The directors present the strategic report for the year ended 30 September 2024.
In FY 2024, revenue grew by 30% due to the company’s successful growth strategy. During the year, Spring built on its reputation and strong client relationships, utilising technology to provide high quality Home Buying services. The gross profit margin improved, with the portfolio performing well overall. In FY 2024 the housing market saw increased activity, with an interest rate cut towards the end of the period and inflation easing during the year. Since FY 2024, the property market has improved further and there have been additional interest rate cuts.
The Directors acknowledge their responsibilities for monitoring risks and uncertainties affecting the Company. These include, but are not limited to, market conditions, changes in government legislation (permanent and temporary) and the effectiveness of financial controls. The Directors monitor these risks through board and management meetings, regular dialogue with business partners and membership of industry panels.
Springmove Limited aim is to maintain a truly effortless, reliable Home Buying service.
In order to achieve this it has developed a range of strategies, including:
Enhancing customer experience through communication at all stages of the house buying process;
Building relationships with business partners to expand the part-exchange market;
Investing in and developing technology solutions;
Ensuring the Company has a committed and fully skilled workforce.
Management uses a range of performance measures to monitor and manage the business. Certain measures are particularly important in the generation of shareholder value and are considered key performance indicators (KPls).
KPIs measure past performance and also provide information to facilitate effective management of the business. Turnover, gross profit and operating profit indicate the volume of properties sold and the profitability achieved. Turnover: £93,638,564 (2023: £72,162,745), gross profit: £5,800,366 (2023: £2,350,616) and operating profit £1,843,854 (2023: £966,880 operating loss) are considered by the directors to be important KPIs as they help to indicate the volume of properties sold and the profitability achieved.
This section comprises our Section 172(1) Statement and should be read in conjunction with the financial and strategic review. The directors of the Company have acted in a way they considered, in good faith, to be most likely to promote the success of the Company for the benefit of the members as a whole, and in doing so had regard, among other things to:
the likely consequences of any decision in the long term
the interests of the Company’s employees
the need to foster business relationships with suppliers, customers and others
the impact of the Company’s operations on the community and the environment
the desirability of the Company maintaining its reputation for high standards of business conduct
Spring’s core values are Team, Empathy, Transparency, Efficiency, Adaptability, Discipline and Boldness. To ensure these values are adhered to at every level of the company, the employee annual review process is structured around them.
The governance and control framework, which is in place across the Company, ensures that our core values are upheld and that decisions made by the board give due regard to the long-term impact of those decisions, the interests of the Company’s stakeholders, and the impact of the Company’s activities on the community, the environment and the Company’s reputation.
The board meets monthly and in addition to reviewing the company’s operating performance, receives reports on the its engagement in social and environmental initiatives. The timely receipt of information on all key aspects of the business allows the board to make decisions, following careful consideration and debate.
The key stakeholders, considered by the board when making decisions. include our people, clients and shareholders, as well as suppliers, the environment and the communities around us. These decisions are then communicated to the managers of the key departments, and the performance review and compensation structure ensure that both the manager’s and their direct reports are correctly incentivised to implement them effectively.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 September 2024.
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, S&W Partners Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Basis for 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
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.
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 are to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
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 engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
understanding the design of the company’s remuneration policies
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested material entries to identify unusual transactions;
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Springmove Limited is a private company limited by shares incorporated in England and Wales. The registered office is Sunley House, 4 Bedford Park, Croydon, CR0 2AP.
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 £.
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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Olympia Partners Limited. These consolidated financial statements are available from its registered office, Sunley House, Bedford Park, Croydon, CR0 2AP.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of the properties over their estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
Short term debtors are measured at transaction price less any provision for impairment. Loans receivable are measured initially at fair value, net of transaction costs and are subsequently carried at amortised costs using the effective interest method, less any provision for impairment.
Short term creditors are measured at transaction price. Other financial liabilities, including bank loans and other loans, are measured initially at fair value, net of transaction costs and are subsequently carried at amortised costs using the effective interest method.
In the application of the company’s accounting policies, the directors are required to make judgements and estimates about the carrying amount of properties held as stock. The estimates and associated assumptions are based on external valuations carried out by chartered surveyors. 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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The directors have assessed the liquidity needs of the company and considered future profit forecasts of the company, and judged that the financial statements are to be prepared on a going concern basis.
Whilst the Directors believe the value of stock held at the balance sheet date has significant value above its cost shown in the financial statements, the company relies upon the financial support of the support of its parent company and other group entities. Having contemplated the continuity of such support the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The properties are purchased at typically 85% of their market value based on a valuation by an independent and experienced third party. However at the balance sheet date the directors have judged that the market value of a number of stock items were lower than cost and so impaired accordingly (included in direct costs). The remainder of the stock has been valued at cost at the balance sheet date as this was valued as lower than market value and therefore, no impairment necessary.
Fees payable to the auditor are included in the £3,630,000 (2023: £2,960,000) management recharge from a fellow group company. Fees payable to the auditor included in the fellow group company, were £60,000 (2023: £36,000).
The average monthly number of persons (including directors) employed by the company during the year was:
Interest on the related party loan is charged at 12.5%.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Amounts owed to group undertakings are repayable on demand, for the current year all of these amounts are interest free. In the prior year £5 million of the amounts owed to group carried interest at a rate of 12.5%.
Bank loans and overdrafts totalling £16,983,331 (2023 - £33,070,313) are secured by a fixed and floating charge over the assets and undertakings of the company. This security contains a negative pledge which means that the company will not create or agree to create or permit to subsist any security interest over the charged assets.
Interest is charged at 4.32% (2023 - 4.32%) plus Bank of England Base Rate.
The shares are non-redeemable and have full voting, equity and dividend rights.
The company has taken advantage of the exemption permitted by Section 33.1A 'Related Party Disclosures' not to provide disclosures of transactions entered into with other wholly-owned members of the group.