The directors present the strategic report for the year ended 30 April 2025.

AFS Group Holdings Ltd (“AFS Group”) consists of four trading companies, AFS Compliance Ltd (“AFSC”), Asset Finance Solutions (UK) Ltd (“AFSUK”), Synergy Commercial Finance Ltd (“SCF”) and Finance Education Centre Ltd (FEC).

AFSC is an authorised and regulated Principal business by the Financial Conduct Authority with responsibility for oversight and regulatory performance of a network of Appointed Representatives (“ARs”) including AFSUK and SCF.

AFSUK operates a national network of franchised specialist asset finance credit brokerages under its umbrella and maintains strong working relationships with an extensive portfolio of Funders serving small and medium enterprises (“SMEs”) in the UK. The franchised credit brokers are both experienced and knowledgeable with a demonstrable track record of providing appropriate funding solutions to customers. The franchisees are also ARs of sister company AFSC.

SCF also operates a national network of franchised finance brokerages under its umbrella with a greater emphasis on providing property finance and cashflow solutions via an extensive portfolio of Funders serving UK SMEs. The franchisees are also ARs of AFSC.

The different areas of experience and expertise of the franchisees, coupled with the product and finance types they provide is the key distinction between an AFSUK and SCF network member.

We encourage the networks to cross refer opportunities that sit outside their competency levels, in order to access the relevant expertise within the Group. This enables them to seamlessly cater for any funding requirement a customer might have, which helps with customer retention, whilst also providing a useful source of incremental income. Following the launch of FEC in 2024, a training and education business was established to cater for the needs of both the internal businesses and those of the wider financial services market. Its primary purpose is to help develop and upskill individuals and via its Academy to help bring through the next generation of finance professionals.

The overarching aim for the AFS Group’s combined networks is to maintain its preeminent position as a leading originator of finance opportunities within the UK SME marketplace. Successful introductions to the Funders result in a commission being paid to AFSUK or SCF following the drawdown of the funding facility. Following receipt of the commission from the Funders the vast majority of commission received is paid monthly in arrears to the franchisee with SCF and AFSUK retaining an element in respect of their franchise fee.

AFSC is paid a monthly service fee by the ARs to contribute towards the ongoing costs of their underlying regulatory efforts and also the provision of additional supporting services and products. This award-winning complete broker offering, which we have labelled “Broker in a Box”, provides everything a broker would possibly need to make an effective start and to successfully develop and grow their business going forwards.

A significant development during the second half of the financial year was the impact felt across the finance industry following the Court of Appeal, not only ruling in favour of 3 claimants in consumer car finance claims, but going further in stating that credit brokers had a fiduciary duty to their customers. This caused a flurry of activity and a fair amount of consternation across the industry. This resulted in an initial pause in new lending whilst the full ramifications were absorbed by the many asset and car finance companies. The response was broadly unanimous across the market place and new full commission disclosure processes and documentation were implemented swiftly by Funders and Brokers to address this. In the main funding returned to normal and the introduction of full commission disclosure to customers didn’t really change the funding dynamic or relationships and everyone in the main just got on with it and it quickly became the new norm.

There was subsequently an appeal made to the Supreme Court by the two finance companies involved and they basically reversed the Court of Appeal decisions and the potential for a fiduciary relationship. There was still a sting in the tail though as they ruled that one of the claimants was vulnerable and so unsophisticated that he had been taken advantage of and the finance had been deemed unfair and was awarded compensation. Whilst in the main the Supreme Court ruling was perceived as a win for the finance companies and therefore the industry, there remains a significant FCA redress scheme to be introduced. Whilst at the time of writing details are still to be determined it could result in many billions of compensation costs both in terms of payments to consumers and the heavy resources that will need to be deployed.

Performance during the year

We have seen continued demand for our credit broking proposition, across both AFSUK and SCF. More significantly, we continue to see strong growth in existing franchisees’ businesses, particularly within the asset finance market. It has been very encouraging to see the number of quality individuals and businesses that have taken up a new franchise with AFS Group. In many cases they have hit the ground running, introducing good levels of high-quality business. This has also made a very useful contribution to the overall network activity levels.

AR numbers    AFSUK          Synergy

1st May 24    152              80

30th April 25    156              81

Their efforts combined with many of the established businesses continuing to drive their own growth aspirations, has once again resulted in a significant increase in activity seen over the last 12 months. Whilst overall AR numbers haven’t moved markedly up, we have added more active businesses, whilst the businesses that are withdrawing from the market, are usually winding down activity levels as they may be nearing retirement. You always get an element of attrition as businesses fail to establish themselves or move on to new opportunities instead. This activity growth is fuelled by the increasing number of people across the network proactively helping SMEs to access finance.

That said, at the start of the financial year, there have again been significant challenges that have affected SMEs and their confidence to invest for growth. The lead up to the recent UK elections saw investment plans placed on hold. Former supply issues, which had driven up prices have now flipped the other way with falling demand resulting in surplus supplies and falling prices. Electric vehicles and a changing customer sentiment has been hit harder than most other asset class. That said, the former supply issues has resulted in fewer used assets coming to the marketplace, which has helped support values in the used vehicle and asset market. Increasing Funder rates made managing the funding process more challenging in terms of meeting Client expectations. As rates were peaking at higher levels than we have seen in recent years it resulted in buying plans being deferred or cancelled. This also had a slowing effect on demand from SMEs who would traditionally stretch the life of an asset by looking to replace it later than they might have previously done. That said, over the course of the full year, demand for funding has broadly been in line with our expectations due to the increasing head count within the network. As a result we have seen another year of significant growth in new lending origination activity.

We have an unrivalled panel of Funders and will be one of the largest introducers to many of them, which ensures we have excellent working relationships and that our franchisees have access to the best range of available finance products, to satisfy their customers’ funding requirements.

AFSUK New business originations

24/25    £1,241M / 85 Funders         23/24    £1,096M / 87 Funders                 

AFSUK Turnover and Pre-tax Profit

24/25     £47.2M    / £3.4M             23/24     £42.5M / £4.1M     

It’s been a similar story within SCF with the same focus on onboarding high quality individuals and businesses who have hit the ground running, whilst replacing those franchisees who have exited the marketplace. The main focus across the network continues to be funding property transactions for high quality SME clients across all aspects of the market with significant development, bridging and commercial term products featuring heavily. Efforts were made to encourage more discussions around SME’s cashflow requirements and that has resulted in more solutions being provided.

The property finance sector has continued to have its fair share of similar issues during the 24/25 financial year that we saw in the previous financial year. Valuers’ perception of property values and how the rate increases would affect affordability impacting on a Funder’s decision to lend on projects. They have also had to factor in the increased cost of living on household bills and where appropriate the increased operational costs of business utilities. This has an impact on cash flow and affordability stress testing, which then adversely affects the maximum lending Funders are comfortable with. The continued challenges been felt by landlords has impacted the buy to let market. The worsening SLAs caused by continued capacity issues for all parties involved in property funding, Funders, Valuers and Solicitors has resulted in funding lead times stretched to the limit and in some instances resulting in a deal not proceeding. This all makes managing SMEs’ funding expectations very difficult indeed. The ability of the franchisees in the face of these challenges to still get deals done for their clients is a testament to their expertise and resilience. It has been rewarding to see the activity levels grow year on year despite the continued difficult trading conditions and reflects the growth in quality brokers operating within the network. Thankfully, rates stabilised and benefitted from base rate reductions resulting in more competitive and flexible products continuing to tempt customers back to the marketplace.

SCF New business originations

24/25    £816M / 100 Funders         23/24    £678M / 108 Funders                

SCF Turnover and Pre-tax Profit

24/25    £10.8M / £592K            23/24     £7.7M / £259K            

AFSC continued to support the networks during this period with greater costs resulting as it resourced up in response to the increasing head counts and activity levels seen across AFSUK and SCF. More people were added to the team to assist with the oversight and technical support needed. All very much part of the controlled growth plans and vitally important to maintaining a strong foundation, upon which to continue to build on.

AFSC Turnover and Pre-tax Profit

24/25    £3.5M / £129K             23/24    £2.6M / £69K        

All of the businesses continue to perform at consistently strong trading levels with the ongoing impact of the significant headwinds being managed appropriately. It is a testament to the quality people within the businesses, both staff and the ARs, that they have successfully navigated these challenging times. This has continued into 2025 with strong sales and cashflow, providing a strong base from which to support the ARs sales efforts, whilst maintaining the all-important compliance oversight.

Much of the internal focus is aimed at delivering a solution that meets the regulatory demands, whilst enabling the ARs to perform their funding activity effectively. The successful introduction of our BIPS systemised solution reflects well on the knowledge and skillsets of the staff within AFSC. Funders are still exiting the regulated business finance space all together or continuing to drive minimum deal size up, which can exclude many smaller SMEs from accessing the valuable funding to support their growth aspirations. Regulated business finance does tend to account for a small minority of business finance written by Funders, which can make the decision to exit the space more attractive than actually gearing up to deliver compliant solutions. We are confident that our approach will ensure a consistent and compliant process across our networks. This should put our ARs in a great position to reap the benefits of a seamless approach to meet the increasing regulatory regime and continue to operate uninterrupted in their efforts to help SMEs of all shapes and sizes to access business finance.

Principle risks and uncertainties

As stated above our AR networks have continued to perform well and in line with our expectations. The emphasis is very much on quality over quantity in terms of network members and this should result in ARs being able to deliver timely and tailored funding solutions for their SME clients. The same resilient SMEs who are having to contend with many challenges in 2024 and 2025.

Principle risks and uncertainties (continued)

Continued economic uncertainty, stickier than expected inflation and increasing NI and taxation following last year’s Autumn budget, have created a very unhelpful environment for SMEs. Some sectors in particular have been badly impacted during this period, including retail and hospitality, but all businesses have had to deal with it in varying degrees. These have had a knock on effect onto the labour market place with some sectors struggling to recruit staff and also a general weakening of the labour market as SMEs have to strike a balance between absorbing increased labour costs or passing on higher prices to customers, creating more inflationary pressures.

We have still seen supply chains disrupted by geopolitical factors and heightened further since the imposition of US tariffs and introduction of subsequent reciprocal arrangements by other nations. This has in particular impacted exporters of goods into the US and also driven up costs of sourcing raw materials.

The proliferation of new technologies, in particular the adoption of Artificial Intelligence (AI) technology across firms is also having a significant impact on how SMEs interact with customers and drive operational efficiencies. This is still a developing and everchanging phenomenon and no one knows how far it will influence our everyday lives in and out of the work place. The legal and regulatory landscape surrounding its deployment is still developing. Businesses are more and more dependent on developing cloud based digital solutions to drive efficiencies and remain competitive. We have also seen as a result of this dependence, many businesses including some high profile household names being impacted by cybercrime, which can be a debilitating threat to any business. In the case of very large businesses the fallout can extend both up and down the supply chain and spread much further impacting many other businesses like a contagion.

More businesses are turning their attention to pursuing an Environmental, Social and Governance agenda, both aligned to the expectations of all their stakeholders and to meet the increasing regulation introduced by the Government. This comes at a time when as you can see they are also having to tackle many other issues, which results in a really mixed outlook for businesses and ultimately their confidence levels. We would probably say that larger businesses tend to be more positive about the future compared to smaller businesses.

This confidence then feeds into the growth aspirations of businesses and their demand for lending to help them achieve their goals.

Businesses need to remain adaptable and proactive in navigating these complex and evolving factors to thrive in the UK economy.

These are all capable of dampening investment and funding demand from SMEs, which will in turn potentially affect the activity levels of our ARs and the commission income that they will receive. Much of this remains beyond our control, but what we can do, is to continue to improve efficiencies through investment in systems capabilities and increase the level of support we provide our ARs, to give them every opportunity to succeed.

Key performance indicators

            24/25        23/24         % Increase/Decrease

AFSUK

Turnover            £47.2M        £42.5M        11

Transactions        18,402        15,739        17

Complaints        5        7        (29)

SCF                    

Turnover            £10.8M        £7.7M        40

Transactions        3,934        3,063        28    

Complaints        5        2        150

Much of KPI focus is around AR numbers and monitoring the resulting activity levels and performance across the networks.

As can be seen above we continue to see good growth across both networks. The number of complaints is an area we take very seriously and it is pleasing to see them operate at such a small fraction of the number of transactions written. Within AFSUK there can be issues around the merchantable quality of the goods supplied and not in reality an issue with the finance product provided, which makes the numbers even smaller, in terms of true customer complaints.

On behalf of the board

The directors present their annual report and financial statements for the year ended 30 April 2025.

The principal activity of the company is that of a holding company of a trading group of asset finance brokerage.

The results for the year are set out on page 12.

Ordinary interim dividends were paid amounting to £3,261,067 (2023 - £3,060,147). The directors do not recommend payment of a further dividend.

Ordinary interim dividends were paid to non-controlling interests amounting to £30,187. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

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

• select suitable accounting policies and then apply them consistently;

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

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of AFS Group Holdings Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2025 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).

In our opinion the financial statements:

• give a true and fair view of the state of the group's and the parent company's affairs as at 30 April 2025 and of the group's profit 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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 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

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.

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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

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

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

• certain disclosures of directors' remuneration specified by law are not made; or

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

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

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

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 have considered the following:

• the nature of the industry and sector, control environment and business performance including the design of the Company's remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;

• results of our enquiries of management about their own identification and assessment of the risks of irregularities;

• the matters discussed among the audit engagement team and relevant specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud;

• 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.

As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. 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 UK Companies Act, employment law, health and safety regulations, pensions legislation and tax legislation.

Audit response to risks identified

Our procedures to respond to risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

• enquiring of management concerning actual and potential litigation and claims;

• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

• reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and

• in addressing the identified risks of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

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.

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 profit and loss account has been prepared on the basis that all operations are continuing operations.

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £3,361,227 (2024 - £2,831,353)

AFS Group Holdings Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Greenbank Court, Challenge Way, Greenbank Business Park, Blackburn, BB1 5QB.

The group consists of AFS Group Holdings Ltd and all of its subsidiaries.

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 £1.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. 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: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company AFS Group Holdings Ltd 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 30 April 2025. 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.

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.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

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.

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. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation 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 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.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

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.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the 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.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

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.

Clawback provisions

Provisions have been included in the financial statements where a commission payment may be repaid to a business normally where a customer ends a contract earlier than expected. This provision is based on the best estimates of management using their many years of experience in this sector.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

During the period the company bought additional shares in its subsidiary, Synergy Commercial Finance Ltd. At the start of the period the company held a 70% share and purchased an additional 12.75% of the share capital. At the balance sheet date the shareholding totalled 82.75%.

Company

Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

Finance lease payments represent rentals payable by the company 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. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Obligations under finance lease agreements are secured as disclosed in note 15.

Company

Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

Obligations under finance lease agreements are secured as disclosed in note 15.

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

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.

AFS Group Holdings Limited has, in accordance with s479C of the Companies Act 2006, provided a guarantee over the liabilities of its subsidiary, Finance Education Centre Limited (company registration number 12417356; registered in England and Wales; registered office address is Greenbank Court Challenge Way, Greenbank Business Park, Blackburn BB1 5QB), which permits the subsidiaries to not obtain an audit of there individual financial statements for the year ended 30 April 2025, in accordance with the exemptions conferred by s479A Companies Act 2006.

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:

The remuneration of key management personnel is as follows.

The following amounts were outstanding at the reporting end date:

Synergy Commercial Finance Ltd is a 82.75% subsidiary of AFS Group Holdings Ltd.

At the balance sheet date £85 (2024 - £85) was due to Synergy Commercial Finance Ltd.

The directors are of the opinion that there is no ultimate controlling party.

Details of the company's subsidiaries at 30 April 2025 are as follows:

(1) The registered office for all companies outlined above is as follows:

Greenbank Court, Challenge Way, Greenbank Business Park, Blackburn, Lancashire, BB1 5QB.

Details of associates at 30 April 2025 are as follows: