Lorien Resourcing Limited 01333388 false 2024-01-06 2025-01-03 2025-01-03 The principal activity of the company is the provision of human resource business services, specialising in recruitment and consultancy. The business provides bespoke solutions to clients to meet their changing needs. These solutions range from the provision of single contingent or permanent resources through to large Recruitment Process Outsource (RPO) and Managed Service Provider (MSP) solutions with large dedicated teams and multiple onsite resources. Our core area of expertise is the provision of Information Technology (IT) resources with a specific focus on the UK market. 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Registration number: 01333388

Lorien Resourcing Limited

Annual Report

for the 52 weeks ended 3 January 2025

 

Lorien Resourcing Limited

Contents

Company Information

1

Strategic Report

2 to 5

Section 172(1) statement

4

Directors' Report

6 to 9

Statement of Directors' Responsibilities

10

Independent Auditor's Report

11 to 14

Profit and Loss Account

15

Statement of Comprehensive Income

16

Balance Sheet

17

Statement of Changes in Equity

18

Notes to the Financial Statements

19 to 37

 

Lorien Resourcing Limited

Company Information

Directors

T Briant

R R King

S R Blockley

Registered office

First Floor, Mulberry House
Parkland Square
750 Capability Green
Luton
LU1 3LU

Auditors

BDO LLP
Eden Building
Salford
Manchester
M3 5EN

 

Lorien Resourcing Limited

Strategic Report for the 52 weeks ended 3 January 2025

The directors present their strategic report for the 52 weeks ended 3 January 2025.

Fair review of the business

The company's key financial and other performance indicators during the period were as follows:

52 weeks
3 January
2025

53 weeks
5 January
2024

Change

£000s

£000s

%

Turnover

487,642

586,964

(16.9)

Gross Profit

27,593

33,221

(16.9)

Administrative expenses

(24,094)

(29,463)

(18.2)

Operating profit

3,499

3,758

(6.9)

Gross profit percentage (%)

5.7

5.7

Conversion rate (%) (Operating profit to Gross profit)

12.7

11.3

Permanent fees as a % of Gross profit

36.4

29.7

The Company operates within the core STEM specialist markets of digital, transformation and technology, focusing on temporary and permanent supply of specialist staff, working with clients across all sectors offering the most appropriate solution for their requirement.

On 13 December 2023 the ultimate parent company at the time, Impellam Group Plc. announced the agreement to sell the Impellam Group of companies ("the Group"), which include the Company, to HeadFirst Global Plc, which is partly owned by Icelake, a Europe-based investment fund that invests in exceptional companies. The sale completed on 21 March 2024.

During the year the business experienced a continuation of softer than expected trading conditions which resulted in revenues of £487.6m, representing a 16.9% decline on the prior year. Despite this, we did see an increase in underlying permanent vacancy opportunities across the year, albeit at levels below the prior year, resulting in net permanent fees of £7.3m, representing a 26% decline on 2023. Across our customer base, we continue to recognise a prudent, cautious approach to cost control measures with delayed hiring decisions impacting our underlying contractor fees in the year, which closed 16.9% down. Overall gross profit for the trading period was £27.6m, 16.9% down on last year at a gross profit percentage rate of 5.7%, consistent with 2023 levels. During the year the business acted promptly to rationalise the cost base, enhancing the operating model efficiency to improve consultant productivity and operating profit conversion which closed at 12.7%, up on the 11.3% rate in 2023. This decisive action assisted to reduce administrative expenses by 18.2% and subsequently, the operating profit closed at £3.5m, down 6.9% on 2023.

The increase in the non-current receivables from related parties is due to the way cash is managed in the Group and is reflected by the increase in amounts payable to related parties and the reduction in cash held by the Company. The value of the total assets less current liabilities is very similar year-on-year. The directors are reviewing options to improve the efficiency of this process and reduce the gross values of these balances.

Trading in 2025 has begun in line with our expectations, strengthened by our evolving business model we believe the business is well positioned to take a competitive advantage once confidence is fully restored and markets recover. Pipelines remain strong but we will continue to remain vigilant, given the political and economic headwinds of inflationary pressure and interest rate rises, continuing events in Ukraine and ongoing talent shortages across all our regions.

The directors continue to monitor the performance of the company and are confident of its continued success.

 

Lorien Resourcing Limited

Strategic Report for the 52 weeks ended 3 January 2025 (continued)

Principal risks and uncertainties

Attracting and retaining talent
Any constraints on the Company’s ability to attract and retain key talent in an increasingly competitive market could result in loss or weakening of client relationships, lack of appropriate leadership and/or erosion of the Company’s talent base, impacting achievement of both financial and other objectives.

Planned business transformation initiatives will create a need for new skill-sets in the Company in the medium term. Factors such as changes to the UK immigration rules may impact on the availability of talent more generally.

The Company’s high-retention business model ensures that brands and central functions are focused on talent management and development, performance review and succession planning. Leadership development programmes are in place and the Impellam Group’s Virtuoso-based approach encourages talent development and progression.

Customer concentration
General decline in a particular industry sector, loss of a key customer or a significant reduction in business volume on a key account could result in reduced revenue and/or increased pressure on gross profit. This exposure is known to have impacted on some of the Company’s competitors.

Management discuss and review market conditions and sales and account management pipelines on an ongoing basis. Management also hold regular meetings with key customers to discuss sales pipelines, current service performance and opportunities to add new services lines or extend existing services.

Technology Systems
The Company is reliant on many different technology systems that may have limited useful life in a fast-changing business environment. The legacy nature of some systems may hinder optimisation of end-to-end business processes. Systems may also be vulnerable to factors beyond the Company’s control e.g. power failures or internet connectivity outages.

The Company has a stable systems infrastructure and an ongoing IT investment programme. The Company is assessing the benefits of utilising systems that are now available within the wider group where they may enhance customer, colleague and worker experiences. In addition, the Company is assessing the use of AI to drive efficiencies and stakeholder benefits.

Cyber and Information security
The risk of external cyber-attacks continues to increase. A successful attack could result in loss of sensitive data, business disruption and/or damage to the Company’s reputation. A programme to enhance security of the Company’s systems against cyber-attack has been implemented and the business has been Cyber Essentials Plus certified since 2021.

Regulatory environment
Regulatory changes can lead to increased costs and workload, particularly where they relate to candidates’ rights, eligibility to work or corporate reporting e.g. payment practices, diversity.

Appropriate policies and codes of conduct are in place across the Company and regular training is provided to employees. External professional advice is sought where insufficient knowledge exists within the Company.

 

Lorien Resourcing Limited

Strategic Report for the 52 weeks ended 3 January 2025 (continued)

Section 172(1) statement

Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders and other matters in their decision-making. We believe we have a history of collaborative, informative stakeholder engagement and decision-making based on long-term success, and we maintain governance structures and processes that support good decision-making.

This section articulates how the Directors have acted to promote the success of the Company for the benefit of its stakeholders. In meeting this responsibility, the Directors have had regard, amongst other matters, to:
a) the likely consequences of any decisions in the long term;
b) the interests of the Company’s colleagues;
c) the need to foster the Company’s business relationships with suppliers, customers and others;
d) the impact of the Company’s operations on the community and environment;
e) the Company’s reputation for high standards of business conduct; and
f) the need to act fairly as between members of the Company.

Engagement with employees

The Company’s stakeholders are clients, candidates, suppliers, colleagues, investors and lenders and the Board recognises the need to regularly engage with its stakeholders as it makes decisions. We develop and encourage long-term relationships with our stakeholders based upon main Impellam Group’s vision ‘to be the world’s most trusted staffing company – trusted by our people, our clients and our investors in equal measure’.

As part of this vision, our stakeholders’ interests have been forefront when the Board of Directors set the strategic priorities of the Company. The strategic priorities of: Enabling our Virtuosos; Transforming our Portfolio; and Improving Resilience include consideration of the key stakeholder groups and how we engage with them.

In addition to regular stakeholder engagement, as the Board of Directors, our intention is to take into account our operational impacts on the community and environment, and our wider societal responsibilities, and in particular, how we impact the regions we serve. We support our communities by finding them good work, supporting local corporate social responsibility initiatives and ensuring our impact on the environment is minimal, as demonstrated by our ISO 14001 accreditation.

Key decisions

Digital transformation

During the year we invested in our core technology platforms to make greater use of digital solutions to improve the efficiency of our business processes.

Stakeholder considerations:
Colleagues, candidates and clients
The investment in the digital transformation systems will ensure the Company is easier and quicker to deal with, generating efficiencies across the candidate journey and enhancing the client experience. We have ensured that by allowing blended working we continue to meet the requirements of our clients and candidates.

Investors and lenders
The investment will ensure that our digital strategies and policies meet the constantly evolving business requirements, helping to improve the resiliency and efficiency and so make the company a more robust proposition.

Outcome
The new digital offerings, which include a new pay/bill system, were rolled out during the second half of the period. In taking these decisions and considering the digital needs of our candidates, customers and colleagues we will ensure we create long term success and become a truly data-led company.

 

Lorien Resourcing Limited

Strategic Report for the 52 weeks ended 3 January 2025 (continued)

Property rationalisation

In a continued effort to support our hybrid working model, the company decided to rationalise our property estate and actively reduce our portfolio size and move into more flexible office space.

Stakeholder considerations:
Colleagues, candidates and clients
Through a combination of a culture of encouraging feedback, survey insights and listening to our colleagues, candidates and clients, we ensured that any changes to the portfolio allowed the company to still offer a safe working environment for all visitors to the properties.

Investors and lenders
By reducing the property portfolio size the company has been able to deliver cost savings and profit growth. This will drive increased shareholder value and enable the company to continue to meet our cash flow targets and manage our lender requirements accordingly.

Outcome
Through rationalising the portfolio, the company has ensured it has an appropriate portfolio balance to support both remote working and face-to-face interactions. The more to flexible office space has enabled the Comppany to have the agility to adjust the size of the property portfolio to suit fluctuating requirements.

Approved by the Board on 21 July 2025 and signed on its behalf by:
 

.........................................
T Briant
Director

.........................................
R R King
Director

 

Lorien Resourcing Limited

Directors' Report for the 52 weeks ended 3 January 2025

The directors present their report and the financial statements for the 52 weeks ended 3 January 2025.

Directors of the company

The directors, who held office during the period, were as follows:

T Briant

J Robertson (resigned 5 February 2025)

The following directors were appointed after the period end:

R R King (appointed 5 February 2025)

S R Blockley (appointed 5 February 2025)

Principal activity

The principal activity of the company is the provision of human resource business services, specialising in recruitment and consultancy.

The business provides bespoke solutions to clients to meet their changing needs. These solutions range from the provision of single contingent or permanent resources through to large Recruitment Process Outsource (RPO) and Managed Service Provider (MSP) solutions with large dedicated teams and multiple onsite resources.

Our core area of expertise is the provision of Information Technology (IT) resources with a specific focus on the UK market. We are the dominant supplier of technical resources to a number of prestigious FTSE 100 clients.

Dividends

The company is recommending a final dividend in respect of 2024 of £8.88 per share totalling £19,980,000 to be paid on the date of signing of the accounts (2023: £Nil).

Financial instruments

Objectives and policies

The principal financial instruments of the Group of which the company is a member comprise participation in the Group's Receivables Purchase Agreement and cash. The main purpose of these financial instruments is to raise finance for the Group's operations. The company has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations. The company does not enter into derivative transactions.

Financial instrument risks

The main risks arising from the company's financial instruments are interest rate risk and foreign currency risk. The board reviews and agrees policies for managing each of these risks as summarised below:

Interest rate risk
The company's exposure to interest rate risk is minimal as borrowings are held at a group level. The company does not currently hedge this risk.

Foreign currency risk
The company is exposed to fluctuations in the exchange rate between sterling and euro. Wherever possible this risk is managed by ensuring expenses related to the generation of these overseas revenues are in the same currency as the income. The company does not seek to hedge this exposure.

Credit risk
The company has exposure to credit risk on trade receivables. To mitigate this risk, the compay participates in the Group credit insurance policy that covers the receivables of the company.

Political donations

The company made no political donations during either the current or prior periods.

 

Lorien Resourcing Limited

Directors' Report for the 52 weeks ended 3 January 2025 (continued)

Employment of disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the abilities of the applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the company continues and that appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The company recognises that it is essential to maintain a highly skilled workforce. To this end the policy of training and development is incorporated in the company plan. It is the policy to promote from within the organisation wherever the possibility exists.

Health and safety measures are given particular attention by the directors and a written policy exists and is known throughout the company.

The company recognises the need for employees to be informed of the company's activities and performance. A corporate intranet for all employees provides a wide range of information and provides an increasingly important communication tool for policies and procedures as well as the sharing of information, document storage and specific news. Meetings are held between management and employees to allow sharing of information and consultation. Employees participate directly in the performance of the business through the Company's bonus arrangements.

Environmental matters

Although we are a service-based organisation with no manufacturing facilities and limited transportation requirements, we are still committed to following environmental best practices in the day-to-day conduct of our business. This includes the use of sustainable and/or recyclable materials when available. A regular review of the potential impacts on the various businesses is undertaken and parts of the Company have achieved accreditation to ISO 14001 in relation to their environment management systems.

A Streamlined Energy and Carbon report has not been included within the report as it is included within the group report of Impellam Group Limited.

Social and community issues

As part of the Company’s mission to find people fulfilling work, we strongly oppose modern slavery in all its forms and will try to prevent it by any means that we can. We expect anyone who has any suspicions of modern slavery in our business or our supply chain to raise their concerns without delay. In light of the Modern Slavery Act 2015 we annually review internal and external measures to ensure we are doing what we can to prevent slavery and human trafficking in our businesses and in our supply chains. Our policy is available on the website of Impellam Group Limited at www.impellam.com.

We have a commitment to carrying out business fairly, honestly and openly. We also have zero tolerance towards bribery. Our Bribery Policy is in place to provide relevant guidance and information to all our people in compliance with the law relating to bribery and corruption, in particular the Bribery Act 2010 (‘the Act’). We are determined to maintain our reputation as a business that will not tolerate fraudulent or corrupt dealings – whether they are attempted against us from outside, from within our own workforce, or towards our clients or suppliers.

 

Lorien Resourcing Limited

Directors' Report for the 52 weeks ended 3 January 2025 (continued)

Going concern

The directors have set out their business review for the Company in the Strategic Report on page 2. After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. In coming to their conclusion, the Directors have considered the Group’s profit and cash flow plans for FY25 and FY26 (the going concern forecast period), as well as considering potential downside scenarios and their potential impact on the trading performance and cash flows of the Group.

Prior to the acquisition of the Group by HeadFirst Global Plc, the Group operated with a £132.5m Revolving Credit Facility (‘RCF’) with a £30m accordion facility. On completion of the acquisition, outstanding amounts on the RCF were repaid on 12 April 2024 and the facility terminated. On 3 June 2024, a new 3 year US$400m (£313m on the date the facility was taken out) committed Receivable Purchase Agreement (‘RPA’) facility was entered into by the Group, of which US$362m (£292m) is drawn as at 3 January 2025. The borrowing base under the RPA is determined by the value of the Group’s USD and GBP receivables and is subject to overall Group liquidity levels as well as leverage and interest cover covenants and capped at US$400m, with a floor of $175m. The Group’s going concern projections assess the potential debt requirements against the Group’s US$400m of committed facilities and against the key covenant ratios over the period to the end of FY26.

The new RPA borrowing facilities are subject to Accelerated Collection Payment Event (ACPE) and Master Servicer Termination Event (MSTE) covenants that are measured monthly. The ACPE covenants are net debt to EBITDA (leverage) of a maximum of 7.0x until May 2025, 6.75x for June and July 2025 and 6.0x thereafter and interest cover of a minimum of 1.5x over the entire length of the facility. The MSTE provides higher covenant headroom with leverage at 7.0x EBITDA until August 2025 and 6.5x thereafter and Interest cover at 1.7x. The Group liquidity basis must be maintained at a minimum of £30m under the ACPE covenant and £20m under the MSTE covenant, which is measured weekly. All covenants are forecast to be met throughout the going concern forecast period.

The Group has modelled sensitivities over the going concern forecast period, as well as assessing reverse stress test scenarios using the ACPE covenant thresholds to be conservative. Therefore, further headroom would exist in these scenarios under the MSTE covenant. The most sensitive assumptions and covenants relate to EBITDA and net debt forecasts. The reverse stress testing focused on a reduction in EBITDA, reduced gross profit and cost savings. A fall in gross profit of more than 4.4% for FY25 would cause a breach in the leverage covenant and require mitigating actions to be initiated. The first action would be pre-emptively not recruit forecast incremental headcount if associated revenues are not materialising, then reduce the discretionary annual bonus accrual which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment. These actions could offset at least 12% reduction in gross profit before the leverage covenant was breached, which is deemed highly unlikely in the current trading climate. The Group is currently trading in FY25 in line with profit forecasts.

Similar to other organisations, it remains hard to predict an uncertain macro-economic backdrop which continues through 2025. Consequently, there is a degree of uncertainty in respect of future forecasts. However, the Group has the finance facility committed until June 2027, subject to extension application in June 2026 and a blend of revenue streams covering permanent, contract, interim and recruitment process outsourcing and a diverse range of clients and suppliers across three regions (UK & Europe, North America and APAC). The various stress test scenarios and mitigating actions indicate the Group can continue operation within its banking covenants and existing cash and financing facilities. Importantly, liquidity risk is mitigated to an extent as a proportion of the Group trade creditors are on a ‘paid when paid’ contractual basis; further working capital is typically released in any downturn scenario, in the contract recruitment sector, and the group continues to maintain credit insurance, to mitigate the impact of any unexpected non-payment by key customers. Further details of the financial position of the Group, its cash flows, liquidity position and borrowing facilities are described within the Strategic Report of Impellam Group Limited.

The going concern forecasts set out above assess the Group on a standalone basis, as the RPA facility is provided to the Group entities only, and not the wider HeadFirst group of companies. Within these forecasts, the directors have considered and included, as necessary, any requirements to provide funding to HeadFirst Group, the ultimate Parent Company, or other subsidiaries that do not form part of the Group.

 

Lorien Resourcing Limited

Directors' Report for the 52 weeks ended 3 January 2025 (continued)

The going concern assessment required careful consideration of the forecasted cash flows over at least the next 12 months, including assumptions on gross profit, cost control, and timing of cash receipts and payments. Given the inherent uncertainty in these forecasts, management exercised significant judgement in:
• Estimating future revenue and gross profit on current market conditions and new business growth
• Assessing the timing and amount of working capital requirements
• Evaluating compliance with borrowing facilities financial covenants
• Considering potential mitigating actions, such as cost reductions such as reducing the discretionary annual bonus which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment.

The directors are satisfied that the forecasts are reasonable and support the entity’s ability to meet its obligations as they fall due. The directors are also satisfied that mitigating actions would be sufficient to allow the Group to operate within its covenants in any reasonably likely scenario. The directors are also of the judgement that it has a good relationship with its primary lender and that they would be willing to offer forbearance in the unlikely event that the covenants are breached for such time as it takes to rectify the situation.

Based on the above, the Directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements.

Directors' liabilities

During the period and to the date of these financial statements, the company had in force an indemnity provision in favour of one or more Directors of the company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditors

The auditors BDO LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved by the Board on 21 July 2025 and signed on its behalf by:
 

.........................................
T Briant
Director

.........................................
R R King
Director

 

Lorien Resourcing Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 101 'Reduced Disclosure Framework' ('FRS 101'). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether FRS 101 has been followed, subject to any material departures disclosed and explained in the financial statements; 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.

 

Lorien Resourcing Limited

Independent Auditor's Report to the Members of Lorien Resourcing Limited

Opinion on the financial statements

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 3 January 2025 and of its profit for the period then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Lorien Resourcing Limited (the 'company') for the 52 week period ended 3 January 2025, which comprise the Profit and Loss Account, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and Notes to the Financial Statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence
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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's 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 directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

 

Lorien Resourcing Limited

Independent Auditor's Report to the Members of Lorien Resourcing Limited (continued)

Other Companies Act 2006 reporting

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 period 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.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of 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 Statement of Directors' Responsibilities, 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.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

Our understanding of the Company and the industry in which it operates;

Discussion with management and those charged with governance; and

Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations.

We considered the significant laws and regulations to be FRS101, the Companies Act 2006 and relevant tax legislation.

 

Lorien Resourcing Limited

Independent Auditor's Report to the Members of Lorien Resourcing Limited (continued)

The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be data protection laws, anti-money laundering regulations and UK employment legislation.

Our procedures in respect of the above included:

Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations;

Review of financial statement disclosures and agreeing to supporting documentation;

Involvement of tax specialists in the audit.

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;

Obtaining an understanding of the Company’s policies and procedures relating to:

o Detecting and responding to the risks of fraud; and

o Internal controls established to mitigate risks related to fraud.

Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;

Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and

Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.

Based on our risk assessment, we considered the areas most susceptible to fraud to be posting of inappropriate journal entries, management bias in accounting estimates, overstatement and non recoverability of accrued income, and improper revenue recognition associated with pre-year end cut off.

Our procedures in respect of the above included:

Testing a sample of journal entries throughout the year, which met a defined risk criterion, by agreeing to supporting documentation.

Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations;

Challenging assumptions and judgements made by management in their significant accounting estimates; and

Testing a sample of revenue transactions within a specified cut off window pre year end, as well as accrued income balances to determine if they have been recorded in the correct period.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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.

 

Lorien Resourcing Limited

Independent Auditor's Report to the Members of Lorien Resourcing Limited (continued)

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.

......................................
Steven Roberts (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor

Manchester, UK

22 July 2025

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

 

Lorien Resourcing Limited

Profit and Loss Account for the 52 weeks ended 3 January 2025

Note

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Turnover

4

487,642

586,964

Cost of sales

 

(460,049)

(553,743)

Gross profit

 

27,593

33,221

Administrative expenses

 

(24,094)

(29,463)

Operating profit

5

3,499

3,758

Interest receivable and similar income

7

33

-

Interest payable and similar expenses

8

(18)

(28)

Profit before tax

 

3,514

3,730

Tax on profit

11

(1,175)

(1,585)

Profit for the period

 

2,339

2,145

The above results were derived from continuing operations.

 

Lorien Resourcing Limited

Statement of Comprehensive Income for the 52 weeks ended 3 January 2025

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Profit for the period

2,339

2,145

Total comprehensive income for the period

2,339

2,145

 

Lorien Resourcing Limited

(Registration number: 01333388)
Balance Sheet as at 3 January 2025

Note

3 January
2025
£ 000


5 January
2024
£ 000

Non-current assets

 

Tangible assets

12

211

366

Right of use assets

13

364

656

Receivables from related parties

14

102,551

66,859

 

103,126

67,881

Current assets

 

Trade and other receivables

14

39,529

64,265

Deferred tax asset

19

84

69

Cash at bank and in hand

15

246

2,502

 

39,859

66,836

Creditors: Amounts falling due within one year

16

(107,322)

(101,230)

Net current liabilities

 

(67,463)

(34,394)

Total assets less current liabilities

 

35,663

33,487

Creditors: Amounts falling due after more than one year

17

(144)

(312)

Provisions for liabilities

18

(153)

(148)

Net assets

 

35,366

33,027

Capital and reserves

 

Called up share capital

21

2,250

2,250

Capital redemption reserve

 

10

10

Retained earnings

 

33,106

30,767

Shareholders' funds

 

35,366

33,027

These financial statements were approved by the Board on 21 July 2025 and signed on its behalf by:

.........................................
T Briant
Director

.........................................
R R King
Director

 

Lorien Resourcing Limited

Statement of Changes in Equity for the 52 weeks ended 3 January 2025

Share capital
£ 000

Capital redemption reserve
£ 000

Retained earnings
£ 000

Total
£ 000

At 31 December 2022

2,250

10

28,622

30,882

Profit for the period

-

-

2,145

2,145

Total comprehensive income

-

-

2,145

2,145

At 5 January 2024

2,250

10

30,767

33,027

Share capital
£ 000

Capital redemption reserve
£ 000

Retained earnings
£ 000

Total
£ 000

At 6 January 2024

2,250

10

30,767

33,027

Profit for the period

-

-

2,339

2,339

Total comprehensive income

-

-

2,339

2,339

At 3 January 2025

2,250

10

33,106

35,366

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025

1

General information

The company is a private company limited by share capital, incorporated and domiciled in the United Kingdom.

The address of its registered office is:
First Floor, Mulberry House
Parkland Square 750 Capability Green
Luton LU1 3LU

These financial statements were authorised for issue by the Board on 21 July 2025.

2

Accounting policies

Summary of material accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”).

In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK adopted international accounting standards.

Summary of disclosure exemptions

In these financial statements, the company has taken advantage of the exemptions available under FRS 101 in respect of the following disclosures:

IFRS 7 - ‘Financial instruments: Disclosures’.

The requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 - ‘Revenue from Contracts with Customers’ (disaggregation of revenue, significant changes in contract assets and liabilities, details on transaction price allocation, timing of the satisfaction of performance obligations and significant judgements made in the application of IFRS 15).

The requirements of paragraph 52 lessee, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 lessor of IFRS 16 - ‘Leases’ (lessee disclosures and lessor disclosures in relation to finance leases and lease income on operating leases).

Paragraph 38 of IAS 1 - ‘Presentation of financial statements’ (comparative information requirements in respect of):

- paragraph 79(a)(iv) of IAS 1
(reconciliation of number of shares at the beginning and end of the period)

- paragraph 73(e) of IAS 16, ‘Property, plant and equipment’
(reconciliations between the carrying amount at the beginning and end of the period)

The following paragraphs of IAS 1 - ‘Presentation of financial statements’ (removing the requirement to present):

- 10(d) (statement of cash flows);

- 16 (statement of compliance with all IFRS);

- 38B-D (additional comparative information);

- 111 (cash flow statement information);

- 134-136 (capital management disclosures)

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

IAS 7 - ‘Statement of cash flows’.

Paragraphs 30 and 31 of IAS 8 - ‘Accounting policies, changes in accounting estimates and errors’ (requirement for the disclosure of information when an entity has not applied a new IFRS that has been issued but is not yet effective).

Paragraph 17 of IAS 24 - ‘Related party disclosures’ (key management compensation).

The requirements in IAS 24, ‘Related party disclosures’ (to disclose related party transactions entered into between two or more members of a group).

Changes in accounting policy

None of the standards, interpretations and amendments effective for the first time from 6 January 2024 have had a material effect on the financial statements.

Going concern

The directors have set out their business review for the Company in the Strategic Report on page 2. After making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. In coming to their conclusion, the Directors have considered the Group’s profit and cash flow plans for FY25 and FY26 (the going concern forecast period), as well as considering potential downside scenarios and their potential impact on the trading performance and cash flows of the Group.

Prior to the acquisition of the Group by HeadFirst Global Plc, the Group operated with a £132.5m Revolving Credit Facility (‘RCF’) with a £30m accordion facility. On completion of the acquisition, outstanding amounts on the RCF were repaid on 12 April 2024 and the facility terminated. On 3 June 2024, a new 3 year US$400m (£313m on the date the facility was taken out) committed Receivable Purchase Agreement (‘RPA’) facility was entered into by the Group, of which US$362m (£292m) is drawn as at 3 January 2025. The borrowing base under the RPA is determined by the value of the Group’s USD and GBP receivables and is subject to overall Group liquidity levels as well as leverage and interest cover covenants and capped at US$400m, with a floor of $175m. The Group’s going concern projections assess the potential debt requirements against the Group’s US$400m of committed facilities and against the key covenant ratios over the period to the end of FY26.

The new RPA borrowing facilities are subject to Accelerated Collection Payment Event (ACPE) and Master Servicer Termination Event (MSTE) covenants that are measured monthly. The ACPE covenants are net debt to EBITDA (leverage) of a maximum of 7.0x until May 2025, 6.75x for June and July 2025 and 6.0x thereafter and interest cover of a minimum of 1.5x over the entire length of the facility. The MSTE provides higher covenant headroom with leverage at 7.0x EBITDA until August 2025 and 6.5x thereafter and Interest cover at 1.7x. The Group liquidity basis must be maintained at a minimum of £30m under the ACPE covenant and £20m under the MSTE covenant, which is measured weekly. All covenants are forecast to be met throughout the going concern forecast period.

The Group has modelled sensitivities over the going concern forecast period, as well as assessing reverse stress test scenarios using the ACPE covenant thresholds to be conservative. Therefore, further headroom would exist in these scenarios under the MSTE covenant. The most sensitive assumptions and covenants relate to EBITDA and net debt forecasts. The reverse stress testing focused on a reduction in EBITDA, reduced gross profit and cost savings. A fall in gross profit of more than 4.4% for FY25 would cause a breach in the leverage covenant and require mitigating actions to be initiated. The first action would be pre-emptively not recruit forecast incremental headcount if associated revenues are not materialising, then reduce the discretionary annual bonus accrual which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment. These actions could offset at least 12% reduction in gross profit before the leverage covenant was breached, which is deemed highly unlikely in the current trading climate. The Group is currently trading in FY25 in line with profit forecasts.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Similar to other organisations, it remains hard to predict an uncertain macro-economic backdrop which continues through 2025. Consequently, there is a degree of uncertainty in respect of future forecasts. However, the Group has the finance facility committed until June 2027, subject to extension application in June 2026 and a blend of revenue streams covering permanent, contract, interim and recruitment process outsourcing and a diverse range of clients and suppliers across three regions (UK & Europe, North America and APAC). The various stress test scenarios and mitigating actions indicate the Group can continue operation within its banking covenants and existing cash and financing facilities. Importantly, liquidity risk is mitigated to an extent as a proportion of the Group trade creditors are on a ‘paid when paid’ contractual basis; further working capital is typically released in any downturn scenario, in the contract recruitment sector, and the group continues to maintain credit insurance, to mitigate the impact of any unexpected non-payment by key customers. Further details of the financial position of the Group, its cash flows, liquidity position and borrowing facilities are described within the Strategic Report of Impellam Group Limited.

The going concern forecasts set out above assess the Group on a standalone basis, as the RPA facility is provided to the Group entities only, and not the wider HeadFirst group of companies. Within these forecasts, the directors have considered and included, as necessary, any requirements to provide funding to HeadFirst Group, the ultimate Parent Company, or other subsidiaries that do not form part of the Group.

The going concern assessment required careful consideration of the forecasted cash flows over at least the next 12 months, including assumptions on gross profit, cost control, and timing of cash receipts and payments. Given the inherent uncertainty in these forecasts, management exercised significant judgement in:
• Estimating future revenue and gross profit on current market conditions and new business growth
• Assessing the timing and amount of working capital requirements
• Evaluating compliance with borrowing facilities financial covenants
• Considering potential mitigating actions, such as cost reductions such as reducing the discretionary annual bonus which is linked to financial performance, followed by reducing other discretionary spend such as marketing, travel and entertainment.

The directors are satisfied that the forecasts are reasonable and support the entity’s ability to meet its obligations as they fall due. The directors are also satisfied that mitigating actions would be sufficient to allow the Group to operate within its covenants in any reasonably likely scenario. The directors are also of the judgement that it has a good relationship with its primary lender and that they would be willing to offer forbearance in the unlikely event that the covenants are breached for such time as it takes to rectify the situation.

Based on the above, the Directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements.

Revenue recognition

Recognition

The company earns revenue from the provision of services relating to provision of staff. This revenue is recognised in the accounting period when the services are rendered at an amount that reflects the consideration to which the entity expects to be entitled in exchange for fulfilling its performance obligations to customers.

The principles in IFRS are applied to revenue recognition criteria using the following 5 step model:

1. Identify the contracts with the customer.
2. Identify the performance obligations in the contract.
3. Determine the transaction price.
4. Allocate the transaction price to the performance obligations in the contract.
5. Recognise revenue when or as the entity satisfies its performance obligations.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Fee arrangements

Below are details of fee arrangements and how these are measured and recognised, for revenue from the provision of services:

Revenue derived from temporary staffing services is recognised and accrued by reference to hours worked (representing the service provided) in accordance with submitted authorised timesheets and pre-agreed charge rates (which include an element of salary and related costs) which are together used to determine the transaction price. This applies both when there is a direct supply as well as when there is supply of a Managed Service to the client, as the timing of performance obligations and the raising of invoices can vary. Timesheets are submitted mainly on a weekly basis, with a limited number being submitted either daily or monthly so any variable aspect of contract assets is limited due to the financial period finishing at the end of a week.

Revenue derived from permanent placements is recognised and accrued when the employment of the individual commences with provision made for potential refunds which can be payable if the placement is terminated within a set period ranging from 14 to 100 days. Revenue recognised from a permanent placement uses a transaction price typically based on a percentage of the candidate’s remuneration package and is recognised when the candidate commences work with the client which is the only performance obligation and point at which control was transferred involved in the supply.

Revenue derived from statement of work services is recognised and accrued by reference to the completion of milestones set in the contract with the client (representing the service provided). The transaction price is determined based upon an estimation of the hours required to complete the work and pre-agreed charge rates (which include an element of salary and related costs). Timesheets are submitted mainly on a weekly basis, with a limited number being submitted either daily or monthly so any variable aspect of contract assets is limited due to the financial period finishing at the end of a week.

For revenue derived from both temporary staffing and permanent placements payment is due following the completion of the performance obligations and an agreed period of credit dependent on the agreed contract with the client.

Principal versus agent

The Company assesses whether it is acting as agent or principal depending on whether the client has a direct relationship with the Company, whether the Company has the primary responsibility for providing the services and whether the Company has control of or holds the inventory risk over the worker placed.

Where the Company acts as a principal in the supply, revenue is recognised as the gross amount due, net of value-added tax, rebates and discounts and after eliminating sales made within the Company. Where the Company provides a service in which it acts as agent for the client, the amount of revenue recognised is limited to the management fee receivable for that service after making provision for any losses foreseen, volume rebates and any other amounts payable rather than the full amount invoiced. Trade receivables and payables related to these sales are recorded at full invoice value. The Company conducts business purely on a principal basis.

Contract assets and receivables

Where goods or services are transferred to the customer before the customer pays consideration, or before payment is due, contract assets are recognised. Contract assets are included in the statement of financial position and represent the right to consideration for products delivered.

Contract receivables (loans and advances) are recognised in the statement of financial position when the company’s right to consideration becomes unconditional.

Contract assets & receivables (loans and advances) are classified as current or non- current based on the company’s normal operating cycle and are assessed for impairment at each reporting date.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Impairment of contract related balances

At each reporting date, the company determines whether or not such assets are impaired by comparing the carrying amount of the asset to the remaining amount of consideration that the company expects to receive less the costs that relate to providing services under the relevant contract. In determining the estimated amount of consideration, the company uses the same principles as it does to determine the contract transaction price, except that any constraints used to reduce the transaction price will be removed for the impairment test.

Where the relevant contracts or specific performance obligations are demonstrating marginal profitability or other indicators of impairment, judgement is required in ascertaining whether or not the future economic benefits from these contracts are sufficient to recover these assets. In performing this impairment assessment, management is required to make an assessment of the costs to complete the contract. The ability to accurately forecast such costs involves estimates around cost savings to be achieved over time, anticipated profitability of the contract, as well as future performance against any contract-specific KPIs that could trigger variable consideration, or service credits. Where a contract is anticipated to make a loss, these judgements are also relevant in determining whether or not an onerous contract provision is required and how this is to be measured.

Finance income and costs policy

Interest income receivable on deposits with financial institutions is recognised on an accrued basis.

Foreign currency transactions and balances

Profit and loss transactions in foreign currencies are translated into sterling at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the closing rates at the balance sheet date and the exchange differences are included in the profit and loss account.

Tax

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.

Tangible assets

Tangible assets is stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of Tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Depreciation

Tangible fixed assets are stated at cost or valuation, less depreciation and any provision for impairment. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost less estimated residual value of each asset on a straight line basis over its estimated useful life, as follows:

Asset class

Depreciation method and rate

Fixtures and fittings

Between 4-7 years

Office equipment

Between 2-4 years

Trade receivables

Trade receivables, which have various terms, are non-interest-bearing and are recognised and carried at fair value and subsequently measured at amortised cost, being the original invoice amount less an allowance for uncollectible amounts, credit notes and expected credit losses.

The Group has a Receivables Purchasing Arrangement (RPA) whereby certain receivables are sold to a third party. This arrangement is on a recourse basis and so the trade receivables sold to the external funding agent have not been derecognised in accordance with IFRS 9. Any other trade receivables which have not been sold to the RPA, remain within trade receivables and will be paid when due under the client payment terms.

The Company applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables and contract assets are grouped based on similar credit risk and ageing. The contract assets have similar risk characteristics to the trade receivables for similar types of contracts.

The expected loss provision is based on the Company’s expectation of future credit losses over the current receivables balance. These expectations are based upon known issues effecting specific debtors as well as general forward-looking information on factors affecting the Company’s customers as a whole as well as an awareness of the economic conditions in the countries where the Company operates. These risk factors are considered both on initial recognition of the receivable and as part of the ongoing assessment. If there has been a significant increase in the credit risk since the initial recognition then an increased loss provision is recognised.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Amounts owed by related parties

Amounts owed by related parties are assessed for impairment based upon the current financial position and expected future performance of the party to which they relate. Loans to overseas entities incur interest at an arms length rate as determined by a transfer pricing study which is currently 6.77%.

The Company applies the IFRS 9 general approach to measuring expected credit losses. This approach requires an assessment at the initiation of the loan as to the risk of default, and a further assessment when the credit risk profile of the loans change. IFRS 9 applies a 3 stage model that is applied when calculating the expected credit losses:
• Stage 1 is defined as having no Significant Increase In Credit Risk (‘SICR’) – a 12 month expected credit loss is recognised at this point.
• Stage 2 is defined as having a SICR – a lifetime expected credit loss is recognised at this point.
• Stage 3 is defined as being credit impaired – a lifetime expected credit loss is recognised at this point.

There is no material impact to these assessments by the interest charged on some loans.

The Company defines the following:
Definition of a default - A loan is considered to be in default when there is evidence that the borrower is in significant financial difficulty such that it will have insufficient assets to repay the loan on demand.
SICR assessment – The risk that the borrower will default on a demand loan depends on whether the party has sufficient cash or other assets to repay the loan immediately (meaning that the risk of default is very low and the loan is in Stage 1); or does not have sufficient cash or other assets to repay the loan immediately (meaning that the risk of default is higher, and the loan could be in Stage 2 or Stage 3).
Credit impaired indicators - A loan is considered to be credit impaired if it meets the definition of a defaulted loan.

The Company performs this assessment qualitatively by reference to the borrower’s immediate cash flow and asset position.

Provisions

Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the reporting date and are discounted to present value where the effect is material.

Leases

Definition

All leases are accounted for by recognising a right-of-use asset and a lease liability except for leases of low-value assets and leases with an expected full term of 12 months or less.

Lease liabilities are measured at the present value of the unpaid contractual payments over the expected lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Company’s incremental borrowing rate on commencement of the lease is used.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Initial recognition and measurement

On initial recognition, the carrying value of the lease liability also includes amounts expected to be payable under any residual value guarantee; the exercise price of any purchase option granted in favour of the Company if it is reasonably certain to exercise that option; and any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of the termination option being exercised.

Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for lease payments made at or before commencement of the lease and initial direct costs incurred.

Subsequent measurement

Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if this is judged to be shorter than the lease term.

Lease modifications

When the Company revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted at a revised discount rate that is implicit in the lease for the remainder of the lease term. The carrying value of lease liabilities is similarly revised if any variable element of future lease payments dependent on a rate or index is revised. In both cases, an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining lease term.

When the Company renegotiates the contractual terms of a lease with the lessor, the accounting depends on the nature of the modification. If the renegotiation results in one or more additional assets being leased for an amount similar to the standalone price for the additional rights-of-use obtained, the modification is accounted for as a separate lease in accordance with the above policy. In all other cases where the renegotiation increases the scope of the lease (whether that is an extension to the lease term, or one or more additional assets being leased), the lease liability is remeasured using the discount rate applicable on the modification date, with the right-of-use asset being adjusted by the same amount. If the renegotiation results in a decrease in the scope of the lease, both the carrying amount of the lease liability and right-of-use asset are reduced by the same proportion to reflect the partial or full termination of the lease with any difference recognised in profit or loss. The lease liability is then further adjusted to ensure the carrying amount reflects the amount of the renegotiated payments over the renegotiated term, with the modified lease payments discounted at the rate applicable on the modification date. The right-of use asset is adjusted by the same amount.

Right-of-use assets are reviewed regularly to ensure that the useful economic life of the asset is still appropriate based on the usage of the asset. Where the asset has reduced in value the Company considers the situation on an asset-by-asset basis and either treats the reduction as an acceleration of depreciation or as an impairment under IAS 36 Impairment of Assets. An acceleration of depreciation occurs in those cases where there is no opportunity or intention to utilise the asset before the end of the lease. An impairment is recognised in those few cases where the current value-in-use of the asset is significantly less than the carrying amount and there is no intention or opportunity known of that mitigates this impairment.

For contracts that both convey a right to the Company to use an identified asset and require services to be provided to the Company by the lessor, the Company has elected to account for the entire contract as a lease.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Short term and low value leases

The company has made an accounting policy election, by class of underlying asset, not to recognise lease assets and lease liabilities for leases with a lease term of 12 months or less (i.e., short-term leases).

The company has made an accounting policy election on a lease-by-lease basis, not to recognise lease assets on leases for which the underlying asset is of low value.

Lease payments on short term and low value leases are accounted for on a straight line bases over the term of the lease or other systematic basis if considered more appropriate. Short term and low value lease payments are included in operating expenses in the income statements.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

The capital redemption reserve arose from the historic cancellation of various shares in the company and is a non-distributable reserve.

Defined contribution pension obligation

The company operates a defined contribution pension scheme. Contributions are recognised in the profit and loss account in the period in which they become payable in accordance with the rules of the scheme.

Financial instruments

Initial recognition

Financial assets and financial liabilities comprise all assets and liabilities reflected in the balance sheet, although excluding Tangible assets, intangible assets, deferred tax assets and prepayments.

Classification and measurement

Financial instruments are classified at inception into one of the following categories, which then determine the subsequent measurement methodology:

Financial assets are classified into one of the following three categories:
• financial assets at amortised cost;
• financial assets at fair value through other comprehensive income (FVTOCI); or
• financial assets at fair value through the profit or loss (FVTPL).

Financial liabilities are classified into one of the following two categories:
• financial liabilities at amortised cost; or
• financial liabilities at fair value through the profit or loss (FVTPL).

The company’s accounting policy for each category is as follows:

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Financial assets at amortised cost

These assets arise principally from the provision of services to customers (for example trade debtors), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions for current and non-current trade debtors are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade debtors is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade debtors. For trade debtors, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within cost of sales in the statement of comprehensive income. On confirmation that the trade debtor will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised. From time to time, the company elects to renegotiate the terms of trade debtors due from customers with which it has previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes to the amounts owed and, in consequence, the new expected cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value is recognised in the statement of comprehensive income (operating profit).

Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI only if it meets both of the following conditions and is not designated as at FVTPL:
• the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
• the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The company does not have any such assets nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Financial assets at fair value through the profit or loss (FVTPL)

The company does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Financial liabilities at amortised cost

The company classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. The company does not have any liabilities held for trading nor does it voluntarily classify any financial liabilities as being at fair value through profit or loss. The company’s accounting policy for each category is as follows:
• Trade creditors and other short-term monetary liabilities, which are initially recognised at fair value and are subsequently carried at amortised cost using the effective interest method.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

2

Accounting policies (continued)

Financial liabilities at fair value through the profit or loss

The company does not have any liabilities held for trading nor does it voluntarily classify any financial liabilities as being at fair value through profit or loss.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

3

Critical accounting judgements and key sources of estimation uncertainty

Agent versus principal
The Company assesses whether it is acting as agent or principal depending on whether the client has a direct relationship with the Company, whether the Company has the primary responsibility for providing the services and whether the Company contracts directly with either the worker placed or any other recruitment agency. This judgement has been reviewed in relation to IFRS 15 ‘Revenue from Contracts with Customers’. Account is also made of the degree of latitude the Company has in establishing the charging rates with all parties.

Where the Company provides a Managed Service, in which it acts as agent for the client (which is mainly Managed Services contracts), the amount of revenue recognised is limited to the management fee receivable for that service after making provision for any losses foreseen, volume rebates and amounts payable under gain-share arrangements rather than the full amount invoiced. Trade receivables and payables related to these sales are recorded at full invoice value.

Lease end dates
Under IFRS 16 ‘Leases’ a right-of-use asset and lease liability needs to be recognised in line with the expected lease term, which may not be the same as the term of the lease. This has led to a level of judgement over the leases in our portfolio on the expected lease termination date. Depending on the circumstances on the individual lease, the Company has taken either the break date (for those circumstances where the break is has a reasonable expectation of being exercised) or the actual lease end date.

Receivables purchase arrangements
The Impellam Group has entered into an agreement to sell certain of their receivables to a third party to accelerate funding for the Group, which includes the receivables of the Company. Judgement has been exercised over the terms of the agreement on whether or not substantially all the risks and rewards related to the receivable have been transferred which could require the de-recognition of the receivables. The judgement reached was that, given the specific facts around the structure of the transaction, that substantially all of the risks and rewards have been retained. As such, the related receivables have not been derecognised as all of the IFRS 9 derecognition criteria have not been met.

Lease interest rates
The Company has estimated the interest rates implicit in the lease when calculating the lease liability and related right-of-use asset under IFRS 16 ‘Leases’. Unless stipulated clearly when taking on the liability the Company uses an incremental borrowing rate calculation to determine the relevant rate. Consideration is taken over the term of the lease, the credit risk of the acquirer and any specific risks relating to the assets acquired by an individual lease.

Ageing of amounts receivable from related parties
The Company has made various judgements on the receivables from Impellam Group Limited and fellow subsidiaries of the Impellam Group. The terms of these balances all state that they are due on demand but the Company has determined that there are some balances which, due either to their size or the lack of liquid assets in the debtor company, are highly unlikely to be repaid within the next twelve months.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

4

Turnover

The analysis of the company's turnover for the period from continuing operations is as follows:

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

UK

483,930

583,162

Europe

3,601

3,668

Rest of the world

111

134

487,642

586,964

5

Operating profit

Arrived at after charging/(crediting)

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Depreciation expense

175

396

Depreciation on right of use assets

292

526

Foreign exchange losses/(gains)

14

27

Operating lease expense - property

623

237

Loss on disposal of property, plant and equipment

-

9

6

Auditors' remuneration

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Audit of the financial statements

92

87

7

Interest receivable and similar income

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Interest from receivables with related parties

33

-

8

Interest payable and similar expenses

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Interest expense on leases

18

28

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

9

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Wages and salaries

14,075

18,162

Social security costs

1,677

2,241

Pension costs, defined contribution scheme

591

712

16,343

21,115

The average number of persons employed by the company (including directors) during the period, analysed by category was as follows:

52 weeks
3 January
2025
No.

53 weeks
5 January
2024
No.

Directors

2

2

Other departments

245

322

247

324

10

Directors' remuneration

The emoluments of the directors are paid by Impellam Group Limited. The emoluments attributable to the services in relation to this company are £59,000 (5 January 2024: £65,000).

11

Income tax

Tax charged/(credited) in the profit and loss account:

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Current taxation

UK corporation tax

1,539

1,559

UK corporation tax adjustment to prior periods

(349)

69

1,190

1,628

Deferred taxation

Arising from origination and reversal of temporary differences

(21)

(25)

Arising from unrecognised temporary difference of prior periods

6

(18)

Total deferred taxation

(15)

(43)

Tax expense in the profit and loss account

1,175

1,585

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

11

Income tax (continued)

The main rate of corporation tax increased from 19% to 25% with effect from 1 April 2023. As the Company’s accounting prior year period ended 5 January 2024 straddled 1 April 2023, a blended rate of 23.52% was used to calculate the prior year tax charge. The rate of 25% has been used for the current period. The tax on profit for the period is higher than the standard rate of corporation tax in the UK (5 January 2024: higher than the standard rate of corporation tax in the UK) of 25% (5 January 2024: 23.52%). The differences are reconciled below:

52 weeks
3 January
2025
£ 000

53 weeks
5 January
2024
£ 000

Profit before tax

3,514

3,730

Corporation tax at standard rate

879

877

(Decrease)/increase in current tax from adjustment for prior periods

(349)

69

Increase from effect of expenses not deductible in determining taxable profit

13

21

Increase from transfer pricing adjustments

626

638

Deferred tax expense/(credit) from unrecognised temporary difference from a prior period

6

(18)

Deferred tax credit relating to changes in tax rates or laws

-

(2)

Total tax charge

1,175

1,585

UK legislation requires, in broad terms, that most transactions between connected parties be at an arm's length price for tax purposes (commonly known as 'transfer pricing'). As a result, this Company must make an adjustment for deemed net interest on UK-UK intercompany balances that has not been recognised in the financial statements. The Government’s Corporate Tax Roadmap, published at the 2024 Autumn Budget, confirmed the Government’s commitment to launch, in Spring 2025, a second-round consultation on several reforms related to transfer pricing including the potential removal of UK-UK transfer pricing, which will remove the requirement to make an adjustment for deemed net interest on UK-UK intercompany balances by the Company.

12

Tangible assets

Fixtures and fittings
£ 000

Office equipment
£ 000

Total
£ 000

Cost or valuation

At 6 January 2024

233

517

750

Additions

1

18

19

Disposals

-

(321)

(321)

At 3 January 2025

234

214

448

Depreciation

At 6 January 2024

56

327

383

Charge for the period

40

135

175

Eliminated on disposal

-

(321)

(321)

At 3 January 2025

96

141

237

Carrying amount

At 3 January 2025

138

73

211

At 5 January 2024

177

189

366

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

13

Right of use assets

Property
£ 000

Total
£ 000

Cost or valuation

At 6 January 2024

1,575

1,575

At 3 January 2025

1,575

1,575

Depreciation

At 6 January 2024

919

919

Charge for the period

292

292

At 3 January 2025

1,211

1,211

Carrying amount

At 3 January 2025

364

364

At 5 January 2024

656

656

14

Trade and other receivables

Trade and other receivables falling due within one year

3 January
2025
£ 000

5 January
2024
£ 000

Trade receivables

30,917

52,364

Receivables from related parties

707

805

Accrued income

6,923

10,250

Prepayments

440

846

Other receivables

542

-

39,529

64,265

Trade and other receivables falling due after more
than one year

3 January
2025
£ 000

5 January
2024
£ 000

Receivables from related parties

102,551

66,859

 

102,551

66,859

Receivables from related parties are unsecured and repayable on demand. Within this amount are receivables totalling £508,000 which bear interest at 6.77%. All other receivables from related parties are interest free. Receivables from related parties are also stated after provisions of £102,000 (5 January 2024: £102,000). Trade debtors are stated after provisions of £197,000 (5 January 2024: £167,000).

Details of non-current trade and other receivables

£102,551,000 (5 January 2024: £66,859,000) of amounts owed by group undertakings is classified as non-current. These are deemed as non-current as they are not expected to be repaid in the next financial period.

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

15

Cash at bank and in hand

3 January
2025
£ 000

5 January
2024
£ 000

Cash at bank

246

2,502

16

Creditors: amounts falling due within one year

3 January
2025
£ 000

5 January
2024
£ 000

Trade payables

39,101

50,871

Accrued expenses

8,654

10,742

Amounts due to related parties

57,948

34,165

Social security and other taxes

1,430

5,137

Outstanding defined contribution pension costs

21

27

Other payables

-

3

Current portion of long term lease liabilities

168

275

Deferred income

-

10

107,322

101,230

Payables to related parties are interest free, unsecured and repayable on demand.

17

Leases

During the period the Company accounted for 4 leased properties under IFRS 16 (5 January 2024: 5). Some leases have provisions for early termination (see lease end dates judgements in note 3). The weighted average Incremental Borrowing Rate used to calculate the lease liability was 3.07% (5 January 2024: 2.84%).

None of the leases accounted for under IFRS 16 during the period recognised future uplifts in rent.

Leases included in creditors

3 January
2025
£ 000

5 January
2024
£ 000

Current portion of long term lease liabilities

168

275

Long term lease liabilities

144

312

Lease liabilities maturity analysis

A maturity analysis of lease liabilities based on undiscounted gross cash flow is reported in the table below:

3 January
2025
£ 000

5 January
2024
£ 000

Less than one year

175

289

2 years

84

175

3 years

63

84

4 years

-

63

Total lease liabilities (undiscounted)

322

611

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

17

Leases (continued)

Within the payments listed above is £10,000 which will be recognised as interest on the lease liability (5 January 2024: £24,000).

Total cash outflows related to leases

Total cash outflows related to leases are presented in the table below:

Payment

3 January
2025
£ 000

5 January
2024
£ 000

Right of use assets

275

473

Interest

14

24

Total cash outflow

289

497

18

Other provisions

Other provisions
£ 000

Total
£ 000

At 6 January 2024

148

148

Increase due to passage of time or unwinding of discount

5

5

At 3 January 2025

153

153

Non-current liabilities

153

153

Other provisions relate to property provisions for the full expected cost of dilapidations and have been discounted to a present value using the relevant lease interest rate.

19

Deferred tax assets and liabilities

Deferred tax assets and liabilities

3 January 2025

Asset
£ 000

Liability
£ 000

Net deferred tax
£ 000

Accelerated tax depreciation

81

-

81

Provisions

3

-

3

84

-

84

5 January 2024

Asset
£ 000

Liability
£ 000

Net deferred tax
£ 000

Accelerated tax depreciation

60

-

60

Provisions

9

-

9

69

-

69

 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

19

Deferred tax assets and liabilities (continued)

Deferred tax movement during the period:

At
6 January 2024
£ 000

Recognised in income
£ 000

At
3 January 2025
£ 000

Accelerated tax depreciation

60

21

81

Provisions

9

(6)

3

69

15

84

Deferred tax movement during the prior period:

At
31 December 2022
£ 000

Recognised in income
£ 000

At
5 January 2024
£ 000

Accelerated tax depreciation

(6)

66

60

Provisions

32

(23)

9

26

43

69

As at the end of 2024, the Company has pre-entry capital losses of £573,000 (5 January 20024: £573,000). No deferred tax asset has been recognised in respect of these losses due to their nature. There are no losses that will expire included in unrecognised tax losses.

20

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the period represents contributions payable by the company to the scheme and amounted to £591,000 (5 January 2024: £712,000).

Contributions totalling £21,000 (5 January 2024: £27,000) were payable to the scheme at the end of the period and are included in creditors.

21

Share capital

Allotted, called up and fully paid shares

 

3 January 2025

5 January 2024

 

No. 000

£ 000

No. 000

£ 000

Ordinary of £1 each

2,250

2,250

2,250

2,250

         
 

Lorien Resourcing Limited

Notes to the Financial Statements for the 52 weeks ended 3 January 2025 (continued)

22

Dividends

The company is recommending a final dividend in respect of 2024 of £8.88 per share totalling £19,980,000 to be paid on the date of signing of the accounts (2023: £Nil).

23

Related party transactions

The company has taken advantage of the exemptions in FRS 101 Section 8 from disclosing transactions with other wholly owned members of the Group and key management compensation. There are no other related party transactions which are required to be disclosed.

24

Parent of group in whose consolidated financial statements the company is consolidated

The name of the parent of the largest group in whose consolidated financial statements the Company's financial statements are consolidated is HeadFirst Global Plc. The name of the parent of the smallest group in whose consolidated financial statements the Company's financial statements are consolidated is Impellam Group Limited. The registered office of Headfirst Global Plc and of Impellam Group Limited is First Floor, Mulberry House, Parkland Square, 750 Capability Green, Luton LU1 3LU, United Kingdom.

  These financial statements are available upon request from Registrar of Companies, Companies Registration Office, Crown Way, Maindy, Cardiff, CF14 3UZ.

25

Parent and ultimate parent undertaking

At the year end the Company identified IceLake Capital Management BV as the ultimate controlling party by virtue of its role in managing the majority of the shareholdings in the ultimate parent company and having the power to appoint the majority of the Board for the ultimate parent entity.

 The company's immediate parent is Impellam Group Limited.

The ultimate parent is HeadFirst Global Plc.