Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
CONTENTS
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
Sales of £10.9m decreased by £5.3m or 32.6% from 2022. This reduction has been influenced by a mix of global economic downturn and a range of supply chain challenges which has forced a strategic move away from less profitable revenue in order to streamline and focus the business.The Directors are now pleased to report that trading has improved and a return to profitability is expected to be reported in 2024.
The market continues to be highly competitive and the group manages this risk through significant investment in new product development and marketing initiatives.
The operations of the group expose it to a variety of financial risks including the effects of changes in foreign currency exchange rates, credit risk and liquidity risk. The principal financial instruments of the group comprise Sterling, US Dollar, Euro and Canadian Dollar cash and bank accounts, bank overdrafts and loans together with trade debtors and trade creditors that arise directly from its operations. The main risks arising from the financial instruments of the group can be analysed as follows: Foreign currency risk The group is exposed in its trading operations to the risk of changes in foreign currency exchange rates. The group both buys and sells goods globally which therefore gives a natural hedge to an extent. The Board has also adopted a foreign exchange strategy to reduce the impact of foreign exchange rates movements as appropriate. The main foreign currencies in which the group operates are the US Dollar, Canadian Dollar and the Euro. The group has US-based subsidiaries which can affect the Sterling group Balance Sheet, as a result of the movements in the Sterling to Dollar exchange rates. Credit risk The principal financial assets of the group are bank balances, cash and trade debtors, which represent the group’s maximum exposure to credit risk in relation to financial assets. Credit risk is managed by monitoring the aggregate amount and duration of exposure to any one customer depending upon their credit rating. In addition, the group takes out credit insurances for customers, where possible, and subject to the terms and conditions of the insurer.
Page 1
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Liquidity risk
The group’s policy had been to ensure continuity of funding through arranging funding for operations via medium term bank loans and over-draft facilities to aid short-term flexibility. Going concern In the 2022 financial statements the Board reported certain trading and cash-flow challenges but are pleased to report an improvement since that time. In particular we note the following points:
A. In summer 2024 the business refinanced with a new lender. The facility in place is a CID facility for 3 years with a maximum drawdown of £1.5m based on a percentage of eligible debtors. The Board are very pleased with the new relationship which has been very positive and supportive. Management have prepared forecasts through to the end of 2025 which show that the business will continue to operate within agreed facilities throughout that period, albeit the headroom is limited at certain points.
B. The order backlog and expected volumes for 2025 have increased compared to both 2023 and 2024 including new customers and increased volumes with existing customers. C. Profit margins are on the increase due to freight costs stabilising back to previous levels and business focus so therefore 2024 and 2025 are expected to generate improved results. As with most similar businesses, there continues to be pressure on cash and close management of day to day payments and receivables is being exercised to maximise the position and manage pressure points. Management are confident that the Company and Group will be in a position to meet their obligations for period not less than 12 months from the date the accounts are signed, although a certain level of uncertainty remains. Cash flow interest rate risks Interest bearing assets comprise cash and bank deposits, all of which earn interest at market rate. The directors monitor the overall level of borrowings and interest costs to limit any adverse effects on financial performance of the group.
Page 2
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022 Operating (loss)/profit margin % -2.87 -3.58 Turnover by employee £ 280,872 395,707 Working capital as a % of turnover 3.56 4.03 Notes to key performance indicators Operating profit margin % = operating profit before impairment loss as a percentage of turnover. AVF Global Limited aims to increase operating profit margins and measures performance against this objective by measuring operating profit margins %. Source data is taken from the audited financial statements. Turnover per employee = turnover divided by the average monthly number of employees in the year. AVF Global Limited aims to increase value added by employees and uses turnover by employee to measure this. Source data is taken from the audited financial statements. Working capital % turnover = year end operating working capital as a percentage of turnover. AVF Global Limited aims to minimise working capital as a % of turnover to facilitate cash management. Source data is taken from the audited financial statements. Operating working capital comprises stock, debtors and creditors excluding corporation tax, deferred tax and other taxes and social security.
Environmental matters
The Group seeks to maintain the highest standards, being aware of social and environmental responsibilities. Employee matters The Group is committed to promoting policies to ensure that employees and those who seek to work for the group are treated equally regardless of sex, marital status, age, creed, colour, race or ethnic origin. The Group gives full and fair consideration to applications for employment received from people with disabilities, having regard to their particular aptitudes and abilities. If employees become disabled, every effort is made to ensure that their employment continues, and training or re-training is arranged and career development and promotion offered whenever practicable. The Group’s policy is to provide equal opportunities to entire staff on the basis of objective criteria and personal merit. The Group believes in promoting the fullest involvement of employees in their work to gain their maximum understanding of and commitment to, the Group’s objectives. This is achieved through regular meetings and an open management style that encourages participation and recognises effort.
This report was approved by the board on 27 November 2024 and signed on its behalf.
Page 3
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL 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.
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.
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;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙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 2006. They 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.
The Company acquired the group headed by AVF Holdings Limited on 16 January 2020. The principal activity of the Group is a highly innovative designer and supplier of accessories focused on home entertainment support systems. The principal activity of the Company is that of a holding Company.
The loss for the year, after taxation, amounted to £550,000 (2022 - loss £1,878,000).
The directors do not recommend the payment of a dividend.
Page 4
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors who served during the year were:
Business review, principal risks and uncertainties facing the company, key performance indicators, discussion of employee matters and discussion of environmental matters that have been included within the Strategic Report.
After the year end, on 27 June 2024, Group refinanced and signed a new financing facility of £1.5m for 3 years.
The auditor, MHA, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
Page 5
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AVF GLOBAL LIMITED
We have audited the financial statements of AVF Global 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 and Company Statements of financial position, the Consolidated and Company Statement of changes in equity, the Consolidated Statement of cash flows and the related notes, including significant accounting policies. The 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).
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 Auditor 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.
We draw attention to note 2.3 in the financial statements, which indicates that whilst the business has recently refinanced with a new lender, the amount of liquidity headroom available in the 12 months from the date of approval of these financial statements is limited at certain points in the year. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Page 6
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AVF GLOBAL LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our 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.
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.
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.
Page 7
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AVF GLOBAL LIMITED (CONTINUED)
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 Auditor's 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:
Enquiry of management and those charged with governance around actual and potential litigation and claims;
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 Auditor's 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 2006. Our 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 Auditor's 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.
for and on behalf of
Birmingham, United Kingdom
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
Page 8
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Page 9
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
REGISTERED NUMBER: 12374001
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 27 November 2024.
The notes on pages 17 to 35 form part of these financial statements.
Page 10
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
REGISTERED NUMBER: 12374001
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023
Page 11
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AVF GLOBAL LIMITED
REGISTERED NUMBER: 12374001
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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 loss after tax of the parent Company for the year was £123,000 (2022: £69,000). The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 17 to 35 form part of these financial statements.
Page 12
|