The Director presents the Strategic Report of Warren Johnson Limited and its subsidiaries ("the Group") for the year ended 31 July 2025.
The year represented a period of strategic transition for the Group. Turnover reduced from £31.41 million to £23.46 million, reflecting a deliberate decision to reduce lower-margin project-based assignments and focus resources on higher-value retained advisory relationships, strategic consultancy and integrated communications mandates.
Although this resulted in lower overall revenue, I am pleased with the quality of the financial performance delivered during the year. The Group successfully improved its profitability and financial resilience through a continued focus on higher-quality revenue, disciplined cost management and operational efficiency.
Gross margin increased significantly from 45.2% to 56.1%, whilst operating margin improved from 11.0% to 12.1%. Profit before taxation remained strong at £2.79 million, representing a profit before tax margin of 11.9%, despite the reduction in turnover. These results demonstrate that the strategic repositioning undertaken over recent years is delivering a stronger and more sustainable earnings profile.
Operational efficiency also improved during the year. Average employee numbers reduced from 94 to 68, following the completion of the Group's operational realignment, whilst revenue generated per employee increased from approximately £334,000 to £345,000, demonstrating improved productivity and a more efficient deployment of resources.
The Group generated £3.26 million of cash from operations during the year, representing operating cash conversion of approximately 115% of operating profit (2024: 81%). Strong cash generation enabled the Group to repay all external bank borrowings, leaving the business debt free at the year end, whilst simultaneously funding ongoing investment in the business and returning £1.87 million to shareholders by way of dividends. Cash balances increased to £1.96 million, further strengthening the Group's financial position.
Throughout the year I continued to invest in developing the Group's integrated communications offering beyond traditional public relations. The Group further strengthened its capabilities across digital communications, social media, influencer marketing, creative production, search optimisation and strategic consultancy. I believe this continued diversification enhances the value delivered to clients whilst reducing reliance upon any individual communications discipline.
International operations continue to form an important part of the Group's activities, contributing approximately one-third of total revenue. The Group continues to support clients through its overseas operations and strategic partnerships whilst maintaining consistent governance, quality standards and client service across all territories.
Employee ownership
The employee ownership structure continued to mature during the year and remains central to the Group's long-term strategy. I firmly believe employee ownership promotes collaboration, encourages long-term decision making and aligns employees with the continued success of the business.
The Group continued to invest in employee wellbeing, technical training and professional development throughout the year. Attracting, developing and retaining talented people remains fundamental to delivering outstanding client service and creating sustainable long-term value for clients, employees and shareholders.
I continually monitor the principal risks facing the Group and maintain procedures designed to identify, assess and manage those risks as part of the Group's governance framework.
Market conditions
Demand for communications and marketing services continues to be influenced by wider economic conditions, corporate confidence and client marketing expenditure. This risk is mitigated through maintaining a diversified client portfolio, expanding the Group's range of specialist services and maintaining a disciplined approach to financial management.
Client relationships
The loss of significant client relationships could adversely affect future revenue. This risk is mitigated through maintaining long-standing client relationships, delivering consistently high standards of service, investing in experienced client leadership and continuing to diversify the client base across sectors and geographical markets.
Recruitment and retention
The Group's continued success depends upon its ability to attract, develop and retain experienced professionals and senior client advisers. The loss of key personnel or difficulties in recruiting individuals with the appropriate industry expertise and client relationships could adversely affect client service, business development and financial performance. This risk is mitigated through the Group's employee ownership model, competitive remuneration and benefits, investment in training and professional development, succession planning and a strong emphasis on employee engagement and retention. The Group also seeks to broaden client relationships across multiple senior team members, reducing reliance on any individual.
Reputation and service quality
The Group's reputation remains one of its most valuable assets. Robust quality assurance procedures, experienced leadership teams and continued professional development help ensure consistently high standards of client service and protect the Group's reputation.
Technology and cyber security
The Group increasingly relies upon digital systems and cloud-based technologies in delivering services to clients. Appropriate IT controls, external specialist support, regular software updates and employee awareness training help mitigate cyber security and data protection risks.
International operations
The Group's international activities expose it to differing economic conditions, foreign exchange movements and regulatory environments. These risks are monitored through regular financial reporting, local management oversight and ongoing review by senior management.
Future outlook
Whilst economic uncertainty and competitive market conditions are expected to continue across the communications sector, I believe the strategic decisions taken over recent years have created a leaner, more resilient and higher-quality business.
The Group enters the new financial year with a strengthened balance sheet, positive operating cash generation, increased cash reserves, no external bank debt and an experienced management team. I intend to continue investing in higher-value advisory services, integrated communications, digital capability and specialist consultancy whilst maintaining prudent financial management and disciplined cost control. The Group also continues to evaluate advances in artificial intelligence and automation to improve internal efficiency whilst enhancing client service.
I remain confident that the Group's employee ownership model, diversified client base, experienced people and strong financial position provide an excellent platform for delivering sustainable long-term growth and creating enduring value for clients, employees and shareholders.
The principal financial and operational performance indicators used to monitor the Group's performance are set out below.
Key Performance Indicator 2025 2024
Revenue £23.46m £31.41m
Revenue per employee £345k £334k
Gross margin 56.1% 45.2%
Operating margin 12.1% 11.0%
Profit before tax £2.79m £3.69m
Profit before tax margin 11.9% 11.8%
Cash generated from operations £3.26m £2.82m
Net assets £3.43m £3.21m
Cash at bank £1.96m £1.77m
External bank debt £NIL £89k
Average employees 68 94
Whilst turnover reduced during the year, the improvement in profitability, operating margins, revenue generated per employee, cash conversion and the elimination of external bank debt demonstrate the success of the Group's strategy of focusing on higher-value client relationships whilst maintaining disciplined financial management.
Alongside these financial measures, I regularly monitor client retention, new business performance, employee engagement, utilisation, working capital management and cash generation, recognising that these measures are fundamental to the Group's continued long-term success.
On behalf of the board
As director I present the annual report and financial statements for the year ended 31 July 2025.
The results for the year are set out on page 8.
The Group profit for the financial year after taxation amounted to £2,086,962 (2024: £2,353,227).
During the year, dividends totalling £1,872,787 were paid to the Company's shareholder. Having considered the Group's current financial position, future cash flow requirements and ongoing investment plans, I do not recommend the payment of a final dividend in respect of the year ended 31 July 2025.
I served as the sole director of the Company throughout the financial year and remained in office up to the date of approval of these financial statements.
In accordance with the company's articles, a resolution proposing that Hilton Consulting Limited be reappointed as auditor of the group will be put at a General Meeting.
United Kingdom company law requires the director to prepare financial statements for each financial year. Under that law, the director has elected to prepare the group and parent company 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 he is satisfied that they give a true and fair view of the state of affairs of the group and parent company, and of the profit or loss of the group 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;
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent company, and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The director is responsible for the maintenance and integrity of the company website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
We have audited the financial statements of Warren Johnson Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 July 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).
Basis for opinion
Conclusions relating to going concern
Other information
Opinions on other matters prescribed by the Companies Act 2006
As explained more fully in the director's responsibilities statement, 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 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 director is responsible for assessing the group's and 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 director either intends to liquidate the group or parent company or to cease operations, or has no realistic alternative but to do so.
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 parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by section 408 of the 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 £2,342,270 (2024 - £3,288,893 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
Warren Johnson Ltd ("The Company") is a private limited company domiciled and incorporated in England and Wales. The registered office is C/O Hilton Consulting, Canalot Studios, 222 Kensal Road, London, W10 5BN.
The Group consists of Warren Johnson 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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Warren Johnson Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 July 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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
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.
The financial statements have been prepared on the going concern basis, which assumes that the Group and the parent company will continue in operational existence for the foreseeable future. In assessing the appropriateness of adopting the going concern basis, the director has undertaken a comprehensive review of the Group's current financial position, projected trading performance, expected cash flows and available funding resources for a period of at least twelve months from the date on which these financial statements are authorised for issue.
Having considered the Group's current financial position, forecast trading performance, expected cash flows, available financial resources and the principal risks and uncertainties facing the business, the director has concluded that the Group and the parent company have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the director continues to adopt the going concern basis of accounting in preparing these financial statements.
The director has not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt upon the Group's or the parent company's ability to continue as a going concern for a period of at least twelve months from the date these financial statements are authorised for issue.
Revenue comprises the fair value of consideration receivable for the provision of public relations, strategic communications, digital marketing, creative production, consultancy and related professional services, net of value added tax and trade discounts.
Revenue is recognised when, or as, the Group satisfies its performance obligations by transferring control of the promised services to customers. Where services are provided over time, revenue is recognised by reference to the extent of progress towards complete satisfaction of the relevant performance obligation.
For retained service contracts and ongoing consultancy engagements, revenue is recognised over the period during which the services are provided, reflecting the continuous transfer of benefit to the customer. Progress towards completion is measured using an input method based on the costs incurred or services performed relative to the total expected inputs required to satisfy the performance obligation.
Revenue relating to project-based assignments, campaigns and other discrete deliverables is recognised when the relevant performance obligations have been satisfied, either over time or at a point in time depending on the nature of the contractual arrangements and the transfer of control to the customer.
Amounts invoiced in advance of the related services being performed are recognised as deferred income and released to revenue as the associated performance obligations are satisfied.
Where contracts contain a significant financing component, the transaction price is adjusted to reflect the time value of money. Financing components are recognised as interest income or interest expense over the financing period using the effective interest method.
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.
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.
Investments in subsidiary undertakings are accounted for in the parent company financial statements at cost less any accumulated impairment losses. Where there is an indication that the carrying amount of an investment may not be recoverable, the investment is reviewed for impairment and written down to its recoverable amount where necessary. Any impairment losses are recognised immediately in profit or loss.
Other equity investments that are neither subsidiaries, associates nor jointly controlled entities are measured at fair value through profit or loss where fair value can be measured reliably. Where fair value cannot be measured reliably without undue cost or effort, such investments are stated at cost less impairment.
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 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.
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.
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 director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Deferred tax liabilities are recognised in respect of timing differences arising principally from accelerated capital allowances and other temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding tax bases, to the extent that it is probable that the timing differences will reverse in future periods.
Management exercises judgement in estimating the amount and timing of the reversal of these timing differences, taking into account expected future taxable profits, enacted or substantively enacted tax rates and the anticipated pattern of recovery or settlement of the underlying assets and liabilities. Changes in these assumptions could result in material adjustments to the carrying amount of deferred tax balances in future reporting periods.
The group estimates the useful lives of plant and equipment based on the period over which the assets are expected to be available for the use. The estimated useful lives of plant and equipment are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the asset.
The group provides an allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analysed historical bad debts, customers, concentrations, customer credit worthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the allowance of doubtful debts of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables.
Management exercises significant judgement in determining the appropriate timing and amount of revenue recognised under customer contracts. Judgement is required in identifying the Group's performance obligations, assessing whether those obligations are satisfied over time or at a point in time, and determining the most appropriate method of measuring progress towards completion.
Judgement is also required in estimating the stage of completion of ongoing client engagements at the reporting date, particularly where projects span multiple accounting periods or comprise several integrated deliverables. In making these assessments, management considers factors including contractual terms, work completed to date, resources consumed, project milestones achieved, expected remaining costs and the transfer of control of services to the client. Where contracts contain multiple distinct performance obligations, management allocates the transaction price to each obligation based on their relative standalone selling prices and recognises revenue as each obligation is satisfied.
Management also exercises judgement in determining whether amounts invoiced in advance represent deferred income and in assessing whether the Group is acting as principal or agent in respect of third-party services procured on behalf of clients. These judgements are based on the substance of the contractual arrangements, including responsibility for fulfilling the performance obligation, pricing discretion and exposure to inventory or service delivery risk.
These judgements are reviewed throughout the life of each significant contract and revised where necessary to reflect changes in the underlying facts and circumstances.
An analysis of the group's turnover is as follows:
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:
Details of the company's subsidiaries at 31 July 2025 are as follows:
Registered office addresses (all UK unless otherwise indicated):
The Group's external bank loan was repaid in full during the financial year in accordance with the agreed repayment schedule. Consequently, no amounts were outstanding at 31 July 2025 (2024: £89,309).
Following the repayment of the loan, the Group had no external bank borrowings at the reporting date and continues to finance its operations through internally generated cash flows and existing cash resources.
The following are the major deferred tax liabilities and assets recognised by the group and company:
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.
The Director has considered events occurring between the reporting date and the date of approval of these financial statements. There have been no adjusting events requiring amendment to the amounts recognised in these financial statements and no non-adjusting events requiring disclosure in accordance with FRS 102 Section 32 *Events after the End of the Reporting Period*. Accordingly, the financial statements do not reflect any events after 31 July 2025 other than those reflected in the normal course of business.