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SMARTSPACE SOFTWARE PLC
Annual Report
for the Year Ended 31 January 2022
Year Ended 31 January 2022 CONTENTS
HIGHLIGHTS
Our Customers and Partners..................................................................... 4
What we do ....................................................................................................... 5
Our History ......................................................................................................... 6
Our Customers ................................................................................................. 7
Key Highlights ................................................................................................... 8
STRATEGIC REPORT
Chairman’s statement ................................................................................... 9
Strategic report: Strategy and operational review ........................ 12
Strategic report: Financial review ..........................................................16
Strategic report: Principal risks ............................................................. 20
Strategic report: s172 statement ............................................................22
GOVERNANCE
Directors and Officers .................................................................................26
Company information and advisers .....................................................27
Remuneration report ...................................................................................28
Audit Committee report .............................................................................31
Corporate Governance report ................................................................33
Directors’ report ............................................................................................37
FINANCIAL STATEMENTS
Independent auditor’s report to the members of
SmartSpace Software plc ........................................................................ 40
Consolidated statement of comprehensive income ................... 46
Consolidated balance sheet .....................................................................47
Consolidated statement of changes in equity ............................... 49
Consolidated statement of cash flows .............................................. 50
Notes to the consolidated financial statements .............................51
Parent Company balance sheet .............................................................93
Parent Company statement of changes in equity ....................... 94
Parent Company statement of cash flows........................................95
Notes to the Parent Company financial statements ................... 96
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SmartSpace Software PLC Annual Report
OUR C USTOMERS AND PART NE RS
Customers
UK
Australia
ROW
82%
9%
9%
Partners
UK
APAC
Americas
65%
21%
14%
Customers
USA
UK
Australia
New Zealand
Canada
Netherlands
36%
20%
18%
12%
5%
1%
Ireland
Germany
Singapore
Italy
ROW
1%
1%
1%
1%
4%
OUR OFFICES
SwipedOn
Space Connect
Anders & Kern
1/115 The Strand
Norderstedt House
Norderstedt House
Tauranga
New Zealand
James Carter Road
James Carter Road
Mildenhall
UK
Mildenhall
UK
Year Ended 31 January 2022
5
WHAT W E DO
SmartSpace Software Plc develops and sells SaaS software solutions to help clients manage their workspaces.
We do this by offering cloud-based SaaS software solutions and complementary hardware to allow:
Desk booking
Meeting room management
Visitor management
Analytics
We differentiate ourselves by offering products that are fast to deploy and easily configured by our customers or partners.
OPERATING BUSINESS ES :
Products/
Services
SaaS Visitor Management
Software (VMS) and desk
management software
SaaS Integrated Workplace
Software
Distribution of Smart
workplace solutions
Includes Meeting Room
Booking, Desk Management
& Visitor Management
Hardware & software sales
Meeting room, workplace
sensors design and install
Market
Global
Global
UK
Small single-site business to
multi-location Fortune 500
businesses
Small to medium size
businesses (up to 1500
employees per location)
Sales Model
Direct
Channel
Channel
Deal size
Average ARR per client
£1,000
Average ARR per client
£7,500
Varies
Employees
34
21
12
Location
Tauranga, New Zealand
Mildenhall, UK
Mildenhall, UK
Austin, Texas
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SmartSpace Software PLC Annual Report
OUR HISTORY
2000
Started life as an AIM company called Coms with a business offering telecoms and IT
infrastructure services.
2013
Acquired Redstone, a major provider of System Integration and IT managed service
business, along with a number of other companies in the animation and telecoms sectors.
2014
Developed our first software solution to help a client manage their desk utilisation.
2015
Restructured the group and divested or closed a number of subsidiaries, exited the
telecoms market.
2016
Accelerated our investment in our space management software, acquired ConnectIB
to enable us to scale our software development capability. Renamed Coms plc to
RedstoneConnect plc with a focus on systems integration, managed services and a growing
software division.
2017
Acquired Anders & Kern, based in Mildenhall who had over 10 years’ experience in
supplying meeting room management technology and implementation.
2018
2019
June 2018 disposed of the systems integration and managed services divisions to focus on
software specialising in space management.
July 2018 renamed RedstoneConnect as SmartSpace Software plc.
October 2018 acquired SwipedOn, a leading SaaS provider of visitor management software.
November 2019 acquired Space Connect, a self-service SaaS workspace management platform
2020
August 2020 disposed of Enterprise software division to allow focus on SaaS sales to the
SME and mid-market
2021
Development of Space Connect partner network, first sales of Evoko Naso, and the launch
of SwipedOn Desks
2022
April 2022 multi language variant of SwipedOn launched to South Korean market, first
step in broadening the addressable market for SwipedOn
SmartSpace Software PLC Annual Report Year Ended 31 January 2022
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OUR CUSTO MERS
Year Ended 31 January 2022 8
SmartSpace Software PLC Annual Report
KEY HIG HLIG HTS
FINANCIAL HIGHLIGHTS
Total Group
revenues up
11%
to £5.14m*
(FY21: £4.63m)
Annual
recurring revenue
(“ARR”) up
64%
year on year to
£4.94m (FY21:
£3.02m)
Gross margin
on continuing
operations strong
at 71%
(FY21: 72%)
Group
Adjusted
LBITDA of
£2.49m
(FY21: £2.12m)
OPERATIONAL HIGHLIGHTS
Recurring
revenues up
43%
to £3.42m
(FY21: £2.39m)
Loss
per share
8.91p
(FY21: 7.54p)
Cash balance
at the period end of
£2.76m
(FY21: £4.52m) and
a net cash position
of £2.38m
(FY21: £4.10m)
• SwipedOn ARR increased by 57% year-on-
year to £4.23m (NZ$8.67m) at 31 January
2022 (FY21: £2.70m)1
• Space Connect ARR increased by
291% year-on-year to £0.61m at 31
January 2022 (FY21: £0.16m)
• Monthly average revenue per user (“ARPU”)
increased by 58% year on year to £75 (NZ$
154) at 31 January 2022 (FY21: £48)
• SwipedOn locations increased to 7,076 at
• At 31 January 2022, Space Connect
had 69 customers, an increase of
56 new customers in the twelve
month period
end 31 January 2022 (FY21: 6,741)
• New partners signed during the
• Revenue churn at expected levels of
10.9% (FY21: 6.8%) mainly from single site
customers with lower value price plans and
limited scope for upsell
year in key geographies including
Poland, The Philippines, India, Ireland,
Belgium, Canada and the USA
• A+K revenue for the twelve
months to 31 January
2022 down 24% to £1.73m
(FY21: £2.27m) due to the
continued impact of the UK
lockdown during the period
• New complementary
workspace technology
product lines added to
the portfolio
REVENUE
Recurring revenue
Non-recurring revenue
£3.0m
£2.5m
£2.0m
£1.5m
£1.0m
£0.5m
0
31 Jul 2019
- H1 FY20
31 Jan 2020
- H2 FY20
31 July 2020
- H1 FY21
31 Jan 2021
- H2 FY21
31 July 2021
- H1 FY22
31 Jan 2022
- H2 FY22
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CH A IRMAN’S STATEMENT
OVERVIEW
I am pleased to report a period of strong organic
revenue growth, especially when taking into account
another year of challenging trading conditions for many
businesses. Despite the considerable disruption caused
by Covid-19, Group recurring revenue grew by 43% year
on year, to £3.42m and contributed towards a total
Group revenue of £5.14m, up 11% from the prior year.
Growing recurring revenue is one of our key objectives
and now accounts for 66% of Group revenue (2021:
52%). Our LBITDA has increased by 18% to £2.49m as
a result of higher staff costs as we establish the team
needed for our growth plans.
Growth in Average Revenue Per User (“ARPU”) has
contributed significantly towards an overall growth
in Annual Recurring Revenue (“ARR”) of 64% to
£4.94m at 31 January 2022. With lockdowns and
‘work from home’ (“WFH”) mandates in place our
focus has been concentrated on expanding revenue
from existing clients. By growing the value of each
customer, with more customers on higher tier plans,
more locations, and more ‘add-on’ software sales,
we were able to achieve many of our key financial
objectives for the year.
The overall growth in Group revenue was achieved
despite Anders & Kern (“A&K”) being severely
impacted by ongoing Covid-19 restrictions in its UK
customer base. This led to a fall in hardware revenues
for A&K which was mitigated to the extent possible
by utilising the UK Government Job Retention
Scheme. Sales of our strategic partner’s meeting room
panel (the “Evoko Naso”) were impacted by Covid-19
as businesses across multiple markets in the US and
Europe delayed hardware investment decisions,
leading to significantly lower than expected revenues
for this product.
PEOPLE
The continued strength of the Group is due to the
hard work and resilience of all the people who work
for SmartSpace. I would like to thank the team for
their contribution, especially for the commitment
and focus they have shown throughout this year. We
have continued to invest in employees who are being
supported through professional training relevant to
their functional areas, as well as other relevant role-
specific training. We recognise the importance of
the right people to our business and therefore are
pro-actively monitoring salary levels to ensure staff
retention is managed.
Our priority during the Covid-19
pandemic has been the health
and safety of our employees. We
minimised the risk of infection in our
offices and worked from home when necessary. Our
staff showed great flexibility and patience in dealing
with these challenges.
Last year we decided to re-locate all our software
development to New Zealand, centralising
development for the Group under the management of
Matt Cooney, Group Chief Technology Officer (“CTO”).
This task was completed by Autumn 2021. Whilst we do
not expect to see financial synergies from this change
the operational benefit will be significant.
BOARD CHANGES
In May 2021 Bruce Morrison and Diana Dyer Bartlett
stepped down as directors of the Company to be
replaced by Kris Shaw as Chief Financial Officer (“CFO”)
and Philip Wood as non-executive director (“NED”).
Kris had been with SmartSpace for over two years
before his appointment as CFO having worked closely
with Bruce on both the acquisition of Space Connect
and disposal of SmartSpace Global. The experience of
working with both Bruce and Diana has provided Kris
with the core foundations to be an excellent CFO.
With our increased focus on software offerings, there
was a requirement that the role of the NED has direct
experience of building fast growing international
software businesses. We therefore appointed Philip
Wood as an independent NED and Chair of the Audit
Committee. Philip is the Deputy Chief Executive Officer
and Chief Financial Officer of Aptitude Software
Group plc, a specialist provider of powerful financial
management software to large global businesses. The
experience Philip brings in growing software businesses
and mentoring finance teams is being hugely helpful
to SmartSpace, as we move through our next phase of
development as a global SaaS business.
ANNUAL GENERAL MEETING
The Board will shortly be sending out a notice of
the Annual General Meeting which once again will
be fully open to all shareholders to attend. For
those unable to attend I would urge shareholders to
email any questions they may have to investors@
smartspaceplc.com and to send in proxies so their
votes on the resolutions contained in the notice of
meeting will be counted.
Year Ended 31 January 2022 10
FUTURE DEVELOPMENTS AND OUTLOOK
Our intention is to become a profitable business and we
have plans in place to transition SmartSpace through to
cash generation. The board believes the Company has
sufficient liquidity to complete this transition to cash
generation towards the end of FY23.
The global economy has entered a period of higher
inflation with raised living costs and consequently
higher wage expectations for both existing staff
members and new hires. The majority of our customers
are on contracts of one year or less allowing us to
factor inflation into our price plans upon renewal.
Recent investment activity within our sector values our
SaaS peers on higher multiples than that commanded
by SmartSpace. We intend to close this gap and build
shareholder value by growing recurring revenues and
delivering high quality cash generative earnings. With
such a large addressable market for our products
globally we are confident in our ability to capitalise on
the opportunities open to us.
As we target strong revenue growth in all three
divisions we intend to:
• Focus on entering new geographies, with a view to
building our customer base in non-English speaking
markets. Our recent launch into South Korea is a first
step in this process.
• We will continue to prioritise revenue expansion
opportunities from existing customers by growing
customer accounts to include more locations. A key
focus for growth will be to continue to build ARPU
by selling SwipedOn Desks and other add-ons to new
and existing customers.
• Build on the momentum achieved so far with the
now well established Space Connect indirect partner
network.
• Seek new technology offerings in the area of
workplace optimisation for A&K to sell to its
established channel partner customers.
These actions combined with the already strong growth
in recurring revenues are key to achieving our financial
plans, allowing us to transition SmartSpace through to
cash generation.
Whilst Covid-19 has hampered sales of Evoko Naso to
date, we remain optimistic about the prospects of this
product, especially as customers return to the office
and WFH mandates are lifted. The feedback on Naso
from the Evoko partner network around the globe is
very positive.
Our ambition and confidence for the year ahead
remains high following a good start to the year. Our
revenue, profitability and cash generation targets
remain unchanged. As we continue to grow our high
margin recurring revenues, we add financial strength
to the business, and with such a large addressable
market and well placed product set, we believe this can
continue for the foreseeable future.
Guy van Zwanenberg
Chairman
17 May 2022
SmartSpace Software PLC Annual Report Year Ended 31 January 2022
Year Ended 31 January 2022
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SPAC E CO NN EC T C ASE STU DY:
BUPA
The opportunity and challenges
In 2019, when their Melbourne HQ became due for renovation,
the leadership team decided the time had come to reimagine
the way their employees could use the workspace.
Kedar Viswanathan – Head of Technology for Employee
Experience and Corporate Services* – takes up the story:
“Before the HQ renovation, the workplace model was very
traditional. Everyone generally sat in the same place each day,
and there was no booking process for desks. We knew the time
was right to reimagine all that: to rethink how shared spaces and
rooms were used, and to find the right technology to make it
easy to manage”.
BUPA chose Space Connect to provide the tech solution
they needed to enable an agile, easily managed workplace
environment, based around room booking.
And then, in March 2020, Covid and lockdowns hit
“At that point” recalls Kedar, “we had to rethink everything - all
over again!” As lockdowns in Australia perpetuated, remote
working became ingrained. By the end of the year the Bupa
team were ready to begin bringing people back from remote
working, and into the office.
But the situation was highly fluid, with lockdown and workplace
restrictions changing almost weekly. “Flexibility became
incredibly important” says Kedar. “Because we had Space
Connect, we were able to very quickly and easily reconfigure the
entire working model to fit the restrictions around workspace
The solution
Adapting to a highly fluid situation
Under the strict new Covid rules, BUPA needed to be able to
tightly control desk usage and building capacity, and manage
and report on who was in the workplace, where, and when.
And they needed to be able to change the parameters,
fast, as the rules changed.
Space Connect’s unique self-configuration features made
all of this easy, including:
• Self-reconfigurable, bookable desks
• The admin ability to easily book and cancel desks on behalf of
others
• Realtime views of current and forward desk availability
capacity”.
“I would recommend
Space Connect for its
flexibility and simplicity
- even when you need
to re-model how desks
and spaces are used”
Kedar Viswanathan, Head of Technology
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STR ATEGIC REPORT: STRAT E GY
AND O PERATIONAL REVIEW
The Directors present their strategic report for the year
ended 31 January 2022:
BUSINESS MODEL, PURPOSE AND
STRATEGY
The Group’s business model is to provide Software
as a Service (“SaaS”) workspace solutions including
desk, meeting room, and visitor management products
for small and medium sized enterprises (“SME”) and
mid-market, enabling our international client base to
optimise the use of their corporate real estate. The
Group’s products are fast to deploy, easy to implement
and configure making them ideally suited to SMEs but
also larger companies in the market for simple but
effective solutions for their space management. The
Group also provides complementary hardware solutions
which integrate with the Group’s software solutions.
The Board believes that technology driven changes in
working practices continues to generate demand from
all industry sectors. Covid-19 has accelerated the move
towards hybrid working further increasing the need for
technology to enable companies to control the use of
meeting rooms and desks more effectively as well as
manage visitors to their premises. The Board has set
the following strategic priorities:
• to focus on delivering pure SaaS revenues where
the Group is not overly exposed to one market or a
particular customer;
• to develop technology-led intellectual property to
help businesses optimise use of their corporate real
estate focussing on rooms, desks and visitors;
• to develop new sales channels to market our
software solutions by establishing a global network
of channel partners;
• to bring together the technologies of Space Connect
and SwipedOn in order to offer a complete solution
to both customer bases and therefore maximise
revenue per user;
• to continue with a strategy of both organic and
acquisitive growth both in our domestic market and
overseas; and
• to deliver higher quality earnings which will, in turn,
improve cash generation.
We believe as working practices change and businesses
reconfigure their office real estate the market will
gravitate towards greater use of technology to
optimise how businesses operate.
As employees demand hybrid
working arrangements, and remote working becomes
more prevalent, businesses will look for real estate
efficiencies which will need technological solutions.
Many businesses have indicated that they plan to
reduce their real estate footprint whilst maintaining
headcount. This change will stimulate demand for
SmartSpace solutions which will allow employees
to book desks for times they are in the office and to
coordinate meetings between participants in the office
and those working remotely. The strategy is to focus
on developing our software to take advantage of the
opportunities afforded by this fast-growing market.
REVIEW OF THE BUSINESS
SwipedOn
We have continued our approach of growing revenue
from existing customers by increasing ARPU,
focusing on clients with the potential to use more
of our products across multiple locations. Our sales
team are incentivised to attract high value, multi-site
customers who comprise an increasing proportion of
our customer base and represent a higher proportion
of our revenues.
From February 2021 all new customers have been
moved to our new price plans, and, progressively,
we have implemented the price increase across
our existing customer base. These new price plans
reflect the investment we have made in the platform
enhancing functionality over the last 18 months.
Despite the increased prices, we maintain a significant
price advantage over our competitors, and SwipedOn
remains one of the most cost effective offerings in the
market. The average ARPU of new customers for the
year has been £90 (2021: £72).
In implementing the price increase we anticipated an
increase in customer churn. Encouragingly this was
at levels lower than forecast and mainly occurred
amongst our smaller, lower value, single site customers,
who are often on the lowest value starter plans.
Customer churn for the year averaged 15.6% whilst
revenue churn was 10.9%. The average ARPU of
churning customers was £51, significantly less than our
new customer ARPU of £90.
The number of new SwipedOn customers in the year
has been lower than historical rates. However as we
target higher value customers with more locations,
SmartSpace Software PLC Annual Report 13
and expand revenue from existing customers, our
recurring revenue has continued to grow. The average
CAC (Customer Acquisition Cost), which includes
the costs of all sales and marketing staff as well as
direct marketing costs, has increased due to digital
marketing price inflation, in particular Google Ad words.
The Company continually reviews the effectiveness
of its marketing spend including the consideration of
alternative delivery channels in order to optimise CAC.
Net revenue retention measures revenue change
from the customer base over a set period of time and
includes the impact of churn, price increases, customer
expansion and contraction, but does not include
growth from new customers. As a result of the price
increase SwipedOn’s NRR at 31 January 2022 was a
very strong 130% (2021: 105%). Such a strong NRR is
not expected in future periods but we will continue to
aim to maintain NRR above 100%.
Our recent launch into South Korea is our first step into
new non-English speaking geographical markets. With
less competition in these markets digital marketing
costs are lower, therefore rebalancing the cost of
acquisition back to historical levels. The launch into
South Korea begins the process of broadening the
addressable market for SwipedOn allowing us to open
in other Far Eastern markets.
It has taken 18 months of development to ensure the
functionality in the SwipedOn platform is fully multi-
language, multi country and multi-location ready.
To support the launch into South Korea there is a
localised website https://www.swipedon.kr, along with
a range of localised marketing collateral. The launch
is supported by an in-country marketing agency with
a digital marketing campaign that will focus on Naver,
the dominant search engine in South Korea. Pre-sales
and ongoing customer support will be handled in
local language.
SwipedOn key
performance indicators
31 Jan 2022 31 Jan 2021
Annual recurring revenue (ARR) £4.23m
£2.70m
Monthly average revenue
per user (ARPU)
Number of customers
Number of customer locations
Locations per customer
£75
4,700
7,076
1.51
£48
4,735
6,741
1.42
Net Revenue Retention (NRR)
130%
105%
Space Connect
We have been focused on expanding our channel
partner distribution network for Space Connect with
new partners signed during the financial year in key
geographies including Poland, The Philippines, India,
Ireland, Belgium, Canada and the USA. Through these
new partnerships, and our existing relationships with
other partners such as Softcat, we have increased
our ARR by 291% to £0.61m. The pipeline of new
customer opportunities remains strong, reinforcing the
momentum seen in the business and underpinning our
confidence in the opportunity for Space Connect, its
product capabilities and the potential market.
During the past year we have invested in the Space
Connect platform including developing our own space
mapping tool which allows faster on-boarding of new
customers. The mapping tool also facilitates self-
provisioning by customers and replaces a third-party
service provider, therefore reducing cost of sales.
Sales of our strategic partner’s meeting room panel
(the “Evoko Naso”) for which Space Connect receives
both licence fees and SaaS revenues were below our
expectations. This is a continued result of Covid-19,
with offices in Evoko’s key markets not fully back
to normal working capacity. As a result, many have
delayed investment decisions for new hardware. The
Board remains convinced by the medium-term growth
opportunity for Naso and expects that once businesses
return to normal, sales will accelerate.
Space Connect key
performance indicators
31 Jan 2022 31 Jan 2021
Annual recurring revenue (ARR) £0.61m
£0.15m
Monthly average revenue
per user (ARPU)
Number of customers
627
69
980
13
In order to meet our growth expectations for Space
Connect we have built a strong team of software
developers, sales staff and customer support. To
maximise cost synergies we have created a unified
helpdesk providing ‘follow the sun’ support for both
Space Connect and SwipedOn customers. Whilst this
has increased the overhead for Space Connect, and
therefore losses, we believe this is the right foundation
needed for future growth.
Annual revenue churn
10.9%
6.9%
Anders & Kern
12 month average customer
acquisition cost (CAC)
£1,730
£744
The third arm of the Group’s business is Anders & Kern
(“A&K”), our specialist distributor and integrator of AV
solutions such as meeting room booking solutions,
workplace sensors and digital signage. A&K operates
solely in the UK. The closure of offices and business
premises during the various lockdowns and WFH
Year Ended 31 January 2022
14
measures continued to impact order intake during
FY22, therefore resulting in an EBITDA loss for the
year. A&K’s network of 200 resellers contributes to the
development of the market for both Evoko Naso and
Space Connect in the UK. Our focus in A&K has been
to pivot from its traditional market of Audio Visual
to focus on workplace optimisation solutions. As a
result, A&K has continued to add to its offering with
new workspace technology product lines being added
to its portfolio which often complement the Group’s
software solutions.
Customer support for all three SmartSpace divisions
is now being led by our newly appointed Group
Customer Services Manager who is based in A&K’s
Mildenhall premises.
Anders & Kern key
performance indicators
Revenue
31 Jan 2022 31 Jan 2021
£1.73m
£2.16m
Gross margin *
35%
38%
* FY21 figures have been adjusted for zero margin A&K sales made
to SmartSpace Global which was agreed as part of the disposal
process. These sales amounted to £0.93m in FY21.
SOFTWARE DEVELOPMENT
The software development of Space Connect used to
take place in the Ukraine. For a number of reasons we
made decision to move all our software development to
New Zealand. Our last developer in the Ukraine left us
in October 2021 and all engineering of Space Connect
takes place in New Zealand and a new offshoring
base in Vietnam. This provides us with a flexible
development resource that can be quickly stood-up for
specific projects at a competitive price.
With the centralisation of software development
headed by our Group CTO we are able to further
converge the technologies of SwipedOn and Space
Connect, offer greater opportunities for our staff to
develop their skills, whilst also allowing the Group
to benefit from a consistent approach to software
development. New Zealand has had a strong focus
on developing its software industry and as a result
has a great talent pool to draw upon. Employment
costs are competitive with other similarly developed
jurisdictions.
During the year we invested £1.56 million (2021:
£1.30m) in maintaining and further enhancing our
software solutions. This included the development of
our mobile application for contactless sign-in, regional
cloud hosting facilities, vaccine pass functionality, and
internationalisation to allow full multi-lingual services.
Space Connect completed the development of its
in-house mapping tool which streamlines customer
onboarding and reduces external costs. An updated
version of Evoko Naso has been developed to improve
and add to the functionality offered to customers.
SwipedOn Desks was released during the year and is
now generating new revenue for the Group.
OUTLOOK
We have planned for a year of further strong growth in
FY23 whilst ensuring our costs are tightly controlled.
On a constant currency basis ARR has grown by a
further 7% in the first quarter of FY23. Growth in ARR
has predominantly been driven by the successful
implementation of price increases in FY22, coupled
with the expansion of existing customers, cross
selling and new customer wins. We continue to see
opportunities to make use of our products in new
ways as demonstrated by the agreement with Thermo
Fisher Scientific to support its school Covid-19 testing
program in 570 locations.
As demonstrated by our recent launch into South
Korea, expansion into non-English speaking markets
will be a key area of focus throughout the coming
year. We see opportunity for growth from SwipedOn
Desks which was launched in Autumn 2021 and has
progressively built customer numbers and ARR.
Hybrid working is fast becoming the expected norm
in many parts of the world. Space Connect is ideally
placed to take advantage of the technological demands
of this change. We will continue to develop unique
features that allow us to target and attract a greater
share of the addressable market. We are encouraged
by Evoko’s optimism in Naso and the feedback that
has been received so far. We are optimistic on the
opportunities from this product as workplaces reopen
and businesses fit out new office spaces.
The team at A&K are eager to make up for ground lost
during the pandemic. We have new products available
to be sold and with businesses gaining confidence that
lockdown will not return we aim to return this business
to pre Covid-19 revenue levels.
Frank Beechinor
Chief Executive Officer
17 May 2022
SmartSpace Software PLC Annual Report
Year Ended 31 January 2022
Year Ended 31 January 2022
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SPAC E CO NN EC T C ASE STU DY:
TR AVIS PERKINS
The real estate opportunity and challenges
Travis Perkins (TP) is the largest builders’ merchants in the UK,
with over 1700 branches and more than 20,000 employees,
extensive real estate, and ‘more traditional’ cultural ways of
working within those spaces.
Post-lockdown in 2020, TP began their selection of a best-of-
breed solution to help their staff return to the workplace in a
covid-secure and managed fashion, with full data insights and
contact tracing.
Key to their requirements were that the
solution needed to:
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4
5
Integrate with Google IDP for SingleSignOn (SSO)
Be easy to scale up and down across the portfolio
Control bookable stock and contact trace
Integrate with Google Calendar for room bookings
Be up and running in less than 2 months
Why Travis Perkins chose Space Connect
The TP team considered a number of vendors to deliver a proof
of concept, working with their trusted IT partner, Softcat, to select
the solution provider.
“In the midst of further Covid restrictions and market challenges,
the scope of the project was fluid and changing” explains Charlie
Craigs, Deputy Team Leader in the Collaborations team at Softcat.
• Lockdown 2.0 occurred and the pilot was altered and extended.
• Changes in Google’s IDP configuration meant that the previous
API integration needed to be updated and recoded as soon as
possible.
“We knew the adaptability of the Space Connect solution and
their team would enable us to deliver the smooth rollout that TP
needed - despite the shifting scope”.
For Travis Perkins, that flexibility along with key, value-driving
features, made Space Connect their first choice. Martin Gallaher,
Programme Manager at Travis Perkins explains:
“The opportunity to not commit to a certain number of desks
and locations was a huge benefit in choosing Space Connect. We
have a great working relationship with Softcat. This, and Space
Connect’s flexibility helped so much, as the project scope changed
with the uncertainties of Covid.”
“Space Connect’s
flexibility means
the way we use the
solution can continue
to flex and evolve with
our business ... with
Space Connect we
absolutely made the
right choice”
Martin Gallaher, Programme Manager
The solution
1. Space Connect reconfigured the google
integration at pace for both SSO and
Room booking
2. Travis Perkins rolled out with Space
Connect desk booking across 6 locations
nationwide.
3. TP Group brand, City Plumbing, is rolling
out with desk booking across 14 locations
nationwide.
16
STR ATEGIC REPORT:
F INA NCIAL REVIEW
OVERVIEW
The Group has been successfully transformed from
an Enterprise focused business to a SaaS focussed
business with subsidiary companies at different stages
of their life cycle. SwipedOn and A&K are established
within their given sectors and are expected to continue
to grow and provide positive contributions to the
Groups cash flow in the coming year. Space Connect is
at the start of its life cycle, selling a new SaaS product,
which the Group is continuing to develop and invest in
to generate growth in both revenues and cash flows. As
with all businesses that are within an investment period
the Group has made a loss after tax in the current
reporting period of £2.56m (2021: £2.26m). This is in
line with our expectations, and also a result of subdued
growth principally caused by the effects of the response
to the COVID 19 Pandemic. Growth returned to forecast
rates within the group in the final half of the period and
we believe that this growth will continue into the future.
REVENUE
Overall revenue for the Group increased by 11% to
£5.14m driven by a 43% increase in recurring revenues
generated by the Group’s SwipedOn and Space Connect
software products. Recurring revenues increased as a
result of higher ARPU and customer locations. Revenue
from the Group’s A&K division decreased by £0.55m as
Covid-19 restrictions continued to impact this division.
Recurring revenues
- SwipedOn
- Space Connect
- Anders & Kern
2022
2021
£’000
£’000
2,916
2,124
373
127
119
151
Total recurring revenue
3,416
2,394
Non-recurring revenue
- SwipedOn
- Space Connect
- Anders & Kern
Total non-recurring revenue
37
85
37
73
1,602 2,125
1,724 2,235
Total revenue
5,140 4,629
The growth in recurring revenues for SwipedOn was
generated by a 58% increase in average revenue per
user (“ARPU”) to £75. SwipedOn focussed on selling
more to its existing customers with 7% more customers
on our highest priced tiers, and 6% increase in the
number of paying locations per customer. A number
of feature improvements also allowed us to apply a
price increase to both new and existing customers
whilst still remaining competitively priced. Covid-19
continued to impact the business with increased churn
from changing customer needs and business closures.
Annual user churn for the year was 15.6% (2021: 11.3%)
and revenue churn 10.9% (2021: 6.9%). These factors
all contribute towards net revenue retention which
increased to 130% for the year (2021: 105%).
Space Connect focussed on building its recurring
revenues by adding new customers through its partner
network. Overall customer numbers increased from 13
at the beginning of the year to 69 at the end. Revenues
from the sale of the white label version of Space
Connect through our partners meeting room booking
panel were impacted by Covid-19 reducing demand
for new meeting room panels. As businesses return to
more normal routines we expect demand to return and
revenues from this product to grow.
A&K continued to see reduced revenues from the sale
of its hardware offerings. Our A&K customer base is UK
orientated selling workplace solutions and therefore the
impact of lockdowns and work from home mandates
was significant. As we exit the lockdown restrictions we
expect normal level of sales for A&K to return.
GROSS PROFIT
Gross profit margin was 71% (2021: 72% *) giving a total
gross profit of £3.65m (2021: £2.65m). Gross margins
from our SaaS business are 89% (2021: 91%) whilst A&K
contributes a 35% margin (2021: 38%*).
* FY21 figures have been adjusted for zero margin A&K sales made
to SmartSpace Global which was agreed as part of the disposal
process. These sales amounted to £0.93m in FY21.
SmartSpace Software PLC Annual Report
17
ADMINISTRATIVE EXPENSES
Administrative expenses have increased by 35% to
£7.32m (2021: £5.42m) as detailed in the table below.
2022 2021
£’000 £’000
consistently cashflow positive and expected to
breakeven at an EBITDA level in the coming year. Space
Connect remains loss making at an EBITDA level whilst
it continues to build its customer base. A&K was loss
making due to reduced sales as a result of Covid-19.
Research and development
1,563 1,319
TAXATION
Less capitalised development
(340)
(290)
Research and development costs
not capitalised
1,223 1,029
Staff and contractor costs excluding
those relating to R&D
3,030 2,267
Sales, general and administrative
expenses
1,921 1,605
Share based payment charge
288
150
Depreciation and amortisation
666
375
Reorganisation and transformation
costs
Total
192
-
7,320 5,426
Excluding share based payments, depreciation and
amortisation, and reorganisation costs, administrative
expenses have increased by £1.27m. This increase arose
from increased expenditure on staff costs (£0.91m),
marketing expenditure (£0.18m) and various other
increased costs (£0.18m). Increased staff costs are
largely contributed by the team we have put in place
for Space Connect which has increased from 3 at the
beginning of FY21, to 18 at the end of FY22. Inflation in
digital advertising has led to the increased marketing
expenditure during the year.
Financial support amounting to £0.05m (FY21: £0.10m)
from the UK Government through wage subsidy
schemes was offset against staff costs.
In the coming year we anticipate inflationary pressure
on our cost base in all geographic regions. This
is particularly strong in areas where we see skills
shortages such as software development. The majority
of our software contracts with customers are for a 12
months or less therefore we will have an opportunity to
pass on this inflationary burden when contracts are due
for renewal.
ADJUSTED LBITDA
Adjusted LBITDA is the loss for the year before
net finance costs, tax, depreciation, amortisation,
reorganisation and transactional items, impairment
charges and share based payment charge. Adjusted
LBITDA was £2.49m (FY21: £2.12m). Whilst SwipedOn
made a LBITDA loss for the year, as ARR grows
and customers pay annually in advance it is now
The taxation credit of £1.11m results from the
recognition of tax assets relating to losses incurred
in the current year which will be utilised in future
periods, together with a re-measurement of losses
recognised in prior periods to the new rate of
corporation tax. Due to a change in the main rate
of UK corporation tax from April 2023 onwards tax
losses have been recognised at a tax rate of 25%
which is the rate expected to be in place when the
losses are utilised. Losses recognised as assets in prior
years have been re-measured based on this new rate
of corporation tax resulting in a credit of £0.46m.
FOREIGN EXCHANGE
The Group sells its products throughout the world
therefore revenues are received in a number of
currencies, with pounds sterling (47%), US dollars
(26%), Australian dollars (13%) and New Zealand dollars
(6%) being the most common. Our administration
costs are denominated in pounds sterling (40%),
New Zealand Dollars (37%) and US Dollars (22%).
Overall foreign currency revenue is closely matched to
foreign currency costs therefore trading exposure to
fluctuations in exchange rates is reduced.
Assets and liabilities denominated in foreign currencies
are mostly limited to our operations in New Zealand
where working capital, deferred revenue, property
plant and equipment, right of use assets and liabilities,
deferred tax assets, and intangible assets are held
in New Zealand Dollars. Net assets denominated in
foreign currencies amount to £4.52m. The Group does
not hedge this foreign currency exposure.
Foreign exchange movements in the period resulted in
a charge of £21,000 (2021: £13,000) to the profit and
loss, and a charge of £0.34m (2021: credit £0.64m) to
other comprehensive income.
EARNINGS PER SHARE
The loss per share was 8.91p (FY21: loss per share
7.54p). The adjusted loss per share which excludes
the after-tax impact of exceptional items, share-based
payments and the amortisation of intangible assets
recognised on acquisition was 7.04p (FY21: loss per
share 6.59p).
Year Ended 31 January 2022
18
INTANGIBLE ASSETS AND GOODWILL
CASH FLOW
Intangible assets comprise £8.37m of goodwill (2021:
£8.72m), £0.86m (2021: £0.88m) internally generated
software, and £1.39m (2021: £1.62m) of other intangibles
acquired as part of business combinations. Software
development costs relating to both SwipedOn and
Space Connect products amounting to £0.34m were
capitalised. An amortisation charge of £0.55m was
recorded against intangible assets; internally generated
software is amortised over 3 years and intangible
assets acquired through business combinations are
amortised over 10 years. Intangible assets denominated
in currencies other than pounds sterling decreased in
value by £0.39m due to movements in exchange rates.
FINANCIAL POSITION
Current tax receivables of £0.07m (2021: £0.10m)
relate to tax credits which the Group receives for
qualifying research and development activities. Cash
reimbursement of these tax credits was received in
February 2022.
Contract liabilities of £1.77m (2021 £1.13m) relate to
SaaS subscriptions received in advance by SwipedOn
and Space Connect which are spread over the period to
which they relate.
Borrowings amount to £0.38m (2021: £0.40m) of
which £0.36m (2021: £0.38m) relate to a mortgage
on the Group’s freehold property in Mildenhall where
A&K are based, together with a Covid-19 support loan
provided by the New Zealand government of £0.03m
(2021: £0.03m). The mortgage is due for repayment
in January 2023 and therefore classified as a current
liability. Management intends to extend the mortgage
period when it comes due for repayment. The Covid-19
support loan is interest free and will be repaid in FY23.
Cash and cash equivalents decreased during the year
by £1.76m (2021: increase £1.93m) due to a cash outflow
from operating activities of £1.61m (2021: £1.44m). As
we move into FY23 cash consumption is at lower levels
than at the beginning of FY22 and further growth in
recurring revenues for SwipedOn and Space Connect,
combined with a return to profitability for A&K, is
expected to transition the business to being cashflow
positive by the end of the financial year.
The net cash outflow from investing activities of
£48,000 (2021: inflow £3.44m) includes the final
£327,000 of disposal proceeds for SmartSpace Global
Limited offset by investments in software development
and property plant and equipment. Cash outflow
from financing activities amounted to £79,000 (2021:
outflow £86,000) as payments were made against the
finance leases and property mortgage.
Our forecasts for revenue growth over the coming year
mean that the Group has sufficient cash flow resources
to continue operations until profitability is achieved.
DIVIDEND POLICY
The Group reported a retained loss of £2.56m (FY21:
loss of £2.26m), which has been transferred to reserves.
At 31 January 2022, the Group had retained earnings of
£9.16m (FY21: £11.70m). The Board considers that it is
in shareholders’ best interests to retain resources in the
Group.
Kristian Shaw
Chief Financial Officer
17 May 2022
SmartSpace Software PLC Annual Report Case Study
Since its inception in 1995, Lush has grown to
become one of the most recognized names in
the beauty industry. The core of their business
is based on a refusal to accept the status quo
and the belief that there had to be a better way
to create natural, fresh cosmetics with a much
smaller impact on the environment.
Today, Lush is a household name with over
10,000 employees around the globe and they
have been a SwipedOn customer since 2019.
Year Ended 31 January 2022
Year Ended 31 January 2022
We caught up with Joshua from the Digital
Services team to find out why they chose
SwipedOn over a number of other workplace
sign in systems available and the benefits they
have seen since implementing it.
LUSH
Read on to find out more.
SWIPEDON CASE STUDY:
Today, Lush is a household name with over 10,000 employees
around the globe and they have been a SwipedOn customer
since 2019.
Since its inception in 1995, Lush has grown to become one of
the most recognized names in the beauty industry. The core
of their business is based on a refusal to accept the status
quo and the belief that there had to be a better way to create
natural, fresh cosmetics with a much smaller impact on the
environment.
Rolling out the SwipedOn
sign in system completely
streamlined the visitor
management process. It
gave us total visibility of our
operations by knowing who
was on the premises at all
times.
Before we started using SwipedOn, we had a paper visitor
book where guests would write down their details. Our
receptionist would then have to locate the correct host and
notify them that their visitor was here.
Tell us a little about your previous visitor management
process?
Challenge: Transforming the reception
Solution
Why SwipedOn?
We know there are some different visitor & employee
management solutions on offer, what was the main reason
your company chose us? As mentioned, our top priority
was to find a brand that fit well with our own business
ethics & values. The fact that SwipedOn helps us reduce our
environmental impact with less paper waste and also plants
native trees for every new customer was what set SwipedOn
apart from the other systems.
Challenges
• Reduce paper wastage and manage data safely and
securely.
• Paper visitor book sign in was a slow and manual process.
• Provide a hygienic way for visitors & employees to sign in
during the pandemic.
Results
• Reduced paper waste and smaller environmental impact.
• A compliant way to manage visitor data with an intuitive
system.
• Total visibility of what happening across different locations.
LOCATION
Dorset, UK
INDUSTRY
Cosmetics
EMPLOYEES
10,000
Challenge
Transforming
the reception
Tell us a little about your previous
visitor management process?
Before we started using SwipedOn, we had a
paper visitor book where guests would write
down their details. Our receptionist would then
have to locate the correct host and notify them
that their visitor was here.
What were the challenges you faced
that drove the need to replace your
What were the top priorities when
paper visitor book?
you were looking for a visitor &
One of our core values is that we believe ethical
employee management solution?
practices should be business as usual and
reducing our environmental impact is a large
part of that.
One of the most important things for us
was finding a brand that aligned with our
We were looking for a new system that would
company’s digital ethics and at the same
allow us to save on paper waste & improve
time could provide a user-friendly and
our data privacy practices for storing and
easy-to-use way to manage our visitor
destroying data when it is no longer needed.
experience.
You came to the right place, we’re
continually voted easy-to-use
by our customers! What results
did you notice by implementing
SwipedOn?
Rolling out the SwipedOn sign in
system totally streamlined the visitor
management process at Lush.
The system enables us to have total
visibility of our operations by being able
to monitor who is on the premises across
all our sites through a centrally managed
portal.
Being able to
“Rolling out the SwipedOn
sign in system completely
have locations set
streamlined the visitor
up differently is
management process. It
really helpful as
gave us total visibility of
our operations by knowing
they have unique
who was on the premises
requirements.
at all times.”
Joshua, Digital Services
19
19
Solution
Why SwipedOn?
We know there are some different visitor &
employee management solutions on offer, what
was the main reason your company chose us?
As mentioned, our top priority was to find a brand that fit
well with our own business ethics & values. The fact that
SwipedOn helps us reduce our environmental impact with
less paper waste and also plants native trees for every new
customer was what set SwipedOn apart from the other
systems.
Which SwipedOn features does Lush find most
useful?
•
•
Easy visitor sign in
Employee in-out
• Multi-location & roaming
• Customization
• Custom visitor fields
• Remember visitors
• Auto sign out
• SwipedOn Pocket App
• Contactless QR sign in
• Screening questions
What a list! Is there any in particular that stand out
or do they all play an important role in automating
workplace management processes?
We use the sign in questions in our R&D environments to
ensure that any site-specific health and safety requirements
are adhered to.
Contactless / QR sign in is great for reducing the number of
people that need to touch the tablet which also reduces the
number of times the device needs to be cleaned.
The auto sign out feature is great for those employees and
visitors who forget to sign out.
Multi-location & roaming are really useful for us as we have a
number of different sites all within close proximity where we
move around frequently. Being able to have different locations
set up slightly differently is super helpful as they have different
requirements.
We love the option to customize the branding and really make
the system feel like it’s unique to us.
20
STR ATEGIC REPORT: PRINC IPAL RISKS
PRINCIPAL RISKS AND UNCERTAINTIES
INFLATION
The Group could potentially be affected by a number
of uncertainties and risks that are not wholly within its
control. These uncertainties and risks, together with
an explanation for how such uncertainties and risks
are managed and the key mitigations available to the
Group are described below.
IMPACTS OF COVID-19
Working practices changed significantly since Covid-19
allowing employees to work from home. It is not yet
known to what extent businesses will return to office
based working. The Board believes that a hybrid office
and home working environment will become prevalent
in the future which will require technology to manage.
The Board therefore considers that the impact of
Covid-19 is significantly mitigated.
The global economy is experiencing a period of
rising inflation which may be further exacerbated
by disruption caused by the war in Ukraine. The
most significant cost impact of rising inflation
for SmartSpace will relate to our staff salaries. In
order to retain our work force it will be important
to appropriately address inflation in pay reviews.
SmartSpace does not have significant levels of
interest bearing debt and its contracts with customers
are almost entirely 1 year or less, thereby allowing
appropriate inflationary price increases to be applied.
The Board therefore considers that the impact of
inflation is mitigated to the extent possible.
RELIANCE ON KEY PERSONNEL AND
MANAGEMENT
The success of the Group will rely upon attracting and
retaining the right calibre of talent and the loss of key
staff would be detrimental to the Group. The Group
operates an active talent and development programme.
The Group continuously monitors and develops this
programme to meet the ambitious requirements of
the business and utilises a number of tools to retain
its senior management including an annual bonus and
long-term incentive plans.
TECHNOLOGICAL CHANGE AND
COMPETITION
The pace of technological advancement in today’s
world is apparent, affecting all aspects of life, and the
Group’s products target a market which is evolving
at a considerable pace. Failure to keep pace with
innovation or to develop the wrong solutions could
lead to a loss in revenue and increased development
costs. We will continue to consult with our clients
to understand their requirements and research the
market to ensure we focus our product development
programme on the most relevant software which
is competitive in the global market. The risk should
we fail to build upon recent investment in software
is considerable, and therefore identifying increased
product functionality and differentiation will ensure we
manage and mitigate this risk.
SmartSpace Software PLC Annual Report 21
SALES AND CHANNEL DEVELOPMENT
GOING CONCERN
The Group continues to make losses as a result of
its current lack of critical mass. The Board continues
to ensure that its overhead base is balanced with its
growth expectations to ensure there will be sufficient
capital to support the Group until it becomes cash
generative without further recourse to shareholders. On
this basis, the Group’s accounts have been prepared on
the going concern basis.
CONFLICT IN UKRAINE
Our software development activities have previously
relied on developers based in Ukraine, however this was
terminated in October 2021. We have no customers,
operations or suppliers based in Russia or Ukraine and
therefore we are not directly exposed to risk from the
current conflict in Ukraine or sanctions on Russia.
Key to our future success will be developing successful
channels to market. Productising our software offering
is crucial to ensuring a successful channel strategy;
ease of sale and installation are both key components
to ensure partner adoption. Failure to develop channels
to market is likely to impact our ability to scale the
business. Recent and ongoing investment will ensure
we have products to share with channel partners along
with the necessary training and installation support.
ACCREDITATIONS AND INDUSTRY
STANDARDS
Industry standards are constantly changing with
data and cyber security being key concerns for most
organisations. Ensuring the Group is planning and
maintaining its accreditations will mitigate the risks
associated with ever changing high standards of
practice.
IP PROTECTION
Our intellectual property is one of our key assets, and
loss thereof could result in us losing our competitive
advantage. Maintaining contractual disciplines and
vetting who we choose to share any level of object
or source code, product knowledge and wherewithal
and general secrets of how we operate are constantly
monitored and reviewed. Confidentiality is a key
component to managing this risk and the Group has
legally binding agreements to ensure this is robust and
maintained.
Year Ended 31 January 2022 22
STR ATEGIC REPORT: S172 STAT EMENT
This section serves as our section 172 statement and
forms part of the Strategic Report and should be read
in conjunction with the Corporate Governance Report.
Under Section 172 of the Companies Act 2006 the
Directors have a duty to promote the success of
the Group over the long term for the benefit of its
shareholders as a whole, having regard to a range of
other key stakeholders’ interests. The Directors must
have regard (amongst other matters), to:
• the likely consequences of any decision in the long
term;
• the interests of the Group’s employees;
• the need to foster the Group’s business relationships
with suppliers, customers and others;
• the impact of the Group’s operations on the
community and the environment;
• the desirability of the Group maintaining a reputation
for high standards of business conduct;
• and the need to act fairly with members of the
Company.
The Board is responsible for the overall direction
of the Group. It focuses primarily upon strategic
issues and is responsible for the Group’s long-term
success. It sets the Group’s strategy, oversees the
allocation of resources and monitors the performance
of the Group, to ensure that the Group is structured
appropriately for the challenges and opportunities of
the future. In performing these duties, the Board is
focused on the sustainability of the Group in the long
term. The Board recognises the need for the Group
to have effective engagement with, and encourage
participation from, all key stakeholders to promote
these long-term interests.
Typically, in a company such as SmartSpace, the
Directors fulfil their duties partly through a governance
framework that delegates day-to-day decision
making to the employees of the Company. The Board
recognises that such delegation needs to be part of
a robust governance structure which covers how we
engage with our stakeholders and how the Board
assures itself that the governance structure and
systems of controls continue to be robust.
The Chairman, with the assistance of the Company
Secretary, sets the agenda for each Board meeting
to ensure the requirements of Section 172 are
always considered and met through a combination
of the following:
• Standing agenda points and papers considered at
each meeting with the CEO and CFO presenting
updates on the financial overview, operational
progress, business development, strategic
progress, and investor relations. The Board also
considers relevant corporate governance and
compliance matters.
• Formal consideration of any factors which are
relevant to major decisions taken by the Board
throughout the year.
• Review of topics through the risk management
process and other standard Audit Committee and
Remuneration Committee agenda items.
GROUP EMPLOYEES
A well-motivated and satisfied workforce is crucial to
the success of the Group. It is therefore important that
the Board are aware of and understand the opinions
of our employees, taking these into account when
making decisions. We encourage our employees to take
part in professional development activities, and where
appropriate, provide the resources to do so. Over 90%
of our employees have been issued share options
encouraging an awareness of the financial factors
which determine the Groups success.
CUSTOMER AND SUPPLIER ENGAGEMENT
The Executive Directors hold regular meetings
with the management of each operating subsidiary
at which progress with customer relationships is
reviewed. A monthly report is produced highlighting
the key performance metrics for managing customer
satisfaction being customer churn rate, support ticket
levels, and net promoter score. Trends are analysed
and the likely cause of those trends identified. Should
concerns be made by customers the Group ensures
that these are addressed as a matter of urgency. The
monthly reports are tabled at Group board meetings
and any issues highlighted by the CEO in his report.
Senior management of our operating subsidiaries
communicate and meet with strategic partners on a
regular basis. This is further supported by Executive
Directors where this is appropriate. Meetings provide
an opportunity for feedback from the partner, ensure
that development priorities are properly addressed, and
customer support remains at a high standard.
The relationships with Group’s key suppliers and
partners are maintained by the management of
SmartSpace Software PLC Annual Report 23
and truthfulness from our employees as a matter of
course and Directors and employees are required at all
times to act with integrity and good conscience. This
requirement is set out in the employee handbook.
ENSURING WE ACT FAIRLY WITH ALL
MEMBERS OF THE COMPANY
The Board ensures that the Group’s shareholders are
treated equally and fairly, regardless of the size of their
shareholding
or their status as a private or institutional holders. The
Group provides clear and timely communications via
the Group’s website and via a Regulatory News Service.
All holders of Ordinary shares are eligible to receive
dividend payments and to vote at general meetings of
the Company.
each operating subsidiary. Regular engagement
with key suppliers takes place to ensure that agreed
service levels are being satisfactorily met, to develop
constructive relationships, and where necessary
proactively address any shortfalls.
SHAREHOLDER ENGAGEMENT
The Board engages with its institutional shareholders
through meetings held after financial reporting and
trading updates. Since Covid-19 these meetings have
taken place through video-conference facilities. Private
shareholders are encouraged to engage with the Board
at the Company’s AGM where the Board makes itself
available for shareholders to ask questions. The Group
also makes live interactive management presentations
through the Investor Meet Company platform to
current and prospective shareholders regardless of the
number of shares they own.
ENGAGEMENT WITH THE WIDER
COMMUNITY AND IMPACTS ON THE
ENVIRONMENT
The Group considers its actions and the likely effect
that they may have on the environment and seeks to
mitigate any negative impact wherever practicable. We
have included for the first time carbon emission data
in this annual report (see page 38). Through various
procedures the Group complies with health and safety
and environmental legislation relevant to its activities.
As part of our commitment to the environment we
plant one tree for every new SwipedOn customer.
These trees are located at 16 locations around New
Zealand. We believe that protecting our environment
is a job for all of us. Handled by a local charity, Trees
that Count, we believe by planting native species trees
we will help restore and enhance the environment,
encourage biodiversity, clean air and waterways and
make a difference to climate change. So far, we have
funded over 6,000 trees.
In addition, we also seek to support local charitable
organisations in the markets we serve by providing our
software free of charge or at a significant discount.
Charities we have helped in this way include The
Children’s Hospital Foundation and Leicestershire
Search and Rescue. We positively encourage charities
to approach us for support.
MAINTAINING A REPUTATION FOR HIGH
STANDARDS OF BUSINESS CONDUCT
The Group has a culture which emphasises that
business should be conducted honestly, fairly and
with due respect for others. We expect honesty
Year Ended 31 January 2022 24
OUR STAKEHOLDERS
Why we engage
Types of engagement undertaken
Issues relevant to the
stakeholder group
Our people
• Continual focus on the health and safety of all employees.
• Personal
The dedication of our people and
their drive for results are the most
significant contributors to our
future success.
• Regular performance reviews and staff surveys
• Competitive remuneration strategy.
Customers
• We provide customer support through our help desks
Engaging with customers helps us
to understand their needs, identify
opportunities and challenges
and plan the future direction and
development of our software
and interaction with our customers through our account
management.
• We survey customers on their likely take up of add-on modules
and functionality, and their views regarding development priorities.
development.
• Remuneration
strategy.
• Health and safety.
• Diversity and
inclusion.
• Customer
satisfaction.
• Innovation
and product
development.
• We monitor our net promoter score to ensure we maintain the
• Product reliability.
highest standards in our products and services.
• Product support.
• We survey lost customers to identify areas for improvement.
Suppliers and partners
• Regular interaction with our outsource partners including weekly
• Product
Maintaining a flexible workforce
through the use of contractors
is vital to the success of the
business. Consistent and reliable
cloud service providers are a
prerequisite for our business.
Strong partnership agreements
are important to distributing the
Group’s products and creating
integrations for customers
Investors
Continued access to funding is
vital to the performance of the
business. We work to ensure
our investors have a clear
understanding of our strategy,
performance and objectives
stand ups and the use of shared platforms such as Microsoft
Teams, Microsoft Sharepoint and shared development tools such
as Jira and Confluence.
development
• Hosting
• The Group uses Microsoft Azure and Amazon Web Services who
are the market leaders providing the highest level of service.
• The Group regularly reviews its partners’ performance and terms
and conditions
• The Group’s Investor Relations Strategy managed by the CEO and
CFO includes regular meetings with key and prospective investors.
• Financial
performance
• The Company’s Annual Report provides an overview of the Group
and regular announcements and press releases are published to
provide updates on the Group’s performance and progress.
• Governance and
transparency
• Directors’
• The AGM provides shareholders with an opportunity to directly
remuneration
engage with the Board.
• Board performance
• The Group has signed up to use the Investor Meet Company
platform to deliver live, interactive management presentations to
current and prospective shareholders regardless of the number of
shares they own.
• There is an ongoing dialogue with the Company’s analysts to
address enquiries and promote the business.
Communities
• Planting of a tree for each new SwipedOn customer
We are committed to maintaining
positive relationships with the
communities in which we operate.
• Provision of free or discounted software to charities or not for
profit organisations
• Operational
performance
• Ethics
The Strategic Report, comprising the Strategy and Operational Review, Financial Review and Principal Risks was approved by
the Board on 17 May 2022 and signed on its behalf by:
Frank Beechinor
Chief Executive Officer
17 May 2022
SmartSpace Software PLC Annual Report 25
GI VING BAC K
Giving back is part of our culture
For every SwipedOn customer we
sign we plant a tree
So far we have we have planted
over 6,700 native species trees in
16 locations around New Zealand.
The project is managed by Trees
that Count, a local not for profit.
Supporting charitable
organisations around the Globe
We provide our software free or at
a discount to selected charities.
6,700+
16+
Trees funded from
customer subscriptions
Locations around
New Zealand
Year Ended 31 January 2022 26
SmartSpace Software PLC Annual Report
DI REC TORS A N D OF FIC ER S
Guy van Zwanenberg
(Chairman)
Kris Shaw
(Chief Financial Officer)
Kris was appointed Group
Chief Financial Officer
on 27 May 2021. Kris is
ACA qualified having
started his career in audit
practice, and subsequently
working in a number of
listed businesses. Prior to
joining the Company, Kris spent seven years leading the
finance team at Agrokultura AB, a Swedish listed agri-
business. He has been with SmartSpace since January
2019 having joined as Financial Controller and taking a
critical role in managing cashflow during the Covid-19
pandemic, and the disposal of the Enterprise business.
Philip Wood
(Non-Executive Director)
Philip joined the Board
on 27 May 2021 as
an independent NED
and Chair of the Audit
Committee. Philip is
currently the Deputy Chief
Executive Officer and
Chief Financial Officer of
Aptitude Software Group plc, a specialist provider of
powerful financial management software to large global
businesses. Philip brings extensive public company
experience having joined the Board of Aptitude
Software Group plc (formerly known as Microgen
plc) in 2007, having previously held the role of Group
Finance Director at AttentiV Systems Group plc where
he oversaw the group’s flotation onto AIM in 2004. The
experience Philip brings in growing software businesses
and mentoring finance teams will be hugely helpful to
SmartSpace, as the Company moves through its next
phase of development as a global SaaS business.
Guy joined the Board on
9 March 2015 as a Non-
Executive Director, a role
which he maintained until
June 2018 when he stepped
into the Chairman’s role.
Guy is also Chairman of the
Remuneration Committee and
Nomination Committee and a member of the Audit
Committee. Guy has more than 40 years’ experience
in industry and practice. He qualified as a Chartered
Accountant with Grant Thornton and then spent three
years working with James Gulliver. Guy subsequently
moved to become UK Finance Director of an American
computer accessory company which was taken public
in 1989. In 1991, he established his own interim financial
management business and has since been involved in
a number of SME businesses providing strategic and
financial help. Guy joined Gamingking PLC in 1998
on a part-time basis as Finance Director and became
Company Secretary and Non-Executive Director in
2006, remaining until May 2013. He joined Quixant plc
as a Non-Executive in March 2013 as part of the float
team. Guy is both a Fellow of The Institute of Chartered
Accountants in England and Wales and a Chartered
Director.
Frank Beechinor
(Chief Executive Officer)
Frank was appointed chairman
of the Board on 10 July 2014
and led the Board and led
the business through its
restructuring from what was
then Coms plc. He became Chief
Executive Officer in July 2018
with the aim of leading SmartSpace
Software plc to become a market leader in space
management technology. He has significant corporate
experience, particularly in the software industry and
building SaaS businesses. Frank is a co-founder of
Cadence Performance Ltd. Frank was previously
founder and CEO of OneClick HR plc from 1997 to 2011
and Non-Executive Chairman of dotDigital Group plc
from May 2011 to March 2019.
Year Ended 31 January 2022
27
COM PANY IN F ORM ATION
AND A DVISERS
REGISTERED OFFICE
Norderstedt House
James Carter Road,
Mildenhall,
Bury St. Edmunds,
IP28 7RQ
Company Number
5332126
COMPANY ADVISERS
Nominated adviser and broker
N+1 Singer
Bartholomew Lane
London
EC2N 2AX
Auditor
RSM UK Audit LLP
Chartered Accountants & Statutory Auditors
170 Midsummer Boulevard
Milton Keynes
MK9 1BP
Registrar
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
Banker
Santander UK Plc
Bootle Centre
Bridle Road
Bootle
L30 4GB
28
REMU NERATION REPORT
THE REMUNERATION COMMITTEE
REMUNERATION PACKAGE
The Company’s remuneration policy is the responsibility
of the Remuneration Committee which comprised Guy
van Zwanenberg (Non-Executive Chairman), Diana
Dyer Bartlett (Non-Executive Director until 27 May
2021), and Philip Wood (Non-Executive Director from
27 May 2021) during the year.
GENERAL POLICY
The Company’s policy is to provide remuneration
packages for Executive Directors which aims to attract
and retain high quality executives and which link their
reward to the Group’s performance.
There are four components to the remuneration
package, namely base salary and benefits, bonus,
pension arrangements and long-term incentive
arrangements:
• The base salaries of the Executive Directors were
set at levels considered to be appropriate when they
entered into service agreements with the Company.
The base salaries are reviewed by the Remuneration
Committee annually and any increases are awarded
having regard to performance and salary levels
in comparable organisations. Benefits which may
include car allowance and private health insurance
are not pensionable.
• The Executive Directors are entitled to a discretionary
bonus provided the Company achieves its targets for
the financial year.
• The Company contributes to money purchase
pension arrangements, and private medical insurance
and death in service benefit are also provided.
• The Company has established an unapproved share
option scheme and an Enterprise Management
Incentive (EMI) share option scheme in which the
Directors may participate.
DIRECTORS’ REMUNERATION
The remuneration of the Directors who held office during the year was:
Salary and
fees
Taxable
benefits
Long-term
incentive
schemes
Pension
related
benefits
Compensation
for loss of
office
Total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
£’000
£’000 £’000
£’000
Guy van Zwanenberg
60
60
Frank Beechinor
220
220
Kristian Shaw
Philip Wood
Bruce Morrison
Diana Dyer Bartlett
94
27
90
13
-
-
150
40
-
19
8
-
7
-
-
19
-
-
12
-
2
90
15
-
48
-
2
63
-
-
3
4
Total
504
470
34
31
155
72
-
-
4
-
4
-
8
-
2
-
-
7
-
9
-
-
-
-
40
-
40
-
-
-
-
-
-
-
62
62
329
304
121
27
-
-
189
172
13
44
741
582
SmartSpace Software PLC Annual Report
29
SHARE OPTIONS AWARDED DURING THE YEAR
The following share options were awarded to the Directors during the year:
Director
Scheme
Instrument
Number of ordinary
shares of 10p each
Exercise
price
Grant
date
Expiry
date
Frank Beechinor
EMI scheme
Share Option
154,535
137.5p
22/09/2021
22/09/2031
Frank Beechinor
LTIP scheme
Share Option
184,415
137.5p
22/09/2021
22/09/2031
Kristian Shaw
EMI scheme
Share Option
125,000
137.5p
22/09/2021
22/09/2031
The options have an exercise price of 137.5p per share, vest three years from the date of grant and once vested are
exercisable at any time up to ten years after the date of grant. These new options do not carry any performance
conditions.
The Directors held the following outstanding options at 31 January 2022:
Director
Instrument
Number of ordinary
shares of 10p each
Exercise
price
Grant
date
Expiry
date
Guy van Zwanenberg
Share Option
30,000
92.0p
11/12/2015
11/12/2025
Frank Beechinor
Frank Beechinor
Frank Beechinor
Kristian Shaw
Kristian Shaw
Share Option
Share Option
Share Option
Share Option
Share Option
100,000
92.0p
11/12/2015
11/12/2025
323,943
94.0p
17/10/2018
17/10/2028
338,950
137.5p
22/09/2021
22/09/2031
125,000
137.5p
22/09/2021
22/09/2031
50,000
92.5p
23/10/2020
23/10/2030
None of the Directors had any beneficial interest in the shares of any subsidiary companies.
The movement on Directors’ share options during the year is set out below:
2022
2021
Number Weighted average
exercise price
Number Weighted average
exercise price
Outstanding at start of year
Granted during the year
Forfeited during the year
Options in place upon appointment
Ceasing to be a director
Outstanding at end of year
Exercisable at end of year
Exercised during year
875,000
463,950
(226,057)
50,000
(195,000)
967,893
102,502
-
93.33p
137.5p
94.0p
92.5p
92.3p
114.5p
93.6p
-
750,000
125,000
-
-
-
93.47p
92.50p
-
-
-
875,000
93.33p
-
-
-
-
There have been no further options granted since the end of the financial year.
Year Ended 31 January 2022
30
SHARE OPTIONS AMENDED AND FORFEITED DURING THE YEAR
The performance criteria relating to certain options granted to Frank Beechinor and Guy van Zwanenberg in prior
periods were amended by extending the qualifying period to meet share price targets. The deadline to meet the share
price targets was extended by two years to 17 October 2023 and the number of options that shall vest is as follows. A
share based payment charge of £160,000 will be recognised over the two year extension period, of which £28,000 was
recognised in the current period.
Average share price achieved
in any 90 calendar day period
following the Date of Grant and
ending on 17 October 2023
Number of 94 pence
options held by
Frank Beechinor
that shall vest
Number of 92 pence
options held by
Frank Beechinor
that shall vest
Number of 92 pence
options held by
Guy van Zwanenberg
that shall vest
250 pence
350 pence
450 pence
500 pence
Total
45,448
65,331
65,331
65,332
241,442
15,385
23,077
23,077
23,076
84,615
4,615
6,923
6,923
6,923
25,384
A further 226,057 options held by Frank Beechinor where share price performance conditions were not met by the
deadline of 17 October 2021 were forfeited.
SmartSpace Software PLC Annual Report
31
AUDIT COMMITTEE REPORT
Upon his commencement as a director of the
Company on 27 May 2021, Philip Wood was
appointed the chair of the Audit Committee,
replacing Diana Dyer Bartlett who resigned on
the same day. Guy van Zwanenberg is the second
member of the Committee. Both Philip Wood and
Guy van Zwanenberg have recent and relevant
financial experience by virtue of their senior financial
roles and both hold a professional accountancy
qualification. The Audit Committee has a number
of responsibilities set out in its terms of reference,
which were last reviewed and updated in April 2019.
The responsibilities include reviewing the annual and
interim reports, discussing findings from the external
auditors, considering the suitability and effectiveness
of the internal control processes, recommending
the appointment and remuneration of the auditor,
and considering any non-audit services to be
provided by the auditor, and determining the Group’s
whistleblowing and anti-bribery policies. There were
two audit committee meetings during the year
both of which were attended by all members of the
Committee at that time. Executive Directors and the
Group’s auditors may be invited to attend all or part
of any meetings. The Committee also meets with the
Group’s external auditor without the presence of the
Executive Directors.
RSM UK Audit LLP were appointed as auditors for
the first time for the year ended 31 January 2020 and
were re-appointed at the Company’s annual general
meeting on 7 July 2021. The audit engagement
partner is named Richard Bartlett-Rawlings.
MEETINGS AND BUSINESS
In advance of the audit of the Group’s financial
statements, the Audit Committee met to review the
audit plan as presented by RSM UK Audit LLP. The
plan set out the proposed scope of work, the audit
approach, materiality and identified areas of audit
risk and was compliant with the Ethical Standards for
Auditors issued by the Financial Reporting Council.
Prior to commencing its audit work, RSM UK Audit
LLP confirmed in writing the safeguards in place
to ensure its independence and objectivity and the
Committee discussed how the auditor proposed to
demonstrate its professional scepticism in the audit
process. The auditor’s quality control processes were
also discussed. Audit fees are disclosed in note 22 to
the consolidated financial statements. RSM UK Audit
LLP did not provide any non-audit services in the
year or since the period end.
At its meeting to discuss the annual report and financial
statements, the Audit Committee confirmed that in its
opinion, the annual report and financial statements,
taken as a whole, are fair, balanced and understandable.
The Audit Committee noted that the financial
statements had been prepared consistently, with no
significant changes in accounting policies compared
with the previous year.
The Group reports a number of alternative performance
measures which are not in accordance with the
reporting requirements of IFRS. These include Loss for
the year before net finance costs, tax, depreciation,
amortisation, reorganisation and transactional items,
impairment charges and share based payment charge
(“LBITDA”), annual recurring revenue (“ARR”), and
monthly average revenue per user (“ARPU”). The
Audit Committee has reviewed these to ensure they
are appropriate and that in each case the reason for
their use is clearly explained; where possible they are
reconciled to the equivalent IFRS figure; and they are
not given prominence over the equivalent IFRS figure.
In reviewing and making its recommendation that the
Annual Report and Financial Statements be approved
by the Board, the Audit Committee has taken into
consideration the following significant issues and
judgement areas:
(a) Carrying value of goodwill and other intangible
fixed assets
At 31 January 2022 the carrying value of goodwill
and other intangible assets was £10,619,000 (2021:
£11,222,000). The Audit Committee reviewed in
detail the judgements taken in the impairment
review performed to determine whether there was
any indication that those assets had suffered any
impairment. The Audit Committee considers the
key judgements in the impairment review to be the
discount rate and revenue growth rates used in the
Value in Use calculations. Following a review of the
impact of the sensitivities performed by management
on the discount rate and revenue growth rate in
the Value in Use calculations, the Audit Committee
considered that the calculations performed together
with the key judgements and estimates were
reasonable and no impairment charge was required.
(b) Going concern
As the Group’s software businesses build their SaaS
customer bases the Group continues to be loss making.
The losses incurred are controlled, predictable and
Year Ended 31 January 2022 32
planned to allow the business to continue to grow.
In the short term the Group will continue to be loss-
making. As reported in the Strategic Report, SwipedOn
has continued to grow despite the worldwide
disruption caused by Covid-19 and is now consistently
generating cash. Space Connect has made significant
growth to its customer base and recurring revenues
but is not yet cash generative. The Audit Committee
has considered the Group forecasts which underpin
the presumption that the accounts should be prepared
under the going concern principle. In particular it has
considered a scenario whereby the SaaS business does
not exceed its historic growth rates in the next twelve
months together with the mitigations available to the
Group. On this basis, the Audit Committee was able to
advise the Board that it was reasonable to prepare the
accounts on a going concern basis.
RISK MANAGEMENT AND INTERNAL
CONTROLS
The Audit Committee has responsibilities for
reviewing the Group’s risk management and internal
controls. It reviewed the Group’s risk register which
includes the measures to manage risk and mitigations
and the summary of principal risks set out in the
Strategic Report.
INTERNAL AUDIT
The Audit Committee considered whether an
internal audit function was required and concluded
that, owing to the Group’s size, this was not
appropriate at this stage.
EXTERNAL AUDITOR
In its review of the effectiveness of the audit process,
the Committee considered:
• the auditor’s fulfilment of the agreed audit plan;
• the level and effectiveness of challenge provided by
the auditor;
• the audit quality control arrangements, including
the stages of review of the Annual Report, the time
spent by the audit partner and whether any issues
identified during the audit had been dealt with on a
timely basis;
• the changes to the auditor’s audit approach and
work which demonstrated the auditor’s professional
scepticism; and
• the report arising from the audit itself.
The Committee was satisfied with the auditor’s
independence and the effectiveness of the audit
process, together with the degree of diligence and
professional scepticism brought to bear and that the
auditor provided effective independent challenge in
carrying out its responsibilities.
RSM UK Audit LLP have indicated their willingness
to continue to act as auditor to the Company for
the forthcoming year and a resolution for their re-
appointment will be proposed at the Annual General
Meeting, as well as a resolution to seek approval of the
auditor’s remuneration.
Philip Wood
Chairman, Audit Committee
17 May 2022
SmartSpace Software PLC Annual Report 33
CO R PORATE GOVERNANCE RE PORT
COMPLIANCE WITH CORPORATE
GOVERNANCE PRINCIPLES
As an AIM listed company the Board recognises the
importance of applying sound corporate governance
principles in managing the Group. The Group adopted
the QCA Corporate Governance Code (“the “QCA
code”) on 28 September 2018 as a benchmark to
measuring our performance against good governance
principles. This report shows how we apply the QCA
Code’s 10 guiding principles in practice.
1. Establish a strategy and business model which
promote long-term value for shareholders
The business model and strategy of the Group are set
out in the strategic report on pages 12 to 14.
The Group’s strategy and business model are
developed by the Chief Executive Officer and his senior
management team and approved by the Board. The
management team, led by the Chief Executive Officer,
is responsible for implementing the strategy and
managing the business at an operational level.
The Group’s immediate key strategic priorities to drive
future growth are as follows:
• to focus on delivering pure SaaS revenues where
the Group is not overly exposed to one market or
customer;
• to develop technology-led intellectual property to
help companies optimise use of their corporate real
estate focussing on rooms, desks and visitors;
• to develop new sales channels to market our
software solutions by establishing a global network
of channel partners;
• to bring together the technologies of Space Connect
and SwipedOn in order to offer a complete solution
to both customer bases and therefore maximise
revenue per user from our customer lists;
• to continue with a strategy of both organic and
acquisitive growth both in our domestic market and
overseas; and
• to deliver higher quality earnings which will, in turn,
improve cash generation.
An evaluation of the potential risks and uncertainties of
the Group is set out on pages 20 to 21.
2. Seek to understand and meet shareholder needs
and expectations
The Group seeks to maintain a regular dialogue with
both existing and potential shareholders in order
to communicate the Group’s strategy and progress
and to understand the needs and expectations of
shareholders.
Beyond the annual general meeting, the Chief
Executive Officer, Chief Financial Officer and, where
appropriate, other members of the Board and senior
management team meet with investors and analysts to
obtain feedback regarding the market’s expectations of
the Group.
The Group’s investor relations activities encompass
dialogue with both institutional and private investors.
Private shareholders – the main forum for private
shareholders to engage with the Board is at the
Company’s AGM where the Board makes itself available
for shareholders to ask questions. The notice of AGM
is sent to shareholders at least 21 days before the
meeting is due to be held. At the meeting, shareholders
vote on each resolution and the meeting is advised of
the number of proxy votes for, against and withheld
on each resolution. The outcome of the AGM is
subsequently announced via RNS and published on the
Company’s website.
Institutional shareholders – the Directors consider
that it is important that its institutional shareholders
understand the business and that their expectations
are in accordance with those of the Board. Members
of the Board engage with institutional shareholders
following the announcement of the annual and interim
results explaining the results and the Board’s vision
for the future. These meetings are arranged by the
Company’s FCA regulated nominated adviser and
broker, who will follow up with investors following the
meetings and provide anonymised feedback to the
Board. Additionally, ad hoc meetings are attended
as requested by existing and potential institutional
investors.
The Board will consider all feedback received from
shareholders whether at the AGM, during face-to-
face meetings with institutional investors, or from its
nominated adviser following those meetings. It reviews
analysts’ notes to ensure they accord broadly with the
Board’s expectations.
The Group also endeavours to maintain a dialogue
and keep shareholders informed through its public
announcements and Company website. SmartSpace’s
website provides not only information specifically
Year Ended 31 January 2022 34
relevant to investors (such as the Group’s Annual
Report and investor presentations) but also regarding
the nature of the business itself with considerable detail
regarding the services it provides and the manner in
which it carries on its business.
3. Take into account wider stakeholder and social
responsibilities and their implications for long-term
success
The Group is aware of its corporate social
responsibilities and the need to maintain effective
working relationships across a range of stakeholder
groups, which include the Group’s employees, partners,
customers, suppliers, and regulatory authorities. The
Group’s operations take account of the requirement
to balance the needs of all of these stakeholder
groups while maintaining focus on the Board’s primary
responsibility to promote the success of the Group
for the benefit of its members as a whole. The Group
endeavours to take account of feedback received
from stakeholders, making amendments to working
arrangements and operational plans where appropriate
and where such amendments are consistent with the
Group’s long-term strategy.
The Group considers its actions and the likely effect
that they may have on the environment and seeks to
mitigate any negative impact wherever practicable.
Through the various procedures and systems it
operates, the Group complies with health and safety
and environmental legislation relevant to its activities.
4. Embed effective risk management, considering
both opportunities and threats, throughout the
organisation
The Board approves an annual budget which identifies
the opportunities to develop the Group’s business
as well as the resources required to implement its
strategy. The Board reviews progress against budgets
and forecasts on a regular basis to ensure the Group’s
performance is on target or actions identified if it is not.
It also evaluates the impact of key risks and assesses
the resources required to mitigate such risks.
The Board is responsible for the systems of risk
management and internal control and for reviewing
their effectiveness. The internal controls are designed
to manage rather than eliminate risk and provide
reasonable but not absolute assurance against material
misstatement or loss. Through the activities of the
Audit Committee, the effectiveness of these internal
controls is reviewed annually.
A summary of the principal risks and uncertainties
facing the Group as well as mitigating actions are
described in the strategic report on pages 20 to 21.
The Group maintains insurance cover as part of its risk
management programme.
The senior management team meet at least monthly to
consider new risks and opportunities presented to the
Group, making recommendations to the Board where
necessary.
5. Maintain the Board as a well-functioning,
balanced team led by the Chair
SmartSpace’s Board consists of four directors, two of
whom are non-executive directors. On an annual basis
each Director seeks re-election at the annual general
meeting.
The Group does not have a director designated as
a Senior Independent Director. In light of the size of
the Board, and the Group’s stage of development, the
Board does not consider it necessary to appoint a
Senior Independent Director.
Directors’ biographies are set out on page 26.
The Board is responsible to the shareholders for the
proper management of the Group and meets at least
ten times a year to set the overall direction and strategy
of the Group, to review technological, operational and
financial performance and to advise on management
appointments. Executive directors are employed on
a full-time basis whilst non-executive directors are
required to attend board and committee meetings, and
are encouraged to be involved in specific workshops,
meetings or seminars in line with their areas of
expertise. All key operational and investment decisions
are subject to board approval as required by the
Company’s schedule of matters reserved for the Board.
SmartSpace Software PLC Annual Report 35
A summary of board and committee meetings held in the year ended 31 January 2022, and directors’ attendance records,
is set out below:
Board Meetings
Audit Committee Meetings
Remuneration Committee Meetings
Guy van Zwanenberg
Frank Beechinor
Kristian Shaw
Philip Wood
Diana Dyer Bartlett
Bruce Morrison
10 / 10
10 / 10
6 / 6
6 / 6
4 / 4
4 / 4
The Board adheres to the QCA Code’s recommendations
that a Board should have at least two independent
non-executive directors. Both Non-Executive directors
are regarded as independent under the QCA Code’s
guidance for determining such independence.
The Non-Executive directors are remunerated by way
of an agreed monthly fee. In 2015 Guy van Zwanenberg
was granted share options under the Company’s
Unapproved Share Option Scheme, at a time when
the Company had trading difficulties and required
substantial board intervention but had limited funds.
The options are not deemed to be significant enough
to impact his independence and were granted following
a shareholder consultation process.
6. Ensure that between them, the Directors have
the necessary up-to-date experience, skills and
capabilities
The Board considers its Directors to have experience
in areas critical to the long-term future success of the
Group, covering a deep understanding of technology,
corporate strategy, finance and investment. The
Directors’ biographies are set out on page 26. Where
required the Board undergoes training in areas needed
to carry out their duties.
The Board regularly reviews the composition of the
Board to ensure that it has the necessary breadth and
depth of skills to support the ongoing development
of the Group. Guy van Zwanenberg has served on the
Board for a number of years and the Board is starting
the process of developing a succession plan.
7. Evaluate board performance based on clear
and relevant objectives, seeking continuous
improvement
Currently there is no formal board performance
evaluation procedure, but the Board does discuss
its operational efficiency as well as that of individual
Directors on a regular basis. As the business grows,
consideration will be given to adopting a more formal
process.
2 / 2
n.a.
n.a.
1 / 1
1 / 1
n.a.
4 / 4
n.a.
n.a.
2 / 2
2 / 2
n.a.
8. Promote a corporate culture that is based on
ethical values and behaviours
The Board seeks to maintain the highest standards
of integrity in the conduct of the Group’s operations.
An open culture is encouraged within the Group, with
regular communications to staff regarding the Group’s
progress. The senior management team regularly
monitors the Group’s cultural environment and seeks to
address any concerns that may arise from time to time.
The Group has in place a whistleblowing policy which
is reviewed on a regular basis. All staff are made aware
of their responsibilities regarding market abuse and
registers are maintained relating to insiders.
The Group is committed to providing a safe
environment for its staff and all other parties for which
the Group has a legal or moral responsibility.
These core beliefs are reinforced by senior
management at town hall and other similar meetings.
9. Maintain governance structures and processes
that are fit for purpose and support good decision
making by the Board
The Board has overall responsibility for promoting
the success of the Group. The Executive Directors
have day-to-day responsibility for the operational
management of the Group’s activities. The Non-
Executive directors are responsible for bringing
independent and objective judgement to board
decisions.
There is a clear separation of the roles of Chief
Executive Officer and Non-Executive Chairman. The
Chairman is responsible for overseeing the running
of the Board, ensuring that no individual or group
dominates the Board’s decision-making and ensuring
the Non-Executive directors are properly briefed
on matters. The Chairman has overall responsibility
for corporate governance matters in the Group. The
Chief Executive Officer has the responsibility for
implementing the strategy of the Board and managing
the day-to-day business activities of the Group. The
Company Secretary is responsible for ensuring that
Year Ended 31 January 2022
36
Board procedures are followed, and applicable rules
and regulations are complied with.
The Board has established Audit, Remuneration and
Nominations Committees with formally delegated
duties and responsibilities, and which comprise Non-
Executive directors only, with executive directors
attending by invitation. The reports of the Audit and
Remuneration committees are set out on pages 28 to
32.
Philip Wood chairs the Audit Committee, Guy van
Zwanenberg chairs the Remuneration Committee and
the Nominations Committee.
The Audit Committee normally meets twice a year
and at other times if necessary. The Audit Committee
recommends the appointment, scope and fees of the
external auditor, discusses issues that arise from the
audit, reviews the reports of the external auditors and
internal control procedures and considers any financial
statements before their publication. The external
auditor attends meetings as required by the Audit
Committee to consider any issues arising from the audit
and the auditor’s work. The audit partner meets the
Audit Committee without the Executive Directors being
present at least once a year.
The Remuneration Committee, which meets as
required, but at least once a year, agrees the terms and
conditions, including annual remuneration, of Executive
Directors and reviews such matters for other senior
personnel including their participation in long term
incentive schemes. It also supervises the Company’s
share incentive schemes and sets performance
conditions for share options granted under the
schemes.
The Nominations Committee meets periodically as
required.
10. Communicate how the Group is governed
and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Group places a high priority on regular
communications with its various stakeholder groups
and aims to ensure that all communications concerning
the Group’s activities are clear, fair and accurate. The
Company’s website is regularly updated, and users can
register to be alerted when announcements are posted
onto the website.
The Group’s financial reports, regulatory news
announcements and notices of general meetings,
can be found in the investor relations section of the
Company’s website.
The Group provides detailed results of shareholder
voting on its website.
SmartSpace Software PLC Annual Report 37
DIRE C TORS’ REPORT
The Directors present their Annual Report on the
affairs of the Group, together with the financial
statements and independent auditor’s report for
the year ended 31 January 2022. The corporate
governance report on pages 33 to 36 forms part of
this report. The Company’s full name is SmartSpace
Software plc (“the Company”), company number
05332126. SmartSpace Software plc is a public
limited company, listed on the AIM market of The
London Stock Exchange and domiciled in the United
Kingdom. The address of its registered office is given
on page 27.
PRINCIPAL ACTIVITIES
During the year the Group’s principal activities were
the development and sale of software products
together with the sale and installation of audio-visual
hardware products. The Group’s software activities
are all cloud based.
RESULTS AND DIVIDEND
The results for the year are set out in the
consolidated statement of comprehensive income on
page 46. The Directors do not recommend payment
of a dividend (2021: £nil).
REVIEW OF THE BUSINESS
A review of the business of the Group, together
with comments on future developments is given in
the Strategic Report including a description of the
principal risks and uncertainties facing the Group on
pages 12 to 21.
RESEARCH AND DEVELOPMENT
Expenditure on research and development amounted
to £1,563,000 in 2022 (2021: £1,319,000) out of which
£340,000 was capitalised under IAS 38 “Intangible
Assets”. The Group intends to continue to invest
in the development of its SwipedOn and Space
Connect software platforms to further enhance their
capabilities. In the opinion of the Directors these
investments will maintain and generate significant
revenues in future years.
FINANCIAL RISK MANAGEMENT
Details of the Group’s financial risk management
objectives and policies are set out in note 13 to the
financial statements.
GOING CONCERN
The Group’s business activities and performance, and
the financial position of the Group, its cash flows and
borrowing facilities, together with the factors likely
to affect its future development, performance and
position, are explained in the Strategic Report. Analysis
of the Group’s key risks is also set out in the Strategic
Report. Further information regarding the assessment
of going concern is in note 23 to the consolidated
financial statements.
After making appropriate enquiries, the Directors
consider that the Company and the Group have
adequate resources to continue in operational existence
for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing
the financial statements.
DIRECTORS
The Directors who held office during the year were as
follows:
Guy van Zwanenberg
Non-Executive Chairman
Frank Beechinor
Chief Executive
Kristian Shaw
Appointed 26 May 2021
Philip Wood
Appointed 26 May 2021
Bruce Morrison
Resigned 26 May 2021
Diana Dyer Bartlett
Resigned 26 May 2021
Chief Financial Officer
Non-Executive Director
Chief Financial Officer
Non-Executive Director
DIRECTORS’ INDEMNITIES
The Directors have been granted an indemnity
from the Company to the extent permitted by
law in respect of liabilities incurred as a result of
their office which remains in force at the date of
this report. The Company maintains directors’ and
officers’ liability insurance.
Year Ended 31 January 2022
38
RE-ELECTION OF DIRECTORS
In accordance with principles of the QCA Code all
Directors are retiring and seeking re-election at the
annual general meeting.
EMPLOYMENT MATTERS
The Group places considerable value on the
involvement of its employees and has continued to
keep them informed on matters affecting them as
employees and on the various factors affecting the
performance of the Group. This is achieved through
formal and informal meetings. Covid-19 has required
our employees to adapt quickly to home working,
and in certain circumstances being furloughed. As
lockdowns have eased formal procedures have been
put in place to allow a return to a Covid-19 secure
workplace.
The Group operates an EMI and LTIP share option
scheme which is open to all employees.
The Group has continued to give full and fair
consideration to applications made by disabled
persons, having regard to their respective aptitudes and
abilities, and to ensure that they benefit from training
and career development programmes in common with
all employees. The Group has continued its policy of
employee involvement by making information available
to employees through the medium of frequent staff
meetings, together with personal appraisals and
feedback sessions.
organisational boundary has been determined using an
equity share approach.
Year ended 31 January 2022
Location based Market based
tCO2e
Intensity ratio: tCO2e /
employee
Intensity ratio: tCO2e /
£1m revenue
22.1
0.33
4.3
21.6
0.32
4.2
OUR CLIMATE CHANGE INITIATIVES
Our tree planting initiative in New Zealand whereby
we plant 1 tree for each new customer contributes
towards carbon sequestration. The 6,000+ trees we
have planted so far will over a 50 year time frame
absorb approximately 1,300 tCO2 equating to 26
tonnes per year.
Covid-19 has brought new ways of working, enforcing
remote meetings and delivery of solutions to
customers. The benefit of reduced travel for the
environment, employees and customers is clear and will
remain after the pandemic has ended.
The use of cloud based hosting for our software
significantly reduces the carbon emissions when
compared to the alternative of self-hosting. Our cloud
computing suppliers (Microsoft Azure and Amazon
AWS) have committed to minimising their carbon
footprint through the use of renewable energy.
ENVIRONMENT
SHARE CAPITAL
The board have considered our impacts and
contribution to climate change together with risks and
opportunities that it poses us as a business. We have
measured our scope 1 and 2 greenhouse gas emissions
which are presented on both a location and market
based approach. We measure our intensity ratio taking
into account both number of employees and on a
revenue basis. As this is the first year of reporting such
information no comparative information is available.
Scope 1 emissions include direct emissions from
operations which is limited to fuel used to heat our
building in Mildenhall and by vehicles owned by
Anders + Kern. Scope 2 emissions include indirect
emissions from the generation of electricity which we
have purchased to maintain our operations. This is
therefore electricity we consume in our Tauranga and
Mildenhall offices. The location based methodology
calculates emissions based on the average energy
generation emission factor for the country of
consumption. The market based approach takes into
account any contractual agreements to purchase
energy with specific attributes and in the absence of
such agreements uses a residual fuel mix factor. Our
Details of the Company’s share capital are disclosed in
note 10 to the consolidated financial statements.
FINANCIAL INSTRUMENTS
Details of the use of financial instruments by the
Company and its subsidiary undertakings are disclosed
in note 8 to the consolidated financial statements.
DIRECTORS’ RESPONSIBILITIES
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 group
and company financial statements for each financial
year. The Directors have elected under company law
are required by the AIM Rules of the London Stock
Exchange to prepare the Group financial statements in
accordance with UK-adopted International Accounting
Standards and have elected under company law to
SmartSpace Software PLC Annual Report 39
prepare the Company financial statements in accordance
with UK-adopted International Accounting Standards.
The Group and Company financial statements are
required by law and international accounting standards
in conformity with the requirements of the Companies
Act 2006 to present fairly the financial position of the
Group and the Company and the financial performance
of the group. The Companies Act 2006 provides in
relation to such financial statements that references
in the relevant part of that Act to financial statements
giving a true and fair view are references to their
achieving a fair presentation.
Under company law the directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
group and the Company and of the profit or loss of the
Group for that period.
2022 was 72.5 pence (31 January 2021: 127.5 pence). At
16 May 2022, being the latest practicable date before
the signing of this document, the closing mid-market
share price was 70.0 pence.
PUBLICATION OF FINANCIAL STATEMENTS
The Company’s financial statements will be
made available on the Company’s website www.
smartspaceplc.com. The maintenance and integrity of
the website is the responsibility of the Directors. The
Directors’ responsibility also extends to the financial
statements contained therein. Shareholders who would
like to receive a copy of the financial statements by
post, should apply to the Company Secretary at the
Company’s registered office.
In preparing each of the Group and Company financial
statements, the directors are required to:
ANNUAL GENERAL MEETING
a. select suitable accounting policies and then apply
them consistently;
b. make judgements and accounting estimates that are
reasonable and prudent;
c. state whether they have been prepared in
accordance with international accounting standards
in conformity with the requirements of the
Companies Act 2006.
d. prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and the Company will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Group’s and the Company’s transactions
and disclose with reasonable accuracy at any time the
financial position of the Group and the Company and
enable them to ensure that the financial statements
comply with the requirements of the Companies Act
2006. They are also responsible for safeguarding
the assets of the group and the company and hence
for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website.
Legislation in the United Kingdom governing the
preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The Company’s Annual General Meeting will be held on
5 July 2022.
AUDITOR
So far as the Directors are aware, there is no relevant
audit information (as defined by section 418 of the
Companies Act 2006) of which the Company’s auditor
is unaware, and each director has taken all the steps that
he ought to have taken as a director in order to make
himself aware of any relevant audit information and to
establish that the Company’s auditor is aware of that
information.
In accordance with section 485 of the Companies Act
2006, a resolution proposing that RSM UK Audit LLP
be re-appointed as auditor will be put to the Annual
General Meeting.
STRATEGIC REPORT
The Company has chosen in accordance with Companies
Act 2006, s.414C(11) to set out in the Company’s
strategic report information required by Large and
Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, Sch. 7 to be contained
in the directors’ report. It has done so in respect of
financial risk management objectives and policies, future
developments and stakeholder engagement.
The Report of the Directors was approved by the Board
on 17 May 2022.
LISTING
The Company’s ordinary shares have been traded on
London’s AIM Market since 6 September 2006. N+1
Singers are the Company’s Nominated Adviser and
Broker. The closing mid-market share price at 31 January
By order of the Board
Kristian Shaw
Company Secretary
17 May 2022
Year Ended 31 January 2022 40
I ND EPENDENT AUDITOR’S RE PORT TO TH E
MEM BERS OF SMARTSPACE SO FTWARE PLC
• the parent company financial statements have been
properly prepared in accordance with UK-adopted
International Accounting Standards and as applied in
accordance with the Companies Act 2006; and
• the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities
under those standards are further described in
the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are
independent of the group and parent company in
accordance with the ethical requirements that are
relevant to our audit of the financial statements
in the UK, including the FRC’s Ethical Standard
as applied to 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.
OPINION
We have audited the financial statements of
Smartspace Software PLC (the ‘parent company’)
and its subsidiaries (the ‘group’) for the year
ended 31 January 2022 which comprise the
consolidated statement of comprehensive income,
the consolidated balance sheet, the consolidated
statement of changes in equity, the consolidated
statement of cash flows, the parent company
balance sheet, the parent company statement of
changes in equity, the parent company statement
of cash flows and notes to the financial statements,
including significant accounting policies. The
financial reporting framework that has been
applied in their preparation is applicable law and
UK-adopted International Accounting Standards
and, as regards the parent company financial
statements, as applied in accordance with the
provisions of the Companies Act 2006.
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 January 2022 and of the group’s loss
for the year then ended;
• the group financial statements have been properly
prepared in accordance with UK-adopted
International Accounting Standards;
Summary of our audit approach
Key audit matters
Group
• Goodwill impairment
• Going concern
Parent Company
• Going concern
Materiality
Group
• Overall materiality: £111,000 (2021: £101,000)
• Performance materiality: £83,500 (2021: £75,900)
Parent Company
• Overall materiality: £40,000 (2021: £42,100)
• Performance materiality: £30,000 (2021: £31,500)
Scope
Our audit procedures covered 99% of revenue, 99% of total assets and 99% of
loss before tax.
SmartSpace Software PLC Annual Report 41
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
group financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on the overall audit strategy,
the allocation of resources in the audit and directing the efforts of the engagement team. These matters were addressed
in the context of our audit of the group and parent company financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Impairment of goodwill under IAS 36
Key audit matter
description
The Group currently holds significant goodwill balances (£8.4m) relating to the subsidiary
entities. Management have assessed the recoverable amounts of the cash generating units
(CGUs) to which these balances are allocated through using cash flow forecasts and discounted
cash flow models, each of which require a high degree of management judgement, and
consequently an elevated level of auditor effort
The accounting policy in respect of goodwill and intangible assets is in note 23(p) and the
disclosures are in note 9(c).
How the matter
was addressed in
the audit
In auditing the recoverable amount of the cash generating units to which goodwill and intangible
assets are allocated we have performed the following procedures over management’s value in
use calculations:
• Challenged the reasonableness of assumptions used through both assessing the discount rate
applied, historical growth rates and also assessing the performance of the businesses post year
end;
• Reviewed management’s ability to accurately forecast performance through comparison of
historic performance against forecast;
• Performed sensitivity analysis to understand and take account of reasonably possible outcomes;
• Consulted with an auditor’s valuation expert;
• Performed tests to assess the integrity and mechanical accuracy of the underlying model; and
• Reviewed the disclosures relating to the impairment review.
• In relation to the goodwill attributable to the Space Connect CGU we made our own estimate
of the recoverable amount based on revenue growth rates historically observed
• Challenged management to consider the outcome if the perpetuity were removed, and the
product’s life were limited to 10 years.
Key observation: As a result of performing the procedures above management revised their model.
Going concern basis of accounting
Key audit matter
description
We consider going concern to be a key audit matter because the Group has been impacted
by the Covid -19 pandemic and has incurred an operating loss of £3,357,000 for the year to
31 January 2022 and a net cash outflow of £1,614,000.
How the matter
was addressed in
the audit
The accounting policy in respect of going concern is in note 23(a) of the financial
statements.
Management have prepared forecasts covering a period of at least 12 months form the date
of approval of these financial statements.
In auditing the going concern basis of accounting we:
• Obtained an understanding of management’s going concern evaluation;
• Assessed the information used in the going concern assessment for consistency with
management’s plan and information obtained through our other audit work;
• Challenged the reasonableness of assumptions used through both assessing the historical
growth rates and the performance of the businesses post year end;
• Reviewed management’s ability to accurately forecast performance through comparison of
historic performance against forecast;
• Performed sensitivity analysis to understand and take account of reasonably possible
outcomes; and
• Performed tests to assess the integrity and mechanical accuracy of the underlying model.
Year Ended 31 January 2022 42
OUR APPLICATION OF MATERIALITY
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing
and extent of our audit procedures. When evaluating whether the effects of misstatements, both individually and
on the financial statements as a whole, could reasonably influence the economic decisions of the users we take into
account the qualitative nature and the size of the misstatements. Based on our professional judgement, we determined
materiality as follows:
Overall materiality
£111,000 (2021: £101,000)
£40,000 (2021: £42,100)
Group
Parent company
Basis for determining overall
materiality
Rationale for benchmark
applied
5% of adjusted losses “LBITDA”
3% of expenditure
LBITDA considered to be
appropriate benchmark as key
KPI reported in the consolidated
financial statements.
Expenses taken to ensure
appropriate consideration of
costs.
Performance materiality
£83,500 (2021: £75,900)
£30,000 (2021: £31,500)
Basis for determining
performance materiality
Reporting of misstatements to
the Audit Committee
75% of overall materiality
75% of overall materiality
Misstatements in excess of £5,000
and misstatements below that
threshold that, in our view, warranted
reporting on qualitative grounds.
Misstatements in excess of £2,000
and misstatements below that
threshold that, in our view, warranted
reporting on qualitative grounds.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
The group consists of 9 components, located in the following countries;
• United Kingdom
• USA
• Australia
• New Zealand
The coverage achieved by our audit procedures was:
Number of
components
Revenue
Total assets
Loss before tax
Full scope audit
Specific audit procedures
Total
5
1
6
99%
1%
99%
1%
99%
1%
100%
100%
100%
Analytical procedures at group level were performed for the remaining 3 components.
Of the above, full scope audits for 1 component and specific audit procedures for 1 component were undertaken by
component auditors.
SmartSpace Software PLC Annual Report 43
CONCLUSIONS RELATING TO GOING
CONCERN
In auditing the financial statements, we have
concluded that the directors’ use of the going
concern basis of accounting in the preparation
of the financial statements is appropriate. For an
explanation of how we evaluated management’s
assessment of the group’s and parent company’s
ability to continue to adopt the going concern basis
of accounting, please see the going concern key
audit matter.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may
cast significant doubt on the group’s or the parent
company’s ability to continue as a going concern for
a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the
directors with respect to going concern are described in
the relevant sections of this report
OTHER INFORMATION
The other information comprises the information
included in the annual report, other than the financial
statements and our auditor’s report thereon. The
directors are responsible for the other information
contained within the annual report. Our opinion on
the financial statements does not cover the other
information and, except to the extent otherwise
explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
Our responsibility is to read the other information
and, in doing so, consider whether the other
information is materially inconsistent with the
financial statements or our knowledge obtained in
the course of the audit or otherwise appears to be
materially misstated. If we identify such material
inconsistencies or apparent material misstatements,
we are required to determine whether this gives
rise to a material misstatement in the financial
statements themselves. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard
OPINIONS ON OTHER MATTERS
PRESCRIBED BY THE COMPANIES ACT
2006
In our opinion, based on the work undertaken in the
course of the audit:
• the information given in the Strategic Report and the
Directors’ Report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
• the Strategic Report and the Directors’ Report have
been prepared in accordance with applicable legal
requirements.
MATTERS ON WHICH WE ARE REQUIRED
TO REPORT BY EXCEPTION
In the light of the knowledge and understanding
of the group and the parent company and their
environment obtained in the course of the audit, we
have not identified material misstatements in the
Strategic Report or the Directors’ Report.
We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept
by the parent company, or returns adequate for
our audit have not been received from branches
not visited by us; or
• the parent company financial statements are not
in agreement with the accounting records and
returns; or
• certain disclosures of directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’
responsibilities statement set out on pages 38 to 39,
the directors are responsible for the preparation of
the financial statements and for being satisfied that
they give a true and fair view, and for such internal
control as the directors determine is necessary to
enable the preparation of financial statements that
are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors
are responsible for assessing the group’s and the
parent company’s ability to continue as a going
concern, disclosing, as applicable, matters related
to going concern and using the going concern basis
of accounting unless the directors either intend to
liquidate the group or the parent company or to
cease operations, or have no realistic alternative but
to do so.
Year Ended 31 January 2022 regulatory frameworks that the group and parent
company operate in and how the group and
parent company are complying with the legal and
regulatory frameworks;
• inquired of management, and those charged with
governance, about their own identification and
assessment of the risks of irregularities, including
any known actual, suspected or alleged instances
of fraud;
• discussed matters about non-compliance with
laws and regulations and how fraud might occur
including assessment of how and where the
financial statements may be susceptible to fraud.
All relevant laws and regulations identified at a
Group level and areas susceptible to fraud that
could have a material effect on the financial
statements were communicated to component
auditors. Any instances of non-compliance with
laws and regulations identified and communicated
by a component auditor were considered in our
audit approach.
44
AUDITOR’S RESPONSIBILITIES FOR THE
AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud
or error and are considered material if, individually
or in the aggregate, they could reasonably be
expected to influence the economic decisions
of users taken on the basis of these financial
statements.
THE EXTENT TO WHICH THE AUDIT WAS
CONSIDERED CAPABLE OF DETECTING
IRREGULARITIES, INCLUDING FRAUD
Irregularities are instances of non-compliance with
laws and regulations. The objectives of our audit
are to obtain sufficient appropriate audit evidence
regarding compliance with laws and regulations
that have a direct effect on the determination of
material amounts and disclosures in the financial
statements, to perform audit procedures to help
identify instances of non-compliance with other
laws and regulations that may have a material
effect on the financial statements, and to respond
appropriately to identified or suspected non-
compliance with laws and regulations identified
during the audit.
In relation to fraud, the objectives of our audit
are to identify and assess the risk of material
misstatement of the financial statements due
to fraud, to obtain sufficient appropriate audit
evidence regarding the assessed risks of material
misstatement due to fraud through designing
and implementing appropriate responses and to
respond appropriately to fraud or suspected fraud
identified during the audit.
However, it is the primary responsibility of
management, with the oversight of those charged
with governance, to ensure that the entity’s
operations are conducted in accordance with the
provisions of laws and regulations and for the
prevention and detection of fraud.
In identifying and assessing risks of material
misstatement in respect of irregularities, including
fraud, the group audit engagement team and
component auditors:
• obtained an understanding of the nature of
the industry and sector, including the legal and
SmartSpace Software PLC Annual Report 45
The most significant laws and regulations were determined as follows:
Legislation / Regulation
Additional audit procedures performed by the Group audit engagement team included:
UK-adopted International
Accounting Standards
and Companies Act 2006
Review of the financial statement disclosures and testing to supporting documentation;
and
Completion of disclosure checklists to identify areas of non-compliance.
Tax compliance
regulations
Inspection of advice received from external tax advisors; and
Review of the tax computation used to calculate the tax provision.
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk
Audit procedures performed by the audit engagement team:
Revenue recognition
Testing was completed on a sample basis to test whether revenue transactions
were recorded in the correct period.
Testing was completed using data analytics to recalculate the revenue recognised
on contracts with performance obligations satisfied over time.
Transactions posted to nominal ledger codes outside of the normal revenue
cycle were identified and investigated for contracts with performance obligations
satisfied at a point in time.
Management override
of controls
Testing the appropriateness of journal entries and other adjustments;
Assessing whether the judgements made in making accounting estimates are
indicative of a potential bias; and
Evaluating the business rationale of any significant transactions that are unusual
or outside the normal course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Richard Bartlett-Rawlings FCA (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
The Pinnacle, 170 Midsummer Boulevard
Milton Keynes, Buckinghamshire, MK9 1BP
18 May 2022
Year Ended 31 January 2022 46
CO NSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
Note
Year ended .
Year ended
31 January 2022 . 31 January 2021
£’000 .
£’000
Continuing operations
Revenue from contracts with customers
4
Costs of sale of goods
Costs of providing services
Gross profit
Administrative expenses
Net impairment losses on financial and contract assets
Other income
Operating loss
Adjusted LBITDA*
Reorganisation and transactional items
Depreciation
Amortisation
Impairment of financial asset
Share based payment charge
Operating loss
Finance income
Finance costs
Loss before tax
Taxation
Loss for the year after tax
Loss for the year from discontinued operations
Loss for the year
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
13(b)
5
3(b)
6(e)
6(a)
6(a)
13(b)
6(b)
6(d)
6(d)
7
6(f)
10(c)
5,140
(1,068)
(427)
3,645
(7,320)
(14)
36
(3,653)
(2,493)
(192)
(114)
(552)
(14)
(288)
4,629
(1,695)
(283)
2,651
(5,426)
(72)
130
(2,717)
(2,120)
-
(103)
(272)
(72)
(150)
(3,653)
(2,717)
1
(26)
(3,678)
1,114
(2,564)
-
(2,564)
1
(27)
(2,743)
612
(2,131)
(124)
(2,255)
-
643
643
Revaluation of property, plant and equipment
9(a)
73
Items that will be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Total other comprehensive (loss) / income
(339)
(266)
Total comprehensive loss attributable to the owners of the group
(2,830)
(1,612)
Basic loss per share
Continuing operations
Discontinued operations
Total
Diluted loss per share
Continuing operations
Discontinued operations
Total
20
20
20
20
(8.91p)
0.00p
(8.91p)
(8.91p)
0.00p
(8.91p)
(7.54p)
(0.44p)
(7.98p)
(7.54p)
(0.44p)
(7.98p)
* Loss for the year from continuing operations before net finance costs, tax, depreciation, amortisation, reorganisation and transactional items,
impairment charges and share based payment charge.
The accompanying notes are an integral part of these consolidated financial statements.
SmartSpace Software PLC Annual Report
CO NSOLIDATED BALANCE S HE E T
Note
31 January 2022
31 January 2021
£’000
£’000
47
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Contract assets
Trade and other receivables
Other financial assets at amortised cost
Current tax receivable
Prepayments
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES
Non-current liabilities
Borrowings
Lease liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Contract liabilities
Other tax liabilities
Borrowings
Lease liabilities
Total current liabilities
Total liabilities
NET ASSETS
9(a)
9(b)
9(c)
9(d)
9(e)
4(b)
8(a)
8(b)
9(f)
8(c)
8(e)
9(b)
8(d)
4(b)
8(e)
9(b)
751
94
10,619
2,465
13,929
203
5
399
-
70
163
2,758
3,598
17,527
-
41
41
1,379
1,774
127
383
67
3,730
3,771
13,756
683
156
11,222
1,389
13,450
89
4
550
328
101
114
4,516
5,702
19,152
355
110
465
826
1,129
341
58
63
2,417
2,882
16,270
continued overleaf
Year Ended 31 January 2022
48
CO NSOLIDATED BALANCE S HE E T (continued)
EQUITY
Capital and reserves attributable to equity shareholders
Share capital
Share premium
Other reserves
Retained earnings
Total equity
10(a)
10(a)
10(b)
10(c)
2,894
3,839
(2,133)
9,156
13,756
2,826
3,830
(2,087)
11,701
16,270
The accompanying notes are an integral part of these consolidated financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 17 May 2022.
They were signed on its behalf by:
Kristian Shaw
Chief Financial Officer
SmartSpace Software plc, Company Number: 5332126
SmartSpace Software PLC Annual Report
49
Total
£’000
CO NSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Note
Share
capital
Share
premium
Other
reserves
Retained
earnings
At 31 January 2020
Loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
Transactions with owners in their capacity
as owners:
Share-based payment expense
- continuing operations
Share-based payment expense
- discontinued operations
At 31 January 2021
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
Transactions with owners in their capacity
as owners:
£’000
2,826
-
-
-
-
-
19
19
-
-
-
Issue of ordinary shares as consideration for a
business combination
10(b)
67
Issue of ordinary shares to option holders
Lapsed share options
Exchange difference
Share-based payment expense
1
-
-
-
19
19
£’000
£’000
£’000
3,830
(2,832)
13,956
17,780
-
-
-
-
-
-
(2,255)
(2,255)
643
643
-
643
(2,255)
(1,612)
150
(48)
-
-
150
(48)
-
-
-
-
9
-
-
-
-
(2,564)
(2,564)
(266)
-
(266)
(266)
(2,564)
(2,830)
(67)
(3)
(16)
(4)
310
-
3
16
-
-
-
10
-
(4)
310
2,826
3,830
(2,087)
11,701
16,270
At 31 January 2022
2,894
3,839
(2,133)
9,156
13,756
The accompanying notes are an integral part of these consolidated financial statements.
Year Ended 31 January 2022
50
CO NSOLIDATED STATEMENT OF
C ASH FLOWS
Cash from operating activities
Cash consumed by operations
Interest received
Interest paid
Income taxes received
Note
Year ended
Year ended
31 January 2022 31 January 2021
£’000
£’000
11
(1,614)
(1,791)
1
(26)
28
1
(42)
394
Net cash outflow from operating activities
(1,611)
(1,438)
Cash flows from investing activities
Payments for property, plant and equipment
Payment of software development costs
Proceeds from disposal of subsidiary (net of cash disposed)
Net cash from investing activities
Cash flows from financing activities
Proceeds from issues of share capital (net of issue costs)
Proceeds from borrowings
Repayment of borrowings
Principal elements of lease payments
Net cashflow from financing activities
Net change in cash and cash equivalents
8(e)
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
8(c)
(36)
(340)
327
(49)
10
-
(27)
(62)
(79)
(1,739)
4,516
(19)
2,758
(44)
(682)
4,167
3,441
-
31
(19)
(98)
(86)
1,917
2,587
12
4,516
Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments with maturity of three
months or less, as adjusted for any bank overdrafts.
The accompanying notes are an integral part of these consolidated financial statements.
SmartSpace Software PLC Annual Report
NOT ES TO THE CONSOLIDAT ED
F INA NCIAL STATEMENTS
51
The operating board primarily uses an adjusted
measure of earnings before interest, tax, depreciation
and amortisation (EBITDA) to assess the performance
of the operating segments. However, the operating
board also receives information about the segments’
revenues and assets on a monthly basis. Information
about segment revenue is disclosed in note 4.
3(b) Adjusted LBITDA
Adjusted LBITDA excludes discontinued operations
and the effects of significant items of income and
expenditure which might have an impact on the quality
of earnings, such as reorganisation and transactional
costs and impairment of assets. It also excludes the
effects of equity-settled share-based payments.
Year ended 31 Year ended 31
January 2021
January 2022
£’000
£’000
Software
Space Connect
SwipedOn
Hardware
(1,082)
(164)
Anders & Kern
(118)
Central operating costs
(1,129)
Total adjusted EBITDA
(2,493)
(646)
(195)
(84)
(1,195)
(2,120)
1. SIGNIFICANT CHANGES IN THE
CURRENT REPORTING PERIOD
The financial position and performance of the Group
was particularly affected by the following events
and transactions that happened during the reporting
period:
• The continuing global Covid-19 pandemic which
impacted revenue and costs in the Group’s
operations.
2. GENERAL INFORMATION
SmartSpace Software plc is a company incorporated
and domiciled in England and Wales under the
Companies Act 2006 and listed on the AIM market
of The London Stock Exchange. The address of the
registered office is given on page 27.
The principal activities of the Company is the
investment in businesses engaged in the development
and sale of workspace technology solutions.
The financial statements are presented in pounds
sterling as that is the currency of the primary economic
environment in which the Group operates. Foreign
operations are included in accordance with the policies
set out in note 23.
3. OPERATING SEGMENTS
3(a) Description of segments and principal
activities
The Group’s operating board, consisting of the Chief
Executive Officer and Chief Financial Officer examines
the Group’s performance from a product perspective
and has identified three reportable segments of its
business:
SwipedOn - based in New Zealand provides the
sale and support of self-service visitor management
software to customers throughout the world.
Space Connect - based in the UK provides the sale and
support of self-service space management software
through a network of partners, distributors and resellers
to customers throughout the world
Anders & Kern - based in the UK makes sales of
hardware and related integration services to customers
in the UK.
Year Ended 31 January 2022
52
3(c) Segmental financial performance
Year ended 31 January 2022
Revenue from contracts with customers
Costs of sale of goods
Costs of providing services
Gross profit
Administrative expenses
Impairment losses on financial and contract assets
Other income
Operating loss
Adjusted LBITDA*
Reorganisation and transactional items
Depreciation
Amortisation
Impairment of financial assets
Share based payment charge
Operating loss
Finance income
Finance costs
Loss before tax
Taxation
Loss after tax
Year ended 31 January 2021
Space
Connect
Swiped
On
Central
Anders operating
costs
& Kern
Total
£’000
£’000
£’000
£’000
£’000
458
(1)
(64)
393
2,953
1,729
(18)
(1,049)
(284)
2,651
(79)
601
-
-
-
-
5,140
(1,068)
(427)
3,645
(1,927)
(3,134)
(874)
(1,385)
(7,320)
(3)
-
(1,537)
(1,082)
-
(6)
(431)
(3)
(15)
(1,537)
-
-
(11)
36
(458)
(164)
-
(79)
(100)
(11)
(104)
(458)
1
(11)
-
-
(273)
(118)
(83)
(22)
(21)
-
(29)
-
-
(14)
36
(1,385)
(3,653)
(1,129)
(2,493)
(109)
(7)
-
-
(192)
(114)
(552)
(14)
(140)
(288)
(273)
(1,385)
(3,653)
-
(12)
-
(3)
1
(26)
(1,537)
(468)
(285)
(1,388)
(3,678)
446
98
58
512
1,114
(1,091)
(370)
(227)
(876)
(2,564)
Space
Connect
Swiped
On
Central
Anders operating
costs
& Kern
Total
£’000
£’000
£’000
£’000
£’000
Revenue from contracts with customers
192
2,161
2,271
Costs of sale of goods
Costs of providing services
Gross profit
Administrative expenses
Impairment losses on financial and contract assets
Other income
Operating loss
Adjusted LBITDA*
Depreciation
Amortisation
Impairment of financial assets
Share based payment charge
Operating loss
Finance income
Finance costs
Loss before tax
Taxation
Loss after tax
1
(4)
(16)
(1,680)
(196)
189
1,949
(83)
508
5
-
-
5
4,629
(1,695)
(283)
2,651
(1,011)
(2,441)
(648)
(1,326)
(5,426)
-
-
(822)
(646)
(3)
(171)
-
(2)
(18)
130
(380)
(195)
(66)
(80)
(18)
(21)
-
-
(54)
-
(72)
130
(140)
(1,375)
(2,717)
(84)
(22)
(21)
-
(13)
(1,195)
(2,120)
(12)
-
(54)
(114)
(103)
(272)
(72)
(150)
(822)
(380)
(140)
(1,375)
(2,717)
-
(102)
(924)
832
(92)
1
(12)
(391)
16
(375)
-
(12)
-
99
1
(27)
(152)
(1,276)
(2,743)
46
(282)
612
(106)
(1,558)
(2,131)
* (Loss)/profit for the year from continuing operations before net finance costs, tax, depreciation, amortisation, reorganisation and transactional items,
impairment charges and share based payment charge.
SmartSpace Software PLC Annual Report
3(d) Segment assets
Space Connect
SwipedOn
Anders & Kern
Segment assets
Unallocated assets
Total assets
53
31 January 2022
Segment
assets
Additions to non-
current assets*
31 January 2021
Segment Additions to non-
assets
current assets*
£’000
5,360
6,533
2,653
14,546
2,981
17,527
£’000
146
224
32
402
-
402
£’000
4,884
6,687
2,640
14,211
4,941
19,152
£’000
294
64
12
370
7
377
*Other than contract assets and deferred tax assets
For the purpose of monitoring segment performance and allocating resource between segments, the Group’s Chief
Executive Officer monitors the tangible, intangible and financial assets attributable to each segment. All assets are
allocated to reportable segments with the exception of cash held by the Parent Company, other financial assets (except for
trade and other receivables) and tax assets. Goodwill has been allocated to reportable segments as described in note 9(c).
The total of non-current assets other than deferred tax assets broken down by location of assets is shown as follows:
UK
Australia
New Zealand
Total assets
3(e) Segment liabilities
31 January 2022
31 January 2021
£’000
5,878
-
5,586
11,464
£’000
6,124
3
5,934
12,061
Segment liabilities are measured in the same way as in the financial statements. These liabilities are allocated based on the
operations of the segment.
31 January 2022
31 January 2021
Space Connect
SwipedOn
Anders & Kern
Segment liabilities
Unallocated
Total liabilities
£’000
524
2,018
865
3,407
364
3,771
£’000
171
1,460
996
2,627
255
2,882
Year Ended 31 January 2022
54
3(f) Revenue by customer geographical location
Year ended 31 January 2022
UK
USA
Australia
New Zealand
Canada
Sweden
Rest of the world
Total
Year ended 31 January 2021
UK
USA
Australia
New Zealand
Canada
Sweden
Rest of the world
Total
Space
Connect
Swiped
On
£’000
£’000
266
2
93
-
-
82
15
440
1,340
566
311
173
-
123
Anders
& Kern
£’000
1,729
-
-
-
-
-
-
458
2,953
1,729
Space
Connect
Swiped
On
£’000
£’000
34
-
135
-
-
23
-
304
974
475
214
151
-
43
Anders
& Kern
£’000
2,213
-
-
-
-
-
58
192
2,161
2,271
Central
£’000
-
-
-
-
-
-
-
-
Central
£’000
5
-
-
-
-
-
-
5
4. REVENUE FROM CONTRACTS WITH CUSTOMERS
4(a) Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at a point in time as follows:
Year ended 31 January 2022
Space Connect
UK New Zealand
Swiped On Anders & Kern Central
UK
UK
Total
£’000
2,435
1,342
659
311
173
82
138
5,140
Total
£’000
2,556
974
610
214
151
23
101
4,629
Total
Segment revenue
Timing of revenue recognition
At a point in time
Over time
£’000
458
84
374
458
£’000
2,953
37
2,916
2,953
£’000
£’000
£’000
1,729
1,599
130
1,729
-
-
-
-
5,140
1,720
3,420
5,140
SmartSpace Software PLC Annual Report
Year ended 31 January 2021
Space Connect
Australia New Zealand
Swiped On Anders& Kern
UK
Central
UK
Segment revenue
Timing of revenue recognition
At a point in time
Over time
£’000
192
74
118
192
£’000
2,161
36
2,125
2,161
£’000
£’000
2,271
5
4,629
2,120
151
2,271
5
-
5
2,235
2,394
4,629
55
Total
£’000
Revenues from external customers come from the sale of software as a service, the sale of software licences, the sale of
professional services and the sale of hardware. The revenue from the sale of software as a service and software licences
relates to the Group’s intellectual property owned by SwipedOn and Space Connect. No single customer represents 10 per
cent or more of the Group’s total revenues.
4(b) Assets and liabilities related to contracts with customers
The Group has recognised the following assets and liabilities related to contracts with customers:
Current contract assets
Software
Loss allowance
Total current contract assets
31 January 2022
31 January 2021
£’000
£’000
5
-
5
4
-
4
Current contract liabilities
31 January 2022
31 January 2021
Software
Hardware
Total contract liabilities
Contract liability movement
At 31 January 2020
Recognised as revenue in period
New contract liabilities
At 31 January 2021
Recognised as revenue in period
New contract liabilities
At 31 January 2022
£’000
1,774
-
1,774
£’000
1,055
74
1,129
£’000
641
(641)
1,129
1,129
(1,129)
1,774
1,774
The Group expects all of the deferred revenue as of 31 January 2022 to be recognised during the next reporting period.
Unsatisfied contracts
The following table shows unsatisfied performance obligations resulting from fixed-price software as a service contracts
and software support agreements:
Aggregate amount of the transaction price allocated to software as a service agreements
and software support agreements that are partially or fully unsatisfied as at 31 January
1,774
1,055
31 January
2022
31 January
2021
£’000
£’000
Year Ended 31 January 2022
56
4(c) Accounting policies
The Group has a number of different types of contractual
arrangements and consequently applies a variety
of methods of revenue recognition, based on the
principles set out in IFRS 15 Revenue from Contracts
with Customers. The revenue and profit in any period
are based on the delivery of performance obligations
and an assessment of when control is transferred to the
customer.
Revenue is recognised when the performance obligation
in a contract has been performed (so ‘point in time’
recognition) or over time as the performance obligation is
transferred to the customer.
For contracts where the Group does not provide the final
services judgement is applied as to whether the Group is
acting as a principal or agent. Where the Group controls
the goods or services before they are transferred to the
customer a principal relationship is considered to be in
place, and revenue is recognised gross.
The transaction price, being the amount to which the
Group expects to be entitled and has rights to under
the contract, is allocated to the identified performance
obligations.
For each performance obligation, the Group determines
if revenue will be recognised over time or at a point in
time. Where the Group recognises revenue over time
for long-term contracts, this is in general due to the
Group performing and the customer simultaneously
receiving and consuming the benefits provided over the
life of the contract. For each performance obligation to
be recognised over time, the Group applies a revenue
recognition method that faithfully depicts the Group’s
performance in transferring control of the goods
or services to the customer. This decision requires
assessment of the real nature of the goods or services
that the Group has promised to transfer to the customer.
The Group applies the relevant output or input method
consistently to similar performance obligations in other
contracts.
If performance obligations in a contract do not meet
the over time criteria, the Group recognises revenue at a
point in time (see below for further details).
The Group disaggregates revenue from contracts with
customers by reporting segment and timing of transfer
of goods and services as management believe this best
depicts how the nature, amount, timing and uncertainty
of the Group’s revenue and cash flows are affected by
economic factors.
Sale of software as a service
The Group offers its software as a service hosted in the
cloud. Under terms of the contract, the customer receives
the right to access the software for an agreed period of
time. To the extent that the customer has been invoiced in
excess of the value of services received to date a contract
liability for the provision of the software as a service is
recognised at the time of sale. Management considers
that revenue is recognised over time as the service is
delivered until the point that the agreement expires.
Revenue invoiced during the reporting period which
relates to future periods is classified as deferred income
within contract liabilities on the balance sheet.
The software comprises a number of different modules
which can be sold as a bundle at the outset or separately
if a customer chooses to take a subscription at a later
date. Additional modules will continue to be developed
and either offered as part of the initial product offering
or sold separately to customers who subscribe to that
module.
Sale of software licences
The Group sells software licences which allow customers
to use the software in their own environment which
results in a transfer of control to the customer at a point
in time. This occurs when the software source has been
transferred to the customer.
Revenue is recognised in full at the point of delivery to
the customer as the risk and rewards of the licences have
transferred at that point to the buyer and the Group does
not retain managerial involvement or effective control
over the software or the licences.
Sale of professional services
The Group sells professional services comprising
implementation, configuration and support services.
These services can be purchased in advance and used by
customers when required and revenue is recognised at a
point in time when the service has been provided.
Hardware and Systems Integration
The Group sells hardware through Anders & Kern or
as part of a contract for software through its software
division. Revenue is recognised at the point when the
performance obligation is fulfilled, usually when the
hardware is delivered to the customer. Where installation
services are sold alongside the hardware, revenue from
those installation services is recognised when those
services are delivered. Customers have no right to return
goods and no warranties are issued to customers.
Contract assets and liabilities
Where the Group provides software as a service or
software support agreements, customers often pay in
advance for a service to be delivered over time. Where
payments made are greater than the revenue recognised
at the period end date, the Group recognises a deferred
income contract liability for this difference. Where
payments made are less than the revenue recognised at
the period end date, the Group recognises an accrued
income contract asset for this difference.
The Group applies the IFRS 9 simplified approach to
measuring expected credit losses which uses a lifetime
expected loss allowance to assess the impairment of
contract assets.
SmartSpace Software PLC Annual Report 57
5. MATERIAL PROFIT OR LOSS ITEMS
The Group has identified a number of items which are material due to the significance of their nature and/or amount.
These are listed separately to provide a better understanding of the financial performance of the Group.
The following items have been credited / (expensed) to the consolidated
statement of comprehensive income:
Reorganisation and transactional costs
Impairment of financial assets
Government grants
- UK Government Job Retention Scheme for continuing operations
- UK Government Job Retention Scheme for discontinued operations
- New Zealand Callaghan Growth grant
- New Zealand Internship grant
Foreign currency gains and (losses)
Inventory provisions: credited / (charged) to profit and loss
Year ended
31 January 2022
Year ended
31 January 2021
£’000
£’000
(192)
(14)
48
-
-
36
(21)
70
-
(72)
104
140
112
17
(13)
(93)
Research and development not capitalised
(1,223)
(1,017)
6. OTHER INCOME AND EXPENSE ITEMS
This note includes an analysis of expenses by nature and a breakdown of the items included in ‘finance income and costs’.
Information about specific profit and loss items is disclosed in the related balance sheet notes.
6(a) Breakdown of expenses by nature
Inventories sold
Employee benefits and expenses net of government grants (see note 6b)
Contractor fees
Depreciation
Amortisation
Marketing
Other expenses
Less: capitalised employee and contractor costs
Total cost of sales and administrative expenses
6(b) Employee and director benefits and expenses
Wages and salaries net of government grants
Share based payments (see note 19)
Social security costs
Pension costs
Total remuneration
Year ended
31 January 2022
Year ended
31 January 2021
£’000
1,044
4,497
385
114
552
951
1,612
(340)
8,815
£’000
1,630
3,308
441
103
272
768
1,172
(290)
7,404
Year ended
31 January 2022
Year ended
31 January 2021
£’000
3,914
288
190
105
£’000
2,890
150
179
89
4,497
3,308
Year Ended 31 January 2022
58
6(c) Average number of people employed
Sales
Software development and technical support
Administrative
Total employees
6(d) Finance income and cost
Finance income
Interest income from financial assets held for cash management
Finance income
Finance cost
Interest charges on bank loans
Interest charges on lease liabilities
Other interest charges
Finance costs expenses
Net finance costs
6(e) Reorganisation and transactional
Reorganisation costs
Year ended
31 January 2022
Year ended
31 January 2021
No.
13
38
17
68
No.
12
30
12
54
Year ended
31 January 2022
Year ended
31 January 2021
£’000
£’000
1
1
(11)
(10)
(5)
(26)
(25)
1
1
(12)
(11)
(4)
(27)
(26)
Year ended
31 January 2022
Year ended
31 January 2021
£’000
192
192
£’000
-
-
Reorganisation costs include notice pay, redundancy and other related exit costs. The reorganisation was started and
completed within the year to 31 January 2022.
6(f) Discontinued operations
In August 2020 the Group completed the disposal of its Enterprise Software Division, SmartSpace Global Limited. The
financial performance of the SSG disposal group together with the loss on disposal is therefore reported in discontinued
activities for the year ended 31 January 2021. The financial performance relating to the disposal group is presented below.
Year ended 31 January 2021
– results to date of disposal
Revenue
Expenses
Loss before income tax
Income tax benefit
Loss after tax
Reversal of impairment / (impairment) of assets in disposal group
Loss after income tax and impairments of discontinued operations
Loss on disposal of subsidiary after income tax
Net loss attributable to discontinued operations
£’000
819
(2,331)
(1,512)
42
(1,470)
1,470
-
(124)
(124)
SmartSpace Software PLC Annual Report
Net cash inflow from operating activities
Net cash inflow / (outflow) from investing activities
Net cash outflow from financing activities
Net increase in cash generated by discontinued operations
59
To
Year ended
13 August 2020 31 January 2020
£’000
233
3,786
(49)
3,970
£’000
2,319
(1,257)
(68)
994
7. TAXATION
This note provides an analysis of the Group’s income tax expense, and shows what amounts are recognised directly
in equity and how the tax expense is affected by non-assessable and non-deductible items. It also explains significant
estimates made in relation to the Group’s tax position.
7(a) Income tax expense
Current tax
Current tax benefit for the year
Total current tax benefit
Deferred tax
Origination and reversal of temporary differences
Adjustments in respect of earlier years
Impact of change in UK corporation tax rate
Remeasurement of temporary differences
Total deferred tax benefit
Income tax benefit
Income tax (benefit) / expense is attributable to:
Loss from continuing operations
Loss from discontinued activities
Other comprehensive income
Year ended
31 January 2022
Year ended
31 January 2021
£’000
£’000
2
2
(608)
(31)
(460)
-
(1,099)
(1,097)
(1,114)
-
17
(1,097)
(103)
(103)
(977)
(98)
(67)
591
(551)
(654)
(612)
(42)
-
(654)
Year Ended 31 January 2022
60
7(b) Numerical reconciliation of income tax expense to prima facie tax payable
Year ended
31 January 2022
Year ended
31 January 2021
Loss from continuing operations before income tax expense
Loss from discontinued operations before income tax expense
Tax at the UK corporation tax rate of 19 % (2021: 19%)
Tax effects of amounts which are not deductible in calculating taxable income:
Non-deductible expenses
Effect of non-taxable income
Effect of different tax rates for loss utilisation / overseas rates
Research and development relief
Tax losses not recognised as assets
Adjustment from prior year
Foreign currency translation of loan to subsidiary
Tax benefit from intergroup transfer of intellectual property
Derecognition of tax assets
Effect of change in tax rates
Income tax benefit
7(c) Amounts recognised in other comprehensive income
Other comprehensive income – revaluation of property
Tax expense
Other comprehensive income net of tax
7(d) Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Continuing operations
Potential tax benefit at 25% (2021: 19%)
£’000
(3,678)
-
(3,678)
(699)
75
-
(43)
-
-
(31)
(27)
-
70
(459)
(1,114)
£’000
(2,743)
(166)
(2,909)
(553)
80
(114)
(38)
(30)
97
(98)
116
(638)
591
(67)
(654)
Year ended
31 January 2022
Year ended
31 January 2021
£’000
£’000
90
(17)
73
-
-
-
Year ended
31 January 2022
Year ended
31 January 2021
£’000
3,476
869
£’000
3,476
660
See note 9(d) for information about recognised tax losses and significant judgements made in relation to them.
The closing deferred tax provision has been calculated at 25% in accordance with the rate enacted at the statement of
financial position date. In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax
rate would increase to 25%. This new law was substantively enacted on 24 May 2021.
SmartSpace Software PLC Annual Report
7(e) Unrecognised temporary differences
Temporary differences relating to investments in subsidiaries for which deferred
tax liabilities have not been recognised:
Foreign currency translation
Potential deferred tax liability
61
Year ended
31 January 2022
Year ended
31 January 2021
£’000
£’000
(133)
(25)
(472)
(90)
Temporary differences of -£133,000 (2021: -£472,000) have arisen as a result of the translation of the Group’s subsidiaries
in New Zealand. A deferred tax liability has not been recognised because the liability will only crystallise in the event of the
disposal of the subsidiaries, and no such disposal is expected in the foreseeable future.
8. FINANCIAL ASSETS AND LIABILITIES
This note provides information about the Group’s financial instruments including:
• An overview of all financial instruments held by the Group;
• specific information about each type of financial instrument;
• accounting policies;
• information about determining the fair value of the instruments, including judgements and estimation uncertainty
involved.
The Group has the following financial instruments:
Financial assets
Financial assets at amortised cost:
Trade receivables and other receivables
Other financial assets at amortised cost
Cash and cash equivalents
Notes
31 January 2022
31 January 2021
£’000
£’000
8(a)
8(b)
8(c)
399
-
2,758
3,157
550
328
4,516
5,394
Financial liabilities
Notes
31 January 2022
31 January 2021
Financial liabilities at amortised cost:
Trade and other payables
Lease liabilities
Borrowings
8(d)
9(b)
8(e)
£’000
£’000
1,379
108
383
1,870
826
173
413
1,412
The Group’s exposure to various risks associated with the financial instruments is discussed in note 13. The maximum
exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets
mentioned above.
8(a) Trade receivables and other receivables
Trade receivables
Other receivables
31 January 2022
31 January 2021
£’000
£’000
387
12
399
468
82
550
Year Ended 31 January 2022
62
Classification of trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
business. They are generally due for settlement within 30 days and are therefore all classified as current. Trade receivables
are recognised initially at the amount of consideration that is unconditional, unless they contain significant financing
components, in which case they are recognised at fair value. The Group holds trade receivables with the objective of
collecting the contractual cash flows, and so it measures them subsequently at amortised cost using the effective interest
method. Details about the Group’s impairment policy and the calculation of the loss allowance are provided in note 13.
Fair value of trade receivables
Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair
value.
Impairment and risk exposure
Information about the impairment of trade receivables and the Group’s exposure to credit risk, foreign currency risk and
interest rate risk can be found in note 13.
8(b) Other financial assets at amortised cost
These amounts generally arise from transactions outside the usual operating activities of the Group and include
consideration due on the disposal of SmartSpace Global.
Subsidiary disposal consideration
Other receivables
Impairment and risk exposure
31 January 2022
31 January 2021
£’000
£’000
-
-
-
327
1
328
Note 13 sets out information about the impairment of financial assets and the Group’s exposure to credit risk.
8(c) Cash and cash equivalents
Current assets
Cash at bank and in hand
31 January 2022
31 January 2021
£’000
£’000
2,758
4,516
The above figures reconcile to the amount of cash shown in the statement of cash flows at the end of the financial year.
8(d) Trade and other payables
Current liabilities
Trade payables
Payroll liabilities
Accrued expenses
Other payables
31 January 2022
31 January 2021
£’000
£’000
395
8
731
245
1,379
279
12
344
191
826
Trade and other payables are unsecured and usually paid within 30 days of recognition.
The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short-
term nature.
SmartSpace Software PLC Annual Report
63
8(e) Borrowings
Government support loans
Bank loans
Total borrowings
31 January 2022
Current Non-Current
£’000
£’000
28
355
383
-
-
-
Total
£’000
28
355
383
31 January 2021
Current Non-Current
£’000
£’000
31
27
58
-
355
355
Total
£’000
31
382
413
Secured liabilities and assets pledged as security
The bank loan of £355,000 (2021: £382,000) is secured by a mortgage over the associated freehold land and building. The
mortgage carries a variable rate of interest 2.5% above the Bank of England base rate and is due for repayment in January
2023. There are no bank covenants that relate to the borrowings.
Fair value
For all the borrowings, the fair values are not materially different from their carrying amount since the interest payable on
those borrowings is either close to current market rates or the borrowings are of a short-term nature.
Details of the Group’s exposure to risks arising from current and non-current borrowings are set out in note 13.
Year Ended 31 January 2022
64
9. NON-FINANCIAL ASSETS AND LIABILITIES
This note provides information about the Group’s non-financial assets and liabilities, including specific information about
each type of non-financial asset and non-financial liability and information about determining the fair value of assets and
liabilities including judgements and estimation uncertainty involved.
9(a) Property, plant and equipment
Freehold
land &
buildings
Fixtures &
fittings
Plant &
machinery
Office
equipment
Total
£’000
£’000
£’000
£’000
£’000
At 31 January 2020
Cost
Accumulated depreciation
Net book amount
Year ending 31 January 2021
Opening net book amount
Additions
Disposals
Depreciation charge
Foreign exchange impact
Closing net book amount
At 31 January 2021
Cost
Accumulated depreciation
Net book amount
Year ending 31 January 2022
Opening net book amount
Additions
Revaluation
Disposals
Depreciation charge
Foreign exchange impact
Closing net book amount
At 31 January 2022
Cost or valuation
Accumulated depreciation
Net book amount
Leased assets
649
(36)
613
613
-
-
(13)
-
600
649
(49)
600
600
-
90
-
(13)
-
677
680
(3)
677
13
(10)
3
3
-
-
(2)
-
1
13
(12)
1
1
-
-
-
(1)
-
-
13
(13)
-
13
(9)
4
4
-
-
(2)
-
2
13
(11)
2
2
-
-
-
(2)
-
(0)
13
(13)
-
126
801
(53)
73
73
44
(2)
(37)
2
80
(108)
693
693
44
(2)
(54)
2
683
154
829
(74)
(146)
80
683
80
36
-
(2)
(38)
(2)
74
683
36
90
(2)
(54)
(2)
751
179
885
(105)
(134)
74
751
Leased assets are presented as a separate line item in the balance sheet, see note 9(b) for details.
Non-current assets pledged as security
Refer to note 21 for information on non-current assets pledged as security by the Group.
SmartSpace Software PLC Annual Report
65
Revaluation, depreciation methods and useful lives
The Group has changed its accounting policy for land and buildings which are now recognised at fair value based on
periodic valuations by external independent valuers, less subsequent depreciation for buildings. Previously land and
buildings were accounted for at historical cost less depreciation. Retrospective application of the revaluation policy for
property has not been recognised as this would be impractical in the case of freehold property. A revaluation surplus is
credited to other reserves in shareholders’ equity. All other property, plant and equipment is recognised at historical cost
less depreciation.
Depreciation is provided so as to write off to the cost or valuation of assets (other than freehold land) less their estimated
residual values over their expected useful economic lives using the straight-line method on the following bases
• Fixtures and fittings
4-5 years
• Plant and machinery
• Office equipment
4-5 years
3-4 years
• Leasehold improvements
5 years
• Freehold buildings
50 years
See note 23 for the other accounting policies relevant to property, plant and equipment.
Revaluation of land and building
Land and buildings are comprised of a single detached industrial building where the Group bases its UK operations. For
the first time in the group financial statements, freehold land and buildings are stated at their revalued amounts, being
the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated
impairment losses. The fair value measurements of the Group’s freehold land and buildings as at October 2021 was
determined to be £680,000 by Arnolds Keys LLP, independent valuers not related to the Group. Arnolds Keys LLP are
members of the Royal Institute Chartered Surveyors and they have appropriate qualifications and recent experience
in the fair value measurement of properties in the relevant locations. The valuation conforms to International Valuation
Standards and was based on recent market transactions on arm’s length terms for similar properties. The Group re-
values its land and buildings with sufficient regularity to ensure that the carrying amount does not differ materially from
that which would be determined using fair value at the end of the reporting period. The Directors asses on an annual
basis if there has been any significant change in fair value. Where it is assessed that there has been a significant change
an independent revaluation is made.
To provide an indication about the reliability of the inputs used in determining fair value, the group classifies its non-
financial assets and liabilities into the three levels prescribed under the accounting standards. The inputs used in the
valuation of land and buildings are based on similar observable transactions in the market and have therefore been
allocated to in their entirety to level 2. When appropriate the group’s policy is to recognise transfers into and transfers
out of fair value hierarchy levels as at the end of the reporting period. There have been no transfers between hierarchy
levels during the year.
The valuation of the land and buildings has been made using comparable rental transactions for properties in the local
area.
If freehold land and buildings were stated on the historical cost basis, the amounts would be as follows:
Cost
Accumulated depreciation
Net book amount
31 January 2022
31 January 2021
£’000
£’000
649
(62)
587
649
(49)
600
Year Ended 31 January 2022
66
9(b) Leases
This note provides information for leases where the Group is a lessee.
(i) Amounts recognised in the balance sheet relating to Right-of-use assets
The balance sheet shows the following amounts relating to right-of-use assets:
At 31 January 2020
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 31 January 2021
Opening net book amount
Additions
Depreciation
Foreign exchange impact
Closing net book amount
At 31 January 2021
Cost or fair value
Accumulated depreciation
Net book amount
Year ended 31 January 2022
Opening net book amount
Remeasurement
Depreciation
Foreign exchange impact
Closing net book amount
At 31 January 2022
Cost or fair value
Accumulated depreciation
Net book amount
Lease liabilities
Current
Non-current
Buildings
£’000
Total
£’000
-
195
(31)
164
164
31
(49)
10
156
240
(84)
156
156
6
(60)
(8)
94
229
(135)
94
-
195
(31)
164
164
31
(49)
10
156
240
(84)
156
156
6
(60)
(8)
94
229
(135)
94
31 January 2022
31 January 2021
£’000
£’000
67
41
108
63
110
173
SmartSpace Software PLC Annual Report
67
(ii) Amounts recognised in the statement of comprehensive income
The statement of comprehensive income shows the following amounts relating to leases:
Depreciation charge on right-of-use assets
Buildings
Interest expense (included in finance costs)
Expense relating to short-term leases (included in administrative expenses)
Expense relating to leases of low value assets (included in administrative expenses)
31 January 2022
31 January 2021
£’000
£’000
60
60
10
6
-
49
49
11
25
-
The total cash outflow for all leases within continuing activities in the year ended 31 January 2022 was £70,000 (2021:
£57,000). The incremental borrowing rate used in calculating lease liabilities in continuing operations is 5.3% (2021: 5.3%).
(iii) The Group’s leasing activities and how these are accounted for
The Group leases office space. Rental contracts are for fixed periods of 4 to 10 years. 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 stand-alone prices.
Lease terms are negotiated on an individual basis and contain a range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
Leased assets may not be used as security for borrowing purposes.
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 payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date
• amounts expected to be payable by the Group under residual value guarantees
• 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 are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases of 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.
To determine the incremental borrowing rate, the Group:
• where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third party financing was received
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group,
which does not have recent third-party financing, and
• makes adjustments specific to the lease, e.g. term, country, currency and security.
Right-of-use assets are initially measured at cost comprising:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received
• any initial direct costs, and
• restoration costs.
Right-of-use assets are 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.
Year Ended 31 January 2022
68
Payments associated with short-term leases 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.
(iv) Extension and termination options
Extension and termination options are included in leases across the Group. These are used to maximise operational
flexibility in terms of managing the assets used in the Group’s operations. The extension and termination options held are
exercisable only by the Group and not by the lessor.
9(c) Intangible assets
Internally
Goodwill
generated Customer
contracts
software
Brand
assets
Intellectual
property
Total
At 31 January 2020
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 31 January 2021
Opening net book amount
Additions
Amortisation charge
Exchange differences
£’000
£’000
£’000
£’000
£’000
£’000
8,165
-
8,165
8,165
-
-
555
661
(3)
658
658
302
(77)
-
207
(56)
151
286
(37)
249
1,363
10,682
(78)
(174)
1,285
10,508
151
249
1,285
10,508
-
(21)
-
-
(30)
17
-
302
(144)
(272)
112
684
Closing net book amount
8,720
883
130
236
1,253
11,222
At 31 January 2021
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 31 January 2022
Opening net book amount
Additions
Amortisation charge
Exchange differences
Closing net book amount
At 31 January 2022
Cost
Accumulated amortisation and impairment
Net book amount
Amortisation methods and useful lives
8,720
-
8,720
8,720
-
-
(346)
8,374
964
(81)
883
883
340
(353)
(9)
861
207
306
1,486
11,683
(77)
(70)
(233)
(461)
130
236
1,253
11,222
130
236
1,253
11,222
-
(22)
-
-
(30)
(15)
-
340
(147)
(552)
(21)
(391)
108
191
1,085
10,619
8,374
1,293
-
8,374
(432)
861
207
(99)
108
285
(94)
191
1,456
11,615
(371)
(996)
1,085
10,619
The Group amortises intangible assets with a limited useful life, using the straight-line method over the following periods:
• Internally generated software
• Customer contracts
• Intellectual property
• Brand asset
3 years
10 years
10 years
10 years
See note 23(p) for the other accounting policies relevant to intangible assets and note 23(j)) for the Group’s policy
regarding impairments.
SmartSpace Software PLC Annual Report
69
Customer contracts
The customer contracts were acquired as part of a business combination. They are recognised at their fair value at the
date of acquisition and they are subsequently amortised on a straight-line basis, based on the timing of projected cash
flows of the contracts over their estimated useful lives.
Significant estimate: useful life of the Group’s acquired intangible assets
The Group has acquired a number of intangible assets as part of its acquisitions of Anders & Kern Limited in May 2017,
SwipedOn Limited in October 2018, and SpaceConnect Pty Limited in November 2019. At 31 January 2022 the carrying
amount of these assets was £1,385,000 (2021: £1,619,000). The Group estimates the useful life of the acquired intangibles
to be 10 years based on their expectation of the period over which the Group will continue to derive benefit from such
assets. However, the actual useful life might be longer or shorter than 10 years depending on customer attrition, technical
innovation or competitor actions. If the estimated useful life was only five years, the carrying amount would be £822,000
at 31 January 2022 (2021: £1,239,000).
Significant estimate: Impairment tests for goodwill
Goodwill is monitored by management at an entity level. A segment-level summary of the goodwill is presented below:
Space Connect
SwipedOn
Anders & Kern
Net book amount
31 January 2022
31 January 2021
£’000
2,445
4,785
1,144
8,374
£’000
2,445
5,131
1,144
8,720
Goodwill on consolidation has been allocated for impairment testing purposes between the cash-generating units
(“CGUs”) and these CGU’s aligned to the Group’s segments. There are three CGU’s, Swiped On, Space Connect and
Anders & Kern. The recoverable amount of the Swiped on and Anders and Kern CGU’s is based on ‘value in use’
calculations using cash flow projections approved by the Directors covering a five-year period with a terminal value to
perpetuity, using a growth rate of 2% (2021: 2%). The Goodwill and Intangibles of Space Connect relate in the main to
software acquired, as such the Directors have utilised a cash flow forecast over a 10 year period to reflect the anticipated
useful economic life of the software.
The Directors believe that the Space Connect business is poised for high
growth, reflecting the desirability of the product and also the relationships
with well regarded partners within the sector. However, as the product is
currently in its initial entry to the global market, management have assessed
the value in use of the Space Connect cash generating unit using a cash flow
forecast that reflect growth in users consistent with that attained to date
from launch in 2020, which then tapers off in the final 5 years of the life of
the software to reflect the trends for the sector. The key sensitivities within
this forecast are the net cashflows generated in the future periods, which if
reduced would likely result in an impairment. This methodology has been
used to ensure that the carrying value as disclosed within the accounts is
supported by the current growth achievements of the business and that value
is not carried in the balance sheet the recovery of which is based upon as yet
unproven high growth forecasts. Should the anticipated high growth not be
attained, management are confident that they have sufficient means to ensure
that costs are adequately controlled such that the assets are not impaired.
The discount rates used in the calculation of the recoverable amount take
into consideration a market participant’s cost of capital, the expected rate
of return and various risks relating to the CGU. At the year end, based on
these assumptions there is no indication of impairment in the remaining
goodwill. Sensitivity analysis indicates that the discount rate may be expected
to fluctuate by up to 2.5% which has been shown not to give rise to an
impairment charge for any CGU.
Year Ended 31 January 2022
70
9(d) Deferred tax balances
Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
2,334
1,268
31 January 2022
31 January 2021
£’000
£’000
Property plant and equipment and Intangible assets
General provisions
Employee benefits
Total deferred tax assets
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
52
79
-
2,465
-
2,465
42
9
70
1,389
-
1,389
The deferred tax assets include an amount of £1,269,000 which relates to carry-forward tax losses of SmartSpace
Software plc. The Group has concluded that the deferred tax asset will be recoverable using the estimated future taxable
income based on the approved business plans and budgets for the Group. The Group is expected to generate taxable
income from 2024 onwards. The losses can be carried forward indefinitely. Deferred tax assets have been calculated using
a tax rate of 25% which is the rate expected to be applicable when the benefit would be realised.
Deferred tax asset movement
At 31 January 2020
Income / (expense) to profit and loss
Exchange differences
At 31 January 2021
Income / (expense) to profit and loss
Expense to other comprehensive income
Exchange differences
At 31 January 2022
Share
based
payments
PP&E and
Intangible
assets
General
provision
£’000
£’000
£’000
46
24
-
70
(70)
-
-
-
-
75
(33)
42
21
(17)
6
52
-
9
-
9
74
-
(3)
80
Tax
losses
£’000
1,385
(139)
22
1,268
1,089
-
(24)
Total
£’000
1,431
(31)
(11)
1,389
1,114
(17)
(21)
2,333
2,465
Deferred tax liability movement
Accelerated tax depreciation
At 31 January 2020
Credit to profit and loss
Exchange differences
At 31 January 2021
Credit to profit and loss
Exchange differences
At 31 January 2022
£’000
583
(581)
(2)
-
-
-
-
Total
£’000
583
(581)
(2)
-
-
-
-
SmartSpace Software PLC Annual Report
9(e) Inventories
Finished goods – at cost
71
31 January 2022
31 January 2021
£’000
203
£’000
89
Inventories recognised as an expense during the year ended 31 January 2022 amounted to £1,044,000 (2021: £1,630,000).
These were included in cost of sales and the cost of providing other services.
9(f) Prepayments
Prepayments
10. EQUITY
31 January 2022
31 January 2021
£’000
163
£’000
114
10(a) Share capital and share premium
31 January 2022
31 January 2021 31 January 2022
31 January 2021
Number
Number
£’000
£’000
Allotted, called up and fully paid:
Ordinary shares of 10p each
28,941,234
28,255,823
2,894
2,826
Movement in ordinary shares
Shares
issued
Share
capital
Share
premium
At 31 January 2020
At 31 January 2021
Number
Price (p)
28,255,823
28,255,823
Shares issued for deferred acquisition
consideration
675,411
72.5
Shares issued for share option exercise
10,000
101.25
£’000
2,826
2,826
67
1
£’000
3,830
3,830
-
9
Merger
reserve
£’000
844
844
422
-
Total
£’000
7,500
7,500
489
10
At 31 January 2022
28,941,234
2,894
3,839
1,266
7,999
Ordinary shares
Ordinary shares have a par value of 10 pence. They entitle the holder to participate in dividends, and to share in the
proceeds of winding up the Company in proportion to the number of shares held.
On a show of hands, every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote;
and on a poll, each share is entitled to one vote. The Company does not have a limited amount of authorised capital.
Options
Information relating to employee share options including details of options issued, exercised and forfeited during the
financial year and options outstanding at the end of the reporting period, is set out in note 19.
Year Ended 31 January 2022
72
10(b) Other reserves
Reverse
Acquisition
deferred
Merger acquisition Translation consideration Revaluation
reserve
reserve
reserve
reserve
reserve
Share
option
reserve
Total
other
reserves
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At 31 January 2020
844
(4,236)
(170)
489
Currency translation differences
Other comprehensive income
-
-
Transactions with owners in their capacity as owners:
Share-based payment expense
- continuing operations
Share-based payment expense
- discontinued operations
-
-
-
-
-
-
643
643
-
-
-
-
-
-
At 31 January 2021
844
(4,236)
473
489
Revaluation of property
Deferred tax on property revaluation
Currency translation differences
Other comprehensive income
-
-
-
-
Transactions with owners in their capacity as owners:
Issue of ordinary shares as consideration
for business combination
422
Issue of ordinary shares to option holders
Exchange difference
Lapsed share options
Share based payment expense
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(339)
(339)
-
-
-
-
-
At 31 January 2022
1,266
(4,236)
134
-
-
-
-
(489)
-
-
-
-
-
-
-
-
-
-
-
90
(17)
-
73
-
-
-
-
241
(2,832)
-
-
643
643
150
150
(48)
(48)
343
(2,087)
-
-
-
-
-
(3)
(4)
(16)
90
(17)
(339)
(266)
(67)
(3)
(4)
(16)
310
-
310
73
630
(2,133)
SmartSpace Software PLC Annual Report
73
Nature and purpose of other reserves
The merger reserve is used when a share issue is
undertaken, and merger relief is available. The conditions
for merger relief are when the consideration for shares in
another company includes issued shares of the acquirer
and on completion of the transaction, the company issuing
the shares will have secured at least 90% equity holding
in the acquiree. The acquisition of SpaceConnect Pty
Limited in November 2019 met the conditions for merger
relief and was therefore accounted for under the merger
relief provisions. Consideration for SpaceConnect Pty
Limited was made in two parts, firstly upon completion of
the acquisition in November 2019, and secondly in April
2021 through the issue of deferred consideration shares.
The movement in the merger reserve in the current period
relates to the settlement of the deferred share consideration
for SpaceConnect Pty in April 2021, which was accounted
for as a transfer from the acquisition deferred consideration
reserve to the merger reserve.
The reverse acquisition reserve arose on the reverse
takeover of SmartSpace Software plc by Coms.com Limited
in the year ended 31 January 2007. Under reverse acquisition
accounting an adjustment within shareholders’ funds is
required to eliminate the cost of acquisition in the issuing
company’s books, and introduce a notional cost of acquiring
the smaller issuing company based on the fair value of its
shares and an adjustment is required to show the share
capital of the legal parent in the consolidated balance sheet
rather than that of the deemed acquirer. Both adjustments
have been included in the reverse acquisition reserve.
Foreign currency translation comprises exchange differences arising on the translation of foreign controlled entities which
are recognised in other comprehensive income and accumulated in a separate reserve within equity. The cumulative
amount is reclassified to profit or loss when the net investment is disposed of.
The acquisition deferred consideration reserve relates to deferred share consideration for the acquisition of subsidiaries.
The revaluation reserve relates to amounts recognised on the fair value revaluation of land and buildings.
The share-based payments reserve is used to recognise the grant date fair value of options issued to employees but not
exercised.
10(c) Retained earnings
The movements in retained earnings were as follows:
Balance at 1 February
Issue of ordinary shares to option holders
Lapsed share options
Net loss for the period
Balance at 31 January
31 January 2022
31 January 2021
£’000
11,701
3
16
(2,564)
9,156
£’000
13,956
-
-
(2,255)
11,701
Year Ended 31 January 2022
74
11. CASH FLOW INFORMATION
11(a) Cash generated from operations
Loss before income tax from continuing operations
Adjustments for:
Depreciation and amortisation
Non-cash employee benefit expense – share-based payments
Net loss on sale of non-current assets
Finance costs - net
Credit loss
Net exchange differences
Change in operating assets and liabilities of continuing operations
Decrease / (increase) in trade and other receivables
Decrease / (increase) in contract assets
Decrease / (increase) in inventories
Decrease / (increase) in prepayments
Increase / (decrease) in trade creditors
Increase / (decrease) in other creditors
Increase / (decrease) in contract liabilities
Cash consumed by continuing operations
Loss before income tax from discontinued operations
Adjustments for:
Depreciation and amortisation
Impairment of intangible assets
Non-cash employee benefit expense – share-based payments
Net gain on sale of non-current assets
Finance costs – net
Credit losses
Net exchange differences
Loss on sale of discontinued operations
Change in operating assets and liabilities of discontinued operations
Decrease / (increase) in trade and other receivables
Decrease / (increase) in contract assets
Decrease / (increase) in prepayments
Increase / (decrease) in trade creditors
Increase / (decrease) in other creditors
Increase / (decrease) in contract liabilities
Cash consumed by discontinued operations
Cash consumed by operations
31 January 2022
31 January 2021
£’000
(3,678)
£’000
(2,743)
666
288
-
25
14
(9)
114
-
(113)
(53)
123
276
733
(1,614)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,614)
375
150
2
25
72
3
(14)
29
157
(43)
(371)
280
439
(1,639)
(166)
-
(1,470)
(47)
9
16
(46)
2
124
697
437
(407)
274
248
177
(152)
(1,791)
SmartSpace Software PLC Annual Report
11(b) Net debt reconciliation
This section sets out an analysis of net cash and the movements in net cash for each of the periods presented.
31 January 2022
31 January 2021
75
Cash and cash equivalents
Borrowings
Lease liabilities in continuing activities
Net cash
Cash and cash equivalents
Gross debt – fixed interest rates
Gross debt – variable interest rates
Net cash
Cash/bank overdraft.
Borrowings.
At 31 January 2020
New leases
Cashflows – continuing operations
Cashflows – discontinued operations
Effect of foreign exchange rate movements
At 31 January 2021
New leases
Cashflows – continuing operations
Effect of foreign exchange rate movements
At 31 January 2022
11(c) Non-cash investing and financing activities
£’000.
2,587
-
(2,053)
3,970
12
4,516
-
(1,739)
(19)
2,758
£’000
2,758
(383)
(108)
2,267
2,758
(108)
(383)
2,267
Leases.
£’000.
(179)
(31)
49
-
(12)
£’000.
(401)
-
(12)
-
-
(413)
(173)
-
30
-
(6)
71
-
(383)
(108)
£’000
4,516
(413)
(173)
3,930
4,516
(173)
(413)
3,930
Total.
£’000.
2,007
(31)
(2,016)
3,970
-
3,930
(6)
(1,638)
(19)
2,267
Remeasurement of right of use assets by means of lease
Acquisition of right of use assets by means of lease
Deferred partial settlement of business combination through share issue
31 January 2022
31 January 2021
£’000
£’000
6
-
490
-
31
-
12. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the
actual results. Management also needs to exercise judgement in applying the Group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which
are more likely to be materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information
about each of these estimates and judgements is included in other notes, together with information about the basis of
calculation for each affected line item in the financial statements.
Year Ended 31 January 2022
76
12(a) Critical estimates
13(b) Credit risk
The areas involving critical estimates are:
• estimated useful lives of intangible assets (see note 9(c))
• Impairment testing of goodwill (see note 9(c))
Credit risk arises from cash and cash equivalents,
cash flows of debt investments carried at
amortised cost and credit exposures to customers
including outstanding receivables.
12(b) Critical judgements
The areas involving critical judgements are:
• recognition of deferred tax asset for carried-forward
tax losses (see note 9(d))
13. FINANCIAL RISK MANAGEMENT
This note explains the Group’s exposure to financial risks
and how these risks could affect the Group’s future financial
performance. Current year profit and loss information has
been included where relevant to add further context.
13(a) Market risk
Foreign currency risk
The group has a translation exposure risk relating to
operations in New Zealand where SwipedOn use New
Zealand dollars. On consolidation, assets and liabilities of
foreign undertakings are translated into sterling at year
end exchange rates. The results of foreign undertakings
are translated into sterling at average rates of exchange
for the year. Foreign exchange differences arising on
the translation of foreign undertakings are recognised
directly in a separate component of equity, the translation
reserve, until the business units are disposed of. Should
the New Zealand Dollar strengthen or weaken by 10%
against pounds sterling then the value of the Group’s net
assets will respectively increase or decrease by £450,000
(2021: £523,000). Foreign exchange differences arising
on the translation of foreign undertakings are taken to
other comprehensive income. As the Group has no plans
to dispose of the asset in the foreseeable future and the
exposure is a non-cash item the Board have no plans to
hedge this translation exposure. See note 3(d) and 3(e)
for details of assets and liabilities held by SwipedOn and
denominated in New Zealand dollars.
Cash flow and fair value interest rate risk
The Group’s borrowings comprise a mortgage and a New
Zealand government Covid-19 support loan. The mortgage
is held with Barclays, secured on the associated freehold
land and buildings, and carries a variable rate of interest
2.5% above the Bank of England base rate. The Covid-19
support loan is for a period of 5 years commencing June
2020, is unsecured and interest free for the first 2 two
years, with interest of 3% per annum for the remaining 3
years. The Group maintains cash reserves such that an
increase in base rate is unlikely to impact the ability of the
Group to meet its mortgage payments.
Risk management
For banks and financial institutions, only
independently rated parties with a minimum rating of
‘A’ are accepted.
For trade receivables, management focuses strongly
on working capital management and the collection
of due invoices. Regular reports of overdue invoices
are circulated amongst senior management and the
Board reviews debtor days each month as part of
the monthly reporting cycle. The risk with any one
customer is limited by constant review of debtor
balances and amounts receivable on contracts and
action to resolve any issues preventing discharge of
obligations.
Security
The Group does not obtain security for trade receivables.
Impairment of financial assets
The Group has three types of assets that are subject to
the expected credit loss model:
• trade receivables for the sale of goods and services;
• other financial assets carried at amortised cost.
While cash and cash equivalents are also subject to
the impairment requirements of IFRS 9, the identified
impairment loss was immaterial.
Trade receivables
The Group applies the IFRS 9 simplified approach
to measuring expected credit losses which uses
a lifetime expected loss allowance for all trade
receivables.
The expected loss rates are based on the payment
profiles of sales over a period of 36 months before
31 January 2022 and the corresponding historical
credit losses experienced within this period. The
historical loss rates are adjusted to reflect current
and forward-looking information on macroeconomic
factors affecting the ability of the customers to settle
the receivables. The Group has identified global
and country specific GDP to be the most relevant
factor, and accordingly adjusts the historical loss
rates based on expected changes to this factor. On
that basis the loss allowance at 31 January 2022 was
determined as follows for trade receivables:
SmartSpace Software PLC Annual Report 31 January 2022
Current
1 -30
31 – 60
days past days past
due
due
61 – 90
days past
due
91 -180
181 – 360
days past days past
due
due
77
Total
Expected loss rate (%)
1.1%
2.2%
7.4%
48.0%
48.0%
82.0%
2.9%
Gross carrying amount
– trade receivables (£’000)
Loss allowance
Net carrying amount
- trade receivables (£’000)
241
(3)
111
(2)
36
(3)
238
109
33
6
(3)
3
4
-
4
1
399
(1)
(12)
-
387
The closing loss allowances for trade receivables as at 31 January 2022 reconcile to the opening loss allowances as follows:
At 1 February
Increase in loss allowance recognised in profit or loss during the year
Receivables written off during the year as uncollectible
At 31 January
2022
£’000
8
14
(10)
12
2021
£’000
-
18
(10)
8
Trade receivables and contract assets are written off where there is no reasonable expectation of recovery. Indicators that
there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment
plan with the Group and the failure to make contracted payments.
Impairment losses on trade receivables and contract assets are presented as net impairment losses within operating profit.
Subsequent recoveries of previously written off amounts are credited against the same line item.
Other financial assets at amortised cost
Other financial assets at amortised cost comprise contingent consideration and other receivables. Assessments of
significant increases in credit loss risk and assumptions about the risk of default are made in determining the expected
credit loss rates from these assets.
Net impairment losses on financial and contract assets recognised in profit or loss
During the year the following losses were recognised in profit or loss in relation to impaired financial assets:
Impairment losses
Movement in loss allowance for trade receivables and contract assets
Impairment losses on other financial assets
Net impairment losses on financial and contract assets
2022
£’000
14
-
14
2021
£’000
18
54
72
13(c) Liquidity risk
Liquidity risk is the risk that the Group cannot meet financial liabilities when they fall due. The Group’s policy for managing
liquidity risk is to ensure that the business has enough financial resources to carry out its day-to-day activities at any point
in time. Management believes that the cash resources on hand, together with future forecast profits of the business, more
than cover the resources needed to meet the financial liabilities of the Group.
Maturity of financial liabilities
The tables below analyse all of the Group’s financial liabilities into relevant maturity groupings based on their contractual
maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their
carrying balances because the impact of discounting is not significant.
Year Ended 31 January 2022
78
Contractual maturity of
financial liabilities
At 31 January 2022
6-12
Less than
6 months months
Between
1 and 2
years
Between
2 and 5
years
Over
5 years
Total
Carrying
amount
Trade payables
Borrowings
Lease liabilities
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
395
13
33
441
-
370
34
404
-
-
41
41
-
-
-
-
-
-
-
-
395
383
108
886
395
383
108
886
Contractual maturity of
financial liabilities
At 31 January 2021
Less than
6 months
Between
1 and 2
years
6-12
months
Between
2 and 5
years
Over
5 years
Total
Carrying
amount
Trade payables
Borrowings
Lease liabilities
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
249
44
31
324
30
14
33
77
-
355
68
423
-
-
41
41
-
-
-
-
279
413
173
865
279
413
173
865
14. CAPITAL MANAGEMENT
14(a) Risk management
The Group considers its capital to comprise its ordinary
share capital, share premium account, other reserves and
retained earnings. A summary of the amounts of capital
in each of these categories is shown in the consolidated
statement of changes in equity on page 49.
In managing its capital, the Group’s primary objective is
to provide a return for its equity shareholders through
capital growth. The Group has £383,000 (2021: £413,000)
of debt representing a gearing ratio of 3% (2021: 3%).
Going forward the Group will balance capital risk
and return at an acceptable level and also maintain a
sufficient funding base to enable the Group to meet
its working capital and strategic investment needs. In
making decisions to adjust its capital structure to achieve
these aims, either through new share issues or the issue
of debt, the Group considers not only its short-term
position but also its long-term operational and strategic
objectives. There have been no other significant changes
to the Group’s management objectives, policies and
processes in the year nor has there been any change in
what the Group considers to be capital.
14(b) Dividends
The Group does not currently pay a dividend.
SmartSpace Software PLC Annual Report
79
15. INTERESTS IN OTHER ENTITIES
The Group’s subsidiaries at 31 January 2022 are set out below. Unless otherwise stated they have share capital consisting
solely of ordinary shares, and the proportion of ownership interests held equals the voting rights held by the Group. The
country of incorporation is also their principal place of operation.
Name
Registered office
Country
Proportion of
ownership
interest
Proportion of Principal
business
voting power
activity
held
Easter Road Holdings Limited
Anders + Kern (U.K.) Limited
SmartSpace Software Limited
SwipedOn Inc
SwipedOn Limited
Norderstedt House
James Carter Road,
Mildenhall,
Bury St. Edmunds,
England, IP28 7RQ
Norderstedt House
James Carter Road,
Mildenhall,
Bury St. Edmunds,
England, IP28 7RQ
115 The Strand,
Tauranga, 3110,
New Zealand
651 N Broad St,
Suite 206, Middletown
New Castle,
Delaware USA
115 The Strand,
Tauranga, 3110,
New Zealand
UK
100%
100%
Holding
company
UK
100%
100%
Hardware and
software sales
New Zealand
100%
100%
USA
100%
100%
New Zealand
100%
100%
Smartspace Software Pty Limited Nexia Sydney, Level 16, Australia
100%
100%
Space Connect Limited
1 Market Street,
Sydney, NSW, 2000
Norderstedt House
James Carter Road,
Mildenhall,
Bury St. Edmunds,
England, IP28 7RQ
UK
100%
100%
Space Connect Pty Limited
Nexia Sydney, Level 16, Australia
1 Market Street,
Sydney, NSW, 2000
100%
100%
Software
sales
All subsidiary undertakings are included in the consolidation.
16. COMMITMENTS
16(a) Capital commitments
There were no capital commitments at 31 January 2022 (2021: £nil).
17. EVENTS OCCURRING AFTER THE END OF THE REPORTING PERIOD
There are no subsequent events occurring after the reporting date that require adjustment or disclosure in the financial
statements.
Holding
company
Software
sales
Software
development
and sales
Holding
company
Software
development
and sales
Year Ended 31 January 2022
80
18. RELATED PARTY TRANSACTIONS
18(a) Subsidiaries
Interests in subsidiaries are set out in note 15.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note. The transactions between the parent and the subsidiaries during the year represent
transfers of cash between the companies amounting to £1,050,000 (2021: 434,000).
18(b) Key management personnel compensation
Short term employment benefits
Post-employment benefits
Termination benefits
Share-based payments
18(c) Directors
Aggregate emoluments
Company contributions to money purchase pension schemes
Taxable benefits
Termination benefits
Long term incentives
Year ended
31 January 2022
Year ended
31 January 2021
£’000
£’000
592
8
40
155
795
720
18
-
106
844
Year ended
31 January 2022
Year ended
31 January 2021
£’000
504
8
34
40
155
741
£’000
470
9
31
-
72
582
Detailed remuneration including the highest
paid director disclosures are provided in
the Directors’ remuneration section in the
remuneration report on pages 28 and 29.
Directors’ fees
Directors fees of £13,333 (2021: £40,000)
were charged by Warspite Limited,
a company connected to Diana Dyer
Bartlett, in respect of services provided by
Diana Dyer Bartlett; £nil (2021: £nil) was
outstanding at the year end.
Directors fees of £60,000 (2021: £60,000)
were charged by VZ Limited, a company
connected to Guy van Zwanenberg, in
respect of services provided by Guy van
Zwanenberg; £6,031 (2021: £nil) was
outstanding at the year end.
SmartSpace Software PLC Annual Report
81
19. SHARE BASED PAYMENTS
The Group operates two equity settled share-based payments plans: an EMI scheme and an Unapproved share scheme.
During the year the Group issued options over 327,035 ordinary shares under the Group’s EMI scheme (2021: 332,500) and
over 406,915 ordinary shares under the Unapproved share scheme (2021: 570,000).
The EMI and unapproved share option schemes incorporate the same general terms and conditions, with the EMI scheme
benefiting from certain tax advantages. Options are granted under the plans for no consideration and carry no dividend or
voting rights. When exercisable each option converts into one ordinary share.
The exercise price of the options is based on the closing price on the day immediately preceding the grant.
19(a) Equity settled employee option plans
Set out below are the summaries of options granted under the plans:
Outstanding at start of the year
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at end of year
Exercisable at end of year
31 January 2022
31 January 2021
Number
Weighted average
exercise price
Weighted average
exercise price
Number
2,156,500
733,950
(10,000)
(665,848)
2,214,602
560,652
101p
121p
101p
94p
110p
123p
1,484,015
902,500
-
(230,015)
2,156,500
40,000
107p
92.5p
-
103p
101p
500p
No options expired during the periods covered by the above tables.
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Date granted
12 June 2013
Expiry date
11 June 2023
Type
Price per share
Share options
31 January
2022
Share options
31 January
2021
Warrants
500.00 p
40,000
11 December 2015
10 December 2025
Options
92.00 p
200,000
31 July 2018
30 July 2028
Options
101.25 p
76,192
17 October 2018
16 October 2028
Options
23 October 2020
22 October 2030
Options
29 September 2021
28 September 2031
Options
94.00 p
92.50 p
92.50 p
374,460
860,000
165,000
29 September 2021
28 September 2031
Options
137.50 p
463,950
1 November 2021
31 October 2031
Options
92.50 p
35,000
40,000
200,000
129,000
885,000
902,500
-
-
-
2,214,602
2,156,500
The outstanding options at the year-end have an exercise price in the range of 92 pence to 500 pence (2021: 92 pence to
500 pence).
The weighted average remaining contractual life of the share options outstanding at the year end is 8 years and 0 months
(2021: 8 years 2 month).
19(b) Fair value of equity settled options granted
Options granted to Directors and to other employees during the year did not contain any performance criteria. The fair
value at the grant date for options without performance conditions is determined using the Black-Scholes model. These
calculations take into account the exercise price, the term of the option, the share price at the date of grant and expected
volatility of the underlying share, the expected dividend yield and the risk free rate for the term of the option. The
expected price volatility is based on historical share price volatility over a period of time equal to the option vesting period
being 3 years. The model inputs and assessed fair value of options granted during the year ended 31 January 2022 were:
Year Ended 31 January 2022
82
Model input
Grant date
Option price
22 September 2021
22 September 2021
1 November 2021
137.50 pence
92.50 pence
92.50 pence
Share price at date of grant
137.50 pence
137.50 pence
89.50 pence
Dividend yield
Vesting period (years)
Assumed volatility at date of grant
Risk-free discount rate
Expected life of option
Fair value per option
-
3
68%
(0.10%)
3 years
-
3
68%
(0.10%)
3 years
76 pence
76 pence
-
3
71%
(0.10%)
3 years
41 pence
The expense recognised in continuing operations for equity-settled share-based payments during the year to 31 January
2022 was £288,000 (2021: £150,000).
Options over 351,441 shares granted to Directors in previous periods had the period for meeting performance criteria
extended by 2 years to 17 October 2023. A share based payment charge of £160,000 will be recognised over the two year
extension period, of which £28,000 was recognised in the current period.
19(c) Cash settled share-based payments
As part of the disposal of SmartSpace Global Limited in August 2020 the Group issued 50,000 cash settled share options
to a former employee who was involved in the disposal process. The options were issued on 13 August 2020, had an
exercise price of 101.25p, and are available for exercise at any point between 31 July 2021 and 31 July 2029. The options
are valued at each reporting date using a Black-Scholes model. At 31 January 2022 the assumed volatility was 77%, risk
free interest rate -0.1%, exercise price 101.25p and current share price at the reporting date of 72.5p. The expected price
volatility is based on historical share price volatility over a period of time equal to the expected period of time before the
options are exercised. A credit was recorded relating to these options of £22,000 for the year and a liability of £8,000
(2021: £31,000) included within trade and other payables.
20. LOSS PER SHARE
20(a) Basic loss per share
Attributable to the ordinary equity holders of the Company:
From continuing operations
From discontinued operations
Total basic loss per share
20(b) Diluted loss per share
Attributable to the ordinary equity holders of the Company:
From continuing operations
From discontinued operations
Total diluted loss per share
Year ended
31 January 2022
Year ended
31 January 2021
Pence
Pence
(8.91p)
-
(8.91p)
(7.54p)
(0.44p)
(7.98p)
Year ended
31 January 2022
Year ended
31 January 2021
Pence
Pence
(8.91p)
-
(8.91p)
(7.54p)
(0.44p)
(7.98p)
SmartSpace Software PLC Annual Report
20(c) Reconciliation of earnings used in calculating earnings per share
Earnings per share data is based on the Group loss for the year and the weighted average number of ordinary shares in
issue.
83
Basic (loss) / earnings per share
Loss attributable to the ordinary equity holders of the Company:
From continuing operations
From discontinued operations
Diluted (loss) / earnings per shares
Loss attributable to the ordinary equity holders of the Company:
From continuing operations
From discontinued operations
20(d) Weighted average number of shares used as the denominator
Year ended
31 January 2022
Year ended
31 January 2021
£’000
£’000
(2,564)
-
(2,564)
(2,564)
-
(2,564)
(2,131)
(124)
(2,255)
(2,131)
(124)
(2,255)
Year ended
31 January 2022
Year ended
31 January 2021
Number
Number
Weighted average number of shares used as the denominator in calculating
basic earnings per share
28,780,768
28,255,823
Adjustments for calculation of diluted earnings per share
Options
-
-
Weighted average number of shares and potential ordinary shares used
as the denominator in calculating diluted earnings per share
28,780,768
28,255,823
20(e) Information concerning the classification of
securities
Options
Options granted to employees under the Group’s
share option schemes are considered to be potential
ordinary shares. Whilst options are never included in
the determination of basic earnings per share, they are
included in the calculation of diluted earnings per share
if considered dilutive. Details relating to the options are
set out in note 19.
At 31 January 2022 options are considered antidilutive
and therefore not included in the calculation of diluted
earnings per share. These options could potentially be
dilutive in the future.
Year Ended 31 January 2022
84
20(f) Alternative measure of earnings per share
To provide an indication of the underlying operating performance per share, an alternative measure of earnings per share
is presented below. This measure excludes reorganisation, transaction, and share based payments which management
do not consider reflect underlying performance. Amortisation of intangible assets recognised in accounting for business
combinations are also excluded.
Loss for the year from continuing operations
Adjustment to basic (loss)/earnings:
Reorganisation and transactional costs
Tax credit on reorganisation and transactional costs
Amortisation of acquired intangibles
Deferred tax credit on amortisation of acquired intangibles
Share based payment charge
Deferred tax credit on share-based payment charge
Adjusted (loss)/earnings attributable to owners of the Company
Number of shares
Year ended
31 January 2022
Year ended
31 January 2021
£’000
(2,564)
192
(36)
198
(49)
288
(55)
(2,026)
No.
£’000
(2,131)
-
-
194
(48)
150
(28)
(1,863)
No.
Weighted average ordinary shares in issue
28,780,768
28,255,823
Weighted average potential diluted shares in issue
28,780,768
28,255,823
Adjusted (loss)/earnings per share
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
(7.04p)
(7.04p)
(6.59p)
(6.59p)
21. ASSETS PLEDGED AS SECURITY
The carrying amounts of assets pledged as security for current and non-current borrowings are:
Non-current
Freehold land and buildings
31 January 2022
31 January 2021
£’000
£’000
677
600
SmartSpace Software PLC Annual Report
22. AUDITORS’ REMUNERATION
During the year the Group (including its overseas subsidiaries) obtained the following services from the Company’s
auditors and its associates.
Year ended
31 January 2022
Year ended
31 January 2021
£’000
£’000
85
Fees payable to the Company’s auditors for the audit of Parent company
consolidated financial statements:
- Audit fees in relation to the year ended 31 January 2020
- Audit fees in relation to the year ended 31 January 2021
- Audit fees in relation to the year ended 31 January 2022
Fees payable to the Company’s auditors for the audit of subsidiary financial statements:
-
2
52
54
-
-
40
40
94
14
57
-
71
-
24
-
24
95
- Audit fees in relation to the year ended 31 January 2020
- Audit fees in relation to the year ended 31 January 2021
- Audit fees in relation to the year ended 31 January 2022
Total audit fees
23. SIGNIFICANT ACCOUNTING POLICIES
23(a) Basis of preparation
Compliance with IFRS
On 31 December 2020, IFRS as adopted by the European
Union at that date was brought into UK law and became
UK-adopted International Accounting Standards, with
future changes being subject to endorsement by the UK
Endorsement Board. Smartspace Software Plc transitioned
to UK-adopted International Accounting Standards in its
consolidated financial statements on 1 February 2021. This
change constitutes a change in accounting framework.
However, there is no impact on recognition, measurement
or disclosure in the period reported as a result of the
change in framework.
Historical cost convention
The financial statements have been prepared under the
historical cost convention except for the following:
• certain financial assets and liabilities including cash
settled share-based payments
• certain classes of property, plant and equipment which
are measured at fair value
• equity settled share-based payments in the scope of
IFRS 2 which are measured at fair value
Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date,
regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating
the fair value of an asset or liability, the Group takes into
account the characteristics of the asset or liability, if market
participants would take those characteristics into account
when pricing the asset or liability at the measurement date.
Fair value for measurement and/or disclosure purposes in
these consolidated financial statements is determined on
such a basis except for share-based payment transactions
that are within the scope of IFRS 2.
Standards and interpretations not yet applied by the
Group
For the purposes of the preparation of these consolidated
financial statements, the Group has applied all standards
and interpretations that are effective for accounting
periods beginning on or after 1 February 2021. There was
no significant impact of new standards and interpretations
adopted in the year, which include:
• COVID-19-Related Rent Concessions (Amendment to
IFRS 16) - effective 1 June 2020
• Interest Rate Benchmark Reform – Phase 2
(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
16) - effective 1 Jan 2021
Year Ended 31 January 2022
86
No new standards, amendments or interpretations to
existing standards that have been published and that
are mandatory for the Group’s accounting periods
beginning on or after 1 February 2022, or later periods,
have been adopted early. The new standards and
interpretations are not expected to have any significant
impact on the financial statements when applied.
Going concern
The financial statements are prepared on a going
concern basis notwithstanding that the Group has
reported an operating loss of £3,653,000 for the
year to 31 January 2022 (2021: £2,717,000 loss) and
cash consumed by operations of £1,614,000 (2021:
£1,639,000).
At 31 January 2022 the Group had £2.76m of gross cash
with three operating segments and a central overhead
to support. Cash forecasts for each segment and the
consolidated Group have been prepared for a period
of twelve months from the date of signing the balance
sheet.
The SwipedOn division has continued to grow its
revenues throughout the Covid-19 pandemic. The
Directors are confident that growth will continue in the
future. SwipedOn is currently cash generative. Whilst
the Directors believe that SwipedOn will continue to
perform well stress tests have taken into account the
possibility of reduced growth in customer locations and
increased customer churn.
As at 31 January 2022 Space Connect had annual
recurring revenues of £610,000 which had grown from
£160,000 at the beginning of the year. The Covid-19
lockdown slowed revenue growth however this is
expected to accelerate as businesses re-open their
workplaces. By the end of the year ending 31 January
2023 Space Connect is expected to be cash-generative.
The Directors have stress tested cashflow forecasts for
lower revenue growth in Space Connect.
The Anders & Kern division which is focussed
exclusively on UK based customers experienced
significant reductions in sales volume due to the
nationwide Covid-19 lockdowns. As businesses return to
the office sales are expected to recover to pre Covid-19
levels. Forecasts for the Anders & Kern division have
assumed that over the coming 12 month period sales
will return to normal levels. Stress tests have included
the possibility that sales remain subdued for the
entire forecast period together with appropriate cost
reductions.
On the basis of these consolidated forecasts and stress
tests, the Directors believe that the Group can continue
to operate within the resources currently available to it
over the forecast period.
Based on the above, the Directors believe it remains
appropriate to prepare the Group and parent company
financial statements on the going concern basis.
23(b) Principles of consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has
control. The Group controls an entity where the Group
is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect
those returns through its power to direct activities of the
entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The acquisition method is used to account for business
combinations by the Group (refer to note 23(i)).
Inter-company transactions, balances and unrealised gains
on transactions between group companies are eliminated.
Unrealised losses are also eliminated, unless the transaction
provides evidence of an impairment of the transferred
asset. Accounting policies for subsidiaries have been
changed where necessary to ensure consistency with the
policies adopted by the Group.
When the Group loses control of a subsidiary, the gain or
loss on disposal recognised in profit or loss is calculated
as the difference between (i) the aggregate of the fair
value of the consideration received and the fair value of
any retained interest and (ii) the previous carrying amount
of the assets (including goodwill), less liabilities of the
subsidiary and any non-controlling interests. All amounts
previously recognised in other comprehensive income
in relation to that subsidiary are accounted for as if the
Group had directly disposed of the related assets and
liabilities of the subsidiary (i.e. reclassified to profit or loss
or transferred to another category of equity as specified/
permitted by applicable IFRSs).
Reverse acquisition accounting
The acquisition of Coms.com Limited in the year ended 31
January 2007 was accounted for as a reverse acquisition
of SmartSpace Software plc by Coms.com Limited. The
consolidated financial statements prepared following the
reverse takeover were issued in the name of SmartSpace
Software plc, but they are a continuance of the financial
statements of Coms.com Limited. Therefore, the assets
and liabilities of Coms.com Limited were recognised and
measured in the consolidated financial statements at their
pre-combination carrying values. The financial statements
reflect the continuance of the financial statements of Coms.
com Limited.
The retained earnings and other equity balances recognised
in these consolidated financial statements at the time of
the acquisition were the retained earnings and other equity
balances of Coms.com Limited immediately before the
business combination.
Under reverse acquisition accounting:
• an adjustment within shareholders’ funds is required
to eliminate the cost of acquisition in the issuing
company’s books, and introduce a notional cost of
acquiring the smaller issuing company based on the
fair value of its shares
SmartSpace Software PLC Annual Report 87
• an adjustment is required to show the share capital of the
legal parent in the consolidated balance sheet rather than
that of the deemed acquirer.
Both adjustments have been included in the reverse
acquisition reserve.
Merger reserve
The merger reserve is used when a share issue is
undertaken and merger relief is available. The conditions
for merger relief are when the consideration for shares in
another company includes issued shares of the acquirer
and on completion of the transaction, the company
issuing the shares will have secured at least 90% equity
holding in the acquiree.
23(c) Segment reporting
Operating segments are reported in a manner consistent
with internal reporting provided to the chief operating
decision maker.
The Board of SmartSpace Software plc has appointed
an operating board which assesses the financial
performance and position of the Group, and makes
strategic decisions. The operating board which has
been identified as being the chief operating decision
maker, consists of the Chief Executive Officer and Chief
Financial Officer.
23(d) Foreign currency translation
Functional and presentation currency
The individual financial statements of each group entity
are presented in the currency of the primary economic
environment in which the entity operates (its functional
currency). For the purpose of the consolidated financial
statements, the results and financial position of each
entity are expressed in pounds sterling which is also the
presentation currency for the consolidated and company
financial statements. The functional currency of the
Company is pounds sterling.
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions,
and from the translation of monetary assets and
liabilities denominated in foreign currencies at year end
exchange rates, are generally recognised in profit or loss.
They are deferred in equity if they are attributable to
part of the net investment in a foreign operation.
Foreign exchange gains and losses that relate to
borrowings are presented in the statement of profit or
loss, within finance costs. All other foreign exchange
gains and losses are presented in the statement of profit
or loss on a net basis, within ‘other gains/losses’.
Non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates
at the date when fair value was determined. Translation
differences on assets and liabilities carried at fair value
are reported as part of the fair value gain or loss.
Group companies
Results and financial position of foreign operations
(none of which has the currency of a hyper-inflationary
economy) that have a functional currency different
from the presentation currency are translated into the
presentation currency as follows:
• Assets and liabilities for each balance sheet presented
are translated at the closing rate at the date of that
balance sheet;
• income and expenses for each statement of profit
or loss and statement of comprehensive income are
translated at average exchange rates (unless this is not
a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates
of the transactions); and
• all resulting exchange differences are recognised in
other comprehensive income.
On translation, exchange differences arising from the
translation of any net investment in foreign entities,
and of borrowings and other financial instruments
designated as hedges of such investments, are
recognised in other comprehensive income. When a
foreign operation is sold or any borrowings forming
part of the net investment are repaid, the associated
exchange differences are reclassified to profit or loss, as
part of the gain or loss on sale.
Exchange rates used are as follows:
Average exchange rate for
1 New Zealand Dollar into
Pounds Sterling
Closing exchange rate for
1 New Zealand Dollar into
Pounds Sterling
31 January
2022
31 January
2021
0.5115
0.5089
0.4896
0.5250
Goodwill and fair value adjustments arising on the
acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and translated at the
closing rate.
23(e) Revenue recognition
The accounting policies for the Group’s revenue from
contracts with customers are explained in note 4.
23(f) Government grants
Grants from the government are recognised at their fair
value where there is a reasonable assurance that the grant
Year Ended 31 January 2022
88
will be received and the Group will comply with all attached
conditions. Where applicable government grants are offset
against the expenditure to which they relate.
23(g) Income tax
The income tax expense or credit for the period is the tax
payable on the current period’s taxable income, based
on the applicable income tax rate for each jurisdiction,
adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax
losses.
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the
Company and its subsidiaries and associates operate
and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to
interpretation. It establishes provisions, where appropriate,
on the basis of amounts expected to be paid to the tax
authorities.
Deferred tax is provided in full, using the liability method,
on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the
financial statements. However, deferred tax liabilities are
not recognised if they arise from the initial recognition of
goodwill. Deferred income tax is also not accounted for
it if arises from initial recognition of an asset or liability in
a transaction other than a business combination that, at
the time of the transaction, affects neither accounting nor
taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or
substantively enacted by the end of the reporting period
and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are only recognised if it is probable
that future taxable amounts will be available to utilise those
temporary differences and losses.
Deferred tax liabilities and assets are not recognised for
temporary differences between the carrying amount and
tax bases of investments in foreign operations where
the Company is able to control the timing of the reversal
of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at
each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected
to apply in the period when the liability is settled or the
asset is realised based on tax laws and rates that have been
enacted or substantively enacted at the balance sheet
date. Deferred tax is charged or credited in the income
statement except when it relates to items charged or
credited in other comprehensive income in which case the
deferred tax is also dealt with in comprehensive income.
The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the
reporting period, to recover or settle the carrying amount
of its assets and liabilities.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to
income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities
on a net basis.
23(h) Leases
The accounting policies for the Group’s leases are
described in note 9(b)
23(i) Business combinations
The acquisition method of accounting is used for all
business combinations regardless of whether equity
instruments or other assets are acquired. The consideration
transferred for the acquisition of subsidiaries comprises:
• fair values of the assets transferred;
• liabilities incurred to the former owners of the acquired
business;
• equity interests issued by the Group;
• fair value of any asset or liability resulting from a
contingent consideration arrangement;
• fair value of any pre-existing equity interest in the
subsidiary.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values
at the acquisition date. The Group recognises any
non-controlling interest in the acquired entity, on an
acquisition-by-acquisition basis, either at fair value or at
the non-controlling interest’s proportionate share of the
acquired entity’s net identifiable assets.
Acquisition-related costs are recognised in profit or loss as
incurred.
The excess of the:
• consideration transferred;
• the amount of any non-controlling interest in the
acquired entity; and
• the acquisition date fair value of any previous equity
interest in the acquired entity
over the fair value of the net identifiable assets acquired is
recorded as goodwill. If those amounts are less than the fair
value of the net identifiable assets of the business acquired,
the difference is recognised directly in profit or loss as a
bargain purchase.
Where settlement of any part of cash consideration
SmartSpace Software PLC Annual Report 89
is deferred, the amounts payable in the future are
discounted to their present value at the date of exchange.
The discount rate used is the entity’s incremental
borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent
financier under comparable terms and conditions.
Contingent consideration is classified either as equity
or as a financial liability. Amounts classified as financial
liability are subsequently remeasured to fair value, with
changes in value recognised in profit or loss.
If the business combination is achieved in stages,
the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date. Any
gains or losses realised from such remeasurement are
recognised in profit or loss.
23(j) Impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the
carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those
assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the
impairment loss (if any). Where the asset does not
generate cash flows that are independent from other
assets, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs. An
intangible asset with an indefinite useful life is tested for
impairment annually and whenever there is an indication
that the asset may be impaired.
Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit)
is reduced to its recoverable amount. An impairment
loss is recognised as an expense immediately, unless the
relevant asset is carried at a re-valued amount, in which
case the impairment loss is treated as a revaluation
decrease.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (cash-generating unit)
is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount
does not exceed the carrying amount that would
have been determined had no impairment loss been
recognised for the asset/cash-generating unit in prior
years. A reversal of an impairment loss is recognised as
income immediately, unless the relevant asset is carried
at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
23(k) Cash and cash equivalents
For the purpose of presentation in the statement of cash
flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions and bank
overdrafts. Bank overdrafts are shown within borrowings in
current liabilities in the balance sheet.
23(l) Trade receivables
Trade receivables are recognised initially at fair value
and subsequently measured at amortised cost using the
effective interest method, less loss allowance. See note 8(a)
for further information about the Group’s accounting for
trade receivables and note 13(b) for a description of the
Group’s impairment policies.
23(m) Inventories
Inventories are stated at the lower of cost and net
realisable value. Cost comprises materials and, where
applicable, direct labour costs and those overheads that
have been incurred in bringing the inventories to their
present location and condition. Cost is calculated using the
weighted average method. Net realisable value represents
the estimated selling price less all estimated costs of
completion and costs to be incurred in marketing, selling
and distribution.
Year Ended 31 January 2022 90
23(n) Financial assets
Classification
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period.
The Group classifies its financial assets in the following
measurement categories:
The carrying value is assessed annually and any
impairment is charged to the income statement.
Gains or losses on disposals are determined by comparing
proceeds with carrying amount. These are included in
profit or loss. When revalued assets are sold, it is group
policy to transfer any amounts included in other reserves
in respect of those assets to retained earnings.
An item of property or plant is derecognised upon
disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
The gain or loss arising on the disposal or scrappage of
an asset is determined as the difference between sales
proceeds and the carrying value of the asset and is
recognised in income.
23(p) Intangible assets
Goodwill
Goodwill is measured as described in note 23(i). Goodwill
on acquisitions of subsidiaries is included in intangible
assets. Goodwill is not amortised but it is tested for
impairment annually or more frequently if events or
changes in circumstances indicated that it might be
impaired, and is carried as cost less accumulated
impairment losses. Gains and losses on the disposal of an
entity include the carrying amount of goodwill relating to
the entity sold.
Goodwill is allocated to cash- generating units for the
purpose of impairment testing. The allocation is made to
those cash-generating units that are expected to benefit
from the business combination in which the goodwill
arose. The units or groups of units are identified at the
lowest level at which goodwill is monitored for internal
management purposes, being the operating segments
(note 3).
• those to be measured subsequently at fair value
(either through other comprehensive income or
through profit or loss)
• those to be measured at amortised cost.
The classification depends on the entity’s business
model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses
will be recorded either in profit or loss or in other
comprehensive income.
Measurement
At initial recognition the Group measures a financial
asset at its fair value plus in the case of a financial
asset not at fair value through profit or loss (FVPL),
transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of
financial assets carried at FVPL are expensed in profit or
loss.
Impairment
The Group assesses, on a forward-looking basis, the
expected credit losses associated with its financial assets
carried at amortised cost. The impairment methodology
applied depends on whether there has been a significant
increase in credit risk.
For trade receivables, the Group applies the simplified
approach permitted by IFRS 9, which requires expected
lifetime losses to be recognised from initial recognition
of the receivables, see note 13(b) for further details.
23(o) Property, plant and equipment
The Group’s accounting policy for land and buildings
is explained in note 9a. All other property, plant and
equipment is stated at historical cost less depreciation.
Historical cost includes expenditure that is directly
attributable of the acquisition of the items.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow to
the Group and the cost of the item can be measured
reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when
replaced. All other repairs and maintenance are charged
to profit or loss during the reporting period in which
they are incurred.
The depreciation methods and periods used by the
Group are disclosed in note 9(a).
SmartSpace Software PLC Annual Report 91
Internally generated intangible assets - Research and
development
Expenditure on research activities is recognised as an
expense in the period in which it is incurred.
Internally-generated intangible assets arising from the
development (or from the development phase on an
internal project) are recognised only if all the following
conditions are met:
• an asset is created that can be identified (such as
software and new processes);
• it is probable that the asset created will generate future
economic benefits;
• the development cost of the asset can be measured
reliably;
• an intention to complete the intangible asset and use
or sell it;
• ability to use or sell the intangible asset, and
• the availability of adequate technical financial and
other resources to complete the development and to
use or sell the intangible asset.
The amount initially recognised for internally-generated
intangible assets is the sum of the expenditure from the
date when the intangible asset first meets the recognition
criteria listed above. Where no internally-generated
intangible asset can be recognised, development
expenditure is recognised in profit or loss in the period in
which it is incurred.
Subsequent to initial recognition internally generated
intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses on
the same basis as intangible assets that are acquired
separately.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination
and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date
(which is regarded as their cost).
Subsequent to initial recognition intangible assets
acquired in a business combination are reported at
cost less accumulated amortisation and accumulated
impairment losses on the same basis as intangible assets
that are acquired separately.
Amortisation methods and periods
Refer to note 9(c) for details about amortisation methods
and periods used by the Group for intangible assets.
Amortisation is charged to profit or loss and included
within administrative expenses.
23(q) Trade and other payables
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial
year which are unpaid. The amounts are unsecured and
are usually paid within 30 days of recognition. Trade and
other payables are presented as current liabilities unless
payment is not due within 12 months after the reporting
period. They are recognised initially at their fair value
and subsequently measured at amortised cost using the
effective interest method.
23(r) Borrowings
Borrowings are initially recognised at their fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of
the borrowings using the effective interest method. Fees
paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn
down. In this case the fee is deferred until the draw-down
occurs. To the extent that there is no evidence that it
is probable that some or all of the facility will be drawn
down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to
which relates.
Borrowings are removed from the balance sheet when
the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying
value of a financial liability that has been extinguished or
transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss as other income or
finance costs.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting
period.
23(s) Cost of sale of goods and cost of providing
services
Cost of sale of goods represents the cost of hardware
together with delivery cost supplied to customers.
Cost of providing services represents the cost of
providing professional services such as implementation,
configuration training and project management.
23(t) Borrowing costs
Borrowing costs are expensed in the period in which they
are incurred.
23(u) Provisions
A provision is recognised in the balance sheet when the
Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation.
If the effect is material, provisions are determined by
Year Ended 31 January 2022 92
discounting the expected future cash flows at a pre-tax
rate that reflects the current market assessment of the
time value of money and, where appropriate, the risks
specific to the liability.
23(v) Employment benefits
Short- term obligations
Liabilities for wages and salaries, including non-
monetary benefits, annual leave and accumulating sick
leave that are expected to settle within 12 months of the
end of the period in which the employees render the
related services are recognised in respect of employees’
services up to the end of the reporting period and are
measured at the amounts expected to be paid when
the liabilities are settled. The liabilities are presented
as current employee benefit obligations in the balance
sheet.
Post- employment obligations
Payments to defined contribution retirement benefit
schemes are recognised as an expense when
employees have rendered services entitling them to the
contributions. Payments to state-managed retirement
benefit schemes are dealt with as payments to defined
contribution schemes where the Group’s obligations
under the schemes are equivalent to those arising in a
defined contribution retirement benefit scheme. The
Group has no further payment obligations once the
contributions have been paid.
Share-based payments
Equity-settled share-based payments to employees and
others providing similar services are measured at the
fair value of the equity instruments at the grant date.
The fair value excludes the effect of non-market based
vesting conditions. Details regarding the determination
of the fair value of equity settled transactions are set out
in note 19.
Where share options are awarded to employees, the fair
value of the option is calculated at the date of grant and
is subsequently charged to the income statement over
the vesting period. Non-market vesting conditions are
taken into account by adjusting the number of equity
instruments expected to vest at the balance sheet date
so that, ultimately, the cumulative amount recognised
over the vesting period is based on the number of
options that eventually vest. Market vesting conditions
are factored into the fair value of the options granted.
As long as all other vesting conditions are satisfied,
a charge is made irrespective of whether the market
vesting conditions are satisfied. The cumulative expense
is not adjusted for failure to achieve a market vesting
condition.
Fair value is measured using an appropriate option
pricing model. The expected life used in the model has
been adjusted, based on management’s best estimate,
for the effects of non-transferability, exercise restrictions
and behavioural considerations.
Where equity instruments are granted to persons other
than employees, the consolidated income statement
is charged with the fair value of goods and services
received.
23(w) Contributed equity
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options
are shown in equity as a deduction net of tax from the
proceeds.
23(x) Dividends
Provision is made for the amount of any dividend
declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of
the reporting period but not distributed at the end of the
reporting period.
23(y) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to the owners of the Company,
excluding any costs of servicing equity other than
ordinary shares;
• by the weighted average number of ordinary shares
outstanding during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into
account:
• the after-tax effect of interest and other financing costs
associated with dilutive potential ordinary shares; and
• the weighted average number of additional ordinary
shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
23(z) Rounding of amounts
All amounts disclosed in the financial statements and notes
have been rounded off to the nearest thousand pounds
sterling unless otherwise stated.
24. CHANGE IN ACCOUNTING POLICIES
The Group changed its accounting policy for land
and buildings from being held at historical cost less
accumulated depreciation to a revaluation model. The
impact of the change can be seen in note 9a.
SmartSpace Software PLC Annual Report PA RENT COMPANY BALANC E S H EE T
Note
31 January 2022
31 January 2021
£’000
£’000
93
ASSETS
Non-current assets
Investments
Property, plant and equipment
Financial assets at amortised cost
Deferred tax assets
Total non-current assets
Current assets
Prepayments
Financial assets at amortised cost
Other receivables
Cash and cash equivalents
Total current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Other tax liabilities
Total current liabilities
Total liabilities
Net assets
EQUITY
Capital and reserves attributable to equity shareholders
Share capital
Share premium
Other reserves
Retained earnings
Total equity
2(b)
2(a)
1(a)
3
1(a)
1(a)
1(b)
4(a)
4(a)
4(b)
4(c)
3,646
2
10,504
1,304
15,456
45
-
-
1,640
1,685
17,141
364
10
374
374
3,567
10
9,385
791
13,753
30
328
1
3,781
4,140
17,893
184
72
256
256
16,767
17,637
2,894
3,839
1,898
8,136
2,826
3,830
1,677
9,304
16,767
17,637
The accompanying notes are an integral part of these financial statements.
As permitted by Section 408 of the Companies Act 2006 no separate Parent company profit and loss account has been
included in these financial statements. The Parent company loss for the period was £1,186,000 (2021: £1,261,000).
The financial statements were approved by the Board of Directors and authorised for issue on 17 May 2022.
They were signed on its behalf by:
Kristian Shaw
Chief Financial Officer
Company Number: 5332126
Year Ended 31 January 2022
94
PA RENT COMPANY STATEME NT
OF CHANGES IN EQUITY
Share
capital
Share
premium
Other Retained
earnings
reserves
At 31 January 2020
Loss for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Share based payment charge – continuing operations
Share based payment charge – discontinued operations
Share based payment charged to subsidiaries
At 31 January 2021
Loss for the year
Total comprehensive loss for the year
Transactions with owners in their capacity as owners:
Issue of ordinary shares as consideration for a
business combination
Issue of ordinary shares to option holders
Lapsed share options
Exchange differences
Share-based payment expense
Share-based payment intercompany charge to subsidiaries
£’000
2,826
-
-
-
-
-
Total
£’000
£’000
£’000
£’000
3,830
1,574
10,565
18,795
-
-
-
-
-
-
-
(1,261)
(1,261)
(1,261)
(1,261)
135
(47)
15
-
-
-
135
(47)
15
2,826
3,830
1,677
9,304
17,637
-
-
67
1
-
-
-
-
-
-
-
9
-
-
-
-
-
-
(1,186)
(1,186)
(1,186)
(1,186)
(67)
(3)
(15)
(4)
183
127
-
3
15
-
-
-
-
10
-
(4)
183
127
At 31 January 2022
2,894
3,839
1,898
8,136
16,767
The accompanying notes are an integral part of these financial statements.
SmartSpace Software PLC Annual Report
95
PA RENT COMPANY STATEME NT
OF CASH FLOWS
Cash flows from operating activities
Cash consumed in operations
Interest paid
Income tax paid
Net cash outflow from operating activities
Cash flows from investing activities
Payment for property, plant and equipment
Proceeds from disposal of subsidiary
Net cash generated from investing activities
Cash flows from financing activities
Proceeds from issues of share capital (net of issue costs)
Net cash used in financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
The accompanying notes are an integral part of these financial statements.
Note
Year ended
31 January 2022
Year ended
31 January 2021
£’000
£’000
5
(2,475)
(1,210)
(3)
-
(1)
(5)
(2,478)
(1,216)
-
327
327
10
10
(2,141)
3,781
1,640
(7)
4,366
4,359
-
-
3,143
638
3,781
Year Ended 31 January 2022
96
NOT ES TO THE PARENT COMPANY
FIN A NCIAL STATEMENTS
1. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
This note provides information about the Company’s financial instruments including:
• an overview of all financial instruments held by the Company;
• specific information about each type of financial instrument;
• accounting policies;
• information about determining the fair value of the instruments including judgements and estimation uncertainty
involved.
Financial assets
Financial assets at amortised cost
Cash and cash equivalents
31 January 2022
31 January 2021
£’000
10,504
1,640
12,144
£’000
9,714
3,781
13,495
Financial liabilities
31 January 2022
31 January 2021
Trade and other payables
£’000
364
364
£’000
184
184
The Company’s exposure to various risks associated with the financial instruments is discussed in note 7. The maximum
exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets
mentioned above.
1(a) Financial assets at amortised cost
Classifications of financial assets at amortised cost
The Company classifies its financial assets at amortised cost only if both the following criteria are met:
• the asset is held within a business whose objective is to collect the contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments of principal and interest.
Financial assets at amortised cost include the following debt investments:
Loans to subsidiary
Intercompany balances
Other financial assets at amortised cost
Other receivables
31 January 2022
Current Non-current
£’000
£’000
Total
£’000
31 January 2021
Current Non-current
£’000
£’000
Total
£’000
-
-
-
-
-
3,559
3,559
6,945
6,945
-
-
-
-
10,504
10,504
-
-
327
1
328
3,816
3,816
5,569
5,569
-
-
327
1
9,385
9,713
SmartSpace Software PLC Annual Report
Loans to subsidiary
In 2018 the Company issued a loan to its subsidiary
SmartSpace Software Limited. The loan is unsecured,
interest free and repayable at 90 days’ notice. The fair
value of the loan is the amortised cost.
As management do not intend to demand repayment
of the loan in the next year the loan has been classified
as non-current. Further information relating to loans to
related parties is set out in note 9.
Loans to subsidiaries are denominated in New Zealand
dollars. As a result, the Company has an exposure to
foreign currency risk when the loan is repaid.
Intercompany balances
The intercompany balances arise from goods and
services and funding provided to or from subsidiary
companies, are interest free and repayable on demand.
As management do not intend to demand repayment
of the intercompany balance in the next year the
balance has been classified as non-current. Fair value
of the intercompany balances is the amortised cost.
Other financial assets at amortised cost
These amounts generally arise from transactions
outside the usual operating activities of the Company
and include the contingent consideration on disposal
of subsidiaries.
1(b) Trade and other payables
Current liabilities
Trade payables
Payroll liabilities
Accrued expenses
Other payables
97
31 January 2022
31 January 2021
£’000
£’000
153
2
200
9
364
48
5
98
33
184
The carrying amounts of trade and other payables are considered to be the same as their fair values.
Year Ended 31 January 2022
98
2. NON-FINANCIAL ASSETS AND LIABILITIES
This note provides information about the Company’s non-financial assets and liabilities, including specific information
about each type of non-financial asset and non-financial liability and information about determining the fair value of assets
and liabilities including judgements and estimation uncertainty involved.
2(a) Property, plant and equipment
Office equipment
£’000
At 31 January 2020
Cost or fair value
Accumulated depreciation
Net book amount
Year ending 31 January 2021
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 31 January 2021
Cost or fair value
Accumulated depreciation
Net book amount
Year ending 31 January 2022
Opening net book amount
Additions
Disposals
Depreciation charge
Closing net book amount
At 31 January 2022
Cost or fair value
Accumulated depreciation
Net book amount
33
(17)
16
16
8
(2)
(12)
10
21
(11)
10
10
-
-
(8)
2
21
(19)
2
Depreciation is provided so as to write off the cost or valuation of assets less their estimated residual values over their
expected useful economic lives using the straight-line method on the following bases
• Office equipment
3-4 years
SmartSpace Software PLC Annual Report
2(b) Investment in subsidiaries
Shares in group undertakings
Balance at 1 February
Equity contribution to SwipedOn Limited
Disposal of SmartSpace Global Limited
Balance at 31 January
99
31 January 2022
31 January 2021
£’000
£’000
3,567
79
-
3,646
4,894
-
(1,327)
3,567
Investments in subsidiaries are recorded at cost, which is the fair value of the consideration paid. Details of subsidiary
undertakings can be seen in note 15 of the Group financial statements.
3. DEFERRED TAX
Deferred tax assets
The balance comprises temporary differences attributable to:
Tax losses
General provisions
Accelerated tax allowances
Share based payments
Deferred tax assets
31 January 2022
31 January 2021
£’000
£’000
1,300
2
2
-
1,304
721
-
-
70
791
The Company has concluded that deferred tax assets relating to carried forward tax losses will be recoverable against
future earnings through the use of UK corporation tax group relief provisions.
Movements
At 31 January 2020
Charged to profit and loss
At 31 January 2021
Charged to profit and loss
At 31 January 2022
Share
based
payments
General
provisions
Accelerated
tax
allowances
£’000
£’000
£’000
45
25
70
(70)
-
-
-
-
2
2
-
-
-
2
2
Tax
losses
£’000
Total
£’000
1,022
1,067
(301)
(276)
721
579
791
513
1,300
1,304
4. EQUITY
4(a) Share capital and share premium
Allotted, called up and fully paid:
31 January 2022
31 January 2021 31 January 2022
31 January 2021
Number
Number
£’000
£’000
Ordinary shares of 10p each
28,941,234
28,255,823
2,894
2,826
Year Ended 31 January 2022
100
Movement in ordinary shares
Shares issued
Share
capital
Share Merger
premium Reserve
Total
Number
Price (p)
£’000
£’000
£’000
£’000
At 31 January 2020
At 31 January 2021
28,255,823
28,255,823
Shares issued for deferred acquisition
consideration
675,411
72.5
Shares issued for share option exercise
10,000
101.25
2,826
2,826
67
1
3,830
3,830
844
7,500
844
7,500
-
9
422
-
489
10
At 31 January 2022
28,941,234
2,894
3,839
1,266
7,999
Full details of the ordinary shares including movements during the current and prior years, are included in note 10(a) to
the consolidated accounts.
4(b) Other reserves
Acquisition deferred
consideration reserve
Share option
reserves
Total other
reserves
Merger
reserve
£’000
844
-
-
844
£’000
489
-
-
489
£’000
241
135
(32)
344
(489)
422
-
-
-
-
-
-
-
-
-
-
-
-
1,266
(3)
(15)
(4)
127
183
632
£’000
1,574
135
(32)
1,677
(67)
(3)
(15)
(4)
127
183
1,898
At 31 January 2020
Transactions with owners in their capacity as owners:
Share-based payment expense
Share-based payment expense – discontinued operations
At 31 January 2021
Transactions with owners in their capacity as owners:
Issue of ordinary shares as consideration for a
business combination
Issue of ordinary shares to option holders
Lapsed share options
Exchange differences
Share-based payment to subsidiaries
Share-based payment expense
At 31 January 2022
Nature and purpose of other reserves
The merger reserve is used when a share issue is undertaken and merger relief is available. The conditions for merger relief
are when the consideration for shares in another company includes issued shares of the acquirer and on completion of the
transaction, the Company issuing the shares will have secured at least 90% equity holding in the acquiree.
The acquisition deferred consideration reserve relates to deferred share consideration for the acquisition of subsidiaries.
The share-based payments reserve is used to recognise the grant date fair value of options issued to employees but not
exercised.
SmartSpace Software PLC Annual Report
4(c) Retained earnings
The movements in retained earnings were as follows:
Balance at 1 February
Net loss for the period
Lapsed share options
Issue of ordinary shares to option holders
Balance at 31 January
5. CASH FLOW INFORMATION
5(a) Cash generated from operations
Loss before income tax
Adjustments for:
Depreciation
Non-cash employee benefit expense – share-based payments
Credit loss
Gain on disposal of subsidiary
Gain on sale of non-current assets
Finance costs - net
Change in operating assets and liabilities:
Movement in financial assets at amortised cost
Movement in other operating assets
Movement in trade payables
Movement in other operating liabilities
Cash used in operations
101
31 January 2022
31 January 2021
£’000
9,304
(1,186)
15
3
£’000
10,565
(1,261)
-
-
8,136
9,304
Year ended
31 January 2022
Year ended
31 January 2021
£’000
(1,699)
£’000
(979)
8
161
18
-
-
3
1
(15)
106
(1,058)
(2,475)
12
103
54
291
2
1
29
22
(5)
(740)
(1,210)
5(b) Net cash reconciliation
The Company does not have any debt therefore net cash is comprised of cash and cash equivalents only.
Year Ended 31 January 2022
102
6. EMPLOYEE AND DIRECTOR INFORMATION
6(a) Employee and director benefits expense
Wages and salaries
Termination benefits
Share based payments
Social security costs
Pension costs
Total remuneration
6(b) Average number of people employed
Administration
Total employees
Year ended
31 January 2022
Year ended
31 January 2021
£’000
657
40
183
69
13
962
£’000
649
-
80
83
22
834
Year ended
31 January 2022
Year ended
31 January 2021
No.
3
3
No.
4
4
Details of directors’ remuneration including the highest paid director are provided in the Directors’ remuneration report on
page 28.
7. FINANCIAL RISK MANAGEMENT
The Company’s exposure to financial risks is managed as part of the Group. Full details about how the Group’s exposure
to financial risks and how these risks could affect the Group’s future financial performance are given in note 13 to the
consolidated financial statements. Information specific to the Company is given below.
7(a) Credit risk
Credit risk arises from cash balances and contractual cash flows of debt investments and other receivables carried at
amortised cost.
Risk management
Credit risk is managed on a Group basis. For banks and institutions only independently rated parties with a minimum
rating of ‘A’ are accepted.
Impairment of loan to subsidiary
The loan to subsidiary is unsecured, interest free and repayable on demand after 3 months notice. The loan is denominated
in New Zealand dollars and therefore subject to currency fluctuations. As the subsidiary is not expected to be able to
repay on such a demand, other recovery strategies such as payment over time are considered. After taking into account
these recovery strategies and possible non-recovery scenarios management have concluded the expected credit losses
are not material.
Balances due from related companies
The Company provides funding to its subsidiaries through short term intercompany receivables. The loans are unsecured,
interest free and repayable on demand. Where liquid assets are not immediately available to repay the full amount due,
management consider other recovery strategies including payment over time through cash generated from operations.
After taking into account these recovery strategies and possible non-recovery scenarios management have concluded
the expected credit losses are not material. However an impairment of £18,000 was recorded against a short term
intercompany receivable due from Smartspace Software Pty Limited which is not expected to be repaid.
SmartSpace Software PLC Annual Report
103
7(b) Liquidity risk
Management monitors rolling forecasts of the Company’s cash balance on the basis of expected cash flows.
Maturity of financial liabilities
The tables below analyse the Company’s financial liabilities into relevant maturity groups based on their contractual
maturities.
The amounts disclosed in the tables are the contractual undiscounted cash flows. Balances due within 12 months equal
their carrying balances as the impact of discounting is not significant.
Contractual maturity
of financial liabilities
At 31 January 2022
Trade and other payables
Total
Contractual maturity
of financial liabilities
At 31 January 2021
Trade and other payables
Total
Less than
6 months
£’000
364
364
Less than
6 months
£’000
153
153
6-12
months
£’000
-
-
6-12
months
£’000
31
31
Total
£’000
364
364
Total
£’000
184
184
Carrying
amount
£’000
364
364
Carrying
amount
£’000
184
184
8. CAPITAL MANAGEMENT
The capital of the Company is managed as part of the capital of the Group as a whole. Full details are contained in note 13
to the consolidated financial statements.
9. RELATED PARTY TRANSACTIONS
9(a) Outstanding balances arising from sales and purchases of goods and services
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
Receivables
Subsidiary undertakings
9(b) Loans to subsidiary undertaking
Loan to subsidiaries
At 1 February 2021
Impact of foreign currency exchange rate movement
At 31 January 2022
31 January 2022
31 January 2021
£’000
£’000
6,945
5,569
31 January 2022
SmartSpace
Software Ltd
£’000
3,816
(257)
3,559
Total
£’000
3,816
(257)
3,559
Year Ended 31 January 2022
104
Loan to subsidiaries
At 1 February 2020
Repayments
Withholding tax incurred
Interest charged
Impact of foreign currency exchange rate movement
At 31 January 2021
No loss allowance was recognised in expense.
9(d) Terms and conditions
31 January 2021
SmartSpace
Software Pty
SmartSpace
Software Ltd
£’000
£’000
2,484
(2,879)
-
101
294
-
3,576
-
(5)
-
245
3,816
Total
£’000
6,060
(2,879)
(5)
101
539
3,816
The loan to SmartSpace Software Limited is unsecured, repayable at 90 days’ notice, and interest free.
9(e) Transactions with subsidiaries
The charge to the subsidiaries for share-based payment was £127,000 (2021: £15,000).
10. INFORMATION INCLUDED IN THE NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
Some of the information included in the notes to the consolidated financial statements is directly relevant to the financial
statements of the Company. Please see the following:
Note 15
Note 17
Note 18(b)
-
-
-
Interest in other entities
Events occurring after the end of the reporting period
Related party transactions: Key management personnel
Note 18(c)
-
Related party transactions: Directors
Note 19
Note 22
-
-
Share based payments
Auditors’ remuneration
11. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements to
the extent they have not already been disclosed in the other notes above. These policies have been consistently applied to
all the years presented, unless otherwise stated.
11(a) Basis of preparation
Compliance with IFRS
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-
adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement
Board. SmartSpace Software plc transitioned to UK-adopted International Accounting Standards in its financial
statements on 1 February 2021. This change constitutes a change in accounting framework. However, there is no impact on
recognition, measurement or disclosure in the period reported as a result of the change in framework.
SmartSpace Software PLC Annual Report
Historical cost convention
11(d) Income tax
105
The income tax expense or credit for the period is the tax
payable on the current period’s taxable income based on
the applicable income tax rate for the jurisdiction adjusted
by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of
the tax laws enacted or substantively enacted at the end
of the reporting period in the UK. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to
interpretation. It established provisions where appropriate
on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts
in the financial statements. Deferred income tax is also
not accounted for if it arises from the initial recognition of
an asset or liability in a transaction other than a business
combination that at the time of the transaction, affects
neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that
have been enacted or substantively enacted by the end of
the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised only if it is probable
that future taxable amounts will be available to utilise those
temporary losses.
The financial statements have been prepared under
the historical cost convention except for contingent
consideration payable which is measured at fair value.
Standards and interpretations not yet applied by the
Company
Certain new accounting standards and interpretations
have been published that are not mandatory for the year
end 31 January 2022 and have not been early adopted
by the Company. None of these are expected to have a
material impact on the Company in the current or future
reporting periods and on foreseeable future transactions.
Standards and interpretations adopted in the year had no
significant impact (See note 23(a) of the Group financial
statements).
Going concern
The ability of the Parent Company to continue as a going
concern is contingent upon the ongoing viability of the
Group. The financial statements for the Group and the
Parent Company are prepared on a going concern basis
notwithstanding that the Group has reported an operating
loss of £3,653,000 for the year to 31 January 2022 (2021:
£2,717,000 loss), and cash consumed by operations of
£1,614,000 (2021: £1,639,000).
At 31 January 2022 the Group had £2.76m of gross
cash, three operating segments and a central overhead
to support. Cash forecasts for each segment and the
consolidated group have been prepared for a period of
twelve months from the date of signing the balance sheet.
These forecasts have been stress tested to take into
account varying degrees of reductions in customer
purchases and subscriptions, delays in product launches
and new sales wins, and extended customer payment
days.
On the basis of this review, the Directors believe that the
Group and the Parent Company will continue to operate
within the resources currently available to it over the
forecast period.
Based on the above, the Directors believe it remains
appropriate to prepare the Group and Parent company
Financial statements on the going concern basis.
11(b) Investment in subsidiaries
Investment in subsidiaries are held at cost less accumulated
impairment losses.
11(c) Functional and presentation currency
The financial statements are prepared in pounds sterling
which is the Company’s functional and presentation
currency. All transactions undertaken by the Company
are denominated in pounds sterling other than the loan
to SmartSpace Software Limited which is denominated in
New Zealand dollars.
Year Ended 31 January 2022 106
Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and liabilities
are offset where the entity has a legally enforceable right to
offset and intends to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
11(e) Cash and cash equivalents
For the purpose of presentation in the statement of cash
flows, cash and short term equivalents includes cash
on hand, deposit held at call with financial institutions,
other short-term, highly liquid investments with original
maturities of three months that are readily convertible
to known amounts of cash and which are subject to an
insignificant risk of changes in value.
11(f) Financial assets
Classification
The Company classifies its financial assets in the following
measurement categories:
• those to be measured subsequently at fair value (either
through other comprehensive income or through profit
or loss)
• those to be measured at amortised cost.
The classification depends on the entity’s business model
for managing the financial assets and the contractual terms
of the cash flows.
For assets measured at fair value, gains and losses will be
recorded either in profit or loss or in other comprehensive
income.
Measurement
At initial recognition the Company measures a financial
asset at its fair value plus in the case of a financial asset
not at fair value through profit or loss (FVPL), transaction
costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried
at FVPL are expensed in profit or loss.
Impairment
The Company assesses, on a forward-looking basis, the
expected credit losses associated with its financial assets
carried at amortised cost. The impairment methodology
applied depends on whether there has been a significant
increase in credit risk.
11(g) Property, plant and equipment
Property, plant and equipment is stated at historical cost
less depreciation. Historical cost includes expenditure that
is directly attributable of the acquisition of the items.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company and the
cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate
asset is derecognised when replaced. All other repairs
and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
The depreciation methods and periods used by the
Company are disclosed in note 2(a).
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period.
The carrying value is assessed annually and any impairment
is charged to the income statement.
Gains or losses on disposals are determined by comparing
proceeds with carrying amount. These are included in profit
or loss.
SmartSpace Software PLC Annual Report 107
An item of property or plant is derecognised upon disposal
or when no future economic benefits are expected to arise
from the continued use of the asset. The gain or loss arising
on the disposal or scrappage of an asset is determined as
the difference between sales proceeds and the carrying
value of the asset and is recognised in income.
11(h) Trade and other payables
These amounts represent liabilities for goods and services
provided to the Company prior to the end of the financial
year which are unpaid. The amounts are unsecured and are
usually paid within 30 days of recognition. Trade and other
payables are presented as current liabilities unless payment
is not due within 12 months after the reporting period. They
are recognised initially at their fair value and subsequently
measured as amortised cost using the effective interest
method.
11(i) Employment benefits
Short- term obligations
Liabilities for wages and salaries, including non-monetary
benefits, annual leave and accumulating sick leave that
are expected to settle within 12 months of the end of the
period in which the employees render the related services
are recognised in respect of employees’ services up to
the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are
settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
the vesting period is based on the number of options that
eventually vest. Market vesting conditions are factored
into the fair value of the options granted. As long as all
other vesting conditions are satisfied, a charge is made
irrespective of whether the market vesting conditions are
satisfied. The cumulative expense is not adjusted for failure
to achieve a market vesting condition.
Fair value is measured using an appropriate option pricing
model. The expected life used in the model has been
adjusted, based on management’s best estimate, for the
effects of non-transferability, exercise restrictions and
behavioural considerations.
Where equity instruments are granted to persons other
than employees, the consolidated income statement is
charged with the fair value of goods and services received.
11(j) Contributed equity
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options
are shown in equity as a deduction net of tax from the
proceeds.
11(k) Dividends
Provision is made for the amount of any dividend
declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of
the reporting period but not distributed at the end of the
reporting period.
Post- employment obligations
11(l) Rounding of amounts
All amounts disclosed in the financial statements and notes
have been rounded off to the nearest thousand pounds
sterling unless otherwise stated.
12. EVENTS OCCURRING AFTER THE END OF
THE REPORTING PERIOD
See note 17 of the Group financial statements for events
occurring after the end of the reporting period.
13. CHANGE IN ACCOUNTING POLICIES
There are no changes to report.
Payments to defined contribution retirement benefit
schemes are recognised as an expense when employees
have rendered services entitling them to the contributions.
Payments to state-managed retirement benefit schemes
are dealt with as payments to defined contribution
schemes where the Company’s obligations under the
schemes are equivalent to those arising in a defined
contribution retirement benefit scheme. The Company has
no further payment obligations once the contributions have
been paid.
Share-based payments
Equity-settled share-based payments to employees and
other providing similar services are measured at the fair
value of the equity instruments at the grant date. The fair
value excludes the effect of non-market based vesting
conditions. Details regarding the determination of the fair
value of equity settled transactions are set out in note 19 to
the consolidated financial statements.
Where share options are awarded to employees, the fair
value of the option is calculated at the date of grant and
is subsequently charged to the income statement over
the vesting period. Non-market vesting conditions are
taken into account by adjusting the number of equity
instruments expected to vest at the balance sheet date so
that, ultimately, the cumulative amount recognised over
Year Ended 31 January 2022 108
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SmartSpace Software PLC Annual Report