Registered Number SC005543
Annual report and financial statements
for the year ended 31 December 2024
Annual report and financial statements
for the year ended 31 December 2024
Contents
Chairman's statement ........................................................................................................................................... 1
Strategic report ..................................................................................................................................................... 7
Statement of corporate governance………………………………………………………………………………………………………………23
Audit committee report………………………………………………………………………………………………………….……………………..27
Remuneration report……………………………………………………………………………………………………………………………………..28
Directors’ report ................................................................................................................................................. 29
Statement of directors' responsibilities in respect of the financial statements ................................................. 34
Independent auditors’ report to the members of Touchstar plc ....................................................................... 36
Consolidated income statement ......................................................................................................................... 41
Consolidated statement of changes in equity .................................................................................................... 42
Company statement of change in equity ............................................................................................................ 43
Consolidated and Company statement of financial position .............................................................................. 44
Consolidated and Company cash flow statements ............................................................................................. 46
Notes to the Group financial statements ........................................................................................................... 47
Group Information…………………………………………………………………………………………………………………..……...…………...81
1
Chairman’s statement for the year ended 31 December 2024
The year 2024 presented challenges for our business. The delay of a major order adversely affected our financial
performance and undermined the credibility we had established in meeting expectations. In response, we
conducted a thorough internal review, scrutinised our strategy, and rigorously examined all facets of our
operations. Although this process was difficult, we learned valuable lessons and took decisive action to address
the issues.
We have now set our sights on creating a stronger business, built upon the solid foundation we have created.
Focus is on becoming more significant, this will not happen overnight, and we are working to a 3-5-year
timeframe. Confident that we have the capability and capacity to succeed, along with the ability and cash
available, we are now ensuring the investment is made to enable this potential to be realised. 2025 will be a
year of internal transition as we build that growth engine. We have entered a phase that will require higher
levels of investment and may erode short term profits.
Significant changes are being made to the organisation, with opportunities to grow within the UK and overseas,
enhance market position, cross -sell to the customer base, and enter new industry sectors.
The future is exciting and all at Touchstar are committed to deliver on this ambition.
Overview of 2024
We began 2024 with optimism, but the year was ultimately defined by two key events. Firstly, the Board
initiated a strategic review of the business to evaluate value creation for shareholders. Secondly, the
rescheduling of a major contract's delivery date from 2024 to this year had adverse effects on our short-term
financial performance and credibility. This occurred amidst a general pause and caution following the UK
general election and change of government.
Strategic review process and conclusion
In the first nine months of 2024, the Company received two unsolicited approaches that ultimately did not
progress. The Board subsequently determined that a strategic review, to formally and openly explore the
Company's options, was in the best interest of shareholders.
Therefore, the Board conducted a strategic review of the Company to identify the path for future growth and
value creation for its Shareholders. This was undertaken in a professional, open and friendly manner – with
three stated objectives. To achieve the right valuation for shareholders, find the best environment for the
business to succeed and increase opportunity for our employees.
The strategic review considered various options, including a potential sale of the Company, its assets and other
relevant transactions. Although we worked actively with potential parties no indicative offer was deemed
satisfactory, not helped by the prior mentioned order moving between financial years.
Through the process several lessons were learnt that were consistent.
•
Business and technology highly rated
•
Fuel distribution seen as “jewel in the crown”
•
Large potential in taking fuel sector expertise overseas
•
With the right partner and resources, organic growth rate could be accelerated
•
Cash valued less than £1 for a £1
•
Issues around cost and transition to a new management team
2
Chairman’s statement for the year ended 31 December 2024
(continued)
Changes flowing from strategic review
Following from the strategic review the Board has worked on a road map, the objective of which is to accelerate
to the next stage of development, increase the underlying value of the business and enhance returns to
shareholders.
The four drivers of the plan are to:
1. increase the rate of organic growth - through further investment in the fuel delivery business in overseas
markets as well as building on the ability of the Group's technology platform and solutions to be applied
in a wider range of vertical sectors.
Particular areas of focus will be:
Industrial chemicals and gases projects identified and actively pursued
•
Success in BIOMASS market being built upon
•
Clear and concise strategy to expand European fuel sector penetration
•
Renewed momentum to continue diversification into non petrochemical market, expanding on the 20
plus customer’s already won
•
Targeting the Warehouse sector as Group offers a full end to end solution
•
Selling more services and solutions into our installed base – ACT now selling fire and security as well
as access control
•
Investment being increased into the products to ensure technology matches the potential of the
business
To support these initiatives there will be additional recruitment to the sales team, greater engagement at
trade shows and a revamping of the website.
2. make changes the management team - to facilitate the next stage of the Group’s development.
Management changes have already been implemented with Lynden Jones joining the Board and
designated to succeed Mark Hardy as CEO with effect from 1 July 2025.
Lynden has been with the Company for over 14 years. He rose to Managing Director of our Access Control
business (“ATC”), successfully enhanced customer experience and improved operational efficiency and
profitability. Under his leadership ATC has been transformed. Revenue has grown 29% over the last two
years, it has gained access to new and exciting sectors and the financial performance further improved by
a move to a SAAS/ recurring revenue driven model. Skills he will now bring to the wider business.
3. increase the Group’s marketing and promotional activities - the Company is undertaking several steps
aimed at enhancing the Group’s profile. This will include an increase news flow with both trade and
investors and greater engagement with retail investor both via webinars and in person
4.
utilisation of surplus cash - under current expectations the company has surplus cash over and above the
requirements of the business
The cash management strategy will operate to the following guidelines:
•
the Company will retain a strong balance sheet with no borrowings
•
cash generation will first be applied to growth initiatives
•
the Company’s dividend policy will remain progressive
•
share buybacks will resume.
3
Chairman’s statement for the year ended 31 December 2024
(continued)
Dividend and resumption of share buybacks
The Board recommends a final ordinary dividend of 1.5p per share (FY23: 1.5p). Together with the interim
dividend of 1.5p (FY23: 1.0p) paid in November 2024, this makes a total ordinary dividend for the year of 3.0p
(FY23: 2.5p).
Subject to the approval of shareholders at the Annual General Meeting, the final ordinary dividend of 1.5p per
share will be paid on 12 August 2025 to shareholders on the register on 25 July 2025. The ex-dividend date will
be 24 July 2025.
The Company intends to resume purchasing its own shares. We believe up to £1.0m could be applied for share
buybacks in the next year although the exact level will be dependent upon availability of shares and the price.
The maximum price payable must not exceed 105% of the average of the closing middle market price per
ordinary share for the previous five days.
People
Over the last few years, the substantial progress of the business has been built upon the dedication and skills
of our people. Throughout the strategic review process this again shone through with all involved impressing
with their passion, understanding of the customer’s needs, the dynamics of the marketplace and pride in our
technology. I feel humbled to work with such a group.
I would personally like to thank Mark Hardy, who is stepping down in July 2025. I have worked alongside Mark
for many years, as we first stabilised a faltering company, from which we created a platform for the future – in
both the good and the difficult times it has been an adventure and pleasure.
CEO – Mark Hardy comments on business review
“In 2024, the Group operated profitably, we believe the systems supplied have effectively enhanced our
customers’ services to their clients. The Group faced a 4.6% decline in turnover, primarily due to timing factors
on a large order and a general downturn in the marketplace. The Company witnessed elements of cautiousness
in the marketplace, following the change in government.
Whilst our turnover was down on 2023, we experienced a slight improvement on margin increasing to 60.2%
(2023: 59.3%). One of our fundamental KPIs for the business is to maintain and build the annual recurring
revenue with licence and support fees. This continued in an upward trend and our contracted recurring
revenue increased to £3,051,000 (2023: £2,921,000).
The marketplace remains in good shape emphasising our product relevance to industry. Both order intake and
the order bank improved on the previous year. Order intake for 2024 amounted to £4,867,000 compared to
£3,850,500 in 2023. The order book on 31 December 2024 was nearly double last year at £1,270,000 (2023:
£694,000). We continue to invest in our products with 2024 investment reaching £978,000 (2023: £972,000).
Product development is expected to be at a similar level this year.
The business has strengthened during the year, particularly with the employees and the positive contribution
they all make to the business. We have been successful in recruiting and retaining good quality people with a
‘can do’ attitude. This results in an extremely effective business, and we have enjoyed securing a number of
new customers, adding to the already healthy blue chip customer base.”
4
Chairman’s statement for the year ended 31 December 2024
(continued)
CEO designate Lynden Jones – introduction, impressions, potential and actions
“Since joining the Touchstar Group, I have gained valuable insights into the broader organisation through the
merger of various businesses. This process has enabled me to help ensure that we maintain high standards
across systems, processes, and workflows. I’m particularly excited about the opportunities for further growth
that lie ahead. One of the most significant areas of potential is the ability to cross-sell across our divisional
customer bases. I see this as a critical strategic approach, and I am fully committed to supporting and guiding
this effort to drive mutual growth.
By understanding the full breadth of the team, I am well-positioned to lead and support this divisional growth.
Energising our staff and fuelling their passion for this collective vision will be a key factor in our success. As we
continue to grow and strengthen the business, our cohesive approach will not only make us more valuable to
our customers but will also enhance the integration of our services.
Offering a comprehensive end-to-end package to both existing and new customers is the next step in advancing
our position in the UK market. While focusing on growing our UK market share, I recognise the importance of
expanding into new verticals and geographical locations. This will secure the long-term future and sustainability
of the Group.
However, I also understand that such growth requires time and investment. The strength and expansion of the
UK market will be the foundation that allows us to strategically plan and invest in new products, locations, and
partnerships. This next chapter is crucial to the continued evolution of the Group and to ensuring its long-term
success.”
Financial review
Regrettably, 2024 did not mark another year of forward progression in our financial performance. As always,
we maintained strict controls over the cost base and achieved improved margins, however the decline in
revenue impacted short term profitability.
FY24
FY23
Variance
Revenue
£6,893,000
£7,224,000
(4.6%)
Operating profit
£322,000
£599,000
(46.2%)
Interest and finance costs
£66,000
£76,000
(£10,000)
Adjusted profit before tax*
£445,000
£675,000
(34%)
Profit before tax
£388,000
£675,000
(42.5%)
Tax
(£22,000)
(£36,000)
+£14,000
Profit after tax
£366,000
£639,000
(42.7%)
Basic earnings per share
4.47p
7.63p
(41.4%)
Dividend per share
3.0p
2.5p
20%
*Excludes net exceptional costs of £57,000 (Cost of the strategic review amounted to £77,500 less the release
of £20,500 historical exceptional liability)
5
Chairman’s statement for the year ended 31 December 2024
(continued)
Revenue decreased by 4.6% to £6,893,000 (FY23: £7,224,000). The decline was predominately due to a large
petrochemical distribution installation being delayed from Q4 2024 to 2025. Although, it is worth noting that
there appeared to be a decline in market activity around the time of the UK election.
Growth in recurring revenue, as expected, continued rising by 4.5% in FY24 to £3,051,000 (FY23:
£2,921,000). For 2024 recurring revenue represented 44% of total sales (FY23: 40%). The business strategy is
to continue to build the level of recurring revenues in both absolute terms and in relation to total sales.
Gross margins improved slightly by 90 basis points and maintained a healthy level at 60.2% (FY23: 59.3%).
We expect margins to trend upward as recurring revenue increases as a proportion of total revenue albeit
margins can show short-term volatility quarter by quarter.
Administrative overheads were tightly controlled at £3,785,000 (FY23:£3,637,000); however, the 4.1% increase
reflects the rising costs of doing business, inflationary pressures, and proactive measures, such as salary
adjustments.
The business is highly sensitive to changes in revenue and profitability was negatively impacted by the 4.5%
decline in revenues which resulted in a 42.5% reduction in profits in FY24 to £388,000 (FY23: £675,000).
The tax charge reduced to £22,000 (FY23: £36,000) and FY24 post-tax profits declined by 42.7% to £366,000
(FY23: £639,000).
Earnings per share showed a similar trend and fell by 41.4% to 4.47p in FY24 (FY23: 7.63p). The Company
suspended the buyback programme during the strategic review period and bought no shares in 2024 (FY23:
275,000) at a total cost of £252,000 (average cost per share of 91p). The total number of shares with voting
rights are 8,200,277 (FY23: 8,200,277).
Adjusted EBITDA* declined at a lower rate than profitability by 13.5% in 2024 at £1,156,000 (FY23: £1,336,000).
*Excludes net exceptional costs of £57,000 (cost of the strategic review amounted to £77,500 less the release
of £20,500 historical exceptional liability)
FY24
FY23
Change
Operating profit before interest and tax
£322,000
£599,000
(46.2%)
Amortisation
£534,000
£532,000
+0.4%
Depreciation - owned assets
£47,000
£46,000
+0.2%
Depreciation - leased assets
£196,000
£159,000
+23.2%
EBITDA
£1,099,000
£1,336,000
Exceptional costs*
£57,000
£nil
Adjusted EBITDA
£1,156,000
£1,336,000
(13.5%)
Spend on Research and Development (R&D)
£978,000
£972,000
+0.6%
R & D Capitalisation
£684,000
£583,000
+17.5%
6
Chairman’s statement for the year ended 31 December 2024
(continued)
Amortisation and depreciation release in 2024 remained at similar levels to 2023. CAPEX spending on R & D is
expected to increase again but not to return to FY18 levels of £929,000.
FY24
FY23
Change
Cash
£2,918,000
£3,005,000
(£87,000)
Cash per Share
34.4p
36.6p
(2.2p)
Cash applied to dividends and buy-backs
£246,000
£334,000
(£88,000)
The balance sheet remains strong. Cash and cash per share at year end were lower than the prior year due to
lower profitability and the cost of the dividends paid rising from £82,000 in FY23 to £246,000 in FY24.
The order book, which we report inclusive of recurring revenues due in the forthcoming year, stood at
£4,038,000 at the year-end (FY23: £3,611,000). This is made up of contracted recurring revenue due of
£3,051,000 (FY23: £2,917,000) and new orders of £987,000 (FY23: £422,000). We noticed that customers
paused placing orders around the time of the UK election but seem to now have normalised behaviour.
Current trading and outlook
Whilst Touchstar made progress in 2024 and demonstrated its ability to respond to short term upset, the slower
market conditions of the second half of the year meant that the year did not go as we had hoped. The strategic
review has highlighted the way forward and we have a plan. Implementation of the plan and the Company's
robust financial health will put us in a good position to deliver long-term profitable growth, whilst navigating
near-term developments in market conditions. 2025 will be a transitional year as we invest and adapt to a
platform that can deliver higher rates of growth, enabling the business to be scaled. This requires a higher level
of investment across the organisation. This has begun and while it may affect short term performance, the
Board remains confident in the business and excited by our future.
We are confident that we can manage inflationary headwinds, trade uncertainty and return to delivery of
financial progress in 2025. The financial results are budgeted to be second half weighted due the timing of
installation of the larger projects.
The broader market and sector within which we operate started the year relatively stable, although it should
be noted we sense a general increasing mood of uncertainty and anxiety in the business community. We
entered 2025 better placed than the prior year, with a higher order book and a strong pipeline of opportunity,
although there is much to be done as we pursue more ambitious plans. I have confidence in our people's ability
to unlock this potential and deliver higher returns for shareholders.
I Martin
Chairman
28 April 2025
7
Strategic report for the year ended 31 December 2024
Business review and principal activities
The Group supplies, installs and maintains licenced software applications and hardware solutions for mobile
applications in the transport, logistics and access control industries. We continue to develop and enhance the
Group’s product portfolio and whilst we supply our core and the more traditional product set, the new
complete solutions allow for increased revenues, greater business stability and profitability for the future.
The Group operates under the Touchstar brand providing consistent brand awareness of the operating
companies. This approach has been successful in promoting a cohesive and singular business details for which
can be accessed under one web site: www.touchstar.co.uk.
2024 results and achievements
In 2024 the company performed solidly with new and existing customer sales. The company operated
profitably, and the systems supplied have been effectively enhanced our customers’ services to their clients.
Whilst our turnover was slightly down on 2023, we experienced a slight improvement on margin increasing to
60.2% (2023: 59.3%). One of our fundamental KPIs for the business is to maintain and build the annual
recurring revenue with licence and support fees. This continued in an upward trend and our contracted
recurring revenue increased to £3,051,000 (2023: £2,920,600).
Both order intake and the order bank improved on the previous year. Order intake for 2024 amounted to
£4,867,000 compared to £3,850,500 in 2023. The Order book on 31 December 2024 was £1,270,000 (2023:
£694,000). We continue to invest in our products with 2024 investment reaching £684,000 (2023: £583,000).
The business has strengthened during the year, particularly with the employees and the positive contribution
they all make to the business. We have been successful in recruiting and retaining good quality people with a
‘can do’ attitude. This results in an extremely effective business and we have enjoyed securing a number of
new customers, adding to the already healthy blue chip customer base.
Financial performance
In 2024, the Group faced a 4.6% decline in turnover, primarily due to timing factors and a general downturn
in the marketplace. The company witnessed elements of cautiousness in the marketplace, following the
change in government. While caution persists, this report outlines the strategic measures we are
implementing to effectively navigate the market environment and steer the Group back toward a growth
trajectory. With employment costs contributing to around 60% of the total costs of the Group, pressures to
increase salaries to recruit and retain talent to support growth plans is the most significant reason behind the
increase in overall costs of £148,000.
Although operating profit reduced from £599,000 in 2023 to £322,000 in 2024, a fall of 46.2%, the reduction
in EBITDA was at a lower rate of 13.5% reducing from £1,336,000 in 2023 to £1,156,000 (before exceptional
costs) in 2024. This was also evident in the slight decrease of £87,000 in cash held at the 31 December 2024
(2023: £471,000).
8
Strategic report for the year ended 31 December 2024 (continued)
Market Analysis
•
Economic Factors: The economic slowdown during the year did have an impact on our 2024
outcome, with order conversion rate being the key factor. Frustrating, but the strong recurring
revenue within the business provides a healthy stable platform to navigate economic
fluctuations of this nature.
•
Industry Trends: As in all technology sectors rapid technological advancements are always
evident. This can provide challenges but also opportunity for increased speeds of product
development. The adoption of AI in assisting software development is beginning to yield
measurable benefits for the business. The global trend to off premise (cloud hosted) applications
has led to increased activity in cyber crime and as such Touchstar invested and achieved ‘cyber
essentials plus’ an accreditation in cyber-attack protection to give customer piece of mind.
•
Competitive Landscape: Largely unchanged on previous years. Touchstar do not win every
deal, but our new customers for the year emphasise the strength of the business and the team
within. Customer service is key to the success of this business and during 2024 we strengthened
our technical support team in addition to the recruitment of additional software engineers. This
makes us a compelling business in the sectors in which we operate – and we believe far better
than any of our competitors.
Future Outlook
Touchstar anticipate a recovery in turnover with a projected growth of 20.4% in the next financial year,
driven by increased marketing activity, product innovation and a growing strength of presence of our
company in the markets we serve.
The product set is continually evolving and increasing its relevance in the marketplace. As a self-sufficient
company, much of the products supplied (the exception being made up with 3rd party elements of hardware)
is the Intellectual Property Rights of Touchstar. This provides strong stability and avoids potential conflict
with 3rd party agreements.
The Group is committed to growing the annual contracted recurring revenue line. In 2024 the recurring
revenue exceeded £3 million and represented 44% of the company turnover. This again, provides strength
for the strong continuance of the business.
9
Strategic report for the year ended 31 December 2024 (continued)
Recurring Revenue
Recurring revenue has evolved into the valuable asset we always envisioned. In 2024, total recurring revenue
surpassed £3 million, marking a continued and positive trend. This achievement is significantly enhancing
both the performance and the underlying value of the business. Recurring revenue accounted for 44% of the
Group's turnover during the year.
While the Group achieved a 4.5% increase in total recurring revenue compared to the previous year, the
primary driver of growth in this profitable revenue segment continues to be software licenses, a key strategic
objective. Notably, both forms of revenue remain stable and exhibit healthy growth, exemplifying the
strength of a comprehensive managed service offering.
Gross Margin
The sustained growth in recurring revenue has led to a robust gross margin of 60.2% in 2024, marking a
significant improvement from 52% four years ago.
10
Strategic report for the year ended 31 December 2024 (continued)
Shareholder Value
As our stock is openly traded on the London Stock Exchange, and enhancing shareholder value is a key element
within the Company’s strategy. Whilst EPS declined as a result of reduced turnover, impacting profit, we
remain confident of recovery in 2025. EPS in 2024 was 4.47p, adjusted being 5.16p (2023:7.63p) and although
his was downward ‘blip’ Touchstar do have a positive trend from five years ago when the EPS was in a negative
position for three years running 2017 to 2019.
This increasing valuation of the businesses KPIs, has allowed the Touchstar share price to continue to
outperform its peers on the London Stock Exchange (AIM). The share price movement during the trading year
of 2024 fluctuated between 85 pence to 112 pence, settling on 95 pence at the year end. A small increase on
the prior year, most likely impacted by the reduction in turnover and profit.
Business environment
The Group’s operations remain focused on the logistics, transport distribution and secure access control
markets. Although servicing different customers, the nature of the products, services and channels to market
are comparable and hence the Directors regard the Group as operating in one primary segment, where the
risks and returns are similar.
2024 saw a healthy activity in the business sectors we operate in, largely due to customer adoption of the latest
technologies and a consolidated push into cross selling between customers of all the products we supply. The
fact that we offer a complete package within our areas means we can provide costs effective solutions whilst
maintaining our margins.
Our in-house developed cloud-based software solutions and services, continue to play a massive role in the
Group’s development and success. Combined one stop solution, continues to be a key differentiator in the
market and has assisted in our growth.
The Group’s Access Control Systems for industrial and retail environments continue to improve and customer
loyalty is a reward of our support ethos. We have expanded our offerings to include other features within
access security, such as car number plate recognition, the integration of facial recognition door entry devices
and CCTV solutions.
-100.00%
-50.00%
0.00%
50.00%
100.00%
150.00%
200.00%
250.00%
Touchstar plc (AIM:TST - Share Pricing
FTSE AIM All-Share (^AXX) - Index Value
11
Strategic report for the year ended 31 December 2024 (continued)
Strategy
The Group’s overriding strategy is to achieve attractive and sustainable rates of growth and returns through
organic means, by providing a continually developing and relevant product set to the market. The Group is in
a stronger position to build on non-organic growth, as our cash reserve grows and our credibility strengthens,
an acquisition of either a product or a company in the relevant fields we specialise, will be considered seriously.
Expanding the sales opportunities: Product development, new market applications, geographic
expansion and potential acquisitions
Product Development
Whilst 2024 was an unusual year, where we experienced the second half generating less revenue than we
envisaged, we remained profitable and continued with all product developments scheduled in both our
hardware and software product sets.
In 2025 we will be concentrating our development efforts around enhancement of the existing solution. The
Back Office in Transport Planning is becoming increasingly valuable to our customers, and we intend to
further enhance its capabilities. We aim to provide enhanced functionality to support delivery planning from
the platform, along with a comprehensive KPI reporting system designed for Transport Planners in the
Customer Routing Department.
The above chart is the landing page of the Back Office platform, providing up to date information on the current
state of deliveries for the day. It enables real-time responses and adjustments in case of issues or shifts in
priorities. Each KPI on the page will provide drill-down functionality, enabling a closer look at detailed
information and facilitating adjustments to schedules as needed. Customers who have seen this in its early
stages have expressed highly positive feedback on its value for their transport planners. In addition to this
functionality on the platform, we also plan to develop and introduce more functionality on the Start of Day
Vehicle Load Planning. Optimising load balance and vehicle allocation for all deliveries as well as route planning
for vehicles and deliveries.
12
Strategic report for the year ended 31 December 2024 (continued)
Product Development (continued)
Whilst we develop the software part of the solution, it is equally important we continue to develop the relevant
hardware for its applications. In 2024 we enhanced the ATEX TS3300 with greater processing power, in 2025
we intend to supply the device with a larger higher clarity (more pixels) display along with the latest
Touchscreen technology. This improvement will also be adaptable to the non-ATEX device supplied into the
Logistics operations.
On the Access Control side of the business, where we have seen significant improvement in performance, we
will continue enhancing and replacing hardware elements – modernising the design, boosting processing power
and optimising for cost efficiency. One particular development is for the new Attendance Terminal, the reader
below:
The CICO touchscreen full colour display
To accelerate development and reduce time to market, we have built this device around the ‘industrial’
raspberry pie processor. Its fast-processing speed, coupled with high-resolution display, positions this model
to the cutting edge of the technology.
Overseas and markets sector development
This continues to remain a key focus for the business. Establishing traction and gaining a footprint in overseas
market is challenging. Last year we conducted research and explored opportunities in various countries. This
year we will be focussing efforts on the Nordics and Baltics. This market, comprising English-speaking and
affluent nations, remains relatively untapped for our product. We also have a small footprint of users in this
area.
Work has commenced in assessing similar markets for the Fuel software solution, namely variants of fuel types,
chemical distribution, animal feeds – where the existing product is well-suited to seamlessly meet the
requirements of these new sectors. We now have a complete biomass (wood pellet) application, developed
for an overseas customer and we believe this will fit well with the market in the UK, but particularly in the
Nordic countries. New market penetration will take time and our investigations on this, will following through
the course of the year.
In the security and access control marketplace, we are continuing our efforts in securing nationwide customers
via the UKSI affiliation; multiple independent companies, regionally based, acting under the umbrella of a single
venture - UKSI. While this approach has generated moderate income so far, it holds significant potential, as
larger suppliers dominate this market but fail to service it effectively. Several projects are underway for 2025,
building on the initial success of 2024, where whilst modest, secured us £60k of additional sales and recurring
revenue.
13
Strategic report for the year ended 31 December 2024 (continued)
Acquisitions
Following the strategic review conducted towards the end of 2024, it became evident that potential acquirers
of Touchstar were unable to fully recognise the value of the business for its shareholders. As we remain on the
AIM stock market, we acknowledge that organic growth alone is neither sufficient nor fast enough to fully
benefit AIM membership and its shareholders.
The company and product range are in strong position making this the ideal time to pursue growth via
acquisition. Whilst one or two companies have been identified as potential targets it remains early days. Our
strategy is to acquire market relevant businesses to strengthen our position and offering in the existing markets
we serve. We will avoid acquisitions that do not fit the market in which we operate as this will dilute our efforts
and distract us from our strategic objectives.
Utilising AI in the Touchstar company development
As mentioned last year, we have been using AI in marketing messaging – for speed and efficiency. During 2024
and moving forward, we have also adopted the use of the Microsoft AI tool, GitHub Copilot, to accelerate
software development. Whilst AI is not full proof and can still produce challenges, it is envisaged productivity
will be increased as it upskills our developers.
The AI GitHub engine works as a coding assistant for the developer, it scans code and suggests more effective
ways to write or construct it, thereby reducing bugs and frustrations for developers. The checking of the code
also optimises best practise development and checks for security lapses to eliminate weaknesses in the code
constructs. The adoption of the Microsoft GitHub was largely driven by its utilisation of the Azure security
encryption scripts and thus compliant with Touchstar’s present Cyber security policies. The GitHub is compliant
with ISO27001 security principles and policy.
Another important aspect of adopting GitHub Copilot from Microsoft is all software developed with the engine
remain the IPR of Touchstar – eliminating copycat software. All software developed with the GitHub engine
remains private and does not enter the public domain unlike the usual AI models.
Organic growth
We continue to secure new customers, which adds to the user base. The introduction of new products and the
implementation of new modules along with adopting latest technologies enables a continued push for organic
growth of the sales revenue line. The Directors are confident this approach will continue to generate additional
sales revenues and further secure our position in a competitive market.
Revenue growth over the next few years is expected to come in the form of capital sales, but an increasing
element of the sale will focus on recurring revenue as contracts extend into three and five year minimum terms.
Pricing policies will allow for annual upfront payment as well as monthly licence payment, via Direct Debit for
software usage (SaaS).
To augment further organic growth, we have embarked on expanding sales outside the UK mainland with sales
and marketing initiatives in specific regions, where we believe we can get the quickest wins. These are
predominantly activities in Europe, along with a modest investment in promotion being adopted for the US
market place.
We are looking to a partner channel increase awareness to end users in certain product sets. This will also
assist in us entering new applications by utilising our existing product set.
14
Strategic report for the year ended 31 December 2024 (continued)
Product range
The Group product range includes elements in three core areas; software applications, mobile computer
hardware and managed services. The Group continues to invest in these core areas and to reduce product
costs where possible.
In-house designed hardware and application software gives the business the opportunity to create market
specific solutions backed by a complete managed service. This provides an offering superior to the competition,
who typically rely on elements of third-party product to construct their solution and aftersales support
programme.
Principal risks and uncertainties
The directors recognise there are a number of risks within the business, which may significantly impact the
performance of the business. These risks are subjected to regular review and, where appropriate, processes
are established to minimise the level of exposure. The principal risks are summarised below:
1. People
The principal asset of the Group is the commitment and skill of its people. A loss or failure to attract key
personnel could impact the ability of the Group to execute on its strategy, causing adverse reputational,
operational and financial challenges. This is an ongoing risk due to shortage of talent. This might make it more
difficult to recruit and retain talent to support our growth plans. The Group monitors closely the satisfaction of
its employees and ensures that remuneration packages match both contribution and the wider employment
market. In addition, the Group has in place incentive schemes which are related to Group results, and which
allow key employees to participate in the success of the Group as a whole.
2. Technology changes
Changes in technology occur at an ever-increasing rate. Through its technical functions the business monitors
emerging technologies and seeks to understand how these technologies will impact current business and how
they may be incorporated in designs of future product offerings.
3. Competition
The Group recognises that it operates on a global basis and as such is subject to competitive global pricing as
well as service and performance criteria in local markets. Margins are monitored on a contract-by-contract
basis and commercial decisions are adjusted accordingly. The Group recognises that a global strategy will create
issues of foreign exchange fluctuations but that the overall contribution from such markets more than
compensates for the level of risk. As described in note 2.1 external global economic challenges brought
additional macroeconomic and societal challenges which the business and the wider sector are adapting to.
4. Key commercial relationships
The Group has a diverse range of customers and suppliers, and whilst these relationships are of significant
importance to the Group’s development, no single customer or supplier is of critical importance to the ongoing
success of the Group.
As detailed in note 4, during the year ended 31 December 2024 approximately £683,000 (2023: £740,000) of
the consolidated entity’s external revenue was derived from sales to one customer, although this was not
deemed of critical importance to the ongoing success of the Group. This customer accounts for 10% of the
Group revenue and is a mixture of recurring revenue and ad-hoc orders.
In the opinion of the directors there no issues or uncertainties around sustainability of the relationship.
15
Strategic report for the year ended 31 December 2024 (continued)
Principal risks and uncertainties (continued)
Corporate responsibilities
The global events over recent years has highlighted more than ever the need for businesses to operate in a
socially responsible and environmentally sustainable way and to look after their staff by providing a safe
working environment. Touchstar conducts its activities to the highest ethical standards and expect customers
and suppliers to embrace these same principles.
Environment
The Group recognises the importance of managing consumption of the world’s natural resources as well as
providing a safe and healthy working environment for its employees. The Group consumes non-replaceable
raw materials and energy and clearly the successful growth of the Group will lead to an increased consumption
of raw materials on an absolute basis. We therefore seek to reduce the amount of resources consumed on a
unit-by-unit basis to limit the size of our environmental footprint.
The Group aims to do this by abiding by the requirements of accepted international standards and codes of
practice which affect the sectors in which the businesses operate, minimise consumption through recycling or
reuse of materials where possible and encouraging efficient use of energy and utilities throughout the business.
Touchstar continues to actively replace its existing motor fleet with a combination of hybrid and fully electric
vehicles, where practical, in addition the Group operates electric charging points at its head office in
Manchester.
Colleagues
Touchstar’s key asset is its employees. The Group holds in high regard and actively encourages teamwork,
striving to take personal responsibility, having a constructive attitude, and working hard to deliver positive
results for customers, colleagues and stakeholders alike. Personal training and development is encouraged,
creating a more sustainable workforce and is very proud of its low attrition rates with the average length of
tenure being over 10 years.
Ethical business practices
Human Rights
Touchstar fully recognises and supports the protection of Human Rights, The Bill of Human Rights and the Core
Conventions in International Labour Organisation (ILO), which have been supplemented by additional
nationally granted rights.
16
Strategic report for the year ended 31 December 2024 (continued)
Ethical business practices (continued)
Anti-corruption and bribery
It is the Group's policy to conduct all its business in an honest and ethical manner. It takes a zero-tolerance
approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all its
business dealings and relationships wherever it operates - implementing and enforcing effective systems to
counter bribery.
Touchstar will uphold all laws relevant to countering bribery and corruption in all the jurisdictions in which it
operates. As a UK plc, the Group remains bound by the laws of the UK, including the Bribery Act 2010, in respect
of its conduct.
Modern slavery
Touchstar has a zero-tolerance approach to modern slavery and will act ethically and with integrity in all its
business dealings and relationships.
Diversity and inclusion
Creating a diverse, inclusive, and positive place for colleagues to work is a core focus for the Group. It also
fosters an environment that enhances innovation, creativity, and productivity.
In order to provide equal employment and advancement opportunities to all individuals, employment decisions
at Touchstar are based on merit, qualifications and abilities.
Except where required by law, employment practices will not be influenced or affected by an applicant's or
employee's race, colour, religion, gender, national origin, political affiliation, marital status, sexual orientation,
age, or any other characteristic protected by law. This policy governs all aspects of employment, including
selection, job assignment, compensation, discipline, termination, and access to benefits and training.
Health & safety
Touchstar is committed to maintaining high standards of health and safety. Following on from the Group's
response to the global pandemic it remains committed to ensuring the physical safety and positive mental
health of all colleagues now and in the future. Where at all possible employees are offered hybrid working.
Social
As a technology business, the Group’s success is built on the intellectual capital of our people, and the pride
they feel in working for the Group. The aim of the management team is to enable, empower and strengthen
our employees through the creation of a positive working culture in which employees feel engaged and
motivated.
As a people-led, technology-driven business, innovation is driven from personal interaction throughout the
Group. A combination of home and office working, in which employees are able to work from home, but also
come into the office in teams so as to foster relationship building, personal development and creative
interaction. We have found hybrid working to be an essential component of our employer offering with both
existing and potential employees viewing it as a key factor in joining and staying with Touchstar.
17
Strategic report for the year ended 31 December 2024 (continued)
Section 172 Statement
Under section 172 of the Companies Act 2006 (“Section 172”), a director of a Group must act in a way that they
consider, in good faith, and would most likely promote the success of the Group for the benefit of its members
as a whole, taking into account the non-exhaustive list of factors set out in Section 172.
Section 172 also requires directors to take into consideration the interests of other stakeholders set out in
Section 172(1) in their decision making. See table below detailing each stakeholder along with why and how
we engage with each.
Touchstar key stakeholders include its investors, employees, regulatory bodies, suppliers and customers.
The Group’s strategy is to achieve attractive and sustainable rates of growth and returns through organic
means. Upon the successful implementation of the Group’s strategy, the Group will have an expanded range
of internal and external stakeholders, relations with which the Board will take into consideration when making
decisions on Group strategy.
Engagement with our members plays an essential role throughout our business. We are cognisant of fostering
an effective and mutually beneficial relationship with our members. Our understanding of our members is
factored into boardroom discussions regarding the potential long-term impacts of our strategic decisions.
Post the reporting period end, the directors of the Group (“Directors”) have continued to have regard to the
interests of the Group’s stakeholders, including the potential impact of its future activities on the community,
the environment and the Group’s reputation when making decisions. The Directors also continue to take all
necessary measures to ensure the Group is acting in good faith and fairly between members and is promoting
the success of the Group for its members in the long term.
The table below acts as our Section 172 statement by setting out the key stakeholder groups, their interests
and how the Group engages with them. Given the importance of stakeholder focus, long-term strategy and
reputation to the Group, these themes are also discussed throughout this Annual Report.
18
Strategic report for the year ended 31 December 2024 (continued)
Section 172 Statement (continued)
Stakeholder
Why we engage
How we engage and decisions made
Our Investors
We maintain and value regular dialogue with
our financial stakeholders throughout the year
and place great importance on our relationship
with them. We know that our investors expect
a comprehensive insight into the financial
performance of the Group, and awareness of
long-term strategy and direction. As such, we
aim to provide high levels of transparency and
clarity about our results and long-term strategy
and to build trust in our future plans.
• Regular reports and analysis on
investors and shareholders
• Annual Report
• Group website
• Shareholder circulars
• AGM
• RNS announcements
• Press releases
• Re-introduction of progressive
dividend payment
• Share buy-backs approved and
initiated
• Drive to increase shareholder earnings
via a year on year increase in Earning
per Share
Our Employees
Our people are at the heart of our business.
Effective employee engagement leads to a
happier, healthier workforce who are invested
in the success of the Group and who are all
pulling in the same direction. Our engagement
seeks to address any employee concerns
regarding working conditions, health and
safety, training and development, as well as
workforce diversity. Engagement with our
employees starts from the top and is driven
effectively throughout the Group.
• Evaluation and feedback processes for
employees and management
• Continue to provide competitive
rewards packages
• Encouraging employee training and
development
• Flat structure communication with
Board
• Provide flexible working conditions
and support
Regulatory
bodies
The Group’s operations are subject to a wide
range of laws, regulations, and listing
requirements including data protection, tax,
employment, environmental and health and
safety legislation, along with contractual terms.
• Group website
• RNS announcements
• Annual Report
• Direct contact with regulators
• Compliance updates at Board
Meetings
• Consistent risk review
19
Strategic report for the year ended 31 December 2024 (continued)
Section 172 Statement (continued)
Stakeholder
Why we engage
How we engage and decisions made
Our Customers
Our customers have individual requirements
that require diligence and trust in our offering.
We aim to listen to and engage with our
customers on a regular basis to ensure that we
understand their needs and can provide
solutions that address them. We ensure that
information is easily accessible and customer
concerns are dealt with in a timely and
professional manner.
• Continual review of feedback from
customers to ensure satisfaction
• Dedicated team for Client Services and
Operations to ensure consumer
concerns are addressed
• Face to face meetings with customers
to further develop relationships.
Our Suppliers
We have a number of key partners and
suppliers with whom we have built strong
relationships with and strongly value. We
establish effective engagement channels to
ensure our relationships remain collaborative
and forward focused, and to foster
relationships of mutual trust and loyalty.
• Building strong partnerships with
suppliers through open two-way
dialogue and regular fae to face
meetings.
• Relationships with suppliers allow the
ongoing review and monitoring of
their performance levels
The above statement should be read in conjunction with the Chairman’s Statement, the rest of the Strategic
Report and the Directors’ Report.
20
Strategic report for the year ended 31 December 2024 (continued)
Key performance indicators
The Group have adopted both financial and non-financial measures to achieve a balanced view of performance.
Annual Recurring
Revenue
£3,051,000
ARR is an important metric as it is
an indicator of valuation of
software companies. Investors
value the certainty of knowing that
there is consistent revenue which
will recur year after year from
customers who derive benefit from
Touchstar’s products.
Recurring revenue has again
increased by 4.5% on 2023
£2,921,000 breaking through the
three-million-pound barrier. It’s
the Groups ambition to grow
recurring revenue to levels
surpassing non-recurring revenue
and beyond.
ARR as a % of Total
Revenue
44%
ARR as a % of total revenue
indicates our progress to improve
the quality of revenues by making
a higher percentage of them
recurring revenues. This includes
the upgrade of customers from
the legacy CE software to
innovative cloud-based
environment integrating with our
Android applications as well as
adding new customers on a term
licence ARR basis, whilst still
offering the traditional
hardware/support maintenance
contracts, providing a customer
with an end-to-end solution.
Total Revenue
Sales and order
pipeline
£6,893,000
Turnover in 2024 decrease by
4.6% from £7,224,000 in 2023.
Sales and order pipeline is an
important KPI. The
management actively monitor
this to justify the continued
development of the Groups
product suite. Understanding
our customer needs and
expectations is of primary
importance in securing orders
and future proofing ARR.
Although turnover for 2024
decreased the order intake
throughout 2024 amounted to
£4,867,000, an increase on
2023 of £1,017,000 with
yearend order book standing at
£1,270,000 (2023: £694,000).
21
Strategic report for the year ended 31 December 2024 (continued)
Key performance indicators (continued)
EPS
4.47p
This KPI provides the shareholder
with a return value on their
investment. Over the previous 5
years this KPI increased
consistently from negative 5.91p to
a return of 7.63p in 2023, an
increase of 13.54p per share. 2024
results were below expectations
nevertheless strict control of costs
where possible has resulted in the
Group generating profits.
Dividend
3p
For many years the Company was
not in a position to pay dividends,
the Board’s confidence in the
future has reflected in the recent
dividend returns to shareholders.
The dividend is a key metric, as
many shareholders value a cash
payment distribution. This metric
is one that is considered
extensively by the Board and
balanced against the need to
invest surplus cash into growing
the business.
Cash
£2,918,000
Cash is a key metric as it
provides assurance on our
ability to invest to grow the
business as well as provide
returns to our shareholders in
the form of dividends and share
buy-backs. It is also a comfort
to customers from a vendor risk
perspective.
It is the intention of
management to return
approximately £1,000,000 back
to shareholders via share buy-
backs
22
Strategic report for the year ended 31 December 2024 (continued)
Future outlook
Across all markets serviced by the Group there is a sustained drive to reduce costs and to improve customer
service. This can only be achieved by continued investment in the most modern technologies providing
instantaneous information between back-office applications and field-based functions. The Group recognises
that competition will continue to impose challenges on margins. With investment in product offering, however,
a robust commercial approach to the marketplace and above all a strong desire to succeed, we are confident
about our prospects, even amidst the continuing global challenges.
On behalf of the board
M W Hardy
Chief Executive Officer
28 April 2025
23
Statement of Corporate governance
Quoted Companies Alliance Code
As an AIM listed Group, the Group is required to adopt a recognised corporate governance code and disclose
any deviations from the chosen code. The Group has decided to adopt the Quoted Companies Alliance
(“QCA”) code. High standards of Corporate Governance are a key priority of the Board and details of how the
Group addresses key governance issues are set out in the Corporate Governance section of its website by
reference to the 10 principles of Corporate Governance developed by the QCA.
http://www.touchstarplc.com/about/governance
Business model and strategy
The Group’s vision, together with its partners, is to create innovative data capture solutions that enhance
business intelligence for our client base. Touchstar’s mission is to deliver innovative products and solutions
on a ‘turnkey’ basis, underpinned by an unparalleled attention to detail and customer-centred philosophy.
To achieve this, the Group will focus on five key business strategies;
•
Further penetrating existing markets by forging stronger customer and partner relationships,
including alliances with independent software vendors and third-party hardware manufacturers
•
Expanding into new markets, where the Group will offer compelling solutions set to meet specific
sector / geographical customer requirements
•
Inspiring Touchstar personnel and clients by building on the Group’s track record of high-
performance teamwork and collaboration
•
Intensifying R&D innovation throughout the organisation and delivering unsurpassed quality and
performance in the Group’s products and solutions
•
Maximising operational effectiveness with lean, world-class operations underpinned by an
investment in personnel, appropriate technologies and business tools to improve functional
performance across the Group
This strategy is intended to deliver long-term growth in shareholder value.
Effective risk management
The Board has an established Audit, Remuneration, and Executive Committees.
The Group receives regular feedback from its external auditors on the state of its risk management and
internal controls. The Board does not consider it to be appropriate to have its own internal audit function at
the present time, given the Group’s size and nature of its business.
The annual budget setting process examines all areas of the Group’s operations both operationally and
financially.
The Group has clear, documented procedures in place to assess and progress opportunities arising, whether
for process improvement, product enhancement, new business or any other matter.
24
Statement of Corporate governance (continued)
Board of directors
During 2024 the Board was comprised of a non-executive Chairman, two executive directors, and an
independent non-executive director. The Board considers that of its two non-executive directors, only one is
independent however they are considered independent in terms of character and judgement in how they
conduct their roles, giving a balance between executive and non-executive directors.
L Jones was appointed director on 18 March 2025 increasing the number of executive directors to three.
The Chairman is responsible for leading the Board, facilitating the effective contribution of all members and
ensuring that it operates effectively in the interests of the shareholders. The Chief Executive Officer is
responsible for the leadership of the business and implementation of the strategy. The Group Secretary is
responsible, on behalf of the Chairman, for ensuring that all Board and Committee meetings are conducted
properly, that the Directors receive the appropriate information prior to the meeting, for ensuring that
governance requirements are considered and implemented and for accurately recording each meeting. The
Directors may have access to independent professional advice, where needed, at the Group’s expense.
A description of the roles of the Directors is included on the website. The directors are aware of, and committed
to, the time requirements needed to fulfil their roles. Directors are required to devote such time and effort to
their duties as is required to secure their proper discharge and, for Non-Executive Directors, this typically entails
one or two days of meetings per month as well as reading and preparation time.
Meetings of the Board and committees
The Board has established Audit, Remuneration and Executive Committees, each of which conducted their
duties throughout the year. The Audit Committee scrutinise the planned scope of the annual audit as well as
monitoring the independence of the auditors. The Remuneration Committee assess the remuneration of
Directors and senior staff and ensured this was appropriate and consistent with the interests of shareholders
and the business. The Executive Committee managed the operation and strategy of the business throughout
the financial year, in regular consultation with the Board.
The Board meets at least four times a year with relevant information distributed to the Directors in advance of
each meeting. All members attended each meeting held during the year.
The Board makes decisions on all material matters including long term and commercial strategy, annual
operating and capital budgets along with capital and financial structure.
The Remuneration and Audit Committees are held on an annual basis.
There were five Board meetings held during the year. All members required to attend the relevant meeting did
attend.
Details of remuneration paid to each director during the year can be found in note 8.
25
Statement of Corporate governance (continued)
Board Performance
The Board judges its own performance by reference to the Group’s progress against the targets set out in the
Group’s strategic plan.
The Group undertakes regular monitoring of personal and corporate performance using agreed key
performance indicators and detailed financial reports. Responsibility for assessing and monitoring the
performance of the executive directors lies with the Chairman and the independent non-executive director.
The Board and the Remuneration Committee evaluate the Board performance, including but not limited to
Board balance, Board skills and remuneration, to ensure that the Board is fit for purpose and is appropriate for
the Group’s ongoing development and growth.
Corporate culture and responsibility
The Board is committed to embodying and promoting a sound corporate culture and has endorsed various
policies which require ethical behaviour of staff and relevant counterparties.
The Board and management conduct themselves ethically at all times and promote a culture in line with the
standards set out on the website.
Communication with shareholders and other relevant stakeholders
The Board attaches great importance to providing shareholders with clear and transparent information on the
Group’s activities, strategies and financial position, in addition to having regard to its obligations
as a quoted public Group and the AIM Rules.
The Group holds meetings with significant shareholders on a regular basis and regards the Annual General
Meeting as a good opportunity to communicate directly with shareholders via an open question and answer
session.
The Group lists contact details on its website should shareholders wish to communicate with the Board. All
announcements and results, including those released via RNS and RNS Reach, are available on the
Group’s website.
Employees
The Group recognises that the contribution made by its skilled and committed workforce is the business’s most
valuable asset. The Group will continue to provide its people with a challenging environment and to provide
rewards which recognise their achievements. The Group recognises that the needs of the business will continue
to change. As such, training is and will continue to be offered such that employees are able to enhance their
skill base to assist the business in meeting future challenges.
The Group has an established policy of encouraging the employment of disabled persons wherever this is
practicable and endeavours to ensure that disabled employees benefit from training and career development
programmes in common with all other employees. The Group’s policy includes, where practicable, the
continued employment of those who may become disabled during their employment.
26
Statement of Corporate governance (continued)
Financial instruments
The Group’s operations expose it to a variety of financial risks that include the effects of changes in credit risk,
liquidity risk and exchange rate risk. The policies set by the Board of Directors are implemented by the Group’s
finance department and are detailed in note 3 to the Group financial statements for the year ended 31
December 2024.
Board of directors
The directors who held office during the year and to the date of this report are given below:
I P Martin - Chairman
Ian has worked in the Insurance and Media industries for over 30 years. More recently, as Chairman and CEO
of Avesco (2002 to 2012) the quoted provider to the event and broadcast industry, Ian led the transformation
of the company from a faltering company to a vibrant business, with revenues rising from around £50 million
to £140 million and a profit that grew at a compound profit of 20% per annum.
Prior to this period, Ian has held board positions at Ascot Underwriting and Brockbank Group plc, where he was
CEO and he helped form Admiral Insurance the FT 100 Company. Ian also holds a number of executive and non-
executive directorships, including as a non-executive Director of Chelverton Growth.
M W Hardy - Chief Executive Officer
Mark joined the company in 1992 and has been involved in the mobile communications market since
graduating from University with a BA Honours degree in Business Studies in 1986. Prior to joining the company,
Mark worked for American based companies and was instrumental in driving sales of high-tech products into
developing markets.
With overall responsibility for the commercial running of Touchstar since 1997, Mark remains extremely active
in the sales and key account management aspects of the business.
Mark will be retiring from the role of CEO, being replaced by Lynden Jones on 1st July 2025.
L Jones – Executive Director
Lynden is the managing director of the Company's subsidiary, Touchstar ATC Limited ("ATC") and under his
leadership ATC has been transformed. Revenue has grown 29% over the last two years, it has gained access to
new and exciting sectors and the financial performance further improved by a move to a SAAS/ recurring
revenue driven model.
He has been with the Company for over 14 years. His focus is on workforce management for complex
environments such as hospitals, education, food manufacturing, and high-end retail. Starting in the sales
department at Feedback Data (which was acquired by the Company in 2013), he rose to Managing Director and
successfully enhanced customer experience and improved operationally efficiency and profitability.
Lynden will become the CEO on Mark’s retirement on 1st July 2025.
J L Christmas - Non-Executive Director
John is a chartered accountant with over 20 years’ experience as finance director of UK listed businesses, most
recently at Avesco Group plc, whom he joined in 2004.
He was Group Finance Director at Boosey & Hawkes plc and previously held positions as Group Finance Director
at MediaKey plc and Video Arts Ltd.
N M Rourke – Chief Finance Officer
Natasha is a certified accountant, a fellow member of ACCA with over 20 years’ experience within the Group.
Prior to joining Touchstar, Natasha spent 17 years in audit practice.
27
Audit Committee report for the year ended 31 December 2024
Audit Committee membership
•
John Christmas (Chair)
•
Ian Martin
I am pleased to present the report of the Audit Committee for the year ended 31 December 2024.
The Audit Committee comprises two Non-Executive Directors of the Company, both of whom served for the
entirety of the year. The Committee is chaired by myself, John Christmas and met once during the year under
review. It operates under formal terms of reference, which are available on request from the Company
Secretary or at the AGM. The Committee provides a forum for reporting by the Group's auditors. By invitation,
the meetings are also attended by the CEO and CFO.
The Audit Committee is responsible for reviewing a wide range of financial matters including ensuring that the
financial performance of the Group is adequately measured and controlled, correctly represented, reported to,
and understood by the Board. The Audit Committee advises the Board on the appointment of external auditors
and on their remuneration, both for audit and non-audit work, and discusses the nature and scope of their
audit.
The Audit Committee liaises with the auditors at least once a year without any Executive Directors present.
The Audit Committee includes one financially qualified member as recognised by the Consultative Committee
of Accountancy Bodies. All Audit Committee members are expected to be financially literate. Following the
above, the Audit Committee has recommended to the Board that HaysMac LLP is re-appointed.
The two main issues that the Audit Committee are concerned with are in relation to revenue recognition and
the carrying value of intangible assets being development costs. The Committee review the Group's revenue
recognition policies to ensure they are compliant with current accounting standards. In addition, the
Committee monitors the intangible carrying value in the Group for any indications of impairment.
Auditor Independence
To ensure auditor independence, consideration is given to their integrity and the objective approach of the
audit process. The use of non-audit services is not considered to be significant, and amounts paid in respect of
these are disclosed in note 7.
I am satisfied that the Committee has satisfactorily discharged its duties in the year in accordance with its terms
of reference, which are reviewed annually.
John Christmas
Chair of the Audit Committee
28 April 2025
28
Remuneration Committee report for the year ended 31 December 2024
Remuneration Committee membership
•
Ian Martin (Chair)
•
John Christmas
I am pleased to present the report of the Remuneration Committee for the year ended 31 December 2024.
The Remuneration Committee comprises two Non-Executive Directors of the Company, both of whom served
for the entirety of the year. The Committee is chaired by myself, Ian Martin and met once during the year under
review. It is responsible for reviewing and determining the policy of the Group on executive remuneration
including specific remuneration packages for each of the Executive members of the Board, pension rights and
compensation payments. The Committee is also responsible for monitoring compliance with the
implementation by the Group of the legal requirements and, so far as reasonably practical, recommendations
and guidelines relating to Directors' remuneration.
None of the Committee has any personal financial interest (other than as shareholders or as noted in the
Directors' report), conflicts of interests arising from cross- directorships or day-today involvement in running
the business. The Committee makes recommendations to the Board. No Director plays any part in any
discussion about his or her own remuneration.
For 2024, the Remuneration Committee has continued to operate a simple remuneration structure made up
of basic salary, pensions and benefits, annual performance-related bonuses, and share options. As in prior
years, a proportion of executive remuneration has been based on performance, designed to align executive
pay with shareholder interests. In this respect, the Committee has assessed the performance of the Executive
Director for the year reported against the targets set a year ago, set performance targets for the following
financial year and made recommendations to the Board on the overall packages for the Executive Directors.
I am satisfied that the Committee has appropriately discharged its duties in the year in accordance with its
responsibilities and encourage you to read the Directors Remuneration Report on the following pages.
Ian Martin
Chair of the Remuneration Committee
28 April 2025
29
Directors’ report for the year ended 31 December 2024
The directors present their annual report and the audited financial statements of the Group for the year
ended 31 December 2024 which should be read in conjunction with the Strategic Report on pages 5 to 18.
The Corporate Governance Statement set out on pages 19 to 22 forms part of this report.
Incorporation
Touchstar plc is a company incorporated in Scotland and its registered number is SC005543.
Dividends
An interim dividend of 1.5p per share was paid on 19 November 2024 (2023: 1p). The directors are
recommending a final dividend of 1.5p per share expected to be paid on 12 August 2025 (2023: 1.5p paid on
17 July 2024).
Purchase of own shares
There were no own shares purchased during 2024, previously purchased shares are being held in treasury and
amount to 275,000 shares.
Shares issued during the year
No shares were issued in 2024 (2023: Nil).
Research and development
The Group is continually developing its products and services to meet the increasing demands of the markets
in which the Group operates. During the year, the Group incurred total research and development costs of
£978,000 (2023: £972,000), of which £684,000 (2023: £583,000) has been capitalised.
Post balance sheet event
There were no post balance sheet events.
Future outlook
The Group's future outlook and opportunities are referred to in the Strategic report on page 5.
Going Concern
The Group's business activities, together with the factors likely to affect its future development, performance
and position are set out above and the risks and uncertainties summarised. The Group and Company has
sufficient financial resources to cover budgeted future cash-flows and has contracts in place with customers
and suppliers across different geographic areas and industries. As a consequence of these factors, the Directors
believe that the Group is well placed to manage its business risks successfully.
Having reviewed the future plans and projections for the business, the Directors believe that the Group and
Company and its subsidiary undertakings 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. Refer to note 2.1 Basis of preparation for further details.
In accordance with the Companies Act s414 c(11) information in relation to the business and risks is shown in
the Strategic Report.
Matters covered in the Strategic report
Statutory disclosures required under Company law within the Directors’ report are included where relevant in
the Strategic report.
30
Directors’ report for the year ended 31 December 2024 (continued)
Directors’ indemnities
As permitted by the Articles of Association, the directors have the benefit of an indemnity which is a qualifying
third-party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in
force throughout the last financial year and is currently in force. The Company also purchased and maintained
throughout the financial year directors’ and officers’ liability insurance in respect of itself and its directors.
Substantial shareholdings
As of 2 April 2024, the Company had been notified of the following interests representing 3% or more of the
issued ordinary share capital:
Ordinary
shares
Percentage
of ordinary
share capital
I P Martin
830,250
10.1%
Thomas William George Charlton
965,000
11.8%
Robert & Virginia Millington
568,000
6.9%
Mr Michael J Taylor
398,000
4.9%
R D McDougall
328,500
4.0%
Unicorn Asset Management
289,995
3.5%
Except for those disclosed above, the directors are not aware of any shareholding which represents 3% or more
of the present issued ordinary share capital of the Company.
Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, cash
flow and fair value interest rate risk), credit risk and liquidity risk. The Group’s overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects
on the Group’s financial performance.
(a)
Market risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, principally with respect to the euro and the US dollar. Foreign exchange risk arises from future
commercial transactions and recognised assets and liabilities.
Natural hedging occurs through the matching of foreign currency income, expenditure and commitments.
When projected foreign currency balances are not anticipated to be covered through this natural matching
process, the Group may choose to enter into forward foreign exchange contracts through its bankers and other
financial institutions.
31
Directors’ report for the year ended 31 December 2024 (continued)
Financial risk management (continued)
(b)
Credit risk
The Group has a customer credit policy in place and the exposure to credit risk is monitored on an ongoing
basis.
At 31 December 2024 there were no significant concentrations of credit risk (2023: £nil). The maximum
exposure to credit risk is represented by the carrying amount of each financial asset included in the balance
sheet. Management does not expect any losses from non-performance by these counterparties. Due to the
nature of the Group’s business, credit risk is assessed on a customer-by-customer basis prior to entering into
contractual arrangements and on an expected credit loss basis in line with IFRS9. See note 2.1 for impact
assessment.
(c)
Liquidity risk
The Group maintains short-term cash deposits and unutilised banking facilities to mitigate any liquidity risk it
may face. Management monitors rolling forecasts of the Group’s liquidity reserves on the basis of forecast
cash flow.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the
remaining period at the balance sheet date to the contractual maturity date. Impact on discounting is not
deemed material/relevant in respect of trade and other payables since this relates predominantly to deferred
revenue for which the cash has already been received and the balance is being released to the income
statement in line with the contract.
At 31 December 2024
Less than
one year
£’000
Between one and
four years
£’000
Trade and other payables (note 24)
1,383
-
At 31 December 2023
Trade and other payables
1,191
-
32
Directors’ report for the year ended 31 December 2024 (continued)
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total
capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in
the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown
in the consolidated balance sheet plus net debt.
The gearing ratios at 31 December 2024 and 2023 were as follows:
2024
£’000
2023
£’000
Net debt
-
-
Total equity
3,436
3,263
Total capital
3,436
3,263
Gearing ratio
-%
-%
As at 31 December 2024, borrowings (which constitute PLC bank overdraft) were entirely offset by positive
cash balances within the subsidiary companies, meaning the Group had no net debt, and therefore no gearing
ratio, at the reporting date (2023 - no gearing ratio).
Fair value estimation
The carrying value, less impairment provision of trade receivables and payables are assumed to approximate
to their fair value. The carrying values of borrowings approximate to their fair value due to their short-term
maturity.
33
Directors’ report for the year ended 31 December 2024 (continued)
Disclosure of information to auditors
Each director at the date of approval of this report confirms that:
•
so far as each director is aware, there is no relevant audit information (that is, information needed by
the auditors in connection with preparing their report) of which the auditors are 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 auditors are aware of that
information.
This statement is given and should be interpreted in accordance with the provision of Section 418 of the
Companies Act 2006.
Independent auditors
On 19 November 2024 the company’s auditor changed its name from Haysmacintyre LLP to HaysMac LLP. The
auditors, HaysMac LLP, have indicated their willingness to continue in office, and a resolution that they be
reappointed will be proposed at the Annual General Meeting.
By order of the Board
N M Rourke
Company Secretary
28 April 2025
34
Statement of directors’ responsibilities in respect of the financial
statements
The directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have prepared the Group financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the United Kingdom and Company financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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 Company and of the profit or loss of the Group and Company for that
period. In preparing the financial statements, the directors are required to:
•
select suitable accounting policies and then apply them consistently;
•
state whether applicable IFRSs as adopted by the United Kingdom have been followed for the Group
financial statements and IFRSs as adopted by the United Kingdom have been followed for the
Company financial statements, subject to any material departures disclosed and explained in the
financial statements;
•
make judgements and accounting estimates that are reasonable and prudent; and
•
prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Group and Company will continue in business.
The directors are also responsible for safeguarding the assets of the Group and Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position
of the Group and Company and enable them to ensure that the financial statements comply with the
Companies Act 2006.
The directors of the ultimate parent company are responsible for the maintenance and integrity of the ultimate
parent company’s website. Legislation in the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
35
Statement of directors’ responsibilities in respect of the financial
statements (continued)
Each of the directors, whose names and functions are listed in the Directors' Report confirm that, to the best
of their knowledge:
•
the Company financial statements, which have been prepared in accordance with IFRSs as adopted by
the United Kingdom, give a true and fair view of the assets, liabilities, financial position and result of
the Company;
•
the Group financial statements, which have been prepared in accordance with IFRSs as adopted by
the United Kingdom, give a true and fair view of the assets, liabilities, financial position and profit of
the Group; and
•
the Directors' Report includes a fair review of the development and performance of the business and
the position of the Group and Company, together with a description of the principal risks and
uncertainties that it faces.
By order of the Board
N M Rourke
Company Secretary
28 April 2025
36
Independent auditors’ report to the members of Touchstar plc
Opinion
We have audited the financial statements of Touchstar Plc (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 December 2024 which comprise the Consolidated income statement, the
Consolidated and Company statements of financial position, the Consolidated and Company statement of
changes in equity, the Consolidated and Company statements of cash flows and notes to the financial
statements, including a summary of significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK adopted international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December
2024 and of the group’s profit for the year then ended;
• have been properly prepared in accordance with UK adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We are independent of the group in accordance with
the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the
financial statements. In particular, we look at where the directors made subjective judgements, for example in
respect of significant accounting estimates that involved making assumptions and considering future events
that are inherently uncertain. As in all our audits, we also addressed the risk of management override of
controls, including evaluating whether there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud. We tailored the scope of our audit to ensure that we obtained sufficient
audit evidence to be able to give an opinion on the financial statements as a whole, taking into account the
structure of the group and the company, the account processes and controls, and the industry in which the
group operates.
The Group comprises three financially significant companies; two principal trading companies and one holding
company, all of which are based in the UK and constitute full scope audit components. We performed audits
of the three components in the Group, giving us the evidence we need to form our opinion on the Group
financial statements. All work was performed by the Group engagement team.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
37
Independent auditors’ report to the members of Touchstar plc
(continued)
Key Audit Matter
How our scope addressed this matter
Fraud in revenue recognition
The Group recognised revenue of £6,893,000 (2023:
£7,224,000) in the year.
This is split between revenue recognised at a point in
time and revenue recognised over time with the
former being £3,842,000 (2023: £4,303,000). Q4
point in time revenue recognised was £1,151,000
(2023: 1,137,000).
The cut off risk identified related to Q4 point in time
revenue that could be recognised in an incorrect
period.
We selected a sample of transactions in the cut off
period
and
vouched
these
to
supporting
documentation including proof of deliveries and
cash receipts to ensure that revenue was recorded in
the correct period.
The revenue per the Group's bill and hold
arrangements was agreed to an external customer
confirmation to ascertain the necessary attributes
that support the satisfaction of the performance
obligations for such arrangement and physically
verified as part of our year-end stock count
attendance procedures.
We used data analytics to identify unusual double
entry pairings involving revenue in the year.
Unexpected entries were vouched to supporting
documentation.
Capitalisation of development costs
The Group capitalised development costs of
£684,000 (2023: £583,000) in the year. This
represent costs incurred on development projects
that are assessed to meet the criteria as set out in
'IAS 38: Intangible assets'
Eligible costs in respect of software developers and
contractors working to develop new software
products are capitalised if the projects to which they
relate meet the relevant criteria, which materially
impacts the Groups profit.
There is judgment involved in assessing the amount
to be capitalised to the projects that are capitalised
under IAS 38.
For all projects with material asset additions in the
year we critically assessed the judgment that the
project met the criteria for capitalisation under
IAS38.
We critically assessed the technical feasibility of
projects through discussions with the Chief
Technology officer and reviewing management
papers prepared to set out the projects and spend.
We critically assessed the commercial feasibility of
projects by agreeing to supportive evidence such as
invoices and future orders.
We selected a sample of third party costs capitalised
and vouched these to external invoices.
We selected a sample of internal time capitalised
and agreed it to supporting documentation in payroll
records. We critically assessed the proportion of
time capitalised through discussions with senior
management.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial statement line items and
disclosures and in evaluating the effect of misstatement, both individually and in aggregate on the financial
statements as a whole.
38
Independent auditors’ report to the members of Touchstar plc
(continued)
Based on our professional judgement, we determined materiality for the financial statements as a whole as
follows:
Group financial statements
Company financial statements
Overall materiality
£120,000 (2023: £145,000)
£37,000 (2023: £25,750)
Performance materiality
£89,600 (2023: £87,000)
£27,750 (2023: £15,450)
How we determined it
1.75% of forecasted revenue
(2023: 2% of forecasted revenue)
5% of forecasted equity (2023: 5%
of forecasted equity)
Rational for benchmark
Revenue has been used as the
benchmark of materiality as we
consider this to be the financial
metric
of
most
interest
to
shareholders and other users of
the financial statements.
Performance materiality is used to
detect errors at a higher precision
level and has been based on 75%
(2023: 60%) of overall materiality.
We believe that equity is a
primary measure used by the
shareholders in assessing the
performance of the entity given
the company is a holding company
and so does not trade but pays out
dividends to the shareholders.
Performance materiality is used to
detect errors at a higher precision
level and has been based on 75%
(2023: 60%) of overall materiality.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our evaluation of the director’s assessment of the entity’s ability
to continue to adopt the going concern basis of accounting included:
•
Obtaining and reviewing the cash flow forecasts and budgets produced by management;
•
Reviewing the mathematical accuracy of the budgets;
•
Reviewing the management's forecasts in light of our understanding of the business and current wider
economic conditions;
•
Considering and assessing the appropriateness of management's sensitivities and testing resilience of
these to an unfavourable future operation scenario.
The key observations of our assessment are that the Group has generated sufficient cash resources to counter
the impact of reasonably adverse financial performance scenarios. This ensures that it can continue its
operations as a going concern without recourse to external funding.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group's ability to continue as a
going concern for a period of at least twelve months from when the financial statements are authorised for
issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
39
Independent auditors’ report to the members of Touchstar plc
(continued)
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements, or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other information. 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 its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or
the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 34, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
40
Independent auditors’ report to the members of Touchstar plc
(continued)
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Based on our understanding of the company and industry, we identified that the principal risks of non-
compliance with laws and regulations related to regulatory requirements for the company and trade
regulations such as health and safety and employment law, and regulatory requirements for AIM listed
companies, and we considered the extent to which non-compliance might have a material effect on the
financial statements. We also considered those laws and regulations that have a direct impact on the
preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls) and determined that the principal risks were related to
posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit
procedures performed by the engagement team included:
•
Inquiries with nominated advisors for any known non-compliance;
•
Inspecting correspondence with regulators and tax authorities;
•
Discussions with management including consideration of known or suspected instances of non-
compliance with laws and regulation and fraud;
•
Evaluating management's controls designed to prevent and detect irregularities;
•
Selecting a sample of point in time revenue in Q4 and vouching revenue recognised to supporting
documentation such as proof of delivery and cash receipts;
•
Identifying and testing accounting journal entries, in particular journal entries posted which exhibited
certain characteristics which we had identified as possible indicators of fraud or irregularity; and
•
Challenging assumptions and judgements made by management in their critical accounting estimates
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with regulation. This
risk increases the more that compliance with a law or regulation is removed from the events and transactions
reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: 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.
Michael Crowson (Senior Statutory Auditor)
10 Queen Street Place
For and on behalf of HaysMac LLP, Statutory Auditors
London
28 April 2025
EC4R 1AG
41
Consolidated income statement for the year ended 31 December 2024
2024
2023
£’000
£’000
Note
Revenue
4
6,893
7,224
Cost of sales
(2,743)
(2,937)
Gross profit
4,150
4,287
Distribution costs
(43)
(51)
Administrative expenses
(3,785)
(3,637)
Operating profit before exceptional costs and share-based
payment provision
408
658
Exceptional costs
5
(57)
-
Share-based payment provision included in administrative
expenses
8(b)
(29)
(59)
Operating profit
6
322
599
Finance income
11(a)
79
85
Finance costs
11(b)
(13)
(9)
Profit before income tax
388
675
Income tax charge
12
(22)
(36)
Profit for the year attributable to the owners of the parent
366
639
Earnings per ordinary share (pence) attributable to owners of the parent during the year (note 14):
2024
2023
Basic
4.47p
7.63p
Adjusted
5.16p
7.63p
Diluted
4.43p
7.58p
The exercise price of all share options granted at 31 December 2024 were below the average market share of
ordinary shares during the period to 31 December 2024 and therefore deemed dilutive.
There is no other comprehensive income or expense in the current year or prior year and consequently no
statement of other comprehensive income or expense has been presented.
All activity in 2024 relating to continuing operations.
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the
parent Company income statement. The profit for the Company is detailed in the Statement of financial position
and the Company statement of changes in shareholders’ equity.
42
Consolidated statement of changes in equity for the year ended 31 December 2024
Share
capital
Treasury
shares
Share premium
account
Share based
payment Reserves
Retained
earnings
Total
Note
£’000
£’000
£’000
£’000
£’000
£’000
At 1 January 2023
424
-
1,119
58
1,332
2,933
Dividend
-
-
-
-
(82)
(82)
Purchase of own shares
-
(252)
-
-
-
(252)
Cost of capital reduction in subsidiary
-
-
-
-
(34)
(34)
Share based payment charge
-
-
-
59
-
59
Transactions with shareholders
-
(252)
-
59
(116)
(309)
Total comprehensive income (profit for the year)
-
-
-
-
639
639
Capital reduction
-
-
(1,119)
-
1,119
-
At 31 December 2023
424
(252)
-
117
2,974
3,263
Dividend to shareholders
-
-
-
-
(246)
(246)
Repatriation of unclaimed dividends
-
-
-
-
24
24
Share based payment charge
27
-
-
-
29
-
29
Transactions with shareholders
-
-
-
29
(222)
(193)
Total Comprehensive income (profit for the year)
-
-
-
-
366
366
At 31 December 2024
424
(252)
-
146
3,118
3,436
The notes on pages 43 to 76 are an integral part of these Group financial statement.
43
Company statement of changes in equity for the year ended 31 December 2024
Share
capital
Treasury
shares
Share premium
account
Share based
payment Reserves
Retained
earnings
Total
Note
£’000
£’000
£’000
£’000
£’000
£’000
At 1 January 2023
424
-
1,119
58
(2,376)
(775)
Dividend
-
-
-
-
(82)
(82)
Purchase of own shares
-
(252)
-
-
-
(252)
Cost of capital reduction
-
-
-
-
(34)
(34)
Share based payment charge
-
-
-
59
-
59
Transactions with shareholders
-
(252)
-
59
(116)
(309)
Total Comprehensive income (profit for the year)
-
-
-
-
1,591
1,591
Capital reduction
-
-
(1,119)
-
1,119
-
At 31 December 2023
424
(252)
-
117
218
507
Dividend to shareholders
-
-
-
-
(246)
(246)
Repatriation of unclaimed dividends
-
-
-
-
24
24
Share based payment charge
27
-
-
-
29
-
29
Transactions with shareholders
-
-
-
29
(222)
(193)
Total Comprehensive income (profit for the year)
-
-
-
-
576
576
At 31 December 2024
424
(252)
-
146
572
890
The notes on pages 43 to 76 are an integral part of these Group financial statement.
44
Consolidated and Company statements of financial position as at 31
December 2024
Group
Company
2024
2023
2024
2023
Note
£’000
£’000
£’000
£’000
Non-current assets
Intangible assets
15
1,288
1,137
-
-
Investments
16
-
-
119
95
Property, plant and equipment
17
108
66
-
-
Right-of-use assets
18
180
225
-
-
Deferred tax assets
20
9
20
9
2
Trade and other receivables
22
88
-
-
1,673
1,448
128
97
Current assets
Inventories
21
992
1,153
-
-
Trade and other receivables
22
1,650
1,199
2
239
Corporation tax receivable
87
18
-
-
Cash and cash equivalents
23
2,918
3,005
1,240
292
5,647
5,375
1,242
531
Total assets
7,320
6,823
1,370
628
Current liabilities
Trade and other payables
24
1,383
1,191
480
121
Contract liabilities
25
2,018
1,938
-
-
Lease liabilities
26
91
149
-
-
3,492
3,278
480
121
Non-current liabilities
Deferred tax liabilities
20
170
90
-
-
Contract liabilities
25
148
130
-
-
Lease liabilities
26
74
62
-
-
392
282
-
-
Total liabilities
3,884
3,560
480
121
45
Consolidated and Company statement of financial position as at 31
December 2024 (continued)
Group
Company
2024
2023
2024
2023
Note
£’000
£’000
£’000
£’000
Capital and reserves attributable
to owners of the parent
Retained earnings
3,118
2,974
572
218
Share capital
28
424
424
424
424
Treasury shares
27
(252)
(252)
(252)
(252)
Share based payment reserve
27
146
117
146
117
Share premium
27
-
-
-
-
Total equity
3,436
3,263
890
507
Total equity and liabilities
7,320
6,823
1,370
628
The notes on pages 43 to 76 are an integral part of these Group financial statements.
The Company reported a profit for the financial year of £576,000 (2023: £1,591,000).
The Group and Company financial statements on pages 37 to 76 were approved by the Board of Directors on
28 April 2025 and were signed on its behalf by:
M W Hardy
Director
Registered number Scotland: SC005543
46
Consolidated and Company cash flow statement for the year ended 31
December 2024
Group
Company
Note
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Operating activities
Operating Profit/(loss)
322
599
(31)
(8)
Adjustments for:
Depreciation
16,17
243
205
-
-
Amortisation
15
534
532
-
-
Share-based payment provision
8(b)
29
59
5
11
Movement in:
Inventories
21
161
(187)
-
-
Trade and other receivables
22
(539)
(224)
237
176
Trade and other payables and contract liabilities 24,25
290
(398)
359
(134)
Cash generated from/(used in) operations
1,040
586
570
45
Interest received
79
85
-
-
Interest paid
(13)
(9)
-
-
Net cash generated from operating activities
1,106
662
570
45
Investing activities
Addition of intangible assets
15
(684)
(583)
-
-
Purchase of property, plant and equipment
16
(89)
(17)
-
-
Net cash used in investing activities
(773)
(600)
-
-
Financing activities
Dividend paid to shareholders
(246)
(82)
(246)
(82)
Repatriation of unclaimed dividends
24
24
Purchase of own shares
27
-
(252)
-
(252)
Cost of capital reduction
27
-
(34)
-
(34)
Dividend received from subsidiary
-
-
600
1,600
Principal elements of lease payments
(198)
(165)
-
-
Net cash generated from financing activities
(420)
(533)
378
1,232
Net (decrease)/increase in cash and cash
equivalents
(87)
(471)
948
1,277
Cash and cash equivalents at start of the year
3,005
3,476
292
(985)
Cash and cash equivalents at end of the year
23
2,918
3,005
1,240
292
47
Notes to the Group financial statements for the year ended
31 December 2024
1
General information
Touchstar plc (the ‘Company’) and its subsidiaries (together ‘the Group’) design and build rugged mobile
computing devices and develop software solutions used in a wide variety of field-based delivery, logistics and
service applications. The Company is a public company limited by share capital incorporated and domiciled in
the United Kingdom. The Company has its listing on the Alternative Investment Market. The address of its
registered office is 1 George Square, Glasgow, G2 1AL.
2
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these consolidated and Company financial
statements are set out below. These policies have been consistently applied to all the years presented, unless
otherwise stated.
2.1 Basis of preparation
The annual report and financial statements of the Company and the Group have been prepared in accordance
with IFRS as adopted by the United Kingdom (IFRS), IFRS IC interpretations, the Companies Act 2006 applicable
to companies reporting under IFRSs and the AIM rules for companies. The annual report and financial
statements have been prepared under the historic cost convention.
The annual report and financial statements have been prepared on a going concern basis. The Company has
elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent
Company income statement. The loss for the Company is detailed in the Statement of changes in shareholders’
equity.
The presentational currency of the Group and Company is pounds sterling. The Company’s functional currency
is pounds sterling. All amounts included in these financial statements are rounded to the nearest thousand
pounds sterling, except where explicitly stated otherwise.
The preparation of financial statements in conformity with United Kingdom adopted IFRS requires the use of
certain critical accounting estimates. It also requires management to exercise its judgement in the process of
applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated financial statements are disclosed
in note 3.
Going concern
These financial statements have been prepared on a going concern basis, which assumes that the Group will
be able to meet its liabilities when they fall due. As of 31 December 2024, the Group held unencumbered cash
of £2,919,000 (2023: £3,005,000), after considering overdraft balances as presented in note 23. The Group still
holds an undrawn £200,000 on demand overdraft facility as of 31 December 2024 (also £nil in April 2025).
48
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.1 Basis of preparation (continued)
Going concern (continued)
The directors remain confident in the business, the skillset employed in its dedicated staff, solid product set
and loyal customer base.
External global economic challenges continued to affect business during 2024, causing slow order conversion
impacting Group sales during the year which decreased on 2023 by 4.6%, in spite of this margins slightly
increased from 59.5% in 2023 to 60.2% in 2024 due to product mix. Nevertheless, the business maintained
tight control of costs and remained profitable, generating a profit after tax of £347,000 (2023: £639,000).
The Group continues to benefit from a supportive bank who have provided the borrowing facility since 2005.
The Group has reduced its reliance on the facility provided by the bank and since early 2023 has an average of
£1,600,000 placed on deposit thereby generating cash via receivable interest. In assessing the Company’s
ability to continue as a going concern, the Board has reviewed the Group’s cash flow and profit forecasts
removing completely reliance on any facilities. The impact of potential risks and related sensitivities to the
forecasts were considered in assessing the likelihood of additional facilities being required in the future.
The directors have at the time of approving the financial statements, a reasonable expectation that the
company has adequate resources to continue in operational existence for the foreseeable future. Thus they
continue to adopt the going concern basis of accounting in preparing the financial statements.
Changes in accounting policies and disclosures
New standards, amendments to standards or interpretations adopted by the Group and Company
The accounting policies adopted are consistent with those of the previous financial year.
The following standards became effective on 1 January 2023, and in the opinion of the Directors will not have
a material impact on the Group’s financial statements:
-
Disclosure of Accounting Policies
(Amendments to IAS 1 Presentation of Financial
Statements and IFRS Practice Statement 2 Making Materiality Judgements)
-
Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors)
-
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments
to IAS 12 Income Taxes)
49
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.1 Basis of preparation (continued)
Changes in accounting policies and disclosures (continued)
New standards, interpretations and amendments not yet effective
At the date of approval of these financial statements, the following standards and interpretations which have
not been applied in these financial statements were in issue, but not yet effective (and in some cases had not
been adopted by the EU):
-
At the date of authorisation of these financial statements the following standards and amendments
to standards, which have not been applied in these financial statements, were in issue, but not yet
effective:
-
Amendment to IFRS 16 ‘Leases on sale and leaseback’ (effective for accounting periods beginning
on or after 1 January 2024).
-
Amendment to IAS 1 ‘Non-current liabilities with covenants’ (effective for accounting periods
beginning on or after 1 January 2024).
-
Amendment to IAS 7 and IFRS 7 ‘Supplier finance’ (effective for accounting periods on or after 1
January 2024 – with transitional reliefs in the first year).
-
Amendments to IAS 21 ‘Lack of Exchangeability’ (effective for accounting periods on or after 1
January 2024 – early adoption is available).
The Company does not believe that there will be a material impact on the financial statements or the amounts
reported from the adoption of these standards.
2.2 Consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when 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 over the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group.
The financial statements consolidate the accounts of Touchstar plc and all of its subsidiary undertakings. Intra-
Group sales and profits are eliminated fully on consolidation.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
50
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.3 Segment reporting
In accordance with IFRS 8 operating segments are reported in a manner consistent with the internal reporting
provided to the directors who are considered to be the chief operating decision makers (CODM). The CODM’s,
who are deemed to be the executive board i.e. Directors, are responsible for allocating resources and assessing
performance of the operating segments, these have been identified as the Executive Board. The Executive
Board considers that the Group comprises one segment, being the supply and maintenance of real time
electronic data systems, and this is how results are reported to the Executive Board.
2.4 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (‘the functional currency’). The consolidated
financial statements are presented in sterling, which is the Company’s functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement.
2.5 Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation. Historical cost
includes expenditure that is directly attributable to 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 the replaced part is derecognised. All other
repairs and maintenance are charged to the income statement during the financial period in which they are
incurred.
Depreciation is calculated using the straight-line method to reduce an asset’s cost to its residual value over its
estimated useful life, as follows:
Plant and machinery
over 2-5 years
Fixtures, fittings, tools and equipment
over 4-5 years
Residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
51
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.6 Intangible assets
Development expenditure
Development expenditure is stated at historic cost less accumulated amortisation. Costs incurred on
development projects (relating to the design and testing of new or improved products) are recognised as
intangible assets when the following criteria are fulfilled:
•
it is technically feasible to complete the intangible asset so that it will be available for use;
•
management intends to complete the intangible asset and use or sell it;
•
there is an ability to use or sell the intangible asset;
•
it can be demonstrated how the intangible asset will generate probable future economic benefits;
•
adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset are available; and
•
the expenditure attributable to the intangible asset during its development can be reliably measured.
Other development expenditure that does not meet the criteria is recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Capitalised development expenditure is recorded as an intangible asset and amortised from the point at which
the asset is ready for use on a straight-line basis over its useful life, not exceeding five years (note 6).
2.7 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost relating to raw materials, consumables,
work on progress and finished goods comprises actual costs incurred in bringing each product to its present
location and condition within each trading subsidiary as follows:
-
Touchstar ATC Limited:
Purchase cost and cost of direct materials using standard cost
-
Touchstar Technologies Limited:
Purchase cost and cost of direct materials using first in/first out (FIFO) basis
The cost of work in progress and finished goods excludes direct labour and related production overheads as
the directors consider that this element is not material.
Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable
selling expenses. Provision is made where necessary for obsolete, slow moving and defective inventory.
52
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.8 Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less provision for impairment.
The Group continues to establish a provision for impairment of trade receivables when there is objective
evidence that the Group will not be able to collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the counterparty, probability that the counterparty will enter
bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that
the trade receivable is impaired. In addition, IFRS 9 requires the group to consider forward looking information
and the probability of default when calculating expected credit losses. The measurement of expected credit
losses reflects an unbiased and probability-weighted amount that is determined by evaluating the range of
possible outcomes as well as incorporating the time value of money. The Group considers reasonable and
supportable customer-specific and market information about past events, current conditions and forecasts of
future economic conditions when measuring expected credit losses.
The amount of the provision is the difference between the carrying amount and the present value of estimated
future cashflows of the asset, discounted, where material, at the original effective interest rate. The carrying
amount of the asset is reduced through the use of an allowance account, and the amount of the loss is
recognised in the Income Statement within ‘administrative costs’. When a trade receivable is uncollectable, it
is written off against the allowance account for the trade receivables. Subsequent recoveries of amounts
previously written off are credited against ‘administrative costs’ in the Income Statement.
They are included within current assets, except where the receivables are expected to be settled in more than
12 months in which case they are classified as non-current assets.
2.9 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts where
applicable are shown within borrowings in current liabilities on the balance sheet and where appropriate the
right of offset has been taken.
2.10 Share capital
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.
53
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.11 Trade and other payables
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of
business from suppliers. Trade and other payables are classified as current liabilities if payment is due within
one year or less. If not they are presented as non-current liabilities.
Trade payables are recognised at fair value and subsequently held at amortised cost.
2.12 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the income statement over the period of the borrowings using the effective interest
method.
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 balance sheet date.
2.13 Current and deferred tax
The tax expense for the year comprises current and deferred tax. Tax is recognised in the income statement,
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.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the balance sheet date. 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 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 consolidated financial statements.
However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects neither accounting
nor taxable profits or losses. Deferred income tax is determined using tax rates (and laws) that have been
substantively enacted by the balance sheet date and are expected to apply when the related deferred income
tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be
available against which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where
the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the
temporary difference will not reverse in the foreseeable future.
54
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.14 Employee benefits
(a) Pension obligations
The Group operates various pension schemes. The schemes are generally funded through payments to
insurance companies. The Group has only defined contribution plans. A defined contribution plan is a pension
plan under which the Group pays fixed contributions into a separate entity.
The Group pays contributions to privately administered pension insurance plans on a contractual or voluntary
basis. The Group has no further payment obligations once the contributions have been paid. The contributions
are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an
asset to the extent that a cash refund or a reduction in the future payment is available.
(b) Profit-sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes
into consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group
recognises a provision where contractually obliged or where there is a past practice that has created a
constructive obligation.
2.15 Share-based payments
The group operates an equity-settled, share-based compensation plan, under which the entity receives services
from employees as consideration for equity instruments (options) of the group. The fair value of the employee
services received in exchange for the grant of the options is recognised as an expense. The total amount to be
expensed is determined by reference to the fair value of the options granted based on the performance of the
group as defined in the Plan.
When the options are exercised, the company issues new shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital (nominal value) and share premium.
The grant by the company of options over its equity instruments to the employees of subsidiary undertakings
in the group is treated as a capital contribution. The fair value of employee services received, measured by
reference to the grant date fair value, is recognised over the vesting period as an increase to investment in
subsidiary undertakings, with corresponding credit to equity in the parent entity accounts.
The Group has conformed with the requirements of IFRS 2 "Share-Based Payment" for share options issued
after 7 November 2002 and unvested at 31 December 2023. Those options are measured at fair value using
the Black-Scholes model and management’s best estimates. Values from this method are expensed on a
straight-line basis over the vesting period of the options.
Options vest only when the Remuneration Committee is satisfied that the vesting criteria has been
met, and are settled subsequently by equity shares in the parent company and unless the Board, at its
discretion, agrees to settle in cash.
55
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.16 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable for the sale of goods and
services in the ordinary course of the Group’s activities. Revenue is shown net of value added tax, returns,
rebates and discounts and after eliminating sales within the Group. All Group revenue is derived from contracts
with customers.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future
economic benefits will flow to the relevant entity and the Group has satisfied its performance obligations as
laid out in contracts with its customers. Any revenue received from customers in advance of the Group
satisfying its performance obligations is classified as a contract liability and carried in the Statement of Financial
Position until it is appropriate to recognise the corresponding revenue (see note 25 Contract liabilities).
Revenue recognised over time relates to fixed term maintenance and software contracts and is recognised on
a straight-line basis over the life on an agreement. All other revenue including but not limited to Installations,
spares, repairs and system sales, relates to Group activities that are recognised at a point in time, with
consideration falling due as performance obligations are satisfied within pre-existing credit terms (see note 4
Revenue).
Bill-and-hold arrangements arise when a customer is billed for goods that are ready for delivery, but
the reporting entity does not ship the goods to the customer until a later date. Revenue is recognized when
control of the goods transfers to the customer.
For a customer to have obtained control of a product in a bill-and-hold arrangement, all of the following criteria
must be met:
a. The reason for the bill-and-hold arrangement must be substantive (for example, the customer has
requested the arrangement).
b. The product must be identified separately as belonging to the customer.
c. The product currently must be ready for physical transfer to the customer.
d. The entity cannot have the ability to use the product or to direct it to another customer.
Transaction prices are determined with references to contracted consideration. No element of financing is
deemed present as sales are typically made with 30-90-day credit terms, which is consistent with market
practice. Where longer term arrangements do arise, the impact of the time value of money on contract
liabilities is considered immaterial and therefore no adjustment is made to reflect this.
56
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.17 Leases
The Group as a lessee
The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low
value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-
line basis over the term of the lease unless another systematic basis is more representative of the time pattern
in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily
determined, the Group uses its incremental borrowing rate based on rate provided by the Groups bankers,
Barclays.
The lease liability is included as a separate line as ‘Lease liabilities’ on the Statement of Financial Position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments
made.
The Company did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement day and any initial direct costs. They are subsequently measured at cost
less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.
If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the
Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful
life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are included as such along with the 'Intangible Assets', 'Tangible Fixed Assets' and
'Investment Property' lines, as applicable, in the Statement of Financial Position.
The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any
identified impairment loss as described in note 18.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account
for any lease and associated non-lease components as a single arrangement. The Company has used this
practical expedient.
57
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
2
Summary of accounting policies (continued)
2.18 Dividend distribution
Any annual final dividend is not provided for until approved at the Annual General Meeting, whilst interim
dividends are charged in the period they are paid.
2.19 Treasury shares
From time to time the Company purchases its own shares for the purpose of satisfying the future exercising of
outstanding share options. These shares are held in treasury and are shown as a reduction in the Company's
reserves.
Consideration paid/received for the purchase/sale of treasury shares is recognised directly in equity. The cost
of treasury shares held is presented as a separate reserve (the "treasury share reserve"). Any excess of the
consideration received on the sale of treasury shares over the weighted average cost of the shares sold is
credited to retained earnings.
2.20 Exceptional items
Items which are both material and non-recurring in nature are presented as exceptional items so as to provide
a better indication of the Group's underlying business performance and are shown separately on the face of
the income statement.
58
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
3
Critical accounting estimates and judgements
The Group and Company makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.
(a) Development expenditure
The Group recognises costs incurred on development projects as an intangible asset which satisfies the
requirements of IAS 38. The calculation of the costs incurred includes the percentage of time spent by certain
employees on the development project. The decision whether to capitalise and how to determine the period
of economic benefit of a development project requires an assessment of the commercial viability of the project
and the prospect of selling the project to new or existing customers (see note 15).
(b) Impairment of intangibles
Judgement is required in determining both the useful economic life of the asset along with any impairment,
notably intangible software development costs. Useful economic life is based on the life expectancy of software
licences and recoverable amounts are based on a calculation of expected future cash flows, which require
assumptions and estimates of future performance to be made. Cash flows are discounted to their present value
using pre-tax discount rates based on the Directors market assessment of risks specific to the asset (see note
15).
(c) Stock provisions
Judgement is required in relation to the appropriate provision to be made for the write down of slow moving
or obsolete inventory. Such provisions are made based on the assessment of the Group’s prospective sale of
inventories and their net realisable value, which are subject to estimation uncertainty (see note 21).
(d) Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based
on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an
overall expected credit loss rate for each group. These assumptions include recent sales experience, historical
collection rates, and forward-looking information that is available.
After due consideration of the assumptions detailed above, no credit loss provision was considered necessary
for the year ended 31 December 2024 (2023: nil) (note 22).
59
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
4
Revenue
The Group has two trading subsidiaries, Touchstar ATC Limited and Touchstar Technologies Limited, however
the Executive Board who are deemed to be the CODMs consider that both companies are engaged in the same
market and therefore the Executive Board review the results of the Group as a whole.
Consequently, the Executive Board regard the Group as operating in one segment, being the supply and
maintenance of real time electronic data systems. All of the Group’s revenue, expenses, results, assets and
liabilities are in respect of the supply and maintenance of real time electronic data systems and are presented
on pages 37 to 40.
All revenue is generated within the UK.
4.1
Geographical information
2024
2023
£’000
£’000
UK
6,568
6,512
Europe
311
694
Rest of World
14
18
6,893
7,224
4.2
Major customers
During the year ended 31 December 2024 approximately £683,000 (2023: £743,000) of the consolidated
entity’s external revenue was derived from sales to one customer.
4.3
Analysis of revenue
2024
2023
£’000
£’000
Recognised at a point in time
3,842
4,303
Recognised over time (recurring revenue) – note 25
3,051
2,921
6,893
7,224
60
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
5
Exceptional costs
2024
£’000
2023
£’000
Cost of the Strategic review
57
-
Details of the Strategic Review can be found in the Chairman’s Statement, the total cost incurred was £77,500
reduced by the release of a historical exceptional liability £20,500 no longer required.
6
Operating profit
2024
£’000
2023
£’000
Operating loss is stated after charging/(crediting):
Depreciation:
Owned assets (note 17)
47
46
Leased assets (note 18)
196
159
Development expenditure amortisation (note 15)
534
532
Share-based payment provision (note 8(b))
29
59
Research and development expenditure
294
390
Cost of inventories recognised as an expense
1,690
1,894
Write down of inventory as an expense
74
45
Staff costs (note 8(a))
2,674
2,668
Loss/(Profit) on foreign exchange
3
4
7
Auditors’ remuneration
During the year the Group obtained the following services from the Company’s auditors at costs as detailed
below:
2024
£’000
2023
£’000
Audit services:
Fees payable to the Company’s auditors for the audit of the Parent
Company and consolidated financial statements
45
40
Fees payable to the Company’s auditors for other services:
Audit of subsidiaries pursuant to legislation
30
25
Other assurance services
2
4
77
69
61
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
8
Employee remuneration
(a) Employee benefits expense
The average monthly number of persons (including directors) employed by the Group and Company during
the year was:
Group
2024
Number
2023
Number
Administrative, management and sales
39
40
Production and technical
15
16
54
56
2024
£’000
2023
£’000
Staff costs for the above persons were:
Wages and salaries
2,643
2,518
Social security costs
293
279
Other pension costs – defined contribution plans
149
120
Share-based payments provision
29
59
3,114
2,976
As at 31 December 2024 the Group and Company had accrued pension costs of £22,000 (2023: £19,000).
Staff costs are inclusive of capitalised salaries amounting to £440,000 (2023: £308,000).
(b) Share-based employee remuneration
The Touchstar plc EMI Share Option Plan (Plan) was approved by the shareholders at the Annual 2021 AGM
on 23 June 2021. It is a share-based payment scheme for employee remuneration which will be settled in
equity.
The Plan is part of the remuneration package for Group employees as selected by the Group’s Remuneration
Committee. Options under this Plan will vest if performance conditions, are met pertaining to profit after tax
and recurring revenue growth as defined in the Plan. Participants in this Plan must be employed until the end
of the agreed vesting period unless deemed as ‘good employees’ by the Group’s Remuneration Committee
on leaving. Upon vesting, each option allows the holder to purchase each allocated share at the market price
determined at the grant date.
62
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
8
Employee remuneration (continued)
(b) Share-based employee remuneration (continued)
The number of options granted during the year and outstanding at 31 December 2024:
Group
2024
Number
2023
Number
At 1 January
422,000
422,000
Granted during the year
-
-
At 31 December
422,000
422,000
The options granted during the year did not achieve one of the two set criteria and are therefore void. The
assessed fair value at grant date of options granted during the year ended 31 December 2023 was £0.30 per
option. The fair value at grant date is determined using the Black-Scholes model that takes into account the
exercise price, the term of the option, the impact of dilution (where material), the share price at grant date
and expected price volatility of the underlying share, the risk-free interest rate for the term of the option, and
the annualised volatility of Touchstar plc’s shares.
The model inputs for options granted to the year ended 31 December 2024:
Grant date
18 Nov 2021
18 Nov 2021
21 Sep 2022
21 Sep 2022
Vesting period ends
Term A
30 Jun 2023
Term B
30 Jun 2024
Term A
30 Jun 2024
Term B
30 Jun 2025
No of shares granted
105,500
105,500
105,500
105,500
Share price at date of grant
£0.85
£0.85
£0.775
£0.775
Volatility
50%
50%
33%
33%
Risk-free rate
1%
1%
3.3%
3.3%
Exercise price at date of grant
£0.85
£0.85
£0.775
£0.775
Exercise period ends
17 Nov 2031
17 Nov 2031
20 Sep 2032
20 Sep 2032
Weighted average remaining
contractual life
6.06 years
6.06 years
6.15 years
6.15 years
The underlying expected price volatility was determined by reference to the historical data of Touchstar plc
shares over the past 12 months. No special features inherent to the options granted were incorporated into
measurements of fair value.
In total, £29,000 (2023: £59,000) of employee remuneration expense (all of which related to equity-settled
share-based payment transactions) has been included in the income statement and credited to the Share-
based payment reserve.
63
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
9
Directors’ emoluments
2024
£’000
2023
£’000
Aggregate emoluments
394
296
Pension costs – defined contribution plans
29
-
423
296
All three Directors are remunerated through the parent company.
The emoluments of the individual Directors were as follows:
2024
£’000
2023
£’000
Salaries and bonuses:
I P Martin
53
52
M W Hardy
216
212
J L Christmas
29
29
N M Rourke
96
3
394
296
Salaries and fees are inclusive of car allowance for M W Hardy of £9,000 (2023: £9,000).
N M Rourke is accruing pension contributions at a rate of 10% of salary.
There were no bonuses awarded during the year. The bonus awarded to M W Hardy for the year ended 31
December 2023 of £18,000 was paid in March 2024.
211,000 share options were granted during the year however one of the two criteria were not met thereby
these options were cancelled. Of the 422,000 valid share options granted 76,000 were granted to M W Hardy
and 40,000 to N M Rourke. The share-based provision recognised during the year relating to the options
granted to the directors amounted to £5,000 (2023: £11,000).
64
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
10
Key management compensation
Key management consists of the directors and three key departmental managers (2023: three).
2024
£’000
2023
£’000
Wages and salaries
613
582
Social security costs
72
68
Pension costs – defined contribution plans
49
28
734
678
During the year the bonuses awarded to key management, not paid at 31 December 2024 was £10,000. (31
December 2023: £24,000).
11
Finance income and costs
(a) Finance income
2024
£’000
2023
£’000
Bank interest received
79
85
(b) Finance costs
Lease interest paid
13
9
12
Income tax credit
2024
£’000
2023
£’000
Corporation tax
Current tax credit
(87)
-
Adjustment in respect of prior years
18
-
Deferred tax charge
91
36
22
36
Corporation tax is calculated at a rate of 25% (2023: 23.5%) of the estimated assessable profit for the year. The
2023 rate is the weighted average tax rate applicable for the year.
65
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
12
Income tax credit (continued)
Factors affecting the tax credit for the year
The charge for the year can be reconciled to the reported profit as follows:
2024
£’000
2023
£’000
Profit before income tax
388
675
Multiplied by the calculated standard rate of corporation tax in the
UK of 25% (2023: hybrid rate 23.52%)
97
159
Effects of:
Items not deductible for tax purposes
8
14
Enhanced research and development deduction
(201)
(214)
Surrender of tax losses for R&D tax credit
131
-
Tax losses for current year unrecognised
-
66
Losses recognised in the period
7
19
Use of previously recognised losses
(46)
-
Use of previously unrecognised losses
(32)
-
Difference between writing-down allowances and depreciation
40
(8)
Adjustment in respect of prior years
18
-
Total tax charge for the year
22
36
Factors affecting the future tax charge
There are no factors currently affecting the future tax charge.
13
Dividends
During the year an interim dividend of 1.5p per share was paid (2023: 1p). The board recommends a final
dividend of 1.5p per share (2023: 1.5p). Together with the interim dividend of 1.5p, paid in November 2024,
gives a total dividend for the year of 3.0p (2023: 2.5p).
66
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
14
Earnings per share
The calculation of earnings per share is based on profit attributable to owners of the parent and the
weighted average number of ordinary shares in issue during the year.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume
conversion of all dilutive potential ordinary shares arising from share options granted to employees where the
exercise price is less than the market price of the Company's ordinary shares at the year end.
The 211,000 options issued during 2024 were cancelled as one of the two criteria set was not met. (2023:
None).
2024
2023
Basic
4.47p
7.63p
Adjusted
5.16p
n/a
Diluted
4.43p
7.58p
Reconciliations of the earnings and weighted average number of shares used in the calculation are set out
below:
2024
£’000
2023
£’000
Basic earnings attributable to owners of the parent – for Basic EPS
366
639
Exceptional costs (note 5)
57
-
Adjusted earnings attributable to owners of the parent – for Adjusted
EPS
423
639
2024
No.
2023
No.
Basic weighted average number of shares, excluding own shares, in issue
8,200,077
8,371,477
Dilutive effect of share options
62,479
54,108
Dilutive weighted average number of shares, excluding own shares,
in issue
8,262,556
8,425,555
67
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
15
Intangible assets
Group
Goodwill
£’000
Development
expenditure
£’000
Total
£’000
Cost
At 1 January 2023
8,591
3,615
12,206
Additions
-
583
583
Disposal
-
(16)
(16)
At 31 December 2023
8,591
4,182
12,773
Additions
-
684
684
Disposal
-
(587)
(587)
At 31 December 2024
8,591
4,279
12,870
Accumulated amortisation
At 1 January 2023
8,591
2,528
11,119
Amortisation charge
-
532
532
Disposal
-
(15)
(15)
At 31 December 2023
8,591
3,045
11,636
Amortisation charge
-
534
534
Disposal
-
(587)
(587)
At 31 December 2024
8,591
2,992
11,583
Net book value
At 31 December 2024
-
1,288
1,288
At 31 December 2023
-
1,137
1,137
At 1 January 2023
-
1,087
1,087
Amortisation of £534,000 (2023: £532,000) is included within administrative expenses in the income
statement.
68
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
15 Intangible assets (continued)
Development expenditure
The calculation of the costs incurred includes third party developers along with the percentage of time spent
by certain employees on hardware and software development for deployment in business operations. The
decision whether to capitalise and how to determine the period of economic benefit of a development project
requires an assessment of the commercial viability of the project and the prospect of selling the project to new
or existing customers.
Management determined budgeted sales growth based on historic performance and its expectations of market
development via each product set’s underlying pipeline.
A review of future cashflows for each of the product sets did not result in any impairment.
Development expenditure has been capitalised on an ongoing basis and therefore has a remaining useful
economic life ranging from 0 to 5 years.
69
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
16
Investments
Shares in
subsidiary
undertakings
£’000
Cost
At 1 January 2023
11,672
Addition
48
At 31 December 2023
11,720
Addition
24
At 31 December 2024
11,744
Accumulated amortisation
At 1 January and 31 December 2024
11,720
Net book value
At 31 December 2024
119
At 31 December 2023
95
At 1 January 2023
47
The additions in 2023 and 2024 relate to the share-based options granted to employees of the subsidiaries
(note 8(b)).
The Parent Company has the following wholly owned trading subsidiary undertakings, incorporated and
operating in Great Britain, which are registered in England and Wales:
Name of company and
registration number
Nature of business
Description of shares held
Touchstar Technologies Limited
04731086
7 Commerce Way, Trafford Park,
Manchester, M17 1HW
Real time electronic data
systems
100,000 ordinary £1 shares
Touchstar ATC Limited
00955977
7 Commerce Way, Trafford Park,
Manchester, M17 1HW
Real time electronic data
systems
140,000 ordinary £1 shares
Touchstar ATC Limited is exempt from the requirement of an individual audit by virtue of Companies Act
Section 479A.
70
Notes to the Group financial statements for the year ended 31
December 2024 (continued)
17 Property, plant and equipment
Plant and
machinery
£’000
Fixtures,
fittings,
tools and
equipment
£’000
Total
£’000
Cost
At 1 January 2023
255
338
593
Additions
9
8
17
Disposals
(21)
-
(21)
At 31 December 2023
243
346
589
Additions
65
24
89
At 31 December 2024
308
370
678
Accumulated depreciation
At 1 January 2023
205
294
499
Charge for the year
26
20
46
Disposals
(22)
-
(22)
At 31 December 2023
209
314
523
Charge for the year
27
20
47
At 31 December 2024
236
334
570
Net book value
At 31 December 2024
72
36
108
At 31 December 2023
34
32
66
At 1 January 2023
50
44
94
Depreciation expenditure of £47,000 (2023: £46,000) is included within administrative expenses in the income
statement.
71
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
18 IFRS 16 Right of use assets
Premises
£’000
Motor
vehicles
£’000
Total
£’000
Cost
At 1 January 2023
510
310
820
Additions
-
86
86
Disposals
-
(38)
(38)
At 31 December 2023
510
358
868
Additions
-
152
152
Disposal
(510)
(217)
(727)
At 31 December 2024
-
293
293
Accumulated depreciation
At 1 January 2023
327
194
521
Charge for the year
82
77
159
Disposals
-
(37)
(37)
At 31 December 2023
409
234
643
Charge for the year
92
104
196
Disposal
(501)
(225)
(726)
At 31 December 2024
-
113
113
Net book value
At 31 December 2024
-
180
180
At 31 December 2023
101
124
225
At 1 January 2023
183
116
299
Both property leases, Manchester and East Sussex expired in December 2024. The East Sussex premises was
vacated with the team being relocated to shared offices on a short-term rental. The Manchester lease rolled
over under the Landlord and Tenant Act 1985 has since been renewed on similar terms in April 2025.
Depreciation expenditure of £196,000 (2023: £159,000) is included within administrative expenses in the
income statement.
72
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
19
(a) Financial instruments by category
The accounting policies for financial instruments have been applied to the line items below:
Group
Company
note
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Financial assets
Trade and other receivables
22
1,407
957
2
1
Cash and cash equivalents
23
2,918
3,005
1,240
292
Total
4,325
3,962
1,242
293
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Financial liabilities
Trade and other payables (excluding tax and
social security payable)
24
903
827
447
71
19
(b) Credit quality of financial assets
Credit risk is managed on a Group basis and arises from cash and cash equivalents and credit exposures to
customers. For banks, only independently rated parties with a minimum rating of ‘A’ are acceptable. The Group
has dealt with one (2023: one) bank during the year. For customers the directors consider that, based on the
historical information about default rates and the current strength of customer relationships, a number of
which are recurring long-term customers, the credit quality of financial assets that are neither past due nor
impaired is good.
None of the financial assets that are fully performing have been renegotiated in the last twelve months.
73
Notes to the Group financial statements for the year ended 31
December 2024 (continued)
20
Deferred tax
20.1 Deferred tax asset
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
At 1 January
20
46
2
3
(Charged)/credited to income statement
(11)
(26)
7
(1)
At 31 December
9
20
9
2
The deferred tax asset for the Group relates to unused tax losses of £600,000 (2023: £800,000).
The Group has an unrecognised deferred tax asset of £123,000 (2023: £162,000) in relation to unused tax
losses. This has not been recognised as the Group considers there is uncertainty as to when the losses will be
realised in future years.
20.2 Deferred tax liability
2024
£’000
2023
£’000
At 1 January
90
80
Charged to income statement
80
10
At 31 December
170
90
Deferred tax (liability)/asset analysis:
2024
£’000
2023
£’000
Amount in respect of fixed assets
(170)
(90)
Amount in respect of losses
9
20
74
Notes to the Group financial statements for the year ended 31
December 2024 (continued)
21
Inventories
2024
£’000
2023
£’000
Raw materials and consumables
708
662
Finished goods and goods for resale
357
558
Provision
(73)
(67)
992
1,153
The cost of inventories recognised as an expense amounted to £1,690,000 included within cost of sales (2023:
£1,894,000). Provision expenses of £74,000 were recognised in the income statement within cost of sales
(2023: £45,000). No finished goods are held at fair value less cost to sell (2023: £nil).
22
Trade and other receivables
22.1 Amounts receivable within one year
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Trade receivables
1,407
957
2
1
Amounts owed by subsidiary undertakings
-
-
-
238
Prepayments and accrued income
243
242
-
-
1,650
1,199
2
239
22.2 Amounts receivable within more than one year
Prepayments and accrued income
88
-
-
-
The amounts owed by subsidiary undertakings are interest free, unsecured and repayable on demand.
The fair value of trade and other receivables is the same as the book value. No provision for impairment of
trade receivables has been made (2023: £nil).
Trade receivables that are less than three months past due are not considered impaired. As of 31 December
2024, trade receivables of £nil (2023: £nil) were past due but not impaired. These relate to a number of
independent customers for whom there is no recent history of default.
75
Notes to the Group financial statements for the year ended 31
December 2024 (continued)
22
Trade and other receivables (continued)
The ageing analysis of these trade receivables is as follows:
2024
£’000
2023
£’000
Up to 3 months past due
20
1
As of 31 December 2024, £nil of trade receivables (2023: £nil) were impaired and provided for. No bad debt
expenses (2023: £nil) has been recognised in the income statement.
The carrying amount of the trade and other receivables denominated in the following currencies is:
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Sterling
1,358
957
2
239
Euros
49
-
-
-
1,407
957
2
239
The other classes within trade and other receivables do not contain impaired assets. The maximum exposure
to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group
does not hold any collateral as security.
76
Notes to the Group financial statements for the year ended 31
December 2024 (continued)
23
Cash and cash equivalents
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Cash at bank and in hand
2,918
3,005
1,240
292
The above balances are not offset in the Consolidated Statement of Financial Position and are included for
illustrative purposes only.
The Company holds cash on deposit included as cash and cash equivalents. The amount held on 95-day notice
deposit at 31 December 2024 was £1,030,000 (2023: £1,563,000) earning interest at a rate of 3.55% per
annum over base.
The Group bank overdraft facility is secured by a bond and floating charge over the entire assets of the Group.
At 31 December 2024, the Group had total committed undrawn facilities of £200,000 (2023: £200,000).
The Group now operates within a £200,000 net overdraft facility which takes into account both the gross cash
position of each Group entity netted off against any borrowings. As at the 31 December 2024, this represents
the net cash and cash equivalents balance of £2,918,000 (2023: £3,005,000) in Note 23.
The Company and its subsidiaries have given a guarantee in relation to the overdraft facilities extended to The
Group.
24 Trade and other payables
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Trade payables
620
479
107
4
Other taxes and social security
480
364
33
50
Amounts owed to subsidiary
undertakings
-
-
300
-
Other payables
29
44
8
-
Customer deposits
29
42
-
-
Accruals
225
262
32
67
1,383
1,191
480
121
77
Notes to the Group financial statements for the year ended 31
December 2024 (continued)
24 Trade and other payables (continued)
Amounts owed to subsidiary undertakings are interest free, unsecured and repayable on demand.
A balance of £230 (2023: £nil) was owed to a key manager as at the year end, and £1,186 (2023: £nil) was owed
to a related party by virtue of common directorship for Factis Ltd. Transactions in the year amounted to total
payments made £2,809 to the key manager, and total payments of £4,838 to Factis Ltd.
The transactions were made at an arm’s length basis.
Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There
have been no guarantees provided or received for any related party payables.
25
Contract liabilities
2024
£’000
2023
£’000
At beginning of year
2,068
2,166
Invoiced
3,149
2,823
Released to income statement
(3,051)
(2,921)
At end of year
2,166
2,068
The group has recognised the following liabilities related to contracts with customers:
Due to be released within one year
2,018
1,938
Due to be released in more than one year
148
130
Contract liabilities relate to unsatisfied performance obligations from maintenance and software licensing
contracts.
78
Notes to the Group financial statements for the year ended 31 December
2024 (continued)
26
Leases
The note provides information for leases where the group is a lessee.
26.1 Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Notes
2024
£’000
2023
£’000
Right-of-use assets
Buildings
-
101
Vehicles
180
124
18
180
225
2024
£’000
2023
£’000
Lease liabilities
Current
91
149
Non-current
74
62
165
211
Under IFRS 16 the assets are now presented in property, plant and equipment and the liabilities as part of the
group’s borrowings.
Contractual undiscounted cash flows are due as follows:
2024
£’000
2023
£’000
Lease liabilities (undiscounted)
Not later than one year
99
156
Between one year and five years
76
74
175
230
There is not considered to be any significant liquidity risk by the Group in respect of leases.
79
Notes to the Group financial statements for the year ended
31 December 2024 (continued)
26 Leases (continued)
26.2 Amounts recognised in the statement of profit or loss
Notes
2024
£’000
2023
£’000
Depreciation charge of right-of-use assets
Buildings
92
82
Vehicles
104
77
6
196
159
The statement of profit or loss shows the following amounts relating to leases:
2024
£’000
2023
£’000
Interest expense (included in finance cost)
13
9
Expense relating to short-term leases
8
25
(included in administrative expenses)
27 Reserves
27.1 The following describes the nature of each reserve within equity:
Reserve
Description and purpose
Share premium
Amount subscribed for share capital in excess of nominal value.
Share-based payment reserve
Provision for options granted under the Group Enterprise Management
Incentive Scheme.
Retained earnings
All other net gains and losses and transactions with owners (e.g. dividends)
not recognised elsewhere.
Treasury shares
Weighted average cost of own shares held in treasury.
80
Notes to the Group financial statements for the year ended 31 December
2024 (continued)
27 Reserves (continued)
27.2 The following describes the nature of each transaction within equity:
Reserve transactions
Description and purpose
Purchase of own shares
At the 31 December 2024 the Group held 275,000 of its own shares with a
fair value of £252,000, these are being held in treasury (2023: 275,000 with
a fair value of £252,000). No shares were repurchased during the year
(2023: 275,000 at a fair value of £252,000).
28
Share capital
Group and Company
2024
Number
2024
£’000
2023
Number
2023
£’000
Ordinary shares of 5p each
8,475,077
424
8,475,077
424
All shares are authorised, issued and fully paid up.
81
Group Information
Registered Number in Scotland SC005543
Touchstar plc
Secretary and Registered Office
7 Commerce Way
N M Rourke
Trafford Park
1 George Square
Manchester
Glasgow
M17 1HW
G2 1AL
T: +44 (0) 1274 741860
E: investor@touchstar.com
www.touchstar.com
Independent Statutory Auditors
Bankers
HaysMac LLP
Barclays Corporate Bank
10 Queen St Place
2nd Floor
London
1 Park Row
EC4R 1AG
Leeds
LS1 5AB
Solicitors
Stockbroker and Financial Advisors
Harrison Clark Rickerbys Limited
Zeus Capital
Overross House
125 Old Broad Street
Ross Park
London
Ross-On-Wye
EC2N 1AR
Herefordshire
HR9 7US
Registrars
Nevilles Registrars Ltd
Neville House
Steelpark Road
Halesowen
B62 8HD