Annual Report
and Financial
Statements
For the year ended 31 December 2023
3
Contents
Norman Broadbent at a glance
Purpose, vision & values
Financial Highlights
Chairman’s Statement
CEO’S Review
Section 172 Statement
Strategic Report
Directors’ Report
Directors’ Remuneration Report
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flow
Company Statement of Cash Flow
Notes to the Financial Statements
Officers & Professional Advisors
05
06
08
11
12
16
17
22
25
28
34
34
35
36
37
38
39
41
42
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Norman Broadbent Plc Annual Report and Financial Statements 4 Norman Broadbent Plc
Annual Report and Financial Statements
Shaping leadership
for 45 years
45 years
Established in 1979,
the first UK headquartered
search firm
3000 + CLIENTS
To date, we have supported over
3000 clients, from start-ups to
FTSE 100 companies
79 COUNTRIES
Our team has placed directors, executives and
leaders in 79 countries around the world
Norman Broadbent Plc
Annual Report and Financial Statements
5
Norman Broadbent
at a glance
Norman Broadbent (AIM: NBB), a leading executive search and senior interim
management business publishes its audited final results for the year ended 31
December 2023 (“FY23” or the “Period”).
Whilst undergoing a period of considerable transformation over the past two years,
the business delivered a very strong financial performance in FY23 with Net Fee
Income (NFI) increasing by 44% in the Period to £10.5 million (2022: £7.3 million) and
underlying EBITDA1 increasing by 800% from £0.1 million in 2022 to £0.9 million in
2023. In addition to growing the teams with quality hires, considerable investment
has been made in the broader platform from a culture and brand proposition
to supporting technology, positioning the business well for further continued
profitable growth.
Aberdeen Office
Edinburgh Office
Knutsford Office
London Office
1 excludes share based payment charges
Norman Broadbent Plc
Annual Report and Financial Statements
7
6
Norman Broadbent Plc
Annual Report and Financial Statements
Purpose,
vision & values
In 2023, Norman Broadbent continued to embrace the foundational work of the previous year’s comprehensive
engagement initiative across the company. We see this framework not just as testament to our collective
commitment but a vital instrument through which we continue to drive accountability and excellence in every
facet of our organisation.
We are committed to maintaining the momentum of this cultural transformation, ensuring that our core principles are
lived experiences for all. By fostering innovative ways for our employees to connect with, contribute to, and embody
our values, we are creating a vibrant, participative environment where the progress of our values is a shared journey.
PURPOSE
To have a lasting positive impact on people’s lives and the organisations we support.
VISION
To be the international brand of choice as an employer and business partner across board, executive and interim
leadership solutions through our passionate, collaborative and delivery-focused culture.
VALUES.
We Promote a Culture of Excellence
Everything we do is underpinned by a commitment to excellence, built on a culture of high
performance, continual improvement and values-driven leadership.
We Embody Genuine Curiosity
Curiosity is the ‘engine of our success,’ allowing us to form meaningful relationships,
understand complex challenges and create exceptional outcomes.
We Champion Collective Success
We support and challenge one another to deliver and celebrate success in an
inclusive environment.
We Care
We care about ourselves, each other, our clients, our communities and the world in which
we live.
8
Norman Broadbent Plc
Annual Report and Financial Statements
Financial
Highlights
KEY PERFORMANCE INDICATORS
Net Fee Income
Earnings/(loss) per share3
£10.5m
0.71p
2023
2022
2021
£10.5m
2023
0.71p
£7.3m
2022
(0.34)p
£5.9m
2021
(1.14)p
Underlying EBITDA/(LBITDA)1
Net cash/(debt)2
£0.9m
£0.4m
2023
£0.9m
2023
£0.4m
2022 £0.1m
2022
£(1.1)m
2021
£(0.3)m
2021
£(0.8)m
Total headcount at year end
Profit/(loss) before tax
52
£0.3m
2023
45
7
2023
£0.3m
2022
36
9
2022
£(0.3)m
2021
29
10
2021
£(0.6)m
Sales and related services
Administration
Norman Broadbent Plc
Annual Report and Financial Statements
9
Net Fee Income (‘NFI’)
growth of 44% in 2023
Return to profitability
with £0.6 million swing
in profit before tax to
£0.3 million (FY22: loss
before tax £0.3 million)
Net cash2 of £0.4 million
at year end (FY22: net
debt2 £1.1 million)
It was a record year for Norman Broadbent with revenue growth of 41% to £12.3 million (2022: £8.7 million). Both
search and interim revenues grew during the year by 52% and 9% respectively; together representing 96% of our
business. Our focus remains on delivering these core services. NFI grew during the year by 44% to £10.5 million and
reflects the quality of the team we have in place and the service they provide to clients.
Investments in our team, processes and tools have contributed to significant productivity improvements in our
ways of working from more frictionless finance processes to technology enabled business acquisition and project
management. This has greatly impacted the business allowing us to generate positive underlying EBITDA1 of £0.9
million, up £0.8 million (2022: EBITDA1 of £0.1 million). Norman Broadbent returned to profitability after many
years of generating losses, with FY23 seeing a profit before tax of £0.3 million, up £0.6 million (2022: loss before
tax £0.3 million).
There was, and continues to be, a strong focus on working capital management. This allowed the early
redemption and conversion of the £0.4 million convertible loan notes (‘CLNs’), reduced our reliance on the
invoice discounting facility which as at 31 December 2023 was £0.2 million (31 December 2022: £0.5 million) and
end the year with a healthy cash balance of £0.8 million (31 December 2022: £0.05 million). In 2023, net cash
inflow from operations increased to £1.7 million (2022 outflow: £0.03 million).
STRATEGIC HIGHLIGHTS
Returned to profitability whilst
maintaining a rapid growth
trajectory as per strategic plan
Reinforced values and
performance-based culture
whilst growing fee generating
and research headcount
Average annual fees per
established fee generating
employee up by 32% over the
previous year
Continued to develop capability
and capacity across the team
through improved processes and
support technologies
Platform now in place to fuel
continued profitable growth
1 excludes share based payment charges
2 excluding lease liabilities
3 fully diluted earnings per share, excludes
share based payment charges
10
Norman Broadbent Plc
Annual Report and Financial Statements
RESULTS FOR THE FINANCIAL YEAR
“I am delighted with the dedication of the entire team with FY23 representing a turning point in the performance
of the business, bringing it back to levels of performance not seen in well over a decade. A refreshed culture
based on values and performance, a motivated and growing team of the highest quality professionals, a
resurgent and recognised brand, underpinned by market leading processes and technologies, come together to
form a very strong platform and engine for future growth, both organic and inorganic.
Chairman’s
Statement
Norman Broadbent Plc
Annual Report and Financial Statements
11
With average fee levels having risen in FY23, Norman Broadbent is rapidly re-establishing its position at the
senior end of the executive search and interim management industry, realigning with the brand’s incredibly
strong and trusted heritage.”
2023 saw a transformation across the business. The foundations were built in the previous two years with
Norman Broadbent returning to profitability. The growth in 2023 is a testimony to the hard work put in by the
team and it was another exceptional year both operationally and financially.
Kevin Davidson
Group Chief Executive
26 March 2024
The culture present throughout the business is one of teamwork, inclusion, quality and delivery. This has
been integral in delivering the results that have been achieved. It’s extremely encouraging to see the levels of
commitment and ambition across every level of the business. This ambition is led by example from the top by
our exceptional and inspirational executive management team.
The team’s commitment to delivering world-class leading services to our customers in every aspect of our
business is second to none. I believe this sets us apart and has been core to our success.
Throughout 2024, the executive team will continue to invest further in our headcount adding both experienced
consultants and researchers. They will continue to reorganise and strengthen our support functions and invest in
leading edge technology to bolster this growth.
We have, in common with our peers, been facing some very challenging market conditions, but the quality of our
service has allowed the team to not only weather the challenges but post the best numbers for over ten years. A net
profit of £0.3 million, NFI of £10.5 million and net cash generated from operating activities of £1.7 million.
The Board’s strategy for rapid yet sustainably profitable expansion has been delivered and will provide the
platform to continue in the same manner throughout 2024.
I would like to thank the entire Norman Broadbent team for their unwavering commitment, hard work and for
the quality of their execution, our clients for partnering with us, for their faith in the excellence of our services and
our shareholders for their continued support.
Peter Searle
Chair
26 March 2024
The Board’s strategy for
rapid yet sustainably
profitable expansion
has been delivered.
Peter Searle
Non-Executive Chairman
12
Norman Broadbent Plc
Annual Report and Financial Statements
CEO’S
Review
We achieved a key milestone in 2023, returning the business to profitability, as planned when I joined Norman
Broadbent in late 2021. We continued to grow our headcount while also investing in supporting infrastructure and
technologies to both modernise and prepare the platform for accelerated future expansion. I am delighted that
all of our objectives have so far been met and I am increasingly confident in our ability to position our incredible
brand as a global leader in senior executive search and interim management.
During 2023, Norman Broadbent placed leaders across the UK, Europe, the US, Australasia and the Middle East
covering multiple sectors and disciplines. As this year has proven, our business is well balanced across both
resilient and rapid growth sectors where there is a considerable shortage of leadership talent.
NFI in 2023 grew by 44% to £10.5 million (2022: £7.3 million) and the Company generated underlying EBITDA1
of £0.9 million which represents a positive swing of £0.8 million (2022: EBITDA1 of £0.1 million). Building on the
considerable efforts and successes of 2022, the strategic pillars of the business continued to be strengthened
during 2023. We will continue to develop our platform in 2024 and beyond as we drive rapid organic growth.
We will also continue to identify and explore appropriate opportunities for inorganic growth.
Kevin Davidson
Chief Executive Officer
1 excludes share based payment charges
The five strategic priorities for the year ahead continue to be the following:
Norman Broadbent Plc
Annual Report and Financial Statements
13
People & Culture
Brand & Market
positioning
Research & Delivery
Financial Stability
& Performance
Business focus
PEOPLE & CULTURE - driving an ambitious
and collaborative culture
Our business is fundamentally about our people
and the culture they create and demonstrate both
internally and externally. This determines performance,
employee retention and attraction, and, ultimately,
positive outcomes for all stakeholders. Having invested
heavily in the culture reset towards the end of 2021
and the beginning of 2022, we have now established
a values driven, ambitious, collaborative and growth
oriented culture, underpinned by trust and a
commitment to exceptional performance.
The level of mandates in terms of both seniority and
fee levels continued to grow throughout 2023. This
was a clear mission that we set when I joined the
Company and a necessary journey that we are on in
re-positioning Norman Broadbent as the pre-eminent
executive search and interim leadership partner across
our chosen markets. We continued to build our board
practice which continued to deliver high-quality Chair,
Non-Executive and Executive Director mandates
throughout the year across the listed, private (private
equity and family owned) and public sectors - a
trend which is reflective of our brand elevation and
supportive of our future ambitions.
We continue to reinforce our cultural anchors
through quarterly values awards, engagement
surveys, performance reviews, charitable fundraising
and community development projects amongst
other activities.
The stability of the team is crucial, especially when
growing rapidly, and, as in 2022, we were delighted
to have had very few regretted leavers in 2023. We
recruited a total of fifteen very high calibre and
culturally aligned colleagues across fee generation,
research, and support in 2023 and secured another
three who started at the beginning of 2024.
BRAND & MARKET POSITIONING
- combining rich heritage with
modern dynamism
Built over 45 years, we are all very proud of the
heritage and strength of the Norman Broadbent brand
which, coupled with the quality of our people and
our culture, will increasingly be the accelerator of our
future growth. We are recognised as leaders in the field
and this brand strength provides a strong foundation
to drive further growth.
RESEARCH & DELIVERY - meticulous
technology enabled processes
Our in-house research team delivers bespoke,
value-added research and business intelligence
on markets, people, and competitors, helping our
clients make better, more informed decisions.
As a result of the investments made in our team,
processes and the implementation of new software
platforms, the productivity, quality, and consistency
of our research and delivery function continues to
improve, positioning us to scale much more smoothly
and effectively. As our growing fee generating
headcount becomes established and mandates
become increasingly more senior, the need to grow
the research team proportionately, from a cost
perspective, also reduces making additional net fee
income ever more accretive to the bottom line.
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Norman Broadbent Plc
Annual Report and Financial Statements
FINANCIAL STABILITY & PERFORMANCE -
growth and sustainable profitability
In 2023, net cash inflow from operating activities
increased significantly to £1.7 million (2022 outflow:
£0.03 million) due to the continued focus on
improving working capital. The growing levels of profits
has further supported cash generation with the Group
closing the year with a cash position of £0.8 million
(31 December 2022: £0.05 million).
As at 31 December 2023, the Group’s balance sheet
position was significantly stronger with net assets of
£1.4 million (31 December 2022: £0.7 million) reflecting
the improvements in profitability, focus on working
capital and reduction in borrowings, notably the
early redemption and conversion of the convertible
loan notes (31 December 2022: £0.4 million) and the
reduced utilisation of the invoice discounting facility
to £0.2 million (31 December 2022: £0.5 million).
Since our CFO, Mehr Malik, joined us in January 2023,
our financial discipline has improved considerably.
We have also introduced new technology which is
dramatically improving all aspects of the business
in a structured and integrated manner. In 2024 we
will be further developing this technology stack
and, in particular, carefully managing the integration
of operating systems to improve the quality and
availability of real time management information. As
with all investments we have been making, this is not
only necessary in modernising the business, but it
establishes a platform which is capable of supporting
our ambitious future growth plans.
BUSINESS FOCUS - building on our
strengths
Whilst continuing to offer a full range of leadership
advisory services, the Company has had a clear
focus on its executive search brand and being at the
forefront of this increasingly valuable market. Norman
Broadbent is still recognised as a leader in the field
of executive search which drives client engagement
and, in turn, opportunities in interim management
and other leadership advisory services. Executive
search will therefore continue to be the core of the
business as we also look to grow interim management
(which represented 16% of NFI in FY23) and our
other leadership advisory service offerings such as
leadership assessment and development .
The fee generation hires made in 2023 have
meaningfully expanded the Company’s position
in the following sectors: Board, Industrial, Retail &
Consumer, Private Equity/Venture Capital, HR, Digital
& Technology and Change & Transformation across
executive search and senior interim management.
The sectors we operate in are generally both resilient
and currently growing . Approximately 50% of our
net fee income in FY23 was generated in industrial
and infrastructure segments which continue to
attract investment and grow rapidly in the UK and
internationally. We have an enviable and growing
track record across power, utilities and the entire
energy value chain from nuclear and conventional
hydrocarbon through the energy transition to
renewables of all descriptions, including wind,
solar, carbon capture and storage and the emerging
hydrogen economy. Working with asset owners,
developers, constructors, equipment and service
providers, technology innovators and investors, the
Company is well placed to capitalise on the continued
and forecast buoyancy of each of these sectors.
Within our Industrial practice we have also developed
a strong and growing capability in chemicals,
transportation infrastructure (including civil aviation
and aerospace), engineering and construction,
marine and shipping, automotive, clean tech and
natural resources.
Our Retail & Consumer practice is also well positioned
with particular strength and brand recognition
across procurement, supply chain and commercial
leadership, an area where there is considerable
focus and investment. This team has continued to
successfully support some of the world’s largest
consumer brands whilst deepening and broadening
our international relationships with them.
We also invested in our Lifesciences team in FY23 and
two additional fee earners joined this team in early
2024. Norman Broadbent is established on a number
of blue-chip preferred supplier lists in this sector
which we are well placed to capitalise on.
The Digital & Technology sector is ever evolving and we
continued to support both large clients on complex
and large scale digital transformation projects, and
also small tech scale ups as they shape leadership
teams for the future.
In addition, within our Corporate Functions practice, we
placed a growing number of Digital & Technology, HR,
Legal and Finance leaders across a multitude of sectors.
Finally, we made key appointments and investments
in our Board practice in 2023. The Norman Broadbent
legacy places our brand very firmly in the boardroom
of most organisations, large and small; an opportunity
which we do not believe has been appropriately
capitalised on in recent years. Our commitment
and fresh approach to building our Board practice
with Diversity, Equity, and Inclusion (DE&I) and
Environmental, Social, and Governance (ESG) at its very
heart is being very well received. As a powerful conduit
to executive search work and broader leadership
advisory services, we will continue to grow and
develop this proactively in 2024 and beyond.
CURRENT TRADING AND OUTLOOK
SUMMARY
Norman Broadbent Plc
Annual Report and Financial Statements
15
The results in FY23 demonstrate just how much the
turnaround of Norman Broadbent plc has achieved
in a short period of time. Having now delivered the
strongest results in a decade, the Board and leadership
team have their sights very much fixed on an
ambitious, but sustainable, growth plan.
Having achieved such strong financial results, whilst
growing rapidly in a depressed market, the Board has
every confidence in the team and is looking to the
future with ever growing optimism and excitement.
Kevin Davidson
Group Chief Executive
26 March 2024
We continue to have ambitious, but achievable organic
growth targets over the next couple of years which we
are confident will deliver NFI in excess of £15 million
by 2025 and EBITDA in excess of £1.25 million. Whilst
continuing to drive growth, the leadership team remains
focussed on overheads and productivity improvements,
ensuring that revenues become ever more accretive
through a combination of seniority of mandates,
economies of scale and efficiency improvements.
Having achieved profitability and positive cash flow in
the expected timescales, the Company is managing
its resources carefully in order to strike the optimal
balance between pace of organic growth, short-
term profitability and continued cash generation. As
the business is now on a more stable footing and
sustainable growth trajectory, corporate development
activity will be increased in 2024 to identify and assess
the potential for both smaller, strategic acquisitions as
well as large-scale transformational opportunities.
The Board continues to monitor carefully the evolving
macro-economic climate and believes that the
Company is well positioned in what are stable and
growing markets, notably across Industrials and,
in particular, Energy, Power, Utilities, Chemicals,
Transport & Infrastructure, including Civil Aviation.
All of these sectors continue to attract significant
capital investment whilst also experiencing extreme
imbalances in the supply of, and demand for, senior
leadership talent.
We are looking to the future with confidence. There
are clearly macro-economic headwinds which we are
monitoring carefully, but with a heavy bias towards
growing and counter-cyclical sectors, a refreshed
culture, an absolute focus on quality and the ongoing
attraction of exceptionally talented and dedicated
colleagues, the Board is confident that the Company
can continue to grow rapidly whilst also delivering
positive and sustainable EBITDA.
Whilst difficulties were experienced in FY23 by many
businesses across executive search and the broader
recruitment industry, we have delivered and intend to
capitalise on our positive momentum to grow the team
further in preparation for a broader economic recovery.
16
Section
172 Statement
The Directors of the Company, as those of all UK companies, must act in accordance with a set of general duties.
These duties are detailed in section 172 of the UK Companies Act 2006 which is summarised as follows:
‘A Director of a company must act in the way they consider, in good faith, would be most likely to promote the
success of the company for the benefit of its shareholders as a whole and, in doing so have regard (amongst
other matters) to:
● The likely consequences of any decisions in the long-term;
● The interests of the company’s employees;
● The need to foster the company’s business relationships with suppliers, clients and others;
● The impact of the company’s operations on the community and environment;
● The desirability of the company maintaining a reputation for high standards of business conduct; and
● The need to act fairly as between shareholders of the Company.
As part of their induction, a Director is briefed on their duties and they can access professional advice on these, from
the Company Secretary, nominated advisor (“Nomad”), or if they judge it necessary, from an independent adviser.
Examples of how Directors have applied these matters in Board discussions and their decision-making are
included throughout this Annual Report:
Stakeholder
Relevant disclosure
Page
Employees
Shareholders
Clients
Suppliers
Purpose, vision & values
Strategic Report
Purpose, vision & values
Chairman’s Statement
Strategic Report
Purpose, vision & values
Chairman’s Statement
CEO’s Review
Strategic Report
Strategic Report
Community and the environment
Strategic Report
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Norman Broadbent Plc
Annual Report and Financial Statements
17
Strategic
Report
THE BUSINESS MODEL
GOING CONCERN
Considering the current financial position of the Group
and on consideration of the business’ forecasts and
projections, taking account of possible changes in
trading performance, the Directors have a reasonable
expectation that the Group has adequate available
resources to continue as a going concern for the
foreseeable future. Accordingly, the Directors continue
to adopt the going concern basis in preparing these
financial statements.
COMMITMENT TO ENVIRONMENTAL,
SOCIAL AND GOVERNANCE EXCELLENCE
At Norman Broadbent, our purpose is to ‘have a lasting
impact on people’s lives and the organisations that we
support’. This provides us with a point on which we can
anchor our Environmental, Social and Governance (ESG)
policies. Central to this is behaving in a way that allows
us not only to meet the needs of our stakeholders, but
also to have a positive impact on those that we work
with and for, alongside society as a whole.
Our dedication to ESG initiatives is integral to our
identity and operations. This approach not only
shapes our internal practices but also extends to our
impact on the wider community and environment,
highlighting our efforts, ongoing projects, and future
ambitions in each of these critical areas.
The Norman Broadbent Group is a leading professional
services firm focussing on executive search, senior
interim management and advisory services. Since
our formation 45 years ago we have developed a
range of complementary services consisting of board
and leadership search, senior interim management,
research and insight and leadership consulting. With
a range of services designed to meet client needs at
different stages in their growth or the economic cycle,
our innovative and flexible approach enables us to
help clients in a creative and bespoke way.
STRATEGY AND OBJECTIVES
The Group’s strategy is to further develop, strengthen
and scale our complementary portfolio of services.
As one of the oldest executive search firms in the UK
there has been focus on re-establishing our market
leading position in board and leadership search
whilst also building our senior interim management
offering. The foundation across our business is now
solid in terms of people, culture and brand. During
2024, we will continue to focus on delivering profitable
growth, driving productivity improvements through
more disciplined processes and the adoption and
combination of new technologies where appropriate.
As we acquire new clients and candidates, and grow
our relationship with existing ones, we seek to deliver
business impact. The Group has built exceptional
business acumen and is able to provide clients with a
high-quality service that yields significant value as the
relationship grows.
The Company’s suppliers enable us to deliver a leading
level of service to our clients. We choose the best
products and services to meet our requirements and
then develop long-term relationships with our suppliers.
The Board values regular dialogue with investors to
ensure their ongoing knowledge and understanding
of the Group’s strategy which is focused on achieving
long-term sustainable growth both for the business
and its shareholders.
EARNINGS PER SHARE
The retained profit for FY23 has resulted in a
reported basic earnings per share of 0.50 pence
(2022: loss per share 0.56 pence).
Norman Broadbent Plc Annual Report and Financial Statements 18
Norman Broadbent Plc
Annual Report and Financial Statements
Norman Broadbent Plc
Annual Report and Financial Statements
19
ENVIRONMENT
SOCIAL
Virtual Office Stewardship Policy
This policy encourages employees to adopt eco-
friendly practices at home, including energy-efficient
habits, effective waste management, and reduced
paper and e-waste usage.
Additionally, our offices have various functions in place
that help reduce our impact on the environment.
These include resource saving measures such as low
energy and movement sensor lighting, the provision
of user enabled printing to support decreased printing
and paper waste and effective communication for
better waste disposal practices.
Our environmental stewardship is characterised by
proactive and evolving strategies:
Travel Policy
With an increase in business travel, our focus has
been on shifting towards mindful, or purposeful,
travel. Business travel is a necessary part of the way
we work, our ability to serve our clients is enhanced
when we visit their locations, and it is important for
building relationships which is at the core of our brand
and service provision. We have worked to reduce
unnecessary journeys, encouraging the business to
consider which trips have valuable business outcomes
and which could be replaced by virtual conferencing.
We promote environmentally conscious travel options
like trains when travel is necessary.
We have two policies in development:
Environmental Purchasing Policy
Our policy, which is in the final stages of development,
commits to sustainable sourcing for electronics,
office supplies, and paper products. We encourage
sustainable working practices which includes
conservation of energy usage and recycling. Key
aspects include:
● Electronics: opting for energy-efficient and
durable devices.
● Office Supplies: preference for recyclable materials
and minimal packaging, including sustainable inks
and toners; and
● Paper: emphasising recycled paper and digital
alternatives, adhering to recognised sustainability
standards like FSC.
Our social initiatives reflect our commitment to
community engagement and employee well-being:
Corporate Social Responsibility (CSR) Committee
CSR plays a pivotal role in achieving our Purpose. It’s
important for us to have a sense of purpose centred
around the common goal of supporting both each other
and others within the communities in which we live and
work; a purpose which we are passionate about and
which means something to us, both as individuals and
a collective. The CSR and social elements of company
culture are extremely important when developing a
collaborative, motivated and fun workplace.
Volunteering Encouragement
We have integrated a system through our human
resources information system (HRIS) Platform, allowing
employees to book volunteering days effortlessly,
akin to annual leave, promoting higher engagement in
community service.
School Outreach Programme
As an organisation we at Norman Broadbent hold
‘caring’ as one of our core values, and I think many of us
would recognise the privileged position that we hold.
This initiative partners our offices with local schools in
need, focusing on those with high rates of free meal
eligibility (to qualify for free school meals, you must
have a household income below £16,000).
Achievements thus far include:
● partnership with Pimlico Academy, featuring CV
workshops, visits to and from academy students,
and attendance at career fairs.
● collaboration with DYW Northeast (Developing the
Young Workforce) for school support, to bridge the
gap between employers and education, particularly
Harlaw Academy (Scotland).
● plans in motion to extend this programme to a
school close to our Knutsford office.
fundraising achievement of £13,000, previously raised
for Barnardos, with a robust fundraising schedule
planned for this year.
Employee Wellbeing
We place considerable value on our employees and
work to promote and support all aspects of wellbeing.
We encourage the involvement of our employees and
achieve this through formal and informal channels
across our offices together with an active social
events calendar. We support physical and mental
wellbeing through a number of schemes including
bike to work, employee assistance programme,
birthday as annual leave, gym discounts and private
medical cover. To improve financial well-being we
have introduced an employee reward platform
where employees can access a range of discounts
and savings. There is a quarterly engagement survey
that helps the leadership team to gain further
insight on the employee experience in addition
to the well-established communications and
consultation procedures.
Diversity Policy
Our organisation is committed to promoting
equal opportunities both as an employer and as a
provider of services. We make every effort to prevent
discrimination or other unfair treatment against any
staff, potential staff or users of our services regardless
of gender, race, colour, nationality, ethnic or national
origins, marital status, family circumstances, disability,
sexual orientation, political or religious belief. The
Group is opposed to racist and sexist practices and
attitudes and is committed to translating this into all
aspects of its everyday work. We have a 40% gender
balance within the Board and have targeted our
Head of Talent Acquisition to work towards improving
our gender diversity in management roles by 2026.
We remain committed to continuing to review and
introduce policies that reflect the changing nature
of the world of work, and to nurturing a more
inclusive culture.
Chosen Charity - Maggies
Our employees have selected Maggies as our charity for
2023 and 2024, reflecting our shared experience with
the impact of cancer. We aim to surpass our previous
A Diversity and Inclusion working group is being
established in 2024 so that we can continue
to support inclusivity and diversity within
our organisation.
20 Norman Broadbent Plc
Annual Report and Financial Statements
GOVERNANCE
Governance at Norman Broadbent Plc involves
continuous improvement and introspection. It
is central to how we operate and consider all
stakeholders within our business.
● provide the Company’s Nomad with any
information it requests in order for the Nomad to
carry out its responsibilities under the AIM Rules
and the AIM Rules for Nominated Advisers;
The Company is quoted on the London Stock
Exchange’s Alternative Investment Market (‘AIM’) and is
therefore not required to comply with the provisions
of UK Corporate Governance Code. However, from the
28 September 2018, under AIM Rule 26, the Company
has adopted as far as possible the principles of the
Quoted Companies Alliance Corporate Governance
Code (the “QCA Code”). The QCA Code identifies ten
principles to be followed in order for companies
to deliver growth in long-term shareholder value,
encompassing an efficient, effective and dynamic
management framework accompanied by good
communication to promote confidence and trust. Set
out below is a summary of how, as at 31 December
2023, the Company was complying with the key
requirements of the QCA code.
Board Committees
The Audit Committee consists of the Non-Executive
directors, is chaired by Jon Kempster and meets
as required.
The Remuneration Committee consists of the
Non-Executive Directors and is chaired by Devyani
Vaishampayan. The remunerationof the Non-Executive
Directors is determined by the Board. At present, the
committee reviews annually the level of Directors’
and other senior employees’ remuneration packages.
Disclosure of Directors’ remuneration is provided in
the Directors’ Remuneration Report on page 25.
The AIM Compliance Committee consists of all
Directors. In accordance with AIM Rule 31 the Group is
required to have in place:
● sufficient procedures, resources and controls
to enable its compliance with the AIM Rules for
Companies (“AIM Rules”);
● seek advice from its nominated adviser (“Nomad”)
regarding its compliance with the AIM Rules
whenever appropriate and take that advice
into account;
● ensure that each of the Company’s Directors
accepts full responsibility, collectively and
individually, for compliance with the AIM Rules; and
● ensure that each Director discloses without
delay all information which the Company needs
in order to comply with AIM Rule 17 (Disclosure
of Miscellaneous Information) insofar as that
information is known to the Director or could with
reasonable diligence be ascertained by the Director.
Having reviewed relevant Board papers and met with
the Company’s Executive Board and the Nomad to
ensure that such is the case, the AIM Committee is
satisfied that the Company’s obligations under AIM
Rule 31 were satisfied in FY23.
Internal controls and risk management
The Directors acknowledge their responsibility for
the Group’s system of internal control of which the
objectives are:
a. safeguarding the Group’s assets;
b. ensuring proper accounting records are
maintained; and
c. ensuring that the financial information used within
the business and for publication is reliable.
The key procedures that have operated during the
FY23 are set out below:
a. the Board meets monthly to review all aspects of
the Group’s performance concentrating mainly
on financial performance, business risks and
development; and
b. a number of matters are reserved for the
Board’s specific approval including major capital
expenditure, banking and dividend policy.
In establishing the systems of internal control, the
Directors have implemented a control environment,
risk management procedures and reporting processes
appropriate to the size of the Group. The system of
internal control is designed to manage rather than
eliminate risk. Further procedures will continue to
be adopted in respect of all the Group’s activities to
further improve financial control.
Social and Environmental Impact Assessment
We are committed to regularly evaluating and enhancing
our impact in these areas across all business units.
Annual Conflict of Interest Questionnaire
Considered, but yet to be incorporated for all Board
members to ensure transparency and accountability.
Company Handbook Review
The re-issuing of our company handbook in August
2023, a practice we have now made annual, to keep all
employees informed and aligned with our standards
and policies.
At Norman Broadbent, we believe that a holistic
approach to environmental responsibility, social
engagement, and robust governance not only benefits
our organisation but also contributes positively to our
communities and the planet. As we continue to refine
and expand our ESG initiatives, we remain dedicated
to setting and achieving higher standards of corporate
responsibility and sustainability.
MONITORING, RISK AND KPIs
The Directors have a responsibility for identifying risks
facing the business and for putting in place procedures
to mitigate and monitor risks. Our Board meetings
incorporate, amongst other agenda items, a review of
monthly management accounts, operational and financial
KPIs, major issues and a monthly update and review of a
risk register that addresses the risks facing the business.
The most important KPIs used in monitoring the business
are set out on page 8.
The Directors monitor revenue against annual targets,
which are adjusted each year to ensure the Group
remains on target to achieve its strategic growth plan.
The principal risks faced by the Group in the current
economic climate are considered to be financial, business
environment and people related.
Financial
The main financial risks arising from the Group’s
operations are the adequacy of working capital,
interest rate, liquidity and credit risk. The principal
financial instruments of the Group comprise cash,
unbilled revenue and customer receivables. These are
monitored closely by the finance team and regularly
by the Board to ensure the long-term sustainability of
the Group and are disclosed further in notes 2 and 17
of the financial statements.
Norman Broadbent Plc
Annual Report and Financial Statements
21
Business Environment
Demand for services is affected by global and
UK-specific economic conditions and the level of
economic activity in the regions and industries in which
the Group operates. When conditions in the economy
deteriorate or economic activity slows, many companies
hire fewer permanent employees or rely on internal
human resource departments to recruit staff.
The Group attempts to mitigate this risk by
operating across various diverse sectors and monitors
the macro-economic climate as described within the
CEO’s review on page 12.
People
The Group’s most vital resource remains its employees
and the Directors remain committed to retaining and
recruiting quality staff who share the Group’s renewed
culture and values. In a people-intensive business the
resignation of key staff which could lead to them taking
clients, candidates and colleagues to another employer
is a significant risk. The Group aims to mitigate this risk
by continuing to develop the culture in a progressive
and inclusive manner, engaging the entire team, and
offering competitive remuneration structures, whilst also
insisting on employment contracts that contain restrictive
covenants that limit a leaver’s ability to approach existing
clients, candidates and employees.
CAUTIONARY STATEMENT
The Group’s Strategic Report has been prepared solely to
provide additional information to shareholders to assess
the Company’s strategies and the potential for those
strategies to succeed.
The Strategic Report contains certain forward-looking
statements. These statements are made by the Directors
in good faith based on the information available to them
up to the time of their approval of this annual report and
such statements should be treated with caution due to
the inherent uncertainties, including those arising from
economic, regulatory and business risk factors, underlying
any such forward-looking information.
The Directors, in preparing this Strategic Report, have
complied with S414C of the Companies Act 2006. The
Strategic Report has been prepared for the Group as a
whole and therefore gives greater emphasis to those
matters which are significant to Norman Broadbent plc
and its subsidiary undertakings when viewed as a whole.
Kevin Davidson
Group Chief Executive
26 March 2024
G: GOVERNANCE
22
Directors’
Report
The Directors present their report and the audited financial statements for the year ended 31 December 2023.
GENERAL INFORMATION
Norman Broadbent plc (the ‘Company’) and its subsidiaries (together the ‘Group’) is a leading professional
services firm with a specific focus on talent acquisition and advisory services. The Company is a public listed
company incorporated in England and Wales. Its registered address is Millbank Tower, 21-24 Millbank, London
SW1P 4QP and its listing is on the AIM market of the London Stock Exchange.
REVIEW OF DEVELOPMENTS AND FUTURE PROSPECTS
The CEO’s Review on pages 12 to 15 reviews the activities of the Group including updates on recent and future
developments and a review of the business, KPIs and principal risks can be found in the Strategic Report on
pages 17 to 21.
RESULTS AND DIVIDENDS
The results of the Group for the year ended 31 December 2023 are set out in the Consolidated Statement of
Comprehensive Income.
The Directors do not recommend the payment of a dividend (2022: £nil).
Profit after tax for the year amounted to £0.3 million (2022: loss after tax of £0.3 million).
SUBSTANTIAL SHARE INTERESTS
As at 31 December 2023, the Company had been notified of the following significant interests in its issued
share capital:
As far as the Directors are aware, no other entities or individuals held 3% or more of the shares in issue.
Ennismore Fund Management Ltd
Downing Strategic Micro-Cap Investment Trust PLC
Pierce Casey
Moulton Goodies Limited
P Searle
Mr T J Mayo
Foresight LLP
Hargreaves Lansdown Nominees Limited
Premier Miton Group Plc
Ordinary shares
of 1.0p each
10,560,888
9,274,374
8,795,243
8,392,353
3,829,192
3,029,904
3,011,033
2,746,117
2,562,300
%
16.54%
14.52%
13.77%
13.14%
6.00%
4.74%
4.71%
4.30%
4.01%
Norman Broadbent Plc
Annual Report and Financial Statements
23
DIRECTORS
The Directors who served during the year are as follows:
Peter
Searle
Kevin
Davidson
Devyani
Vaishampayan
Jonathan
Kempster
(appointed 1st
June 2023)
Mehr
Malik
(appointed 16th
January 2023)
Fiona
McAnena
(resigned 29th
June 2023)
The Directors’ interests in the shares of the Company are shown in the Directors’ Remuneration Report on
pages 25 to 27.
Norman Broadbent Plc Annual Report and Financial Statements 24
Norman Broadbent Plc
Annual Report and Financial Statements
25
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
Each of the Directors at the date of approval of this
report confirms:
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under
that law the Directors have prepared the Group and
Parent Company financial statements in accordance
with International Financial Reporting Standards
(IFRS) as adopted by the UK. Under company law the
Directors must not approve the financial statements
unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and the
Company and of the profit or loss of the Group for
that period. The Directors are also required to prepare
financial statements in accordance with the rules of
the London Stock Exchange for companies trading
securities on the Alternative Investment Market. In
preparing these financial statements, the Directors are
required to:
may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company’s website
is the responsibility of the Directors. The Directors’
responsibility also extends to the on-going integrity of
the financial statements contained therein.
MATTERS COVERED IN THE STRATEGIC
REPORT
Items required under LMAR schedule 7 to be
disclosed in the Directors’ Report are set out in
the Strategic Report in accordance with S.414C(11)
Companies Act 2006.
STATEMENT OF DISCLOSURE TO AUDITOR
a. Each of the Directors at the date of approval of this
report confirms there is no relevant information of
which the Group’s auditors are unaware; and
b. The Directors 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 the Group’s auditors are aware
of that information.
● Select suitable accounting policies and then apply
AUDITORS
Kreston Reeves LLP have expressed their willingness
to continue in office as auditors and a resolution to
reappoint them is being proposed at the forthcoming
Annual General Meeting.
Approved by the Board of Directors and signed on
behalf of the Board.
Kevin Davidson
Director
26 March 2024
them consistently;
● Make judgements and accounting estimates that
are reasonable and prudent;
● State whether they have been prepared in
accordance with IFRS as adopted by the UK, subject
to any material departures disclosed and explained
in the financial statements;
● Prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the Group will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position
of the Company and the Group 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 Company and the Group
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
WEBSITE PUBLICATION
The Directors are responsible for ensuring the annual
report and financial statements are made available
on a website. Financial statements are published on
the Company’s website in accordance with legislation
in the United Kingdom governing the preparation
and dissemination of financial statements, which
Directors’
Remuneration Report
b. Bonus
The Company operates a discretionary bonus scheme
for Executive Directors. The scheme is based on
achieving agreed levels of profitability within the part
of the Group they are directly involved with. Bonus
payments are non-pensionable.
c. Benefits
When appropriate, Executives are provided with
medical insurance and life assurance.
d. Pension
The Company’s defined contribution pension scheme
is available to all Executive Directors.
e. Share Options
The Chief Executive (Kevin Davidson), the Chief
Financial Officer (Mehr Malik) and the Non-Executive
Chairman (Peter Searle) have share options. Kevin
Davidson and Mehr Malik participate in the Save As
You Earn (SAYE) scheme.
f. Service Contracts
Both Executive Directors are employed on rolling
contracts subject to between three and six months’
notice from either the executive or the Group. The
Remuneration Committee reviews each case of
early termination individually in order to ensure
compensation settlements are made which are
appropriate to the circumstances, taking care to
ensure that poor performance is not rewarded.
POLICY FOR NON-EXECUTIVE DIRECTORS
The Board is responsible for determining the fees
payable to Non-Executive Directors. The Executive
Directors seek to advise the Board on the level of
fees based on external evidence of fees paid to
Non-Executive Directors of similar companies.
The Remuneration Committee was established to
keep under review the remuneration and terms
of employment of Executive Directors and to
recommend such remuneration and terms and
changes thereof to the Board. The Remuneration
Committee’s composition, responsibilities and
operation comply with the UK Corporate Governance
Code. In forming its remuneration policy, the
Remuneration Committee confirms that it has
complied with the UK Corporate Governance Code.
An explanation of how the Company has applied the
principles and the extent to which the provisions in
the Code have been complied with appears below.
UNAUDITED INFORMATION
Under the Company’s Articles of Association, the
Board may delegate any of its powers, authorities and
discretions to a sub-committee of the Board.
The Remuneration Committee comprises of at least
two Non-Executive Directors. The Remuneration
Committee is formally constituted with written terms
of reference. No individual Director participates when
their own remuneration is under consideration.
In formulating its remuneration policy, the
Remuneration Committee has given full consideration
to the relevant sections of the UK Corporate
Governance Code issued by the Committee on
Corporate Governance. There follows the full text
of the Remuneration Report for the year ended
31 December 2023 which has been approved and
adopted by the Board of Directors for submission to
the shareholders.
COMPOSITION
Devyani Vaishampayan chairs the Remuneration
Committee and Jon Kempster is the second member.
POLICY FOR EXECUTIVE DIRECTORS
To attract, motivate and retain high calibre executives
by rewarding them with appropriate salary, bonus
scheme, benefits and share option packages.
a. Salary
Salaries are reviewed annually, and the Remuneration
Committee takes account of similar companies in its
industry by reference to published information for
similar jobs as well as individual performance.
Norman Broadbent Plc Annual Report and Financial Statements 26
Norman Broadbent Plc
Annual Report and Financial Statements
27
DIRECTORS’ INTEREST IN SHARES AND SHARE OPTIONS
Details of the interests of those Directors that held office during the year, all of which are beneficial, in the shares
of Norman Broadbent plc on the dates specified are as follows:
AUDITED INFORMATION:
Directors’ Emoluments
The emoluments of the Directors of the Company for the year ended 31 December 2023 were as follows:
31 December 2023
31 December 2022
Ordinary Shares of
1.0p Each
%
Ordinary Shares of
1.0p Each
%
Salary
and fees
Bonus Benefits Pensions
£’000
£’000
£’000
£’000
Total
2023
£’000
Total
2022
£’000
Ordinary Shares:
Peter Searle
Kevin Davidson
Jon Kempster *
(appointed 1st June 2023)
Mehr Malik
(appointed 16th January 2023)
Fiona McAnena
(resigned 29th June 2023)
3,829,192
6.00
3,723,929
6.02
Executive Directors
449,100
0.70
449,100
0.73
Kevin Davidson
220
200
163,070
0.26
158,350
0.25
—
—
—
—
138,222
0.22
201,555
0.33
Mehr Malik
(appointed 16th January 2023)
Stephen Smith
(resigned 23rd August 2022)
152
19
391
104
10
24
15
—
153
61
—
261
—
—
—
—
—
—
3
1
1
5
2
—
—
—
—
2
11
7
2
20
—
—
—
—
—
—
434
221
22
677
106
10
24
15
—
314
—
151
465
106
20
17
—
14
155
157
Devyani Vaishampayan
—
—
—
—
* Held by person closely associated.
Share interests:
The following share options were held by those Directors named below as at 31 December 2023, further details
of which are disclosed in note 19. One quarter of the LTIP options had vested as at the year end.
Kevin Davidson
Mehr Malik
Peter Searle
31 December 2023
SAYE
LTIP
options
31 December 2022
SAYE
LTIP
options
2,548,148
1,700,000
1,000,000
360,000
180,000
1,950,000
—
—
1,000,000
—
—
—
Non-Executive Directors
Peter Searle
Fiona McAnena
(resigned 29th June 2023)
Devyani Vaishampayan
Jon Kempster
(appointed 1st June 2023)
Angela Hickmore
(resigned 11th May 2022)
Devyani Vaishampayan
Chair of the Remuneration Committee
26 March 2024
Norman Broadbent Plc Annual Report and Financial Statements 28
Norman Broadbent Plc
Annual Report and Financial Statements
29
Independent Auditor’s Report
Independent Auditor’s Report to the Members of
Norman Broadbent plc
OPINION
We have audited the financial statements of Norman
Broadbent plc (the ‘parent company’) and its subsidiaries
(the ‘Group’) for the year ended 31 December 2023
which comprise the consolidated income statement,
the consolidated statement of comprehensive income,
consolidated and company statement of financial
position, consolidated and company statement of
changes in equity, consolidated and company statement
of cash flows and notes to the financial statements,
including a summary of significant accounting policies.
The financial reporting framework that has been applied
in their preparation is applicable law and UK adopted
international accounting standards.
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 31 December
2023, and of the Group’s profit for the year then ended;
● Have been properly prepared in accordance with
UK adopted international accounting standards; and
● Have been prepared in accordance with the
requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those
standards are further described in the Auditor’s
responsibilities for the audit of the financial statements
section of our report. We are independent of the Group
in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the
United Kingdom, including the Financial Reporting
Council’s Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING
CONCERN
Our evaluation of the directors’ assessment of the Group’s
ability to continue to adopt the going concern basis
of accounting included discussions with the directors
and assessment of their forecasts for the periods up
until 31 December 2026 for reasonableness, checking
their mathematical accuracy, carrying out sensitivity
analysis on the forecasts and comparing previously
prepared forecasts to actual results achieved. 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.
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 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.
AN OVERVIEW OF THE SCOPE OF OUR
AUDIT
As part of designing our audit procedures, we
determined materiality and assessed the risks of material
misstatement in the financial statements. In particular,
we assessed for misstatement those account balances
that could be impacted by the directors’ subjective
judgements, for example in respect of significant
accounting estimates that involved making assumptions
and considering future events that are inherently
uncertain. We also addressed the risk of management
override of internal controls, including evaluating
whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
We performed a full scope audit on the parent
company and one component. Our audit scope
covered 100% of the Group’s revenue, the Group’s profit
before tax and the Group’s net assets.
Our audit approach is consistent with that of the
previous year.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed risks
of material misstatement (whether or not due to fraud)
we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of
resources in the audit, and directing the efforts of the
engagement team. These matters were addressed in
the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. This
is not a complete list of all risks identified by our audit.
KEY AUDIT MATTER
Valuation of Investments
HOW OUR AUDIT ADDRESSED THIS MATTER
Included within the parent company statement of
financial position are fixed asset investments of
£1.2m (2022 £1.2m) which comprise the carrying
value of its investment in the Group’s subsidiaries.
This balance represents the most significant
balance in the parent company statement of
financial position.
Investments are tested annually for impairment
by the directors using estimation techniques
which have a high degree of inherent uncertainty.
Based on the carrying value of the investments
in the parent company financial statements and
the judgment involved in determining whether
any provision for impairment is required due
to the trading performance of the subsidiary
company, and the economic environment in
which it trades, the valuation of investments was
considered a key audit risk area.
An analysis of the investments in each subsidiary company
was obtained and agreed to the nominal ledger. We
compared the carrying value of the investments with the net
assets of each subsidiary company to build an assessment
of whether any provisions against the carrying value
were required.
We obtained the directors’ calculations supporting the
valuation of the investment in the trading subsidiary. This
was based on the trading subsidiary’s current net asset
value and its trading forecasts for a period of 3 years up to
December 2026.
Our audit work on the trading forecasts included discussion
with the directors, assessing the reasonableness of their
assumptions used, checking their mathematical accuracy,
carrying out sensitivity analysis primarily on differing levels of
revenue to assess the impact on the forecasts and considering
the accuracy of previously prepared forecasts to actual
results achieved.
Carrying Value of Goodwill
Goodwill, which comprises the brand name
and client loyalty, arose on the acquisition of
subsidiaries in previous years. It is included in
the consolidated statement of financial position
at a carrying value of £1.4m (2022: £1.4m). This
balance represents one of the most significant
balances in the consolidated statement of
financial position.
Goodwill is tested annually for impairment by the
directors using estimation techniques which have
a high degree of inherent uncertainty.
Based on the carrying value of goodwill and
the judgment involved in determining whether
any further provision for impairment against its
carrying value was required due to the trading
performance of the subsidiary company, and
the economic environment in which it trades,
the carrying value of goodwill was considered a
key audit risk area.
Based upon the audit work performed no matters
came to our attention to indicate that investments are
materially misstated.
An analysis of the goodwill was obtained from the directors,
and we compared this to our expectations.
We obtained the directors’ assessment of the valuation of
goodwill which was based on the Group’s trading forecasts
for a period of 5 years up to December 2028, discounted to
their present value.
Our audit work on the forecasts included discussion with
the directors, assessing the reasonableness of assumptions
supporting the forecasts, checking their mathematical
accuracy, carrying out sensitivity analysis primarily on
differing levels of revenue to assess the impact on the
forecasts and considering the accuracy of previously
prepared forecasts to actual results achieved. We also
assessed the reasonableness of the discount rate used in the
present value calculations.
We assessed the goodwill disclosures in the financial
statements for accuracy and reasonableness.
Based upon the audit work performed no matters came to
our attention to indicate that the carrying value of goodwill is
materially misstated.
Norman Broadbent Plc Annual Report and Financial Statements 30 Norman Broadbent Plc
Annual Report and Financial Statements
Norman Broadbent Plc
Annual Report and Financial Statements
31
KEY AUDIT MATTER
Revenue Recognition
HOW OUR AUDIT ADDRESSED THIS MATTER
The Group has three main sources of revenue:
Executive search placement fees which are
generated through high level executive search
recruitment services with the positions generally
being at senior management level.
We discussed the Group’s revenue recognition policies with
the directors and, independently, with sales staff clarifying
any discrepancies noted. We considered whether the Group’s
accounting policies complied with IFRS 15 - Revenue from
Contracts with Customers.
Interim management placement fees which
are generated through placing candidates into
Board positions for short periods of time.
Leadership and consulting fees which are
generated through consultative services in
relation to recruitment.
As revenue is a key driver of the Group’s
performance, and represents a higher risk of
misstatement, we determined this was a key
audit risk area.
We tested revenue recognition during the year by
undertaking directional testing on a sample of transactions,
carrying out analytical review procedures and testing invoice
posting around the year end to ensure revenue was being
recorded in the correct period.
Based upon the audit work performed no matters came to
our attention to indicate that revenue is materially misstated.
HOW WE TAILORED THE AUDIT SCOPE
We tailored the scope of our audit to ensure that
we performed sufficient work to enable us to give
an opinion on the financial statements as a whole,
considering the structure of the Group and the parent
company, the accounting processes and controls, and
the industry in which they operate.
For the year ended 31 December 2023 we determined
there were two entities in scope for our Group audit,
Norman Broadbent plc, the parent company of the
Group, and Norman Broadbent Executive Search
Limited, the trading subsidiary company.
OUR APPLICATION OF MATERIALITY
We determined materiality for the Group to
be £159,000. We reported all audit differences
found in excess of £7,900 to the directors and the
management board.
For each company within the scope of our Group audit,
we allocated a materiality that was less than our overall
Group materiality. For the parent company we allocated
a materiality of £27,500 and for the trading subsidiary
company we allocated a materiality of £151,000.
We determined Group materiality of £159,000 based
on a calculation of 1.5% of Group net fee income (NFI)
for the year. As the Group’s principal activity is that of
the provision of recruitment services, NFI is considered
by the directors to be a key metric of Group
performance. As the Group’s parent company is AIM
listed, the number of users and the level of interest in
the financial statements is expected to be higher than
it would be for a non-quoted company. Therefore, the
significance of balances is expected to be greater and
consequently 1.5% of Group NFI has been assessed as
the most appropriate basis for materiality.
Based on our risk assessments, together with our
assessment of the Group’s overall control environment,
our judgement was that performance materiality
was 70% of our Group materiality. In assessing the
appropriate level, we considered the nature of the
Group’s activities and risk profile.
We determined materiality for the parent company
to be 2% of gross assets and materiality for the
trading subsidiary company to be 1.5% of NFI,
reduced by 5% so that it falls below Group materiality.
These assessments of the appropriate materiality
calculations were based on their respective activities
and risk profiles, with the resulting materiality levels
being limited to Group materiality.
OTHER INFORMATION
The directors are responsible for the other information.
The other information comprises the information
included in the annual report, other than the financial
statements and our auditor’s report thereon. 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.
In connection with our audit of the financial
statements, 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
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.
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.
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 its 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 24, 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
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.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities,
including fraud is detailed below:
CAPABILITY OF THE AUDIT IN DETECTING
IRREGULARITIES, INCLUDING FRAUD
Based on our understanding of the Group and industry,
and through discussion with the directors and other
management (as required by auditing standards), we
identified that the principal risks of non-compliance
with laws and regulations related to health and safety,
anti-bribery and employment law. We considered
the extent to which non-compliance might have a
material effect on the financial statements. We also
considered those laws and regulations that have
a direct impact on the preparation of the financial
statements such as the Companies Act 2006 and
taxation legislation. We communicated identified laws
and regulations throughout our team and remained
alert to any indications of non-compliance throughout
the audit. We evaluated management’s incentives
and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of
controls) and determined that the principal risks were
related to posting inappropriate journal entries to
increase revenue or reduce expenditure, management
bias in accounting estimates and judgemental areas
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.
33
Graham Hunt BA FCA (Senior Statutory Auditor)
For and on behalf of Kreston Reeves LLP,
Statutory Auditor and Chartered Accountants
London
26 March 2024
● Obtain an understanding of internal control
relevant to the audit in order to design
audit procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the
Group’s and the parent company’s internal control.
● Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the directors.
● Conclude on the appropriateness of the directors’
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether
a material uncertainty exists related to events
or conditions that may cast significant doubt on
the Group’s or the parent company’s ability to
continue as a going concern. If we conclude that
a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report.
However, future events or conditions may cause the
Group or the parent company to cease to continue
as a going concern.
● Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
● Obtain sufficient appropriate audit evidence
regarding the financial information of the entities or
business activities within the Group to express an
opinion on the consolidated financial statements.
We are responsible for the direction, supervision
and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
32 Norman Broadbent Plc
Annual Report and Financial Statements
of the financial statements such as the valuations of
investment in subsidiaries and the carrying value of
goodwill. Audit procedures performed by the Group
engagement team included:
● Detailed discussions were held with the directors
and management to identify any known or
suspected instances of non-compliance with laws
and regulations; and
● Assessment of identified fraud risk factors; and
● Challenging assumptions and judgements made
by the directors in their significant accounting
estimates, concentrating on the calculations
supporting the carrying value of goodwill and
investment in subsidiaries; and
● Obtaining confirmation from management of
related parties and related party transactions, and
review of transactions throughout the period to
identify any previously undisclosed transactions
with related parties outside the normal course of
business; and
● Reading minutes of meetings of those charged with
governance; and
● Performing analytical procedures with automated
data analytics tools to identify any unusual or
unexpected relationships, including related party
transactions, that may indicate risks of material
misstatement due to fraud; and
● Identifying and testing journal entries, in particular
any manual entries made at the year end for
financial statement preparation.
Because of the inherent limitations of an audit,
there is a risk that we will not detect all irregularities,
including those leading to a material misstatement
in the financial statements or non-compliance
with regulation. This risk increases the more that
compliance with a law or regulation is removed from
the events and transactions reflected in the financial
statements, as we will be less likely to become aware
of instances of non-compliance.
As part of an audit in accordance with ISAs (UK),
we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
● Identify and assess the risks of material
misstatement of the financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from
fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of
internal control.
Norman Broadbent Plc Annual Report and Financial Statements 34
Consolidated Income
Statement
For the year ended 31 December 2023
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit/(loss)
Net finance cost
Profit/(loss) before tax
Taxation
Profit/(loss) for the year
Earnings per share
Profit/(loss) per share
- Basic
- Diluted
Adjusted profit/(loss) per share
- Basic
- Diluted
Note
3
7
4
6
8
8
2023
£’000
12,306
(1,731)
10,575
(10,163)
412
(103)
309
—
309
0.50p
0.39p
0.91p
0.71p
2022
£’000
8,697
(1,350)
7,347
(7,608)
(261)
(77)
(338)
—
(338)
(0.56)p
(0.56)p
(0.34)p
(0.34)p
The results for the periods presented above are derived from continuing operations.
The accompanying notes form an integral part of these financial statements.
Consolidated Statement of
Comprehensive Income
Profit/(loss) for the year
Total comprehensive income/(loss) for the year
Attributable to:
Owners of the Company
The accompanying notes form an integral part of these financial statements.
2023
£’000
309
309
309
2022
£’000
(338)
(338)
(338)
Consolidated Statement of
Financial Position
For the year ended 31 December 2023
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Bank overdraft and interest bearing loans
Lease liabilities
Total current liabilities
Net current liabilities
Non-current liabilities
Bank and other loans
Lease liabilities
Total non-current liabilities
Total liabilities
Total assets less total liabilities
Issued share capital
Share premium account
Retained earnings
Total equity
35
2022
£’000
1,363
402
1,765
2,320
50
2,370
2,006
483
203
2,692
(322)
618
155
773
3,465
670
2023
£’000
1,363
178
1,541
2,901
765
3,666
3,393
207
111
3,711
(45)
113
8
121
3,832
1,375
6,365
14,233
(19,223)
1,375
6,345
14,110
(19,785)
670
Notes
10
11
13
14
15
16
20
16
20
18
18
The accompanying notes form an integral part of these financial statements.
These financial statements were approved by the Board of Directors on 26 March 2024.
Signed on behalf of the Board of Directors
K Davidson
Director
Company No 00318267
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 36
Company Statement of
Financial Position
For the year ended 31 December 2023
Non-current assets
Investments
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Bank loans
Total current liabilities
Net current assets
Non-current liabilities
Bank and other loans
Total non-current liabilities
Total liabilities
Total assets less total liabilities
Equity
Issued share capital
Share premium account
Retained earnings
Total equity
Notes
12
13
14
15
16
16
18
18
2023
£’000
1,200
1,200
155
14
169
90
48
138
31
113
113
251
1,118
2022
£’000
1,200
1,200
1,557
6
1,563
52
46
98
1,465
572
572
670
2,093
6,365
14,233
(19,480)
1,118
6,345
14,110
(18,362)
2,093
The accompanying notes form an integral part of these financial statements.
These financial statements were approved by the Board of Directors on 26 March 2024.
Signed on behalf of the Board of Directors
K Davidson
Director
Company No 00318267
37
Consolidated Statement of
Changes in Equity
For the year ended 31 December 2023
Equity attributable to equity holders of Norman Broadbent Plc
Balance at 1 January 2023
Profit for the year
Total comprehensive income for the year
Credit to equity for share based payments
Conversion of convertible loan notes
Transactions with owners of the Company
Share Capital
£’000
6,345
—
—
—
20
20
Share
Premium
£’000
14,110
Retained
Earnings
£’000
(19,785)
—
—
—
123
123
309
309
253
—
253
Total Equity
£’000
670
309
309
253
143
396
Balance at 31 December 2023
6,365
14,233
(19,223)
1,375
Balance at 1 January 2022
Loss for the year
Total comprehensive income for the year
Credit to equity for share based payments
Issue of ordinary shares
Transactions with owners of the Company
6,334
14,080
(19,578)
—
—
—
11
11
—
—
—
30
30
(338)
(338)
131
—
131
Balance at 31 December 2022
6,345
14,110
(19,785)
836
(338)
(338)
131
41
172
670
The accompanying notes form an integral part of these financial statements.
Share Capital
Retained Earnings
This represents the nominal value of shares that have
been issued by the Company.
Share Premium
This reserve records the amount above the nominal
value received for shares issued by the Company.
Share premium may only be utilised to write off any
expenses incurred or commissions paid on the issue of
those shares, or to pay up new shares to be allotted to
members as fully paid bonus shares.
This reserve comprises all current and prior period
retained profits and losses after deducting any
distributions made to the Company’s shareholders and
adding any credits for share based payments.
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 38
Company Statement of
Changes in Equity
For the year ended 31 December 2023
Equity attributable to equity holders of Norman Broadbent Plc
Share Capital
Share
Premium
Retained
Earnings
Total Equity
Balance at 1 January 2023
Loss for the year
Total comprehensive income for the year
Credit to equity for share based payments
Conversion of convertible loan notes
Total transactions with owners of the Company
£’000
6,345
—
—
—
20
20
£’000
14,110
—
—
—
123
123
£’000
(18,362)
(1,371)
(1,371)
253
—
253
Balance at 31 December 2023
6,365
14,233
(19,480)
£’000
2,093
(1,371)
(1,371)
253
143
396
1,118
Balance at 1 January 2022
Profit for the year
Total comprehensive income for the year
Credit to equity for share based payments
Issue of ordinary shares
Transactions with owners of the Company
6,334
14,080
(19,157)
1,257
—
—
—
11
11
—
—
—
30
30
664
664
131
—
131
664
664
131
41
172
Balance at 31 December 2022
6,345
14,110
(18,362)
2,093
The accompanying notes form an integral part of these financial statements.
Share Capital
Retained Earnings
This represents the nominal value of shares that have
been issued by the Company.
Share Premium
This reserve records the amount above the nominal
value received for shares issued by the Company.
Share premium may only be utilised to write off any
expenses incurred, or commissions paid on the issue
of those shares, or to pay up new shares to be allotted
to members as fully paid bonus shares.
This reserve comprises all current and prior period
retained profits and losses after deducting any
distributions made to the Company’s shareholders and
adding any credits for share based payments.
Consolidated Statement of
Cash Flow
For the year ended 31 December 2023
Net cash generated from/(used in) operating activities
Cash flows from investing activities and servicing of finance
Net finance cost
Payments to acquire tangible fixed assets
Net cash used in investing activities
Cash flows from financing activities
New loans received
Repayments of borrowings
Payment of lease liabilities
Proceeds from issue of share capital
Decrease in invoice discounting
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Analysis of net funds
Cash and cash equivalents
Borrowings due within one year
Borrowings due within more than one year
Net funds/(debt)
Notes
(i)
11
18
16
2023
£’000
1,712
(27)
(16)
(43)
—
(389)
(241)
—
(324)
(954)
715
50
765
765
(207)
(113)
445
The accompanying notes (i) and (ii) form an integral part of the Consolidated Statement of Cash Flow.
39
2022
£’000
(33)
(51)
(65)
(116)
400
(32)
(200)
41
(469)
(260)
(409)
459
50
50
(483)
(618)
(1,051)
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 40
Note (i)
Reconciliation of operating profit/(loss) to net cash from operating activities
Operating profit /(loss) from continued operations
Depreciation/impairment of property, plant and equipment
Share based payment charge
Increase in trade and other receivables
Increase in trade and other payables
Taxation paid
Net cash generated from/(used in) operating activities
Note (ii)
Reconciliation of movement of debt
Net increase/(decrease) in cash and cash equivalents
New loans received
Repayments of borrowings
Conversion of loan notes to equity
Decrease in invoice discounting
Interest accrued
Movement in borrowings for the period
Net borrowings at the start of the period
Net cash/(borrowings) at the end of the period
The accompanying notes form an integral part of these financial statements.
2023
£’000
412
231
253
(579)
1,395
—
1,712
2023
£’000
715
—
389
143
324
(75)
1,496
(1,051)
445
2022
£’000
(261)
223
131
(405)
279
—
(33)
2022
£’000
(409)
(400)
32
—
469
—
(308)
(743)
(1,051)
Company Statement of
Cash Flow
For the year ended 31 December 2023
Net cash generated from/(used in) operating activities
Cash flows from investing activities and servicing of finance
Interest paid
Net cash used in investing activities
Cash flows from financing activities
New loans received
Repayments of borrowings
Proceeds from issue of share capital
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Analysis of net funds
Cash and cash equivalents
Borrowings due within one year
Borrowings due after one year
Net debt
Notes
(i)
18
(ii)
2023
£’000
397
—
—
—
(389)
—
(389)
8
6
14
14
(48)
(113)
(147)
The accompanying notes (i) and (ii) form an integral part of the Company Statement of Cash Flow.
Note (i)
Reconciliation of operating profit/(loss) to net cash from operating activities
Operating (loss)/profit
Share based payment charge
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Net cash generated from/(used in) operating activities
Note (ii)
Reconciliation of movement of debt
Net increase/(decrease) in cash and cash equivalents
New borrowings
Repayments of borrowings
Conversion of loan notes to equity
Interest accrued
Movement in borrowings for the period
Net borrowings at the start of the period
Net borrowings at the end of the period
The accompanying notes form an integral part of these financial statements.
2023
£’000
(1,296)
253
1,402
38
397
2023
£’000
8
—
389
143
(75)
465
(612)
(147)
41
2022
£’000
(548)
(25)
(25)
400
(32)
41
409
(164)
170
6
6
(46)
(572)
(612)
2022
£’000
689
131
(172)
(1,196)
(548)
2022
£’000
(164)
(400)
32
—
—
(532)
(80)
(612)
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements Norman Broadbent Plc
Annual Report and Financial Statements
43
42
Notes to the
Financial Statements
For the year ended 31 December 2023
1.
Significant Accounting Policies
The principal accounting policies adopted in the
preparation of these financial statements are set out
below. These policies have been consistently applied
to both years presented unless otherwise stated.
1.1.
Basis of Preparation
The consolidated financial statements of Norman
Broadbent plc (“Norman Broadbent”, “the Company”
or “the Group”) have been prepared in accordance
with International Financial Reporting Standards,
International Accounting Standards and interpretations
issued by the International Accounting Standards
Board (IASB), UK adopted International Financial
Reporting Standards (adopted IFRSs) and with those
parts of the Companies Act 2006 applicable to those
companies reporting under IFRS. The consolidated
financial statements have been prepared under
the historical cost convention, as modified by
the revaluation of financial assets and liabilities
(including derivative instruments) at fair value through
profit or loss. The consolidated financial statements
are presented in pounds and all values are rounded
to the nearest thousand (£000), except when
otherwise indicated.
The preparation of financial statements in compliance
with UK adopted IFRS Accounting Standards requires
the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the
process of applying the Group’s accounting policies.
The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements
are disclosed in note 1.19.
1.1.1
Going Concern
The consolidated financial statements of the Group
have been prepared under the assumption the Group
operates on a going concern basis, which assumes the
Group will be able to discharge its liabilities as they
fall due. In confirming the validity of the going concern
basis of preparation, the Group has considered the
following specific factors:
● The Group reported an operating profit from
continued operations in the year to 31 December 2023 of
£0.3m compared with an operating loss of £0.3m in 2022.
● The consolidated statement of financial position
shows a net asset position at 31 December 2023 of £1.4m
(2022: £0.7m) with cash at bank of £0.8m (2022: £0.05m).
● At the date that these financial statements were
approved the Group had no overdraft facility, a CBILS
loan of £0.2m and its receivable finance facility which
is 100% secured by the Group’s trade receivables.
● Management prepares an annual budget and
longer-term strategic plan, including an assessment
of cash flow requirements, and continue to monitor
actual performance against budget and plan
throughout the reporting period.
The Group’s business activities, together with the
factors likely to affect its future development,
performance and position are set out in the Strategic
Report. Based on these factors, management has a
reasonable expectation that the Group has and will
have adequate resources to continue in operational
existence for the foreseeable future.
1.1.2
Changes in Accounting Policy and Disclosures
a. New and amended accounting standards adopted
by the Group
The Group adopted the following new and amended
relevant IFRS in the year:
● Disclosure of Accounting Policies - Amendments to
IAS 1 and IFRS Practice Statement 2
● Definition of Accounting Estimates - Amendments
to IAS 8
● Deferred Tax related to Assets and Liabilities arising
from a Single Transaction - Amendments to IAS 12
b.
Standards, amendments and interpretations to
existing standards that are not yet effective and
have not yet been adopted early by the Group
There are a number of standards, amendments to
standards, and interpretations which have been
issued by the International Accounting Standards
Board (“IASB”) that are effective in future accounting
periods that the Group has decided not to adopt early.
Any standards that are not deemed relevant to the
operations of the Group have been excluded:
● Classification of Liabilities as Current or Non-
Current - Amendments to IAS 1
● Leases on sale and leaseback - Amendment to IFRS 16
● Supplier finance - Amendment to IAS 7 and IFRS 7
● Lack of Exchangeability - Amendments to IAS 21
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
1.
Significant Accounting Policies
(continued)
The Group is currently assessing the impact of the new
accounting standards and amendments. The Group
does not believe that these amendments will have
a significant impact on the financial statements of
the Group.
1.2.
Basis of Consolidation
The Group’s financial statements consolidate those
of the parent company and all of its subsidiaries at
31 December 2023. All subsidiaries have a reporting
date of 31 December. Subsidiaries are consolidated
from the date of their acquisition, being the date on
which the Group obtains control, and continue to be
consolidated until the date that such control ceases.
Accounting policies have been applied consistently.
Inter-company transactions, balances and unrealised
gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated.
1.3.
Goodwill
Goodwill arising on acquisition of subsidiaries is
included in the consolidated statement of financial
position as an asset at cost less impairment. If the
goodwill balance is material, it is tested annually for
impairment and carried at cost less accumulated
impairment losses. Any impairment is recognised
immediately in the income statement and is not
subsequently reversed.
1.4.
Impairment of Non-Financial Assets
Assets that have an indefinite useful life, for example
goodwill, are not subject to amortisation and are
tested annually for impairment. Assets that are
subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs to sell
and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows
(cash-generating units).
Norman Broadbent Plc Annual Report and Financial Statements 44
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
1.
Significant Accounting Policies
(continued)
1.5.
Financial Assets and Liabilities
Financial assets and liabilities are recognised initially
at their fair value and are subsequently measured at
amortised cost. For trade receivables, trade payables
and other short-term financial liabilities this generally
equates to original transaction value.
1.9.
Investments
Investments in subsidiary undertakings are stated
at cost less provision for any impairment in value.
Investments are tested annually for impairment and
whenever events or changes in circumstance indicate
that the carrying amount may not be recoverable an
impairment loss is recognised immediately for the
amount by which the investment’s carrying amount
exceeds its recoverable value.
1.6.
Property, Plant and Equipment
1.10.
Borrowings
The cost of property, plant and equipment is their
purchase cost, together with any incidental costs
of acquisition.
Depreciation is recognised on a straight-line basis to
write down the cost less estimated residual value of
each asset over its expected useful economic life at
the following rates:
● Office and computer equipment - over three to
four years
● Fixtures and fittings - lower of lease term and
four years
● Land and buildings leasehold - over three to
five years
● Right of use asset - lower of the asset’s useful life
and the lease term
1.7.
Trade Receivables
Trade receivables are amounts due from customers for
services performed in the ordinary course of business.
If collection is expected in one year or less (or in the
normal operating cycle of the business if longer), they
are classified as current assets. If not, they are presented
as non-current assets. Trade receivables are recognised
initially at transaction price. They are subsequently
measured at amortised cost using the effective interest
method, less provision for impairment. A provision
for the impairment of trade receivables is established
when there is objective evidence that the Group will
not be able to collect all amounts due according to the
original terms of the receivables.
1.8.
Cash and Cash Equivalents
Cash and cash equivalents include cash in hand and
deposits held at call with banks. Bank overdrafts are
shown within borrowings in current liabilities on the
balance sheet.
Borrowings are recognised initially at fair value,
net of transaction costs incurred. Borrowings are
subsequently carried at amortised cost; any difference
between the proceeds (net of transaction costs) and
the redemption value is recognised in the income
statement over the period of the borrowings using the
effective interest method.
1.11.
Invoice Discounting Facility
The terms of this arrangement are judged to be such
that the risk and rewards of ownership of the trade
receivables do not pass to the finance provider. As
such the receivables are not derecognised on draw-
down of funds against this facility. This facility is
recognised as a liability for the amount drawn.
1.12.
Trade Payables
Trade payables are non-interest bearing and are
initially recognised at fair value and then subsequently
measured at amortised cost.
1.13.
Foreign Currency Translation
Functional and presentation currency
Items included in the financial statements of each of
the Group’s entities are measured using the currency
of the primary economic environment in which
the entity operates (‘the functional currency’). The
consolidated financial statements are presented
in sterling, which is functional currency of Norman
Broadbent Plc.
Transactions and balances
Foreign currency transactions are translated into
the functional currency using the exchange rates
prevailing at the dates of the transactions or valuation
where items are re-measured. Foreign exchange gains
and losses resulting from the settlement of such
transactions and from the translation at year-end
exchange rates of monetary assets and liabilities
45
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
1.
Significant Accounting Policies
(continued)
denominated in foreign currencies are recognised
in the consolidated income statement, except when
deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges.
Foreign exchange gains and losses that relate to
borrowings and cash and cash equivalents are
presented in the consolidated income statement
within ‘net finance cost’. All other foreign exchange
gains and losses are presented in the income
statement within ‘operating expenses’.
1.14.
Taxation
Taxation currently payable is based on the taxable
profit for the year. Taxable profit differs from net profit
as reported in the consolidated income statement
because it excludes items of income and 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 balance sheet date.
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying
amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in
the computation of taxable profit and is accounted
for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all material
taxable timing differences and deferred tax assets
are recognised to the extent that it is probable
that 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 an initial recognition
of goodwill or from the initial recognition (other than
in the business combination) of other assets and
liabilities in the transaction that affects neither the tax
profit nor the accounting profit.
Deferred tax is calculated using the tax rates that have
been enacted or substantively enacted at the balance
sheet date. Deferred tax is charged or credited to the
consolidated income statement, except when it relates
to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.
1.15.
Revenue Recognition
Revenue comprises the fair value of the consideration
received or receivable for the sale of goods and
services in the ordinary course of the Group’s activities.
Revenue is shown net of value-added tax, returns,
rebates and discounts and after eliminating sales
within the Group. The Group recognises revenue when
the amount of revenue can be reliably measured, it
is probable that future economic benefits will flow to
the entity and when specific criteria have been met for
each of the Group’s activities as described below.
Executive search services
Executive Search services are provided on a retained
basis and the Group generally invoices the client
at pre-specified milestones agreed in advance at a
specific point in time. Revenue is recognised at three
stages; retainer, shortlist and completion fee. Revenue
is recognised based on delivery of performance
obligations at defined stages including resource
allocation and search strategy agreement at retainer
stage, delivery of candidate shortlist and candidate
acceptance of placement.
Short-term contract and interim business
Revenue is recognised for interim business over time
as services are rendered, validated by receipt of a client
approved timesheet or equivalent. Fixed Term Contracts
or Candidate conversions are recognised on client
approval and invoice date at a specific point in time.
Assessment, career coaching and talent management
Revenue is recognised in line with delivery. Where
revenue is generated by contracts covering a number
of sessions then revenue is recognised over the
contract term based on the average number of
sessions taken up and is invoiced at a specific point
in time.
Interest income
Interest income is accrued on a time basis, by
reference to the principal outstanding and at the
effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that
asset’s net carrying amount.
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 46
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
1.
Significant Accounting Policies
(continued)
1.16.
Pensions
The Group operates a number of defined contribution
pension schemes for the benefit of certain employees.
The costs of the pension schemes are charged to the
income statement as incurred.
1.17.
Leases
The Group makes the use of leasing arrangements
principally for the provision of office space and various
office equipment. Rental contracts are typically
made for fixed periods of 3 to 5 years but may have
extension options.
Contracts may contain both lease and non-lease
components. The Group allocates the consideration in
the contract to the lease and non-lease components
based on their relative standalone prices.
However, for leases of property for which the Group
is a lessee and for which it has major leases, it
has elected not to separate lease and non-lease
components and instead accounts for these as a single
lease component.
Leases are recognised as a right-of-use asset and a
lease liability at the lease commencement date.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities
include the net present value of the following
lease payments:
● Fixed payments (including in-substance fixed
payments), less any lease incentives receivable;
● Variable lease payments that are based on an index
or a rate, initially measured using the index or rate
as at the commencement date;
are discounted using the interest rate implicit in
the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Group,
the lessee’s incremental borrowing rate is used, being
the rate that the individual lessee would have to pay
to borrow the funds necessary to obtain an asset
of similar value to the right-of-use asset in a similar
economic environment with similar terms, security
and conditions.
Lease payments are allocated between principal and
finance cost. The finance cost is charged to profit or
loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of
the liability for each period.
Right-of-use assets are measured at cost comprising
the following:
● The amount of the initial measurement of
lease liability;
● Any lease payments made at or before the
commencement date less any lease incentives
received; and
● Any initial direct costs.
Right-of-use assets are generally depreciated over the
shorter of the asset’s useful life and the lease term
on a straight-line basis. If the Group is reasonably
certain to exercise a purchase option, the right-of-use
asset is depreciated over the underlying asset’s useful
life. Right-of-use assets are tested for impairment in
accordance with IAS 36 Impairment of assets.
Payments associated with short-term leases of
equipment and vehicles and all leases of low-value
assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases
with a lease term of 12 months or less. Low-value
assets comprise IT equipment and small items of
office furniture.
● Amounts expected to be payable by the Group
under residual value guarantees;
1.18.
Share Option Schemes
● The exercise price of a purchase option if the
Group is reasonably certain to exercise that
option; and
● Payments of penalties for terminating the lease,
if the lease term reflects the Group exercising
that option.
Lease payments to be made under reasonably
certain extension options are also included in the
measurement of the liability. The lease payments
For equity-settled share-based payment transactions
the Group, in accordance with IFRS 2, measures
their value and the corresponding increase in equity
indirectly, by reference to the fair value of the equity
instruments granted. The fair value of those equity
instruments is measured at grant date, the EBITDA
Options and SAYE Options using a Binomial option
model and the Share Price Options using a Monte
Carlo simulation model. The expense is apportioned
over the vesting period of the financial instrument and
is based on the numbers which are expected to
47
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
1.
Significant Accounting Policies
(continued)
to vest and the fair value of those financial instruments
at the date of grant. If the equity instruments granted
vest immediately, the expense is recognised in full.
1.19.
Critical Accounting Judgements
and Estimates
a. Impairment of goodwill – determining whether
goodwill is impaired requires an estimation of
the value in use of cash-generating units (CGUs)
to which goodwill has been allocated. The value
in use calculation requires an estimation of the
future profitability expected to arise from the CGU
and a suitable discount rate in order to calculate
present value.
b. Impairment of investments – determining whether
investments are impaired requires an estimation
of the value in use of each subsidiary. The value in
use calculation requires an estimation of the future
profitability expected to arise from each subsidiary
and a suitable discount rate in order to calculate
present value.
c. Revenue recognition – revenue is recognised
based on estimated timing of delivery of services
based on the assignment structure and historical
experience. Were these estimates to change then
the amount of revenue recognised would vary.
d. Share-based payments – the expense recognised
for share-based payment schemes reflects the
number of share options granted that will vest
and management’s expectations regarding share
lapses and non-market performance conditions.
All options are subject to both time vesting and
performance conditions.
2.
Financial Risk Management
The financial risks that the Group is exposed to through
its operations are interest rate risk, liquidity risk and
credit risk. 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.
There have been no substantive changes in the Group’s
exposure to financial risks, its objectives, policies and
processes for managing those risks or the methods
used to measure them from previous periods, unless
otherwise stated in this note.
The Board has overall responsibility for the
determination of the Group’s risk management
objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority
for designing and operating processes that ensure
the effective implementation of the objectives and
policies to the Group’s Executive Committee.
The overall objective of the Board is to set policies
that seek to reduce risk as far as possible, without
unduly affecting the Group’s competitiveness and
flexibility. Further details regarding specific policies
are set out below:
2.1.
Interest Rate Risk
The Group’s interest rate risk arises from borrowings
linked to the Bank of England Base Rate and affects
the invoice discounting facility and the CBILS loan. As
interest rates have risen over 2023 the corresponding
interest expense to the Group has increased. The
Group’s management factors these increases into
cash flow projections (see liquidity risk below) which
indicate that the Group will be able to meet interest
expenses under reasonably expected circumstances.
2.2.
Liquidity Risk
Liquidity risk arises from the Group’s management
of working capital and finance charges. It is the risk
that the Group will encounter difficulty in meeting its
financial obligations as they fall due. The Group’s policy
is to ensure that it will always have sufficient cash and
borrowing facilities to allow it to meet its liabilities
when they become due. The Group has access to an
invoice discounting facility, which provides immediate
access to funding when required and is secured by the
Group’s trade receivables. The Group took advantage
of a CBILS loan in November 2020 which is repayable
over six years to 2026. The Board receives cash flow
projections as well as monthly information regarding
cash balances. At the balance sheet date, these
projections indicated that the Group expected to
have sufficient liquid resources to meet its obligations
under reasonably expected circumstances.
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 48
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
2.
Financial Risk Management (continued)
2.3.
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. The Group is mainly exposed to credit risk from credit sales. It is Group policy to
assess the credit risk of new customers before entering contracts.
Each new customer is analysed individually for creditworthiness before the Group’s standard payment and
delivery terms and conditions are offered. The Board determines concentrations of credit risk by reviewing the
trade receivables’ ageing analysis.
The Board monitors the ageing of credit sales regularly and at the reporting date does not expect any losses from
non-performance by the counterparties other than those specifically provided for (see note 13). The Directors
are confident about the recoverability of receivables based on the blue chip nature of its customers, their credit
ratings and the very low levels of default in the past.
2.4.
Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern
in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure
and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the
underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
3.
Revenue
Group revenues are primarily driven from UK operations. When revenue is derived from overseas business the
results are presented to the Board by geographic region to identify potential areas for growth or those posing
potential risks to the Group.
i.
Class of Business:
The analysis by class of business of the Group’s turnover is set out below:
Revenue - Search
Revenue - Interim Management
Revenue - Leadership Consulting
Revenue - Other
Total
ii.
Revenue by Geography:
United Kingdom
Rest of the world
Total
2023
£’000
8,585
3,189
501
31
12,306
2023
£’000
9,078
3,228
12,306
2022
£’000
5,666
2,920
111
—
8,697
2022
£’000
6,660
2,037
8,697
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
4.
Profit/(Loss) on Ordinary Activities before Taxation
Profit/(loss) on ordinary activities before taxation is stated
after charging:
Depreciation and impairment of property, plant and equipment
Employee remuneration (see note 5)
Auditors’ remuneration:
Audit work
Non-audit work
The Company audit fee for the year was £28,990 (2022: £26,640).
5.
Employee Remuneration
2023
£’000
231
8,143
58
—
49
2022
£’000
223
6,004
51
—
The average number of full time equivalent employees (including Directors) during the year was as follows:
Sales and related services
Administration
Expenses recognised for employee benefits are analysed below:
Wages and salaries
Social security costs
Defined contribution pension cost
Share based payment
2023
No.
44
7
51
2023
£’000
6,752
921
217
253
8,143
2022
No.
36
9
45
2022
£’000
5,095
586
192
131
6,004
The emoluments of the Directors are disclosed as required by the Companies Act 2006 on page 27 in the
Directors’ Remuneration Report. The table of Directors’ emoluments has been audited and forms part of these
financial statements. This also includes details of the highest paid Director.
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 50
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
6.
Taxation
a. Tax charged in the income statement
Current tax:
UK corporation tax
Foreign tax
Total current tax
Deferred tax:
Origination and reversal of temporary differences
Tax charge/(credit)
b. Reconciliation of the total tax charge
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
6.
Taxation (continued)
2023
£’000
2022
£’000
At 31 December 2023 the Group had capital losses carried forward of £8,129,000 (2022: £8,129,000) and trading
losses carried forward of £14,233,510 (2022: £14,879,676). A deferred tax asset has not been recognised as their
utilisation in the near future is uncertain.
The analysis of deferred tax in the consolidated balance sheet is as follows:
51
—
—
—
—
—
—
—
—
—
—
Deferred tax assets:
Tax losses carried forward
Total
7.
Net Finance Cost
2023
£’000
—
—
2023
£’000
103
103
2022
£’000
—
—
2022
£’000
77
77
The difference between the current tax shown above and the amount calculated by applying the standard rate of
UK corporation tax to the profit/(loss) before tax is as follows:
Interest payable on leases, invoicing facility and other loans
Profit/(loss) on ordinary activities before taxation
Tax on profit/(loss) on ordinary activities at standard UK
corporation tax rate of 23.5% (2022: 19%)
Effects of:
Expenses not deductible
Share option costs
Depreciation in excess of capital allowances
Provision movement
Adjustment to losses carried forward
Current tax charge for the year
c. Deferred tax
At 1 January 2023
Charged/(credited) to the income statement in 2023
At 31 December 2023
2023
£’000
309
73
6
60
11
2
(152)
—
Tax losses
£’000
—
—
—
2022
£’000
(338)
(64)
6
25
(6)
(1)
40
—
Total
£’000
—
—
—
Total
8.
Earnings Per Share
i. Basic earnings per share
This is calculated by dividing the profit/(loss) attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period:
Profit/(loss) attributable to owners of the Company
Weighted average number of ordinary shares
ii.
Diluted earnings per share
2023
£’000
309
000’s
62,104
2022
£’000
(338)
000’s
60,879
This is calculated by adjusting the weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary
shares in the form of employee share options (LTIP and SAYE schemes). For these options a calculation is done to
determine the number of shares that could have been acquired at fair value (determined as the average annual
market share price of the Company’s shares) based on the monetary value of the subscription rights attached to
the outstanding options. The number of shares calculated as above is compared with the number of shares that
would have been issued assuming the exercise of the share options.
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 52
53
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
8.
Earnings Per Share (continued)
10.
Intangible Assets
Goodwill arising on consolidation
£’000
Profit/(loss) attributable to owners of the Company
Weighted average number of ordinary shares
iii.
Adjusted earnings per share
2023
£’000
309
000’s
78,572
2022
£’000
(338)
000’s
60,879
An adjusted earnings per share has also been calculated in addition to the basic and diluted earnings per share
and is based on earnings adjusted to eliminate the effects of charges for share based payments. It has been
calculated to allow shareholders to gain a clearer understanding of the trading performance of the Group.
2023
£’000
2023
Basic
pence per
share
2023
Diluted
pence per
share
2022
£’000
2022
Basic
pence per
share
2022
Diluted
pence per
share
Group
Balance at 1 January 2022
Balance at 31 December 2022
Balance at 31 December 2023
Provision for impairment
Balance at 1 January 2022
Balance at 31 December 2022
Balance at 31 December 2023
Net book value
At 1 January 2022
At 31 December 2022
At 31 December 2023
Basic earnings
Profit/(loss) after tax
Adjustments
309
0.50
0.39
(338)
(0.56)
(0.56)
Goodwill acquired through business combinations is allocated to cash-generating units (CGUs) and is
shown below:
Share based payment charge
Adjusted earnings
253
562
0.41
0.91
0.32
0.71
131
(207)
0.22
(0.34)
0.22
(0.34)
9.
Profit of Parent Company
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is
not presented as part of these accounts. The parent company’s loss for the year amounted to £1.4 million
(2022: £0.7 million profit).
Balance at 1 January 2022
Balance at 31 December 2022
Balance at 31 December 2023
Executive Search
£’000
1,303
1,303
1,303
Leadership
Consulting
£’000
60
60
60
3,690
3,690
3,690
2,327
2,327
2,327
1,363
1,363
1,363
Total
£’000
1,363
1,363
1,363
Goodwill has been subject to an impairment review by the Directors of the Group. As set out in accounting policy
note 1, the Directors test the goodwill for impairment annually as set out below.
Expected future cash flows for each CGU for over a five year period are derived from the most recent three year
financial projections agreed by the board and an assumed net fee and cost growth rate of 5% in years four and
five. Although the growth rates of 5% exceeds the long-term growth rate for the economy, they are considered
appropriate based on the expected future growth rate of the business. A discount rate of 12.5% (2022: 10%-12.5%),
representing the weighted average cost of capital for the Group, in line with businesses in the same sector, is
then used to calculate the present value of those cash flows and then aggregated to give an overall valuation.
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 54
55
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
11.
Property, Plant and Equipment
12.
Investments
Land and
buildings -
leasehold
£’000
Right-of-
use asset
£’000
Office and
computer
equipment
£’000
Fixtures
and
fittings
£’000
94
6
—
100
—
(80)
20
92
8
—
100
—
(80)
20
2
—
—
774
34
—
808
—
—
808
332
168
—
500
176
—
676
442
308
132
309
59
—
368
16
(261)
123
227
47
—
274
55
(252)
77
82
94
46
50
—
—
50
—
(43)
7
50
—
—
50
—
(43)
7
—
—
—
Total
£’000
1,227
99
—
1,326
16
(384)
958
701
223
—
924
231
(375)
780
526
402
178
Group Cost
Balance at 1 January 2022
Additions
Disposals
Balance at 31 December 2022
Additions
Disposals
Balance at 31 December 2023
Accumulated depreciation
Balance at 1 January 2022
Charge for the year
Disposals
Balance at 31 December 2022
Charge for the year
Disposals
Balance at 31 December 2023
Net book value
At 1 January 2022
At 31 December 2022
At 31 December 2023
The Group had no capital commitments as at 31 December 2023 (2022: £nil).
Company Cost
Balance at 1 January 2022
Balance at 31 December 2022
Balance at 31 December 2023
Provision for impairment
Balance at 1 January 2022
Impairment for the year
Balance at 31 December 2022
Impairment for the year
Balance at 31 December 2023
Net book value
At 1 January 2022
At 31 December 2022
At 31 December 2023
Shares in subsidiary undertakings
£’000
5,935
5,935
5,935
4,735
—
4,735
—
4,735
1,200
1,200
1,200
During the year to 31 December 2023 the Company held the following ownership interests:
Principal
investments:
Norman Broadbent
Executive Search Limited
Norman Broadbent
Ireland Ltd
Country of
incorporation
or registration
and operation
Principal activities
Proportion of shares
held by the Company
England and Wales
Executive search
100% ordinary shares
Republic of Ireland
Dormant
100% ordinary shares
The registered office for Norman Broadbent Executive Search Limited is Millbank Tower, 21-24 Millbank London
SW1P 4QP. The registered office for Norman Broadbent Ireland Limited is The Merrion Buildings, 18 - 20 Merrion
Street, Dublin 2, Ireland.
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 56
57
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
13.
Trade and Other Receivables
13.
Trade and Other Receivables (continued)
Group
Company
There is no material difference between the carrying value and the fair value of the Group’s and the Company’s
trade and other receivables.
As at 31 December 2023, Group trade receivables of £1.3m (2022: £1.0m), were past their due date but not
impaired, save as referred to below. They relate to customers with no default history. The ageing profile of these
receivables is as follows:
Trade payables
Other taxation and social security
Trade receivables
Less: provision for
impairment
Trade receivables – net
Other debtors
Prepayments and accrued
income
Due from Group
undertakings
Total
Non-Current
Current
2023
£’000
2,714
(178)
2,536
43
322
—
2,901
—
2,901
2,901
2022
£’000
2,135
(2)
2,133
48
139
—
2,320
—
2,320
2,320
2023
£’000
—
—
—
—
8
147
155
—
155
155
2022
£’000
—
—
—
—
7
1,550
1,557
—
1,557
1,557
Up to 3 months
3 to 6 months
6 to 12 months
Total
Group
Company
2023
£’000
1,054
214
—
1,268
2022
£’000
765
115
55
935
2023
£’000
2022
£’000
—
—
—
—
—
—
—
—
The largest amount due from a single trade debtor at 31 December 2023 represents 12% (2022: 15%) of the total
trade receivables balance outstanding.
As at 31 December 2023, £178,000 of group trade receivables (2022: £2,000) were considered impaired. A
provision for impairment has been recognised in the financial statements. Movements on the Group’s provision
for impairment of trade receivables are as follows:
At 1 January
Provision for receivable impairment
Receivables written-off as uncollectable
At 31 December
2023
£’000
2
178
(2)
178
2022
£’000
14
—
(12)
2
14.
Cash and Cash equivalents
Cash at bank and in hand
Total
Group
Company
2023
£’000
765
765
2022
£’000
50
50
2023
£’000
14
14
2022
£’000
6
6
There is no material difference between the carrying value and the fair value of the Group’s and the Company’s
cash at bank and in hand.
15.
Trade and Other Payables
Group
Company
2023
£’000
343
407
22
2,621
3,393
2022
£’000
212
330
24
1,440
2,006
2023
£’000
2022
£’000
46
(8)
—
52
90
8
(2)
—
46
52
Other payables
Accruals
Total
There is no material difference between the carrying value and the fair value of the Group’s and the Company’s
trade and other payables.
16.
Borrowings
Current
Invoice discounting facility (see note (a)
below)
Loans (see note (b) below)
Non-Current
Loans (see note (b) below)
Total
Group
Company
2023
£’000
159
48
113
320
2022
£’000
483
—
618
1,101
2023
£’000
2022
£’000
—
48
113
161
—
46
572
618
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 58
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
16.
Borrowings (continued)
17.
Financial Instruments (continued)
The carrying amounts and fair value of the Group’s borrowings, which are all denominated in sterling, are as follows:
Carrying amount
Fair value
2023
£’000
159
161
320
2022
£’000
483
618
1,101
2023
£’000
159
161
320
2022
£’000
483
618
1,101
Invoice discounting facility
Loans (see note (b) below)
Total
a.
Invoice discounting facilities:
The Group operates an invoice discounting facility with Metro Bank. All Group invoices are raised through
Norman Broadbent Executive Search Limited and as such Metro Bank (SME Invoice Finance Ltd) holds an all asset
debenture for Norman Broadbent plc and Norman Broadbent Executive Search Limited. Funds are available
to be drawn down at an advance rate of 88% against trade receivables of Norman Broadbent Executive Search
Limited that are aged less than 120 days with the facility capped at £2.1 million. At 31 December 2023, the
outstanding balance on the facility of £0.2 million was secured by trade receivables of £2.5 million. Interest is
charged on the drawn down funds at a rate of 2.4% above the bank base rate.
b. Loans
In November 2020 the Group received a CBILS Loan of £250,000 for a term of 6 years. Repayment of capital
and interest began in January 2022, and from this month the loan incurs interest at 4.75% above the Metro Bank
UK base rate. Metro Bank holds an all asset fixed and floating charge over Norman Broadbent Executive Search
Limited linked to this facility.
During May 2022 Downing Strategic Micro-Cap Investment Trust Plc and Moulton Goodies Limited subscribed
for £200,000 of Convertible Loan Notes (CLNs) each. Interest was payable at 10% per annum up to the first
anniversary date and 12.5% per annum up to the second anniversary date. A second ranking fixed and floating
charge over the assets and undertaking of Norman Broadbent plc and Norman Broadbent Executive Search
Limited was provided as security. Subsequent to the year end the charge was satisfied in full.
£200,000 of the CLNs plus interest was repaid in May 2023. During November 2023 £100,000 of the CLNs was
repaid and the Company allotted 2,047,706 new ordinary shares of 1p each at a conversion price of 7.0 pence per
share for the remaining £100,000 of CLNs plus repayment of all interest due and the redemption fee.
17.
Financial Instruments
Financial assets and financial liabilities are recognised on the balance sheet when the Group becomes a party to
the contractual provisions of the instrument. Financial assets are derecognised when the rights to receive cash
flows from the asset have expired, or when the Group has transferred those rights and substantially all the risks
and rewards of the asset.
Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expired.
The carrying value of each asset and liability is considered to be a reasonable approximation of the fair value.
The following tables show the carrying amounts of financial assets and financial liabilities held by the Group.
Group
Financial assets
Trade and other receivables
Other debtors
Financial liabilities
Trade creditors
Accruals and deferred income
Other payables
Bank loans – Current
Bank loans – Non-current
Lease liabilities – Current
Lease liabilities – Non-current
Company
Financial assets
Amounts owed by group undertakings
Financial liabilities
Trade and other payables
Accruals and deferred income
Bank loans – Current
Bank loans – Non-current
59
2022
£’000
2,133
48
2,181
212
1,440
24
483
618
203
155
3,135
2022
£’000
1,550
1,550
8
46
46
572
672
2023
£’000
2,536
43
2,579
343
2,621
22
207
113
111
8
3,425
2023
£’000
147
147
46
52
48
113
259
In common with other businesses, the Group is exposed to risks that arise from its use of financial instruments.
Details on these risks and the policies set out by the Board to reduce them can be found in note 2.
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 60
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
18.
Share Capital and Premium
Allotted and fully paid
Ordinary Shares:
63,865,249 Ordinary shares of 1.0p each
(2022: 61,817,510)
Deferred Shares:
23,342,400 Deferred A shares of 4.0p each
(2022: 23,342,400)
907,118,360 Deferred shares of 0.4p each
(2022: 907,118,360)
1,043,566 Deferred B shares of 42.0p each
(2022: 1,043,566)
2,504,610 Deferred C shares of 29.0p each
(2022: 2,504,610)
Total
Deferred A Shares of 4.0p each
2023
£’000
638
934
3,628
438
727
6,365
2022
£’000
618
934
3,628
438
727
6,345
The Deferred A Shares carry no right to dividends or distributions or to receive notice of or attend general
meetings of the Company. In the event of a winding up, the shares carry a right to repayment only after the
holders of Ordinary Shares have received a payment of £10 million per Ordinary Share. The Company retains the
right to cancel the shares without payment to the holders thereof. The rights attaching to the shares shall not be
varied by the creation or issue of shares ranking pari passu with or in priority to the Deferred A Shares.
Deferred Shares of 0.4p each
The Deferred Shares carry no right to dividends, distributions or to receive notice of or attend general meetings
of the Company. In the event of a winding up, the shares carry a right to repayment only after payment of capital
paid up on Ordinary Shares plus a payment of £10,000 per Ordinary Share. The Company retains the right to
transfer or cancel the shares without payment to the holders thereof.
Deferred B Shares of 42.0p each
The Deferred B Shares carry no right to dividends or distributions or to receive notice of or attend general
meetings of the Company. In the event of a winding up, the shares carry the right to repayment only after the
holders of Ordinary Shares have received a payment of £10 million per Ordinary Share. The Company retains the
right to cancel the shares without payment to the holders thereof. The rights attaching to the shares shall not be
varied by the creation or issue of shares ranking pari passu with or in priority to the Deferred B Shares.
61
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
18.
Share Capital and Premium (continued)
Deferred C Shares of 29.0p each
The Deferred Shares carry no right to dividends or distributions or to receive notice of or attend general meetings
of the Company. In the event of a winding up, the shares carry the right to repayment only after the holders of
Ordinary Shares have received a payment of £10 million per Ordinary Share. The Company retains the right to
cancel the shares without payment to the holders thereof.
A reconciliation of the movement in share capital and share premium is presented below:
No. of
ordinary
shares
000’s
60,741
1,076
61,817
2,048
63,865
Ordinary
shares
£’000
Deferred
shares
£’000
Share
premium
£’000
607
11
618
20
638
5,727
—
5,727
—
5,727
14,080
30
14,110
123
14,233
Total
£’000
20,414
41
20,455
143
20,598
At 1 January 2022
Issued during the year
At 31 December 2022
Issued during the year
At 31 December 2023
During the year 2,047,706 Ordinary Shares were issued at a consideration of 7.00 pence per share.
19.
Share Based Payments
As at 31 December 2023, the Group maintained two share-based payment schemes for employee
remuneration, the Long Term Incentive Plan (LTIP) and the Save As You Earn Scheme (SAYE). Both programmes
will be settled in equity.
LTIP
The LTIP is part of the remuneration package of the Group’s senior management team. The scheme is an
executive Enterprise Management Incentive (“EMI”) share option scheme and 4,148,148 options were granted
as part of the scheme on 28 July 2023. All options are subject to both time vesting conditions and performance
conditions. 50% of the Options are subject to market-based share price performance conditions (the “Share Price
Options”) and 50% are subject to certain EBITDA performance conditions (the “EBITDA Options”).
SAYE
During the year the Company established a tax advantaged SAYE scheme. The scheme is based on eligible
employees being granted options over shares with an exercise price of £0.05 per share, which represents a 20
percent discount to the closing middle market price of a share on 12 June 2023.
Employees agree to opening a sharesave account with the nominated savings carrier and save monthly over a
three year saving period. On vesting, participants have a 6-month period to exercise their options.
The Company issued 4,500,000 options on 29 June 2023 (the “SAYE Grant Date”). The SAYE options have no
performance conditions attached to them.
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 62
63
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
19.
Share Based Payments (continued)
20.
Leases
Share options and weighted average exercise prices are as follows for the reporting periods presented:
2023
Charge
2023
Number
of share
options
2022
Charge
2022
Number
of share
options
Scheme
£’000
000’s
£’000
LTIP
SAYE
Total
243
10
253
12,148
4,212
16,360
131
—
131
000’s
9,950
—
9,950
Vesting
period
Expiry date
Performance
metrics
Years
Years
3
3
7
EBITDA and
share price
0.5 after
vesting
None
LTIP
SAYE
Weighted average
exercise price
Weighted average
exercise price
£
—
—
—
—
—
—
—
000’s
—
9,950
—
9,950
4,148
(1,950)
12,148
£
—
—
—
—
0.05
0.05
0.05
000’s
—
—
—
—
4,500
(288)
4,212
At 1 January 2022
Granted
Forfeited
At 31 December 2022
Granted
Forfeited
At 31 December 2023
The weighted average remaining contractual life of the options outstanding at the end of 2023 was 5.7 years for
the LTIP and 3.1 years for the SAYE scheme (2022: 6.2 years for the LTIP).
The share options granted in 2023 were valued using the following assumptions:
Option pricing model used
Weighted average share price at grant
date (£)
Exercise price (£)
Expiry date
Expected volatility
Expected dividend yield
Risk-free interest rate
LTIP – EBITDA
Options
Binomial option
model
LTIP – Share
Price Options
Monte Carlo
simulation
0.053
—
0.053
—
SAYE
Binomial option
model
0.055
0.05
July 2030
July 2030
February 2027
44.9%
0.0%
4.72%
44.9%
0.0%
4.72%
43.4%
0.0%
4.72%
All property leases are accounted for by recognising a right-of-use asset and a lease liability, with depreciation
and interest expense being charged to the consolidated income statement.
Right-of-use assets are recognised at the commencement date of the lease and they are measured at cost, less
any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement date less any lease incentives received. The recognised
right-of-use assets are depreciated on a straight-line basis over the shorter of their estimated useful life and the
lease term. Right-of-use assets are subject to impairment.
At the commencement date of the lease, lease liabilities are measured at the present value of lease payments to
be made over the lease term. The Group uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily determinable.
Consolidation statement
Depreciation expense
Operating Profit
Finance Costs
Profit before Tax
2023
£’000
(176)
(176)
(2)
(178)
2022
£’000
(168)
(168)
(25)
(193)
Consolidated statement of financial position
Right-of-use assets
£’000
Lease liabilities
£’000
As at 1 January 2022
Additions
Disposals
Depreciation expense
Interest expense
Payments
At 31 December 2022
Additions
Disposals
Depreciation expense
Interest expense
Payments
At 31 December 2023
442
34
—
(168)
—
—
308
—
—
(176)
—
—
132
(498)
(34)
—
—
(26)
200
(358)
—
—
—
(2)
241
(119)
Norman Broadbent Plc Annual Report and Financial StatementsNorman Broadbent Plc Annual Report and Financial Statements 64
Notes to the Financial Statements (continued)
For the year ended 31 December 2023
20.
Leases (continued)
Impact on consolidated statement of
financial position
Right-of-use assets
Total Assets
Lease liabilities – less than one year
Lease liabilities – more than one year
Total Liabilities
Equity
21.
Pension Costs
2023
£’000
132
132
(111)
(8)
(119)
13
2022
£’000
308
308
(203)
(155)
(358)
(50)
The Group operates several defined contribution pension schemes for the business. The assets of the schemes
are held separately from those of the Group in independently administered funds. The pension cost represents
contributions payable by the Group to the funds and amounted to £217,000 (2022: £192,000). At the year end
£22,000 of contributions were outstanding (2022: £14,000).
22.
Related Party Transactions
The following transactions were carried out with related parties:
Key management compensation:
Key management includes Executive and Non-Executive Directors. The compensation paid or payable to the
directors can be found in the Directors’ Remuneration Report on pages 25-27.
23.
Contingent Liability
The Company is a member of the Norman Broadbent plc Group VAT scheme. As such it is jointly accountable
for the combined VAT liability of the Group. The total VAT outstanding in the Group at the year end was £192,000
(2022: £123,000).
Norman Broadbent Plc
Annual Report and Financial Statements
65
Officers &
Professional Advisors
BOARD OF DIRECTORS
COMPANY NUMBER
PETER SEARLE
Group Chair
KEVIN DAVIDSON
Group CEO
MEHR MALIK
Group CFO
JON KEMPSTER
Non-Executive Director
DEVYANI VAISHAMPAYAN
Non-Executive Director
COMPANY SECRETARY
MEHR MALIK
REGISTERED OFFICE
Millbank Tower
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00318267
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AUDITORS
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Norman Broadbent Plc Annual Report and Financial Statements 66
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Norman Broadbent Plc Annual Report and Financial Statements