The directors present the strategic report of Allen Lane Limited (‘Allen Lane’) for the year ended 31 December 2024.
In 2024, Allen Lane remained a market leader in Public and Not for Profit (PNFP) Sector Recruitment, continuing to specialise in the provision of interim recruitment, executive search, permanent recruitment and managed service solutions. It houses some of the industry’s outstanding recruitment professionals. It continued to provide core recruitment specialisms in Finance, IT, Procurement, Project Management and Legal and Governance recruitment; and added the provision of HR recruitment services to its portfolio of disciplines. It ceased to recruit Housing and Property professionals.
2024 proved to be another challenging year, from both an operational and revenue perspective for the company, and indeed for many established recruitment companies. There were macro-economic factors such as the General Election (which is preceded by Purdah – the period between the announcement of a General Election and the formation of a newly elected government) which ensured Central Government remained quiet for much of the year, and the margin reductions across the UK’s PNFP that we have noticed for some time through an increased reliance on frameworks, in particular across Local Authorities – our biggest sector from a revenue and contractor number perspective. The US election results has had an impact on the charity sector, and it remains challenging in the NHS to place contingent labour contractors with impact of Price Caps. As with 2023, we saw fewer significant (volume) permanent recruitment campaigns won compared to historically and fewer executive search mandates than we would have hoped for due to a combination of over-populated frameworks, less movement in the market, more organisations (such as the Government Finance Function) doing their own recruitment and the scale of competition in the industry.
On a more ‘micro’ level, we saw some experienced recruiters leave the business which had a mixed impact on revenue. Over a short-term, we benefit from revenue they generated prior to their departures as we don’t pay commission out on this income (we call this ‘legacy’ revenue) but will miss out in the longer term both from the guaranteed revenue their experience would create and the fact that these contactors finish on a gradual basis. These factors combined to adversely impact revenue in 2025.
Internally, Allen Lane continued to invest in relevant job boards, enhanced LinkedIn and secured “Cyber Essentials plus”. We delivered increased training to staff including the newly formed SMT (impacted by our CFO returning to Australia) and also introduced a number of new consultants to the company, including forming an HR recruitment practice. Allen Lane continues to maintain very high internal standards through its accreditations for international standards ISO 9001 (Quality Management Systems), 14001 (Environmental Management Systems) and 27001 (Information Security Management Systems).
In 2024, Allen Lane’s ultimate parent company Outsourcing Inc was acquired by BAIN Capital. From 1 April 2025 Allen Lane, as a subsidiary of the ALV Groupco, was acquired by CPL Resources Limited (CPL) from Outsourcing UK as part of internal group restructuring. CPL are a significant player in the Irish resourcing market (with other 30% of the market) with a presence in small number of other European markets. The consequences of being part of the CPL group will be realised in the 2025 results.
From 1 July 2025 the name of the ultimate parent company Outsourcing Inc changed to Brexa Holdings Ltd.
Headline numbers in 2024 compared to 2023 show a decrease in turnover to £51m (2023: £57m). Gross profit decreased to £8m (2023: £9.2m), however profit/loss before interest and tax increased to £1M (2023: £0.9m)
Key Performance Indicators
Allen Lane monitors and analyses its performance using the following key performance indicators:
Turnover: Turnover in the 12 months to 31 December 2024 was 10% lower than the previous financial year, due to fewer placements across both the interim and permanent businesses. Permanent revenue fell less than the 1%, however the most significant impact was on interim revenue, with a decrease of 10% attributed internal staff changes, framework and competitor pressures, and reduced client budgets in some sectors.
Gross Profit (Interim and Permanent): Internally, this is reported by division (Finance, Procurement, IT, Legal and HR) and sector (NHS, Central Government, Local Government, Charities, Education). Gross Profit of £8M in 2024 was 13% lower than 2023 – largely due to a combination of reduced interim turnover, framework and client pressure on margins.
EBIT: 2024 EBIT of £1m was largely in line with the 2023 EBIT performance. Although turnover and gross profit decreased markedly from 2023 there were targeted cost savings that offset the revenue shortfalls.
Total Temporary contractors headcount and average hourly margin: The number of new starters and finishers each month is monitored as is the net change in average hourly margin each month. Overall total interim headcount and average hourly margin at each month end are key performance indicators.
Financial risks facing the company
The financial risks facing Allen Lane are:
Increased Employers’ National Insurance (from 13.8% to 15%) puts pressure on the business as this impacts all salaries and commission costs.
Costs of living and interests rates remain high meaning there continues to be significant financial pressure put on clients, such as Local Authorities. To mitigate this risk, we maintain strong relationships and work closely with senior leaders within these clients.
We expect further cuts to civil service numbers in 2025 meaning that it will be difficult to grow in the Central Government sector. In addition, reduced client spending in some sectors coupled with the use of low margin frameworks and Vendor Management Systems (some of which the company is not on) have an impact, and the increased use of ‘tenure discounts’ where organisations cut margins on contractors further or totally after 12 months. Where possible, we use frameworks allowing preferable margins or negotiate contracts to maximise revenue.
The very competitive industry which the company operates in. The company manages this by ensuring its top level of service to clients and consistently high standards in its processes which it has been renowned for in its c. 21 years of trading.
Ensuring the company is on relevant public sector frameworks or has agreements in place to access frameworks via other approved suppliers. In addition, Allen Lane needs to ensure it adheres to framework changes such as mandated rates that can be charged. Allen Lane proactively tenders for new frameworks that would be beneficial to the company and re-tenders on current frameworks when applicable. It also monitors framework changes, updating internal systems and processes to comply with relevant changes. It also carries out regular internal audits of its processes.
Increasing overhead costs as suppliers increase their charges due to high inflation. To help mitigate cost increases, the CFO is responsible for approving all new expenditure and regularly reviews existing expenses.
Operational risks & uncertainties facing the company
Allen Lane is exposed to the following risks and uncertainties:
A new government was formed in 2024, and whilst we have not seen a return to “austerity measures”, there is clearly an emphasis on cutting government spends and reducing headcount in government organisations. In addition, it will be interesting to see what impact the abolition of NHS England and devolution in Local Authorities (expected in 2027) will have on the NHS and Local Government markets.
The rise of Employers’ National Insurance will impact our clients increasing their contractor spend automatically in many cases. We also expect fundraising to be affected by continued high costs of living, and AID spending cut by both UK and US government will have a detrimental impact on the charity market. We mitigate against these market risks by continuing to be lean from a headcount perspective.
Cyber Security: Ensuring no breach of confidential, personal and sensitive information held by Allen Lane. A cyber security breach could impact business as usual and result in financial penalties and loss of business and reputation. Allen Lane has invested significantly in IT infrastructure and systems and ensures its information on security policies, procedures and protection is robust, up-to-date and fit for purpose. In 2025, we will change our IT Provider from Advania to CPL.
IR35 legislation: The UK’s anti-avoidance tax legislation is considered in all temporary placements which Allen Lane makes and steps are followed and documented to ensure the correct treatment of all placements.
Non-compliance with UK and EU laws and regulation covering employment. Allen Lane manages this risk through frequent and comprehensive reviews of various developments in their related sector.
Flexible working: The post pandemic way of working means employees and our clients are no longer in the office full-time. This can impact productivity, learning, development and progression and make it more difficult to keep employee morale high, resulting in staff turnover. This is being mitigated by employee engagement surveys, targeted (internal and external) training, staff events and other initiatives.
Whilst we have cut our Property / Housing practice, we relaunched our HR recruitment practice in 2024 form which we expect growth, as we do from our Procurement and Legal / Governance practices, supplementing our established Finance and IT practices. Diversification is key and whilst we are excited to be in new areas, being new/small in these areas leaves us exposed if we lose resources, especially those with established client relationships. This is mitigated by finding developmental opportunities for strong performers, rewarding employees financially and providing staff rewards. In addition, we continue to provide strong external marketing and internally are increasing incentives around cross-selling.
Managed Service Solutions: Whilst contingent labour interim and permanent recruitment remains our core business focus, it is hard to grow at pace with low margins. Providing more of a managed service solution, with packaged up work in partnership with our sister company ‘Veracity’, is a lucrative opportunity for growth however there is uncertainty with regards to their current ability to win new business. To mitigate against this, we are increasing training internally on selling this service and investing in new talent experienced in this market, both for Allen Lane and Veracity.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
There are no significant events since the balance sheet date which would require disclosure in these financial statements.
However, there has been a change in ownership after the end of this reporting period; as of 30 April 2025 the company and ALV Groupco Limited have been acquired by CPL Talent Solutions Limited – also a subsidiary of Outsourcing Inc. The largest group of which the results of the Company are consolidated, and the ultimate parent company continues to be Outsourcing Inc.
Refer to the Strategic report for the future developments of the company.
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 Allen Lane Limited (the 'company') for the year ended 31 December 2024 which comprise the income statement, the statement of financial position, the statement of changes in equity 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 101 Reduced Disclosure Framework (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 company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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.
As part of our planning process:
We enquired of management the systems and controls the company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: IFRS, FRS 101, Companies Act 2006, IR35, GDPR, employment law and compliance with government frameworks.
We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Review of internal control procedures to ensure timesheets were approved prior to paying contract workers.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations. This included reviewing frameworks in place, as well as reports from regulatory bodies to confirm compliance.
Testing key revenue lines, in particular cut-off, for evidence of management bias.
Obtaining third-party confirmation of material bank balances.
Documenting and verifying all significant related party balances and transactions.
Reviewing documentation such as the company board minutes, correspondence with solicitors, for discussions of irregularities including fraud.
Completing analytical review of the revenue cycle and margins and seeking explanations from management for exceptions.
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. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
Allen Lane Limited is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is 33 King Street, St James's, London, United Kingdom, SW1Y 6RJ. The company's principal activities and nature of its operations are disclosed in the directors' report.
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 £.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
disclosure of qualitative and quantitative information about contracts with customers;
disclosure of revenue recognised from contracts with customers in categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors;
disclosure of performance obligations in contracts with customers and timing of satisfaction of performance obligations;
disclosure of significant judgements in the application of IFRS 15;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date; and
related party disclosures for transactions with the parent or wholly owned members of the group.
Where required, equivalent disclosures are given in the group accounts of Outsourcing UK Limited. The group accounts of the immediate parent comany are available to the public and can be obtained as set out in note 20.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
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 income statement.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments.
Financial liabilities, including trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Share capital represents the nominal value of equity shares that have been issued.
Retained earnings represent all current and prior period retained profit and losses.
The tax expense represents the tax currently payable.
Deferred tax has not been recognised as it is immaterial to these financial statements.
At inception, The company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, The company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; The company's estimate of the amount expected to be payable under a residual value guarantee; or The company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
The charge for the year can be reconciled to the profit per the income statement as follows:
Property, plant and equipment includes right-of-use assets, as follows:
The total cash outflow for leases was £270,619 (2023: £351,481).
The company is party to a debt factoring arrangement where it factors a portion of its gross debtor values and advances received are without recourse. The company has presented a net figure in trade receivables in respect of the portion of debtors not factored, being the gross trade receivable balance factored less the sum of all non-returnable advances received without recourse. The relevant figures are as follows: gross trade receivables of £1,536,032 (2023: £3,758,272) less non returnable advances of £1,241,530 (2023: £3,112,774) giving a net balance of £294,501 (2023: £645,498) under this arrangement included within the trade receivables balance above.
The bank holds a fixed and floating charge on all freehold, leasehold and book debts and other assets.
The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
During the year, a new lease agreement was signed by the company on their existing business premises following expiry of the previous lease.
Lease payments represent rentals payable by the company for its business premises (property) and for a photocopier (fixtures, fittings and equipment). The lease term for the business premises ends on 24 September 2030 and the lease term for the photocopier ends on 28 February 2025.
There are no contingent rent, renewal or purchase options and escalation clauses in the lease agreement. There are no significant restrictions imposed by lease arrangements.
The incremental borrowing rate at the date of initial application (i.e. the rate at 25 September 2024) for the business premises is 4% per annum.
The incremental borrowing rate at the date of the lease for the photocopier on 1 January 2020 is 4% per annum.
Please see note 10 for details regarding right of use assets.
The provision recorded in the financial statements reflects the present value of the estimated cost of dilapidations at the end of the lease of the client's business premises. This has been calculated based on a discount rate of 4%. The amount would be payable upon the end of the lease on 24 September 2030.
B Ordinary shares are non pari passu with Ordinary shares and attach no right for the holder to receive notice, attend or vote at any general meeting or written resolution. The holder has no entitlement to receive dividends and has only limited rights to capital on distribution.
The company does not have a limited amount of authorised share capital.