Company registration number  (England and Wales)
Medication Packaging Holdco Limited
Annual report and Financial Statements
For the year ended 31 May 2023
Medication Packaging Holdco Limited
Company information
Directors
Mr M Stokes
Mr J D Agnew
Mr J J Brade
Mr G P Harford
Secretary
Mr M Stokes
Company number
12147309
Registered office
Crewe Hall
Enterprise Park
Crewe
Cheshire
CW1 6UL
Auditor
DJH Mitten Clarke Audit Limited
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
Medication Packaging Holdco Limited
Contents
Page
Strategic report
1 - 6
Directors' report
7 - 9
Independent auditor's report
10 - 13
Group statement of comprehensive income
14
Group statement of financial position
15
Company statement of financial position
16
Group statement of changes in equity
17
Company statement of changes in equity
18
Group statement of cash flows
19
Notes to the financial statements
20 - 40
Medication Packaging Holdco Limited
Strategic report
For the year ended 31 May 2023
- 1 -

The directors present the strategic report for the year ended 31 May 2023.

Review of the business

The principal activity of Medication Packaging Holdco Limited (“the Company”, “the Group” ) is that of a group holding company. The principal activity of the Group is the design, manufacture and sale of printed folded cartons and leaflets to the pharmaceutical, healthcare, beauty and cosmetics sectors.

 

The Group operates through its trading subsidiaries which are disclosed in note 15.

 

The Group achieved sales of £49,099,911 (2022: £24,240,507) and profit before taxation of £2,856,418 (2022: £1,653,939) however the comparative year included only three months of trading from FG Curtis Limited. The net assets at the year end were £12,349,599 (2022 £10,543,236). It is considered to be a successful trading performance for the year.

 

The directors are pleased with the performance of the Group, particularly in light of the challenges faced over the last twelve months which have seen global shortages in the supply chain, significant inflationary pressures and rising energy costs.

 

This last year of trading, represents the first full year of performance from FG Curtis Limited, following its acquisition in February 2022. It is pleasing to report that the Group has seen a very successful trading performance from FG Curtis limited, with sales of £26.8m being achieved. The earnout period, relating to the acquisition of FG Curtis Limited, which ran through until 30th September 2022 was concluded, with a final payment being made to the former shareholders of £4.7m.

 

With the growth being achieved by FG Curtis Limited and to ensure that future growth plans can be achieved the Group undertook a significant investment commitment, which has resulted in the doubling of the FG Curtis Limited potential operating capacity, by obtaining a new unit which is located opposite the existing site. This new unit which only became into operation right at the end of the financial year, will provide greater operational efficiency and provides the ability to store stock on site.

The Group is pleased to disclose that in April 2023, FG Curtis Limited became the first UK carton manufacturer to gain B Corp accreditation. Gaining this accreditation confirms the commitment of the Group to providing high-quality packaging solutions whilst minimising our impact upon the environment.

It is testament to the Group’s strength and strategy, that is has successfully adapted to the challenges faced over the last twelve months. This has been achieved with the support of the Group’s dedicated employees and by working closely with suppliers and customers to ensure the unprecedented market conditions have been carefully manged and the Group has been able to continue to serve the needs of its customer and effectively grow the business.

 

Medication Packaging Holdco Limited
Strategic report (continued)
For the year ended 31 May 2023
- 2 -
Principal risks and uncertainties

With the unprecedented global shortages in the supply chain, the Group has worked hard to ensure that it has continued to service effectively its customers and has at times during the year, maintained stocks at higher than normal levels.

 

For Medica Packaging Limited, the Group maintains credit insurance in place to mitigate the risk of a failure of a customer, together with a process of close monitoring and management of the customer base. With F.G. Curtis Limited the Group has reviewed the potential to hold credit insurance, but has concluded that cover is not currently required.

 

As the Group continues to grow, attracting and retaining experienced and high performing employees becomes ever more challenging, however, the Group looks to develop and progress employees in line with Group performance.

 

As a manufacturing business maintaining high standards of health and safety across our operations is key to the success of our Group. Any failure to implement and operate safe working practices can damage the reputation of the Group. We continue to invest in health and safety compliance personnel, constantly reviewing our operating procedures and employee training.

 

Our IT systems and infrastructure form a vital part of the business operation. We have a dedicated IT team who along with external support, monitor the security and performance of our information systems. We are conscious that cybersecurity risks continue to increase globally. Any major IT breach can result in the failure of the system, the loss of sensitive information and even financial loss, via fraudulent payments. We continue to invest in maintaining and upgrading our cyber risk detection and prevention tools to mitigate the risk of cyber attacks. We continue to invest in developing our processes to improve our efficiency and to aid in supporting and serving our customers.

 

The Group has exposure to currency variation and it looks to mitigate this through effective purchasing, monitoring the need to hedge where necessary and reviewing alternative sources of supply. Similarly, while there are sales into international markets, the ability to hedge exposure is closely monitored.

ESG

The Group continues to develop its reporting in relation to ESG, as there is ever increasing importance by our key stakeholders on the actions the Group is taking to minimise carbon emissions and improve our resource and energy efficiency.

 

Within the Group the trading entities have ISO 14001 and FSC Certification. In addition at FG Curtis B Corp accreditation has been achieved and the business was also the first company in the UK to achieve World Land Trust certified carbon balanced packaging accreditation. Within our manufacturing process, the majority of our waste is recycled.

 

 

The Group values its employees and recognises that they are key to the success of the Group and the ability to deliver the Group’s strategy. The Group employees in excess of 250 employees, with many employees having worked for the Group for many years.

 

Training and development of its employees is key to the success of the Group and it looks to reward employees with competitive pay and benefits and ensure appropriate training and development opportunities are provided.

 

The Group is an inclusive employer and has in place policies and procedures to ensure no barriers exist to prevent any groups from achieving success within the Group.

Medication Packaging Holdco Limited
Strategic report (continued)
For the year ended 31 May 2023
- 3 -
Key performance indicators

The Group monitors performance daily and has in place key performance indicators that are designed to evaluate how the group performs. The key performance indicators that the Group uses are:

 

Actual Sales performance against prior year

2023 - £24,859k (103%) increase on 2022

2022 - £17,245k (247%) increase on 2021 (2021 being a 9 month period)

 

EBITDA

2023 - £7,847k

2022 - £3,656k

Increase £4,191k (114.6%) for the year

 

EBITDA is calculated as Operating profit, adjusted for depreciation, profit/(loss) on disposal of tangible fixed assets and amortisation.

 

B-Corp Accreditation

The Board are pleased to disclose that in April 2023 FG Curtis Limited it became the first UK carton manufacturer to gain B Corp accreditation. As a leading sustainable printed packaging manufacturer, committed to producing eco-friendly, high quality packaging solutions whilst minimising our impact upon the environment, becoming a B Corp in April 2023 is a mark of approval of the way we have always worked. There should not be any work or manufacturing undertaken that is detrimental to the world we all live in and now it is even more important for like-minded companies to work together to achieve that end. From our inception, FG Curtis has been a pioneer in its commitment to this ethos. Proof of this is endorsed by our other credentials such as FSC Certification, ISO 14001, BPIF Zero Foil 2 Landfill and being the first company in the UK to achieve World Land Trust certified carbon balanced packaging accreditation. It's not just about being passionate though, it's about commitment to the community and environment. Initiatives like the Curtis Centre of Excellence, which encourages the next generation of packaging designers, and partnering with organizations like Bee1 to promote pollinator health and biodiversity through the planting of wildflowers. Becoming a B Corps is an endorsement of all that Curtis believes in, stands for and demonstrates its commitment to creating a better world for all.

 

Environment

There is recognition that the Group has a responsibility to the environment, customers, suppliers and employees. The Group, where possible ensures that it purchases material certified by the Programme for the Endorsement of Forest Certification (PEFC) or the Forest Stewardship Council (FSC). The Group’s commitment to protecting the environment is evidenced by group members ISO 14001 accreditation and Sedex certified as well as FG Curtis being the first company in the UK to offer World Land Trust certified carbon balancing packaging.

Other information and explanations

The unpresented market conditions that the Group has faced over these last twelve months, have highlighted how it has been able to effectively adapt to these challenges and ensure it continues to serve the needs of its customers and effectively grow the business.

The prospects for the future are encouraging and the Group is now well placed to build upon the financial performance achieved this year. With a committed workforce and a commitment to continue to invest further in both people and infrastructure, the future is approached with confidence.

Medication Packaging Holdco Limited
Strategic report (continued)
For the year ended 31 May 2023
- 4 -
Promoting the success of the Group

The Directors, in line with their duties under S172 of the Companies Act 2006, believe they have both individually and as a Board acted in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole and in doing so have regard to a range of matters when making decisions for the long term.

 

In promoting the success of the group, a director must have regard to:

 

  1. The likely consequences of any decision in the long term

  2. The interests of the group’s employees

  3. The need to foster the group’s business relationships with suppliers, customers and others

  4. The impact of the group’s operations on the community and the environment

  5. The desirability of the group maintaining a reputation for high standards of business conduct

  6. The need to act fairly as between members of the group

 

 

How the Board factored the requirements of S172 of the Companies Act 2006, with the Key stakeholders is detailed below:

 

 

Stakeholder

Activities and considerations

Response

Employees

Our employees are key to the success of the Group.

The Board consider succession plans and closely monitor staffing levels, vacancies and employee turnover levels.

With the high inflationary pressures being faced by our employees the Board considered how it could best support our employees.

 

The Board provided a one off cost of living bonus to all its employees in December.

 

There have been a number of promotions – confirming the commitment to develop and reward employee commitment.

Suppliers

The unprecedented market conditions which saw global shortages in the supply chain and significant inflationary pressures – saw the Board continue to work closely with suppliers to carefully manage through these unprecedented market conditions. The Board recognise that relationships with suppliers are important to the long-term success of the Group.

Review meetings are held with suppliers to continue to build relationships and understand new offerings.

 

The Board carefully worked with suppliers to ensure continuity of supply and to be able to serve customer demand through the unprecedented global shortages in the supply chain and significant inflationary pressures.

 

 

Medication Packaging Holdco Limited
Strategic report (continued)
For the year ended 31 May 2023
- 5 -

Stakeholder

Activities and considerations

Response

Customers

Our customers are key to the success of the Group. We regularly engage with our customers through formal meetings and scheduled customer audits.

We carefully monitor our customer service through OTIF performance and our commitment to quality.

The Board has recognised the increasing demand of customers to have product sourced from sustainable supplies and the Group’s commitment to IS0 14001 and FSC accreditation confirm the commitment to meeting our customer needs. FG Curtis limited has also gained the B Corp accreditation.

We have also invested in an additional site at FG Curtis to ensure we fulfil efficiently the growing customer demand.

 

Shareholders/Investors

The Board meets monthly to monitor performance against forecasts, develop strategy, consider acquisitions, operational performance and health and safety and appraise capital investments.

The Board approved the commitment for a new site at FG Curtis Limited and carefully monitored the Group’s performance during the unprecedented challenging market conditions. The Board challenge the forecasts presented noting the market trends and economic outlook.

 

Communities and the Environment

The Board is conscious of how the Group impacts both the local community and the environment.

 

Within the Group FG Curtis Limited gained the B Corp accreditation and the Group is now measuring its carbon emissions

The Group looks to contribute to the local community through the engagement of local people.

 

There is strong focus on maintaining and developing the strong brands within the Group – to ensure that the businesses are well regarded within the local communities.

Recognising the impact on the environment has seen the Group tackling carbon emissions and minimising waste.

 

Medication Packaging Holdco Limited
Strategic report (continued)
For the year ended 31 May 2023
- 6 -

On behalf of the board

Mr M Stokes
Director
20 February 2024
Medication Packaging Holdco Limited
Directors' report
For the year ended 31 May 2023
- 7 -

The directors present their annual report and financial statements for the year ended 31 May 2023.

Principal activities

The principle activity of the Company continued to be that of a holding company.

 

The principal activity of the Group continued to be that of the design, manufacture and sale of printed folding cartons and leaflets to the pharmaceutical, healthcare and other closely related industries in the UK and Europe.

Results and dividends

The results for the year are set out on page 14.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr M Stokes
Mr J D Agnew
Mr J J Brade
Mr G P Harford
Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Employee involvement

The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

 

There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.

Medication Packaging Holdco Limited
Directors' report (continued)
For the year ended 31 May 2023
- 8 -
Energy and carbon report

As Medication Packaging Holdco Limited is a large group, it is required to report on its emissions, energy consumption and energy efficiency by way of Streamlined Energy and Carbon Reporting in this Directors' report.

 

The group has consumed more than 40,000 kWh of energy in this reporting period, and it therefore does not qualify as a low energy user under these regulations.

 

However, no energy reporting information has been disclosed in these financial statements as the group has taken exemptions available in the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, Part 7A, Paragraph 20E which allows a group to exclude information for subsidiary companies that would not be required to report in their own right. All subsidiaries of Medication Packaging Holdco Limited are small or medium sized company's and so are not required to include energy reporting information in their own financial statements. On this basis, no information is required to be included in the group report.

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Strategic report

The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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.

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 auditor of the company 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 auditor of the company is aware of that information.

Medication Packaging Holdco Limited
Directors' report (continued)
For the year ended 31 May 2023
- 9 -
On behalf of the board
Mr M Stokes
Director
20 February 2024
Medication Packaging Holdco Limited
Independent auditor's report
To the members of Medication Packaging Holdco Limited
- 10 -
Opinion

We have audited the financial statements of Medication Packaging Holdco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2023 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).

In our opinion the financial statements:

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 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 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 directors 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 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.

Medication Packaging Holdco Limited
Independent auditor's report (continued)
To the members of Medication Packaging Holdco Limited
- 11 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

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 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:

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 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 directors either intend to liquidate the parent 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Medication Packaging Holdco Limited
Independent auditor's report (continued)
To the members of Medication Packaging Holdco Limited
- 12 -

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

 

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

To address the risk of fraud through management bias and override of controls, we:

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

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.

Medication Packaging Holdco Limited
Independent auditor's report (continued)
To the members of Medication Packaging Holdco Limited
- 13 -

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.

Nicola Johnson (Senior Statutory Auditor)
For and on behalf of DJH Mitten Clarke Audit Limited
22 February 2024
Accountants
Statutory Auditor
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
Medication Packaging Holdco Limited
Group statement of comprehensive income
For the year ended 31 May 2023
- 14 -
2023
2022
Notes
£
£
Turnover
3
49,099,911
24,240,507
Cost of sales
(31,634,622)
(15,517,069)
Gross profit
17,465,289
8,723,438
Distribution costs
(3,296,234)
(2,065,808)
Administrative expenses
(9,144,167)
(4,441,080)
Other operating income
355,139
439,460
Operating profit
4
5,380,027
2,656,010
Interest receivable and similar income
8
21,894
208
Interest payable and similar expenses
9
(2,545,503)
(1,002,279)
Profit before taxation
2,856,418
1,653,939
Tax on profit
10
(1,050,055)
(549,996)
Profit for the financial year
25
1,806,363
1,103,943
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
Medication Packaging Holdco Limited
Group statement of financial position
As at 31 May 2023
31 May 2023
- 15 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
27,139,257
27,493,531
Tangible assets
12
5,672,291
6,199,130
32,811,548
33,692,661
Current assets
Stocks
15
3,665,541
3,073,632
Debtors
16
12,462,952
10,596,001
Cash at bank and in hand
3,696,147
1,510,565
19,824,640
15,180,198
Creditors: amounts falling due within one year
17
(13,334,167)
(13,303,855)
Net current assets
6,490,473
1,876,343
Total assets less current liabilities
39,302,021
35,569,004
Creditors: amounts falling due after more than one year
18
(25,581,922)
(24,510,132)
Provisions for liabilities
Provisions
21
244,000
44,000
Deferred tax liability
22
1,126,500
471,636
(1,370,500)
(515,636)
Net assets
12,349,599
10,543,236
Capital and reserves
Called up share capital
24
1,500,000
1,500,000
Other reserves
25
6,625,322
7,229,239
Profit and loss reserves
25
4,224,277
1,813,997
Total equity
12,349,599
10,543,236
The financial statements were approved by the board of directors and authorised for issue on 20 February 2024 and are signed on its behalf by:
20 February 2024
Mr M Stokes
Director
Company registration number 12147309 (England and Wales)
Medication Packaging Holdco Limited
Company statement of financial position
As at 31 May 2023
31 May 2023
- 16 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
13
11,716,553
11,716,553
Current assets
Debtors
16
6,348,393
6,348,393
Net current assets
6,348,393
6,348,393
Total assets less current liabilities
18,064,946
18,064,946
Creditors: amounts falling due after more than one year
18
(10,065,447)
(9,406,960)
Net assets
7,999,499
8,657,986
Capital and reserves
Called up share capital
24
1,500,000
1,500,000
Other reserves
25
6,625,322
7,229,239
Profit and loss reserves
25
(125,823)
(71,253)
Total equity
7,999,499
8,657,986

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £658,487 (2022 - £512,562 loss).

The financial statements were approved by the board of directors and authorised for issue on 20 February 2024 and are signed on its behalf by:
20 February 2024
Mr M Stokes
Director
Company registration number 12147309 (England and Wales)
Medication Packaging Holdco Limited
Group statement of changes in equity
For the year ended 31 May 2023
- 17 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 June 2021
1,000,000
4,822,031
290,270
6,112,301
Year ended 31 May 2022:
Profit and total comprehensive income
-
-
1,103,943
1,103,943
Issue of share capital
24
500,000
-
-
500,000
Discounting of loan notes
-
2,826,992
-
2,826,992
Transfer to/from profit and loss account
-
(419,784)
419,784
-
Balance at 31 May 2022
1,500,000
7,229,239
1,813,997
10,543,236
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
1,806,363
1,806,363
Transfer to/from profit and loss account
-
(603,917)
603,917
-
Balance at 31 May 2023
1,500,000
6,625,322
4,224,277
12,349,599
Medication Packaging Holdco Limited
Company statement of changes in equity
For the year ended 31 May 2023
- 18 -
Share capital
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 June 2021
1,000,000
4,822,031
21,525
5,843,556
Year ended 31 May 2022:
Loss and total comprehensive income for the year
-
-
(512,562)
(512,562)
Issue of share capital
24
500,000
-
-
500,000
Discounting of loan notes
-
2,826,992
-
2,826,992
Transfer to/from profit and loss account
-
(419,784)
419,784
-
Balance at 31 May 2022
1,500,000
7,229,239
(71,253)
8,657,986
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
(658,487)
(658,487)
Transfer to/from profit and loss account
-
(603,917)
603,917
-
Balance at 31 May 2023
1,500,000
6,625,322
(125,823)
7,999,499
Medication Packaging Holdco Limited
Group statement of cash flows
For the year ended 31 May 2023
- 19 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
7,159,466
2,050,286
Income taxes paid
(576,910)
(81,206)
Net cash inflow from operating activities
6,582,556
1,969,080
Investing activities
Purchase of tangible fixed assets
(471,189)
(2,236,132)
Proceeds from disposal of tangible fixed assets
20,001
200,500
Purchase of subsidiaries, net of cash acquired
(4,703,607)
(19,748,323)
Interest received
21,894
208
Net cash used in investing activities
(5,132,901)
(21,783,747)
Financing activities
Proceeds from issue of shares
-
500,000
Proceeds from other loans
56,917
-
Repayment of other loans
-
(56,917)
Proceeds from borrowings
-
5,750,000
Repayment of borrowings
-
(750,402)
Proceeds from new bank loans
2,910,000
14,550,000
Repayment of bank loans
(1,195,421)
(2,057,000)
Payment of finance leases obligations
(800,228)
(437,840)
Proceeds from new finance lease obligations
-
1,895,000
Interest paid
(1,857,734)
(523,886)
Interest element of finance lease paid
(29,282)
(7,610)
Net cash (used in)/generated from financing activities
(915,748)
18,861,345
Net increase/(decrease) in cash and cash equivalents
533,907
(953,322)
Cash and cash equivalents at beginning of year
1,158,343
2,111,665
Cash and cash equivalents at end of year
1,692,250
1,158,343
Relating to:
Cash at bank and in hand
3,696,147
1,510,565
Bank overdrafts included in creditors payable within one year
(2,003,897)
(352,222)
Medication Packaging Holdco Limited
Notes to the group financial statements
For the year ended 31 May 2023
- 20 -
1
Accounting policies
Company information

Medication Packaging Holdco Limited (“the company”) is a private company limited by shares domiciled and incorporated in England and Wales. The registered office is Crewe Hall, Enterprise Park, Crewe, Cheshire, CW1 6UL.

 

The group consists of Medication Packaging Holdco Limited and all of its subsidiaries.

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.

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:

 

 

The financial statements of the company are consolidated in the financial statements of Medication Packaging Holdco Limited as at 31 May 2023. These consolidated financial statements are available from its registered office, Crewe Hall, Enterprise Park, Crewe, Cheshire, CW1 6UL.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with other group entities where the relationship is one of being wholly owned.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
1
Accounting policies
(Continued)
- 21 -
1.2
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Medication Packaging Holdco Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 May 2023. 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.

 

On 28th February 2022 Appleseed Bidco Limited acquired F.G. Curtis Limited and it's subsidiaries. Therefore, the comparative results include the 3 month period of trade from the date control was achieved.

1.4
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
1
Accounting policies
(Continued)
- 22 -

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 revenue 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.

1.6
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years.

1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
Over the period of the 15 year lease
Plant and equipment
10% to 33% straight line
Fixtures and fittings
14% to 33.33% straight line
Computers
20% to 50% straight line
Motor vehicles
25% straight line

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.

1.8
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

1.9
Impairment of fixed assets

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 (if any).

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
1
Accounting policies
(Continued)
- 23 -
1.10
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Within the group, certain subsidiaries recognise stock using the following method:

 

                               

 

Net realisable value is based on estimated selling price less further costs expected to be incurred to completion and disposal.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.11
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial instruments

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

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.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
1
Accounting policies
(Continued)
- 24 -
Impairment of financial assets

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. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

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, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

Basic financial liabilities, including creditors, bank loans, 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.

 

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.13
Equity instruments

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.

1.14
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
1
Accounting policies
(Continued)
- 25 -
Current 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

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 income statement, 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.

1.15
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.16
Employee benefits

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.

1.17
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
1
Accounting policies
(Continued)
- 26 -
1.18
Leases

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.

1.19
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.

2
Judgements and key sources of estimation uncertainty

In the application of the group’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.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 27 -
Key sources of estimation uncertainty

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.

The economic useful life of tangible fixed assets

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

The estimation of the cost of individual stock items

Within the group, a subsidiary has adopted the retail method for valuing work in progress and manufactured finished goods. This requires the directors to estimate the profit margin percentage used to reduce selling price to the estimated cost. This estimated profit margin percentage is based on the average results for the current year gross profit less an estimated portion of production overheads attributed to direct costs, as a percentage of turnover.

 

Within the group, another subsidiary determines the valuation of both work-in-progress and finished goods, by applying a standard cost per hour to both the actual labour time and actual machinery time on each job assignment. The estimated standard cost rates used are vary depending on the stage of the production process or the type of machine used. The hourly labour rate is estimated based on an average staff cost for that section of the production line. The hourly machine rate is based on management's estimate of costs applicable to each machine used.

Assessment of other intangible assets

Goodwill has been recognised on acquisitions made. Management have estimated the useful economic life of goodwill to be 20 years, based on the time period over which ongoing benefits and cashflows are anticipated from the acquired subsidiary, This reflects the acquired customer base, knowledge and expertise of management and the reputation of the subsidiary acquired. Uncertainties in these estimates relate to the actual economic useful life of goodwill.

Estimated present value of unsecured loan notes

A total of £17,250,000 in loan notes has been issued by Medication Packaging Holdco Limited. The loan notes are all unsecured, carry 0% interest and are repayable in 2030. Due to the 0% interest rate not being a market rate, the directors initially measured the loan notes at net present value. The discount rate using in calculating this value was an estimated interest rate, based on expert advice and consideration of interest rates available on the open market, had the loan notes been obtained under 'normal market conditions'. The estimated discount rate applied to all loan notes in issue is 7%.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Design, manufacture and sale of printed cartons, leaflets and display material
49,099,911
24,240,507
Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
3
Turnover and other revenue
(Continued)
- 28 -
2023
2022
£
£
Turnover analysed by geographical market
UK
35,148,876
21,091,784
Europe
13,287,260
2,943,334
Rest of world
663,775
205,389
49,099,911
24,240,507
2023
2022
£
£
Other revenue
Interest income
21,894
208
4
Operating profit
2023
2022
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
612
(7,835)
Depreciation of tangible fixed assets
992,307
514,171
Profit on disposal of tangible fixed assets
(14,280)
(199,825)
Amortisation of intangible assets
1,489,012
684,859
Operating lease charges
657,018
315,297
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
12,500
4,000
Audit of the financial statements of the company's subsidiaries
61,500
51,000
74,000
55,000
For other services
All other non-audit services
24,750
16,000
Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
- 29 -
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Manufacturing
195
164
-
-
Sales and distribution
40
41
-
-
Admin
37
49
-
-
Total
272
254
-
0
-
0

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
10,868,568
5,919,267
-
0
-
0
Social security costs
1,128,688
521,195
-
-
Pension costs
444,588
251,016
-
0
-
0
12,441,844
6,691,478
-
0
-
0
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
614,500
598,070
Company pension contributions to defined contribution schemes
14,800
13,066
629,300
611,136
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
330,500
332,000
Company pension contributions to defined contribution schemes
8,000
7,333

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
- 30 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
14,258
-
0
Other interest income
7,636
208
Total income
21,894
208
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
1,832,728
498,886
Other interest on financial liabilities
25,000
25,000
Interest on finance leases and hire purchase contracts
29,282
7,609
Unwinding of discount on provisions
658,487
470,784
Other interest
6
-
Total finance costs
2,545,503
1,002,279
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
755,000
133,213
Adjustments in respect of prior periods
(122,608)
(7)
Total current tax
632,392
133,206
Deferred tax
Origination and reversal of timing differences
(32,592)
684,414
Tax losses carried forward
450,255
(267,624)
Total deferred tax
417,663
416,790
Total tax charge
1,050,055
549,996
Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
10
Taxation
(Continued)
- 31 -

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:

2023
2022
£
£
Profit before taxation
2,856,418
1,653,939
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
571,284
314,248
Tax effect of expenses that are not deductible in determining taxable profit
149,386
104,443
Tax effect of utilisation of tax losses not previously recognised
(51,071)
-
0
Effect of change in corporation tax rate
94,308
370,260
Depreciation on assets not qualifying for tax allowances
2,733
141,280
Amortisation on assets not qualifying for tax allowances
297,802
-
0
Research and development tax credit
(840)
-
0
Under/(over) provided in prior years
-
0
18,822
Enhanced capital allowances
(10,817)
(129,703)
Deferred tax under/(over) provided in prior year
26,450
(285,671)
Deferred tax over provided in current year
(187,840)
-
0
Under/(over) provided in current years
165,356
16,317
Tax (under)/over provided in prior period
115,912
-
Tax adjustments in respect of prior period
(122,608)
-
Taxation charge
1,050,055
549,996

Factors that may affect future tax charges

With the availability of significant tax reliefs for capital expenditure, such as the 100% Annual Investment allowance, the group anticipates continuing to be able to claim capital allowances in excess of depreciation in the short term. However, if capital expenditure slows down, this trend will reverse.

 

The main rate of corporation tax rate has been increased from 19% to 25% with effect from 1 April 2023, significantly increasing the tax payable on profits earned.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
- 32 -
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 June 2022
28,361,909
Additions
1,134,738
At 31 May 2023
29,496,647
Amortisation and impairment
At 1 June 2022
868,378
Amortisation charged for the year
1,489,012
At 31 May 2023
2,357,390
Carrying amount
At 31 May 2023
27,139,257
At 31 May 2022
27,493,531
The company had no intangible fixed assets at 31 May 2023 or 31 May 2022.

The goodwill acquired in the year arose from additional consideration paid in respect of the acquisition of F.G. Curtis Limited in 2022.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
- 33 -
12
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 June 2022
525,261
15,304,732
839,042
1,062,435
134,091
17,865,561
Additions
137,652
233,664
80,039
19,834
-
0
471,189
Disposals
-
0
(1,671,834)
(1,179)
(820,440)
-
0
(2,493,453)
At 31 May 2023
662,913
13,866,562
917,902
261,829
134,091
15,843,297
Depreciation and impairment
At 1 June 2022
191,288
9,622,111
788,533
984,502
79,997
11,666,431
Depreciation charged in the year
49,618
848,736
38,616
30,448
24,889
992,307
Eliminated in respect of disposals
-
0
(1,666,834)
(458)
(820,440)
-
0
(2,487,732)
At 31 May 2023
240,906
8,804,013
826,691
194,510
104,886
10,171,006
Carrying amount
At 31 May 2023
422,007
5,062,549
91,211
67,319
29,205
5,672,291
At 31 May 2022
333,973
5,682,621
50,509
77,933
54,094
6,199,130
The company had no tangible fixed assets at 31 May 2023 or 31 May 2022.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2023
2022
2023
2022
£
£
£
£
Plant and equipment
2,124,341
3,504,530
-
0
-
0
Motor vehicles
18,111
27,989
-
0
-
0
2,142,452
3,532,519
-
-
13
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
11,716,553
11,716,553
Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
13
Fixed asset investments
(Continued)
- 34 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 June 2022 and 31 May 2023
11,716,553
Carrying amount
At 31 May 2023
11,716,553
At 31 May 2022
11,716,553
14
Subsidiaries

Details of the company's subsidiaries at 31 May 2023 are as follows:

Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Appleseed Holdco Limited
1
Holding company
Ordinary
100.00
-
Appleseed Bidco Limited
1
Holding company
Ordinary
0
100.00
Medica Packaging Limited
1
The design, manufacture and sale of printed folded cartons and leaflets
Ordinary
0
100.00
F.G. Curtis Limited
2
The design, manufacture and sale of printed folded cartons and leaflets
Ordinary
0
100.00
3D Creative Packaging Limited
3
The design, manufacture and sale of printed folded cartons and leaflets
Ordinary
0
100.00

Registered office and business trading addresses (all UK unless otherwise indicated):

1
Crewe Hall, Enterprise Park, Crewe, Cheshire, CW1 6UL
2
Unit 8, Gatton Park Business Centre, Wells Place, Merstham, Surrey, RH1 3DR
3
Unit A3 Broomsleigh Business Park, Worsley, London, SE26 5BN

Subsidiary audit exemption

 

The following subsidiaries are claiming exemption from audit under Section 479A of the Companies Act 2006:

 

Appleseed Holdco Limited - Company number 09250826

3D Creative Packaging Limited - Company number 07161440

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
- 35 -
15
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
1,352,095
1,286,280
-
-
Work in progress
1,045,647
1,070,996
-
-
Finished goods and goods for resale
1,267,799
716,356
-
0
-
0
3,665,541
3,073,632
-
-

Stocks are stated after provision for impairment of £45,930 (2022 £124,016).

16
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
11,371,263
9,625,088
-
0
-
0
Amounts owed by group undertakings
-
-
6,348,393
6,348,393
Other debtors
269,855
491,199
-
0
-
0
Prepayments and accrued income
584,634
479,714
-
0
-
0
12,225,752
10,596,001
6,348,393
6,348,393
Deferred tax asset (note 22)
237,200
-
-
0
-
0
12,462,952
10,596,001
6,348,393
6,348,393

Trade debtors are stated after provisions for impairment of £15,266 (2022 £4,266).

Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

 

17
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
4,036,920
1,509,126
-
0
-
0
Obligations under finance leases
20
426,961
802,032
-
0
-
0
Trade creditors
5,328,170
5,239,481
-
0
-
0
Corporation tax payable
357,901
302,419
-
0
-
0
Other taxation and social security
1,021,179
650,438
-
-
Other creditors
66,760
3,629,761
-
0
-
0
Accruals and deferred income
2,096,275
1,170,598
-
0
-
0
13,334,166
13,303,855
-
0
-
0
Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
- 36 -
18
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
19
14,231,935
13,393,475
-
0
-
0
Obligations under finance leases
20
1,284,540
1,709,697
-
0
-
0
Other loans
19
10,065,447
9,406,960
10,065,447
9,406,960
25,581,922
24,510,132
10,065,447
9,406,960
19
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
16,264,958
14,550,379
-
0
-
0
Bank overdrafts
2,003,897
352,222
-
0
-
0
Other loans
10,065,447
9,406,960
10,065,447
9,406,960
28,334,302
24,309,561
10,065,447
9,406,960
Payable within one year
4,036,920
1,509,126
-
0
-
0
Payable after one year
24,297,382
22,800,435
10,065,447
9,406,960

 

Bank loans

During the year Appleseed Bidco Limited received an additional bank loan carrying interest at 1 month SONIA plus 5.75% margin with a repayment term of 4 years. In the prior year Appleseed Bidco Limited received a bank loan, relating to two funding facilities provided by the company's bank. One of the loans carries interest at 1 month SONIA plus 5.75% margin with a repayment term of 5 years. The other loan carries interest at 1 month SONIA plus 6.75% margin and is due for repayment at the end of the 5 year term. All facilities are secured on all assets of the group.

 

Bank overdrafts

The bank overdrafts above relate to an invoice discounting creditor, which is secured against the assets of the group. Interest is charged on the facility at 2.00% above the base rate.

 

Other loans

In prior years £17,250,000 of unsecured loan notes were issued by Medication Packaging Holdco Limited repayable in 2030 and attracting interest at 0%. These loans notes are presented at present value using a discount rate of 7%. £658,487 (2022 - £470,784) was recognised in the statement of comprehensive income in the period in relation to the unwinding of the discount on all loan notes. At the year end, the balance of the gross loan notes outstanding was £17,250,000 (2022 - £17,250,000) and the present value as shown above was £10,065,447 (2022 - £9,406,960).

 

 

 

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
- 37 -
20
Finance lease obligations
Group
Company
2023
2022
2023
2022
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
426,961
802,032
-
0
-
0
In two to five years
1,284,540
1,709,697
-
0
-
0
1,711,501
2,511,729
-
-

Obligations under finance leases are secured against the assets of Medica Packaging Limited with cross charges over the assets of fellow group companies. Appleseed Bidco Limited, Appleseed Holdco Limited, Medication Packaging Holdco Limited, FG Curtis Limited and 3D Creative Packaging Limited.

 

Finance lease payments represent rentals payable by the company for certain items of plant and machinery and motor vehicles. 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 3-5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Interest is charged on hire purchase creditors at a weighted average 7%.

21
Provisions for liabilities
Group
Company
2023
2022
2023
2022
£
£
£
£
Dilapidation provision
44,000
44,000
-
-
Other provision
200,000
-
-
-
244,000
44,000
-
-
Movements on provisions:
Dilapidation provision
Other provision
Total
Group
£
£
£
At 1 June 2022
44,000
-
44,000
Additional provisions in the year
-
200,000
200,000
At 31 May 2023
44,000
200,000
244,000

Dilapidations provision

 

A dilapidations provision has been recognised in respect of works required to reinstate and make good a leased property. Expenditure is expected to be incurred in early 2024.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
21
Provisions for liabilities
(Continued)
- 38 -

Other provisions

 

A member of the Group entered into an agreement with a customer to rectify some failed packaging manufactured during the year. A provision of £200,000 has been made for the expected costs to rectify the packaging and work is expected to be completed in early 2024.

22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Accelerated capital allowances
1,126,500
1,159,092
-
-
Tax losses
-
-
237,200
687,456
1,126,500
1,159,092
237,200
687,456
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 June 2022
471,637
-
Charge to profit or loss
417,663
-
Liability at 31 May 2023
889,300
-

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period. The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.

23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
444,588
251,016

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions totalling £62,867 (2022 - £57,152) were payable to the fund at the reporting date and are included in creditors.

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
- 39 -
24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,500,000
1,500,000
1,500,000
1,500,000

Each ordinary share has full voting rights, full dividend rights, is non-redeemable and has no right to participate in a distribution of capital, except on winding up.

25
Reserves
Other reserves

Other reserves arose due to the discounting of loan notes to present value.

Profit and loss reserves

Profit and loss reserves represents the accumulated profits less accumulated losses and distributions up to the reporting date. This is a distributable reserve.

26
Financial commitments, guarantees and contingent liabilities

Company

The company has given an unlimited guarantee, secured on all of the company's assets, as security for the borrowings of fellow group undertakings. At 31 May 2023 these borrowings amounted to £19,808,796 (2022 - £14,902,601). As at the date of approval of these accounts, the directors do not anticipate that the guarantees will be called upon.

27
Operating lease commitments
Lessee

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:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
613,001
613,429
-
-
Between two and five years
1,555,536
767,398
-
-
2,168,537
1,380,827
-
-
28
Related party transactions

In prior years £15,856,625 of unsecured loan notes were issued to Harwood Private Equity VL.P, a related party due to their control of Medication Packaging Holdco Limited. These are subject to 0% interest and are due in 2030. These loans notes are presented at present value using a discount rate of 7% and £603,917 (2022 - £419,784) was recognised in the statement of comprehensive income in the period in relation to the unwinding of the discount on all loan notes. At the year end, the balance of the gross loan notes was £15,856,625 (2022 - £15,856,625) and the present value was £9,231,303 (2022 - £8,627,386).

Medication Packaging Holdco Limited
Notes to the group financial statements (continued)
For the year ended 31 May 2023
- 40 -
29
Controlling party

The ultimate controlling party is considered to be Harwood Private Equity V L.P.

30
Cash generated from group operations
2023
2022
£
£
Profit for the year after tax
1,806,363
1,103,943
Adjustments for:
Taxation charged
1,050,055
549,996
Finance costs
2,545,503
1,002,279
Investment income
(21,894)
(208)
Gain on disposal of tangible fixed assets
(14,280)
(199,825)
Amortisation and impairment of intangible assets
1,489,012
684,859
Depreciation and impairment of tangible fixed assets
992,307
514,171
Increase in provisions
200,000
-
Movements in working capital:
Increase in stocks
(591,909)
(270,153)
Increase in debtors
(1,686,667)
(2,540,641)
Increase in creditors
1,390,976
1,205,865
Cash generated from operations
7,159,466
2,050,286
31
Analysis of changes in net debt - group
1 June 2022
Cash flows
Other non-cash changes
31 May 2023
£
£
£
£
Cash at bank and in hand
1,510,565
2,185,582
-
3,696,147
Bank overdrafts
(352,222)
(1,651,675)
-
(2,003,897)
1,158,343
533,907
-
1,692,250
Borrowings excluding overdrafts
(23,957,339)
(1,714,579)
(658,487)
(26,330,405)
Obligations under finance leases
(2,511,729)
800,228
-
(1,711,501)
(25,310,725)
(380,444)
(658,487)
(26,349,656)
32
Non cash transactions

Included within Group finance costs is the unwinding of the discount applied to loan notes of £658,487.

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