The director presents the strategic report for the year ended 31 December 2022.
The results for the financial year ended 31 December 2022 are set out in the statement of comprehensive income. Group revenue for the financial year amounted to £9,841k (2021 - £11,136k) generating a profit before taxation of £292k (2021 - £440k).
The group commercial performance comparative analysis is skewed owing to the demerger of Parafix Hungaria Kft from the group, concluded in February 2021, the strategic transaction allowed for greater focus on domestic operations in the United Kingdom coupled with marketing focussed on Western Europe. This has contributed to improved UK sales performance with sales of £9,841k in the year, compared to £9,616k in 2021 and £8,050k in 2020.
2022 gross margins have fallen from that achieved in 2021 (36.0% compared to 37.2%), although operating margins have improved to 4.7% (2021 - 4.5%) with improved overhead control.
Annual cash from operations continued to facilitate a significant reduction in debt, with group asset finance debt reducing in line with plan.
The director considers the year-end financial position to be successful given the commercial growth achieved in what was considered to be an uncertain global landscape.
Management of risk remains critical for the Group in delivering growth plans.
Shortage of staffing in the UK remains a threat to operations with continuity of human resource difficult to maintain. The pandemic and Brexit remain key contributory factors in explaining the fall in overseas workers with a lack of regional talent hurting the ability to recruit. Partnerships with recruitment agencies remain vital in the attempt to mitigate the shortfall in labour.
A decay in the global supply chain has been observed since the start of the pandemic with many key suppliers failing to maintain on time, in full deliveries. A short-term fix of inventory expansion has tempered the threat and will be the subject of scrutiny to ensure that stock levels are optimised as the situation improves.
Rising inflation in the UK is being felt in the profit and loss account with materials and power experiencing notable rises. These costs are being passed on to the customer base in the form of price increases and will be the subject of ongoing scrutiny to ensure that threats to profitability are diminished.
Brexit threats have been well managed with no adverse impacts reported. Foreign exchange is studied to mitigate the threat of losses. Contingency plans are in place to manage threats that may be posed from the supplier base.
Operational, financial and commercial risks are considered to be well managed with appropriate safeguarding in place to mitigate threats.
On 12 April 2023, the company sold its investment in the entire share capital of Parafix Holdings Limited and its subsidiary companies to Addev Materials SAS.
Following the sale of its shareholding in subsidiary companies, the company is exploring and made investments in various opportunities in order to maximise value.
Apart from those measures identified above in the business review, the directors are of the opinion that no further inclusion of financial key performance indicators is necessary for an understanding of the development, performance or position of the Groups business.
On behalf of the board
The director presents his annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £150,000.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The group operates management policies designed to minimise its exposure to financial risk:
The group operates a number of policies and procedures designed to mitigate credit risk. In particular, before entering into a transaction with a customer a detailed credit review is undertaken to determine whether or not, in the opinion of the directors, the customer has the ability to meet its debts as they fall due.
The group will only enter into a transaction with a customer on the basis of fixed, pre-agreed terms from suppliers and consequently is not exposed to price risk.
The group operates a range of policies to ensure there is sufficient liquidity and cash to meet its liabilities as they fall due. Regular cash flow forecasts are prepared to ensure the group is able to pay its debts as they fall due.
Group policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling. This hedging activity would involve the use of foreign exchange forward contracts.
Research and development expenditure amounts to £133,894 (2021 - £130,103). The director considers that research and development will continue, in order to enhance the technical knowledge and product range currently available to customers.
The director has presented the future developments of the group in the Strategic Report.
The auditor, Carpenter Box, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
We have audited the financial statements of Punter Family Investments Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, 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
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the 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 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 parent company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework that the group operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the group’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud; and
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: employment law and compliance with the UK Companies Act.
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing minutes of meetings of the board and senior management;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to stock provisions; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.
As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the period was £
Punter Family Investments Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 53 Spencer Road, Lancing Business Park, Lancing, West Sussex, BN15 8UA.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company and all of its subsidiaries. A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation.
The prior year financial statements for the company, were prepared for a ten month period from the date of its incorporation. Therefore the results for this period will not be entirely comparable with the current year or group which include the results for the 12 month period to 31 December 2022.
At the time of approving the financial statements, the director has a reasonable expectation that the group and company has adequate resources to continue in operational existence for the foreseeable future. The director has considered relevant information, including the group and company’s principal risks and uncertainties and the impact of subsequent events in making their assessment.
At the balance sheet date the group and company is in a net current liabilities position. The group and company is reliant on the ongoing support of its creditors including companies under control of the director and is meeting its liabilities as they fall due. The financial statements do not include any adjustments that would result in the withdrawal of their support.
Based on these assessments and having regard to the resources available to the entity, the director has concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.
Revenue represents amounts receivable for goods net of VAT and trade discounts. Revenue is recognised when the company obtains the right to consideration in exchange for the goods provided.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Freehold land is not depreciated and assets under construction are not depreciated until the asset has been brought in to use.
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 income statement.
In the parent company financial statements investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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 statement of financial position 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 trade and other receivables 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.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. The impairment loss is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity .
Basic financial liabilities, including trade and other payables, bank loans and loans from fellow group companies, 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Research and development
Research expenditure is written off against profits in the year in which it is incurred.
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.
Due to the nature of the trading subsidiary's operations, excess material may remain upon completion of specific projects. It may be possible to use this material on future projects, but often this is not possible due to the unique nature of many of the materials ordered. Where this is the case management makes a full provision for these stock lines. Management also provide for slow moving or obsolete stock lines identified during their stock reviews. Additionally management apply a 10% provision to all older and low value stock lines, which are at a greater risk of obsolescence.
The average monthly number of persons employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The group has estimated trading and non-trading losses of £nil and £67,000 (2021: £nil and £67,000) respectively available for carry forward against future income.
During the prior year a dividend in specie of £5 million was declared by the group as part of a demerger as described in note 21.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
In the prior year, motor vehicles transferred on demerger were transferred using the carrying net book value at the date of transfer. The gross cost impact of the transfers on both cost and accumulated depreciation has been reflected in the current year, with no effect on the brought forward or carrying net book value of the assets.
Details of the company's subsidiaries at 31 December 2022 are as follows:
The bank loans across the group, with varying interest rates between 2.75% to 3.05% above base rate and 8.9% fixed per annum. Loans are secured by legal charges over the group's freehold property and by a debenture and a fixed and floating charge over the group's assets.
Finance lease payments represent rentals payable by group companies for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The net obligations under hire purchase contracts are secured upon the assets to which the finance relates.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The director has considered the net deferred tax liability and concluded that it is not possible to state the estimated liabilities which will reverse within 12 months, this is due to the level of reversal being dependant on events which are not yet known.
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.
All of the ordinary shares carry full voting, dividend and capital distribution (including on winding up) rights.
During February 2021 Punter Family Investments Limited (formerly Parafix Global Limited) was incorporated and a group reconstruction occurred whereby 11,000,000 ordinary shares of £1 each were issued in the company. As part of the group reconstruction Punter Family Investments Limited (formerly Parafix Global Limited) became the ultimate parent company of Parafix Holdings by virtue of a transfer of the entire share capital of Parafix Holdings Limited to Punter Family Investments Limited (formerly Parafix Global Limited).
On 28 February 2021, the entire share capital of Parafix Hungária Kft was transferred to Punter Investments Limited (formerly Parafix Europe Limited), a company under common control, by way of a dividend in specie following a share capital reduction of Punter Family Investments Limited (formerly Parafix Global Limited) for an amount of £5 million.
On 17 May 2021 a further share capital reduction was undertaken, resulting in 5,925,000 ordinary shares of £1 each being cancelled and £5,925,000 transferred to distributable reserves of Punter Family Investments Limited (formerly Parafix Global Limited).
On 25 April 2013 Parafix Holdings Limited set up The Parafix Holdings Limited Enterprise Management Incentive Plan for the benefit of the group's senior employees. A fair value of £6 per ordinary share was established on this date, and 6,000 options were granted with an exercise price of £6. As a result of the the group reconstruction, 2,000 options lapsed with the remaining 4,000 options being subject to replacement EMI options in Punter Family Investments Limited (formerly Parafix Global Limited) as the ultimate parent company of Parafix Holdings Limited on exactly the same terms.
The options can only be exercised upon specific events. On this basis the directors have calculated that the charge to the income statement for the year ended 31 December 2022 is immaterial. Accordingly, no charge has been made to the income statement of Parafix Tapes and Conversions Limited, being the company in which the option-holders are employees. At the statement of financial position date 4,000 (2021 - 4,000) share options were outstanding.
The amount included within other reserves relates to a merger reserve created as part of the group reconstruction in the prior year.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The group's bankers hold an unlimited guarantee in respect of the borrowings of Parafix Holdings Limited, which amounted to £532,487 at 31 December 2022 (2021 - £576,089). This guarantee is secured by an unlimited debenture over the group's assets.
Furthermore, at the year-end the group has an outstanding commitment of £209,395 to finalise the purchase of an item of plant and machinery.
The following amounts were outstanding at the reporting end date (note that the only key management personnel is the director):
The following amounts were outstanding at the reporting end date:
On 12 April 2023, the entire share capital of Parafix Holdings Limited, was acquired by Addev Materials SAS.
Since the balance sheet date dividends totaling £405,000 have been declared and paid by the company.