Company registration number 10602670 (England and Wales)
MAGENTA PRIME LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
MAGENTA PRIME LIMITED
COMPANY INFORMATION
Directors
Mr P French
Mr I G Simister
Mr I J Wolstenholme
Mr J S Browning
Mr S A Hobson
Mr S Ormerod
Mr P I Wild
(Appointed 24 January 2024)
Company number
10602670
Registered office
New Quay Road
Lancaster
United Kingdom
LA1 5QP
Auditor
Azets Audit Services
Fleet House
New Road
Lancaster
United Kingdom
LA1 1EZ
MAGENTA PRIME LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
MAGENTA PRIME LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Business review

The loss before tax for the year amounted to £2,356k (2023: £3,409k). Net liabilities increased as at 31 March 2024 to £7,385k (2023: £6,991k).

The Company has performed in line with expectations. The performance of the Company is based on recharging its subsidiary for management services and relying on dividends from its subsidiary to service debt payments.

There are no concerns as to the future prospects of the Company as the debt is properly structured to allow repayment as and when required. The subsidiary company is highly profitable and able to support the Company through dividend payments as may be required.

Going concern

At 31 March 2024 the Company had net liabilities of £7,385k (2023: £6,991k) and net current assets of £1,815k (2022: £13k).

The Directors while making the going concern assessment have considered the combined cash flows from Metamark Group Holdings Limited, Metamark (UK) Limited, Trimwel Limited and Magenta Prime Limited (together called as a ‘Group’).

This is due to the fact that all of these entities in the group are integral to each other and support each other on an as needs basis. The Company has also received letters of support from both Metamark Group Holdings Limited and Metamark (UK) Limited. The Board has considered and debated a range of substantial possible scenarios on the Group’s operations, financial position and forecasts covering a period of at least the next 12 months to August 2025.

These take into account sensitivity analysis and stress testing performed on the forecasts to assess the level at which current trading would need to reduce by before the bank covenants were breached After review of the forecasts along with mitigating factors available to them, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence and to satisfy any upcoming covenant conditions in the foreseeable future.

Accordingly, the Directors continue to adopt the going concern basis in preparing the annual report and financial statements.

Principal risks

The principal non-financial risks facing the group are disruption to the supply of raw materials, a downturn in the current economic climate and high levels of inflation.

Supply of Raw Materials

Supply chain disruption and global increases in demand have affected the availability of certain products and delivery lead times have become more challenging. The business has strong relationships with all its key suppliers and works with them very closely, on a daily basis, to ensure continuity of supply is maximised, thereby minimising any disruption to production.

Inflation and demand

The business continually monitors margin and works closely with key suppliers on pricing of products purchased, so a considered and appropriate response to any inflationary price rises can be determined. Sales volumes are also monitored daily, to review the impact of the current economic climate on demand and take steps to mitigate the impact of this if necessary.

MAGENTA PRIME LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
Financial risk management objectives and policies

The Company holds or issues financial instruments in order to achieve three main objectives, being:

(a) to finance its operations;

(b) to manage its exposure to interest and currency risks arising from its operations and from its sources of finance; and

(c) for trading purposes.

In addition, the Company has other financial assets and liabilities arising directly from the Group’s operations. Transactions in financial instruments result in the Company assuming or transferring to another party one or more of the financial risks described below. The Company also makes use of debenture loans to finance acquisitions.

The existence of these financial instruments exposes the Company to a number of financial risks, which are described in more detail below.

Interest rate risk

The Company is exposed to fair value interest rate risk on its borrowings and cash flow interest rate risk on bank loans. The Company has entered into agreements on its loans so as to minimise its exposure to changes in interest rates.

Credit risk

Investments of cash surpluses and borrowings are made through banks and companies which must fulfil credit rating criteria approved by the board.

Liquidity risk

The Company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense. whilst ensuring the Company has sufficient liquid resources to meet the operating needs of the business.

The Company monitors its exposure to risk through day to day management, weekly operational meetings and monthly board and management meetings.

Financial key performance indicators

The Company uses a range of financial and non-financial key performance indicators (KPIs) to monitor the current and forecast performance of the Company against its budget and competitors. These KPIs include measuring the profitability and assets of the business.

Future outlook

The Company will continue to service its debt and provide its subsidiary with management services.

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

 

Mr P I Wild
Director
21 August 2024
MAGENTA PRIME LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company continued to be that of providing management services.

Results and dividends

The results for the year are set out on page 8.

 

No ordinary dividends were paid. The directors do not recommend payment of a 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 P French
Mr I G Simister
Mr I J Wolstenholme
Mr J S Browning
Mr S A Hobson
Mr S Ormerod
Mr P I Wild
(Appointed 24 January 2024)
Directors' insurance

The company has maintained insurance on behalf of certain key directors and officials against liabilities arising in relation to the company.

Financial instruments

Details of the company's financial risk management objectives and policies are included in note 19 to the financial statements.

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. It is the policy of the company 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 company's policy is to consult and discuss with employees, any matters likely to affect employees' interests.

 

Information about matters of concern to employees is given through information bulletins and 'all company' quarterly online CEO update meetings, which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

Auditor

Azets Audit Services were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

MAGENTA PRIME LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
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 company and of the profit or loss of the company 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 company’s transactions and disclose with reasonable accuracy at any time the financial position of the 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 company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Strategic report

In accordance with section 414C(11) of the Companies Act, certain matters required to be detailed in the Directors' Report are detailed in the Strategic Report where the Director considers them to be of strategic importance to the Company.

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 company’s auditor 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 company’s auditor is aware of that information.

On behalf of the board
Mr P I Wild
Director
21 August 2024
MAGENTA PRIME LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MAGENTA PRIME LIMITED
- 5 -
Opinion

We have audited the financial statements of Magenta Prime Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 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 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.

Opinions on other matters prescribed by the Companies Act 2006

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

MAGENTA PRIME LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MAGENTA PRIME LIMITED
- 6 -
Matters on which we are required to report by exception

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.

 

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 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 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.

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.

MAGENTA PRIME LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MAGENTA PRIME LIMITED
- 7 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

Susanna Cassey
Senior Statutory Auditor
For and on behalf of Azets Audit Services
29 August 2024
Chartered Accountants
Statutory Auditor
Fleet House
New Road
Lancaster
United Kingdom
LA1 1EZ
MAGENTA PRIME LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
Notes
£'000
£'000
Turnover
3
1,218
1,155
Administrative expenses
(1,210)
(1,152)
Operating profit
4
8
3
Income from shares in group undertakings
3
5,600
4,100
Interest payable and similar expenses
7
(7,964)
(7,512)
Loss before taxation
(2,356)
(3,409)
Tax on loss
8
1,962
1,664
Loss for the financial year
(394)
(1,745)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

The notes on pages 11 to 22 form part of these financial statements.

MAGENTA PRIME LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£'000
£'000
£'000
£'000
Fixed assets
Investments
9
63,749
63,749
Current assets
Debtors
11
1,824
503
Cash at bank and in hand
4
1
1,828
504
Creditors: amounts falling due within one year
12
(13)
(491)
Net current assets
1,815
13
Total assets less current liabilities
65,564
63,762
Creditors: amounts falling due after more than one year
13
(72,949)
(70,753)
Net liabilities
(7,385)
(6,991)
Capital and reserves
Called up share capital
17
-
0
-
0
Profit and loss reserves
(7,385)
(6,991)
Total equity
(7,385)
(6,991)

The notes on pages 11 to 22 form part of these financial statements.

The financial statements were approved by the board of directors and authorised for issue on 21 August 2024 and are signed on its behalf by:
Mr S Ormerod
Director
Company Registration No. 10602670
MAGENTA PRIME LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
Share capital
Profit and loss reserves
Total
£'000
£'000
£'000
Balance at 1 April 2022
-
0
(5,246)
(5,246)
Year ended 31 March 2023:
Loss and total comprehensive income for the year
-
(1,745)
(1,745)
Balance at 31 March 2023
-
0
(6,991)
(6,991)
Year ended 31 March 2024:
Loss and total comprehensive income for the year
-
(394)
(394)
Balance at 31 March 2024
-
0
(7,385)
(7,385)

The notes on pages 11 to 22 form part of these financial statements.

MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
1
Accounting policies
Company information

Magenta Prime Limited is a private company limited by shares incorporated in England and Wales. The registered office is New Quay Road, Lancaster, United Kingdom, LA1 5QP.

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 £'000.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This 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:

 

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare and deliver consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

Magenta Prime Limited is a wholly owned subsidiary of Metamark Group Holdings Limited and the results of Magenta Prime Limited are included in the consolidated financial statements of Metamark Group Holdings Limited which are available from Luneside, New Quay Road, Lancaster, LA1 5QP.

MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
1.2
Going concern

At 31 March 2024 the Company had net liabilities of £7,385k (2023: £6,991k) and net current assets of £1,815k (2022: £13k). true

The Directors while making the going concern assessment have considered the combined cash flows from Metamark Group Holdings Limited, Metamark (UK) Limited, Trimwel Limited and Magenta Prime Limited (together called as a ‘Group’). This is due to the fact that all of these entities in the group are integral to each other and support each other on an as needs basis. The Company has also received letters of support from both Metamark Group Holdings Limited and Metamark (UK) Limited.

The Board has considered and debated a range of substantial possible scenarios on the Group’s operations, financial position and forecasts covering a period of at least the next 12 months to August 2025. These take into account sensitivity analysis and stress testing performed on the forecasts to assess the level at which current trading would need to reduce by before the bank covenants were breached After review of the forecasts along with mitigating factors available to them, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence and to satisfy any upcoming covenant conditions in the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing the annual report and financial statements.

1.3
Turnover

Turnover represents intra group management fees for support services. Turnover is recognised at the fair value of consideration received for the management services provided in the normal course of business and is shown net of VAT and other sles related taxes. Turnover from rendering of services is recognised when the services are transferred.

1.4
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.5
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.6
Financial instruments

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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.

MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

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 company 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 company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.

 

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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.7
Equity instruments

Equity instruments issued by the company 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 company.

1.8
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 company’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 profit and loss account, 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 when the company has 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.

1.9
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.

1.10
Retirement benefits

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

1.11
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.

1.12

Finance Costs

Finance costs are charged to the profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’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.

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.

Valuation of Investments

Investments in subsidiaries are held at cost less accumulated impairment losses. Investments are regularly reviewed for indicators of impairment, as and when such circumstances arise, resulting in an assessment of future discounted cashflows to support the carrying values.

3
Turnover and other revenue
2024
2023
£'000
£'000
Turnover analysed by class of business
Management charges
1,218
1,155
2024
2023
£'000
£'000
Other revenue
Dividends received
5,600
4,100
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£'000
£'000
Fees payable to the company's auditor for the audit of the company's financial statements
9
8
5
Employees

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

2024
2023
Number
Number
Management
6
5
MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
5
Employees
(Continued)
- 16 -

Their aggregate remuneration comprised:

2024
2023
£'000
£'000
Wages and salaries
981
931
Social security costs
129
127
Pension costs
50
42
1,160
1,100
6
Directors' remuneration
2024
2023
£'000
£'000
Remuneration for qualifying services
981
931
Company pension contributions to defined contribution schemes
50
42
1,031
973

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 6 (2023 - 4).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£'000
£'000
Remuneration for qualifying services
304
300
Company pension contributions to defined contribution schemes
23
21
7
Interest payable and similar expenses
2024
2023
£'000
£'000
Interest on loans
5,214
2,907
Interest payable to group undertakings
2,750
3,434
Other interest on financial liabilities
-
0
1,171
7,964
7,512
MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
8
Taxation
2024
2023
£'000
£'000
Current tax
UK corporation tax on profits for the current period
(1,973)
(1,222)
Adjustments in respect of prior periods
(28)
-
0
Total current tax
(2,001)
(1,222)
Deferred tax
Origination and reversal of timing differences
39
(321)
Changes in tax rates
-
0
(121)
Total deferred tax
39
(442)
Total tax credit
(1,962)
(1,664)

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£'000
£'000
Loss before taxation
(2,356)
(3,409)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(589)
(648)
Tax effect of expenses that are not deductible in determining taxable profit
16
105
Tax effect of income not taxable in determining taxable profit
(1,400)
(779)
Adjustments in respect of prior years
11
-
0
Effect of change in corporation tax rate
-
0
(121)
Deferred tax not provided due to Corporate Interest Restriction
-
0
(221)
Taxation credit for the year
(1,962)
(1,664)
9
Fixed asset investments
2024
2023
Notes
£'000
£'000
Investments in subsidiaries
10
63,749
63,749
MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
10
Subsidiaries

Details of the company's subsidiaries at 31 March 2024 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Metamark (UK) Limited
Luneside, St George's Quay, New Quay Road, Lancaster, Lancashire, United Kingdom, LA1 5GQ
Manufacture and distribution of vinyl materials
Ordinary
100.00
-
Metamark Technical Films Limited*
Luneside, St George's Quay, New Quay Road, Lancaster, Lancashire, United Kingdom, LA1 5GQ
Dormant
Ordinary
-
100.00
Trimwel Limited*
2A Canal Bank, Hume Avenue, Park West Industrial Park, Dublin 12, Republic of Ireland
Distributor of sign making materials
Ordinary
-
100.00
Metamark India Private Limited*
E-20, 2nd Floor, Hauz Khas, New Delhi, South Delhi, Delhi, 110016, India
Distribution of vinyl materials
Ordinary
-
100.00
Fleet Design Ltd*
Luneside, St George's Quay, New Quay Road, Lancaster, Lancashire, United Kingdom, LA1 5GQ
Manufacture and distribution of vinyl materials
Ordinary
-
100.00
Metamark USA LLC*
300 Centre Drive, Suite G-313, Superior, CO, 80027, USA
Distribution of vinyl materials
Ordinary
-
100.00

* - Shares held by Metamark (UK) Limited

11
Debtors
2024
2023
Amounts falling due within one year:
£'000
£'000
Corporation tax recoverable
28
-
0
Amounts owed by group undertakings
1,330
-
0
1,358
-
Deferred tax asset (note 15)
466
503
1,824
503
12
Creditors: amounts falling due within one year
2024
2023
£'000
£'000
Amounts owed to group undertakings
-
0
491
Accruals and deferred income
13
-
0
13
491

Amounts owed to group undertakings are interest free and repayable on demand.

MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
13
Creditors: amounts falling due after more than one year
2024
2023
Notes
£'000
£'000
Bank loans
14
42,699
42,456
Amounts owed to group undertakings
30,250
28,297
72,949
70,753

Amounts owed to group undertakings falling due after more than one year are charged interest at 10% per annum.

14
Loans
2024
2023
£'000
£'000
Bank loans
42,699
42,456
Payable after one year
42,699
42,456

The Group refinanced on 11 August 2022 obtaining a bank loan of £44 million, incurring refinance fees of £1.6m which have been capitalised. The principal is due to be repaid on 11 August 2029. The refinance fees are being amortised over the 7 year period of the loan. Interest is accruing at 6.50% above SONIA per annum, and is repayable quarterly.

 

The bank loans are secured by fixed and floating charges over the assets and undertakings of Metamark Group Holdings Limited, Magenta Prime Limited, Metamark (UK) Limited and Metamark Technical Films Limited.

15
Deferred taxation

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

Assets
Assets
2024
2023
Balances:
£'000
£'000
Short term timing differences - non trading
466
503
2024
Movements in the year:
£'000
Asset at 1 April 2023
(503)
Charge to profit or loss
37
Asset at 31 March 2024
(466)
MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
15
Deferred taxation
(Continued)
- 20 -

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.

16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
50
42

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. There were no outstanding contributions at 31 March 2024 (2023 - £Nil).

17
Share capital
2024
2023
£'000
£'000
Issued and fully paid
1 Ordinary of £1 each
-
-
-
0
-
0
18
Financial commitments, guarantees and contingent liabilities

The Company has given an unlimited guarantee over the assets of the Company in respect of the preference shares of Metamark Group Holdings Limited. At the year end, the preference shares amounted to £35,394k (2023 - £31,528k).

MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
19
Financial risk management objectives and policies

The company holds or issues financial instruments in order to achieve three main objectives, being:

 

(a) to finance its operations;

(b) to manage its exposure to interest risks arising from its operations and from its sources

of finance; and

(c) for trading purposes.

 

In addition, the company has other financial assets and liabilities arising directly from the group’s operations. Transactions in financial instruments result in the company assuming or transferring to another party one or more of the financial risks described below. The company also makes use of debenture loans to finance acquisitions. The existence of these financial instruments exposes the company to a number of financial risks, which are described in more detail below.

 

Interest rate risk

The company is exposed to fair value interest rate risk on its borrowings and cash flow interest rate risk on bank loans. The company has entered into agreements on its loans so as to minimise its exposure to changes in interest rates.

 

Credit risk

Investments of cash surpluses and borrowings are made through banks and companies which must fulfil credit rating criteria approved by the board.

 

Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

20
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Management charges expense
2024
2023
£'000
£'000
Entities with control, joint control or significant influence over the company
50
51

The following amounts were outstanding at the reporting end date:

2024
2023
Amounts due to related parties
£'000
£'000
Entities with control, joint control or significant influence over the company
30,250
28,297
Entities over which the entity has control, joint control or significant influence
-
491
MAGENTA PRIME LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
20
Related party transactions
(Continued)
- 22 -
2024
2023
Amounts due from related parties
£'000
£'000
Entities over which the entity has control, joint control or significant influence
1,330
-
Other information

The company has taken advantage of the exemption contained in Section 33 of Financial Reporting Standard 102 'Related Party Disclosures' from disclosing transactions entered into between two or more members of a group, where the entity is wholly owned and included within the consolidated financial statements which are publicly available.

21
Ultimate controlling party

The immediate parent undertaking is Metamark Group Holdings Limited, a company registered in England and Wales with registered office New Quay Road, Lancaster, United Kingdom, LA1 5QP.

The ultimate parent undertaking and ultimate controlling party is Primary Capital Partners LLP, an entity registered in England and Wales with registered office Augustine House, 6A Austin Friars, London, EC2N 2HA.

The largest and smallest group in which the results of the company are consolidated is that headed by Metamark Group Holdings Limited, a company registered in England and Wales with registered office New Quay Road, Lancaster, United Kingdon, LA1 5QP. The consolidated accounts for Metamark Group Holdings Limited are publicly available and may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.

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