REGISTERED NUMBER: 07558476 (England and Wales)

The Dragonfly Agency Limited

Strategic Report,

Report of the Director and

Audited Financial Statements

for the Year Ended 31st December 2024

Page

Company information

1

Strategic report

2

to

3

Report of the director

4

to

5

Report of the independent auditors

6

to

9

Income statement

10

Other comprehensive income

11

Statement of financial position

12

to

13

Statement of changes in equity

14

Statement of cash flows

15

Notes to the statement of cash flows

16

Notes to the financial statements

17

to

24

Director:

Mrs V K I Grant

Registered office:

Sanderson House

Station Road

Horsforth

Leeds

LS18 5NT

Business address:

4 Stafford Street

Edinburgh

EH3 7AU

Registered number:

07558476 (England and Wales)

Auditors:

Rennie Welch Audit Limited

Academy House

Shedden Park Road

Kelso

Roxburghshire

TD5 7AL

The director presents her strategic report for the year ended 31st December 2024.

Review of business

The company continued to be an award-winning, boutique direct marketing agency offering creative, print and digital campaigns that are driven by deep data profiling and targeted distribution to deliver results for our clients.

Dragonfly's core values remain at the forefront of everything we do every day. These values are:

- Integrity - we're trusted, open problem solvers

- Honesty - we're proud champions and ambassadors

- Promise to our customers - we provide better solutions

- Relationships - we deliver value and memorable moments

2024 was a challenging but successful year. External market pressures throughout the UK economy affected both ourselves and our clients, however we continued to support our clients with their commitment to direct marketing.

Our largest client made the decision to move operations in-house ending our 10 year relationship. We navigated this change and welcomed new clients and continued our great relationships with our existing clients.

The business successfully maintained and achieved recertification in all of our qualifications including B Corp, ISO14001 and ISO27001. We continued our journey through our ESG strategy to becoming Net Zero.

For the second year running we won a Strategic Mail Partnership Award, a highly commended achievement for one of our Dragonflies.

During 2024 our South African clients increased spend as the direct mail channel became more popular. The remaining UK production element was moved to South Africa so that these operations were more in line with our ESG strategy and benefitting the South African market. The impact of this means that the South African financial results are now included the wider Dragonfly company.

Principal risks and uncertainties

The key business risks affecting the company are:

- Product availability and pricing

- Inflation

- Foreign exchange

- Interest rates

- GDPR and compliance requirements

The Director regularly reviews the risk strategy and makes arrangements to reduce exposure using appropriate financial instruments.

The company manages its cash and borrowing requirements in order to minimise interest expense whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business. The cash reserves are maintained to allow the business to take account of any expansion and investment opportunities that may arise.

Development and performance

The results for the year show a loss on ordinary activities before tax of £82,134 (2023 - profit of £1,787,274). The Board are satisfied with the performance for the financial year considering the challenges faced and increased costs in the supply chain.

During 2024 Royal Mail postage prices continued to increase forcing clients to reconsider mailing quantities. 2024 saw UK interest rates increase further affecting budgets available for marketing.

The Board monitor the progress of the company by the following KPIs:

2024

2023

Turnover

£4.8m

£21.2m

Gross profit %

18%

16%

Net profit / (loss) before tax %

-1.7%

8%

On behalf of the board:

Mrs V K I Grant - Director

29th September 2025

The director presents her report with the financial statements of the company for the year ended 31st December 2024.

Principal activity

The principal activity of the company in the year under review was that of marketing consultancy.

Dividends

Interim dividends were paid for the year ended 31st December 2024, the total dividend distributions for these were £482,000. The director does not recommend a final dividend to be declared for the year ended 31st December 2024.

Events since the end of the year

Information relating to events since the end of the year is given in the notes to the financial statements.

Directors

Mrs V K I Grant has held office during the whole of the period from 1st January 2024 to the date of this report.

Other changes in directors holding office are as follows:

A W Bagshaw ceased to be a director after 31st December 2024 but prior to the date of this report.

Charitable donations and expenditure

During the year the company made various charitable donations totalling £12,514 (2023 - £8,043).

Director's responsibilities statement

The director is responsible for preparing the Strategic report, the Report of the director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless she is 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 director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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 her to ensure that the financial statements comply with the Companies Act 2006. She is 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.

Statement as to disclosure of information to auditors

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and she has taken all the steps that she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

On behalf of the board:

Mrs V K I Grant - Director

29th September 2025

Opinion

We have audited the financial statements of The Dragonfly Agency Limited (the 'company') for the year ended 31st December 2024 which comprise the Income statement, Other comprehensive income, Statement of financial position, Statement of changes in equity, Statement of cash flows and Notes to the statement of cash flows, Notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31st December 2024 and of its loss for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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 director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information in the Strategic report and the Report of the director, but does not include the financial statements and our Report of the auditors 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.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit:

-	the information given in the Strategic report and the Report of the director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic report and the Report of the director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

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

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

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

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Director's responsibilities statement set out on page four, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditors' 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 a Report of the auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

Audit response to risks identified

- the nature of the industry and sector, control environment and business performance.

- any matters we identified having obtained and reviewed the company's documentation of their policies and procedures relating to:

-- identifying, evaluating, and complying with laws and regulations and whether they were aware of any instances of non-compliance.

-- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected, or alleged fraud.

-- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.

- the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and have not identified any significant areas with potential for fraud to occur. We hold this view on the basis on that the company is classified under the Companies Act 2006 as a medium company for reporting purposes, under which anomalies would be detected.

Further to this no non-routine financial accounting has taken place from which we would expect an increase of fraud or error to occur.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and local tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company's ability to operate or to avoid a material penalty.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the auditors.

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 a Report of the auditors 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.

Gillian Adamson BSC (Hons) CA CTA (Senior Statutory Auditor)

for and on behalf of Rennie Welch Audit Limited

Academy House

Shedden Park Road

Kelso

Roxburghshire

TD5 7AL

29th September 2025

Turnover

3

4,786,789

21,229,805

Cost of sales

(3,922,698

)

(17,842,306

)

Gross profit

864,091

3,387,499

Administrative expenses

(1,023,075

)

(1,663,177

)

(158,984

)

1,724,322

Other operating income

619

-

Operating (loss)/profit

5

(158,365

)

1,724,322

Interest receivable and similar income

76,231

62,952

(Loss)/profit before taxation

(82,134

)

1,787,274

Tax on (loss)/profit

6

18,284

(398,692

)

(Loss)/profit for the financial year

(63,850

)

1,388,582

(Loss)/profit for the year

(63,850

)

1,388,582

Other comprehensive income

-

-

Total comprehensive income for the year

(63,850

)

1,388,582

Fixed assets

Intangible assets

8

74,833

104,766

Tangible assets

9

9,530

16,567

84,363

121,333

Current assets

Debtors: amounts falling due within one year

10

1,927,369

2,515,397

Debtors: amounts falling due after more than one year

10

2,406,566

2,040,442

Cash at bank and in hand

2,342,467

3,314,561

6,676,402

7,870,400

Creditors

Amounts falling due within one year

11

510,387

1,193,266

Net current assets

6,166,015

6,677,134

Total assets less current liabilities

6,250,378

6,798,467

Provisions for liabilities

13

1,811

4,050

Net assets

6,248,567

6,794,417

Capital and reserves

Called up share capital

14

2

2

Retained earnings

15

6,248,565

6,794,415

Shareholders' funds

6,248,567

6,794,417

The financial statements were approved by the director and authorised for issue on 29th September 2025 and were signed by:

Mrs V K I Grant - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1st January 2023

2

5,677,833

5,677,835

Changes in equity

Dividends

-

(272,000

)

(272,000

)

Total comprehensive income

-

1,388,582

1,388,582

Balance at 31st December 2023

2

6,794,415

6,794,417

Changes in equity

Dividends

-

(482,000

)

(482,000

)

Total comprehensive income

-

(63,850

)

(63,850

)

Balance at 31st December 2024

2

6,248,565

6,248,567

Cash flows from operating activities

Cash generated from operations

1

(467,694

)

(928,732

)

Tax paid

(147,001

)

(689,361

)

Net cash from operating activities

(614,695

)

(1,618,093

)

Cash flows from investing activities

Purchase of intangible fixed assets

-

(26,672

)

Purchase of tangible fixed assets

(309

)

(5,261

)

Interest received

76,231

62,952

Net cash from investing activities

75,922

31,019

Cash flows from financing activities

Amount introduced by directors

1,232,001

272,001

Amount withdrawn by directors

(1,183,322

)

(722,065

)

Equity dividends paid

(482,000

)

(272,000

)

Net cash from financing activities

(433,321

)

(722,064

)

Decrease in cash and cash equivalents

(972,094

)

(2,309,138

)

Cash and cash equivalents at beginning of year

2

3,314,561

5,623,699

Cash and cash equivalents at end of year

2

2,342,467

3,314,561

1.	Reconciliation of (loss)/profit before taxation to cash generated from operations

2024

2023

£

£

(Loss)/profit before taxation

(82,134

)

1,787,274

Depreciation charges

37,279

25,286

Finance income

(76,231

)

(62,952

)

(121,086

)

1,749,608

Decrease/(increase) in trade and other debtors

189,675

(987,003

)

Decrease in trade and other creditors

(536,283

)

(1,691,337

)

Cash generated from operations

(467,694

)

(928,732

)

2.	Cash and cash equivalents

The amounts disclosed on the Statement of cash flows in respect of cash and cash equivalents are in respect of these Statement of financial position amounts:

Year ended 31st December 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

2,342,467

3,314,561

Year ended 31st December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

3,314,561

5,623,699

3.	Analysis of changes in net funds

At 1.1.24

Cash flow

At 31.12.24

£

£

£

Net cash

Cash at bank and in hand

3,314,561

(972,094

)

2,342,467

3,314,561

(972,094

)

2,342,467

Total

3,314,561

(972,094

)

2,342,467

1.	Statutory information

The Dragonfly Agency Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	Accounting policies

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover represents the total invoice value, excluding value added tax, of sales invoiced during the year, or the fair value of goods and services provided for amounts not invoiced at the year end.

Turnover arising from the sale of goods is recognised when the significant risks and rewards of ownership have passed to the buyer. Turnover arising from the provision of services is recognised as contract activity progresses and the right to consideration is earned. Unbilled turnover is included in debtors as amounts recoverable on contracts.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of four years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Fixtures and fittings

-

20% on cost

Office equipment

-

20% on cost

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses.

Financial instruments

The following assets and liabilities are classified as financial instruments - trade debtors, other debtors, inter company loans, trade creditors, other creditors, accruals and directors' loans.

Directors' loans (being repayable on demand), trade debtors, other debtors, inter company loans, trade creditors, other creditors and accruals are measured at the undiscounted amount of the cash or other consideration expected to be paid or received.

Financial assets that are measured at amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Employee benefits

Short-term employee benefits, including holiday pay, are recognised as an expense in the income statement in the period in which they are incurred.

The company operates a defined contribution pension scheme. The assets of the scheme are held seperately from those of the company in an independently administered fund. The pension costs charge represents contributions payable for the period by the company to the fund.

Provisions

Provisions are set up only where it is probable that a present obligation exists as a result of an event prior to the statement of financial position date and that a payment will be required in settlement that can be estimated reliably.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks, 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 change in value. In the statement of financial position, bank overdrafts are shown within borrowings or current liabilities.

Going concern

The director has considered the company's financial position for a period of 12 months from the date of signing these financial statements and has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future despite making a loss in the period. Accordingly, she continues to adopt the going concern basis in preparing these financial statements.

3.

Turnover

The turnover and loss (2023 - profit) before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2024

2023

£

£

Direct marketing services

4,786,789

21,229,805

4,786,789

21,229,805

4.	Employees and directors

2024

2023

£

£

Wages and salaries

503,784

751,898

Social security costs

51,450

73,881

Other pension costs

17,421

23,700

572,655

849,479

The average number of employees during the year was as follows:

2024

2023

10

14

2024

2023

£

£

Directors' remuneration

42,063

32,115

Directors' pension contributions to money purchase schemes

455

455

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

5.	Operating (loss)/profit

The operating loss (2023 - operating profit) is stated after charging:

2024

2023

£

£

Hire of plant and machinery

2,096

1,703

Depreciation - owned assets

7,346

10,320

Computer software amortisation

29,933

14,966

Auditors' remuneration

7,250

6,925

Foreign exchange differences

20,689

104,969

6.

Taxation

Analysis of the tax (credit)/charge

The tax (credit)/charge on the loss for the year was as follows:

2024

2023

£

£

Current tax:

UK corporation tax

-

398,545

Corporation tax adjustment re previous year

(16,045

)

-

Total current tax

(16,045

)

398,545

Deferred tax

(2,239

)

147

Tax on (loss)/profit

(18,284

)

398,692

Reconciliation of total tax (credit)/charge included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2024

2023

£

£

(Loss)/profit before tax

(82,134

)

1,787,274

(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 23.521% (2023 - 23.521%)

(19,319

)

420,385

Effects of:

Expenses not deductible for tax purposes

1,618

2,347

Depreciation in excess of capital allowances

1,656

1,127

Deferred tax adjustment

(2,239

)

147

Previous year adjustment

-

(25,314

)

Total tax (credit)/charge

(18,284

)

398,692

7.

Dividends

2024

2023

£

£

Interim

482,000

272,000