Daniel J. Edelman Limited
Annual Report and Financial Statements
For the year ended 30 June 2024
Company Registration No. 00924113 (England and Wales)
Daniel J. Edelman Limited
Company Information
Directors
R W Edelman
E J Williams
V A Malanga
M J R Murphy
(Appointed 6 December 2024)
Secretary
N Hughes
Company number
00924113
Registered office
Francis House
11 Francis Street
London
England
SW1P 1DE
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Daniel J. Edelman Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Notes to the financial statements
14 - 32
Daniel J. Edelman Limited
Strategic Report
For the year ended 30 June 2024
Page 1

The directors present the strategic report for the year ended 30 June 2024.

Review of the business

The company (Daniel J. Edelman Limited) is a subsidiary of Daniel J. Edelman Holdings, Inc., the world’s largest communications firm. The principal activity of the company is to offer a full range of services, including specialist advice and programmes on consumer and business-to-business public relations; corporate and financial public relations; public affairs; environmental, healthcare and hi-tech communications; employee relations; and crisis management. In addition, it offers an extensive range of complementary services including design, script writing, publications, film and video production, media training, market research, website design, build and support services. It also separately acts as a management company for the European operations of the wider Daniel J. Edelman Holdings, Inc. Group of companies.

 

The company’s profit for the financial year, after tax, amounted to £2,629,950 (2023: £6,248,613). Net assets at 30 June 2024 were £25,462,259 (2023: £22,503,199) the reason for the increase in net assets is due to the profit for the year. Profit before taxation was £4,219,035 (2023: £7,144,914), a decrease of £2,925,879. The decrease in profit was largely driven by a decrease in interest receivable and similar income during the year and increase in staff costs. The increase in costs were offset by an increase in gross profit.

 

At the end of the year the company had net current assets of £12,465,353 compared to £49,505 at the end of the prior year. The increase in net current assets was mainly driven by an increase intercompany debtors, a decrease in intercompany payables and decrease in accruals and deferred income.

 

Like many businesses, the company has not been immune from the impact of inflation with pressure on wages and utility costs. The company will continue to manage the business to the same metrics and seek to improve productivity to offset the impact of inflation.

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 2024 amounted to £2.00 billion compared with £1.89 billion in the prior year. Within this competitive market, the company is the third largest full-service agency (2023: second largest), with 4.5% of the total fees of the top 150 (2023: 4.6%).

Future development

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 and continues to closely monitor the performance of all parts of the business and take the necessary actions to mitigate against any uncertainty.

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, the company aims to motivate, reward and nurture its best people; give its people the opportunity to take on new roles and diversify their experience, augmenting teams with the best from its industry and beyond.

Daniel J. Edelman Limited
Strategic Report (Continued)
For the year ended 30 June 2024
Page 2
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.

Principal risks and uncertainties

The principal risks and uncertainties faced by the company can be broadly grouped as business risk, competition risk and financial risks.

 

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, ensuring its planning remains up to date and assess any new or emerging risks.

 

Competition 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. No one client represents more than 6% (2023: 6%) of the company’s turnover in this year.

 

Financial risk management

 

Credit risk

The company aims to mitigate credit 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.

 

Foreign exchange risk

Whilst all the turnover is generated in the UK, the company does earn some of its turnover in currencies other than sterling. The exchange risk is managed by the ultimate controlling party Daniel J. Edelman Holdings, Inc., who has full visibility over the total funds held in various currencies.

 

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. The company’s cash deposits are held with JP Morgan Chase Bank, NA.

Daniel J. Edelman Limited
Strategic Report (Continued)
For the year ended 30 June 2024
Page 3
Section 172 (1) statement

This section details how the directors of Daniel J. Edelman Limited fulfil their duties in respect of s.172 (1) (a-f) of the Companies Act 2006. The following paragraphs explain how the directors have regard for and behave in a way that considers how best to promote the success of the company for the benefit of all stakeholders.

 

Daniel J. Edelman Limited is 100% owned by its ultimate controlling party, Daniel J. Edelman Holdings, Inc. The Global CEO is the largest shareholder and actively involved in the management and oversight of the business, as well as a member of the Board of Daniel J. Edelman Limited. The Global Executive Committee, comprising the Global CEO, COO and CFO, sets global policies (such as the Code of Ethics). The organisational structure means that other activities, such as client engagement, employee engagement, resourcing and risk management is delegated to regional and local operational management teams. The local operational management report on a monthly basis to regional and global management.

 

When making strategic decisions, the directors of the company consider how best to strengthen the business, provide employees with opportunities to grow, advance the industry, and serve as a responsible citizen of the world anchored by a long-held set of core values.

Our clients, people and suppliers

The company’s strategy, as outlined in the rest of this Strategic report, focuses on the long-term sustainability of the company through maintaining and growing our existing client base. The directors believe this can only be achieved by having a strong understanding of our clients’ business challenges and continuing to produce high-quality work from a motivated and supported workforce.

 

The company is in constant communication with its clients through its client service teams where concerns, issues, and successes are addressed.

 

We have close relationships with all of our suppliers, keeping them up to date with our latest policies and reviewing accounts on a monthly basis.

The community and the environment

The directors consider how best to create social and environmental returns and the company is committed to improving the sustainability of our planet. We work to foster the trust of our clients, employees and partners through our global corporate social responsibility mandate. From our volunteerism and pro bono work to greener offices and responsible procurement, citizenship at Edelman continues to activate a collective force for good over the long-term. We aim to align all of our policies, programmes and operations to the United Nations Sustainable Development Goals to ensure we’re holding ourselves accountable for action every step of the way. More detail on our community and environment assessments, policies and activities can be found on our group website, www.edelman.com.

On behalf of the board

E J Williams
Director
21 March 2025
Daniel J. Edelman Limited
Directors' Report
For the year ended 30 June 2024
Page 4

The directors present their annual report and financial statements for the year ended 30 June 2024.

Principal activities

The principal activity of the company continued to be that of PR services.

Results and dividends

The results for the year are set out on page 11.

During the year, the Company did not pay a dividend (2023: £8,700,000). During the year the Company did not receive a dividend (2023: £3,500,000).

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)
R W Edelman
E J Williams
V A Malanga
M J R Murphy
(Appointed 6 December 2024)
I C Dobson
(Resigned 14 July 2023)
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

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.

 

Daniel J. Edelman Limited
Directors' Report (Continued)
For the year ended 30 June 2024
Page 5
Energy and carbon report

The energy and emissions report for the company for the year to 30 June 2024 is:

2024
2023
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Energy Used
176,024
854,084
2024
2023
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 2 - indirect emissions
- Energy Used
36
162
Intensity ratio
Tonnes CO2e per employee
0.054
0.249
Quantification and reporting methodology

We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting. The associated greenhouse gases have been calculated using the average CO2 rates per kWh published by the UK government for 2024. This was 0.20493 kg per kWh for electricity. 2023's energy use came from a combination of electricity at a rate of 0.20496 kg per kWh, and CNG / Natural gas at a rate of 0.18256 kg per kWh (Gross CV).

 

Intensity measurement

The number of staff used for the intensity ratio calculation is the average number of staff of the company and of its fellow group companies that occupy the same offices.

Measures taken to improve energy efficiency

In November 2022, the wider Edelman group publicly stated targets to reduce scopes 1 and 2 by 80% and scope 3 emissions by 55%, both by 2030, in our report and CDP submission. Edelman group companies are considered to be companies with the same ultimate controlling party Daniel J. Edelman Holdings, Inc. The global group will also be working with a third-party company to set a science-based target in line with the Science-Based Target Initiative's Ambition for 1.5 Degrees initiative.

Daniel J. Edelman Limited
Directors' Report (Continued)
For the year ended 30 June 2024
Page 6
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:

 

 

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 J Williams
Director
21 March 2025
Daniel J. Edelman Limited
Independent Auditor's Report
To the Members of Daniel J. Edelman Limited
Page 7
Opinion

We have audited the financial statements of Daniel J. Edelman Limited (the 'company') for the year ended 30 June 2024 which comprise the Statement of Comprehensive Income, 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:

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 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.

Other information

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.

Daniel J. Edelman Limited
Independent Auditor's Report (Continued)
To the Members of Daniel J. Edelman Limited
Page 8

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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:

 

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.

Daniel J. Edelman Limited
Independent Auditor's Report (Continued)
To the Members of Daniel J. Edelman Limited
Page 9
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:

 

 

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.

 

 

Daniel J. Edelman Limited
Independent Auditor's Report (Continued)
To the Members of Daniel J. Edelman Limited
Page 10

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:

 

 

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.

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 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
Daniel J. Edelman Limited
Statement of Comprehensive Income
For the year ended 30 June 2024
Page 11
2024
2023
Notes
£
£
Turnover
3
125,981,410
117,673,288
Cost of sales
(38,523,012)
(33,043,904)
Gross profit
87,458,398
84,629,384
Administrative expenses
(82,627,194)
(81,510,772)
Other operating income
-
0
91,818
Operating profit
5
4,831,204
3,210,430
Interest receivable and similar income
8
1,171,488
4,424,214
Interest payable and similar expenses
9
(1,302,987)
(489,730)
Hive up on investment in subsidiary
4
(480,670)
-
0
Profit before taxation
4,219,035
7,144,914
Tax on profit
10
(1,589,085)
(896,301)
Profit for the financial year
2,629,950
6,248,613

The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.

Daniel J. Edelman Limited
Balance Sheet
As at 30 June 2024
Page 12
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
12
-
0
157,040
Tangible assets
13
11,978,934
12,569,092
Investments
14
3,578,294
12,155,154
15,557,228
24,881,286
Current assets
Stock
16
-
1,993,951
Debtors
17
48,202,153
43,032,870
Cash at bank and in hand
-
0
91,202
48,202,153
45,118,023
Creditors: amounts falling due within one year
18
(35,736,800)
(45,068,518)
Net current assets
12,465,353
49,505
Total assets less current liabilities
28,022,581
24,930,791
Provisions for liabilities
Provisions
19
(957,675)
(1,963,151)
Deferred tax liability
20
(1,602,647)
(464,441)
(2,560,322)
(2,427,592)
Net assets
25,462,259
22,503,199
Capital and reserves
Called up share capital
23
1,000
1,000
Share premium account
3,889
3,889
Profit and loss reserves
25,457,370
22,498,310
Total equity
25,462,259
22,503,199
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. 00924113
Daniel J. Edelman Limited
Statement of Changes in Equity
For the year ended 30 June 2024
Page 13
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2022
1,000
3,889
24,957,606
24,962,495
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
-
6,248,613
6,248,613
Dividends
11
-
-
(8,700,000)
(8,700,000)
Debit to equity for equity settled share-based payments
21
-
-
(7,909)
(7,909)
Balance at 30 June 2023
1,000
3,889
22,498,310
22,503,199
Year ended 30 June 2024:
Profit and total comprehensive income for the year
-
-
2,629,950
2,629,950
Credit to equity for equity settled share-based payments
21
-
-
329,110
329,110
Balance at 30 June 2024
1,000
3,889
25,457,370
25,462,259
Daniel J. Edelman Limited
Notes to the Financial Statements
For the year ended 30 June 2024
Page 14
1
Accounting policies
Company information

Daniel J. Edelman Limited is a private company limited by shares incorporated in England and Wales. The registered office is 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 financial statements of the company are consolidated in the financial statements of A&R Coöperatie U.A., These consolidated financial statements are available from its registered office, Gustav Mahleraan 2970, 1801 LA Amsterdam.

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group. The smallest group to consolidate these financial statements A&R Coöperatie U.A., which can be found at the registered address Gustav Mahleraan 2970, 1801 LA Amsterdam.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 15
1.2
Going concern

These financial statements have been prepared on a going concern basis. In preparing the financial statements the directors have taken into account all information that could reasonably be expected to be available for the following 12 months from the date of signing the financial statements and beyond.true

 

The directors 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; e) and 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 of 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.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 16
1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.5
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:

Leasehold improvements
Over the term of the lease
Fixtures and fittings
Between 15% and 33.3% per annum

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.

1.6
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.

1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 17

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.8
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.

1.9
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 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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 18
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.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

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 method.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 19
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
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.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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.

1.12
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 20
1.13
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.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Share-based payments

The ultimate parent company, Daniel J. Edelman Holdings, Inc., offers a Stock Purchase Plan ("the Plan") to certain directors and employees to allow those individuals to acquire an ownership interest in the parent company through the purchase of the parent company's Class B Common Shares.

The company accounts for the Plan Class B Shares held by its directors and employees under FRS 102 section 26 Share-based payment' as an equity-settled share-based payment. At the issuance date, the fair value of the shares is computed using discounted book value valuation model. The fair value of the shares is charged to the profit and loss account in the year of issuance and is recorded in equity.

Daniel J. Edelman Holdings, Inc., also offers a Senior Executive Restricted Stock Plan ("RSP") to certain directors and employees to allow those individuals a right to acquire an ownership interest in the parent company through the purchase of the parent company's Class B Common Shares.

The RSP is accounted for as stock options with compensation expense measured at the date of issuance and recognised over a five-year requisite service period.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 21
1.16
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

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.

Principal vs agent

Revenue recognition includes a judgement with regards to whether the company is acting as principal or agent when contracting with third parties (including other related entities), and incurring costs that are passed on to the client, When the company takes primary responsibility for the work performed in an arrangement, it is considered to be the principal. The impact of this critical accounting judgement explains the difference between revenue and gross profit as presented on the profit and loss account and as set out in note 3.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

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.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 22
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Public Relations
82,625,647
93,042,913
Management Services
32,805,492
15,206,160
Market Research
10,550,271
9,424,215
125,981,410
117,673,288
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
125,981,410
117,673,288
4
Exceptional items
2024
2023
£
£
Expenditure
Hive up on investment in subsidiary
480,670
-

In the current year, the company hived up all of the net assets in its subsidiary Landmark Public Policy Advisers Europe Limited. The total assets transferred into the company totalling £8,007,363 was offset against the remaining value of the company £8,488,033 and the subsequent balance of £480,670 was written off in full.

5
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Foreign exchange losses
245,650
1,942,707
Fees payable to the company's auditor for the audit of the company's financial statements
659,376
229,682
Depreciation of owned tangible fixed assets
1,623,427
809,385
Profit on disposal of tangible fixed assets
(8,255)
(42,031)
Amortisation of intangible assets
157,040
314,089
Operating lease charges
1,919,341
1,736,962
Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 23
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Professional staff
447
430
Support staff
121
122
Total
568
552

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
50,829,568
47,999,440
Social security costs
5,681,768
5,663,255
Pension costs
2,050,478
1,868,306
Total
58,561,814
55,531,001
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
4,983,570
1,123,215
Amounts receivable under long term incentive schemes
1,520
9,512
Company pension contributions to defined contribution schemes
19,809
8,340
5,004,899
1,141,067
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
464,586
867,773
Company pension contributions to defined contribution schemes
695
8,340
Share based payments
1,520
9,512
466,801
885,625
Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 24
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest receivable from group companies
1,171,488
924,214
Income from fixed asset investments
Income from shares in group undertakings
-
0
3,500,000
Total income
1,171,488
4,424,214
9
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
1,302,987
489,730
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
450,879
66,434
Deferred tax
Origination and reversal of timing differences
1,138,206
829,867
Total tax charge
1,589,085
896,301
Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
10
Taxation
(Continued)
Page 25

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
4,219,035
7,144,914
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.49%)
1,054,759
1,463,993
Disallowed expenses
422,250
243,203
Income not taxable
-
0
(947,986)
Adjustments in respect of previous years
44,143
(22,425)
Tax rate changes
33,143
150,972
Withholding tax
34,790
8,544
Taxation charge for the year
1,589,085
896,301
11
Dividends
2024
2023
£
£
Final paid
-
0
8,700,000
12
Intangible fixed assets
Goodwill
£
Cost
At 1 July 2023 and 30 June 2024
5,548,759
Amortisation and impairment
At 1 July 2023
5,391,719
Amortisation charged for the year
157,040
At 30 June 2024
5,548,759
Carrying amount
At 30 June 2024
-
0
At 30 June 2023
157,040
Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 26
13
Tangible fixed assets
Leasehold improvements
Assets under construction
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 July 2023
958,675
10,928,144
3,247,182
15,134,001
Additions
383,070
-
0
652,301
1,035,371
Disposals
-
0
-
0
(1,712,137)
(1,712,137)
Transfers
9,287,216
(10,928,144)
1,638,826
(2,102)
At 30 June 2024
10,628,961
-
0
3,826,172
14,455,133
Depreciation and impairment
At 1 July 2023
43,373
-
0
2,521,536
2,564,909
Depreciation charged in the year
760,314
-
0
863,113
1,623,427
Eliminated in respect of disposals
-
0
-
0
(1,712,137)
(1,712,137)
At 30 June 2024
803,687
-
0
1,672,512
2,476,199
Carrying amount
At 30 June 2024
9,825,274
-
0
2,153,660
11,978,934
At 30 June 2023
915,302
10,928,144
725,646
12,569,092
14
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
15
3,578,294
12,155,154
Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
14
Fixed asset investments
(Continued)
Page 27
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 July 2023
12,155,154
Return on investment
(8,007,363)
Amounts written off
(480,670)
Disposals
(88,827)
At 30 June 2024
3,578,294
Carrying amount
At 30 June 2024
3,578,294
At 30 June 2023
12,155,154

During the period, the remaining trade and assets in the company's subsidiary, Landmark Public Policy Advisors Europe Limited, were transferred into Daniel J. Edelman Limited. This was recognised as a return on investment reduction to the investment value. The remaining balance was subsequently transferred to Goodwill.

15
Subsidiaries

Details of the company's subsidiaries at 30 June 2024 are as follows:

Name of undertaking
Class of
% Held
shares held
Direct
Indirect
Edelman Dale Financial Communications Limited
Dormant
Ordinary
100
0
Eric Williams and Partners (Public relations consultants) Limited
Dormant
Ordinary
100
0
Genesis Public Relations Limited
Dormant
Ordinary
100
0
JC.DC Limited
Dormant
Ordinary
100
0
Assembly Media Limited (Communications marketing)
Communications marketing
Ordinary
100
0
Spook Media Limited
Dormant
Ordinary
100
0
Daniel J. Edelman Group Limited
Dormant
Ordinary
100
0
The Centre International Limited
Dormant
Ordinary
100
0
Smithfield Consultants Limited
Financial media and investor communications consultancy
Ordinary
100
0
Smithfield Financial Limited
Dormant
Ordinary
0
100
Smithfield Trustee Limited
Dormant
Ordinary
0
100

Registered office addresses (all UK unless otherwise indicated):

1
Francis House, 11 Francis Street, London, SW19 1DE
Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 28
16
Stock
2024
2023
£
£
Work in progress
-
1,993,951
17
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
22,479,451
20,335,477
Corporation tax recoverable
518,873
-
0
Amounts owed by group undertakings
15,692,044
10,390,296
Other debtors
5,885
3,643,353
Prepayments and accrued income
9,505,900
8,663,744
Total debtors
48,202,153
43,032,870

Amounts owed by immediate parent and group undertakings include £6,186,550 (2023: £4,140,102) held under a group cash pooling arrangement which bears interest at a short-term variable rate, based on currency. All other amounts owed by parent and group undertakings are unsecured, non-interest bearing and are repayable under normal trading terms.

18
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
1,651,916
3,347,502
Amounts owed to group undertakings
4,046,511
9,043,181
Corporation tax
-
0
524,629
Other taxation and social security
4,016,190
2,592,692
Other creditors
285,831
342,900
Accruals and deferred income
25,736,352
29,217,614
Total creditors
35,736,800
45,068,518
Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 29
19
Provisions for liabilities
2024
2023
£
£
Provisions for liabilities
957,675
1,963,151
Movements on provisions:
Payroll Provision
Dilapidation Provision
Total
£
£
£
At 1 July 2023
1,005,476
957,675
1,963,151
Settlement of provision
(1,005,476)
-
(1,005,476)
At 30 June 2024
-
957,675
957,675
20
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
1,692,984
1,802,257
Tax losses
-
(1,249,128)
Other timing differences
(90,337)
(88,688)
1,602,647
464,441
2024
Movements in the year:
£
Liability at 1 July 2023
464,441
Charge to profit or loss
1,138,206
Liability at 30 June 2024
1,602,647

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 30
21
Share-based payment transactions

Share-based payments - 2012 Plan

 

The ultimate parent company, Daniel J. Edelman Holdings, Inc., offers a Stock Purchase Plan ("the Plan") to certain directors and employees to allow those individuals to acquire an ownership interest in the parent company through the purchase of the parent company's Class B Common Shares.

 

At the issuance date, the fair value of the shares is computed using discounted book value valuation model, and this is charged to the profit and loss account in the year of issuance since the shares are 100% vested upon issuance. This model takes into account the characteristics of the plan such as purchase price, estimated market value based on historical growth rates, length of service or tenure and the weighted average cost of capital. The fair value of the shares is charged to the profit and loss account in the year of issuance and is recorded in equity.

 

During the year 10,000 (2023: nil) shares were issued, with charges of £286,112 (2023: £nil).

 

In the current year the estimated fair value of the shares issued was $363,521 (£286,112) or $52.20 per share, (2023: $nil or $nil). The key assumptions used in the valuation model for the financial year 2024 were purchase price of $150.43; weighted average cost of capital of 12%; expected growth rate of 7.9% and expected life of 15 years.

 

Share-based payments - RSP

 

In 2018, the ultimate parent company, Daniel J. Edelman Holdings, Inc., offered a Senior Executive Capitalize Stock Plan ("RSP") to certain directors and employees to allow those individuals the right to acquire an ownership interest in the parent company through the purchase of the parent company's Class B Common Shares.

 

After six years from share issuance, Daniel J. Holdings, Inc. may elect to repurchase the shares at the book value per share of the most recently issued financial statements. The purchase of the Class B non-voting common stock through the RSP, which typically includes a non-recourse loan note, is accounted for as a stock option. The estimated fair value of the award is measured at the date of issuance and recognised over the five-year vesting period.

 

During the year no shares were made available for future grant (2023: nil), and no shares were forfeited (2023: 5,000). Newly issued shares have a contract period of five years. The Company utilised the Black-Scholes option pricing model to determine the estimated fair value for RSP issuances. The expected term of newly issued shares is five years, the volatility 30%, risk-free interest rate of 1.81% and there is no expected dividend flow.

 

Total compensation expense related to the RSP for the year was £42,998 (2023: £44,352) and total compensation income relating to the forfeit of shares was £nil (2023: £52,261). At 30 June 2024, total unrecognised compensation expense of £70,271 (2023: £116,688) is expected to be recognised over the next two years.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 31
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
2,050,478
1,868,306

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. Amounts outstanding at the year end totalled £468,639 (2023: £354,752)

23
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
24
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
1,465,999
980,777
Between two and five years
14,101,575
9,744,910
In over five years
6,793,108
12,615,772
22,360,682
23,341,459
25
Related party transactions

The company had related party transactions with wholly owned subsidiaries and the parent undertaking, and as such has taken advantage of the exemption permitted under section 33.1A not to provide disclosures of transactions entered into with other wholly owned members of the group.

 

During the year ended 30 June 2024, Daniel J. Edelman Limited purchased services amounting to £470,217 and sold services amounting to £238,836 from UEG UK Ltd, a related party.

 

As at 30 June 2024, a balance of £94,066 was outstanding and receivable to Daniel J. Edelman Limited from UEG UK Ltd.

 

During the year ended 30 June 2024, Daniel J. Edelman Limited purchased services amounting to £6,445 from United Entertainment Group Holdings LLC, a related party.

 

As at 30 June 2024, a balance of £3,389 was outstanding and payable to United Entertainment Group Holdings LLC from Daniel J. Edelman Limited.

Daniel J. Edelman Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 32
26
Ultimate controlling party

The company's immediate parent company is Edelman Europe Holdings B.V. The directors regard the ultimate controlling party as Daniel J. Edelman Holdings, Inc., a company incorporated in the United States of America. This is the largest group to consolidate these financial statements and the parent undertaking of A&R Coöperatie U.A. is the smallest group to consolidate these financial statements.

 

Copies of the financial statements of Daniel J. Edelman Holdings, Inc. can be obtained from its registered address 111 N Canal Street Suite 1100, Chicago, IL 60606, United States and copies of the financial statements of A&R Coöperatie U.A. can be obtained from its registered address Gustav Mahlerlaan 2970, Amsterdam, 1081 LA, Netherlands.

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