Company registration number 07408649 (England and Wales)
DIRECT COLLECTION BAILIFFS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
DIRECT COLLECTION BAILIFFS LTD
COMPANY INFORMATION
Directors
Gary Robinson
Simon Williamson
Darren Connor
Lee Samuels-Camozzi
Company number
07408649
Registered office
Direct House
Greenwood Drive
Manor Park
Runcorn
WA7 1UG
Auditor
Afford Bond Holdings Limited
31 Wellington Road
Nantwich
Cheshire
CW5 7ED
DIRECT COLLECTION BAILIFFS LTD
CONTENTS
Page
Strategic report
2
Directors' report
1
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
DIRECT COLLECTION BAILIFFS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 1 -
The directors present their annual report and financial statements for the year ended 31 October 2024.
Principal activities
The principal activity of the company continued to be that of debt collection.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,650,000. 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:
Gary Robinson
Simon Williamson
Darren Connor
Lee Samuels-Camozzi
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Gary Robinson
Director
27 March 2025
DIRECT COLLECTION BAILIFFS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 2 -
The directors present the strategic report for the year ended 31 October 2024.
Fair review of the business
The directors are pleased to report that strong financial performance over recent years has continued into 2024. Key indicators, which reflect the financial performance and position of the company during the year include turnover, net assets and average number of employees. Whilst turnover has increased by 21.3% to £16,780,126 (2023: £13,834,850), the company continues to consolidate its position in the market place. Net assets have increased by 41.2% to £4,445,066 (2023: £3,147,033) and the average number of employees has increased to 166 (2023: 146).
Principal risks and uncertainties
The company has exposure to the general risks and uncertainties over the state of the economy as a whole and the specific external pressures facing the non-essential debt recovery sector which may impact upon the performance of the business from time to time. Overall levels of customer confidence and disposable income are important areas for us to monitor as they affect the trade of our immediate debt recovery customers which has a knock-on effect on our operational performance.
The directors use timely management accounts information and budgeting and forecasting techniques to help to mitigate, as far as possible, all known risks and allow for an adequate level of resources to deal with any unknown risks which may arise. Tight financial controls and the availability of a few different sources of funding, along with the close day-today involvement of the directors, helps the company to minimise liquidity risks.
Development and performance
The directors are aware that the planned responses required to the principal risks and uncertainties mentioned above, including unforeseen events outside of their control, can necessitate their plans for growth and future development to change at short notice. Although short term plans may have to be delayed or altered, the medium to long term plans can largely remain on course.
Our performance is reflected in the profit and loss account and associated notes, with the headline figures noted above in the fair review of the business and an analysis of key performance indicators noted below. The directors are looking to build upon their recent success and continue to grow the company over the coming years based on significant investment in the business over recent years.
Key performance indicators
In addition to the comments noted above, the directors consider other key performance indicators (% and ratios) to be profitablity, liquidity and return on capital. Profitability, calculated as profit after tax over turnover, is satisfactory at 17.57% (2023: 12.74%). Liquidity, calculated as current assets over current liabiltiies, has remained steady at 1.88 (2023: 2.07). Return on capital, calculated as profit after tax over net assets, has significantly improved to 66.32% (2023: 56.02%). The directors anticipate increasing margins in the future based on a higher demand for debt recovery services and efficiency gains within the business.
Summary
The directors are pleased with the performance and financial position of the company again this year and consider that, with continuing investment in its operational capabilities as well as its staff, the company is well placed to be able to grow even more in the future as conditions allow.
Gary Robinson
Director
27 March 2025
DIRECT COLLECTION BAILIFFS LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2024
- 3 -
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;
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.
DIRECT COLLECTION BAILIFFS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIRECT COLLECTION BAILIFFS LTD
- 4 -
Opinion
We have audited the financial statements of Direct Collection Bailiffs Ltd (the 'company') for the year ended 31 October 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 October 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 FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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.
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.
DIRECT COLLECTION BAILIFFS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIRECT COLLECTION BAILIFFS LTD (CONTINUED)
- 5 -
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
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and take advantage of the small companies exemption from the requirement to prepare a strategic report.
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.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit is considered capable of detecting irregularities, including fraud
Our assessment of the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur, is based on ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 to A39-5. An understanding of the significance of irregularities in the context of the financial statements as a whole is required for our assessment. Whilst considering how our audit work addresses the detection of irregularities, we also consider the likelihood of detection based on our approach. Irregularities from fraud are inherently more difficult to detect than those arising from error. We obtain an understanding of the entity's risk assessment process, including the risk of fraud, as part of our work on the entity's systems and controls. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
The laws and regulations identified as being of significance in the context of the entity are those considered to form part of United Kingdom Generally Accepted Accounting Practice. An understanding of the legal and regulatory framework applicable to the entity and how the entity is complying with that framework is necessary for our assessment and requires an understanding of the entity's policies and procedures om compliance with laws and regulations, including documentation of any instances of non-compliance.
DIRECT COLLECTION BAILIFFS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIRECT COLLECTION BAILIFFS LTD (CONTINUED)
- 6 -
Walkthrough testing is carried out on the recorded system notes to check that the controls operate as stated and contain sufficient levels of supervision. Segregation of duties should be commensurate with the size of the entity. Analytical procedures are used to review the client's data for unusual entries, highlighting those transactions requiring further explanations as to the reasons for such variations arising. This also includes the identification and testing of unexpected journal entries to judge their appropriateness. Evaluation of the assumptions and judgements used by management within significant accounting estimates is undertaken to assess if these indicate evidence of potential management bias occurring.
Detailed testing is carried out in respect of significant transactions. An evaluation is done of the business rationale behind any amounts which appear unusual or outside the company's normal course of business. The financial statements are then reviewed with relevant disclosures tested against supporting underlying documentation, as applicable.
Matters about non-compliance with laws and regulations and fraud are communicated with the engagement team, who are assessed as having the appropriate competence and capabilities to identify any potential issues regarding non-compliance in order to conduct their work effectively on the assignment. Communication of relevant matters to all members of the audit team is necessary to ensure that they understand the particular risks specific to the entity, in order that the audit procedures are planned appropriately to mitigate against these identified risks.
Audit response to risks identified
Our audit response will depend on the risks identified but may include:
- Enquiry of management, those charged with governance and the entity’s solicitors around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business including reviewing accounting estimates for bias.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Corresponding amounts presented for the year ended 31 October 2023 are unaudited on the basis that the company was exempt from the requirement to obtain an audit of its financial statements for that year.
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.
DIRECT COLLECTION BAILIFFS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DIRECT COLLECTION BAILIFFS LTD (CONTINUED)
- 7 -
Paul Edwards FCCA CTA
Senior Statutory Auditor
For and on behalf of Afford Bond Holdings Limited
27 March 2025
Chartered Accountants
Statutory Auditor
31 Wellington Road
Nantwich
Cheshire
CW5 7ED
DIRECT COLLECTION BAILIFFS LTD
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 OCTOBER 2024
- 8 -
2024
2023
as restated
Notes
£
£
Turnover
3
16,780,126
13,834,850
Cost of sales
(11,378,236)
(10,108,137)
Gross profit
5,401,890
3,726,713
Administrative expenses
(1,804,996)
(1,739,342)
Operating profit
4
3,596,894
1,987,371
Interest receivable and similar income
7
118,758
91,116
Interest payable and similar expenses
8
(16,234)
(32,625)
Profit before taxation
3,699,418
2,045,862
Tax on profit
9
(751,385)
(282,894)
Profit for the financial year
2,948,033
1,762,968
Retained earnings brought forward
2,657,101
2,675,513
Dividends
10
(1,650,000)
(1,291,548)
Retained earnings carried forward
4,444,966
3,146,933
DIRECT COLLECTION BAILIFFS LTD
BALANCE SHEET
AS AT 31 OCTOBER 2024
31 October 2024
- 9 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
11
113,903
167,055
Current assets
Stocks
12
1,038,939
632,186
Debtors
13
2,292,859
3,668,083
Cash at bank and in hand
5,966,665
2,812,051
9,298,463
7,112,320
Creditors: amounts falling due within one year
14
(4,943,172)
(3,436,436)
Net current assets
4,355,291
3,675,884
Total assets less current liabilities
4,469,194
3,842,939
Creditors: amounts falling due after more than one year
15
(192,558)
Provisions for liabilities
Provisions
17
475,637
Deferred tax liability
18
24,128
27,711
(24,128)
(503,348)
Net assets
4,445,066
3,147,033
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
4,444,966
3,146,933
Total equity
4,445,066
3,147,033
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 27 March 2025 and are signed on its behalf by:
Gary Robinson
Director
Company registration number 07408649 (England and Wales)
DIRECT COLLECTION BAILIFFS LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2024
- 10 -
2024
2023
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
3,460,642
2,492,480
Interest paid
(16,234)
(32,625)
Income taxes paid
(247,663)
(118,965)
Net cash inflow from operating activities
3,196,745
2,340,890
Investing activities
Purchase of tangible fixed assets
(51,668)
(51,943)
Repayment of loans
1,843,385
7,153
Interest received
118,758
91,116
Net cash generated from investing activities
1,910,475
46,326
Financing activities
Repayment of bank loans
(302,606)
(109,894)
Dividends paid
(1,650,000)
(1,291,548)
Net cash used in financing activities
(1,952,606)
(1,401,442)
Net increase in cash and cash equivalents
3,154,614
985,774
Cash and cash equivalents at beginning of year
2,812,051
1,826,277
Cash and cash equivalents at end of year
5,966,665
2,812,051
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2024
- 11 -
1
Accounting policies
Company information
Direct Collection Bailiffs Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Direct House, Greenwood Drive, Manor Park, Runcorn, WA7 1UG.
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.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
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, fittings & equipment
25% straight line
Motor vehicles
50% straight line
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
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 12 -
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.
1.6
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 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.
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 13 -
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.
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.
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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 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.
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
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.
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
1
Accounting policies
(Continued)
- 15 -
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
1.14
Foreign exchange
Transactions in currencies other than pounds 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.
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.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Collection fees
6,806,498
5,132,614
High Court Writs
4,828,229
4,167,755
Administration fees
2,239,579
1,902,365
Transfer up
1,094,455
854,326
Debt recovery fees
642,723
541,927
Abortive fees
283,605
261,277
Traces, Foreits and Express Possession
354,574
241,718
Other income
123,710
100,682
Work in progress
406,753
632,186
16,780,126
13,834,850
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
3
Turnover and other revenue
(Continued)
- 16 -
2024
2023
£
£
Turnover analysed by geographical market
UK
16,780,126
13,834,850
2024
2023
£
£
Other revenue
Interest income
118,758
91,116
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
4,500
3,000
Depreciation of owned tangible fixed assets
104,820
121,308
Operating lease charges
147,312
160,513
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
166
146
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,263,473
3,001,989
Social security costs
372,938
332,548
Pension costs
65,813
60,976
3,702,224
3,395,513
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 17 -
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
111,039
108,944
Company pension contributions to defined contribution schemes
1,347
1,321
112,386
110,265
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
118,758
91,116
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
16,234
32,625
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
840,172
390,018
Adjustments in respect of prior periods
(85,204)
(134,835)
Total current tax
754,968
255,183
Deferred tax
Origination and reversal of timing differences
(3,583)
27,711
Total tax charge
751,385
282,894
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
9
Taxation
(Continued)
- 18 -
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
3,699,418
2,045,862
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 22.52%)
924,855
460,728
Tax effect of expenses that are not deductible in determining taxable profit
2,772
412
Permanent capital allowances in excess of depreciation
49,334
14,082
Research and development tax credit
(221,993)
(220,039)
Deferred tax adjustments in respect of prior years
(3,583)
27,711
Taxation charge for the year
751,385
282,894
10
Dividends
2024
2023
£
£
Interim paid
1,650,000
1,291,548
11
Tangible fixed assets
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
Cost
At 1 November 2023
823,477
18,698
842,175
Additions
51,668
51,668
At 31 October 2024
875,145
18,698
893,843
Depreciation and impairment
At 1 November 2023
674,341
779
675,120
Depreciation charged in the year
95,253
9,567
104,820
At 31 October 2024
769,594
10,346
779,940
Carrying amount
At 31 October 2024
105,551
8,352
113,903
At 31 October 2023
149,136
17,919
167,055
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 19 -
12
Stocks
2024
2023
£
£
Work in progress
1,038,939
632,186
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
318,905
102,813
Other debtors
1,751,761
3,428,358
Prepayments and accrued income
222,193
136,912
2,292,859
3,668,083
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
16
110,048
Trade creditors
413,476
425,696
Corporation tax
897,323
390,018
Other taxation and social security
518,530
537,795
Other creditors
2,740,348
1,679,864
Accruals and deferred income
373,495
293,015
4,943,172
3,436,436
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
192,558
16
Loans and overdrafts
2024
2023
£
£
Bank loans
302,606
Payable within one year
110,048
Payable after one year
192,558
The long-term loans are secured by fixed and floating charges over the company property which was created on 16 November 2017.
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
16
Loans and overdrafts
(Continued)
- 20 -
17
Provisions for liabilities
2024
2023
£
£
Legal Provision
-
475,637
The legal provision relates to two ongoing legal disputes of which payments of £475,637 was settled during the year.
18
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
24,128
27,711
2024
Movements in the year:
£
Liability at 1 November 2023
27,711
Credit to profit or loss
(3,583)
Liability at 31 October 2024
24,128
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.
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
65,813
60,976
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.
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 21 -
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100
21
Related party transactions
Transactions with related parties
In 2018, the company provided a guarantee to Barclays Bank PLC regarding a loan provided to Direct Collections Limited. Full details of the charge have been filed at Companies House.
The following amounts were outstanding at the reporting end date:
2024
2023
Amounts due from related parties
£
£
Key management personnel
-
1,845,734
This amount was repaid in full within 9 months of the year end.
22
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
2,948,033
1,762,968
Adjustments for:
Taxation charged
751,385
282,894
Finance costs
16,234
32,625
Investment income
(118,758)
(91,116)
Depreciation and impairment of tangible fixed assets
104,820
121,308
(Decrease)/increase in provisions
(475,637)
475,637
Movements in working capital:
Increase in stocks
(406,753)
(632,186)
(Increase)/decrease in debtors
(468,161)
563,952
Increase/(decrease) in creditors
1,109,479
(23,602)
Cash generated from operations
3,460,642
2,492,480
DIRECT COLLECTION BAILIFFS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2024
- 22 -
23
Analysis of changes in net funds
1 November 2023
Cash flows
31 October 2024
£
£
£
Cash at bank and in hand
2,812,051
3,154,614
5,966,665
Borrowings excluding overdrafts
(302,606)
302,606
-
2,509,445
3,457,220
5,966,665
24
Prior period adjustment
In prior years the company has not provided for work in progress on its various activities.
It has been established that the work in progress balance was material to the prior period financial statements, so comparative figures have be restated by the following amounts:
Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Oct 2023
£
£
£
Current assets
Stocks
-
632,186
632,186
Creditors due within one year
Taxation
(785,459)
(142,354)
(927,813)
Net assets
2,657,201
489,832
3,147,033
Capital and reserves
Profit and loss reserves
2,657,101
489,832
3,146,933
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 October 2023
£
£
£
Turnover
13,202,664
632,186
13,834,850
Taxation
(140,540)
(142,354)
(282,894)
Profit for the financial period
1,273,136
489,832
1,762,968
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