Company registration number 11145797 (England and Wales)
NEWLYN GROUP HOLDING LTD
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
Century House
Wargrave Road
Henley-on-Thames
Oxfordshire
United Kingdom
RG9 2LT
NEWLYN GROUP HOLDING LTD
CONTENTS
Page
Company information
1
Strategic report
2 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Group statement of comprehensive income
10
Group balance sheet
11 - 12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 38
NEWLYN GROUP HOLDING LTD
COMPANY INFORMATION
- 1 -
Directors
Ms. M. Coyne
Mr. T, Durant
Ms. M. Fenner
Mrs. D. McCarthy
Ms. L. Sargent
Mr. D. Smith
Mrs. J. Smith
Ms. C. Vickers
Mr. A. White
Company number
11145797
Registered office
Century House
Wargrave Road
Henley-on-Thames
Oxfordshire
United Kingdom
RG9 2LT
Auditor
Verallo
Century House
Wargrave Road
Henley-on-Thames
Oxfordshire
United Kingdom
RG9 2LT
NEWLYN GROUP HOLDING LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

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

Principal activities

The principal activity of the company and group continued to be that of bailiff services.

Review of the business

The group emerged from 2021, post COVID in a strong position to commence the trading year on a positive note. The industry itself returned to near normal conditions in 2022 and clients were more positive and pro-active in their attitude to the enforcement industry as a whole. In 2023 the group continues to focus on its core activity, being debt recovery and enforcement services, principally to Local Authorities.

As reported in the groups statement of comprehensive income on page 10. These figures show a marked increase on the previous year’s performance which underlines the success of the Board’s decisions and strategic planning for developing the company’s market share of the enforcement recovery industry.

Principal risks and uncertainties

The management team continue to work closely with the client base to ensure the service we are delivering is in line with the clients aims and goals, in this way we continue to maintain primary service provider status.  This approach also helps with the day to day operations and management of our own resources.

 

We continue with the robust system and process approach that has allowed the group to develop its growth potential.  We have maintained our funding strategy to staffing levels and CapEx expenditure to ensure we are correctly positioned for current contracts and those new business areas we are targeting.  The board of directors have formally reviewed and documented the the principal risks facing the business on a monthly basis for the past 12 months.

 

The principal risks and uncertainties facing the group are as follows

Economic Position - The group has emerged stronger and better, analysis of our performance shows the group achieved its aim not only from trading figures but from client feedback in comparison with our competitors. The marketplace continues to evolve with acquisitions and mergers, but the trading forecast is very positive with best-ever year figures being produced.

Competitor pressure – As mentioned above the market continues to evolve but remains as competitive as ever. The group is delighted with its performance during the year and is in an excellent position to not only maintain its market position but to substantial increase its presence.

Key personnel – The group retained all key operating personnel and managed to recruit some new members of staff to strategic roles. Management continues to seek to ensure that key personnel are appropriately remunerated to ensure that good performance is recognised.

The company has continued to evolve its practices and procedures by embracing another effect of the pandemic, the Working From Home (WFH) culture which has developed in both its own work force and that of its clients.  Our hybrid system featuring a combination of home and office working fits well with the reduced face to face meetings required by our clients.  The company continues to make use of zoom and team meetings has seen us reduce travelling expenses, fuel costs, help improve our green credentials and increase performance by reducing unproductive travelling time.  This approach is opening up a whole different marketplace of staff resources whilst allowing for continued development of our service offering to clients.

NEWLYN GROUP HOLDING LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Key performance indicators

Management use a range of performance measures to monitor and manage the business. The KPIs used to determine the progress and performance of the group are set out below:

Turnover

Turnover amounts to £27,422,149 (2022 - £25,752,909)

Gross profit margin

The group's gross profit margin totals 60.9% (202260.1%)

Financial position at the reporting date

The balance sheet shows that the group's net assets for the period totals £17,363,704 (2022 - £13,855,483).

The group invested £324,607 (2022 - £360,444) in fixed assets.

Other information and explanations

With the effects of the pandemic almost behind us now, the client base has returned to near normal operating conditions and the group has posted record performance figures. The board believe that the group is in an excellent position to develop its market share and establish a very strong trading position for years to come.

On behalf of the board

Mr. D. Smith
Director
29 July 2024
NEWLYN GROUP HOLDING LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

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

Results and dividends

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

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

No preference dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Ms. M. Coyne
Mr. T, Durant
Ms. M. Fenner
Mrs. D. McCarthy
Ms. L. Sargent
Mr. D. Smith
Mrs. J. Smith
Ms. C. Vickers
Mr. A. White
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Auditor

In accordance with the company's articles, a resolution proposing that Verallo be reappointed as auditor of the group will be put at a General Meeting.

NEWLYN GROUP HOLDING LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

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

On behalf of the board
Mr. D. Smith
Director
29 July 2024
NEWLYN GROUP HOLDING LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NEWLYN GROUP HOLDING LTD
- 6 -
Opinion

We have audited the financial statements of Newlyn Group Holding Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

 

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

 

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

NEWLYN GROUP HOLDING LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWLYN GROUP HOLDING LTD
- 7 -

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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 their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

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

NEWLYN GROUP HOLDING LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWLYN GROUP HOLDING LTD
- 8 -
Auditor's responsibilities for the audit of the financial statements

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

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

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

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

Our approach was as follows:

 

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

 

 

 

NEWLYN GROUP HOLDING LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWLYN GROUP HOLDING LTD
- 9 -

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.

 

Use of 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.

Michelle Hewitt-Dutton FCCA (Senior Statutory Auditor)
For and on behalf of Verallo
Statutory Auditor
31 July 2024
Office: Henley-on-Thames
NEWLYN GROUP HOLDING LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
27,422,149
25,752,909
Cost of sales
(10,716,127)
(10,275,661)
Gross profit
16,706,022
15,477,248
Administrative expenses
(10,372,570)
(9,422,093)
Other operating income
53,950
51,769
Operating profit
4
6,387,402
6,106,924
Interest receivable and similar income
7
199,452
26,188
Interest payable and similar expenses
8
(1,393,817)
(1,441,295)
Profit before taxation
5,193,037
4,691,817
Tax on profit
9
(1,505,215)
(2,137,072)
Profit for the financial year
23
3,687,822
2,554,745
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.

EBITDA

 

The earnings before interest, tax, depreciation and amortisation totals £11,590,385 (2022 - £11,241,828)

The notes on pages 17 to 38 form part of these financial statements.

NEWLYN GROUP HOLDING LTD
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
10
21,142,169
26,116,798
Tangible assets
11
554,671
509,306
21,696,840
26,626,104
Current assets
Debtors
15
8,413,739
7,291,843
Cash at bank and in hand
12,753,243
13,019,892
21,166,982
20,311,735
Creditors: amounts falling due within one year
16
(14,110,163)
(12,732,363)
Net current assets
7,056,819
7,579,372
Total assets less current liabilities
28,753,659
34,205,476
Creditors: amounts falling due after more than one year
17
(11,110,400)
(20,280,000)
Provisions for liabilities
Deferred tax liability
19
99,954
69,993
(99,954)
(69,993)
Net assets
17,543,305
13,855,483
Capital and reserves
Called up share capital
21
947
947
Share premium account
22
14,719,613
14,719,613
Profit and loss reserves
23
2,822,745
(865,077)
Total equity
17,543,305
13,855,483
NEWLYN GROUP HOLDING LTD
GROUP BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
The financial statements were approved by the board of directors and authorised for issue on 29 July 2024 and are signed on its behalf by:
29 July 2024
Mr. D. Smith
Director
Company registration number 11145797 (England and Wales)

The notes on pages 17 to 38 form part of these financial statements.

NEWLYN GROUP HOLDING LTD
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
12
55,476,000
55,476,000
Current assets
Debtors
15
432,270
10
Cash at bank and in hand
266,321
456,103
698,591
456,113
Creditors: amounts falling due within one year
16
(12,354,000)
(9,550,717)
Net current liabilities
(11,655,409)
(9,094,604)
Total assets less current liabilities
43,820,591
46,381,396
Creditors: amounts falling due after more than one year
17
(11,110,400)
(20,280,000)
Net assets
32,710,191
26,101,396
Capital and reserves
Called up share capital
21
947
947
Share premium account
22
14,719,613
14,719,613
Profit and loss reserves
23
17,989,631
11,380,836
Total equity
32,710,191
26,101,396

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £6,608,795 (2022 - £2,492,594 profit).

The financial statements were approved by the board of directors and authorised for issue on 29 July 2024 and are signed on its behalf by:
29 July 2024
Mr. D. Smith
Director
Company registration number 11145797 (England and Wales)

The notes on pages 17 to 38 form part of these financial statements.

NEWLYN GROUP HOLDING LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
947
14,719,613
(3,419,822)
11,300,738
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
2,554,745
2,554,745
Balance at 31 December 2022
947
14,719,613
(865,077)
13,855,483
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
3,687,822
3,687,822
Balance at 31 December 2023
947
14,719,613
2,822,745
17,543,305

The notes on pages 17 to 38 form part of these financial statements.

NEWLYN GROUP HOLDING LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
947
14,719,613
8,888,242
23,608,802
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
2,492,594
2,492,594
Balance at 31 December 2022
947
14,719,613
11,380,836
26,101,396
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
6,608,795
6,608,795
Balance at 31 December 2023
947
14,719,613
17,989,631
32,710,191

The notes on pages 17 to 38 form part of these financial statements.

NEWLYN GROUP HOLDING LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
6,651,508
12,789,859
Interest paid
(1,393,817)
(1,441,295)
Income taxes paid
(1,092,557)
(2,182,717)
Net cash inflow from operating activities
4,165,134
9,165,847
Investing activities
Purchase of tangible fixed assets
(324,607)
(360,444)
Proceeds from disposal of tangible fixed assets
137,972
68,688
Interest received
199,452
26,188
Net cash generated from/(used in) investing activities
12,817
(265,568)
Financing activities
Repayment of borrowings
(20,280,000)
-
Proceeds from new bank loans
20,335,400
-
Repayment of bank loans
(4,500,000)
(4,500,000)
Net cash used in financing activities
(4,444,600)
(4,500,000)
Net (decrease)/increase in cash and cash equivalents
(266,649)
4,400,279
Cash and cash equivalents at beginning of year
13,019,892
8,619,613
Cash and cash equivalents at end of year
12,753,243
13,019,892

The notes on pages 17 to 38 form part of these financial statements.

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
1
Accounting policies
Company information

Newlyn Group Holding Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales, company registration no. 11145797. The registered office is Century House, Wargrave Road, Henley-on-Thames, RG9 2LT.

 

The group consists of Newlyn Group Holding Ltd and all of its subsidiaries.

1.1
Accounting convention

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

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

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

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

1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Newlyn Group Holding Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Newlyn Plc and Newlyn Contact Centre Services Limited have been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of Newlyn Plc and Newlyn Contact Centre Services Limited for the period from its acquisition on 10 April 2018. The purchase consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.

1.4
Going concern

The financial statements for the group and company have been prepared on a going concern basis, which assumes the company will continue in operational existence, and will be able to meet its liabilities as they fall due, for a period of at least twelve months from the date of approval of the financial statements.

 

In reaching this conclusion the directors have considered the support provided to the company by its trading subsidiaries, to provide sufficient funds to enable the company to meet it's liabilities as they fall due.

 

The directors have a reasonable expectation that the group and company has adequate resources to continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover represents revenue earned (excluding value added tax) under contracts to provide professional services from bailiff and related activities.

 

Bailiff service income is recognised on remittance of fees to the clients' debtors, as it is only at this point that the economic benefits are guaranteed to flow to the group.

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Plant and equipment
33% straight line
Fixtures and fittings
15% on reducing balance
Motor vehicles
33% on reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.9
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.11
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

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

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.12
Equity instruments

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

1.13
Taxation

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

Current tax

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

Deferred tax

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

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.14
Employee benefits

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

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
1.15
Retirement benefits

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

1.16
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

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

 

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

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Assessing indicators of impairment

In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no material indicators of impairments identified during the current financial year other than in respect of bad and doubtful trade debtor balances recognised in the financial statements.

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 24 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Recoverability of receivables

Directors assess the recoverability of receivables on a monthly basis, through the review of the ageing profile of the current debtors, along with past knowledge of the client and recoverability. At the year end, it was concluded by the directors that no provision would be required. A 1% bad debt provision would give rise to a £12,082 impact on the financial statements.

Determining residual and useful economic life of tangible assets

The group depreciates tangible assets over their estimated useful lives. The estimation of the useful life of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programs.

 

Judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices.

Added Value

Within the contractual agreements between Newlyn PLC and the local councils, there is potential for a contractual obligation to provide added value services.

    

The agreements do not specify a cash value, therefore the directors estimate the cost of the obligations, based upon previous experiences with the customer and the anticipated cost over the life of the agreement. Any amendment to the provision is made through the profit and loss on an annual basis.

 

An amount of £524,452 (2022 - £492,283) has been included in the financial statements in relation to the added value.

Legal Provision

Management are aware that the risk of litigation against the company is high in the sector they operate in. As such, they employ the use of legal professionals to ensure accurate estimation of the potential exposure they may face in relation to such legal proceedings.

 

An amount of £54,739 (2022 - £54,739) has been included in the financial statements in relation to the legal provision.

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Bailiff services
27,422,149
25,752,909
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
27,422,149
25,752,909
2023
2022
£
£
Other revenue
Interest income
199,452
26,188
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Depreciation of owned tangible fixed assets
228,354
193,068
Profit on disposal of tangible fixed assets
(87,084)
(32,793)
Amortisation of intangible assets
4,974,629
4,974,629
Operating lease charges
265,859
161,546
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
5,000
5,000
Audit of the financial statements of the company's subsidiaries
44,500
36,065
49,500
41,065
NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
6
Employees

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

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Directors
5
9
9
9
Bailiffs
14
11
-
-
Administration
47
43
-
-
Sales & Marketing
8
7
-
-
Call centre
35
36
-
-
Total
109
106
9
9

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
5,387,736
5,080,082
-
0
-
0
Social security costs
457,614
442,028
-
(869)
Pension costs
62,312
58,831
-
0
-
0
5,907,662
5,580,941
-
0
(869)
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
184,055
25,243
Other interest income
15,397
945
Total income
199,452
26,188
NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
1,285,760
111,984
Other interest on financial liabilities
108,057
1,328,960
Other interest
-
351
Total finance costs
1,393,817
1,441,295
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,907,264
2,063,937
Adjustments in respect of prior periods
(252,409)
33,717
Total current tax
1,654,855
2,097,654
Deferred tax
Origination and reversal of timing differences
(149,640)
39,418
Total tax charge
1,505,215
2,137,072
NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 28 -

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
5,193,037
4,691,817
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
1,220,364
891,445
Tax effect of expenses that are not deductible in determining taxable profit
1,238,916
1,207,898
Unutilised tax losses carried forward
(179,601)
-
0
Effect of change in corporation tax rate
3,990
16,799
Group relief
(252,700)
-
0
Under/(over) provided in prior years
-
0
33,717
Deferred tax adjustments in respect of prior years
-
0
(58)
Super deduction
(3,501)
(12,697)
Movement in provisions
-
0
(32)
Deferred tax adjustments in respect of prior years
(522,253)
-
0
Taxation charge
1,505,215
2,137,072

As of 1 April 2023 the corporation tax rate in the UK increased to 25% (rather than remaining at 19% as previously enacted). The 25% main rate of corporation tax and marginal relief will be relevant for any asset sales or timing differences expected to reverse on or after 1 April 2023.

10
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
49,746,286
Amortisation and impairment
At 1 January 2023
23,629,488
Amortisation charged for the year
4,974,629
At 31 December 2023
28,604,117
NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Intangible fixed assets
(Continued)
- 29 -
Carrying amount
At 31 December 2023
21,142,169
At 31 December 2022
26,116,798
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
11
Tangible fixed assets
Group
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
230,717
(3,876)
257,580
484,421
Additions
297,382
-
0
27,225
324,607
Disposals
(199,565)
(11,880)
(298,760)
(510,205)
Transfers
447,905
46,084
147,243
641,232
At 31 December 2023
776,439
30,328
133,288
940,055
Depreciation and impairment
At 1 January 2023
(85,126)
(31,498)
91,739
(24,885)
Depreciation charged in the year
167,340
3,415
57,599
228,354
Eliminated in respect of disposals
(180,699)
(6,200)
(272,418)
(459,317)
Transfers
447,905
46,084
147,243
641,232
At 31 December 2023
349,420
11,801
24,163
385,384
Carrying amount
At 31 December 2023
427,019
18,527
109,125
554,671
At 31 December 2022
315,843
27,622
165,841
509,306
The company had no tangible fixed assets at 31 December 2023 or 31 December 2022.
12
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
13
-
0
-
0
55,476,000
55,476,000
NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Fixed asset investments
(Continued)
- 30 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 and 31 December 2023
55,476,000
Carrying amount
At 31 December 2023
55,476,000
At 31 December 2022
55,476,000
13
Subsidiaries

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

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Newlyn Plc
England
Bailiff services
Ordinary £1 shares
100
Newlyn Contact Centre Services Limited
England
Bailiff services
Ordinary £0.01 shares
100
14
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
7,836,225
7,187,924
n/a
n/a
Measured at amortised cost
23,484,969
31,907,833
n/a
n/a

As permitted by the reduced disclosure framework within FRS 102, the company has taken advantage of the exemption from disclosing the carrying amount of certain classes of financial instruments, denoted by 'n/a' above.

 

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
15
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
7,833,866
7,168,574
-
0
-
0
Other debtors
2,359
19,350
10
10
Prepayments and accrued income
397,913
103,919
252,659
-
0
8,234,138
7,291,843
252,669
10
Deferred tax asset (note 19)
179,601
-
0
179,601
-
0
8,413,739
7,291,843
432,270
10

Included within trade debtors is an amount of £5,480,930 (2022 - £5,015,371), that relates to designated client money (note 16).

 

The bank holds a £50,000 bond against the client money by way of security.

16
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
18
4,725,000
-
0
4,725,000
-
0
Trade creditors
5,658,245
5,142,722
-
0
-
0
Amounts owed to group undertakings
-
0
-
0
7,629,000
5,179,000
Corporation tax payable
962,676
400,378
-
0
-
0
Other taxation and social security
772,918
704,152
-
-
Other creditors
55,094
52,353
-
0
-
0
Accruals and deferred income
1,936,230
6,432,758
-
0
4,371,717
14,110,163
12,732,363
12,354,000
9,550,717

Included within trade creditors is an amount of £5,480,930 (2022 - £5,015,371) that relates to designated client money (note 15).

 

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
17
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
18
11,110,400
-
0
11,110,400
-
0
Other borrowings
18
-
0
20,280,000
-
0
20,280,000
11,110,400
20,280,000
11,110,400
20,280,000
18
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
15,835,400
-
0
15,835,400
-
0
Other loans
-
0
20,280,000
-
0
20,280,000
15,835,400
20,280,000
15,835,400
20,280,000
Payable within one year
4,725,000
-
0
4,725,000
-
0
Payable after one year
11,110,400
20,280,000
11,110,400
20,280,000

On 1 February 2023, Newlyn Group Holding Limited entered into a new loan agreement with National Westminster Bank PLC, for the principal amount of £20,005,000. The loan is repaid in quarterly instalments with the final instalment due in March 2027.

19
Deferred taxation

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

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Accelerated capital allowances
99,954
69,993
-
-
Tax losses
-
-
179,601
-
99,954
69,993
179,601
-
NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Deferred taxation
(Continued)
- 33 -
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Company
£
£
£
£
Tax losses
-
-
179,601
-
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
69,993
-
Credit to profit or loss
(149,640)
(179,601)
Asset at 31 December 2023
(79,647)
(179,601)
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
62,312
58,831

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

21
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary of 1p each
39,660
39,660
396
396
B Ordinary of 1p each
55,000
55,000
550
550
94,660
94,660
946
946
NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Share capital
(Continued)
- 34 -
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Preference of 0.1p each
400
400
1
1
Preference shares classified as equity
1
1
Total equity share capital
947
947
NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Share capital
(Continued)
- 35 -

Ordinary A Shares

 

Any profits which the Company decides to distribute in respect of any financial year will be distributed amongst the holders of the A Shares. Dividends will be distributed to those holders of A Shares in proportion to the number of fully paid up A Shares held by them respectively and will accrued on a daily basis.

 

On any return of capital or assets including on a liquidation or a capital reduction, any capital or assets of the Company remaining for distribution among the Shareholders after the payment of the Company's liabilities will be applied first, in paying to the holders of the Preference Shares an amount up to but not exceeding £14,719,613.40 in aggregate (the Preference Amount) pro rata in proportion to the number of fully paid up Preference Shares held by them respectively, and second if the aggregate proceeds available for distribution (including the Preference Amount) do not exceed £20,200,000 (the Hurdle), in paying to the holders of the A Shares any amount in excess of the Preference Amount (the Preference Excess Amount) pro rata in proportion to the number of fully paid up A Shares held by them respectively; or if the aggregate proceeds available for distribution (including the Preference Amount) exceed the Hurdle, in paying to the holders of the A Shares the A Share Excess Amount (as defined in the articles) pro rata in proportion to the number of fully paid up A Shares held by them respectively.

 

Each A Share will have one vote per share. In the event that, Pursuant to the Investment Agreement (as defined in the articles) the Founder Representative (as defined in the articles) serves an Underperformance Notice (as defined in the articles) and the Founder Representative exercises on behalf of the Founders (as defined in the articles) their right to enhanced voting rights then the voting rights conferred on the A Shares shall represent 90% of the voting rights conferred on all Shares (and, if relevant, interests shall be split inter se in proportion to the number of A Shares held by each Founder) after the application of this voting enhancement.

 

The A Ordinary Shares are redeemable.

 

Ordinary B Shares

 

The B Ordinary Shares shall not participate in any dividend.

 

On any return of capital or assets including on a liquidation or a capital reduction, any capital or assets of the Company remaining for distribution among the Shareholders after the payment of the Company's liabilities will be applied first, in paying to the holders of the Preference Shares an amount up to but not exceeding £14,719,613.40 in aggregate (the Preference Amount) pro rata in proportion to the number of fully paid up Preference Shares held by them respectively, and second if the aggregate proceeds available for distribution (including the Preference Amount) do not exceed £20,200,000 (the Hurdle), in paying to the holders of the A Shares any amount in excess of the Preference Amount (the Preference Excess Amount) pro rata in proportion to the number of fully paid up A Shares held by them respectively; or if the aggregate proceeds available for distribution (including the Preference Amount) exceed the Hurdle, in paying to the holders of the A Shares the A Share Excess Amount (as defined in the articles) pro rata in proportion to the number of fully paid up A Shares held by them respectively and the B Shares an amount equal to the Preference Excess Amount less the A Share Excess Amount pro rata in proportion to the number of fully paid up B Shares held by them respectively.

 

Each B Share will have one vote per share.

 

The B Ordinary Shares are redeemable.

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Share capital
(Continued)
- 36 -

Preference Shares

 

Dividends

The Preference Shares shall not participate in any dividend.

 

Capital

On any return of capital or assets including on a liquidation or a capital reduction, any capital or assets of the Company remaining for distribution among the Shareholders after the payment of the Company's liabilities will be applied first, in paying to the holders of the Preference Shares an amount up to but not exceeding £14,719,613.40 in aggregate pro rata in proportion to the number of fully paid up Preference Shares held by them respectively.

 

Voting

The holders of the Preference Shares may receive notice of, attend and speak, but not vote, at any general meeting of the Company.

 

Redemption

The Preference Shares are non-redeemable.

22
Merger relief reserve
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning and end of the year
14,719,613
14,719,613
14,719,613
14,719,613
23
Profit and loss reserves
Group
Company
2023
2022
2023
2022
£
£
£
£
At the beginning of the year
(865,077)
(3,419,822)
11,380,836
8,888,242
Profit for the year
3,687,822
2,554,745
6,608,795
2,492,594
At the end of the year
2,822,745
(865,077)
17,989,631
11,380,836

The Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 37 -
24
Financial commitments, guarantees and contingent liabilities

Due to the nature of the business, the group is subject to small claims litigation from time to time. At the year end there are no known cases which would have a material impact on the financial statements.

 

On 1 February 2023, Newlyn Group Holding Limited entered into a new loan agreement with National Westminster Bank PLC, for the principal amount of £20,005,000, the loan is secured by an unlimited Intercompany Composite Guarantee by Newlyn Group Holding Limited, Newlyn PLC and Newlyn Contact Centre Services Limited. A charge over the shares of Newlyn PLC and, Newlyn Contact Centre Services Limited and a fixed and floating charge with a negative pledge, over the assets of Newlyn Contact Centre Services Limited.

25
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
252,856
155,200
-
-
Between two and five years
718,456
620,800
-
-
In over five years
929,600
1,084,800
-
-
1,900,912
1,860,800
-
-
26
Related party transactions

The company is exempt under FRS 102 s33.1A from disclosing any transaction with wholly owned Group companies.

 

During the year the group entered into transactions with three companies related by virtue of mutual directors. In total sales of £38,425 (2022 - £2,918) and purchases of £187,237 (2022 - £164,038) were made to these entities. At the year end the company owed its related parties £nil (2022 - £Nil).

 

NEWLYN GROUP HOLDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 38 -
27
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
3,687,822
2,554,745
Adjustments for:
Taxation charged
1,505,215
2,137,072
Finance costs
1,393,817
1,441,295
Investment income
(199,452)
(26,188)
Gain on disposal of tangible fixed assets
(87,084)
(32,793)
Amortisation and impairment of intangible assets
4,974,629
4,974,629
Depreciation and impairment of tangible fixed assets
228,354
193,068
Movements in working capital:
Increase in debtors
(942,295)
(1,795,915)
(Decrease)/increase in creditors
(3,909,498)
3,343,946
Cash generated from operations
6,651,508
12,789,859
28
Analysis of changes in net debt - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
13,019,892
(266,649)
12,753,243
Borrowings excluding overdrafts
(20,280,000)
4,444,600
(15,835,400)
(7,260,108)
4,177,951
(3,082,157)
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