DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2024 |
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
Aerotech Ltd is a subsidiary of Aerotech Inc. and the main operating activities of the business are Sales and Technical Support of Aerotech’s global product range. We operate a consultative sales process understanding our prospects needs and assist them in the selection of the solutions that will help solve their needs.
FY2024 was a year where the investment in our facilities delivered the capacity increase of our manufacturing sites, previously affected by global supply chain shortages allowing orders from both backlog and current fiscal year to ship throughout the year. At the start of the year our backlogs were higher than we would like causing longer lead times to our customers. Throughout the year the backlog has been reduced and our lead times are now where we want them to be. Net Orders generally tracked below plan based on the combination of lower demand in capital equipment spending and the fact that many repeat customers still have their own stocks of our equipment which they had purchased to secure their supply chain. Net Orders Received (NOR) from sales activities finished at 70% of our plan. Our Global Technical Support maintained their order rate too adding to the overall net orders of the business.
In terms of overall financial performance, the company met its financial goals in terms of shipments and profitability. The Company is in a solid financial position, with little risks to cash shortages in the new financial year. The profit for the year was higher than the prior year, at £2,630,588 (2023: £ 2,360,960) with net assets of £7,014,045 (2023: £5,988,153). Dividends of £1,604,695 (2023: £1,268,928) were paid. Of the orders received, 27% were first orders for new revenue streams. Of the new business, 57% were new design wins from current customers and 43% were new logo first orders. The business of the Company is a mix of domestic and foreign territories, mainly western European countries. The split based on orders is 45% foreign and 55% domestic. Opportunity generation was slightly lower than the previous year with 64% of opportunities created for new business opportunities. 52% of these opportunities were for new logo customers showing the continued new business focus. Whilst the amounts of New Logo opportunities were slightly lower the number of opportunities was higher.
Our backlog is much lower than last year so it is more important this year to secure new orders. We are still observing some weakness in the order rates but believe that our main markets are showing the signs of recovery and when expect strong rebound when it happens.
As a summary, the Key Performance Indicators are as follows:
• Sales: £17.196m (2023 - £18.454m) -7% YOY • Profit Before Tax: £3.455m (2023 - £2.969m) +16% YOY • Current ratio: 9.11 (2023 - 3.83) • Net Assets: £7.014m (2023 - £5.988m)
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
No additional KPIs are monitored by management.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
The directors present their report and the financial statements for the year ended 30 June 2024.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £2,629,882 (2023 - £2,360,959).
A dividend of £1,604,695 (2023 - £1,268,928) was approved and paid during the year.
The directors who served during the year were:
There are no future developments likely to affect the Company aside from those referenced in the Strategic Report.
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AEROTECH, LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
There have been no significant events affecting the Company since the year end.
The auditors, CLA Evelyn Partners Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AEROTECH, LIMITED
We have audited the financial statements of Aerotech, Limited (the 'Company') for the year ended 30 June 2024, which comprise the Statement of income and retained earnings, the Balance sheet, the Statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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AEROTECH, LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AEROTECH, LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
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AEROTECH, LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AEROTECH, LIMITED (CONTINUED)
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 Auditors' 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:
We obtained a general understanding of the Company's legal and regulatory framework through enquiry of management concerning their understanding of relevant laws and regulations, the entity's policies and procedures regarding compliance, and how they identify, evaluate and account for litigation claims. We also drew on our existing understanding of the company’s industry and regulation. We understand that the Company complies with the framework through:
∙Outsourcing payroll, accounts preparation and tax compliance to external experts; and
∙Subscribing to relevant updates from external experts, and making changes to internal procedures and controls as necessary.
In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements, which are central to the Company's ability to conduct its business, and/or where there is a risk that failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the Company:
∙The Companies Act 2006 and FRS 102 in respect of the preparation of the financial statements.
The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur. The areas identified in this discussion were:
∙Stock provision and valuation, as these are estimates made by management;
∙Misappropriation of assets due to high stock values;
∙Payment of bonuses based on sales levels, which creates an incentive for management to manipulate results;
∙Staff changes in the year, especially with key authorisations and potential lack of segregation of duties; and
∙Manipulation of the financial statements, especially revenue, via fraudulent journal entries.
These areas were communicated to the other members of the engagement team not present at the discussion.
The procedures we carried out to gain evidence in the above areas included:
∙Challenging management regarding the assumptions used in the estimates identified above, and comparison to market data and post-year-end data as appropriate;
∙Substantive work on material areas affecting profits;
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AEROTECH, LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AEROTECH, LIMITED (CONTINUED)
Auditors' responsibilities for the audit of the financial statements (continued)
∙Testing journal entries, focusing particularly on postings to unexpected or unusual accounts and those posted at unusual times; and
∙Obtaining detail of staff changes in the year and the authorisation controls in place.
Overall, the senior statutory auditor was satisfied that the engagement team collectively had the appropriate competence and capabilities to identify or recognise irregularities
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' 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 Auditors' 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.
for and on behalf of
Accountants
Statutory Auditors
Brockbourne House
77 Mount Ephraim
Kent
TN4 8BS
Date:
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 JUNE 2024
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BALANCE SHEET
AS AT 30 JUNE 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 21 form part of these financial statements.
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 JUNE 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Aerotech Limited is a company limited by shares that is domiciled and incorporated in England and Wales.
The address of the Company's registered office is 5th Floor, Thames Tower, Station Road, Reading, Berkshire, England, RG1 1LX. The address of the Company's principal place of business is The Old Brick Kiln, Ramsdell, Tadley, Hampshire, RG26 5PR.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
At the time of approving these financial statements, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Functional and presentation currency
Transactions and balances
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
2.Accounting policies (continued)
The whole of the turnover is attributable to the Company's principal activity of the design and manufacture of precision positioning systems.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
10.Taxation (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
Other reserves
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
The Company operates a defined contribution scheme for its employees. The assets of the scheme are held separately from those of the Company in an independently administered fund. There were no contributions payable to the fund at the balance sheet date (2023 - £nil).
The ultimate parent company is Aerotech Inc. which is incorporated in the United States of America. This is the smallest and largest group of which the company is included in the consolidated financial statements.
In the opinion of the directors, the ultimate controlling party is the shareholders of Aerotech Inc. acting in concert, by virtue of their combined shareholding. The financial statements are consolidated into the financial statements of the parent company, Aerotech Inc. The parent company's registered office address is 101 Zeta Drive, Pittsburgh, PA 15238, United States of America.
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