REGISTERED NUMBER: 11722532 (England and Wales) |
Group Strategic Report, |
Report of the Directors and |
Consolidated Financial Statements |
for the Period 28 May 2023 to 31 May 2024 |
for |
Recruitment Acquisitions Group Limited |
REGISTERED NUMBER: 11722532 (England and Wales) |
Group Strategic Report, |
Report of the Directors and |
Consolidated Financial Statements |
for the Period 28 May 2023 to 31 May 2024 |
for |
Recruitment Acquisitions Group Limited |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Contents of the Consolidated Financial Statements |
for the Period 28 May 2023 to 31 May 2024 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Consolidated Income Statement | 10 |
Consolidated Other Comprehensive Income | 11 |
Consolidated Statement of Financial Position | 12 |
Company Statement of Financial Position | 13 |
Consolidated Statement of Changes in Equity | 14 |
Company Statement of Changes in Equity | 15 |
Consolidated Statement of Cash Flows | 16 |
Notes to the Consolidated Statement of Cash Flows | 17 |
Notes to the Consolidated Financial Statements | 18 |
Recruitment Acquisitions Group Limited |
Company Information |
for the Period 28 May 2023 to 31 May 2024 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants and |
Statutory Auditors |
Venture House |
Calne Road |
Lyneham |
Chippenham |
SN15 4PP |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Group Strategic Report |
for the Period 28 May 2023 to 31 May 2024 |
The directors present their strategic report of the company and the group for the period 28 May 2023 to 31 May 2024. |
REVIEW OF BUSINESS AND FUTURE DEVELOPMENT |
The directors and investors focus on two main key performance indicators (KPIs), being turnover and gross profit. |
The Group has traded successfully with turnover of £31,072,450, gross profit of £4,026,137 and operating loss of £221,202. The acquisitive nature of the group over the past three years has resulted in goodwill of £7,645,015 and a charge in the year for amortisation of £648,921. EBITDA is £448,149 for the period. |
It has been confirmed with the Group's shareholders that after a period of consolidation there is renewed appetite to continue acquiring. Acquisition targets for the Group all operate in the blue-collar sector and the strategy where possible is to look at acquisitions that capture market share and integrate with existing businesses. In addition, the Group is looking at potential acquisitions and new branch openings in new geographies and adjacent sectors to de-risk concentration and Industry risk. |
On 26th May 2023 the board of Recruitment Acquisitions Group signed a written board resolution to issue a new class of shares which are non-voting but otherwise equally ranking with other ordinary shares. These shares were issued and used as a debt for equity swap in respect of long-term loans totalling £4,453,246. This was approved by the existing shareholders. |
The board had three main reasons for agreeing these measures with its funders: |
1. This significantly strengthens the balance sheet of the group and consolidates the previous phase of growth where the group acquired 5 established businesses in the sector. |
2. This allows the group to prepare for the next phase of growth. The board has instructed advisors to seek funding to allow it to continue to grow by way of acquisitions as the business has now demonstrated its skill in this respect. |
3. The board acknowledges that the swap recognises the confidence that the investors have in the business and that their interests are better served by obtaining more equity than holding debt. |
This transaction was completed on 5th July 2023 and has the effect of improving the net assets of the group by £4,453,246. |
On the back of this successful debt for equity swap the Group is in discussions with one if its remaining funders who has confirmed their intention to also swap their loan for equity. This will be executed at the most recent valuation carried out for the previous swap and will further improve the Group's Balance Sheet. |
On 1st November 2023 the Group acquired the business of Partners Employment European Recruitment Ltd (PEER) as a business purchase into the Skills Direct Limited trading entity. This acquisition is in line with the acquisition strategy and further bolsters Skills Direct's reputation and share of market in the South West. The acquisition occurred during the peak business period for the group and was successfully integrated with no drop off in service levels for either the new or existing customers of Skills Direct Limited. The acquisition has also proved successful financially. |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Group Strategic Report |
for the Period 28 May 2023 to 31 May 2024 |
PRINCIPAL RISKS AND UNCERTAINTIES |
In common with every other business, the group aims to minimise financial risk. The measures used by the directors to manage this risk include the preparation of profit and cash flow forecasts, regular monitoring of actual performance against these forecasts and ensuring that adequate financing facilities are in place to meet the requirements of the business. |
Credit Risk |
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. This is mitigated by having an invoice discount facility in place and monitoring debtors on a weekly basis. It is group policy to assess the credit risk of new customers before entering contracts. The Group has also increased the trade credit insurance coverage in the business given concerns relating to the economic downturn. |
Liquidity Risk |
Liquidity risk arises principally from the group's management of working capital. This risk is managed by ensuring that cash balances and headroom in the invoice discount facility are adequate to meet expected short-term requirements. A 90 day daily forecast is maintained to monitor this and the board receives a 12 month rolling cashflow projection on a monthly basis. |
Operational Risk |
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the group's processes, personnel, technology and infrastructure and from external sources. The senior management team manages operational risk to balance the avoidance of financial losses and damage to reputation with overall cost effectiveness. |
ON BEHALF OF THE BOARD: |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Report of the Directors |
for the Period 28 May 2023 to 31 May 2024 |
The directors present their report with the financial statements of the company and the group for the period 28 May 2023 to 31 May 2024. |
DIVIDENDS |
No dividends will be distributed for the period ended 31 May 2024. |
EVENTS SINCE THE END OF THE PERIOD |
Information relating to events since the end of the period is given in the notes to the financial statements. |
DIRECTORS |
Other changes in directors holding office are as follows: |
POLITICAL DONATIONS AND EXPENDITURE |
No political donations were made during the year. |
DISCLOSURE IN THE STRATEGIC REPORT |
The company has opted to disclose some items in the Strategic Report rather than the Directors Report. |
DIRECTORS' RESPONSIBILITIES STATEMENT |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and then apply them consistently; |
- | make judgements 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 company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and 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. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Report of the Directors |
for the Period 28 May 2023 to 31 May 2024 |
AUDITORS |
The auditors, Venture House Business Service Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Recruitment Acquisitions Group Limited |
Opinion |
We have audited the financial statements of Recruitment Acquisitions Group Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 May 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, Notes to the Financial Statements, including a summary of 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). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 May 2024 and of the group's loss for the period 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 UK, including the FRC'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. |
Material uncertainty related to going concern |
We draw attention to the going concern note in the financial statements. Our opinion is not modified in respect of this matter. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 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. |
Opinions 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 Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Recruitment Acquisitions Group Limited |
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 Report of the Directors. |
We have nothing to report in respect of the following matters where 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 four, 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 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. |
Report of the Independent Auditors to the Members of |
Recruitment Acquisitions Group Limited |
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 a Report of the Auditors 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 financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Discussions were held with, and enquiries made of, management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity. |
The following laws and regulations were identified as being of significance to the entity: Employment law. The laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation. |
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud. |
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK). |
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 Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Recruitment Acquisitions Group Limited |
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 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 a Report of the Auditors 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 |
Chartered Accountants and |
Statutory Auditors |
Venture House |
Calne Road |
Lyneham |
Chippenham |
SN15 4PP |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Consolidated Income Statement |
for the Period 28 May 2023 to 31 May 2024 |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
Notes | £ | £ |
TURNOVER | 31,072,450 | 29,735,858 |
Cost of sales | 27,046,313 | 25,793,213 |
GROSS PROFIT | 4,026,137 | 3,942,645 |
Administrative expenses | 4,247,339 | 5,349,500 |
OPERATING LOSS | 4 | (221,202 | ) | (1,406,855 | ) |
Interest receivable and similar income | 119 | 63 |
(221,083 | ) | (1,406,792 | ) |
Interest payable and similar expenses | 6 | 483,326 | 307,373 |
LOSS BEFORE TAXATION | (704,409 | ) | (1,714,165 | ) |
Tax on loss | 7 | 19,009 | 62,098 |
LOSS FOR THE FINANCIAL PERIOD | ( |
) | ( |
) |
Loss attributable to: |
Owners of the parent | (723,418 | ) | (1,776,263 | ) |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Consolidated Other Comprehensive Income |
for the Period 28 May 2023 to 31 May 2024 |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
Notes | £ | £ |
LOSS FOR THE PERIOD | (723,418 | ) | (1,776,263 | ) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
(723,418 |
) |
(1,776,263 |
) |
Total comprehensive income attributable to: |
Owners of the parent | (723,418 | ) | (1,776,263 | ) |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Consolidated Statement of Financial Position |
31 May 2024 |
31.5.24 | 27.5.23 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 | 3,624,337 | 3,751,928 |
Tangible assets | 10 | 20,444 | 28,448 |
Investments | 11 | - | - |
3,644,781 | 3,780,376 |
CURRENT ASSETS |
Debtors | 12 | 5,980,339 | 5,409,759 |
Cash at bank and in hand | 313,071 | 110,174 |
6,293,410 | 5,519,933 |
CREDITORS |
Amounts falling due within one year | 13 | 8,869,412 | 6,760,697 |
NET CURRENT LIABILITIES | (2,576,002 | ) | (1,240,764 | ) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
1,068,779 |
2,539,612 |
CREDITORS |
Amounts falling due after more than one year |
14 |
(283,330 |
) |
(5,484,246 |
) |
PROVISIONS FOR LIABILITIES | 18 | (4,471 | ) | (4,216 | ) |
NET ASSETS/(LIABILITIES) | 780,978 | (2,948,850 | ) |
CAPITAL AND RESERVES |
Called up share capital | 19 | 136 | 102 |
Share premium | 20 | 4,453,212 | - |
Retained earnings | 20 | (3,672,370 | ) | (2,948,952 | ) |
SHAREHOLDERS' FUNDS | 780,978 | (2,948,850 | ) |
The financial statements were approved by the Board of Directors and authorised for issue on 27 February 2025 and were signed on its behalf by: |
J R C Drake - Director |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Company Statement of Financial Position |
31 May 2024 |
31.5.24 | 27.5.23 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 |
Tangible assets | 10 |
Investments | 11 |
CURRENT ASSETS |
Debtors | 12 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 13 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
14 |
NET ASSETS/(LIABILITIES) | ( |
) |
CAPITAL AND RESERVES |
Called up share capital | 19 |
Share premium | 20 |
Retained earnings | 20 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS | ( |
) |
Company's loss for the financial year | (65,675 | ) | (1,692,199 | ) |
The financial statements were approved by the Board of Directors and authorised for issue on |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Consolidated Statement of Changes in Equity |
for the Period 28 May 2023 to 31 May 2024 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 June 2022 | 102 | (1,172,689 | ) | - | (1,172,587 | ) |
Changes in equity |
Total comprehensive income | - | (1,776,263 | ) | - | (1,776,263 | ) |
Balance at 27 May 2023 | 102 | (2,948,952 | ) | - | (2,948,850 | ) |
Changes in equity |
Issue of share capital | 34 | - | 4,453,212 | 4,453,246 |
Total comprehensive income | - | (723,418 | ) | - | (723,418 | ) |
Balance at 31 May 2024 | 136 | (3,672,370 | ) | 4,453,212 | 780,978 |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Company Statement of Changes in Equity |
for the Period 28 May 2023 to 31 May 2024 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 June 2022 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 27 May 2023 | ( |
) | ( |
) |
Changes in equity |
Issue of share capital | - |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 May 2024 | ( |
) |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Consolidated Statement of Cash Flows |
for the Period 28 May 2023 to 31 May 2024 |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 770,984 | (100,567 | ) |
Interest paid | (483,326 | ) | (307,373 | ) |
Tax paid | (240,231 | ) | (20,631 | ) |
Deferred Taxation | 255 | 768 |
Net cash from operating activities | 47,682 | (427,803 | ) |
Cash flows from investing activities |
Purchase of intangible fixed assets | (521,330 | ) | (11,275 | ) |
Purchase of tangible fixed assets | (2,901 | ) | (6,647 | ) |
Interest received | 119 | 63 |
Net cash from investing activities | (524,112 | ) | (17,859 | ) |
Cash flows from financing activities |
Loan repayments in year | (3,773,919 | ) | (138,877 | ) |
Amounts written off in the year | - | (102,603 | ) |
Share issue | 4,453,246 | - |
Forfeit share options | - | 200,000 |
Net cash from financing activities | 679,327 | (41,480 | ) |
Increase/(decrease) in cash and cash equivalents | 202,897 | (487,142 | ) |
Cash and cash equivalents at beginning of period |
2 |
110,174 |
597,316 |
Cash and cash equivalents at end of period |
2 |
313,071 |
110,174 |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Statement of Cash Flows |
for the Period 28 May 2023 to 31 May 2024 |
1. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
£ | £ |
Loss before taxation | (704,409 | ) | (1,714,165 | ) |
Depreciation charges | 659,827 | 2,069,322 |
Loss on disposal of fixed assets | - | 2,586 |
Finance costs | 483,326 | 307,373 |
Finance income | (119 | ) | (63 | ) |
438,625 | 665,053 |
(Increase)/decrease in trade and other debtors | (570,580 | ) | 63,472 |
Increase/(decrease) in trade and other creditors | 902,939 | (829,092 | ) |
Cash generated from operations | 770,984 | (100,567 | ) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Period ended 31 May 2024 |
31.5.24 | 28.5.23 |
£ | £ |
Cash and cash equivalents | 313,071 | 110,174 |
Period ended 27 May 2023 |
27.5.23 | 1.6.22 |
£ | £ |
Cash and cash equivalents | 110,174 | 597,316 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 28.5.23 | Cash flow | At 31.5.24 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 110,174 | 202,897 | 313,071 |
110,174 | 202,897 | 313,071 |
Debt |
Debts falling due within 1 year | (3,263,947 | ) | (1,426,998 | ) | (4,690,945 | ) |
Debts falling due after 1 year | (5,484,246 | ) | 5,200,916 | (283,330 | ) |
(8,748,193 | ) | 3,773,918 | (4,974,275 | ) |
Total | (8,638,019 | ) | 3,976,815 | (4,661,204 | ) |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements |
for the Period 28 May 2023 to 31 May 2024 |
1. | STATUTORY INFORMATION |
Recruitment Acquisitions Group Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The group has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirement of paragraph 3.17(d). |
With respect to the parent company cashflow statement. |
Basis of consolidation |
The Group and all its subsidiary undertakings are consolidated. Intercompany transactions and balances among Group companies are eliminated in full. The results and fair values of the assets and liabilities of undertakings acquired are consolidated from the date on which the Group gains control. Business combinations are accounted for using the purchase method of accounting under FRS 102, Section 19 Business Combinations. In the balance sheet, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at fair value at the date of acquisition (which is the date on which control is passed to the parent). The results of the acquired operations are included in the consolidated profit and loss account from the date of acquisition. |
Significant judgements and estimates |
In the application of the company's accounting policies, which are described in note 2, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
The estimates and underlying assumptions are reviewed on an on going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
Impairment of investments and goodwill |
Goodwill arising on business combinations is amortised over its useful economic life, currently estimated by the group as 10 years. The amortisation charge is sensitive to changes in the estimated useful economic life. Goodwill is reviewed with reference to budgets and forecast and compared to its recoverable value with adjustment made if necessary. |
The cost of investments on the parent company balance sheet are reviewed with reference to budgeted and forecast profitability of the subsidiaries and impairment in the cost of investment reflected if necessary. |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts and settlement discounts. |
Turnover from temporary assigment sales are predominantly recognised on a weekly basis corresponding with the assignment week and fees arising from the placement of permanent staff are recognised on the signing of the employment contract. |
Goodwill |
Goodwill, being the amount paid in connection with the acquisition of companies between 2018 and 2022, is being amortized evenly over its estimated useful life of ten years. |
Goodwill is also included relating to the aquisition of the trade and assets of Partners Employment European Recruitment Ltd by Skills Direct Ltd during the year ended 31 May 2024. This acqusition is being amortized evenly over its estimated useful life of three years. |
Tangible fixed assets |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
Financial instruments |
The group has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments. |
Basic financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method. |
Basic financial liabilities, including trade and other payables, bank loans and loans from fellow group companies, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. |
Financial assets and liabilities are offset and 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. |
Taxation |
Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated 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 statement of financial position date. |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
2. | ACCOUNTING POLICIES - continued |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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 period 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. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Investment in subsidiary undertakings |
Investments in subsidiary undertakings are recongnised at cost, less any subsequent impairment. |
3. | EMPLOYEES AND DIRECTORS |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
£ | £ |
Wages and salaries | 26,583,385 | 25,303,508 |
Social security costs | 2,148,300 | 1,997,697 |
Other pension costs | 246,057 | 265,751 |
28,977,742 | 27,566,956 |
The average number of employees during the period was as follows: |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
Administration |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
£ | £ |
Directors' remuneration | 228,215 | 59,985 |
Directors' pension contributions to money purchase schemes | 3,838 | 10,899 |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
3. | EMPLOYEES AND DIRECTORS - continued |
Information regarding the highest paid director for the period ended 31 May 2024 is as follows: |
Period |
28.5.23 |
to |
31.5.24 |
£ |
Emoluments etc | 94,255 |
Pension contributions to money purchase schemes | 1,963 |
There are no wages and salaries in the parent company. |
4. | OPERATING LOSS |
The operating loss is stated after charging: |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
£ | £ |
Hire of plant and machinery | 90,430 | 56,448 |
Other operating leases | 113,630 | 150,390 |
Depreciation - owned assets | 10,905 | 26,163 |
Loss on disposal of fixed assets | - | 2,586 |
Goodwill amortisation | 648,921 | 2,043,160 |
Auditors' remuneration | 43,800 | 46,150 |
Auditors' remuneration for non audit work | 21,850 | 21,000 |
Foreign exchange differences | 365 | 61 |
5. | EXCEPTIONAL ITEMS |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
£ | £ |
Exceptional items | (9,524 | ) | 101,015 |
This relates to amounts written off loans due to/from a subsidiary which did not trade during the year. This subsidiary has been sold post year end but the net assets of the subsidiary have been written off in the current year; this amount is also included in the amount above. |
The comparative relates to amounts due to investors written off during the year, including an amount for interest previously charged on a loan. |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
£ | £ |
Factoring charges | 387,648 | 281,396 |
Interest payable | 95,678 | 25,977 |
483,326 | 307,373 |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the loss for the period was as follows: |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
£ | £ |
Current tax: |
UK corporation tax | 18,754 | 62,866 |
Deferred tax | 255 | (768 | ) |
Tax on loss | 19,009 | 62,098 |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the period is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
Period | Period |
28.5.23 | 1.6.22 |
to | to |
31.5.24 | 27.5.23 |
£ | £ |
Loss before tax | (704,409 | ) | (1,714,165 | ) |
Loss multiplied by the standard rate of corporation tax in the UK of 25 % (2023 - 19 %) |
(176,102 |
) |
(325,691 |
) |
Effects of: |
Expenses not deductible for tax purposes | 195,366 | 382,812 |
Capital allowances in excess of depreciation | (255 | ) | (768 | ) |
Adjustments to tax charge in respect of previous periods | - | 5,745 |
Total tax charge | 19,009 | 62,098 |
8. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
9. | INTANGIBLE FIXED ASSETS |
Group |
Goodwill |
£ |
COST |
At 28 May 2023 | 7,123,685 |
Additions | 521,330 |
At 31 May 2024 | 7,645,015 |
AMORTISATION |
At 28 May 2023 | 3,371,757 |
Amortisation for period | 648,921 |
At 31 May 2024 | 4,020,678 |
NET BOOK VALUE |
At 31 May 2024 | 3,624,337 |
At 27 May 2023 | 3,751,928 |
The goodwill was acquired as part of the acquisition of Skills Direct Limited on 8 June 2021, C&H Agency Limited on 4 November 2021 (see note on Business Combinations for more information) and the recruitment division of TPSG Procurement Limited. The goodwill is amortised on a straight-line basis over a useful life of 10 years. |
On 1st November 2023 the Group aquired the business of Partners Employment European Recruitment Ltd, the additions for the year relate to this acquisition. The goodwill is amortised on a straight line basis over a useful life of 3 years. |
10. | TANGIBLE FIXED ASSETS |
Group |
Improvements | Fixtures |
to | and | Motor | Computer |
property | fittings | vehicles | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 28 May 2023 | 20,000 | 305,316 | 13,750 | 37,941 | 377,007 |
Additions | - | - | - | 2,901 | 2,901 |
At 31 May 2024 | 20,000 | 305,316 | 13,750 | 40,842 | 379,908 |
DEPRECIATION |
At 28 May 2023 | 20,000 | 296,871 | 13,750 | 17,938 | 348,559 |
Charge for period | - | 2,741 | - | 8,164 | 10,905 |
At 31 May 2024 | 20,000 | 299,612 | 13,750 | 26,102 | 359,464 |
NET BOOK VALUE |
At 31 May 2024 | - | 5,704 | - | 14,740 | 20,444 |
At 27 May 2023 | - | 8,445 | - | 20,003 | 28,448 |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
11. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 28 May 2023 |
and 31 May 2024 |
NET BOOK VALUE |
At 31 May 2024 |
At 27 May 2023 |
The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following: |
Subsidiaries |
Registered office: 4 Fore Street, Trowbridge, England, BA14 8HD |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 4 Fore Street, Trowbridge, England, BA14 8HD |
Nature of business: |
% |
Class of shares: | holding |
Registered office: Mit Barn Writtle Road, Margaretting, Ingatestone, England, CM4 0EL |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 4 Fore Street, Trowbridge, England, BA14 8HD |
Nature of business: |
% |
Class of shares: | holding |
Registered office: 4 Fore Street, Trowbridge, England, BA14 8HD |
Nature of business: |
% |
Class of shares: | holding |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
11. | FIXED ASSET INVESTMENTS - continued |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31.5.24 | 27.5.23 | 31.5.24 | 27.5.23 |
£ | £ | £ | £ |
Trade debtors | 5,653,268 | 5,059,293 |
Other debtors | 269,720 | 286,695 |
Prepayments and accrued income | 57,351 | 63,771 |
5,980,339 | 5,409,759 |
Debt factoring is in place over the trade debtors of the Group. Liabilities of £3,643,275 (2023: £3,063,947) are recognised in creditors in association with this. |
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31.5.24 | 27.5.23 | 31.5.24 | 27.5.23 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 15) | 3,643,275 | 3,063,947 |
Other loans (see note 15) | 1,047,670 | 200,000 |
Trade creditors | 83,080 | 233,400 |
Amounts owed to group undertakings | - | - |
Tax | 1,225 | 222,447 |
Social security and other taxes | 777,302 | 561,837 |
VAT | 1,807,526 | 942,584 | - | - |
Other creditors | 766,518 | 705,756 |
Accruals and deferred income | 742,816 | 830,726 |
8,869,412 | 6,760,697 |
14. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
31.5.24 | 27.5.23 | 31.5.24 | 27.5.23 |
£ | £ | £ | £ |
Other loans (see note 15) | 283,330 | 5,484,246 |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
15. | LOANS |
An analysis of the maturity of loans is given below: |
Group | Company |
31.5.24 | 27.5.23 | 31.5.24 | 27.5.23 |
£ | £ | £ | £ |
Amounts falling due within one year or on | demand: |
Bank loans | 3,643,275 | 3,063,947 |
Other loans | 1,047,670 | 200,000 |
4,690,945 | 3,263,947 |
Amounts falling due between two and five | years: |
Other loans - 2-5 years | 283,330 | 5,484,246 |
Current and long term other loans includes a loan with a 7% interest rate which is being repaid monthly. |
Other loans due within one year includes interest free loans of £625,000 which is repayable on demand. |
Last year the bank loans figure included £200,000 of a guarantee held by the factoring company. The guarantee of £200,000 is shown in other debtors this year. The comparatives have been amended to reflect this revised treatment. |
16. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Non-cancellable operating | leases |
31.5.24 | 27.5.23 |
£ | £ |
Within one year | 160,194 | 125,632 |
Between one and five years | 228,660 | 180,003 |
388,854 | 305,635 |
17. | SECURED DEBTS |
Security in the form of a fixed and floating charge over the assets of the Group in respect of group factoring debt of £3,643,275. |
18. | PROVISIONS FOR LIABILITIES |
Group |
31.5.24 | 27.5.23 |
£ | £ |
Deferred tax |
Accelerated capital allowances | 4,471 | 4,216 |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
18. | PROVISIONS FOR LIABILITIES - continued |
Group |
Deferred |
tax |
£ |
Balance at 28 May 2023 | 4,216 |
Provided during period | 255 |
Balance at 31 May 2024 | 4,471 |
19. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.5.24 | 27.5.23 |
value: | £ | £ |
Ordinary B | £1 | 34 | - |
Allotted and issued: |
Number: | Class: | Nominal | 31.5.24 | 27.5.23 |
value: | £ | £ |
Share capital 1 | £1 | 102 | 102 |
During the year 34 ordinary B shares were issued. |
33 shares were issued at a premium of £130,976 and 1 share was issued at a premium of £131,004. |
These shares were issued as a debt for equity swap in respect of long-term loans totalling £4,453,246. |
20. | RESERVES |
Group |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 28 May 2023 | (2,948,952 | ) | - | (2,948,952 | ) |
Deficit for the period | (723,418 | ) | (723,418 | ) |
Cash share issue | - | 4,453,212 | 4,453,212 |
At 31 May 2024 | (3,672,370 | ) | 4,453,212 | 780,842 |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
20. | RESERVES - continued |
Company |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 28 May 2023 | ( |
) | (3,990,101 | ) |
Deficit for the period | ( |
) | ( |
) |
Cash share issue | - | 4,453,212 | 4,453,212 |
At 31 May 2024 | ( |
) | 397,436 |
21. | PARENT COMPANY |
Fedelta Holdings Limited is regarded by the directors as being the company's ultimate parent company. |
22. | RELATED PARTY DISCLOSURES |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
During the year the group paid consultancy fees of £64,000 (2023: £171,250) to companies controlled by directors. |
Purchases of NIL (2023: £210,319) were made by one of the subsidiary companies to a company controlled by its director with a balance due at the year end of NIL (2023 NIL). |
The group paid rent of £16,200 (2023: £37,853) to a company controlled by a shareholder. |
Interest of £72,000 (2023: £24,000 was paid by the group during the year on a loan from a trust beneficiary. At the year end there was a balance £1,131,000 (2023: £1,231,000) due to the trust beneficiary. |
Bad debts includes £8,133 which was due from a director. This amount was written off when they resigned. |
23. | POST BALANCE SHEET EVENTS |
It is the intention of the directors that a further debt for equity swap will take place in respect of long term debt of £625,000. It is hoped that this will take place before 31 May 2025. |
In January 2025 it was agreed to sell the shares in two subsidiaries, C&D Group Limited and Priory Personnel Limited outside of the group. |
Recruitment Acquisitions Group Limited (Registered number: 11722532) |
Notes to the Consolidated Financial Statements - continued |
for the Period 28 May 2023 to 31 May 2024 |
24. | GOING CONCERN |
The net assets of the group increased to £780,978 due primarily to the conversion of £4,453,246 of long term debt to equity which has resulted in a net asset position. |
The directors have given consideration to the continual changes and volatility within this sector and the effect on the ongoing trade of the business. The directors will continue to review the trade position and react accordingly. |
The directors believe that the business has sufficient prospect of trade and access to funding to continue to trade for a period of no less than twelve months from the approval of these accounts and accordingly the accounts have been prepared on a going concern basis. |