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Registered number: 09907766










SORT GROUP LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
SORT GROUP LIMITED
 

COMPANY INFORMATION


Directors
K Tunnicliffe 
B Thompson 
L Tilley 
K Ahmed (appointed 13 September 2023)




Registered number
09907766



Registered office
Burdsall House
Derby Conference Centre

Derby

Derbyshire

DE24 8UX




Independent auditors
PKF Smith Cooper Audit Limited

1 Prospect Place

Millennium Way

Derby

DE24 8HG





 
SORT GROUP LIMITED
 

CONTENTS



Page
Group strategic report
1 - 3
Directors' report
4 - 5
Independent auditors' report
6 - 9
Consolidated statement of comprehensive income
10
Consolidated balance sheet
11
Company balance sheet
12
Consolidated statement of changes in equity
13
Company statement of changes in equity
14
Consolidated statement of cash flows
15
Consolidated analysis of net debt
16
Notes to the financial statements
17 - 32


 
SORT GROUP LIMITED
 

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Business review
 
The principal activities of the Group are that of a panel manager, law firm and software provider. The Group’s brands (SortRefer and SortLegal) are nationally recognised and are highly respected in the industry for quality, design and cutting edge technology which has enabled the Group to continue growing year on year.
The services are sold through third party financial intermediaries and estate agents located throughout the United Kingdom. The Group transacted c.30k conveyancing transactions compared to c.31k in the prior year. The product mix moved in favour of remortgage vs transactional which impacted the Groups PBT for the reporting period.
The shift in product mix was as a direct result of the mini budget fiasco, cost of living rises and the Bank of England base rate increases. 
The business model has seen significant change as the Group has ventured into a new market of selling software as a service and has made significant inroads to ready its first two products, Electronic ID and Digital Onboarding for market launch.
A key focus for the Group centres around new software development and the continued emphasis on technological development. The Group has committed additional resources to R&D and is well positioned to continue the development and delivery of appropriate software solutions.
As the Groups services are aimed at financial markets, it will continue to be affected by external factors such as political, economic, legal and currency volatility which are all out of its control. However, the Group is well positioned to manage this complexity as it has an experienced management team, strong liquidity, and sufficient reserves which make it capable of managing a complex business model through its robust management processes.
Turnover has decreased by c.£265k to £10.86m due to a shift in favour of remortgages. Cost controls and diversification measures put in place by management have ensured that the Group continues to achieve PBT c.£529k (2022: c.£749k) despite the uncertainties in the UK economy. The Group remains resilient in the current economic climate and has continued to operate profitably at strong margins post year end.
The Group continues to invest heavily in staff development, training and competency to ensure its people are capable of taking on higher premium legal work when the marker returns as well as opening up new revenue channels via Software as a Service. 

Page 1

 
SORT GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties
 
The Groups activities expose it to a number of financial risks including interest rate risk, credit risk, cashflow risk and liquidity risk. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provide written principals on the use of financial derivatives to manage these risks. The Group does not use derivative financial instruments for speculative purposes.
As the Group operates within the financial service sector, it has exposure to many political, economic and sociocultural factors.
Any significant increase in the base rate would negatively impact the Groups revenues as the home buyer home mover market would retract. However, management have a robust process in place for managing interest rate risk by offering fixed price and remortgage products to its introducer base. These would serve to mitigate any impact, at least in the short term.
Interest rate risk
The UK economy is currently experiencing high levels of inflation and increases in interest rates. Where inflation has impacted on the costs the business is incurring, the greater interest rate risk in on turnover.  The Group has seen a number of first-time buyers and home movers delay plans.  This has seen a rise in remortgage products which bring lower margins. 
Cashflow risk
The Group’s activities expose it primarily to the financial risks of changes in interest rates. A rise in lower margin products can impact the groups liquidity due to a decrease in EBITDA.
Credit risk
The Group’s principal financial assets are bank balances and cash, trade and other receivables and investments.
The Group’s credit risk is primarily attributable to its intercompany debts, however these are eliminated out in full in the consolidated statement of of comprehensive income. An allowance for doubtful debtors is made where there is concern over the recoverability of debtors as a result of the age of debts and the financial stability of customers. 
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-ratings agencies.
The Group has no significant concentration of credit risk, with exposure spread over a panel of customers. 
Liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Group uses a short to medium term cashflow. Further details regarding liquidity risk can be found in the accounting policies in the financial statements.

Page 2

 
SORT GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial key performance indicators

The Group’s key performance indicators during the year were as follows:

2023
2022
        £
        £
KPI

Turnover

10,862,525

11,127,851
 
Operating profit

757,581

908,018
 
Net profit

529,018

749,012
 

The Group continued to manage the business using the same key performance indicators that it had used historically to good effect. These metrics include but are not limited to sales, margin contribution and operation income growth. Management have robust tracking programmes in place across the Group to ensure visibility and empowerment and responsibility are instilled throughout the organisation from the top down. The financial key performance indicators are discussed further in the business review.
Strategic plans, financial objective and delivery targets continues to be used to good effect. These plans are broken down to individual segments that include both financial and non-financial objectives. The Company will continue to manage these metrics closely to ensure that corporate and operating objectives are aligned.


This report was approved by the board on 10 September 2024 and signed on its behalf.



K Ahmed
Director

Page 3

 
SORT GROUP LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

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.

Principal activity

The principal activity of the Company is that of a holding Company. The principal activity of the group is conveyancing referral and legal conveyancing services.

Results and dividends

The profit for the year, after taxation, amounted to £529,018 (2022 - £749,012).

Dividends of £nil (2022 - £300,000) were paid during the year. No further dividends are recommended.

Directors

The directors who served during the year were:

K Tunnicliffe 
B Thompson 
L Tilley 
K Ahmed (appointed 13 September 2023)

Future developments

The Group has continued to trade profitably after the financial year end and there have been no significant post balance sheet events noted, nor any significant changes.  The Group is opening an additional revenue opportunity which is to sell its software as a service and enter the electronic ID and digital onboarding space for law firms.

Page 4

 
SORT GROUP LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

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.

Post balance sheet events

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

Auditors

Under section 487(2) of the Companies Act 2006PKF Smith Cooper Audit Limited will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

This report was approved by the board on 10 September 2024 and signed on its behalf.
 





K Ahmed
Director

Page 5

 
SORT GROUP LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SORT GROUP LIMITED
 

Opinion


We have audited the financial statements of Sort Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated statement of comprehensive income, 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 December 2023 and of the Group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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.


Page 6

 
SORT GROUP LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SORT GROUP LIMITED (CONTINUED)


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.


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 4, 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 7

 
SORT GROUP LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SORT GROUP LIMITED (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:

Based on our understanding of the Group and industry, we identify the laws and regulations affecting the Group, including CLC regulations. We identified that the principal risk of fraud or non-compliance with laws and regulations related to:
• Management bias in respect of accounting estimates and judgements made;
• Management override of control;
• Posting of unusual journals or transactions.
We focused on those areas that could give rise to a material misstatement in the Group financial statements. Our procedures included, but were not limited to:
• Enquiry of management and those charged with governance around actual and potential litigation and claims, including instances of non-compliance with laws and regulations and fraud.
• Reviewing minutes of meetings of those charged with governance where available.
• Reviewing legal expenditure in the year to identify instances of non-compliance with laws and regulations and fraud.
• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
• Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
It is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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.


Page 8

 
SORT GROUP LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SORT GROUP LIMITED (CONTINUED)


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.





James Delve (Senior statutory auditor)
for and on behalf of
PKF Smith Cooper Audit Limited
Statutory Auditors
1 Prospect Place
Millennium Way
Derby
DE24 8HG

12 September 2024
Page 9

 
SORT GROUP LIMITED
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

Turnover
 3 
10,862,525
11,127,851

Cost of sales
  
(8,151,132)
(8,184,589)

Gross profit
  
2,711,393
2,943,262

Administrative expenses
  
(1,953,812)
(2,035,244)

Operating profit
 4 
757,581
908,018

Interest receivable and similar income
 8 
50,023
9,968

Interest payable and similar expenses
 9 
(20,015)
(25,743)

Profit before tax
  
787,589
892,243

Tax on profit
 10 
(258,571)
(143,231)

Profit for the year
  
529,018
749,012

Profit for the year attributable to:
  

Owners of the parent company
  
529,018
749,012

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 17 to 32 form part of these financial statements.

Page 10

 
SORT GROUP LIMITED
REGISTERED NUMBER: 09907766

CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
537,098
497,604

Tangible assets
 13 
120,018
94,055

  
657,116
591,659

Current assets
  

Debtors: amounts falling due within one year
 15 
760,124
789,378

Cash at bank and in hand
 16 
2,294,233
2,001,943

  
3,054,357
2,791,321

Creditors: amounts falling due within one year
 17 
(919,436)
(1,192,188)

Net current assets
  
 
 
2,134,921
 
 
1,599,133

Total assets less current liabilities
  
2,792,037
2,190,792

Deferred tax
 18 
(148,827)
(76,600)

Net assets
  
2,643,210
2,114,192


Capital and reserves
  

Called up share capital 
 19 
101
101

Share premium account
 20 
947,516
947,516

Profit and loss account
 20 
1,695,593
1,166,575

  
2,643,210
2,114,192


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 10 September 2024.




K Ahmed
Director

The notes on pages 17 to 32 form part of these financial statements.

Page 11

 
SORT GROUP LIMITED
REGISTERED NUMBER: 09907766

COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 14 
1,116,564
1,116,564

  
1,116,564
1,116,564

Current assets
  

Debtors: amounts falling due after more than one year
 15 
905,594
905,594

Cash at bank and in hand
 16 
1,257
4,903

  
906,851
910,497

Creditors: amounts falling due within one year
  
(775,439)
(755,150)

Net current assets
  
 
 
131,412
 
 
155,347

Total assets less current liabilities
  
1,247,976
1,271,911

Net assets
  
1,247,976
1,271,911


Capital and reserves
  

Called up share capital 
 19 
101
101

Share premium account
 20 
947,516
947,516

Profit and loss account
 20 
300,359
324,294

  
1,247,976
1,271,911


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 10 September 2024.


K Ahmed
Director

The notes on pages 17 to 32 form part of these financial statements.

Page 12

 
SORT GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 January 2022
101
947,516
717,563
1,665,180


Comprehensive income for the year

Profit for the year
-
-
749,012
749,012
Total comprehensive income for the year
-
-
749,012
749,012


Contributions by and distributions to owners

Dividends: Equity capital
-
-
(300,000)
(300,000)


Total transactions with owners
-
-
(300,000)
(300,000)



At 1 January 2023
101
947,516
1,166,575
2,114,192


Comprehensive income for the year

Profit for the year
-
-
529,018
529,018
Total comprehensive income for the year
-
-
529,018
529,018


At 31 December 2023
101
947,516
1,695,593
2,643,210


The notes on pages 17 to 32 form part of these financial statements.

Page 13

 
SORT GROUP LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 January 2022
101
947,516
346,938
1,294,555


Comprehensive income for the year

Profit for the year
-
-
277,356
277,356
Total comprehensive income for the year
-
-
277,356
277,356


Contributions by and distributions to owners

Dividends: Equity capital
-
-
(300,000)
(300,000)


Total transactions with owners
-
-
(300,000)
(300,000)



At 1 January 2023
101
947,516
324,294
1,271,911


Comprehensive income for the year

Loss for the year
-
-
(23,935)
(23,935)
Total comprehensive income for the year
-
-
(23,935)
(23,935)


At 31 December 2023
101
947,516
300,359
1,247,976


The notes on pages 17 to 32 form part of these financial statements.

Page 14

 
SORT GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
529,018
749,012

Adjustments for:

Amortisation of intangible assets
68,647
54,011

Depreciation of tangible assets
58,130
30,415

Loss on disposal of tangible assets
-
12,148

Interest paid
20,015
25,743

Interest received
(50,023)
(9,968)

Taxation charge
258,571
143,231

Decrease in debtors
2,542
77,453

Increase/(decrease) in creditors
155,699
(3,807)

Corporation tax (paid)
(98,083)
(102,835)

Net cash generated from operating activities

944,516
975,403


Cash flows from investing activities

Purchase of intangible fixed assets
(108,141)
(161,260)

Purchase of tangible fixed assets
(84,093)
(72,923)

Interest received
50,023
9,968

Net cash from investing activities

(142,211)
(224,215)

Cash flows from financing activities

Repayment of shareholder loans
(490,000)
(20,000)

Dividends paid
-
(300,000)

Interest paid
(20,015)
(25,743)

Net cash used in financing activities
(510,015)
(345,743)

Net increase in cash and cash equivalents
292,290
405,445

Cash and cash equivalents at beginning of year
2,001,943
1,596,498

Cash and cash equivalents at the end of year
2,294,233
2,001,943


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,294,233
2,001,943


The notes on pages 17 to 32 form part of these financial statements.

Page 15

 
SORT GROUP LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

2,001,943

292,290

2,294,233

Shareholder loans

(490,000)

490,000

-


1,511,943
782,290
2,294,233

The notes on pages 17 to 32 form part of these financial statements.

Page 16

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Sort Group Limited is a private Company limited by shares and registered in England. The Company's registration number is 09907766 and the Company's registered office is Burdsall House, Derby Conference Centre, Derby, DE24 8UX. The principal activity of the Company is that of a holding Company. The principal activity of the group is conveyancing referral and legal conveyancing 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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies.

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

The Company's functional and presentational currency is GBP. 
The Company has prepared it's financial statements to the nearest £.

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 statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

 
2.3

Going concern

After reviewing the Group's forecasts and projections, the director has concluded that the Group has adequate resources to continue in operational existence for the foreseeable future and at least 12 months from the date of approval of these financial statements. As such the Group continues to adopt the going concern basis in preparing it's financial statements.

Page 17

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
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.

Revenue generated from conveyancing referrals is recognised once the referred conveyancing work has been completed by the customer, as the contractual terms of referrals set, state that referral revenues are only due once the contract has been completed in full.
Revenue generatecd from legal conveyancing services performed are recognised on a % completion basis as legal work is performed on individual cases. Amounts for works completed but not billed by the year end are recognised in amounts recoverable on contracts. Provisions are made for any amounts that are not considered to be recoverable from customers.

 
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.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.6

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.7

Interest income

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

Page 18

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

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.

 
2.10

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; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

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.

Page 19

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.11

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.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

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.

 Amortisation is provided on the following bases:

Website development
-
10%
straight line
Software
-
33%
straight line
Goodwill
-
20%
straight line

Amortisation is only charged on intangible assets when these become available for use. Assets under construction are not amortised the assets under construction have become available for use. On an asset becoming available for use, the asset in question is transferred to the relevant intangible asset category and is amortised on the bases noted above.

 
2.12

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.

At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on the following basis.

Depreciation is provided on the following basis:

Fixtures and fittings
-
33%
Reducing balance
Office equipment
-
33%
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.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 20

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.14

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.

 
2.15

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.

 
2.16

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.

 
2.17

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Deferred tax liabilities are also presented within provisions but are measured in accordance with the accounting policy on taxation.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.18

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 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.

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
Page 21

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.18
Financial instruments (continued)

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 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 instruments

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.

 
2.19

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 22

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Turnover

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


2023
2022
£
£

Conveyancing referral income
7,694,493
8,814,117

Legal conveyancing services
3,168,032
2,313,734

10,862,525
11,127,851


All turnover arose within the United Kingdom.


4.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Research & development charged as an expense
-
192,916

Depreciation
58,130
21,420

Amortisation
68,647
54,011

Other operating lease rentals
124,443
133,355


5.


Auditors' remuneration

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


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
3,150
3,150

Page 23

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Employees

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


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Wages and salaries
3,007,022
2,994,284
-
-

Social security costs
304,554
317,704
-
-

Cost of defined contribution scheme
103,683
98,411
-
-

3,415,259
3,410,399
-
-


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



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Employees
87
93
3
3


7.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
127,650
119,736

Group contributions to defined contribution pension schemes
7,113
4,725

Amounts paid to third parties in respect of directors' services
117,050
98,925

251,813
223,386


During the year retirement benefits were accruing to 1 director (2022 - 1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £127,650 (2022 - £119,736).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £7,113 (2022 - £4,725).


8.


Interest receivable

2023
2022
£
£


Other interest receivable
50,023
9,968

Page 24

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Interest payable and similar expenses

2023
2022
£
£


Shareholder loan interest payable
20,015
25,743


10.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
186,344
96,861

Adjustments in respect of previous periods
-
5,974


186,344
102,835


Total current tax
186,344
102,835

Deferred tax


Origination and reversal of timing differences
72,227
46,001

Adjustments in respect of previous periods
-
(5,605)

Total deferred tax
72,227
40,396


Tax on profit
258,571
143,231
Page 25

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
787,589
892,243


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
185,241
169,526

Effects of:


Fixed asset differences
219
4,051

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
13,737
10,856

Adjustments in respect of previous periods
-
369

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
-
(47,650)

Remeasurement of deferred tax for changes in tax rates
1,092
(1,299)

Movement in deferred tax not recognised
58,282
7,378

Total tax charge for the year
258,571
143,231


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


11.


Dividends

2023
2022
£
£


Dividends paid on ordinary shares
-
300,000

Page 26

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Intangible assets

Group





Asset under construction
Website development
Computer software
Goodwill
Total

£
£
£
£
£



Cost


At 1 January 2023
24,938
562,554
27,950
1,187,940
1,803,382


Additions
106,541
-
1,600
-
108,141


Transfer between categories
(85,041)
85,041
-
-
-



At 31 December 2023

46,438
647,595
29,550
1,187,940
1,911,523



Amortisation


At 1 January 2023
-
113,355
4,483
1,187,940
1,305,778


Charge for the year on owned assets
-
59,291
9,356
-
68,647



At 31 December 2023

-
172,646
13,839
1,187,940
1,374,425



Net book value



At 31 December 2023
46,438
474,949
15,711
-
537,098



At 31 December 2022
24,938
449,199
23,467
-
497,604



Page 27

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Tangible fixed assets

Group






Fixtures and fittings
Office equipment
Total

£
£
£



Cost


At 1 January 2023
91,579
69,248
160,827


Additions
71,739
12,354
84,093



At 31 December 2023

163,318
81,602
244,920



Depreciation


At 1 January 2023
29,269
37,503
66,772


Charge for the year on owned assets
35,080
23,050
58,130



At 31 December 2023

64,349
60,553
124,902



Net book value



At 31 December 2023
98,969
21,049
120,018



At 31 December 2022
62,310
31,745
94,055


14.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
1,116,564



At 31 December 2023
1,116,564

Page 28

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Sort Limited
Burdsall House, Derby Conference Centre, Derby, Derbyshire, DE24 8UX
Ordinary
100%
Sort Legal Limited
Burdsall House, Derby Conference Centre, Derby, Derbyshire, DE24 8UX
Ordinary
100%


15.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Due after one year

Amounts owed by group undertakings
-
-
905,594
905,594


Group
Group
2023
2022
£
£

Trade debtors
243,341
351,652

Other debtors
22,650
49,362

Prepayments and accrued income
182,352
156,045

Amounts recoverable on contracts
311,781
232,319

760,124
789,378


Amounts owed by group undertakings are unsecured, interest free and repayable on demand. Where amounts owed from fellow group undertakings are not anticipated to be repaid within 12 months and so these are shown as due after more than one year to reflect the actual substance of the debtor.
Trade debtors are stated after bad debt provisions of £4,796 (2022: £19,102).


16.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Cash at bank and in hand
2,294,233
2,001,943
1,257
4,903


Page 29

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Trade creditors
252,072
126,153
-
2,400

Amounts owed to group undertakings
-
-
772,289
225,696

Corporation tax
61,549
-
-
-

Other taxation and social security
329,172
262,943
-
-

Other creditors
17,781
550,846
-
523,514

Accruals and deferred income
258,862
252,246
3,150
3,540

919,436
1,192,188
775,439
755,150


ncluded in other creditors is £NIL (2022: £297,094) owed to the majority shareholder and £NIL (2022: £226,420) to a minority shareholder. The loans attracted interest at 3% per annum.
Amounts owed to group undertakings are interest free and repayable on demand.


18.


Deferred taxation


Group



2023


£



At beginning of year
(76,600)


Charged to profit or loss
(72,227)



At end of year
(148,827)

Company


2023


At beginning of year
-



At end of year
-



The provision for deferred taxation is made up as follows:

Group
Group
2023
2022
£
£

Fixed asset timing differences
(150,364)
(79,486)

Short term timing differences
1,537
2,886

(148,827)
(76,600)

Page 30

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
18.Deferred taxation (continued)


The expected reversal of deferred tax is not anticipated to be material. 


19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



10,000 (2022 - 10,000) Ordinary shares of £0.01 each
100
100
120 (2022 - 120) Exit shares of £0.01 each
1
1

101

101

The ordinary shares have full voting rights, as well as rights to dividends, distributions as well as return on capital. The exit shares have no voting rights, no rights to dividends and only a right to return on capital subsequent to ordinary shares being paid.



20.


Reserves

Share premium account

Represents the difference between consideration received and the nominal value of issued shares, less any related issue costs incurred.

Profit and loss account

Represents the cumulative retained profits and losses.


21.


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 £103,683 (2022 - £98,411). Contributions totalling £17,781 (2022 - £26,619) were payable to the fund at the balance sheet date and are included in creditors.

Page 31

 
SORT GROUP LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Commitments under operating leases

At 31 December 2023 the Group had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2023
2022
£
£

Not later than 1 year
77,981
102,407

Later than 1 year and not later than 5 years
-
73,500

77,981
175,907

The parent company had no commitments under non-cancellable operating leases at the balance sheet date.


23.


Related party transactions

The Group paid £48,793 (2022: £18,360) of remuneration to close family members of the Directors during the course of the year.
The Group paid £117,050 (2022: £98,925) to a Company with Directors in common, for Director services provided during the year.
The Group is owed £20,000 (2022: £20,000) from K Tunnicliffe (Director and majority shareholder), recognised in other debtors. No additional amounts were advanced or repaid by the director in the current or prior year. The amounts owed are unsecured, interest free and repayable on demand.
At the year end, the Company owed £NIL (2022: £297,094) to the majority shareholder and £NIL (2022: £226,420) to a minority shareholder, recognised in other creditors. These loans attracted interest at 3% per annum and were fully repaid in the year.


24.


Controlling party

Kevin Tunnicliffe is the ultimate owner of the Company by virtue of his majority shareholding.


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