Sparkler_Limited - Accounts
Sparkler_Limited - Accounts
Unaudited Abbreviated Accounts
For the year ended 30 June 2016
Company Registration No. 04197111 (England and Wales)
Contents
Page
Strategic report
1 - 2
Abbreviated balance sheet
3
Notes to the abbreviated accounts
4 - 5
Strategic Report
For the year ended 30 June 2016
Page 1
The directors present the strategic report and financial statements for the year ended 30 June 2016.
Principal Activities
Sparkler is an award-winning insight and strategy consultancy. We help build businesses for the digital age. To do this we offer four services – Insight (both qualitative and quantitative), Panels & Communities, Strategy, and Service Innovation.
We are London-based but our work covers the globe including Europe, Africa, the Americas and Asia. We deliver this by working with a range of hand-picked local partners.
We work with blue-chip companies, both domestic and international. We specialise in the digital space: on the one hand working with pure-play digital companies including Google, Facebook, Microsoft, Yahoo!, eBay, Amazon & BBC, and on the other hand clients from traditionally offline sectors looking to take advantage of, and blend, digital opportunities. These clients include Diageo, TUI, Sainsbury's, McDonald's, British Gas, HSBC, Nestle, Electrolux and Camelot.
Performance and development of the business during the year
The financial year ending 30 June 2016 saw significant revenue growth of 22% to £5,871,000 (2015: £4,801,000); an increase of gross profit of 29% to £4,159,000 (2015: £3,234,000); and an increase in pre-tax profit of 68% to £953,000 (2015: £567,000).
Client growth and business stability
Our increases in revenue were driven by organic growth with current clients diverting more of their marketing spend towards our research and consultancy services, and from winning new clients including Google, ASOS, Camelot, Reckitt Benckiser and Foot Locker
We also began to benefit from our moves from our Insight base, into the arenas of Strategy and Service Innovation.
Beyond this, we went into this year actively seeking to develop even stronger relationships with our most loyal clients, building a more secure, formally retained foundation. The delivery and growth of longitudinal Panels and Communities is central to this trajectory. By the year's end, we had increased the number of retained clients from three to eight. We have now also established Panels & Communities as an integrated international offer, including a multi-lingual team of native speakers in-house.
The solidity of the business was further enhanced as we looked to ensure that our client footprint was suitably broad to avoid any over-reliance on any one company. By the year's end we had continued to broaden our client base whilst growing, and no single client accounted for more than 10% of our total income.
We continued to keep close financial control over our administration expenses during the year and this was reflected in the strengthening of our operating profit margin to 16.2% (2015: 11.8%).
Strategic Report (Continued)
For the year ended 30 June 2016
Page 2
People and recruitment
Attracting and keeping top talent is central to our success. We have a strong staff retention rate of 82%. The types of work we do, and the nature of the clients we work with, clearly plays its part but in addition to this we have maintained our strong ‘kaizen' learning culture with internal training sessions every Friday punctuated with external guests. This year we welcomed speakers from ad agency CP&B, Red Bee, programmatic specialist Infectious, and the London College of Fashion. We also have a £250 creative bursary available for all staff.
Our headcount grew 10% to facilitate the revenue growth, support our new offerings (e.g. Service Innovation) and ensure that our infrastructure (e.g. IT and Finance) could support this growth, both this year and into the future.
External recognition
We continue to be an award-winning agency with three of our shortlisted projects (for Yahoo!) winning in each of their categories at the IAB Europe's Research Awards in May of the financial year. We also more recently have been shortlisted in three categories in this year's MRS Awards – Best Agency, New Consumer Insight (for the IAB) and Financial Services Research (for British Gas).
Principal risks and uncertainties
As is clear from the points above, we have taken a host of steps to minimise risks from client and staff perspectives. Nevertheless the market we work in is highly competitive, marketing spend is often the first to get cut in tough times and, with the impact of the Brexit vote unknown, continuing with the above stability-driving strategies feels key. The internationalisation of our client base also helps offset any future risk associated with Brexit.
Having said all this, our outlook is very optimistic and our focus is very much on growth, off a stable platform.
During the year ahead (2016-17), we will be taking on over 3,000 square feet of extra office space to facilitate that further growth.
Future Outlook
In many ways the reasons for our success this year also represent solid foundations for the year ahead – a more robust business model, broader client base, extension into new services, stable staff, etc. More broadly, we feel that clients' increased interest in all things digital, will increase demand for our services, which the planned increases in staff and space will enable us to satisfy.
Looking forward our strategic focuses are further Internationalisation of our offer, and further Digitalisation of our offer, and maintaining best-in-class quality.
On behalf of the board
Director
10th March 2017
Abbreviated Balance Sheet
As at 30 June 2016
Page 3
2016
2015
Notes
£
£
£
£
Fixed assets
Tangible assets
2
Current assets
Debtors
Cash at bank and in hand
Creditors: amounts falling due within one year
(1,774,363 )
(1,168,206 )
Net current assets
Total assets less current liabilities
Provisions for liabilities
(10,240 )
(11,620 )
1,429,503
1,185,169
Capital and reserves
Called up share capital
3
Profit and loss account
Shareholders' funds
Approved by the Board for issue on 10 March 2017
Director
Company Registration No. 04197111
Notes to the Abbreviated Accounts
For the year ended 30 June 2016
Page 4
1
Accounting policies
1.1
Accounting convention
1.2
Compliance with accounting standards
The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).
1.3
Turnover
1.4
Tangible fixed assets and depreciation
Property Improvements
Computer equipment
Office equipment
Bicycles and bicycle equipment
Over 12 months
1.5
Leasing
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.6
Revenue recognition
Fee income represents revenue earned under a wide variety of contracts to provide professional services. Revenue is recognised as earned when, and to the extent that, the firm obtains the right to consideration in exchange for its performance under these contracts. It is measured at the fair value of the right to consideration, which represents amounts chargeable to clients, including expenses and disbursements but excluding value added tax.
Revenue is generally recognised as contract activity progresses so that for incomplete contracts it reflects the partial performance of the contractual obligations. For such contracts the amount of revenue reflects the accrual of the right to consideration by reference to the value of work performed. Revenue not billed to clients is included in debtors and payments on account in excess of the relevant amount of revenue are included in creditors.
Fee income that is contingent on events outside the control of the firm is recognised when the contingent event occurs.
1.7
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
Notes to the Abbreviated Accounts (Continued)
For the year ended 30 June 2016
Page 5
2
Fixed assets
Tangible assets
£
Cost
At 1 July 2015
337,780
Additions
45,033
At 30 June 2016
382,813
Depreciation
At 1 July 2015
245,847
Charge for the year
64,872
At 30 June 2016
310,719
Net book value
At 30 June 2016
72,094
At 30 June 2015
91,933
3
Share capital
2016
2015
£
£
Allotted, called up and fully paid
4
Control
The company is controlled by Mr J Robson and Mr M Willis who own 100% of the shares.