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REGISTERED NUMBER: 07112423 (England and Wales)















Valleys Finance Limited

Unaudited Financial Statements for the Year Ended 31 December 2023






Valleys Finance Limited (Registered number: 07112423)






Contents of the Financial Statements
for the Year Ended 31 December 2023




Page

Company Information 1

Balance Sheet 2

Notes to the Financial Statements 3


Valleys Finance Limited

Company Information
for the Year Ended 31 December 2023







Directors: D G Phillips
J R Phillips
G C Southall





Registered office: 98a Commercial Street
Tredegar
Gwent
NP22 3DW





Registered number: 07112423 (England and Wales)





Accountants: Haines Watts Wales LLP
7 Neptune Court
Vanguard Way
Cardiff
CF24 5PJ

Valleys Finance Limited (Registered number: 07112423)

Balance Sheet
31 December 2023

2023 2022
Notes £    £   
Fixed assets
Intangible assets 4 375,000 567,897
Tangible assets 5 67,225 51,799
442,225 619,696

Current assets
Debtors 6 2,973,604 2,423,168
Cash at bank and in hand 199,237 96,864
3,172,841 2,520,032
Creditors
Amounts falling due within one year 7 (1,887,881 ) (1,538,335 )
Net current assets 1,284,960 981,697
Total assets less current liabilities 1,727,185 1,601,393

Creditors
Amounts falling due after more than one
year

8

(11,109

)

(19,174

)
Net assets 1,716,076 1,582,219

Capital and reserves
Called up share capital 100 100
Retained earnings 10 1,715,976 1,582,119
Shareholders' funds 1,716,076 1,582,219

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 December 2023.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 December 2023 in accordance with Section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for:
(a)ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and
(b)preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 8 August 2024 and were signed on its behalf by:





J R Phillips - Director


Valleys Finance Limited (Registered number: 07112423)

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

1. Statutory information

Valleys Finance Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. Accounting policies

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The functional currency of Valleys Finance Limited is considered to be pounds sterling because that is the currency of the primary economic environment in which the Company operates.

Going Concern
The directors of Valleys Finance Limited have assessed what the impact of the Cost-of-Living crisis will have on the ability of the Company to continue as a going concern. Throughout the year, the business continued to be impacted by the Cost-of-Living crisis, whereby customers have faced the highest levels of inflation in recent history.

The Home Collected Industry by its nature offers a product which inherently allows a great deal of forbearance to its customers with its repayments. The business has also continued to improve the rigour of its affordability and sustainability assessments in its lending. As such, the business' collections have not been significantly impacted and remain strong, with the large majority of its customers continuing to meet their repayment obligations.

The Financial Conduct Authority's (FCA) Consumer Duty also came into force from 31 July 2023, which required the firm to undertake a significant review of its product and making changes where appropriate to meet the four outcomes, aimed to improving the outcome for consumers. The business has always aimed to provide good outcomes for its customers and as such, whilst a significant amount of resources has been invested, and continues to be invested, into Consumer Duty, the business has not been detrimentally impacted as a result of this.

Similar to the prior financial period, the company has been able to take advantage of market opportunities that have developed during the year, more specifically where competitors have withdrawn from the market. This has allowed the business to, again, recruit from a pool of individuals that have significant experience in the industry and expand into new regions of the UK. As a result, the business experienced levels of new business that were above expectations, whilst continuing to improve the quality of the loan book.

As a result of these actions, the business has seen positive growth in its loan book size and throughout the Profit & Loss. At the date of this report, the impact of the opportunities taken advantage of have required upfront investment, without the results being fully embedded into the business. As such, the loan book is continuing to grow and the majority of cash collections continue to be reinvested into new lending. As such, the business has not been able to reduce its liabilities at the rate it is usually able to in the first quarter of each financial period.

It is expected that the loan facility will start to be paid down during the second quarter of the financial period, as loan book growth slows due to seasonal patterns. The directors have also received confirmation that its loan facility will continue to be available for at least 12 months from the date of signing these financial statements. The directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least 12 months from the date of signing. Therefore, the directors have prepared the financial on the basis of a going concern.

Valleys Finance Limited (Registered number: 07112423)

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

2. Accounting policies - continued

Turnover
Turnover primarily represents loan interest receivable. Loan interest turnover is recognised in the period in which the cash is received. The directors do not believe there is a material difference between the cash and accruals basis for revenue recognition when assessing the performance of the company during the financial period.

Intangible assets
Intangible assets are stated at cost or valuation, net of amortisation and any provision for impairment. Amortisation is provided on all intangible assets at rates to write off the cost or valuation of each asset over its expected useful life as follows:

Computer software - 3 - 5 years straight line
Other intangible assets - 5 - 20 years straight line

Other 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.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.
Fixtures and fittings - Straight line over 5 years
Motor vehicles - Straight line over 4 years
Computer equipment - 20% to 33% straight line

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

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 credited or charged to profit or loss.

Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

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

Financial assets and liabilities are only offset in the Balance Sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


Valleys Finance Limited (Registered number: 07112423)

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

2. Accounting policies - continued
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

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

Pension costs and other post-retirement benefits
The Company operates a defined contribution scheme. The amount charged to the Income Statement in respect of pension costs and other post-retirement benefits is the contributions payable in the financial year. Differences between contributions payable in the financial year and contributions actually paid are included as either accruals or prepayments in the Balance Sheet.

Impairment of assets
Assets, other than those measured at fair value, are assessed for indicators of impairment at each Balance Sheet date. If there is objective evidence of impairment, an impairment loss is recognised in the Income Statement as described below.

3. Employees and directors

The average number of employees during the year was 79 (2022 - 65 ) .

4. Intangible fixed assets
Other
intangible Computer
assets software Totals
£    £    £   
Cost
At 1 January 2023
and 31 December 2023 2,553,966 25,475 2,579,441
Amortisation
At 1 January 2023 1,986,069 25,475 2,011,544
Amortisation for year 192,897 - 192,897
At 31 December 2023 2,178,966 25,475 2,204,441
Net book value
At 31 December 2023 375,000 - 375,000
At 31 December 2022 567,897 - 567,897

Valleys Finance Limited (Registered number: 07112423)

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

5. Tangible fixed assets
Fixtures
and Motor Computer
fittings vehicles equipment Totals
£    £    £    £   
Cost
At 1 January 2023 7,148 150,571 - 157,719
Additions - 17,283 31,377 48,660
Disposals - (12,170 ) - (12,170 )
At 31 December 2023 7,148 155,684 31,377 194,209
Depreciation
At 1 January 2023 7,148 98,772 - 105,920
Charge for year - 28,889 3,258 32,147
Eliminated on disposal - (11,083 ) - (11,083 )
At 31 December 2023 7,148 116,578 3,258 126,984
Net book value
At 31 December 2023 - 39,106 28,119 67,225
At 31 December 2022 - 51,799 - 51,799

6. Debtors: amounts falling due within one year
2023 2022
£    £   
Trade debtors 2,908,839 2,361,256
Other debtors 43,755 36,092
Deferred tax asset 21,010 25,820
2,973,604 2,423,168

7. Creditors: amounts falling due within one year
2023 2022
£    £   
Hire purchase contracts (see note 9) 20,593 19,530
Trade creditors 11,011 8,479
Amounts owed to related parties 848,355 659,667
Tax 168,093 133,527
Social security and other taxes 61,177 46,098
Other creditors 778,652 177,234
Directors' current accounts - 493,800
1,887,881 1,538,335

Whilst the director's loans and related party loans are repayable on demand, the expectation is that the loans will be repaid after more than one year.

8. Creditors: amounts falling due after more than one year
2023 2022
£    £   
Hire purchase contracts (see note 9) 11,109 19,174

Net obligations under hire purchase contracts are secured by fixed charges on the assets concerned.

Valleys Finance Limited (Registered number: 07112423)

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

9. Leasing agreements

Minimum lease payments fall due as follows:

Hire purchase contracts
2023 2022
£    £   
Net obligations repayable:
Within one year 20,593 19,530
Between one and five years 11,109 19,174
31,702 38,704

Non-cancellable operating leases
2023 2022
£    £   
Within one year 13,000 12,000
Between one and five years 52,000 48,000
In more than five years 52,000 60,000
117,000 120,000

10. Reserves
Retained
earnings
£   

At 1 January 2023 1,582,119
Profit for the year 368,197
Dividends (234,340 )
At 31 December 2023 1,715,976

11. Related party disclosures

Unsecured shareholder loans totalling £319,535 were held at the year end. The loans are interest-free and repayable on demand. However the expectation is that the loans will be repayable after one year.

Other related party transactions
A secured loan of £848,355 (2022: £659,667) from Family Finance Limited, a company under common ownership, is included in creditors. An interest rate of 2.6% above base rate compounded monthly and paid down throughout the year is charged to the loan. The expectation is that the loan will be repayable after one year.

During the year, the Company recharged costs of £13,754 (2022: £37,535) to Family Finance Limited.

12. Ultimate controlling party

The controlling party is D G Phillips and J R Phillips.