Zeno Communications (UK) Ltd
Annual Report and Financial Statements
For the year ended 30 June 2024
Company Registration No. 05628110 (England and Wales)
Zeno Communications (UK) Ltd
Company Information
Directors
A Blasco
K M Greene
V A Malanga
Company number
05628110
Registered office
8th Floor
160 Old Street
London
England
EC1V 9BW
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Zeno Communications (UK) Ltd
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 27
Zeno Communications (UK) Ltd
Strategic Report
For the year ended 30 June 2024
Page 1

The Directors present the Strategic Report and audited financial statements for Zeno Communications (UK) Limited (the 'Company') for the year ended 30 June 2024.

Review of the business

The principal activity of the Company continued to be public relations services, with a core focus on clients within the Consumer, Health, Corporate and Technology sectors.

 

2024 saw gross profit of £8,073,014 reported, a decrease of 10.7% on 2023 from £9,041,931. The decrease in 2024 can be attributed to a decline in public relations spend with existing clients.

 

An operating profit of £177,383 was reported in 2024 (2023: operating loss of £232,317). The return to operating profit can be attributed to a number of factors, including a reduction in intra-group service fees, and reduced freelance staff costs.

 

As a result of the profit for the year, the net liabilities position at the end of the year decreased to £1,263,807(2023: net liabilities £1,291,001). The strategy to achieve a net asset position is to do so through delivering operating profits on a consistent and sustained basis.

Key Performance Indicators (KPIs)

The KPIs used to manage and review the trading operations and resourcing decisions of the Company by the senior management are the following adjusted performance measures:

 

         2024     2023

            

(Reduction)/growth in gross profit            (10.7)%     10.0%

            

Operating profit/(loss) margin      2.2% (2.6)%

            

Employment costs to gross profit ratio          71.9%     65.3%

 

Gross profit is calculated as turnover less third party costs incurred and recharged to clients. Operating profit/(loss) margin is calculated as the operating profit/(loss) to net revenue ratio. The primary KPI which drives operating profit/(loss) margin is employment costs to net revenue ratio, with a target of 60%. In 2024 this was 71.9% (2023: 65.3%).

Business environment

The public relations market in the United Kingdom is highly fragmented and competitive. Within this competitive market, the company achieved a ranking of 56 (2023: 50) in the 2024 PR Week league tables which are based on 2023 fees, which were the latest available as at the balance sheet date.

Future developments

Regarding future developments, given the continued uncertain economic environment the directors have carried out a detailed and comprehensive review of the business and its future prospects taking into account all information that could reasonably be expected to be available for the following 12 months and beyond. The company expects to continue its strategy as planned, building on prior years.

Strategy

The Company’s overriding objective is to achieve attractive and sustainable rates of net revenue and operating profit growth primarily through maintaining and expanding its client base off the back of high quality work, and by leveraging its global agency footprint within the UK public relations marketplace.

Zeno Communications (UK) Ltd
Strategic Report (Continued)
For the year ended 30 June 2024
Page 2
Principal risks and uncertainties (continued)

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

 

Business risk

 

During any downturn in the United Kingdom economy, spending constraints of clients may significantly impact service-providing companies. The potential impact on the Company will continue to be assessed on an ongoing basis.

 

Business continuity plans are in place in case of technology disruption or lack of access to the premises. Following the global pandemic in early 2020, the Company now successfully operates a permanent hybrid working model with no issues noted in the period up to signing these financial statements.

 

The Company has reviewed the business for potential successors for key management. If key management leave the Company, the impact of their exiting the business is reviewed 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.

 

Given the Company generates all turnover and profits in the UK (and works with other Zeno Group, Inc. subsidiary companies for overseas work), there was no significant impact from changes in laws and regulations.

 

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 negotiations, ensure our planning remains up to date and assess any new or emerging risks on an on going basis.

 

Competitive risk

 

The Company seeks to mitigate its exposure to increased competition and the possibility of adverse market conditions by maintaining a wide portfolio of clients in different sectors who require a variety of Public Relations services. No one client represents more than 2% (2023: 31%) of the Company’s fee income.

 

Financial risk management

 

Credit risk

The Company aims to mitigate liquidity risk by managing cash generation of its operations and operating cash collection targets across the Company as well as performing credit checks on all new clients. The Company’s cash deposits are held with JP Morgan Chase Bank, NA.

 

Foreign exchange risk

Whilst all the turnover is generated in the UK, the Company does earn some of its turnover in currencies other than sterling. It seeks to manage the exposure to fluctuations in exchange rates by having contracts in place which allow for fee adjustments should the exchange rate fluctuate by more than a reasonable percentage. The Company also seeks to minimise its holdings of currencies other than sterling.

 

Liquidity and cash flow risk

The Company is part of a group cash pooling arrangement with Daniel J. Edelman Holdings, Inc. 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.

 

Zeno Communications (UK) Ltd
Strategic Report (Continued)
For the year ended 30 June 2024
Page 3
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 in to 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.

On behalf of the board

A Blasco
Director
25 March 2025
Zeno Communications (UK) Ltd
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 the provision of public relations services with a core focus on clients within the Consumer, Health, Corporate and Technology sectors.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend the 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:

A Blasco
K M Greene
V A Malanga
Qualifying third party indemnity provisions

The ultimate parent company, Daniel J. Edelman Holdings, Inc. maintained liability insurance throughout the year and up to the date of signature of the financial statements for the Directors and officers of the Company. The articles of association provided the directors with a qualifying third party indemnity throughout the year and the indemnity remains in force at the date of the signature of the financial statements.

Auditor

Moore Kingston Smith LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put forward at a General Meeting.

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.

Zeno Communications (UK) Ltd
Directors' Report (Continued)
For the year ended 30 June 2024
Page 5
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
A Blasco
Director
25 March 2025
Zeno Communications (UK) Ltd
Independent Auditor's Report
To the Members of Zeno Communications (UK) Ltd
Page 6
Opinion

We have audited the financial statements of Zeno Communications (UK) Ltd (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.

Zeno Communications (UK) Ltd
Independent Auditor's Report (Continued)
To the Members of Zeno Communications (UK) Ltd
Page 7

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.

Zeno Communications (UK) Ltd
Independent Auditor's Report (Continued)
To the Members of Zeno Communications (UK) Ltd
Page 8
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.

 

 

Zeno Communications (UK) Ltd
Independent Auditor's Report (Continued)
To the Members of Zeno Communications (UK) Ltd
Page 9

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
28 March 2025
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Zeno Communications (UK) Ltd
Statement of Comprehensive Income
For the year ended 30 June 2024
Page 10
2024
2023
Notes
£
£
Turnover
3
11,184,015
11,758,983
Cost of sales
(3,111,001)
(2,717,052)
Gross profit
8,073,014
9,041,931
Administrative expenses
(7,895,631)
(9,274,248)
Operating profit/(loss)
4
177,383
(232,317)
Interest receivable and similar income
7
164,426
45,575
Interest payable and similar expenses
8
(303,680)
(91,247)
Profit/(loss) before taxation
38,129
(277,989)
Tax (expense)/benefit on profit/(loss)
9
(10,935)
20,189
Profit/(loss) for the financial year
27,194
(257,800)

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.

The Company has no other items of comprehensive income and therefore no separate Statement of Other Comprehensive Income has been presented. The notes on pages 13 to 27 form part of these financial statements.

Zeno Communications (UK) Ltd
Balance Sheet
As at 30 June 2024
Page 11
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
321,798
399,900
Current assets
Stock
12
-
274,643
Debtors
13
4,445,438
3,300,641
4,445,438
3,575,284
Creditors: amounts falling due within one year
14
(5,939,132)
(5,041,375)
Net current liabilities
(1,493,694)
(1,466,091)
Total assets less current liabilities
(1,171,896)
(1,066,191)
Provisions for liabilities
Provisions
15
(82,680)
(224,810)
Deferred tax liability
16
(9,231)
-
0
(91,911)
(224,810)
Net liabilities
(1,263,807)
(1,291,001)
Capital and reserves
Called up share capital
18
15
15
Share premium account
782,399
782,399
Capital contribution reserve
3,012,721
3,012,721
Profit and loss reserves
(5,058,942)
(5,086,136)
Total equity
(1,263,807)
(1,291,001)
The financial statements were approved by the board of directors and authorised for issue on 25 March 2025 and are signed on its behalf by:
A  Blasco
Director
Company Registration No. 05628110
Zeno Communications (UK) Ltd
Statement of Changes in Equity
For the year ended 30 June 2024
Page 12
Share capital
Share premium account
Capital contribution reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 July 2022
15
782,399
3,012,721
(4,828,336)
(1,033,201)
Year ended 30 June 2023:
Loss and total comprehensive income for the year
-
-
-
(257,800)
(257,800)
Balance at 30 June 2023
15
782,399
3,012,721
(5,086,136)
(1,291,001)
Year ended 30 June 2024:
Profit and total comprehensive income for the year
-
-
-
27,194
27,194
Balance at 30 June 2024
15
782,399
3,012,721
(5,058,942)
(1,263,807)
Zeno Communications (UK) Ltd
Notes to the Financial Statements
For the year ended 30 June 2024
Page 13
1
Accounting policies
Company information

Zeno Communications (UK) Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 8th Floor, 160 Old Street, London, England, EC1V 9BW.

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 Zeno Group The Netherlands BV. These consolidated financial statements are available from its registered office, Gustav Mahlerlaan 2970, Amsterdam 1081 LA, The Netherlands.

Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 14
1.2
Going concern

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

 

The company has net current liabilities of £1,493,694 (2023: £1,466,091) and net liabilities of £1,263,807 (2023: £1,291,001) at the reporting date, after making a profit after tax for the year ended 30 June 2024 of £27,194 (2023: loss after tax of £257,800). The directors confirm that they are satisfied that the company has adequate resources to continue in business for the foreseeable future.

They have considered the company's profit in the year, the net current liabilities, 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 goods, or the provision of services; (c) the amount of revenue can be measured reliably; (d) it is probable that future economic benefits will flow to the entity; and (e) when the specific criteria relating to each of the company's sales channels have been met, as described below.

 

Turnover represents amounts receivable for services, net of value added tax and trade discounts. Turnover includes third party costs incurred to service client projects where the company considers itself to be principal rather than agent. These costs, including costs recharged from related parties for the work performed on their behalf, are classified as third party costs. Further details are disclosed in note 2.

 

Turnover is normally recognised at the point at which the service is provided and the value can be determined. 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 revenue will be held as deferred income until the service has been provided.

 

Unbilled revenue on client assignments is included as accrued income within trade and other debtors. Where individual on account billings exceed revenue recognised and costs incurred to date on client assignments, the excess is classified as deferred income within trade and other creditors. Timing differences and billing discrepancies can arise where there are differences between billing arrangements (i.e. invoicing) and the timing of the delivery of the service and thus the revenue recognition. These can result in debits or credits and thus assets and liabilities. Any assets arising relating to accrued income are investigated and written off immediately if deemed irrecoverable. Liabilities relating to client deposits are held for a period of up to two years during which time they are written back to revenue if, after investigation it is found that no further liability exists.

Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 15

Where a project is not complete at year end the account team working on the project will provide an estimate of stage of completion of that open project, and only the estimated proportion of the project completed is recognised as turnover.

 

Third party costs comprise third party costs incurred to service client projects, including cost recharged from related parties for the work performed on their behalf. Therefore net revenue represents net fees and commissions earned during the year.

 

Net revenue is presented separately in the statement of comprehensive income account to provide further understanding of the financial performance of the company. Further details on net revenue are disclosed in note 3.

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 5 years.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Trademarks
3 years
Customer lists
3 years
Non-compete
3 years
1.6
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 period of the lease
Fixtures, fittings and equipment
Between 15% and 33.3% per annum
Computer equipment
33.3% per annum
Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 16
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.

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 rate method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

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.

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.

Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 17
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.

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.

 

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.

Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
1
Accounting policies
(Continued)
Page 18
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.

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
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.

1.16
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.

1.17

Interest

Interest receivable and payable are recorded in the profit and loss account as they accrue.

Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 19
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.

Revenue recognition

Revenue recognition includes a critical judgement with regard to principal versus agent status in respect of third party costs incurred, that are passed on to the clients.

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.

Stage of completion

The company reviews the work that has been completed to determine the amount of revenue that should be recognised based on the stage of completion. Open projects included in net revenue amount to £3,134,080 (2023: £3,513,798), of which a 5% change in the percentage of completion would result in a change of £156,704 (2023: £175,690).

3
Turnover

An analysis of the company's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Public relations services
11,184,015
11,758,983
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
11,184,015
11,758,983
Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 20
4
Operating profit/(loss)
2024
2023
Operating profit/(loss) for the year is stated after charging:
£
£
Exchange losses
16,551
152,006
Depreciation of owned tangible fixed assets
107,010
122,910
Operating lease charges
451,821
399,835
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
40,000
92,442
For other services
All other non-audit services
3,500
-
0
6
Employees

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

2024
2023
Number
Number
PR Professional staff
68
71
Administrative
9
10
Total
77
81

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
4,946,054
5,001,087
Social security costs
652,376
693,979
Pension costs
207,802
211,964
5,806,232
5,907,030
Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 21
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest receivable from group companies
164,426
45,575
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
(58,793)
-
Interest payable to group undertakings
362,473
91,247
303,680
91,247
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(36,680)
-
0
Adjustments in respect of prior periods
(7,711)
(21,568)
Total current tax
(44,391)
(21,568)
Deferred tax
Origination and reversal of timing differences
60,260
(31,907)
Changes in tax rates
1,306
33,556
Adjustment in respect of prior periods
(6,240)
(270)
Total deferred tax
55,326
1,379
Total tax charge/(credit)
10,935
(20,189)

The UK rate of corporation tax applicable to the Company for this accounting year was 25% (2023: 20.49%). The Finance Act 2021 increases the main rate of corporation tax from 19% to 25% effective from 1 April 2023. The closing deferred tax balances have been calculated at 25%, the applicable tax rates for the period over which the deferred tax balances were expected to reverse.

Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
9
Taxation
(Continued)
Page 22

The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Profit/(loss) before taxation
38,129
(277,989)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.49%)
9,532
(56,960)
Tax effect of expenses that are not deductible in determining taxable profit
14,048
25,053
Effect of change in corporation tax rate
1,306
(270)
(Under)/over provided in prior years
(6,240)
11,988
Withholding tax
(7,711)
-
0
Taxation charge/(credit) for the year
10,935
(20,189)
10
Intangible fixed assets
Goodwill
Trademarks
Customer lists
Non-compete
Total
£
£
£
£
£
Cost
At 1 July 2023 and 30 June 2024
2,711,407
331,000
1,827,000
160,000
5,029,407
Amortisation and impairment
At 1 July 2023 and 30 June 2024
2,711,407
331,000
1,827,000
160,000
5,029,407
Carrying amount
At 30 June 2024
-
0
-
0
-
0
-
-
0
At 30 June 2023
-
0
-
0
-
0
-
-
0
Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 23
11
Tangible fixed assets
Leasehold improvements
Fixtures, fittings and equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 July 2023
265,325
137,509
245,094
647,928
Additions
-
0
33,676
13,446
47,122
Disposals
-
0
(23,853)
(92,367)
(116,220)
At 30 June 2024
265,325
147,332
166,173
578,830
Depreciation and impairment
At 1 July 2023
34,185
35,062
178,781
248,028
Depreciation charged in the year
34,869
26,565
45,576
107,010
Eliminated in respect of disposals
-
0
(5,641)
(92,365)
(98,006)
At 30 June 2024
69,054
55,986
131,992
257,032
Carrying amount
At 30 June 2024
196,271
91,346
34,181
321,798
At 30 June 2023
231,140
102,447
66,313
399,900
12
Stock
2024
2023
£
£
Work in progress
-
274,643

Work in progress represents unbilled third-party direct costs and is valued at the lower of cost and net realisable value, and is stated after provisions for impairment of £nil (2023: £nil). The amount written back to the profit and loss account for the year is £nil (2023: £3,352).

Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 24
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,643,071
1,783,237
Corporation tax recoverable
137,965
104,194
Amounts owed by group undertakings
876,022
121,654
Other debtors
8,968
7,023
Prepayments and accrued income
779,412
1,238,438
4,445,438
3,254,546
Deferred tax asset (note 16)
-
0
46,095
4,445,438
3,300,641
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
245,773
254,477
Amounts owed to group undertakings
2,987,554
2,506,070
Taxation and social security
441,050
318,477
Other creditors
94
-
0
Accruals and deferred income
2,264,661
1,962,351
5,939,132
5,041,375
15
Provisions for liabilities
2024
2023
£
£
Payroll provision
-
142,130
Dilapidations provision for property lease
82,680
82,680
82,680
224,810
Movements on provisions:
Payroll provision
Dilapidations provision for property lease
Total
£
£
£
At 1 July 2023
142,130
82,680
224,810
Other movements
(142,130)
-
(142,130)
At 30 June 2024
-
82,680
82,680
Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
15
Provisions for liabilities
(Continued)
Page 25

During 2023 the Company exited their lease at 127-133 Charing Cross Road, and subsequently were required to make good the property as per the terms of the lease. The provision shown above was expressly for this lease, and was utilised in full. The Company took out a new lease in 2022, with the dilapidation for that property treated as an asset.

 

In the previous year, the Company identified a potential payroll liability of £142,130. This was settled in full during the period.

16
Deferred taxation
The amounts of deferred taxation (liability)/assets recognised as follows:
2024
2023
£
£
Other timing differences
10,525
76,936
Depreciation less than/(in excess of) capital allowances
(19,756)
(30,841)
Total deferred tax (liability)/asset
(9,231)
46,095
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
207,802
211,964

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. As of 30 June 2024: £27,390 (2023: £17,855) of the company contributions had not been paid and are included within accruals.

18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
1
1
1
1
Ordinary B of 10p each
125
125
13
13
Ordinary C of 10p each
15
15
1
1
141
141
15
15
Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
18
Share capital
(Continued)
Page 26

The company's ordinary shares, which carry no right to fixed income, each carry the right to one vote at the general meetings of the company.

 

The votes attributable to 'B' shares as a class of shares are counted as 5% of the total votes cast at a shareholders' meeting. The.'B' shares have no right to participate in any dividend.

 

The votes attributable to 'C' shares as a class of shares are counted as 5% of the total votes cast at a shareholders' meeting. The 'C' shares have no right to participate in any dividend.

19
Contingent liabilities

The company together with certain other Edelman group companies has entered into a cash pooling arrangement with JP Morgan Chase Bank, NA. JP Morgan Chase Bank, NA has the right to apply positive cash balances of the company against indebtedness or liabilities of any other companies named in the agreement. This facility is limited to the amount in an overdraft agreement with JP Morgan Chase Bank, NA which is guaranteed by Daniel J. Edelman Inc., a fellow group company.

20
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
449,184
447,808
Between two and five years
686,575
1,201,105
1,135,759
1,648,913
21
Related party transactions

As permitted by FRS 102 Section 33 "related party disclosures" the financial statements do not disclose transactions with any wholly owned subsidiary undertakings. There were no other related party transactions to report.

 

During the period the company made sales of £123,680 to United Entertainment Group UK Limited, a fellow group subsidiary. At the year end, United Entertainment Group UK Limited owed the company £123,680. This amount is interest free and repayable on demand.

 

Zeno Communications (UK) Ltd
Notes to the Financial Statements (Continued)
For the year ended 30 June 2024
Page 27
22
Ultimate controlling party

Zeno Communications (UK) Limited is a subsidiary of Zeno Group The Netherlands BV, an entity incorporated in the Netherlands.

 

The smallest group in which the results of the company are consolidated is that headed by Zeno Group The Netherlands BV and the largest group in which the results of the company are consolidated is that headed by Daniel J. Edelman Holdings, Inc. The consolidated group financial statements of Zeno Group The Netherlands BV can be obtained from Gustav Mahlerlaan 2970, Amsterdam 1081 LA, The Netherlands. The consolidated group financial statements of Daniel J. Edelman Holdings, Inc. can be obtained from 111 N Canal, Suite 1100, Chicago IL 60606 Illinois, United States of America.

 

The ultimate parent and controlling party is Daniel J. Edelman Holdings, Inc., an entity incorporated in the United States of America.

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