Principal activities and review of business
The principal activity of the company continued to be that of marketing and public relations consultants.
Summary & Key Aims
Volpa, trading as The Cunningly Good Group, is one of Scotland’s leading independent communications agencies.
The business is currently the Chartered Institute of Public Relations’ Gold Pride Award 2023 Winner of Best Small Consultancy, an award it received in October 2023.
Cunningly Good Group’s small but specialist team boast a range of skills in marketing, public relations, design and website development. Our aim is to be one of the UK’s top independent agencies, working with ambitious brands, who want to scale, are ready to invest, and who need an agency partner with grit, determination and the experience to help them achieve their potential.
The business is managed by the director Tricia Fox who is also the principal shareholder of Volpa Limited.
Our Key Strengths include:
- Strong integrated marketing campaign delivery proposition which is proving desirable to clients.
- Our breadth of skills and understanding of marketing solutions across a range of different service specialisms.
- A small but talented and highly experienced team who ensure the delivery of outstanding and multi award winning campaigns.
We successfully retained the Communications Management Standard accreditation, and are still one of a handful of agencies in Scotland to secure this national standard, and renewed our CyberEssentials accreditation for a fifth consecutive year.
Performance Review
Long term recovery from the impact of the coronavirus pandemic continued throughout this financial year with the business achieving some long awaited stability and steadier trading patterns more akin to performance pre-covid.
This year the business was able to benefit from significant direct cost savings as a result of a reduction of the business’s office space requirements in the previous financial year, and from a small reduction in headcount through natural attrition. The focus was on stability, strength and profitability and it is safe to say that is exactly what was delivered.
Throughout this period we continued to secure and deliver new business, with notable new contracts awarded through the public sector tendering process. There was a small overall reduction of just 4.43% in fee revenues compared to an 8% reduction in chargeable capacity versus the previous twelve months.
The market remained volatile with regards to demand for specific services during this trading year, and we experienced particularly high demand for strategic marketing, up 31.76%, set against fluctuations in demand for specialist communications skills and design (down 24% and 12% respectively). The website development and management services remained stable and broadly in line with the two previous years’ performance.
Turnover for this 12 month period was slightly lower than in the previous 12 months (4.4% decrease), with turnover differences mainly down to a small reduction in chargeable staff over the period.
Our gross profit margin for the year improved by 4.2% on the previous year, returning to pre-pandemic trading levels of 45.03% with our net margin increasing by 544% on the previous year. These increases are further indication that the business recovery plans are continuing to deliver and are on track.
We returned a commercial profit, unaided by grant support, delivering a net operating profit of 9.01% and £17,564 (2023 - £1,162 loss). Had it not been for increased interest on covid debt repayments of £10,758, this profitability would have been higher still.
Our financial strategy for 2024-25 is to make use of our profit margins to more rapidly make capital repayments against the more expensive covid debts, reducing interest payments, strengthening the balance sheet and maximising profitability.
Key Financial Ratios
Year
YE 2024 YE 2023
Operating Profit 9.01% 1.40%
Gross Profit Margin 45.03% 40.83%
Current Ratio 1.24 1.19
Economic Climate
For yet another year, the economic climate in the UK continues to be extremely challenging. Interest rate variances have brought with them major cost instabilities in the supply chain which we have adapted to nimbly. Combined with the cost of living crisis, and continued pandemic recovery, it is the perfect storm for recession.
Recessionary circumstances serve our business model well and this is evident by the rapid increase in, and growing demand for, strategic marketing services which are experiencing a similar level of uptick in demand last witnessed during the 2008 recession period.
Giving Back
We have a commitment as an accredited Living Wage Employer to ensure all our employees are financially secure and we are signed up to The Scottish Business Pledge.
Future Developments
The company is focused on profitable growth for the next financial year as a means to deliver covid debt reduction. As part of that, we will continue to periodically review the overhead load to maximise our operating efficiencies.
We have worked hard to secure longer term contractual partnerships with clients over the last 12 months and to re-evaluate any contracts that are no longer delivering adequate margin. These refreshed contracts will underpin future growth plans. Some clients have now committed to terms that are for 24 months and beyond which delivers confidence.
We are also looking to more quickly reduce the covid debt burden, and to drive a more robust balance sheet position through more consistent profit generation.
We have very clear new business development targets, and an active plan to identify, engage with and work for particular operators in our sectors of expertise.
The aims of the director remains:
- Continue to stabilise the business after a period of significant change, and continue positive growth and recovery adjusting the operating plan as necessary to respond to demand fluctuations.
- To nurture existing client relationships into longer term partnership and to develop new business.
- To continue to diversify the client base with a focus on a richer mix of public and private sector clients, and with retainer income and project income.
- To maintain our focus on driving efficiency measures within the business and maximizing utilization and profitability.
- To continue to rebuild our position as an industry leader through strategic sales and marketing activity.