Science Group plc (the ‘Company’) together with its subsidiaries (‘Science Group’ or the ‘Group’) reports its audited results for the year ended 31 December 2021.


Science Group reports another record performance delivering substantial profit growth. The Group’s strong balance sheet, significant cash resources and undrawn new debt facility provide both a solid foundation for the existing operations and the potential to pursue further corporate development opportunities. As a result, Science Group is well positioned for the year ahead.

Financial Highlights

  • Record revenue and adjusted operating profit, ahead of upgraded expectations
  • Group revenue growth of 10% to £81.2 million (2020: £73.7 million)
  • Adjusted* operating profit increased by 49% to £16.3 million (2020: £10.9 million)
  • Adjusted* basic earnings per share increased by 47% to 28.5p (2020: 19.4p)
  • Recommended dividend increase of 25% to 5.0p per share (2020: 4.0p per share)

Investments & Acquisitions

  • Strategic investment, including two director appointees, in TP Group plc, a supplier of products and services into the defence sector
  • Investment in Frontier comprising royalty buy-out and add-on acquisition

Balance Sheet

  • Cash of £34.3 million and net funds of £19.0 million
  • Successful equity fund raising in September 2021 of £17.8 million net
  • New undrawn revolving credit facility of £25 million


Science Group plc

Martyn Ratcliffe, Chairman

Jon Brett, Finance Director

Tel +44 (0) 1223 875200


Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker)

Nick Adams, Alex Price

Tel: +44 (0) 20 7710 7600


Liberum Capital Limited (Joint Broker)

Neil Patel, Cameron Duncan

Tel: +44 (0) 20 3100 2000


* Alternative performance measures are provided in order to enhance the shareholders’ ability to evaluate and analyse the underlying financial performance of the Group. Refer to Note 1 for detail and explanation of the measures used.


Statement of Executive Chair

Science Group is an international science, technology and consulting organisation. The Group comprises three divisions: R&D Consultancy; Regulatory & Compliance; and Frontier Smart Technologies (‘Frontier’), together with significant freehold property assets and a strategic shareholding in TP Group plc.

Notwithstanding the global pandemic and supply chain constraints, Science Group has delivered another record performance with growth reported in all three divisions and a substantial increase in Group profitability. As a result, Science Group has continued its track record of delivering value to shareholders whilst investing in the long-term sustainability of the business and sharing the rewards of success with the Group’s employees. This successful execution of both corporate and operating strategies provides an excellent platform for the future of Science Group.

Financial Summary

For the year ended 31 December 2021, Science Group reported revenue of £81.2 million (2020: £73.7 million). This growth, combined with benefits derived from the greater scale of the Group, converted into an adjusted operating profit increase of 49% to £16.3 million (2020: £10.9 million). Adjusted operating profit has more than doubled over the past 2 years. Adjusted basic earnings per share increased by 47% to 28.5 pence (2020: 19.4 pence), reflecting the Board’s focus on translating its strategy into shareholder value.

Amortisation of acquisition related intangibles and the share based payment charge totalled £3.6 million (2020: £3.7 million) and the Group’s share of the estimated loss in TP Group was £1.1 million (2020: not applicable). As a result, the Group reported an operating profit of £11.6 million for the year (2020: £7.1 million) and profit before tax of £10.9 million (2020: £6.4 million). Basic earnings per share was 22.4 pence (2020: 16.9 pence).

Science Group continues to benefit from good cash conversion and a strong balance sheet. At 31 December 2021, Group cash was £34.3 million (2020: £27.1 million) and net funds were £19.0 million (2020: £10.6 million). The Group’s term loan, which expires in 2026, was £15.4 million (2020: £16.6 million). In addition to the term loan, in December 2021 the Group also agreed a new £25 million Revolving Credit Facility with its bank, which to date has not been drawn. As a result, the Group has significant existing cash resources and available facilities to continue its strategy.

R&D Consultancy

The R&D Consultancy division, operating under a unified brand, provides science-led advisory and product/technology development services. The division combines science and engineering capabilities with expertise in key vertical sectors, namely: Medical; Consumer; Food & Beverage; and Industrial, Chemicals & Energy.

For the year ended 31 December 2021, the R&D Consultancy division generated revenue of £34.3 million (2020: £32.2 million). The Medical sector continued to perform well in 2021, reporting organic growth against a strong prior year comparator. The other sectors had a slower start to the year but saw some recovery in the second half as the effects of the pandemic eased.

The unification of the division under the single brand Sagentia Innovation has enabled these businesses to offer an integrated set of services to clients. This has presented cross-selling opportunities to the division and also attracted clients who recognise the value of the extended service offering, combining strategic advisory services, leading edge scientific consulting and product/technology development for physical & digital solutions.

Regulatory & Compliance

The Regulatory & Compliance division provides scientific and regulatory advice together with registration and compliance services for the Chemicals and Food & Beverage sectors, both of which operate internationally in regulated markets. The division comprises the North American and European operations of TSG, acquired in 2017, together with Leatherhead Food Research, acquired in 2015. The scale of each of the three business areas is broadly similar.

For the year ended 31 December 2021, the Regulatory & Compliance division generated revenue of £21.4 million (2020: £20.1 million). Of this revenue around 25% is of a recurring nature, primarily within the Food & Beverage sector and the USA registration renewals activities.

The division made good progress in its strategic development during 2021 as the increased scale and reputation is now attracting larger opportunities. To support this growth, the division invested in a new finance system which is now live across all three business areas, replacing three different legacy systems with a common platform. The TSG America state regulatory business also successfully launched a new rules-based system to improve the efficiency of the registration renewals operations.

Frontier Smart Technologies

Frontier Smart Technologies (‘Frontier’) is the market leader in DAB/DAB+/SmartRadio technology chips and modules. Formerly an AIM-listed, Cayman-domiciled company, Frontier was acquired by Science Group in 2019.

Following the successful turnaround and integration during 2020, in January 2021 the Board initiated a review of the future strategy for Frontier. This wide-ranging review confirmed the strategic leadership position of Frontier and identified a number of opportunities to enhance and develop the business. Consequently, effective 1 July 2021, an agreement was reached to buy out future royalties associated with the use of licensed technology for the sum of $6.0 million (£4.3 million). (For the year ended 31 December 2020, Frontier paid royalties of $1.0 million in relation to licensing this technology.)

In progressing the post-review Frontier strategy, the Group also completed the acquisition of Magic Systech Inc (‘Magic’), for $4.0 million (£3.0 million). Magic is a Taiwan-based company which specialises in internet radio technology and the acquisition enhances the Frontier proposition including a lower production cost architecture. Magic is now being integrated into Frontier.

The Frontier division had a strong year in 2021 reporting 21% growth in revenue to £24.9 million (2020: £20.5 million) and an adjusted operating profit margin of 21% (2020: 16%), producing a 59% increase in adjusted operating profit. This success was achieved despite the global semiconductor and other supply chain constraints.

Freehold Properties

Science Group owns two freehold properties, Harston Mill near Cambridge and Great Burgh in Epsom. The last independent valuation in March 2021 indicated an aggregate value of these properties in the range £21.0 million to £35.0 million. The properties are held on the balance sheet on a cost basis at £21.0 million (2020: £21.2 million).

Great Burgh is owned by a property subsidiary of Science Group plc and it has been the Board’s declared intent to adopt the same approach for the Harston Mill property, which for historic reasons was held within the operating subsidiary. In 2021, this legacy was addressed resulting in a tax payment outflow of approximately £1.8 million.

For the year ended 31 December 2021, the rental and associated services income derived from the Group’s freehold properties was £3.6 million (2020: £4.0 million), of which £0.6 million (2020: £0.8 million) was generated from third-party tenants. Intra-group charges are eliminated on Group consolidation but the reported segmental profit of the operating divisions includes property rental at market rates.


The corporate function is responsible for the strategic development of Science Group. Corporate costs increased in the period to £4.4 million (2020: £2.5 million), reflecting the significant activity in the year and the Group’s share in the estimated loss of TP Group (‘TPG’) which is reported as a corporate cost in segmental reporting.

In addition to the Frontier royalty buy-out and acquisition of Magic, in August the Group made a strategic investment in TPG through a stake-building exercise. TPG is a provider of consulting services and engineering products to the defence and aerospace sectors where Science Group has little presence. Science Group tried to engage with TPG but all approaches were rejected, including a possible offer for TPG which was withdrawn on 3 September 2021. At 31 December 2021, Science Group was the largest shareholder in TPG owning 28.0% at a total cost of £12.8 million.

The Group is actively managing the TPG investment and in October 2021 secured 2 seats on the TPG Board including, from 1 November 2021, the role of Executive Chair. The TPG strategy was redefined to focus on core UK-based operations and this strategy is now being executed by the TPG Board. To address cash flow volatility, and potential going concern risks (as reported by TPG in its 2020 Annual Report), in December 2021 Science Group extended a standby credit facility of up to £5.0 million to TPG. For accounting purposes, TPG was held as a financial investment until 13 October 2021 and was equity accounted thereafter.

For the first time since 2010, to continue its strategic development, Science Group undertook an equity fundraising. Net proceeds of £17.8 million were raised through the successful placing of new Ordinary Shares with existing and new institutional investors.

With the continued success and growth of the Group, the Board is recommending increasing the dividend by 25% to 5.0 pence per share (2020: 4.0 pence per share). Subject to shareholder approval at the Annual General Meeting (‘AGM’), the dividend will be payable on 17 June 2022 to shareholders on the register at the close of business on 20 May 2022.

During the year, the Company repurchased 149,000 shares at a total cost of £0.6 million at an average price of £3.79 pence per share (2020: 715,000 shares at a cost of £1.7 million). At 31 December 2021, shares in issue (excluding treasury shares held of 0.5 million) were 45.7 million (2020: 41.2 million excluding treasury shares held of 0.8 million).

Environmental, Social & Governance

The Group takes its responsibilities to the environment and to the community seriously. In 2021 the Group commenced assessment of Greenhouse Gas (‘GHG’) emissions across its businesses with a view to planning for NetZero. Electricity in the Group’s major sites is already derived from renewable sources, as far as practicable, and electric vehicle charging points have been installed at the Group’s freehold properties. Waste management remains a major focus with policies to ensure reduction, reuse, and recycling as appropriate.

In parallel with its own actions, Science Group is actively engaged in working with clients on sustainability programmes. Furthermore, in 2021, the Group launched a CTO (Chief Technology Officer) Forum to bring together senior R&D executives from leading international corporates engaged on creating actionable strategies for NetZero. The initiative draws on the combination of science, advisory and regulatory expertise within Science Group to provide a differentiated insight into the environmental and sustainability challenges of global organisations.

Science Group has a diverse employee base, representing over 30 nationalities, and actively promotes the values of diversity and inclusion. Employee development and training, at all levels, is very important, and the Group is especially mindful of the development of more junior employees during enforced remote working as a result of the pandemic. The Group is also aware of its position in society particularly the impact of the pandemic upon local communities and has therefore increased its charitable donations in the last two years, supporting charities (primarily foodbanks) close to the Group’s offices around the world.

The Board of Science Group is well balanced between executive and independent non-executive directors (‘NED’) ensuring objectivity in decision-making. The Group is led by the Executive Chair, who also remains the Group’s largest shareholder, driving the corporate strategy, with a Group Managing Director who runs day to day operations. The Board believes in strong, independent NEDs and, as part of succession planning, takes into consideration Board diversity. Both the Remuneration and Audit committees are composed of 100% independent directors. The Group’s formal and effective governance model is reinforced by an open, transparent culture with NEDs having unconstrained access to any and all employees throughout the Group.

Covid-19, Inflation and Geopolitical factors

The Group has adapted to operating under the constraints resulting from the Covid-19 pandemic. The primary focus has been to protect employees and to promote their physical and mental wellbeing. Operationally, there has been a mix of home, office and lab-based working, adhering to Government policy in each country, whilst successfully delivering products and services for clients.

The Frontier division also suffered from supply-chain issues associated with the global semiconductor and other component shortages but managed the situation well, benefitting from good relations with suppliers and the Group’s strong financial position. While the recent Covid restrictions in Shenzhen and Hong Kong may have a short-term impact on product shipments and 2022 is likely to continue to be constrained by component supply, the Board anticipates that the Frontier team will again be able to manage through the operational challenges and maintain its market leading position.

The Science Group Board monitors economic and other external factors. The potential inflationary pressures on employment costs were recognised early and where possible client contracts have been amended to facilitate fee rate increases within the Services divisions as appropriate. Similarly, the product supply-side inflation has been mitigated by passing cost increases onto the distribution channel. The recent geopolitical instability could further impact the global economic environment with the near-term effects anticipated to be:

  • An increase in inflationary pressures, particularly energy costs which even prior to recent events were projected to more than double in 2022 compared with 2021.
  • A slowing of European investment and economic growth, which at the present time the Board considers will have only a limited impact on the Group.
  • Strengthening of the US Dollar, which has a net positive effect on Science Group due to the proportion of revenue generated in US Dollars with a primary cost base in Sterling.

At the present time, the Board considers that in aggregate the net effect of the above on Science Group operations is broadly neutral, with the benefits of the strong US Dollar offsetting the other external factors.


In summary, Science Group has reported another year of excellent results with all three divisions performing well, leading to the Board upgrading Group profit forecasts several times. The outstanding performance over the past two years, during a global pandemic, is due to the commitment and dedication of the Group’s operating managers and employees.

Recent years have also seen an acceleration in the corporate development of Science Group, most recently evidenced by the strategic investment in TP Group plc. Although there can be no certainty that any transactions will satisfy the Board’s evaluation criteria and diligence process, the Group’s significant cash resources further enhanced by the new credit facility, enable the Board to explore both add-on acquisitions and larger opportunities to increase the scale of Science Group.

While inflation, geopolitical instability and potential further disruption from the pandemic are being closely monitored, Science Group’s strategy and operational execution have demonstrated resilience. The Group’s strong balance sheet provides both a solid foundation for the existing operations and the potential to pursue growth opportunities should they arise. As a result, Science Group is well positioned for the year ahead.

Martyn Ratcliffe

Executive Chair


Finance Director’s Report

Overview of results

In the year ended 31 December 2021, the Group generated revenue of £81.2 million (2020: £73.7 million). Revenue from the services operating businesses, that is revenue derived from consultancy services and materials recharged on these projects, increased to £55.7 million (2020: £52.3 million) while product revenue generated by Frontier increased to £24.9 million (2020: £20.5 million). Revenue generated by freehold properties, comprising property and associated services income derived from space let to third parties in the Harston Mill facility, was £0.6 million (2020: £0.8 million).

Adjusted operating profit for the Group increased to £16.3 million (2020: £10.9 million). The Group’s statutory operating profit of £11.6 million (2020: £7.1 million) includes the amortisation of acquisition related intangible assets (£2.9 million), share based payment charges (£0.7 million) and a share of the estimated loss of associate investment, TP Group plc, of £1.1 million. The statutory profit before tax was £10.9 million (2020: £6.4 million) and statutory profit after tax was £9.6 million (2020: £7.0 million). Statutory basic earnings per share (‘EPS’) was 22.4 pence (2020: 16.9 pence per share).

Adjusted operating profit is an alternative profit measure that is calculated as operating profit excluding amortisation of acquisition related intangible assets, acquisition integration costs, share based payment charges and other specified items that meet the criteria to be adjusted. Refer to the notes to the financial statements for further information on this and other alternative performance measures.

TP Group plc

The Group commenced on-market purchases of shares in TP Group plc (‘TPG’), in August 2021, increasing its holding to 28.0% at 31 December 2021.

Prior to 13 October 2021, the Group accounted for the TPG shareholding as a financial investment, recognised at fair value on the balance sheet. On 13 October 2021, when two Science Group plc Directors were appointed to the Board of TPG, the Group started to account for its holding in TPG as an associate under the equity accounting method.

TPG has not released its results for the period ended 31 December 2021. A loss after tax of £1.1 million has been included within the Science Group Income Statement, which is an estimate based on TPG reported information and public statements, proportionate to the Group’s 28% shareholding and the duration for which TPG was accounted as an associate.

In December 2021, the Group made available a standby revolving credit facility to TPG. The facility is for a maximum of £5.0 million for the period from the date of signing until 30 September 2023. The facility, which incurs an interest rate of 1% per month on sums drawn or 0.4% per month on undrawn amounts, remained undrawn at 31 December 2021.

Foreign exchange

A considerable proportion of the Group’s revenue is denominated in currencies other than Sterling. Changes in exchange rates can have a significant influence on the Group’s financial performance. In 2021, £50.2 million of the Group’s operating business revenue was denominated in US Dollars (2020: £41.8 million), including all of Frontier’s revenue. In addition, £3.1 million of the Group operating business revenue was denominated in Euros (2020: £3.6 million). The average exchange rate during 2021 was 1.37 for US Dollars and 1.16 for Euros (2020: 1.29 and 1.13 respectively). To date, the Group has opted not to utilise foreign exchange hedging instruments but keeps this under review.


The tax charge for the year was £1.4 million (2020: tax credit of £0.6 million). The underlying tax charge on the profits generated by the operating businesses has been partially offset through brought forward Frontier losses and a Research and Development tax credit of £0.3 million (2020: £0.2 million). Science Group recognises R&D tax credits within tax reporting, not as a credit against operating costs.

As planned, the Harston Mill property was transferred within the Group from trading company, Sagentia Limited, to Quadro Harston Limited. This resulted in a tax payment outflow in 2021 of £1.8 million. There was a matching deferred tax liability release, leaving the transaction tax neutral in the Income Statement.

At 31 December 2021, Science Group had £27.8 million (2020: £31.7 million) of tax losses of which £17.6 million (2020: £21.4 million) related to trading losses in Frontier. Of the Frontier losses, £10.0 million (2020: £5.3 million) is recognised as a deferred tax asset which is anticipated to be used to offset future taxable profits. The balance of £7.6 million (2020: £16.1 million) has not been recognised as a deferred tax asset due to the uncertainty in the timing or feasibility of utilisation of these losses. Aside from Frontier, the Group has other tax losses of £10.2 million (2020: £10.3 million) unrecognised as a deferred tax asset due to the low probability that these losses will be able to be utilised.

Financing and cash

Cash flow from operating activities (excluding Client Registration Funds) was £13.2 million (2020: £17.2 million). Reported cash from operating activities in accordance with IFRS was £14.0 million (2020: £17.7 million). The difference in these two metrics relates to the fact that TSG, particularly in the USA, processes regulatory registration payments on behalf of clients. The alternative performance measure, adjusting for Client Registration Funds, more accurately reflect the Group’s cash position and cash flow.

The Group’s term loan with Lloyds Bank plc, secured on the Group’s freehold properties, is a 10 year fixed term loan expiring in 2026. Phased interest rate swaps hedge the loan resulting in a fixed effective interest rate of 3.5%, comprising a margin over 3 month London Interbank Offered Rate (‘LIBOR’), the cost of the loan arrangement fee and the cost of the swap instruments. The Group has adopted hedge accounting for the interest rate swap related to the bank loan under IFRS 9, Financial Instruments, and the gain on change in fair value of the interest rate swaps was £763,000 (2020: loss of £519,000) which was recognised in Other Comprehensive Income.

With LIBOR ceasing to be used as an interest rate benchmark at the end of 2021, the Group transitioned the term loan and the respective swap instruments to use the Sterling Overnight Index Average (‘SONIA’) as an appropriate alternative. The transition was agreed during the year and will be effective from March 2022. The hedged position on the loan remains and there is no change to the effective fixed interest rate of 3.5%.

In December 2021, in addition to the term loan, the Group signed a new £25.0 million revolving credit facility (‘RCF’) with Lloyds Bank plc in order to provide additional capital resources to enable the execution of the Group’s acquisition strategy. The RCF is for up to £25.0 million, with an additional £5.0 million accordion option, for a term of four years with a one year extension. The margin on drawn sums is 3.3% over SONIA and is 1.1% per annum on undrawn amounts. Drawn amounts are secured on the Group’s assets by debentures. At 31 December 2021, the RCF remained undrawn.

The RCF has two financial covenants with which the Group needs to comply if the facility is drawn: (i) the Group’s net leverage, as defined as the net debt divided by the rolling 12 month EBITDA, should not exceed 2.5; and (ii) the Group’s interest cover, as defined as the rolling 12 month EBITDA divided by the rolling interest payments on all borrowings, should not be less than 4.0. Reporting is on a 6 monthly basis unless the net leverage exceeds 2, in which case reporting moves to quarterly until net leverage returns to below 2 again. For the term of the RCF, the previous covenants for the term loan are superseded by the covenants of the RCF and will not apply.

The Group cash balance (excluding Client Registration Funds) at 31 December 2021 was £34.3 million (2020: £27.1 million) and net funds were £19.0 million (2020: net funds of £10.6 million). Client Registration Funds of £2.9 million (2020: £2.0 million) were held at the year end. Working capital management during the year continued to be a focus with debtor days of 31 days at 31 December 2021 (2020: 31 days). A higher level of inventory was held at the year end to mitigate uncertainty in forward supply, resulting in inventory days increasing to 76 days at 31 December 2021 (2020: 43 days).

Share capital

At 31 December 2021, the Company had 45,720,276 ordinary shares in issue (2020: 41,238,392) and the Company held an additional 465,598 shares in treasury (2020: 823,643). The increase in shares in issue is primarily related to a 10% share placement (4,123,839 shares) completed in September 2021. Of the ordinary shares in issue, 104,400 (2020: 104,400) shares are held by the Frontier Employee Benefit Trust. The voting rights in the Company at 31 December 2021 are 45,615,876 (2020: 41,133,992). In this report, all references to measures relative to the number of shares in issue exclude shares held in treasury unless explicitly stated to the contrary.


Jon Brett

Finance Director

About Science Group

Science Group plc is an international science & technology consultancy and systems organisation. The Group’s operating businesses are supported by a scalable corporate and shared services infrastructure and underpinned by a robust balance sheet including significant cash resources and freehold property assets.