The director presents the strategic report for the year ended 31 March 2023.
The principal activity of the company continues to be the provision of permanent, contract and interim IT recruitment services to clients throughout the UK, Germany and USA.
The profit and loss account shows Turnover for the year of £19.7m (2022: £21.3m), Gross profit for the year of £3.9m (2022: £5.7m) and a loss before tax for the year of £484k (2022: £747k).
The Company balance sheet shows a reduction of net assets on the prior year, in line with the investment in the business and the macro-economic factors in the tech sector, interest rate rises, and global conflict events in the second half of the year.
The director considers that the company has reported a strong set of financial results considering the unprecedented events of the year. This financial year had to be focussed on right-sizing the business to ensure strong ongoing performance whilst correctly positioning the business to capitalise on future opportunities.
Future Developments
We are confident in the direction the business is taking and clarity of focus and are excited about the further opportunities that will be created for key employees. The business will continue to focus on permanent and contract IT recruitment across the UK, USA, Germany and rest of Europe.
Competition
There is as always competitive risk from other companies, however Venturi are confident in their approach and commitment to quality of service and that this will ensure that longstanding client relationships are maintained which is evidenced with 80% repeat business, and new business opportunities will be realised. The director believes that their business plan for developing existing markets and expanding into new markets will mean that Venturi continues to evolve and grow. We perceive that we are in the most dynamic marketplaces and territories that will help us achieve our long-term goal of profitably for the years to come.
Credit Risk
The company’s principal financial asset is trade debtors. To minimise this risk to this asset credit insurance is used where appropriate and rigorous credit control measures are employed. In addition, the company’s exposure is spread over a large number of customers with the largest customer making up less than 10% of the ledger. This year we have again witnessed repeat custom and deeper penetration into our existing client base which is testament to our ongoing client account management strategy.
Liquidity risk
The company oversees all facets of its cash needs to ensure ample liquid resources for meeting operational requirements. The company continues to utilise invoice discounting facilities to ensure cash needs are met.
Cash flow risk
Cash flow forecasting serves as one of the most important functions performed by the finance team where weekly, monthly and quarterly forecasts are regularly monitored, and necessary measures are undertaken.
I.T. System Failure Risk
The company is heavily dependent on its I.T. Systems and database. To mitigate this risk, the director has ensured that a disaster recovery plan is in place, and cyber security cover is maintained. Venturi passionately believes in investment in infrastructure and its CRM system and continues to work with the best breed suppliers to compete at the highest level in this ever-evolving dynamic landscape.
Reduction in Business Activity
The company, like any other business, is exposed to a risk of a downturn in the IT Sector. In addition, trading levels are influenced by the general economy. To mitigate this risk, the director is pro-actively engaged in the running of the business, seeking out and capitalising on new opportunities such as launching into mainland Europe. We continue to strive for a strong contract contribution to our business which we feel gives us visibility of ongoing recurring revenue. We also continue to identify and serve vertical markets where demand outstrips supply.
Turnover has decreased by 8% in the year and gross profit has decreased by 32%, this is as a result of the decline in general economic conditions. Continuing to drive the efficiency and effectiveness of the workforce will ensure that Venturi will be best placed to take advantage of all the opportunities that come our way. We continue to pursue our goal of being the recruitment company most known for improving the recruitment experience within the tech sector.
Exceptional costs of circa £128k are included in the accounts for the year (2022: Nil). Details of exceptional items are disclosed in note 4.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 March 2023.
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £274,650. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Saffery LLP have expressed their willingness to continue in office.
Basis for opinion
Material Uncertainty in Relation to Going Concern
We draw attention to note 1.2 in the financial statements which describes the company's financing of working capital. As stated in note 1.2, these events or conditions, along with the other matters as set forth in note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in this respect.
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
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 information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
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.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the director, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with director and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified;
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Venturi Limited is a private company limited by shares incorporated in England and Wales. The registered office is WPP Manchester Campus, 1st Floor, 1 New Quay Street, Manchester, England, M3 4BN.
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 £.
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:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Venturi Holdings Limited. These consolidated financial statements are available from its registered office, WPP Manchester Campus, 1st Floor, 1 New Quay Street, Manchester, England, M3 4BN.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Venturi Limited is a wholly owned subsidiary of Venturi Holdings Limited and the results of Venturi Limited are included in the consolidated financial statements of Venturi Holdings Limited which are available from WPP Manchester Campus, 1st Floor, 1 New Quay Street, Manchester, England, M3 4BN.
The company meets its day-to-day working capital requirements through invoice discounting facilities. The recent rise in inflation and increase in interest rates naturally creates a challenging economic environment with tough trading conditions. Consequently, this can create periods where the availability of cash needs to be tightly managed. The company maintains its cash flow requirements through cashflow projections which are closely monitored and it continues to maintain a strong relationship with its financiers. The companies forecasts for the year ended 31 March 2024 and beyond show that net profit is expected to increase, and the Director believes that the company can manage its working capital requirements appropriately.
At the time of approving the financial statements, the Director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and thus continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
Fixtures, fittings and IT includes website development costs capitalised.
Basic financial assets, which include debtors, 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.
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.
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.
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, 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
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 using the weighted price earnings model. 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. A corresponding adjustment is made to equity.
The expense in relation to share options over the parent company's shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company's investment in that subsidiary.
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.
Invoice discounting
Amounts due in respect of invoice discounting are separately disclosed as creditors due within one year. The company can use these facilities to draw down on a percentage of the value of certain sales invoices. The management and collection of trade debtors remains with the company.
In the application of the company’s accounting policies, the director is 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.
Impairment of investments
Impairment of the investments in Venturi Group Inc and Venturi Germany GmbH require management to prepare discounted cash flows which involves making significant judgements and assumptions, including sales growth rates and interest rates. The value of the investments as at 31 March 2023 was £22,157 (March 2023: £22,157).
An analysis of the company's turnover is as follows:
The financial statements include certain exceptional costs that have been separately disclosed in order to provide a clear understanding of the company’s financial performance. These exceptional costs relate to significant expenses incurred during the year that are considered to be both unusual in nature and non-recurring.
The exceptional costs recognised during the year relate to costs incurred in connection with the following:
i) a refinance amounting to £95,090 to move a term loan and invoice discounting facility of the business to a new provider
ii) a recruitment fee amounting to £33,000 for a board level hire
The exceptional costs have been presented separately in the statement of comprehensive income to ensure transparency and facilitate a better understanding of the underlying operating performance of the company.
Management believes that the separate disclosure of exceptional costs provides users of the financial statements with valuable insights into the financial results of the company and enhances comparability with prior periods.
It should be noted that the exceptional costs disclosed in this note are distinct from the normal operating expenses incurred by the company in the ordinary course of business. The normal operating expenses are disclosed separately in the financial statements and are not included in the exceptional costs.
The exceptional costs recognised in the financial statements are deemed to be non-recurring in nature, and their inclusion in the income statement is intended to present a more accurate depiction of the company’s ongoing financial performance, excluding the impact of these exceptional items.
Management has exercised judgement and applied appropriate professional expertise in determining the classification of costs as exceptional. The evaluation of costs as exceptional involved an assessment of the underlying circumstances, management’s intent, and the materiality of the expenses incurred.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 1 (2022 - 1).
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Factors that may affect future tax charges
With effect from 1 April 2023 the rate of corporation tax increased from 19% to 25%. From the same date a small companies rate of 19% was introduced for companies with profits of £50,000 or less. The main rate of 25% applies to companies with profits over £250,000 and marginal relief applies for profit between the thresholds. The corporation tax liabilities within the financial statements are calculated using these rates.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 31 March 2023 are as follows:
Registered office addresses (all UK unless otherwise indicated):
The results of the above companies are consolidated into the financial statements of Venturi Holdings Limited.
There is a fixed and floating charge over the assets of the company in favour of Sonovate Limited dated 8 June 2018 which was satisfied during the year.
There is a fixed and floating charge over the assets of the company in favour of National Westminster Bank PLC dated 27 May 2020.
There is a fixed and floating charge over the assets of the company in favour of Close Brothers Limited dated 16 June 2022.
Included within other creditors is net invoice financing facilities of £836,857 (2022: £1,171,644) which are secured against trade debtors.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
The short term timing differences of £5,471 is expected to reverse within 12 months and relates to timing differences that are expected to mature within the same period.
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.
The outstanding amount included in creditors for pension contributions as at 31 March 2023 amounted to £21,822 (2022: £15,463).
The company valued the granted options using a weighted price earnings model with a suitable discount applied to reflect the number of shares granted. The method used was selected as it was considered the most appropriate model to value a trading company.
The company recognised total expenses of £nil related to equity settled share based payment transactions during the period as the directors consider the charge to be immaterial.
All classes of shares have rights pari-passu with the other classes of shares.
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:
Retained earnings represents accumulated profits less dividends paid.
Venturi Holdings Limited is the immediate and ultimate parent undertaking. Venturi Holdings Limited is the largest and smallest group in which Venturi Limited is a member and for which consolidated financial statements are prepared and publicly available. A copy of the group financial statements can be obtained from WPP Manchester Campus, 1st Floor, 1 New Quay Street, Manchester, England, M3 4BN.
The company's ultimate controlling party is Bradley Lamb, a director and majority shareholder of Venturi Holdings Limited.
During the year the company entered into the following transactions with related parties:
As at 31 March 2023 amounts owed to the director amounted to £400,000 (2022: £nil). The amounts are interest free and repayable on demand. There have been no repayments during the year.