Triad : 2021 Annual Report

TRIAD GROUP PLC

Annual Report and Accounts 20202021

Financial Highlights:

REVENUE FOR THE YEAR ENDED		2020:
31 March 2021:
£17.8m		£19.4m
GROSS PROFIT		2020:
31 MARCH 2021:
£3.8m		£2.9m
GROSS PROFIT AS A PERCENTAGE OF REVENUE		2020:
31 MARCH 2021:
21.4%		14.7%
PROFIT/(LOSS) BEFORE TAX		2020:
31 MARCH 2021:
£0.6m		(£0.6m)
PROFIT/(LOSS) AFTER TAX		2020:
31 MARCH 2021:
£0.7m		(£0.8m)
CASH RESERVES		2020:
31 MARCH 2021:
£4.9m		£3.8m

Table of contents

Triad Group Plc  |  Annual Report for the year ended 31 March 2021

02 Strategic report

13 Directors' report

16 Corporate governance report

22 Directors' remuneration report

29 Independent auditors' report to the members of Triad Group Plc 36 Statements of comprehensive income and expense

37 Statements of changes in equity

38 Statements of financial position

39 Statements of cash flows

40 Notes to the financial statements

59 Five year record

60 Shareholders' information and financial calendar

61 Corporate information

Strategic report

Financial highlights

•  Revenue for the year ended 31 March 2021: £17.8m (2020: £19.4m)

•  Gross profit: £3.8m (2020: £2.9m)

•  Gross profit as a percentage of revenue: 21.4% (2020: 14.7%)

•  Profit before tax: £0.6m (2020 Loss: £0.6m)

•  Profit after tax: £0.7m (2020 Loss: £0.8m)

•  Cash reserves: £4.9m (2020: £3.8m)

Chairman's statement

Dr John Rigg

Financial headlines

For the year ended 31 March 2021 the Group reports revenue of £17.8m (2020: £19.4m). The gross profit as a percentage of revenue has increased to 21.4% (2020: 14.7%) and profit before tax was £0.6m (2020 Loss: £0.6m). Profit after tax was £0.7m (2020 Loss: £0.8m) reflecting the increase in the deferred tax asset (see page 11). Cash reserves have increased to £4.9m (2020: £3.8m). The effects of the Covid-19 pandemic upon both financial results in 2021 and current trading are set out on pages 8 and 14.

Gross profit has increased by £0.9m during the year due to an increase in higher margin consultancy engagements, particularly in the public sector (see note 4). Revenue in the year has reduced by a net £1.6m, mainly due to the reduction in private sector low margin contractor led assignments. Gross profit as a percentage of revenue has subsequently increased significantly by 6.7%, reflecting the improvements in both the ratio of consultants to contractors on consultancy engagements and the focus upon higher margin core business. Cash has also increased significantly by £1.1m due to the profit in the year and improvements in working capital.

Overview of results

I am delighted to report a very strong set of results, delivered during a year of unprecedented global challenges. The Group has worked almost entirely on a remote basis during the period, and I am also pleased to confirm that we experienced no significant Covid-19 related illnesses during that time.

The Group's return to profit has been accompanied by some significant progress on the strategic front. Reinforcing the Group's reputation as a consultancy, trusted by clients to deliver tangible results from their technology investments, we have significantly increased the number of permanent fee-earning consultants during the period. At the same time,

the Group has been steadily exiting from lower value and non-core activities in the resourcing area. Combined, this has resulted in a much clearer focus for the business going forwards and has also brought rewards in the guise of much improved gross margin. Gross margin has increased from 14.7% of revenue in the previous year to 21.4% in the period. Indeed, gross profit as a percentage of revenue in the second half of the year reached 25.5% versus 14.9% for the same period of the previous year. Whilst revenue reduced in the year by £1.6m, the growth of consulting assignments at an average margin percentage of 33% and the reduction in contractor assignments and non-core business at an average of 14%, has materially increased gross profit.

The Group successfully utilised its in-house resourcing capability to support the recruitment of a net additional 21 consultants during the period. Further, consultant utilisation increased in the year from 49% to 63% and, with the growth in headcount, consultant days billed increased year on year. Our new recruits come from a number of disciplines, notably business analysts, project managers, software engineers, user research consultants and delivery managers.

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Strategic report

It was very pleasing to note some substantial successes during the year, including opportunities with Ministry of Justice, Department for Business, Energy & Industrial Strategy, Ofgem, Department for Transport, Renewable Energy Systems Ltd and Westcoast Ltd. In all of these situations, Triad's reputation for delivery excellence has been a key factor in client decisions to place their trust in us.

Outlook

The Group is looking to build on the momentum created during the previous year. Several of the recently won contracts are still ramping up and significant further recruitment is planned to service demand on these and the new work we hope to win.

The clear emphasis of the business going forward is on consultant led engagements where we can add value to our clients by minimising the risk of their technology investments. All of our business development effort is organised to underpin this mission and we are optimistic about securing more work across both the public sector and the private sector.

The Group remains debt free except for lease liabilities arising due to the application of IFRS 16 and enjoys strong reserves of cash.

Dividend

Recognising the strength of this year's performance and the Group's confidence in the near future, the Board proposes a dividend of 2p per share (2020: nil per share).

Employees

On behalf of the Board of Directors, I would like to thank all of the staff (including our 20+ new starters) for their commitment and contribution during a very challenging year.

John Rigg

Executive Chairman

14 June 2021

Triad Group Plc Annual Report and Accounts 2021  |  3