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Registration number: 04527016

Savannah Group Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2023

Brebners
Chartered Accountants & Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

 

Savannah Group Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 9

Consolidated Income Statement

10

Consolidated Statement of Financial Position

11

Statement of Financial Position

12

Consolidated Statement of Changes in Equity

13

Statement of Changes in Equity

14

Consolidated Statement of Cash Flows

15

Notes to the Financial Statements

16 to 31

 

Savannah Group Limited

Company Information

Directors

K J Cheverton

C M Donkin

S Gough

M L Kacary

E J Llewellyn-Lloyd

A M G Martin

Registered office

7th Floor
8 Old Jewry
London
EC2R 8DN

Auditor

Brebners
Chartered Accountants & Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

 

Savannah Group Limited

Strategic Report for the Year Ended 31 December 2023

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

Principal activity

The principal activity of the group is executive recruitment consulting.

Fair review of the business

Despite challenging market conditions, Savannah Group demonstrated resilience and adaptability in 2023. The group's core business remained profitable, with gross profit margin increasing from 54% in 2022 to 58% in 2023. Group gross profit fell from £11,347k in 2023 to £9,056k in 2022 primarily due to a fall in revenue of 29% to £14,972k as a result of lesser demand from customers for interim placements. To navigate the economic challenges, Savannah Group focused on cost control, leading to a corporate restructuring in the second half of the year. While this restructuring impacted short-term profitability with group operating profit falling from £604k in 2022 to £266k in 2023, it positions the group for future success and long-term sustainability.

Non-financial KPIs

In a group this size the directors consider there are collectively numerous non-financial performance indicators but no individual indicator is more important than any other.

Financial KPIs

The company's key financial and other performance indicators during the year were as follows:

 

Unit

2023

2022

Turnover

£

15,603,494

21,108,187

Profit before tax

£

216,612

604,230

Net assets

£

590,435

230,536

Strategic investments in technology

In line with its key strategic priorities, Savannah Group continued to invest in its AI-powered talent platform, MapX, which is currently in beta phase. This proprietary technology provides the group with a significant competitive advantage in the market. Despite being in development, MapX revenues grew by 65% year-over-year, demonstrating its potential as a high-growth revenue stream.

Price risk, credit risk, liquidity risk and cash flow risk

Liquidity, credit, price and cash flow risks are managed by the directors on a constant basis to ensure the group maintains adequate cash flows to serve its working capital requirements.

Credit risk is the risk that one party to a financial instrument will cause a financial loss for that other party by failing to discharge an obligation. The group's policies are aimed at minimising such losses by authorisation of credit terms to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures.

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. Savannah Group actively manages its liquidity risk by producing regular cash flow forecasts to ensure it can meet its financial obligations as they fall due. The payouts related to retiring shareholders have resulted in lower cash balances at the end of the year. However, by the end of 2023, the majority of these shareholder payments had been completed. Additionally, the ongoing development of the AI tool has required sustained internal funding throughout the year, as the board decided to prioritise this investment over seeking external financing at this stage. The group aims to raise additional finance in the first half of 2024 to ensure sufficient funding is available for future growth and operations.

 

Savannah Group Limited

Strategic Report for the Year Ended 31 December 2023

Cash flow risk is the risk of exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability such as future interest payments on a variable rate debt. The group manages this risk, where significant, and does not maintain any derivatives or complex financial instruments.

The group uses basic financial instruments and had no hedging arrangements at 31 December 2023.

Principal risks and uncertainties

As a predominantly UK-based executive recruitment business, Savannah Group faces risks and uncertainties stemming from the current macroeconomic environment. Economic cycles and fluctuations in demand directly impact the group's performance, with hiring freezes and reduced recruitment needs being common during downturns.

To mitigate these risks, Savannah Group has strategically diversified its service offerings based on an AI-powered talent platform. These recession-resilient offerings provide more stable revenue streams during economic downturns when traditional recruitment demand declines. The investment in MapX, an AI-driven platform, enables the group to widen its talent search beyond the constraints of Brexit-impacted geographies, opening up new markets and opportunities.

Research and development

The company continues to undertake research and development in order to improve and diversify its service offering.

Future developments

Despite the challenges posed by the macroeconomic environment and the impact of Brexit, Savannah Group has demonstrated resilience and adaptability in 2023. The group's strategic investments in technology, particularly the MapX AI platform, position it well for future growth and success. By diversifying its service offerings and expanding into recession-resilient areas, Savannah Group aims to mitigate risks and build long-term sustainability. The group remains committed to navigating the evolving market landscape and seizing opportunities for growth and innovation in the years ahead.

Approved by the Board on 11 July 2024 and signed on its behalf by:

.........................................
K J Cheverton
Director

 

Savannah Group Limited

Directors' Report for the Year Ended 31 December 2023

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

Directors of the group

The directors who held office during the year were as follows:

K J Cheverton

C M Donkin

S Gough

M L Kacary

E J Llewellyn-Lloyd

A M G Martin

Dividends

During the year interim dividends of £Nil (2022: £378,239) were paid. No final dividend is proposed.

Purchase of own shares

During the year 484,947 A Deferred Shares and 85,000 C Ordinary Shares were repurchased by the company for an amount of £830,100. On purchase the shares were cancelled and an amount of £570 was transferred to capital redemption reserve.

Information included in the Strategic Report

The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of future developments, research & development and financial risk management and exposure.

Directors' liabilities

As permitted by the Articles of Association, the Directors have the benefit of an indemnity which is a qualifying third party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force.

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Approved by the Board on 11 July 2024 and signed on its behalf by:

.........................................
K J Cheverton
Director

 

Savannah Group Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 group and the company 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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 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 and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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.

 

Savannah Group Limited

Independent Auditor's Report to the Members of
Savannah Group Limited

Opinion

We have audited the financial statements of Savannah Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023, which comprise the Consolidated Income Statement, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and 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 the company's 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 auditor 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.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Savannah Group Limited

Independent Auditor's Report to the Members of
Savannah Group Limited

Conclusions relating to going concern

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

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 ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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.

Opinion on other matter 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 Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities [set out on page 5], 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 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.

 

Savannah Group Limited

Independent Auditor's Report to the Members of
Savannah Group Limited

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

Based on our understanding of the Group and the industry in which it operates, we determined that the principal risks of non-compliance with laws and regulations related to the reporting framework (FRS 102 and the Companies Act 2006) and UK corporate taxation laws, health and safety legislation, anti-bribery legislation and data protection legislation. These risks were communicated to our audit team and we remained alert to any indications of non-compliance throughout our audit.

We understood how the Group is complying with relevant legislation by making enquiries of management. We also considered the results of our audit procedures and to what extent these corroborate this understanding and assessed the susceptibility of the company’s financial statements to material misstatement. This included consideration of how fraud might occur and evaluation of management’s incentives and opportunities for fraudulent manipulation of the financial statements.

We designed our audit procedures to identify any non-compliance with laws and regulations. Such procedures included, but were not limited to, inspection of any regulatory or legal correspondence; challenging assumptions and judgements made by management; identifying and testing journal entries with a focus on large or unusual transactions as determined based on our understanding of the business; and identifying and assessing the effectiveness of controls in place to prevent and detect fraud.

Owing to the inherent limitations of an audit, there remains a risk that a material misstatement may not have been detected, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance with laws and regulations and cannot be expected to detect all instances of non-compliance.

The primary responsibility for the detection and prevention of fraud rests with those responsible for governance and management. The further removed non-compliance with laws and regulations is from the events reflected in the financial statements, the less likely the auditor will become aware of it.

The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment, collusion, omission, misrepresentation or forgery.

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 auditor's report.

 

Savannah Group Limited

Independent Auditor's Report to the Members of
Savannah Group Limited

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.

......................................
Martin Widdowson (Senior Statutory Auditor)
For and on behalf of

Brebners, Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

11 July 2024

 

Savannah Group Limited

Consolidated Income Statement for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

15,603,494

21,108,187

Cost of sales

 

(6,547,945)

(9,760,692)

Gross profit

 

9,055,549

11,347,495

Administrative expenses

 

(8,790,008)

(10,744,263)

Operating profit

4

265,541

603,232

Other interest receivable and similar income

5

427

998

Interest payable and similar expenses

6

(49,356)

-

Profit before tax

 

216,612

604,230

Tax on profit

10

148,387

1,332

Profit for the financial year

 

364,999

605,562

Profit/(loss) attributable to:

 

Owners of the company

 

364,999

605,562

 

Savannah Group Limited

Consolidated Statement of Financial Position as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

11

2,927,736

1,486,931

Tangible assets

12

108,798

164,177

 

3,036,534

1,651,108

Current assets

 

Debtors

14

2,645,699

2,933,742

Cash at bank and in hand

 

67,817

1,651,895

 

2,713,516

4,585,637

Creditors: Amounts falling due within one year

16

(5,084,508)

(5,562,045)

Net current liabilities

 

(2,370,992)

(976,408)

Total assets less current liabilities

 

665,542

674,700

Creditors: Amounts falling due after more than one year

16

-

(325,000)

Provisions for liabilities - Deferred taxation

17

(75,107)

(119,164)

Net assets

 

590,435

230,536

Capital and reserves

 

Called up share capital

19

1,355

1,925

Share premium reserve

20

-

489,356

Capital redemption reserve

20

1,839

1,269

Own share reserve

20

(325,000)

(1,150,000)

Retained earnings

20

912,241

887,986

Equity attributable to owners of the company

 

590,435

230,536

Shareholders' funds

 

590,435

230,536

Approved and authorised by the Board on 11 July 2024 and signed on its behalf by:
 

.........................................

K J Cheverton
Director

Company registration number: 04527016

 

Savannah Group Limited

Statement of Financial Position as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

11

-

1,486,931

Tangible assets

12

108,798

164,177

Investments

13

1

-

 

108,799

1,651,108

Current assets

 

Debtors

14

5,624,715

2,933,742

Cash at bank and in hand

 

54,399

1,651,895

 

5,679,114

4,585,637

Creditors: Amounts falling due within one year

16

(5,069,284)

(5,562,045)

Net current assets/(liabilities)

 

609,830

(976,408)

Total assets less current liabilities

 

718,629

674,700

Creditors: Amounts falling due after more than one year

16

-

(325,000)

Provisions for liabilities - Deferred Taxation

17

-

(119,164)

Net assets

 

718,629

230,536

Capital and reserves

 

Called up share capital

19

1,355

1,925

Share premium reserve

-

489,356

Capital redemption reserve

1,839

1,269

Own share reserve

(325,000)

(1,150,000)

Retained earnings

1,040,435

887,986

Shareholders' funds

 

718,629

230,536

The company made a profit after tax for the financial year of £493,193 (2022 - profit of £605,562).

Approved and authorised by the Board on 11 July 2024 and signed on its behalf by:
 

.........................................
K J Cheverton
Director

Company registration number: 04527016

 

Savannah Group Limited

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023
Equity attributable to the parent company

Share capital
£

Share premium reserve
£

Capital redemption reserve
£

Own share reserve
£

Retained earnings
£

Total
£

Total equity
£

At 1 January 2022

2,103

471,279

784

(975,000)

1,485,663

984,829

984,829

Profit for the year

-

-

-

-

605,562

605,562

605,562

Future share repurchases

-

-

-

(175,000)

-

(175,000)

(175,000)

Dividends

-

-

-

-

(378,239)

(378,239)

(378,239)

New share capital subscribed

307

18,077

-

-

-

18,384

18,384

Purchase of own share capital

(485)

-

485

-

(825,000)

(825,000)

(825,000)

At 31 December 2022

1,925

489,356

1,269

(1,150,000)

887,986

230,536

230,536

Share capital
£

Share premium reserve
£

Capital redemption reserve
£

Own share reserve
£

Retained earnings
£

Total
£

Total equity
£

At 1 January 2023

1,925

489,356

1,269

(1,150,000)

887,986

230,536

230,536

Profit for the year

-

-

-

-

364,999

364,999

364,999

Purchase of own share capital

(570)

-

570

825,000

(830,100)

(5,100)

(5,100)

Share premium transfer

-

(489,356)

-

-

489,356

-

-

At 31 December 2023

1,355

-

1,839

(325,000)

912,241

590,435

590,435

 

Savannah Group Limited

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Share premium reserve
£

Capital redemption reserve
£

Own share reserve
£

Retained earnings
£

Total
£

At 1 January 2022

2,103

471,279

784

(975,000)

1,485,663

984,829

Profit for the year

-

-

-

-

605,562

605,562

Future share repurchases

-

-

-

(175,000)

-

(175,000)

Dividends

-

-

-

-

(378,239)

(378,239)

New share capital subscribed

307

18,077

-

-

-

18,384

Purchase of own share capital

(485)

-

485

-

(825,000)

(825,000)

At 31 December 2022

1,925

489,356

1,269

(1,150,000)

887,986

230,536

Share capital
£

Share premium reserve
£

Capital redemption reserve
£

Own share reserve
£

Retained earnings
£

Total
£

At 1 January 2023

1,925

489,356

1,269

(1,150,000)

887,986

230,536

Profit for the year

-

-

-

-

493,193

493,193

Purchase of own share capital

(570)

-

570

825,000

(830,100)

(5,100)

Share premium transfer

-

(489,356)

-

-

489,356

-

At 31 December 2023

1,355

-

1,839

(325,000)

1,040,435

718,629

 

Savannah Group Limited

Consolidated Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
£

2022
£

Cash flows from operating activities

Profit for the year

 

364,999

605,562

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

4

83,583

87,332

Loss on disposal of tangible assets

504

11

Finance income

5

(427)

(998)

Finance costs

6

49,356

-

Income tax expense

10

(148,387)

(1,332)

 

349,628

690,575

Working capital adjustments

 

Decrease in trade debtors

 

392,372

896,562

Decrease in trade creditors

 

(802,537)

(361,183)

Increase/(decrease) in other reserves

 

825,000

(175,000)

Cash generated from operations

 

764,463

1,050,954

Income taxes paid

 

-

(31,575)

Net cash flow from operating activities

 

764,463

1,019,379

Cash flows from investing activities

 

Interest received

427

998

Acquisitions of tangible assets

(29,473)

(62,509)

Proceeds from sale of tangible assets

 

766

1,185

Acquisition of intangible assets

11

(1,440,805)

(1,226,739)

Net cash flows from investing activities

 

(1,469,085)

(1,287,065)

Cash flows from financing activities

 

Interest paid

6

(49,356)

-

Proceeds from issue of ordinary shares, net of issue costs

 

-

18,384

Payments for purchase of own shares

 

(830,100)

(825,000)

Dividends paid

-

(378,239)

Net cash flows from financing activities

 

(879,456)

(1,184,855)

Net decrease in cash and cash equivalents

 

(1,584,078)

(1,452,541)

Cash and cash equivalents at 1 January

 

1,651,895

3,104,436

Cash and cash equivalents at 31 December

 

67,817

1,651,895

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
7th Floor
8 Old Jewry
London
EC2R 8DN

The principal activity of the company and group is that of executive recruitment consulting.

2

Accounting policies

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except any items disclosed in the accounting policies as being shown at fair value and are presented in sterling, which is the functional currency of the entity.

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December each year.

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

The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Going concern

At 31 December 2023 the group's financial position showed net assets of £590,435. Subsequent to the year end, the group secured an £800,000 government-backed Recovery Loan Scheme (RLS) loan to supplement its existing invoice discounting facility. These financial resources are intended to support the group's new investments and effectively manage working capital requirements throughout the year.

The group has prepared financial forecasts, including detailed cashflow projections extending untl the end of December 2025. Based on these forecasts the directors anticipate that the group will consistently generate positive cash flows from its operations and maintain sufficient financial resources to meet its obligations as they fall due for the foreseeable future. Post balance sheet trading indicates that these forecasts are achievable.

On the basis of the forecasts prepared, the directors do not believe that a material uncertainty exists that may cast significant doubt on the group's ability to continue in operational existence. Therefore the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company's activities. Turnover is shown net of value added tax, returns, rebates and discounts.

The group recognises revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity. Revenue from a contract to provide services is recognised in the period in which services are provided in accordance with the stage of completion of the contract. Subscription revenue is recognised over the term of the contract.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Leasehold improvements

straight line over the term of the lease

Furniture, fittings & equipment

20% reducing balance and 33% straight line

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Intangible assets

Separately acquired trademarks and patents are shown at historical cost.

Trademarks, patents, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.

Trademarks, patents and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

Intangible assets are amortised over their estimated useful economic lives once developed and capable of producing future economic benefit.

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Assets held under hire purchase contracts are capitalised at the lesser of fair value or present value of minimum lease payments in the statement of financial position. The present value of the minimum lease payments is calculated using the interest rate implicit in the lease. A corresponding liability is recognised at the same value in the statement of financial position. The asset is then depreciated over its useful life.

The minimum lease payments are apportioned between the finance charge recognised in the income statement and the reduction of the outstanding liability using the effective interest method. The finance charge in each period is allocated so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

3

Turnover

The analysis of the group's turnover for the year from continuing operations is as follows:

2023
£

2022
£

Rendering of services - UK

15,603,494

21,108,187

4

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

83,583

87,331

Foreign exchange losses/(gains)

21,038

(116,234)

Loss on disposal of property, plant and equipment

504

11

5

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

427

998

6

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

31,755

-

Interest expense on other finance liabilities

17,601

-

49,356

-

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
£

2022
£

Wages and salaries

5,766,715

7,821,080

Social security costs

548,557

562,092

Pension costs, defined contribution scheme

212,481

227,281

Redundancy costs

34,500

10,000

Other employee expenses

371,370

224,412

6,933,623

8,844,865

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Recruitment consultants and support staff

64

64

64

64

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

1,080,712

1,433,447

Contributions paid to money purchase schemes

27,501

27,175

1,108,213

1,460,622

During the year the number of directors who were receiving benefits and share incentives was as follows:

2023
No.

2022
No.

Accruing benefits under defined benefit pension scheme

4

4

In respect of the highest paid director:

2023
£

2022
£

Remuneration

413,445

673,219

Company contributions to money purchase pension schemes

7,500

7,500

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

9

Auditor's remuneration

2023
£

2022
£

Audit of these financial statements

28,000

21,250

Audit of the financial statements of group undertakings

7,000

-

35,000

21,250

10

Taxation

Tax charged/(credited) in the consolidated income statement

2023
£

2022
£

Current taxation

UK corporation tax

(104,330)

-

UK corporation tax adjustment to prior periods

-

(62,213)

(104,330)

(62,213)

Deferred taxation

Arising from origination and reversal of timing differences

(44,057)

60,881

Tax receipt in the income statement

(148,387)

(1,332)

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of 25% (2022 - 19%). Due to the change in tax rates from 1 April 2023 the hybrid corporation tax rate for the year is 23.5%.
 

2023
£

2022
£

Profit before tax

216,612

604,230

Corporation tax at hybrid rate

50,903

114,804

Decrease in UK and foreign current tax from adjustment for prior periods

-

(62,213)

Tax increase from effect of capital allowances and depreciation

12,544

939

Tax (decrease)/increase from other short-term timing differences

(44,057)

82,807

Effect of expense not deductible in determining taxable profit

(261,269)

13,881

Effect of tax losses

197,191

-

Tax decrease from effect of research and development tax credit

(104,330)

(142,319)

Tax increase/(decrease) from other tax effects

631

(9,231)

Total tax credit

(148,387)

(1,332)

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Deferred tax

Group

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Accelerated capital allowances

-

(414,062)

Losses carried forwards and other timing differences

-

338,955

-

(75,107)

2022

Asset
£

Liability
£

Accelerated capital allowances

-

(135,391)

Losses carried forwards and other timing differences

-

16,227

-

(119,164)

Company

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Accelerated capital allowances

(26,697)

-

Losses carried forwards and other timing differences

104,183

-

77,486

-

2022

Asset
£

Liability
£

Accelerated capital allowances

-

(135,391)

Losses carried forwards and other timing differences

-

16,227

-

(119,164)

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

11

Intangible assets

Group

Software development
£

Total
£

Cost or valuation

At 1 January 2023

1,486,931

1,486,931

Additions

1,440,805

1,440,805

At 31 December 2023

2,927,736

2,927,736

Amortisation

At 1 January 2023 and 31 December 2023

-

-

Carrying amount

At 31 December 2023

2,927,736

2,927,736

At 31 December 2022

1,486,931

1,486,931

Company

Software development
£

Total
£

Cost or valuation

At 1 January 2023

1,486,931

1,486,931

Additions

1,426,450

1,426,450

Disposals

(2,913,381)

(2,913,381)

At 31 December 2023

-

-

Amortisation

At 1 January 2023 and 31 December 2023

-

-

Carrying amount

At 31 December 2023

-

-

At 31 December 2022

1,486,931

1,486,931

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

12

Tangible assets

Group

Leasehold improvements
£

Furniture, fittings and equipment
 £

Total
£

Cost or valuation

At 1 January 2023

324,742

398,762

723,504

Additions

-

29,473

29,473

Disposals

-

(1,475)

(1,475)

At 31 December 2023

324,742

426,760

751,502

Depreciation

At 1 January 2023

251,676

307,651

559,327

Charge for the year

32,474

51,108

83,582

Eliminated on disposal

-

(205)

(205)

At 31 December 2023

284,150

358,554

642,704

Carrying amount

At 31 December 2023

40,592

68,206

108,798

At 31 December 2022

73,066

91,111

164,177

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Company

Leasehold improvements
£

Furniture, fittings and equipment
 £

Total
£

Cost or valuation

At 1 January 2023

324,742

398,762

723,504

Additions

-

29,473

29,473

Disposals

-

(1,475)

(1,475)

At 31 December 2023

324,742

426,760

751,502

Depreciation

At 1 January 2023

251,676

307,651

559,327

Charge for the year

32,474

51,108

83,582

Eliminated on disposal

-

(205)

(205)

At 31 December 2023

284,150

358,554

642,704

Carrying amount

At 31 December 2023

40,592

68,206

108,798

At 31 December 2022

73,066

91,111

164,177

13

Investments

Company

2023
£

2022
£

Investments in subsidiaries

1

-

Subsidiaries

£

Cost or valuation

At 1 January 2023

-

Additions

1

At 31 December 2023

1

Carrying amount

At 31 December 2023

1

At 31 December 2022

-

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

2023

2022

Subsidiary undertakings

MAPX Ltd

7th Floor 8-10 Old Jewry, London, England, EC2R 8DN

Ordinary

100%

100%

The principal activity of MAPX Ltd is that of recruitment software development.

14

Debtors

   

Group

Company

Note

2023
£

2022
£

2023
£

2022
£

Trade debtors

 

1,828,260

2,317,676

1,826,493

2,317,676

Amounts owed by group undertakings

 

-

-

3,011,182

-

Other debtors

 

239,202

201,166

239,201

201,166

Prepayments

 

144,102

142,559

140,548

142,559

Accrued income

 

267,882

210,418

267,882

210,418

Deferred tax assets

10

-

-

77,486

-

Corporation tax asset

 

166,253

61,923

61,923

61,923

 

2,645,699

2,933,742

5,624,715

2,933,742

Other debtors includes an amount of £181,636 (2022: £181,636) receivable in greater than one year.

15

Cash and cash equivalents

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Cash at bank

67,817

1,651,895

54,399

1,651,895

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

16

Creditors

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Due within one year

Trade creditors

1,602,454

1,212,094

1,595,160

1,212,094

Social security and other taxes

1,157,772

519,052

1,156,842

519,052

Other payables

497,007

58,306

497,007

58,306

Accruals and deferred income

1,827,275

3,772,593

1,820,275

3,772,593

5,084,508

5,562,045

5,069,284

5,562,045

Due after one year

Accruals and deferred income

-

325,000

-

325,000

Other payables includes an amount of £415,112 (2022: £Nil) secured by a fixed charge over certain bank debts and a fixed and floating charge over the other assets and undertakings of the company.

17

Provisions for liabilities

Group

Deferred tax
£

Total
£

At 1 January 2023

119,164

119,164

Increase/(decrease) in existing provisions

(44,057)

(44,057)

At 31 December 2023

75,107

75,107

Company

Deferred tax
£

Total
£

At 1 January 2023

119,164

119,164

Increase/(decrease) in existing provisions

(119,164)

(119,164)

At 31 December 2023

-

-

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

18

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £212,481 (2022 - £227,281).

19

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

A Deferred Shares of of £0.001 each

318,282

318

803,229

803

C Ordinary Shares of of £0.001 each

1,036,666

1,037

1,121,666

1,122

 

1,354,948

1,355

1,924,895

1,925

Rights of shares

The A Deferred Shares carry no rights to vote or to receive dividends. The A Deferred Shares may participate in capital distributions and carry not right to redemption.

Purchase of own shares

During the year 484,947 A Deferred Shares and 85,000 C Ordinary Shares were repurchased by the company for an amount of £830,100. On purchase the shares were cancelled and an amount of £570 was transferred to capital redemption reserve.

Share options

On 20 November 2016 share options were granted in relation to an EMI scheme. Options over 733,333 B Ordinary shares of £0.001 each were granted at an exercise price of £0.0074 per share. At 31 December 2023 333,333 (2022: 333,333) share options remained unexercised.

On 20 December 2019 share options were granted in relation to an EMI scheme. Options over 1,569,791 C Ordinary shares of £0.001 each were granted at an exercise price of £0.06 per share to be settled in cash. During the year, 75,000 options lapsed. At 31 December 2023 no options (2022: 75,000) remained unexercised.

On 30 September 2022 share options were granted in relation to an EMI scheme. Options over 2,337,800 B Ordinary shares of £0.001 each were granted at an exercise price of £0.17 per share to be settled in cash. During the year, 77,083 options lapsed. At 31 December 2023, 683,633 (2022: 760,716) options remained unexercised.

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

20

Reserves


Share premium account

This reserve records the difference between the proceeds received from share issues and the nominal value of shares issued. During the year there was a capital redemption and the share premium account was reduced from £489,356 to £Nil.

Capital redemption reserve

This reserve records the nominal value of shares repurchased by the company.

Own share reserve

This reserve records the committed future consideration in respect of the company's own shares that it is committed to purchasing. The share repurchases are contracted to take place in stages with the final purchase expected in 2024.

Profit and loss account

This reserve includes all current and prior period profits and losses.

21

Dividends

   

2023
£

 

2022
£

Dividends on C Ordinary Shares

 

-

 

378,239

         

22

Commitments

Operating leases

The total of future minimum lease payments is as follows:

2023

2022

£

£

Not later than 1 year

298,522

302,727

Later than 1 year and not later than 5 years

-

298,522

298,522

601,429

The amount of non-cancellable operating lease payments recognised as an expense during the year was £252,273 (2022: £252,273).

 

Savannah Group Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

23

Analysis of changes in net debt

Group

At 1 January 2023
£

Cash flows
£

At 31 December 2023
£

Cash and cash equivalents

Cash

1,651,895

(1,584,078)

67,817

 

1,651,895

(1,584,078)

67,817

24

Related party transactions

Company

Exemption has been taken under FRS 102, paragraph 33.1A not to disclose transactions or amounts falling due with companies that are wholly owned by the group.

Group

Key management personnel

All directors and certain senior employees who have authority and responsibility for planning, directing and controlling the activities of the group are considered to be key management personnel. Total remuneration in respect of these individuals is £1,108,213 (2022: £1,460,622).

25

Non adjusting events after the financial period

Subsequent to 31 December 2023 166,667 A Deferred Shares of £0.001 each were purchased by the company for consideration of £325,000.