Interfront 2025 Annual Report

126 INTERFRONT ANNUAL REPORT 2025 costs increased by 13.3%, driven primarily by the growth in staff numbers (2025:204.8; 2024:187.9) and annual inflation-related salary adjustments, with a modest contribution from the initial costs associated with the newly introduced senior-management layer. The average salary cost per employee rose by 5.66% (2025: R72 203; 2024: R68 332). While this upward pressure on costs is expected to continue into the new financial year, once the full-year effect of the management changes is realised, it is anticipated that the average cost per head will stabilise over time as growth at junior levels offsets this impact. To support business continuity and retention of institutional knowledge, the company maintained a limited complement of external software developers, albeit at a significantly reduced cost, 34.9% lower than the previous year. Interest income increased by 26.6%, primarily driven by a stronger cash position resulting from higher operating revenues, despite a slight reduction in the average interest rates. Administrative expenses increased by only 2.8%, representing a real-term reduction. The nominal increase is primarily attributable to delays in securing office premises in the Gauteng region, owing to public procurement constraints. This is expected to be resolved in the forthcoming year, with plans underway to establish a dedicated office in Gauteng, where 47.2% of the staff are now based. Auditor’s remuneration rose by 34.8%, largely due to the timing and scope of internal audit engagements during the reporting period. A marginal foreign exchange loss was recorded, reflecting volatility in the Rand and the conclusion of the Luxembourg contract in December 2024, which was the primary contributor to foreign exchange fluctuations. Given the limited exposure to foreign revenue, no hedging arrangements were deemed necessary. Statement of Financial Position Interfront’s current assets increased by 14.7%, driven by robust cash generation and strong financial controls. Notably, trade and other receivables decreased by 45.2% as the previous year’s closing balance reflected an anomalous spike in billing towards the year-end. The normalisation of billing cycles contributed to the reduction in receivables. Cash and cash equivalents increased substantially by 98.5%, reflecting revenue growth and a reduction in trade receivables. This supports the company’s objective of establishing and maintaining a three-month working capital buffer, reinforcing its financial resilience in the absence of grant funding.