The directors present the strategic report for the year ended 31 December 2024.
The principal activity of ViewSonic Europe Limited (‘the company’) is the sale and marketing of visual display products through its UK branch and overseas branches.
From an operational perspective challenging economic conditions have continued to have a significant impact on the company and worldwide ViewSonic group operations.
The company recorded a small decrease in revenue during the year and the overall trading performance and profitability of the company was noted as being impacted by a number of factors. It was pleasing that the gross margin was improved to 24.1% from 23.8%. Operating losses decreased after a challenging 2024.
The primary focus of the company is to ensure that core products can generate revenue growth by expanding market channels, product innovation and improved margins by optimising the product mix. In addition, the company continues strategic development of new product pipelines which will help to differentiate the product range from competitors and enhance the ViewSonic brand value. Even with wider market demand challenges for certain products the company notes there is a strong demand for ViewSonic core LCD product categories. The company remains confident in its long term European business plan and growth strategy across a diverse product range. The company has a network of key contract supply manufacturers to ensure it can meet consumer demand and also the high product specifications the ViewSonic brand is associated with.
Currency instability has continued to impact the business and pricing strategies. The company and wider group have been able to manage these risks and the directors are satisfied with the overall performance of the company in the period given the ongoing challenging economic conditions.
The company’s primary financial instruments are trade debtors, cash at bank, trade creditors and intercompany balances, which arise directly from its operations. The company has continued support from the ViewSonic Group and the use of any financial derivatives is governed by the policies approved by the parent company and board of directors.
Credit risk
The company trades only with recognised, creditworthy third parties. It is the company policy that all customers who trade on credit terms are subject to credit check procedures. Customer payments terms and receivable balances are monitored on an ongoing basis to mitigate the exposure to bad debts.
Foreign trade
Trading with overseas suppliers and customers can expose the company to the risk of adverse exposure to foreign exchange rate movements impacting profit. The company mitigates this risk by close control and management of the cash and currency positions.
All products are manufactured, assembled, tested and packaged by contract manufacturers overseas. The company generally uses several suppliers and contract manufacturers to produce components and finished goods. The use of a number of preferred suppliers assists in the mitigation of supply chain issues and control costs in a market where component cost and availability can be volatile. The company also has robust quality control measures. The company is aware any such delay or disruption to operations would impact adversely on the company reputation and ability to trade.
Key personnel
A potential risk is the loss of key personnel in the company. Management seek to ensure that key personnel are appropriately remunerated to ensure that good performance is recognised.
The directors consider the following to be the key performance indicators when assessing the performance of the company:
2024 2023
Turnover $125.30m $126.10m
Gross Profit $30.21m $30.00m
EBITDA ($2.61m) ($0.94m)
(Earnings before Interest, tax,
depreciation and amortisation)
ViewSonic Europe Limited have taken appropriate steps to mitigate trading risks through a number of measures. The company continues to meet customer demand with strong stock management and forecasting procedures. The company is aware the continued success of the business and execution of its business plan is driven by expanding geographic markets, consumer channels and ongoing product development.
Section 172 of the Companies Act 2006 requires a director of a company to act in the way they consider, in good faith, would most likely promote the success of the company for the benefit of its members and stakeholders.
In doing this, Section 172 requires a director to have regard, amongst other matters, to the:
- likely consequences of any decisions in the long-term;
- interests of the company's employees;
- need to foster the company's business relationships with suppliers, customers and others;
- impact of the company's operations on the community and environment;
- maintenance of its reputation for high standards of business conduct; and
- need to act fairly as between the different stakeholders of the company.
In discharging its s172 duties, the Company has regard to the interests and views of its internal and external stakeholders.
Information regarding engagement with stakeholders, including employees, suppliers and customers is included in the relevant section of the Strategic Report included in the Company’s financial statements for the year ended 31 December 2024, which are publicly available from Companies House. By considering the Company's purpose, vision, and values, together with its strategic priorities, the Company aims to make sure its decisions are consistent and equitable. The Company has established policies and procedures that reflect its commitment to responsible business practices.
These policies are communicated clearly and consistently across the staff base. The Company seeks to foster a culture of open communication and transparency, encouraging feedback from all stakeholders. As is normal for large companies, the Company delegates authority for day-to-day management to its executives and engages management in setting, approving, and overseeing the execution of the business strategy and related policies. The Company reviews the financial and operational performance of the business on a monthly basis with formal reporting and review at both board and executive level, supplemented by daily, weekly and monthly reporting and assessment of various KPIs across all areas of the operations.
Regular Company board meetings are held throughout the year with a mix of Group directors and Company executive directors in attendance with participation also from other senior employees. Through these and other means the Company reviews a variety of important matters over the course of the financial year including risk and compliance, corporate governance, environmental, legal, pensions, and health and safety matters, as well as stakeholder-related diversity and inclusivity, corporate social responsibility, and other stakeholder related matters.
This ensures the Company has an overview of engagement with stakeholders and complies with its s172 duty to promote the success of the Company.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 11.
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 company has summarised how they have made regard to the need to foster its business relationships with suppliers, customers and others and the effect of that regard on principal decision-making within the strategic report.
At the time of approving the financial statements the directors have a reasonable expectation after considering its future financial projections and making enquiries of their ultimate parent undertaking, ViewSonic Corporation, a US Delaware Corporation, that the company and group have adequate resources to continue in operational existence for the foreseeable future. The company has obtained a letter from its ultimate parent undertaking confirming that they will continue to provide, or arrange to provide resources to enable them to continue that financial support, for a period of at least 12 months from date of signing of these financial statements. Loan balances with a maturity date within one year at 31 December 2024 were extended to March 2027 and the group continues to provide funding as and when required.
In the preparation of future financial projections the company and group have considered the areas of uncertainty, in particular those relating to market risks, cost management and working capital management. Specifically, considering any ongoing impact of challenging macro-economic factors. From these considerations the directors deem that the company and group continue to have sufficient levels of cash for the ongoing financial support from its ultimate parent undertaking.
Saffery LLP have expressed their willingness to continue in office.
Under the Energy and Carbon Report Regulations 2018, the Company is required to report on the environmental impacts of the organisation respect of their energy usage in the UK and the seas around it. The key environmental impact is the electricity consumption and the business travel or employee-owned vehicles which the company is responsible for purchasing the fuel. This is broken down as follows:
We have followed the 2023 HM Government Environmental Reporting Guidelines. We have also used the GHG Report Protocol - Corporate Standard and have used 2023 UK Government's Conversion Factors for Company reporting.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per sales revenue $M, which is appropriate for the sector.
We have increased video conferencing technology for staff meetings to reduce the need for travel between sites.
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 intend 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Further, the company is subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements; through a significant fine, litigation or restrictions on the company’s operations. We identified the most significant of such laws and regulations to be the CE Marking Directive, the UKCA Marking Directive, the EMC Directive and the Waste Electrical and Electronic Equipment recycling (WEEE) Directive.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above 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 would become aware of it. 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.
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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
ViewSonic Europe Limited is a private company limited by shares incorporated in England and Wales. The registered office is Miles Yard, 10 Miles Street, London, SW8 1GX.
The financial statements are prepared in USD, which is the functional and presentational currency of the company. Monetary amounts in these financial statements are rounded to the nearest $000.
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 ViewSonic Corporation. These consolidated financial statements are available from its registered office, World Headquarters, 10 Pointe Drive, Brea, CA92821-7620, USA.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the income statement is charged with fair value of goods and services received.
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.
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.
The company consistently has ongoing sales promotions. Promotions include items such as cooperative advertising, rebates and price protection. Accruals for these promotions are provided for at the time of sale based upon estimates derived from historic cost experience and stock holdings held by customers at the balance sheet date.
The company provides a variety of warranty programmes, each tailored to its specific products. Estimated future warranty costs are accrued in the profit and loss account and balance sheet at the time the product is sold, based upon historic experience of the failure rates and unit repair costs.
Stock is stated at the lower of cost and net realisable value. As the company has various product lines, it maintains a stock provision for ageing stock. The ageing profile of stock is reviewed on a period basis to ensure the stock provision is accurate, consistently applied and in line with the accounting policy.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
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:
The company has tax losses of $28,000,000 to utilise against future trading profits.
The company enters into forward foreign currency contracts to mitigate the exchange rate risk.
Forward currency contracts
The forward currency contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key assumptions used in valuing the derivatives are the forward exchange rates for USD:GBP and USD:EUR.
As at 31 December 2024, the outstanding contracts all mature within 12 months of the year end.
An impairment charge of $104k (2023: write back of $1,989k) was recognised in cost of sales against stock during the year due to slow-moving and obsolete stock.
As at 31 December 2024, the company had outstanding loans and accrued interest in the sum of $42,138k (2023: $23,017k) from fellow group company, ViewSonic Corporation, a company registered in the USA. These loans bear an annual interest charge between 2.86% - 5.10% calculated on the daily unpaid capital balance.
The loans repayable within one year at 31 December 2024 of $32,011k were extended post year end with a term until March 2027.
Warranty provision
The Company provides up to a five year end-user warranty on some products with the majority of products having a three year end-user warranty.
Environmental provision
The Company provides for the environmental disposal of products on waste electrical and electronic equipment (WEEE).
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
The deferred tax asset set out above is expected to reverse within 24 months and relates to the utilisation of tax losses against future expected profits of the same period.
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. The amount of outstanding contributions at the end of the year were $8,526 (2023: $8,395).
In the financial year the company received loans from group undertakings as disclosed in note 16 of the financial statements with interest charges between 0.59% and 5.10% calculated on daily unpaid capital balances. The market rate of interest assessed by the directors has been determined at 8.50%. The loans have been recorded at fair value with the difference between fair value and book value recorded as a capital contribution. During the year a capital contribution was recorded of $1,947k (2023: $988k).
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:
The Company has taken advantage of the exemption in accordance with FRS 102, paragraph 33.1A "Related party disclosures" from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company.