Company registration number 03452110 (England and Wales)
PRIME MEDICA LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PRIME MEDICA LIMITED
COMPANY INFORMATION
Directors
S Jenkins
G E Peterson
Company number
03452110
Registered office
Mere House
Brook Street
Knutsford
Cheshire
WA16 8GP
Auditor
Azets Audit Services
Ship Canal House
98 King Street
Manchester
M2 4WU
PRIME MEDICA LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 20
PRIME MEDICA LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present this strategic report together with the audited financial statements for the year ended 31 December 2023.
Prime Global partners with the world’s leading names in healthcare and technology, as well as the most exciting start-ups and scale-ups. We provide a mix of expertise which encompasses high science, communications combined with award winning and cutting-edge technology, evidence and data, and visionary creativity.
Together we accelerate life-changing solutions to global healthcare challenges. Prime Medica Limited is a wholly owned subsidiary of Prime Global Medical Communications Limited, a growing and successful independent life science communications and commercialization partner, with offices in the UK (London, Knutsford, Brighton, Oxford and Cambridge), the US (New York and California) as well as satellite locations in Greece, Spain and New Zealand.
Business review
Prime Medica Ltd’s turnover increased in 2023, as a result of business restructuring and reallocation of business within the Group.
Principal risks and uncertainties
Market Demand
The client base is predominantly ‘blue chip’ global pharmaceutical companies, which have robust business continuity plans in place. Whilst the macro-economic outlook has placed increased pressure on client budgets and led to a lengthening of the procurement process, the Company has continued to receive purchase orders, invoice payments and contract documentation and expects to continue to grow the business throughout 2024.
Operations
Management minimised spend on non-essential items in order to mitigate the impact of any future project cancellations and to lessen the cashflow impact of the delayed project delivery. The company has invested in developing new tools and KPIs to help drive efficiency and agility in its project teams to be better able to respond to variations in client demands. The market for global medical communications remains buoyant and future business pipelines remain strong.
Cash
The Company maintained strong cash reserves throughout 2023 and continues to benefit from additional support originally provided by HSBC in 2022 as it continues its next stage of its growth strategy, in line with its VOS 2026-2030 growth strategy.
Sensitivity Analysis
Management have performed sensitivity analysis in respect of fee revenue and cash flow forecast. This analysis indicates the Company will have sufficient cash reserves in order to pay obligations within 12 months from the signing of the financial statements.
Conclusion
Management conclude that the Company continues to be well placed to service its clients.
PRIME MEDICA LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Cash and debt facilities
The Company had significant cash on hand as at year end and has an arranged overdraft facility with HSBC bank which it can call on if required to support the cashflow requirements of the Company.
The Company considers that it has adequate short term cashflows and financing facilities in place to continue to trade and meet its obligations to pay debts as they fall due.
Other risks of the business are as follows:
The international client base exposes the Company to exchange rate movements predominantly in USD and EUR. Hedging techniques are used where appropriate to manage this risk.
The potential risk of losing client business or managing changes to the prescribing recommendations is mitigated by various client and service diversification strategies and by delivering a high value-added quality service thereby creating strong growth and opportunities. The organisational structure is designed to ensure that the impact of any negative factors or situations are mitigated and managed by a strong Company ethos.
Financial performance indicators
Financial performance of the business is reviewed monthly through management reporting of various KPI’s for net revenue, gross margin, expenditure and overall EBIT.
Cash flow forecasting and overhead expenditure are monitored and managed monthly. The directors review the KPI’s on a regular basis, ensuring optimal overall business performance.
People first vision
Investing in the right people and developing a team of experts in communications within the healthcare sector is critical to our brand vision. The company has invested in recruitment and training programmes to ensure upscaling and opportunities exist for all staff through individualised personal development plans.
G E Peterson
Director
27 June 2024
PRIME MEDICA LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity and aim of the company is to be the strategic partner of choice within the global biotechnology and pharmaceutical sectors, and to provide innovative global medical communications and market access services throughout any product, therapeutic or disease lifecycle. These services include strategic consultancy, strategic publication planning, comprehensive and innovative medical communication plans and education programmes, market access and HEOR support including the full spectrum creative, digital and branding services.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £630,000 (2022: £Nil). The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
S Jenkins
G E Peterson
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training and support systems are arranged. 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, through company newsletters and staff meetings, matters likely to affect employees' interests. Information about matters of concern to employees is given through company 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
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
PRIME MEDICA LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
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
G E Peterson
Director
27 June 2024
PRIME MEDICA LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PRIME MEDICA LIMITED
- 5 -
Opinion
We have audited the financial statements of Prime Medica Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, the balance sheet 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit 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.
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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
PRIME MEDICA LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PRIME MEDICA 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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, 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.
PRIME MEDICA LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PRIME MEDICA 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:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Andrew Reddington
Senior Statutory Auditor
For and on behalf of Azets Audit Services
27 June 2024
Chartered Accountants
Statutory Auditor
Ship Canal House
98 King Street
Manchester
M2 4WU
PRIME MEDICA LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
11,906,613
9,484,053
Cost of sales
(10,729,921)
(8,616,609)
Gross profit
1,176,692
867,444
Administrative expenses
(6,481,933)
(5,372,914)
Other operating income
3
6,179,809
5,490,653
Operating profit
4
874,568
985,183
Interest payable and similar expenses
(360)
(2,242)
Profit before taxation
874,208
982,941
Tax on profit
7
(217,277)
(184,059)
Profit for the financial year
656,931
798,882
Retained earnings brought forward
4,824,282
4,025,400
Dividends
8
(630,000)
Retained earnings carried forward
4,851,213
4,824,282
PRIME MEDICA LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
249,377
312,136
Current assets
Debtors
10
12,729,448
9,462,461
Cash at bank and in hand
893,707
627,821
13,623,155
10,090,282
Creditors: amounts falling due within one year
11
(8,927,430)
(5,455,956)
Net current assets
4,695,725
4,634,326
Total assets less current liabilities
4,945,102
4,946,462
Provisions for liabilities
Deferred tax liability
12
43,889
72,180
(43,889)
(72,180)
Net assets
4,901,213
4,874,282
Capital and reserves
Called up share capital
14
50,000
50,000
Profit and loss reserves
15
4,851,213
4,824,282
Total equity
4,901,213
4,874,282
The financial statements were approved by the board of directors and authorised for issue on 27 June 2024 and are signed on its behalf by:
G E Peterson
Director
Company Registration No. 03452110
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
Prime Medica Limited is a private company limited by shares incorporated in England and Wales. The registered office is Mere House, Brook Street, Knutsford, Cheshire, WA16 8GP.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
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 the Reduced Financial Reporting Regime, as permitted by FRS 102, regarding the disclosure requirements of Sections 3, 4, 7, 11, 12 and 33 of the standard.
The financial statements of the company are consolidated in the financial statements of Prime Global Medical Communications Ltd. These consolidated financial statements are available from Companies House, Crown Way, Cardiff, CF14 3UZ.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
In forming this assessment, the directors have reasonable expectation of continued support through the injection of funds to the wider group, if required, from external investors and are confident the underlying business has the ability to generate sufficient positive cash flows which will support the payment of liabilities and meet all other financial obligations as they fall due. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The directors note that the business is trading profitably in terms of Earnings Before Interest, Tax, Depreciation and Amortisation and is forecast to continue to be cash generative for a period of at least 12 months from the date of signing these accounts.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and trade discounts.
Profit on long-term contracts is recognised as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of the work carried out at the year end, by recording turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Revenues derived from variations on contracts are recognised only when they have been accepted by the customer.
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Short leasehold improvements
Straight line over the term of the lease
Fixtures and fittings
25% reducing balance
Computers
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
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. Financial assets classified as receivable within one year are not amortised.
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.
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the 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 and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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 enacted or substantively enacted at the balance sheet date. 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.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.11
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.12
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.
1.13
Rental income from operating leases is recognised on a straight line basis over the lease term.
The company recognises management fees on the basis of services provided to its fellow subsidiaries.
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.
Turnover and profit recognition
Profit on long-term contracts is recognised as the work is carried out if the final outcome can be assessed with reasonable certainty. The profit included is calculated on a prudent basis to reflect the proportion of work carried out at the balance sheet date, by recording turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs incurred to date bear to total expected costs for that contract. Turnover derived from variations on contracts is only recognised when they have been accepted by the customer.
Recoverability of intercompany debtors
Determine whether intercompany debtors are recoverable. In making assessment of the recoverability of intercompany debtors, the directors review forecasts and strategies for the businesses. The directors are confident that intercompany debtors are recoverable in full.
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
3
Turnover and other revenue
The whole of the turnover is attributable to the principal activity of the company.
The proportion of turnover that is attributable to markets outside of the United Kingdom is 2023: 86% (2022: 84%).
2023
2022
£
£
Other operating income
Net rents receivable
44,489
44,754
Management charges to group undertakings
6,135,320
5,445,899
6,179,809
5,490,653
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences
(86,339)
26,803
Auditors remuneration
9,075
8,250
Depreciation of tangible fixed assets
127,642
117,056
Profit on disposal of tangible fixed assets
(7)
-
Operating lease charges
635,976
728,702
5
Directors' remuneration
No remuneration was paid to the directors.
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Delivery
267
215
Administration
24
37
Management
8
8
Total
299
260
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
13,410,483
12,289,369
Social security costs
1,492,776
1,417,024
Pension costs
614,863
548,257
15,518,122
14,254,650
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
169,347
Group relief on profits for the current period
243,296
Adjustments in respect of prior periods
2,272
Total current tax
245,568
169,347
Deferred tax
Origination and reversal of timing differences
(26,778)
22,201
Adjustment in respect of prior periods
(1,513)
(7,489)
Total deferred tax
(28,291)
14,712
Total tax charge
217,277
184,059
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
874,208
982,941
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
205,439
186,759
Tax effect of expenses that are not deductible in determining taxable profit
6,125
6,360
Adjustments in respect of prior years
2,447
(7,489)
Effect of change in corporation tax rate
(1,585)
5,328
Fixed asset differences
4,851
(6,899)
Taxation charge for the year
217,277
184,059
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
8
Dividends
2023
2022
£
£
Final paid
630,000
9
Tangible fixed assets
Short leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2023
267,529
207,014
800,280
1,274,823
Additions
3,760
61,474
65,234
Disposals
(358)
(358)
At 31 December 2023
267,529
210,416
861,754
1,339,699
Depreciation and impairment
At 1 January 2023
249,060
185,416
528,211
962,687
Depreciation charged in the year
1,852
5,869
119,921
127,642
Eliminated in respect of disposals
(7)
(7)
At 31 December 2023
250,912
191,278
648,132
1,090,322
Carrying amount
At 31 December 2023
16,617
19,138
213,622
249,377
At 31 December 2022
18,469
21,598
272,069
312,136
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,581,010
3,280,456
Corporation tax recoverable
148,698
Amounts owed by group undertakings
9,155,128
5,520,497
Other debtors
156,909
68,152
Prepayments and accrued income
687,703
593,356
12,729,448
9,462,461
Amounts owed by group undertakings are interest free and repayable on demand.
Included in prepayments and accrued income is an amount relating to accrued income of £391,743 (2022: £208,074).
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
11
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
483,661
641,950
Amounts owed to group undertakings
5,373,362
2,677,442
Corporation tax
27,118
Other taxation and social security
20,605
23,860
Other creditors
122,314
5,742
Accruals and deferred income
2,927,488
2,079,844
8,927,430
5,455,956
Amounts owed to group undertakings are interest free and repayable on demand.
Included in accruals and deferred income is an amount relating to deferred income of £2,082,646 (2022: £1,426,430).
Included in amounts owed to group undertakings is an amount relating to group relief on corporation tax of £241,788(2022:£Nil)
12
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
57,989
72,180
Short term timing differences
(14,100)
-
43,889
72,180
2023
Movements in the year:
£
Liability at 1 January 2023
72,180
Credit to profit or loss
(28,291)
Liability at 31 December 2023
43,889
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
614,863
548,257
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
At the balance sheet date, contributions amounting to £119,692 (2022: £2,353) were payable to the fund and are included in creditors.
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50,000
50,000
50,000
50,000
15
Profit and loss reserves
The Company's capital and reserves are as follows:
Share capital
Called up share capital reserve represents the nominal value of the shares issued.
Profit and loss account
The profit and loss account represents cumulative profits or losses net of Ordinary dividends declared and other adjustments.
16
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
470,735
696,958
Between two and five years
1,137,600
1,323,935
In over five years
758,400
1,042,800
2,366,735
3,063,693
PRIME MEDICA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Operating lease commitments
(Continued)
- 20 -
Lessor
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2023
2022
£
£
Within one year
15,589
52,817
Between two and five years
15,589
15,589
68,406
17
Financial commitments, guarantees and contingent liabilities
The company's present and future assets are subject to a fixed and floating charge in favour of GLAS Trust Corporation Limited in respect of certain borrowings of a fellow group company, Moonbeam Bidco Ltd. At 31 December 2023, the net borrowings encompassed by the charges amounted to £55,855,835 (2022: £57,374,531).
18
Related party transactions
The company has taken advantage of the exemption available in Section 33.1A of FRS 102, whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertakings of the group.
Loans and transactions concerning directors and officers of the company
Included within other creditors is a directors loan account of £nil (2022: £1,314). The loan account is interest free and the maximum outstanding during the year was £6,089 (2022: £3,760).
During the year, the group paid rental charges of £237,000 (2022: £237,000) for the use of a property which is held in an EPUT pension scheme. G E Peterson is the trustee of the pension scheme. At the current and preceding balance sheet dates no balance was owed to or from the EPUT pension scheme.
19
Ultimate controlling party
The company's immediate parent undertaking is Prime Global Medical Communications Ltd, a company incorporated in England and Wales and registered at Mere House, Brook Street, Knutsford, Cheshire, WA16 8GP.
The smallest group in which this company's results are consolidated is that headed by Prime Global Medical Communications Ltd. The consolidated accounts are available from Companies house, Crown Way, Cardiff, CF14 3UZ.
The largest group in which this company's results are consolidated is that headed by Moonbeam Topco Ltd. The consolidated accounts are available from Companies house, Crown Way, Cardiff, CF14 3UZ.
The company's ultimate parent undertaking and controlling party is considered to be Levine Leichtman Capital Partners Europe II SCSP, Sarl, a company registered in Luxembourg.
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