The directors present the strategic report for the period ended 31 March 2024.
Russell Taylor Holdings Limited is a non-trading holding company. The Group is a technical and engineering recruitment business, with its head office in Burton, Cheshire. It provides temporary and permanent recruitment solutions to over 250 clients across the UK.
There have not been any significant changes to the group's principal activities during the period under review. The directors are not aware, at the date of this report, of any likely changes to the principal activities in the next financial year.
During the period, the company acquired a 55% shareholding in Recruitment Investment Network Ltd at deemed fair value of £396,000, from two of the company shareholders (one also being a company director) as part of a wider group restructure. Further details of the subsidiary acquired are provided in note 28.
The board has made strategic decisions during 2024, to streamline the group's trading activities and operations and this in turn has resulted in cost savings which will benefit future years. Going forward the group will focus on a small number of profitable trading entities, with the intension to increase turnover and profitability, generating cash flow to enable new opportunities to be taken as they arise.
Shortly after the balance sheet date, a loss making subsidiary went into liquidation. This subsidiary in isolation has net liabilities of £881,888 at 31 March 2024. The group's liquidity position has dramatically improved post period end, now this loss making subsidiary is no longer being funded from group cash flow.
Financial Performance
Group turnover for the period amounts to £45.7m compared to £38.8m in 2022. Fundamentally this increase is due to the accounting period being extended by 3 months to 31 March 2024, with a (5.6%) reduction in group sales on a 12-month comparable basis. The period has been a challenging time, and decisions made by the board will have had a short-term impact on reported results. That being said, the business continues to maintain strong client relationships and it is expected that turnover growth will be achieved in future periods, following operational changes made during 2024.
Gross profit margin has increased from 18.7% to 19.0%. This is partly as a result of an increased proportion of permanent placement income, which provides a higher gross margin, which has offset inflationary rises in wage costs. The key focus of the business in 2024 and 2025 is to further increase the permanent placement income and improve the temporary placement margin.
The group has reported a loss after tax of £1.5m (2022: £0.2m profit) for the period, which principally relates to an isolated number of subsidiaries, one of which went into liquidation post period end and others will be streamlined in 2024. The board is confident that changes made during the period, some of which continued into 2024, will positively benefit the group for future periods and a return to group profitability is a main focus. The group has incurred increased overhead costs due to inflation and significant rises to interest rates, both caused by global economic factors. Despite this, the board are pleased with the group's management of costs and cash flow throughout 2023/24 and into early 2025. Heightened risk to bad debt continues as all businesses are impacted by global economic matters and pressures, though improved credit control is now in place, which supplements existing debt insurance cover.
The group balance sheet has depleted during the period due to the group loss reported. Post period end, the group's net asset position is being restored as key trading subsidiaries operate profitability and others being strategically wound down. The removal of a significant loss making subsidiary which had net liabilities of £881,888, from the group in April 2024 has a immediate improvement to the group financial balance sheet position. The board are confident that the group has managed through a challenging period and from hereon will return the group to a stronger financial standing.
Operational
The business has maintained its existing office footprint, but invested in bringing in experienced and well-regarded key hires in the sectors we wish to grow our business in.
The key performance indicator the business focuses on more than any other is gross margin %. Many of our competitors work to gross margins below 10%, however due to our strong product offering and good mix of permanent placements, we have achieved a gross margin of 19.0%. We are focusing heavily on returning our gross margin % to 20% by 2025.
People
People are the most important asset to our business, and we continue to invest heavily in their welfare, training and development. The majority of our senior management team have grown from junior roles in the business.
Russell Taylor Group is an Investor in People and ISO registered business.
In 2023/24 we have recruited to strengthen our team and now have the largest number of staff in the business. It has been a challenge to recruit staff in 2023/24 to work within the business, due to shortages of people available on the market. This has hindered growth slightly but the business has invested heavily in recruiting and training from different industries and also trainees.
The group uses various financial instruments including loans and various other items, such as debtors and creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the group's operations.
The existence of these financial instruments exposes the group to several financial risks, which are described in more detail below. The directors review and agree policies for managing these risks. These policies have remained unchanged from previous years.
Competitive Risk
The recruitment industry is very competitive, but the group has developed strong relationships with customers and has a strong sales pipeline to negate this risk.
Liquidity Risk
The group seeks to manage financial risk by ensuring liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Short-term flexibility is achieved by an invoice discounting facility.
Interest rate risk
The group finances its operations through a combination of retained profits, bank loans, an invoice discounting facility and finance leases and hire purchase contracts. The group exposure to interest rate fluctuations on its borrowings is managed by the use of both fixed and floating facilities.
Credit risk
The principal credit risk arises from the group's trade debtors.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary. The group's debts are also insured under a bad debt insurance policy.
Economic risk
As a result of global economic factors, including both the recovery post Covid-19 and the Ukraine war, costs generally have increased impacting on purchases and overhead costs, including energy. These inflation related price increases are expected to remain for some time to come. Close monitoring of costs by the directors to budget are in place to mitigate the financial impact on on-going profitability.
The group reviews and monitors its performance against a number of key performance indicators both financial and non-financial. The principal measures include revenue growth, improvement of gross margins, profit before tax (“PBT”). These are reviewed by the directors on a monthly basis.
The directors have and will continue to monitor all of the KPI’s and daily operating controls and maintain a strong focus on increasing performance in all aspects of the business.
The main KPI’s and corresponding results are as follows:
| 15 month | 12 month |
| period ended | year ended |
| 31 March | 31 December |
| 2024 | 2022 |
|
|
|
Sales | £45.7m | £38.8m |
Sales growth % (on 12 month comparable basis) | (5.6%) | 22.1% |
Gross margin | 19.0% | 18.7% |
EBITDA | (£0.1m) | £1.0m |
Net current liabilities | (£2.0m) | £0.2m |
Net assets/(liabilities) | (£0.5m) | £1.1m |
The period ended 31 March 2024 has been challenging, though the board have made key strategic and operational changes which will benefit the group for future years. The group loss reported for the period principally relates to a loss making subsidiary which has been removed from the group shortly after the balance sheet date and a small number of recently acquired subsidiaries which were loss making and are being streamlined. The directors are confident that changes made in 2024 will return the group to profitability, which in turn will strengthen the balance sheet position.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 March 2024.
The results for the period are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
The company will continue to act as a parent holding company to the Russell Taylor trading group.
The group will continue to provide recruitment services, seeking growth opportunities as they arise.
During the period ended 31 March 2024 the group operating structure has been reviewed and measures taken to streamline the group's operating entities, fundamentally reducing the number of trading entities within the group. This work continues post period end. This was intended to improve group focus in respect of the profitable trading subsidiaries and reduce group costs. Post period end cost savings are benefiting the group and financial performance for the period to date has improved. The changes made are expected to benefit future periods, with the group returning to profitability in 2025.
The auditor, Sumer Auditco Limited, were appointed as auditor to the company and are deemed to be reappointed under section 487(2) of the Companies Act 2006.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Russell Taylor Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 March 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial 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.
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.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussions with the directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: laws related to employment, health and safety and data protection.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
We design procedures in line with our responsibilities, outlined below to detect material misstatement due to fraud:
Matters are discussed amongst the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud
Identifying and assessing the design and effectiveness of controls that management have in place to prevent and detect fraud
Detecting and responding to the risks of fraud following discussions with management and enquiring as to whether management have knowledge of any actual, suspected or alleged fraud;
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £5,376 (2022 - £220,526 profit).
Russell Taylor Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Burton Manor, The Village, Burton, Cheshire, CH64 5SJ.
The group consists of Russell Taylor Holdings Limited and all of its subsidiaries.
The Directors' decided to extend the current accounting period from 31st December 2023 to 31st March 2024. As such, the comparative figures (including notes) are not entirely comparable.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Russell Taylor Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Shortly after the balance sheet date, a loss making subsidiary went into liquidation. This subsidiary in isolation has net liabilities of £881,888 at 31 March 2024. The group's liquidity position has dramatically improved post period end, now this loss making subsidiary is no longer being funded from group cash flow.
At the period end date, creditors amounts falling due within one year include £139,438 due to related parties, £678,450 to connected companies, £48,463 owed to a company director and £69,875 owed to a shareholder. Technically these liabilities are included in creditors: amounts falling due within one year, on the basis that no formal agreements are in place, and as such are deemed repayable on demand. That being said, agreement has been sought from related parties, the director and shareholder, that repayment will not be required unless cash flow permits.
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Going concern - company
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, based on continued financial support from fellow group companies and related companies, together with additional financial support provided by a director and shareholder.
At the period end date, creditors: amounts falling due within one year include £517,772 owed to fellow group companies, £98,047 owed to related companies, £149,074 owed to a company director and £69,875 owed to a shareholder. Technically these liabilities are included in creditors: amounts falling due within one year, on the basis that no formal agreements are in place, and as such are deemed repayable on demand. That being said, agreement has been sought with the relevant companies and individuals that repayment will not be required unless cash flow permits.
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Revenue from temporary placements, which represents amounts billed for services of temporary staff, is recognised when the service has been provided. Revenue from permanent placements is recognised at the date when an offer is accepted by a candidate and a starting date has been determined. This includes revenue anticipated, but not invoiced, at the balance sheet date which is accrued on the balance sheet within prepayments and accrued income.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Dividend income
Dividend income receivable from subsidiary companies is recognised in the period they are voted.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The useful economic life of acquired goodwill has been estimated by the director of the group to ensure an appropriate amortisation charge is recognised each accounting period. Additionally annual considerations of whether there are any indicators of impairment are undertaken by the directors and processed as required.
Amortisation charge for the period amounted to £282,113 (2022: £65,138).
Refer to note 14 for the carrying value of intangible fixed assets impacted by this key estimate, as included in the group balance sheet.
The useful economic life of tangible fixed assets has to be estimated by the directors of the company to ensure an appropriate depreciation charge is recognised in the year. The value of the assets ultimately depends on the condition of the assets and whether economic income can be derived from the asset. The directors undertake a periodic review of the assets to ensure the value of the assets is fairly stated within the financial statements.
During the period, depreciation of £274,260 (2022: £200,702) has been charged.
Refer to note 15 for the carrying value of tangible fixed assets impacted by this key estimate, as included in the group balance sheet.
Investments in subsidiary undertakings is stated at historical cost which includes consideration paid, associated acquisition professional fees and deferred consideration (if applicable).
Annual impairment reviews are undertaken by the Board considering both current and future profitability linked to the EBITDA multiple established on acquisition.
Impairments indicators may include a reduction in turnover, profitability or EBITDA, and can also be affected by industry factors.
At the balance sheet date, the Board are satisfied that no impairment of the carrying value of the various investments in subsidiary undertakings is required.
Refer to note 16 and 17 for further details of the investments held in subsidiaries and the carrying value as at 31 March 2024, as included in the company balance sheet.
Exceptional items in the current period represents provisions for non-recoverability of related company loan, in respect of Peninsula Group (Wirral) Ltd, Dun Recruitment Limited and 80 Capital Limited.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
Operational workers, who are retained under a contract for services and are used in the daily operation of the group as a recruitment and employment agency, are not included in the average number of employees above. The average number of operational workers for the period was 410 (2022: 594).
These workers are not legally classified as employees but their costs are included within wages and salaries.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
The actual (credit)/charge for the period can be reconciled to the expected (credit)/charge for the period based on the profit or loss and the standard rate of tax as follows:
Deferred tax has been recognised at a rate of 25%. In October 2022, the government announced an increase in the corporation tax main rate from 19% to 25% for companies with profit over £250,000. There is a small company rate of 19% for taxable profits under £50,000 and marginal relief available for profits falling between £50,000 - £250,000 with effect from 1 April 2023.
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 31 March 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
All subsidiaries, excluding Russell Taylor Group Limited, are exempt from audit under the provisions of s479a of the Companies Act 2006. The company has provided a guarantee for the liabilities of the subsidiaries, excluding Russell Taylor Group Limited, in connection with the financial period ended 31 March 2024.
The company's 55% shareholding in Recruitment Investment Network Ltd (as shown above), also results in the company having an indirect shareholding of 35.75% in Building Services Recruit Limited and 33% indirect shareholding in Revolution Resourcing Limited.
Details of associates at 31 March 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
1 Burton Manor, The Village, Burton, Cheshire, CH64 5SJ
Building Services Recruit Limited and Revolution Resourcing Limited are exempt from audit under the provisions of s479a of the Companies Act 2006. The company has provided a guarantee for the liabilities of the companies, in connection with the financial period ended 31 March 2024.
Bank loans are secured.
Obligations under hire purchase agreements are secured against the assets to which they relate.
Other creditors includes £6,139,088 (2022: £6,582,756) in respect of Invoice Discounting facilities, which are secured on trade debtors.
Other creditors also includes £Nil (2022: £150,000) in respect of a short term loan which is secured by a personal guarantee provided by one of the company's directors.
Bank loans are secured.
Obligations under hire purchase agreements are secured against the assets to which they relate.
Bank loans and overdrafts are secured.
Bank loans relate to Coronavirus Business Interruption Loans (CBILs) and Bounce Back Loans (BBLs) within the trading subsidiary companies which are repayable over 5-6 years.
Bank loans includes £216,667 (2022: £466,667) in respect of a Coronavirus Business Interruption Loan (CBILs) which is repayable by monthly repayments of £16,667 over a 60 month period, with interest charged at 3.8% p.a. Full repayment is due during April 2025. This bank loan is secured.
Bank loans also include £Nil (2022: £31,250) in respect of a short term business loan which is repayable by 12 monthly repayments of £7,210, with an effective interest rate of 15.4% p.a. Full repayment was achieved during June 2023. This bank loan is secured by way of a personal guarantee provided by a company director.
Bank loans includes £21,660 (2022: £34,020) in respect of a Bounce Back Loan (BBLs) which is repayable by monthly repayments of £833 over a 72 month period, with interest charged at 2.5% p.a. Full repayment is due during May 2026. This bank loan is secured.
Bank loans includes £90,095 (2022: £117,500) in respect of a Coronavirus Business Interruption Loan (CBILs) which is repayable by monthly repayments of £3,261 over a 72 month period, with interest charged at 11% p.a. Full repayment is due during November 2026. This bank loan is secured.
Other loans include £6,250 (2022: £Nil) in respect of a short term business loan which is repayable by 12 monthly repayments of £7,516, with an effective interest rate of 20.2% p.a. Full repayment was achieved during April 2024. This non-bank loan is secured by way of a personal guarantee provided by a company director.
Other loans also include £45,833 (2022: £Nil) in respect of a short term business loan which is repayable by 12 monthly repayments of £5,706, with an effective interest rate of 24.5% p.a. Full repayment is due during January 2025. This non-bank loan is unsecured.
Other loans also include £41,731 (2022: £Nil) in respect of a short term business loan which is repayable by 48 monthly repayments of £2,013, with an effective interest rate of 9.5% p.a. Full repayment is due during November 2024. This non-bank loan is secured by way of a personal guarantee provided by a company director.
Other loans also include £34,417 (2022: £Nil) in respect of a short term non-bank business loan which is repayable by 12 monthly repayments of £9,042, with an effective interest rate of 17.4% p.a. Final repayment is due by July 2024. This non-bank loan is unsecured.
In the prior year, other loans of £150,000 related to a short term non-bank loan, which was secured by way of a personal guarantee by one of the company directors. Interest was charged at an effective rate of 84.6% and the loan was repayable over 3 months.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3-4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Within certain subsidiaries within the group, there are deferred tax liabilities in respect of accelerated capital allowances that are expected to mature over the associated fixed assets useful economic life. Pension contributions will attract tax relief in the period paid. Group tax losses carried forward will be utilised against future profits.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
As at the balance sheet date, contributions due to the schemes in respect of the current reporting period were £15,067 (2022: £691).
All shares carry no fixed right to income and rank pari passu in every respect.
On 28 April 2023 the group acquired 55% of the issued capital of Recruitment Investment Network Ltd.
The goodwill arising on the acquisition of the business is attributable to surplus paid on the net assets of the company, and totals £473,381.
On 28 April 2023 the group indirectly acquired 55% percent of the issued capital of KR Site Services NW Limited.
The goodwill arising on the acquisition of the business is attributable to to surplus paid on the net assets of the company, and totals £17,763.
The company was indirectly acquired upon the acquisition of Recruitment Investment Network Ltd, as KR Site Services Limited is a wholly owned subsidiary of this company.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
After the balance sheet date, on the 15th April 2024, the trading subsidiary, Recruit Right Limited went into liquidation.
After the balance sheet date, on the 28th April 2024, Russell Taylor Holdings Limited acquired the remaining 45% shareholding in Recruitment Investment Network Ltd for the total consideration of £324,000. This brings Russell Taylor Holdings Limited's shareholding in Recruitment Investment Network Ltd to 100%.
During the period the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
The above transactions were entered into with entities which are under the control of B P Russell and his wife.
During the period, a 55% shareholding in Recruitment Investment Network Ltd was acquired at deemed fair value of £396,000, from two of the company shareholders (one also being a company director) as part of a wider group restructure.
As a result of the above group restructure, at the balance sheet date, other debtors include £463,229, being amounts owed by associate companies. These balances are unsecured, non-interest bearing and repayable on demand.
At the balance sheet date, other creditors include £678,450, being amounts owed to associate companies. These balances are unsecured, non-interest bearing and repayable on demand.
At the balance sheet date, other creditors includes £69,875 (2022: £44,303 other debtors), being an amount owed to a shareholder. During the period interest of £291 (2022: £Nil) was charged by the company to the shareholder loan account. The balance is unsecured and repayable on demand. No interest is charged by the shareholder to the company whilst in credit.
At the balance sheet date, other debtors includes £5,000 (2022: £4,000), owed by a non-group director. This balance is unsecured, non-interest bearing and repayable on demand.
Dividends totalling £0 (2022 - £171,000) were paid in the period in respect of shares held by the company's directors.
The ultimate controlling party is deemed to be B P Russell by virtue of his majority shareholding in Russell Taylor Holdings Limited.