Cover
Cover | 6 Months Ended |
Dec. 31, 2023 | |
Document Information [Abstract] | |
Document Type | 6-K |
Entity File Number | 001-38607 |
Entity Registrant Name | ENDAVA PLC |
Entity Address, Address Line One | 125 Old Broad Street |
Entity Address, City or Town | London |
Entity Address, Postal Zip Code | EC2N 1AR |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2023 |
Entity Central Index Key | 0001656081 |
Current Fiscal Year End Date | --06-30 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - GBP (£) £ in Thousands | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | [1] | |
Disclosure of attribution of expenses by nature to their function [line items] | |||
REVENUE | £ 371,973 | £ 401,410 | |
Cost of sales | (272,630) | (261,496) | |
GROSS PROFIT | 99,343 | 139,914 | |
Selling, general and administrative expenses | (78,618) | (79,886) | |
OPERATING PROFIT | 20,725 | 60,028 | |
Net finance income / (expense) | 7,193 | (1,189) | |
PROFIT BEFORE TAX | 27,918 | 58,839 | |
Tax on profit on ordinary activities | (7,205) | (12,092) | |
PROFIT FOR THE YEAR AND PROFIT ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE COMPANY | 20,713 | 46,747 | |
Items that may be reclassified subsequently to profit or loss: | |||
Exchange differences on translating foreign operations | 1,869 | 823 | |
Total comprehensive income for the year | £ 22,582 | £ 47,570 | |
EARNINGS PER SHARE (EPS): | |||
Weighted average number of shares outstanding - Basic (in shares) | 58,101,072 | 56,962,777 | |
Weighted average number of shares outstanding - Diluted (in shares) | 58,367,296 | 57,923,559 | |
Basic EPS (in gbp per share) | £ 0.36 | £ 0.82 | |
Diluted EPS (in gbp per share) | £ 0.35 | £ 0.81 | |
Direct cost of sales | |||
Disclosure of attribution of expenses by nature to their function [line items] | |||
Cost of sales | £ (259,412) | £ (249,253) | |
Allocated cost of sales | |||
Disclosure of attribution of expenses by nature to their function [line items] | |||
Cost of sales | £ (13,218) | £ (12,243) | |
[1] (1) The presentation of the income statement has been changed to no longer separately disclose the net impairment gains/losses on financial assets on the face of the Condensed Consolidated Statements of Comprehensive Income, but include them within Selling, general and administrative expenses. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - GBP (£) £ in Thousands | Dec. 31, 2023 | Jun. 30, 2023 |
ASSETS - NON-CURRENT | ||
Goodwill | £ 255,749 | £ 240,818 |
Intangible assets | 61,561 | 66,216 |
Property, plant and equipment | 23,181 | 25,940 |
Lease right-of-use assets | 54,949 | 65,084 |
Deferred tax assets | 21,314 | 20,156 |
Financial assets and other receivables | 6,386 | 5,242 |
TOTAL | 423,140 | 423,456 |
ASSETS - CURRENT | ||
Trade and other receivables | 170,318 | 177,866 |
Corporation tax receivable | 2,327 | 4,042 |
Financial assets | 186 | 56 |
Cash and cash equivalents | 198,602 | 164,703 |
TOTAL | 371,433 | 346,667 |
TOTAL ASSETS | 794,573 | 770,123 |
LIABILITIES - CURRENT | ||
Lease liabilities | 13,782 | 14,573 |
Trade and other payables | 84,678 | 91,159 |
Corporation tax payable | 5,103 | 5,940 |
Contingent consideration | 5,335 | 7,650 |
Deferred consideration | 2,499 | 1,267 |
TOTAL | 111,397 | 120,589 |
LIABILITIES - NON CURRENT | ||
Lease liabilities | 45,645 | 54,441 |
Deferred tax liabilities | 13,730 | 14,623 |
Contingent consideration | 0 | 3,809 |
Deferred consideration | 3,280 | 4,837 |
Other liabilities | 543 | 516 |
TOTAL | 63,198 | 78,226 |
EQUITY | ||
Share capital | 1,167 | 1,155 |
Share premium | 17,753 | 14,625 |
Merger relief reserve | 48,139 | 42,805 |
Retained earnings | 566,589 | 522,926 |
Other reserves | (13,644) | (10,176) |
Investment in own shares | (26) | (27) |
TOTAL | 619,978 | 571,308 |
TOTAL LIABILITIES AND EQUITY | £ 794,573 | £ 770,123 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) - GBP (£) £ in Thousands | Total | Share capital | Share premium | Merger relief reserve | Investment in own shares | Retained earnings | Capital redemption reserve | Other reserves | Foreign exchange translation reserve |
Beginning balance at Jun. 30, 2022 | £ 432,723 | £ 1,135 | £ 9,152 | £ 30,003 | £ (155) | £ 398,102 | £ 161 | £ 1,505 | £ (7,180) |
Equity-settled share-based payment transactions - net of tax | 17,755 | 17,755 | |||||||
Issuance of shares related to acquisitions | 9,975 | 2 | 9,973 | ||||||
Exercise of options | 2,277 | 13 | 2,264 | ||||||
Hyperinflation adjustment | 163 | 163 | |||||||
Transaction with owners | 30,170 | 15 | 12,237 | 17,918 | |||||
Profit for the year | 46,747 | 46,747 | |||||||
Other comprehensive income | 823 | 823 | |||||||
Total comprehensive income for the year | 47,570 | 46,747 | 823 | ||||||
Ending balance at Dec. 31, 2022 | 510,463 | 1,150 | 21,389 | 30,003 | (155) | 462,767 | 161 | 1,505 | (6,357) |
Beginning balance at Jun. 30, 2023 | 571,308 | 1,155 | 14,625 | 42,805 | (27) | 522,926 | 161 | 6,842 | (17,179) |
Equity-settled share-based payment transactions - net of tax | 22,950 | 22,950 | |||||||
Issuance of shares related to acquisitions | 0 | 3 | 0 | 5,334 | (5,337) | ||||
Exercise of options | 3,138 | 9 | 3,128 | 1 | |||||
Hyperinflation adjustment | 0 | 0 | |||||||
Transaction with owners | 26,088 | 12 | 3,128 | 5,334 | 1 | 22,950 | (5,337) | ||
Profit for the year | 20,713 | 20,713 | |||||||
Other comprehensive income | 1,869 | 1,869 | |||||||
Total comprehensive income for the year | 22,582 | 20,713 | 1,869 | ||||||
Ending balance at Dec. 31, 2023 | £ 619,978 | £ 1,167 | £ 17,753 | £ 48,139 | £ (26) | £ 566,589 | £ 161 | £ 1,505 | £ (15,310) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - GBP (£) £ in Thousands | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
OPERATING ACTIVITIES | |||
Profit for the year | £ 20,713 | £ 46,747 | |
Income tax charge | 7,205 | 12,092 | [1] |
Non-cash adjustments | 31,833 | 24,974 | |
Tax paid | (4,814) | (10,047) | |
Net changes in working capital | (3,314) | (7,635) | |
Net cash from operating activities | 51,623 | 66,131 | |
INVESTING ACTIVITIES | |||
Purchase of non-current assets (tangibles and intangibles) | (2,200) | (7,591) | |
(Loss) on disposal of non-current assets | (27) | ||
Proceeds from disposal of non-current assets | 16 | ||
Payment for acquisition of subsidiary, net of cash acquired | (6,710) | (32,397) | |
Other acquisition related settlements | (6,680) | 0 | |
Interest received | 3,522 | 797 | |
Net cash used in investing activities | (12,095) | (39,175) | |
FINANCING ACTIVITIES | |||
Proceeds from sublease | 87 | 237 | |
Repayment of lease liabilities | (7,420) | (6,491) | |
Interest and debt financing costs paid | (583) | (423) | |
Grant received | 230 | 220 | |
Proceeds from exercise of options | 3,129 | 2,266 | |
Net cash used in financing activities | (4,557) | (4,191) | |
Net change in cash and cash equivalents | 34,971 | 22,765 | |
Cash and cash equivalents at the beginning of the year | 164,703 | 162,806 | |
Net foreign exchange differences | (1,072) | (248) | |
Cash and cash equivalents at the end of the year | £ 198,602 | £ 185,323 | |
[1] (1) The presentation of the income statement has been changed to no longer separately disclose the net impairment gains/losses on financial assets on the face of the Condensed Consolidated Statements of Comprehensive Income, but include them within Selling, general and administrative expenses. |
General Information
General Information | 6 Months Ended |
Dec. 31, 2023 | |
Corporate information and statement of IFRS compliance [abstract] | |
General Information | General Information Reporting Entity Endava plc (“Endava” or the “Company” and, together with its subsidiaries, the “Group” and each a “Group Entity”) is domiciled in London, United Kingdom. The address of the Company’s registered office is 125 Old Broad Street, London, EC2N 1AR. The Group’s expertise spans the entire ideation-to-production spectrum, creating value for its clients through creation of Product and Technology Strategies and Intelligent Digital Experiences, delivered via world-class engineering and through its broad technical capabilities. These unaudited condensed consolidated financial statements incorporate the financial statements of the Group and entities controlled by the Group as of and for the six months ended December 31, 2023. These condensed financial statements were authorised for issue by the Company's Board of Directors on March 27, 2024. |
Application of New and Revised
Application of New and Revised International Financial Reporting Standards ("IFRSs") | 6 Months Ended |
Dec. 31, 2023 | |
Notes and other explanatory information [abstract] | |
Application of New and Revised International Financial Reporting Standards (IFRS) | Application of New and Revised International Financial Reporting Standards (“IFRSs”) Several other amendments and interpretations apply for the first time in fiscal year 2024, but do not have a material impact on these unaudited condensed consolidated financial statements. The Group does not anticipate that adoption of the following IFRSs will have a material effect on the Group’s consolidated financial statements and related disclosures. Effective for annual periods beginning on or after January 2023: • IFRS 17 - Insurance Contracts • Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8 • Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction • Amendment to IAS 12 - International tax reform Effective for annual periods beginning on or after January 2024: • Amendment to IFRS 16: Subsequent measurement requirements for sale and leaseback transactions • Amendment to IAS 1: Non-current Liabilities with Covenants • Amendment to IAS 7 and IFRS 7 - Supplier finance • |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2023 | |
Notes and other explanatory information [abstract] | |
Significant Accounting Policies | Significant Accounting Policies a. Statement of compliance These unaudited condensed consolidated financial statements have been prepared on the basis of accounting policies consistent with those applied in the consolidated financial statements and notes thereto for the year ended June 30, 2023 contained in the Group's Annual Report on Form 20-F filed with the United States Securities and Exchange Commission (the “SEC”) on September 19, 2023 (File No. 001-38607). The principal accounting policies adopted by the Group in the preparation of the condensed consolidated financial statements are set out below. b. Basis of Preparation These condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, and should be read in conjunction with the Group’s last annual consolidated financial statements as at and for the year ended June 30, 2023. These condensed consolidated financial statements do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual consolidated financial statements. c. Functional and Presentation Currency The unaudited condensed consolidated financial statements are presented in British Pound Sterling (“Sterling”), which is the Company’s functional currency. All financial information presented in Sterling has been rounded to the nearest thousand, except when otherwise indicated. d. Use of Estimates and Judgments The preparation of condensed consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts for assets, liabilities, income and expenses. Actual result may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. e. Going concern The Group has been closely monitoring the impact of the developments on its businesses, mainly because the continuous worsening of global business and economic conditions may impact the stability of operations and could have an adverse impact on the earnings of the Group. While the technology sector has experienced economic headwinds globally, the impact on the Group’s operations and liquidity has not been substantial. In accordance with IAS 1 “Presentation of financial statements”, and revised FRC (“Financial Reporting Council") guidance on “risk management, internal control and related financial and business reporting”, the Directors have considered the funding and liquidity position of the Group and have assessed the Group’s ability to continue as a going concern for the foreseeable future. In doing so, the Directors have reviewed the Group’s budget and forecasts, and have taken into account all available information about the future for a period of at least, but not limited to, 12 months from the date of approval of these condensed consolidated financial statements. Having considered the outcome of these assessments, the Directors believe that the Group has adequate resources to continue operations for the foreseeable future, being at least 12 months from the date of approval of these condensed consolidated financial statements, and accordingly continue to adopt the going concern basis in preparing the condensed consolidated financial statements. f. Basis of Consolidation (i) Business combinations Business combinations are accounted for using the acquisition method. The results of businesses acquired in a business combination are included in the consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognised as goodwill. The Group performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price to the tangible and intangible assets acquired and liabilities assumed based on management’s best estimate of fair value. The Group determines the appropriate useful life of intangible assets by performing an analysis of cash flows based on historical experience of the acquired businesses. Intangible assets are amortised over their estimated useful lives based on the pattern in which the economic benefits associated with the asset are expected to be consumed, which to date has approximated the straight-line method of amortisation. Any contingent and deferred consideration payable are measured at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not re-measured and settlement is accounted for within equity. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the 'measurement period' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. Otherwise, subsequent changes in the fair value of deferred and contingent consideration payable are recognised in the statement of comprehensive income within finance expense or finance income. Transaction costs associated with business combinations are expensed as incurred and are included in selling, general and administrative expenses. (ii) Subsidiaries Subsidiaries are entities controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. (iii) Transactions eliminated on consolidation All transactions and balances between Group Entities are eliminated on consolidation. g. Revenue The Group generates revenue primarily from its single class of business being the provision of IT services. It recognises revenue in accordance with IFRS 15 – “Revenue from Contracts with Customers”: • The Group accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. • The Group identifies its distinct performance obligations under each contract. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. • The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring products or services to a customer. With respect to all types of contracts, revenue is only recognised when the performance obligations are satisfied and the control of the services is transferred to the customer, either over time or at a point in time, at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those services. • The Group considers the majority of its contracts to have a single performance obligation. In cases in which there are multiple performance obligations in the contract, a separate price allocation is performed based on relative standalone selling prices. • Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and taxes. The Group’s services are generally performed under time-and-material based contracts (where materials consist of travel and out-of-pocket expenses) and fixed-price contracts. The vast majority of the Group's contracts are relatively short term in nature and have a single performance obligation. Under time-and-materials based contracts, the Group charges for services based on daily or hourly rates and generally bills and collects monthly in arrears. The Group applies the practical expedient. Under the practical expedient, if the vendor’s right to consideration from a customer corresponds directly with the value to the customer of the vendor’s performance completed to date, the vendor can recognise revenue at the amount to which the vendor has the right to invoice. Consequently the revenue from time-and-materials contracts is recognised based on the right to invoice for services performed, with the corresponding cost of providing those services reflected as cost of sales when incurred. Fixed price contracts are predominantly flat rate recurring service arrangements provided evenly over time, where revenue is recognised on a straight-line basis over the period of the service and do not require any judgment. A small proportion of fixed price contracts contain percentage of completion and milestone contracts recognised over time. Percentage of completion and milestone contract revenue is recognised over time applying the input or output methods depending on the nature of the project and the agreement with the customer. The input method is applied by recognising revenue on the basis of the Group’s efforts to date to the satisfaction of the performance obligation relative to the total expected inputs to the satisfaction of the performance obligation. The output method is applied by recognising revenue on the basis of direct measurements of the value to the customer of the services transferred to date relative to the remaining services promised under the contract, respectively. Each method is applied according to the characteristics of each contract and client. The inputs and outputs are selected based on how faithfully they depict the Group's performance towards complete satisfaction of the performance obligation. These methods are followed where reasonably dependable estimates of revenues and costs can be made. Percentage of completion and milestone contracts generally correspond to short-term contracts that generally do not span more than one accounting period. The group also enters into a small number of volume-based arrangements where revenue is recognised based upon performance of certain activities (e.g. processing of IT service tickets). Volume-based revenue is recognised over time based on the volume of IT related services provided in the period at the fixed rate per activity. Variable consideration usually takes the form of volume-based discounts, price concessions or incentives. Determining the estimated amount of such variable consideration involves assumptions and estimation uncertainty that can have an impact on the amount of revenues reported. From time to time, the Group may enter into arrangements with third-party suppliers to sell services. In such cases, the Group evaluates whether it is the principal (i.e., reports revenues on a gross basis) or the agent (i.e., reports revenues on a net basis). In doing so, the Group first evaluates whether it has control of the service before it is transferred to the customer. If the Group controls the service before it is transferred to the customer, the Group is the principal; if not, the Group is the agent. Determining whether the Group controls the service before it is transferred to the customer may require judgment. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets primarily relate to unbilled amounts on fixed-price contracts. Services performed on or prior to the balance sheet date, but invoiced thereafter, are reflected in accrued income. Contract liabilities, or deferred income, consist of advance payments from clients and billings in excess of revenues recognised. The Group classifies deferred income as current on the consolidated balance sheet and it is recognised as revenue when the services are |
Operating Segment Analysis
Operating Segment Analysis | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of entity's operating segments [Abstract] | |
Operating Segment Analysis | Operating Segment Analysis Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding on how to allocate resources and in assessing performance. The Company’s CODM is considered to be the Company’s Chief Executive Officer (“CEO”). The CEO reviews financial information presented on a Group level basis for the purposes of making operating decisions and assessing financial performance. Therefore, the Group has determined that it operates in a single operating and reportable segment. |
Revenue
Revenue | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of revenue from contracts with customers [Abstract] | |
Revenue | Revenue Set out below is the disaggregation of the Group’s revenue from contracts with customers by geographical market, based on where the service is being delivered to: Six months Ended December 31 2023 2022 UK 128,278 158,700 North America 114,713 135,088 Europe 93,811 89,430 Rest of the world 35,171 18,192 Total 371,973 401,410 The Group's revenue by industry sector is as follows: Six months Ended December 31 2023 2022 Payments and Financial Services 98,766 120,029 Banking and Capital Markets 52,172 65,262 Insurance 30,455 25,348 TMT (1) 85,767 88,908 Mobility 39,815 39,340 Other 64,998 62,523 Total 371,973 401,410 (1) Technology, Media and Telecommunications ("TMT") |
Particulars of Employees (inclu
Particulars of Employees (including Directors) | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of additional information [Abstract] | |
Particulars of Employees (including Directors) | Particulars of Employees (including Directors) Six Months Ended December 31 2023 2022 The average number of staff employed by the group during the period (including directors): Number of operational staff 10,606 11,032 Number of administrative staff 1,140 1,071 Number of management staff 9 8 Total 11,755 12,111 |
Tax on Profit on Ordinary Activ
Tax on Profit on Ordinary Activities | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of income tax [Abstract] | |
Tax on Profit on Ordinary Activities | Tax on Profit on Ordinary Activities Six Months Ended December 31 2023 2022 Current tax 7,205 12,092 Tax for the six months ended December 31, 2023 is charged using the Group’s best estimate of the average annual effective rate expected for the full year applied to the profit before tax of the six month period plus the impact of any one off tax items arising in the period. The resulting effective rate for the six months ended December 31, 2023 is 25.8% (six months ended December 31, 2022: 20.6%). |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of earnings per share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share Basic EPS is calculated by dividing the profit for the period attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the period. Six Months Ended December 31 2023 2022 Profit for the year, attributable to equity holders of the Company 20,713 46,747 Six Months Ended December 31 2023 2022 Weighted average number of shares outstanding 58,101,072 56,962,777 Earnings per share - basic (£) 0.36 0.82 Diluted earnings per share Diluted EPS is calculated by dividing the profit for the period attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of shares that would be issued if all dilutive potential ordinary shares were converted into ordinary shares. In accordance with IAS 33 ”Earnings Per Share”, the dilutive earnings per share are without reference to adjustments in respect of outstanding shares when the impact would be anti-dilutive. Six Months Ended December 31 2023 2022 Profit for the year, attributable to equity holders of the Company 20,713 46,747 Six Months Ended December 31 2023 2022 Weighted average number of shares outstanding 58,101,072 56,962,777 Diluted by: options in issue and contingent shares 266,224 960,782 Weighted average number of shares outstanding (diluted) 58,367,296 57,923,559 Earnings per share - diluted (£) 0.35 0.81 |
Cash Flow Adjustments and Chang
Cash Flow Adjustments and Changes in Working Capital | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of cash flow statement [Abstract] | |
Cash Flow Adjustments and Changes in Working Capital | Cash Flow Adjustments and Changes in Working Capital Six Months Ended December 31 Non-cash adjustments 2023 2022 Depreciation, amortisation and impairment of non-financial assets 18,761 16,087 Interest income (3,522) (797) Interest expense 2,060 1,175 Foreign exchange loss 3,408 1,993 Grant income (1,458) (1,319) Research and development tax credit (2,501) (1,200) Share-based compensation expense 23,556 15,909 Fair value movement on contingent consideration (8,706) (7,143) Hyperinflation effect loss — 5 Fair value movement of financial liabilities 238 286 Loss / (Gain) on disposal of non-current assets 107 (21) Gain on right of use assets disposals (110) (1) Total non-cash adjustments 31,833 24,974 Six Months Ended December 31 Net changes in working capital 2023 2022 Decrease / (Increase) in trade and other receivables 7,871 (6,580) (Decrease) / Increase in trade and other payables (11,185) (1,055) Total changes in working capital (3,314) (7,635) Investing activities |
Acquisitions of Subsidiaries
Acquisitions of Subsidiaries | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of detailed information about business combination [abstract] | |
Business combinations | Business combinations On August 3, 2023, Endava announced the acquisition of TLM Partners Inc, together with its subsidiaries (”TLM”), a company that provides outsourced development services across design, engineering and art/animation for PC and console video games and other digital entertainment. TLM has a particular expertise in highly complex areas of cross-play, industry experience and deep relationships with a wide array of platform partners and clients in the United States and around the world including prominent games publishers and developers.TLM, a Delaware company, has subsidiaries in Canada and Ireland and a branch in Romania. TLM had 61 staff members as of August 31, 2023. The acquisition accounting of TLM was considered final as of December 31, 2023. The consideration included elements of cash, equity, deferred and contingent consideration. The following table summarises the acquisition date fair values of each major class of consideration transferred: £’000 Initial cash consideration 3,214 Fair value of deferred consideration 741 Fair value of contingent consideration 4,378 Total consideration transferred 8,333 Under the TLM share purchase agreement (the “TLM Purchase Agreement”) , the Group paid the former equity holders of TLM a cash purchase price of £3.2 million, including post closing adjustments on the cash, debt and working capital of TLM. In addition, the Group recognised deferred consideration with a fair value of £0.7 million attributed to a holdback amount, payable within 18 months of the acquisition date. The deferred consideration is measured at amortised cost using the effective interest rate method. The fair value at the balance sheet date approximates to its carrying value. The Group also recognised a fair value of £4.4 million of consideration contingent upon fulfillment of certain earn-out conditions related to revenue and EBITDA of TLM during the earn-out period. Management estimated a 39% payout of this contingent consideration using probability-weighted outcomes. The fair value was then determined by applying an appropriate discount rate that embeds the risk included in the projected scenarios. Any subsequent revaluations to contingent consideration as a result of changes in such estimations are recognised in the consolidated statement of comprehensive income. Under the TLM Purchase Agreement, there are other amounts in the form of restricted share units under the 2018 Equity Incentive Plan, that are payable in future periods based on the continued service of certain TLM employees. As all restricted share units are based on continued service provided to the post-combination entity, they have been excluded from consideration and will instead be accounted for as ongoing remuneration under IFRS 2. The Company's allocation of the total purchase consideration against the net liabilities acquired is as follows: £’000 Intangible assets - client relationships 2,106 Property, plant and equipment 88 Cash and cash equivalents 160 Trade and other receivables 1,106 Borrowings (5,740) Trade and other payables (3,843) Deferred tax liability (537) Fair value of net liabilities acquired (6,660) Other than intangible assets, the fair value approximates the carrying value of the net liabilities acquired. Management have no doubt over the collectibility of the trade receivables included in the trade and other receivables line above. Intangible assets subject to valuation include client relationships. The multi period excess earnings method was applied to determine the fair value of the client relationship intangible asset. The fair value determined under this approach used customer attrition and discount rates as critical assumptions. The contribution of other tangible and intangible assets to the cash flows were also used as inputs in the fair value determination exercise, but they are not considered to be critical assumptions. The after-tax residual cash flows attributable to existing customers were discounted to a present value. Deferred tax The deferred tax liability at acquisition on the client relationship was £0.5 million based on a book base of £2.1 million and a tax base of nil at the date of acquisition. Goodwill Goodwill arising from the acquisition has been recognised as follows: £’000 Consideration transferred 8,333 Fair value of net liabilities acquired 6,660 Goodwill 14,993 The goodwill arising from the acquisition represents the knowledge and experience of the workforce, who are instrumental in securing future revenue growth, the new customer relationships anticipated to arise post-acquisition and a proportion of goodwill that is, by its nature, the unidentifiable underlying assets that contributes in generating profits. Acquisition related costs in the form of legal and professional fees of £0.9 million were expensed as incurred and are presented under selling, general and administrative expenses |
Revolving Credit Facility
Revolving Credit Facility | 6 Months Ended |
Dec. 31, 2023 | |
Financial Instruments [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility On February 9, 2023, Endava announced the successful closing of a £350 million unsecured, multicurrency revolving credit facility. This facility is for general business purposes, including future capital investments and development activities. The facility replaced Endava’s previous unsecured revolving credit facility of £200 million, which was due to expire on October 12, 2024. It also provides for uncommitted accordion options for up to an aggregate of £150 million in additional borrowing and has two renewal options for one year each. In February 2024, Endava entered into an extension option extending the maturity date of the facility to February 2027. |
Share-Based Payment Arrangement
Share-Based Payment Arrangements | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of share-based payment arrangements [Abstract] | |
Share-Based Payment Arrangements | Share-Based Payment Arrangements The Group had the following share-based payment arrangements: Company Share Option Plan (“CSOP”), Joint Share Ownership Plan (“JSOP”), Long Term Incentive Plan (“LTIP”), 2018 Equity Incentive plan (“EIP”) and 2018 Sharesave Plan (“SAYE”). During the reporting period, discounted ”Share Success” (”SS”) options were granted under the EIP to all eligible employees at the prescribed eligibility date, other than the U.K. employees which were granted under a CSOP sub-plan to the EIP. The SS options are disclosed separately to other awards under the EIP and CSOP. The number, weighted-average exercise price, weighted average share price at exercise date and average contractual life of the share options under the above arrangements were as follows: CSOP JSOP LTIP EIP SAYE SS Options outstanding at July 1, 2023 5,845 6,965 29,012 904,825 345,845 1,465,971 Options granted during the period — — — 1,386,725 — 1,666,357 Options exercised during the period — — (125) (383,158) (79,353) — Options forfeited during the period — — — (13,059) (12,896) (120,596) Options outstanding at December 31, 2023 5,845 6,965 28,887 1,895,333 253,596 3,011,732 Weighted average exercise price December 31, 2023 - £ 0.90 — — — 39.43 49.30 Weighted average share price at exercise date during six month period ending December, 31, 2023 - £ — — 50.28 39.76 52.55 — Weighted average contractual life December 31, 2023 - years 1 13 2 3 0 6 Options granted in the period have been valued using a Black Scholes option pricing model using the following inputs. 2023 2022 Exercise price £36.81- £38.75 £54.52 Risk-free rate 4.49 % 4.23 % Expected volatility 50.14 % 50.36 % Expected dividends — — Fair value of option £32.85- £33.49 £35.68 Other options granted under the Group's equity plans have a nil exercise price, therefore their fair value equals the share price at grant date. For the six months ended December 31, 2023, the Group recognised a £23.56 million share-based payment charge in respect of all the Group’s share option schemes (December 31, 2022: £15.90 million). |
Business combinations
Business combinations | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of detailed information about business combination [abstract] | |
Business combinations | Business combinations On August 3, 2023, Endava announced the acquisition of TLM Partners Inc, together with its subsidiaries (”TLM”), a company that provides outsourced development services across design, engineering and art/animation for PC and console video games and other digital entertainment. TLM has a particular expertise in highly complex areas of cross-play, industry experience and deep relationships with a wide array of platform partners and clients in the United States and around the world including prominent games publishers and developers.TLM, a Delaware company, has subsidiaries in Canada and Ireland and a branch in Romania. TLM had 61 staff members as of August 31, 2023. The acquisition accounting of TLM was considered final as of December 31, 2023. The consideration included elements of cash, equity, deferred and contingent consideration. The following table summarises the acquisition date fair values of each major class of consideration transferred: £’000 Initial cash consideration 3,214 Fair value of deferred consideration 741 Fair value of contingent consideration 4,378 Total consideration transferred 8,333 Under the TLM share purchase agreement (the “TLM Purchase Agreement”) , the Group paid the former equity holders of TLM a cash purchase price of £3.2 million, including post closing adjustments on the cash, debt and working capital of TLM. In addition, the Group recognised deferred consideration with a fair value of £0.7 million attributed to a holdback amount, payable within 18 months of the acquisition date. The deferred consideration is measured at amortised cost using the effective interest rate method. The fair value at the balance sheet date approximates to its carrying value. The Group also recognised a fair value of £4.4 million of consideration contingent upon fulfillment of certain earn-out conditions related to revenue and EBITDA of TLM during the earn-out period. Management estimated a 39% payout of this contingent consideration using probability-weighted outcomes. The fair value was then determined by applying an appropriate discount rate that embeds the risk included in the projected scenarios. Any subsequent revaluations to contingent consideration as a result of changes in such estimations are recognised in the consolidated statement of comprehensive income. Under the TLM Purchase Agreement, there are other amounts in the form of restricted share units under the 2018 Equity Incentive Plan, that are payable in future periods based on the continued service of certain TLM employees. As all restricted share units are based on continued service provided to the post-combination entity, they have been excluded from consideration and will instead be accounted for as ongoing remuneration under IFRS 2. The Company's allocation of the total purchase consideration against the net liabilities acquired is as follows: £’000 Intangible assets - client relationships 2,106 Property, plant and equipment 88 Cash and cash equivalents 160 Trade and other receivables 1,106 Borrowings (5,740) Trade and other payables (3,843) Deferred tax liability (537) Fair value of net liabilities acquired (6,660) Other than intangible assets, the fair value approximates the carrying value of the net liabilities acquired. Management have no doubt over the collectibility of the trade receivables included in the trade and other receivables line above. Intangible assets subject to valuation include client relationships. The multi period excess earnings method was applied to determine the fair value of the client relationship intangible asset. The fair value determined under this approach used customer attrition and discount rates as critical assumptions. The contribution of other tangible and intangible assets to the cash flows were also used as inputs in the fair value determination exercise, but they are not considered to be critical assumptions. The after-tax residual cash flows attributable to existing customers were discounted to a present value. Deferred tax The deferred tax liability at acquisition on the client relationship was £0.5 million based on a book base of £2.1 million and a tax base of nil at the date of acquisition. Goodwill Goodwill arising from the acquisition has been recognised as follows: £’000 Consideration transferred 8,333 Fair value of net liabilities acquired 6,660 Goodwill 14,993 The goodwill arising from the acquisition represents the knowledge and experience of the workforce, who are instrumental in securing future revenue growth, the new customer relationships anticipated to arise post-acquisition and a proportion of goodwill that is, by its nature, the unidentifiable underlying assets that contributes in generating profits. Acquisition related costs in the form of legal and professional fees of £0.9 million were expensed as incurred and are presented under selling, general and administrative expenses |
Subsequent events
Subsequent events | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of non-adjusting events after reporting period [abstract] | |
Subsequent events | Subsequent events On February 29, 2024, Endava entered into a definitive agreement to acquire 100% ownership of GalaxE Group, Inc (”GalaxE”) headquartered in New Jersey, United States. When completed, the transaction will add approximately 1,650 employees to Endava and provide several key strategic benefits to Endava: (1) significantly expand Endava's footprint in North America; (2) provide deep domain expertise in the U.S. Healthcare market; (3) establish Endava's delivery operations in India and (4) provide complementary platform capabilities focused on enterprise digital transformation. Total consideration for the acquisition is $405 million, primarily in cash with some stock, of which $30 million is conditional upon future performance of the GalaxE business. The transaction is expected to close in early April 2024 subject to the completion of customary closing conditions and approval, including the expiration of the required waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2023 | |
Notes and other explanatory information [abstract] | |
Statement of compliance | Statement of compliance These unaudited condensed consolidated financial statements have been prepared on the basis of accounting policies consistent with those applied in the consolidated financial statements and notes thereto for the year ended June 30, 2023 contained in the Group's Annual Report on Form 20-F filed with the United States Securities and Exchange Commission (the “SEC”) on September 19, 2023 (File No. 001-38607). The principal accounting policies adopted by the Group in the preparation of the condensed consolidated financial statements are set out below. |
Basis of Preparation | Basis of Preparation These condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, and should be read in conjunction with the Group’s last annual consolidated financial statements as at and for the year ended June 30, 2023. These condensed consolidated financial statements do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual consolidated financial statements. |
Functional and Presentation Currency | Functional and Presentation Currency The unaudited condensed consolidated financial statements are presented in British Pound Sterling (“Sterling”), which is the Company’s functional currency. All financial information presented in Sterling has been rounded to the nearest thousand, except when otherwise indicated. |
Use of Estimates and Judgments | Use of Estimates and Judgments The preparation of condensed consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts for assets, liabilities, income and expenses. Actual result may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. |
Going concern | Going concern The Group has been closely monitoring the impact of the developments on its businesses, mainly because the continuous worsening of global business and economic conditions may impact the stability of operations and could have an adverse impact on the earnings of the Group. While the technology sector has experienced economic headwinds globally, the impact on the Group’s operations and liquidity has not been substantial. In accordance with IAS 1 “Presentation of financial statements”, and revised FRC (“Financial Reporting Council") guidance on “risk management, internal control and related financial and business reporting”, the Directors have considered the funding and liquidity position of the Group and have assessed the Group’s ability to continue as a going concern for the foreseeable future. In doing so, the Directors have reviewed the Group’s budget and forecasts, and have taken into account all available information about the future for a period of at least, but not limited to, 12 months from the date of approval of these condensed consolidated financial statements. Having considered the outcome of these assessments, the Directors believe that the Group has adequate resources to continue operations for the foreseeable future, being at least 12 months from the date of approval of these condensed consolidated financial statements, and accordingly continue to adopt the going concern basis in preparing the condensed consolidated financial statements. |
Basis of Consolidation | Basis of Consolidation (i) Business combinations Business combinations are accounted for using the acquisition method. The results of businesses acquired in a business combination are included in the consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognised as goodwill. The Group performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price to the tangible and intangible assets acquired and liabilities assumed based on management’s best estimate of fair value. The Group determines the appropriate useful life of intangible assets by performing an analysis of cash flows based on historical experience of the acquired businesses. Intangible assets are amortised over their estimated useful lives based on the pattern in which the economic benefits associated with the asset are expected to be consumed, which to date has approximated the straight-line method of amortisation. Any contingent and deferred consideration payable are measured at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not re-measured and settlement is accounted for within equity. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the 'measurement period' (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. Otherwise, subsequent changes in the fair value of deferred and contingent consideration payable are recognised in the statement of comprehensive income within finance expense or finance income. Transaction costs associated with business combinations are expensed as incurred and are included in selling, general and administrative expenses. (ii) Subsidiaries Subsidiaries are entities controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. (iii) Transactions eliminated on consolidation All transactions and balances between Group Entities are eliminated on consolidation. |
Revenue | Revenue The Group generates revenue primarily from its single class of business being the provision of IT services. It recognises revenue in accordance with IFRS 15 – “Revenue from Contracts with Customers”: • The Group accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. • The Group identifies its distinct performance obligations under each contract. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. • The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring products or services to a customer. With respect to all types of contracts, revenue is only recognised when the performance obligations are satisfied and the control of the services is transferred to the customer, either over time or at a point in time, at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those services. • The Group considers the majority of its contracts to have a single performance obligation. In cases in which there are multiple performance obligations in the contract, a separate price allocation is performed based on relative standalone selling prices. • Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and taxes. The Group’s services are generally performed under time-and-material based contracts (where materials consist of travel and out-of-pocket expenses) and fixed-price contracts. The vast majority of the Group's contracts are relatively short term in nature and have a single performance obligation. Under time-and-materials based contracts, the Group charges for services based on daily or hourly rates and generally bills and collects monthly in arrears. The Group applies the practical expedient. Under the practical expedient, if the vendor’s right to consideration from a customer corresponds directly with the value to the customer of the vendor’s performance completed to date, the vendor can recognise revenue at the amount to which the vendor has the right to invoice. Consequently the revenue from time-and-materials contracts is recognised based on the right to invoice for services performed, with the corresponding cost of providing those services reflected as cost of sales when incurred. Fixed price contracts are predominantly flat rate recurring service arrangements provided evenly over time, where revenue is recognised on a straight-line basis over the period of the service and do not require any judgment. A small proportion of fixed price contracts contain percentage of completion and milestone contracts recognised over time. Percentage of completion and milestone contract revenue is recognised over time applying the input or output methods depending on the nature of the project and the agreement with the customer. The input method is applied by recognising revenue on the basis of the Group’s efforts to date to the satisfaction of the performance obligation relative to the total expected inputs to the satisfaction of the performance obligation. The output method is applied by recognising revenue on the basis of direct measurements of the value to the customer of the services transferred to date relative to the remaining services promised under the contract, respectively. Each method is applied according to the characteristics of each contract and client. The inputs and outputs are selected based on how faithfully they depict the Group's performance towards complete satisfaction of the performance obligation. These methods are followed where reasonably dependable estimates of revenues and costs can be made. Percentage of completion and milestone contracts generally correspond to short-term contracts that generally do not span more than one accounting period. The group also enters into a small number of volume-based arrangements where revenue is recognised based upon performance of certain activities (e.g. processing of IT service tickets). Volume-based revenue is recognised over time based on the volume of IT related services provided in the period at the fixed rate per activity. Variable consideration usually takes the form of volume-based discounts, price concessions or incentives. Determining the estimated amount of such variable consideration involves assumptions and estimation uncertainty that can have an impact on the amount of revenues reported. From time to time, the Group may enter into arrangements with third-party suppliers to sell services. In such cases, the Group evaluates whether it is the principal (i.e., reports revenues on a gross basis) or the agent (i.e., reports revenues on a net basis). In doing so, the Group first evaluates whether it has control of the service before it is transferred to the customer. If the Group controls the service before it is transferred to the customer, the Group is the principal; if not, the Group is the agent. Determining whether the Group controls the service before it is transferred to the customer may require judgment. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets primarily relate to unbilled amounts on fixed-price contracts. Services performed on or prior to the balance sheet date, but invoiced thereafter, are reflected in accrued income. Contract liabilities, or deferred income, consist of advance payments from clients and billings in excess of revenues recognised. The Group classifies deferred income as current on the consolidated balance sheet and it is recognised as revenue when the services are |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of revenue from contracts with customers [Abstract] | |
Summary of disaggregated revenue by geographical split | Set out below is the disaggregation of the Group’s revenue from contracts with customers by geographical market, based on where the service is being delivered to: Six months Ended December 31 2023 2022 UK 128,278 158,700 North America 114,713 135,088 Europe 93,811 89,430 Rest of the world 35,171 18,192 Total 371,973 401,410 The Group's revenue by industry sector is as follows: Six months Ended December 31 2023 2022 Payments and Financial Services 98,766 120,029 Banking and Capital Markets 52,172 65,262 Insurance 30,455 25,348 TMT (1) 85,767 88,908 Mobility 39,815 39,340 Other 64,998 62,523 Total 371,973 401,410 (1) Technology, Media and Telecommunications ("TMT") |
Particulars of Employees (inc_2
Particulars of Employees (including Directors) (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of additional information [Abstract] | |
Schedule of particulars of employees (including directors) | Six Months Ended December 31 2023 2022 The average number of staff employed by the group during the period (including directors): Number of operational staff 10,606 11,032 Number of administrative staff 1,140 1,071 Number of management staff 9 8 Total 11,755 12,111 |
Tax on Profit on Ordinary Act_2
Tax on Profit on Ordinary Activities (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of income tax [Abstract] | |
Summary of current tax | Six Months Ended December 31 2023 2022 Current tax 7,205 12,092 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of earnings per share [Abstract] | |
Schedule of earnings per share | Six Months Ended December 31 2023 2022 Profit for the year, attributable to equity holders of the Company 20,713 46,747 Six Months Ended December 31 2023 2022 Weighted average number of shares outstanding 58,101,072 56,962,777 Earnings per share - basic (£) 0.36 0.82 Six Months Ended December 31 2023 2022 Profit for the year, attributable to equity holders of the Company 20,713 46,747 Six Months Ended December 31 2023 2022 Weighted average number of shares outstanding 58,101,072 56,962,777 Diluted by: options in issue and contingent shares 266,224 960,782 Weighted average number of shares outstanding (diluted) 58,367,296 57,923,559 Earnings per share - diluted (£) 0.35 0.81 |
Cash Flow Adjustments and Cha_2
Cash Flow Adjustments and Changes in Working Capital (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of cash flow statement [Abstract] | |
Schedule of cash flow statement adjustments | Six Months Ended December 31 Non-cash adjustments 2023 2022 Depreciation, amortisation and impairment of non-financial assets 18,761 16,087 Interest income (3,522) (797) Interest expense 2,060 1,175 Foreign exchange loss 3,408 1,993 Grant income (1,458) (1,319) Research and development tax credit (2,501) (1,200) Share-based compensation expense 23,556 15,909 Fair value movement on contingent consideration (8,706) (7,143) Hyperinflation effect loss — 5 Fair value movement of financial liabilities 238 286 Loss / (Gain) on disposal of non-current assets 107 (21) Gain on right of use assets disposals (110) (1) Total non-cash adjustments 31,833 24,974 Six Months Ended December 31 Net changes in working capital 2023 2022 Decrease / (Increase) in trade and other receivables 7,871 (6,580) (Decrease) / Increase in trade and other payables (11,185) (1,055) Total changes in working capital (3,314) (7,635) |
Share-Based Payment Arrangeme_2
Share-Based Payment Arrangements (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of share-based payment arrangements [Abstract] | |
Number and weighted average exercise price of share options | The number, weighted-average exercise price, weighted average share price at exercise date and average contractual life of the share options under the above arrangements were as follows: CSOP JSOP LTIP EIP SAYE SS Options outstanding at July 1, 2023 5,845 6,965 29,012 904,825 345,845 1,465,971 Options granted during the period — — — 1,386,725 — 1,666,357 Options exercised during the period — — (125) (383,158) (79,353) — Options forfeited during the period — — — (13,059) (12,896) (120,596) Options outstanding at December 31, 2023 5,845 6,965 28,887 1,895,333 253,596 3,011,732 Weighted average exercise price December 31, 2023 - £ 0.90 — — — 39.43 49.30 Weighted average share price at exercise date during six month period ending December, 31, 2023 - £ — — 50.28 39.76 52.55 — Weighted average contractual life December 31, 2023 - years 1 13 2 3 0 6 |
Summary of valuation inputs | Options granted in the period have been valued using a Black Scholes option pricing model using the following inputs. 2023 2022 Exercise price £36.81- £38.75 £54.52 Risk-free rate 4.49 % 4.23 % Expected volatility 50.14 % 50.36 % Expected dividends — — Fair value of option £32.85- £33.49 £35.68 |
Business combinations (Tables)
Business combinations (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Disclosure of detailed information about business combination [abstract] | |
Disclosure of detailed information about business combination | The consideration included elements of cash, equity, deferred and contingent consideration. The following table summarises the acquisition date fair values of each major class of consideration transferred: £’000 Initial cash consideration 3,214 Fair value of deferred consideration 741 Fair value of contingent consideration 4,378 Total consideration transferred 8,333 The Company's allocation of the total purchase consideration against the net liabilities acquired is as follows: £’000 Intangible assets - client relationships 2,106 Property, plant and equipment 88 Cash and cash equivalents 160 Trade and other receivables 1,106 Borrowings (5,740) Trade and other payables (3,843) Deferred tax liability (537) Fair value of net liabilities acquired (6,660) Goodwill arising from the acquisition has been recognised as follows: £’000 Consideration transferred 8,333 Fair value of net liabilities acquired 6,660 Goodwill 14,993 |
Revenue (Details)
Revenue (Details) - GBP (£) £ in Thousands | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | £ 371,973 | £ 401,410 | [1] |
Payments and Financial Services | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 98,766 | 120,029 | |
Banking and Capital Markets | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 52,172 | 65,262 | |
Insurance | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 30,455 | 25,348 | |
TMT | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 85,767 | 88,908 | |
Mobility | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 39,815 | 39,340 | |
Other | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 64,998 | 62,523 | |
UK | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 128,278 | 158,700 | |
North America | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 114,713 | 135,088 | |
Europe | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 93,811 | 89,430 | |
Rest of the world | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | £ 35,171 | £ 18,192 | |
[1] (1) The presentation of the income statement has been changed to no longer separately disclose the net impairment gains/losses on financial assets on the face of the Condensed Consolidated Statements of Comprehensive Income, but include them within Selling, general and administrative expenses. |
Particulars of Employees (inc_3
Particulars of Employees (including Directors) (Details) - employee | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
The average number of staff employed by the group during the period (including directors): | ||
Number of operational staff | 10,606 | 11,032 |
Number of administrative staff | 1,140 | 1,071 |
Number of management staff | 9 | 8 |
Total | 11,755 | 12,111 |
Tax on Profit on Ordinary Act_3
Tax on Profit on Ordinary Activities - Current Tax (Details) - GBP (£) £ in Thousands | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disclosure of income tax [Abstract] | ||
Current tax | £ 7,205 | £ 12,092 |
Tax on Profit on Ordinary Act_4
Tax on Profit on Ordinary Activities - Narrative (Details) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disclosure of income tax [Abstract] | ||
Effective tax rate | 25.80% | 20.60% |
Earnings Per Share - Basic Earn
Earnings Per Share - Basic Earnings Per Share (Details) - GBP (£) £ / shares in Units, £ in Thousands | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | [1] | |
Disclosure of earnings per share [Abstract] | |||
Profit for the year, attributable to equity holders of the Company | £ 20,713 | £ 46,747 | |
Weighted average number of shares outstanding (in shares) | 58,101,072 | 56,962,777 | |
Earnings per share - basic (in gbp per share) | £ 0.36 | £ 0.82 | |
[1] (1) The presentation of the income statement has been changed to no longer separately disclose the net impairment gains/losses on financial assets on the face of the Condensed Consolidated Statements of Comprehensive Income, but include them within Selling, general and administrative expenses. |
Earnings Per Share - Diluted Ea
Earnings Per Share - Diluted Earnings Per Share (Details) - GBP (£) £ / shares in Units, £ in Thousands | 6 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Disclosure of earnings per share [Abstract] | |||
Profit for the year, attributable to equity holders of the Company | £ 20,713 | £ 46,747 | [1] |
Weighted average number of shares outstanding (in shares) | 58,101,072 | 56,962,777 | [1] |
Dilutive effect of all instruments on weighted average number of ordinary shares (in shares) | 266,224 | 960,782 | |
Weighted average number of shares outstanding (diluted) (in shares) | 58,367,296 | 57,923,559 | [1] |
Earnings per share - diluted (in gbp per share) | £ 0.35 | £ 0.81 | [1] |
[1] (1) The presentation of the income statement has been changed to no longer separately disclose the net impairment gains/losses on financial assets on the face of the Condensed Consolidated Statements of Comprehensive Income, but include them within Selling, general and administrative expenses. |
Cash Flow Adjustments and Cha_3
Cash Flow Adjustments and Changes in Working Capital - Schedule of cash flow statement adjustments (Details) - GBP (£) £ in Thousands | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Non-cash adjustments | ||
Depreciation, amortisation and impairment of non-financial assets | £ 18,761 | £ 16,087 |
Interest income | (3,522) | (797) |
Interest expense | 2,060 | 1,175 |
Foreign exchange loss | 3,408 | 1,993 |
Grant income | (1,458) | (1,319) |
Research and development tax credit | (2,501) | (1,200) |
Share-based compensation expense | 23,556 | 15,909 |
Fair value movement on contingent consideration | (8,706) | (7,143) |
Hyperinflation effect loss | 0 | 5 |
Fair value movement of financial liabilities | 238 | 286 |
Loss / (Gain) on disposal of non-current assets | 107 | (21) |
Gain on right of use assets disposals | (110) | (1) |
Total non-cash adjustments | 31,833 | 24,974 |
Net changes in working capital | ||
Decrease / (Increase) in trade and other receivables | 7,871 | (6,580) |
(Decrease) / Increase in trade and other payables | (11,185) | (1,055) |
Total changes in working capital | £ (3,314) | £ (7,635) |
Cash Flow Adjustments and Cha_4
Cash Flow Adjustments and Changes in Working Capital - Narrative (Details) - GBP (£) £ in Thousands | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disclosure of cash flow statement [Abstract] | ||
Other acquisition related settlements | £ 6,680 | £ 0 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) £ in Millions | Feb. 09, 2023 GBP (£) renewalOption | Oct. 12, 2019 GBP (£) |
Multicurrency revolving credit facility | ||
Disclosure of detailed information about borrowings [line items] | ||
Notional amount | £ 350 | |
Multicurrency revolving credit facility, maturity october 2024 | ||
Disclosure of detailed information about borrowings [line items] | ||
Notional amount | £ 200 | |
Uncommitted accordion options | ||
Disclosure of detailed information about borrowings [line items] | ||
Notional amount | £ 150 | |
Number of renewal options | renewalOption | 2 | |
Renewal term | 1 year |
Share-Based Payment Arrangeme_3
Share-Based Payment Arrangements - Movement in Share Options (Details) | 6 Months Ended |
Dec. 31, 2023 shares £ / shares | |
CSOP | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Share options outstanding at beginning of period (in shares) | 5,845 |
Options granted during the period (in shares) | 0 |
Options exercised during the period (in shares) | 0 |
Options forfeited during the period (in shares) | 0 |
Share options outstanding at end of period (in shares) | 5,845 |
Weighted average exercise price of share options outstanding in share-based payment arrangement (in gbp per share) | £ / shares | £ 0.90 |
Weighted average share price for share options in share-based payment arrangement exercised during period at date of exercise (in gpb per share) | £ / shares | £ 0 |
Weighted average remaining contractual life (in years) | 1 year |
JSOP | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Share options outstanding at beginning of period (in shares) | 6,965 |
Options granted during the period (in shares) | 0 |
Options exercised during the period (in shares) | 0 |
Options forfeited during the period (in shares) | 0 |
Share options outstanding at end of period (in shares) | 6,965 |
Weighted average exercise price of share options outstanding in share-based payment arrangement (in gbp per share) | £ / shares | £ 0 |
Weighted average share price for share options in share-based payment arrangement exercised during period at date of exercise (in gpb per share) | £ / shares | £ 0 |
Weighted average remaining contractual life (in years) | 13 years |
LTIP | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Share options outstanding at beginning of period (in shares) | 29,012 |
Options granted during the period (in shares) | 0 |
Options exercised during the period (in shares) | (125) |
Options forfeited during the period (in shares) | 0 |
Share options outstanding at end of period (in shares) | 28,887 |
Weighted average exercise price of share options outstanding in share-based payment arrangement (in gbp per share) | £ / shares | £ 0 |
Weighted average share price for share options in share-based payment arrangement exercised during period at date of exercise (in gpb per share) | £ / shares | £ 50.28 |
Weighted average remaining contractual life (in years) | 2 years |
EIP | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Share options outstanding at beginning of period (in shares) | 904,825 |
Options granted during the period (in shares) | 1,386,725 |
Options exercised during the period (in shares) | (383,158) |
Options forfeited during the period (in shares) | (13,059) |
Share options outstanding at end of period (in shares) | 1,895,333 |
Weighted average exercise price of share options outstanding in share-based payment arrangement (in gbp per share) | £ / shares | £ 0 |
Weighted average share price for share options in share-based payment arrangement exercised during period at date of exercise (in gpb per share) | £ / shares | £ 39.76 |
Weighted average remaining contractual life (in years) | 3 years |
SAYE | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Share options outstanding at beginning of period (in shares) | 345,845 |
Options granted during the period (in shares) | 0 |
Options exercised during the period (in shares) | (79,353) |
Options forfeited during the period (in shares) | (12,896) |
Share options outstanding at end of period (in shares) | 253,596 |
Weighted average exercise price of share options outstanding in share-based payment arrangement (in gbp per share) | £ / shares | £ 39.43 |
Weighted average share price for share options in share-based payment arrangement exercised during period at date of exercise (in gpb per share) | £ / shares | £ 52.55 |
Weighted average remaining contractual life (in years) | 0 years |
SS | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | |
Share options outstanding at beginning of period (in shares) | 1,465,971 |
Options granted during the period (in shares) | 1,666,357 |
Options exercised during the period (in shares) | 0 |
Options forfeited during the period (in shares) | (120,596) |
Share options outstanding at end of period (in shares) | 3,011,732 |
Weighted average exercise price of share options outstanding in share-based payment arrangement (in gbp per share) | £ / shares | £ 49.30 |
Weighted average share price for share options in share-based payment arrangement exercised during period at date of exercise (in gpb per share) | £ / shares | £ 0 |
Weighted average remaining contractual life (in years) | 6 years |
Share-Based Payment Arrangeme_4
Share-Based Payment Arrangements - Valuation Inputs (Details) - SS - GBP (£) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Exercise price (in gbp per share) | £ 54.52 | |
Risk-free rate | 4.49% | 4.23% |
Expected volatility | 50.14% | 50.36% |
Expected dividends | 0% | 0% |
Fair value of option (in gbp per share) | £ 35.68 | |
Bottom of range [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Exercise price (in gbp per share) | £ 36.81 | |
Fair value of option (in gbp per share) | £ 32.85 | |
Top of range [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Exercise price (in gbp per share) | £ 38.75 | |
Fair value of option (in gbp per share) | £ 33.49 |
Share-Based Payment Arrangeme_5
Share-Based Payment Arrangements - Narrative (Details) - GBP (£) £ in Thousands | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Share-based compensation | £ 23,560 | £ 15,900 |
Business combinations - Narrati
Business combinations - Narrative (Details) - TLM Partners Inc [Member] £ in Thousands | 6 Months Ended | ||
Aug. 03, 2023 GBP (£) | Dec. 31, 2023 GBP (£) | Aug. 31, 2023 employee | |
Disclosure of detailed information about business combination [line items] | |||
Number of employees | employee | 61 | ||
Initial cash consideration | £ 3,214 | ||
Fair value of deferred consideration | £ 741 | ||
Contingent consideration arrangements, payment period | 18 months | ||
Fair value of contingent consideration | £ 4,378 | ||
Deferred tax liability | 537 | ||
Intangible assets - client relationships | 2,106 | ||
Acquisition-related costs recognised as expense for transaction recognised separately from acquisition of assets and assumption of liabilities in business combination | £ 900 | ||
Customer-related intangible assets | |||
Disclosure of detailed information about business combination [line items] | |||
Deferred tax liability | 500 | ||
Identifiable intangible assets | £ 0 | ||
Forecast | |||
Disclosure of detailed information about business combination [line items] | |||
Contingent consideration (in percent) | 39% |
Business combinations- Acquisit
Business combinations- Acquisition date fair values of each major class of consideration transferred (Details) - TLM Partners Inc [Member] £ in Thousands | Aug. 03, 2023 GBP (£) |
Disclosure of detailed information about business combination [line items] | |
Initial cash consideration | £ 3,214 |
Fair value of deferred consideration | 741 |
Fair value of contingent consideration | 4,378 |
Total consideration transferred | £ 8,333 |
Business combinations - Schedul
Business combinations - Schedule of Company's allocation of the total purchase consideration amongst the net assets acquired (Details) - TLM Partners Inc [Member] £ in Thousands | Aug. 03, 2023 GBP (£) |
Disclosure of detailed information about business combination [line items] | |
Intangible assets - client relationships | £ 2,106 |
Property, plant and equipment | 88 |
Cash and cash equivalents | 160 |
Trade and other receivables | 1,106 |
Borrowings | (5,740) |
Trade and other payables | (3,843) |
Deferred tax liability | (537) |
Fair value of net liabilities acquired | £ (6,660) |
Business combinations-Goodwill
Business combinations-Goodwill arising from the acquisition (Details) - GBP (£) £ in Thousands | Dec. 31, 2023 | Aug. 03, 2023 | Jun. 30, 2023 |
Disclosure of detailed information about business combination [line items] | |||
Goodwill | £ 255,749 | £ 240,818 | |
TLM Partners Inc [Member] | |||
Disclosure of detailed information about business combination [line items] | |||
Total consideration transferred | £ 8,333 | ||
Identifiable assets acquired (liabilities assumed) | 6,660 | ||
Goodwill | £ 14,993 |
Subsequent Events (Details)
Subsequent Events (Details) - Major business combination - GalaxE Group, Inc $ in Millions | Feb. 29, 2024 USD ($) employee |
Disclosure of non-adjusting events after reporting period [line items] | |
Percentage of voting equity interests acquired | 100% |
Number of additional employees acquired | employee | 1,650 |
Total consideration transferred | $ 405 |
Fair value of contingent consideration | $ 30 |