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Registered number: 11769612









DIGITAL TOPCO LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2023

 
DIGITAL TOPCO LIMITED
 
 
COMPANY INFORMATION


Directors
D G Forsyth 
S J Hibbert 
K C Hills 
A C Parkinson 
S Whapshott 




Company secretary
M J Dunn (appointed 19 January 2024)



Registered number
11769612



Registered office
27 Old Gloucester Street

London

WC1N 3AX




Independent auditor
CLA Evelyn Partners Limited
Chartered Accountants & Statutory Auditor

14th Floor

103 Colmore Row

Birmingham

B3 3AG





 
DIGITAL TOPCO LIMITED
 

CONTENTS



Page
Group Strategic Report
1 - 5
Directors' Report
6 - 7
Directors' Responsibilities Statement
8
Independent Auditor's Report
9 - 12
Consolidated Statement of Comprehensive Income
13
Consolidated Statement of Financial Position
14 - 15
Company Statement of Financial Position
16 - 17
Consolidated Statement of Changes in Equity
18
Company Statement of Changes in Equity
19
Consolidated Statement of Cash Flows
20 - 21
Notes to the Financial Statements
22 - 46


 
DIGITAL TOPCO LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023

Introduction
 
The Directors present their report and the financial statements for the year ended 30 September 2023.

Principal acitivty and business review
 
The principal activity of the Company is the holding company of Automated Systems Group Limited, whose principal activity is the sale and service of multi-function devices, photocopiers, printers and associated software.
During the year, the Group acquired indirect subsidiaries of Automated Systems Group Ltd Limited which were Copyrite Digital Systems Ltd and Sharples Group Limited.  The combined group continues to provide solutions and support for the modern office workplace, being the supply of managed print and document solutions and is a market leader in the UK. The business supports a wide range of sectors and organisations, from sole traders to public sector organisations and from small to large multi national corporations.
Performance in the year was in line with expectations and revenue and EBITDA were both ahead of the previous year. The business continued its strategy of growing through acquisition and ensuring high customer retention through market leading customer service.
The business has continued to provide exceptional levels of customer service and the Directors have placed particular focus on cost control, cash generation and customer retention. The strength of the business across the customer base continues to deliver resilient revenue and margins.
The board will continue to drive profit growth going forward. Confidence in the business continues to be strong and the business has made the strategic acquisitions in the year of Sharples and Copyrite.
The business continues to enjoy the support of its funders and has received a credit approved offer to extend its banking facilities to September 2025.


Page 1

 
DIGITAL TOPCO LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023

Key performance indicators

A key profitability measure used by the business and its major industry peers is an adjusted EBITDA metric. The business has seen an 8% growth in organic sales from £37.6m in 2022 to £40.6m in 2023 along with the impact of the acquisitions of Sharples and Copyrite in the year, turnover has increased to £44.6m and gross margin to £21m. During the year the Group has implemented new systems. Due to the systems upgrade, the acquisitions were not integrated as quickly as planned leading to a higher level of cost.

2023
2022
      £000
      £000
Turnover

44,569

37,581
 
Gross margin

20,992

18,381
 
Gross margin %

47.1%

48.9%
 
EBITDA

6,417

6,333
 
EBITDA %

14.3%

16.9%
 
Operating profit

(40)

262
 
Depreciation

560

622
 
Amortisation

5,109

4,738
 
Exceptional costs (see note 6)

476

401
 
Other non- recurring costs

312

310
 
EBITDA

6,417

6,333
 

Risk Management
 
The Group is exposed to a variety of risks which are continually assessed by management and the board.
The impact of the global recession and the subsequent recovery within the UK economy has differed by sector. The Group monitors customer performance and KPIs closely and the wide spread of 7,000 customers across diverse industries and geographies, with no major dependency, mean that these risks are significantly ameliorated.
Liquidity risk is monitored regularly and the Group remained positive in terms of cash generation throughout the year.
The Group’s principal suppliers are global manufacturers. The strength and longevity of partnership with the vendors has allowed the business to work in collaboration, ensuring supply chain issues have been minimised and customer service levels maintained. Further, because of supply chain issues the Group has expanded its refurbishment program both assisting its ESG agenda and bridging supply chain issues.

Page 2

 
DIGITAL TOPCO LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023

Environmental, social and governance (ESG)

The Group is committed to continued investment in actions to support the ESG goals across the business.
The Group attempts to limit unnecessary energy usage wherever possible. The expansion into the 35,000 square foot Head Office facility in Ely enabled the business to consolidate several existing properties reducing the need for travel. As part of the office move 10 EV chargers were installed and 84% of the vehicle fleet has now transitioned to Hybrid or Electric vehicles.
The Head Office has been upgraded to LED lighting throughout, with main offices controlled by PIR sensors. The warehouse has installed both polystyrene and cardboard compactors ensuring that waste is repurposed. The business operates a certified cartridge recycling program with nothing going to landfill and has also expanded its recycling of parts and refurbishment of devices as part of an ongoing programme to reduce waste.
The Group partners with PrintRelief, the global program supporting environmental reforestation, working with customers to plant over 36,000 trees. ASL is the only UK partner to achieve Platinum partner status. Increased investment in remote monitoring solutions and automated delivery service provides for reduced machine downtime, engineering travel and toner wastage.
The business works actively with the apprentice levy and has been able to support in excess of 30 apprenticeships to date. Employees are encouraged to participate in using Volunteering & Charity leave as offered in the company policy and many have taken part in charitable events within the community. Staff have nominated East Anglian Air Ambulance as its charity of the year.
Following the annual external audit ISO 9001 and ISO 14001 and Cyber Essential PLUS accreditations have been maintained and are working towards ISO 27001.

Page 3

 
DIGITAL TOPCO LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023

SECTION 172 STATEMENT
 
Section 172 of The Companies Act 2006 states that a director of a Company must act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
     a. The likely consequences of any decision in the long term;
     b. The interests of the Company’s employees;
     c. The need to foster the Company’s business relationships with suppliers, customers and others;
     d. The impact of the Company’s operations on the community and the environment;
     e. The desirability of the Company maintaining a reputation for high standards of business conduct; and
     f. The need to act fairly as between members of the company.
The following summarises how the Company’s Board fulfils its duties under Section 172:
Decision Making:
The board considers all stakeholders in its decision making and oversees the management of the Company’s business working to ensure it operates to the high standards of business conduct. The Board fully ensures the potential impacts of the decisions it makes on stakeholders, the environment and the communities in which we operate. Where appropriate it seeks professional advice, include legal advice.
Employee Engagement:
The Company’s employees are crucial to the success of the business. We aim to be a responsible employer in our approach to the pay and benefits of employees. The health, safety and wellbeing of our employees is one of the primary considerations in the way we do business and we operate market leading employee engagement technology
Business Relationships:
The directors ensure that the Company engages regularly with its suppliers and customers and aims to develop long term relationships that underpin successful trading for all.
Community and Environment:
The Company is committed to minimising its impact on the environment and has implemented a Carbon Reduction Plan with 14 separate projects being overseen by the Company’s ESG Steering Group.  These include the implementation of recycling and waste management plan, the use of cardboard and polystyrene compactors, the use of LED lighting and a fleet of vehicles that are 84% hybrid or electric.
Culture and Values:
The board ensures that the company operates a high performance culture that puts customers at its core and that high levels of service are delivered to customers.  The employee engagement platform facilitates communication of these values and company wide recognition of success.
Streamlined Energy & Carbon Reporting (SECR)
ASL are committed to achieving Net Zero emissions by 2030 by embedding Social and Environmental initiatives into our future business strategy to create a positive impact and ongoing commitment to do better by individuals, communities, and the planet. Total emissions for the reporting year 2023 was 536,000kg, which equates to 13,193kg/£1mil turnover. Comparative data for 2022 is not provided as the disclosures were not a requirement in that year. 

Page 4

 
DIGITAL TOPCO LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023


This report was approved by the board and signed on its behalf.



................................................
D G Forsyth
Director

Date: 27 August 2024

Page 5

 
DIGITAL TOPCO LIMITED
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023

The Directors present their report and the financial statements for the year ended 30 September 2023.

Results and dividends

The loss for the year, after taxation, amounted to £6,818 (2022 - loss £4,639k).

No dividends have been paid or proposed in the year (2022 - £Nil).

Directors

The Directors who served during the year were:

P B Derry (resigned 8 March 2023)
D G Forsyth 
S J Hibbert 
K C Hills 
A C Parkinson 
S Whapshott 
M Ramzan (resigned 19 January 2024)

Future developments

The Group aim to continue to grow both turnover and EBITDA. The strategy is a combination of organic and acquisition growth.

Financial risk management objectives and policies

The Group uses various sources of financing, these include bank balances and overdraft facilities, other loans, finance lease and hire purchase arrangements and various items such as trade debtors and creditors that arise directly from its operations.
The main risks that arise from the Group's financial instruments are liquidity risk, interest rate risk and credit risk.
Liquidity risk
The Group needs to manage its financial risk by ensuring it maintains sufficient liquidity available to meet future needs and short-term flexibility.
Interest rate risk 
The Group finances its business through borrowings of which £34,790k net of arrangement fees is fixed (management loans in Digital Topco Limited and Primary loans in Digital Bidco Limited) and £34,165k net of arrangement fees is variable (Bank loans in Digital Topco Limited and Digital Bidco Limited). The Group has a small proportion of its total debt (£1m) through an overdraft facility which is subject to interest rate fluctuations.
Credit risk
The principal credit risk lies with trade debtors. This credit risk is managed by setting customer limits based on a combination of payment history and third-party references. These limits are reviewed on a regular basis in conjunction with debt ageing and collection history.

Page 6

 
DIGITAL TOPCO LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023

Qualifying third party indemnity provisions

Qualifying third-party indemnity provision is in place for the benefit of all Directors of the Group.

Disclosure of information to auditor

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and

the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end other than the approved loan extension offer described in note 2.3.

Auditor

The auditor, CLA Evelyn Partners Limitedwill 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.
 





................................................
D G Forsyth
Director

Date: 27 August 2024

Page 7

 
DIGITAL TOPCO LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023

The Directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the Directors are required to:

select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent; and


prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 8

 
img2c68.png 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DIGITAL TOPCO LIMITED
 

Opinion
We have audited the financial statements of Digital Topco Limited (the 'Parent Company') and its subsidiaries (the 'Group) for the year ended 30 September 2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statement of Financial Position, the Consolidated and Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows, and the 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 FRS 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:
give a true and fair view of the state of the Group's and the Parent Company's affairs as at 30 September 2023 and of the Group's loss for the year then ended;  
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

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 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.
Page 9

 
DIGITAL TOPCO LIMITED
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DIGITAL TOPCO LIMITED (CONTINUED)

Other information
The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report and Financial Statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 

We have nothing to report in this regard. 


Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Group 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 Group Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors’ Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 8, 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 Group and 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 Group or Parent Company or to cease operations, or have no realistic alternative but to do so. 

Page 10

 
DIGITAL TOPCO LIMITED
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DIGITAL TOPCO LIMITED (CONTINUED)

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained a general understanding of the Group’s legal and regulatory framework through enquiry of
management concerning: their understanding of relevant laws and regulations; the Group’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 Group’s industry and regulation. We also discussed this area in relation to significant subsidiaries with group management.
We understand that the Group complies with the framework through:
 
Outsourcing accounts preparation and tax compliance to external experts.

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 Group’s ability to conduct its business; and where failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the Group:

The Companies Act 2006 and UK accounting standards in respect of the preparation and presentation
of the financial statements.

The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur. The areas identified in this discussion were:
 
Manipulation of results by misstating turnover relating to machine sales, particularly year end cut off.
Manipulation of results by management override of controls

The procedures we carried out to gain evidence in the above areas included:
 
Reviewing a sample of journals, based on risk criteria, to confirm they had a proper business purpose.
Challenging management regarding the assumptions used in key estimates.
Substantive work on revenue cut off.
 
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Page 11

 
DIGITAL TOPCO LIMITED
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DIGITAL TOPCO LIMITED (CONTINUED)

Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.



Benjamin Stapleton (Senior Statutory Auditor)
  
for and on behalf of
CLA Evelyn Partners Limited
 
Chartered Accountants
Statutory Auditor
  
14th Floor
103 Colmore Row
Birmingham
B3 3AG

28 August 2024
Page 12

 
DIGITAL TOPCO LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023

2023
2022
Note
£000
£000

  

Turnover
 4 
44,569
37,581

Cost of sales
  
(23,577)
(19,200)

Gross profit
  
20,992
18,381

Administration expenses excluding exceptional items
  
(14,887)
(12,358)

Depreciation and amortisation
  
(5,669)
(5,360)

Exceptional administration expenses
 5 
(476)
(401)

Total administrative expenses
  
(21,032)
(18,119)

Operating (loss)/profit
 6 
(40)
262

Interest receivable and similar income
  
1
-

Interest payable and similar expenses
 10 
(6,321)
(4,732)

Loss before taxation
  
(6,360)
(4,470)

Tax on loss
 11 
(458)
(169)

Loss for the financial year
  
(6,818)
(4,639)

  

The notes on pages 22 to 46 form part of these financial statements.

Page 13

 
DIGITAL TOPCO LIMITED
REGISTERED NUMBER:11769612

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023

2023
2022
Note
£000
£000

Fixed assets
  

Intangible assets
 12 
37,784
34,005

Tangible assets
 13 
2,089
1,479

  
39,873
35,484

Current assets
  

Stocks
 15 
8,814
7,861

Debtors: amounts falling due within one year
 16 
9,054
6,660

Cash at bank and in hand
 17 
265
565

  
18,133
15,086

Creditors: amounts falling due within one year
 18 
(14,716)
(11,713)

Net current assets
  
 
 
3,417
 
 
3,373

Total assets less current liabilities
  
43,290
38,857

Creditors: amounts falling due after more than one year
 19 
(69,014)
(57,763)

Provisions for liabilities
  

Other provisions
 22 
(300)
(300)

  
 
 
(300)
 
 
(300)

Net liabilities
  
(26,024)
(19,206)


Capital and reserves
  

Called up share capital 
 23 
10
10

Share premium account
 24 
977
977

Profit and loss account
 24 
(27,011)
(20,193)

Shareholders' deficit
  
(26,024)
(19,206)


Page 14

 
DIGITAL TOPCO LIMITED
REGISTERED NUMBER:11769612
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 SEPTEMBER 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
D G Forsyth
Director

Date: 27 August 2024

The notes on pages 22 to 46 form part of these financial statements.

Page 15

 
DIGITAL TOPCO LIMITED
REGISTERED NUMBER:11769612

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023

2023
2022
Note
£000
£000

Fixed assets
  

Investments
 14 
658
658

  
658
658

Current assets
  

Debtors: amounts falling due after more than one year
 16 
8,257
4,344

Debtors: amounts falling due within one year
 16 
13
11

  
8,270
4,355

Total assets less current liabilities
  
 
 
8,928
 
 
5,013

  

Creditors: amounts falling due after more than one year
 19 
(10,612)
(5,983)

  

Net liabilities
  
(1,684)
(970)


Capital and reserves
  

Called up share capital 
 23 
10
10

Share premium account
 24 
977
977

Profit and loss account brought forward
  
(1,957)
(1,283)

Loss for the year
  
(714)
(674)

Profit and loss account carried forward
  
(2,671)
(1,957)

Shareholders' deficit
  
(1,684)
(970)


Page 16

 
DIGITAL TOPCO LIMITED
REGISTERED NUMBER:11769612
    
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 SEPTEMBER 2023

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The loss after tax of the Company for the year was £714k (2022 - £674k).
The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


................................................
D G Forsyth
Director

Date: 27 August 2024

The notes on pages 22 to 46 form part of these financial statements.

Page 17

 
DIGITAL TOPCO LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£000
£000
£000
£000


At 1 October 2021
10
977
(15,554)
(14,567)


Comprehensive income for the year

Loss for the year
-
-
(4,639)
(4,639)
Total comprehensive income for the year
-
-
(4,639)
(4,639)



At 1 October 2022
10
977
(20,193)
(19,206)


Comprehensive income for the year

Loss for the year
-
-
(6,818)
(6,818)
Total comprehensive income for the year
-
-
(6,818)
(6,818)


At 30 September 2023
10
977
(27,011)
(26,024)


Page 18

 
DIGITAL TOPCO LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£000
£000
£000
£000


At 1 October 2021
10
977
(1,283)
(296)


Comprehensive income for the year

Loss for the year
-
-
(674)
(674)
Total comprehensive income for the year
-
-
(674)
(674)



At 1 October 2022
10
977
(1,957)
(970)


Comprehensive income for the year

Loss for the year
-
-
(714)
(714)
Total comprehensive income for the year
-
-
(714)
(714)


At 30 September 2023
10
977
(2,671)
(1,684)


Page 19

 
DIGITAL TOPCO LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

2023
2022
£000
£000

Cash flows from operating activities

Loss for the financial year
(6,818)
(4,639)

Adjustments for:

Amortisation of intangible assets
5,109
4,738

Depreciation of tangible assets
560
622

Loss on disposal of tangible assets
92
10

Interest paid
6,321
4,732

Interest received
(1)
-

Taxation charge
458
169

(Increase) in stocks
(567)
(1,521)

(Increase) in debtors
(441)
(942)

Increase/(decrease) in creditors
(1,068)
1,478

Corporation tax paid
113
(82)

Net cash generated from operating activities

3,758
4,565


Cash flows from investing activities

Purchase of intangible fixed assets
(65)
(349)

Purchase of tangible fixed assets
(1,211)
(667)

Sale of tangible fixed assets
-
6

Interest received
1
-

Cash paid on acquisition of subsidiaries
(11,257)
(815)

Net cash used in investing activities

(12,532)
(1,825)
Page 20

 
DIGITAL TOPCO LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023


2023
2022

£000
£000



Cash flows from financing activities

New bank loans
7,475
-

Repayment of finance leases
(126)
(80)

Interest paid
(2,085)
(1,652)

Repayment of other loans
(579)
(1,102)

Interest paid on finance leases
(10)
(25)

Net cash from/(used in) financing activities
4,675
(2,859)

Net (decrease) in cash and cash equivalents
(4,099)
(119)

Cash and cash equivalents at beginning of year
565
647

Cash acquired on acquisitions
2,973
37

Cash and cash equivalents at the end of year
(561)
565


Cash and cash equivalents at the end of year comprise:

Cash at bank and overdrafts
(561)
565

(561)
565


Page 21

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

1.


General information

Digital Topco Limited is a private company, limited by shares, domiciled and incorporated in England and Wales (registered number: 11769612). The registered office address is 27 Old Gloucester Street, London, United Kingdom, WC1N 3AX.
The Group and Parent Company's functional and presentational currency is GBP.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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 Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

Parent Company disclosure exemptions

In preparing the separate financial statements of the Parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:

Only one reconciliation of the number of shares outstanding at the beginning and end of the year has been presented as the reconciliation for the Company and the Parent Company would be identical; and
No Statement of Cash Flows has been presented for the Parent Company.
No disclosures have been given for the aggregate remuneration of the key management personnel of the Parent Company as their remuneration is included in the totals for the Company as a whole.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 22

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

The Group made a loss after tax for the period of £6,818k (2022 - £4,639k) and had net liabilities of £26,024k (2022 - £19,206k) at 30 September 2023.
The Directors have made an assessment in preparing these financial statements as to whether the Group and Company remain a going concern.
The Group trades at a healthy EBITDA level which the directors consider a key performance indicator. The Group continues to have the backing of its shareholders and major stakeholders. Subsequent to the year end, the Group has received an approved offer from its bankers to extend its loan facilities until September 2025.
On the basis of the above, the directors have produced cash flow forecasts, which demonstrate that there are sufficient cash resources available to the Group to ensure they can meet their financial obligations as they fall due and meet all revised banking covenants for the foreseeable future, this being the period covering at least twelve months from the date of approval of these financial statement. For these reasons, they continue to adopt the going concern basis in preparing these financial statements.

 
2.4

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

Turnover on maintenance services is recognised based on the volume of print usage by the
Page 23

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

2.Accounting policies (continued)


2.4
Turnover (continued)

customer and is recognised over the period that the usage has occurred.

 
2.5

Operating leases: the Group as lessor

Rental income from operating leases is credited to profit or loss on a straight-line basis over the lease term.

Amounts paid and payable as an incentive to sign an operating lease are recognised as a reduction to income over the lease term on a straight-line basis, unless another systematic basis is representative of the time pattern over which the lessor's benefit from the leased asset is diminished.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Exceptional items

Exceptional costs are those costs, that are one off in nature, that are associated with restructuring the business, to enable growth, through both acquisition and organically. These costs include any costs to restructure the business as a result of the growth achieved.

 
2.10

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the profit or loss over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model,
intangible assets are measured at cost less any accumulated amortisation and any accumulated
impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful
Page 24

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

2.Accounting policies (continued)


2.10
Intangible assets (continued)

life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:


 Goodwill on strategic acquisitions  - 10 years
 Goodwill on tactical acquisitions  - 5 years
Internally developed software costs
 
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.

If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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:

Leasehold property
-
Over the life of the lease
Motor vehicles
-
4 years
Equipment
-
5 years
Computer equipment
-
5 years
Equipment held for leasing
-
5 years

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.

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 25

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

2.Accounting policies (continued)

 
2.13

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis.

At each Consolidated Statement of Financial Position date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Toner in the field is the value of the unutilised stock which has been supplied to customers and is held on site for future consumption. Toner is valued at the latest purchase price of toner supplied to customers.

 
2.14

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the Consolidated Statement of Financial Position date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the Consolidated Statement of Financial Position date.

 
2.15

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

 
2.17

Financial instruments

Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.
 
Page 26

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

2.Accounting policies (continued)


2.17
Financial instruments (continued)

Trade and other debtors and creditors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the Group will not be able to collect all amounts due.
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and bank overdrafts which are an integral part of the Group’s cash management.
Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Interest bearing bank loans, overdrafts and other loans which meet the criteria to be classified as basic financial instruments are initially recorded at the present value of cash payable to the bank, which is ordinarily equal to the proceeds received net of direct issue costs. These liabilities are subsequently measured at amortised cost, using the effective interest rate method.

 
2.18

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Page 27

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the Group's accounting policies, management 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The Directors consider that the following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements: 
Intangible fixed assets
Intangible fixed assets consist mainly of goodwill arising on business combinations.
Key estimates and judgements are applied in establishing the useful lives of intangibles. Management concluded that there are no separately identifiable intangible assets on acquisitions. It was further concluded that goodwill arising from acquisitions has a useful life of either 5 years for tactical acquisition or 10 years for strategic acquisitions. This being based upon previous experience and future expectations of the market.
Toner in field valuation
Toner in the field is the value of the unutilised stock which has been supplied to customers and is held on site for future consumption. The value of toner per machine is an estimate, based on historical patterns of customer usage, and involves an element of judgement.
Revenue installation
Revenue recognised requires judgement relating to installation fees, where no margin is recognised above the estimated costs of installation.
Impairment of external debtor balances
The recoverability of amounts owed by customers is considered on an ongoing basis by the Directors. Appropriate provision is made whenever events or circumstances indicate that the related balance may not be recoverable.

Page 28

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

4.


 Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£000
£000

Equipment sales
20,981
16,133

Service and support sales
23,588
21,448

44,569
37,581


All turnover arose within the United Kingdom.


5.


Exceptional items

2023
2022
£000
£000


Legal and professional
476
401

The exceptional items relating to non-recurring legal and professional fees and settlement costs in respect of acquisition transactions, redundancies and internal restructuring costs.


6.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:

2023
2022
£000
£000

Depreciation of tangible assets
560
622

Amortisation
5,109
4,738

Other operating lease rentals
709
507

Loss/(Profit) on sale of fixed assets
92
10


7.


Auditor's remuneration

2023
2022
£000
£000



Fees payable to the Group's auditor and its subsidiaries for the audit of the Group's annual financial statements
67
53

Taxation compliance services
25
17

Preparation of financial statements
12
7

Page 29

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

8.


Employees

Staff costs, including Directors' remuneration, were as follows:


Group
Group
2023
2022
£000
£000


Wages and salaries
8,422
7,765

Social security costs
955
961

Cost of defined contribution scheme
424
359

9,801
9,085


The average monthly number of employees, including the Directors, during the year was as follows:


        2023
        2022
            No.
            No.







Sales
40
40



Service
107
103



Administration
28
18



Management
15
8

190
169

The Company has no employees other than the Directors who receive no remuneration directly from the Company.

9.


Directors' remuneration

2023
2022
£000
£000

Directors' emoluments
698
738

Company contributions to defined contribution pension schemes
122
95

Compensation for loss of office
75
-

895
833


During the year retirement benefits were accruing to 4 Directors (2022 - 4) in respect of defined contribution pension schemes.

The highest paid Director received remuneration of £175k (2022 - £226k).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £55k (2022 - £40k).

Page 30

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

10.


Interest payable and similar expenses

2023
2022
£000
£000


Bank interest payable
2,988
1,720

Other loan interest payable
3,323
2,987

Finance leases and hire purchase contracts
10
25

6,321
4,732


11.


Taxation


2023
2022
£000
£000

Corporation tax


Current tax on profits for the year
195
169

Adjustments in respect of previous periods
263
-


Total current tax
458
169

Deferred tax

Total deferred tax
-
-


Taxation on profit on ordinary activities
458
169
Page 31

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
 
11.Taxation (continued)


Factors affecting tax charge/(credit) for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of22% (2022 -19%). The differences are explained below:

2023
2022
£000
£000


Loss on ordinary activities before tax
(6,360)
(4,470)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 22% (2022 - 19%)
(1,399)
(849)

Effects of:


Fixed asset differences
275
-

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
673
522

Non-tax deductible amortisation of goodwill and impairment
395
409

Capital allowances for year in excess  of depreciation
-
172

Adjustments to tax charge in respect of prior periods
262
-

Remeasurement of deferred tax charge in respect of previous periods
(34)
-

Movement in deferred tax not recognised
286
-

Other timing differences leading to an increase (decrease) in taxation
-
(85)

Total tax charge for the year
458
169


Factors that may affect future tax charges

Finance Act 2021 included legislation to increase the main rate of corporation tax from 19% to 25% from 1 April 2023. The full anticipated effect of these changes is reflected in the above deferred tax balances.
At the year end, a subsidiary company in the Group had historic taxable losses of £4,335k (2022: £4,335k) for which no deferred tax asset had been recognised due to the uncertainty around the timing of future profits in that entity.  

Page 32

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

12.


Intangible assets

Group





Development expenditure
Goodwill
Total

£000
£000
£000



Cost


At 1 October 2022
349
48,151
48,500


Additions
-
8,888
8,888



At 30 September 2023

349
57,039
57,388



Amortisation


At 1 October 2022
14
14,481
14,495


Charge for the year
70
5,039
5,109



At 30 September 2023

84
19,520
19,604



Net book value



At 30 September 2023
265
37,519
37,784



At 30 September 2022
335
33,670
34,005



Page 33

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

13.


Tangible fixed assets

Group






Leasehold property
Motor vehicles
Equipment
Computer equipment
Equipment held for leasing
Total

£000
£000
£000
£000
£000
£000



Cost or valuation


At 1 October 2022
825
41
346
320
876
2,408


Additions
27
-
-
798
358
1,183


Disposals
-
-
-
(109)
(48)
(157)


Acquisition of subsidiary
-
-
6
-
73
79



At 30 September 2023

852
41
352
1,009
1,259
3,513



Depreciation


At 1 October 2022
117
31
183
139
459
929


Charge for the year 
44
6
20
157
333
560


Disposals
-
-
-
(17)
(48)
(65)



At 30 September 2023

161
37
203
279
744
1,424



Net book value



At 30 September 2023
691
4
149
730
515
2,089



At 30 September 2022
708
10
163
181
417
1,479

Page 34

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

           13.Tangible fixed assets (continued)




The net book value of land and buildings may be further analysed as follows:


2023
2022
£000
£000

Long leasehold
691
708

691
708


The assets above are pledged as security for the Group's bank loans. 
The net book value of assets held under finance leases or hire purchase contracts, included above is £Nil 
(2022 - £170k). 


14.


Fixed asset investments

Company





Investments in subsidiary companies

£000



Cost or valuation


At 1 October 2022
658



At 30 September 2023
658




Page 35

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Principal activity

Class of shares

Holding

Digital Bidco Limited
Holding company
Ordinary
100%
ASL Technology Holdings Ltd.*
Holding company
Ordinary
100%
Automated Systems Group Limited*
Sales and servicing of photocopiers and other office equipment
Ordinary
100%
Copyright Digital Systems Limited*
Sales and servicing of photocopiers and other office equipment
Ordinary
100%
Sharples Group Limited*
Sales and servicing of photocopiers and other office equipment
Ordinary
100%

*Subsidiaries are indirectly held.
During the year the Group acquired Copyright Digital Systems Limited and Sharples Group Limited.
Sharples Group Limited was acquired on 2 February 2023.
Copyright Digital Systems Limited was acquired on 17 March 2023.
The registered office address for all the direct and indirect subsidiary undertaking is 27 Old Gloucester Street, London, United Kingdom, WC1N 3AX.


15.


Stocks

Group
Group
2023
2022
£000
£000

Finished goods and goods for resale
8,814
7,861


The difference between purchase price or production cost of stocks and their replacement cost is not material.
An impairment reversal of £31k (
2022 - £19k loss) was recognised in administrative expenses against stock during the year due to slow moving and obsolete stock.

Page 36

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

16.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Due after more than one year

Amounts owed by group undertakings
-
-
8,257
4,344

-
-
8,257
4,344


Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Due within one year

Trade debtors
4,493
3,223
-
-

Other debtors
788
467
-
2

Prepayments and accrued income
3,773
2,970
13
9

9,054
6,660
13
11


During the year, a formal agreement was put in place in respect of Amounts owed by group undertakings, with the amount being due in October 2024. 


17.


Cash and cash equivalents

Group
Group
2023
2022
£000
£000

Cash at bank and in hand
265
565

Less: bank overdrafts
(826)
-

(561)
565


Page 37

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

18.


Creditors: Amounts falling due within one year

Group
Group
2023
2022
£000
£000

Bank overdrafts
826
-

Bank loans
-
1,709

Trade creditors
6,015
5,957

Corporation tax
737
-

Other taxation and social security
1,889
991

Obligations under finance lease and hire purchase contracts
53
139

Other creditors
364
534

Accruals and deferred income
4,832
2,383

14,716
11,713


The obligations under finance leases and hire purchase contracts are secured over the assets concerned.

Page 38

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

19.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Bank loans
34,165
25,887
3,913
-

Shareholder loans
34,790
31,499
6,099
5,545

Net obligations under finance leases and hire purchase contracts
59
87
-
-

Amounts owed to group undertakings
-
-
600
438

Other creditors
-
290
-
-

69,014
57,763
10,612
5,983


During the year, a formal agreement was put in place in respect of amounts owed by group undertakings, with the amount being due in October 2024.

Bank loans
The bank loan attracts interest at a rate of between 3-4% plus LIBOR and is secured by a fixed and floating charge on the assets of the Company.
Shareholder loans
Shareholder loans comprise the following:
Secured loan stock of £28,691k (2022 - £26,322k) owed to funds managed by Primary Capital. This loan stock is subject to an interest rate of 10% per annum and is repayable in December 2025.
Secured loan stock of £6,099k (2022 - £5,545k) owed to the Company’s Directors and Shareholders. This loan stock is subject to an interest rate of 10% per annum and is repayable in December 2025.

Page 39

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

20.


Loans


Analysis of the maturity of loans is given below:


Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Amounts falling due within one year

Bank loans
-
1,709
-
-


Amounts falling due 2-5 years

Bank loans
34,165
25,887
3,913
-

Shareholder loans
34,790
31,499
6,099
5,545


68,955
57,386
10,012
5,545

68,955
59,095
10,012
5,545



21.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
Group
2023
2022
£000
£000

Within one year
53
139

Between 1-5 years
59
87

112
226


22.


Provisions


Group






Dilapidations

£000





At 1 October 2022
300



At 30 September 2023
300

Page 40

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

23.


Share capital

2023
2022
£000
£000
Allotted, called up and fully paid



658,261 (2022 - 658,261) Ordinary A shares of £0.01 each
7
7
141,739 (2022 - 141,739) Ordinary B shares of £0.01 each
1
1
200,000 (2022 - 200,000) Ordinary C shares of £0.01 each
2
2
100 (2022 - 100) Deferred shares of £0.01 each
-
-

10

10


The ordinary A, ordinary B and ordinary C shares entitle the holders to one vote per holder and the shares have attached to them the right to receive a dividend, and no restrictions on the repayment of the capital. The deferred shares do not confer any voting rights or the right to receive a dividend and have no restrictions on the repayment of capital.


24.


Reserves

Share premium account

The share premium account is used to record the aggregate amount or value of premiums paid when the Company's shares are issued at an amount in excess of nominal value.

Profit and loss account

This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.

Page 41

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
25.


Analysis of net debt







At 1 October 2022
Balances acquired through acquisitions
New loan funding
Cashflows
Other non-cash changes
At 30 September 2023
£000

£000

£000

£000

£000

£000

Cash at bank and in hand

565

2,973

-

(3,273)

-

265

Bank overdrafts

-

-

-

(826)

-

(826)

Finance leases

(226)

-

-

114

-

(112)

Bank loans

(27,596)

-

(7,475)

906

-

(34,165)

Other loans

(31,499)

(570)

-

570

(3,291)

(34,790)


(58,756)
2,403
(7,475)
(2,509)
(3,291)
(69,628)

Page 42

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

26.
 

Business combinations

On 17 March 2023, the Company acquired the entire share capital of Copyright Digital Systems Limited for total consideration of £7,674k. Since the year end the trade and assets were hived up into Automated Systems Group Ltd.
The book value and fair value of the assets and liabilities acquired were as follows:
 
Acquisition of Copyright Digital Systems Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value adjustments
Fair value
£000
£000
£000

Fixed Assets

Tangible
51
-
51

Intangible
203
(203)
-

254
(203)
51

Current Assets

Stocks
234
-
234

Debtors
513
-
513

Cash at bank and in hand
2,177
-
2,177

Total Assets
3,178
(203)
2,975

Creditors

Creditors: due within one year
(1,214)
-
(1,214)

Total Identifiable net assets
1,964
(203)
1,761


Goodwill
5,913

Total purchase consideration
7,674

Page 43

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

26.Business combinations (continued)

Consideration

£000


Cash
6,868

Deferred consideration
500

Professional Fees
306

Total purchase consideration
7,674



Acquisition of Sharples Group Limited

On 3rd February 2023, the Company acquired the entire share capital of Sharples Group Limited for total consideration of £4,213k. The trade and assets were immediately hived up into the Company.
The book value and fair value of the assets and liabilities acquired were as follows:

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value adjustments
Fair value
£000
£000
£000

Fixed Assets

Intangible
428
(428)
-

428
(428)
-

Current Assets

Stocks
153
-
153

Debtors
934
-
934

Cash at bank and in hand
797
-
797

Total Assets
2,312
(428)
1,884

Creditors

Due within one year
(580)
-
(580)

Total Identifiable net assets
1,732
(428)
1,304


Goodwill
2,909

Total purchase consideration
4,213

Page 44

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

26.Business combinations (continued)

Consideration

£000


Cash
3,649

Deferred consideration
130

Professional Fees
434

Total purchase consideration
4,213




27.


Pension commitments

The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £424k (2022 - £311k). Contributions totalling £44k (2022 - £32k) were payable to the fund at the reporting date and are included in creditors.


28.


Commitments under operating leases

At 30 September 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2023
2022
£000
£000

Not later than 1 year
647
647

Later than 1 year and not later than 5 years
562
1,209

1,209
1,856
Page 45

 
DIGITAL TOPCO LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023

29.


Related party transactions

The Company has taken advantage of the exemption in FRS 102 Section 33.1A to not disclose transactions with wholly owned group entities.
Included in the Group ‘Other loans’ balance in Note 20 is £28,971k (
2022 - £26,304k) owed to Primary Capital, the ultimate parent company of Digital Topco Limited. Interest of £2,650k (2022 - £2,355k) accrued during the financial year in relation to this balance.
Included in the Company ‘Other loans’ balance in Note 20 is £1,373k (
2022 - £3,403k) secured loan stock owed to Directors of the Group. Interest of £233k (2022 - £308k) accrued during the financial year in relation to these balances.
Additionally, £113k (
2022 - £109k) fees were payable to service companies in respect of Directors’ services for the financial year.
Key management personnel are considered to be the directors and disclosed in note 9.


30.


Controlling party

Primary Capital IV (Nominees) Limited is considered to be the Company's ultimate parent entity.

Page 46