Watchstone Group PLC - Final Results

Watchstone Group plc

("Watchstone" or the "Company" or the "Group")

Preliminary results for the year ended 31 December 2024

Watchstone Group plc (WTG.L) today announces its results for the year ended 31 December 2024.

The Annual Report and Accounts for the year ended 31 December 2024 will be released in due course and posted (where applicable) to registered shareholders. Once published, the Annual Report and Accounts will be available at www.watchstonegroup.com/investors.

The 2024 Annual General Meeting ("AGM") will be held on 27 June 2025 at 10.00am in London. At the AGM, the Company will propose a reduction of the share premium account and a subsequent return of cash to shareholders. The Company will also propose a cancellation of its Aquis listing pending the final return of assets to shareholders and a wind up of the Company (subject to any other potential options presented to the Board).

The Notice of the AGM will be published on the Company's website at https://www.watchstonegroup.com/investors/shareholder-information/.

For further information:

Chairman and CEO's Report

The matters pursued resolved and/or defended in 2024 and since the year end now bring the activities of Watchstone to a long-awaited end. It has been a complex and extensive restructuring with many twists and turns. We will now look to delist the company from Aquis in order to save further costs and to return the remaining assets of the Group to shareholders whilst being open to discussions in respect of the remaining shell.

During the year, in March 2024, the Group was informed the Upper Tier Tax Tribunal ("UTT") had found in favour of HMRC in respect of our claim for a repayment of historic tax paid. Having taken advice, the Group appealed the decision of the UTT to the Court of Appeal, which was heard in March 2025.  In April 2025, the appeal was dismissed. The Board has decided not to seek permission to appeal to the Supreme Court. In May 2025, the Group was party to a settlement at no cost to the Group in respect of a matter related to a historic property lease. Accordingly, for the first time in more than ten years, the Group is not subject to, or pursuing, any litigation.

The two remaining Directors, being the only employees of the Group, agreed to vary their contracts effective from 1 January 2025 to further rationalise costs proportionate to the ongoing activities of the business with total non-contingent fees of £50,000.  Further details are included in the Directors' Remuneration Report in the Annual Report and Accounts .

During 2024, £3.7m was returned to Shareholders as a Capital Return following court approval for a Capital Reduction.

We would like to thank our shareholders for their support during 2024 and patience whilst we work to realise maximum value from our remaining assets.

for the year ended 31 December 2024

The accompanying notes form part of the Financial Statements.

for the year ended 31 December 2024

The accompanying notes form part of the Financial Statements.

as at 31 December 2024

for the year ended 31 December 2024

The above Consolidated Cash Flow Statement includes cash flows from both continuing and discontinued operations.

Notes:

1.  Results announcement

The Financial Statements for the year ended 31 December 2024 have been prepared in accordance with UK adopted international accounting standards in conformity with the requirements of the Companies Act 2006.  However, this announcement does not contain sufficient information to comply with adopted IFRS. The Group will publish its Annual Report and Financial Statements in due course and these will appear on the Group's website at www.watchstonegroup.com and be posted to shareholders. The auditors have reported on those accounts; their report was (i) unqualified; and (ii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 31 December 2024. Statutory accounts for the year ended 31 December 2023 have been delivered to the Registrar of Companies and those for the year ended 31 December 2024 will be delivered by 30 June 2025. This preliminary announcement was approved by the Board of Directors on 22 May 2025 and these preliminary results have been extracted from the audited results for the year ended 31 December 2024.

2. Administrative expenses

Following a hearing in November 2023, in March 2024, Watchstone was informed of the decision of the Upper Tax Tribunal ("UTT") which found in favour of HMRC.  The Group was granted permission to appeal the decision of the UTT to the Court of Appeal which was heard in March 2025.  The legal expenses during 2024 primarily relate to the costs of preparing for this appeal.

Legal fees incurred during 2023 primarily relate to the litigation undertaken by the Company against PwC and Aviva Canada. 

Since the Group is the Claimant in the HMRC matter, no provisions are made in respect of the costs of such actions since the Group is (or was) not obliged to continue to pursue them. 

3. Provisions

Split:

Legal disputes and regulatory matters

Following a hearing held in December 2021, on 12 April 2022, Watchstone was informed of the decision of the First Tier Tribunal which found in favour of HMRC and that the Group had not made any supplies of telematics devices or related services in the VAT periods 07/2014 to 07/2018. Accordingly, the appeal was dismissed and the Group has provided for the costs incurred by HMRC.

An appeal with the UTT was heard in November 2023. In March 2024, Watchstone was informed of the decision of the UTT which found in favour of HMRC.  Accordingly, the appeal was dismissed and the Group has additionally provided for the costs incurred by HMRC at the UTT at 31 December 2024.  An amount of these costs were partly settled with HMRC during 2024. The Group was granted permission to appeal the decision of the UTT to the Court of Appeal which was heard in March 2025 and dismissed in April 2025.

This represents the entirety of the provisions held by the Group at 31 December 2023 and 31 December 2024.

4. Contingent assets and liabilities

During 2024, the Company was notified of a claim in respect of a historic property lease by a former subsidiary of the Group where the parent company had entered into a guarantee for the former subsidiary. In May 2025, the claim was settled at no cost to the Group.