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GATC Gattaca Plc

106.50
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Gattaca Plc LSE:GATC London Ordinary Share GB00B1FMDQ43 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 106.50 103.00 110.00 106.50 106.50 106.50 300 07:33:30
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Employment Agencies 385.17M 1.23M 0.0386 27.59 33.93M

Gattaca PLC Interim Results (6764G)

31/03/2022 7:00am

UK Regulatory


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TIDMGATC

RNS Number : 6764G

Gattaca PLC

31 March 2022

31 March 2022

Gattaca plc

("Gattaca" or "the Group")

Interim Results for the six months ended 31 January 2022

Evolution of strategy

Gattaca plc ("Gattaca" or the "Group"), the specialist Engineering and Technology staffing solutions business, today announces its financial results for the six months ended 31 January 2022.

Financial Highlights

 
 
                              2022 H1                   2021 H1 (restated) 
                                                                (1) 
                     =========================  =================================  ========================= 
                      Continuing    Continuing           Continuing    Continuing   Continuing    Continuing 
                        reported    underlying             reported    underlying     reported    underlying 
                                           (3) 
                     ===========  ============  ===================  ============  ===========  ============ 
                            GBPm          GBPm                 GBPm          GBPm            %             % 
                     ===========  ============  ===================  ============  ===========  ============ 
 Revenue                   202.2         202.2                204.8         204.8          -1%           -1% 
                     ===========  ============  ===================  ============  ===========  ============ 
 Net Fee Income 
  (NFI) (2)                 21.6          21.6                 20.5          20.5           5%            5% 
                     ===========  ============  ===================  ============  ===========  ============ 
 EBITDA                    (1.2)           0.9                  1.4           1.4          n/a          -36% 
                     ===========  ============  ===================  ============  ===========  ============ 
 
 Loss before tax           (2.5)         (0.3)                (0.3)         (0.0)          n/a           n/a 
                     ===========  ============  ===================  ============  ===========  ============ 
 Loss after tax            (2.4)         (0.2)                (0.2)           0.0          n/a           n/a 
                     ===========  ============  ===================  ============  ===========  ============ 
 Discontinued o 
  perations                (0.6)           n/a                (0.2)           n/a          n/a           n/a 
                     ===========  ============  ===================  ============  ===========  ============ 
 Reported l oss 
  after t ax               (3.1)           n/a                (0.4)           n/a          n/a           n/a 
                     ===========  ============  ===================  ============  ===========  ============ 
 
 Basic earnings 
  per share                (7.5)         (0.8)                (0.7)           0.0 
                     ===========  ============  ===================  ============  ===========  ============ 
 Diluted earnings 
  per share                (7.5)         (0.8)                (0.7)           0.0 
                     ===========  ============  ===================  ============  ===========  ============ 
 Interim dividend             0p           n/a                   0p           n/a 
                     ===========  ============  ===================  ============  ===========  ============ 
 Adjusted net cash       GBP4.8m           n/a             GBP22.7m           n/a 
  at end of period 
  (4) 
                     ===========  ============  ===================  ============  ===========  ============ 
 Net (debt) / cash     GBP(0.1)m           n/a             GBP15.8m           n/a 
                     ===========  ============  ===================  ============  ===========  ============ 
 
 

Highlights

 
 --   Group continuing underlying NFI of GBP21.6 million, up 5% year-on-year 
          UK NFI up 9% at GBP20.3 million (2021 H1: GBP18.6 million) 
          International NFI down 30%, driven by a decline in international 
           contract NFI. Most International regions are now predominantly 
           focused on the permanent market 
          Permanent NFI up 41% year-on-year, now representing 30% of 
           group NFI (2021 H1: 23%) 
 --   Investment in sales headcount continued, up 12% versus 31 July 
       2021 
 --   Group adjusted net cash (exc IFRS 16 lease liabilities) of GBP4.8 
       million (31 July 2021: GBP19.9 million), in the period the Group 
       repaid the final balance of GBP5.6m of deferred VAT. The Group 
       is covenant free. 
 --   No interim dividend (2021 H1: nil pence). The Board remains committed 
       to paying dividends when the Group returns to sustainable levels 
       of profitability. 
 --   Post period-end, Gattaca confirmed its Board succession plan 
          Kevin Freeguard, Chief Executive Officer, and Salar Farzad, 
           Chief Financial Officer, to step down from the Board at the 
           end of March 2022 
          Matt Wragg appointed to succeed Kevin as Chief Executive Officer 
          Oliver Whittaker appointed to succeed Salar as Chief Financial 
           Officer 
 
 

Four priorities for new leadership

 
 --   Increase external focus 
 --   Culture 
 --   Operational performance 
 --   Continued cost focus 
 

Outlook

We are seeing encouraging trends across many of our sectors and believe we are positioned to capture the opportunities that these trends provide. The Group has now established its operating model, fully integrated a new global technology platform, and strategically invested in its sales headcount. With these critical internal components now complete, Gattaca has the right infrastructure and capabilities to capture the opportunities presented across our markets.

Gattaca's challenge now is to capitalise on the actions already taken and to take the necessary steps to position the Group for growth in the medium to long term. We expect continuing underlying profit before tax for its financial year ending 31 July 2022 to be around breakeven as announced in January 2022. Looking to 2023 and beyond, although the trajectory of the business has been slower than previously anticipated we expect to see the benefits of our investment in headcount and the technology platform begin to come through, delivering a return to profitable and sustainable long-term growth. This will continue to be supported by strong market demand for STEM talent, which we believe will remain scarce and in high demand.

Commenting on the results, Patrick Shanley, Chairman said:

"The first half of FY 2022 has been a period of mixed performance for Gattaca. We see encouraging trends and positive signs of growth across a number of our core markets however, our contract business has taken longer to recover than expected which is impacting the Group's performance.

To ensure we successfully capture the robust demand for STEM skills across our markets, we plan to significantly increase our external focus, particularly client acquisition and expansion, and leverage our new operating model and technology platform to increase efficiency and performance output.

Finally, on behalf of the entire Board, I would like to take the opportunity to thank Kevin and Salar for their contribution over the last 4/5 years and welcome Matt and Oliver who, following careful succession planning, are well-prepared to lead us forward."

Kevin Freeguard, Chief Executive Officer said:

"Following the significant improvement in capability made over the last several years Gattaca is well positioned to take full advantage of the strong demand for STEM talent. I am delighted that we have developed our internal talent such that the Board has been able to appoint internal candidates to succeed both myself and Salar. I wish the Gattaca team every success for the future"

Matthew Wragg, incoming Chief Executive Officer said:

"Kevin and Salar have led us through some challenging times while significantly reducing the Group's net debt, establishing our new operating model, and overhauling our technology platforms. Thanks to their contribution, we are now in a stronger position to focus our energy once again on our STEM talent markets helping our customers with their talent challenges during a period of particularly high demand. It is against this backdrop that I am optimistic for the future of the Group and excited for everyone in the team."

The information contained within this announcement is deemed by the Group to constitute inside information as stipulated

under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

The following footnotes apply, unless where otherwise indicated, throughout these Interim Results:

1. Results are restated following the April 2021 IFRS Interpretations Committee agenda decision on cloud computing arrangements, resulting in previously capitalised software assets being expensed, and the results for the 6 months to January 2021 have been restated for the presentation of discontinued operations

2. NFI is calculated as revenue less contractor payroll costs

3. Continuing underlying results exclude the NFI and (losses) before taxation of discontinued businesses predominantly being operations in Mexico and South Africa (2022 H1: GBP(0.7)m, 2021 H1 : GBP(0.2)m), non-underlying items within administrative expenses in 2021 primarily related to reversal of restructuring costs provided for in prior year (2022 H1: GBP0.1m, 2021 H1 : GBP(0.2)m), amortisation of acquired intangibles (2022 H1: GBP0.2m, 2021 H1 : GBP0.2m), impairment of acquired intangibles (2022 H1: GBP2.0m, 2021 H1 : GBP0.0m), and exchange (losses) / gains from revaluation of foreign assets and liabilities (2022 H1: GBP0.1m, 2021 H1 : GBP(0.2)m).

4. Adjusted net cash is calculated as net cash excluding lease liabilities, less any capitalised finance costs.

For further information please contact:

 
Gattaca plc                               +44 (0) 1489 898989 
Matthew Wragg, Chief Executive Officer 
 designate 
 Oliver Whittaker, Chief Financial 
 Officer designate 
Liberum Capital Limited (Nomad and 
 Broker)                                 +44 (0) 20 3100 2000 
Lauren Kettle 
 Robert Morton 
 
Citigate Dewe Rogerson                   +44 (0) 20 7638 9571 
Jos Bieneman 
 Lucy Eyles 
 

Operational Review

The Group's trading performance in the first half of 2022 saw the Group maintain year on year NFI growth of 5%, with the UK operations achieving growth of 9%, driven by strong performance in the permanent recruitment market. Group adjusted underlying loss before tax was GBP0.3 million, driven by our mix of net fee income growth offset by our ongoing investment in sales and fulfilment headcount, which will mature into 2023 and beyond.

During H1 several key priority initiatives were progressed across the Group. Gattaca's new global technology platform is now integrated across the whole Group and we are starting to the realise benefits of this single platform and the opportunities that it presents. Furthermore we integrated a market leading AI sourcing technology into our platform, enabling improved candidate attraction and engagement. We also now have a comprehensive data and MI platform working across the Group.

During the period, we continued to invest in our sales and fulfilment teams. Headcount increased by 12% in sales and 29% in fulfilment between July 2021 and January 2022, and Gattaca has provided L&D investment to embed them into the Group.

Gattaca revisited its product offering, with a particular focus on permanent packages of work to align with current market trends and conditions.

In H1 2022 we launched the Group's refreshed Purpose, Vision, Mission and Values to all of our staff, and have been focused on ensuring that these values are part of our practices and processes to ensure they become truly embedded in the organisation.

Also in the period, Gattaca established and communicated its ESG ambitions, demonstrating the Group's commitment to sustainability. These ambitions are:

 
 --   Achieve net zero emissions by 2030 
 --   Ensure an equal gender balance in our management positions by 
       August 2026 
 --   To be in the top quartile for our employee engagement score by 
       2026 
 --   To positively impact 100,000 lives by 2025 
 

Four priorities for new leadership

The new leadership team has identified four priority areas to ensure the continued evolution of the Group's strategy. While there has undoubtedly been important recent progress, Gattaca's challenge now is to capitalise on the actions already taken and to take the necessary steps to position the Group for growth in the medium to long term.

There is a real opportunity to build on Gattaca's many great strengths, the focus on in demand STEM skills; its core strength in robust sectors; blue chip and long-standing client base; and the strength of the balance sheet.

The priorities are:

 
 --   Increase external focus 
          Leverage externally focused CEO; previously Chief Customer 
           Officer 
          Simplify the sales process 
          Invest in marketing to demonstrate key STEM skills messaging 
          Increase client acquisition and investment in client development 
 --   Culture 
          Bring through our next generation of leadership 
          Increase localised accountability 
          Embed purpose, vision, mission and values across the business 
          Increase staff engagement and participation 
 --   Operational performance 
          Realise operating model productivity 
          Increase efficiency and performance output 
          Leverage investment in technology to improve candidate attraction, 
           conversion and client experience 
 --   Continued cost focus 
          Rebalance the cost base: delayering infrastructure, estate, 
           and other third-party costs 
          Improve staff retention via culture, talent acquisition, learning 
           & development, performance management and leadership 
          Technology leveraged to automate process and enhance service 
 
 

Operational review by sector

 
 Net Fee Income (NFI) GBPm       2022 H1   2021 H1 (restated)(1)   Change 
 Infrastructure                    6.7              6.9             -2% 
                                ========  ======================  ======= 
 Defence                           3.2              2.9             10% 
                                ========  ======================  ======= 
 Mobility                          2.2              1.4             63% 
                                ========  ======================  ======= 
 Technology, Media & Telecoms      2.2              1.9             18% 
                                ========  ======================  ======= 
 Energy                            1.8              2.1             -15% 
                                ========  ======================  ======= 
 Other                             4.1              3.5             18% 
                                ========  ======================  ======= 
 Total UK                         20.3             18.6              9% 
                                ========  ======================  ======= 
 International                     1.3              1.9             -30% 
                                ========  ======================  ======= 
 Continuing Total Group 
  NFI                             21.6             20.5              5% 
                                ========  ======================  ======= 
 

Infrastructure

Infrastructure NFI was down 2% year on year, partly impacted by accounting related to the bankruptcy of one of our clients, NMCN, and the loss of two significant clients. The Infrastructure market for permanent recruitment is particularly strong, and we are building our teams in this area to capitalise on this opportunity.

UK Infrastructure demand has recovered to pre-Covid levels with a shortage of skilled labour and increased requirement for international attraction. The AMP and CP6 investment cycles in water and rail have now moved into the build and construction phases. Furthermore, nationwide investment in fibre and EV is driving significant demand for skilled blue-collar workers in the utilities market.

Defence

Defence was up 10% year-on-year, due to strong demand for Technology skills and a strong Defence market including a well performing large RPO deal.

While this sector tends to remain stable irrespective of short-term economic fluctuations, demand for labour in the Defence sector has increased 17.5%. Permanent recruitment has seen largest demand, with some reduction of overall contractor workforce post IR35 and Covid. Investment in the defence sector in both the UK and US markets, creates an ongoing sustainable scale opportunity. Gattaca is currently working with 68% of the Ministry of Defense Top 100 suppliers, and is well placed to service both Technology and Engineering staffing requirements, with an opportunity for growth in Manufacturing and IT.

Mobility

Strong growth in Mobility NFI, of 63% year-on-year, was achieved off a relatively small base following significant market impact during the pandemic period. In Q4 2022, a significant contract is due to expire which will impact 2023.

The Mobility market is attractive as industry rebuilds, with permanent recruitment demand outstripping contract, as businesses rehire having downsized during the pandemic and the associated market downturn. Mobility market s upply chains have been impacted by the pandemic, semi-conductor shortages and now the conflict in Ukraine. The supply of t echnician skills remains tight, and we see investment in new technology driving high demand especially across EV and battery development

Technology, Media & Telecoms (TMT)

TMT has seen a strong return to growth in H1 2022 with NFI up 18% year-on-year. This has been driven by increased headcount and strong demand for technology skills.

Recruitment demand is robust with all sectors investing in technology skills. These skillsets typically have lower barriers associated with fixed geographical location, offering the option of remote working. There is a strong demand for permanent hires and, notably, we increasingly see clients buying "packages" of hires (versus one-off hires), which provide more scalable opportunities. Demand for contract recruitment lags permanent hiring, but it is climbing as the 'great resignation' slows. Skills associated with the development of cloud and security, infrastructure, data, and enterprise resource planning are particularly in-demand. The market is candidate-driven, resulting in average salaries increasing and clients increasingly offering fully remote working.

Energy

Energy NFI was down 15% year on year, primarily driven by the loss of a significant client and reduced focus on high cost to serve international markets. Project related and seasonal demand is creating solid market opportunity for contract recruitment.

Investment is increasing across all sectors within Energy. Gattaca well positioned to capture market opportunities in nuclear, transmission and distribution, renewables and oil and gas markets. In particular, demand is focused around skills in project management, controls and design engineers driven by the investment in programmes.

UK Other

NFI was up 18% year-on-year driven by strong performance from Gattaca Projects, our statement of work brand and Barclay Meade, our professional services brand.

The Projects business has continued to grow in 2022 with a wider client base that has benefited from our experience in project management and in-depth technical expertise.

Demand for professional skill sets across accounting and finance, procurement, HR and sales has been particularly strong in the permanent recruitment market and our professional services brand has successfully captialised on this market opportunity. We continue to see high levels of demand resulting in salary and rate increases.

International

International NFI was down 30% year on year, as we have repositioned our North American business away from Telco contract recruitment and towards Engineering and Technology contingent and RPO permanent opportunities which are trending positively.

In North America and Europe hiring demand is tracking similar to UK, with our regions predominantly focused on the permanent recruitment market in three of our eight sectors. Within North America and Europe we have an opportunity for expansion leveraging a stabilised and maturing operating model.

Group contractor and permanent fee mix

Contract fees accounted for 70% of continuing underlying NFI in H1 2022 (2021 H1 restated: 77%). During the period, the contract base was relatively flat with approximately 5,100 contractors.

Permanent fees accounted for 30% of continuing underlying NFI in H1 2022 (2021 H1 restated: 23%). There was increased demand for permanent hires in our contingent and solutions business across almost all our market sectors. Our professional services brands, Alderwood and Barclay Meade, saw particularly high demand during the period as their market recovered strongly.

People

Gattaca's full time equivalent headcount at 31 January 2022 was 540, an increase of 103, or 24%, from 31 January 2021. This increase was primarily due to growth in sales headcount where we added 85 new heads. The ratio of sales to support staff was 73:27, compared to a ratio of 71:29 at 31 January 2021.

Financial Overview

Revenue for the period was GBP202.2 million (2021 H1: GBP204.8 million), down 1% year-on-year on a continuing basis.

NFI of GBP21.6 million represented a 5% year-on-year increase on a continuing basis. The Contract NFI margin of 7.8% (2021 H1 restated: 8.0%) was down 0.2 percentage points compared with the prior year.

Continuing underlying loss before tax for the period amounted to GBP0.3 million (2021 H1 restated: loss before tax GBP(0.0) million). On a continuing underlying basis, the effective tax rate was 5% (2021 H1 restated: 100%). The Group's continuing underlying effective tax rate reported at 31 July 2021 was 7%.

Basic underlying earnings per share from continuing operations were (0.8)pence (2021 H1 restated: 0.0pence) and adjusted underlying diluted earnings per share from continuing operations were (0.8)pence (2021 H1 restated: 0.0pence).

Administrative costs

Underlying administrative costs of GBP21.7 million (2021 H1 restated: GBP20.2 million) increased by 7.4% on the prior year period, as we invested in our staff base through additional headcount and reward. During the period, we received no payments from the UK Government Job Retention Scheme, having ended the Group's participation in the UK Government Job Retention Scheme in October 2020.

A breakdown of the increase in administrative costs is shown below:

 
 
                                                       GBPm 
                                                      ====== 
 H1 2021 continuing underlying administrative costs 
  restated(1)                                          20.2 
                                                      ====== 
  UK Sales staff investment                             0.9 
                                                      ====== 
  Commission, bonus & incentives                        0.7 
                                                      ====== 
  UK Group Support                                      0.2 
                                                      ====== 
  Contractor cost write offs associated with client 
   bad debt                                             0.3 
                                                      ====== 
  Legal and professional fees                          (0.2) 
                                                      ====== 
  Reduction in bad debt charges                        (0.3) 
                                                      ====== 
  Reduction in software cost                           (0.3) 
                                                      ====== 
  Other admin costs                                     0.2 
                                                      ====== 
 H1 2022 continuing underlying administrative costs    21.7 
                                                      ====== 
 

Non-underlying costs and discontinued operations

The continuing non-underlying costs in H1 2022 of GBP2.3 million (2021 H1 restated: costs of GBP0.3 million), relates predominantly to the impairment of goodwill held in relating to the 'Infrastructure - RSL Rail' CGU. Non-underlying costs in the comparative period primarily related to unfavourable foreign exchange movements.

In the 2021 full year accounts, Mexican and South African operations were classified as discontinued. Loss before tax in H1 2022 for all discontinued operations was GBP0.7 million (2021 H1 restated: loss GBP0.2 million).

Financing costs

Net financing costs of GBP0.1 million (2021 H1: GBP0.6 million) were GBP0.5 million lower due to a decrease in interest payable and a GBP0.2 million decrease in foreign exchange impacts on translation of foreign currency balances within local entities (treated as non-underlying) compared to prior year.

Bank interest payable was GBP0.3 million lower than the comparative period, predominantly due to prior year capitalised borrowing costs being written off on the repayment of the revolving credit facility in October 2020.

Debtors, cash flow, net debt and financing

Net (debt) / cash at 31 January 2022 was GBP(0.1) million (31 July 2021: GBP14.1 million; 31 January 2021: GBP15.8 million), while adjusted net cash (net cash excluding IFRS 16 lease liabilities) was GBP4.8 million (31 July 2021: GBP19.9 million; 31 January 2021: GBP22.7 million) at the period end. The Group has now repaid all deferred VAT to HMRC.

The Group's trade and other receivables balance was GBP63.7m at 31 January 2022 (31 July 2021: GBP64.1m), of which debtor and accrued income balances were GBP59.7 million, a GBP1.2 million reduction over the 6 month period from 31 July 2021. The Group's days sales outstanding ('DSO') over this period (on a weekly based countback method) increased by 11 days from 52 to 63 days. Approximately 5 days of this increase is attributable to payment process difficulties with one client which is expected to be resolved in the near future. Whilst DSO position at 31 July 21 is considered to have been near optimal levels, there is room for improvement on the current DSO, and we remain focused on improving our time to bill and time to collect.

Capital expenditure in the period amounted to GBP0.1 million (2021 H1 restated: GBP0.3 million). Following the publication of the IFRS Interpretations Committee's ('IFRIC') final agenda decision on accounting for configuration and customisation costs in a SaaS arrangement, including for cloud-based arrangements, the Group has updated its accounting policy. This change in accounting policy has been applied to all relevant capitalised intangible asset costs held on the balance sheet, see note 1.24 in the accompanying interim financial statements.

As at 31 January 2022, the Group had a working capital facility of GBP75 million. This facility includes both recourse and non-recourse elements. Under the terms of the non-recourse facility, the trade receivables are assigned to, and owned by, HSBC and so have been derecognised from the Group's statement of financial position. In addition, the non-recourse working capital facility does not meet the definition of loans and borrowings under IFRS. The utilisation of this facility at 31 January 2022 was GBP8.9 million recourse and GBP10.4 million non-recourse.

Dividend

The Board is mindful of the importance of dividends to shareholders. A dividend of 1.5 pence per share was paid in the period in relation to the 2021 financial year. The Board has not proposed an interim dividend for 2022. The Board remains committed to paying dividends when the Group returns to sustainable levels of profitability.

Risks

The Board considers strategic, financial and operational risks and identifies actions to mitigate those risks. Key risks and their mitigations were disclosed on pages 45 to 53 of the Annual Report for the year ended 31 July 2021.

We continue to manage a number of potential risks and uncertainties including contingent liabilities as noted in the interim accounts - many of which are common to other similar businesses - which could have a material impact on our longer-term performance.

Outlook

We are seeing encouraging trends across many of our sectors and believe we are positioned to capture the opportunities that these trends provide. The Group has now established its operating model, fully integrated a new global technology platform, and strategically invested in its sales headcount. With these critical internal components now complete, Gattaca has the right infrastructure and capabilities to capture the opportunities presented across our markets.

Gattaca's challenge now is to capitalise on the actions already taken and to take the necessary steps to position the Group for growth in the medium to long term. We expect continuing underlying profit before tax for its financial year ending 31 July 2022 to be around breakeven as announced in January 2022. Looking to 2023 and beyond, although the trajectory of the business has been slower than previously anticipated we expect to see the benefits of our investment in headcount and the technology platform begin to come through, delivering a return to profitable and sustainable long-term growth. This will continue to be supported by strong market demand for STEM talent, which we believe will remain scarce and in high demand.

Condensed Consolidated Income Statement

For the period ended 31 January 2022

 
 
 
                                                                           Restated       Restated 
                                                                           6 months      12 months 
                                                            6 months        (1) (2)    to 31/07/21 
                                                         to 31/01/22    to 31/01/21            (1) 
                                                           unaudited      unaudited 
                                                 Note        GBP'000        GBP'000        GBP'000 
==============================================  =====  =============  =============  ============= 
 Continuing operations 
 Revenue                                          2          202,199        204,799        415,726 
 Cost of sales                                             (180,593)      (184,277)      (373,646) 
==============================================  =====  =============  =============  ============= 
 Gross profit                                     2           21,606         20,522         42,080 
 Administrative expenses (3)                                (24,068)       (20,223)       (40,188) 
==============================================  =====  =============  =============  ============= 
 (Loss)/profit from continuing operations         2          (2,462)            299          1,892 
 Finance income                                                   73             24             56 
 Finance cost                                                  (153)          (633)        (1,136) 
==============================================  =====  =============  =============  ============= 
 (Loss)/profit before taxation                               (2,542)          (310)            812 
 Taxation                                         5              120             93           (41) 
----------------------------------------------  -----  -------------  -------------  ------------- 
 (Loss)/profit after taxation from continuing 
  operations                                                 (2,422)          (217)            771 
==============================================  =====  =============  =============  ============= 
 
   Discontinued operations 
 Loss for the period from discontinued 
  operations (attributable to equity holders 
  of the Company)                                 12           (643)          (194)        (1,208) 
==============================================  =====  =============  =============  ============= 
 Loss for the period                                         (3,065)          (411)          (437) 
==============================================  =====  =============  =============  ============= 
 

(1) Results are restated following the April 2021 IFRS Interpretations Committee agenda decision on cloud computing arrangements, resulting in previously capitalised software assets being expensed, as explained further in Note 1.24.

(2) Results for the 6 months to January 2021 have been restated for the presentation of discontinued operations as explained in Note 12.

(3) Administrative expenses from continuing operations includes net impairment losses on trade receivables and accrued income of GBP172,000 (6 months to 31 January 2021 restated: losses of GBP477,000 and 12 months to 31 July 2021: losses of GBP420,000).

Loss for the period for 31 January 2022, 31 January 2021 and the year to 31 July 2021 are wholly attributable to equity holders of the Parent.

 
 
                                                          Restated       Restated 
                                                          6 months      12 months 
                                           6 months        (1) (2)            (1) 
                                        to 31/01/22    to 31/01/21    to 31/07/21 
                                          unaudited      unaudited 
 Earnings per ordinary share    Note          pence          pence          pence 
=============================  =====  =============  =============  ============= 
 Basic earnings per share        6            (9.5)          (1.3)          (1.4) 
 Diluted earnings per share      6            (9.5)          (1.3)          (1.4) 
=============================  =====  =============  =============  ============= 
 

Reconciliation to adjusted profit measures

Underlying profit is the Group's key adjusted profit measure; profit from continuing operations is adjusted to exclude non-underlying income and expenditure as defined in the Group's accounting policy, amortisation and impairment of goodwill and acquired intangibles, impairment of leased right-of-use assets and net foreign exchange gains or losses.

 
 
 
                                                                                 Restated             Restated 
                                                                                 6 months            12 months 
                                                                  6 months        (1) (2)                  (1) 
                                                               to 31/01/22    to 31/01/21          to 31/07/21 
                                                                 unaudited      unaudited 
                                                                   GBP'000        GBP'000              GBP'000 
================================================   =======================  =============  =================== 
 (Loss)/profit from continuing operations                          (2,462)            299                1,892 
 Add 
 Depreciation of property, plant and equipment, 
  depreciation of leased right-of-use assets 
  and amortisation of software and software 
  licences                                                             995          1,089                2,185 
 Non-underlying items included within 
  administrative expenses                                               90          (197)                (193) 
 Amortisation and impairment of goodwill 
  and acquired intangibles and impairment 
  of leased right-of-use assets                                      2,264            193                  548 
=================================================  =======================  =============  =================== 
 Underlying EBITDA                                                     887          1,384                4,432 
=================================================  =======================  =============  =================== 
 Less 
 Depreciation and impairment of property, 
  plant and equipment, leased right-of-use 
  assets and amortisation of software and 
  software licenses                                                  (995)        (1,089)              (2,185) 
 Net finance costs excluding foreign exchange 
  gains and losses                                                   (153)          (335)                (412) 
=================================================  =======================  =============  =================== 
 Underlying (loss)/profit before taxation                            (261)           (40)                1,835 
=================================================  =======================  =============  =================== 
 Underlying taxation                                                    14             40                (132) 
=================================================  =======================  =============  =================== 
 Underlying (loss)/profit after taxation 
  from continuing operations                                         (247)              -                1,703 
=================================================  =======================  =============  =================== 
 

(1) Results are restated following the April 2021 IFRS Interpretations Committee agenda decision on cloud computing arrangements, resulting in previously capitalised software assets being expensed, as explained further in Note 1.24.

(2) Results for the 6 months to January 2021 have been restated for the presentation of discontinued operations as explained in Note 12.

Condensed Consolidated Statement of Comprehensive Income

For the period ended 31 January 2022

 
 
 
                                                                                  Restated            Restated 
                                                                                  6 months           12 months 
                                                                   6 months        (1) (2)                 (1) 
                                                                to 31/01/22    to 31/01/21         to 31/07/21 
                                                                  unaudited      unaudited 
                                                                    GBP'000        GBP'000             GBP'000 
==================================================  =======================  =============  ================== 
 Loss for the period                                                (3,065)          (411)               (437) 
 
 Other comprehensive (loss)/income 
 Items that may be reclassified subsequently 
  to profit or loss 
 Exchange differences on translation of foreign 
  operations                                                           (85)             12                 281 
==================================================  =======================  =============  ================== 
 Other comprehensive (loss)/income for the 
  period                                                               (85)             12                 281 
==================================================  =======================  =============  ================== 
 
 Total comprehensive loss for the period 
  attributable 
  to equity holders of the parent                                   (3,150)          (399)               (156) 
==================================================  =======================  =============  ================== 
 
                                                                                  Restated            Restated 
                                                                                  6 months           12 months 
                                                                   6 months        (1) (2)                 (1) 
                                                                to 31/01/22    to 31/01/21         to 31/07/21 
                                                                  unaudited      unaudited 
                                                                    GBP'000        GBP'000             GBP'000 
==================================================  =======================  =============  ================== 
 Attributable to: 
      Continuing operations                                         (3,254)          (253)               1,004 
      Discontinued operations                                           104          (146)             (1,160) 
==================================================  =======================  =============  ================== 
                                                                    (3,150)          (399)               (156) 
==================================================  =======================  =============  ================== 
 
 

(1) Results are restated following the April 2021 IFRS Interpretations Committee agenda decision on cloud computing arrangements, resulting in previously capitalised software assets being expensed, as explained further in Note 1.24.

(2) Results for the 6 months to January 2021 have been restated for the presentation of discontinued operations as explained in Note 12.

Condensed Consolidated Statement of Changes in Equity

For the period ended 31 January 2022

 
 
                                                                                        Retained 
                                                 Share-based                 Treasury   earnings 
                     Share     Share    Merger       payment   Translation     shares        (1) 
                   capital   premium   reserve       reserve       reserve    reserve        (2)     Total 
                   GBP'000   GBP'000   GBP'000       GBP'000       GBP'000    GBP'000    GBP'000   GBP'000 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Total equity at 
  1 August 
  2020 as 
  reported             323     8,706    28,750           526         (147)       (97)      1,711    39,772 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Adjustments due 
  to change 
  of accounting 
  policy, 
  net of tax             -         -         -             -             -          -    (4,738)   (4,738) 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Restated total 
  equity 
  at 1 August 
  2020                 323     8,706    28,750           526         (147)       (97)    (3,027)    35,034 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Loss for the 
  period                 -         -         -             -             -          -      (411)     (411) 
 Other 
  comprehensive 
  income                 -         -         -             -            12          -          -        12 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Total 
  comprehensive 
  loss                   -         -         -             -            12          -      (411)     (399) 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Deferred tax            -         -         -             -             -          -          -         - 
 movement 
 in respect of 
 share options 
 Share-based 
  payments 
  charge                 -         -         -            28             -          -          -        28 
 Share-based 
  payments 
  reserve 
  transfer               -         -         -          (71)             -          -         71         - 
 Issue of 
  treasury 
  shares 
  to employees           -         -         -             -             -         17          -        17 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Transactions 
  with owners            -         -         -          (43)             -         17         71        45 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 
 Restated total 
  equity 
  at 31 January 
  2021                 323     8,706    28,750           483         (135)       (80)    (3,367)    34,680 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 
 Total equity at 
  1 August 
  2020 as 
  reported             323     8,706    28,750           526         (147)       (97)      1,711    39,772 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Adjustments due 
  to change 
  of accounting 
  policy, 
  net of tax             -         -         -             -             -          -    (4,738)   (4,738) 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Restated total 
  equity 
  at 1 August 
  2020                 323     8,706    28,750           526         (147)       (97)    (3,027)    35,034 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Loss for the 
  period                 -         -         -             -             -          -      (437)     (437) 
 Other 
  comprehensive 
  income                 -         -         -             -           281          -          -       281 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Total 
  comprehensive 
  loss                   -         -         -             -           281          -      (437)     (156) 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Deferred tax 
  movement 
  in respect of 
  share options          -         -         -             -             -          -         65        65 
 Share-based 
  payments 
  charge                 -         -         -           104             -          -          -       104 
 Share-based 
  payments 
  reserve 
  transfer               -         -         -         (176)             -          -        176         - 
 Issue of 
  treasury 
  shares 
  to employees           -         -         -             -             -         60          -        60 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Transactions 
  with owners            -         -         -          (72)             -         60        241       229 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 
 Restated total 
  equity 
  at 31 July 
  2021                 323     8,706    28,750           454           134       (37)    (3,223)    35,107 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 
 Restated total 
  equity 
  at 1 August 
  2021                 323     8,706    28,750           454           134       (37)    (3,223)    35,107 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Loss for the 
  period                 -         -         -             -             -          -    (3,065)   (3,065) 
 Other 
  comprehensive 
  loss                   -         -         -             -          (85)          -          -      (85) 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Total 
  comprehensive 
  loss                   -         -         -             -          (85)          -    (3,065)   (3,150) 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Dividend paid 
  in the 
  year                   -         -         -             -             -          -      (484)     (484) 
 Deferred tax 
  movement 
  in respect of 
  share options          -         -         -             -             -          -       (66)      (66) 
 Share-based 
  payments 
  charge                 -         -         -            13             -          -          -        13 
 Share-based 
  payments 
  reserve 
  transfer               -         -         -          (78)             -          -         78         - 
 Translation 
  reserves 
  movements due 
  to disposal 
  of foreign 
  operations             -         -         -             -           881          -      (881)         - 
 Purchase of 
  treasury 
  shares                 -         -         -             -             -       (68)          -      (68) 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 Transactions 
  with owners            -         -         -          (65)           881       (68)    (1,353)     (605) 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 
 Total equity at 
  31 January 
  2022                 323     8,706    28,750           389           930      (105)    (7,641)    31,352 
================  ========  ========  ========  ============  ============  =========  =========  ======== 
 
 

(1) Results are restated following the April 2021 IFRS Interpretations Committee agenda decision on cloud computing arrangements, resulting in previously capitalised software assets being expensed, as explained further in Note 1.24.

(2) Results for the 6 months to January 2021 have been restated for the presentation of discontinued operations as explained in Note 12.

Condensed Consolidated Statement of Financial Position

As at 31 January 2022

 
                                                                                       (1) (2)                     (1) 
                                                                                            21                      21 
                                                                                      Restated                Restated 
                                                                                      6 months               12 months 
                                                           6 months                        (1)                     (1) 
                                                        to 31/01/22                to 31/01/21             to 31/07/21 
                                                          unaudited                  unaudited 
                                     Note                   GBP'000                    GBP'000                 GBP'000 
==================================  =====  ========================  =========================  ====================== 
 Non-current assets 
 Goodwill and intangible assets       7                       3,980                      6,984                   6,343 
 Property, plant and equipment                                1,465                      1,332                   1,578 
 Right-of-use assets                  10                      5,069                      6,683                   5,674 
 Investments                                                      -                         19                       - 
 Deferred tax assets                                            470                      1,107                     971 
 Total non-current assets                                    10,984                     16,125                  14,566 
==================================  =====  ========================  =========================  ====================== 
 Current assets 
 Trade and other receivables (As 
  at 31 
  January 2022: GBP134,000 is 
  falling 
  due after one year, GBPnil for 
  31 January 
  2021 and 31 July 2021)              8                      63,652                     45,605                  64,135 
 Corporation tax receivables                                  1,226                         64                     818 
 Cash and cash equivalents            13                     13,731                     27,082                  29,238 
 Assets classified as 
  held-for-sale                                                   -                          -                     346 
==================================  =====  ========================  =========================  ====================== 
 Total current assets                                        78,609                     72,751                  94,537 
==================================  =====  ========================  =========================  ====================== 
 Total assets                                                89,593                     88,876                 109,103 
==================================  =====  ========================  =========================  ====================== 
 
 Non-current liabilities 
 Deferred tax liabilities                                      (21)                       (30)                    (14) 
 Provisions                                                 (1,248)                    (1,522)                 (1,269) 
 Lease liabilities                    10                    (3,421)                    (5,056)                 (4,281) 
 Total non-current liabilities                              (4,690)                    (6,608)                 (5,564) 
==================================  =====  ========================  =========================  ====================== 
 Current liabilities 
 Trade and other payables                                  (42,115)                   (40,136)                (56,121) 
 Provisions                                                   (900)                      (751)                   (464) 
 Current tax liabilities                                      (169)                      (454)                   (796) 
 Lease liabilities                    10                    (1,477)                    (1,909)                 (1,480) 
 Bank loans and borrowings            9                     (8,890)                    (4,338)                 (9,348) 
 Liabilities directly associated 
  with 
  assets classified as 
  held-for-sale                                                   -                          -                   (223) 
==================================  =====  ========================  =========================  ====================== 
 Total current liabilities                                 (53,551)                   (47,588)                (68,432) 
==================================  =====  ========================  =========================  ====================== 
 Total liabilities                                         (58,241)                   (54,196)                (73,996) 
==================================  =====  ========================  =========================  ====================== 
 
 Net assets                                                  31,352                     34,680                  35,107 
==================================  =====  ========================  =========================  ====================== 
 
 Equity 
 Share capital                        11                        323                        323                     323 
 Share premium                                                8,706                      8,706                   8,706 
 Merger reserve                                              28,750                     28,750                  28,750 
 Share-based payment reserve                                    389                        483                     454 
 Translation reserve                                            930                      (135)                     134 
 Treasury shares reserve                                      (105)                       (80)                    (37) 
 Retained earnings                                          (7,641)                    (3,367)                 (3,223) 
==================================  =====  ========================  =========================  ====================== 
 Total equity                                                31,352                     34,680                  35,107 
==================================  =====  ========================  =========================  ====================== 
 

The accompanying notes are an integral part of these interim Financial Statements.

(1) Results are restated following the April 2021 IFRS Interpretations Committee agenda decision on cloud computing arrangements, resulting in previously capitalised software assets being expensed, as explained further in Note 1.24.

Condensed Consolidated Cash Flow Statement

For the period ended 31 January 2022

 
                                                                          Restated                Restated 
                                                                          6 months               12 months 
                                                           6 months        (1) (2)                     (1) 
                                                        to 31/01/22    to 31/01/21             to 31/07/21 
                                                          unaudited      unaudited 
                                                                          Restated                Restated 
                                                                          6 months               12 months 
                                                           6 months        (1) (2)                     (1) 
                                                        to 31/01/22    to 31/01/21             to 31/07/21 
                                                          unaudited      unaudited 
                                                              Total          Total                   Total 
                                                            GBP'000        GBP'000                 GBP'000 
 Cash flows from operating activities 
 Loss after taxation                                        (3,065)          (411)                   (437) 
 Adjustments for: 
  Depreciation of property, plant and equipment 
   and amortisation of goodwill, intangible 
   assets and software and software licences                    563            387                     901 
    Depreciation of leased right-of-use assets                  728            953                   1,875 
    Loss from sale of subsidiary, associate                      55              -                       - 
     or investment 
    Loss on disposal of property, plant and 
     equipment                                                   12             27                       8 
    Impairment of goodwill and acquired intangibles           2,000              -                       - 
    Impairment of right-of-use assets                             -              -                     183 
    Impairment of property, plant and equipment                   -              -                      18 
    Interest income                                           (132)           (88)                    (65) 
    Interest costs                                              160            650                   1,218 
    Taxation (credit)/expense recognised in 
     Income Statement                                         (153)           (71)                      26 
    Decrease/(increase) in trade and other 
     receivables                                                617          2,912                (15,498) 
    (Decrease)/increase in trade and other 
     payables                                              (14,005)        (6,009)                  10,098 
    Increase/(decrease) in provisions                           408          (547)                 (1,064) 
    Share-based payment charge                                   13             86                     271 
====================================================  =============  =============  ====================== 
 Cash used in operations                                   (12,799)        (2,111)                 (2,466) 
 Interest paid                                                 (96)           (83)                   (320) 
 Interest on lease liabilities                                 (64)           (82)                   (156) 
 Interest received                                                -             32                      65 
 Income taxes paid                                            (493)        (1,048)                 (1,322) 
====================================================  =============  =============  ====================== 
 Cash used in operating activities                         (13,452)        (3,292)                 (4,199) 
====================================================  =============  =============  ====================== 
 
 Cash flows from investing activities 
 Purchase of plant and equipment                              (102)              -                   (332) 
 Purchase of intangible assets                                    -          (293)                    (83) 
 Cash used in investing activities                            (102)          (293)                   (415) 
====================================================  =============  =============  ====================== 
 
 Cash flows from financing activities 
 Lease liability principal repayment                          (970)        (1,046)                 (2,355) 
 (Purchase)/sale of treasury shares                            (68)             17                      60 
 Working capital facility (repaid)/withdrawn                  (458)          4,572                   9,197 
 Dividend paid                                                (484)              -                       - 
 Repayment of term loan                                           -        (7,500)                 (7,500) 
====================================================  =============  =============  ====================== 
 Cash used in financing activities                          (1,980)        (3,957)                   (598) 
====================================================  =============  =============  ====================== 
 
 Effects of exchange rates on cash and cash 
  equivalents                                                    27          (172)                   (346) 
 
 Decrease in cash and cash equivalents                     (15,507)        (7,714)                 (5,558) 
 Cash and cash equivalents at beginning of 
  period                                                     29,238         34,796                  34,796 
====================================================  =============  =============  ====================== 
 Cash and cash equivalents at end of period 
  ((3))                                                      13,731         27,082                  29,238 
====================================================  =============  =============  ====================== 
 

Net decrease in cash and cash equivalents for discontinued operations was GBP1,156,000 (6 months to 31 January 2021 restated: decrease of GBP1,447,000 and year to 31 July 2021: decrease of GBP1,534,000).

(1) Results are restated following the April 2021 IFRS Interpretations Committee agenda decision on cloud computing arrangements, resulting in previously capitalised software assets being expensed, as explained further in Note 1.24.

(2) Results for the 6 months to January 2021 have been restated for the presentation of discontinued operations as explained in Note 12.

(3) Included in Cash and cash equivalents is GBP902,000 of restricted cash (6 months to 31 January 2021: GBP1,588,000 year to 31 July 2021: GBP7,115,000) which meets the definition of cash and cash equivalents but is not available for use by the Group. This balance arises from the Group's non-recourse working capital arrangements.

NOTES

Forming part of the financial statements

1 The Group and Company Significant Accounting Policies

The accounting policies applied in these condensed interim Financial Statements are consistent with those used in the preparation of the Group's consolidated Financial Statements for the year ended 31 July 2021, as described in those annual Financial Statements, with the exception of policies, amendments and interpretations effective as of 1 August 2021 and other changes detailed below.

1.1 The Business of the Group

Gattaca plc ('the Company') and its subsidiaries (together 'the Group') is a human capital resources business providing contract and permanent recruitment services in the private and public sectors. The Company is a public limited company, which is listed on the Alternative Investment Market (AIM) and is incorporated and domiciled in England, United Kingdom. The Company's address is: 1450 Parkway, Solent Business Park, Whiteley, Fareham, Hampshire, PO15 7AF. The registration number is 04426322.

1.2 Basis of preparation of the interim Financial Statements

These condensed consolidated interim Financial Statements are for the six months ended 31 January 2022. They have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all of the information required for full annual Financial Statements, and should be read in conjunction with the consolidated Financial Statements for the year ended 31 July 2021 which have been filed with the Registrar of Companies. The auditor's report on those Financial Statements was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

These condensed consolidated interim Financial Statements (the interim Financial Statements) have been prepared in accordance with the accounting policies set out below which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and are effective at 1 August 2021 or are expected to be adopted and effective at 1 August 2021.

These financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

1.3 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 of the Group's 2021 Annual Report. The financial position of the Group, its cash flows and liquidity position mirror those of the ultimate parent company and can be found in the Chief Financial Officer's Report of the 2021 Annual Report for Gattaca plc.

The majority of our staff have now adopted a hybrid working style between our offices and remote working and there has not been any significant impact to our ability to operate effectively. The initial reduction in contractor numbers in April 2020, whilst impacting profitability, has resulted in reduced working capital requirements and has created further liquidity. The Group has also undertaken other actions, including an increase to the payment terms of certain contractors and these actions have created a permanent working capital benefit, and reduce our working capital requirements during growth. We have seen signs of extensions in debtor days as a result of the ongoing pandemic recovery impact on trading at our clients and we continue to be alert for any sudden changes. There is sufficient headroom on our working capital facilities to absorb a level of extensions, but we would also manage supply to the customer if payment within an appropriate period was not being made. A significant deterioration in payment terms would significantly impact the Group's liquidity.

The Directors have prepared detailed cash flow forecasts to July 2025, covering a period of 40 months from the date of approval of these financial statements. This base case is drawn up with appropriate regard for the current macroeconomic environment and the particular circumstances in which the Group operates. This conservative base case assumes a steady growth in the Group's contract and permanent NFI year on year.

The output of the base case forecasting process has been used to perform sensitivity analysis on the Group's cash flow to model the potential effects should principal risks actually occur either individually or in unison. The sensitivity analysis modelled scenarios with significantly lower NFI growth rates and extended DSO considered. The Group has modelled the impact of a severe but plausible scenario including growth of 0%-0.6% in contract NFI across FY23 to FY25, with customer receivables DSO extended to 60 days.

After making appropriate enquiries and considering the uncertainties described above, the Directors have a reasonable expectation at the time of approving these interim financial statements that the Group and the Company has adequate resources to continue in operational existence for the foreseeable future. Following careful consideration the Directors do not consider there to be a material uncertainty with regards to going concern and consider it is appropriate to adopt the going concern basis in preparing the interim financial statements.

1.4 New standards and interpretations

The following are new standards or improvements to existing standards that are mandatory for the first time in the Group's accounting period beginning on 1 August 2021 and no new standards have been early adopted. The Group's January 2022 interim Financial Statements have adopted these amendments to IFRS:

 
 --   Amendment to IFRS 16, ' Leases' - Covid-19 related rent concessions 
       (effective 1 June 2020). 
 --   Amendment to IFRS 9, IAS39 and IFRS 7 - interest rate benchmark 
       reform (effective 1 January 2020) 
 

Following the IFRS Interpretations Committee's agenda decision published in April 2021, during the 6 months to 31 January 2022, the Group voluntarily changed its accounting policy relating to the capitalisation of certain software costs, specifically relating to the capitalisation of implementation costs such as configuration and customisation costs for cloud-based software under SaaS arrangements. This is further described, along with the financial impact, in Note 1.24.

New standards in issue, not yet adopted

The Group has not yet adopted certain new standards, amendments and interpretations to existing standards, which have been published but which are only effective for the Group accounting periods beginning on or after 1 August 2021. These new pronouncements are listed as follows:

 
 --   Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest 
       Rate Benchmark Reform - Phase 2 (effective 1 January 2021) 
 

The Directors are currently evaluating the impact of the adoption of all other standards, amendments and interpretations but do not expect them to have a material impact on the Group's operations or results.

Forthcoming requirements

The following amendments are required for application for the Group's periods beginning after 1 August 2021 or later:

 
 Standard                                                   Effective date (annual period 
                                                                   beginning on or after) 
==================  =====================================  ============================== 
 IAS 1 amendments    Classification of liabilities                         1 January 2022 
                      as current or non-current 
 IAS 16 amendments   Property, plant and equipment                         1 January 2022 
                      proceeds before intended use 
 IAS 37 amendments   Onerous contracts-cost of fulfilling                  1 January 2022 
                      a contract 
 IFRS 3 amendments   Reference to the conceptual                           1 January 2022 
                      framework 
 

1.5 Basis of consolidation

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date on which that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree, and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangements. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of the acquiree's identifiable net assets.

Acquisition-related costs are expensed as incurred.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Where necessary, amounts reported by subsidiaries have been adjusted to conform to the Group's accounting policies.

1.6 Revenue

Revenue is measured by reference to the fair value of consideration received or receivable by the Group for services provided, excluding VAT and trade discounts.

Temporary placements

Revenue from temporary, or contract, placements is recognised at the point in time when the candidate provides services, upon receipt of a client-approved timesheet or equivalent proof of time worked. Timing differences between the receipt of a client-approved timesheet and the raising of an invoice are recognised as accrued income. The Group has assessed its use of third party providers to supply candidates for temporary placements under the agent or principal criteria and has determined that it is the principal on the grounds that it retains primary responsibility for provision of the services.

A number of contractual rebate arrangements are in place in respect of volume and value of sales; these are accounted for as variable consideration reducing revenue and estimated in line with IFRS 15.

Any consideration payable at the start of contracts to customers is recognised as a prepayment and released to profit or loss over the terms of the contract it relates to, as a reduction to revenue.

Permanent placements

Revenue from permanent placements, which is based on a percentage of the candidate's remuneration package, is recognised when candidates commence employment which is the point at which the performance obligation of the contract is considered met. Some permanent placements are subject to a 'claw-back' period whereby if a candidate leaves within a set period of starting employment, the customer is entitled to a rebate subject to the Group's terms and conditions. Provisions as a reduction to revenue are recognised for such arrangements if material. In addition, a number of contractual rebate arrangements are in place in respect of volume and value of sales; these are accounted for as variable consideration reducing revenue and estimated in line with IFRS 15.

Other

Other revenue streams are generated from provision of engineering services and other fees. Revenue from the provision of engineering services is recognised either over a period of time when the performance obligations are satisfied over the course of project milestones or at a point in time upon receipt of client-approved timesheets. Other fees mainly relate to relate to account management fees for providing recruitment services. Revenue from other fees is recognised on confirmation from the client committing to the agreement and either at a point in time or over time in accordance with terms of each individual agreement as performance obligations are met.

1.7 Government grants

Government grants are assistance by government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to operating activities.

Government grants are recognised when there is a reasonable assurance that the Group will comply with the conditions attached to it and that the grant will be received. They are recognised in the consolidated Income Statement on a systematic basis over the periods in which the related costs that they compensate are recognised as expenses.

Grants are either presented as grant income or deducted in reporting the related expense they compensate in the Income Statement.

1.8 Non-underlying items

Non-underlying items are income or expenditure that are considered unusual and separate to underlying trading results because of their size, nature or incidence and are presented within the consolidated Income Statement but highlighted through separate disclosure. The Group's Directors consider that these items should be separately identified within the income statement to enable a proper understanding of the Group's business performance.

Items which are included within this category include but are not limited to:

 
 --   costs of acquisitions; 
 --   integration costs following acquisitions; and 
 --   material restructuring costs including related professional fees 
       and staff costs. 
 

In addition, the Group also excludes from underlying results amortisation and impairment of goodwill and acquired intangibles, impairment of leased right-of-use assets and net foreign exchange gains or losses.

Specific adjusting items are included as non-underlying based on the following rationale:

 
                                                                                              Does not 
                                                                                       reflect in-year 
                                                   Distorting                              operational 
                                             due to irregular            Distorting        performance 
                                                  nature year    due to fluctuating      of continuing 
 Item                                                 on year         nature (size)           business 
=========================================  ==================  ====================  ================= 
 Costs of acquisitions                           ü               ü               ü 
 Integration costs following acquisitions        ü                                    ü 
 Material restructuring costs                                         ü               ü 
 Amortisation and impairment of goodwill         ü               ü               ü 
  and acquired intangibles 
 Impairment of leased right-of-use               ü               ü               ü 
  assets 
 Net foreign exchange gains and losses                                ü               ü 
 Tax impact of the above                         ü               ü               ü 
=========================================  ==================  ====================  ================= 
 

1.9 Property, plant and equipment

Property, plant and equipment is stated at cost, net of depreciation and any provision for impairment.

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset in terms of annual depreciation as follows:

 
 Motor vehicles           25.0%                    Reducing balance 
 Fixtures, fittings and   12.5% to 33.3%           Straight line 
  equipment 
 Leasehold improvements   Over the period of the   Straight line 
                           lease term 
 

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

When revalued assets are sold, the amounts included in other reserves in respect of those assets are transferred to retained earnings.

1.10 Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the fair value of the consideration given for a business over the Company's interest in the fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree. Goodwill is stated at cost less accumulated impairment.

Goodwill impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment. Goodwill is allocated to cash-generating units, being the lowest level at which goodwill is monitored. The carrying value of the assets of the cash-generating unit, including goodwill, intangible and tangible assets and working capital balances, is compared to its recoverable amount, which is the higher of value in use and fair value less costs to sell. Any excess in carrying value over recoverable amount is recognised immediately as an impairment expense and is not subsequently reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

1.11 Intangible assets

Customer relationships

Customer relationships comprise principally of existing customer relationships which may give rise to future orders (customer relationships), and existing order books. They are recognised at fair value at the acquisition date, and subsequently measured at cost less accumulated amortisation and impairment. Customer relationships are determined to have a useful life of ten years and are amortised on a straight-line basis.

Trade names and trademarks

Trade names and trademarks have either arisen on the consolidation of acquired businesses or have been separately purchased and are recognised at fair value at the acquisition date. They are subsequently measured at cost less accumulated amortisation and impairment. Trade names and trademarks are determined to have a useful life of ten years and are amortised on a straight-line basis.

Software and software licences

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software. These costs are amortised using the straight-line method to allocate the cost of the software licences over their useful lives of between two and five years. Subsequent licence renewals are expensed to profit or loss as incurred. Software licences are stated at cost less accumulated amortisation and impairment.

Costs incurred for the development of software code that enhances or modifies, or creates additional capability to existing on premise systems and meets the definition of and recognition criteria for an intangible asset are recognised as intangible software assets and depreciated over a useful life of between two and ten years.

Implementation costs for cloud-based software under Software-as-a-Service (SaaS) arrangements

SaaS arrangements are service contracts providing the Group with the right to access the cloud provider's application software over the contract period. In most cases, this will not meet the definition of an intangible asset under IAS 38. The following outlines the accounting treatment of implementation costs incurred in relation to SaaS arrangements:

 
 --   Implementation costs relating to cloud-based software under SaaS 
       arrangements are assessed as they are incurred. These would include 
       implementation support, consultancy, configuration costs, customisation 
       costs and testing services. If the services are provided by the 
       cloud supplier or a third party and are considered to be separate 
       from the access to the software, then they are either recognised 
       as an intangible asset under IAS 38 if they meet the relevant 
       capitalisation criteria or, more likely, they are expensed to 
       the income statement as incurred. If the implementation services 
       are provided by the cloud provider but are not considered to be 
       separate from access to the software, which generally is the case 
       for customisation costs for cloud-based software, then they are 
       recognised as an expense over the period of the service contract, 
       resulting in a prepayment asset if the services are paid for in 
       advance. 
 

Internally generated intangible assets

Internal development costs that are directly attributable to the design and testing of identifiable and unique non-cloud based software products are capitalised as part of internally generated software and include employee costs and professional fees attributable to the development of the asset. Other internal expenditure that does not meet these criteria is recognised as an expense to profit or loss as incurred. Software development internal costs recognised as assets are amortised on a straight-line basis over their estimated useful lives of between two and ten years.

Expenditure on internally generated brands and other intangible assets is expensed to profit or loss as incurred.

Other

Other intangible assets acquired by the Group have a finite useful life between five and ten years and are measured at cost less accumulated amortisation and accumulated losses.

Amortisation of intangible assets and impairment losses are recognised in profit or loss within administrative expenses.

Intangible assets are tested for impairment either as part of a goodwill-carrying cash-generated unit, or when events arise that indicate an impairment may be triggered. Provision is made against the carrying value of an intangible asset where an impairment is deemed to have occurred. Impairment losses on intangible assets are recognised in the income statement under administrative expenses.

1.12 Disposal of assets

The gain or loss arising on the disposal of an asset is determined as the difference between the disposal proceeds and the carrying amount of the asset and is recognised in the income statement at the time of disposal.

1.13 Leases

The Group has applied IFRS 16 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under IAS17 and IFRIC 14.

The Group leases office property, motor vehicles and equipment. Rental contracts range from monthly to eight years.

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Contracts may contain both lease and non-lease components, and consideration is allocated in the contract to the lease and non-lease components based on their relative stand-alone prices.

Assets and liabilities arising from a lease are initially measured on a present value basis at the lease commencement date. Lease liabilities include the net present value of the fixed payments less any lease incentives receivable, variable lease payments that are based on an index or a rate, amounts expected to be payable by the group under residual value guarantees, the exercise price of any purchase option if the Group is reasonably certain to exercise that option, and payments of penalties for terminating the lease if that option is expected to be taken.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

Lease payments are discounted at either the interest rate implicit in the lease or when this interest rate cannot be readily determined, the Group's incremental borrowing rate associated with a similar asset. When calculating lease liabilities, the Group uses its incremental borrowing rate, being the rate it would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic climate with similar terms, security and conditions. This is estimated using publicly available data adjusted for changes specific to the lease in financing conditions, lease term, country and currency.

The Group does not have leases with variable lease payments based on an index or rate.

Extension or termination options are included in a number of the Group's leases. In determining the lease term, the Group considers all facts and circumstances that create an economic incentive to exercise, or not to exercise, an option. Extension options are only included in the lease term if the lease is reasonably certain to be extended. The lease term is reassessed if an option is actually exercised or the Group becomes obliged to exercise (or not to exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs that is within the control of the Group.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

 
 --   the amount of the initial measurement of lease liability, 
 --   any lease payments made at or before the commencement date less 
       any lease incentives received, 
 --   any initial direct costs, and 
 --   restoration costs. 
 

Right-of-use assets are depreciated on a straight-line basis over the term of the lease with depreciation expense recognised in the income statement.

Lease modifications are a change in scope of a lease that was not part of the original lease. Any change that is triggered by a clause already part of the original lease contract is a re-assessment and not a modification. Changes to lease cash flows as part of a re-assessment result in a re-measurement of the lease liability using an updated discount rate and a corresponding adjustment to the carrying value of the right-of-use asset.

Advantage has been taken of the practical expedients for exemptions provided for leases with less than 12 months to run, for leases of low value, to account for leases with similar characteristics as a portfolio with a single discount rate and to present existing onerous lease provisions against the carrying value of right-of-use assets. Payments associated with short-term leases and leases of low value are recognised on a straight-line basis as an expense in profit or loss.

1.14 Taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities.

Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.

Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the Statement of Financial Position date.

Deferred tax on temporary differences associated with shares in subsidiaries is not provided for if these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to the offset and there is an intention to settle balances on a net basis.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Income Statement, except where they relate to items that are charged or credited directly to equity (such as share-based payments) in which case the related deferred tax is also charged or credited directly to equity.

1.15 Pension costs

The Group operates a number of country-specific defined contribution plans for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in other creditors in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

1.16 Share-based payments

All share-based remuneration is ultimately recognised as an expense in the Income Statement with a corresponding credit to the share-based payment reserve. All goods and services received in exchange for the grant of any share-based remuneration are measured at their fair values. Fair values of employee services are indirectly determined by reference to the fair value of the share options awarded. Their value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example, profitability and sales growth targets).

If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting. Upon exercise of share options, proceeds received net of attributable transaction costs are credited to share capital and share premium.

The Company is the granting and settling entity in the Group share-based payment arrangement where share options are granted to employees of its subsidiary companies. The Company recognises the share-based payment expense as an increase in the investment in subsidiary undertakings.

The Group operates two long-term incentive share option plans. The Zero Priced Share Option Bonus covers all share options issued with an exercise price of GBP0.01; the Long-Term Incentive Plan Options have an exercise price above GBP0.01. Grants under both categories have been made as part of a CSOP scheme, depending on the terms of specific grants.

The Group also operates a Share Incentive Plan ('SIP'), the Gattaca plc Share Incentive Plan ('The Plan'), which is approved by HMRC. The Plan is held by Gattaca plc UK Employee Benefit Trust ('the EBT'), the purpose of which is to enable employees to purchase Company shares out of pre-tax salary. For each share purchased the Group grants an additional share at no cost to the employee. The expense in relation to these 'free' shares is recorded as employee remuneration and measured at fair value of the shares issued as at the date of grant. The assets and liabilities of the EBT are included in the Gattaca Plc Consolidated Statement of Financial Position.

1.17 Financial instruments

Financial assets

IFRS 9 contains a classification and measurement approach for financial assets that reflects the business model in which assets are managed and their cash flow characteristics. Under IFRS 9, all financial assets are measured at either amortised cost, fair value through profit and loss ('FVTPL') or fair value through other comprehensive income ('FVOCI').

Financial assets: debt instruments

The Group classifies its debt instruments in the following measurement categories depending on the Group's business model for managing the asset and the cash flow characteristics of the asset:

(i) those to be measured subsequently at fair value through other comprehensive income (OCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the Income Statement.

(ii) those to be measured subsequently at FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognised in profit or loss and presented net within other gains/(losses) in the year in which it arises.

(iii) those to be measured subsequently at amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/ (losses), together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the Income Statement.

The Group reclassifies debt investments when and only when its business model for managing those assets changes.

Financial assets: equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group's management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group's right to receive payments is established.

Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Impairment of financial assets

IFRS 9 require the application of the 'Expected Credit Loss' model ('ECL'). This applies to all financial assets measured at amortised cost or FVOCI, except equity investments.

The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI.

The Group has reviewed each category of its financial assets to assess the level of credit risk and ECL provision to apply:

 
 --   Trade receivables: the Group has chosen to take advantage of the 
       practical expedient in IFRS 9 when assessing default rates over 
       its portfolio of trade receivables, to estimate the ECL based 
       on historical default rates specific to groups of customers by 
       industry and geography that carry similar credit risks. Separate 
       ECL's have been modelled for UK customers in different industries, 
       and customers in the Americas, Europe, Asia and Africa. 
 --   Accrued income is in respect of temporary placements where a client-approved 
       timesheet has been received or permanent placements where a candidate 
       has commenced employment, but no invoice has been raised. Default 
       rates have been determined by reference to historical data. 
 --   Cash and cash equivalents are held with established financial 
       institutions. The Group has determined that based on the external 
       credit ratings of counterparties, this financial asset has a very 
       low credit risk and that the estimated expected credit loss provision 
       is not material. 
 

At each reporting date, the expected credit loss provision will be reviewed to reflect changes in credit risk and historical default rates and other economic factors. Changes in the ECL provision are recognised in profit or loss.

Financial liabilities

Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument and comprise trade and other payables and bank loans. Financial liabilities are recorded initially at fair value, net of direct issue costs and are subsequently measured at amortised cost using the effective interest rate method.

A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged, cancelled or expires.

Non-recourse receivables factoring is not recognised as a financial liability as there is no contractual obligation to deliver cash; subsequently, the receivables are de-recognised and any difference between the receivable value and amount received through non-recourse factoring is recognised as a finance cost.

1.18 Cash and cash equivalents

In the Consolidated Cash Flow Statement, cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the Statement of Financial Position and Cash Flow Statement, bank overdrafts are netted against cash and cash equivalents where the offsetting criteria are met.

Cash in transit inbound from, or outbound to, a third party is recognised when the transaction is no longer reversible by the party making the payment. This is determined to be in respect of all electronic payments and receipt transactions that commence before or on the reporting date and complete within one business day after the reporting date.

Restricted cash and cash equivalent balances are those which meet the definition of cash and cash equivalents but are not available for wider use by the Group. These balances arise from the Group's non-recourse working capital arrangements.

1.19 Provisions

Provisions are recognised where the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

1.20 Dividends

Dividend distributions payable to equity shareholders are included in 'other short term financial liabilities' when the dividends are approved in general meeting prior to the financial position date.

1.21 Foreign currencies

Items included in the Financial Statements of each of the Group's entities are measured using the currency of the primary economic environment in which each entity operates ('the functional currency'). The consolidated Financial Statements are presented in 'currency' (GBP), which is the Group's presentation currency.

Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the Statement of Financial Position date. Non-monetary items that are measured at historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Income and expenses are translated at the actual rate.

Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were initially recorded are recognised in the Income Statement in the year in which they arise.

The assets and liabilities in the Financial Statements of foreign subsidiaries are translated at the rate of exchange ruling at the Statement of Financial Position date.

The individual Financial Statements of each Group company are presented in its functional currency. On consolidation, the assets and liabilities of overseas subsidiaries, including any related goodwill, are translated to Sterling at the rate of exchange at the balance sheet date. The results and cash flows of overseas subsidiaries are translated to Sterling using the average rates of exchange during the period. Exchange adjustments arising from the re-translations of the opening net investment and the results for the period to the period end rate are accounted for in the translation reserve in the statement of Comprehensive Income. On divestment, these exchange differences are reclassified from the translation reserve to the Income Statement.

1.22 Equity

Equity comprises the following:

 
 --   'Share capital' represents the nominal value of equity shares; 
 --   'Share premium' represents the excess over nominal value of the 
       fair value of consideration received for equity shares, net of 
       expenses of the share issue; 
 --   'Merger reserve' represents the equity balance arising on the 
       merger of Matchtech Engineering and Matchmaker Personnel and to 
       record the excess fair value above the nominal value of the share 
       consideration on the acquisition of Networkers International plc; 
 --   'Share-based payment reserve' represents equity-settled share-based 
       employee remuneration until such share options are exercised or 
       lapse; 
 --   'Translation reserve' represents the foreign currency differences 
       arising on translating foreign operations into the presentational 
       currency of the Group; 
 --   'Treasury shares reserve' represents Company shares purchased 
       directly by the Group to satisfy obligations under the employee 
       share plan; 
 --   'Retained earnings' represents retained profits. 
 

1.23 Critical accounting judgements and key sources of estimation uncertainty

Critical accounting judgements

Note 1.24 describes the Group's change in accounting policy in respect of configuration and customisation costs incurred in implementing Software-as-a-service (SaaS) arrangements. In applying the entity's accounting policy, the directors made the following key judgements that may have the most significant effect on the amounts recognised in financial statements.

Determination of whether configuration and customisation implementation services are separate from the cloud-based SaaS software access

 
 --   Under the new accounting policy application guidance, implementation 
       costs including costs to configure or customise the cloud-based 
       provider's software are recognised as operating expenses when 
       the services are received, if they are separate from the provision 
       of the SaaS contract. 
 --   Where the SaaS arrangement supplier provides both configuration 
       and customisation services, judgement has been applied to determine 
       whether these services are separate from the underlying use of 
       the SaaS software. Separate configuration and customisation costs 
       are expensed as incurred as the software is configured or customised 
       (i.e. upfront). Non-separate configuration and customisation costs 
       are expensed over the SaaS contract term. 
 

Capitalisation of configuration and customisation implementation costs in SaaS arrangements

 
 --   In implementing SaaS arrangements, suppliers have developed software 
       code that either enhances, modifies or creates additional capability 
       to the existing owned software or to software held under SaaS 
       arrangements. Where modifications have been made to owned software, 
       this is used to connect with the SaaS arrangement cloud-based 
       applications. 
 --   Judgement has been applied in determining whether the changes 
       to the owned software or software held under a SaaS arrangement 
       meets the definition of and recognition criteria for an intangible 
       asset in accordance with IAS 38 Intangible Assets. 
 

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the Statement of Financial Position date that carry a risk of causing a material adjustment within the next 12 months are discussed below:

ECL provisions in respect of trade receivables

The Group's policy for default risk over receivables is based on the on-going evaluation of the credit risk of its trade receivables. Estimation is used in assessing the ultimate realisation of these receivables, including reviewing the potential likelihood of default, the past collection history of each customer, any insurance coverage in place and the current economic conditions. As a result, expected credit loss provisions for impairment of trade receivables have been recognised, as discussed in Note 8. The impact of the ongoing economic recovery from COVID-19 has been incorporated into these estimates.

Valuation of goodwill and intangible assets

Goodwill and intangible assets (including acquired intangibles) are tested for impairment on an annual basis or otherwise when changes in events or situations indicate that the carrying value may not be recoverable. This requires an estimate to be made of the recoverable amount of the cash-generating unit to which the assets are allocated, including forecasting future cash flows of each cash-generating unit and forming assumptions over the discount rate and long-term growth rate applied. The impact of the ongoing economic recovery from COVID-19 has been reflected in the forecast future cash flows.

1.24 Changes in accounting policy - Software-as-a-service (SaaS) arrangements

In the 6 months to 31 January 2022, following the IFRS Interpretation Committee's agenda decision published in April 2021, the Group changed its accounting policy relating to the capitalisation of certain software costs, specifically relating to the capitalisation of implementation costs such as configuration and customisation costs for cloud-based software under SaaS arrangements.

The Group's accounting policy was previously to capitalise costs directly attributable to the development of intangible software assets, including configuration and customisation costs, irrespective of whether the services were performed by the SaaS supplier or a third party. Following the adoption of the IFRIC agenda guidance, all software intangible assets were identified and assessed to determine if they related to cloud-based software under SaaS arrangements. The Group then assessed whether they had control over the software and any associated capitalised implementation costs. For those arrangements where the Group did not have control of the developed cloud-based software under the updated IFRIC agenda guidance, to the extent that the implementation services were performed by a third party, the Group determined if the service was separate from the underlying software service contract and if so, derecognised the intangible asset previously capitalised. Amounts paid to a supplier for customisation costs that were not separate from the underlying software service contract, were treated as a prepayment over the period of the service contract.

Accordingly, in line with the treatment prescribed in IAS 8 and IAS 1 in respect of changes in accounting policies, this change has been applied retrospectively, restating the prior period balance sheet at 1 August 2020 and 31 July 2021. The full impact of the change in accounting policy is detailed below.

Condensed Consolidated Income Statement

 
 For the 6 month period ended 31                   As previously 
 January                                       reported/restated 
 2021                                                        (1)                  Adjustment               As restated 
                                                         GBP'000                     GBP'000                   GBP'000 
=================================  =============================  ==========================  ======================== 
 Continuing operations 
 Gross profit                                             20,522                           -                    20,522 
=================================  =============================  ==========================  ======================== 
 Administrative expenses - other 
  administrative 
  expenses                                              (19,561)                           -                  (19,561) 
 Administrative expenses - 
  expense of 
  implementation costs                                         -                       (546)                     (546) 
 Administrative expenses - 
  reversal of 
  amortisation of software 
  implementation 
  costs                                                    (109)                          45                      (64) 
 Administrative expenses - 
  unwinding of 
  the prepaid software 
  implementation costs                                         -                        (52)                      (52) 
=================================  =============================  ==========================  ======================== 
 Profit before taxation                                      852                       (553)                       299 
 Net finance costs                                         (609)                           -                     (609) 
 Taxation                                                   (12)                         105                        93 
=================================  =============================  ==========================  ======================== 
 Profit/(loss) after taxation 
  from continuing 
  operations                                                 231                       (448)                     (217) 
=================================  =============================  ==========================  ======================== 
 Profit/(loss) for the period                                 38                       (449)                     (411) 
=================================  =============================  ==========================  ======================== 
 

(1) Figure for the 6 months to January 2021 has been restated for the presentation of discontinued operations as explained in Note 12.

 
 
 For the year ended 31 July 2021                    As previously 
                                                         reported                  Adjustment              As restated 
                                                          GBP'000                     GBP'000                  GBP'000 
==================================  =============================  ==========================  ======================= 
 Continuing operations 
 Gross profit                                              42,080                           -                   42,080 
==================================  =============================  ==========================  ======================= 
 Administrative expenses - other 
  administrative 
  expenses                                               (38,374)                           -                 (38,374) 
 Administrative expenses - expense 
  of 
  implementation costs                                          -                     (1,544)                  (1,544) 
 Administrative expenses - 
  reversal of 
  amortisation of software 
  implementation 
  costs                                                     (422)                         283                    (139) 
 Administrative expenses - 
  unwinding of 
  the prepaid software 
  implementation costs                                          -                       (131)                    (131) 
==================================  =============================  ==========================  ======================= 
 Profit before taxation                                     3,284                     (1,392)                    1,892 
 Net finance costs                                        (1,080)                           -                  (1,080) 
 Taxation                                                   (415)                         374                     (41) 
==================================  =============================  ==========================  ======================= 
 Profit after taxation from 
  continuing 
  operations                                                1,789                     (1,018)                      771 
==================================  =============================  ==========================  ======================= 
 Profit/(loss) for the year                                   581                     (1,018)                    (437) 
==================================  =============================  ==========================  ======================= 
 

Condensed Consolidated Statement of Changes in Equity

 
                                  As previously 
                                       reported   Adjustment   As restated 
                                        GBP'000      GBP'000       GBP'000 
===============================  ==============  ===========  ============ 
 Total equity at 1 August 2020           39,772      (4,738)        35,034 
 Profit/(loss) for the period                38        (449)         (411) 
 Balance at 31 January 2021              39,867      (5,187)        34,680 
===============================  ==============  ===========  ============ 
 
 
                                  As previously 
                                       reported   Adjustment   As restated 
                                        GBP'000      GBP'000       GBP'000 
===============================  ==============  ===========  ============ 
 Total equity at 1 August 2020           39,772      (4,738)        35,034 
 Profit/(loss) for the period               581      (1,018)         (437) 
 Balance at 31 July 2021                 40,863      (5,756)        35,107 
===============================  ==============  ===========  ============ 
 

Condensed Consolidated Statement of Financial Position

 
                                                 As previously                                           As restated 
                                                      reported                                        as at 1 August 
                                                         as at                 Adjustment                       2020 
                                                      1 August             as at 1 August 
                                                          2020                       2020 
                                                       GBP'000                    GBP'000                    GBP'000 
================================  ============================  =========================  ========================= 
 Non-current assets 
 Goodwill and intangible assets                         12,877                    (5,929)                      6,948 
 Deferred tax assets                                         -                        859                        859 
================================  ============================  =========================  ========================= 
 Total non-current assets                               21,726                    (5,070)                     16,656 
================================  ============================  =========================  ========================= 
 Current assets 
 Trade and other receivables                            48,862                         84                     48,946 
================================  ============================  =========================  ========================= 
 Total current assets                                   83,684                         84                     83,768 
================================  ============================  =========================  ========================= 
 Total assets                                          105,410                    (4,986)                    100,424 
================================  ============================  =========================  ========================= 
 Non-current liabilities 
 Deferred tax liabilities                                (277)                        248                       (29) 
================================  ============================  =========================  ========================= 
 Total non-current liabilities                        (14,914)                        248                   (14,666) 
================================  ============================  =========================  ========================= 
 Total liabilities                                    (65,638)                        248                   (65,390) 
================================  ============================  =========================  ========================= 
 Net assets                                             39,772                    (4,738)                     35,034 
================================  ============================  =========================  ========================= 
 
 Equity 
 Retained earnings                                       1,711                    (4,738)                    (3,027) 
================================  ============================  =========================  ========================= 
 Total equity                                           39,772                    (4,738)                     35,034 
================================  ============================  =========================  ========================= 
 
 
                                             As previously               Adjustment              As restated 
                                                  reported                 as at 31                 as at 31 
                                                     as at             January 2021             January 2021 
                                                31 January 
                                                      2021 
                                                   GBP'000                  GBP'000                  GBP'000 
================================  ========================  =======================  ======================= 
 Non-current assets 
 Goodwill and intangible assets                     13,512                  (6,528)                    6,984 
 Deferred tax assets                                     -                    1,107                    1,107 
================================  ========================  =======================  ======================= 
 Total non-current assets                           21,546                  (5,421)                   16,125 
================================  ========================  =======================  ======================= 
 Current assets 
 Trade and other receivables                        45,475                      130                   45,605 
================================  ========================  =======================  ======================= 
 Total current assets                               72,621                      130                   72,751 
================================  ========================  =======================  ======================= 
 Total assets                                       94,167                  (5,291)                   88,876 
================================  ========================  =======================  ======================= 
 Non-current liabilities 
 Deferred tax liabilities                            (134)                      104                     (30) 
================================  ========================  =======================  ======================= 
 Total non-current liabilities                     (6,712)                      104                  (6,608) 
================================  ========================  =======================  ======================= 
 Total liabilities                                (54,300)                      104                 (54,196) 
================================  ========================  =======================  ======================= 
 Net assets                                         39,867                  (5,187)                   34,680 
================================  ========================  =======================  ======================= 
 
 Equity 
 Retained earnings                                   1,820                  (5,187)                  (3,367) 
================================  ========================  =======================  ======================= 
 Total equity                                       39,867                  (5,187)                   34,680 
================================  ========================  =======================  ======================= 
 
 
                                                  As previously                  Adjustment               As restated 
                                                       reported                    as at 31                  as at 31 
                                                          as at                   July 2021                 July 2021 
                                                   31 July 2021 
                                                        GBP'000                     GBP'000                   GBP'000 
================================  =============================  ==========================  ======================== 
 Non-current assets 
 Goodwill and intangible assets                          13,778                     (7,435)                     6,343 
 Deferred tax assets                                          -                         971                       971 
================================  =============================  ==========================  ======================== 
 Total non-current assets                                21,030                     (6,464)                    14,566 
================================  =============================  ==========================  ======================== 
 Current assets 
 Trade and other receivables                             63,937                         198                    64,135 
================================  =============================  ==========================  ======================== 
 Total current assets                                    94,339                         198                    94,537 
================================  =============================  ==========================  ======================== 
 Total assets                                           115,369                     (6,266)                   109,103 
================================  =============================  ==========================  ======================== 
 Non-current liabilities 
 Deferred tax liabilities                                 (524)                         510                      (14) 
================================  =============================  ==========================  ======================== 
 Total non-current liabilities                          (6,074)                         510                   (5,564) 
================================  =============================  ==========================  ======================== 
 Total liabilities                                     (74,506)                         510                  (73,996) 
================================  =============================  ==========================  ======================== 
 Net assets                                              40,863                     (5,756)                    35,107 
================================  =============================  ==========================  ======================== 
 
 Equity 
 Retained earnings                                        2,533                     (5,756)                   (3,223) 
================================  =============================  ==========================  ======================== 
 Total equity                                            40,863                     (5,756)                    35,107 
================================  =============================  ==========================  ======================== 
 

Condensed Consolidated Cash Flow Statement

 
 For period ended 31 January 2021              As previously 
                                                    reported   Adjustment   As restated 
                                                     GBP'000      GBP'000       GBP'000 
 Cash flows from operating activities 
 Profit/(loss) after taxation                             38        (449)         (411) 
 Cash used in operating activities                   (2,648)        (644)       (3,292) 
============================================  ==============  ===========  ============ 
 
 Cash flows from investing activities 
 Purchase of intangible assets                         (937)          644         (293) 
============================================  ==============  ===========  ============ 
 Cash used in investing activities                     (937)          644         (293) 
============================================  ==============  ===========  ============ 
 
 Cash and cash equivalents at end of period           27,082            -        27,082 
============================================  ==============  ===========  ============ 
 
 
 For year ended 31 July 2021                 As previously 
                                                  reported   Adjustment   As restated 
                                                   GBP'000      GBP'000       GBP'000 
 Cash flows from operating activities 
 Profit/(loss) after taxation                          581      (1,018)         (437) 
 Cash used in operating activities                 (2,411)      (1,789)       (4,200) 
==========================================  ==============  ===========  ============ 
 
 Cash flows from investing activities 
 Purchase of intangible assets                     (1,872)        1,789          (83) 
==========================================  ==============  ===========  ============ 
 Cash used in investing activities                 (2,204)        1,789         (415) 
==========================================  ==============  ===========  ============ 
 
 Cash and cash equivalents at end of year           29,238            -        29,238 
==========================================  ==============  ===========  ============ 
 

2 Segmental Information

An operating segment, as defined by IFRS 8 'Operating segments', is a component of the Group that engages in business activities from which it may earn revenues and incur expenses. The Group determines and presents operating segments based on the information that is provided internally to the chief operating decision maker, which has been identified as the Board of Directors of Gattaca plc. Previously, the Group was managed through its three reporting segments, UK Engineering, UK Technology and International. From August 2021 the Group aligned its operating model to the markets in which its clients operate. From December 2021 financial information provided to the Board was based on this new reporting and operating structure. As a result of this change, the segmental information for 6 months to 31 January 2022 has been presented based on the new structure in line with the requirements of IFRS 8: Operating Segments and the information for 6 months to 31 January 2021 and 12 months to 31 July 2021 have been restated accordingly.

 
 
 6 months 
  to 31 
  January 
  2022 
  unaudited 
                                                                                                                                 Non-recurring 
                                                                                                                                         items 
                                                                                                                                           and 
                                                             Technology,                                            Continuing    amortisation 
 All amounts                                                       Media        Infra-       Inter-                 underlying     of acquired                     Total 
  in GBP'000           Mobility    Energy       Defence       & Telecoms     structure     national         Other   operations     intangibles   Dis-continued     Group 
================  =============  ========  ============  ===============  ============  ===========  ============  ===========  ==============  ==============  ======== 
 Revenue                 24,095    19,152        32,325           21,951        72,011        3,896        28,769      202,199               -               -   202,199 
 Gross 
  profit                  2,231     1,777         3,179            2,211         6,743        1,335         4,130       21,606               -            (10)    21,596 
 Operating 
  contribution            1,163       953         1,478            1,290         1,974        (246)         1,603        8,215               -           (569)     7,646 
 Depreciation, 
  impairment 
  and 
  amortisation            (118)      (94)         (159)            (108)         (355)         (19)         (142)        (995)         (2,264)            (32)   (3,291) 
================  =============  ========  ============  ===============  ============  ===========  ============  ===========  ==============  ==============  ======== 
 Profit/(loss) 
  from 
  reportable 
  segments                1,045       859         1,319            1,182         1,619        (265)         1,461        7,220         (2,264)           (601)     4,355 
 Central 
  overheads                                                                                                            (7,328)            (90)           (127)   (7,545) 
================  =============  ========  ============  ===============  ============  ===========  ============  ===========  ==============  ==============  ======== 
 Loss 
  from 
  operations                                                                                                             (108)         (2,354)           (728)   (3,190) 
 Finance 
  (cost)/ 
  income, 
  net                                                                                                                    (153)              73              52      (28) 
================  =============  ========  ============  ===============  ============  ===========  ============  ===========  ==============  ==============  ======== 
 Loss 
  before 
  tax                                                                                                                    (261)         (2,281)           (676)   (3,218) 
================  =============  ========  ============  ===============  ============  ===========  ============  ===========  ==============  ==============  ======== 
 
 
 
 
 6 months 
  to 31 
  January 
  2021 
  unaudited/ 
  restated 
  (1) 
  (2) 
                                                                                                                                   Non-recurring 
                                                                                                                                           items 
                                                                                                                                             and 
                                                              Technology,                                             Continuing    amortisation 
 All amounts                                                        Media        Infra-       Inter-                  underlying     of acquired                     Total 
  in GBP'000           Mobility   Energy       Defence         & Telecoms     structure     national          Other   operations     intangibles   Dis-continued     Group 
================  =============  =======  ============  =================  ============  ===========  =============  ===========  ==============  ==============  ======== 
 Revenue                 19,947   25,911        34,457             21,935        71,485        5,141         25,923      204,799               -           1,682   206,481 
 Gross 
  profit                  1,366    2,101         2,888              1,873         6,896        1,902          3,496       20,522               -             534    21,056 
 Operating 
  contribution              405    1,111         1,544                595         3,556        (581)          1,164        7,794               -            (29)     7,765 
 Depreciation, 
  impairment 
  and 
  amortisation            (106)    (137)         (183)              (117)         (380)         (27)          (139)      (1,089)           (193)            (58)   (1,340) 
================  =============  =======  ============  =================  ============  ===========  =============  ===========  ==============  ==============  ======== 
 Profit/(loss) 
  from 
  reportable 
  segments                  299      974         1,361                478         3,176        (608)          1,025        6,705           (193)            (87)     6,425 
 Central 
  overheads                                                                                                              (6,410)             197           (132)   (6,345) 
================  =============  =======  ============  =================  ============  ===========  =============  ===========  ==============  ==============  ======== 
 Profit/(loss) 
  from 
  operations                                                                                                                 295               4           (219)        80 
 Finance 
  (cost)/ 
  income, 
  net                                                                                                                      (335)           (274)              47     (562) 
================  =============  =======  ============  =================  ============  ===========  =============  ===========  ==============  ==============  ======== 
 Loss 
  before 
  tax                                                                                                                       (40)           (270)           (172)     (482) 
================  =============  =======  ============  =================  ============  ===========  =============  ===========  ==============  ==============  ======== 
 
 
 
 
 12 months 
  to 31 
  July 
  2021 
  unaudited/ 
  restated 
  (1) 
                                                                                                                                   Non-recurring 
                                                                                                                                           items 
                                                                                                                                             and 
                                                             Technology,                                              Continuing    amortisation 
 All amounts                                                       Media        Infra-        Inter-                  underlying     of acquired                      Total 
  in GBP'000           Mobility    Energy        Defence      & Telecoms     structure      national          Other   operations     intangibles   Dis-continued      Group 
================  =============  ========  =============  ==============  ============  ============  =============  ===========  ==============  ==============  ========= 
 Revenue                 43,251    48,854         67,680          42,319       146,286         9,816         57,520      415,726               -           3,432    419,158 
 Gross 
  profit                  3,141     3,916          5,858           3,735        14,182         3,528          7,720       42,080               -           1,047     43,127 
 Operating 
  contribution            1,102     2,049          2,976           1,211         7,164         (520)          2,952       16,934               -           (213)     16,721 
 Depreciation, 
  impairment 
  and 
  amortisation            (227)     (257)          (356)           (222)         (769)          (52)          (302)      (2,185)           (548)           (244)    (2,977) 
================  =============  ========  =============  ==============  ============  ============  =============  ===========  ==============  ==============  ========= 
 Profit/(loss) 
  from 
  reportable 
  segments                  875     1,792          2,620             989         6,395         (572)          2,650       14,749           (548)           (457)     13,744 
 Central 
  overheads                                                                                                             (12,502)             193           (693)   (13,002) 
================  =============  ========  =============  ==============  ============  ============  =============  ===========  ==============  ==============  ========= 
 Profit/(loss) 
  from 
  operations                                                                                                               2,247           (355)         (1,150)        742 
 Finance 
  (cost)/ 
  income, 
  net                                                                                                                      (412)           (668)            (73)    (1,153) 
================  =============  ========  =============  ==============  ============  ============  =============  ===========  ==============  ==============  ========= 
 Loss 
  before 
  tax                                                                                                                      1,835         (1,023)         (1,223)      (411) 
================  =============  ========  =============  ==============  ============  ============  =============  ===========  ==============  ==============  ========= 
 
 

A segmental analysis of total assets has not been included as this information is not available to the Board; the majority of assets are centrally held and are not allocated across the reportable segments.

 
 
 Geographical 
 information 
                                      Total Group revenue                               Non-current assets 
 All amounts in GBP'000                                                                        Restated       Restated 
                                                                                                    (3)            (3) 
                              6 months       6 months      12 months            6 months       6 months      12 months 
                           to 31/01/22    to 31/01/21    to 31/07/21         to 31/01/22    to 31/01/21    to 31/07/21 
========================  ============  =============  =============  ===  =============  =============  ============= 
 UK                            196,434        197,038        402,254              10,592         15,343         13,740 
 Rest of Europe                    274          1,621          2,316                   1              1              - 
 Middle East and Africa              -            729          1,685                  16            344            551 
 Americas                        5,491          7,093         12,903                 375            437            275 
 Total                         202,199        206,481        419,158              10,984         16,125         14,566 
========================  ============  =============  =============  ===  =============  =============  ============= 
 

Revenue and non-current assets are allocated to the geographic market based on the domicile of the respective subsidiary.

(1) Segmental disclosures for the 6 months to 31 January 2021 and year to 31 July 2021 have been restated as a result of the change in operating model structure.

(2) Figure for the 6 months to January 2021 have been restated for the presentation of discontinued operations as explained in Note 12.

(3) Results are restated following the April 2021 IFRS Interpretations Committee agenda decision on cloud computing arrangements, resulting in previously capitalised software assets being expensed, as explained further in Note 1.24.

3 Revenue from Contracts with Customers

Revenue from contracts with customers is disaggregated by major service line and operating segment, as well as timing of revenue recognition as follows:

 
 Major service lines - continuing 
  underlying operations 
                                                                                                        Continuing 
                                                       Technology,       Infra-      Inter-             underlying 
                         Mobility   Energy   Defence         Media    structure    national    Other    operations 
 6 months to January          GBP      GBP       GBP    & Telecoms          GBP         GBP      GBP           GBP 
  2022                       '000     '000      '000      GBP '000         '000        '000     '000          '000 
======================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Temporary placements      23,423   19,034    31,236        21,475       70,848       2,797   23,845       192,658 
 Permanent placements         672      118     1,089           476        1,163       1,099    1,938         6,555 
 Other                          -        -         -             -            -           -    2,986         2,986 
======================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Total                     24,095   19,152    32,325        21,951       72,011       3,896   28,769       202,199 
======================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 
 
 Major service lines - continuing 
  underlying operations 
                                                                                                        Continuing 
                                                       Technology,       Infra-      Inter-             underlying 
 Restated 6 months       Mobility   Energy   Defence         Media    structure    national    Other    operations 
  to January 2021             GBP      GBP       GBP    & Telecoms          GBP         GBP      GBP           GBP 
  (1)                        '000     '000      '000      GBP '000         '000        '000     '000          '000 
======================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Temporary placements      19,594   25,761    33,543        21,547       70,802       3,986   23,669       198,902 
 Permanent placements         344      133       892           380          637       1,151    1,126         4,663 
 Other                          9       17        22             8           46           4    1,128         1,234 
======================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Total                     19,947   25,911    34,457        21,935       71,485       5,141   25,923       204,799 
======================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 
 
 Major service lines - continuing 
  underlying operations 
                                                                                                        Continuing 
                                                       Technology,       Infra-      Inter-             underlying 
                         Mobility   Energy   Defence         Media    structure    national    Other    operations 
 Restated 12 months           GBP      GBP       GBP    & Telecoms          GBP         GBP      GBP           GBP 
  to July 2021 (1)           '000     '000      '000      GBP '000         '000        '000     '000          '000 
======================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Temporary placements      42,326   48,559    65,581        41,376      144,298       7,575   52,430       402,145 
 Permanent placements         903      259     2,050           922        1,883       2,240    2,557        10,814 
 Other                         22       36        49            21          105           1    2,533         2,767 
======================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Total                     43,251   48,854    67,680        42,319      146,286       9,816   57,520       415,726 
======================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 

Timing of revenue recognition - continuing operations

 
                            '000     '000      '000          '000         '000        '000     '000          '000 
                                                                                                       Continuing 
                                                      Technology,       Infra-      Inter-             underlying 
                        Mobility   Energy   Defence         Media    structure    national    Other    operations 
 6 months to January         GBP      GBP       GBP    & Telecoms          GBP         GBP      GBP           GBP 
  2022                      '000     '000      '000      GBP '000         '000        '000     '000          '000 
=====================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Point in time            24,095   19,152    32,325        21,951       72,011       3,896   25,783       199,213 
 Over time                     -        -         -             -            -           -    2,986         2,986 
=====================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Total                    24,095   19,152    32,325        21,951       72,011       3,896   28,769       202,199 
=====================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 
 
                          '000     '000      '000          '000         '000        '000     '000          '000 
                                                                                                     Continuing 
                                                    Technology,       Infra-      Inter-             underlying 
 Restated 6 months    Mobility   Energy   Defence         Media    structure    national    Other    operations 
  to January 2021          GBP      GBP       GBP    & Telecoms          GBP         GBP      GBP           GBP 
  (1)                     '000     '000      '000      GBP '000         '000        '000     '000          '000 
===================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Point in time          19,947   25,911    34,457        21,935       71,485       5,141   24,810       203,686 
 Over time                   -        -         -             -            -           -    1,113         1,113 
===================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Total                  19,947   25,911    34,457        21,935       71,485       5,141   25,923       204,799 
===================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 
 
                           '000     '000      '000          '000         '000        '000     '000          '000 
                                                                                                      Continuing 
                                                     Technology,       Infra-      Inter-             underlying 
                       Mobility   Energy   Defence         Media    structure    national    Other    operations 
 Restated 12 months         GBP      GBP       GBP    & Telecoms          GBP         GBP      GBP           GBP 
  to July 2021 (1)         '000     '000      '000      GBP '000         '000        '000     '000          '000 
====================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Point in time           43,251   48,854    67,680        42,319      146,286       9,816   55,022       413,228 
 Over time                    -        -         -             -            -           -    2,498         2,498 
====================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 Total                   43,251   48,854    67,680        42,319      146,286       9,816   57,520       415,726 
====================  =========  =======  ========  ============  ===========  ==========  =======  ============ 
 

No single customer contributed more than 10% of the Group's revenues (6 months to 31 January 2021 and 12 months to 31 July 2021: none). Revenue is recognised for each performance obligation over time based on the proportion of cost incurred to total forecast costs.

The Group has determined that its contract assets from contracts with customers are trade receivables and accrued income, and its contract liabilities are deferred income, which are set out below:

 
                                   6 months       6 months      12 months 
                                to 31/01/22    to 31/01/21    to 31/07/21 
                                  unaudited      unaudited 
                                      Total          Total          Total 
                                    GBP'000        GBP'000        GBP'000 
============================  =============  =============  ============= 
 Trade receivables (Note 8)          39,993         29,488         34,187 
 Accrued income (Note 8)             19,779         12,518         26,742 
 Deferred income                      (576)          (803)          (880) 
============================  =============  =============  ============= 
 

Accrued income relates to the Group's right to consideration for temporary and permanent placements made but not billed by the year end. These transfer to trade receivables once billing occurs. All accrued income at a given reporting date is billed within the following financial year and is classified in current assets. Deferred income at a given reporting date is recognised as revenue in the following financial year once performance obligations are satisfied and is classified in current liabilities.

(1) As explained in Note 1.24, reported operating segments have changed at 31 January 2022 as a result of a change in internal operating structure; consequently, all prior period information has been restated on the new basis. In addition, South African and Mexican operations have been restated from the International segment to Discontinued in the 6-month period to 31 January 2021, as explained in Note 12.

4 Government Grants

Grant income recognised from government grants recognised in Cost of Sales and Administrative Expenses are as follows:

 
                                                         6 months                  6 months                  12 months 
                                                      to 31/01/22               to 31/01/21                to 31/07/21 
 Continuing operations                                    GBP'000                   GBP'000                    GBP'000 
==================================  =============================  ========================  ========================= 
 UK Government Coronavirus Job 
  Retention 
  Scheme grant income recognised 
  in Cost 
  of Sales for temporary workers                                -                        43                         43 
 UK Government Coronavirus Job 
  Retention 
  Scheme grant income recognised 
  in Administrative 
  Expenses for employees                                        -                       458                        458 
==================================  =============================  ========================  ========================= 
 Total                                                          -                       501                        501 
==================================  =============================  ========================  ========================= 
 

As a response to the COVID-19 global pandemic, the Group made use of the UK Government's Coronavirus Job Retention Scheme (6 months to 31 January 2021: claim period is from August 2020 to November 2020, 12 months to 31 July 2021: claim period is from August 2020 to November 2020). Under this scheme, Her Majesty's Revenue & Customs (HMRC) provides UK companies with a non-refundable grant equivalent to a portion of wages, National Insurance contributions and pension contributions for employees and temporary workers who were retained in employment but placed on furlough. From 1 August 2021 National Insurance contributions and pension contributions were no longer eligible for claims. When considering temporary workers, the contractors employed by Gattaca's clients that Gattaca provides payroll services to and whose costs are recognised as Cost of Sales by Gattaca, are also considered eligible.

As the scheme was conditional upon the Group retaining its employees in employment, or the temporary contract workers being retained by their employers, whilst they are furloughed during the COVID-19 pandemic, it is designed to compensate companies for staff or temporary worker costs incurred. As all claims submitted for all periods have been received, the Group considers the scheme meets the definition of a government grant as set out in IAS 20 and has accounted for it as such. For grants received for Gattaca's employees on furlough, the Group has presented the grant income as a deduction to staff costs presented in Administrative Expenses in the Income Statement; for grants received for temporary contract workers of Gattaca's clients on furlough, the Group has presented the grant income as a deduction to Cost of Sales.

5 Taxation

 
                                                                            21 
                                                                      Restated           Restated 
                                                                      6 months          12 months 
                                                       6 months        (1) (2)    (1) to 31/07/21 
                                                    to 31/01/22    to 31/01/21 
                                                      unaudited      unaudited 
                                                          Total          Total              Total 
 Analysis of (credit)/charge in the period              GBP'000        GBP'000            GBP'000 
  for continuing operations 
================================================  =============  =============  ================= 
 (Loss)/profit before tax for continuing 
  operations                                            (2,542)          (310)                812 
================================================  =============  =============  ================= 
 
 (Loss)/profit before tax multiplied by 
  the standard rate of corporate tax in 
  the UK of 19% (31 January 2021: 19.0%, 
  31 July 2021: 19.0%)                                    (483)           (59)                154 
 
     Expenses not deductible for tax purposes 
      and goodwill impairment loss                          360              3                139 
     Income not taxable                                    (10)              -                  - 
     Effect of share-based payments                          12            (4)               (19) 
     Irrecoverable withholding tax                            2              1                 56 
     Changes in tax rate                                   (25)              -               (29) 
     Overseas losses not recognised as deferred 
      tax assets                                             21           (49)                 46 
     Difference between UK and overseas tax 
      rates                                                   3             17               (85) 
     Adjustment to tax charge in respect of 
      previous periods                                        -            (2)              (221) 
================================================  =============  =============  ================= 
 Total taxation (credit)/charge for the 
  period for continuing operations                        (120)           (93)                 41 
================================================  =============  =============  ================= 
 
 Total taxation (credit)/charge for the 
  period for discontinued operations                       (33)             22               (15) 
================================================  =============  =============  ================= 
 

Deferred tax assets of GBP470,000, after offset against deferred tax liabilities, have been recognised at 31 January 2022 in respect of trading losses in the UK, on the basis that future taxable profits are expected to be available for the losses to be utilised against.

((1)) The prior period comparative figures have been restated, following the adoption of the IFRS Interpretations Committee's decision on configuration or customisation costs in a cloud computing arrangement. The pre-tax restatements result in restated deferred tax assets in these prior periods, which unwind in the year ending 31 July 2022 when current year tax deductions are available.

((2)) 6 months to January 2021 figures have been restated for the presentation of discontinued operations following announcements relating to the full closure of our Mexico operations and sale of our South African recruitment operations on 30 July 2021.

6 Earnings Per Share

Earnings per share (EPS) has been calculated by dividing the consolidated profit or loss after taxation attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.

Diluted earnings per share has been calculated on the same basis as above, except that the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares (arising from the Group's share option schemes) into ordinary shares has been added to the denominator. Share options are treated as dilutive when, at the reporting date, they would be issuable had the performance year ended at that date.

The Group has dilutive potential ordinary shares, being the LTIP and Zero-priced share options. The number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) is calculated based on the monetary value of the subscription rights attached to the outstanding share options.

The effect of potential ordinary shares are reflected in diluted EPS only when they are dilutive. Potential ordinary shares are considered dilutive when their inclusion in the calculation would decrease EPS, or increase the loss per share from continuing operations in accordance with IAS 33. This is regardless of whether the potential ordinary shares are dilutive for EPS from total operations. The effect of potential ordinary shares are considered dilutive for the year ended 31 July 2021 and therefore have been included in the calculations below. The effect of potential ordinary shares are not considered dilutive for the 6 months to 31 January 2022 or the 6 months to 31 January 2021 and therefore have not been included in the calculations below.

There are no changes to the profit numerator as a result of the dilution calculation.

The earnings per share information has been calculated as follows:

 
                                                                                    Restated                  Restated 
                                                                                         (1)                       (1) 
                                                         6 months                   6 months                 12 months 
                                                      to 31/01/22                to 31/01/21               to 31/07/21 
                                                        unaudited                  unaudited 
 Total earnings                                           GBP'000                    GBP'000                   GBP'000 
===============  ====================  ==========================  =========================  ======================== 
 Total loss attributable to 
  ordinary share holders                                  (3,065)                      (411)                     (437) 
=====================================  ==========================  =========================  ======================== 
 
 Number of                                                  000's                      000's                     000's 
 shares 
===============  ====================  ==========================  =========================  ======================== 
 Basic weighted average number 
  of ordinary shares in issue                              32,290                     32,290                    32,290 
 Dilutive potential ordinary 
  shares                                                        -                          -                        68 
=====================================  ==========================  =========================  ======================== 
 Diluted weighted average number 
  of shares                                                32,290                     32,290                    32,358 
=====================================  ==========================  =========================  ======================== 
 
 Total earnings                                                                     Restated                  Restated 
 per share                                                                               (2)                       (2) 
                                                            pence                      pence                     pence 
===============  ====================  ==========================  =========================  ======================== 
 Earnings per 
  ordinary 
  share                  *    Basic                         (9.5)                      (1.3)                     (1.4) 
=============== 
 
         *    Diluted                                       (9.5)                      (1.3)                     (1.4) 
 ====================================  ==========================  =========================  ======================== 
 
 Earnings for                                                                       Restated                  Restated 
 continuing                                                                              (1)                       (1) 
 operations                                               GBP'000                    GBP'000                   GBP'000 
===============  ====================  ==========================  =========================  ======================== 
 Total (loss)/profit for period                           (2,422)                      (217)                       771 
=====================================  ==========================  =========================  ======================== 
 
 Total earnings 
 per share for                                                                      Restated                  Restated 
 continuing                                                                              (2)                       (2) 
 operations                                                 pence                      pence                     pence 
===============  ====================  ==========================  =========================  ======================== 
 Earnings per 
  ordinary 
  share 
  from 
  continuing 
  operations             *    Basic                         (7.5)                      (0.7)                       2.4 
=============== 
 
         *    Diluted                                       (7.5)                      (0.7)                       2.4 
 ====================================  ==========================  =========================  ======================== 
 
 Earnings for                                                                       Restated                  Restated 
 discontinuing                                                                           (1)                       (1) 
 operations                                               GBP'000                    GBP'000                   GBP'000 
===============  ====================  ==========================  =========================  ======================== 
 Total loss for the period                                  (643)                      (194)                   (1,208) 
=====================================  ==========================  =========================  ======================== 
 
 Total earnings 
 per share for                                                                      Restated                  Restated 
 discontinuing                                                                           (2)                       (2) 
 operations                                                 pence                      pence                     pence 
===============  ====================  ==========================  =========================  ======================== 
 Earnings per 
  ordinary 
  share 
  from 
  discontinuing 
  operations             *    Basic                         (2.0)                      (0.6)                     (3.7) 
=============== 
 
         *    Diluted                                       (2.0)                      (0.6)                     (3.7) 
 ====================================  ==========================  =========================  ======================== 
 
 Earnings from 
 continuing                                                                         Restated                  Restated 
 underlying                                                                              (1)                       (1) 
 operations                                               GBP'000                    GBP'000                   GBP'000 
===============  ====================  ==========================  =========================  ======================== 
 Total (loss)/profit for the 
  period                                                    (247)                          -                     1,703 
=====================================  ==========================  =========================  ======================== 
 
 Total earnings 
 per share for 
 continuing                                                                         Restated                  Restated 
 underlying                                                                              (2)                       (2) 
 operations                                                 pence                      pence                     pence 
===============  ====================  ==========================  =========================  ======================== 
 Earnings per 
  ordinary 
  share 
  for 
  continuing 
  underlying 
  operations             *    Basic                         (0.8)                          -                       5.3 
 
         *    Diluted                                       (0.8)                          -                       5.3 
 ====================================  ==========================  =========================  ======================== 
 

(1) Historical financial information has been restated to account for the impact of the change in accounting policy in relation to SaaS arrangements as explained in Note 1.24. In addition, 6 months to January 2021 figures have been restated for the presentation of discontinued operations as explained in Note 12.

(2) As explained above, EPS for year ended 31 July 2021 has been restated due to the restated results for the year. For the 6 months to 31 January 2021 the effect of potential ordinary shares is no longer considered to be dilutive, as such, EPS has been restated as a result of a change in result, as well as a change in the number of shares included in the calculations.

7 Intangibles

In the 6 months to 31 January 2022, following the IFRS Interpretation Committee's agenda decision published in April 2021, the Group changed its accounting policy relating to the capitalisation of certain software costs, specifically relating to the capitalisation of implementation costs such as configuration and customisation costs for cloud-based software under Software-as-a-service (SaaS) arrangements. Please refer to Note 1.24 for more details. The change of the accounting policy has resulted in a reclassification of certain cloud-based software intangible assets to either a prepaid asset in the Statement of Financial Position or to an expense in the Income Statement, impacting both the current and prior periods presented.

 
                                                                                         Software 
                                                      Customer     Trade             and software 
                                      Goodwill   Relationships     Names     Other       licenses     Total 
                                       GBP'000         GBP'000   GBP'000   GBP'000        GBP'000   GBP'000 
==============  ===================  =========  ==============  ========  ========  =============  ======== 
 Cost            At 1 August 2020       28,739          22,245     5,346     3,809          2,521    62,660 
  Additions                                  -               -         -         -            937       937 
  Reclassification 
   to prepayments 
   as a result of 
   change of 
   accounting 
   policy                                    -               -         -         -           (98)      (98) 
  Reclassification 
   to Income 
   Statement 
   as a result of 
   change of 
   accounting 
   policy                                    -               -         -         -          (546)     (546) 
 ===================                 =========  ==============  ========  ========  =============  ======== 
  At 31 January 
   2021                                 28,739          22,245     5,346     3,809          2,814    62,953 
 ===================                 =========  ==============  ========  ========  =============  ======== 
 
  At 1 August 2020                      28,739          22,245     5,346     3,809          2,521    62,660 
  Additions                                  -               -         -         -          1,872     1,872 
  Reclassification 
   to assets held 
   for sale                                  -               -         -         -            (2)       (2) 
  Reclassification 
   to prepayments 
   as a result of 
   change of 
   accounting 
   policy                                    -               -         -         -          (245)     (245) 
  Reclassification 
   to Income 
   Statement 
   as a result of 
   change of 
   accounting 
   policy                                    -               -         -         -        (1,544)   (1,544) 
 ===================                 =========  ==============  ========  ========  =============  ======== 
  At 31 July 2021                       28,739          22,245     5,346     3,809          2,602    62,741 
 ===================                 =========  ==============  ========  ========  =============  ======== 
  Disposals                                  -               -         -         -           (70)      (70) 
 ===================                 =========  ==============  ========  ========  =============  ======== 
  At 31 January 
   2022                                 28,739          22,245     5,346     3,809          2,532    62,671 
 ===================                 =========  ==============  ========  ========  =============  ======== 
 
 Amortisation 
  and 
  impairment     At 1 August 2020       24,382          20,530     5,057     3,527          2,216    55,712 
  Amortisation for 
   the period                                -             119        19        55            109       302 
  Reclassification 
   to prepayments 
   as a result of 
   change of 
   accounting 
   policy                                    -               -         -         -            (4)       (4) 
  Reclassification 
   to Income 
   Statement 
   as a result of 
   change of 
   accounting 
   policy                                    -               -         -         -           (41)      (41) 
 ===================                 =========  ==============  ========  ========  =============  ======== 
  At 31 January 
   2021                                 24,382          20,649     5,076     3,582          2,280    55,969 
 ===================                 =========  ==============  ========  ========  =============  ======== 
 
  At 1 August 2020                      24,382          20,530     5,057     3,527          2,216    55,712 
  Amortisation for 
   the period                                -             332        45       171            422       970 
  Reclassification 
   to assets held 
   for sale                                  -               -         -         -            (1)       (1) 
  Reclassification 
   to prepayments 
   as a result of 
   change of 
   accounting 
   policy                                    -               -         -         -           (19)      (19) 
  Reclassification 
   to Income 
   Statement 
   as a result of 
   change of 
   accounting 
   policy                                    -               -         -         -          (264)     (264) 
 ===================                 =========  ==============  ========  ========  =============  ======== 
  At 31 July 2021                       24,382          20,862     5,102     3,698          2,354    56,398 
 ===================                 =========  ==============  ========  ========  =============  ======== 
  Amortisation for 
   the period                                -             134        22       108             87       351 
  Impairment                             2,000               -         -         -              -     2,000 
  Released on 
   disposal                                  -               -         -         -           (58)      (58) 
 ===================                 =========  ==============  ========  ========  =============  ======== 
  At 31 January 
   2022                                 26,382          20,996     5,124     3,806          2,383    58,691 
 ===================                 =========  ==============  ========  ========  =============  ======== 
 
 Net book        At 31 January 
  value           2021                   4,357           1,596       270       227            534     6,984 
  At 31 July 2021                        4,357           1,383       244       111            248     6,343 
 ===================                 =========  ==============  ========  ========  =============  ======== 
  At 31 January 
   2022                                  2,357           1,249       222         3            149     3,980 
 ===================                 =========  ==============  ========  ========  =============  ======== 
 
 
 

The costs and carrying amount of goodwill allocated to Cash Generating Unit's (CGU's) before impairment is as follows:

 
                                                   22     31/01/21 
                                             6 months     6 months   12 months 
                                             31/01/22     31/01/21    31/07/21 
                                            unaudited    unaudited 
                                              GBP'000      GBP'000     GBP'000 
========================================  ===========  ===========  ========== 
 Energy (previously UK Engineering)             1,712        1,712       1,712 
 Infrastructure - RSL Rail (previously 
 Resourcing Solutions Limited)                  2,645        2,645       2,645 
 Total                                          4,357        4,357       4,357 
========================================  ===========  ===========  ========== 
 
 
 

As part of the operational restructure discussed further in Note 2, the Cash Generating Unit's (CGU's) to which goodwill and intangible assets have been allocated to previously have been amended as follows: UK Engineering to Energy which is a reportable segment, and Resourcing Solutions to Infrastructure - RSL Rail, a sub-division of the reportable operating segment Infrastructure for which distinct financial information is available but not used by the Chief Operating Decision Maker (CODM). These changes best represent the original business units that the assets were allocated to.

Impairment testing

Goodwill and intangible assets are reviewed and tested for impairment on an annual basis or more frequently to determine if there is an indication of impairment.

If any indication of impairment exists, then the recoverable amount of a CGU's goodwill and intangible asset's recoverable amount is determined using value-in-use calculations.

As a result of management's trading forecasts now being lower that those at time of acquisition, total impairment losses of GBP2,000,000 (6 months to 31 January 2021: GBPnil, year to 31 July 2021: GBPnil) have been recorded in respect of goodwill and acquired intangible assets within the Infrastructure - RSL Rail CGU.

The key assumptions and estimates used when calculating a CGU's value-in-use, are as follows:

Cash flows from operations

Cash flows from operations are based on the Group's 3 year business plan and applying the over-arching Group NFI and cost growth rates for the 3 year period on top of the FY22 full year forecast for the Energy and Infrastructure - RSL Rail sectors.

Discount rates

The pre-tax rates used to discount the forecast cash flows ranged from 18.4% to 18.9% (6 months to 31 January 2021: 14.4% to 14.9%, year to 31 July 2021: 15.0% to 16.0%) reflecting the Group's weighted average cost of capital, adjusted for specific risks associated with the asset's estimated cash flows. The discount rate is based on the weighted average cost of capital (WACC). The risk-free rate, based on government bond rates, is adjusted for equity and industry risk premiums, reflecting the increased risk compared to an investor who is investing the market as a whole. Net present values are calculated using pre-tax discount rates derived from the Group's post-tax WACC of 13.3% (6 months to 31 January 2021: 12.9%, year to 31 July 2021: 12.5%) for CGUs assessed.

Growth rates

The medium-term growth rates are based on management forecasts, reflecting past experience and economic environment. Long-term growth rates are based on external sources of an average estimated growth rate of 2.0% (6 months to 31 January 2021: 2.0%, year to July 2021: 2.0%), using a weighted average of operating country real growth expectations.

As a result of these forecasts, total impairment losses of GBP2,000,000 (6 months to 31 January 2021: GBPnil, year to 31 July 2021: GBPnil,) have been recorded in respect of goodwill within the Infrastructure - RSL Rail CGU.

 
                                  6 months     6 months       6 months       6 months     12 months      12 months 
                                  31/01/22     31/01/22       31/01/22       31/01/22      31/07/21       31/07/21 
                                 unaudited    unaudited      unaudited      unaudited 
                                  Goodwill   Intangible       Goodwill     Intangible      Goodwill     Intangible 
                                                 assets                        assets                       assets 
 Impairment expenses               GBP'000      GBP'000        GBP'000        GBP'000       GBP'000        GBP'000 
=============================  ===========  ===========  =============  =============  ============  ============= 
 Energy (previously                      -            -              -              -             -              - 
  UK Engineering) 
 Infrastructure - RSL                2,000            -              -              -             -              - 
  Rail (previously Resourcing 
  Solutions Limited) 
=============================  ===========  ===========  =============  =============  ============  ============= 
 Total                               2,000            -              -              -             -              - 
=============================  ===========  ===========  =============  =============  ============  ============= 
 
 

Sensitivity analysis has been performed to show the impact of reasonable or possible changes in key assumptions, in particular with reference to the economic uncertainty surrounding the ongoing recovery from the COVID-19 pandemic. An increase in the post-tax discount rate by a factor of 0.2% to 13.5%, or a reduction in the long-term growth rate to 1.8%, would not trigger a further material impairment for any of the CGU's. For both the Infrastructure - RSL Rail CGU and the Energy CGU, a reduction of 33% in management's mid-term forecasts for FY23-FY27 would not trigger any material further impairment.

8 Trade and Other Receivables

 
 
                                                          Restated     Restated 
                                             6 months     6 months    12 months 
                                             31/01/22     31/01/21     31/07/21 
                                            unaudited    unaudited 
                                              GBP'000      GBP'000      GBP'000 
========================================  ===========  ===========  =========== 
 Trade receivables from contracts with 
 customers, net of loss allowance              39,933       29,488       34,187 
 Other receivables                              2,292        1,857        1,817 
 Prepayments                                    1,648        1,742        1,389 
 Accrued income                                19,779       12,518       26,742 
========================================  ===========  ===========  =========== 
 Total                                         63,652       45,605       64,135 
========================================  ===========  ===========  =========== 
 
 
 

Prepayments as at 31 January 2021 and 31 July 2021 have been restated as a result of change of accounting policy in light of the International Financial Reporting Standards Interpretations Committee (IFRIC) latest guidance on SaaS arrangements. Please refer to Note 1.24 for more details.

Included in other receivables as at 31 January 2022 is GBP134,000 in respect of deferred consideration from the South African entities' disposal which is due after more than one year.

Accrued income relates to the Group's right to consideration for temporary and permanent placement made but not billed at the year end. These transfer to trade receivables once billing occurs.

The Directors consider that the carrying amount of trade and other receivables approximates to the fair value.

Impairment of trade receivables from contracts with customers

 
 
                                                        6 months                6 months   12 months 
                                                        31/01/22                31/01/21    31/07/21 
                                                       unaudited               unaudited 
                                                         GBP'000                 GBP'000     GBP'000 
========================================  ======================  ======================  ========== 
 Trade receivables from contracts with 
 customers, gross amounts                                 42,591                  33,693      37,636 
 Loss allowance                                          (2,658)                 (4,205)     (3,449) 
========================================  ======================  ======================  ========== 
 Trade receivables from contracts with 
 customers, net of loss allowance                         39,933                  29,488      34,187 
========================================  ======================  ======================  ========== 
 
 

Trade receivables are amounts due from customers for services performed in the ordinary course of business. They are generally settled within 30-60 days and are therefore all classified as current.

The Group uses a third party credit scoring system to assess the creditworthiness of potential new customers before accepting them. Credit limits are defined by customer based on this information. All customer accounts are subject to review on a regular basis by senior management and actions are taken to address debt aging issues.

Trade receivables are subject to the expected credit loss model. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics by geographical region or customer industry.

The expected loss rates are based on the payment profiles of sales over a period of 36 months before the relevant period end and the corresponding historical credit losses experienced within this period. The historic loss rates are adjusted to reflect any relevant current and forward-looking information expected to affect the ability of customers to settle the receivables. Additionally, the projected post-COVID economic recovery based on external reports, forecast data and scenario analysis has been taken into account when assessing the credit risk profiles for specific industries and geographies.

The loss allowance for trade receivables was determined as follows:

 
 31 January                                       More than              More than             More than 
 2022                                               30 days                60 days               90 days 
 unaudited                  Current                past due               past due                   due                Total 
=============  ====================  ======================  =====================  ====================  =================== 
 Weighted 
  expected 
  loss 
  rate (%)                     3.8%                    4.7%                   5.7%                 53.8% 
 Gross 
  carrying 
  amount - 
  trade 
  receivables 
  (GBP'000)                  37,945                   2,300                    351                 1,995               42,591 
 Loss 
  allowance 
  (GBP'000)                   1,456                     109                     20                 1,073                2,658 
=============  ====================  ======================  =====================  ====================  =================== 
 
 31 January                                       More than              More than             More than 
 2021                                               30 days                60 days               90 days 
 unaudited                  Current                past due               past due                   due                Total 
=============  ====================  ======================  =====================  ====================  =================== 
 Weighted 
  expected 
  loss 
  rate (%)                     8.3%                    6.1%                   6.2%                 57.6% 
 Gross 
  carrying 
  amount - 
  trade 
  receivables 
  (GBP'000)                  19,424                   9,554                  1,384                 3,331               33,693 
 Loss 
  allowance 
  (GBP'000)                   1,621                     581                     86                 1,917                4,205 
=============  ====================  ======================  =====================  ====================  =================== 
 
 31 July 2021                                     More than              More than             More than 
                                                    30 days                60 days               90 days 
                            Current                past due               past due                   due                Total 
=============  ====================  ======================  =====================  ====================  =================== 
 Weighted 
  expected 
  loss 
  rate (%)                     5.2%                    5.0%                  18.6%                 60.9% 
 Gross 
  carrying 
  amount - 
  trade 
  receivables 
  (GBP'000)                  33,741                     654                    743                 2,498               37,636 
 Loss 
  allowance 
  (GBP'000)                   1,756                      33                    138                 1,522                3,449 
=============  ====================  ======================  =====================  ====================  =================== 
 

The loss allowance for trade receivables at the period end reconciles to the opening loss allowance as per below:

 
 
                                                   6 months                  6 months                12 months 
                                                   31/01/22                  31/01/21                 31/07/21 
                                                  unaudited                 unaudited 
                                                    GBP'000                   GBP'000                  GBP'000 
==================================  =======================  ========================  ======================= 
 Opening loss allowance for the 
  period                                              3,449                     3,987                    3,987 
 Increase/(release) in loss 
  allowance 
  recognised in profit and loss 
  during 
  the period                                              5                       439                    (296) 
 Receivable written off during the 
  period 
  as uncollectable                                    (796)                     (221)                    (242) 
==================================  =======================  ========================  ======================= 
 Closing loss allowance for the 
  period                                              2,658                     4,205                    3,449 
==================================  =======================  ========================  ======================= 
 
 

Impairment of accrued income

 
 
                                                        6 months                6 months   12 months 
                                                        31/01/22                31/01/21    31/07/21 
                                                       unaudited               unaudited 
                                                         GBP'000                 GBP'000     GBP'000 
========================================  ======================  ======================  ========== 
 Gross accrued income                                     20,621                  12,743      27,807 
 Loss allowance                                            (842)                   (225)     (1,065) 
========================================  ======================  ======================  ========== 
 Closing loss allowance for the period                    19,779                  12,518      26,742 
========================================  ======================  ======================  ========== 
 
 
 
 31 January                                         More than                More than              More than 
 2022                                                 30 days                  60 days                90 days 
 unaudited                    Current                past due                 past due                    due                  Total 
=============  ======================  ======================  =======================  =====================  ===================== 
 Weighted 
  expected 
  loss 
  rate (%)                       2.5%                    2.5%                     2.5%                  32.1% 
 Gross 
  carrying 
  amount - 
  trade 
  receivables 
  (GBP'000)                    17,932                     903                      690                  1,096                 20,621 
 Loss 
  allowance 
  (GBP'000)                       450                      23                       17                    352                    842 
=============  ======================  ======================  =======================  =====================  ===================== 
 
 31 January                                         More than                More than              More than 
 2021                                                 30 days                  60 days                90 days 
 unaudited                    Current                past due                 past due                    due                  Total 
=============  ======================  ======================  =======================  =====================  ===================== 
 Weighted 
  expected 
  loss 
  rate (%)                       0.0%                    0.0%                     0.0%                  14.2% 
 Gross 
  carrying 
  amount - 
  trade 
  receivables 
  (GBP'000)                     9,753                     640                      765                  1,585                 12,743 
 Loss 
  allowance 
  (GBP'000)                         -                       -                        -                    225                    225 
=============  ======================  ======================  =======================  =====================  ===================== 
 
 31 July 2021                                       More than                More than              More than 
                                                      30 days                  60 days                90 days 
                              Current                past due                 past due                    due                  Total 
=============  ======================  ======================  =======================  =====================  ===================== 
 Weighted 
  expected 
  loss 
  rate (%)                       2.9%                    2.7%                     2.6%                  23.7% 
 Gross 
  carrying 
  amount - 
  trade 
  receivables 
  (GBP'000)                    21,455                   3,546                    1,519                  1,287                 27,807 
 Loss 
  allowance 
  (GBP'000)                       624                      96                       40                    305                  1,065 
=============  ======================  ======================  =======================  =====================  ===================== 
 

The loss allowance for accrued income at the period end reconciles to the opening loss allowance as per below:

 
 
                                             6 months                     6 months                      12 months 
                                             31/01/22                     31/01/21                       31/07/21 
                                            unaudited                    unaudited 
                                              GBP'000                      GBP'000                        GBP'000 
===========================  ========================  ===========================  ============================= 
 Opening loss allowance for 
  the period                                    1,065                          269                            269 
 Amount utilised in the                         (350)                            -                              - 
 period 
 Increase/(release) in loss 
  allowance 
  recognised in profit and 
  loss during 
  the period                                      127                         (44)                            796 
 Closing loss allowance for 
  the period                                      842                          225                          1,065 
===========================  ========================  ===========================  ============================= 
 
 

9 Loans and Borrowings

 
 
                                             6 months     6 months   12 months 
                                             31/01/22     31/01/21    31/07/21 
                                            unaudited    unaudited 
                                              GBP'000      GBP'000     GBP'000 
========================================  ===========  ===========  ========== 
 Working capital facility                       8,890        4,338       9,348 
 Finance costs capitalised                          -            -           - 
========================================  ===========  ===========  ========== 
 Bank loans and borrowings due in less 
 than one year                                  8,890        4,338       9,348 
========================================  ===========  ===========  ========== 
 
 Bank loans and borrowings due in more              -            -           - 
 than one year 
========================================  ===========  ===========  ========== 
 
 Total bank loans and borrowings                8,890        4,338       9,348 
========================================  ===========  ===========  ========== 
 
 

The Group has a non-recourse working capital facility. Under the terms of the non-recourse facility, the trade receivables assigned to the facility are owned by HSBC and so have been de-recognised from the Group's Statement of Financial Position; in addition, the non-recourse working capital facility does not meet the definition of loans and borrowings under IFRS. The Group continues to collect cash from trade receivables assigned to the non-recourse facility on behalf of HSBC which is then transferred to them periodically each month. Any cash collected from trade receivables under the non-recourse facility at the end of reporting period that had not been transferred to HSBC, is presented as restricted cash included within the Group's cash balance. At all the reporting periods above, the Group had agreed banking facilities with HSBC totalling GBP75m Invoice Financing working capital facility (recourse and non-recourse).

The Group's working capital facilities are secured by way of an all assets debenture, which contains fixed and floating charges over the assets of the Group. This facility allows certain companies within the Group to borrow up to 90% of invoiced or uninvoiced trade receivables up to a maximum of GBP75m. Interest is charged on the recourse borrowings at a rate of 1.75% (year to 31 July 2021: 1.75%) over HSBC Bank base rate of 0.5% (year to 31 July 2021: 0.1%).

In October 2020, the Group repaid the GBP7.5m Revolving Credit Facility in full and no longer is required to comply with certain financial covenants over the Revolving Credit Facility.

10 Lease

The balance sheet shows the following amounts related to leases where the Group is a lessee.

 
 
 Right-of-use assets                                 Buildings   Vehicles     Other     Total 
                                                       GBP'000    GBP'000   GBP'000   GBP'000 
===============  =================================  ==========  =========  ========  ======== 
 
 Cost             At 1 August 2020                      10,004        348        16    10,368 
  Effect of reassessment of lease 
   term                                                    283          -         5       288 
  Effect of movement in exchange 
   rates                                                     7          -         1         8 
 =================================================  ==========  =========  ========  ======== 
  At 31 January 2021                                    10,294        348        22    10,664 
 =================================================  ==========  =========  ========  ======== 
  At 1 August 2020                                      10,004        348        16    10,368 
  Effect of reassessment of lease 
   term                                                    416          -         5       421 
  Effect of movement in exchange 
   rates                                                    41          -         1        42 
  Reclassification to assets held 
   for sale                                              (216)          -      (14)     (230) 
 =================================================  ==========  =========  ========  ======== 
  At 31 July 2021                                       10,245        348         8    10,601 
 =================================================  ==========  =========  ========  ======== 
  Additions                                                118         30         -       148 
  Change of lease consideration                           (20)        (9)         -      (29) 
  Effect of movement in exchange 
   rates                                                    17          -         -        17 
 =================================================  ==========  =========  ========  ======== 
  At 31 January 2022                                    10,360        369         8    10,737 
 =================================================  ==========  =========  ========  ======== 
 
 Accumulated 
  depreciation    At 1 August 2020                       2,847        176         7     3,030 
  Depreciation charge                                      866         83         4       953 
  Effect of movement in exchange 
   rates                                                   (1)          -       (1)       (2) 
 =================================================  ==========  =========  ========  ======== 
  At 31 January 2021                                     3,712        259        10     3,981 
 =================================================  ==========  =========  ========  ======== 
  At 1 August 2020                                       2,847        176         7     3,030 
  Depreciation charge                                    1,749        119         7     1,875 
  Impairment                                               183          -         -       183 
  Effect of movement in exchange 
   rates                                                    40          -         -        40 
  Reclassification to assets held 
   for sale                                              (190)          -      (11)     (201) 
 =================================================  ==========  =========  ========  ======== 
  At 31 July 2021                                        4,629        295         3     4,927 
 =================================================  ==========  =========  ========  ======== 
  Depreciation charge                                      698         29         1       728 
  Effect of movement in exchange 
   rates                                                    13          -         -        13 
 =================================================  ==========  =========  ========  ======== 
  At 31 January 2022                                     5,340        324         4     5,668 
 =================================================  ==========  =========  ========  ======== 
 
 Net book 
  value           At 31 January 2021                     6,582         89        12     6,683 
  At 31 July 2021                                        5,616         53         5     5,674 
  At 31 January 2022                                     5,020         45         4     5,069 
 =================================================  ==========  =========  ========  ======== 
 

At 31 January 2022, included within property right-of-use asset is dilapidation costs of GBP1,504,000 (31 January 2021: GBP1,627,000, 31 July 2021: GBP1,491,000) and net book value of GBP440,000 (31 January 2021: GBP662,000, 31 July 2021: GBP526,000).

 
                      Properties    Vehicles       Other        Total 
                       unaudited   unaudited   unaudited   31 January 
                                                                   22 
 Lease liabilities       GBP'000     GBP'000     GBP'000      GBP'000 
===================  ===========  ==========  ==========  =========== 
 Current                   1,448          27           2        1,477 
 Non-current               3,399          19           3        3,421 
===================  ===========  ==========  ==========  =========== 
                           4,847          46           5        4,898 
===================  ===========  ==========  ==========  =========== 
 
                      Properties    Vehicles       Other        Total 
                                                           31 January 
                       unaudited   unaudited   unaudited           21 
 Lease liabilities       GBP'000     GBP'000     GBP'000      GBP'000 
===================  ===========  ==========  ==========  =========== 
 Current                   1,833          72           4        1,909 
 Non-current               5,030          20           6        5,056 
===================  ===========  ==========  ==========  =========== 
                           6,863          92          10        6,965 
===================  ===========  ==========  ==========  =========== 
 
                                                                Total 
                                                              31 July 
                      Properties    Vehicles       Other           21 
 Lease liabilities       GBP'000     GBP'000     GBP'000      GBP'000 
===================  ===========  ==========  ==========  =========== 
 Current                   1,423          55           2        1,480 
 Non-current               4,268           9           4        4,281 
===================  ===========  ==========  ==========  =========== 
                           5,691          64           6        5,761 
===================  ===========  ==========  ==========  =========== 
 

Lease liabilities for properties have lease terms of between one and seven years (31 January 2021: one and eight years, 31 July 2021: one and seven years).

 
 
 Reconciliation 
 of lease 
 liabilities 
 movement in the 
 period                          Properties                      Vehicles                       Other                        Total 
                                    GBP'000                       GBP'000                     GBP'000                      GBP'000 
================  =========================  ============================  ==========================  =========================== 
 At 1 August 
  2020                                7,551                           176                           9                        7,736 
 Lease payments                     (1,037)                          (87)                         (4)                      (1,128) 
 Interest 
  expense on 
  lease 
  liabilities                            79                             3                           -                           82 
 Effect of 
  reassessment 
  of lease 
  term                                  257                             -                           5                          262 
 Effect of 
  movement in 
  exchange 
  rates                                  13                             -                           -                           13 
================  =========================  ============================  ==========================  =========================== 
 At 31 January 
  2021                                6,863                            92                          10                        6,965 
================  =========================  ============================  ==========================  =========================== 
 
 At 1 August 
  2020                                7,551                           176                           9                        7,736 
 Lease payments                     (2,387)                         (116)                         (8)                      (2,511) 
 Interest 
  expense on 
  lease 
  liabilities                           151                             4                           1                          156 
 Effect of 
  reassessment 
  of lease 
  term                                  268                             -                           5                          273 
 Effect of 
  movement in 
  exchange 
  rates                                 120                             -                           1                          121 
 Liabilities 
  directly 
  associated 
  with assets 
  held for sale                        (12)                             -                         (2)                         (14) 
================  =========================  ============================  ==========================  =========================== 
 At 31 July 2021                      5,691                            64                           6                        5,761 
================  =========================  ============================  ==========================  =========================== 
 Additions                              110                            30                           -                          140 
 Lease payments                     (1,002)                          (31)                         (1)                      (1,034) 
 Interest 
  expense on 
  lease 
  liabilities                            63                             1                           -                           64 
 Changes of 
  lease 
  consideration                        (20)                          (18)                           -                         (38) 
 Effect of 
  movement in 
  exchange 
  rates                                   5                             -                           -                            5 
================  =========================  ============================  ==========================  =========================== 
 At 31 January 
  2022                                4,847                            46                           5                        4,898 
================  =========================  ============================  ==========================  =========================== 
 

11 Share Capital

 
 Authorised share capital                                6 months                  6 months                 12 months 
                                                         31/01/22                  31/01/21                  31/07/21 
                                                        unaudited                 unaudited 
                                                          GBP'000                   GBP'000                   GBP'000 
=======================================  ========================  ========================  ======================== 
 40,000,000 ordinary shares of GBP0.01 
  each                                                        400                       400                       400 
=======================================  ========================  ========================  ======================== 
 
 Allotted, called up, and fully paid                     6 months                  6 months                 12 months 
                                                         31/01/22                  31/01/21                  31/07/21 
                                                        unaudited                 unaudited 
                                                          GBP'000                   GBP'000                   GBP'000 
=======================================  ========================  ========================  ======================== 
 Ordinary shares of GBP0.01 each                              323                       323                       323 
=======================================  ========================  ========================  ======================== 
 

The movement in the number of shares in issue is shown below:

 
                                  '000 
=============================  ======= 
 In issue at 1 August 2020      32,290 
 Exercise of share options           - 
=============================  ======= 
 In issue at 31 January 2021    32,290 
=============================  ======= 
 
 In issue at 1 August 2020      32,290 
 Exercise of share options           - 
=============================  ======= 
 In issue at 31 July 2021       32,290 
=============================  ======= 
 
 In issue at 1 August 2021      32,290 
 Exercise of share options           - 
=============================  ======= 
 In issue at 31 January 2022    32,290 
=============================  ======= 
 

12 Discontinued Operations

2022

The assets and liabilities relating to South African recruitment operations have been sold at the end of November 2021. The net loss of GBP55,000 from the South African recruitment operation disposal has been recognised in non-underlying costs. The deferred consideration of GBP134,000 has been recognised in the other receivables. There were no further changes to discontinued operations during the period.

2021

On 30 July 2021, the Group announced the decision to close its Mexico operations. In addition, the Group also announced a management buy-out agreement of the South Africa recruitment operations which is expected to complete within one year of 31 July 2021. The Fulfilment, Solutions and Group Support functions of the South African operations will be retained and transferred to a new South African entity. As a result, the Group has reclassified its entire Mexican operations and South African recruitment operations as discontinued in the consolidated financial statements for the year ended 31 July 2021.

 
 
 
                                                                                       Restated            12 months 
                                                                                       6 months          to 31/07/21 
                                                              6 months                      (1) 
                                                           to 31/01/22              to 31/01/21 
                                                             unaudited                unaudited 
                                                                 Total                    Total                Total 
                                                               GBP'000                  GBP'000              GBP'000 
============================================   =======================  =======================  =================== 
 Revenue                                                             -                    1,682                3,432 
 Cost of sales                                                    (10)                  (1,148)              (2,385) 
---------------------------------------------  -----------------------  -----------------------  ------------------- 
 Gross (loss)/profit                                              (10)                      534                1,047 
 Administrative expenses (2)                                     (718)                    (753)              (2,197) 
---------------------------------------------  -----------------------  -----------------------  ------------------- 
 Loss from operations                                            (728)                    (219)              (1,150) 
 Finance income                                                     59                       64                   39 
 Finance cost                                                      (7)                     (17)                (112) 
---------------------------------------------  -----------------------  -----------------------  ------------------- 
 Loss before taxation                                            (676)                    (172)              (1,223) 
 Taxation                                                           33                     (22)                   15 
---------------------------------------------  -----------------------  -----------------------  ------------------- 
 Loss after taxation from continuing 
  operations                                                     (643)                    (194)              (1,208) 
=============================================  =======================  =======================  =================== 
 
 Exchange differences on translation of 
  discontinued operations                                          747                       48                   48 
---------------------------------------------  -----------------------  -----------------------  ------------------- 
 Other comprehensive profit/(loss) from 
  discontinued operations                                          104                    (146)              (1,160) 
=============================================  =======================  =======================  =================== 
 

Cash flows from discontinued operations

 
                                                      22           21 
                                                             Restated   12 months 
                                                             6 months    31/07/21 
                                                6 months          (1) 
                                                31/01/22     31/01/21 
                                               unaudited    unaudited 
                                                 GBP'000      GBP'000     GBP'000 
===========================================  ===========  ===========  ========== 
 Net cash used in operating activities             (990)      (1,396)     (1,348) 
 Net cash used in investing activities              (45)            -        (32) 
 Net cash used in financing activities              (68)         (67)       (139) 
 Effects of exchange rates on cash and 
  cash equivalents                                  (53)           16        (15) 
===========================================  ===========  ===========  ========== 
 Net decrease in cash and cash equivalents 
  from discontinued operations                   (1,156)      (1,447)     (1,534) 
===========================================  ===========  ===========  ========== 
 

(1) 6 months to January 2021 figures have been rested for the presentation of Mexican and South African discontinued operations as explained above.

(2) Included in administrative expenses are GBP127,000 (6 months to 31 January 2021: GBP132,000, 12 months to 31 July 2021: GBP693,000) of non-underlying items relating to employee costs, professional fees and administrative expenses relating to business closures. In addition, it includes net impairment reversals on trade receivables from discontinued operations of GBP40,000 (6 months to 31 January 2021 restated: impairment reversals of GBP82,000, 12 months to 31 July 2021: impairment losses of GBP80,000).

13 Net Debt

Net debt is the total amount of cash and cash equivalents less interest-bearing loans and borrowings, including finance lease liabilities.

Net cash flows include the net drawdown of loans and borrowings and cash interest paid relating to loans and borrowings.

 
                                         1 August                       Net cash                      Non-cash                     31 January 
                                             2021                          flows                     movements                           2022 
 31 January 2022                          GBP'000                        GBP'000                       GBP'000                        GBP'000 
 unaudited 
==================  =============================  =============================  ============================  ============================= 
 Cash and cash 
  equivalents                              29,238                       (15,507)                             -                         13,731 
 Interest-bearing                               -                              -                             -                              - 
 term loan 
 Working capital 
  facilities                              (9,348)                            458                             -                        (8,890) 
 Lease liabilities                        (5,761)                          1,034                         (171)                        (4,898) 
==================  =============================  =============================  ============================  ============================= 
 Total net 
  cash/(debt)                              14,129                       (14,015)                         (171)                           (57) 
==================  =============================  =============================  ============================  ============================= 
 Capitalised                                    -                              -                             -                              - 
 finance costs 
==================  =============================  =============================  ============================  ============================= 
 Total net 
  cash/(debt) 
  after 
  capitalised 
  finance costs                            14,129                       (14,015)                         (171)                           (57) 
==================  =============================  =============================  ============================  ============================= 
 
 
                                     1 August                       Net cash                     Non-cash                     31 January 
                                         2020                          flows                    movements                           2021 
 31 January 2021                      GBP'000                        GBP'000                      GBP'000                        GBP'000 
 unaudited 
==================  =========================  =============================  ===========================  ============================= 
 Cash and cash 
  equivalents                          34,796                        (7,714)                            -                         27,082 
 Interest-bearing 
  term loan                           (7,500)                          7,500                            -                              - 
 Working capital 
  facilities                            (151)                        (4,187)                            -                        (4,338) 
 Lease liabilities                    (7,736)                          1,128                        (357)                        (6,965) 
==================  =========================  =============================  ===========================  ============================= 
 Total net cash                        19,409                        (3,273)                        (357)                         15,779 
==================  =========================  =============================  ===========================  ============================= 
 Capitalised 
  finance costs                           196                              -                        (196)                              - 
==================  =========================  =============================  ===========================  ============================= 
 Total net 
  cash/(debt) 
  after 
  capitalised 
  finance costs                        19,605                        (3,273)                        (553)                         15,779 
==================  =========================  =============================  ===========================  ============================= 
 

.

 
                                     1 August   Net cash                      Non-cash   31 July 
                                         2020      flows                     movements      2021 
 31 July 2021                         GBP'000    GBP'000                       GBP'000   GBP'000 
==================================  =========  =========  ============================  ======== 
 Cash and cash equivalents             34,796    (5,558)                             -    29,238 
 Interest-bearing term loan           (7,500)      7,500                             -         - 
 Working capital facilities             (151)    (9,197)                             -   (9,348) 
 Lease liabilities                    (7,736)      2,511                         (536)   (5,761) 
==================================  =========  =========  ============================  ======== 
 Total net cash                        19,409    (4,744)                         (536)    14,129 
==================================  =========  =========  ============================  ======== 
 Capitalised finance costs                196          -                         (196)         - 
==================================  =========  =========  ============================  ======== 
 Total net cash after capitalised 
  finance costs                        19,605    (4,744)                         (732)    14,129 
==================================  =========  =========  ============================  ======== 
 

14 Dividends

The Group declared a final dividend in respect of the year ended 31 July 2021 on 4 November 2021, which was paid on 10 December 2021.

 
                                                     22           21 
                                               6 months     6 months   12 months 
                                               31/01/22     31/01/21    31/07/21 
                                              unaudited    unaudited 
                                                GBP'000      GBP'000     GBP'000 
==========================================  ===========  ===========  ========== 
 Equity dividends paid at 1.5 pence per             484            -           - 
  share (6 months to 31 January 2021: nil 
  pence, 12 months to 31 July 2021: nil 
  pence) 
==========================================  ===========  ===========  ========== 
 

15 Contingent Liabilities

We continue our cooperation with the United States Department of Justice and in the 6 month period to 31 January 2022 have incurred GBP27,000 (6 months to 31 January 2021: GBP29,000, year to 31 July 2021: GBP29,000) in advisory fees on this matter. The Group is not currently in a position to know what the outcome of these enquiries may be and therefore we are unable to quantify the likely outcome for the Group.

16 Events after the Reporting Period End

In March 2022, the Group exercised the break clause relating to one of its UK property leases, shortening the lease term from March 2027 to September 2022. This has been disclosed as a non-adjusting post balance sheet event.

17 Statement of Directors' Responsibilities

The Directors' confirm that these condensed interim Financial Statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair view of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

 
 --   an indication of important events that have occurred during the 
       first six months and their impact on the condensed set of Financial 
       Statements, and a description of the principal risks and uncertainties 
       for the remaining six months of the financial year; and 
 --   material related-party transactions in the first six months and 
       any material changes in the related-party transactions described 
       in the last annual report. 
 

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