is the delivery of a SaaS solution and the implementation
is an integral part of this. The associated revenue will therefore be
recognised over the period that the service is live, post implementation.
Therefore the Directors must exercise their judgement in determining
those instances where the implementation services form a separate
performance obligation for the client.
Revenue related to implementation services in the year to 30 June 2023
was £8,563,000 (2022: £7,645,000). Once a service is live for a client there
is generally only one performance obligation – the provision of the SaaS
solution. This meets the criteria to be recognised over time and, because
the SaaS solution should be provided on a continuing basis, the Directors
have exercised their judgement that it is appropriate to recognise this
revenue on a straight-line basis, reflecting the passage of time.
Contract costs
Costs associated with winning new contracts, such as sales commission
for the Group’s ‘Win’ sales team, are capitalised within intangible
assets and amortised over the longer of the contract period or the
expected term of the client relationship, where significant further costs
are not expected to be incurred for renewal. Costs associated with
implementation of the Group’s SaaS solution are capitalised as Contract
fulfilment costs and amortised over the period of the performance
obligation. The Directors exercise judgement in determining the costs to
be capitalised and use estimates to determine the expected term of the
client relationship. Contract costs capitalised in the year to 30 June 2023
were £2,839,000 (2022: £2,728,000).
Share-based payment charge
The Group issues share options and other share-based incentives to
certain employees. The Black Scholes and Monte Carlo models are used
to calculate the appropriate charge for these options. The choice and use
of this model to calculate a charge involves using a number of estimates
and judgements to establish the appropriate inputs to be entered into
the model, covering areas such as the use of an appropriate risk-free
interest rate and dividend rate, exercise restrictions and behavioural
considerations. A significant element of judgement is therefore involved
in the calculation of the charge. In addition, the Directors estimate the
percentage of options that are expected to vest considering the likelihood
of achieving performance targets and employee churn rates. Should
more options vest than estimated the charge would increase.
The total charge recognised in the year to 30 June 2023 is £2,426,000
(2022: £1,851,000). Further information on share options can be found in
Note 18.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
81
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2 Critical accounting estimates and judgements continued
Deferred tax asset recognition
The Directors’ judgement is required to determine the amount of tax
assets that can be recognised, based upon the likely timing and level of
future taxable profits together with an assessment of the effect of future
tax planning strategies. With the Group’s increase in EBITDA and strong
pipeline to promote further growth, a larger proportion of tax losses
brought forward are now expected to be realisable and therefore in the
judgement of the Directors meet the ‘probable’ definition criteria for an
asset within IAS 12. The value of the unrecognised tax losses at 30 June
2023 was £12.0 million (2022: £20.5 million). The value of the deferred tax
asset not recognised at 30 June 2023 was £3.0 million (2022: £5.1 million).
During the year a deferred tax asset of £1,626,000 (2022: £131,000) was
recognised for tax losses carried forward. Further information on the
Group’s deferred tax position can be found in Note 15.
3 Segmental analysis
The Group is organised into two principal operating divisions for
management purposes. These reflect the organic Eagle Eye business
and the newly acquired Untie Nots business. All non-current assets are
held in the United Kingdom, other than the right of use asset relating to
the lease for the Paris office of Untie Nots.
Revenue is analysed as follows:
Service
Development and set up fees
Subscription and transaction fees
Product
AIR revenue
Untie Nots revenue
Messaging revenue
Timing
Services transferred over time
2023
£000
2022
£000
8,563
7,645
34,511
24,022
43,074
31,667
2023
£000
2022
£000
38,440
29,497
2,212
–
2,422
2,170
43,074
31,667
2023
£000
2022
£000
43,074
31,667
Organic
2023
£000
Untie Nots
2023
£000
Total
2023
£000
Organic &
Total
2022
£000
40,862
2,212
43,074
31,667
(2,091)
–
(2,091)
(2,037)
In the year to 30 June 2023, revenue from two of the Group’s customers
represented more than 10% of the Group’s revenue. Revenue related
to those customers was £8,897,000, and £6,047,000 respectively. In the
year to 30 June 2022, revenue from three of the Group’s customers
represented more than 10% of the Group’s revenue. Revenue related to
those customers was £5,917,000, £4,066,000 and £3,987,000 respectively.
Revenue
Cost of sales
Gross profit
38,771
2,212
40,983
29,630
Adjusted operating costs
(30,060)
(2,134)
(32,194)
(23,154)
Adjusted EBITDA
8,711
78
8,789
6,476
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
82
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3 Segmental analysis continued
All revenues are from external customers. Continuing revenues can
be attributed to the following geographical locations, based on the
customers’ location:
4 Operating (loss)/profit
Operating (loss)/profit is stated after charging to the statement of
comprehensive income:
United Kingdom
United States
Canada
Australia
Rest of Europe
Rest of Asia Pacific
2023
£000
2022
£000
16,076
16,458
15,159
6,601
6,163
5,917
3,772
2,426
1,589
315
63
202
Depreciation of owned tangible assets
Depreciation of right of use assets
Amortisation of intangible assets
Amortisation of contract fulfilment costs
Net employee costs (see Note 5)
IT infrastructure costs
43,074
31,667
Expenses relating to short-term leases
2023
£000
219
268
3,771
1,426
2022
£000
150
170
2,499
1,071
20,836
13,876
8,065
6,548
243
191
63
67
33
677
35
45
33
466
Auditor’s remuneration
Audit of Parent and consolidated accounts
Audit of the Company’s subsidiaries
Non-audit services
Other non-audit services1
Research and development
1 Other non-audit services includes Sarbanes Oxley compliance costs of £33,000 (2022: £33,000).
All international territories have demonstrated growth year on year; the
decline in the United Kingdom reflects a reduction in revenue earned
from Sainsbury’s as this contract reaches the end of its lifecycle.
The amount of revenue recognised in 2023 from performance obligations
satisfied (or partially satisfied) in previous periods is £nil (2022: £nil).
Transaction price allocated to the remaining performance obligation
The following table includes revenue expected to be recognised in
the future related to performance obligations that are unsatisfied (or
partially unsatisfied) at the reporting date.
Development and
set up fees
Subscription fees
2024
£000
2025
£000
2026
£000
Total
£000
8,212
31,471
39,683
2,678
5,381
8,059
402
11,292
1,650
38,502
2,052
49,794
No consideration from contracts with customers is excluded from the
amounts presented above.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
83
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
5 Particulars of staff
The average number of persons employed by the Group, including
Executive Directors, during the year was:
Product development
Operations
Sales and administration
The aggregate payroll costs of these persons were:
Wages and salaries
Share-based payment charge
Social security costs
Pension costs – defined contribution plan
2023
No
73
97
52
2022
No
53
67
42
222
162
2023
£000
2022
£000
20,985
14,952
2,426
2,154
715
1,851
1,557
459
26,280
18,819
Aggregate emoluments including short-term
employee benefits
Share-based payment charge
Pension costs – defined contribution plan
Social security costs
2023
£000
2022
£000
3,115
1,968
46
419
2,321
1,546
35
412
5,548
4,314
Directors’ remuneration
Remuneration of Directors during the year was as follows:
2023
£000
2022
£000
Aggregate emoluments including short-term
employee benefits
2,008
1,757
Pension costs – defined contribution plan
20
15
2,028
1,772
The remuneration of the highest paid Director during the year was:
Less: amounts capitalised as intellectual property
(2,605)
(2,215)
Less: amounts capitalised as contract costs
(2,839)
(2,728)
20,836
13,876
Aggregate emoluments including short-term
employee benefits
2023
£000
2022
£000
858
740
Key management remuneration
Remuneration of the key management team, which includes the executive
leadership team including Directors, during the year was as follows:
The remuneration of individual Directors is disclosed in the
Remuneration Report on page 56. Retirement benefits are accruing
to two (2022: two) Directors. Other than as stated in the Remuneration
Report, there were no other share options exercised or gains made on
exercise of share options by Directors during the year (2022: nil).
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
84
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
6 Finance income and expense
Interest receivable on bank deposits
Interest payable on facilities
Interest on lease liability
7 Taxation
Current tax
UK Corporation tax at 19.00% (2022: 19.00%)
Overseas tax
Adjustments in respect of prior years
Deferred tax
In respect of current year
In respect of prior years
Tax on (loss)/profit on ordinary activities
2023
£000
30
2023
£000
139
31
170
2023
£000
–
(453)
–
(453)
414
(1,909)
(1,495)
(1,948)
2022
£000
Tax reconciliation
1
(Loss)/profit before tax
(760)
685
2023
£000
2022
£000
Tax using UK corporation tax rate of 20.50%
(2022: 19.00%)
Non-deductible expenses
Employee share acquisition relief
Share-based payments
Temporary timing differences
Overseas tax
Unrelieved tax losses
Change in deferred tax rate
Research and development tax credit claim
(156)
260
(629)
498
397
(480)
(1,749)
(269)
180
Tax on (loss)/profit on ordinary activities
(1,948)
130
17
(249)
352
3
(15)
(277)
(1)
171
131
2022
£000
21
29
50
2022
£000
–
460
(319)
141
(171)
161
(10)
131
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
85
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
8 Earnings per share
The calculation of basic earnings per share is based on the result
attributable to ordinary shareholders divided by the weighted average
number of ordinary shares in issue during the year. The calculation of
diluted earnings per share is based on the result attributable to ordinary
shareholders divided by the weighted average number of shares in
issue during the year, diluted for the effect of options being converted to
ordinary shares. Basic and diluted earnings per share from continuing
operations is calculated as follows:
2023
2022
Earnings
per share
pence
Profit
£000
Weighted
average
number of
ordinary
shares
Earnings
per share
pence
Profit
£000
Weighted
average
number of
ordinary
shares
4.25
1,188 27,942,991
2.12
554 26,136,009
Additions
Acquisitions
At 30 June 2023
Amortisation
At 1 July 2021
Charge for the year
3.79
1,188 31,380,031
1.86
554 29,829,550
At 30 June 2022
Basic earnings
per share
Diluted
earnings per
share
Charge for the year
At 30 June 2023
9 Intangible assets
Goodwill
£000
Costs to obtain
contracts
£000
Customer
contracts
£000
Intellectual
property
£000
Total
£000
Cost
At 1 July 2021
Additions
2,664
–
607
420
At 30 June 2022
2,664
1,027
–
284
–
–
–
–
15,925
19,196
2,215
2,635
18,140
21,831
2,605
2,889
3,451
6,115
–
8,582
1,644
13,677
1,311
8,582
22,389 38,397
–
–
–
–
–
388
187
575
247
822
489
452
–
–
–
12,281
12,669
2,312
2,499
14,593
15,168
1,038
1,038
2,486
3,771
17,079
18,939
7,544
5,310
19,458
–
3,547
6,663
Net book value
At 30 June 2023
6,115
At 30 June 2022
2,664
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
86
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
9 Intangible assets continued
The Group’s intellectual property relates to:
1) its internally developed AIR platform;
2023
Cash generating unit
Carrying value of
goodwill
£000
Period over which
cash flows have
been projected
2) the acquired intellectual property of 2ergo Limited which consisted
UK
of a then stand-alone messaging platform and an app and customer
interface loyalty solution, both of which have now been integrated
within the AIR platform; and
Untie Nots
2,664
3,451
5 years
5 years
3) the acquired intellectual property of Untie Nots SAS.
Costs to obtain contracts relates to the incremental costs of obtaining
contracts which would not have otherwise been incurred.
2022
Cash generating unit
Carrying value of
goodwill
£000
Period over which
cash flows have
been projected
Growth
rate beyond
management
approved
forecasts
2.0%
2.0%
Growth
rate beyond
management
approved
forecasts
Pre-tax
discount rate
for cash flow
projections
13%
13%
Pre-tax
discount rate
for cash flow
projections
The Group’s goodwill relates to its acquisition of 2ergo Limited on
16 April 2014 and Untie Nots SAS on 3 January 2023.
Following the successful integration of the acquired 2ergo business, the
Group has one identifiable cash generating unit in the UK. An annual
impairment review of the goodwill arising on the 2ergo acquisition
has therefore been performed for the UK cash generating unit. The
recoverable value of the unit has been based on its value in use.
Although taking advantage of central Group resources, and in particular
the experience and processes of the Group’s sales and marketing team,
the Untie Nots business is still able to be identified as a separate cash
generating unit. The recoverable value of the unit has been based on its
value in use.
The cash flow projections, which were based on three year forecasts
approved by the Directors and then extended to cover a five year period
with a terminal value assumed, supported the carrying value of goodwill
and the Group’s intellectual property with no impairment required.
UK
2,664
5 years
1.5-2.0%
12%
As the acquired 2ergo business is fully integrated, the smallest cash
generating unit which the goodwill for that unit relates to is the UK cash
generating unit.
The key assumptions underlying the forecast are the continued
success in winning new business and the discount rate applied. These
assumptions are based on management’s experience, the current
pipeline and the historical success of the cash-generating unit. As the
Group’s SaaS AIR platform is a unique solution in the marketplace
there are no directly comparable companies to compare against when
estimating the discount and growth rates to be applied. The rates
chosen are estimated considering those used by the Group’s partners,
other entities that the Group is compared with by City analysts and
investors and other entities with similar characteristics to the Group.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
87
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
9 Intangible assets continued
The key assumptions underlying the forecast for the Untie Nots cash
generating unit are the continued success in winning new business and
the discount rate applied. These assumptions are based on management’s
experience and the current pipeline, including the impact of being able
to cross-sell into existing Eagle Eye customers, plus the access to new
markets made capable by Eagle Eye’s international presence. As the Untie
Nots SaaS platform is a unique solution in the marketplace there are no
directly comparable companies to compare against when estimating
the discount and growth rates to be applied. The rates chosen are
therefore the same as for the UK cash generating unit.
The forecasts for both of the units provide sufficient headroom over
the value of goodwill and intangible assets attributed to each cash-
generating unit. No reasonable change in assumptions would lead to an
impairment and therefore no sensitivities have been disclosed. The Group
has no intangible assets with indefinite useful lives other than goodwill.
10 Contract fulfilment costs
11 Property, plant and equipment
Cost
At 1 July 2021
Additions
Disposals
At 30 June 2022
Additions
Acquisitions
Disposals
Right of
use assets
£000
Computer
equipment
£000
Office
furniture
and fittings
£000
Intellectual
property
£000
1,497
–
–
1,497
853
209
(175)
703
178
(7)
874
171
14
(6)
311
2,511
–
–
311
–
–
–
178
(7)
2,682
1,024
223
(181)
At 30 June 2023
2,384
1,053
311
3,748
At 1 July
Additions
Amortisation
At 30 June
2023
£000
1,433
2,555
(1,426)
2,562
2022
£000
196
2,308
(1,071)
1,433
Costs to fulfil contracts are charged to the income statement as
amortisation over the period of satisfaction of the performance
obligations that those costs relate to.
Depreciation
A1 1 July 2021
Charge for the year
Disposals
At 30 June 2022
Charge for the year
Disposals
At 30 June 2023
Net book value
At 30 June 2023
At 30 June 2022
881
170
–
1,051
268
(175)
1,144
1,240
446
516
140
(7)
649
210
(6)
853
200
225
288
1,685
10
–
320
(7)
298
1,998
9
–
487
(181)
307
2,304
4
13
1,444
684
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
88
There is only one class of Right of Use assets, being Buildings (see Note 19).
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
12 Trade and other receivables
Trade receivables
Less: Provision for expected credit losses
Prepayments
Accrued income
Other assets
2023
£000
7,716
(173)
7,543
1,378
1,315
849
2022
£000
7,732
(158)
7,574
1,022
802
455
11,085
9,853
The ageing of trade receivables that were not impaired at 30 June 2023
was:
Not past due
Up to 3 months past due
More than 3 months past due
2023
£000
7,358
38
147
2022
£000
7,050
524
–
7,543
7,574
Accrued income and other receivables are not past due (2022: not past
due).
The Group trades only with recognised, credit-worthy third parties.
Receivable balances are monitored on an ongoing basis with the
aim of minimising the Group’s exposure to credit losses. The Group
has reviewed, in detail, all items comprising the above not past due
and overdue but not impaired trade receivables to ensure that no
impairment exists. In addition to assessing the recoverability of
each debt invoice individually, the Group also assesses whether it is
appropriate to make any general provision for expected credit losses
taking into account such factors as historic collection rates and the
general economic conditions for clients in each of the sectors the
Group serves.
As at 30 June 2023, trade receivables of £173,000 (2022: £158,000) were
impaired and provided for. £167,000 of these were more than three
months old (2022: £158,000 more than three months old). The amount
of the provision was £173,000 as at 30 June 2023 (2022: £158,000).
Movements on the provision for impairment of trade receivables are as
follows:
At 1 July
Provision for expected credit losses charged
At 30 June
2023
£000
158
15
173
2022
£000
127
31
158
The other classes within trade and other receivables do not contain
impaired assets. The maximum exposure to credit risk for trade and
other receivables at the reporting date is the carrying value of each class
of receivable disclosed above.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
89
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
12 Trade and other receivables continued
Significant changes in the accrued income balances during the period
are as follows:
13 Trade and other payables
At 1 July
Transfers from accrued income recognised
at the beginning of the period to receivables
Increases as a result of progress made
against performance obligations, excluding
amounts invoiced during the year
At 30 June
2023
£000
802
2022
£000
443
Current
Trade payables
Accruals
(802)
(443)
Lease liabilities
Deferred income
Other liabilities
1,315
1,315
802
802
Deferred consideration on acquisition of
Untie Nots SAS
The carrying amounts of the Group’s trade and other receivables are
denominated in the following currencies:
Sterling
Canadian Dollars
Australian Dollars
US Dollars
New Zealand Dollars
Euros
2023
£000
4,708
820
221
3,767
3
1,566
11,085
2022
£000
4,685
1,791
492
2,885
–
–
9,853
Non-current
Lease liabilities
Deferred income
Contingent consideration on acquisition of
Untie Nots SAS
The deferred consideration on the acquisition of Untie Nots SAS relates
to amounts due following the finalisation of certain tax affairs related to
the period prior to the acquisition and were paid on 3 July 2023.
2023
£000
2022
£000
3,212
7,034
491
4,154
1,793
2,509
5,915
194
2,079
1,488
654
–
17,338
12,185
805
2,670
1,326
4,801
324
2,038
–
2,362
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
90
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
13 Trade and other payables continued
Significant changes in the deferred income balances during the period
are as follows:
14 Financial liabilities
At 1 July
Revenue recognised that was included
in the deferred income balance at the
beginning of the year
Increases due to cash received, excluding
amounts recognised as revenue during
the year
At 30 June
2023
£000
2022
£000
4,117
2,147
Borrowings due within one year
Borrowings due in more than one year
2023
£000
1,102
197
1,299
2022
£000
–
–
–
(2,079)
(541)
4,786
6,824
2,511
4,117
The £5.0 million revolving credit facility from HSBC Innovation Bank
expires in November 2024, with an additional £2.5 million available,
subject to credit approval at the time, should there be an appropriate
investment opportunity. As at 30 June 2023, £1.0 million (2022: £nil)
of the facility had been drawn down. As security for the facility, HSBC
Innovation Bank holds fixed and floating charges over the assets of the
Group, including the intellectual property and trade debtors of the Group.
The carrying amounts of the Group’s trade and other payables are
denominated in the following currencies:
Untie Nots holds fixed term capital repayment loans with outstanding
amounts at 30 June 2023 of €160,000 with BPI and €187,000 with BNP
Paribas.
Sterling
Euros
Canadian Dollars
Australian Dollars
New Zealand Dollars
US Dollars
2023
£000
2022
£000
15,665
12,174
15 Deferred tax asset
The elements of deferred taxation are as follows:
3,432
615
741
10
46
486
403
–
1,677
1,438
22,139
14,547
Accelerated capital allowances and intellectual property
Tax losses
2023
£000
157
(1,783)
(1,626)
2022
£000
203
(334)
(131)
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
91
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
15 Deferred tax asset continued
Movement in deferred tax:
At 1 July 2021
Credited/(charged) to income statement
At 30 June 2022
Accelerated
capital
allowances &
intellectual
property
£000
(235)
32
(203)
Tax losses
£000
356
(22)
334
Total
£000
121
10
131
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
Financial liabilities, including leases
2023
£000
2022
£000
9,031
10,615
19,646
14,019
2,595
16,614
8,534
3,632
12,166
9,913
518
10,431
Credited to income statement
46
1,449
1,495
At 30 June 2023
(157)
1,783
1,626
No deferred tax asset is recognised for unused tax losses and deferred
taxation arising on share options across the Group of £12.0 million (2022:
£20.5m) due to uncertainty over the timing of their recovery.
16 Financial instruments and financial risk management
The Group is exposed to a variety of financial risks that arise from its use
of financial instruments: credit risk, liquidity risk, foreign exchange risk
and capital risk.
Principal financial instruments
The principal financial instruments used by the Group from which
financial instrument risk arises are as follows:
• Trade and other receivables
• Cash and cash equivalents
• Trade and other payables
• Financial liabilities
Management believe that the fair values of all financial assets and
financial liabilities equals their carrying value.
Disclosures in respect of the Group’s financial risks are set out below:
Financial risk management
The Group’s overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group’s financial performance.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from trade receivables from customers
and cash deposits with financial institutions. The Group’s exposure to
credit risk is influenced mainly by the individual characteristics of each
customer. Credit checks are performed on new and potential customers
and receivable balances are monitored on an ongoing basis with the
aim of minimising the Group’s exposure to bad debt. The Directors
consider the above measures to be sufficient to control the credit
risk exposure.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
92
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
16 Financial instruments and financial risk management
continued
The Group gives careful consideration to which organisations it uses
for its banking services in order to minimise credit risk. Following the
collapse of Silicon Valley Bank, the Group’s treasury policy has been
revised with the revised policy in the process of being implemented at
30 June 2023, subject to the opening of accounts with certain banks.
Limits are now in place on the proportion of the Group’s funds which
can be placed with any one banking institution. In addition, as well as
being amongst the largest banks in each territory, those institutions
must have a minimum A – long term rating.
At the reporting date, the Group’s cash held on short-term deposit with
Barclays Bank plc in the United Kingdom was £nil (2022: £186,000), with
Investec Bank plc in the United Kingdom was £890,000 (2022: £23,000),
with HSBC Bank plc in the United Kingdom was £807,000 (2022: £6,000),
with HSBC Innovation Bank (formerly Silicon Valley Bank UK Ltd) was
£4,009,000 (2022: £2,100,000), with HSBC Bank Canada in Canada was
£2,004,000 (2022: £961,000), with Citizen’s Bank in the United States of
America was £1,000 (2022: £nil), with First Citizens Bank in the United
States of America was £229,000 (2022: £nil), with Mercury in the United
States of America was £384,000 (2022: £nil), with BNP Paribas in France
was £722,000 (2022: £nil) with ANZ Bank in New Zealand was £246,000
(2022: £nil) and with ANZ Bank in Australia was £1,323,000 (2022:
£356,000).
The carrying amount of financial assets recorded in the consolidated
financial statements represents the Group’s maximum exposure
to credit risk without taking into account the value of any collateral
obtained. In the Directors’ opinion there have been no impairments of
financial assets in the period, other than in relation to trade receivables
written off of £nil (2022: £nil). The Group’s trade receivables and contract
assets do not contain significant financing components and therefore
the Group uses the Simplified Approach to calculating expected credit
losses under IFRS 9. The size of the bad debt provision at 30 June 2023
has been amended to reflect any disputes in the year.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group manages its cash
flows to ensure that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or damage to the Group’s reputation.
The Group has maintained its facility with HSBC Innovation Bank
(formerly Silicon Valley Bank UK Ltd) and has a £5m revolving credit
facility, secured on the Group’s assets, with an additional £2.5m available,
subject to credit approval at the time, should there be an appropriate
investment opportunity. At 30 June 2023, £1.0m of the facility was
utilised (30 June 2022: £nil), leaving headroom of £4.0m.
The Directors manage liquidity risk by regularly reviewing the Group’s
cash requirements by reference to short-term cash flow forecasts and
medium-term working capital projections prepared by management.
Foreign exchange risk
Activities in each foreign currency are funded as much as possible
through operating cash flows, mitigating foreign exchange risk. Funds
held in foreign currencies and not required for operating expenses in
the local currency are converted to Sterling as appropriate taking into
consideration prevailing foreign exchange rates at the time of receipt
and the Group’s hedging of future foreign currency cash flows through
the use of participating forward contracts. There were no outstanding
hedges at 30 June 2023 (2022: none). The Group’s revolving credit facility
is denominated in Sterling.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
93
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
16 Financial instruments and financial risk management
continued
The Group has the following cash and cash equivalent deposits:
A 5% change in the currency translation rate between Sterling and
overseas currencies would have the following effect on the Group’s net
assets and profit before tax:
Sterling
Euros
Canadian Dollars
Australian Dollars
US Dollars
New Zealand Dollars
2023
£000
2,218
722
2,004
1,467
3,912
292
2022
£000
1,219
–
962
750
678
23
Canadian Dollars
Net assets
Profit/(loss) before tax
Australian Dollars
Net assets
Profit/(loss) before tax
10,615
3,632
The gross value of receivables and payables by currency is disclosed
in Notes 12 and 13 respectively. The Group has the following net other
financial instruments:
Sterling
Euros
Canadian Dollars
Australian Dollars
US Dollars
New Zealand Dollars
2023
£000
(7,500)
(2,240)
296
(428)
2,284
5
2022
£000
(4,107)
–
1,292
13
1,423
–
US Dollars
Net assets
Profit/(loss) before tax
Euros
Net assets
Profit/(loss) before tax
New Zealand Dollars
Net assets
(7,583)
(1,379)
Profit/(loss) before tax
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
2023
£000
(105)
(7)
2023
£000
(48)
(4)
2023
£000
(307)
(15)
2023
£000
(602)
1
2023
£000
(11)
21
2022
£000
(110)
22
2022
£000
(42)
187
2022
£000
(381)
(155)
2022
£000
–
–
2022
£000
–
–
94
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
16 Financial instruments and financial risk management
continued
Maturity of financial assets and liabilities
All of the Group’s financial assets and financial liabilities at each
reporting date are either receivable or payable within one year, other
than in respect of the Group’s leases (see Note 19) and therefore the fair
value of those financial assets and liabilities equals their carrying value.
Capital management
The Group’s capital structure is comprised of shareholders’ equity and
debt raised through the revolving credit facility with HSBC Innovation
Bank. The objective of the Group when managing capital is to maintain
adequate financial flexibility to preserve its ability to meet its financial
obligations, both current and long term. The capital structure is
managed and adjusted to reflect changes in economic conditions.
The Group funds its expenditures on commitments from existing cash
and cash equivalent balances, primarily received from operating cash
flows, issuances of shareholders’ equity and from the revolving credit
facility with HSBC Innovation Bank. There are no externally imposed
capital requirements. Financing decisions are made by the Directors
based on forecasts of the expected timing and level of capital and
operating expenditure required to meet the Group’s commitments and
development plans.
17 Share capital and reserves
The authorised share capital of the Company at 30 June 2023 is
29,257,404 ordinary shares of 1p each.
At 1 July 2021
Issue of share capital
At 30 June 2022
Issue of share capital
Issue costs
Number of
shares issued
and fully paid
26,096,563
325,548
26,422,111
2,835,293
–
Share capital
£000
Share premium
£000
261
3
264
29
–
17,503
182
17,685
12,525
(285)
At 30 June 2023
29,257,404
293
29,925
On 8 August 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 2,600.
On 20 October 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 2,700.
On 16 November 2022, the Company issued 1p ordinary shares pursuant
to the placing to raise funds towards the acquisition of Untie Nots SAS.
The total number of shares issued on this date was 1,261,261.
On 16 November 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 15,568.
On 22 November 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 55,000.
On 25 November 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 46,574.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
95
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
17 Share capital and reserves continued
On 3 January 2023, the Company issued 1p ordinary shares pursuant to
consideration for the acquisition of Untie Nots SAS. The total number of
shares issued on this date was 931,519.
On 21 January 2023, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 200,000.
On 10 February 2023, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 272,119.
On 14 March 2023, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 15,000.
On 12 April 2023, the Company issued 1p ordinary shares pursuant to the
exercise of employee share options. The total number of shares issued
on this date was 27,952.
On 11 May 2023, the Company issued 1p ordinary shares pursuant to the
exercise of employee share options. The total number of shares issued
on this date was 5,000.
Merger reserve
The acquisition of its principal subsidiary, Eagle Eye Solutions Limited, by
the Group in 2014 did not meet the definition of a business combination
and therefore fell outside the scope of IFRS 3. The acquisition was therefore
accounted for in accordance with the principles of merger accounting.
The consideration paid to the shareholders of Eagle Eye Solutions
Limited was 13,641,384 ordinary shares of 1p each. A merger reserve
arises on consolidation being the difference between the nominal value
of the shares issued on acquisition and the net assets acquired.
18 Share option schemes
The Company has a share option scheme for certain employees and
Directors of the Group. Options are generally exercisable at a price equal
to the market price of the Company’s shares on the day immediately
prior to the date of grant. Options are forfeited if the employee or
Director leaves the Group before the options vest. The service and
performance criteria relating to the options are the continuing
employment of the holder and the achievement of certain earnings-
based performance criteria and in the case of the LTIP Share Option
Scheme, may include the overall underlying performance of the
Company, taking into account, among other matters, the Company’s
share price (as set out on pages 50 to 55).
2023
Number of
share
options
2023
Weighted
average
exercise
price
£
2022
Number of
share
options
Outstanding at the
beginning of the year
3,745,589
0.27 4,570,527
Granted during the year
473,010
0.01
219,144
Exercised in the year
(642,513)
(0.59)
(325,548)
Lapsed in the year
(6,688)
(1.74)
(718,534)
2022
Weighted
average
exercise
price
£
0.27
0.01
(0.57)
(0.04)
Outstanding at the end
of the year
Exercisable at the end
of the year
3,569,398
0.17 3,745,589
0.27
2,300,690
0.16 2,129,885
0.18
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
96
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
18 Share option schemes continued
In the year ended 30 June 2023, options were granted on 4 April 2023.
The aggregate of the estimated fair value of the options granted on that
day was £2,692,000 and the share price on that date was £5.70.
In the year ended 30 June 2022, options were granted on 7 February
2022. The aggregate of the estimated fair value of the options granted
on that day was £1,268,000 and the share price on that date was £5.85.
In the year ended 30 June 2023, options were exercised as follows:
In the year ended 30 June 2022, options were exercised as follows:
Date of exercise
4 February 2022
16 March 2022
26 April 2022
20 May 2022
27 May 2022
Share price
£5.85
£4.30
£4.56
£4.70
£5.53
Date of exercise
8 August 2022
20 October 2022
16 November 2022
22 November 2022
25 November 2022
20 January 2023
10 February 2023
14 March 2023
12 April 2023
11 May 2023
Share price
£5.53
£5.63
£5.64
£5.55
£5.68
£5.50
£5.40
£5.58
£5.50
£5.38
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
97
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
18 Share option schemes continued
Options outstanding under the Company’s share option schemes were as follows:
Name of scheme
2023
No of
options
2022
No of
Calendar
Exercise price
options
year of grant
Exercise period
per share
EMI Share Option Scheme
24,344
44,588
2014 2014-2024
EMI Share Option Scheme
EMI Share Option Scheme
EMI Share Option Scheme
–
120,000
2014 2014-2024
28,808
7,500
38,808
37,500
2015 2015-2025
2015 2015-2025
EMI Share Option Scheme
57,300
105,000
2016 2016-2026
EMI Share Option Scheme
–
2,600
2016 2016-2026
EMI Share Option Scheme
58,193
58,193
2017
2017-2027
EMI Share Option Scheme
117,500
122,500
2017
2017-2027
EMI Share Option Scheme
20,926
50,000
2019 2019-2029
LTIP Share Option Scheme
585,979
647,476
2016 2016-2026
LTIP Share Option Scheme
251,581
319,190
2017
2017-2027
LTIP Share Option Scheme
729,956
922,323
2019 2019-2029
LTIP Share Option Scheme
536,103
597,525
2020 2020-2030
LTIP Share Option Scheme
462,802
462,802
2021 2021-2031
LTIP Share Option Scheme
215,396
217,084
2022 2022-2032
LTIP Share Option Scheme
473,010
–
2023 2023-2033
The weighted average remaining contractual life of these options is 6.0 years (2022: 6.2 years).
£0.51
£1.55
£2.07
£2.23
£1.32
£1.06
£2.69
£2.33
£1.00
£0.01
£0.01
£0.01
£0.01
£0.01
£0.01
£0.01
The fair value of the employees’ services received in exchange for the grant of share options is recognised as an expense. The total amount to be
expensed over the vesting period is determined by reference to the fair value of the share options granted. Fair value is determined by reference to
the Black-Scholes option pricing model.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
98
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
18 Share option schemes continued
The inputs into the option pricing model are as follows:
The inputs into the pricing model are as follows:
Weighted average exercise price
Expected volatility
Expected life
Risk free interest rate
Expected dividends
2023
£0.17
2022
Weighted average exercise price
£0.27
Expected volatility
25.3%-44.4% 25.3%-44.4%
Expected life
5-8 years
5-8 years
Risk free interest rate
0.2%-3.7%
0.2%-1.9%
Expected dividends
Nil
Nil
2023
£0.01
40%-45%
3-5 years
3.31%-3.38%
Nil
The volatility of the Company’s share price on each date of grant is
calculated as the average of the annualised standard deviations of daily
continuously compounded returns on the Company’s stock.
On 4 April 2023, the Group launched the Growth Plan, a one-off award
of B shares in Eagle Eye Solutions Holdings Limited ('B shares'), an
intermediate holding company of the Group, which are convertible on
exercise into ordinary shares in Eagle Eye ('Ordinary Shares'). The plan is
designed to focus solely on creating shareholder value through a series
of distinct, stretching share price hurdles. The awards under the Growth
Plan will vest on the third anniversary of grant and, unless converted
into ordinary shares, expire after ten years from grant. The fair value of
the employees’ services received in exchange for the Growth Plan shares
is recognised as an expense. The total amount to be expensed over the
vesting period is determined by reference to the fair value of the share
options granted. Fair value is determined by reference to the Monte
Carlo pricing model.
The Group recognised a charge of £2,426,000 (2022: £1,851,000) related
to equity-settled share-based payment transactions in the year.
19 Leases
Depreciation charge for right of use assets
Interest expense on lease liabilities
Short-term lease expense
Total cash outflow for leases
2023
£000
268
31
243
558
2022
£000
170
29
191
405
The carrying value of and, where applicable, additions to the Group’s
right of use assets are disclosed in Note 11.
At 30 June, the Group had aggregate minimum lease payments under
non-cancellable leases for office sites under IFRS 16 as follows:
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
Due within 1 year
Due within 2-5 years
2023
£000
523
426
949
2022
£000
211
344
555
99
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
19 Leases continued
The Group’s Guildford office lease agreement can be cancelled at the
end of its initial ten year term, which commenced in July 2015. The lease
for the Group’s Manchester office can be cancelled at the end of its
initial ten year term, which commenced in December 2013. The lease for
the Group’s London office can be cancelled after two years of its initial
five year term, which commenced in April 2023. The lease for the Group’s
Paris office can be cancelled at the end of its current three year term,
which commenced in January 2023. There are no further options for
extension or termination and there are no residual value guarantees.
20 Related party transactions
The remuneration of the Directors and key management personnel is
disclosed in Note 5.
During the year the Group acquired sub-contractor technical
development services to the value of £41,000 (2022: £66,000) from
Eagle Eye Technology Limited, a company in which Stephen Rothwell,
a Director of the Company, holds an interest. At 30 June 2023, £3,900
(2022: £10,000) was outstanding in respect of these services.
None of the key management personnel of the Group owe any amounts
to any company within the Group (2022: £nil), nor are any amounts
due from any company in the Group to any of the key management
personnel (2022: £nil).
21 Alternative performance measure
Adjusted EBITDA is a key performance measure for the Group and is
derived as follows:
(Loss)/profit before taxation
Add back:
Finance income and expense
Share-based payments
Depreciation and amortisation
Acquisition cost
Adjusted EBITDA
2023
£000
(760)
140
2,426
5,685
1,298
8,789
2022
£000
685
49
1,851
3,891
–
6,476
22 Net cash
Net cash is a key performance measure for the Group and is defined as
follows:
30 June
2022
£000
Cash flow
£000
Foreign
exchange
adjustments
£000
Acquisition
£000
30 June
2023
£000
Cash and cash
equivalents
3,632
5,376
(561)
2,168
10,615
Financial liabilities
–
(372)
–
(927)
(1,299)
Net cash
3,632
5,004
(561)
1,241
9,316
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
100
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
23 Business combinations
On 3 January 2023, Eagle Eye Group plc completed the acquisition of
100% of the issued share capital of Untie Nots SAS. The consideration
for the acquisition was made up of initial cash consideration of €9.1m
and €5.9m worth of newly issued shares in Eagle Eye Group plc.
Further consideration of €0.7m was paid on 3 July 2023 following
the finalisation of certain tax affairs related to the period prior to
the acquisition. Contingent consideration is due to be paid in FY25
subject to specific revenue targets being achieved in the year to
December 2024 and achievement of a minimum EBITDA margin.
The contingent consideration included in the goodwill calculation is
a discounted probability weighted value, payable to those vendors
who are not employees of the Group. Contingent consideration due to
vendors who are required to remain employees of the Group to earn
the consideration will be expensed through the income statement in
accordance with IFRS 3.
Intangible assets
Property, plant and equipment
Trade and other receivables
Current tax receivable
Cash and cash equivalents
Trade and other payables
Financial liabilities
Provision fair value of identified
net assets
Provisional goodwill
Fair value of consideration
Satisfied by:
Cash
Shares issued
Deferred consideration
Contingent consideration
Book value
£000
Provisional fair
value adjustment
£000
Provisional fair
value
£000
–
14
1,261
497
2,149
(872)
(927)
10,226
10,226
209
(32)
–
–
223
1,229
497
2,149
(209)
(1,081)
–
(927)
12,316
3,451
15,767
8,549
5,192
670
1,357
15,767
24 Ultimate controlling party
The Directors do not consider there to be an ultimate controlling party
due to no individual party owning a majority share in the Company. See
page 59 for information on percentage shareholdings.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
101
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Company Statement of Financial Position
Contents Generation – Sub Page
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
COMPANY STATEMENT OF FINANCIAL POSITION
as at 30 June 2023
Notes
2023
£000
2022
£000
Non-current assets
Investments in subsidiaries
4
28,750
10,647
Current assets
Trade and other receivables
5
5,576
8,319
The Company has not presented its own income statement as
permitted by section 408 (4) of the Companies Act 2006. The loss
for the financial year dealt with in the accounts of the Company is
£2,080,000 (2022: £792,000).
These financial statements were approved by the Board on
18 September 2023 and signed on its behalf by:
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Short term borrowings
Non-current liabilities
Trade and other payables
Total liabilities
Net assets
Equity attributable to owners of the parent
Share capital
Share premium
Share option reserve
Retained losses
Total equity
673
141
6,249
8,460
34,999
19,107
L Sharman-Munday
Director
T Mason
Director
Company number: 08892109
6
(1,055)
(134)
(1,000)
–
(2,055)
(134)
6
(1,356)
–
(3,411)
(134)
31,588
18,973
7
7
293
264
29,925
17,685
7,291
5,549
(5,921)
(4,525)
31,588
18,973
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
102
Contents Generation - Section Company Statement of Changes in Equity
Contents Generation – Sub Page
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2023
Share
capital
£000
Share
premium
£000
Share
option
reserve
£000
Retained
losses
£000
Total
£000
Balance at 1 July 2021
261
17,503
3,997
(4,032)
17,729
Loss for the financial year
Transactions with owners recognised in equity
Exercise of share options
Fair value of share options exercised in the year
Share-based payment charge
–
3
–
–
3
–
182
–
–
–
–
(792)
(792)
–
185
(299)
299
–
1,851
–
1,851
182
1,552
299
2,036
Balance at 30 June 2022
264
17,685
5,549
(4,525) 18,973
Loss for the financial year
Transactions with owners recognised in equity
Issue of share capital
Issue costs
Exercise of share options
Fair value of share options exercised in the year
Share-based payment charge
–
–
22
12,148
–
7
–
–
(285)
377
–
–
29
12,240
–
–
–
(2,080)
(2,080)
–
–
12,170
(285)
384
–
(684)
684
2,426
1,742
–
2,426
684
14,695
Balance at 30 June 2023
293
29,925
7,291
(5,921) 31,588
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
103
Contents Generation - Section Notes to the Company Financial Statements
Contents Generation – Sub Page
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE COMPANY FINANCIAL STATEMENTS
1 Accounting policies
Basis of preparation
These financial statements have been prepared on a going concern
basis under the historical cost convention, and in accordance with
the Companies Act 2006 and applicable United Kingdom accounting
standards. These financial statements conform to FRS 102.
The Directors have prepared detailed financial forecasts and cash flows
for the Group looking beyond 12 months from the date of approval of
these consolidated financial statements. In developing these forecasts
the Directors have made assumptions based upon their view of the
current and future economic conditions that will prevail over the
forecast period. The success of the Group drives the success of the
Company.
The preparation of financial statements requires management to
exercise its judgement in the process of applying accounting policies.
The areas involving a higher degree of judgement, or areas where
assumptions and estimates are significant to the financial information,
are disclosed in Note 2.
In accordance with FRS 102, the Company has taken advantage of the
exemptions from the following disclosure requirements:
• Section 7 ‘Statement of Cash Flows’ – Presentation of a Statement of
Cash Flow and related notes and disclosures
• Section 11 ‘Basic Financial Instruments’ & Section 12 ‘Other Financial
Instrument Issues’ – Carrying amounts, interest income/expense and
net gains/losses for each category of financial instrument; basis of
determining fair values; details of collateral, loan defaults or breaches,
details of hedges, hedging fair value changes recognised in profit or
loss and in other comprehensive income
• Section 26 ‘Share-based Payment' – Sections 26.18(b), 26.19-26.21 and
26.23
• Section 33 ‘Related Party Disclosures’ – Compensation for key
management personnel
The presentational and functional currency of the Company is Sterling.
Results in these financial statements have been prepared to the
nearest £1,000.
Going concern
As part of their going concern review the Directors have followed
the guidelines published by the Financial Reporting Council entitled
“Guidance on Risk Management and Internal Control and Related
Financial and Business Reporting”.
On the basis of the above projections, the Directors are confident
that the Group has sufficient working capital and available funds to
honour all of its obligations to creditors as and when they fall due. In
reaching this conclusion, the Directors have considered the forecast
cash headroom, the resources available to the Group and the potential
impact of changes in forecast growth and other assumptions, including
the potential to avoid or defer certain costs and to reduce discretionary
spend as mitigating actions in the event of such changes. This means
that the Company expects to be able to recover its intercompany
receivables. Accordingly, the Directors continue to adopt the going
concern basis in preparing these financial statements.
Investments
Investments held by the Company are stated at cost less any provision
for impairment in the Company’s financial statements. The cost
includes the non-cash impact of Group settled share-based payment
arrangements.
Impairment of investments
The Company reviews the carrying values of its investments annually to
determine whether there is any indication that those investments have
suffered an impairment loss. If any such indication exists, the recoverable
amount of the investment is estimated in order to determine the extent
of the impairment loss (if any). Recoverable amount is the higher of fair
value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the investment for which
the estimates of future cash flows have not been adjusted.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
104
Contents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Impairment of investments continued
If the recoverable amount of an investment is estimated to be less than
its carrying amount, the carrying amount of the investment is reduced
to its recoverable amount.
Financial instruments
Financial assets and financial liabilities are recognised in the Statement
of Financial Position when the Company becomes party to the
contractual provisions of the instrument. Financial assets are de-
recognised when the contracted rights to the cash flows from the
financial asset expire or when the contracted rights to those assets are
transferred. Financial liabilities are de-recognised when the obligation
specified in the contract is discharged, cancelled or expired.
Financial assets
(a) Trade and other receivables
Trade and other receivables are recognised initially at their fair
value and then at amortised cost. Appropriate provisions for
estimated irrecoverable amounts are recognised in the statement of
comprehensive income when there is objective evidence that the assets
are impaired.
(b) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits held on call with banks.
Financial liabilities and equity
(c) Trade and other payables
Trade payables are recognised initially at their fair value and then
amortised cost.
(d) Equity instruments
An equity instrument is any contract that evidences a residual interest
in the assets of an entity after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds
received, net of issue costs.
Current income tax
The tax currently payable is based on taxable loss for the year. Taxable
loss differs from the loss for the financial year as reported in the income
statement because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that
are never taxable or deductible. The Company’s liability for current tax
is calculated using tax rates that have been enacted or substantively
enacted by the reporting date.
Share-based payments
The Company issues equity-settled share-based remuneration to certain
employees of the Group as consideration for services. Equity-settled
share-based payments are measured at fair value at the date of grant by
reference to the fair value of the equity instruments granted, calculated
using the Black-Scholes or Monte Carlo models as appropriate. The
fair value determined at the grant date of equity-settled share-based
payments is recognised as an expense for employees of the Company,
or as an investment in the subsidiary entity employing the relevant
employees otherwise, over the vesting period on a straight-line basis,
based on the Directors’ estimate of the number of instruments that will
eventually vest with a corresponding adjustment to equity. The expected
life used in the valuation, based on the Directors’ best estimate, takes
account of the effect of non-transferability, exercise restrictions, and
behavioural considerations.
Non-vesting and market vesting conditions are taken into account
when estimating the fair value of the options at grant date. Service and
non-market vesting conditions are taken into account by adjusting the
number of options expected to vest at each reporting date.
When the options are exercised the Company issues new shares. The
proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
105
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
1 Accounting policies continued
Equity
Equity comprises the following:
• Share capital, representing the nominal value of issued shares of the
Company;
• Share premium, representing the excess over the nominal value of
the fair value of consideration received for shares, net of expenses of
the share issue;
• Share option reserve, representing the cost of equity-settled share-
based payments until such share options are exercised or lapse; and
• Retained losses.
2 Critical accounting estimates and judgements
The preparation of these financial statements requires the Directors to
make judgements and estimates that affect the reported amounts of
assets and liabilities at each reporting date. Estimates and judgements
are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to
be reasonable under the circumstances. Actual results could differ from
these estimates. Information about such judgements and estimations
is contained in individual accounting policies. The key judgements and
sources of estimation uncertainty that could cause an adjustment to be
required to the carrying amount of assets or liabilities within the next
accounting period are outlined below:
Impairment of investments
An impairment review of the Company’s investments in its subsidiaries
is undertaken at least annually. This review involves the use of
judgement to consider the future projected income streams that will
result from those investments. The expected future cash flows are
modelled and discounted over the expected life of the investments in
order to test for impairment. In the years represented in these financial
statements no impairment charge was recognised as a result of these
reviews.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
Share-based payment charge
The Company issues share options and other share-based incentives
to certain employees of the Group. The Black Scholes and Monte Carlo
models are used to calculate the appropriate charge for these options.
The use of this model to calculate a charge involves using a number of
estimates and judgements to establish the appropriate inputs to be
entered into the model, covering areas such as the use of an appropriate
interest rate and dividend rate, exercise restrictions and behavioural
considerations. A significant element of judgement is therefore involved
in the calculation of the charge. In addition, the Directors estimate
the percentage of options that are expected to vest considering the
likelihood of achieving performance targets and employee churn rates.
Should more options vest than estimated the charge would increase.
The total charge recognised by the Company in the year to 30 June 2023
is £nil (2022: £nil) with a capital contribution in a subsidiary company of
£2,426,000 (2022: £1,851,000). Further information on share options can
be found in Note 18 to the consolidated financial statements.
3 Particulars of staff
The Company had no staff during the year or the prior year, other than
Directors. Details of Directors’ remuneration are contained in Note 5 to
the consolidated financial statements.
4 Investments
Investments in subsidiaries and joint ventures
Cost and net book value
At 1 July 2021
Share-based payment charge
At 30 June 2022
Share-based payment charge
Acquisition of Untie Nots SAS
At 30 June 2023
£000
8,796
1,851
10,647
2,426
15,677
28,750
106
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
4 Investments continued
Investments in subsidiaries and joint ventures continued
Class and percentage
of shares held and
Investment
Principal activity
Country of incorporation
voting rights
Eagle Eye Solutions Limited1
Digital loyalty services England & Wales
Ordinary 100%
Eagle Eye Solutions (North) Limited1
Dormant England & Wales
Ordinary 100%
Eagle Eye Solutions Holdings Limited1
Holding Company England & Wales
A Ordinary 100%
Eagle Eye Solutions Canada Limited2
Digital loyalty services
Canada
Ordinary 100%
Eagle Eye Solutions Australasia Pty Limited3
Digital loyalty services
Australia
Ordinary 100%
Eagle Eye Solutions Inc4
Digital loyalty services
United States
Ordinary 100%
Eagle Eye Solutions New Zealand Limited5
Digital loyalty services
New Zealand
Ordinary 100%
Untie Nots SAS6
Untie Nots Inc7
Digital AI promotion services
France
Ordinary 100%
Digital AI promotion services
United States
Ordinary 100%
1 The registered office address of this entity is 5 New Street Square, London, EC3A 4TW, UK.
2 The registered office address of this entity is 400-725 Granville Street, Vancouver, BC, V7Y 1G5, Canada.
3 The registered office address of this entity is Level 21, 55 Collins Street, Melbourne 3000, Vic, Australia.
4 The registered office address of this entity is 251 Little Falls Drive, Wilmington, DE 19808-1674, USA.
5 The registered office address of this entity is 166 Moorhouse Avenue, Sydenham, Christchurch 8011, New Zealand.
6 The registered office address of this entity is 5 Rue Saint-Germain l’Auxerrois, 75001 Paris, France.
7 The registered office address of this entity is 838 Walker Road, Suite 21-2, Dover, DE 19904, USA.
5 Trade and other receivables
Amounts due from Group undertakings
Prepayments and accrued income
2023
£000
5,543
33
5,576
2022
£000
8,225
94
8,319
The Company’s receivables do not contain impaired assets. The maximum exposure to credit risk at the
reporting date is the carrying value of each class of receivable disclosed above. All of the Company’s receivables
are denominated in Sterling.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
107
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
6 Trade and other payables
Current
Trade payables
Accruals and deferred income
Deferred consideration
Financial liabilities
2023
£000
354
47
654
1,000
2,055
2022
£000
65
69
–
–
134
Non-current
Contingent consideration
1,356
–
7 Share capital
The authorised share capital of the Company at 30 June 2023 is
29,257,404 ordinary shares of 1p each.
At 1 July 2021
Issue of share capital
At 30 June 2022
Issue of share capital
Issue costs
Number of
shares issued
and fully paid
26,096,563
325,548
26,422,111
2,835,293
–
Share capital
£000
Share premium
£000
261
3
264
29
–
17,503
182
17,685
12,525
(285)
At 30 June 2023
29,257,404
293
29,925
On 8 August 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 2,600.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
On 20 October 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 2,700.
On 16 November 2022, the Company issued 1p ordinary shares pursuant
to the placing to raise funds towards the acquisition of Untie Nots SAS.
The total number of shares issued on this date was 1,261,261.
On 16 November 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 15,568.
On 22 November 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 55,000.
On 25 November 2022, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 46,574.
On 3 January 2023, the Company issued 1p ordinary shares pursuant to
consideration for the acquisition of Untie Nots SAS. The total number of
shares issued on this date was 931,519.
On 21 January 2023, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 200,000.
On 10 February 2023, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 272,119.
On 14 March 2023, the Company issued 1p ordinary shares pursuant
to the exercise of employee share options. The total number of shares
issued on this date was 15,000.
On 12 April 2023, the Company issued 1p ordinary shares pursuant to the
exercise of employee share options. The total number of shares issued
on this date was 27,952.
On 11 May 2023, the Company issued 1p ordinary shares pursuant to the
exercise of employee share options. The total number of shares issued
on this date was 5,000.
108
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
8 Related party transactions
The remuneration of the Directors is disclosed in Note 5 to the
consolidated financial statements.
9 Ultimate controlling party
The Directors do not consider there to be an ultimate controlling party
due to no individual party owning a majority share in the Company. See
page 59 for information on percentage shareholdings.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
109
Contents Generation – PageContents Generation – Sub PageContents Generation - Section Other Information
Notice of Annual General Meeting
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTICE OF ANNUAL GENERAL MEETING
Company no. 8892109
EAGLE EYE SOLUTIONS GROUP PLC
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting ('AGM')
of Eagle Eye Solutions Group plc ('the Company') will be held at The
Clubhouse, St. James's, 8 St James's Square, London, SW1Y 4JU at 1.00
pm on 16 November 2023.
The AGM will be held in order to consider and, if thought fit, pass the
following resolutions which will be proposed as special or ordinary
resolutions as indicated.
ORDINARY BUSINESS
Ordinary resolutions
1. THAT the report of the Directors, the financial statements and the
report of the auditors for the Company’s financial year ended 30 June
2023, be received and adopted.
2. THAT Lucy Sharman-Munday, who retires by rotation and is eligible
for re-election pursuant to article 19 of the Company's articles of
association, be re-appointed as a Director of the Company.
3. THAT Charlotte Stranner, who was appointed since the last AGM
and is eligible for re-election pursuant to article 19 of the Company's
articles of association, be re-appointed as a Director of the Company.
4. THAT Anne de Kerckhove, who was appointed since the last AGM
and is eligible for re-election pursuant to article 19 of the Company's
articles of association, be re-appointed as a Director of the Company.
5. THAT:
(a) RSM UK Audit LLP of Ninth Floor, Landmark, St Peter's Square,
1 Oxford Street, Manchester, M1 4PB, be re-appointed as auditors
of the Company to hold office from the conclusion of the AGM
until the conclusion of the next Annual General Meeting of the
Company at which financial statements are laid before the
Company’s shareholders; and
(b) the Directors be authorised to determine the auditors’ remuneration.
SPECIAL BUSINESS
Ordinary resolutions
6. THAT the Directors be generally and unconditionally authorised for
the purposes of section 551 of the Companies Act 2006 ('the Act') to
exercise all the powers of the Company to:
(a) allot shares in the Company and grant rights to subscribe for
or convert any security into shares in the Company up to an
aggregate nominal amount of £97,524.68; and
(b) allot equity securities (as defined in section 560 of the Act) up to
an aggregate nominal amount of £195,049.36 (such amount to be
reduced by the nominal amount of any shares allotted or rights
granted under paragraph (a) of this resolution 6) in connection
with an offer by way of a rights issue to:
(i) the holders of ordinary shares in the Company in proportion
(as nearly as may be practicable) to the respective numbers of
ordinary shares held by them; and
(ii) holders of other equity securities, as required by the rights of
those securities or, subject to such rights, as the Directors of the
Company otherwise consider necessary,
and so that the Directors of the Company may impose any limits
or restrictions and make any arrangements which they consider
necessary or appropriate to deal with treasury shares, fractional
entitlements, record dates, legal, regulatory or practical problems
in, or under the laws of, any territory or any other matter.
These authorities shall apply in substitution for all previous authorities
(but without prejudice to the validity of any allotment pursuant to such
previous authority) and expire at the end of the next Annual General
Meeting of the Company or, if earlier, 15 months after the date of this
resolution, save that the Company may before such expiry make any
offer or agreement which would or might require shares to be allotted
or rights granted to subscribe for or convert any security into shares after
such expiry and the Directors may allot shares or grant such rights in
pursuance of any such offer or agreement as if the power and authority
conferred by this resolution had not expired.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
110
Contents Generation – Sub Page OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
Special resolutions
7. THAT, subject to the passing of resolution 6, the Directors be generally
and unconditionally empowered for the purposes of section 570 of
the Act to allot equity securities (within the meaning of section 560 of
the Act) for cash:
(a) pursuant to the authority conferred by resolution 6; or
(b) where the allotment constitutes an allotment within the meaning
of section 560(2)(b) of the Act,
in each case as if section 561 of the Act did not apply to any such
allotment, provided that this power shall be limited to:
(i) the allotment of equity securities in connection with an offer
of equity securities (but in the case of an allotment pursuant to
the authority granted under paragraph (b) of resolution 6, such
power shall be limited to the allotment of equity securities in
connection with an offer by way of a rights issue only) to:
(A) the holders of ordinary shares in the Company in proportion
(as nearly as may be practicable) to the respective numbers
of ordinary shares held by them; and
(B) holders of other equity securities, as required by the rights of
those securities or, subject to such rights, as the Directors of
the Company otherwise consider necessary,
and so that the Directors of the Company may impose any
limits or restrictions and make any arrangements which they
consider necessary or appropriate to deal with treasury shares,
fractional entitlements, record dates, legal, regulatory or
practical problems in, or under the laws of, any territory or any
other matter; and
(ii) the grant of options to subscribe for shares in the Company,
and the allotment of such shares pursuant to the exercise of
options granted under the terms of any share option scheme
adopted or operated by the Company and the allotment of
shares pursuant to any share incentive plan ('SIP') adopted or
operated by the Company; and
(iii)the allotment of equity securities, other than pursuant
to paragraphs (i) and (ii) above of this resolution, up to an
aggregate nominal amount of £29,257.40.
This power shall (unless previously renewed, varied or novated by the
Company in general meeting) expire at the conclusion of the next
Annual General Meeting of the Company following the passing of
this resolution or, if earlier, on the date 15 months after the passing of
such resolution, save that the Company may before the expiry of this
power make any offer or enter into any agreement which would or
might require equity securities to be allotted, or treasury shares sold,
after such expiry and the Directors may allot equity securities or sell
treasury shares in pursuance of any such offer or agreement as if the
power conferred by this resolution had not expired.
By order of the Board
James Esson
Company Secretary
For and on behalf of Eagle Eye Solutions Group plc
Dated: 18 October 2023
Registered Office: 5 New Street Square, London EC4A 3TW
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
111
Contents Generation – PageContents Generation – Sub PageContents Generation - Section
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
Notes:
1. Members are entitled to appoint a proxy to exercise all or any of
their rights to attend and to speak and vote on their behalf at the
meeting and at any adjournment of it. A member may appoint more
than one proxy in relation to the meeting provided that each proxy
is appointed to exercise the rights attached to a different share or
shares held by that member. If a proxy appointment is submitted
without indicating how the proxy should vote on any resolution, the
proxy will exercise his discretion as to whether and, if so, how he votes.
2. A proxy need not be a member of the Company. A proxy form which
may be used to make such appointment and give proxy instructions
accompanies this notice. If you do not have a proxy form and
believe that you should have one, or if you require additional forms,
please contact Computershare Investor Services plc, The Pavilions,
Bridgwater Road, Bristol, BS13 8AE.
3. To be valid any proxy form or other instrument appointing a proxy
must be received by post or (during normal business hours only)
by hand by Computershare Investor Services plc, The Pavilions,
Bridgwater Road, Bristol, BS99 6ZY no later than 1.00 p.m. on 14
November 2023 (or, in the event of any adjournment, no later than
12.00 p.m. on the date which is two days before the time of the
adjourned meeting (weekends and public holidays in England and
Wales excluded), together with, if appropriate, the power of attorney
or other authority (if any) under which it is signed or a duly certified
copy of that power or authority.
4. The return of a completed proxy form will not prevent a member
attending the meeting and voting in person if he/she wishes to do so.
5. A vote withheld option is provided on the form of proxy to enable
you to instruct your proxy not to vote on any particular resolution,
however, it should be noted that a vote withheld in this way is not
a ‘vote’ in law and will not be counted in the calculation of the
proportion of the votes ‘For’ and ‘Against’ a resolution.
6. To be entitled to attend and vote at the meeting (and for the
purpose of the determination by the Company of the votes they
may cast), members must be registered in the register of members
of the Company at 1.00 p.m. on 14 November 2023 (or, in the event
of any adjournment, no later than 12.00 p.m. on the date which is
two days before the time of the adjourned meeting (weekends and
public holidays in England and Wales excluded). Changes to the
register of members after the relevant deadline shall be disregarded
in determining the rights of any person to attend and vote at the
meeting.
7. In the case of joint holders, where more than one of the joint holders
purports to appoint a proxy, only the appointment submitted by
the most senior holder will be accepted. Seniority is determined
by the order in which the names of the joint holders appear in the
Company's register of members in respect of the joint holding (the
first-named being the most senior).
8. If a member submits more than one valid proxy appointment, the
appointment received last before the latest time for the receipt of
proxies will take precedence.
9. Any corporation which is a member can appoint one or more
corporate representatives who may exercise on its behalf all of its
powers as a member provided that they do not do so in relation to
the same shares.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
112
Contents Generation – PageContents Generation – Sub PageContents Generation - Section OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
Notes: continued
10. A user of the CREST system (including a CREST Personal Member)
may appoint a proxy or proxies by having an appropriate CREST
message transmitted to be received by no later than 1.00pm on 14
November 2023 (or not less than 48 hours before the time fixed for
any adjourned AGM, provided that no account shall be taken of any
part of a day that is not a working day).
CREST members who wish to appoint a proxy or proxies through
the CREST electronic proxy appointment service may do so by using
the procedures described in the CREST Manual. CREST Personal
Members or other CREST sponsored members, and those CREST
members who have appointed a voting service provider(s), should
refer to their CREST sponsor or voting service provider(s) who will be
able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the
CREST service to be valid, the appropriate CREST message (a ‘CREST
Proxy Instruction’) must be properly authenticated in accordance
with Euroclear International Limited’s specifications, and must
contain the information required for such instruction, as described in
the CREST Manual (available via www.euroclear.com). The message,
regardless of whether it constitutes the appointment of a proxy or
is an amendment to the instruction given to a previously appointed
proxy, must, in order to be valid, be transmitted so as to be received
by the issuer’s agent (ID 3RA50) by 1.00pm on 14 November 2023
(or not less than 48 hours before the time fixed for any adjourned
AGM, provided that no account shall be taken of any part of a day
that is not a working day). For this purpose, the time of receipt will
be taken to be the time (as determined by the time stamp applied
to the message by the CREST Application Host) from which the
issuer’s agent is able to retrieve the message by enquiry to CREST
in the manner prescribed by CREST. After this time any change
of instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or
voting service providers, should note that Euroclear International
Limited does not make available special procedures in CREST for
any particular message. Normal system timings and limitations will,
therefore, apply in relation to the input of CREST Proxy Instructions.
It is the responsibility of the CREST member concerned to take (or,
if the CREST member is a CREST Personal Member, or sponsored
member, or has appointed (a) voting service provider(s), to procure
that his or her CREST sponsor or voting service provider(s) take(s))
such action as shall be necessary to ensure that a message is
transmitted by means of the CREST system by any particular time. In
this connection, CREST members and, where applicable, their CREST
sponsors or voting system provider(s), are referred, in particular, to
those sections of the CREST Manual concerning practical limitations
of the CREST system and timings.
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
113
Contents Generation – PageContents Generation – Sub PageContents Generation - Section
Company Information
OVERVIEW
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
Solicitors
Independent auditor
Taylor Wessing LLP
5 New Street Square
London
EC4A 3TW
RSM UK Audit LLP
Chartered Accountants
Ninth Floor, Landmark
St Peter’s Square
1 Oxford Street
Manchester
M1 4PB
COMPANY INFORMATION
Directors
Malcolm Wall
Tim Mason
Steve Rothwell
Lucy Sharman-Munday
Sir Terry Leahy
Robert Senior
Charlotte Stranner
Secretary
James Esson
Company number
8892109
Registered office
Nominated Adviser
and Broker
Bankers
5 New Street Square
London
EC4A 3TW
Investec Bank plc
30 Gresham Street
London
EC2V 7QN
HSBC UK Bank Plc
Alphabeta
14-18 Finsbury Square
London
EC2A 1BR
EAGLE EYE SOLUTIONS GROUP PLC ANNUAL REPORT AND ACCOUNTS 2023
114
Contents Generation – Sub PageContents Generation - Section Eagle Eye Solutions Group plc
Customer service enquiries: Tel: 0844 824 3699
Sales and general enquiries: Tel: 0844 824 3686
Email: info@eagleeye.com
Head Office:
31 Chertsey Street
Guildford
Surrey
GU1 4HD