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Registered number: 06545585









Kinetic PLC









Annual Report and Consolidated Financial Statements

For the year ended 31 March 2024

 
Kinetic PLC
 
 
Company Information


Directors
N Betton 
J Heseltine 




Company secretary
N Betton



Registered number
06545585



Registered office
Lancastrian Office Centre
Talbot Road

Manchester

M32 0FP




Independent auditors
Hurst Accountants Limited
Chartered Accountants and Statutory Auditors

3 Stockport Exchange

Stockport

SK1 3GG





 
Kinetic PLC
 

Contents



Page
Group strategic report
 
1 - 2
Directors' report
 
3 - 4
Independent auditors' report
 
5 - 8
Consolidated profit and loss account
 
9
Consolidated balance sheet
 
10
Company balance sheet
 
11
Consolidated statement of changes in equity
 
12
Company statement of changes in equity
 
13
Consolidated statement of cash flows
 
14
Consolidated analysis of net debt
 
15
Notes to the financial statements
 
16 - 33


 
Kinetic PLC
 
 
Group Strategic Report
For the year ended 31 March 2024

Introduction
 
Kinetic PLC provides human resource and staffing services to the manufacturing, engineering and technical markets in the UK.

Business review
 
Kinetic PLC's growth strategy will continue with further diversification into industrial and engineering markets with our contract and permanent offerings within the UK as well as enhancing the human resource and staffing services offerings within its other brands.
Other brands within the group, Pay Partners and Kinetic Nursing Services continue to trade as autonomous companies supported by the group which delivers back office support services.

The key financial and other performance indicators during the year were as follows:
      
 2024  2023  % Change 
Turnover £'000     17,948  16,501  9% 
Group operating profit £'000              75,641  -  17,091% 
Equity shareholders' funds £'000   1,724  1,665  4% 
Fixed assets £'000                154  190  (19%) 
Current assets as a % of current liabilities   124%  123%  1% 
Average number of employees   53  53  -%
Turnover increased by 9% delivering a better result to the prior year however gross profit margin fell from 18.5% to 17.7%. The increased volume delivered an extra £127k gross profit above last years result. The business has been affected by the  effects of rising inflation and increased interest rates leading to an increase in overheads of £52k (1.7% increase).
The number of employees remains consistent in comparison to 2023. There are further plans to increase the employee numbers into the Nursing business in 2024 to enable further growth.
The company continues to be well capitalised with a strong balance sheet and cash reserves.
Kinetic PLC shows continuing commitment to employees being the company's greatest asset as it is an employee owned company. All employees equally share in the success of the business. All employee owners receive detailed updates on the performance of the business and are engaged at all levels with the goal to work as a group supporting one another.

Principal risks and uncertainties
 
Commercial risks to the core business continue to be challenging external market forces and industry legislation costs. There is still a shortage of skilled personnel in the UK due to continuing relatively high levels of employment. Such risks we have mitigated with further investment in other platforms and tools to attract suitable candidates alongside our well established in-house database.
Challenges within the current economic climate with increased inflation and interest rates are having to be managed very carefully in an attempt to control overhead costs. 
Bad debts remain a significant risk and we have robust systems in place to mitigate such risks. We credit check all potential clients and have credit insurance in place for our key customers that are reviewed monthly for exposure.
The directors have reviewed Kinetic PLC’s business model and strategy and we operate a full risk register managed within our BS 9001:2015 British Quality Standard accreditation.

Page 1

 
Kinetic PLC
 

Group Strategic Report (continued)
For the year ended 31 March 2024

Financial key performance indicators
 
Operational KPI’s: Numbers of timesheets on a weekly basis alongside the number of trading clients on a monthly basis. Full forecasts of the following month's permanent recruitment pipeline are tracked to actual results on a monthly basis. Scheduled interviews, candidates placed, number of calls made, and number of client visits are all measured and reported real time via monitors set up in each of the offices.
Key financial indicators are measured at an office level to compare actual results against budgets and the prior year on a monthly basis. These are all reported on a monthly basis via the monthly management accounts along with the profit and loss accounts for each of the businesses in the group.

Other key performance indicators
 
Kinetic PLC also operates balanced scorecard to monitor strategy and to ensure the business is continuing to drive innovation and cost management throughout the organisation. Critical success factors continue to be focused on customer development and satisfaction, internal business process, finance and employee learning and growth. Examples of additional measures are application rates and placement rates from the job boards and other tools we use to ensure a good return on investment.


This report was approved by the board and signed on its behalf.



J Heseltine
Director

Date: 10 August 2024

Page 2

 
Kinetic PLC
 
 
 
Directors' Report
For the year ended 31 March 2024

The directors present their report and the financial statements for the year ended 31 March 2024.

Directors' responsibilities statement

The directors are responsible for preparing the group strategic report, the directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £58,243 (2023 -loss £32,722).

The directors do not recommend payment of a final dividend (2023: £nil). No dividends were paid in the year (2023: £nil).

Directors

The directors who served during the year were:

N Betton 
J Heseltine 

Future developments

An indication of the likely future developments in the group's business is provided in the Strategic Report.

Disclosure of information to auditors

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Page 3

 
Kinetic PLC
 
 
 
Directors' Report (continued)
For the year ended 31 March 2024

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditorsHurst Accountants Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





N Betton
Secretary
Date: 10 August 2024

Page 4

 
Kinetic PLC
 
 
 
Independent auditors' report to the members of Kinetic PLC
 

Opinion


We have audited the financial statements of Kinetic PLC (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2024, which comprise the consolidated profit and loss account, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 March 2024 and of the Group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


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


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 5

 
Kinetic PLC
 
 
 
Independent auditors' report to the members of Kinetic PLC (continued)


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the group strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the group strategic report and the 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 the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the group strategic report or the directors' report.


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


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the directors' responsibilities statement set out on page 3, 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 Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
Kinetic PLC
 
 
 
Independent auditors' report to the members of Kinetic PLC (continued)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' 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 Group financial statements.


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:

Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
• The nature of the industry and sector in which the company operates; the control environment and business            performance including key drivers for directors' remuneration, bonus levels and performance targets.
• The outcome of enquiries of local management and parent company management, including whether management    was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge   of any actual, suspected, or alleged fraud. 
• Supporting documentation relating to the Company's policies and procedures for:
    - Identifying, evaluating, and complying with laws and regulations
    - Detecting and responding to the risks of fraud
• The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
• The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the    financial statements and any potential indicators of fraud.
• The legal and regulatory framework in which the Company operates, particularly those laws and regulations which    have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or    which had a fundamental effect on the operations of the Company, including application of the Employment    Agencies Act 1973, Agency Workers Regulations 2010, Working Time Regulations 1998, Conduct of Employment   Agencies and Regulations 2003, General Data Protection Requirements, and Anti-bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
• Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with    the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
• Discussions with management, including consideration of known or suspected instances of non-compliance with    laws and regulations and fraud.
• Evaluation of management’s controls designed to prevent and detect irregularities.
• Enquiring of management about any actual and potential litigation and claims.
• Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of    material misstatement due to fraud.




 
Page 7

 
Kinetic PLC
 
 
 
Independent auditors' report to the members of Kinetic PLC (continued)


We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to    identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or   error.
• Challenging assumptions made by management in their significant accounting estimates, and assessing whether the    judgements made in making accounting estimates are indicative of a potential bias; and
• Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of    business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them.  Also, 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 by, for example, forgery or intentional misrepresentations, or through collusion.


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 auditors' report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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 auditors' 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.





Mike Jackson (Senior statutory auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants and Statutory Auditors
3 Stockport Exchange
Stockport
SK1 3GG

19 August 2024
Page 8

 
Kinetic PLC
 
 
Consolidated Profit and Loss Account
For the year ended 31 March 2024

2024
2023
Note
£
£

  

Turnover
 4 
17,948,186
16,500,991

Cost of sales
  
(14,776,641)
(13,456,455)

Gross profit
  
3,171,545
3,044,536

Administrative expenses
  
(3,095,904)
(3,044,096)

Operating profit
 5 
75,641
440

Interest receivable and similar income
 9 
48,720
1,577

Interest payable and similar expenses
 10 
(68,946)
(41,645)

Profit/(loss) before tax
  
55,415
(39,628)

Tax on profit/(loss)
 11 
2,828
6,906

Profit/(loss) for the financial year
  
58,243
(32,722)

Profit/(loss) for the year attributable to:
  

Owners of the parent
  
58,243
(32,722)

There are no items of other comprehensive income for 2024 or 2023 other than the profit/(loss) for the yearAs a result, no separate Statement of comprehensive income has been presented.

The notes on pages 16 to 33 form part of these financial statements.

Page 9

 
Kinetic PLC
Registered number: 06545585

Consolidated Balance Sheet
As at 31 March 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 13 
153,791
189,850

Current assets
  

Debtors: amounts falling due within one year
 16 
3,853,245
4,411,464

Cash at bank and in hand
 17 
4,403,572
3,751,340

  
8,256,817
8,162,804

Creditors: amounts falling due within one year
 18 
(6,665,753)
(6,663,214)

Net current assets
  
 
 
1,591,064
 
 
1,499,590

Total assets less current liabilities
  
1,744,855
1,689,440

Provisions for liabilities
  

Deferred taxation
 19 
(21,150)
(23,978)

  
 
 
(21,150)
 
 
(23,978)

Net assets
  
1,723,705
1,665,462


Capital and reserves
  

Called up share capital 
 20 
20,000
20,000

Share premium account
 21 
1,904,155
1,904,155

Own shares held by Employee Ownership Trust
 21 
(3,000,273)
(3,000,273)

Profit and loss account
 21 
2,799,823
2,741,580

Equity attributable to owners of the parent Company
  
1,723,705
1,665,462


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




J Heseltine
Director

Date: 10 August 2024

The notes on pages 16 to 33 form part of these financial statements.

Page 10

 
Kinetic PLC
Registered number: 06545585

Company Balance Sheet
As at 31 March 2024

2024
2023
Note
£
£

Fixed assets
  

Investments
 14 
5,180,545
5,180,545

  

Creditors: amounts falling due within one year
 18 
(3,515,083)
(3,515,083)

Net current liabilities
  
 
 
(3,515,083)
 
 
(3,515,083)

Total assets less current liabilities
  
1,665,462
1,665,462

  

  

Net assets
  
1,665,462
1,665,462


Capital and reserves
  

Called up share capital 
 20 
20,000
20,000

Share premium account
 21 
1,904,155
1,904,155

Own shares held by Employee Ownership Trust
 21 
(3,000,273)
(3,000,273)

Profit and loss account brought forward
  
2,741,580
3,001,979

Profit/(loss) for the year
  
-
(260,399)

Profit and loss account carried forward
  
2,741,580
2,741,580

  
1,665,462
1,665,462


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


J Heseltine
Director

Date: 10 August 2024

The notes on pages 16 to 33 form part of these financial statements.

Page 11

 
Kinetic PLC
 

Consolidated Statement of Changes in Equity
For the year ended 31 March 2024


Called up share capital
Share premium account
Own shares held by Employee Ownership Trust
Profit and loss account
Total equity

£
£
£
£
£


At 1 April 2022
20,000
1,904,155
(3,000,273)
2,774,302
1,698,184


Comprehensive income for the year

Loss for the year
-
-
-
(32,722)
(32,722)
Total comprehensive income for the year
-
-
-
(32,722)
(32,722)



At 1 April 2023
20,000
1,904,155
(3,000,273)
2,741,580
1,665,462


Comprehensive income for the year

Profit for the year
-
-
-
58,243
58,243
Total comprehensive income for the year
-
-
-
58,243
58,243


At 31 March 2024
20,000
1,904,155
(3,000,273)
2,799,823
1,723,705


The notes on pages 16 to 33 form part of these financial statements.

Page 12

 
Kinetic PLC
 

Company Statement of Changes in Equity
For the year ended 31 March 2024


Called up share capital
Share premium account
Own shares held by Employee Ownership Trust
Profit and loss account
Total equity

£
£
£
£
£


At 1 April 2022
20,000
1,904,155
(3,000,273)
3,001,979
1,925,861


Comprehensive income for the year

Loss for the year
-
-
-
(260,399)
(260,399)
Total comprehensive income for the year
-
-
-
(260,399)
(260,399)



At 1 April 2023
20,000
1,904,155
(3,000,273)
2,741,580
1,665,462
Total comprehensive income for the year
-
-
-
-
-


At 31 March 2024
20,000
1,904,155
(3,000,273)
2,741,580
1,665,462


The notes on pages 16 to 33 form part of these financial statements.

Page 13

 
Kinetic PLC
 

Consolidated Statement of Cash Flows
For the year ended 31 March 2024

2024
2023
£
£

Cash flows from operating activities

Profit/(loss) for the financial year
58,243
(32,722)

Adjustments for:

Depreciation of tangible assets
66,260
66,219

Interest paid
68,946
41,645

Interest received
(48,720)
(1,577)

Taxation credit
(2,828)
(6,906)

Decrease/(increase) in debtors
558,219
(229,713)

Increase/(decrease) in creditors
184,458
(251,741)

Net cash generated from operating activities

884,578
(414,795)


Cash flows from investing activities

Purchase of tangible fixed assets
(31,940)
(30,465)

Sale of tangible fixed assets
1,739
-

Interest received
48,720
1,577

Net cash from investing activities

18,519
(28,888)

Cash flows from financing activities

Interest paid
(68,946)
(41,645)

Net cash used in financing activities
(68,946)
(41,645)

Net increase/(decrease) in cash and cash equivalents
834,151
(485,328)

Cash and cash equivalents at beginning of year
2,117,386
2,602,714

Cash and cash equivalents at the end of year
2,951,537
2,117,386


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
4,403,572
3,751,340

Invoice discounting facility
(1,452,035)
(1,633,954)

2,951,537
2,117,386


The notes on pages 16 to 33 form part of these financial statements.

Page 14

 
Kinetic PLC
 

Consolidated Analysis of Net Debt
For the year ended 31 March 2024




At 1 April 2023
Cash flows
At 31 March 2024
£

£

£

Cash at bank and in hand

3,751,340

652,232

4,403,572

Invoice discounting facility

(1,633,954)

181,919

(1,452,035)


2,117,386
834,151
2,951,537

The notes on pages 16 to 33 form part of these financial statements.

Page 15

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

1.


General information

Kinetic Plc is a private company limited by members capital, incorporated in England and Wales. The address of the registered office and principal place of business is Lancastrian Office Centre, Talbot Road, Stretford, Manchester, M32 0FP. 
The nature of the company's operation and principal activity is that of a holding company. The principal activity of the group is human resource management services and payroll bureau services.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own profit and loss account in these financial statements.

The company has taken advantage of the exemption allowed under FRS 102 paragraph 1.11 and 1.12 and has not presented its own Statement of Cash Flows in these financial statements.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated profit and loss account from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 16

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

2.Accounting policies (continued)

 
2.3

Going concern

The financial statements have been prepared on a going concern basis. The following paragraphs set out the
basis of which the directors have reached their conclusion.
Whilst the economic impact within the manufacturing and engineering recruitment markets has been significant, the company is well capitalised with a diversified business model to withstand the current and future climate.  
The group and company currently meet their working capital requirements through their cash and bank funding.  Based on the group's forecasts and projections, the directors believe they have sufficient facilities to trade through the next 12 months.
Therefore, the directors believe it is appropriate to prepare the accounts to 31 March 2024 on a going concern basis and that there will be no adverse effect on solvency for more than 12 months after the date of approval of the financial statements.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

The Group operates in the recruitment industry and has two main revenue streams. Contractor revenue is recognised based on time worked during the period and placement revenue is recognised based on the start date of the successful candidate.

 
2.5

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 17

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

2.Accounting policies (continued)

 
2.8

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

 
2.9

Current and deferred taxation

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

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.10

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Page 18

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

2.Accounting policies (continued)

 
2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Fixtures and fittings
-
15%
straight line
Computer equipment
-
20%
straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

  
2.16

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

Page 19

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

2.Accounting policies (continued)

 
2.17

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

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

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

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

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

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this
Page 20

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

2.Accounting policies (continued)


2.17
Financial instruments (continued)

constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

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

  
2.18

Employee Ownership Trust

Investments in the Company's own shares which are held for the benefit of the beneficiaries of the Kinetic Employee Ownership Trust are shown as a deduction from shareholder's funds. At the year end all shares held have not been allocated to employees of the Company.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make significant judgements and estimates that affect amounts recognised for assets and liabilities at the reporting date and the amounts of revenue and expenses incurred during the period. Actual outcomes may differ from these judgements, estimates, and assumptions.
The directors believe that judgements, estimates, and assumptions do not have a significant risk of causing a material difference to the carrying amounts of the net assets and liabilities within the next financial year.

Page 21

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

4.


Turnover

An analysis of turnover by class of business is as follows:


2024
2023
£
£

Human resource services
17,563,280
16,134,359

Payroll bureau services
384,906
366,632

17,948,186
16,500,991


All turnover arose within the United Kingdom.


5.


Operating profit

The operating profit is stated after charging:

2024
2023
£
£

Depreciation of tangible fixed assets
66,260
66,219

Operating lease rentals - land and buildings
156,825
139,523

Other operating lease rentals
34,963
32,379

Defined contribution pension costs
91,689
93,993


6.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2024
2023
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
14,725
14,025

All other services

Taxation compliance services
5,355
5,100

All non-audit services not included above
6,695
6,375

Page 22

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

7.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£


Wages and salaries
1,852,430
1,805,858
-
-

Social security costs
194,986
202,065
-
-

Cost of defined contribution scheme
91,689
93,993
-
-

2,139,105
2,101,916
-
-


The average monthly number of employees, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Sales and administrative staff
53
53


8.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
165,175
151,834

Group contributions to defined contribution pension schemes
10,800
14,445

175,975
166,279


During the year retirement benefits were accruing to 2 directors (2023 -2) in respect of defined contribution pension schemes.

The total remuneration paid to key management personnel during the year was £448,821 (2023: £400,671).


9.


Interest receivable

2024
2023
£
£


Other interest receivable
48,720
1,577

Page 23

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

10.


Interest payable and similar expenses

2024
2023
£
£


Bank interest payable
68,946
41,645


11.


Taxation


2024
2023
£
£



Total current tax
-
-

Deferred tax


Origination and reversal of timing differences
(2,828)
(6,906)

Total deferred tax
(2,828)
(6,906)


Taxation on loss on ordinary activities
(2,828)
(6,906)

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2023 -higher than) the standard rate of corporation tax in the UK of 25% (2023 -19%). The differences are explained below:

2024
2023
£
£


Profit/(loss) on ordinary activities before tax
55,415
(39,628)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 -19%)
13,854
(7,529)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
3,257
2,165

Change in tax rates
7,572
(1,542)

Tax losses utilised
(27,511)
-

Total tax credit for the year
(2,828)
(6,906)


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 24

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024
 
11.Taxation (continued)



Page 25

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

12.


Intangible assets

Group and Company





Goodwill

£



Cost


At 1 April 2023
1,837,103



At 31 March 2024

1,837,103



Amortisation


At 1 April 2023
1,837,103



At 31 March 2024

1,837,103



Net book value



At 31 March 2024
-



At 31 March 2023
-

See note 15 for further details of subsidiary companies.



Page 26

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

13.


Tangible fixed assets

Group






Fixtures and fittings
Computer equipment
Total

£
£
£



Cost or valuation


At 1 April 2023
34,945
290,922
325,867


Additions
19,953
11,987
31,940


Disposals
-
(3,201)
(3,201)



At 31 March 2024

54,898
299,708
354,606



Depreciation


At 1 April 2023
13,184
122,833
136,017


Charge for the year
7,297
58,963
66,260


Disposals
-
(1,462)
(1,462)



At 31 March 2024

20,481
180,334
200,815



Net book value



At 31 March 2024
34,417
119,374
153,791



At 31 March 2023
21,761
168,089
189,850

Page 27

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

14.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 April 2023
5,440,944



At 31 March 2024

5,440,944



Impairment


At 1 April 2023
260,399



At 31 March 2024

260,399



Net book value



At 31 March 2024
5,180,545



At 31 March 2023
5,180,545


15.



Subsidiary undertakings



Direct subsidiary undertakings


The following were direct subsidiary undertakings of the Company:

Name

Principal activity

Class of shares

Holding

Kinetic Recruitment Services Limited
Human resource management
Ordinary
100%
Kinetic Nursing Services Limited
Human resource management
Ordinary
100%
PayPartners Limited
Payroll bureau services
Ordinary
100%

Page 28

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

15.Subsidiary undertakings (continued)


Indirect subsidiary undertaking


The following was an indirect subsidiary undertaking of the Company:

Name

Principal activity

Class of shares

Holding

The Kinetic Employee Benefit Trust Limited
Dormant
Ordinary
100%

The registered office of all subsidiary undertakings is Lancastrian Office Centre, Talbot Road, Stretford, Manchester, M32 0FP.


16.


Debtors

Group
Group
2024
2023
£
£


Trade debtors
3,629,531
4,180,067

Other debtors
74,256
76,162

Prepayments and accrued income
149,458
155,235

3,853,245
4,411,464



17.


Cash and cash equivalents

Group
Group
2024
2023
£
£

Cash at bank and in hand
4,403,572
3,751,340

Less: invoice discounting facility
(1,452,035)
(1,633,954)

2,951,537
2,117,386


Included above is an amount of £3,294,233 (2023: £3,215,204) in relation to the Managed Account Package provided by the group to service users.  This represents funds received from local councils for the group to manage the draw down of funds and make payments for care and support as directed.  There is a corresponding amount shown within creditors as due back to the councils if not utilised by the service users.

Page 29

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

18.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£

Invoice discounting facility
1,452,035
1,633,954
-
-

Trade creditors
92,477
58,700
-
-

Amounts owed to group undertakings
-
-
3,515,083
3,515,083

Other taxation and social security
925,015
769,424
-
-

Other creditors
370,315
129,814
-
-

Accruals and deferred income
3,825,911
4,071,322
-
-

6,665,753
6,663,214
3,515,083
3,515,083


The invoice discounting facility is secured against the assets of the Group.

Page 30

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

19.


Deferred taxation


Group



2024


£






At beginning of year
(23,978)


Credited to profit or loss
2,828



At end of year
(21,150)

Group
Group
2024
2023
£
£

Accelerated capital allowances
(35,081)
(32,667)

Other timing differences
13,931
8,689

(21,150)
(23,978)


20.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



13,984 (2023 -13,984) A Ordinary shares of £1 each
13,984
13,984
1,018 (2023 -1,018) B Ordinary shares of £1 each
1,018
1,018
4,998 (2023 -4,998) C Ordinary shares of £1 each
4,998
4,998

20,000

20,000


The A Ordinary shares, the B Ordinary shares and the C Ordinary shares shall be separate classes of share but shall carry the same rights and privileges and shall rank pari passu in all respects.
During the period, 5,511 Ordinary B shares were held in an EMI share option scheme to employees of Kinetic plc for an option price of 924p, governed by the trust deed. None of the options have lapsed or been exercised at the balance sheet date.
The fair value of the options was measured by using an option pricing model. The equity-settled share-based payment expense is assessed to be immaterial by management, and has not been accounted for.

Page 31

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

21.


Reserves

Share premium account
Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
Profit and loss account
Profit and loss account includes all current and prior period profits and losses.
Own shares held by Employee Ownership Trust
The Kinetic Employee Ownership Trust holds 13,984 A Ordinary Shares and 4,998 C Ordinary Shares. All Kinetic Plc employees as defined by the trust are entitled to an equal distribution of profits.


22.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £91,689 (2023: £93,993). Contributions totalling £55,723 (2023: £45,734) were payable to the fund at the balance sheet date.


23.


Commitments under operating leases

At 31 March 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2024
2023
£
£

Land and Buildings

Not later than 1 year
106,988
100,923

Later than 1 year and not later than 5 years
153,768
110,051

260,756
210,974


Group
Group
2024
2023
£
£

Other

Not later than 1 year
38,260
24,137

Later than 1 year and not later than 5 years
46,511
15,236

84,771
39,373

Page 32

 
Kinetic PLC
 
 
 
Notes to the Financial Statements
For the year ended 31 March 2024

24.


Own shares held by Employee Ownership Trust

2024
2023
£
£



Employee Ownership Trust
3,000,273
3,000,273

The Kinetic Employee Ownership Trust holds 13,984 £1 A Ordinary shares and 4,988 £1 C Ordinary shares of the company's issued share capital. These shares are included in the company's financial statements, as a deduction from shareholders' funds. At the year end all shares held have not been allocated to employees of the Company. 


25.


Related party transactions

The company has taken advantage of the provision under FRS 102 section 33.1a not to disclose transactions between companies which are wholly owned within the group.


26.


Controlling party

At the year end, the Group and Company were under the ultimate control of the Kinetic Employee Ownership Trust by virtue of its 94.91% interest in the voting share capital of the Company.

 
Page 33