Page 65 - Beeks Financial Cloud Group Annual Report 2021

Beeks Financial Cloud Group PLC
Notes to the Consolidated Financial Statements For the year ended 30 June 2021

39 and IFRS 7 – Interest Rate covenants processes for managing its capital;
benchmark reform phase 2 / Potential further impact of its financial risk management
Covid-19 objectives; details of its financial
CHANGE IN ACCOUNTING / the finance facilities available instruments and hedging activities;
ESTIMATES to The Group, including the and its exposures to credit risk and
During the year, as part of the availability of any short term liquidity risk.
impairment review carried out on funding required.
acquired intangible assets, The The directors are of the opinion that
Group reviewed the appropriateness The Group’s business activities, The Group can operate within their
of the remaining useful life of together with the factors likely current debt facilities and comply
the customer relationship list of to affect its future development, with its banking covenants. At the
CNS, acquired in 2019. The Group performance and position are set end of the financial year, The Group
deemed it appropriate to reduce the out in the Strategic report on pages had net cash of £1.9m (2020: Net
estimated useful life from 8 years to 4 to 23 including the potential impact debt £0.75m) a level which the Board
4 years. The impact on the current of Covid-19. The financial position is comfortable with given the strong
and remaining years’ amortisation of The Group, its cash flows, liquidity cash generation of The Group and FINANCE
charge for this asset is an additional position and borrowing facilities low level of debt to EBITDA ratio. The
annual charge of £70,000. are described in the Chief Financial Group has a diverse portfolio of
Officer’s Report on pages 13 to 16. customers with relatively low customer
GOING CONCERN concentration which are split across
The Directors have assessed the In the past eighteen months since different geographic areas. As a
current financial position of Beeks the response to the Covid-19 consequence, the directors believe
Financial Cloud Group PLC, taking pandemic was initiated in the UK, that The Group is well placed to
account of its business activities, there has been limited impact manage its business risks.
together with the factors likely to affect on Beeks’ trading from Covid-19.
its future development, performance We take great comfort from the The directors have considered The
and position as set out in the resilience of our business model Group budgets and the cash flow
Strategic report on pages 4 to 23. and are fortunate that we are forecasts for the next two financial
not significantly exposed to the years, and associated risks, including
The key factors considered by the industries that are suffering the the potential impact of Covid-19, and
Directors were: worst effects. The level of customer the availability of bank and leasing
/ historic and current trading and churn across our business has facilities. We have run appropriate
profitability of The Group, remained low and cash collection scenario and stress tests applying
/ the rate of growth in sales both has been in line with our typical reasonable downside sensitivities
historically and forecast, profile. We do however remain and are confident we have the
/ the competitive environment in vigilant to the economic impact resources to meet our liabilities as
which The Group operates, the ongoing situation may create, they fall due including mitigating
/ the current level of cash particularly on the SME segment actions to take should some loan
reserves, of the market. Note 1 to the facilities not be made available
/ current level of debt obligations financial statements includes The at the end of current terms, which
/ Ability to comply with existing Group’s objectives, policies and is December 2022 and coincides
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