Smithfield Consultants Limited
Annual Report and Financial Statements
For the year ended 30 June 2024
Company Registration No. 04735490 (England and Wales)
Smithfield Consultants Limited
Company Information
Directors
V A Malanga
E Williams
M J R Murphy
(Appointed 7 January 2025)
Secretary
N Hughes
Company number
04735490
Registered office
C/O Daniel J. Edelman Limited
Francis House
11 Francis Street
London
England
SW1P 1DE
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Smithfield Consultants Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
Smithfield Consultants Limited
Strategic Report
For the year ended 30 June 2024
Page 1
The directors present the strategic report on Smithfield Consultants Limited (the ‘company’) for the year ended 30 June 2024.
Fair review of the business
The company is part of Daniel J. Edelman Holdings, Inc., the largest worldwide public relations group.
The company profit for the year, after tax, amounted to £2,409,149 (2023: £2,052,690). Net assets at 30 June 2024 were £8,509,258 (2023: £6,100,109). The growth in net assets can be attributed to trading profits achieved in 2024. Turnover increased by 4% (2023: 16% increase) over last year, whilst gross profit was up by 9% (2023: 13%). Profit before tax was up 17% (2023: 3%) over the prior year; the increase was due to an increase in gross profit.
Future developments
Given the current uncertain economic environment, the directors have carried out a detailed and comprehensive review of the business and its future prospects, taking into account all information that could reasonably be expected to be available for the following 12 months and beyond. The company will continue to be responsive in its strategy given the uncertainty around the economy and continues to closely monitor the performance of all parts of the business and take the necessary actions to mitigate against the economic uncertainty.
The business continues to monitor and assess its preparedness for a worst-case scenario, including the risks and mitigations across the business. This includes continued liaison with key customers, ongoing assessment of people, succession planning in key roles and continued review of contracts. Management will continue to monitor all situations, ensure its planning remains up to date and assess any new or emerging risks on an ongoing basis.
Employees
The company systematically provides employees with information on matters of concern to them, consulting them or their representatives regularly, so their views can be taken into account when making decisions that are likely to affect their interests. Employee involvement in the company is encouraged, as achieving a common awareness on the part of all employees of the financial and economic factors affecting the company plays a major role in maintaining its position as a leading public relations agency.
The company is committed to employment policies which follow best practice, based on equal opportunities for all employees, irrespective of sex, race, colour, disability or marital status. The company gives full and fair consideration to applications for employment from disabled persons, having regard to their particular aptitudes and abilities. Appropriate arrangements are made for the continued employment and training, career development and promotion of disabled persons employed by the company. If members of staff become disabled the company seeks to continue their employment, either in the same or, if appropriate, an alternative position.
Strategy
The company’s overriding objective is to achieve attractive and sustainable rates of growth primarily through maintaining and expanding its client base off the back of high quality work. In order to solve our clients’ business challenges in the right way, we aim to motivate, reward and nurture our best people, give our people the opportunity to take on new roles and diversify their experience, augmenting our teams with the best from our industry and beyond.
Business environment
The public relations market in the United Kingdom remains highly fragmented and competitive. In the PR Week league tables 2024, which are the latest available figures, the total fees (net revenue) for the top 150 agencies in 2023 amounted to £2.00 billion compared with £1.89 billion in the prior year. The company’s direct parent Daniel J. Edelman Limited features on the PR week tables for 2024 as the third largest full-service agency (2023: second largest), with 4.5% of the total fees of the top 150 (2023: 4.6%).
Smithfield Consultants Limited
Strategic Report (Continued)
For the year ended 30 June 2024
Page 2
Principal risks and uncertainties
The principal risks and uncertainties faced by the company can be broadly grouped as business risk, competitive risk and financial risk.
Business risk
The company has reviewed the business for potential successors for key management. If key management leave the company, the impact of their departure is looked at to ensure that the company can maintain relationships with clients and that other staff can cover key areas of the business.
The company has expertise in business reputation that can be used if there are any issues arising for the company itself. The business continues to monitor and assess its preparedness for a worst-case scenario including the risks and mitigations across the business. This includes continued liaison with key customers, ongoing assessment of people and succession planning in key roles; and continued review of contracts. Management will continue to monitor all situations, ensure its planning remains up to date and assess any new or emerging risks, including the current economic uncertainty in the UK, on an ongoing basis.
Competitive risk
The company seeks to mitigate its exposure to increased competition and the possibility of adverse market conditions by maintaining a wide portfolio of clients in different sectors who require a variety of communications services.
Financial risk management
Credit risk
The company aims to mitigate liquidity risk by managing cash generation of its operations and operating cash collection targets across the company as well as performing credit checks on all new clients. The company’s cash deposits are held with JP Morgan Chase Bank, NA.
Foreign exchange risk
Whilst all turnover is generated in the UK, the company does earn some of its turnover in currencies other than sterling. It seeks to manage the exposure to fluctuations in exchange rates by having contracts in place which allow for fee adjustments should the exchange rate fluctuate by more than a reasonable percentage. The company also seeks to minimise its holdings of currencies other than sterling.
Liquidity and cash flow risk
The company is part of a group cash pooling arrangement that gives it access to funds to mitigate the cash flow risk. The company forecasts and monitors its cash flows on an ongoing basis to manage this risk.
E Williams
Director
21 March 2025
Smithfield Consultants Limited
Directors' Report
For the year ended 30 June 2024
Page 3
The directors present their annual report and financial statements for Smithfield Consultants Limited (the 'company') for the year ended 30 June 2024.
Principal activities
The principal activity of the company continued to be that of acting as public relations advisers and consultants.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid (2023: £2,000,000). The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
N Agarwal
(Resigned 20 September 2024)
V A Malanga
I C Dobson
(Resigned 14 July 2023)
E Williams
M J R Murphy
(Appointed 7 January 2025)
Qualifying third party indemnity provisions
The articles of association provided the directors with a qualifying third party indemnity throughout the year and the indemnity remains in force at the date of the signature of the financial statements.
The ultimate parent company, Daniel J. Edelman Holdings, Inc., maintained liability insurance for the directors and officers of the company throughout the year and up to the date of signature of the financial statements,
Auditor
In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the company will be put forward at a General Meeting.
Smithfield Consultants Limited
Directors' Report (Continued)
For the year ended 30 June 2024
Page 4
Statement of directors' responsibilities
The directors are responsible for preparing the annual report 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 of the profit or loss of the company 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;
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 company 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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
E Williams
Director
21 March 2025
Smithfield Consultants Limited
Independent Auditor's Report
To the Members of Smithfield Consultants Limited
Page 5
Opinion
We have audited the financial statements of Smithfield Consultants Limited (the 'company') for the year ended 30 June 2024 which comprise the Profit and Loss Account, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 company's affairs as at 30 June 2024 and of its 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.
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's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, 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 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.
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.
Smithfield Consultants Limited
Independent Auditor's Report (Continued)
To the Members of Smithfield Consultants Limited
Page 6
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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, 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 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 company or to cease operations, or have no realistic alternative but to do so.
Smithfield Consultants Limited
Independent Auditor's Report (Continued)
To the Members of Smithfield Consultants Limited
Page 7
Auditor's 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 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 financial statements.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Smithfield Consultants Limited
Independent Auditor's Report (Continued)
To the Members of Smithfield Consultants Limited
Page 8
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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.
Esther Carder
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
25 March 2025
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Smithfield Consultants Limited
Profit and Loss Account
For the year ended 30 June 2024
Page 9
2024
2023
Notes
£
£
Turnover
3
12,563,659
12,132,493
Cost of sales
(1,563,645)
(1,995,046)
Gross profit
11,000,014
10,137,447
Administrative expenses
(8,194,589)
(7,708,190)
Other operating income
733
1,119
Operating profit
4
2,806,158
2,430,376
Interest receivable and similar income
7
420,130
157,532
Profit before taxation
3,226,288
2,587,908
Tax on profit
8
(817,139)
(535,218)
Profit for the financial year
2,409,149
2,052,690
The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.
Smithfield Consultants Limited
Balance Sheet
As at 30 June 2024
Page 10
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
272
Investments
11
2
3
274
3
Current assets
Stock
13
-
30,569
Debtors
14
13,731,008
9,753,960
13,731,008
9,784,529
Creditors: amounts falling due within one year
15
(5,066,469)
(3,684,423)
Net current assets
8,664,539
6,100,106
Total assets less current liabilities
8,664,813
6,100,109
Creditors: amounts falling due after more than one year
16
(155,555)
Net assets
8,509,258
6,100,109
Capital and reserves
Called up share capital
19
10,280
10,280
Share premium account
262,000
262,000
Profit and loss reserves
8,236,978
5,827,829
Total equity
8,509,258
6,100,109
The financial statements were approved by the board of directors and authorised for issue on 21 March 2025 and are signed on its behalf by:
M J R Murphy
Director
Company Registration No. 04735490
Smithfield Consultants Limited
Statement of Changes in Equity
For the year ended 30 June 2024
Page 11
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2022
10,280
262,000
5,775,139
6,047,419
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
-
2,052,690
2,052,690
Dividends
9
-
-
(2,000,000)
(2,000,000)
Balance at 30 June 2023
10,280
262,000
5,827,829
6,100,109
Year ended 30 June 2024:
Profit and total comprehensive income for the year
-
-
2,409,149
2,409,149
Balance at 30 June 2024
10,280
262,000
8,236,978
8,509,258
Smithfield Consultants Limited
Notes to the Financial Statements
For the year ended 30 June 2024
Page 12
1
Accounting policies
Company information
Smithfield Consultants Limited is a private company limited by shares incorporated in England and Wales. The registered office is C/O Daniel J. Edelman Limited, Francis House, 11 Francis Street, London, England, SW1P 1DE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
The requirements of Section 7 Statement of Cash Flows and Section 3 Financial Statement Presentation paragraph 3.17(d).
The requirement of S: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
The requirement of Section 33 Related Party Disclosures paragraph to disclose key management personnel compensation
The exemption available under Section 33 Related Party Disclosures paragraph 33.1A not to disclose transactions with other wholly owned members of the group.
The financial statements of the company are consolidated in the financial statements of A&R Coöperatie U.A. These consolidated financial statements are available from Gustav Mahlerlaan 2970, Amsterdam, 1081 LA, Netherlands.
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 13
1.2
Going concern
The company made profits after tax of £true2,409,149 (2023: £2,052,690) and has net current assets of £8,664,539 (2023: £6,100,106). The directors confirm that they are satisfied that the company has adequate resources to continue in business for the foreseeable future.
They have considered the company's profit in the year, the net current assets, future profits projected, the company's ongoing cash requirements, the availability of cash through the group cash pooling arrangement and the written letter of support received from the ultimate parent, Daniel J. Edelman Holdings, Inc.
As a result of the review which includes an assessment of the ability and confirmation of the ultimate parent to provide this support, the directors are confident the company has sufficient resources to continue as a going concern for at least 12 months from the date of signing these financial statements and on this basis, they consider that it is appropriate to prepare the financial statements on the going concern basis.
1.3
Turnover
The company recognises turnover when a) the significant risks and rewards of ownership have been transferred to the buyer; b) the company retains no continuing involvement or control over the services; c) the amount of turnover can be measured reliably; d) it is probable that future economic benefits will flow to the entity; and e) when the specific criteria relating to each of the company's sales channels have been met, as described below.
Turnover represents amounts receivable for services, net of value added tax and trade discounts.
Turnover is normally recognised at the point at which the service is provided and the value can be determined. In those instances where there is no formal arrangement in place, however the services have begun, the turnover is deferred until the arrangement is formalised. To the extent that services have been invoiced but the service has not been provided in the financial year covered by these financial statements, that turnover will be held as deferred income until the service has been provided.
Where projects are still ongoing at year end, a percentage of completion method is used to calculate total revenue for each open project. The calculation is usually based on total hours or project milestones, depending on the type of project.
Unbilled revenue on client assignments is included as accrued income within trade and other debtors. Timing differences can arise where there are differences between billing arrangements (i.e. invoicing) and the timing of the delivery of the service, and thus the turnover recognition, resulting in either assets or liabilities. Any asset arising relating to accrued income is investigated, and if the asset is deemed irrecoverable then it is written off immediately. On the majority of projects, a client will make an advanced payment for third party costs on the project; these advance payments are held as a client deposit liability. Client deposit balances are moved to the P&L when the third party costs have been incurred by the company. Liabilities relating to client deposits are held for a period of up to two years during which time they are written back to turnover if, after investigation, it is found that no further liability exists.
The company acts as the principal in all services offered and controls the service provided to the client. The company therefore recognises both the turnover and related third party costs within these financial statements.
Third party costs comprise costs incurred to service client projects, including costs recharged from related parties for work performed on behalf of the ultimate client.Gross profit therefore represents net fees and commissions earned during the year.
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 14
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
3 years on a straight line basis
Computers
3 years on a straight line basis
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest rate method 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. Financial assets classified as receivable within one year are not amortised.
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 15
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest rate method.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The taxation expense for the period comprises current and deferred tax recognised in the reporting period. Tax is recognised in the profit and loss account, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case tax is also recognised in other comprehensive income or directly in equity respectively.
Current or deferred taxation assets and liabilities are not discounted.
Current tax
Current tax is the amount of income tax payable in respect of the taxable profit for the year or prior years. Tax is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the period end. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 16
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Foreign exchange
Transactions in currencies other than pound sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 17
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated 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 ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Critical judgements in applying the group's accounting policies
Revenue recognition
Turnover is recognised to the extent economic benefits will flow to the company and that turnover can be reliably measured. Turnover represents amounts received or receivable from clients, exclusive of Value Added Tax, for the rendering of services, and comprises charges for fees, commissions and rechargeable expenses and marketing products incurred on behalf of the clients. Turnover derived from retainers is recognised on a straight line basis in accordance with the contract. Where the term of a project straddles the period end, the Company has applied an element of judgement to determine the turnover to recognise in the period, being the percentage of completion of the work specified in the contract.
Other areas of judgement and accounting estimates
The financial statements include other areas of judgement and accounting estimates. While these are not considered significant accounting estimates or critical judgements, the recognition and measurement of certain material assets and liabilities are based on assumptions and / or are subject to longer term uncertainties. The other areas of judgement and accounting estimates are:
When assessing the accruals included within the financial statements
When assessing the recoverable value of trade and other debtors
When assessing impairment of trade and other debtors, the aging profile of debtors and historical experience.
The company makes estimates of the split of certain senior managers' time and expenses to be recharged to other group companies for services provided.
3
Turnover
2024
2023
£
£
Turnover analysed by class of business:
Public relations
12,563,659
12,132,493
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
3
Turnover
(Continued)
Page 18
2024
2023
£
£
Turnover analysed by geographical market:
United Kingdom
12,563,659
12,132,493
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
11,543
97,735
Fees payable to the company's auditor for the audit of the company's financial statements
39,000
74,876
Depreciation of owned tangible fixed assets
230
-
Operating lease charges
459,679
485,436
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Professional staff
42
37
Support staff
2
3
Total
44
40
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
4,802,086
4,492,258
Social security costs
540,902
509,428
Pension costs
195,941
152,269
5,538,929
5,153,955
6
Directors' remuneration
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
6
Directors' remuneration
(Continued)
Page 19
During the year, no emoluments were paid directly to the directors in respect of qualifying services provided to the company. The directors carry out work for a number of other Edelman group entities, therefore it is not possible to estimate a value for the directors' emoluments attributable to the company. The emoluments for the directors of the company are paid by Daniel J. Edelman Limited and Daniel J. Edelman Holdings, Inc. Accordingly, no remuneration for directors is included within the company's financial statements (2023: nil).
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest receivable from group companies
420,130
157,532
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
818,578
537,337
Deferred tax
Origination and reversal of timing differences
(1,439)
(2,119)
Total tax charge
817,139
535,218
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
3,226,288
2,587,908
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.49%)
806,572
530,262
Tax effect of expenses that are not deductible in determining taxable profit
6,023
Effect of change in corporation tax rate
(529)
(1,067)
Income not taxable
8,959
Adjustments in respect of previous years
2,137
Taxation charge for the year
817,139
535,218
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 20
9
Dividends
2024
2023
£
£
Final paid
2,000,000
10
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 July 2023
700
8,864
9,564
Additions
502
502
At 30 June 2024
700
9,366
10,066
Depreciation and impairment
At 1 July 2023
700
8,864
9,564
Depreciation charged in the year
230
230
At 30 June 2024
700
9,094
9,794
Carrying amount
At 30 June 2024
272
272
At 30 June 2023
11
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
12
2
3
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
11
Fixed asset investments
(Continued)
Page 21
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 July 2023
3
Disposals
(1)
At 30 June 2024
2
Carrying amount
At 30 June 2024
2
At 30 June 2023
3
12
Subsidiaries
Details of the company's subsidiaries at 30 June 2024 are as follows:
Name of undertaking
Address
Class of
% Held
shares held
Direct
Smithfield Trustee Limited
1
Ordinary
100.00
Smithfield Financial Limited
1
Ordinary
100.00
Registered office addresses (all UK unless otherwise indicated):
1
Francis House, 11 Francis Street, London, England, SW1P 1DE
13
Stock
2024
2023
£
£
Work in progress
-
30,569
During the year £nil was charged to the profit and loss account for impairments (2023: £14,669).
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 22
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,534,481
2,185,648
Amounts owed by group undertakings
11,708,027
7,144,365
Prepayments and accrued income
476,210
413,096
13,718,718
9,743,109
Deferred tax asset (note 17)
12,290
10,851
Total debtors
13,731,008
9,753,960
15
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
390,842
99,090
Amounts owed to group undertakings
653,167
219,020
Corporation tax
775,838
172,994
Other taxation and social security
363,694
458,135
Other creditors
19,021
37,531
Accruals and deferred income
2,863,907
2,697,653
Total creditors
5,066,469
3,684,423
16
Creditors: amounts falling due after more than one year
2024
2023
£
£
Other creditors
155,555
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2024
2023
Balances:
£
£
Accelerated capital allowances
12,290
10,851
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
17
Deferred taxation
(Continued)
Page 23
2024
Movements in the year:
£
Asset at 1 July 2023
10,851
Credit to profit and loss
1,439
Asset at 30 June 2024
12,290
The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
195,941
152,269
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. The amount owed by the Company to the pension scheme at the year end totalled £42,053 (2023: £37,530).
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,280
10,280
10,280
10,280
20
Financial commitments, guarantees and contingent liabilities
The company together with certain other Edelman group companies has entered into a cash pooling arrangement with JP Morgan Chase Bank, NA.
JP Morgan Chase Bank, NA has the right to apply positive cash balances of the company against indebtedness or liabilities of any of the other companies named in the agreement.
This facility is limited to the amount in an overdraft agreement with JP Morgan Chase Bank, NA which is guaranteed by Daniel J. Edelman Inc., a fellow group company. Edelman group companies are considered companies with the same ultimate controlling party Daniel J. Edelman Holdings, Inc.
21
Related party transactions
Smithfield Consultants Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
21
Related party transactions
(Continued)
Page 24
The company has taken advantage of the exemption as per paragraph 33.1A of FRS102, 'Related Party Disclosures', from disclosing transactions with related parties, which are wholly owned within the Daniel J. Edelman Holdings, Inc. Group.
As at 30 June 2024, a balance of £473 (2023: £nil) was outstanding and payable to Smithfield
Consultants Limited by United Entertainment Group Limited.
22
Ultimate controlling party
The company's immediate parent undertaking is Daniel J. Edelman Limited. The directors regard the ultimate controlling party as Daniel J. Edelman Holdings, Inc., a company registered in the USA, which is the largest group to consolidate these financial statements and the parent undertaking of A&R Coöperatie U.A. which is the smallest group to consolidate these financial statements.
Copies of the financial statements of Daniel J. Edelman Holdings, Inc., can be obtained from 111 N Canal Street Suite 1100, Chicago, IL 60606, United States. Copies of the financial statements of A&R Coöperatie U.A. can be obtained from Gustav Mahlerlaan 2970, Amsterdam, 1081 LA, Netherlands.
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