Company registration number 03634112 (England and Wales)
LEXINGTON COMMUNICATIONS LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
LEXINGTON COMMUNICATIONS LIMITED
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 9
Income statement
10
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Notes to the financial statements
14 - 25
LEXINGTON COMMUNICATIONS LIMITED
COMPANY INFORMATION
- 1 -
Directors
Mr M Craven
E S Cook
Mr M Derr
Mr B Terrett
Lord D Stevenson
Mr A Hughes
Company number
03634112
Registered office
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
Auditor
TC Group
6th Floor Kings House
9-10 Haymarket
London
United Kingdom
SW1Y 4BP
Business address
198 High Holborn
London
WC1V 7BD
LEXINGTON COMMUNICATIONS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

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

Fair review of the business

2023 was a good year for Lexington, despite the challenges of the market and the wider economy. We achieved solid double digit growth and continued to grow our client base, our headcount, our international footprint, all while continuing to invest in our culture and our people.

 

The company achieved strong growth across our core areas of public affairs, healthcare, corporate communications and sustainability. We invested in a new office in Dubai and invested in areas such as data, digital and design. As the first full year as part of the kyu Collective, we also grew our international client base.

 

The challenging UK economic situation affected revenues in some sectors – the property and built environment sector in particular. This is likely to continue into 2024. However with elections in the UK, EU and USA in 2024, we anticipate a strong demand for our core services and expect to see stronger growth next year. As ever, recruiting the right people into the business remains our biggest challenge.

Principal risks and uncertainties

Macro-economic challenges and the uncertain geopolitical situation will continue to pose a risk to business and indeed the wider UK and global market.

 

Tighter corporate budgets brought about by economic slowdown may also play a part, as well as clients taking longer to sign off projects than in previous times.

 

But the labour market appears to be easing after a few difficult years and the lowering of inflation has also reduced pressure on wages.

Development and performance

2023 was a successful year for Lexington with significant increases in revenues in health, public affairs, corporate reputation and ESG. There were a number of significant senior hires across the business and a reorganisation of the management team.

Key performance indicators

Highlights included:

LEXINGTON COMMUNICATIONS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

Prospects for 2024

The board confidently expects revenues and EBIT to continue to grow in a similar manner in 2024. At the same time, in order to continue with our long-term growth strategy, we are looking to identify new growth opportunities, including looking at opening in new markets and looking at potential acquisition targets to enhance our business offer.

On behalf of the board

Mr M Craven
Director
20 March 2024
LEXINGTON COMMUNICATIONS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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

Principal activities
The principal activity of the company continued to be that of business consultants.
Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £2,000,000. 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 M Craven
E S Cook
F Golant
(Resigned 8 September 2023)
Mr M Derr
Mr B Terrett
Lord D Stevenson
Mr A Hughes
Auditor

The auditor, TC Group, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

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

On behalf of the board
Mr M Craven
Director
20 March 2024
LEXINGTON COMMUNICATIONS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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.

LEXINGTON COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEXINGTON COMMUNICATIONS LIMITED
- 6 -
Opinion

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

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

Other information

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

 

We have nothing to report in this regard.

LEXINGTON COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LEXINGTON COMMUNICATIONS LIMITED
- 7 -

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

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

 

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

Responsibilities of directors

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

Auditor's responsibilities for the audit of the financial statements

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

 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

LEXINGTON COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LEXINGTON COMMUNICATIONS LIMITED
- 8 -

Our approach was as follows:

 

 

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.

 

 

 

 

 

 

LEXINGTON COMMUNICATIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LEXINGTON COMMUNICATIONS LIMITED
- 9 -

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.

Philip Clark FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
21 March 2024
Office: London
LEXINGTON COMMUNICATIONS LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Revenue
3
12,096,893
10,559,532
Cost of sales
(959,575)
(1,186,625)
Gross profit
11,137,318
9,372,907
Administrative expenses
(8,540,294)
(7,518,015)
Other operating income
221,691
166,487
Operating profit
4
2,818,715
2,021,379
Investment income
7
422,644
363,758
Profit before taxation
3,241,359
2,385,137
Tax on profit
8
(545,232)
(410,390)
Profit for the financial year
2,696,127
1,974,747

The income statement has been prepared on the basis that all operations are continuing operations.

LEXINGTON COMMUNICATIONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
£
£
Profit for the year
2,696,127
1,974,747
Other comprehensive income
-
-
Total comprehensive income for the year
2,696,127
1,974,747
LEXINGTON COMMUNICATIONS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
10
183,474
151,241
Investments
11
25,502
25,502
208,976
176,743
Current assets
Trade and other receivables
13
4,045,102
3,005,490
Cash and cash equivalents
2,741,499
2,833,570
6,786,601
5,839,060
Current liabilities
14
(2,466,379)
(2,211,937)
Net current assets
4,320,222
3,627,123
Total assets less current liabilities
4,529,198
3,803,866
Provisions for liabilities
Deferred tax liability
15
34,195
4,990
(34,195)
(4,990)
Net assets
4,495,003
3,798,876
Equity
Called up share capital
17
270
270
Share premium account
372,921
372,921
Capital redemption reserve
120
120
Retained earnings
4,121,692
3,425,565
Total equity
4,495,003
3,798,876
The financial statements were approved by the board of directors and authorised for issue on 20 March 2024 and are signed on its behalf by:
Mr M Craven
Director
Company Registration No. 03634112
LEXINGTON COMMUNICATIONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total
Notes
£
£
£
£
£
Balance at 1 January 2022
180
-
0
120
3,250,818
3,251,118
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
-
1,974,747
1,974,747
Issue of share capital
17
90
372,921
-
-
373,011
Dividends
9
-
-
-
(1,800,000)
(1,800,000)
Balance at 31 December 2022
270
372,921
120
3,425,565
3,798,876
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
2,696,127
2,696,127
Dividends
9
-
-
-
(2,000,000)
(2,000,000)
Balance at 31 December 2023
270
372,921
120
4,121,692
4,495,003
LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

Lexington Communications Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6th Floor Kings House, 9-10 Haymarket, London, United Kingdom, SW1Y 4BP.

1.1
Accounting convention

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

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

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

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

 

 

The financial statements of the company are consolidated in the financial statements of Kyu Investment (UK) Limited. These consolidated financial statements are available from its registered office, 6th Floor, Herbal House, 8 Back Hill, London, England, EC1R 5EN.

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.

 

Lexington Communications Limited is a wholly owned subsidiary of Kyu Investment (UK) Limited and the results of Lexington Communications Limited are included in the consolidated financial statements of Kyu Investment (UK).

LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

1.3
Revenue

Revenue is recognised at the fair value of the consideration received or receivable for 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.

Revenue from contracts for the provision of consultancy is recognised in the period to which that consultancy was provided.

1.4
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Leasehold improvements
Over term of lease
Fixtures, fittings & equipment
20% on cost
1.5
Non-current investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.6
Impairment of non-current 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).

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks.

LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.8
Financial instruments

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

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

Basic financial assets, which include trade and other receivables 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.

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.

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.

LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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 trade and other payables, 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.

 

Trade payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

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.

Derecognition of financial liabilities

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

1.9
Equity instruments

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

1.10
Taxation

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

LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Current tax

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

Deferred tax

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

1.11
Employee benefits

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

1.12
Retirement benefits

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

1.13
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to income 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 lease asset are consumed.

1.14
Foreign exchange

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.

LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
2
Judgements and key sources of estimation uncertainty

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

 

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

 

In the opinion of the directors there are no significant judgements or areas of estimation uncertainty.

 

3
Revenue
2023
2022
£
£
Revenue analysed by class of business
Business consultancy
12,096,893
10,559,532
2023
2022
£
£
Revenue analysed by geographical market
United Kingdom
12,096,893
10,559,532
2023
2022
£
£
Other revenue
Interest income
22,644
3,758
Dividends received
400,000
360,000
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
37,249
(14,784)
Fees payable to the company's auditor for the audit of the company's financial statements
11,000
10,000
Depreciation of owned property, plant and equipment
56,639
45,502
Operating lease charges
436,079
438,338
LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
5
Employees

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

2023
2022
Number
Number
Consultants
80
71
Administration
6
5
Total
86
76

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
6,294,629
5,356,949
Social security costs
765,367
618,741
Pension costs
152,399
125,642
7,212,395
6,101,332
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
738,613
629,431
Company pension contributions to defined contribution schemes
4,838
5,813
743,451
635,244
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
373,613
332,795
LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
7
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
22,644
3,758
Income from fixed asset investments
Income from shares in group undertakings
400,000
360,000
Total income
422,644
363,758
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
672,313
410,390
Adjustments in respect of prior periods
(156,286)
-
0
Total current tax
516,027
410,390
Deferred tax
Origination and reversal of timing differences
29,205
-
0
Total tax charge
545,232
410,390
LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 22 -

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
3,241,359
2,385,137
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
762,368
453,176
Tax effect of expenses that are not deductible in determining taxable profit
6,101
21,935
Tax effect of income not taxable in determining taxable profit
(94,082)
(68,400)
Adjustments in respect of prior years
(156,286)
-
0
Effect of timing differences
(2,074)
3,679
Deferred tax movement
29,205
-
0
Taxation charge for the year
545,232
410,390
9
Dividends
2023
2022
£
£
Interim paid
2,000,000
1,800,000
LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
10
Property, plant and equipment
Leasehold improvements
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 January 2023
187,165
561,707
748,872
Additions
56,830
32,042
88,872
Disposals
-
0
(3,355)
(3,355)
At 31 December 2023
243,995
590,394
834,389
Depreciation and impairment
At 1 January 2023
158,671
438,960
597,631
Depreciation charged in the year
12,169
44,470
56,639
Eliminated in respect of disposals
-
0
(3,355)
(3,355)
At 31 December 2023
170,840
480,075
650,915
Carrying amount
At 31 December 2023
73,155
110,319
183,474
At 31 December 2022
28,494
122,747
151,241
11
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
12
25,502
25,502
12
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Lexington North Limited
England and Wales
Ordinary shares
100.00
LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
13
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
3,025,289
2,666,706
Corporation tax recoverable
228,158
-
0
Other receivables
7,951
5,744
Prepayments and accrued income
783,704
333,040
4,045,102
3,005,490
14
Current liabilities
2023
2022
£
£
Trade payables
377,169
176,515
Corporation tax
-
0
117,946
Other taxation and social security
727,873
842,657
Other payables
72,043
63,980
Accruals and deferred income
1,289,294
1,010,839
2,466,379
2,211,937
15
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
34,195
4,990
2023
Movements in the year:
£
Liability at 1 January 2023
4,990
Charge to profit or loss
29,205
Liability at 31 December 2023
34,195
LEXINGTON COMMUNICATIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
152,399
125,642

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.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.1p each
180,120
180,120
180
180
A Ordinary shares of 0.1p each
45,939
45,939
46
46
B Ordinary shares of 0.1p each
44,188
44,188
44
44
270,247
270,247
270
270
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
300,000
300,000
Between two and five years
725,000
1,025,000
1,025,000
1,325,000
19
Ultimate controlling party

The company's immediate parent company is Kyu Investment Limited, a company registered in the UK. The company's ultimate controlling parent is Hakuhodo DY Holdings, a company registered in Japan.

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