The directors present the strategic report for the period ended 31 December 2022.
Associated Couriers, UK is the holding company for Vision Logistics, UK who are experts in providing bespoke logistics solutions for the Healthcare industry. We also provide UK-based storage and warehousing, manage order fulfilment for Ecommerce businesses and fulfil sample marketing campaigns for some of the world’s most recognisable brands. With strategically placed depots across the UK, we’re able to provide businesses with flexible and adaptable logistics, including 3PL, 4PL, storage & warehousing and fulfilment. We take the utmost care in all aspects of the logistics process, from understanding each customer’s unique needs, to ensuring that every delivery reaches its destination safely and securely. Our industry-leading service combines bespoke storage and warehousing with meticulous fulfilment and compassionate delivery by friendly, trusted drivers. Vision Logistics, UK was founded in the year 1992 and has served customers across the UK in the same capacity through its acquisition by Associated Couriers, UK in April 2022 in which it joined the larger Life Logistics Global network. As part of the Life Logistics Global family of brands, Vision UK is primed to continue delivering the same consistent results across the UK and western Europe by leveraging relationships across the entire portfolio of LLG brands.
As a holding company, Associated Couriers, UK relies primarily on the financial performance of Vision Logistics, UK as its core operating entity and source of cash. The entity was formed in April 2022 to purchase Vision Logistics UK and also exists as the primary shareholder and holder of debt from Life Logistics Global, the parent company of Associated Couriers, UK. As such, the obligations of Associated Couriers, UK are funded directly from the operations of Vision Logistics, UK and are entirely dependent on the performance thereof.
For the period between 6th April 2022 and 31st December 2022, Associated Couriers UK had turnover of 6.18M GBP and yielded a gross profit of 1.39M GBP (22.4% gross profit margin). Administrative expenses for this period of 1.13M GBP yielded an EBITDA of 0.26M GBP. During the period of 6th April 2022 and 31st December 2022, AC UK generated 0.28M GBP in cash from the operating activities of Vision Logistics, UK. Associated Couriers, UK will owe a 1.00M GBP purchase consideration payment to the predecessor sellers of Vision Logistics, UK on 31st October 2023 which is anticipated to be funded entirely from the operations of the company or through additional short term borrowings from Life Logistics Global.
The current major risk affecting the business are the concentration of sales for Vision Logistics, UK to one primary customer, Essity, who provides sales and distribution of incontinence and healthcare products to customers throughout the UK. During 2022, Essity made up c70% of Vision Logistics, UK total turnover. Additionally, continuing to focus on growing the Essity relationship may prove limiting to the growth of the organization as Essity’s primary source of revenue is government sponsored contracts to distribute healthcare items and as such, if Essity is not awarded additional distribution of products then it is not possible for Vision to expand the scope of services provided to Essity. These contracts are also ‘open book’ in nature resulting in much lower margins to Vision Logistics than if they were to be ‘closed book’ and negotiated for additional gross profit. Though there is a risk of high concentration with one single customer in Essity, the risk of Essity’s individual failure is extremely low given the nature of the government contracts awarded to them.
Conversely, the go-forward strategy of Vision Logistics, UK is to target new customers in higher gross profit areas of service in order to accelerate rapid growth without increasing the additional concentration of turnover at Essity.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 December 2022.
The results for the period are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
We have audited the financial statements of Associated Couriers UK Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 December 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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).
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 group and parent 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 group's and parent 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 information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their 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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 parent 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 parent company or to cease operations, or have 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £370,912.
Associated Couriers UK Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .
The group consists of Associated Couriers UK Limited and its wholly owned subsidiary, Vision Logistical Solutions Limited.
The company was incorporated on the 6th April 2022 for the purpose of acquiring Vision Logistical Solutions Limited, which it completed on the 13th April 2022. These consolidated financial statements report the financial activity of the group and company for the 8 and a half months to 31 December 2022.
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.
The 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 for parent company information presented within the consolidated financial statements:
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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Associated Couriers UK Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The company was established as an intermediate holding company, by the Life Logistics Global group to acquire all the shares in Vision Logistical Solutions Limited. The acquisition was funded by borrowing from a fellow member of the Life Logistics Global group. Although the amounts owed to group undertakings, shown within creditors falling due less than one year, are repayable on demand, the directors are satisfied they will not be called until the company has sufficient funds to repay them. Hence at the time of approving the financial statements, the directors have a reasonable expectation that the company and group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is measured at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates where applicable.
Turnover from fulfilment and distribution services are recognised once the company has performed its service to the client.
Agency revenue is recognised where the company enters into an agency agreement relationship, only the company's component of services provided is recognised as revenue and not the amounts collected on behalf of the principal.
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 recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group 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). 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors and loans from fellow group companies, 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.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 if, and only if, there is 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.
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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
In the application of the group’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.
The following judgements have had the most significant effect on amounts recognised in the financial statements.
Goodwill arising on the group's acquisition of Vision Logistical Solutions Limited is capitalised and amortised on a straight line basis over its estimated useful economic life. This estimate is based on a variety of factors such as the expected useful life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.
All of the group's turnover is derived from the provision of logistical transport solutions by Vision Logistical Solutions Limited.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
The actual charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
The company acquired 100% of the issued share capital in Vision Logistical Solutions Limited on the 13th April 2022. Vison Logistical Solutions Limited is a company registered in England and Wales, with registered office address of Unit D1 Railway Triangle, Walton Road, Portsmouth, Hampshire, United Kingdom, PO6 1TH.
The principal activity of Vision Logistical Solutions Limited is that of the provision of logistical transport solutions.
On 13 April 2022 the company acquired 100% percent of the issued capital of Vision Logistical Solutions Limited.
Loans owed to group undertakings comprises £5,808,977 relating to a formal loan which Associated Couriers UK Limited obtained from a fellow group undertaking with control over the company, to fund its acquisition of Vision Logistical Solutions Limited. The loan is denominated in Euro's and its principal of €6,866,566 is payable in full on 15th August 2026. The loan is unsecured and interest accrues on the loan at 6% per annum and is payable in quarterly instalments. At 31 December 2022 the company had breached the contractual terms of this loan, such that the loan became contractually repayable on demand, and hence presented within creditors falling due within one year, within these financial statements.
Amounts owed to group undertakings includes £498,778 of informal intercompany loans owed to a fellow group undertaking with control over the company. These informal loans are unsecured, carry no right to interest and are repayable on demand.
Finance lease payments represent fixed rentals payable by the group for certain items of plant and equipment. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. At the balance sheet date there were £18,650 of contributions payable by the group.
The company was incorporated on the 6th April 2022, issuing 100 Ordinary shares of £1 each at par.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
In the preparation of these consolidated financial statements, the directors have applied the exemption available within FRS 102 Section 33.1A not to disclose transactions and balances with fellow wholly owned group undertakings.
The company's immediate parent company is Associated Couriers Group Inc., a company registered in the United States of America, which holds the entire share capital in the company. Ultimately the company is a member of the Life Logistics Global group headed by LLG Holding GmbH, a company registered in Germany.