Company registration number 06309397 (England and Wales)
MEDIAWORKS UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
MEDIAWORKS UK LIMITED
COMPANY INFORMATION
Directors
M Rutherford
D Hoggan
B C Jacobson
G Smith
Secretary
M Rutherford
Company number
06309397
Registered office
Floor 2 Honeycomb
The Watermark
Gateshead
Tyne And Wear
NE11 9SZ
Auditor
Sumer Auditco Limited
The Beehive, Beehive Ring Road
London Gatwick Airport
Gatwick
United Kingdom
RH6 0PA
MEDIAWORKS UK LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
MEDIAWORKS UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

The directors present the strategic report for the year ended 31 March 2023.

Principal activities

The principal activity of the company is the provision of the complete portfolio of digital and strategic marketing services.

 

Using quantified and qualitative insights about a client, its competitors, and its customers, we develop strategic marketing solutions to achieve our client's commercial objectives, including the delivery of integrated marketing tactics and campaigns necessary for executing that strategy.

 

Our marketing solutions span the following tactics and channels:

 

 

 

 

 

 

 

 

Review of the business

The directors report turnover for the year of £7,716,849 (2022: £7,787,446) and EBITDA of £749,162 (2022: £1,842,875). The balance sheet as at 31 March 2023 shows net assets of £2,743,626 (2022: £2,766,030).

The demand within the market for data-led digital solutions continues to grow, with digital channels representing the majority proportion of the UK’s total advertising spend and this share of wallet is predicted to continue to expand.

 

To support this growth, the company has continued its focus on the recruitment and development of talented individuals across the agency, growing average headcount from 132 to 138 during the year and cementing our market position as one of the leading digital agencies in the North.

 

Geographically, the agency has now firmly established its presence across the North of England and Scotland, with physical offices in Gateshead, Leeds, Manchester and Edinburgh, offering wider access to talent across these territories.

 

 

MEDIAWORKS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Review of the Business (continued)

We have continued to focus on delivering best-in-class, integrated marketing strategies and solutions which align to the commercial goals of our clients. The quality of service delivery and performance of our campaigns have received recognition through a variety of industry awards and accreditations.

 

The company believes firmly in continuous innovation and has continued to develop its product offering to align with the needs of our growing client portfolio, and to ensure that we remain capable of delivering a market-leading, 'full service' digital transformation solution to our partners.

 

We have also continued to invest in further phases of development and adoption of our propriety data warehouse and analytical toolset, featuring powerful artificial intelligence, which we have deployed to drive even greater internal efficiencies and powerful insight for our clients.

 

The significant investments made by the company in expanding our regional office footprint, headcount and software tools have resulted in a dilution of operating profits. However, the directors are confident that these investments will provide the infrastructure necessary to support the future scale of the agency.

With strong links to a network of excellent local universities, we believe Mediaworks employs some of the best digital and creative minds in the industry. Along with analytical experts, our delivery team boasts campaign strategists, project managers, in-house developers, designers, videographers and content creators, who add value with a bespoke approach to each campaign. It is vitally important for us to attract, train, and retain high calibre and motivated employees. We are committed to creating opportunities for apprentices and graduates to enter the digital sector and providing career pathways for our people to flourish and reach their full potential.

 

In summary, the company has continued to deliver strong financial and operational performance. The directors are confident that the agency can maintain the growth in both our client portfolio and financial results as we enter our new financial year.

Principal risks and uncertainties

The company's principal financial instruments comprise cash and cash equivalents. Other financial assets and liabilities, such as trade creditors and trade debtors, arise directly from the company's operating activities.

 

The main risks associated with the company's financial assets and liabilities are set out below:

 

Interest rate risk

The company retains surplus cash in its bank current account and a floating rate interest bank deposit account. There are no financial creditors. The company's interest income is therefore affected by movements in interest rates, but not materially. The company does not undertake any hedging activity

 

Liquidity risk

The company aims to mitigate liquidity risk by managing cash generated by its operations.

 

Foreign currency risk

The company does not have any foreign currency transactions (all transactions are denominated in sterling and therefore is not exposed to any foreign currency risk).

Key performance indicators

The company's key financial and other performance indicators during the year were as follows:

 

 

Unit

2023

2022

Turnover

£

7,716,849

7,787,446

Average debtor days during the year

Days

53

55

Gross Margin

%

68

74

MEDIAWORKS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -

On behalf of the board

B C Jacobson
Director
29 September 2023
MEDIAWORKS UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -

The directors present their annual report and financial statements for the year ended 31 March 2023.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £325,610. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

M Rutherford
D Hoggan
B C Jacobson
G Smith
Future developments

Data analytics capability is an area that we have invested heavily into during recent years and shall continue to do so, developing our people, systems and processes to deliver best-in-class insight for our clients through intelligent and automated analysis of their data, alongside relevant third-party data sets.

 

With such strong technical capabilities and resource in place, the directors believe we are well positioned to capitalise on the market demand for digital services and we are confident that we can achieve the ambitious growth forecasts set out in our current business plan.

 

Whilst continuing to develop our product range, we will aim to grow our market share of top tier clients across the North of England, Scotland and Ireland, alongside major national brands and blue-chip businesses in our target sectors.

Auditor

Sumer Auditco Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

MEDIAWORKS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 5 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Going concern

The financial statements have been prepared on a going concern basis.

 

The company meets its day to day working capital requirements through cash generated from operations and bank loans. At the year end the company had net assets of £2,744k including cash at bank of £1,114k. The company is also subject to a debenture securing its parent company bank loan of £550k.

 

The company's forecasts and projections for the next twelve months show that the company should have sufficient headroom from these facilities to be able to continue in operation existence for that period, taking into account reasonable possible changes in trading performance and the potential impact on the business of possible future scenarios arising from the increases in inflation and the impact of these increases on the wider economy.

 

Although the forecast prepared, taking account of the matters above, support the ability of the company to remain a going concern and to be able to trade and meet its debts as they fall due, the full impact of increasing inflation and interest rates on the wider community and the underlying trading assumptions used in forecasting are extremely judgemental and difficult to predict and could be subject to significant variation.

 

However, based on the factors set out above, the directors believe that there is no material uncertainty in relation to going concern and that the company has adequate financial resources to continue in operational existence for at least twelve months from the date of signing the financial statements and therefore the directors believe it remains appropriate to prepare the financial statements on a going concern basis.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
B C Jacobson
Director
29 September 2023
MEDIAWORKS UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MEDIAWORKS UK LIMITED
- 6 -
Opinion

We have audited the financial statements of Mediaworks UK Limited (the 'company') for the year ended 31 March 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

MEDIAWORKS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MEDIAWORKS UK LIMITED
- 7 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

MEDIAWORKS UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MEDIAWORKS UK LIMITED
- 8 -
Capability of the audit in detecting irregularities, including fraud

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

 

The following laws and regulations were identified as being of significance to the entity:

 

 

 

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

 

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Gainford
Senior Statutory Auditor
For and on behalf of Sumer Auditco Limited
Statutory Auditor
The Beehive, Beehive Ring Road
London Gatwick Airport
Gatwick
United Kingdom
RH6 0PA
29 September 2023
MEDIAWORKS UK LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
7,716,849
7,787,446
Cost of sales
(2,449,269)
(2,010,197)
Gross profit
5,267,580
5,777,249
Administrative expenses
(4,752,077)
(4,040,788)
Other operating income
233,659
106,414
EBITDA
749,162
1,842,875
Amortisation and depreciation
(459,501)
(316,624)
Profit before taxation
289,661
1,526,251
Tax on profit
7
13,545
(209,963)
Profit for the financial year
303,206
1,316,288

The profit and loss account has been prepared on the basis that all operations are continuing operations.

MEDIAWORKS UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
2023
2022
£
£
Profit for the year
303,206
1,316,288
Other comprehensive income
-
-
Total comprehensive income for the year
303,206
1,316,288
MEDIAWORKS UK LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
596,874
611,847
Tangible assets
10
463,704
468,549
1,060,578
1,080,396
Current assets
Debtors
11
2,918,995
3,105,782
Cash at bank and in hand
1,114,138
1,496,269
4,033,133
4,602,051
Creditors: amounts falling due within one year
12
(2,144,971)
(2,698,591)
Net current assets
1,888,162
1,903,460
Total assets less current liabilities
2,948,740
2,983,856
Provisions for liabilities
Deferred tax liability
13
205,114
217,826
(205,114)
(217,826)
Net assets
2,743,626
2,766,030
Capital and reserves
Called up share capital
15
2,000
2,000
Capital redemption reserve
18,000
18,000
Profit and loss reserves
2,723,626
2,746,030
Total equity
2,743,626
2,766,030
The financial statements were approved by the board of directors and authorised for issue on 29 September 2023 and are signed on its behalf by:
B C Jacobson
Director
Company registration number 06309397 (England and Wales)
MEDIAWORKS UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2021
2,000
18,000
1,957,381
1,977,381
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
-
1,316,288
1,316,288
Dividends
8
-
-
(527,639)
(527,639)
Balance at 31 March 2022
2,000
18,000
2,746,030
2,766,030
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
303,206
303,206
Dividends
8
-
-
(325,610)
(325,610)
Balance at 31 March 2023
2,000
18,000
2,723,626
2,743,626
MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
1
Accounting policies
Company information

Mediaworks UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Floor 2 Honeycomb, The Watermark, Gateshead, Tyne And Wear, NE11 9SZ.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Mediaworks Holdings Ltd. These consolidated financial statements are available from its registered office, Floor 2 Honeycomb, The Watermark, Gateshead, Tyne And Wear, NE11 9SZ.

1.2
Going concern

The financial statements have been prepared on a going concern basis.true

 

The company meets its day to day working capital requirements through cash generated from operations and bank loans. At the year end the company had net assets of £2,744k including cash at bank of £1,114k. The company is also subject to a debenture securing its parent company bank loan of £550k.

 

The company's forecasts and projections for the next twelve months show that the company should have sufficient headroom from these facilities to be able to continue in operation existence for that period, taking into account reasonable possible changes in trading performance and the potential impact on the business of possible future scenarios arising from the increases in inflation and the impact of these increases on the wider economy.

 

Although the forecast prepared, taking account of the matters above, support the ability of the company to remain a going concern and to be able to trade and meet its debts as they fall due, the full impact of increasing inflation and interest rates on the wider community and the underlying trading assumptions used in forecasting are extremely judgemental and difficult to predict and could be subject to significant variation.

 

However, based on the factors set out above, the directors believe that there is no material uncertainty in relation to going concern and that the company has adequate financial resources to continue in operational existence for at least twelve months from the date of signing the financial statements and therefore the directors believe it remains appropriate to prepare the financial statements on a going concern basis.

 

MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
1.3
Turnover

Turnover comprises the fair value of the consideration received or receivable for the provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.

 

Project based revenue is recognised in the period in which the services are provided in accordance with the stage of completion of the contract.

 

Recurring revenue is recognised each month over the period of the contract.

 

The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company’s activities.

1.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software development
3 years
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Property improvements
10 years
Fixtures and fittings
8 years
Computers
4 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 17 -
1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received, if considered material to the financial statements.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Share-based payments

The parent company operates an equity-settled, share-based compensation plan, under which this company receives services from employees as consideration for equity instruments (options) of the entity.

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest, if considered material to the financial statements. A corresponding adjustment is made to equity. If the vesting period can not be predetermined then no expense is recognised until the options are exercised.

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.15
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Software development

The cost of an internally generated asset is capitalised as an intangible asset where it is determined by management that the ability to develop the assets is technically feasible, will be completed and that the asset will generate economic benefit.

Assesing indicators of impairment

In assessing whether there have been any indicators of impairment in assets, the directors have considered both external and internal sources of information such as market conditions and experience of recoverability. There have been no indicators of impairments identified during the current financial year.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Determining residual values and useful economic lives of intangible and tangible fixed assets

The company depreciates tangible fixed assets and amortises intangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management.

 

Judgement is applied by management when determining the residual values of tangible and intangible fixed assets. When determining the residual value management aim to assess the amount that the group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life.

 

The carrying amount of intangible fixed assets at the reporting date was £596,874 (2022 - £611,847) and the carrying amount of tangible fixed assets at the reporting date was £463,704 (2022 - £468,549).

Recoverability of trade debtors

The company establishes a provision for trade debts that are estimated not to be recoverable. When assessing the recoverability the directors consider factors such as the ageing of debtors, past experience of recoverability, and the credit profile of individual customers. The carrying value of this provision is £110,000 (2022 - £14,058).

MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Rendering of services
7,716,849
7,787,446
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
7,356,327
7,442,379
Europe
142,016
90,590
Other
218,506
254,477
7,716,849
7,787,446
2023
2022
£
£
Other revenue
Grants received
55,936
29,449
Management fees receivable
167,472
76,965

Grants income includes amounts of £55,936 (2022 - £24,713) received in relation to rates refunds from local authorities as well as education and skills apprenticeship grants and £nil (2022 - £4,736) in relation to the coronavirus job retention scheme.

4
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
6,500
9,000
For other services
Taxation compliance services
1,000
1,750
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Direct
75
70
Administrative
59
58
Directors
4
4
Total
138
132
MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
5
Employees
(Continued)
- 20 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
5,004,884
4,127,928
Social security costs
533,722
408,286
Pension costs
96,713
192,889
5,635,319
4,729,103
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
234,057
297,462
Company pension contributions to defined contribution schemes
4,436
6,521
238,493
303,983
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
124,453
Adjustments in respect of prior periods
(833)
(2,793)
Total current tax
(833)
121,660
Deferred tax
Origination and reversal of timing differences
(12,712)
88,303
Total tax (credit)/charge
(13,545)
209,963
MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
7
Taxation
(Continued)
- 21 -

The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
289,661
1,526,251
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
55,036
289,988
Tax effect of expenses that are not deductible in determining taxable profit
84,828
52,675
Tax effect of income not taxable in determining taxable profit
(5,978)
(6,867)
Adjustments in respect of prior years
-
0
(2,793)
Effect of change in corporation tax rate
(3,051)
52,279
Group relief
-
0
(58,196)
Research and development tax credit
(146,329)
(119,918)
Deferred tax adjustments in respect of prior years
-
0
2,795
Other
1,949
-
0
Taxation (credit)/charge for the year
(13,545)
209,963
8
Dividends
2023
2022
£
£
Final paid
325,610
527,639
MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
9
Intangible fixed assets
Software development
£
Cost
At 1 April 2022
831,358
Additions
329,983
At 31 March 2023
1,161,341
Amortisation and impairment
At 1 April 2022
219,511
Amortisation charged for the year
344,956
At 31 March 2023
564,467
Carrying amount
At 31 March 2023
596,874
At 31 March 2022
611,847
10
Tangible fixed assets
Property improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 April 2022
438,446
148,878
302,439
889,763
Additions
40,955
29,742
39,004
109,701
Disposals
-
0
-
0
(412)
(412)
At 31 March 2023
479,401
178,620
341,031
999,052
Depreciation and impairment
At 1 April 2022
142,997
94,746
183,471
421,214
Depreciation charged in the year
45,442
11,626
57,117
114,185
Eliminated in respect of disposals
-
0
-
0
(51)
(51)
At 31 March 2023
188,439
106,372
240,537
535,348
Carrying amount
At 31 March 2023
290,962
72,248
100,494
463,704
At 31 March 2022
295,449
54,132
118,968
468,549
MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 23 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,222,815
1,562,429
Corporation tax recoverable
40,000
-
0
Amounts owed by group undertakings
1,429,366
1,311,105
Other debtors
15,668
8,737
Prepayments and accrued income
211,146
223,511
2,918,995
3,105,782
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
287,736
464,878
Corporation tax
-
0
122,364
Other taxation and social security
766,318
545,325
Other creditors
135,951
118,918
Accruals and deferred income
954,966
1,447,106
2,144,971
2,698,591
13
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
205,114
217,826
2023
Movements in the year:
£
Liability at 1 April 2022
217,826
Credit to profit or loss
(12,712)
Liability at 31 March 2023
205,114

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
96,713
192,889

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

 

Contributions totalling £21,890 (2022 - £22,872) were payable to the scheme at the end of the year and are included in other creditors.

15
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
B ordinary shares of 1p each
100,000
100,000
1,000
1,000
A ordinary shares of 1p each
100,000
100,000
1,000
1,000
200,000
200,000
2,000
2,000
16
Financial commitments, guarantees and contingent liabilities

Yorkshire Bank hold a fixed and floating charge over the assets of the company along with a cross guarantee with Mediaworks Holdings and group companies, securing the group's borrowings.

17
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
93,178
114,084
Between two and five years
521,498
477,138
In over five years
57,308
194,846
671,984
786,068

The amount of non cancellable operating lease payments recognised as an expense during the year was £100,097 (2022 - £100,097)

MEDIAWORKS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 25 -
18
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
297,415
175,237
52,438
13,065
Other related parties
33,040
30,400
8,125
106,154
Management fees receivable
2023
2022
£
£
Entities with control, joint control or significant influence over the company
87,602
76,965
2023
2022
Amounts due to related parties
£
£
Other related parties
9,750
2,160

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
290,706
482,031
Other related parties
1,055
1,984
Other information

The company is a wholly owned subsidiary and has taken advantage of the exemption permitted by Section 33 Related Party Disclosures not to provide disclosures of transactions entered into with other wholly owned members of the group.

19
Ultimate controlling party

The company's ultimate parent undertaking is Mediaworks Holdings Limited, a company incorporated in England & Wales and its registered office is Floor 2 Honeycomb, The Watermark, Gateshead, England, NE11 9SZ.

 

B C Jacobson is the controlling party by virtue of his interest in the issued share capital of the parent company.

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