REGISTERED NUMBER: |
Valleys Finance Limited |
Unaudited Financial Statements for the Year Ended 31 December 2023 |
REGISTERED NUMBER: |
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: |
Registered office: |
Registered number: |
Accountants: |
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 |
Tangible assets | 5 |
Current assets |
Debtors | 6 |
Cash at bank and in hand |
Creditors |
Amounts falling due within one year | 7 | ( |
) | ( |
) |
Net current assets |
Total assets less current liabilities |
Creditors |
Amounts falling due after more than one year |
8 |
( |
) |
( |
) |
Net assets |
Capital and reserves |
Called up share capital |
Retained earnings | 10 |
Shareholders' funds |
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. |
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 |
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 |
2. | Accounting policies |
Basis of preparing the financial statements |
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 |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
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 |
4. | Intangible fixed assets |
Other |
intangible | Computer |
assets | software | Totals |
£ | £ | £ |
Cost |
At 1 January 2023 |
and 31 December 2023 |
Amortisation |
At 1 January 2023 |
Amortisation for year |
At 31 December 2023 |
Net book value |
At 31 December 2023 |
At 31 December 2022 |
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 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2023 |
Depreciation |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
Net book value |
At 31 December 2023 |
At 31 December 2022 |
6. | Debtors: amounts falling due within one year |
2023 | 2022 |
£ | £ |
Trade debtors |
Other debtors |
Deferred tax asset | 21,010 | 25,820 |
7. | Creditors: amounts falling due within one year |
2023 | 2022 |
£ | £ |
Hire purchase contracts (see note 9) |
Trade creditors |
Amounts owed to related parties | 848,355 | 659,667 |
Tax |
Social security and other taxes |
Other creditors |
Directors' current accounts | - | 493,800 |
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) |
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 |
Between one and five years |
Non-cancellable | operating leases |
2023 | 2022 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
10. | Reserves |
Retained |
earnings |
£ |
At 1 January 2023 |
Profit for the year |
Dividends | ( |
) |
At 31 December 2023 |
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. |