REGISTERED NUMBER: 00525612 (England and Wales) |
Family Finance Limited |
Group Strategic Report, Report of the Directors and |
Consolidated Financial Statements for the Year Ended 31 December 2023 |
REGISTERED NUMBER: 00525612 (England and Wales) |
Family Finance Limited |
Group Strategic Report, Report of the Directors and |
Consolidated Financial Statements for the Year Ended 31 December 2023 |
Family Finance Limited (Registered number: 00525612) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Consolidated Statement of Comprehensive Income | 7 |
Consolidated Balance Sheet | 8 |
Company Balance Sheet | 9 |
Consolidated Statement of Changes in Equity | 10 |
Company Statement of Changes in Equity | 11 |
Consolidated Cash Flow Statement | 12 |
Notes to the Consolidated Cash Flow Statement | 13 |
Notes to the Consolidated Financial Statements | 14 |
Family Finance Limited |
Company Information |
for the Year Ended 31 December 2023 |
Directors: |
Registered office: |
Registered number: |
Auditors: |
7 Neptune Court |
Vanguard Way |
Cardiff |
CF24 5PJ |
Family Finance Limited (Registered number: 00525612) |
Group Strategic Report |
for the Year Ended 31 December 2023 |
The directors present their strategic report of the company and the group for the year ended 31 December 2023. |
The group continues its strategy of developing its loan book across a balanced range of product types. |
Principal activities |
The principal activities of the group are the provision of instalment credit finance, provision of bridging loan finance and the retailing of electrical and other goods. |
Review of business |
The group made a profit before tax of £2,139,584 (2022: £2,525,203). This was a satisfactory result in what has been a difficult trading environment given the Cost-of-Living crisis. Income has increased by £0.2m to £9.4m for the year ended 31 December 2023. |
Despite the ongoing macroeconomic uncertainties, the loan book overall grew in size. Similar to the prior financial period however, the loan book saw a shrinkage in size across its Hire Purchase (HP) products on motor and retail goods, as well as its unsecured lending product. The secured lending product was the only element of the loan book which saw growth in 2023, largely resulting from continued growth of its Bridging loan product, introduced in the 2021 financial period. Secured lending balances (Gross) grew by £2.9m, or 24% to £15.0m. |
The directors have also taken a cautious approach regarding retail goods on HP as well as unsecured lending, in light of the ongoing regulatory uncertainty. Total HP agreements have decreased by 1,894, or 18.1% to 8,582 and unsecured lending agreements have decreased by 196, or 21.1% to 733 as at the balance sheet date. |
The group continues to be supervised by the Financial Conduct Authority (FCA) since full authorisation was received, and continues to apply enhanced and embedded procedures, systems and controls. |
Objectives and strategy |
The group's Mission Statement is to successfully respond to challenges, and opportunities to deliver profitability in our market during our seventh decade of trading. This has been achieved by ensuring our staff are trained, skilled, motivated and able to deliver outstanding customer outcomes. As a result of this exceptional customer service the company protects its long-term customer relationships whilst continuing to attract new customers. Vigorous vetting procedures with particular emphasis on affordability has resulted in a positive effect on arrears management and provisions. This is encapsulated by our ongoing commitment to Treating Customers Fairly. |
Principal risks and uncertainties |
The group's financial instruments result in the group's expose to liquidity, credit and cash flow risk. The exposure of the group to the various elements of financial risk are as follows; |
Credit risk |
The directors consider the main financial risk to the business to be the credit risk of customers defaulting on loans. However, this risk is mitigated by the company's strong cash collection and credit control procedures, and through the checking of customers credit rating and affordability. In addition, a significant number of loans are secured against the underlying asset. |
Liquidity and cashflow risk |
Liquidity risk is the risk that the group will have insufficient resources available to meet its financial obligations as they fall due. This risk is managed periodically through monitoring of expected cashflows and is enhanced by the significant cashflows generated by the business. As detailed within the creditors more than 1 year note, the terms of the current facilities provide adequate liquidity for the group to continue as a going concern. We have retained the same level of facilities at Siemens, Aldermore and Hampshire Trust. |
On behalf of the board: |
Family Finance Limited (Registered number: 00525612) |
Report of the Directors |
for the Year Ended 31 December 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 December 2023. |
Dividends |
Dividends proposed in the 2023 financial year amounted to £NIL (2022: £1,754,280) |
Directors |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
Other changes in directors holding office are as follows: |
Political donations and expenditure |
There have been no political donations made during the year. |
Statement of directors' responsibilities |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
Statement as to disclosure of information to auditors |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
Family Finance Limited (Registered number: 00525612) |
Report of the Directors |
for the Year Ended 31 December 2023 |
Auditors |
The auditors, Haines Watts Wales LLP, Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
On behalf of the board: |
Report of the Independent Auditors to the Members of |
Family Finance Limited |
Opinion |
We have audited the financial statements of Family Finance Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of 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: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2023 and of the group's profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 the 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 directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 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 the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where 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. |
Report of the Independent Auditors to the Members of |
Family Finance Limited |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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 group's and 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 group or the parent company or to cease operations, or have no realistic alternative but to do so. |
Auditors' 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 a Report of the Auditors 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: |
Our planning procedures identify the legal and regulatory frameworks applicable to the operations and financial |
statements of the company. These are reviewed internally with the audit team including relevant industry experience |
and expectations as well as externally with the client management. The key laws and regulations we considered in this context were the UK Companies Act 2006, UK GAAP (FRS 102) and relevant tax legislation. |
Once identified, we assess the risks of material misstatements in relation to the laws and regulations, irregularities, |
including fraud and adjust our testing accordingly. Our audit procedures include: |
- Discussing with Directors and management which areas of the business they believe to be more susceptible to |
fraud, and whether they have any knowledge or suspicion of fraudulent activities. |
- Discussing with Directors and management the legal and regulatory obligations of the business and whether they |
have any knowledge or suspicion of non-compliance. |
- Obtaining an understanding of the key controls put in place by the company to address risks identified, |
assessing the effectiveness of those and discussing how these are maintained and monitored internally. |
- Assessing the risk of management override and review and testing of journal entries made into the accounting |
system. |
- Challenging assumptions and judgements made by the company in relation to the significant accounting |
estimates employed in the preparation of the financial statements. |
Despite the audit being planned and conducted in accordance with ISAs (UK) there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularities likely involve collusion, forgery, intentional |
misrepresentation, or the override of internal controls. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
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 a Report of the Auditors 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. |
for and on behalf of |
7 Neptune Court |
Vanguard Way |
Cardiff |
CF24 5PJ |
Family Finance Limited (Registered number: 00525612) |
Consolidated |
Statement of Comprehensive |
Income |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
Turnover | 3 | 9,439,112 | 9,254,745 |
Cost of sales | (1,164,309 | ) | (996,441 | ) |
Gross profit | 8,274,803 | 8,258,304 |
Distribution costs | (311,528 | ) | (403,928 | ) |
Administrative expenses | (5,838,832 | ) | (5,427,510 | ) |
2,124,443 | 2,426,866 |
Other operating income | 15,141 | 98,334 |
Operating profit | 2,139,584 | 2,525,200 |
Profit before taxation | 5 | 2,139,584 | 2,525,200 |
Tax on profit | 6 | (517,311 | ) | (487,293 | ) |
Profit for the financial year |
Other comprehensive income | - | - |
Total comprehensive income for the year | 1,622,273 | 2,037,907 |
Profit attributable to: |
Owners of the parent | 1,622,273 | 2,037,907 |
Total comprehensive income attributable to: |
Owners of the parent | 1,622,273 | 2,037,907 |
Family Finance Limited (Registered number: 00525612) |
Consolidated Balance Sheet |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
Fixed assets |
Intangible assets | 9 | 46,777 | 58,408 |
Tangible assets | 10 | 201,003 | 288,208 |
Investments | 11 | 1,390 | 1,390 |
249,170 | 348,006 |
Current assets |
Stocks | 12 | 125,232 | 135,946 |
Debtors: amounts falling due within one year | 13 | 16,786,107 | 12,168,014 |
Debtors: amounts falling due after more than one year |
13 |
20,069,678 |
21,721,006 |
Cash at bank and in hand | 209,726 | 729,100 |
37,190,743 | 34,754,066 |
Creditors |
Amounts falling due within one year | 14 | (7,366,458 | ) | (9,399,167 | ) |
Net current assets | 29,824,285 | 25,354,899 |
Total assets less current liabilities | 30,073,455 | 25,702,905 |
Creditors |
Amounts falling due after more than one year |
15 |
(11,228,933 |
) |
(8,223,562 |
) |
Net assets | 18,844,522 | 17,479,343 |
Capital and reserves |
Called up share capital | 21 | 507,319 | 522,107 |
Share premium | 65,000 | 65,000 |
Capital redemption reserve | 92,681 | 77,893 |
Retained earnings | 18,179,522 | 16,814,343 |
Shareholders' funds | 18,844,522 | 17,479,343 |
The financial statements were approved by the Board of Directors and authorised for issue on 4 April 2024 and were signed on its behalf by: |
R Hopkins - Director |
Family Finance Limited (Registered number: 00525612) |
Company Balance Sheet |
31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
Fixed assets |
Intangible assets | 9 |
Tangible assets | 10 |
Investments | 11 |
Current assets |
Debtors: amounts falling due within one year | 13 |
Debtors: amounts falling due after more than one year |
13 |
Cash at bank and in hand |
Creditors |
Amounts falling due within one year | 14 | ( |
) | ( |
) |
Net current assets |
Total assets less current liabilities |
Creditors |
Amounts falling due after more than one year |
15 |
( |
) |
( |
) |
Net assets |
Capital and reserves |
Called up share capital | 21 |
Share premium |
Capital redemption reserve |
Retained earnings |
Shareholders' funds |
Company's profit for the financial year | 1,597,218 | 1,996,756 |
The financial statements were approved by the Board of Directors and authorised for issue on |
Family Finance Limited (Registered number: 00525612) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up | Capital |
share | Retained | Share | redemption | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 January 2022 | 522,107 | 16,530,716 | 65,000 | 77,893 | 17,195,716 |
Changes in equity |
Dividends | - | (1,754,280 | ) | - | - | (1,754,280 | ) |
Total comprehensive income | - | 2,037,907 | - | - | 2,037,907 |
Balance at 31 December 2022 | 522,107 | 16,814,343 | 65,000 | 77,893 | 17,479,343 |
Changes in equity |
Reduction in share capital | (14,788 | ) | - | - | - | (14,788 | ) |
Total comprehensive income | - | 1,365,179 | - | 14,788 | 1,379,967 |
Balance at 31 December 2023 | 507,319 | 18,179,522 | 65,000 | 92,681 | 18,844,522 |
Family Finance Limited (Registered number: 00525612) |
Company Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up | Capital |
share | Retained | Share | redemption | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Profit for the year | - | 1,996,756 | - | - | 1,996,756 |
Total comprehensive income | - | - |
Dividends | - | ( |
) | - | - | ( |
) |
Balance at 31 December 2022 |
Changes in equity |
Profit for the year | - | 1,597,218 | - | - | 1,597,218 |
Other comprehensive income | - | (257,094 | ) | - | (242,306 | ) |
Total comprehensive income | - | - |
Reduction in share capital | (14,788 | ) | - | - | - | (14,788 | ) |
Balance at 31 December 2023 |
Family Finance Limited (Registered number: 00525612) |
Consolidated Cash Flow Statement |
for the Year Ended 31 December 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | (1,040,802 | ) | (1,394,611 | ) |
Tax paid | (550,983 | ) | (366,799 | ) |
Net cash from operating activities | (1,591,785 | ) | (1,761,410 | ) |
Cash flows from investing activities |
Purchase of intangible fixed assets | (10,680 | ) | (58,688 | ) |
Purchase of tangible fixed assets | (22,854 | ) | (205,735 | ) |
Sale of tangible fixed assets | 18,780 | 134,716 |
Net cash from investing activities | (14,754 | ) | (129,707 | ) |
Cash flows from financing activities |
New loans in year | 9,977,016 | 8,282,759 |
Loan repayments in year | (6,305,794 | ) | (6,174,354 | ) |
Capital repayments in year | (79,280 | ) | 74,052 |
Amount introduced by directors | - | 1,997,469 |
Amount withdrawn by directors | (2,247,683 | ) | - |
Equity dividends paid | - | (1,754,280 | ) |
Purchase of own shares | (257,094 | ) | - |
Net cash from financing activities | 1,087,165 | 2,425,646 |
(Decrease)/increase in cash and cash equivalents | (519,374 | ) | 534,529 |
Cash and cash equivalents at beginning of year |
2 |
729,100 |
194,571 |
Cash and cash equivalents at end of year | 2 | 209,726 | 729,100 |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 31 December 2023 |
1. | Reconciliation of profit before taxation to cash generated from operations |
2023 | 2022 |
£ | £ |
Profit before taxation | 2,139,584 | 2,525,200 |
Depreciation charges | 128,166 | 128,730 |
Profit on disposal of fixed assets | (14,577 | ) | (98,334 | ) |
2,253,173 | 2,555,596 |
Decrease/(increase) in stocks | 10,714 | (7,840 | ) |
Increase in trade and other debtors | (2,962,290 | ) | (3,338,977 | ) |
Decrease in trade and other creditors | (342,399 | ) | (603,390 | ) |
Cash generated from operations | (1,040,802 | ) | (1,394,611 | ) |
2. | Cash and cash equivalents |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£ | £ |
Cash and cash equivalents | 209,726 | 729,100 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 729,100 | 194,571 |
3. | Analysis of changes in net debt |
At 1.1.23 | Cash flow | At 31.12.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 729,100 | (519,374 | ) | 209,726 |
729,100 | (519,374 | ) | 209,726 |
Debt |
Finance leases | (200,794 | ) | 79,280 | (121,514 | ) |
Debts falling due within 1 year | (2,627,454 | ) | (617,666 | ) | (3,245,120 | ) |
Debts falling due after 1 year | (8,107,732 | ) | (3,053,556 | ) | (11,161,288 | ) |
(10,935,980 | ) | (3,591,942 | ) | (14,527,922 | ) |
Total | (10,206,880 | ) | (4,111,316 | ) | (14,318,196 | ) |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 December 2023 |
1. | Statutory information |
Family Finance Limited is a |
2. | Accounting policies |
Basis of preparing the financial statements |
The group has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirement of paragraph 33.7. |
Critical accounting judgements and key sources of estimation uncertainty |
Amounts receivable under hire purchase and instalment credit agreements are stated after deduction of the sum which in the opinion of the directors is required as a provision for bad and doubtful debts, taking account of age, cash movements and security value. |
The provision uses a standard calculation, which provides a fixed percentage of arrears based on the amount of instalments overdue. Management will also manually make specific provisions to cover known risks. |
Turnover |
Turnover represents interest earned on loans and advances and amounts (excluding value added tax) derived from the provision of goods and services to customers during the year. |
Income arising on hire purchase agreements and credit instalment sales is credited to the profit and loss each year. |
The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of the financial instrument (or a shorter period where appropriate) to the net carrying value of the financial asset or financial liability. The calculation takes into account all contractual terms of the financial instrument. |
Income relating to the sale of goods is recognised when substantially all of the risks and rewards of ownership have passed to the customer, generally being at the point of sale. |
Income relating to maintenance of goods sold is treated as deferred income and released to the profit and loss account over the period of the maintenance obligation. |
Intangible assets |
Intangible Assets represent software development costs aquired by the Company and are stated at cost less accumulated amortisation and less accumulated impairment losses. Amortisation is charged to the profit and loss account one straight-line basis over the estimated useful economic life of the asset being 3 to 5 years |
Tangible fixed assets |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
Family Vision Limited policy is to capitalise individual assets over £2,400 |
Family Finance Limited policy is to capitalise individual assets over £5,000. |
Investments in subsidiaries |
These investments comprise the cost of 100% of the ordinary share capital of the following subsidiary undertakings both of which are registered in England and Wales at the registered office Of 93 Commercial Street, Tredegar, Gwent, NP22 3DN, and have been consolidated within the group financial statements:' |
Family Vision Limited - trading as an electrical and other goods retailer |
Family Leasing Limited - dormant |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | Accounting policies - continued |
Stocks |
Stocks are stated at the lower of cost and estimated selling price less costs to sell. Cost is based on the weighted average principle and includes expenditure incurred in acquiring the stocks and costs incurred in bringing them to their existing location and condition. |
Stock is assessed at each reporting date by management to determine whether there is objective evidence that it is impaired. Stock is impaired if objective evidence indicated that a loss event has occUrred after the initial recognition of the asset and that the loss event had a negative effect on the estimated future cash flow of that asset that can be estimated reliably. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
A defined contribution pension is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account for the period during which services are rendered by employees. |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | Accounting policies - continued |
Going concern |
At 31 December 2023, the group had net assets of £18,844,522 (2022: £17,479,343) and net current assets (excluding debtors due after more than one year) of £9,749,939 (2022: £3,633,893) and reported a profit for the year then ended of £1,622,273 (£2022: £2,037,907). The financial statements have been prepared on a going concern basis, which the directors consider to be appropriate for the following reasons. |
Similar to the prior financial year, throughout the 2023 financial year the business continued to be impacted by the Cost-of-Living crisis, whereby our customers faced the highest levels of inflation in recent history, alongside increasing interest rates due to the Bank of England increasing the Base Rate in order to combat inflation. Despite inflation levels steadily falling throughout the financial year and the Base Rate being held from August 2023, customers have continued face greater levels of financial difficulty. |
The business has however, always aimed to provide high levels of forbearance to its customers through positive engagement. As such the business' collections have not been significantly impacted and remain strong, with the large majority of its customers continuing to meet their repayment obligations. |
As a result of these external factors, the business’ Motor HP book, as expected, shrank during the financial period, albeit only modestly (less than 1%). The shrinkage in this area of the business however allowed the business to redirect its funds to continue its diversification into the Bridging Loan market, where the gross loan book grew by over £2.1m gross. |
The macroeconomic picture for the 2024 financial period looks more positive, with an opening level of inflation being less than half that at January 2023, alongside second-hand car prices appearing to have peaked and reduced slightly. The business therefore expects that the Motor HP book will stabilise for the forthcoming financial period, but has the potential to grow. |
As at the date of this report, despite the operational and financial impact of the Cost-of-Living crisis, the group has maintained a positive level of trading and profitability for 2023 and the directors expect that the group will continue to be profitable and cash generative in the forecast period as explained below. |
The directors have prepared a cashflow forecast for at least 12 months from the date of approval of these financial statements. These forecasts take account of the potential impact of the macroeconomic stresses caused by the Cost-of-Living crisis. Severe but plausible downside scenarios have been modelled, which include the assumption that there is no growth in 2024 over 2023 and that collections reduce by up to 20% over the forecast period. |
Under these scenarios, lending levels are expected to remain stable, with expected falls in Motor HP lending being offset against by Secured lending. Other forms of lending (HP on retail goods and unsecured lending) are expected to remain stable in their own right. Collection levels in the base case are expected to be in line with the value of the gross loan book as was the case in prior financial periods. With continued pressures on household incomes expected for the majority of the year ahead however, the company will continue to offer its high levels of forbearance to customers and as such, the potential impacts of this have been reflected in the relevant downside scenarios. |
The forecasts prepared, as well as the assessment of ongoing funding requirements, indicate that the company will have sufficient funds, through its cash resources, available facilities and ongoing profitable trading, to meet its liabilities as they fall due for that period, whilst also maintaining its planned levels of new business lending. |
The company retains significant headroom on the block discount loan facilities. The facilities renew on an annual basis and whilst the directors acknowledge that there can be no certainty that the facilities will extend beyond their renewal dates, at the date of approval of these financial statements, they have no reason to believe they will not do so. Indeed, should any facility expire, each drawdown will continue to be repaid over the predetermined schedule period which are aligned to the collection of the loans and advances which they are secured against. |
On the basis of their assessment as discussed above, the directors are confident that the group and company will have sufficient funds to continue to its liabilities as they fall due for at least 12 months from the date of the approval of the financial statements, and therefore continue to adopt the going concern basis in preparing the financial statements. |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | Accounting policies - continued |
Impairment |
Loans and advances |
Amounts receivable under hire purchase and instalment credit agreements are stated after deduction of the sum which in the opinion of the directors is required as a provision for bad and doubtful debts, taking account of age, cash movements and security value. |
Other financial assets (including trade and other debtors) |
Financial assets are assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset.is impaired if objective evidence indicated that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effect on the estimated future cash flow of that asset that can be estimated reliably. |
Non-financial assets |
The carrying amounts of the entity's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. 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. |
Reversing an impairment |
An impairment loss is reversed if and only if the reasons for.the impairment have ceased to apply. |
Impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. |
Basic financial instruments |
Loans and advances |
Loans and advances are recognised initially at the nominal value of future cash flows net of unearned interest and bad debt provisions. The loan asset and unearned interested are measured subsequently at amortized cost using the effective interest rate method, less any impairment. |
Trade and other debtors |
Trade and other debtors are recognised initially at transaction price less attributable costs. Subsequent to initial recognition they are measured at amortised cost, less any impairment losses in the case of trade debtors. |
Investments in ordinary shares. |
Investments in equity instruments are measured initially at fair value. Subsequent to initial recognition investments are measured at cost less impairment in the profit or loss. |
Cash and cash equivalents |
Cash and cash equivalents comprise cash balances at the bank and cash in hand. |
3. | Turnover |
The turnover and profit before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
2023 | 2022 |
£ | £ |
Interest on agreements | 8,808,907 | 8,427,371 |
Retail sales | 630,205 | 827,374 |
9,439,112 | 9,254,745 |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
4. | Employees and directors |
2023 | 2022 |
£ | £ |
Wages and salaries | 2,479,831 | 2,700,903 |
Social security costs | 308,611 | 359,352 |
Other pension costs | 174,841 | 51,074 |
2,963,283 | 3,111,329 |
The average number of employees during the year was as follows: |
2023 | 2022 |
Sales and distribution | 9 | 12 |
Administration and collections | 40 | 39 |
Directors | 8 | 9 |
2023 | 2022 |
£ | £ |
Directors' remuneration | 1,051,337 | 1,237,121 |
Directors' pension contributions to money purchase schemes | 6,100 | 5,192 |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 2 | 4 |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc | 531,387 | 634,171 |
5. | Profit before taxation |
The profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Other operating leases | 50,000 | 51,000 |
Depreciation - owned assets | 105,856 | 122,703 |
Profit on disposal of fixed assets | (14,577 | ) | (98,334 | ) |
Computer software amortisation | 22,311 | 6,030 |
Auditors' remuneration | 6,390 | 7,660 |
Auditors' remuneration for non audit work | 5,820 | 5,820 |
Taxation advisory services | 2,400 | 2,400 |
6. | Taxation |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | 521,785 | 482,702 |
Deferred tax | (4,474 | ) | 4,591 |
Tax on profit | 517,311 | 487,293 |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
6. | Taxation - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax | 2,139,584 | 2,525,200 |
Profit multiplied by the standard rate of corporation tax in the UK of 25 % (2022 - 19 %) |
534,896 |
479,788 |
Effects of: |
Expenses not deductible for tax purposes | 13,087 | 15,035 |
Income not taxable for tax purposes | (3,644 | ) | (18,683 | ) |
Depreciation in excess of capital allowances | 11,041 | 6,561 |
prior periods (deferred tax) |
change in tax rates |
Deferred tax provided for during the year | (4,474 | ) | 4,592 |
Change in tax rates | (33,595 | ) | - |
Total tax charge | 517,311 | 487,293 |
7. | Individual statement of comprehensive income |
As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements. |
8. | Dividends |
2023 | 2022 |
£ | £ |
Ordinary shares of 1 each |
Interim | - | 1,754,280 |
9. | Intangible fixed assets |
Group |
Computer |
software |
£ |
Cost |
At 1 January 2023 | 219,353 |
Additions | 10,680 |
At 31 December 2023 | 230,033 |
Amortisation |
At 1 January 2023 | 160,945 |
Amortisation for year | 22,311 |
At 31 December 2023 | 183,256 |
Net book value |
At 31 December 2023 | 46,777 |
At 31 December 2022 | 58,408 |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
9. | Intangible fixed assets - continued |
Company |
Computer |
software |
£ |
Cost |
At 1 January 2023 |
Additions |
At 31 December 2023 |
Amortisation |
At 1 January 2023 |
Amortisation for year |
At 31 December 2023 |
Net book value |
At 31 December 2023 |
At 31 December 2022 |
10. | Tangible fixed assets |
Group |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
Cost |
At 1 January 2023 | 19,147 | 438,689 | 45,460 | 503,296 |
Additions | - | 17,154 | 5,700 | 22,854 |
Disposals | - | (67,918 | ) | - | (67,918 | ) |
At 31 December 2023 | 19,147 | 387,925 | 51,160 | 458,232 |
Depreciation |
At 1 January 2023 | 5,113 | 181,930 | 28,045 | 215,088 |
Charge for year | 1,914 | 95,695 | 8,247 | 105,856 |
Eliminated on disposal | - | (63,715 | ) | - | (63,715 | ) |
At 31 December 2023 | 7,027 | 213,910 | 36,292 | 257,229 |
Net book value |
At 31 December 2023 | 12,120 | 174,015 | 14,868 | 201,003 |
At 31 December 2022 | 14,034 | 256,759 | 17,415 | 288,208 |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
10. | Tangible fixed assets - continued |
Company |
Motor | Computer |
vehicles | equipment | Totals |
£ | £ | £ |
Cost |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2023 |
Depreciation |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
Net book value |
At 31 December 2023 |
At 31 December 2022 |
11. | Fixed asset investments |
Group |
Shares in |
group |
undertakings |
£ |
Cost |
At 1 January 2023 |
and 31 December 2023 | 1,390 |
Net book value |
At 31 December 2023 | 1,390 |
At 31 December 2022 | 1,390 |
Company |
Shares in |
group |
undertakings |
£ |
Cost |
At 1 January 2023 |
and 31 December 2023 |
Net book value |
At 31 December 2023 |
At 31 December 2022 |
12. | Stocks |
Group |
2023 | 2022 |
£ | £ |
Stocks | 125,232 | 135,946 |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
13. | Debtors |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Amounts falling due within one year: |
Loans and advances | 16,143,758 | 11,495,588 |
Other debtors | 368,372 | 411,370 |
VAT | 15,494 | - |
Deferred tax asset | 108,284 | 103,810 | 103,920 | 100,514 |
Prepayments | 150,199 | 157,246 |
16,786,107 | 12,168,014 |
Amounts falling due after more than one | year: |
Loans and advances | 20,069,678 | 21,721,006 |
Aggregate amounts | 36,855,785 | 33,889,020 |
Deferred tax asset |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Deferred tax | 108,284 | 103,810 | 103,920 | 100,514 |
14. | Creditors: amounts falling due within one year |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 16) | 3,245,120 | 2,627,454 |
Hire purchase contracts (see note 17) | 89,091 | 120,186 |
Trade creditors | 761,947 | 658,186 |
Amounts owed to group undertakings | - | - |
Tax | 274,277 | 303,475 |
Social security and other taxes | 101,006 | 94,923 |
Directors' current accounts | 2,381,249 | 4,628,932 | 2,381,249 | 4,628,932 |
Accrued expenses | 513,768 | 966,011 |
7,366,458 | 9,399,167 |
Amounts owed to subsidiary undertaking, Family Vision Limited are repayable on demand and interest is charged at 4.5% per annum. |
15. | Creditors: amounts falling due after more than one year |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans (see note 16) | 11,161,288 | 8,107,732 |
Hire purchase contracts (see note 17) | 32,423 | 80,608 |
Accruals and deferred income | 35,222 | 35,222 |
11,228,933 | 8,223,562 |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
15. | Creditors: amounts falling due after more than one year - continued |
Bank loans at 31 December 2023 comprised of block discounting facilities with Siemens Financial Services, Aldermore plc and Hampshire Trust. |
Amounts drawn under the facilities are repayable over a predetermined schedule with an average life of 42 months. Interest charged varies according to market rates at the point of draw down (typically 4-5% flat rate). The facilities are secured against the HP agreements subject to draw down. Should any facility expire, each drawdown will continue to be repaid over the predetermined schedule period. |
16. | Loans |
An analysis of the maturity of loans is given below: |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Amounts falling due within one year or on | demand: |
Bank loans | 3,245,120 | 2,627,454 |
Amounts falling due between two and five | years: |
Bank loans - 2-5 years | 11,161,288 | 8,107,732 |
17. | Leasing agreements |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year | 89,091 | 120,186 |
Between one and five years | 32,423 | 80,608 |
121,514 | 200,794 |
Company |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Group |
Non-cancellable | operating leases |
2023 | 2022 |
£ | £ |
Within one year | 140,524 | 117,624 |
Between one and five years | 293,641 | 258,236 |
In more than five years | 200,000 | 240,000 |
634,165 | 615,860 |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
17. | Leasing agreements - continued |
Company |
Non-cancellable | operating leases |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
18. | Secured debts |
The bank account has the following guarantees attached to it: |
1) Debenture on the banks standard form dated 24/06/2002 |
2) Debenture on the banks standard form dated 07/04/1997 |
19. | Financial instruments |
2023 | 2022 |
Assets measured at amortised cost | £ | £ |
Loans and Advances | 36,213,436 | 33,216,594 |
Other Debtors | 368,372 | 411,370 |
Cash | 209,726 | 729,100 |
36,791,534 | 34,357,064 |
Liabilities measured at amortised cost |
Bank Loans | 14,406,408 | 10,735,186 |
Trade Creditors | 761,947 | 685,190 |
Other Creditors | - | - |
Finance Leases | 121,514 | 200,794 |
Director Loan Accounts | 2,381,249 | 4,628,932 |
17,671,118 | 16,233,102 |
20. | Deferred tax |
Group |
£ |
Balance at 1 January 2023 | (103,810 | ) |
Credit to Statement of Comprehensive Income during year | (4,474 | ) |
Balance at 31 December 2023 | (108,284 | ) |
Company |
£ |
Balance at 1 January 2023 | ( |
) |
Credit to Statement of Comprehensive Income during year | ( |
) |
Balance at 31 December 2023 | ( |
) |
21. | Called up share capital |
Allotted and issued: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Share capital 1 | 1 | 507,319 | 522,107 |
During the year 14,788 shares were repurchased by Family Finance Limited and subsequently cancelled. |
Family Finance Limited (Registered number: 00525612) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2023 |
22. | Pension commitments |
The company operates a defined contribution pension scheme for certain employees of the company. The assets of the scheme are held separately from those of the company. Contributions to the scheme are determined by the directors. Contributions to the scheme for the year were £174,841 (2022:£85,685) |
23. | Contingent liabilities |
Neither the group nor the company had any contingent liabilities as at 31 December 2023 (2022: £Nil). |
24. | Directors' advances, credits and guarantees |
The following advances and credits to directors subsisted during the years ended 31 December 2023 and 31 December 2022: |
2023 | 2022 |
£ | £ |
D G Phillips |
Balance outstanding at start of year | 1,678,991 | 1,002,559 |
Amounts advanced | - | 676,432 |
Amounts repaid | (978,991 | ) | - |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | 700,000 | 1,678,991 |
J R Phillips |
Balance outstanding at start of year | 2,949,941 | 1,628,904 |
Amounts advanced | 160,000 | 1,368,160 |
Amounts repaid | (1,428,692 | ) | (47,123 | ) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year | 1,681,249 | 2,949,941 |
25. | Related party disclosures |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
Other related parties |
2023 | 2022 |
£ | £ |
Recharge of payments made by Family Finance on behalf of Valleys Finance |
2,011,973 |
1,504,448 |
Family Finance Executive Pension Scheme - Property rentals payable | (50,000 | ) | (48,000 | ) |
Amount due from Valleys Finance Ltd | 198,355 | 164,967 |
Amount due from Valleys Finance Ltd - Stocking loan | 650,000 | 500,000 |
Valleys Finance is a limited company of which two of the directors of Family Finance Limited are directors. The balance outstanding above constitutes a monthly recharge balance which is interest free and a stocking loan balance for a regular cash flow funding which is repayable on demand. |
26. | Ultimate controlling party |
The ultimate controlling party is J R Phillips. |