Interfront 2024 Annual Report

A B C D FINANCIAL INFORMATION in real terms, the full incorporation of the e@syFile team for the first time means that any year- on-year comparison has to be nuanced. The average staff count also rose by 20.52% (2024: 187.9, 2023: 155.9). To mitigate the lack of internal development skills and market scarcity, Interfront continued engaging external developers, resulting in a 26.7% expense growth in this area. After adjusting for the prior year’s one-time Section 197 transfer fee, administrative expenses increased by 31%, driven mainly by higher variable costs related to the expansion of staff, particularly in IT spending. However, auditors’ remuneration fell by 18.5%, largely owing to the timing of internal audit activities. Notwithstanding the volatility of the rand, Interfront recorded a marginal forex profit during the year. Currently, the limited risk associated with foreign revenue does not warrant hedging against future exchange rate fluctuations. Statement of Financial Position Current assets saw an increase of 11.1%. Notably, trade and other receivables experienced a significant surge of 266.4%. This increase is due to a growth in revenue that has a direct correlation to trade receivables. Additionally, following an agreement with our primary customer, Interfront revised its billing structure in the latter half of the financial year from monthly advance billing to billing based on the completion of deliverables. This shift necessitated internal operational adjustments and altered our administrative requirements and interactions with our customer. Consequently, we experienced periodic fluctuations in billing cycles, culminating in a substantial increase in billings during the final month of the financial year. As a result, trade receivables saw a notable uptick. Moreover, prepayments and other receivables rose significantly, owing to accrued trade receivables being linked to the new billing model. Non-current assets experienced a 4.8% decrease, primarily influenced by reduced intangible asset amortisation, albeit offset by an increase in Property, Plant, and Equipment driven by the expansion of staff numbers. Current liabilities rose by 8.4%, mainly due to elevated staff-related provisions, in line with the overall rise in average staff numbers. Additionally, VAT payable saw a substantial increase, aligned with the sizeable billable amounts at year-end. Conversely, trade payables decreased by 25.6%, reflecting the new billing model, which eliminated billing in advance. Non-current liabilities of the company decreased by 47.7%. This decrease was attributable to the reversal of the non-current portion of the operating lease liability. The financial outcomes of the company, in accordance with the break-even financial model, demonstrate an after-tax accounting surplus of R4 078 142, which contributes to the 8% increase in net assets totalling R55 million (contrasted with R50.9 million in the preceding year). In summary, Interfront, as an accountable contributor to the public domain, maintains its steadfast commitment to prudent financial stewardship. We remain committed to adopting the cost-saving measures set out by the National Treasury.