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Aptitude Software Group PLC
Earnings Release • Mar 26, 2025
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Earnings Release
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Aptitude Software Group PLC
26 March 2025
26 March 2025
APTITUDE SOFTWARE GROUP PLC
('Aptitude' or 'the Group')
Audited Results for the Year Ended
31 December 2024
Aptitude (LSE: APTD), a market-leading provider of finance transformation software solutions, specialising in autonomous finance, reports its Audited Results for the year ended 31 December 2024.
The Group has delivered a robust performance amidst an ongoing strategic transition of the business, demonstrating continued Annual Recurring Revenue ('ARR') growth, strong pipeline progression and operational efficiency while building the foundations for accelerated success in the future.
Financial Highlights
| Year ended 31 December | 2024 | 2023 | % Change |
| Annual Recurring Revenue 1, 2 ('ARR') at year end | £52.1m | £51.3m | 2% |
| - AI Autonomous Finance6 | £17.1m | £15.3m | 12% |
| - Other Software | £29.8m | £31.0m | (4%) |
| - Assure | £5.2m | £5.0m | 4% |
| Revenue | |||
| Total Revenue | £70.0m | £74.7m | (6%) |
| - Recurring Revenue3 | £54.4m | £53.4m | 2% |
| - Non-Recurring Revenue | £15.6m | £21.3m | (26%) |
| Recurring Revenue proportion | 78% | 71% | 7% |
| Profit and EPS | |||
| Adjusted Operating Profit4 | £9.9m | £9.7m | 2% |
| Statutory Operating Profit | £5.7m | £5.3m | 8% |
| Adjusted Operating Margin4 | 14% | 13% | 1% |
| Basic Earnings per Share | 8.8p | 7.2p | 22% |
| Cash and Balance Sheet | |||
| Cash and cash equivalents at year end | £30.4m | £34.1m | (11%) |
| Net funds5 | £20.3m | £22.7m | (11%) |
| Share buyback completed | £4.0m | - | N/A |
| Final Ordinary Dividend per Share | 3.6p | 3.6p | - |
| Full Year Ordinary Dividend per Share | 5.4p | 5.4p | - |
| · | ARR growth within AI Autonomous Finance, the Group's strategic focus, of 12% reflecting significant market opportunity and a well-positioned product portfolio. |
| · | Adjusted operating margin of 14% (2023: 13%), driven by robust cost control and increasing margins through an improving revenue mix. |
| · | Strong cash position, with £30.4m cash (2023: £34.1m) and £20.3m net funds (2023: £22.7m), enabling continued enhanced shareholder returns through the share buyback programme. A total of £4.0m shares were bought back by the Company in 2024. |
| · | Maintained full year dividend of 5.4p per share. |
Operational Highlights
We are fundamentally transforming the business to enable long-term, scalable growth - embedding a new operating model across go-to-market, product and engineering, client experience, and our partner ecosystem.
Key successes include:
| · | Expanding the Pipeline - Grew the Fynapse pipeline 15x in active opportunities and 10x in value since July 2023. |
| · | Securing Enterprise Clients - Signed six major Fynapse clients: T-Mobile, HCSC, KPMG, Inspired, One Digital, and Chubb, including three AAH migrations. |
| · | Driving Cross-Sell & Upsell - Revamped Client Experience function, leading to 21 client expansions in 2024, reinforcing future Fynapse adoption, and reducing software churn to 8% in 2024 (2023: 10%). |
| · | Strengthening Go-to-Market Execution - Rebuilt and refined go to market ("GTM") execution for greater market traction. |
| · | Scaling Partner-Led Sales - Streamlined from 60 partners to six managed partners (Microsoft, Deloitte, EY, KPMG, Capgemini, HSO), exceeding our initial 30% ARR partner-sourced target. |
| · | Transforming Product & Engineering - Appointed a Chief Product & Technology Officer ("CPTO") and implemented a Product vs. Project Management approach, significantly improving efficiency and output. |
| · | Good new business success across other products - Large Australian bank taking the Aptitude Accounting Hub ('AAH') and several US organisations taking Aptitude Revenue Management ('ARM'). |
| · | Extended engagement with 21 clients in 2024 taking expanded offerings and reinforcing stronger client relationships - All are clients with the potential for future Fynapse adoption. |
Outlook
| · | Strong growth in Fynapse pipeline value and opportunities, with 70% of pipeline connected to the partner channel. |
| · | The Board has decided to accelerate the transition from being dependent on in-house implementation services to a partner-led model which we expect will in due course result in partners delivering implement services. |
| · | This is a deliberate acceleration of the model already in motion - because partner-led execution delivers scale, efficiency, and access to faster-moving Tier 2 and 3 opportunities. |
| · | While this will impact short-term revenue, this is a necessary step toward a higher-margin, better quality ARR model. As a result, 2025 revenues and profits are expected to remain similar to 2024, before returning to growth in 2026. |
With strong leadership, a SaaS-first, partner-led model, and disciplined execution, Aptitude is well-positioned to unlock the full value of the Fynapse opportunity - driving scalable growth, margin expansion, and market leadership. We believe this partner-led model will be underpinned by high-quality recurring revenue, growing profitability over time, and strong cash generation.
Commenting on the results, Alex Curran, Chief Executive Officer, said: -
"2024 has been a year of rapid and deliberate transformation. In a short space of time, we've reshaped the business and put Aptitude firmly on the path to becoming a high-margin, SaaS leader in autonomous finance transformation. We've delivered double-digit growth in AI Autonomous Finance ARR and significantly expanded the Fynapse pipeline through our shift to a partner-first model.
These proof points underpin our confidence as we accelerate execution-committing fully to a partner-led strategy that drives scale, improves revenue quality, and expands margins. We're building a business designed for long-term growth, market leadership, and a defining role in the future of AI-powered finance."
Analyst Presentation
A presentation for analysts will take place at 09:00 today. Analysts wishing to attend should contact [email protected] to register.
Aptitude Software Group plc 020-3687-3200
Alex Curran, Chief Executive Officer
Ivan Martin, Chairman
Mike Johns, Chief Financial Officer
Canaccord Genuity Limited 020-7523-8000
Simon Bridges / Andrew Potts
Alma Strategic Communications 020-3405-0205
Caroline Forde / Hilary Buchanan
Prior to publication the information communicated in this announcement was deemed by the Company to constitute inside information for the purposes of article 7 of the Market Abuse Regulations (EU) No 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations No 2019/310 ('MAR'). With the publication of this announcement, this information is now considered to be in the public domain.
About Aptitude Software
Aptitude Software provides software solutions that deliver fully autonomous finance to enable its clients to drive growth, efficiency and sustainability. Fynapse is Aptitude's intelligent finance data management and accounting platform designed to increase productivity and lower costs for finance teams globally. Fynapse provides a single view of finance and business data, unparalleled performance and automation, faster and better insights, user-friendly functionality and market-leading total cost of ownership.
Throughout this announcement:
1 Annual Recurring Revenue ('ARR') is the value of Aptitude's recurring revenue at a specific point in time, normalised to a one-year period. ARR includes recurring revenues contracted but yet to commence and excludes recurring revenues which are currently being received but for which formal termination has been received. Included in ARR are recurring revenues from the Group's solution management services.
2 Constant Currency is calculated by comparing the 2024 results with 2023 results retranslated at the rates of exchange prevailing during 2024. 2023 ARR has been restated to reflect constant currency.
3 Recurring Revenue includes revenues from the Group's solution management services.
4 Adjusted Operating Profit and Adjusted Operating Margin exclude non-underlying operating items, unless stated to the contrary, but includes share-based payments. Further detail in respect of the non-underlying operating items can be found within Note 2.
5 Net Funds represents cash and cash equivalents less finance obligations, which includes capital lease obligations and a loan.
6 AI Autonomous Finance ARR includes ARR from the Aptitude Accounting Hub ('AAH') and Fynapse.
Certain non-IFRS financial measures (e.g. Adjusted Operating Profit) are included which assist management in comparing performance on a consistent basis.
Chairman's Statement
Reflecting on a Decade of Transformation
As I enter my final year as Chairman of Aptitude, I reflect on nearly a decade of strategic change. The Company has transformed from a multi-asset organisation into a regulatory and compliance software business and now into a SaaS-driven, CFO-focused leader, poised to lead the next phase of AI-powered finance transformation.
Strengthening Our Market Position
Aptitude has always anticipated market shifts, but the scale of our current transformation is unmatched during my time as Chairman. In 2024, we took decisive steps to transition to a partner-first, SaaS-led model. We recognised that a services-heavy approach would constrain scalability, slow Fynapse adoption, and limit long-term revenue growth. In 2025, we are accelerating the shift further, making the necessary adjustments to fully embed this model and ensure long-term scalability, profitability, and competitive strength.
Executing the Business Model Shift
As Fynapse implementations become faster and demand for AI-powered finance transformation grows, it is critical that we transition more services to partners. This approach maximises scalability, strengthens partner engagement, and drives sustainable ARR growth ensuring Aptitude is fully aligned with a high-margin SaaS business model.
To drive long-term success, we are:
| · | Prioritizing strategic partners that can accelerate adoption at scale. |
| · | Continuing the restructuring of our operating model to fully support a partner-first SaaS strategy. |
| · | Investing in go-to-market execution to capitalise on the growing Fynapse pipeline. |
These structural changes will continue throughout 2025. This transition positions us to capitalise on the £3bn+ market opportunity, ensuring sustainable growth and reinforcing Aptitude's leadership in AI-powered finance transformation.
Board and Leadership Evolution
As previously announced, Barbara Moorhouse will step down at this year's AGM, and on behalf of the Board I would like to express my gratitude for the hard work, talent and support she has put into the business since her appointment as Non-Executive Director ('NED') and Audit Chair in April 2017, and her subsequent role as Senior Independent Director and Remuneration Committee Chair in April 2022. Her contributions have been invaluable, and I wish her the very best for the future.
Our CFO, Mike Johns, will also be stepping down from his position following the publication of the Annual Report and Accounts, and we wish him all the very best and thank him for his support over his seven years with the Group.
The Board has engaged the services of a leading executive search firm to appoint both a new NED and CFO. The search for a new NED and potential future Chairperson is well progressed. The search for a CFO is at an earlier stage but Aptitude has a strong finance function to support the business in the interim.
Looking Ahead with Confidence
The transformation we have embarked on is ambitious, necessary, and built for long-term value creation. 2024 was a year of foundational change refining our partnership model, operational structure, and go-to-market strategy.
As we move into 2025, the focus is clear:
| · | Strengthen execution, embedding a partner-first mindset across every part of the business. |
| · | Drive profitable, scalable growth, leveraging our first-mover advantage in AI-powered finance transformation. |
| · | Continue operational discipline, balancing investment with cost control to maintain sustainable financial performance. |
As I enter my final year as Chairman, I do so with confidence in Aptitude's trajectory. With a clear strategy, strong leadership, and increasing market adoption of Fynapse, the Company is well-positioned to deliver long-term value for its customers, partners, and shareholders. I extend my sincere thanks to all who have contributed to and supported Aptitude's success.
Dividend and Share Buyback
The Board has proposed an unchanged final dividend of 3.60 pence per share (2023 3.60 pence), making a total ordinary dividend of 5.40 pence per share for the year (2023: 5.40 pence). Subject to shareholder approval at the Group's Annual General Meeting on 28 May, the proposed final dividend will be paid on 13 June 2025 to shareholders on the register at 23 May 2025.
In 2024, the Group operated a share buyback programme and repurchased £4.0m of its own Ordinary Share Capital to 31 December 2024 . The buyback programme is in accordance with the Group's authority to make market purchases of its own Ordinary Shares granted to it by shareholders on 14 May 2024. The share buyback programme is for £20m over a three-year period and the Group intends to continue with the buyback as originally stated.
Outlook
Aptitude is entering 2025 with a sharpened focus on scalability, profitability, and long-term growth. The foundational shifts made in 2024 embedding a partner-first, SaaS-led model, refining go-to-market execution and accelerating Fynapse adoption position the Company to capitalise on the £3bn+ market opportunity in AI-powered finance transformation. While the transition from a services-heavy approach will impact short-term revenue, it is a necessary step toward a higher-margin, better quality ARR model. With strong leadership, strategic partnerships, and disciplined execution, Aptitude is well-positioned for sustained growth and market leadership in the years ahead.
Ivan Martin
Chairman
25 March 2025
Chief Executive Officer's Report
Overview
Aptitude is accelerating its transformation. In 2024, we were in line with market consensus expectations while shifting rapidly from an on-premise compliance model to a partner-first, SaaS-led business. We overhauled go-to-market execution, product development, client experience, and partner engagement. Fynapse is gaining traction, our pipeline is expanding, and a smaller number of key partners are fully engaged.
We now face a choice: maintain a services-heavy model for short-term stability or accelerate toward scalable, high-margin growth. We choose acceleration. In 2025, we are doubling down on our partner-first strategy to drive Fynapse adoption, scale ARR, and strengthen revenue and profitability over time.
This is an intensification of our plan to achieve 80% of ARR through partners by 2027, maximising growth and driving competitive advantage. To succeed, we now know we must shift more services to partners and prioritise software revenues, creating a more predictable and scalable business.
Aptitude is targeting a £3bn+ market opportunity as finance functions embrace AI-powered, real-time decision-making. With Fynapse, we are positioned to lead this transformation across Tier 1, 2, and 3 organisations through a partner-first, SaaS-led model.
We are now midway through this transition, with further structural changes planned in 2025 to fully align our organisation and operations. Without this shift, long-term growth will be constrained, impacting partner momentum and competitiveness. While this transformation requires short-term adjustments, it ensures we will build a stronger, more resilient business for the future.
2024 Achievements: Driving Momentum
In just 12 months, we have fundamentally rewired the business to scale efficiently and align with our partner-first, SaaS-first strategy. Key achievements include:
| · | Expanding the Pipeline - Grew the Fynapse pipeline 15x in active opportunities and 10x in value since July 2023, with 70% of opportunities tied to partners. |
| · | Securing Enterprise Clients - Signed six major Fynapse clients: T-Mobile, HCSC, KPMG, Inspired, One Digital, and Chubb, including three AAH migrations. |
| · | Driving Cross-Sell & Upsell - Revamped Client Experience function, leading to 21 client expansions in 2024, reinforcing future Fynapse adoption. |
| · | Strengthening Go-to-Market Execution - Rebuilt and refined GTM execution for greater market traction. |
| · | Scaling Partner-Led Sales - Streamlined from 60 partners to six managed partners (Microsoft, Deloitte, EY, KPMG, Capgemini, HSO), exceeding our initial 30% ARR partner-sourced target. |
| · | Transforming Product & Engineering - Appointed a CPTO and implemented a Product vs. Project Management approach, significantly improving efficiency and output. |
These changes have strengthened our foundation, but they have also underscored the urgency of accelerating our partner-led model.
Accelerating the Business Model Shift
Aptitude's transition to a partner-first, SaaS-led model is reshaping our business for greater scalability, efficiency, and profitability. Faster Fynapse implementations, a shift to high-margin ARR revenue, and deeper partner enablement are key drivers of this evolution. To sustain momentum, we are investing in partner execution, sales acceleration, and product differentiation, ensuring long-term growth.
Scaling for Growth
To capitalise on the £3bn+ opportunity, we are embedding a partner-first approach that expands market reach, accelerates adoption, and enhances efficiency. By reducing implementation risk, freeing internal resources for innovation, and prioritising software ARR, we will strengthen revenue predictability and competitive positioning. While this requires upfront investment, it cements Aptitude's leadership in AI-powered finance and builds a high-growth, high-margin SaaS business.
Executing with Discipline: Scaling Fynapse for the Future
The transition to AI-powered, autonomous finance is an industry-defining moment, and Aptitude is at the forefront. We are not just launching a product; we are defining a category. The steps taken in 2024, combined with our partner-first approach, ensure we are positioned to drive this market shift.
A High-Performance Culture: Our People Drive Success
Aptitude's success is driven by its people, and I want to thank our team for their dedication during this transformation.
We continue to foster a high-performance, results-driven culture retaining key talent while actively managing underperformance to maximise efficiency and impact.
Outlook: Accelerating Execution in 2025 & Beyond
Aptitude is advancing its transformation, building on the decisive shifts made in 2024. We have embedded a partner-first, SaaS-led model, significantly expanded our pipeline, and secured major enterprise clients, reinforcing our market position.
In 2025 we are accelerating execution - moving from a services-heavy model to a fully partner-driven approach that scales Fynapse adoption, strengthens margins, and enhances long-term revenue quality. While this transition will impact short-term services revenue, it will over time:
| · | Improve profitability |
| · | Increase revenue predictability |
| · | Align us to achieve 80% of ARR through partners by 2027 |
With these strategic changes in motion, 2025 revenues and profits are expected to remain similar to 2024, returning to growth in 2026. We look ahead with confidence in our journey, underpinned by a robust, profitable business foundation with high levels of recurring revenue and a strong financial position to invest in our growth opportunity.
Alex Curran
Chief Executive Officer
25 March 2025
Group Financial Performance
Revenue
Recurring Revenues
Annual Recurring Revenue ('ARR') grew by 2% on a constant currency basis in the year to £52.1 million at 31 December 2024 (31 December 2023: £51.3 million, restated for the prevailing exchange rate at 31 December 2024).
ARR is the key financial metric for the Group. Included within ARR are Aptitude's annual licence fees and maintenance for its on-premise clients, subscription fees for the Group's SaaS clients and revenues from its Solution Management Service offering ('Aptitude Assure'), this offering contributed ARR at 31 December 2024 of £5.2 million (31 December 2023: £5.0 million).
Net Retention Rate in the year was 99% (2023: 98%), measured by the total value of on-going ARR at the year-end from clients in place at the start of the year as a percentage of the opening ARR from those clients on a constant currency basis. The Group continues to benefit from standard inflationary clauses in most of its contracts, albeit at a lower level than in previous periods due to the reduction in prevailing inflation rates.
Recurring revenues recognised in 2024 increased by 2% to £54.4 million (2023: £53.4 million). Recurring revenues are a strategic priority for the Group and now represent 78% of overall revenue (2023: 71%). A key part of the Group's strategy is to increase this percentage whilst maximising the growth rate of Aptitude's ARR, increasing both the overall quality of revenue and operating margin.
Non-Recurring Revenue
Non-recurring revenue, comprised of implementation services, software development and non-recurring software fees, totalled £15.6 million for the year ended 31 December 2024 (2023: £21.3 million) representing a 26% reduction. The reduction in non-recurring revenues is in line with the Group's expectation as it works more closely with its partners in this area and as a result of shorter implementation cycles for Fynapse. The reduction in non-recurring revenues from 2023 is also a result of the successful go-lives of a large number of Aptitude Insurance Calculation Engine clients following the passing of the compliance deadline at the end of 2023.
Research & Development Expenditure
Total expenditure on product management, research & development decreased 1% in the year ended 31 December 2024 to £17.7 million (2023: £17.8 million). Research and development investment continues to be monitored by the Group in line with overall return on investment for each product. In December 2024, the Product and Technology functions were restructured to further support the AI Autonomous Finance opportunity and drive efficiency across the function. Research & development costs represent 25% of revenue for the year ended 31 December 2024 (2023: 24%), with the proportion of research and development costs expected to reduce in future periods.
The Board has continued to determine that none of the internal research & development costs incurred during the year meet the criteria for capitalisation. Consequently, these have been expensed as incurred through the income statement.
Operating Profit and Margins
Adjusted Operating Profit for the year ended 31 December 2024 was in line with expectations at £9.9 million (2023: £9.7 million). Adjusted Operating Margin increased to 14% (2023: 13%), strengthened by the Group's improving revenue mix and disciplined cost control. Operating profit on a statutory basis was £5.7 million (2023: £5.3 million). The continued success of Fynapse, with its cloud-native capabilities, is expected to further enhance margins and profitability.
Foreign Exchange
With 50% (2023: 50%) of the Group's revenues being generated from North American clients, the majority of which are invoiced in US Dollars, the financial results are impacted by changes in the US dollar exchange rate. Aptitude's 2023 revenue and Adjusted Operating Profit would have been reported at £74.2 million and £9.6 million respectively on a constant currency basis (compared to actual result of £74.7 million and £9.7 million). Constant currency is calculated by comparing the 2024 results with 2023 results retranslated at the rates of exchange prevailing during 2024.
Non-Underlying Items
Non-underlying items of £4.2 million (2023: £4.4 million) are principally related to the £0.9 million of Product and Technology function restructuring (2023: £0.2 million) and intangible amortisation of £3.4 million (2023: £3.4 million). There were no further restructuring costs in relation to the integration of MPP with the wider business in 2024 (2023: £0.8m).
Taxation
The total tax charge before adjusting for the impact of non-underlying and other sundry items of £2.0 million (2023: £1.7 million) represents 20.09% of the Group's profit before tax (2023: 17.95%).
Statutory Results
The Group reported a profit for the year attributable to equity shareholders of £5.0 million (2023: £4.1 million).
Earnings per Share
Adjusted Basic Earnings per Share increased by 2% to 13.9 pence (2023: 13.6 pence) and Basic Earnings per Share increased 22% to 8.8 pence (2023: 7.2 pence).
Dividend
A final ordinary dividend of 3.60 pence per share is proposed (2023: 3.60 pence), making a total ordinary dividend of 5.40 pence per share for the year (2023: 5.40 pence).
Balance Sheet
The Group continues to have a strong balance sheet with net assets at 31 December 2024 of £57.9 million (2023: £60.3 million). Cash at 31 December 2024 was £30.4 million (31 December 2023: £34.1 million) and net funds of £20.3 million (31 December 2023: £22.7 million). The Group continued to fund both the ordinary dividend of £3.1m (2023: £3.1m) and the share buyback programme £4.0m (2023: nil) in the year, providing enhanced returns to shareholders.
Trade receivables (net) at 31 December 2024 increased to £12.1 million (2023: £10.3 million) of which £6.8 million (2023: £5.0 million) were overdue for payment at the year end. Of these overdue balances £3.7 million has been collected at 24 March 2024. DSO (debtor days) increased to 55 at 31 December 2024 (2023: 53). The growth in the Group's Annual Recurring Revenue resulted in deferred income at 31 December 2024 increasing to £32.2 million (2023: £31.5 million).
Capital Allocation Policy
Aptitude aims to deliver high returns to shareholders through targeting sustainable profit growth and strong free cash flow. The Group invests in developing its business driven by the opportunity with Fynapse, while maintaining robust liquidity to manage the working capital cycle. Aptitude's capital allocation priorities are as follows:
| · | Managing working capital - The first priority of the Group is to maintain sufficient cash reserves to manage the annual working capital cycle, while maintaining appropriate levels of net funds. A level of net cash not less than 1.5 x adjusted EBITDA is the Group's stated minimum. |
| · | Investment for organic growth - The Group continues to invest in the organic growth of the business including the need to continue to invest in our people and technology and through capital expenditure where required. |
| · | Maintenance of the Group's progressive dividend - The Group is committed to provide progressive dividends to shareholders, and this remains the preferred ongoing method to return cash to shareholders without impacting on the investment required to grow the business. |
| · | Enhanced returns to shareholders - As the Group continues to generate excess cash after the above priorities, the Group will look to make enhanced returns to shareholders, including through the existing share buyback programme. |
While the above framework is intended to guide decision making for the allocation of capital, the Board may choose to exercise discretion in its application should there be a business requirement.
Mike Johns
Chief Financial Officer
25 March 2025
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
| Year ended 31 Dec 2024 | Year ended 31 Dec 2023 | ||||||||||||||||
| Note | Before non-underlying items | Non- underlying items | Total | Before non-underlying items | Non- underlying items | Total | |||||||||||
| Continuing operations | £000 | £000 | £000 | £000 | £000 | £000 | |||||||||||
| Revenue | 1 | 70,044 | - | 70,044 | 74,685 | - | 74,685 | ||||||||||
| Operating costs | 2 | (60,126) | (4,243) | (64,369) | (64,959) | (4,441) | (69,400) | ||||||||||
| Operating profit | 9,918 | (4,243) | 5,675 | 9,726 | (4,441) | 5,285 | |||||||||||
| Finance income | 368 | - | 368 | 282 | - | 282 | |||||||||||
| Finance costs | (450) | - | (450) | (527) | - | (527) | |||||||||||
| Net finance costs | (82) | - | (82) | (245) | - | (245) | |||||||||||
| Profit before income tax | 9,836 | (4,243) | 5,593 | 9,481 | (4,441) | 5,040 | |||||||||||
| Income tax expense | 3 | (1,484) | 871 | (613) | (1,786) | 871 | (915) | ||||||||||
| Profit for the period | 8,352 | (3,372) | 4,980 | 7,695 | (3,570) | 4,125 | |||||||||||
| Earnings per share | |||||||||||||||||
| Basic | 4 | 8.8p | 7.2p | ||||||||||||||
| Diluted | 4 | 8.6p | 7.1p | ||||||||||||||
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
| Year ended 31 Dec 2024 | Year ended 31 Dec 2023 | |
| £000 | £000 | |
| Profit for the year | 4,980 | 4,125 |
| Other comprehensive income/(expense) | ||
| Items that will or may be reclassified to profit or loss: | ||
| Cash flow hedges reclassified to income statement | (713) | (1,242) |
| (Loss)/gain on effective cash flow hedges | (254) | 1,044 |
| Deferred tax on cash flow hedges | 242 | 50 |
| Currency translation difference | (247) | (954) |
| Other comprehensive expense for the year, net of tax | (972) | (1,102) |
| Total comprehensive income for the year | 4,008 | 3,023 |
GROUP BALANCE SHEET
FOR THE YEAR ENDED 31 DECEMBER 2024
| As at | As at | |||
| 31 Dec 2024 | 31 Dec 2023 | |||
| Notes | £000 | £000 | ||
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment including right-of-use assets | 6 | 4,016 | 4,484 | |
| Goodwill | 7 | 46,006 | 46,006 | |
| Intangible assets | 8 | 15,412 | 17,739 | |
| Other long-term assets | 730 | 1,016 | ||
| Deferred tax assets | 1,250 | 1,379 | ||
| 67,414 | 70,624 | |||
| Current assets | ||||
| Trade and other receivables | 9 | 14,861 | 12,526 | |
| Financial assets - derivative financial instruments | 387 | 1,141 | ||
| Current income tax assets | 1,721 | 1,037 | ||
| Cash and cash equivalents | 30,400 | 34,085 | ||
| 47,369 | 48,789 | |||
| Total assets | 114,783 | 119,413 | ||
| LIABILITIES | ||||
| Current liabilities | ||||
| Financial liabilities | ||||
| - borrowings | 10 | (7,180) | (1,250) | |
| - derivative financial instruments | (214) | - | ||
| Trade and other payables | 11 | (40,622) | (40,773) | |
| Lease liabilities | 12 | (527) | (426) | |
| Current income tax liabilities | (1,802) | (1,588) | ||
| Provisions | 13 | (25) | (100) | |
| (50,370) | (44,137) | |||
| Net current (liabilities)/assets | (3,001) | 4,652 | ||
| Non-current liabilities | ||||
| Financial liabilities - borrowings | 10 | - | (7,139) | |
| Lease liabilities | 12 | (2,416) | (2,588) | |
| Provisions | 13 | (358) | (268) | |
| Deferred tax liabilities | (3,722) | (4,967) | ||
| (6,496) | (14,962) | |||
| NET ASSETS | 57,917 | 60,314 |
GROUP BALANCE SHEET
FOR THE YEAR ENDED 31 DECEMBER 2024
| As at | As at | ||
| 31 Dec 2024 | 31 Dec 2023 | ||
| £000 | £000 | ||
| SHAREHOLDERS' EQUITY | |||
| Share capital | 14 | 4,204 | 4,204 |
| Share premium account | 11,959 | 11,959 | |
| Capital redemption reserve | 12,372 | 12,372 | |
| Other reserves | 34,325 | 34,989 | |
| Treasury shares reserve | 15 | (3,812) | - |
| Accumulated losses | (23) | (2,349) | |
| Foreign currency translation reserve | (1,108) | (861) | |
| TOTAL EQUITY | 57,917 | 60,314 |
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
| Attributable to owners of the Parent | ||||||||||||
| Share capital | Share premium | Accumulated losses | Foreign currency translation reserve | |||||||||
| Capital redemption reserve | Other reserves | Treasury shares reserves | Total equity |
|||||||||
| £000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | |||||
| Group | ||||||||||||
| Balance at 1 January 2024 | 4,204 | 11,959 | (2,349) | (861) | 12,372 | 34,989 | - | 60,314 | ||||
| Profit for the year | - | - | 4,980 | - | - | - | - | 4,980 | ||||
| Cash flow hedges reclassified to income statement | - | - | - | - | - | (713) | - | (713) | ||||
| Loss on effective cash flow hedges | - | - | - | - | - | (254) | - | (254) | ||||
| Deferred tax on cash flow hedges | - | - | - | - | - | 242 | - | 242 | ||||
| Exchange rate adjustments | - | - | - | (247) | - | - | - | (247) | ||||
| Total comprehensive income for the year | - | - | 4,980 | (247) | - | (725) | - | 4,008 | ||||
| Share options - value of employee service | - | - | 611 | - | - | - | - | 611 | ||||
| Transfer on exercise of options | - | - | (287) | - | - | 85 | 202 | - | ||||
| Purchase of own shares | - | - | - | - | - | (24) | (4,014) | (4,038) | ||||
| Deferred tax on share options | - | - | 103 | - | - | - | - | 103 | ||||
| Dividends to equity holders of the company | - | - | (3,081) | - | - | - | - | (3,081) | ||||
| Total Contributions by and distributions to owners of the company recognised directly in equity | - | - | (2,654) | - | - | 61 | (3,812) | (6,405) | ||||
| Balance at 31 December 2024 | 4,204 | 11,959 | (23) | (1,108) | 12,372 | 34,325 | (3,812) | 57,917 | ||||
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
| Year ended | Year ended | ||
| 31 Dec 2024 | 31 Dec 2023 | ||
| Note | £000 | £000 | |
| Cash flows from operating activities | |||
| Cash generated from operations | 16 | 8,852 | 11,945 |
| Interest paid | (226) | (316) | |
| Income tax paid | (1,854) | (635) | |
| Net cash flows generated from operating activities | 6,772 | 10,994 | |
| Cash flows from investing activities | |||
| Purchase of property, plant and equipment, excluding right-of-use assets |
(481) | (601) | |
| Interest received | 368 | 282 | |
| Purchase of intangible assets | (1,120) | - | |
| Net cash used in investing activities | (1,233) | (319) | |
| Cash flows from financing activities | |||
| Dividends paid to company's shareholders | 5 | (3,081) | (3,096) |
| Purchase of own shares | (4,058) | (186) | |
| Repayments of loan | (1,250) | (1,250) | |
| Extension fee on loan | - | (40) | |
| Repayment of capital lease obligations | (592) | (534) | |
| Net cash generated used in financing activities | (8,981) | (5,106) | |
| Net (decrease)/increase in cash and cash equivalents | (3,442) | 5,569 | |
| Cash, cash equivalents and bank overdrafts at beginning of year | 34,085 | 29,245 | |
| Exchange rate gains/(losses) on cash and cash equivalents | (243) | (729) | |
| Cash and cash equivalents at end of year | 30,400 | 34,085 |
Notes to the Audited preliminary results for the year ended 31 December 2024
1. Segmental analysis
Business segments
The Board has determined the operating segments based on the reports it receives from management to make strategic decisions.
The only business segment for both periods was Aptitude and therefore no segmental analysis is provided for this period.
The principal activity of the Group throughout 2023 and 2024 was the provision of business-critical software and services.
1 (a) Geographical analysis
The Group has two geographical segments for reporting purposes, the United Kingdom and the Rest of the World.
The following table provides an analysis of the Group's sales by origin and by destination.
| Sales revenue by origin | Sales revenue by destination | ||||
| Year ended 31 Dec 2024 |
Year ended 31 Dec 2023 |
Year ended 31 Dec 2024 |
Year ended 31 Dec 2023 |
||
| £000 | £000 | £000 | £000 | ||
| United Kingdom | 38,430 | 41,087 | 12,220 | 11,747 | |
| Rest of World | 31,614 | 33,598 | 57,824 | 62,938 | |
| 70,044 | 74,685 | 70,044 | 74,685 |
2. Non-underlying items
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| Amortisation of intangibles | 3,381 | 3,381 |
| Reorganisation costs | 862 | 1,060 |
| 4,243 | 4,441 |
3. Income tax expense
| Year ended 31 Dec 2024 |
Year ended 31 Dec 2023 |
||||
| Analysis of charge in the year | £000 | £000 | |||
| Current tax: | |||||
| - tax charge on underlying items | (1,562) | (2,463) | |||
| - adjustment to tax in respect of prior periods on underlying items | 192 | (241) | |||
| Total current tax | (1,370) | (2,704) | |||
| Deferred tax: | |||||
| - tax (charge)/credit on underlying items | (114) | 951 | |||
| - tax credit on non-underlying items | 871 | 871 | |||
| - adjustment to tax in respect of prior periods on underlying items | - | (33) | |||
| Total deferred tax | 757 | 1,789 | |||
| Income tax expense | (613) | (915) | |||
The net adjustment to tax in respect of prior periods on underlying items totalling £192,000 (2023: £274,000) relates to the reduction in the assumed benefit from research and development relief in the UK.
The total tax charge of £613,000 (2023: £915,000) represents 11.0% (2023: 18.2%) of the Group profit before tax of £5,593,000 (2023: £5,040,000). The change in effective tax rate is due to research and development tax relief.
After adjusting for the impact of non-underlying items, tax losses and prior year tax charge, the tax charge for the year of £1,976,000 (2023: £1,702,000) represents 20.09% (2023: 17.95%), which is the tax rate used for calculating the adjusted earnings per share.
The difference between the total tax charge and the amount calculated by applying the effective United Kingdom corporation tax rate of 25% (2023: 23.50%) to the profit on ordinary activities before tax is as follows:
| Year ended 31 Dec 2024 |
Year ended 31 Dec 2023 |
|||
| £000 | £000 | |||
| Profit before tax | 5,593 | 5,040 | ||
| Tax at the United Kingdom corporation tax rate of 25% (2023: 23.50%) | (1,398) | (1,185) | ||
| Effects of: | ||||
| Adjustment to tax in respect of prior periods | 192 | (274) | ||
| Adjustment in respect of foreign tax rates | 67 | 62 | ||
| Non-underlying expenses not deductible for tax purposes | (69) | (138) | ||
| Other | 190 | 166 | ||
| Research and development tax relief | 124 | 226 | ||
| Polish research and development tax relief | 300 | 190 | ||
| Change in future tax rates | (19) | 38 | ||
| Total taxation | (613) | (915) | ||
United Kingdom corporation tax is calculated at 25% (2023: 23.50%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
4. Earnings per share
To provide an indication of the underlying operating performance per share, the adjusted profit after tax figure shown below excludes non-underlying items and has a tax charge using the effective rate of 20.09% (2023: 17.95%).
| Year ended 31 Dec 2024 |
Year ended 31 Dec 2023 |
|||
| £000 | £000 | |||
| Profit before tax and non-underlying items | 9,836 | 9,481 | ||
| Tax charge at a rate of 20.09% (2023: 17.95%) | (1,976) | (1,702) | ||
| 7,860 | 7,779 | |||
| Tax adjustments in respect of prior years | 192 | (274) | ||
| Non-underlying items net of tax | (3,372) | (3,570) | ||
| Recognition of tax losses | 300 | 190 | ||
| Profit on ordinary activities after tax | 4,980 | 4,125 | ||
| 2024 Number (thousands) |
2023 Number (thousands) |
|||
| Weighted average number of shares | 56,837 | 57,338 | ||
| Effect of dilutive share options | 1,010 | 670 | ||
| 57,847 | 58,008 | |||
| 2024 Basic EPS pence |
2024 Diluted EPS pence |
2023 Basic EPS pence |
2023 Diluted EPS pence |
|
| Earnings per share | 8.8 | 8.6 | 7.2 | 7.1 |
| Non-underlying items net of tax | 5.9 | 5.8 | 6.2 | 6.2 |
| Prior years' tax charge/(credit) | (0.3) | (0.3) | 0.5 | 0.5 |
| Recognition of tax losses | (0.5) | (0.5) | (0.3) | (0.3) |
| Adjusted earnings per share | 13.9 | 13.6 | 13.6 | 13.5 |
Adjusted earnings per share are calculated using adjusted profit after tax.
5. Dividends
| 2024 pence per share |
2023 pence per share | 2024 £000 |
2023 £000 |
|
| Dividends paid: | ||||
| Interim dividend | 1.80 | 1.80 | 1,024 | 1,032 |
| Final dividend (prior year) | 3.60 | 3.60 | 2,057 | 2,064 |
| 5.40 | 5.40 | 3,081 | 3,096 | |
| Proposed but not recognised as a liability: | ||||
| Final dividend (current year) | 3.60 | 3.60 | 2,006 | 2,064 |
The proposed final dividend was approved by the Board on 25 March 2025 but was not included as a liability as at 31 December 2024, in accordance with IAS 10 'Events after the Balance Sheet date'. If approved by the shareholders at the Annual General Meeting this final dividend will be payable on 13 June 2025 to shareholders on the register at the close of business on 23 May 2025. The final dividend will be subject to changes for the value of the buyback completed when payable.
6. Property, plant and equipment including right-of-use assets
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| Opening net book value 1 January | 4,484 | 5,103 |
| Additions | 879 | 601 |
| Net disposals | (14) | (117) |
| Exchange movements | (29) | (54) |
| Depreciation | (1,304) | (1,049) |
| 4,016 | 4,484 |
7. Goodwill
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| Opening net book value 1 January | 46,006 | 46,006 |
| 46,006 | 46,006 |
8. Intangible assets
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| Opening net book value 1 January | 17,739 | 21,120 |
| Additions | 1,120 | - |
| Amortisation | (3,447) | (3,381) |
| 15,412 | 17,739 |
In the year, the Group purchased perpetual software licenses and determined a useful economic life of 10 years. The amortisation charge has been shown in underlying costs.
9. Trade and other receivables
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| Trade receivables | 13,197 | 10,678 |
| Less: provision for impairment of receivables | (1,107) | (358) |
| Trade receivables - net | 12,090 | 10,320 |
| Other receivables | 216 | 14 |
| Prepayments | 1,754 | 1,796 |
| Accrued income | 801 | 396 |
| 14,861 | 12,526 |
Within the trade receivables balance of £13,197,000 (2023: £10,678,000) there are balances totalling £6,755,000 (2023: £5,036 ,000) which, at 31 December 2024, were overdue for payment. Of this balance, 55% (2023: 34%) has been collected at 24 March 2025 (2023: 18 March 2024).
10. Financial liabilities
| 31 Dec 2024 | 31 Dec 2023 | ||
| £000 | £000 | ||
| Bank loan | 7,180 | 8,389 | |
| The borrowings are repayable as follows: | |||
| Within one year | 7,188 | 1,250 | |
| In the second year | - | 7,188 | |
| 7,188 | 8,438 | ||
| Unamortised prepaid facility arrangement fees | (8) | (49) | |
| At 31 December | 7,180 | 8,389 | |
On 15 October 2021, the Group and Company entered into a loan agreement with Bank of Ireland consisting of a £10 million term loan in addition to a revolving credit facility of £10 million. The loan is secured on all the assets of the Group. Operating covenants are limited to the Group's net debt leverage of 2.0 : 1 and interest cover of 4.0 : 1. At 31 December 2024, the Group's net debt leverage was -2.41 : 1 and interest cover was 17.23 : 1. The term loan is repayable over three years with an initial 12-month repayment holiday followed by annual capital repayments of £1,250,000. The term loan contains two one-year extension options, one of which was exercised in 2023. In 2024, Bank of Ireland announced its withdrawal from the UK market, and as a result the additional one year extension was not sought, in line with other UK clients of the organisation. In light of the decision by the Bank of Ireland the loan is now repayable, in full, within 12 months of the balance sheet date. Accordingly, the amount of £5.9m that would have been disclosed as a long term liability is now reported as a current liability. The loan is denominated in Pounds Sterling and carries interest at SONIA-5 NCCR LAG plus 1.75%. The Group entered into an interest swap on 2 November 2021, effectively fixing the interest rate at 2.95% over the original term of the loan.
11. Trade and other payables
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| Trade payables | 405 | 482 |
| Other tax and social security payable | 929 | 1,614 |
| Other payables | 154 | 168 |
| Accruals | 6,909 | 7,034 |
| Deferred income | 32,225 | 31,475 |
| 40,622 | 40,773 |
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| Amounts payable under capital lease agreements: | ||
| Within one year | 633 | 538 |
| Within two to five years | 2,111 | 1,997 |
| After five years | 544 | 906 |
| Total | 3,288 | 3,441 |
| Less: future finance charges | (345) | (427) |
| Present value of lease obligations | 2,943 | 3,014 |
| Less: Amount due for settlement within 12 months (shown under current liabilities) | (527) | (426) |
| 2,416 | 2,588 |
12. Lease obligations
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| The present value of financial lease liabilities is split as follows: | ||
| Within one year | 527 | 426 |
| Within two to five years | 1,890 | 1,728 |
| After five years | 526 | 860 |
| 2,943 | 3,014 |
13. Provisions
| Provisions | ||
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| At 1 January | 368 | 316 |
| Charged/(released) to income statement | 19 | 158 |
| Utilised in period | - | (114) |
| Foreign exchange movement | (4) | 8 |
| At 31 December | 383 | 368 |
£307,000 (2023: £288,000) of the total provision at 31 December 2024 of £383,000 (2023: £368,000) relates to the cost of dilapidations in respect of its occupied leasehold premises.
14. Share capital
| Ordinary shares of 7 1/3p each | Number | £000 | |
| Issued and fully paid: | |||
| At 1 January 2024 | 57,337,611 | 4,204 | |
| At 31 December 2024 | 57,337,611 | 4,204 | |
15. Treasury shares reserve
| 31 Dec 2024 | 31 Dec 2023 | |
| £000 | £000 | |
| At 1 January | - | - |
| Purchase of own shares | (4,014) | - |
| Transfer of exercise of options | 202 | - |
| At 31 December | (3,812) | - |
1,185,400 shares were purchased by the Company in 2024 for a total cost of £4.0m under the Company's share buyback programme.
16. Cash flows from operating activities
Reconciliation of profit before tax to net cash generated from operations:
| Year ended 31 Dec 2024 |
Year ended 31 Dec 2023 |
|
| £000 | £000 | |
| Profit before tax for the year | 5,593 | 5,040 |
| Adjustments for: | ||
| Depreciation | 1,304 | 1,049 |
| Amortisation | 3,447 | 3,381 |
| Share-based payment expense | 611 | 125 |
| Finance income | (368) | (282) |
| Finance costs | 450 | 527 |
| Changes in working capital: | ||
| (Increase)/decrease in receivables | (2,049) | 63 |
| (Decrease)/increase in payables | (136) | 2,042 |
| Cash generated from operations | 8,852 | 11,945 |
17. Statement by the directors
The preliminary results for the year ended 31 December 2024 are prepared in accordance with UK adopted International Accounting Standards (IAS) and interpretations by the IFRS Interpretations Committee applicable to companies reporting under UK adopted IFRS. They do not include all the information required for full annual statements and should be read in conjunction with the 2024 Annual Report. The accounting policies adopted in this preliminary announcement are consistent with the Annual Report for the year ended 31 December 2024.
The comparative figures for the financial year 31 December 2023 have been extracted from the Group's statutory accounts for that financial year. The 2023 financial statements, which were prepared in accordance with UK adopted international accounting standards and company law, have been reported on by the Group's auditors and delivered to the registrar of companies.
The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 31 December 2024 or 31 December 2023. The Annual Report for 2024 will be delivered to the Registrar of Companies in due course. The auditors' report on those accounts was unqualified and neither drew attention to any matters by way of emphasis nor contained a statement under either section 498(2) of Companies Act 2006 (accounting records or returns inadequate or accounts not agreeing with records and returns), or section 498(3) of Companies Act 2006 (failure to obtain necessary information and explanations).
The Board of Aptitude Software Group plc approved the release of this audited preliminary announcement on 25 March 2025.
The Annual Report for the year ended 31 December 2024 will be posted to shareholders in due course and will be delivered to the Registrar of Companies following the Annual General Meeting of the Company. The report will also be available on the investor relations page of our web site (www.aptitudesoftware.com). Further copies will be available on request and free of charge from the Company Secretary at 8th Floor, 138 Cheapside, London, EC2V 6BJ.
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