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Brightlocal Services Ltd
Company statement of changes in equity
For the year ended 31 December 2024
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Total transactions with owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Total transactions with owners
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The notes on pages 18 to 31 form part of these financial statements.
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Page 15
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Brightlocal Services Ltd
Consolidated statement of cash flows
For the year ended 31 December 2024
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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Corporation tax received/(paid)
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Purchase of unlisted and other investments
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Net cash from investing activities
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Cash flows from financing activities
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Net cash used in financing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 18 to 31 form part of these financial statements.
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Page 16
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Brightlocal Services Ltd
Consolidated analysis of net debt
For the year ended 31 December 2024
The notes on pages 18 to 31 form part of these financial statements.
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Page 17
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
Brightlocal Services Ltd is a private company, limited by shares, incorporated in England & Wales, registered number 10380004. The registered office is First Floor Huntingdon House, 20-25 North Street, Brighton, East Sussex, BN1 1EB.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of income and retained earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.
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 forseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Page 18
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
2.Accounting policies (continued)
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Operating leases: the Group as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Expenditure on research and development is capitalised and amortised over three years.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
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Long-term leasehold property
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over the term of the lease
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Page 19
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
2.Accounting policies (continued)
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of income and retained earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.
Page 20
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
2.Accounting policies (continued)
Interest income is recognised in profit or loss using the effective interest method.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Page 21
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Group contributions to defined contribution pension schemes
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During the year retirement benefits were accruing to 2 directors (2023 - 2) in respect of defined contribution pension schemes.
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Page 22
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
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Current tax on profits for the year
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Origination and reversal of timing differences
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Factors affecting tax charge for the year
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The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 23.52%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23.52%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Difference on tax charges following prior period adjustment where tax not adjusted
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Other differences leading to an increase (decrease) in the tax charge
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Total tax charge for the year
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Page 23
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
Page 24
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
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Long-term leasehold property
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Charge for the year on owned assets
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Amounts owed by group undertakings
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Prepayments and accrued income
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Page 25
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Charged to profit or loss
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The deferred taxation balance is made up as follows:
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Accelerated capital allowances
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Page 26
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
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Allotted, called up and fully paid
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2,020 (2023 - 2,020) Ordinary shares of £1.00 each
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2 (2023 - 2) Ordinary B shares of £1.00 each
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2 (2023 - 2) Ordinary C shares of £1.00 each
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2 (2023 - 2) Ordinary D shares of £1.00 each
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2 (2023 - 2) Ordinary E shares of £1.00 each
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2 (2023 - 2) Ordinary F shares of £1.00 each
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1 (2023 - 1) Ordinary G share of £0.01
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1 (2023 - 1) Ordinary H share of £1.00
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The Company's Ordinay shares rank pari passu with each other.
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Investments in subsidiary company
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Bright Little Light Ltd
The company purchased 100% of the ordinary voting share capital of Bright Little Light Ltd on 16 September 2016, which was controlled by the Directors, by issuing additional share capital in the company in the sum of £10 in exchange for the shares in Bright Little Light Ltd.
BrightLocal Ltd
The company owns 100% of the subscriber ordinary voting share capital of BrightLocal Ltd in the sum of £1 that was incorporated on 16 September 2016.
Brightlocal Poland Ltd
The company owns 100% of the subscriber ordinary voting share capital of Brightlocal Poland Ltd in the sum of £994 that was incorporated on 16 October 2023 in Poland. Brightlocal Poland Ltd, a wholly owned subsidiary of the Company, has not been included in the consolidation on the grounds of immateriality. The exclusion of this subsidiary does not affect the true and fair view of the consolidated financial statements.
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Page 27
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
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Investments in subsidiary companies
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The following were subsidiary undertakings of the Company:
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The aggregate of the share capital and reserves as at 31 December 2024 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:
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Aggregate of share capital and reserves
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Profit and loss account
The profit and loss account comprises all current and previous profits and losses of the Group, all of which are considered distributable.
The Group operates a defined pension contribution scheme. The assets of the scheme are held
separately from those of the Group in an independently administered fund. Pension contributions due at
the year end amounted to £12,921 (2023: £10,991). Total contributions payable by the Group for the year totalled £63,460 (2023: £50,690).
Page 28
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
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Commitments under operating leases
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At 31 December 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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Parent Company and Subsidiaries
The consolidated financial statements include the results of the Company and its subsidiaries, other than Brightlocal Poland Ltd. Transactions and balances between group entities have been eliminated on consolidation and are not disclosed in these financial statements, in accordance with FRS 102 Section 33, as the consolidated financial statements are publicly available.
During the year, the Group entered into transactions with related parties outside the consolidated group, namely Brightlocal Poland Ltd. These transactions were made on normal commercial terms. Details are as follows:
Brightlocal Poland Ltd
Brightlocal Poland Ltd is fully owned by BrightLocal Services Ltd.
During the year the company provided financial assistance to Brightlocal Poland Ltd of £30,049 (2023: £18,011). At the year end Brightlocal Poland Ltd owed the company £51,719 (2023: £21,670).
Key Management Personnel Compensation
The directors and other members of key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the company, directly or indirectly. This includes the directors (executive and non-executive) and members of the senior management team.
The total compensation paid to key management personnel during the year was £616,195 (2023: £461,779).
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The company's ultimate controlling parties are M Anderson and S Anderson by virtue of their joint ownership of 70.1% of the issued share capital in the company.
Page 29
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
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Change in accounting estimate
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During the year, the depreciation method for Computer equipment changed from 50% Straight Line
method to 33.3% Straight Line method. The cause for this change was due to all previous assets
depreciated in full under the historic method being disposed of within the year, and management reassessing the useful economic life of this type of asset.
During the year, the depreciation method for Fixtures and fittings changed from 33.3% Straight Line
method to 20% Reducing Balance method. The cause for this change was due to all assets being
depreciated in full under the historic method and new assets purchased within the year, and management reassessing the useful economic life of this type of asset.
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During the year, a prior period restatement was identified arising from the incorrect application of the company’s accruals accounting policies. In particular, the recognition of accrued income, deferred income, prepayments and accruals had not been consistently or correctly applied in prior financial periods. This resulted in income and expenditure being recognised in accounting periods that did not appropriately reflect the underlying transactions.
The error related primarily to the timing of recognition rather than the validity of the underlying balances. Consequently, profits reported in prior years were overstated due to income being recognised prematurely and certain costs not being fully accrued in the appropriate accounting periods.
In accordance with FRS 102 Section 10 Accounting Policies, Estimates and Errors, the prior period misstatement has been corrected. Comparative figures have been restated as if the accounting policies had been correctly applied in the periods concerned. A reconciliation is presented below showing the original position, the prior year adjustment, and the resulting restated position, as follows:
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Profit for the financial year
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Page 30
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Brightlocal Services Ltd
Notes to the financial statements
For the year ended 31 December 2024
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These amounts represent the net effect of movements in accrued income, deferred income, prepayments and accruals, reflecting the reversal of income recognised prematurely and the recognition of costs not previously accrued.
The net effect of the adjustments has been reflected in the restated comparative figures presented in the financial statements. A corresponding adjustment has been made to opening reserves at 1 January 2023, to ensure retained earnings accurately reflect the results that would have been reported had the accounting policies been correctly applied. This is set out on the statement of changes in equity on pages 13 and 14.
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Page 31
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