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Company registration number: 02643915
Frontline Consultancy and Business Services Limited
Financial statements
31 December 2024
Frontline Consultancy and Business Services Limited
Contents
Directors and other information
Strategic report
Directors report
Independent auditor's report to the members
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Frontline Consultancy and Business Services Limited
Directors and other information
Directors Mr W Milligan
Mrs G Milligan
Mr A L Hilton
Mr B M McEvilly
Mr C J Glithero
Mrs A E Hibbert (Appointed 25 January 2024)
Mr L Jones (Appointed 1 April 2024)
Secretary Mrs A E Hibbert
Company number 02643915
Registered office Frontline House
Epsom Avenue
Handforth
Cheshire
SK9 3PW
Business address Frontline House
Epsom Avenue
Handforth
Cheshire
SK9 3PW
Independent Auditor Downham Morris & Co
45-49 Greek Street
Stockport
Cheshire
SK3 8AX
Bankers Barclays Bank Plc
51 Mosley Street
Manchester
M60 2AU
Frontline Consultancy and Business Services Limited
Strategic report
Year ended 31 December 2024
Introduction
The directors present the Strategic Report for the year ended 31 December 2024.
Business review
The company is a Managed Services Provider (Microsoft 365, Hosting, Service Desk, Cyber Security products, IBMi) and a SAP Business One Gold Partner. In addition to installing SAP Business One on-premises we also host it in Microsoft's public cloud or in our Data Centres.
2024 saw the business scale its Data Centre offering to multiple data centres across the UK and Europe. All locations are minimum tier 3 design ensuring optimal service and competitive pricing.
Financial key performance indicators
In 2024, the focus of the business has been centred on recovery and stabilisation following the loss of our largest customer in 2023. Revenue has dropped as expected from 2023 but with gross profit increasing from 35.0% to 35.4%. This is in line with expectation.
Overheads have continued to be carefully managed and have been reduced in line with expectation by more than £800,000.
The Statement of Financial Position shows net assets of £4.4m have increased from the position in 2023.
Principal risks and uncertainties
The Board is aware of its responsibility to manage the risks within the business. Risk management is reviewed regularly with improvements implemented in a timely fashion.
Frontline is a software reseller for SAP and Microsoft. If one of these companies got into financial difficulties it could have a detrimental effect on the financial performance of the business. We mitigate this risk by having a diverse range of services including our bespoke development division and our Managed Services division.
Going concern
The company has a number of customers and suppliers across different geographical areas and industries. The directors consider that the company has sufficient liquid reserves and a significant asset base which may be utilised for funding to remain solvent during future periods of turbulence and, as a consequence, believe the company is well placed to manage its business risks successfully despite the uncertain economic outlook.
The directors' assessment of going concern is based on the latest available financial and non-financial information and government guidance. Stress testing has been conducted and considered, taking into account any potential business disruptions and impact on revenue that may occur from future economic uncertainty.
After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the annual report and accounts.
Financial risk
The company's objective of financial risk management is to reduce the impact of price fluctuations and other factors of uncertainty in financial markets on earnings, cash flows and balance sheet, as well as to ensure sufficient liquidity.
Liquidity risk
The company manages liquidity risk by having sufficient amounts of cash available and by having a balanced maturity profile of long-term debt.
Fraud
The company has a strong control framework in respect of potential fraud or other dishonest behaviour which is regularly reviewed by the directors.
Research and development
The company continues to conduct research and development activities into innovative new products and services.
This report was approved by the board of directors on 9 May 2025 and signed on behalf of the board by:
.........................
Mrs A E Hibbert
Director
Frontline Consultancy and Business Services Limited
Directors report
Year ended 31 December 2024
The directors present their report and the financial statements of the company for the year ended 31 December 2024.
Directors
The directors who served the company during the year were as follows:
Mr W Milligan
Mrs G Milligan
Mr A L Hilton
Mr B M McEvilly
Mr C J Glithero
Mrs A E Hibbert (Appointed 25 January 2024)
Mr L Jones (Appointed 1 April 2024)
Dividends
The directors do not recommend the payment of a dividend.
Future developments
We continue to improve our existing solutions as well as introduce new product and service offerings as part of both our Managed Services and Software divisions. In a constantly developing market, it is important that the company remains ahead of this.
Financial instruments
Financial instruments that are debt instruments measured at amortised cost comprise of trade debtors, intercompany loans, directors' loans and cash at bank and in hand.
Financial liabilities measured at amortised cost consist of trade creditors, obligations under finance leases, intercompany loans and share capital.
The main risks arising from these financial instruments are credit risk, interest rate risk and liquidity risk. The risks facing the company are assessed on an ongoing basis by the directors and appropriate timely action taken to mitigate them.
Events after the end of the reporting period
There have been no significant events affecting the company since the year end.
Disclosure of information in the strategic report.
The company's business activities, together with factors likely to affect its future development, financial position, financial risk management objectives and exposures to risk are described in the strategic report on pages 2 - 3. The company has disclosed an indication of its activities in the field of research and development and this can be found in the strategic report. The directors' assessment of going concern can be found in the strategic report.
Directors responsibilities statement
The directors are responsible for preparing the strategic report, directors 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 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 judgments and accounting estimates that are reasonable and prudent; and
- 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 09 May 2025 and signed on behalf of the board by:
.........................
Mrs A E Hibbert
Director
Frontline Consultancy and Business Services Limited
Independent auditor's report to the members of
Frontline Consultancy and Business Services Limited
Year ended 31 December 2024
Opinion
We have audited the financial statements of Frontline Consultancy and Business Services Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements: - give a true and fair view of the state of the company's affairs as at 31 December 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.
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 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.
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. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the 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 has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters where 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 the returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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. 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: Based on our understanding and accumulated knowledge of the company and the sector in which it operates, we considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud and whether such actions or non-compliance might have a material effect on the financial statements. These included but were not limited to those that relate to the form and content of the financial statements, such as the company accounting policies, the financial reporting framework and the UK Companies Act 2006. All team members were briefed to ensure they were aware of any relevant regulations in relation to their work.We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates as well as inappropriate revenue cut-off. Our audit procedures included, but were not limited to:- Agreement of the financial statement disclosures to underlying supporting documentation;- Identifying and testing journal entries, with a focus on journals indicating large or unusual transactions based on our understanding of the business;- Discussions with management, including consideration of known or suspected instances of non- compliance with laws and regulation and fraud; - Obtaining an understanding of the control environment in monitoring compliance with laws and regulations.Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.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. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. we also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 auditors 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.
.........................
Ian Gwynfor Morris (Senior Statutory Auditor)
For and on behalf of
Downham Morris & Co
Chartered certified accountant and statutory auditor
45-49 Greek Street
Stockport
Cheshire
SK3 8AX
09 May 2025
Frontline Consultancy and Business Services Limited
Statement of comprehensive income
Year ended 31 December 2024
2024 2023
Note £ £
Turnover 5 9,161,263 10,385,469
Cost of sales ( 5,916,338) ( 6,753,292)
_______ _______
Gross profit 3,244,925 3,632,177
Administrative expenses ( 2,839,641) ( 3,641,453)
Other operating income 6 7,054 27,531
_______ _______
Operating profit 7 412,338 18,255
Other interest receivable and similar income 10 20,120 39,439
Interest payable and similar expenses 11 ( 87,734) ( 45,255)
_______ _______
Profit before taxation 344,724 12,439
Tax on profit 12 ( 110,176) ( 27,400)
_______ _______
Profit/(loss) for the financial year and total comprehensive income 234,548 ( 14,961)
_______ _______
All the activities of the company are from continuing operations.
Frontline Consultancy and Business Services Limited
Statement of financial position
31 December 2024
2024 2023
Note £ £ £ £
Fixed assets
Intangible assets 13 - 11,655
Tangible assets 14 1,090,204 1,284,147
_______ _______
1,090,204 1,295,802
Current assets
Debtors 15 6,986,881 6,882,546
Cash at bank and in hand 1,084,064 1,433,628
_______ _______
8,070,945 8,316,174
Creditors: amounts falling due
within one year 17 ( 3,990,816) ( 4,577,332)
_______ _______
Net current assets 4,080,129 3,738,842
_______ _______
Total assets less current liabilities 5,170,333 5,034,644
Creditors: amounts falling due
after more than one year 18 ( 556,331) ( 636,318)
Provisions for liabilities 20 ( 164,337) ( 183,209)
_______ _______
Net assets 4,449,665 4,215,117
_______ _______
Capital and reserves
Called up share capital 23 1,107 1,107
Share premium account 24 108,040 108,040
Capital redemption reserve 24 783 783
Profit and loss account 24 4,339,735 4,105,187
_______ _______
Shareholders funds 4,449,665 4,215,117
_______ _______
These financial statements were approved by the board of directors and authorised for issue on 09 May 2025 , and are signed on behalf of the board by:
.........................
Mrs A E Hibbert
Director
Company registration number: 02643915
Frontline Consultancy and Business Services Limited
Statement of changes in equity
Year ended 31 December 2024
Called up share capital Share premium account Capital redemption reserve Profit and loss account Total
£ £ £ £ £
At 1 January 2023 1,107 108,040 783 4,120,148 4,230,078
Profit/(loss) for the year ( 14,961) ( 14,961)
_______ _______ _______ _______ _______
Total comprehensive income for the year - - - ( 14,961) ( 14,961)
_______ _______ _______ _______ _______
At 31 December 2023 and 1 January 2024 1,107 108,040 783 4,105,187 4,215,117
Profit/(loss) for the year 234,548 234,548
_______ _______ _______ _______ _______
Total comprehensive income for the year - - - 234,548 234,548
_______ _______ _______ _______ _______
At 31 December 2024 1,107 108,040 783 4,339,735 4,449,665
_______ _______ _______ _______ _______
Frontline Consultancy and Business Services Limited
Statement of cash flows
Year ended 31 December 2024
2024 2023
Note £ £
Cash flows from operating activities
Profit/(loss) for the financial year 234,548 ( 14,961)
Adjustments for:
Depreciation of tangible assets 524,201 505,007
Amortisation of intangible assets 11,655 18,759
Other interest receivable and similar income ( 20,120) ( 39,439)
Interest payable and similar expenses 87,734 45,255
Gain/(loss) on disposal of tangible assets ( 16,157) 2,104
Tax on profit 191,850 27,400
Accrued expenses/(income) ( 5,391) -
Changes in:
Trade and other debtors ( 178,359) ( 1,224,250)
Trade and other creditors ( 171,518) 606,602
_______ _______
Cash generated from operations 658,443 ( 73,523)
Interest paid ( 87,734) ( 45,255)
Interest received 20,120 39,439
Tax paid ( 348,110) ( 202,830)
_______ _______
Net cash from/(used in) operating activities 242,719 ( 282,169)
_______ _______
Cash flows from investing activities
Purchase of tangible assets ( 332,515) ( 29,856)
Proceeds from sale of tangible assets 18,415 -
_______ _______
Net cash used in investing activities ( 314,100) ( 29,856)
_______ _______
Cash flows from financing activities
Proceeds from borrowings - 500,000
Repayments of borrowings ( 325,000) ( 258,333)
Payment of finance lease liabilities 46,817 ( 180,568)
_______ _______
Net cash (used in)/from financing activities ( 278,183) 61,099
_______ _______
Net increase/(decrease) in cash and cash equivalents ( 349,564) ( 250,926)
Cash and cash equivalents at beginning of year 16 1,433,628 1,684,554
_______ _______
Cash and cash equivalents at end of year 16 1,084,064 1,433,628
_______ _______
Frontline Consultancy and Business Services Limited
Notes to the financial statements
Year ended 31 December 2024
1. General information
Frontline Consultancy and Business Services Limited is a private company limited by shares, registered in England & Wales. The address of the registered office and principal place of business is Frontline House, Epsom Avenue, Handforth, Cheshire, SK9 3PW. The nature of the company's operations and its principal trading activity is the provision of IT consultancy, hardware and software services.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Turnover
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts, rebates, value added tax and other sales taxes.Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on despatch of the goods, the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and the costs incurred or to be incurred in respect of the transactions can be measured reliably.When the outcome of a transaction involving the rendering of services can be reliably estimated, revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period.When the outcome of a transaction involving the rendering of services cannot be reliably estimated, revenue is recognised only to the extent that expenses recognised are recoverable.Managed service contract income is recognised on a time incurred basis.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves. In this case, tax is recognised in other comprehensive income or directly in capital and reserves, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to profit or loss.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at a revalued amount, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Deferred development expenditure - 10 year straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
tangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in capital and reserves, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in capital and reserves in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in capital and reserves in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Fixtures and fittings - 10-15 years straight line
Motor vehicles - 5 years straight line
Computer equipment - 3-5 years straight line
If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of tangible assets, the depreciation is revised prospectively to reflect the new estimates.
Impairment
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. When it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
Hire purchase and finance leases
Assets held under finance leases are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event; it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised in finance costs in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets or either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in other operating expenses.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Critical accounting policies
In the application of the company's accounting policies, which are described in note 3, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the company's accounting policies
The directors do not consider that the amounts recognised in the current or prior financial period's financial statements have been significantly affected by any critical judgements made in the process of applying the company's accounting policies.
Key sources of estimation uncertainty
Revenue recognition
The company's revenue recognition policies are central to how the company values the work carried out in each financial year. These policies require calculation of project completion, which require assessments on judgements to be made. At 31 December 2024, amounts recoverable in work in progress totalled £217,516 (2023: £98,801). Amounts of work in progress deferred at the year end date totalled £533,982 (2023: £490,366).
Provision against impairment loss on trade receivables and accrued income
The company exercises judgement in providing for impairment loss on trade receivables and accrued income and a review of these areas is carried out on a line-by-line basis at each financial period end. At the year end, the company has a provision for impairment loss of £88,649 (2023: £70,162).
Other estimates and judgements
The company exercises significant judgement in estimating the useful life of its intangible and tangible asset base. At the year end, the company holds intangible assets at a carrying value of £nil (2023: £11,655) and tangible fixed assets at a carrying value of £1,090,207 (2023: £1,284,147). An amortisation charge of £11,655 (2023: £18,759) and a depreciation charge of £524,200 (2023: £505, 007) was recognised through the profit and loss account.
Should these estimates vary, the profit or loss and statement of financial position of subsequent years could be impacted.
5. Turnover
Turnover arises from:
2024 2023
£ £
Consultancy, hardware & software services 9,161,263 10,385,469
_______ _______
The turnover is attributable to the principal activity of the company. An analysis of turnover by the geographical markets that substantially differ from each other is given below:
2024 2023
£ £
United Kingdom 9,021,916 10,295,718
Europe 30,615 43,715
Rest of World 108,732 46,036
_______ _______
9,161,263 10,385,469
_______ _______
6. Other operating income
2024 2023
£ £
Commission receivable 7,054 27,531
_______ _______
7. Operating profit
Operating profit is stated after charging/(crediting):
2024 2023
£ £
Amortisation of intangible assets 11,655 18,759
Depreciation of tangible assets 524,201 505,007
(Gain)/loss on disposal of tangible assets ( 16,157) 2,104
Impairment of trade debtors 20,187 58,900
Foreign exchange differences 4,033 4,191
Fees payable for the audit of the financial statements 15,000 15,400
_______ _______
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2024 2023
Administrative staff 7 8
Customer service & support 55 75
Sales & marketing 7 9
_______ _______
69 92
_______ _______
The aggregate payroll costs incurred during the year were:
2024 2023
£ £
Wages and salaries 3,887,613 4,617,004
Social security costs 451,830 534,143
Other pension costs 68,999 123,169
_______ _______
4,408,442 5,274,316
_______ _______
9. Directors remuneration
The directors aggregate remuneration in respect of qualifying services was:
2024 2023
£ £
Remuneration 721,545 505,022
Company contributions to pension schemes in respect of qualifying services 6,510 17,222
Compensation for loss of office - 33,100
_______ _______
728,055 555,344
_______ _______
The number of directors who accrued benefits under company pension plans was as follows:
2024 2023
Number Number
Defined contribution plans 7 6
_______ _______
Remuneration of the highest paid directors in respect of qualifying services:
2024 2023
£ £
Aggregate remuneration 207,264 161,237
Company contributions to pension plans in respect of qualifying services 1,321 1,321
_______ _______
208,585 162,558
_______ _______
10. Other interest receivable and similar income
2024 2023
£ £
Bank deposits 20,120 39,439
_______ _______
11. Interest payable and similar expenses
2024 2023
£ £
Bank loans and overdrafts 60,742 31,878
Other loans made to the company:
Finance leases and hire purchase contracts 26,849 11,982
Other interest on other loans made to the company 143 1,395
_______ _______
87,734 45,255
_______ _______
12. Tax on profit
Major components of tax expense
2024 2023
£ £
Current tax:
UK current tax expense 128,977 22,346
Adjustments in respect of previous periods 71 21,105
_______ _______
Total current tax 129,048 43,451
Deferred tax:
Origination and reversal of timing differences ( 18,872) ( 16,051)
_______ _______
Tax on profit 110,176 27,400
_______ _______
Reconciliation of tax expense
The tax assessed on the profit for the year is higher than (2023: higher than) the standard rate of corporation tax in the UK of 25.00 % (2023: 23.52%).
2024 2023
£ £
Profit before taxation 344,724 12,439
_______ _______
Profit multiplied by rate of tax 86,181 2,926
Adjustments in respect of prior periods 71 32,174
Effect of expenses not deductible for tax purposes 11,506 8,029
Effect of capital allowances and depreciation 31,290 1,295
Change in future tax rates - ( 653)
Marginal relief - ( 320)
Deferred taxation ( 18,872) ( 16,051)
_______ _______
Tax on profit 110,176 27,400
_______ _______
Factors affecting future tax expense
There were no factors that may affect future tax charges.
13. Intangible assets
Deferred development expenditure Total
£ £
Cost
At 1 January 2024 and 31 December 2024 231,652 231,652
_______ _______
Amortisation
At 1 January 2024 219,997 219,997
Charge for the year 11,655 11,655
_______ _______
At 31 December 2024 231,652 231,652
_______ _______
Carrying amount
At 31 December 2024 - -
_______ _______
At 31 December 2023 11,655 11,655
_______ _______
Deferred development expenditure relates to an application that has been developed by the company for resale. The net proceeds from future sales are reasonable expected to exceed total costs of developing the application. The cost is being amortised over 10 years on a straight line basis, this being the directors' estimation of the product's life cycle.
14. Tangible assets
Fixtures & fittings Motor vehicles Computer equipment Total
£ £ £ £
Cost
At 1 January 2024 664,478 151,574 4,485,592 5,301,644
Additions 8,399 - 324,116 332,515
Disposals ( 268,778) - ( 471,503) ( 740,281)
_______ _______ _______ _______
At 31 December 2024 404,099 151,574 4,338,205 4,893,878
_______ _______ _______ _______
Depreciation
At 1 January 2024 369,694 37,610 3,610,193 4,017,497
Charge for the year 23,521 30,805 469,874 524,200
Disposals ( 268,778) - ( 469,245) ( 738,023)
_______ _______ _______ _______
At 31 December 2024 124,437 68,415 3,610,822 3,803,674
_______ _______ _______ _______
Carrying amount
At 31 December 2024 279,662 83,159 727,383 1,090,204
_______ _______ _______ _______
At 31 December 2023 294,784 113,964 875,399 1,284,147
_______ _______ _______ _______
Obligations under finance leases
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Computer equipment
£
At 31 December 2024 516,614
_______
At 31 December 2023 496,852
_______
15. Debtors
2024 2023
£ £
Trade debtors 1,530,963 1,751,600
Prepayments and accrued income 839,903 778,350
Other debtors 4,616,015 4,352,596
_______ _______
6,986,881 6,882,546
_______ _______
Provision for the impairment of trade debtors as at 31 December 2024 was £88,649 (2023: £70,162).
16. Cash and cash equivalents
2024 2023
£ £
Cash at bank and in hand 1,084,064 1,433,628
_______ _______
17. Creditors: amounts falling due within one year
2024 2023
£ £
Bank loans and overdrafts 175,000 325,000
Trade creditors 379,438 367,778
Accruals and deferred income 2,470,087 2,461,725
Corporation tax 210,652 348,039
Social security and other taxes 481,922 612,044
Obligations under finance leases 158,790 206,986
Other creditors 114,927 255,760
_______ _______
3,990,816 4,577,332
_______ _______
Net obligations under hire purchase contracts are secured against the assets to which they relate.Bank loans are secured by fixed and floating charges over company assets.The company entered into a loan agreement in respect of a loan totalling £900,000 with Barclays Bank Plc in April 2020. Interest is charged on a floating rate basis not lower than 2.79% per annum. The lending facility was supported by the Coronavirus Business Interruption Loan Scheme, with interest arising during the first 12 months payable by the UK Government under the terms of the Scheme. After the first 12 months, interest is payable by the company.The company entered into a loan agreement in respect of a loan totalling £500,000 with Barclays Bank Plc which was drawn down in August 2023. Interest is charged on a floating rate basis not lower than 5.65% per annum.
18. Creditors: amounts falling due after more than one year
2024 2023
£ £
Bank loans and overdrafts 266,667 441,667
Obligations under finance leases 289,664 194,651
_______ _______
556,331 636,318
_______ _______
Net obligations under hire purchase contracts are secured against the assets to which they relate.Bank loans are secured by fixed and floating charges over company assets.The company entered into a loan agreement in respect of a loan totalling £900,000 with Barclays Bank Plc in April 2020. Interest is charged on a floating rate basis not lower than 2.79% per annum. The lending facility was supported by the Coronavirus Business Interruption Loan Scheme, with interest arising during the first 12 months payable by the UK Government under the terms of the Scheme. After the first 12 months, interest is payable by the company.The company entered into a loan agreement in respect of a loan totalling £500,000 with Barclays Bank Plc which was drawn down in August 2023. Interest is charged on a floating rate basis not lower than 5.65% per annum.
19. Obligations under finance leases
Company lessee
The total future minimum lease payments under finance lease agreements are as follows:
2024 2023
£ £
Not later than 1 year 165,724 230,197
Later than 1 year and not later than 5 years 325,848 220,482
_______ _______
Present value of minimum lease payments 491,572 450,679
_______ _______
20. Provisions
Deferred tax (note 21) Total
£ £
At 1 January 2024 183,209 183,209
Charges against provisions ( 18,872) ( 18,872)
_______ _______
At 31 December 2024 164,337 164,337
_______ _______
21. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2024 2023
£ £
Included in provisions (note 20) 164,337 183,209
_______ _______
The deferred tax account consists of the tax effect of timing differences in respect of:
2024 2023
£ £
Accelerated capital allowances 177,803 187,327
Other timing differences ( 13,466) ( 4,118)
_______ _______
164,337 183,209
_______ _______
22. Employee benefits
Defined contribution plans
The amount recognised in profit or loss in relation to defined contribution plans was £ 68,999 (2023: £ 123,169 ).
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of a company in an independently administered fund. The pension cost represents contributions payable by the company to the fund and amounted to £68,999 (2023: £123, 169). Contributions totalling £53,864 (2023: £16,471) were payable to the fund at the balance sheet date and are included in other creditors.
23. Called up share capital
Issued, called up and fully paid
2024 2023
No £ No £
Ordinary shares of £ 1.00 each 1,107 1,107 1,107 1,107
_______ _______ _______ _______
24. Reserves
The share premium reserve includes the value of premiums paid on the issue of share capital.The capital redemption reserve includes the nominal value of own shares purchased by the company.The profit and loss account includes all current and prior period retained profits and losses.
25. Analysis of changes in net debt
At 1 January 2024 Cash flows At 31 December 2024
£ £ £
Cash and cash equivalents 1,433,628 (349,564) 1,084,064
Debt due within one year (531,986) 198,196 (333,790)
Debt due after one year (636,318) 79,987 (556,331)
_______ _______ _______
265,324 ( 71,381) 193,943
_______ _______ _______
26. Commitments under operating leases
The company as lessee
The total future minimum lease payments under non-cancellable operating leases are as follows:
£ £
Not later than 1 year 303,370 115,572
Later than 1 year and not later than 5 years 651,976 363,858
_______ _______
955,346 479,430
_______ _______
27. Directors advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company:
2024
Balance brought forward Advances /(credits) to the directors Balance o/standing
£ £ £
Mr W Milligan 1,530,376 123,420 1,653,796
Mrs G Milligan 1,470,362 118,580 1,588,942
_______ _______ _______
3,000,738 242,000 3,242,738
_______ _______ _______
2023
Balance brought forward Advances /(credits) to the directors Balance o/standing
£ £ £
Mr W Milligan 1,038,110 492,266 1,530,376
Mrs G Milligan 997,399 472,963 1,470,362
_______ _______ _______
2,035,509 965,229 3,000,738
_______ _______ _______
The amount owed to the company by its directors at the year end was £3,242,738 (2023: £3,000,738) and is included within other debtors. No interest is charged on loans due to and from the directors and loans are repayable on demand.
28. Related party transactions
At the year end, an amount totalling £275,000 (2023: £275,000) was due from a company under common control and is included within other debtors. No interest is being charged on the balance and the amount due is repayable on demand.
29. Controlling party
The company is under the control of its director , Mr W Milligan , by virtue of his majority shareholding.