Altitude : 2021/22 Annual Report

Audited Annual Results

for the Year Ended 31 March 2022

Strategic Report

Governance

Financial Statements

Altitude is a technology company and has developed an industry specific marketplace which provides various design tools, applications, and web site pop-up stores for promotional product distributors and suppliers.

Read more on page 4 ARROW-RIGHT

Contents

1 Financial Highlights

Strategic Report

3 Business Model

8 Chairman's Statement

10 Chief Executive's Statement

14 Chief Operating Officer's Report

16 Chief Financial Officer's Report

21 S172 Statement

Governance

24 The Board

26 Directors' Report

33 Independent Auditor's Report

to the Members of Altitude Group plc

Financial Statements

40 Consolidated Statement of Comprehensive Income

41 Consolidated Statement of Changes in Equity

42 Consolidated Balance Sheet

43 Consolidated Cash Flow Statement

1. Notes to the Consolidated Financial Statements

1. Company Balance Sheet

77 Company Statement of Changes in Equity

78 Notes to the Company Balance Sheet

83 Notice of Annual General

88 Advisors

Financial Highlights

Group revenues	Gross margin	Group adjusted operating profit*
£11.9m	51.5%	£1.1m
CIRCLE-UP 54.9% (2021: £7.7 million)	CIRCLE-DOWN (2021: 72.3%)	CIRCLE-UP 90.2% (2021: £0.6 million)
	Anticipated and reflective
	of blended revenues across the Group
Adjusted basic	Operating cashflow before	Cash balance
earning per share**	changes in working capital	at 30 June 2022
1.77p	£1.1m	£1.6m
CIRCLE-UP 71.9% (2021: £1.03p)	CIRCLE-UP 149% (2021: £0.4 million)	CIRCLE-DOWN 54.9% (2021: £2.1 million)
		Cash at year end 2022 of £0.9 million

• Services revenue grew by 17.3%, surpassing the Industry average of 12.1% reflecting the strong performance of our AIM network
• Strong trading momentum has continued into the first quarter of our new financial year providing further confidence that the current market expectations are at least in line for the full year
  Read Chief Financial Officer's Report on page 16 ARROW-RIGHT

Key corporate developments and operational highlights

• AIM membership has continued to grow, and currently totals 2,425 global members, up from 1,917 at acquisition, consolidating its position as the largest global distributor organisations
• The Group has continued to strengthen its core technology platforms, with 476 distributors adopting the AIM Tech Suite for search and order creation, a 32% increase from 359 in FY 2021.
  To date, the Group has launched 2,646 unique webstores
• Merchanting revenue increased by 141.4% to £5.6 million (2021: £2.3 million) through the now fully evolved AIM Capital Solutions ("ACS") programme
• During the year the Group secured a financing facility of £0.5m that remains undrawn

Outlook

• Preferred Partner service fees tracked 32% over last year demonstrating recovery and gaining momentum into the new financial year
• The Group's Merchanting programmes are expanding and driving new growth within the promotional products industry and adjacent markets
• The Group remains debt free and has a credit facility in place to support continued growth and expansion
• The Board is confident in the future scalability and success of the business and the executive management team's ability to successfully execute upon the Group's strategy

• Operating profit before share-based payment charges, amortisation of intangible assets, depreciation of tangible assets and exceptional charges

• Adjusted basic earnings per share from continuing operations is calculated using profit after tax but before share-based payment charges, amortisation of intangible assets, depreciation of tangible assets and exceptional charges and the weighted average number of equity voting shares in issue

Altitude Group Plc	www.altitudeplc.com	1
Audited Annual Results

Strategic Report		Governance		Financial Statements

Strategic

Report

Nichole Stella, Group CEO of Altitude:

"The Group experienced a year of strong profitable growth, driven by the commitment of our teams and the quality of our programmes. We are also extremely pleased to see last year's strong trading momentum has continued into the first quarter of our new financial year providing further confidence that the current market expectations are at least in line for the full year. We have continued to be nimble and drive the business forward through the most uncertain of times, building a strong foundation and delivering year-over-year positive growth, whilst

remaining debt free and not raising dilutive funds. We retain our high growth ambitions and are confident in our ability to substantially scale and expand the business."

Chief Executive's Statement page 10 ARROW-RIGHT

Technology is at the core of our value drivers

• Efficiency, Effectiveness, Experience, Trust Read more on page 14 ARROW-RIGHT

2 Altitude Group Plc Audited Annual Results

Business Model

Who Are We

Altitude is a technology company and has developed an industry specific marketplace which provides various design tools, applications, and web site pop-up stores for promotional product distributors and suppliers. We have developed a robust e-commerce enabled and scalable, trading platform that facilitates the execution of both offline and online promotional product transactions. This gives us the ability to generate revenue based on the transactional throughput both inside and outside

our platform. The Group's technology combined with an experienced team and proven service offerings delivers in-industry scalable growth opportunities and expansion into adjacent markets. We deliver products and services in two distinct areas - Services and Merchanting. Services is comprised of technology and software applications, membership subscriptions, preferred partner programmes, and marketing services programmes. Our Merchanting programmes include ACS and our adjacent market programmes, where the Group now acts as principal

in the sale of promotional products. Page 5 ARROW-RIGHT

The Industry We Serve

Post-pandemic, the market for promotional products in the US alone is estimated to be worth more than $23 billion (Source: ASI). It is a large market, but an inefficient one, with approximately 75% of transactions still carried out offline. Additionally, it is very fragmented with approximately 3,000 suppliers and 23,000 distributors serving a very broad customer base, spanning individual consumers to large corporates and non-profit organisations.

Find out about Market Opportunities page 6 ARROW-RIGHT

What Do We Do

We deliver Services to our members, affiliatesand preferred partners that helps them to drive sales growth, increase cost savings and improve their efficiency and ease of doing business. Our Merchanting teams drive scalable growth on sales, ensuring we have the right products available for fulfilling our customers' needs, effective and seamless processing of orders and tight working capital management. Page 4 ARROW-RIGHT

P U - E L C R I C

2,425

Global

Members

(2019: 1,917)

$23b

US promotional products industry

3

Strategic Report		Governance		Financial Statements

Business Model

(...continued)

Services Revenue £6.3m

CIRCLE-UP17.3%

Technology Services

Our marketplace platform delivers important opportunities and efficiencies to our members and affiliates, improving profitability through:

COGS	Efficiency- providing an intuitive online ordering experience for buyers coupled with the
	back-end technology stack to support the quick fulfilment of orders for branded merchandise
OCTAGON-CHECK	Effectiveness - ensuring product / inventory availability whenever and wherever you are,
	with 24/7/365 uptime and a mobile first approach
USERS-GEAR	Experience - delivering the right experience and high degree of satisfaction for members,
	affiliates, partners, and end-buyers
HANDSHAKE	Trust - providing a complaint and reliable service from start to finish

The Group derives SaaS technology fee revenue for marketplace access, e-commerce solutions and its proprietary ERP system.

Business Services

In addition to our marketplace platform, the Group delivers highly sought-after business benefits to members and affiliates such as:

•	Preferred Partner pricing benefits	•	Education & professional development
• Freight programmes and shipping discounts	•	Expanded marketing services,
•	Community & networking opportunities		products and tools

The Group derives subscription fee revenue from providing a broad range of services to distributors including supplier relations services, negotiated group discounts, events and exhibitions, catalogues, artwork services and marketing programmes.

Preferred Partner Services

The Group provides vendors and suppliers with services to expandtheir visibility and sales to the AIM and ACS community through:

• Top level visibility across our marketplace product search engine

• Preferred technology integration opportunities

• Guaranteed participation in publications, catalogues, educational product programmes and merchandise campaigns

• Expanded access to AIM community via social media, events

The Group derives revenue through gross transaction fees on orders through our supplier network, vendors and other service providers in return for providing marketing services and promotion of those suppliers to distributors. Revenues from this source reflect

the value of the resulting purchase orders placed with preferred partners by distributors.

Overseas Manufactures ARROW-RIGHT	Preferred	Members
Partners

Merchanting Revenue £5.6m

CIRCLE-UP141.4%

Affiliates

The Group recruits high-calibre sales professionals to affiliate (Affiliates) with the Group which:

• Enables Affiliates to focus on sales activities, which is their skillset, and to become part of a corporate business driving growth and profitability, which is our skillset, which helps them exceed their stand-alone potential
• Full utilisation of technology is both advantageous and mandatory
• Provides scalable expansion and growth back to the Group

The Group derives revenue from the sale of promotional products which is procured

via our affiliates, who act as our sales agents. Along with our dedicated team our Affiliates utilise our technology, preferred partner network, efficient processes and financial expertise to deliver increased sales levels and profitability.

Adjacent Markets

Gear Shops: The Group derives revenue via successful integration of our technology and from the sale of branded merchandise through adjacent Educational markets.

Altitude succeeds and scales through its ability to influence and direct member purchasing through its preferred suppliers, through our ability to recruit high calibre sales affiliates and via expansion into adjacent markets. Page 6 ARROW-RIGHT

	Affilates
ARROW-UP	ARROW-UP

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Audited Annual Results

Strategic Report		Governance		Financial Statements

Business Model

(...continued)

Market Opportunities

Currently, the Group has exceeded pre-covid

network numbers with more than 2,100 AIM distributor members within the North American network, representing c.9% of the industry's distributor companies. With an experienced management team and robust industry-specific technology, supplier solutions, pricing benefits, marketing solutions, Affiliate solutions and adjacent market solutions, the Group has never been better placed to scale and accelerate business growth.

Post-covid, the Advertising Specialty Institute® (ASI) has marked the ongoing resilience of North American promotional products industry, with total annual revenue rising to $23.2 billion in 2021, up from the covid-impacted 2020 industry revenue of $20.7 billion. The market is highly fragmented with a network

of 23,000 distributors, whilst the top 5 market-leading distributor organizations represent a small segment of the market at c. $3 billion in sales.

	Adjacent markets potential
Print	($78.9 billion)
Uniform	($12 billion)
Printed Signage	($10.6 billion)
Educational / Collegiate	($12 billion)
Promotional	($23 billion)

E-commerce continues to drive sales activity across the industry. Promotional Products Association International (PPAI) reported on 1 June 2022, "the share of online sales of promotional products was 25.8% in 2021 (up from 17.3% in 2020)."

Given the size of the untapped addressable promotional product market and our robust software solutions and programmes we believe the market opportunity for the Group is strong.

Additionally, adjacent markets that are active in promotional product sales such as; print ($78.9 billion), uniform ($12 billion), printed signage ($10.6 billion) and the educational / collegiate markets ($12 billion) expand the potential addressable market substantially. (Sources: Market sizes taken from reputable Industry publications).

Our Aspirations

We retain our high growth ambitions and are confident in our ability

to substantially scale and expand the business. The expansion of our Affiliate network and the successful integration of our technology

into adjacent markets delivers opportunities for significant growth over the medium term.

6	Altitude Group Plc	7
Audited Annual Results