Company registration number 04097204 (England and Wales)
FIREBRAND TRAINING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
FIREBRAND TRAINING LIMITED
COMPANY INFORMATION
Directors
R P Chapman
S Capaldo
G D MacLeod
G S M Gaddes
J C Preston-Taylor
P R Rowlett
Secretary
G D MacLeod
Company number
04097204
Registered office
27 Old Gloucester Street
London
WC1N 3AX
Auditor
Harwood Hutton Limited
22 Wycombe End
Beaconsfield
Buckinghamshire
HP9 1NB
FIREBRAND TRAINING LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of income and retained earnings
9
Balance sheet
10
Notes to the financial statements
11 - 21
FIREBRAND TRAINING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors have pleasure in presenting their report and the financial statements of the company for the year ended 31 December 2022.
Fair review of the business
2022 saw the company continue its recovery from the pandemic impacted performance of the previous 2 years, and saw significant revenue growth in all divisions, with an overall increase of 36%.
Commercial training revenues increased by approximately 29% as economic recovery continued. In the Government Funded division of the business, delivered revenues also increased as new apprenticeship starts increased, and following the successful initial pilots in 2021, the company was awarded further contracts to deliver National Skills Bootcamp training programmes, boosting revenue for this division and leading to growth of approximately 44%.
The business continued to carefully monitor its cost base in line with adjusted activity levels, but also made significant investment to prepare itself for future growth and recovery by investing in sales headcount and marketing spend, and continuing to ensure that the quality of its Apprenticeship provision remains high.
On 16 June 2022 the entire issued share capital and voting rights in Softech UK Holdings Limited, Softech DACH Holdings Limited and Softech Benelux Holdings Limited (collectively known as Firebrand) was acquired by Bright Topco Limited indirectly through Verano Acquisitions Limited which is part of the BPP Education Group. Work began on integrating the business into the group to take advantage of additional opportunities. The business incurred exceptional costs in relation to the sale which led to a loss for the financial year, but these costs are not reoccurring.
Financial risk management objectives
The company draws its revenues from a broad base of customers and there is no concentrated or specific risk in one customer cancelling orders or ceasing to trade.
The company monitors its sales and delivery of courses closely, ensuring that courses are run on an economic basis whilst meeting the company's revenue volume targets.
The company has a relatively flexible cost model and is able to respond to changes in demand as soon as they are identified.
Cash collections are constantly monitored and majority of customer payments are received in advance of course attendance. The company carefully monitors credit terms and ensures that it is not overexposed to any particular customer, minimising the risk of bad debt.
The company has built a strong pipeline of business and is able to respond quickly to changes in demand.
Key Risks faced by the company aside from those identified under Financial Risk management include:
Apprenticeship Quality, Compliance & Financial Health: The company must ensure that the quality of its learning provision meets standards set down by the Education Regulator OFSTED, and that its funding claims are compliant with ESFA requirements. The business manages this by ensuring that quality of all aspects of training delivery and support are subject to regular review, monitoring and internal quality audit. Matters affecting quality and learner progression are discussed at regular senior management and board meetings. Financial Health of the business is regularly monitored to ensure that the company will be able to maintain its position on the register of approved training providers.
Product Obsolescence Risk: The business must ensure that it continues to offer sufficient variety of product to meet the needs of its customers, without being over-reliant on any one particular vendor or product stream. The business mitigates this risk by maintaining close relationships with all of its key vendors and partners, and continually researches alternative product sets to broaden its portfolio.
Business Continuity Risk: The company has moved key IT systems to the cloud to ensure that any potential disruption to company premises would not impact severely on the company’s ability to trade.
Coronavirus Restrictions Risk: The business has developed online solutions to enable it to continue to trade despite restrictions being placed on physical training.
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FIREBRAND TRAINING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Future developments
2023 to date has seen the company continue to grow, with revenue growth across both divisions.
The commercial training business has grown by over 20% in the first 8 months of the year. The company’s Apprenticeship offering continues to prove attractive to customers of all sizes, and has seen both key contracts renewed, and new business established. New apprentice start numbers for the year continue to grow, and the company has been awarded further contracts to deliver Government funded National Skills Bootcamps, both extensions of the original contracts awarded in 2021 and additional contracts awarded via tender.
Investments made during 2022 have contributed to the growth which will lead to improved profitability, as well as continuing to explore opportunities provided through being part of a larger group.
Financial
Turnover was up compared with the previous year by 36% in 2022 at £20,255,483 for the year (2021 - £14,843,671).
Administrative costs increased by 32% at £13,411,941 for the year compared to £10,153,124 for the previous 12 months.
Net operating profit before exceptional items was 2.6% of turnover compared to 3.6% in 2021.
Employees
Our success is dependent on employing people of the highest calibre and creating a work environment in which they can excel.
We achieve this by:
Fostering an environment which enables employees to develop their skills and knowledge.
Ensuring our people have regular opportunities to learn about all aspects of our business.
Encouraging open and honest assessment of employee performance and behaviour through regular performance feedback and annual appraisals.
Rewarding staff with fair and competitive salary and benefits packages and the opportunity to share in the success of the business.
In addition, the importance of operating with integrity, openness and respect is recognised by:
Encouraging a working environment in which employees feel comfortable about providing feedback and actively contributing to the development of the business.
Promoting an environment of equality of opportunity which is intolerant of discrimination, harassment or victimisation.
Maintaining healthy and safe working conditions.
The company places a high priority on providing an excellent level of both technical and soft skills training to its staff at all levels, and seeks to develop, where possible, staff through challenging work experiences including secondments through our overseas network of offices.
The employees of the company are kept well informed of the performance and objectives of the company through staff briefings, quarterly company conference calls and twice yearly company meetings, and other communication channels including email and team meetings.
Employees are given the opportunity to develop and progress according to ability, irrespective of their race, creed, sex, marital status and age.
The company actively encourages the involvement of its staff, and regular meetings between company and team management and employees to allow a free flow of information and ideas. The company also conducts twice yearly employee feedback surveys, as well as encouraging feedback in regular daily, weekly and monthly team meetings, which is shared by senior management on a weekly basis.
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FIREBRAND TRAINING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
The company gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person and to provide training and career development and promotion to disabled employees wherever appropriate.
Environment
The company acknowledges it has a duty to minimise its environmental impact, most of which is generated through the occupation of buildings, business travel of its employees and the generation of training documentation. The company has always taken its environmental responsibilities seriously and we have already put in place many environmental initiatives. We are committed to monitoring our environmental impact and looking for ways to reduce it focusing on those areas where the greatest impact can be made. We will also endeavour to work with and influence our suppliers and business partners now and into the future.
Our aims:-
Minimise and conserve: We shall identify opportunities to reduce the resources we consume including energy, water, paper and other natural resources, thereby also minimising the amount of waste we produce. Where practicable, we shall reuse re-cycled materials and procure recycled products.
Comply: We shall endeavour to comply with all relevant environmental legislation and regulations. Moreover we shall treat these as the minimum standard and seek to exceed them wherever possible.
Measure and monitor: We shall implement and document a framework for setting and reviewing environmental objectives and for measuring performance.
Involve and communicate: We shall document and communicate our policy to employees, suppliers and business partners and provide the necessary training and resources to support the implementation of our policy where appropriate.
The trading results for the year and the group's financial position at the end of the year are shown in the attached financial statements.
..............................
S Capaldo
Director
Date: 26 September 2023
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FIREBRAND TRAINING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company during the period was the provision of IT training and related services.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R P Chapman
S Capaldo
G D MacLeod
G S M Gaddes
(Appointed 16 June 2022)
J C Preston-Taylor
(Appointed 16 June 2022)
P R Rowlett
(Appointed 16 June 2022)
Auditor
The auditor, Harwood Hutton Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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 company and of the profit or loss of the company 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;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management and future developments.
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FIREBRAND TRAINING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
Statement of disclosure to auditor
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 company’s auditor 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 company’s auditor is aware of that information.
On behalf of the board
..............................
S Capaldo
Director
Date: 26 September 2023
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FIREBRAND TRAINING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FIREBRAND TRAINING LIMITED
Opinion
- 6 -
We have audited the financial statements of Firebrand Training Limited (the 'company') for the year ended 31 December 2022 which comprise the Statement of Income and Retained Earnings, the Balance Sheet and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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.
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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 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.
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.
FIREBRAND TRAINING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FIREBRAND TRAINING LIMITED
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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
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 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 are to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue 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.
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.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and reviewing legal and professional fee invoices;
we reviewed the minutes of board meetings to identify any references to non-compliance with laws and regulations.
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FIREBRAND TRAINING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FIREBRAND TRAINING LIMITED
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC and relevant regulators.
reviewing the findings of the funding assurance audit to ensure compliance with apprenticeship funding regulations.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
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.
David Jones
Senior Statutory Auditor
For and on behalf of Harwood Hutton Limited
Date: 26 September 2023
Chartered Accountants
Statutory Auditor
22 Wycombe End
Beaconsfield
Buckinghamshire
HP9 1NB
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FIREBRAND TRAINING LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2022
2022
2021
Notes
£
£
Turnover
3
20,255,483
14,843,671
Cost of sales
(7,229,790)
(5,053,050)
Gross profit
13,025,693
9,790,621
Administrative expenses
(13,411,941)
(10,153,124)
Other operating income
924,208
899,656
Exceptional item
4
(807,011)
Operating (loss)/profit
5
(269,051)
537,153
Interest payable and similar expenses
8
(45,276)
(107,500)
(Loss)/profit before taxation
(314,327)
429,653
Tax on (loss)/profit
9
20,669
(89,988)
(Loss)/profit for the financial year
(293,658)
339,665
Retained earnings brought forward
944,582
604,917
Retained earnings carried forward
650,924
944,582
The accompanying accounting policies and notes form part of these financial statements.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
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FIREBRAND TRAINING LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
10
140,274
83,108
Tangible assets
11
165,962
214,554
306,236
297,662
Current assets
Stocks
12
239,645
124,300
Debtors
13
6,754,496
4,881,600
Cash at bank and in hand
610,373
2,919,402
7,604,514
7,925,302
Creditors: amounts falling due within one year
14
(7,198,229)
(5,463,090)
Net current assets
406,285
2,462,212
Total assets less current liabilities
712,521
2,759,874
Creditors: amounts falling due after more than one year
15
(1,776,667)
Provisions for liabilities
Deferred tax liability
17
61,497
38,525
(61,497)
(38,525)
Net assets
651,024
944,682
Capital and reserves
Called up share capital
19
90
90
Capital redemption reserve
10
10
Profit and loss reserves
650,924
944,582
Total equity
651,024
944,682
The financial statements were approved by the board of directors and authorised for issue on 26 September 2023 and are signed on its behalf by:
S Capaldo
Director
Company Registration No. 04097204
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FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
Company information
Firebrand Training Limited is a private company limited by shares incorporated in England and Wales. The registered office is 27 Old Gloucester Street, London, WC1N 3AX.
1.1
Accounting convention
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.
This 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:
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 each category of financial instrument;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Bright Topco Limited. These consolidated financial statements are available from its registered office, BPP House, Aldine Place, 142-144 Uxbridge Road, London, Greater London, W12 8AA.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.
1.3
Turnover
Turnover is measured at the fair value of the consideration received or receivable for the sale of goods and the rendering of services in the normal course of business, and is shown net of discounts and VAT.
Rendering of services
Revenue arises from the provision of stand-alone residential training courses and training under government-backed apprenticeships and bootcamps, and the associated course materials and assessment fees.
Revenue for stand-alone courses is recognised when the delegate completes the course.
Revenue for apprenticeships and bootcamps is recognised proportionally over the performance of the service contract, by reference to the stage of completion of the transaction at the end of the reporting period.
Other operating income
Other operating income consists of management charges receivable from entities trading under the Firebrand brand overseas, and is recognised proportionally as the services are provided over the agreed period.
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FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
1.4
Intangible fixed assets other than goodwill
Intangible assets, representing qualifying computer software, are recognised at cost less accumulated amortisation and any impairment losses.
Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Software
33.3% straight line basis
Development Costs
33.3% straight line basis
1.5
Tangible fixed assets
Tangible fixed assets are 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:
Leasehold improvements
Over the period of the lease
Computer equipment
33.3% straight line basis
Fixtures, fittings & equipment
15% or 25% reducing balance basis
Motor vehicles
25% reducing balance basis
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 credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company 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).
1.7
Stocks
Stocks represent course books and exam vouchers held for use on future courses, and are stated at the lower of cost and estimated selling price less costs to complete and sell, after making allowances for obsolete items.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ”Basic Financial Instruments” to all of its financial instruments.
Financial instruments are recognised in the company’s balance sheet when the company becomes party to the contractual provisions of the instrument.
Basic financial assets
Short term debtors are measured at transaction price less any provision for impairment. Loans receivable, including those made to fellow group companies, are measured initially at fair value, net of transaction costs and are subsequently carried at amortised costs using the effective interest method, less any provision for impairment.
Basic financial liabilities
Short term creditors are measured at transaction price. Other financial liabilities, including bank loans and other loans, are measured initially at fair value, net of transaction costs and are subsequently carried at amortised costs using the effective interest method.
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FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
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.
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.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
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 leases asset are consumed.
1.13
Government grants
In response to COVID-19, the UK Government announced a number of initiatives for businesses to assist with cashflow. The company has received financial assistance under the Coronavirus Job Retention Scheme and the Coronavirus Business Interruption Loan Scheme. The amount received has been recognised in the profit and loss account within other operating income.
1.14
Foreign exchange
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.
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FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Recognition of revenue on apprenticeships
Recognition of revenue in relation to government-backed apprenticeships requires judgement regarding the most appropriate pattern of revenue recognition, in the context of a changing funding environment. Following the introduction of the Levy, apprenticeship income has been invoiced more evenly over the period of the apprenticeship, with a significant amount being receivable on the successful completion of the apprenticeship. The directors have adjudged it appropriate to recognise Revenue across the duration of the Apprenticeship as and when fundable activities are performed, which includes initial and ongoing administration and support activities, delivery of training courses, and the End Point Assessments which mark the completion of the Apprenticeship.
Recognition of revenue on bootcamps
Similar to Government-backed Apprenticeships, recognition of revenue in relation to the Skills Bootcamps programmes also requires judgment regarding the most appropriate pattern of revenue recognition. Bootcamp revenue is invoiced in three instalments subject to learners achieving certain milestones, including evidence of completion of learning and job outcomes. These milestones may occur after the company has performed the fundable activities and the directors have therefore judged it appropriate to recognise the first 90% of revenue in line with the delivery of the programmes, subject to the learners having completed the programme satisfactorily. Due to the relatively short nature of the programmes, this does not lead to a significant risk of material misstatement. The final 10% instalment, which is only receivable when job outcome is confirmed, is recognised when invoiced.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Non-apprenticeship course income
9,575,386
7,406,301
Apprenticeship and bootcamp course income
10,358,077
7,161,562
Other income
322,020
275,808
20,255,483
14,843,671
- 14 -
FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
3
Turnover and other revenue
(Continued)
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
18,900,743
13,963,877
Europe
945,551
685,236
Rest of the world
409,189
194,558
20,255,483
14,843,671
2022
2021
£
£
Other revenue
Grants received
-
44,308
4
Exceptional item
2022
2021
£
£
Expenditure
Exceptional item
807,011
-
During the year the company incurred exceptional costs totalling £807,011 relating to the sale of the company. These costs contributed to the loss for the period, which is not expected to reoccur in the future.
5
Operating (loss)/profit
2022
2021
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses
21,682
28,656
Government grants
-
(44,308)
Fees payable to the company's auditor for the audit of the company's financial statements
33,892
20,000
Depreciation of owned tangible fixed assets
76,317
105,315
Profit on disposal of tangible fixed assets
-
(22,825)
Amortisation of intangible assets
51,526
27,134
Operating lease charges
280,117
118,009
- 15 -
FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Apprenticeships
87
61
Customer Services
4
3
Directors
3
3
Education & Technology
15
11
Finance
6
4
Instructors
10
10
Marketing
9
9
Operations
8
5
Sales
37
26
Total
179
132
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
8,709,784
5,970,075
Social security costs
788,984
572,989
Pension costs
237,000
176,498
9,735,768
6,719,562
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
312,568
148,719
Company pension contributions to defined contribution schemes
74,890
46,960
387,458
195,679
The number of directors for whom retirement benefits are accruing under defined benefit schemes amounted to 3 (2021 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
283,398
-
Company pension contributions to defined contribution schemes
10,150
-
- 16 -
FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
8
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
45,276
103,396
Other interest
4,104
45,276
107,500
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(43,641)
69,024
Deferred tax
Origination and reversal of timing differences
22,972
20,964
Total tax (credit)/charge
(20,669)
89,988
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
(Loss)/profit before taxation
(314,327)
429,653
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(59,722)
81,634
Tax effect of expenses that are not deductible in determining taxable profit
29,009
10,169
Effect of change in corporation tax rate
14,756
Permanent capital allowances in excess of depreciation
(6,469)
(3,272)
Depreciation on assets not qualifying for tax allowances
1,757
1,457
Taxation (credit)/charge for the year
(20,669)
89,988
The UK corporation tax rate for the year ended 31 December 2022 is 19% (2021: 19%). The Finance Act 2021, which received Royal Assent on 10 June 2021, enacted a 6% increase in the corporation tax rate from its current rate of 19% to 25% for the year beginning 1 April 2023. Any deferred tax assets and liabilities existing at 31 December 2022 are reflected according to the applicable corporation tax rate expected to apply at the time of realisation.
- 17 -
FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Intangible fixed assets
Software
Development Costs
Total
£
£
£
Cost
At 1 January 2022
134,477
27,440
161,917
Additions
82,857
25,835
108,692
At 31 December 2022
217,334
53,275
270,609
Amortisation and impairment
At 1 January 2022
74,154
4,655
78,809
Amortisation charged for the year
44,153
7,373
51,526
At 31 December 2022
118,307
12,028
130,335
Carrying amount
At 31 December 2022
99,027
41,247
140,274
At 31 December 2021
60,323
22,785
83,108
The amortisation on intangible assets is included within administrative expenses.
11
Tangible fixed assets
Leasehold improvements
Computer equipment
Fixtures, fittings & equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2022
111,043
1,142,973
124,920
145,674
1,524,610
Additions
2,940
107,894
4,836
115,670
Disposals
(145,674)
(145,674)
At 31 December 2022
113,983
1,250,867
129,756
1,494,606
Depreciation and impairment
At 1 January 2022
95,096
1,057,077
100,154
57,729
1,310,056
Depreciation charged in the year
4,554
67,828
3,935
76,317
Eliminated in respect of disposals
(57,729)
(57,729)
At 31 December 2022
99,650
1,124,905
104,089
1,328,644
Carrying amount
At 31 December 2022
14,333
125,962
25,667
165,962
At 31 December 2021
15,947
85,896
24,766
87,945
214,554
- 18 -
FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
12
Stocks
2022
2021
£
£
Finished goods and goods for resale
239,645
124,300
13
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
3,539,470
2,594,023
Corporation tax recoverable
86,850
Amounts owed by group undertakings
97,398
115,044
Other debtors
463,295
402,959
Prepayments and accrued income
2,567,483
1,769,574
6,754,496
4,881,600
14
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
16
520,000
Trade creditors
2,135,713
978,857
Corporation tax
69,292
Other taxation and social security
374,965
443,803
Other creditors
134,403
92,956
Accruals and deferred income
4,553,148
3,358,182
7,198,229
5,463,090
15
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
16
1,776,667
16
Loans and overdrafts
2022
2021
£
£
Bank loans
2,296,667
Payable within one year
520,000
Payable after one year
1,776,667
- 19 -
FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
17
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
65,990
41,890
Pension contributions
(4,493)
(3,365)
61,497
38,525
2022
Movements in the year:
£
Liability at 1 January 2022
38,525
Charge to profit or loss
22,972
Liability at 31 December 2022
61,497
18
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
237,000
176,498
Included within other creditors are amounts of £39,836 (2021 - £26,575) relating to defined contribution pension commitments.
19
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
90
90
90
90
- 20 -
FIREBRAND TRAINING LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
20
Financial commitments
At the reporting end date the company had outstanding commitments for future minimum payments under non-cancellable contracts, which fall due as follows:
2022
2021
£
£
Within one year
2,204,675
1,287,045
Between two and five years
8,818,698
5,552,880
In over five years
1,388,220
11,023,373
8,228,145
21
Related party transactions
Transactions with related parties
Transactions entered into between two or more wholly owned members of a group have not been disclosed in accordance with FRS 102 33.1A.
22
Ultimate controlling party
The results of Firebrand Training Limited are consolidated into the accounts of Bright Topco Limited. The accounts of Bright Topco Limited are available at their registered address, BPP House, Aldine Place, 142-144 Uxbridge Road, Greater London, England.
Prior to 16 June 2022 the ultimate controlling parties were S Capaldo and T Capaldo by virtue of their shareholdings in Softech UK Holdings Limited. On 16 June 2022 Verano Acquisition Limited purchased 100% of the shareholding in Softech UK Holdings Limited. Verano Acquisitions Limited is a company incorporated in the United Kingdom and registered in England and Wales.
The ultimate parent of the Company is Bright Holdings S.a.r.l. (registered in Luxembourg) and the ultimate controlling party is a group of investment funds managed by TDR Capital LLP (registered in the UK).
- 21 -
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