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Financial Highlights:
REVENUE FOR THE YEAR ENDED
31 MARCH 2019:
2018:
£22.7m
PROFIT BEFORE TAX
31 MARCH 2019:
2018:
£1.66m
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION
AND AMORTISATION (EBITDA) 31 MARCH 2019:
2018:
£1.09m
PROFIT AFTER TAX
31 MARCH 2019:
2018:
£1.62m
GROSS PROFIT AS A PERCENTAGE OF REVENUE
31 MARCH 2019:
2018:
19.3%
£1.02m£0.89m£27.8m£1.75m17.0% Table of contents
Triad Group Plc | Annual report for the year ended 31 March 2019
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Strategic report
Directors’ report
Corporate governance report
Directors’ remuneration report
Independent auditors’ report to the members of Triad Group Plc
Statements of comprehensive income and expense
Statements of changes in equity
Statements of financial position
Statements of cash flows
Notes to the financial statements
Five year record
Shareholders’ information and financial calendar
Corporate information
Whilst there have been instances of deferred investment
decisions caused by the ongoing Brexit saga and resulting
economic uncertainty, there has been no major impact
to the programmes with which the Group is involved. The
business remains exposed to the effect of large programmes
terminating and their replacements taking time to build up
the equivalent momentum. Recruitment is key to addressing
this issue, making sure that there is sufficient capacity to
build the next wave of income in advance of other work
coming to an end.
Considering the headwinds which are being encountered
by our business sector, I regard this as a very good
performance by management and staff. I believe it is
essential that we continue to focus on long term resilience
and robustness, and maintain our strong cash performance.
I believe the fundamentals of the business are very robust.
The low share price, combined with a low price-earnings
ratio and a return to regular dividend payments makes the
Group a high-yield proposition, currently 7%.
Strategic report
Financial highlights
•
Revenue for the year ended 31 March 2019: £22.7m
(2018: £27.8m)
Profit before tax: £1.02m (2018: £1.66m)
•
• Earnings before interest, tax, depreciation and
amortisation (EBITDA): £1.09m (2018: £1.75m)
Profit after tax: £0.89m (2018: £1.62m)
•
• Gross profit as a percentage of revenue: 19.3%
(2018: 17.0%)
Chairman’s statement
Dr John Rigg
For the year ended 31 March 2019 the Group reports
revenue of £22.7m (2018: £27.8m). Profit before tax has
decreased to £1.02m (2018: £1.66m) and gross profit as a
percentage of revenue has increased to 19.3% (2018: 17.0%).
The Group’s year end cash reserves have increased to
£4.6m (2018: £3.8m).
Revenue has declined predominantly due to contractor
numbers across two large private sector accounts (one
low margin and one low day rate) reducing significantly
during the year, a trend emerging towards the end of the
previous financial year. The improvement in gross margin
as a percentage of revenue to 19.3% (2018: 17.0%), reflects
the Group’s commitment to reduce low-margin contractor
business, together with an increase in the ratio of permanent
staff to contractors on our consultant-led engagements.
The restoration of larger, higher margin, contracts, remains a
primary objective for the Group.
The company has set ambitious targets in terms of recruitment
of consultants. By the end of the year, we hope to double
permanent consultant numbers with year on year increases
after that. A number of these consultants will have work-
winning responsibilities and it is likely we will need to recruit
additional business development specialists to bolster the
work-winning effort.
Whilst operating across the public, private and not-for-profit
sectors, the public sector represents our major competitive
environment at present. Whilst the company has fared
extremely well via the Government frameworks, the competition
has intensified. Competitions that would typically see 8–10
participants are now more likely to see 30–50 participants, with
pricing a more significant factor. Our intention is not to reduce
pricing dramatically, meaning that the quality of our responses
elsewhere has to be even higher to win new work. Whilst we
are seeing some very creditable performances in national
competitions, we are conscious that further improvement is
required to improve our winning ratio.
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| Triad Group Plc Annual Report and Accounts 2019
Strategic report
High Court Case
Outlook
As described in my RNS statements of January and February
of this year, in a recent High Court Hearing the Company
and Directors successfully obtained default judgment in
respect of a claim brought by the Company against a major
shareholder. The full costs of the claim were also awarded to
the Company.
There is no sign of the addressable market diminishing, nor our
ability to serve it. We have exciting plans to seize this opportunity
and to drive our gross margin and profit as we do so.
We recognise that there may be some lag as the increased
capacity comes on stream, but we have the strength within
the business to sustain this essential development phase.
Whilst we did our utmost to minimise the impact of this
situation on the day-to-day running of the company it,
without doubt, had a negative impact on our capacity to
push the business forwards. We hope the outcome of
the hearing has now removed the major cause of this
distraction.
Dividend
Employees
On behalf of the Board I would like to thank all our staff for
their hard work over the past year.
In addition to the interim dividend paid during the year of 1.0p
(2018: 0.5p), I am pleased to announce that the Directors
have proposed a final dividend for the year ended 31 March
2019 of 2p per share (2018: 1.0p).
John Rigg
Executive Chairman
7 June 2019
Organisation overview
Triad Group Plc Annual Report and Accounts 2019
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| Triad Group Plc Annual Report and Accounts 2019
Strategic report
Managing Director’s statement
Adrian Leer
Whilst the year past was not without challenge, we
witnessed some very creditable performances across a
number of clients. Our multi-year engagement with Ministry
of Justice continued, with two large teams providing support
to the Crime Programme, one being a group of consultants
responsible for providing all of the business analysis inputs
to the programme. The other team provides production
support services to the programme, enabling new releases
to go into live production.
At Ofgem, we undertook a difficult engagement that involved
launching a new digital service to support the ECO-3
legislation. The service went live on time, even though the
legislation was signed off late on in the project.
At Department for Transport, we have been developing the
new platform to support the management and reporting
of Greenhouse Gases. This project has involved some
exciting technological developments, including the use of
containerisation strategies to improve ease of deployment.
The team also made use of the Gov.uk service Notify and,
indeed, made some improvements to it that are now part of
the updated Notify service.
Our continued efforts in the public sector were recognised
when, in January 2019, we were ranked fourth (in terms of
spend) of all suppliers who have provided services under the
digital services frameworks since their inception. (Source:
Crown Commercial Services) We were successful in winning
a place on the Data and Application Solutions Framework, on
which we will promote our Microsoft credentials alongside
our consulting capabilities. This framework contains only
80 suppliers across all lots, making it a much narrower
competitive field than other frameworks.
At Dalcour Maclaren, our team has continued to develop
the Connect platform into a state of the art scheme
management system that supports DM and their clients.
Overall, utilisation levels for our consultants have been
higher than for several years and the proportion of
consultant-led assignments versus contractor-only
assignments has increased.
Two of our contractor-only engagements reduced
significantly during the year. Our global banking client
has engaged on a programme to transfer contractor staff
to permanent positions across its supplier base. Due to
the length of service involved, many of our contractors
transferred to permanent without any transfer fees being
due. The client had cited concerns around the roll-out of the
Off-Payroll legislation (IR35) to the private sector. This roll-
out was subsequently postponed to the next financial year,
see later. Another of our contractor-only clients experienced
a significant downturn in demand for our GIS staff from their
governmental client.
We continue to seek opportunities to extend the Group’s
service portfolio. Our management consultancy offering
continues to strengthen enabling us to access opportunities
at an earlier stage of their development and to earn fees that
are reflective of the strategic contribution we make. There
have been significant engagements during the year with
Highways England, Ministry of Justice and a leading regional
law firm. At the law firm, our team helped the IT leadership
team to develop their digital strategy, a strategy which
contains some sector-leading thinking.
We have been increasing our consultant headcount
steadily across a number of disciplines including delivery
management and business analysis. Our recruitment plans
are ambitious, with an aim to grow our consultant headcount
significantly over the next two years. This is an essential
component of our strategy, enabling us to increase our work-
winning capacity whilst also improving gross margin.
The Group has successfully delivered a number of
improvements related to our marketing efforts, notably
with the company web-site and an enhanced engagement
programme using thought leadership to drive business
development efforts. The Group will continue to build on its
campaigns to engage with senior technology leaders within
private sector organisations to raise the corporate profile
and provide us with access to key decision makers.
The outlook for next year is positive yet challenging. We
expect our involvement in existing long-term projects to
continue and replicate this success in other public and
private sector organisations. Work with a new client started
in May to replace their legacy order management system.
The client is one of the largest technology distributors in the
UK and the project reflects our key strengths in creating new
digital solutions within complex legacy environments.
With an average headcount for the year of just 56 staff,
the Group has performed extremely well to produce these
results. It is a great tribute to all of the staff and I thank them
for their outstanding effort.
Adrian Leer
Managing Director
7 June 2019
Triad Group Plc Annual Report and Accounts 2019
| 5
Strategic report
Triad Group Plc is engaged in the provision of IT
consultancy, solutions and resourcing services to the
public and private sectors.
Business model
The Group provides services to the public and private
sectors in the provision of IT consultancy and solutions
services, and IT resourcing (both contract and permanent).
Typically, this entails the supply of our own permanent
consultants, the supply of carefully chosen associates and
contractors, or a combination of these.
The Group operates in the United Kingdom from offices in
Godalming (registered office) and Milton Keynes.
Principal objectives
The principal objectives of the Group are to;
•
•
Provide clients with industry leading service in our
core skills.
Achieve sustainable profitable growth across the
business and increase long term shareholder value.
The key elements of our strategy to achieve our objectives are;
To provide a range of specialist services relevant to our
clients’ business
• Our services include consultancy, change leadership,
project delivery, software development, mobility
services and business insights. Further capacity and
expertise is provided via our resourcing services.
• We continue to adopt a “business first, technology
second” approach to solving our clients’ problems.
A cornerstone of our service offer is our consultancy
model, offering advice and guidance to clients in terms
of technology investments.
To develop long term client relationships across a broad
client base
• Enduring client relationships fuel profitability.
A hallmark of our recent improvements has been the
frequency of repeat business, which itself has been a
function of outstanding delivery and proactive business
development within existing accounts.
• Our consistent track record in this regard is our major
asset when developing propositions for new clients,
along with the use of case studies and references.
•
We have structured our service offering to enable
clients to engage early, thus enabling the building of
trust and confidence from the outset.
• Our strategy includes working with carefully chosen
partners operating under their client frameworks in
addition to the frameworks on which Triad is listed. This will
expose more opportunities whilst reducing the cost of sale.
To leverage group capability and efficiency to increase
profitability
• We continue to develop synergies across the Group’s
activities both externally and internally, driving better
outcomes for clients whilst improving efficiency and
effectiveness. The management team sets objectives
to ensure that these synergies are exploited.
• We enable our clients to benefit from access to a full
range of IT services, delivered through a single, easy to
access, point of sale.
• We will continue to provide the highest quality of
service to our customers through our teams of skilled
consultants and market experts.
Principal risks and uncertainties
The Group’s business involves risks and uncertainties,
which the Board systematically manages through its
planning and governance processes.
The Board has conducted a robust assessment of the
principal risks facing the Group, examining the Group’s
operating environment, scanning for potential risks to the
health and wellbeing of the organisation. The Directors
factor into the business plan the likelihood and magnitude
of risk in determining the achievability of the operational
objectives. Where feasible, preventive and mitigating
actions are developed for all principal risks.
Senior management review the risk register and track the
status of these risk factors on an on-going basis, identifying
any emerging risks as they appear.
The outputs of this management review form part of the
Board’s governance process, reviewed at regular Board
meetings.
The principal risks identified are:
IT services market
The demand for IT services is affected by UK market
conditions. This includes, for example, fluctuations in
political and economic uncertainty, and the level of public
sector spending. The creation of new services, acquisition
of new clients and the development of new commercial
vehicles is important in protecting the Group from
fluctuations in market conditions.
To work with partners
Brexit
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| Triad Group Plc Annual Report and Accounts 2019
Strategic report
The political and economic uncertainty caused by Brexit
has the potential to negatively affect the public sector
market due to an impact on government spending plans
and the cancellation or delay of IT projects. Conversely,
opportunities exist for the Group to provide services to
assist government departments in preparation for Brexit,
and post-Brexit reality.
Revenue visibility
The pipeline of contracted orders for time and materials
consultancy work can be relatively short. The Board
carefully reviews forecasts to assess the level of risk
arising from business that is forecast to be won.
Availability of staff
The ability to recruit and retain staff, and access to
appropriately skilled resources are key to ensuring the
ability to win and deliver IT services to our clients. The
Group continues to recruit quality individuals, and ensures a
resilient network of associate resources is maintained.
Competition
The Group operates in a highly competitive environment. The
markets in which the Group operates are continually monitored
to respond effectively to emerging opportunities and threats.
There are or may be other risks and uncertainties faced by the
Group that the Directors currently deem immaterial, or of which
they are unaware, that may have a material adverse impact on
the Group.
The risk appetite of the Group is considered in light of the
principal risks and their impact on the ability to meet its
strategic objectives. The Board regularly reviews the risk
appetite which is set to balance opportunities for business
development and growth in areas of potentially higher risk,
whilst maintaining reputation, regulatory compliance, and high
levels of customer satisfaction.
Viability Statement
In accordance with the Listing Rules the Directors have
assessed the Company’s viability over the next five financial
years.
This assessment of viability has been made with reference
to the Group’s current financial and operational positions,
revenue projections, cash flows, availability of required
finance, commercial opportunities and threats, and the
Group’s experience in managing adverse conditions in the
past. The Company was founded in 1988 and has survived
successfully since then.
The assessment also considered the impact of severe, yet
plausible, scenarios based on the principal risks set out on
page 6 oposite. In particular, the effect of an unexpected
loss of the Group’s largest client was considered in order
to assess the financial impact on revenue visibility, staff
utilisation and cash flow. Sensitivities around revenue
growth, gross margins, and availability of funds to meet
operational requirements were considered.
Based on this assessment the Directors have concluded
that there is a reasonable expectation that the Company
and Group will continue in operation and meet its liabilities
as they fall due over the next five years.
Given the Group’s business model and commercial and
financial exposures the Directors consider that five years
is an appropriate period for the assessment. The maximum
period of visibility of commercial arrangements with
clients is currently two years, however in considering the
assessment period assumptions have been made beyond
this immediate timeframe.
Performance assessment,
financial review and outlook
Financial and non-financial key performance indicators
(KPIs) used by the Board to monitor progress are revenue,
profit from operations, EBITDA, gross margin and
headcount. Financial KPIs are discussed in more detail in
the Financial Review below. The outlook for the Group is
discussed in the Chairman’s statement on page 2.
The KPIs are as follows;
2019
2018
Revenue
£22,713,000
£27,819,000
Profit from operations
£1,019,000
£1,679,000
Earnings before interest,
tax, depreciation and
amortisation (EBITDA)
Gross margin
Average headcount
£1,090,000
£1,745,000
19.3%
56
17.0%
58
Corporate social responsibility
Our employees
The Group is committed to equal opportunities and
operates employment policies which are designed to
attract, retain and motivate high quality staff, regardless
of gender, age, race, religion or disability. The Group has a
policy of supporting staff in long term career development.
The Group recognises the importance of having effective
communication and consultation with, and of providing
leadership to, all its employees. The Group promotes the
involvement of its employees in understanding the aims and
Triad Group Plc Annual Report and Accounts 2019
| 7
Strategic report
performance of the business.
Group performance
The following table shows the average number of persons
employed during the year, by gender, who were directors,
senior managers or employees of the Company.
Directors
Senior managers
Employees
Male
Female
Total
6
1
38
45
–
1
10
11
6
2
48
56
Environment and greenhouse gas reporting
The Group is committed to ensuring that the actual
and potential environmental impact of its activities is
understood and managed effectively.
The annual quantity of Greenhouse Gas (GHG) Emissions for
the period 1 April 2018 to 31 March 2019 in tonnes of carbon
dioxide equivalents (tCO2e) is shown in the table below.
Emission source:
Combustion of fuel
Electricity and heat
purchased for own use
Total
tCO2e per £1m revenue
2019
tCO2e *
2018
tCO2e *
16
71
87
3.8
19
117
136
4.9
* The calculation of tCO2e for each source has been prepared
in accordance with DEFRA guidelines for GHG reporting.
The Group reports the following results for the financial year
ended 31 March 2019:
Group revenue has decreased to £22.7m (2018: £27.8m).
This is further to a continued reduction in higher volume
lower margin projects. Gross margin as a percentage of
revenue has increased to 19.3% (2018: 17.0%) reflecting this
reduction in lower margin projects together with higher levels
of permanent consultant utilisation throughout the year.
The Group reports a decrease in profit from operations
to £1.02m (2018: £1.68m). Earnings before interest, tax,
depreciation and amortisation (EBITDA) is £1.09m (2018:
£1.75m). The Group reports a profit after tax of £0.89m
(2018: £1.62m).
Overheads
Administrative expenses for the year have increased to
£3.36m (2018: £3.04m). The prior year figure included a
reversal of a legal cost provision of £0.2m. Excluding the
effect of this reversal, the net increase was mainly due to
an increase in expenditure in marketing and lead generation
activities of £0.1m.
Staff Costs
Total staff costs have increased to £4.6m (2018: £4.2m),
see note 7. Whilst the total average headcount for the year
has decreased to 56 (2018: 58), the average number of
fee earning technical consultants employed has increased,
resulting in higher salary and associated direct costs.
Cash
Cash and cash equivalents at 31 March 2019 increased
to £4.6m (2018: £3.8m). There was a net cash inflow from
operating activities of £1.3m (2018: £1.7m). The net cash
outflow from financing activities was £0.28m (2018: outflow
of £0.16m) which included dividend payments totalling
£0.31m (2018: £0.16m) during the year, see note 9. The net
cash outflow from investing activities was £0.15m (2018:
£0.02m).
Social, community and human rights issues
Fixed assets
We do not report on social, community and human rights
issues as the Group has no significant matters to report
that would be required to understand the performance of
the Group’s business.
Financial review
Tangible assets were purchased totalling £0.13m (2018:
£0.06m) predominantly relating to property refurbishment
costs.
Net assets
The net asset position of the Group at 31 March 2019 was
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| Triad Group Plc Annual Report and Accounts 2019
Strategic report
£5.8m (2018: £5.1m). The movements during the year are
detailed on page 31.
Share options
355,000 options were exercised by directors and staff
during the year (2018: 124,400). No options were granted
during the year (2018: 660,000). An expense of £28,000
(2018: £1,878) has been recognised relating to options
granted in September 2014 and March 2018.
New Standards
From 1 April 2018, the Group has adopted IFRS 15 ‘Revenue
from Contracts with Customers’ and IFRS 9 ‘Financial
Instruments’. Other than additional disclosure and
presentational requirements required by these standards
there was no material impact on the financial statements
following adoption.
By order of the Board
Nick Burrows
Finance Director
7 June 2019
Triad Group Plc Annual Report and Accounts 2019
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| Triad Group Plc Annual Report and Accounts 2019
Directors’ report
The Directors present their Annual Report on the activities
of the Group, together with the financial statements for the
year ended 31 March 2019. The Board confirms that these,
taken as a whole, are fair, balanced and understandable,
and that they provide the information necessary for
shareholders to assess the Group’s and Company’s position
and performance, business model and strategy, and that
the narrative sections of the report are consistent with the
financial statements and accurately reflect the Group’s
performance and financial position.
The Strategic Report provides information relating to the
Group’s activities, its business and strategy and the principal
risks and uncertainties faced by the business, including
analysis using financial and other KPIs where necessary.
These sections, together with the Directors’ Remuneration
and Corporate Governance Reports, provide an overview of
the Group, including environmental and employee matters
and give an indication of future developments in the Group’s
business, so providing a balanced assessment of the Group’s
position and prospects, in accordance with the latest narrative
reporting requirements. The Group’s subsidiary undertakings
are disclosed in the notes to the financial statements.
Corporate Governance disclosures required within the
Directors’ Report have been included within our Corporate
Governance Report beginning on page 14.
Share capital and substantial
shareholdings
Share capital
As at 31 March 2019, the Company’s issued share capital
comprised a single class of shares referred to as ordinary
shares. Details of the ordinary share capital can be found in
note 19 to these financial statements.
Voting rights
The Group’s articles provide that on a show of hands at a
general meeting of the Company every member who (being
an individual) is present in person and entitled to vote shall
have one vote and on a poll, every member who is present
in person or by proxy shall have one vote for every share
held. The notice of the Annual General Meeting specifies
deadlines for exercising voting rights and appointing a
proxy or proxies to vote in relation to resolutions to be
passed at the Annual General Meeting.
Transfer of shares
There are no restrictions on the transfer of ordinary shares
in the Company other than as contained in the Articles:
• The Board may, in its absolute discretion, and without
giving any reason for its decision, refuse to register any
transfer of a share which is not fully paid up (but not so
as to prevent dealing in listed shares from taking place)
and on which the Company has a lien. The Board may
also refuse to register any transfer unless it is in respect
of only one class of shares, in favour of no more than
four transferees, lodged at the Registered office, or such
other place as the Board may decide, for registration,
accompanied by a certificate for the shares to be
transferred (except where the shares are registered in
the name of a market nominee and no certificate has
been issued for them) and such other evidence as the
Board may reasonably require to prove the title of the
intending transferor or his right to transfer the shares.
Certain restrictions may from time to time be imposed by
laws and regulations, for example:
Insider trading laws; and
•
• Whereby certain employees of the Group require the
approval of the Company to deal in the Company’s
ordinary shares.
Appointment and replacement of directors
The Board may appoint Directors. Any Directors so appointed
shall retire from office at the next Annual General Meeting of
the Company, but shall then be eligible for re-appointment.
The current Articles require that at the Annual General
Meeting one third of the Directors shall retire from office but
shall be eligible for re-appointment. The Directors to retire
by rotation at each Annual General Meeting shall include any
Director who wishes to retire and not offer himself for re-
election and otherwise shall be the Directors who, at the date
of the meeting, have been longest in office since their last
appointment or re-appointment.
A Director may be removed from office by the service of a
notice to that effect signed by at least three quarters of all
the other Directors.
Triad Group Plc Annual Report and Accounts 2019
|
11
Directors’ report
Amendment of the Company’s Articles of Association
The Company’s Articles may only be amended by a special
resolution passed at a general meeting of shareholders.
are qualifying third-party indemnity provisions as defined
by Section 236 of the Companies Act 2006, were in force
throughout the year and are currently in force.
Substantial shareholdings
As at 31 March 2019, since the date of the last annual report
in June 2018, the Company had received the following
notification relating to interests in the Company’s issued share
capital, as required under the Disclosure and Transparency
Rules (DTR 5) when a notifiable threshold is crossed.
% of total voting rights
Disclosure of information to auditor
All of the current Directors have taken all the steps that
they ought to have taken to make themselves aware of
any information needed by the Company’s auditor for the
purposes of their audit and to establish that the auditor is
aware of that information. The Directors are not aware of any
relevant audit information of which the auditor is unaware.
P Atkinson
0.0%*
Forward-looking statements
* Notification was received informing the Company of a
reduction in holding to 0%, from above the notifiable threshold.
As at 7 June 2019, no notifications have been received since
the year-end.
The Strategic Report contains forward-looking statements.
Due to the inherent uncertainties, including both economic
and business risk factors, underlying such forward-looking
information, the actual results of operations, financial
position and liquidity may differ materially from those
expressed or implied by these forward-looking statements.
Dividends
The Directors are proposing a final dividend of 2p per
ordinary share (2018: 1p). This dividend has not been
accrued in the statements of financial position.
Financial instruments
The Board reviews and agrees policies for managing
financial risk. These policies, together with an analysis of
the Group’s exposure to financial risks are summarised in
note 3 of these financial statements.
Research and development activity
Research and development activities are undertaken with
the prospect of gaining new technical knowledge and
understanding, and developing new software.
Directors’ interests in contracts
Directors’ interests in contracts are shown in note 22 to
the accounts.
Directors’ insurance and indemnities
The Company maintains directors’ and officers’ liability
insurance which gives appropriate cover for any legal action
brought against its directors and officers. The Directors also
have the benefit of the indemnity provisions contained in the
Company’s Articles of Association. These provisions, which
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| Triad Group Plc Annual Report and Accounts 2019
Going concern
The Group’s business activities, together with the factors
likely to affect its future development, performance and
position, are set out in the Strategic Report. The financial
position of the Group, its cash flows, liquidity position
and borrowing facilities are described in the Strategic
Report, and in note 17 to the financial statements. In
addition, note 3 to the financial statements includes the
Group’s objectives, policies and processes for managing
its capital, its financial risk management objectives, details
of its financial instruments and hedging activities, and its
exposure to credit risk and liquidity risk. As highlighted in
note 17 to the financial statements, the Group meets its day
to day working capital requirements through cash reserves
and an invoice finance facility (which is currently unutilised).
The Group’s projections, taking account of reasonable
possible changes in trading performance, show that the
Group should be able to operate within the level of its
current facility. The facility may be terminated by either
party with one month's written notice. The Board receives
regular cash flow and working capital projections to enable
it to monitor its available headroom under this facility.
These projections indicate that the Group expects to
have sufficient resources to meet its reasonably expected
obligations. The bank has not drawn to the attention of the
Group any matters to suggest that this facility will not be
continued on acceptable terms.
Directors’ report
Further information in relation to the Directors’
consideration of the going concern position of the
Company is contained in the Viability Statement on page 7.
• prepare a Directors’ Report, Strategic Report and
Director’s Remuneration Report which comply with the
requirements of the Companies Act 2006.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future
and at least twelve months from the date of approval of the
financial statements. Accordingly, they continue to adopt
the going concern basis in preparing the annual report and
accounts.
Auditor
BDO LLP have indicated their willingness to continue in
office. Accordingly, a resolution to reappoint BDO LLP as
auditors of the Company will be proposed at the next Annual
General Meeting.
Environment and greenhouse
gas reporting
Carbon dioxide emissions data is contained in the Corporate
Social Responsibility section of the Strategic Report.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the annual
report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors are required to prepare the Group financial
statements and have elected to prepare the Company
financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by
the European Union. 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
for the Group and Company for that period.
In preparing these financial statements, the Directors are
required to:
•
select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
•
state whether they have been prepared in accordance
with IFRSs as adopted by the European Union, subject
to any material departures disclosed and explained in
the financial statements;
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements
comply with the Companies Act 2006 and, as regards the
Group financial statements, Article 4 of the IAS Regulation.
They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring the annual
report and the financial statements are made available
on a website. Financial statements are published on
the company’s website in accordance with legislation
in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and
integrity of the Company's website is the responsibility of
the Directors. The Directors' responsibility also extends to
the ongoing integrity of the financial statements contained
therein.
The Directors confirm to the best of their knowledge:
•
•
The Group financial statements have been prepared
in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union
and Article 4 of the IAS Regulation and give a true and
fair view of the assets, liabilities, financial position and
profit and loss of the Group.
The annual report includes a fair review of the
development and performance of the business and
the financial position of the Group and the Parent
Company, together with the description of the principal
risks and uncertainties that they face.
By order of the Board
Nick Burrows
Company Secretary
7 June 2019
Triad Group Plc Annual Report and Accounts 2019
|
13
Corporate governance report
The Board has considered the principles and provisions of the
UK Corporate Governance Code 2016 (“the Code”) applicable
for this financial period. The following statement sets out the
Group’s application of the principles of the Code and the extent
of compliance with the Code’s provisions, made in accordance
with the requirements of the Listing Rules.
The Board
The Directors who held office during the financial year were:
Executive Directors
John Rigg, Chairman
Adrian Leer, Managing Director
Nick Burrows, Finance Director
Independent non-executive Directors
Alistair Fulton, senior independent
non-executive Director
Steven Sanderson
Chris Duckworth
John Rigg is Chairman. He is a Chartered Accountant. He
was a founder of Marcol Group Plc and was its Managing
Director from 1983 until 1988. Marcol was floated on the
Unlisted Securities Market in 1987. He was Chairman of Vega
Group plc from 1989 until 1996, holding the post of Chief
Executive for much of this period. Vega floated on the main
market in 1992. He was a founder shareholder of Triad and
served as the Chairman of the Company from 1988 up to
just before its flotation in 1996, when he resigned to develop
new business interests overseas. He was appointed as non-
executive Chairman in June 1999: in May 2004 he became
part-time executive Chairman. Between 4 February 2005 and 5
September 2007 John was acting Group Chief Executive.
Adrian Leer is Managing Director. He was appointed to the
Board on 3 March 2015. He initially joined Triad in 2009 in
a consultative capacity, providing advice to the business
regarding its fledgling geospatial product, Zubed, and helping
to secure significant wins with major clients. In 2010, he
became General Manager of Zubed Geospatial. Adrian became
Commercial Director of Triad Consulting & Solutions in 2012.
Nick Burrows is the Finance Director. He is a Chartered
Accountant who joined Triad in 2001 as Financial Controller
of the Consulting & Solutions business. He was appointed
Company Secretary in 2008 and executive Finance Director in
October 2009.
Alistair Fulton is a non-executive Director. He is a Chartered
Engineer and member of the British Computer Society. He
was the founding Managing Director of Triad. He continued in
this role until February 1997 when he became non-executive
14
| Triad Group Plc Annual Report and Accounts 2019
Chairman, a position he retained until June 1999, when he took
up his present position.
Steven Sanderson is a non-executive Director. He is a
Chartered Accountant. He was appointed non-executive
Director in January 2007. He has extensive experience
at executive director level in the IT services and
telecommunications sectors. His background includes public
flotations, plc directorship, fund raising, acquisition and
disposal activities.
Chris Duckworth was appointed on 1 July 2017 as a non-
executive Director. He has held numerous positions within
public and private companies as Finance Director, Managing
Director, non-executive Director and Chairman. He was a
founding shareholder and from 1989 to 1994 was Finance
Director of Triad where he remained as a non-executive
Director until 1999. From 1989 to 1994 he was Finance Director
of Vega Group PLC after which he served as a non-executive
Director until 1997. He was a founding shareholder and
Chairman of Telecity PLC in May 1998 and subsequently acted
as a non-executive Director until August 2001.
The Board exercise full and effective control of the Group
and has a formal schedule of matters specifically reserved
to it for decision, including responsibility for formulating,
reviewing and approving Group strategy, budgets and major
items of capital expenditure.
Regularly the Board will consider and discuss matters that
include, but are not limited to:
Financial performance and forecast;
Strategy;
•
•
•
• City and compliance matters.
Human resources; and
The Executive Chairman, John Rigg, is responsible for
the leadership and efficient operation of the Board. This
entails ensuring that Board meetings are held in an open
manner, and allow sufficient time for agenda points to be
discussed. It also entails the regular appraisal of each
director, providing feedback and reviewing any training or
development needs.
The Board meets regularly with senior management to
discuss operational matters. The Non-Executive Directors
must satisfy themselves on the integrity of financial
information and that financial controls and systems of
risk management are robust. Following presentations by
senior management and a disciplined process of review
and challenge by the Board, clear decisions on the policy or
strategy are adopted. The responsibility for implementing
Board decisions is delegated to management on a
structured basis and monitored at subsequent meetings.
Corporate governance report
During the period under review, and to date, the Executive
Chairman has not held any significant commitments outside
the Group.
Alistair Fulton is the nominated senior independent non-
executive Director. Steven Sanderson and Chris Duckworth
are non-executive Directors. All have long-standing industry
experience in both executive and non-executive roles and
are free from any business or other relationship that could
materially interfere with the exercise of their independent
judgement. The Board benefits from their experience and
independence, when they bring their judgement to Board
decisions. The Board considers that all continue to remain
independent for the reasons stated above.
The Group has a procedure for Directors to take
independent professional advice in connection with the
affairs of the Group and the discharge of their duties as
Directors.
The Board has an Audit Committee, comprised of the
Executive Chairman John Rigg, and the independent non-
executive Directors, Alistair Fulton and Steven Sanderson.
The Committee is chaired by Alistair Fulton.
The Board has a Remuneration Committee, comprised of
the Executive Chairman John Rigg, and the independent
non-executive Directors, Alistair Fulton and Steven
Sanderson. The Committee is chaired by Alistair Fulton.
The following table shows the attendance of Directors
at scheduled meetings of the Board and Audit and
Remuneration Committees during the year ended 31
March 2019 and shows that the Board are able to
allocate sufficient time to the company to discharge their
responsibilities effectively.
Board
Audit
Committee
Remuneration
Committee
Number of meetings held
11
1
Number of meetings attended by executive Directors:
John Rigg (Chairman)
Nick Burrows
Adrian Leer
10
11
11
1
–
–
Number of meetings attended by non-executive Directors:
Alistair Fulton
Steven Sanderson
Chris Duckworth
11
10
11
1
1
–
2
2
–
–
2
2
–
Audit Committee
The members of the Audit Committee are shown oposite.
The Board believe that John Rigg and Steven Sanderson,
both Chartered Accountants with broad experience of the
IT industry, and Alistair Fulton, who has been a Director of
companies in the IT sector for over 30 years, have recent
and relevant financial experience, as required by the Code.
The Audit Committee is responsible for reviewing the
Group’s annual and interim financial statements and
other announcements. It is also responsible for reviewing
the Group’s internal financial controls and its internal
control and risk management systems. It considers
the appointment and fees of the external auditor, and
discusses the audit scope and findings arising from audits.
The Committee is also responsible for assessing the
Group’s need for an internal audit function.
Consideration of significant issues in relation to the
financial statements
The Audit Committee have considered the following
significant issues in relation to the preparation of these
financial statements;
Revenue recognition: The Committee has considered
revenue recognised in projects during, and active at the
end of, the financial year to ensure revenue has been
recognised correctly.
Going concern: The Committee has reviewed budgets
and cash flow projections against borrowing facilities
available to the Group to ensure the going concern basis of
preparation of the results remains appropriate.
Meetings with auditor and senior finance team
Members of the Audit Committee met with the senior
finance team in advance of their meeting with the auditor,
prior to commencement of the year-end audit to discuss;
• Audit scope, strategy and objectives
•
•
Key audit and accounting matters
Independence and audit fee
A meeting was held following completion of the audit with
the senior finance team and the auditor to assess the
effectiveness of the audit and discuss audit findings.
Triad Group Plc Annual Report and Accounts 2019
|
15
Corporate governance report
Effectiveness of external audit process
The Committee conducts an annual review of the
effectiveness of the annual report process. Inputs into the
review include feedback from the finance team, planning
and scope of the audit process and identification of risk,
the execution of the audit, communication by the auditor
with the Committee, how the audit adds value and a review
of auditor independence and objectivity. Feedback is
provided to the external auditor and management by the
Committee, with any actions reviewed by the Committee.
Auditor independence and objectivity
The Committee has procedures in place to ensure that
independence and objectivity is not impaired. These include
restrictions on the types of services which the external
auditor can provide, in line with the FRC Ethical Standards
on Auditing. The external auditor has safeguards in place
to ensure that objectivity and independence is maintained
and the Committee regularly reviews independence taking
into consideration relevant UK professional and regulatory
requirements. The external auditor is required to rotate the
audit partner responsible for the Group audit every five years.
Non-audit fees
During the year the Group did not engage its auditor for
any non-audit work.
The Committee is responsible for reviewing any non-audit
work to ensure it is permissible under EU audit regulations
and that fees charged are justified, thus ensuring auditor
independence is preserved.
Appointment of external auditor
BDO LLP was reappointed external auditor in 2017 following
a tendering process.
BDO LLP has confirmed to the Committee that they remain
independent and have maintained internal safeguards to
ensure that the objectivity of the engagement partner and
audit staff is not impaired.
Internal audit
The Audit Committee has considered the need for a
separate internal audit function this year but does not
consider it appropriate in view of the size of the Group. The
Group is certified to ISO 9001: 2015.
Internal controls and risk management
The Board has applied the internal control and risk
management provisions of the Code by establishing
a continuous process for identifying, evaluating and
managing the significant risks faced by the Group. The
Board regularly reviews the process, which has been in
place from the start of the year to the date of approval of
this report and which is in accordance with FRC guidance
16
| Triad Group Plc Annual Report and Accounts 2019
on risk management, internal control and related financial
and business reporting. The Board is responsible for the
Group's system of internal control and for reviewing its
effectiveness. Such a system is designed to manage rather
than eliminate risk of failure to achieve business objectives,
and can only provide reasonable and not absolute
assurance against misstatement or loss.
In compliance with the Code, the Audit Committee
regularly reviews the effectiveness of the Group's systems
of internal financial control and risk management. The
Board’s monitoring covers all controls, including financial,
operational and compliance controls and risk management.
It is based principally on reviewing reports from
management to consider whether significant weaknesses
and risks are effectively managed and, if applicable,
considering the need for more extensive monitoring.
The Board has also performed a specific assessment for the
purpose of this annual report. This assessment considers all
significant aspects of internal control and risk management
arising during the period covered by the report.
The key elements of the internal control and risk
management systems are described below:
•
Clearly documented procedures contained in a
series of manuals covering Group operations and
management, which are subject to internal project audit
and external audit as well as regular Board review.
• An appropriate budgeting process where the business
prepares budgets for the coming year, which are
approved by the Board.
• Close involvement in the day-to-day management of the
business by the executive Directors.
• Regular meetings between the executive Chairman,
executive Director and senior managers to discuss
and monitor potential risks to the business, and to
implement mitigation plans to address them.
Remuneration Committee
The Remuneration Committee is responsible for setting
remuneration for executive directors and the Chairman
in accordance with the remuneration policy below. In
addition, the Committee is responsible for recommending
and monitoring the level and structure of remuneration for
senior management.
The Group’s Remuneration Committee is authorised to
take appropriate counsel to enable it to discharge its duty
to make recommendations to the Board in respect of all
aspects of the remuneration package of Directors.
The Directors Remuneration Report can be found on page 18.
Corporate governance report
Whistleblowing
B.2.1/2.4
Staff may contact the senior independent non-executive
Director, in confidence, to raise genuine concerns of possible
improprieties in financial reporting or other matters.
Directors’ training
Any new Board members are made fully aware of their
duties and responsibilities as Directors of listed companies,
and are supported in understanding and applying these
by established and more experienced Directors. Further
training is available for any Director at the Group’s expense
should the Board consider it appropriate in the interests of
the Group.
Relations with shareholders
Substantial time and effort is spent by Board members
on meetings with and presentations to existing and
prospective investors. The views of shareholders derived
from such meetings are disseminated by the Chairman to
other Board members.
Private shareholders are invited to attend and participate at
the Annual General Meeting.
B.6
B.2.3
B.7.1
Terms of reference
There should be a nominations committee
which should lead the process for board
appointments and make recommendations to
the board. The Board considers that because
of its size, the whole Board should be involved
in Board appointments.
The board should undertake a formal
and rigorous annual evaluation of its own
performance and that of its committees and
individual directors. There is a process of
continuous informal evaluation, due to the small
size of the Board.
Non-executive directors should be appointed
for specified terms subject to re-election.
Although not appointed for fixed terms, Non-
executive Directors are subject to re-election
in accordance with the Company’s Articles of
Association at the Annual General Meeting.
Their contracts are subject to a notice period
that does not exceed one month.
Non-executive directors who have served longer
than nine years should be subject to annual re-
election. The Board consider that because of its
size, re-election by rotation in accordance with
the Company’s Articles of Association at the
Annual General Meeting is sufficient.
The terms of reference of the Audit and Remuneration
Committees are available on request from the Company
Secretary.
By order of the Board
Statement of compliance
The Board considers that it has been compliant with the
provisions of the Code for the whole of the period, except
as detailed below:
Nick Burrows
Company Secretary
7 June 2019
A.2.1
The roles of chairman and chief executive
should not be exercised by the same
individual. John Rigg is the Executive
Chairman. Adrian Leer is Managing Director.
The Board currently has no plans to recruit
a Chief Executive Officer as it considers that
the duties are being satisfactorily covered
by members of the Executive Board and the
Group’s senior management.
Triad Group Plc Annual Report and Accounts 2019
|
17
Directors’ remuneration report
On the following pages we set out the Remuneration Report for the year ended 31 March 2019. The members of the
Remuneration Committee are shown in the Corporate Governance Report on page 14.
This report has been prepared in accordance with the Companies Act 2006 and is split into two sections as follows;
1. The Directors’ remuneration policy.
2. The Annual report on remuneration. This will be subject to an advisory shareholder vote at this years’
Annual General Meeting.
No major decisions or changes were made to Directors’ remuneration during the year.
Directors’ remuneration policy
The remuneration policy sets out the framework within which the Company remunerates its Directors. The Company’s
remuneration policy was put to a shareholder vote at the 2018 Annual General Meeting of the Company and was approved by
83.36% of shareholders. The remuneration policy will be put to a shareholder vote every three years unless any changes to the
policy are proposed before then.
Policy table—executive Directors
Element
Base salary
Benefits in kind
Relevance to short and
long term strategic
objectives
Reflects the individual’s
skills, responsibilities and
experience.
Supports the recruitment
and retention of Executive
Directors.
Protects the well-being of
directors and provides fair
and reasonable market
competitive benefits.
Operation
Maximum payable
Performance metrics
Reviewed annually
taking into consideration
individual and
companywide
performance and the wider
employee pay review.
Ordinarily, salary
increases will be in
line with average
increases awarded to
other employees in the
Company.
None, although individual
performance is
considered when setting
salary levels.
None.
Benefits are set at a
level considered to
be appropriate taking
into account individual
circumstances.
Benefits in kind include
company cars or
allowances, private
medical insurance, life
cover and permanent
health insurance.
Benefits are reviewed
periodically.
Pension
Provides competitive
post-retirement benefits
to support the recruitment
and retention of Executive
Directors.
The Company pays
contributions into a
personal pension scheme
or cash alternative.
The Company matches
individual contributions up
to a maximum of 5%.
None.
Share option
scheme
Encourages share
ownership amongst
employees and aligns
their interests with the
shareholders.
The Company operates an
EMI share option scheme.
Discretionary awards are
made in accordance with
the scheme rules.
The potential value of
options held rises as the
Company’s share price
increases.
Specific performance
criteria are specified
at the time of awarding
the share options to
ensure alignment with the
interests of shareholders.
18
| Triad Group Plc Annual Report and Accounts 2019
Directors’ remuneration report
The award of share options is at the discretion of the Remuneration Committee: there is no scheme providing entitlement to
share options, and there is no long-term incentive scheme. The Group does not believe that performance related bonuses are
appropriate at the present time. The executive Directors’ existing interests in shares and share options are expected to align
their interests with those of shareholders.
Policy table—non-executive Directors
Element
Fees
Relevance to short and
long term strategic
objectives
Competitive fees to
attract experienced
directors.
Operation
Maximum payable
Performance metrics
Reviewed annually.
Not applicable.
In general, the level of fee
increase for the non-
executive directors will be
set taking account of any
change in responsibility.
The remuneration of the non-executive Directors is agreed by the Board. However, no Director is involved in deciding their
own remuneration.
Approach to recruitment remuneration
The Group’s remuneration policy is to provide remuneration packages which secure and retain management of the highest
quality. Therefore, when determining the remuneration packages of new executive Directors, the Remuneration Committee
will structure a package in accordance with the general policy for executive Directors as shown above. In doing so the
Committee will consider a number of factors including:
•
•
•
•
the salaries and benefits available to executive Directors of comparable companies;
the need to ensure executive Directors’ commitment to the continued success of the Group;
the experience of each executive Director; and
the nature and complexity of the work of each executive Director.
Directors’ service contracts and policy
The details of the Directors’ contracts are summarised as follows:
J C Rigg
A M Fulton
S M Sanderson
N E Burrows
A Leer
C J Duckworth
Date of contract
Notice period
01/07/1999
19/02/1997
01/01/2007
03/03/2015
03/03/2015
01/07/2017
1 month
1 month
1 month
6 months
6 months
1 month
All contracts are for an indefinite period. No contract has any provision for the payment of compensation upon the
termination of that contract.
Triad Group Plc Annual Report and Accounts 2019
|
19
Directors’ remuneration report
Illustrations of application of remuneration policy
As there are currently no performance related or variable elements of executive Director remuneration it is not appropriate
to prepare illustrations required under the legislation.
Policy on payment for loss of office
It is the Group’s policy in relation to Directors’ contracts that:
• executive Directors should have contracts with an indefinite term providing for a maximum of six months’ notice by either party.
• non-executive Directors should have terms of engagement for an indefinite term providing for one month notice by either party.
•
there is no provision for termination payments to Directors.
Consideration of employment conditions elsewhere in group
In setting the executive Directors’ remuneration, the Committee takes into account the pay and employment conditions
applicable across the Group in the reported period. No consultation has been held with employees in respect of executive
Directors’ remuneration.
Consideration of shareholders views
The policy is unchanged from the previous year as endorsed by the unanimous vote in favour of the approval of the
Directors’ Remuneration Report at the Annual General Meeting in September 2018.
Annual report on remuneration (audited)
Directors' remuneration—single total figure of remuneration
The remuneration of each of the Directors for the period they served as a Director are set out below:
2019
Director
Basic salary & fees
Benefits in kind
Pension
£’000
£’000
£’000
Other*
£’000
Total
£’000
Executive
J C Rigg
N E Burrows
A Leer
Non-executive
A M Fulton
S M Sanderson
C J Duckworth
60
122
167
35
35
35
–
12
15
—
—
—
–
20
17
—
—
—
–
–
35
–
–
–
60
154
234
35
35
35
* This represents a discretionary one-off bonus.
20
| Triad Group Plc Annual Report and Accounts 2019
Directors’ remuneration report
Director
Executive
J C Rigg
N E Burrows
A Leer
Non-executive
A M Fulton
S M Sanderson
C J Duckworth (appointed 1/7/17)
2018
Basic salary
and fees
Benefits in kind
Pension
Share
options
Total
£’000
£’000
£’000
£’000
£’000
60
114
146
43
35
29
–
13
12
–
–
–
–
19
9
–
–
–
–
13*
26*
–
–
–
60
159
193
43
35
29
* This represents the value of share options that vested on 18 September 2017, calculated as the number of options that vested
multiplied by difference between the market price of the shares as at the vesting date (62.5p) and the exercise price (11.0p).
Benefits in kind include the provision of company car and medical insurance.
Pension includes a 5% employer contribution together with contributions made under an employee salary sacrifice scheme.
Other than vesting conditions in relation to outstanding share options (see note 20), no performance measures or targets
were in place for either the year ended 31 March 2019, or any prior financial year, upon which any variable pay elements
could become payable during the year.
Two Directors are members of a money purchase scheme into which the Group contributed during the year.
Payments to past Directors
There were no payments to past Directors during the year.
Payment for loss of office
There were no payments for loss of office during the year.
Directors’ interests in shares
The Directors who held office at the end of the financial year had the following beneficial interests in the ordinary shares of
the Company. No change has occurred between the year end and the date of this report.
A M Fulton
J C Rigg
S M Sanderson
N E Burrows
A Leer
C J Duckworth
1 April 2018
354,100
4,509,400
104,089
9,893
5,379
13,379
31 March 2019
354,100
4,509,400
104,089
14,893
155,379
13,379
Triad Group Plc Annual Report and Accounts 2019
| 21
Directors’ remuneration report
Directors’ share options
The interests of executive Directors in share options were as follows::
N E Burrows:
granted 07.08.08
granted 23.09.11
granted 18.09.14
granted 09.03.18
A Leer:
granted 23.09.11
granted 18.09.14
granted 09.03.18
At beginning
of year
Granted
during year
Exercised
during year
At end
of year
Exercise
price
Exercise period
5,000
100,000
25,000
75,000
50,000
100,000
150,000
505,000
–
–
–
–
–
–
–
–
(5,000)
–
–
–
–
100,000
25,000
75,000
(50,000)
(100,000)
–
–
–
150,000
(155,000)
350,000
14.0p
13.5p
11.0p
53.5p
13.5p
11.0p
53.5p
07.08.11 to 07.08.18
23.09.14 to 23.09.21
18.09.17 to 18.09.24
09.03.21 to 09.03.28
23.09.14 to 23.09.21
18.09.17 to 18.09.24
09.03.21 to 09.03.28
125,000 share options were exercisable at the end of the year (2018: 280,000).
During the year, A Leer exercised share options over a total of 150,000 shares at a nominal gain of £35,500, and N E Burrows
exercised share options over a total of 5,000 shares at a nominal gain of £2,800.
Share options are exercisable provided that the relevant performance requirement has been satisfied.
For options granted on 9 March 2018: 100% of the shares granted under an Option will vest if the Company’s share price at
31 March 2021 has increased by 30% or more from the share price as at the date of grant. 50% of shares granted under an
Option will vest if the Company’s share price at 31 March 2021 has increased by 15% from the share price as at the date of
grant. Between these upper and lower thresholds, awards vest on a straight-line basis.
For all other options: In any financial year commencing at least one year after the date of grant, the Company shall have
achieved a positive basic earnings per share (subject to adjustment to exclude identified exceptional items), as reported in its
audited annual accounts.
The total share based payment expense recognised in the year in respect of Directors’ share options is £11,821 (2018: £756).
The market price of the Company’s shares was 39p at 31 March 2019 and the range during the year was between 34.5p and 78.5p.
.
22
| Triad Group Plc Annual Report and Accounts 2019
Directors’ remuneration report
Annual report on remuneration (unaudited)
Performance graph
The following graph shows the Group’s performance, measured by total shareholder return, compared with the performance
of the FTSE Fledgling Index (“FTSEFI”) also measured by total shareholder return (“TSR”). The FTSEFI has been selected
for this comparison because it is an index of companies with similar current market capitalisation to Triad Group Plc.
TRD v FTSE Fledgling Index
Fledging
Triad
400
350
300
250
200
150
100
50
x
e
d
n
I
Mar 09 Mar 10 Mar 11
Mar 12
Mar 13
Mar 14
Mar 15
Mar 16
Mar 17
Mar 18
Mar 19
Chief executive remuneration
For the financial year ended 31 March 2019 the salary of the Executive Chairman was £60,000 (2018: £60,000). Employee
salaries increased, on average, by 4% in the year.
Relative importance of spend on pay
The total dividends or other cash distributions to shareholders during the year was £316,300 (2018: £155,258), see note 9.
The total employee remuneration (including directors) during the year was £4.567m (2018: £4.228m).
Consideration of matters related to directors’ remuneration
During the financial year, the remuneration committee met twice to consider Directors’ remuneration. No external advice was
sought in relation to matters discussed at these meetings.
Statement of voting at last general meeting
At the last annual general meeting the Directors’ Remuneration Report was approved with 83.16% of votes cast in favour
of the resolution with 7,000 votes withheld. The Directors Remuneration Policy was approved with 83.36% of votes cast in
favour of the resolution with 7,000 votes withheld.
Alistair Fulton
Chairman, Remuneration Committee
7 June 2019
Triad Group Plc Annual Report and Accounts 2019
| 23
Independent auditors’ report to the members of Triad Group Plc
Opinion
We have audited the financial statements of Triad Group Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 31 March 2019 which comprise the statements of comprehensive income and expense, the statements of changes
in equity, the statements of financial position, the statement of cash flows and notes to the financial statements, including a
summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the
Parent Company financial statements.
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 March 2019 and of the
Group’s and the Parent Company’s profit for the year then ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006; and, as regards the Group
financial statements, Article 4 of the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the Group and the Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied
to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to principal risks, going concern and viability statement
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs (UK)
require us to report to you whether we have anything material to add or draw attention to:
•
•
•
•
•
the disclosures in the annual report set out on page 6 that describe the principal risks and explain how they are being
managed or mitigated;
the directors’ confirmation set out on page 6 in the annual report that they have carried out a robust assessment of the principal
risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity;
the directors’ statement set out on page 12 in the financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting in preparing the financial statements and the directors’
identification of any material uncertainties to the Group and the Parent Company’s ability to continue to do so over a
period of at least twelve months from the date of approval of the financial statements;
whether the directors’ statement relating to going concern required under the Listing Rules in accordance with Listing
Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
the directors’ explanation set out on page 7 in the annual report as to how they have assessed the prospects of the Group,
over what period they have done so and why they consider that period to be appropriate, and their statement as to whether
they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or
assumptions.
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) that 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.
24
| Triad Group Plc Annual Report and Accounts 2019
Independent auditors’ report to the members of Triad Group Plc
Revenue recognition
As detailed in note 1, revenue is recognised predominantly on a time and materials basis, and the basis of revenue
recognition has remained consistent on the transition to IFRS 15. Agreements to place a number of consultants for a period
of time are agreed with customers. Revenue is then recognised based on the timesheets recorded and approved, either
internally or externally, and a charge is based on an agreed hourly rate as per the agreement.
We considered there to be a significant risk over the completeness and existence of revenue due to missing or late
timesheets or contractor invoices and through manual postings to revenue in the financial close process.
How we addressed the key matter in our audit
We tested the controls over the approval of timesheets and the recognition of these invoices in the accounting system.
We performed a test on a sample basis over the revenue postings around the year end and post year end, agreeing the
posting to supporting documentation, ensuring correct treatment of the balance. We also completed a test on a sample
basis over the contractor costs incurred around the year end, agreeing them to supporting documentation and ensuring that
the revenue associated with these has been recorded in the correct period.
We performed a test on a sample basis over the revenue postings throughout the year, agreeing the posting to supporting
documentation, ensuring correct treatment of the balance.
We tested a sample of manual journal postings to revenue, agreeing the posting to supporting documentation.
We tested a sample of year end accrued and deferred income balances and agreed them through to supporting documentation.
Further to this, we selected a sample of contracts for services provided in the year and agreed the revenue recognised
against the policy stipulated in the contract to check the revenue recognition was appropriate. We tested the sample of
contracts and the associated revenue to supporting documentation to check that the revenue was correctly recognised.
In respect of the first year adoption of IFRS 15, we have obtained and examined the director’s assessment of the accounting
standard and are satisfied that there is no material change in the basis of revenue recognition.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements. Misstatements below these levels will
not necessarily be evaluated as immaterial as we also take into account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
The materiality for the Group financial statements as a whole was set at £114,000 (2018 £278,000). This was determined
with reference to a benchmark of revenue of which it represents 0.5%. We consider revenue to be the most appropriate
benchmark as it is one of the principal considerations for users of the financial statements in assessing the financial
performance and development of the Group.
In determining the performance materiality in both the current and prior year, we based our assessment on a level of 70%
of materiality. In setting the level of performance materiality we considered a number of factors including the expected total
value of known and likely misstatements (based on past experience and other factors), the amount of areas of estimation
within the financial statements and the type of audit testing to be completed.
The materiality threshold is the same for the Group and Company as the rest of the entities within the Group are dormant
and do not require a statutory audit. The reporting threshold to those charged with governance was set at £2,280 (2018
£6,000) which is 2% of the materiality threshold. We also agreed to report differences below these thresholds that, in our
view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
The Group financial statements are a consolidation of six companies made up of one trading Company (the Parent
Company) which provides consultancy and development services and five dormant companies. In establishing the overall
approach to the Group audit, we determined the type of work that needed to be performed on each Company. The Group
Triad Group Plc Annual Report and Accounts 2019
| 25
Independent auditors’ report to the members of Triad Group Plc
operates solely in the United Kingdom. Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group’s system of internal control, and assessing the risks of material misstatement in the
financial statements at the Group and Parent Company level.
Based on our assessment we performed an audit of the complete financial information of the Parent Company as the only
trading Company.
In our audit, we tested and examined information, using sampling and other auditing techniques, to the extent we considered
necessary to provide a reasonable basis for us to draw conclusions. Our audit evidence was largely obtained through
substantive procedures.
Our audit aimed to detect non compliance with relevant laws and regulations that could lead to a material error arising in
the Group financial statements as well as the susceptibility of the Group to fraud. We obtained an understanding of the
regulatory and legal framework of the industry that the Group operate in.
We completed audit procedures across the Group to respond to the risk of an error arising in the specific areas in relation
but not limited to compliance with the Companies Act 2006, the UK listing rules and UK tax legislation. The procedures
included the investigation of potential non compliance with laws and regulations, review of the communications with the
regulatory bodies and a reconciliation of the financial statement disclosures to the requirements.
We also addressed the risk of management override of internal controls, including testing journals and evaluating whether
there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
Annual Report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether 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 the other information, we are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in
the other information and to report as uncorrected material misstatements of the other information where we conclude that
those items meet the following conditions:
• Fair, balanced and understandable set out on page 11 – the statement given by the directors that they consider
the annual report and financial statements taken as a whole is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s performance, business model and strategy, is materially
inconsistent with our knowledge obtained in the audit; or
• Audit Committee reporting set out on page 15
• Directors’ statement of compliance with the UK Corporate Governance Code set out on page 17 – the parts of the
directors’ statement required under the Listing Rules relating to the Company’s compliance with the UK Corporate
Governance Code containing provisions specified for review by the auditor in accordance with Listing Rule 9.8.10R(2) do
not properly disclose a departure from a relevant provision of the UK Corporate Governance Code.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with
the Companies Act 2006.
26
| Triad Group Plc Annual Report and Accounts 2019
Independent auditors’ report to the members of Triad Group Plc
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 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 and the part of the directors’ remuneration report to be audited 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 13, 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.
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.
Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed by the directors to audit the financial statements for the
year ending 31 March 2006 and subsequent financial periods. We successfully retendered for the audit of the financial statements
for the year ended 31 March 2018, and we were reappointed as auditors in respect of the year ended 31 March 2019 by the
Members. The period of total uninterrupted engagement is 14 years, covering the years ending 31 March 2006 to 31 March 2019.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and
we remain independent of the Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit Committee.
Triad Group Plc Annual Report and Accounts 2019
| 27
Independent auditors’ report to the members of Triad Group Plc
Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company’s members
as a body, for our audit work, for this report, or for the
opinions we have formed.
James Fearon (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
7 June 2019
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
28
| Triad Group Plc Annual Report and Accounts 2019
Triad Group Plc Annual Report and Accounts 2019
| 29
Statements of comprehensive income and expense
for the year ended 31 March 2019
Group and Company
Note
Revenue
Cost of sales
Gross profit
Administrative expenses
Profit from operations
Finance expense
Profit before tax
Tax charge
Profit for the year and total comprehensive income
attributable to equity holders of the parent
Basic earnings per share
Diluted earnings per share
All amounts relate to continuing activities.
4
5
6
8
10
10
2019
£’000
22,713
(18,337)
4,376
(3,357)
1,019
(2)
1,017
(132)
885
5.60p
5.44p
2018
£’000
27,819
(23,095)
4,724
(3,045)
1,679
(17)
1,662
(38)
1,624
10.45p
10.02p
30
| Triad Group Plc Annual Report and Accounts 2019
Statements of changes in equity for the year ended 31 March 2019
Group
At 1 April 2017
Profit for the year and total
comprehensive income
Dividend paid
Ordinary shares issued
Share-based payments
At 1 April 2018
Profit for the year and total
comprehensive income
Dividend paid
Ordinary shares issued
Share-based payments
At 31 March 2019
Company
At 1 April 2017
Profit for the year and total
comprehensive income
Dividend paid
Ordinary shares issued
Share-based payments
At 1 April 2018
Profit for the year and total
comprehensive income
Dividend paid
Ordinary shares issued
Share-based payments
At 31 March 2019
Share
Capital
£’000
155
–
–
1
—
156
–
–
4
–
160
Share
Capital
£’000
155
—
–
1
—
156
–
–
4
–
160
Share premium
account
Capital redemption
reserve
Retained earnings
Total
£’000
605
£’000
104
£’000
2,775
1,624
(155)
–
2
4,246
885
(316)
–
28
£’000
3,639
1,624
(155)
15
2
5,125
885
(316)
44
28
£’000
2,770
1,624
(155)
–
2
£’000
3,634
1,624
(155)
15
2
–
–
–
–
104
–
–
–
–
–
–
–
–
104
4,241
5,120
–
–
–
–
885
885
(316)
(316)
–
28
44
28
104
4,838
5,761
–
–
14
—
619
–
–
40
–
659
—
–
14
—
619
–
–
40
–
659
104
4,843
5,766
Share premium
account
Capital redemption
reserve
Retained earnings
Total
£’000
605
£’000
104
Share capital represents the amount subscribed for share capital at nominal value.
The share premium account represents the amount subscribed for share capital in excess of the nominal value.
The capital redemption reserve represents the nominal value of the purchase and cancellation of its own shares by the
Company in 2002.
Retained earnings represents the cumulative net gains and losses recognised in the statement of comprehensive income
and expense.
Triad Group Plc Annual Report and Accounts 2019
| 31
Statements of financial position at 31 March 2019
Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Financial liabilities
Short term provisions
Non-current liabilities
Financial liabilities
Long term provisions
Total liabilities
Net assets
Shareholders’ equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total shareholders’ equity
Note
11
12
8
14
15
16
17
18
17
18
19
Registered number 2285049
Group
Company
2019
£’000
15
205
191
411
3,333
4,604
7,937
8,348
2018
£’000
Restated
4
136
323
463
3,985
3,751
7,736
8,199
2019
£’000
15
205
191
411
3,333
4,604
7,937
8,348
2018
£’000
Restated
4
136
323
463
3,985
3,751
7,736
8,199
(2,480)
(2,895)
(2,485)
(2,900)
(3)
–
(3)
(99)
(3)
–
(3)
(99)
(2,483)
(2,997)
(2,488)
(3,002)
(17)
(82)
(99)
(2,582)
5,766
160
659
104
4,843
5,766
(20)
(57)
(77)
(17)
(82)
(99)
(20)
(57)
(77)
(3,074)
(2,587)
(3,079)
5,125
5,761
5,120
156
619
104
4,246
5,125
160
659
104
4,838
5,761
156
619
104
4,241
5,120
The financial statements on pages 30 to 50 were approved by the Board of Directors and authorised for issue on 7 June
2019 and were signed on its behalf by:
Nick Burrows
Director
Alistair Fulton
Director
Triad Group Plc is registered in England and Wales with registered number 2285049.
32
| Triad Group Plc Annual Report and Accounts 2019
Statements of cash flows for the year ended 31 March 2019
Group and company
Cash flows from operating activities
Profit for the year before taxation
Adjustments for:
Depreciation of property, plant and equipment
Amortisation/impairment of intangible assets
Interest expense
Unwinding of discount on provisions
Profit on disposal of tangible assets
Share-based payment expense
Changes in working capital
Decrease in trade and other receivables
Decrease in trade and other payables
Decrease in provisions
Cash generated by operations
Finance expense
Tax received
Net cash flows from operating activities
Investing activities
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of property, plant and equipment
Net cash used in investing activities
Financing activities
Proceeds of issue of shares
Finance lease principal payments
Dividends paid
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
Note
2019
£’000
2018
£’000
1,017
1,662
65
6
2
–
–
28
652
(415)
(74)
1,281
(2)
–
1,279
–
(17)
(134)
(151)
44
(3)
(316)
(275)
853
3,751
4,604
62
4
4
13
(11)
2
1,066
(807)
(294)
1,701
(17)
–
1,684
11
–
(29)
(18)
15
(23)
(155)
(163)
1,503
2,248
3,751
9
15
Triad Group Plc Annual Report and Accounts 2019
| 33
Notes to the financial statements for the year ended 31 March 2019
1. Principal accounting policies
Basis of preparation
The principal accounting policies adopted in the
preparation of the financial statements are set out below.
The policies have been consistently applied to all the years
presented, unless otherwise stated.
These financial statements have been prepared in
accordance with International Financial Reporting
Standards (IFRS and IFRIC interpretations), as adopted
by the European Union (EU), issued by the International
Accounting Standards Board (IASB) and with those parts
of the Companies Act 2006 applicable to companies
preparing their accounts under IFRS.
These financial statements have been prepared on a going
concern basis.
These financial statements have been prepared on a
historical cost basis and are presented in sterling, the
functional currency of the Company.
New standards adopted for the year ended 31 March 2019
The following International Financial Reporting Standards
were adopted by the Group as at 1 April 2018.
IFRS 9 Financial instruments
IFRS 9 is an International Financial Reporting Standard
(“IFRS”) set by the IASB and replaces IAS 39, the previous
accounting standard for financial instruments. IFRS 9 has
three core components: Classification and Measurement,
Impairment and Hedge Accounting.
Under IFRS 9, financial assets are required to be classified
based on the business model within which they are
managed and their contractual cash flow characteristics.
These factors determine whether the financial assets
are measured at amortised cost, fair value through other
comprehensive income or fair value through profit or loss.
The requirements for the classification of financial liabilities,
as they currently apply to the group, remain unchanged.
The majority of the Group’s financial assets are trade
receivables which were held at amortised cost under IAS
39, and will continue to be measured at amortised cost
under IFRS 9. The adoption of IFRS 9 has not resulted
in any changes to the measurement basis of the group’s
financial assets.
The Group has adopted IFRS 9 using the retrospective
method of adoption. The reclassification of contract asset
and contract liability balances (see notes 14 and 16) require
the comparative figures in the statement of financial
position to be shown as ‘Restated’.
IFRS 15 Revenue from contracts with customers
IFRS 15 applies to all revenue arising from contracts with
customers, unless those contracts are in the scope of
other standards. The new standard establishes a five-
step model to account for revenue arising from contracts
with customers. IFRS 15 establishes the principles that an
entity applies when reporting information about the nature,
amount, timing and uncertainty of revenue and cash flows
from a contract with a customer. Applying IFRS 15, an entity
recognises revenue to depict the transfer of promised
goods or services to the customer in an amount that
reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services.
The Group has adopted IFRS 15 using the retrospective
method of adoption. There was no impact on profit after tax
or retained earnings on adoption of IFRS 15.
See specific accounting policies below for details of the
application of these new standards.
The following standards were also effective from 1 April
2018 but had no material effect on the financial statements;
• Amendment to IFRS 2 Share based payment
• Amendment to IAS 28 Investments in associates and
joint ventures
• Amendment to IAS 40 Investment property
Basis of consolidation
Where the Company has control over an investee, it is
classified as a subsidiary. The Company controls an
investee if all three of the following elements are present:
power over the investee, exposure to variable returns from
the investee and the ability of the investor to use its power
to affect those variable returns. The consolidated financial
statements present the results of the Company and its
subsidiaries (“the Group”) as if they formed a single entity.
Intercompany transactions and balances between Group
companies are therefore eliminated in full.
Property, plant and equipment
Property, plant and equipment are stated at cost, net of
accumulated depreciation and any impairment in value.
Depreciation is calculated as to write off the cost of assets,
less their estimated residual values, on a straight line basis
over the expected useful economic lives of the assets
concerned. The principal annual rates used for this purpose
are:
Computer hardware
Fixtures and fittings
Motor vehicles
%
25–33
10–33
25–33
34
| Triad Group Plc Annual Report and Accounts 2019
Notes to the financial statements for the year ended 31 March 2019
Intangible assets
Expenditure on internally developed products is capitalised
if it can be demonstrated that:
•
it is technically feasible to develop the product so that
it will be available for use or sale;
• adequate resources are available to complete the
development;
•
•
•
there is an intention to complete the product and use or
sell it;
it is able to be used or sold;
the product will generate future economic benefits,
internally and/or externally; and
• expenditure attributable to the development of the
product can be measured reliably.
Intangible assets are stated at cost, net of accumulated
amortisation and any impairment in value. The cost of
internally developed software is the attributable salary
costs and directly attributable overheads.
Amortisation is calculated so as to write off the cost
of assets, less their estimated residual values, on a
straight-line basis over the expected useful economic
lives of the assets concerned. Amortisation is charged to
administration expenses in the statement of comprehensive
income and expense. The principal annual rates used for
this purpose are:
and at provision rates based on historical observed default
rates, adjusted for forward looking estimates. At every
reporting date, the historical observed default rates and
forward-looking estimates are updated.
Amounts are written off to administrative expenses
against the carrying amount of trade receivables when it is
certain that the receivable will not be realised.
Cash
Cash in the statement of financial position comprises
cash held on demand with banks. For the purpose of
the consolidated cash flow statement, cash and cash
equivalents consist of cash, as defined above, net of bank
borrowings due on demand.
Trade and other payables
Trade and other payables are recognised initially at fair
value, and subsequently measured at amortised cost using
the effective interest method.
Borrowings
Borrowings are recognised initially at fair value, and
subsequently measured at amortised cost using the
effective interest method.
Leases
Costs in respect of operating leases are charged to the
statement of comprehensive income and expense on a
straight line basis over the lease term.
Purchased computer software
Internally developed software
%
25–33
10–25
Finance lease payments are apportioned between the
finance charge and the reduction of the outstanding
liability. The finance charge is allocated so as to produce a
constant periodic rate of interest on the remaining balance
of the liability.
Foreign currencies
Impairment of non-financial assets
Non-financial assets are subject to impairment tests whenever
events or changes in circumstances indicate that their carrying
amount may not be recoverable. Where the carrying value of an
asset exceeds its recoverable amount the asset is written down
accordingly. Impairment is charged to administration expenses
in the statements of comprehensive income and expense.
Assets and liabilities expressed in foreign currencies are
translated into sterling at the exchange rate ruling on the
date of the statement of financial position. Transactions
in foreign currencies are recorded at the exchange rate
ruling as at the date of the transaction. All differences on
exchange are taken to the statement of comprehensive
income and expense in the year in which they arise.
Trade and other receivables
Revenue
Trade and other receivables are initially recognised at fair
value plus transaction costs, and subsequently measured
at amortised cost using the effective interest method, less
provision for impairment.
At each reporting date an amount of impairment is recognised
as lifetime expected credit losses (lifetime ECL’s).
Lifetime ECL’s are calculated using a provision matrix that
groups trade receivables according to the time past due,
Revenue recognised in any financial period is based on the
delivery of performance obligations and an assessment
of when control is transferred to the customer. Revenue is
either recognised at a ‘point in time’ when a performance
obligation has been performed, or ‘over time’ as control of
the performance obligation is transferred to the customer.
The majority of the Group’s revenue is derived from the
provision of services under time and materials contracts.
Triad Group Plc Annual Report and Accounts 2019
| 35
Notes to the financial statements for the year ended 31 March 2019
Performance obligations under such contracts relate to
the provision of staff to customers. The transaction price
of the performance obligation is determined by reference
to charge-out rates for supplied staff and are specified in
the contract. Since the customer simultaneously receives
and consumes the benefits of the Group’s performance
obligations under such contracts, revenue is recognised
over time using the output method which uses a direct
measurement of value to the customer of the services
transferred to date.
Where temporary workers are supplied to customers, the
associated revenue is recognised gross (inclusive of the
cost of the temporary workers) since the Group is acting
as principal. Under IFRS 15, in order to be recognised as
principal, there must be a transfer of control between
the vendor and the customer. Where the Group provides
temporary contractors, it is acting as principal since it
receives resourcing requirements directly from the customer,
has prime responsibility to find suitable candidates and
negotiate pay rates with them, and delivers the resources
to the client including acceptance that the service provided
meets the client’s expectations. Revenue is therefore
recognised as the gross amount invoiced to customers.
Revenue from fixed price contracts, which may include
software and product development or support contracts,
is determined by reference to those fixed prices,
agreed at inception of the contract. Since it has a right
to consideration from a customer in an amount that
corresponds directly with the value to the customer of
the Group’s performance completed to date, the Group
recognises revenue in the amount to which it has a right to
invoice. For fixed price contracts revenue is recognised on
an over time basis using the input (percentage completion)
method. Percentage completion is calculated as the total
hours worked as at the statement of financial position
date divided by the total expected hours to be worked to
complete the project.
Revenue for permanent recruitment services is based on
a percentage of a successful candidate’s remuneration
package, as agreed with the customer at inception of the
contract. Revenue is recognised at a point in time when
the performance obligation has been satisfied, usually
acceptance of the candidate by the customer.
Taxation
The charge for taxation is based on the profit or loss for
the year as adjusted for disallowable items. It is calculated
using tax rates that have been enacted or substantively
enacted by the statement of financial position date.
Full provision is made for deferred tax on all temporary
differences resulting from the difference between the
carrying value of an asset or liability and its tax base, and
on tax losses carried forward indefinitely. Deferred tax
assets are recognised to the extent that it is probable that
the deferred tax asset will be recovered in the foreseeable
future. Deferred tax is calculated at the tax rates that are
expected to apply to the period when the asset is realised
or liability is settled.
Pension costs
Contributions to defined contribution plans are charged to
the statements of comprehensive income and expense as
the contributions accrue.
Share-based payments
Share-based incentive arrangements are provided to
employees under the Group’s share option scheme. Share
options granted to employees are valued at the date of
grant using an appropriate option pricing model and are
charged to operating profit over the performance or vesting
period of the scheme. The annual charge is modified to
take account of shares forfeited by employees who leave
during the performance or vesting period and, in the case
of non-market related performance conditions, where it
becomes unlikely the option will vest.
Provisions
A provision is recognised when the Group has a legal or
constructive obligation as a result of a past event and it
is probable that an outflow of economic benefits will be
required to settle the obligation. If the effect is material,
expected future cash flows are discounted using a current
pre-tax rate that reflects the risks specific to the liability.
Calculations of these provisions require judgements to be
made. The Group has provided for property dilapidation and
vacant property as detailed in note 18.
New standards and interpretations
The following standard which has been issued but is not
yet mandatory, has not been adopted by the Group in these
financial statements. On adoption, the Group will apply the
new standard retrospectively.
IFRS 16, Leases (effective for the Group from 1 April 2019)
IFRS 16 specifies how to measure, present and disclose leases.
It requires that leases are recognised in the statement of
financial position as assets and liabilities with exceptions where
the underlying asset is of low value, or where the lease term is
12 months or less.
The asset is subsequently accounted for in accordance
with the cost or revaluation model in IAS 16 Property, Plant
and Equipment. The lease liability is initially measured at
the present value of the lease payments payable over the
lease term, discounted at the rate implicit in the lease if that
can be readily determined. If that rate cannot be readily
determined, the lessee shall use their incremental borrowing
36
| Triad Group Plc Annual Report and Accounts 2019
Notes to the financial statements for the year ended 31 March 2019
rate. The liability is unwound over the term of the lease,
giving rise to an interest expense.
The effect of applying this standard as at 31 March 2019
would be to recognise operating lease assets with an
approximate value of £1.3m, and lease payment liabilities with
an approximate value of £1.2m.
This will result in an annual depreciation charge of
approximately £0.3m.
Amendments
The following amendments which have been issued but
which are not yet mandatory, have not been adopted by the
Group in these financial statements. The Directors do not
anticipate that their adoption in future periods will have a
material impact on the financial statements of the Group;
• Amendment to IFRS 2 Share based payment
2. Critical accounting estimates
and judgements
Estimates and judgements are continually evaluated
based on historical experience and other factors,
including expectations of future events that are believed
to be reasonable under the circumstances. The Group
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.
Expected credit losses
In accordance with IFRS 9 ‘Financial Instruments’ the
Group calculates ECL’s using a provision matrix based
on estimated default rates. At every reporting date the
estimates are updated based on an analysis of receivable
balances, client payment patterns, historical rates of
default, and any forward-looking information that may
impact the likelihood of recovery.
Deferred tax asset
A deferred tax asset of £191,000 (2018: £323,000) has
been recognised in accordance with the accounting policy
on page 36. A deferred tax asset of £395,000 (2018:
£450,000) has not been recognised.
The recognition of deferred tax assets is based upon
whether it is probable that sufficient taxable profits will
be available in the future against which the reversal of
temporary differences can be used. Where the temporary
differences relate to losses, the availability of the losses to
offset against forecast taxable profits is also considered.
3. Financial risk management
The Group uses financial instruments that are necessary to
facilitate its ordinary purchase and sale activities, namely
cash, bank borrowings in the form of a receivables finance
facility and trade payables and receivables: the resultant
risks are foreign exchange risk, interest rate risk, credit
risk and liquidity risk. The Group does not use financial
derivatives in its management of these risks.
The Board reviews and agrees policies for managing these
risks and they are summarised below. These policies are
consistent with last year.
3.1 Financial risk factors
Foreign exchange risk
There are a small number of routine trading contracts with
both suppliers and clients in euros. In all such circumstances
the contracts with supplier and client will be in the same
currency thereby mitigating the Group’s exposure to
movements in exchange rates. Payments and receipts are
made through a bank account in the currency of the contract
therefore balances held in any foreign currency are to
facilitate day to day transactions. With a functional currency
of sterling there are the following foreign currency net assets:
Group and company
Note
2019
2018
Currency: Euros
Net cash
Trade and other receivables
Trade and other payables
£'000
£'000
15
14
16
100
8
(17)
91
72
21
(28)
65
Any change in currency rates would have no significant
effect on results.
Interest rate risk
The Group’s interest rate risk arises from its borrowings,
which are at a rate that fluctuates in relation to movements
in bank base rate. This facility, as detailed in note 17, is
secured by way of a debenture over all assets. At the year-
end borrowing under this facility totalled £nil (2018: £nil).
Cash balances are held in short term interest bearing
accounts, repayable on demand: these attract interest rates
which fluctuate in relation to movements in bank base rate.
This maintains liquidity and does not commit the Group to
long term deposits at fixed rates of interest.
There were no borrowings during the year.
Triad Group Plc Annual Report and Accounts 2019
| 37
Notes to the financial statements for the year ended 31 March 2019
Credit risk
3.2 Fair value estimation
The Group is mainly exposed to credit risk from credit sales.
It is Group policy to assess the credit risk of new customers
before entering into contracts. Each new customer is
assessed, using external ratings and relevant information
in the public domain, before any credit limit is granted. In
addition, trade receivables balances are monitored on a
regular basis to minimise exposure to credit losses. The
amount charged to the income statement during the year in
respect of expected credit losses was £nil (2018: £10,000).
The Group is also exposed to credit risk from contract
assets, being revenue earned but not yet invoiced (note 14).
Financial assets that are past due but not impaired are
analysed in note 14. Each balance has been reviewed by
management to assess its recoverability.
The Group also has credit risk from cash deposits with
banks (note 15).
The Group’s maximum exposure to credit risk is:
The carrying value of financial assets and liabilities
approximate their fair values.
4. Revenue
The Group operates solely in the UK. All material revenues
are generated in the UK.
The largest single customer contributed 33% of Group revenue
(2018: 28%) and was in the public sector. No other customers
contributed more than 10% of Group revenue (2018: two
customers contributed 14% and 10% of Group revenue).
Disaggregation of revenue
In accordance with IFRS 15, the Group disaggregates
revenue by contract type as management believe this best
depicts how the nature, timing and uncertainty of the Group’s
revenue and cash flows are affected by economic factors.
Accordingly, the following table disaggregates the Group’s
revenue by contract type:
Trade and other receivables
Contract assets
Other debtors
Cash and cash equivalents
Note
2019
2018
14
14
14
15
£'000
£'000
2,964
2,491
58
95
1,216
–
4,604
3,751
7,721
7,458
Group and company
Time and materials
Fixed price
Percentage fee based
2019
2018
£'000
£'000
22,472
27,511
111
130
106
202
22,713
27,819
The Group also disaggregates revenue by operating sector
reflecting the different commercial risks (e.g. credit risk)
associated with each.
Group and company
Public sector
Private sector
2019
2018
£'000
£'000
13,432
14,224
9,281
13,595
22,713
27,819
Contract balances
For all contracts, the Group recognises a contract liability to
the extent that payments made are greater that the revenue
recognised at the period end date. When payments are made
less than the revenue recognised at the period end date, the
Group recognises a contract asset for the difference.
Liquidity risk
The Group’s liquidity risk arises from its management of
working capital. The Group has a facility to borrow an
amount up to 90% of approved trade debtors subject to
a maximum limit of £2.6m. The facility may be terminated
by either party with one month’s written notice. The Board
receives regular cash flow and working capital projections to
enable it to monitor its available headroom under this facility.
At the statement of financial positon date these projections
indicated that the Group expected to have sufficient liquid
resources to meet its reasonably expected obligations.
Maturity of financial liabilities is set out in notes 16 and 17.
Capital risk management
The Group’s capital comprises both borrowings and
shareholders’ equity. Its objectives when managing capital
are to safeguard the Group’s ability to continue as a going
concern in order to maximise shareholder value. To maintain or
adjust the capital structure the Group may adjust the dividend
payment to shareholders, return capital to shareholders, issue
new shares or alter the level of borrowings.
38
| Triad Group Plc Annual Report and Accounts 2019
Notes to the financial statements for the year ended 31 March 2019
Contract assets and contract liabilities are included within ‘trade and other receivables’ and ‘trade and other payables’
respectively on the face of the statement of financial position.
Contract assets
Contract liabilities
Group and company
At 1 April
Transfers in the period from contract assets to trade receivables
Excess of revenue recognised over cash (or right to cash) being
recognised in the period
Amounts included in contract liabilities that was recognised as
revenue in the period
Cash received in advance of performance and not recognised as
revenue in the period
2019
£’000
1,216
(1,216)
58
–
–
2018
£’000
757
(757)
1,216
–
–
At 31 March
58
1,216
2019
£’000
(25)
–
–
25
(43)
(43)
2018
£’000
(82)
–
–
82
(25)
(25)
The comparative balances and brought forward figures have been restated from ‘Accrued income’ to ‘Contract assets’, and from
‘Deferred income’ to ‘Contract liabilities’.
The contract asset balance at 31 March 2018 arose further to delays in two large public sector clients being slow in providing
purchase orders resulting in a delay in the Group being able to raise invoices. There were no such delays as at 31 March 2019.
There is no expected impairment of contract assets.
Triad Group Plc Annual Report and Accounts 2019
| 39
Notes to the financial statements for the year ended 31 March 2019
5. Profit from operations
Profit from operations is stated after charging:
Depreciation of owned assets
Amortisation of intangible assets
Profit on sale of fixed assets
Operating leases for land and buildings
Other operating leases
Impairment of receivables
Auditors' remuneration:
Audit of financial statements: Group and company
Other services
6. Finance expense
Bank interest payable
Other interest payable
Total interest expense
Unwinding of discount on provisions
Net foreign exchange loss
Total finance expense
7. Employees and directors
Group and company
Average number of persons (including Directors) employed
Senior management
Fee earners
Sales
Administration and finance
40
| Triad Group Plc Annual Report and Accounts 2019
2019
£'000
65
6
–
303
13
–
57
–
2019
£'000
–
1
1
–
1
2
2018
£'000
62
4
(11)
484
28
10
56
–
2018
£'000
3
1
4
13
–
17
2019
Number
2018
Number
8
31
11
6
56
8
28
16
6
58
Notes to the financial statements for the year ended 31 March 2019
Staff costs for the above persons (including Directors)
Wages and salaries
Social security costs
Defined contribution pension costs
Equity settled share-based payments
Directors
Emoluments
Benefits in kind
Money purchase pension contributions
Total remuneration
Social security costs
2019
£'000
3,722
420
397
28
4,567
2019
£'000
489
27
37
553
61
614
2018
£'000
3,475
416
335
2
4,228
2018
£'000
427
25
28
480
60
540
Two Directors (2018: two) had retirement benefits accruing under money purchase pension schemes. Key management
personnel are considered to be the Directors.
8. Tax charge/credit
Current tax
Current tax on profits for the year
Deferred tax
Decrease in recognised deferred tax asset
Total tax charge for the year
2019
£'000
–
132
132
2018
£'000
–
38
38
Triad Group Plc Annual Report and Accounts 2019
| 41
Notes to the financial statements for the year ended 31 March 2019
The differences between the actual tax charge for the year and the standard rate of corporation tax in the UK applied to
profits for the year are as follows:
Profit before tax
Profit before tax multiplied by standard rate of corporation tax in the UK of 19% (2018: 19%)
Expenses not deductible for tax purposes
Recognition of previously unrecognised deferred tax on losses
Tax charge for the year
Deferred tax asset
The movement is deferred tax is as follows:
At beginning of the year
Utilisation against taxable profits
Recognition of previously unrecognised deferred tax on losses
Decrease in relation to timing differences
At end of the year
2019
£'000
1,017
193
(44)
(17)
132
2019
£'000
323
(149)
47
(30)
191
2018
£'000
1,662
316
(12)
(266)
38
2018
£'000
361
(304)
276
(10)
323
Deferred tax assets have been recognised in respect of tax losses where the Directors believe it is probable that the assets
will be recovered. A deferred tax asset amounting to £395,000 (2018: £450,000) has not been recognised in respect of
trading losses of £2,327,000 (2018: £2,367,000), which can be carried forward indefinitely.
The Chancellor announced a reduction in the main rate of UK corporation tax to 17% with effect from 1 April 2020. The
change became substantively enacted on 16 March 2016 and therefore the effect of the rate reductions has been reflected
in the calculation of the deferred tax, as it was substantively enacted prior to the statement of financial position date.
9. Dividends
Final dividend for the year ended 31 March 2017 – 0.5p per share
Interim dividend for the year ended 31 March 2018 – 0.5p per share
Final dividend for the year ended 31 March 2018 – 1.0p per share
Interim dividend for the year ended 31 March 2019 – 1.0p per share
Total dividend paid
2019
£'000
–
–
158
158
316
2018
£'000
77
78
–
–
155
In addition, the Directors are proposing a final dividend on equity shares of 2p per share (2018: 1p). This dividend has not
been accrued in the statement of financial position.
Subject to shareholder approval at the Annual General Meeting, the Company will pay the proposed dividend on 23 August 2019
to all shareholders on the register of members of the Company at the close of business on 2 August 2019 (the "Record Date").
42
| Triad Group Plc Annual Report and Accounts 2019
Notes to the financial statements for the year ended 31 March 2019
10. Earnings per ordinary share
Earnings per share have been calculated on the profit for the year divided by the weighted average number of shares in
issue during the period based on the following:
Profit for the year
Average number of shares in issue
Effect of dilutive options
Average number of shares in issue plus dilutive options
Basic earnings per share
Diluted earnings per share
11. Intangible assets
Group and Company
Cost
At 31 March 2017
Additions
At 31 March 2018
Additions
Disposals
At 31 March 2019
Accumulated amortisation/impairment
At 31 March 2017
Charge for the year
At 31 March 2018
Charge for the year
Disposals
At 31 March 2019
Net book value
At 31 March 2019
At 31 March 2018
2019
£885,000
15,798,113
481,416
16,279,529
5.60p
5.44p
2018
£1,624,000
15,541,786
669,503
16,211,289
10.45p
10.02p
Purchased
software
£'000
Internally
developed
software
£'000
272
–
272
17
(163)
126
264
4
268
6
(163)
111
15
4
1,110
–
1,110
–
–
1,110
1,110
–
1,110
–
–
1,110
–
–
Total
£'000
1,382
–
1,382
17
(163)
1,236
1,374
4
1,378
6
(163)
1,221
15
4
Triad Group Plc Annual Report and Accounts 2019
| 43
Notes to the financial statements for the year ended 31 March 2019
12. Property, plant and equipment
Group and company
Computer
hardware
£'000
Fixtures
& fittings
£'000
Motor
vehicles
£'000
Total
£'000
Cost
At 31 March 2017
Additions
Disposals
At 31 March 2018
Additions
Disposals
At 31 March 2019
Accumulated depreciation
At 31 March 2017
Charge for the year
Disposals
At 31 March 2018
Charge for the year
Disposals
At 31 March 2019
Net book value
At 31 March 2019
At 31 March 2018
370
13
(210)
173
22
(16)
179
305
29
(210)
124
26
(16)
134
45
49
754
16
(4)
766
112
(484)
394
687
26
(4)
709
30
(484)
255
139
57
42
35
(38)
39
–
–
39
40
7
(38)
9
9
–
18
21
30
1,166
64
(252)
978
134
(500)
612
1,032
62
(252)
842
65
(500)
407
205
136
The net carrying amount of property, plant and equipment includes £21,000 (2018: £30,000) in respect of assets held under
finance leases.
13. Investments
Company
Investments are:
(a) Generic Software Consultants Limited (“Generic”), a 100% subsidiary undertaking, in respect of both voting rights and
issued shares, which is registered in England and Wales and has an issued share capital of 5,610 US$1 ordinary shares.
The investment is stated in the Company’s books at £440.
44
| Triad Group Plc Annual Report and Accounts 2019
Notes to the financial statements for the year ended 31 March 2019
Up to 31 March 2009 Generic acted as an agent for the business, but did not enter into any transactions in its own
right: its business was included within the figures reported by the Company. On 1 April 2009 the agency agreement was
terminated and all business is now conducted directly by the parent company through its Generic business.
(b) Triad Special Systems Limited, Generic Online Limited, Zubed Geospatial Limited, Zubed Sales Limited, are all 100%
subsidiaries which are registered in England and Wales. They are dormant companies, which have never traded. Each
has a share capital of £1.
The registered office of Triad Special Systems is Huxley House, Weyside Park, Catteshall Lane, Godalming, Surrey GU7
1XE. The registered office of the other subsidiaries is 37 Sunningdale House, Caldecotte Lake Drive, Caldecotte, Milton
Keynes MK7 8LF.
14. Trade and other receivables
Group and company
Trade receivables
Less: provision for expected credit losses
Trade receivables-net
Contract assets
Other debtors
Trade and other receivables
Prepayments
2019
£'000
2,984
(20)
2,964
58
95
3,117
216
3,333
2018
£'000
2,536
(45)
2,491
1,216
–
3,707
278
3,985
The fair value of trade and other receivables approximates closely to their book value.
The provision for expected credit losses on trade receivables is calculated as follows:
Group and company
Expected
default rate
Gross carrying
amount
Credit loss
allowance
Current
Up to 30 days past due
30 to 60 days past due
Over 60 days past due
(A)
%
–
2.5
5.0
10.0
(B)
£'000
2,461
330
164
29
2,984
(A x B)
£'000
–
9
8
3
20
No provision has been recognised for contract assets and other debtors as they are expected to be fully recovered.
Triad Group Plc Annual Report and Accounts 2019
| 45
Notes to the financial statements for the year ended 31 March 2019
Movements on the provision for impairment of trade receivables is as follows:
Group and company
At beginning of the year
Charged to income statement
Credited to income statement
Written off during the year
At end of the year (credit loss allowance)
2019
£'000
45
–
(20)
(5)
20
The carrying amount of the Group’s trade and other receivables are denominated in the following currencies:
Group and company
Sterling
Euros
15. Cash and cash equivalents
Group and company
Cash available on demand
2019
£'000
3,109
8
3,117
2019
£'000
4,604
The fair value of cash and cash equivalents approximates closely to their book value.
The carrying amount of the Group’s cash and cash equivalents is denominated in the following currencies:
Group and company
Sterling
Euros
2019
£'000
4,504
100
4,604
2018
£'000
33
20
(8)
–
45
2018
£'000
3,686
21
3,707
2018
£'000
3,751
2018
£'000
3,679
72
3,751
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash, as detailed above, net
of any bank borrowings repayable on demand. There were no bank borrowings during the year.
46
| Triad Group Plc Annual Report and Accounts 2019
Notes to the financial statements for the year ended 31 March 2019
16. Trade and other payables
Trade payables
Accruals
Owed to subsidiary
Contract liabilities
Other taxation and social security
Group
Company
2019
£’000
1,617
301
–
1,918
43
519
2018
£’000
Restated
2,131
398
–
2,529
25
341
2019
£’000
1,617
301
5
1,923
43
519
2018
£’000
Restated
2,131
398
5
2,534
25
341
2,480
2,895
2,485
2,900
The majority of trade and other payables are settled within three months from the year end.
The fair value of trade and other payables approximates closely to their book value.
The carrying amount of trade and other payables is denominated in the following currencies:
Group
Company
Sterling
Euros
17. Financial liabilities
Group and company
Current
Finance lease obligations
Non-current
Finance lease obligations
2019
£’000
1,906
17
1,923
2019
£’000
1,901
17
1,918
2018
£’000
2,501
28
2,529
2019
£'000
3
17
2018
£’000
2,506
28
2,534
2018
£'000
3
20
The carrying amount of finance lease obligations relates to future lease payments on a motor vehicle.
The fair value of bank borrowings approximates closely to their book value.
The carrying amount of the Group’s financial liabilities is all denominated in sterling.
Bank borrowings are in the form of a receivables finance facility to borrow an amount up to 90% of approved trade debtors
subject to a maximum limit of £2.6m. This facility is secured by way of a debenture over all the assets of the Group. Bank
borrowings are repayable upon demand. The balance at the year end was £nil (2018: £nil).
The receivables finance facility is included as part of cash and cash equivalents for the purpose of the cash flow statement
as it forms an integral part of the Group’s cash management.
Triad Group Plc Annual Report and Accounts 2019
| 47
Notes to the financial statements for the year ended 31 March 2019
18. Provisions
Group and company
At 1 April 2018
Charged to income statement
Utilised in year
At 31 March 2019
Provision
for property
dilapidation
Other
provision
Total
£’000
£’000
£’000
106
15
(39)
82
50
–
(50)
–
156
15
(89)
82
The maturity profile of the present value of provisions is as follows:
Group and company
Current
Provision for property dilapidation
Other provision
Non-current
Provision for property dilapidation
2019
£'000
2018
£'000
–
–
–
82
49
50
99
57
The provision for property dilapidation covers the estimated future costs required to meet obligations under property leases
to redecorate and repair property.
19. Share capital
Ordinary shares of 1p each
Issued, called up and fully paid:
Number
Nominal value
2019
2018
15,968,979
£159,690
15,613,979
£156,140
During the year 355,000 1p ordinary shares were issued as a result of the exercise by employees of share options:
Number
Option price
Increase in Increase in share capital
Increase in Increase in share premium
51,000
94,000
210,000
355,000
14.0p
13.5p
11.0p
£510
£940
£2,100
£3,550
£6,630
£11,750
£21,000
£39,380
48
| Triad Group Plc Annual Report and Accounts 2019
Notes to the financial statements for the year ended 31 March 2019
20. Share-based payments
At 31 March 2019, 1,028,600 options granted under employee share option schemes remain outstanding:
Date option granted
23 September 2011
18 September 2014
9 March 2018
Number
268,600
130,000
630,000
Exercise price
Period options exercisable
13.5p
11.0p
53.5p
23 September 2014 to 23 September 2021
18 September 2017 to 18 September 2024
9 March 2021 to 9 March 2028
Under the terms of the scheme, options vest after a period of three years continued employment and are subject to the
following performance conditions:
For options granted on 9 March 2018: 100% of the shares granted under an Option will vest if the Company’s share price at
31 March 2021 has increased by 30% or more from the share price as at the date of grant. 50% of shares granted under an
Option will vest if the Company’s share price at 31 March 2021 has increased by 15% from the share price as at the date of
grant. Between these upper and lower thresholds, awards vest on a straight line basis.
For all other options: In any financial year commencing at least one year after the date of grant, the Company shall have
achieved a positive basic earnings per share (subject to adjustment to exclude identified exceptional items), as reported in
its audited annual accounts.
Options have been valued using the Black-Scholes option-pricing model. No performance conditions were included in the
fair value calculations.
No options were granted during the year (2018: 660,000).
The total expense recognised in the year is £28,000 (2018: £1,878).
A reconciliation of option movements over the year to 31 March 2019 is shown below:
Outstanding at start of year
Granted
Exercised
Forfeited
Outstanding at end of year
Exercisable at end of year
2019
2018
Number
of options
1,413,600
–
(355,000)
(30,000)
1,028,600
398,600
Weighted
average
exercise
price
Pence
31.6
–
12.1
53.5
37.7
12.7
Number of
options
878,000
660,000
(124,400)
–
1,413,600
753,600
Weighted
average
exercise
price
Pence
12.5
53.5
12.8
–
31.6
12.4
There were 355,000 options exercised during the year. The above figures include options held by Directors which are set
out in the Directors’ Remuneration Report on page 18.
The weighted average share price at the date of exercise for share options exercised during the period was 52.3p. The
options outstanding as at 31 March 2019 had an exercise price of 11.0p, 13.5p or 53.5p and a weighted average remaining
contractual life of 6.8 years (2018: 7.1 years).
Triad Group Plc Annual Report and Accounts 2019
| 49
Notes to the financial statements for the year ended 31 March 2019
21. Commitments
The Group and Company had capital commitments totalling £67,000 at 31 March 2019 (31 March 2018: £nil).
The future aggregate minimum lease payments under non-cancellable operating leases are:
Not later than 1 year
Later than 1 year and no later than 5 years
2019
£'000
327
1,132
1,459
2018
£'000
336
926
1,262
The Group sublets part of its Godalming office. The future aggregate minimum lease payments to the Group under non-
cancellable operating leases are:
Not later than 1 year
Later than 1 year and no later than 5 years
22. Related party transactions
2019
£'000
119
–
119
2018
£'000
48
48
96
The Group and Company rents one of its offices under a lease expiring in 2028, with a break clause in 2023. The current
annual rent of £215,000 was fixed, by independent valuation, at the last rent review in 2008. JC Rigg, a Director, has notified
the Board that he has a 50% beneficial interest in this contract. The balance owed at the year end was £nil (2018: £nil).
50
| Triad Group Plc Annual Report and Accounts 2019
Five year record
Consolidated income statement
Years ended 31 March
Revenue
Gross profit
Profit before tax
Tax (charge)/credit
Profit after tax
Retained profit for the financial year
Basic earnings per share (pence)
Balance sheet
As at 31 March
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Equity shareholders’ funds
2019
£’000
22,713
4,376
1,017
(132)
885
885
5.60
2019
£’000
411
7,937
2018
£’000
27,819
4,724
1,662
(38)
1,624
1,624
10.45
2018
£’000
463
7,736
(2,483)
(2,997)
(99)
5,766
160
659
104
4,843
5,766
(77)
5,125
156
619
104
4,246
5,125
2017
£’000
30,912
5,000
1,521
13
1,534
1,534
10.08
2017
£’000
503
7,299
(4,118)
(45)
3,639
155
605
104
2,775
3,639
2016
£’000
28,317
4,236
863
350
1,213
1,213
8.01
2016
£’000
483
5,638
2015
£’000
23,482
3,325
352
–
352
352
2.32
2015
£’000
236
4,401
(3,757)
(3,387)
(308)
2,056
151
562
104
1,239
2,056
(411)
839
151
562
104
22
839
Triad Group Plc Annual Report and Accounts 2019
| 51
Shareholders’ information and financial calendar
Share register
Equiniti maintain the register of members of the Company. If you have
any questions about your personal holding of the Company’s shares,
please contact:
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Telephone: 0371 384 2486
If you change your name or address or if the details on the envelope
enclosing the report, including your postcode, are incorrect or
incomplete, please notify the registrar in writing.
Shareholders’ enquiries
If you have an enquiry about the Group’s business, or about something
affecting you as a shareholder (other than queries that are dealt with
by the registrar) you should contact the Company Secretary, by letter
or telephone at the Company’s registered office.
Company Secretary and registered office:
Nick Burrows
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone: 01908 278450
Email:
investors@triad.co.uk
Website:
www.triad.co.uk
Financial calendar
Annual General Meeting
14 August 2019
Final dividend: payment date
23 August 2019
Final dividend: record date
2 August 2019
Financial year ended 31 March 2020: expected announcement of results
Half year
Full year
November 2019
June 2020
52
| Triad Group Plc Annual Report and Accounts 2019
Corporate information
Executive Directors
John Rigg, Chairman
Adrian Leer, Managing Director
Nick Burrows, Finance Director
Non-executive Directors
Alistair Fulton
Steven Sanderson
Chris Duckworth
Secretary and registered office
Nick Burrows
Triad Group Plc
Weyside Park
Catteshall Lane
Godalming
Surrey
GU7 1XE
Telephone:
01908 278450
Email:
investors@triad.co.uk
Website:
www.triad.co.uk
Country of incorporation and domicile
of parent company
United Kingdom
Legal form
Public limited company
Company number
2285049
Registered Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Brokers
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR
Solicitors
Freeths
Davy Avenue
Knowlhill
Milton Keynes
MK5 8HJ
Bankers
Lloyds Bank plc
City Office
11–15 Monument Street
London
EC3V 9JA
Registrars
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Triad Group Plc Annual Report and Accounts 2019
| 53
Godalming office:
Huxley House
Weyside Park
Catteshall Lane
Godalming
Surrey GU7 1XE
Milton Keynes office:
3 Caldecotte Lake Business Park
Caldecotte Lake Drive
Milton Keynes MK7 8LF
01908 278450
www.triad.co.uk