Company Registration Number 12449239 (England and Wales)
THE UK RECRUITMENT CO. LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
THE UK RECRUITMENT CO. LTD
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
THE UK RECRUITMENT CO. LTD
COMPANY INFORMATION
Directors
Mr IJ Munro
Twenty20 Midco 1 Limited
Company number
12449239
Registered office
33 Soho Square
London
England
W1D 3QU
Auditor
MHA
Century House
The Lakes
Northampton
NN4 7HD
Bankers
Barclays Bank PLC
2 Churchill Place
Canary Wharf
London
E14 5RB
THE UK RECRUITMENT CO. LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -

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

Fair review of the business

The principal activity of the company is the provision of managed workforce solutions and permanent placement services. The directors are not aware, at the date of this report of any likely major changes in the activity over the next year.

 

On the 31 March 2022, the Company purchased the trade and assets of Premiere Employment Group Limited, this accounts for the increased trading numbers in the current financial year.

 

The commercial impact of Covid-19 has largely subsided, albeit there still remain opportunities to support the government with vaccination and associated programmes; and the company continues to promote agile working for its employees.

 

Over the year, additional investment has been made into the IT infrastructure as the company harmonises systems across the wider ownership group.

Principal risks and uncertainties

The directors consider strategic, operational and financial risks and identify actions to mitigate those risks on a regular basis. The principal risks and uncertainties are detailed below:

 

Economic and competitive risk

Competitors in the general staffing market range from large multi-national organisations to small privately-owned businesses. All of the markets in which the company operates are continually subject to competition from both existing and new competitors. The costs of entry to the market can be relatively low, however, in certain specialist sectors, such as within the Public Sector, these costs can rise on the back of increased levels of compliance, and business investment required by local regulators and clients.

 

With inflation rising to 8.9% in the year to 31 March 2023, and interest rates rising at their fastest rate for many years, the company needs to remain agile and focused on managing the impact of these risks on all related stakeholders.

 

Commercial risk

The company benefits from close commercial relationships with key clients in both the public and private sectors. Within the private sector, the company is not dependent on any single key client. The public sector markets in which we operate are directly dependent on funding from local and national government organisations and these clients remain the largest customers in the business.

 

Technology risk

The company is reliant on a number of technology systems in providing its services to clients. These systems are located both in-house and in various data centres. The business continues to review and enhance its ability to cope with the loss of a technology system as a result of a significant event.

 

Regulatory risk

The staffing industry is governed by an increasing level of compliance. Additionally, clients require more complex levels of compliance in their contractual arrangements. The company takes its responsibilities seriously, is committed to meeting all of its regulatory responsibilities, which includes changes to national minimum wage legislation, and continues to develop its internal controls and processes with respect to legal and contractual obligations.

 

Financial risk

The company utilities various financial instruments including cash and other items, such as trade debtors and trade creditors that arise directly from its operations. The existence of these financial instruments exposes the company to a number of financial risks, which are described in more detail below.

 

The main risks arising from the company's financial instruments are market risk, interest rate risk, credit risk, and liquidity risk. The directors regularly review and agree policies for managing each of these risks and they are summaries below.

THE UK RECRUITMENT CO. LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -

Market Risk

Market risk encompasses two types of risk, being interest rate and market price risk. Interest rates are increasing however with a low level of borrowing, movements in interest rates are not currently a significant risk to trading. Market price risks are constantly reviewed by management in each operation.

 

With the Brexit direction now known, some of the previous uncertainties within the labour markets have fallen away. Clearly, the picture remains fluid and the company must be alive to the risks around labour supply where currently it utilises a large proportion of workers from overseas. The business is actively engaging with customers on Brexit strategies to ensure customers secure the best resources.

 

Interest Rate Risk

The company finances its operations through a mixture of cash, creditors, and an invoice discounting facility. The exposure to interest rate fluctuations are largely limited to the movement in base rate in the UK, which is currently 5.25%. The financing has been modelled into the look forward assumptions.

 

Credit Risk

The company's principal financial assets are cash and trade debtors.

 

To manage credit risk the directors set credit limits for customers based on a combination of third party credit references and payment history. Credit limits are reviewed by the company's credit controllers on a regular basis in conjunction with debt ageing and collection history. The company expects that economic challenges will continue to negatively impact credit limits on certain types of customers with whom it trades, thus requiring a greater degree of focus to stay on top of cash collections to avoid build-up of trade debtors and possible bad debt.

 

Liquidity risk

The company manages liquidity risk by ensuring sufficient liquidity is available to meet the foreseeable cash need of the business. The facilities in place provide sufficient normal liquidity headroom, further substantial modelling has taken place to determine the impact on cash availability from the current economic scenarios. These scenarios have largely focussed on the impact of volume reductions. Liquidity risk is proactively managed using 13 week forecasts, thus providing time for compensatory actions to be taken, should forecasts need updating.

Key performance indicators

Financial

The financial performance of the company is measured using the following key performance indicators:

 

Cash collection is an important part of effective working capital management. The average debtor days at the period end were 38 days (2022: 43 days).

 

Sales for the year to March 2023 were £192m (2022: £111m) and delivered an operating profit before exceptional costs/income were £5.6m (2022: £3.6m).

 

The company had net current assets of £7.3m (2022: £9.9m) as at the balance sheet date.

 

Non-Financial

The company measures its non-financial performance as follows:

 

The securing of new business is a critical area if the business is to continue to grow and a number of new accounts were awarded from both new and existing customers. The company is a large employer and strives to ensure that a minimum of 99% of all employees are paid accurately and on time. During the year, the company achieved payroll accuracy exceeding 99.8%.

Future developments and events after the balance sheet date

Despite the economic challenges the directors expect the general level of activity to increase over the forthcoming year. This is as a result of ongoing investment into key target markets, a heightened focus on delivering what the customer wants and through investment in new IT platforms.

THE UK RECRUITMENT CO. LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
Going concern

The directors refer to the going concern accounting policy stated in the notes to the financial statements.

Promoting the success of the company

This report sets out how the Directors comply with the requirements of Section 172 of the Companies Act 2006 and how these requirements have impacted the Directors activities and decision making during the financial year ended 31 March 2023.

 

The Directors consider that they have acted in good faith to promote the success of the company on behalf of the stakeholders, in relation to matters set out in s172 of the Act. This has been achieved by working with the stakeholders to formulate long term plans and strategic imperatives, which are monitored and updated regularly. The stakeholders of the company include the employees, clients, suppliers and shareholders of the business.

On behalf of the board

Mr IJ Munro
26 October 2023
THE UK RECRUITMENT CO. LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -

The directors present their report with the financial statements of the company for the year ended 31 March 2023.

Principal activities

The principal activity of the company in the period under review was that of managed workforce solutions and permanent placement services.

Results and dividends

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

Ordinary dividends were paid amounting to £7,100,000. The directors do not recommend payment of a final dividend.

Directors

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

Mr IJ Munro
Twenty20 Midco 1 Limited
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors which were made during the year and remain in force at the date of this report.

Supplier payment policy

The company's policy is to settle terms of payment with suppliers when agreeing the terms of each transaction, ensuring that suppliers are made aware of the terms of payment and abide by the terms of payment.

Business relationships

The Directors and Management Team regularly review how they maintain positive relationships with all its stakeholders including suppliers, customers and others. They have built a reputation on high levels of customer service and uphold this through accreditations such as ISO 9001.

Auditor

MHA 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. Following a rebranding exercise on 15 May 2023 the trading name of the company's independent auditor changed from MHA MacIntyre Hudson to MHA.

Corporate governance

During the past year, there has been a continued focus on corporate governance, with the board spending a large proportion of its time examining and strengthening our processes throughout the company. Ensuring that a solid governance framework is in place is key to maintaining trust and transparency and an important building block for future growth.

Energy and carbon report

Please refer to the financial statements of the ultimate parent company for this information.

THE UK RECRUITMENT CO. LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 5 -
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.

Disclosure in strategic report

The company has chosen, in accordance with Section 414 C(ii) of the Companies Act 2006, and as noted in this Directors' Report, to include certain matters in its Strategic Report that would otherwise be required to disclose in this Directors' Report, specifically in respect of the review of the business, key performance indicators, principal business risks and uncertainties and future developments for the company.

Statement of disclosure to auditor

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Decision making

The Directors monitor and review strategic objectives against business plans on a regular basis. The Management Team support the Directors with the planning and execution of long-term plans and are experienced in the successful implementation of strategic business decisions.

On behalf of the board
Mr IJ Munro
Director
26 October 2023
THE UK RECRUITMENT CO. LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF THE UK RECRUITMENT CO. LTD
- 6 -
Opinion

We have audited the financial statements of The UK Recruitment Co. Ltd (the ‘company’) for the year ended 31 March 2023, which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and 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 United Kingdom, including the Financial Reporting Council'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:

THE UK RECRUITMENT CO. LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF THE UK RECRUITMENT CO. LTD
- 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s report.

 

THE UK RECRUITMENT CO. LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF THE UK RECRUITMENT CO. LTD
- 8 -

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Guy Hodgkinson BA ACA (Senior Statutory Auditor)
For and on behalf of MHA
13 November 2023
Chartered Accountants
Statutory Auditor
MHA is the trading name of MacIntyre Hudson LLP, a Limited liability partnership in England and Wales (registered number OC312313)
THE UK RECRUITMENT CO. LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
2023
2022
Notes
£
£
Turnover
192,054,620
111,059,545
Cost of sales
(170,111,853)
(92,878,069)
Gross profit
21,942,767
18,181,476
Administrative expenses
(16,313,020)
(14,553,165)
Other operating income
100,302
26,129
Exceptional item
3
-
0
1,796,041
Operating profit
5
5,730,049
5,450,481
Interest payable and similar expenses
7
(95,582)
(6,429)
Profit before taxation
5,634,467
5,444,052
Tax on profit
8
(1,080,005)
(507,326)
Profit for the financial year
4,554,462
4,936,726

 

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

The notes on pages 12 to 22 form part of these financial statements.

THE UK RECRUITMENT CO. LTD
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
57,669
57,651
Current assets
Debtors
11
28,071,189
34,558,693
Cash at bank and in hand
187,583
2,102,704
28,258,772
36,661,397
Creditors: amounts falling due within one year
12
(20,923,409)
(26,780,478)
Net current assets
7,335,363
9,880,919
Net assets
7,393,032
9,938,570
Capital and reserves
Called up share capital
15
10
10
Profit and loss reserves
16
7,393,022
9,938,560
Total equity
7,393,032
9,938,570

The notes on pages 12 to 22 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 19 October 2023 and are signed on its behalf by:
Mr IJ Munro
Director
Company Registration No. 12449239
THE UK RECRUITMENT CO. LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2021
10
6,876,834
6,876,844
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
4,936,726
4,936,726
Dividends
9
-
(1,875,000)
(1,875,000)
Balance at 31 March 2022
10
9,938,560
9,938,570
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
4,554,462
4,554,462
Dividends
9
-
(7,100,000)
(7,100,000)
Balance at 31 March 2023
10
7,393,022
7,393,032

The notes on pages 12 to 22 form part of these financial statements.

THE UK RECRUITMENT CO. LTD
STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Judgements and key sources of estimation uncertainty

In the application of the company's accounting policies above, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future period.

Critical judgements

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

Bad debt provision

Trade debtor balances are reviewed at each period end for recoverability and whether an impairment charge is necessary; a specific bad debt provision of £63,062 (2022: £155,338) has been provided at the reporting date.

2
Accounting policies
Company information

The UK Recruitment Co. Ltd is a private company limited by shares, and incorporated in England and Wales under registered number 12449239. The registered office is 33 Soho Square, London, W1D 3QU, and the principal place of business is 1st Floor, Meridian House, Sandy Way, Grange Park, Northampton, NN4 5EJ.

2.1
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 Twenty20 Capital Bidco1 Limited Group these consolidated financial statements are available from its registered office, 33 Soho Square, London, W1D 3QU.

THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2
Accounting policies
(Continued)
- 13 -

In order to consolidate and relaunch the business across the UK under one legal structure, on the 31 March 2022 the company purchased the trade and assets of fellow subsidiary Premiere Employment Group Limited. This included the transfer of all employees, customer contracts and creditors. Following the transfer the resulting inter-company balance was waived. The combined Recruitment Company footprint is now well placed to service customers right across the UK and to build out its Public and Commercial Sector offerings under one unified brand.

2.2
Business combinations

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

 

The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.

 

Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

2.3
Going concern

The company now has access to a £25m invoice discounting facility with Close Brothers. Based on current short term cashflow projections, the company can operate within the facility structure provided.true

 

The capital structure of the company will ensure that it is adequately funded with sufficient headroom in facilities to accommodate the growth plans of the business.

 

To enhance financial performance, management has taken, and will continue to take steps to maximise overhead efficiency and are confident that the company has adequate resources to continue operating for the foreseeable future.

 

Although the current economic environment creates uncertainty, the company's forecasts and projections, which take account of reasonably possible changes in performance and the risks and uncertainties, indicate that the company will be able to operate within the level of its facilities, for a period of at least 12 months from the date these financial statements are signed.

 

Consequently, the going concern principle has been adopted in preparing the annual report and financial statements.

2.4
Turnover

Turnover represents amounts recognised by the company in respect of services supplied, exclusive of Value Added Tax and trade discounts. Turnover principally consists of managed workforce solutions and permanent placement services. Turnover from the provision of labour is recognised at the employment contract start date.

 

2.5
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.

THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Accounting policies
(Continued)
- 14 -

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:

Leasehold improvements
Straight-line over 12 months
Plant and equipment
Straight-line over 3 years
Fixtures and fittings
Straight-line over 5 years
Computer equipment
Straight-line over 3 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.

2.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

2.7
Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand.

2.8
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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Accounting policies
(Continued)
- 15 -
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.

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.

2.9
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.

2.10
Taxation

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

THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
2
Accounting policies
(Continued)
- 16 -
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.

2.11
Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

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.

2.12
Pension cost and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

 

Differences between contributions payable in the period and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

2.13
Lease commitments

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 leased asset are consumed.

2.14
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.

2.15
Foreign currencies

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2.16

Trade and other debtors

Trade and other debtors are recognised initially at transaction price less attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

2.17

Trade and other creditors

Trade and other creditors are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses in the case of trade creditors.

THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
3
Intercompany balance waiver
2023
2022
£
£
Intercompany balance waiver - Premiere Employment Group Limited
-
(1,796,041)

In the year to March 2022, as part of a group organisation, the balance of an intercompany loan payable to Premiere Employment Group Limited, a fellow group subsidiary, was waived.

4
Employees

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

2023
2022
Number
Number
Administration
223
177

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
8,458,945
7,606,336
Social security costs
1,017,577
893,853
Pension costs
176,553
149,941
9,653,075
8,650,130

In addition, the average number of persons on hire to clients was 7,949 (2022: 5,165). The associated costs were wages and salaries of £156,240,586 (2022: £85,650,180), social security costs of £10,946,297 (2022: £5,844,983) and pension costs of £1,936,051 (2022: £660,864).

5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(100,302)
(26,129)
Fees payable to the company's auditor for the audit of the company's financial statements
45,000
25,000
Depreciation of owned tangible fixed assets
54,942
5,974
Operating lease charges
498,298
427,981
6
Directors' remuneration

The remuneration of the directors is borne by another company within the group of companies of which they are directors. The portion of this remuneration which related to the company is considered to be £nil (2022: £nil) in the current period.

THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
95,582
6,429
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,080,005
507,326

The actual 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
5,634,467
5,444,052
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
1,070,549
1,034,370
Tax effect of expenses that are not deductible in determining taxable profit
7,152
2,349
Change in unrecognised deferred tax assets
4,689
-
0
Group relief
-
0
(180,038)
Other non-reversing timing differences
-
0
(8,109)
Depreciation in excess of capital allowances
(2,385)
-
0
Intercompany loan write off
-
0
(341,246)
Taxation charge for the year
1,080,005
507,326

The UK government has announced that from 1 April 2023 the rate of corporation tax will be 25% for companies with annual profits over £250,000. For companies with annual profits below £50,000 the rate will remain at 19%. Marginal relief provisions will be introduced so that, where a company's profits fall between the lower (£50,000) and upper (£250,000) limits, it will be able to claim an amount of marginal relief that bridges the gap between the lower and upper limits, providing a gradual increase in the corporation tax rate.

9
Dividends
2023
2022
£
£
Interim paid
7,100,000
1,875,000
THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
10
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computer equipment
Total
£
£
£
£
£
Cost
At 1 April 2022
3,345
-
0
90,521
54,229
148,095
Additions
-
0
13,001
5,128
36,831
54,960
Disposals
-
0
-
0
(20,251)
-
0
(20,251)
At 31 March 2023
3,345
13,001
75,398
91,060
182,804
Depreciation
At 1 April 2022
3,345
-
0
67,017
20,082
90,444
Depreciation charged in the year
-
0
2,837
26,026
26,079
54,942
Eliminated in respect of disposals
-
0
-
0
(20,251)
-
0
(20,251)
At 31 March 2023
3,345
2,837
72,792
46,161
125,135
Carrying amount
At 31 March 2023
-
0
10,164
2,606
44,899
57,669
At 31 March 2022
-
0
-
0
23,504
34,147
57,651
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
24,240,289
29,263,764
Corporation tax recoverable
52,051
21,513
Amounts owed by group undertakings
9,943
1,589,237
Other debtors
-
0
1,086
Prepayments and accrued income
3,768,906
3,683,093
28,071,189
34,558,693

Amounts due from other group undertakings are unsecured, non-interest bearing, and repayable on demand.

THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Factoring account
13
2,046,134
3,529,259
Trade creditors
318,034
235,445
Amounts owed to group undertakings
666,367
272,482
Taxation and social security
7,541,367
9,330,516
Other creditors
270,841
1,513,386
Accruals and deferred income
10,080,666
11,899,390
20,923,409
26,780,478

Amounts due to other group undertakings are unsecured, non-interest bearing, and repayable on demand.

13
Secured Debts
The following secured debts are included within creditors:
2023
2022
£
£
Factoring account
2,046,134
3,529,259
Payable within one year
2,046,134
3,529,259

On the 2nd March 2020 Close Brothers Limited created a fixed charge and also a floating charge over all of the property and undertakings of the company; this charge contains a negative pledge.

 

On the 2nd March 2020 a shareholder created a fixed charge and also a floating charge over all of the property and undertakings of the company; this charge contains a negative pledge.

 

14
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
176,553
149,941

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.

In addition, pension costs relating to persons on hire to clients was £1,936,051 (2022: £660,864).

 

Contributions outstanding to the fund at the balance sheet date totaled £101,539 (2022: £36,060).

THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
15
Share capital
Allotted, issued and fully paid:
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 10p each
100
100
10
10

The company has one class of ordinary shares which carry no right to fixed income.

16
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
9,938,560
6,876,834
Profit for the year
4,554,462
4,936,726
Dividends declared and paid in the year
(7,100,000)
(1,875,000)
At the end of the year
7,393,022
9,938,560

Profit and loss reserves includes all current and prior year retained profits and losses.

17
Business combinations

In the comparative period, on the 31st March 2022, The UK Recruitment Co. Ltd acquired the trade and assets of Premiere Employment Group Limited. The acquisition was accounted for under the merger method of accounting.

Total identifiable net assets at that date totalled £1,796,031. Total consideration paid totalled £1,796,031, which was settled via the intercompany accounts as noted under the exceptional items note.

18
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
299,015
213,809
Between two and five years
481,250
237,627
780,265
451,436
19
Related party transactions

The Company is not required to disclose transactions with other members of the group in which the company is a part on the basis that the entity is a wholly owned subsidiary of the parent of the group as stated in section 33 of FRS102.

THE UK RECRUITMENT CO. LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
20
Ultimate controlling party

The immediate parent undertaking at the balance sheet date was Twenty20 Midco 1 Limited and the ultimate parent undertaking was Twenty20 Capital Investments Limited, both companies are registered in England and Wales and their registered office is 33 Soho Square, London, 21D 3QU.


The parent company of the smallest group that includes the company and for which consolidated financial statements are prepared is Twenty20 Capital Bidco1 Limited. The parent company of the largest group that includes the company and for which consolidated financial statements are prepared is Twenty20 Capital Investments Limited. Copies of these financial statements can be obtained from the registered office at 33 Soho Square, London, W1D 3QU.

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