Company registration number 13233643 (England and Wales)
BUTTERFLY BIDCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BUTTERFLY BIDCO LIMITED
COMPANY INFORMATION
Directors
F M Kufer
R Sklar
Company number
13233643
Registered office
Hermes House
88-89 Blackfriars Rd
South Bank
London
United Kingdom
SE1 8HA
Auditor
BDO LLP
Central Square
29 Wellington Street
Leeds
LS1 4DL
BUTTERFLY BIDCO LIMITED
CONTENTS
Page
Strategic report
1 - 5
Directors' report
6 - 8
Directors' responsibilities statement
9
Independent auditor's report
10 - 13
Statement of comprehensive income
14
Balance sheet
15
Statement of changes in equity
16
Notes to the financial statements
17 - 29
BUTTERFLY BIDCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

Principal activities

The Company is part of the Butterfly Topco Limited group of companies (Butterfly Group) whose principal activity is as a leading global provider of on premises or virtual event visualisation solutions, specialising in the provision of the software, hardware and support services that allow creative production teams to pre-visualise, stimulate and deliver their 3D shows in real-time.

 

The Company's immediate parent undertaking is Butterfly Midco Limited.

 

The principal activity of the Company is that of a holding company alongside management services performed on behalf of the Group.

Review of the business

The company itself generates revenue from management services performed on behalf of the Group and generates no external revenue.

 

The company is also charged loan interest from its direct parent company Butterfly Midco limited which is driving the overall loss for the entity.

 

The Company finished the financial year with a loss after tax of £13.9m (2022 – loss after tax £12.5m) and net liabilities of £32.9 million (2022 – £19.4 million) and net current assets of £43.8 million (2022 – £42.4 million).

 

The Company provides management services for the Butterfly Group, and it is reliant on support from other group companies to settle any liabilities. The administrative costs relate to professional and audit fees for the Group and intercompany loans are in place throughout the Group with forecast cashflow requirements performed at a Group level ensuring liabilities and adequate funding of the Company is covered.

 

The Company ended the financial year with outstanding loan notes of £146.5m (2022 - £133.1m) with the prior year interest charges being rolled up with the original principal.

 

In 2023 the Butterfly Group saw strong revenue growth through continued vertical, geographic and product expansion alongside building out the Meptik LLC and Polygon Labs LLC revenue streams. The Group also underwent an extensive cost rationalisation exercise across our staff and administrative expenses, and finalised the project to onshore the supply chain which will deliver future gross margin improvements.

 

The above cost saving measures were taken to ensure the business is rightsized and in a good position to maximise profit and cash generation in future periods and already the Company has seen a strong improvement year-on year in profitability.

 

The Group also had an injection of £4m from Shareholders in the form of a convertible loan note to ensure the Group’s balance sheet is strengthened and can meet future obligations under appropriate stress testing.

BUTTERFLY BIDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

The principal risks and uncertainties of the Company relate to the ongoing activities of the companies in which it holds an investment both directly and indirectly.

 

This means it is dependant for its revenues upon the performance of its subsidiaries in the live and virtual events visualisation industry. The risks that the Company are exposed to are managed at a group level. The nature of the risk including the risk management principles and strategies to mitigate these risks are disclosed in the consolidated financial statements of Butterfly Topco Limited.

BUTTERFLY BIDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Financial risk management objectives and policies

The Company's activities expose it to a variety of financial risks. These risks are managed at a group level of the ultimate parent undertaking Butterfly Topco Limited. The principal financial risks are summarised below:

 

Credit risk

The Company's main financial assets are its cash balances, and intercompany debtors. For banks and financial institutions, only independent rated parties with a strong credit rating are accepted. Intercompany debtors are regularly reviewed for recoverability from an overall Group perspective for recoverability. The Company position is predominantly due to shareholder loan notes and other financing activities.

 

Liquidity risk

Liquidity risk arises from timing differences between cash inflows and outflows. At the reporting date, the Company had net cash balances and was in a net current asset position. However the liquidity of the Company is wholly reliant on the support of the Butterfly Topco Group.

 

Interest rate risk

Interest bearing financial liabilities comprise loan notes issued by a fellow group company and bank loans. Loan notes are held at fixed rates of interest. There is no hedging policy in place to protect changes to the SONIA rate and relies where possible on natural hedges of its financial assets and liabilities.

Key performance indicators

As the Company itself is not a trading entity it does not assess itself individually but is assessed as part of the larger Butterfly Group as a whole. Disclosure for the Company will be included within the consolidated results of Butterfly Topco Limited.

Other performance indicators

The Group also reviews a number of other non-financial KPIs which apply to the subsidiaries of the Company:

 

BUTTERFLY BIDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The Directors of the Group acknowledge that they must act in a way which is considered in good faith and would be most likely to promote the success of the company and its wider Group for the benefit of all interested parties as defined in Section 172(1) of the Companies Act 2006. In doing so, the Directors of the Group have considered the following aspects and how they have regarded each of the matters set out below.

 

Have regard to the likely consequence of any decision in the long-term

Our mission is to build leading edge technology solutions for creatives around the world to deliver unparalleled performances for audiences in person and in the cloud. We recognise that our decisions must take into account the long-term consequences for our company and its stakeholders. For example, when considering investment in new products or services, we take into account the potential impact on our financial position, our ability to compete in the market, and the interests of our shareholders.

 

The interests of the Group’s employees

We monitor the development, performance and impacts of our activity on social and employee matters. We are committed to providing a positive working environment that is free from all forms of illegal and improper discrimination and harassment. Our employees are key to the success of our company, and we are committed to promoting their interests. We provide a wider range of benefits, as well as opportunities for training and development and remote working. We also have policies in place to promote diversity and inclusion, and we seek to foster a positive working environment that promotes innovation and collaboration.

 

The need to foster the Group’s business relationships with suppliers, customers and others

We recognise that our success is closely tied to our relationships with our customers and suppliers. We aim to provide high-quality products and services that meet the needs of our customers, and we work closely with our suppliers to ensure that we have reliable and cost-effective supply chains.

 

In 2023 several new products were in development providing new advances in power and output to match our customers creative needs. We continue to work with all our supply chain to ensure compliance with all relevant legislation and minimising impact on our business operations.

 

The impact of the Group’s operations on the community and environment

We understand that our operations have an impact on the wider community and the environment. We are committed to minimising our environmental footprint through the use of renewable energy sources and the reduction of waste and emissions. We also support industry initiatives and charities through donations and volunteer work within the Group.

 

The desirability of the Group maintaining a reputation for high standards of business conduct

Respecting human rights is a core value and one that we expect our business partners to share. We have documented policies and procedures internally as well as robust supplier T&C's which reference what we expect from our Suppliers and ensure we limit the risk to the business and uphold our core values. Employees have access to all Group policies and procedures, with training provided as part of the employee onboarding process with regards to the Corporate Criminal Offences Act, Modem Slavery Act, Anti- Bribery and Corruption.

 

We have a zero-tolerance stance for all human rights abuse. We are committed to ensuring we maintain robust programs and procedures to protect our people and prevent such abuse through our supply chain. Our Supplier Code of Conduct expressly prohibit the use of forced, imprisoned, bonded, indentured or involuntary labour including child labour. Other requirements include safe and clean working conditions, fair wages and no discrimination.

 

The need to act fairly between all interested parties within the group

The Board considers all interested parties when making business decisions to ensure fair representation irrespective of their interest holding within the Group. The Group has robust policies in place to ensure that fair representation is maintained both at board level and within the wider business through, management meetings and Non-executive representation at the Board.

Future developments

It is the intention of the directors that the Company will continue for the foreseeable future, oversee and managing the operational aspects of the Group. The Group plans to expand into new geographical locations and accelerate growth through the acquisition of new businesses alongside organic growth with new products and verticals.

BUTTERFLY BIDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

On behalf of the board

R Sklar
Director
9 September 2024
BUTTERFLY BIDCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

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

Results and dividends

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

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

Directors

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

F M Kufer
R Sklar
Post reporting date events

Following a restructuring of the subsidiaries owned by the Company, on 14 August 2024 the Company took direct ownership of the entire ordinary share capital of Disguise Technologies Limited. This leaves New Leaf Topco Limited ("NLT"), and its subsidiary New Leaf Bidco Limited ("NLB"), as non-trading legacy companies.

 

This restructuring involved NLT issuing two ordinary shares for total consideration of £23,845,142, which was as part of a debt-for-equity swap. NLT then undertook a capital reduction, effective on 13 August 2024, which cancelled the share premium account in its entirety, resulting in an increase in retained profits of £28,806,407.

 

On 14 August 2024, the Company then acquired the entire share capital of the trading subsidiaries from NLB at par value. All remaining profits of NLB were then distributed through the Company and to BBL, along with all retained profits of the Company.

Auditor

The auditor, BDO LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Energy and carbon report

The Company has taken the exemption available to subsidiary companies to not disclose information in respect of greenhouse gas emissions, energy consumption, and energy efficiency action given that this is disclosed in the consolidated financial statements of the ultimate parent company, Butterfly Topco Limited.

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.

BUTTERFLY BIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
Going concern

As at 31 December 2023, the Company had net liabilities of £32.9m (2022 - £19.4m) and net current assets of £43.8m (2022 - £42.4m).

 

The directors have received confirmation from the Group that it will provide ongoing financial support for a period of not less than 12 months in order of the Company to meet its liabilities as they fall due. As a result, the below disclosures which are in respect of the wider Butterfly Topco Limited group, are considered relevant to the Company.

 

As at the year-end date the Group had generated EBITDA of £7.6m (2022 - £0.8m) and generated cash flows from operating activities of £9.8m (2022 - £1.3m). Closing cash balances were £10.7m (2022 - £2.5m), taking into account the injection from its shareholders of £4.0m by way of convertible shareholder loan notes issued on 10 July 2023 after discussion with its Senior Lender.

 

The Group had £12.8m of term loans drawn from its facilities agreement with its Senior Lender to finance the acquisitions of Polygon Labs LLC and Meptik LLC both acquired in 2022. £10m is drawn from one term loan and £2.8m from an additional term loan facility of £7.0m, both of which are not due for repayment until December 2027. At the year-end date the net debt position of the Group excluding shareholder loans was £2.1m (2022 - £9.3m). The Group has access to additional facilities via a £3.0m revolving credit facility which is undrawn and £4.2m of the additional term loan facility which is undrawn to finance further commitments under the acquisitions.

 

The Group’s term loan arrangements with its Senior Lender are based on two covenants. The first is Adjusted Leverage (the ratio of an Adjusted EBITDA-based metric to Total Net Debt) measured on a quarterly basis on a rolling 12-month period with the target ratio reducing over time. The second covenant is an Interest Cover (the ratio of Cashflow to Net Finance Charges) again measured on a quarterly basis on a rolling 12-month period. The Senior Facilities are provided by Santander UK PLC and details can be found in Note 20 to the financial statements.

 

The Group has net current assets of £14.7m (2022 - £10.5m) at 31 December 2023 and has remained stable through 2024 to the date of signing of the financial statements. The directors are satisfied with the cash, additional facilities line and current balance of term loans within the business such that it can meet any future ongoing obligations.

 

The long term debt of the Group is made up of shareholder loan notes of £151.2m (2022 – £132.9m) which mature on the earlier of the Group entering into an agreement with a new acquirer or the maturity of those loan notes in March 2031. The shareholders have not requested any interest repayments until that point.

 

The directors monitor cashflow through short and long term forecasting and its going concern assessment is on a future looking period of a minimum of twelve months from the date of signing the audited financial statements. These forecasts are stress tested on revenue following a deep review of pipeline known projects and historical seasonality, alongside modelling of debtor days lengthening.

 

Our margin forecasts are based on our new supply chain product pricing and working capital is driven predominantly by our sales demand and appropriately run through our financial model taken into account any historical trends. The forecasts have also been heavily sensitised in producing a financing case to ensure that with minimal revenue growth and cost efficiencies actioned we are still able to maintain cash liquidity and meet our covenant requirements.

 

The directors have considered the financial forecasts of the overall Group inclusive of this entity, taking into consideration the current macroeconomic climate, the projections are for the Group to remain profitable and generate positive cashflows in both a short term and long term assessment giving the Group the ability to continue to operate into the future and meet the respective financial covenants.

 

The directors conclude that there are no material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern and have therefore adopted the going concern basis in preparing the financial statements.

BUTTERFLY BIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -

Qualifying third party indemnity provisions

The Company has taken out qualifying third party indemnity insurance for the benefit of one or more of the directors of the Company. Such third-party indemnity provisions were in place at the date of the signing of the Directors' Report.

 

Matters covered in the Strategic Report

Disclosures required under S416(4) of the Companies Act 2006 are commented upon in the Strategic Report as the directors consider them to be of strategic importance to the Group.

 

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

 

On behalf of the board
R Sklar
Director
9 September 2024
BUTTERFLY BIDCO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -

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.

BUTTERFLY BIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BUTTERFLY BIDCO LIMITED
- 10 -
Opinion

In our opinion the financial statements:

 

We have audited the financial statements of Butterfly Bidco Limited (“the Company”) for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

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.

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 Directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. 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.

BUTTERFLY BIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BUTTERFLY BIDCO LIMITED
- 11 -

Other Companies Act 2006 reporting

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

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.

Extent to which the audit was 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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

BUTTERFLY BIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BUTTERFLY BIDCO LIMITED
- 12 -

Non-compliance with laws and regulations

 

Based on:

 

We considered the significant laws and regulations to be the applicable accounting framework, the Companies Act 2006, UK Corporation tax legislation and UK VAT registration.

 

The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be the health and safety legislation, UK employment law and the Data Protection Act.

 

Our procedures in respect of the above included:

Fraud

 

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

Based on our risk assessment, we considered the areas most susceptible to fraud to be:

 

Our procedures in respect of the above included:

 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

BUTTERFLY BIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BUTTERFLY BIDCO LIMITED
- 13 -

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

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.

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.

Neil Ebdon (Senior Statutory Auditor)
For and on behalf of`BDO LLP, Statutory Auditor
Leeds, UK
9 September 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
BUTTERFLY BIDCO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
Turnover
3
3,226,619
3,068,491
Administrative expenses
(3,093,730)
(2,842,208)
Equity-settled share based payment
(367,646)
(216,906)
Operating (loss)/profit
4
(234,757)
9,377
Interest payable and similar expenses
7
(14,818,765)
(12,517,289)
Loss before taxation
(15,053,522)
(12,507,912)
Tax on loss
8
1,202,377
18,614
Loss for the financial year
(13,851,145)
(12,489,298)

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

BUTTERFLY BIDCO LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 15 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
9
82,343,337
82,343,337
Current assets
Debtors
11
49,222,368
44,797,195
Cash at bank and in hand
151,408
23,111
49,373,776
44,820,306
Creditors: amounts falling due within one year
12
(5,575,297)
(2,398,991)
Net current assets
43,798,479
42,421,315
Total assets less current liabilities
126,141,816
124,764,652
Creditors: amounts falling due after more than one year
13
(159,025,704)
(144,165,041)
Net liabilities
(32,883,888)
(19,400,389)
Capital and reserves
Called up share capital
17
6,505
6,505
Share premium account
645,513
645,513
Capital contribution reserve
2,338,448
1,970,802
Profit and loss reserves
(35,874,354)
(22,023,209)
Total equity
(32,883,888)
(19,400,389)
The financial statements were approved by the board of directors and authorised for issue on 9 September 2024 and are signed on its behalf by:
R Sklar
Director
Company registration number 13233643 (England and Wales)
BUTTERFLY BIDCO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
Share capital
Share premium account
Capital contribution reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2022
6,505
645,513
-
(9,533,911)
(8,881,893)
Year ended 31 December 2022:
Loss and total comprehensive loss
-
-
-
(12,489,298)
(12,489,298)
Capital contribution in respect of loan
-
-
1,753,896
-
0
1,753,896
Capital contribution in respect of share-based payments
-
-
216,906
-
216,906
Balance at 31 December 2022
6,505
645,513
1,970,802
(22,023,209)
(19,400,389)
Year ended 31 December 2023:
Loss and total comprehensive loss
-
-
-
(13,851,145)
(13,851,145)
Capital contribution in respect of share-based payments
-
-
367,646
-
0
367,646
Balance at 31 December 2023
6,505
645,513
2,338,448
(35,874,354)
(32,883,888)
BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
1
Accounting policies
Company information

Butterfly Bidco Limited is a private company limited by shares incorporated in England and Wales. The registered office is Hermes House, 88-89 Blackfriars Rd, South Bank, London, United Kingdom, SE1 8HA.

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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. 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 financial statements of the company are consolidated in the financial statements of Butterfly Topco Limited. These consolidated financial statements are available from its registered office, Hermes House, 88-89 Blackfriars Road, South Bank, London, SE1 8HA.

The company is exempt under section 400 of the Companies Act 2006 from the requirement to produce group accounts because it is included in the published consolidated financial statements of its ultimate parent undertaking Butterfly Topco Limited. Therefore these accounts present information about the company and not about its group.

BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.2
Going concern

As at 31 December 2023, the Company had net liabilities of £32.9m (2022 - £19.4m) and net current assets of £43.8m (2022 - £42.4m).true

 

The directors have received confirmation from the Group that it will provide ongoing financial support for a period of not less than 12 months in order of the Company to meet its liabilities as they fall due. As a result, the below disclosures which are in respect of the wider Butterfly Topco Limited group, are considered relevant to the Company.

 

As at the year-end date the Group had generated EBITDA of £7.6m (2022 - £0.8m) and generated cash flows from operating activities of £9.8m (2022 - £1.3m). Closing cash balances were £10.7m (2022 - £2.5m), taking into account the injection from its shareholders of £4.0m by way of convertible shareholder loan notes issued on 10 July 2023 after discussion with its Senior Lender.

 

The Group had £12.8m of term loans drawn from its facilities agreement with its Senior Lender to finance the acquisitions of Polygon Labs LLC and Meptik LLC both acquired in 2022. £10m is drawn from one term loan and £2.8m from an additional term loan facility of £7.0m, both of which are not due for repayment until December 2027. At the year-end date the net debt position of the Group excluding shareholder loans was £2.1m (2022 - £9.3m). The Group has access to additional facilities via a £3.0m revolving credit facility which is undrawn and £4.2m of the additional term loan facility which is undrawn to finance further commitments under the acquisitions.

 

The Group’s term loan arrangements with its Senior Lender are based on two covenants. The first is Adjusted Leverage (the ratio of an Adjusted EBITDA-based metric to Total Net Debt) measured on a quarterly basis on a rolling 12-month period with the target ratio reducing over time. The second covenant is an Interest Cover (the ratio of Cashflow to Net Finance Charges) again measured on a quarterly basis on a rolling 12-month period. The Senior Facilities are provided by Santander UK PLC and details can be found in Note 20 to the financial statements.

 

The Group has net current assets of £14.7m (2022 - £10.5m) at 31 December 2023 and has remained stable through 2024 to the date of signing of the financial statements. The directors are satisfied with the cash, additional facilities line and current balance of term loans within the business such that it can meet any future ongoing obligations.

 

The long term debt of the Group is made up of shareholder loan notes of £151.2m (2022 – £132.9m) which mature on the earlier of the Group entering into an agreement with a new acquirer or the maturity of those loan notes in March 2031. The shareholders have not requested any interest repayments until that point.

 

The directors monitor cashflow through short and long term forecasting and its going concern assessment is on a future looking period of a minimum of twelve months from the date of signing the audited financial statements. These forecasts are stress tested on revenue following a deep review of pipeline known projects and historical seasonality, alongside modelling of debtor days lengthening.

 

Our margin forecasts are based on our new supply chain product pricing and working capital is driven predominantly by our sales demand and appropriately run through our financial model taken into account any historical trends. The forecasts have also been heavily sensitised in producing a financing case to ensure that with minimal revenue growth and cost efficiencies actioned we are still able to maintain cash liquidity and meet our covenant requirements.

 

The directors have considered the financial forecasts of the overall Group inclusive of this entity, taking into consideration the current macroeconomic climate, the projections are for the Group to remain profitable and generate positive cashflows in both a short term and long term assessment giving the Group the ability to continue to operate into the future and meet the respective financial covenants.

 

The directors conclude that there are no material uncertainties that may cast significant doubt on the Company’s ability to continue as a going concern and have therefore adopted the going concern basis in preparing the financial statements.

BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.3
Turnover

Revenue relates to management fees charged to group undertakings. Revenue is recognised over the period to which the management fees relate.

 

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and revenue can be measured reliably. Revenue is measured at the fair value of consideration receivable, after discounts and excluding VAT.

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.

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.

BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
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, 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.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the 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.

BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
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.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

1.10
Retirement benefits

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

1.11
Share-based payments

Where shares are awarded under the group's long term incentive plan, the fair value of the shares at the grant date is charged to the statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each statement of financial position date so that the cumulative amount recognised over the vesting period is based on the number of options that eventually vest, Market vesting conditions are factored into the fair value of options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.

 

The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors that are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).

 

Where the terms and conditions of shares are modified before they vest, the increase in the fair value of the shares, measured immediately before and after the modification, is also charged to the statement of comprehensive income over the remaining vesting period.

 

Where shares are issued by one group entity for settlement in its own shares and these are granted to employees of a subsidiary entity, the issuing entity recognises the charge as an increase in cost of investment while the subsidiary recognised this as a capital contribution.

BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Investments

In preparing the financial statements, the directors have considered whether there are any indicators of impairment of the company's investments. Factors taken into consideration include the past and expected future performance of the subsidiaries, development costs and customer relationships. The directors are satisfied that there are no such indicators of impairment at the reporting date as development costs remain current as well as the underlying customer base.

Equity-settled share-based payment charge

The company has issued shares and share-matching arrangements as part of its long-term incentive plan for employees. For shares, these are classified as equity-settled share-based payments and are therefore fair valued at the grant date, and the resultant share-based payment charge spread over the expected vesting period of the instruments.

 

There are a number of existing schemes from prior years. For the shares issued in May 2023, these were valued using a Monte-Carlo simulation option pricing model based on the Black-Scholes model. This requires a number of assumptions to be made including the share price at the grant date, the volatility of the share price, expected dividend yield and expected period to exercise.

 

The shares were issued with an average exercise price of £1 per share for E shares and £0.50 per share for F shares. The weighted average fair value net of exercise price is £33.08 for E shares and £0.62 for F shares, which was determined with input from an expert.

 

The directors are satisfied that the share price is reasonable taking into consideration the EBITDA performance and the resultant expected enterprise value of the company, based on benchmarking of the earnings ratio to comparable companies in the sector.

 

The total anticipated share-based payment charge is spread over the vesting period of the instruments. For those instruments that do not vest before the year-end, management make an assessment of the expected timing of the vesting date.

Group debtors

The directors have assessed the ability of other group companies to pay the amounts owed and concluded that these debts remain recoverable. This assessment is integrated with the investment judgement disclosed above.

3
Turnover

The whole of the turnover is attributable to the principal activity of the Company.

 

All turnover arose within the United Kingdom.

BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
11,550
11,000
5
Employees

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

2023
2022
Number
Number
Management
9
10

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,460,687
2,206,054
Social security costs
306,448
298,723
Pension costs
37,870
37,033
Share-based payment expense
367,646
216,906
3,172,651
2,758,716
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
439,980
827,489
Amounts received under long term incentive schemes
61,193
-
0
Company pension contributions to defined contribution schemes
4,050
3,943
444,030
831,432

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

The number of directors who are entitled to receive shares under long term incentive schemes during the year was 2 (2022 - 2).

BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Directors' remuneration
(Continued)
- 24 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
302,975
527,168
Amounts receivable under long term incentive schemes
24,477
-
Company pension contributions to defined contribution schemes
-
3,943
7
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
1,495,250
411,319
Interest payable to group undertakings
13,316,564
12,105,970
Other interest
6,951
-
0
14,818,765
12,517,289
8
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
(387,702)
(22,188)
Changes in tax rates
(24,387)
-
0
Adjustment in respect of prior periods
(790,288)
3,574
Total deferred tax
(1,202,377)
(18,614)
BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 25 -

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:

2023
2022
£
£
Loss before taxation
(15,053,522)
(12,507,912)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(3,540,588)
(2,376,503)
Tax effect of expenses that are not deductible in determining taxable profit
877,670
41,212
Adjustments in respect of prior years
-
0
3,574
Effect of change in corporation tax rate
-
0
(5,325)
Group relief
2,275,299
2,318,428
Other permanent differences
(83)
-
0
Deferred tax adjustments in respect of prior years
(790,288)
-
0
Remeasurement of deferred tax for changes in tax rate
(24,387)
-
0
Taxation credit for the year
(1,202,377)
(18,614)

Factors that may affect future tax charges

The main corporation tax rate increased from 19% to 25% on 1 April 2023. The deferred tax balances at 31 December 2023 have been measured using the rates expected to apply in the reporting periods when the timing differences reverse, being 25% (2022 - 25%).

9
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
10
82,343,337
82,343,337
10
Subsidiaries

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

BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Subsidiaries
(Continued)
- 26 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
New Leaf Topco Limited
Hermes House, 88-89 Blackfriars Road, South Bank, London, SE1 8HA
Ordinary
100.00
-
New Leaf Bidco Limited
Hermes House, 88-89 Blackfriars Road, South Bank, London, SE1 8HA
Ordinary
-
100.00
Disguise Technologies Limited
Hermes House, 88-89 Blackfriars Road, South Bank, London, SE1 8HA
Ordinary
-
100.00
Disguise Systems Limited
Hermes House, 88-89 Blackfriars Road, South Bank, London, SE1 8HA
Ordinary
-
100.00
Disguise Systems (APAC) Limited
16/F Wing On Centre, 111 Connaught Road Central, Sheung Wan, Hong Kong
Ordinary
-
100.00
Disguise Systems Inc
421 Colyton Street, #1R, Los Angeles, CA 90013
Ordinary
-
100.00
Disguise Systems (China) Limited
Room 103, 6/F WeWork, The Konnect, 118 South Yunnan Road, Huangpu District, Shanghai, China
Ordinary
-
100.00
Disguise EMEA Limited
Hermes House, 88-89 Blackfriars Road, South Bank, London, SE1 8HA
Ordinary
-
100.00
Disguise Spain, Sociedad Limitada
Calle Tanger (Glories) 86, Barcelona, 08018, Spain
Ordinary
-
100.00
Digital Systems Canada Inc
630, boul. ReneLevesque Quest, Bureau 2780, montreal, Quebec, H3B 1S6, Canada
Ordinary
-
100.00
Disguise New Zealand Limited
Level 4 BDO Centre, 4 Gaham Street, Auckland 1010, New Zealand
Ordinary
-
100.00
Disguise Korea Limited
127 Beobwon-ro, Songpa-gu, Seoul, 05836, Korea
Ordinary
-
100.00
Disguise Japan Limited Liability
71 We Work Ocean Gate Minato Mirai, Japan
Ordinary
-
100.00
Previz LLC
1115 W Sunset Boulevard, Los Angeles, CA 90012, US
Ordinary
-
100.00
Disguise Systems Singapore Pte. Limited
600 North Bridge Road, #23-01, Parkview Square, Singapore (188788)
Ordinary
-
100.00
Polygon Labs LLC
228 Bushwick Ave 3G, Brooklyn, NY, 11206, New York
Ordinary
-
100.00
Meptik LLC
215 Chester Ave SE Suite A-111, Atlanta, GA 30316
Ordinary
-
100.00

Changes since the year-end are explained in note 19.

11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
47,947,889
44,763,949
Other debtors
278
4,435
Prepayments and accrued income
47,940
4,927
47,996,107
44,773,311
Deferred tax asset (note 15)
1,226,261
23,884
49,222,368
44,797,195
BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
14
-
0
1,500,000
Trade creditors
77,313
33
Amounts owed to group undertakings
4,307,005
-
0
Taxation and social security
366,365
291,988
Other creditors
8,450
24,090
Accruals and deferred income
816,164
582,880
5,575,297
2,398,991
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Loan notes owed to parent company
14
146,451,605
133,135,041
Bank loans and overdrafts
14
12,530,000
11,030,000
Accruals and deferred income
44,099
-
0
159,025,704
144,165,041
14
Loans and overdrafts
2023
2022
£
£
Loan notes owed to parent company
146,451,605
133,135,041
Bank loans
12,530,000
12,530,000
158,981,605
145,665,041
Payable within one year
-
0
1,500,000
Payable after one year
158,981,605
144,165,041

Loan notes owed to group undertakings are repayable on 3 March 2031. Interest is charged at 10% per annum.

 

The bank loans consist of a £10m term loan that is fully drawn and £2.53m of an additional facility loan totalling £7m, and is secured by a fixed and floating charge over the assets of the group and bears interest at a rate of 4.25% per annum on top of the prevailing SONIA rate. The facility matures in December 2027.

 

The facility arrangement fees have been amortised over the term of the bank loan for the amounts falling after more than 5 years.

BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
15
Deferred taxation

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

Assets
Assets
2023
2022
Balances:
£
£
Tax losses
1,226,261
23,884
2023
Movements in the year:
£
Asset at 1 January 2023
(23,884)
Credit to profit or loss
(1,202,377)
Asset at 31 December 2023
(1,226,261)

The Company has estimated tax losses carried forward of £8,157,000, which are all recognised as a deferred tax asset.

16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
37,870
37,033

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

 

Contributions of £8,425 (2022: £8,645) were due to the fund.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 1p each
650,453
650,453
6,505
6,505
BUTTERFLY BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
18
Reserves

Share capital

Called up share capital represents the nominal value of shares issued.

 

Share premium account

The share premium account represents the premium on issue of equity shares less any issue costs.

 

Capital contribution reserve

This represents contributions made by a parent company in relation to settling share-based payments issued to employees or rollover securities in the ultimate parent company.

 

Profit and loss account

This represents retained profits after dividends paid and other adjustments.

19
Events after the reporting date

Following a restructuring of the subsidiaries owned by the Company, on 14 August 2024 the Company took direct ownership of the entire ordinary share capital of Disguise Technologies Limited. This leaves New Leaf Topco Limited ("NLT"), and its subsidiary New Leaf Bidco Limited ("NLB"), as non-trading legacy companies.

 

This restructuring involved NLT issuing two ordinary shares for total consideration of £23,845,142, which was as part of a debt-for-equity swap. NLT then undertook a capital reduction, effective on 13 August 2024, which cancelled the share premium account in its entirety, resulting in an increase in retained profits of £28,806,407.

 

On 14 August 2024, the Company then acquired the entire share capital of the trading subsidiaries from NLB at par value. All remaining profits of NLB were then distributed through the Company and to BBL, along with all retained profits of the Company.

20
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 undertaking of the group. Balances with group undertakings are shown in notes 11 and 12.

21
Ultimate controlling party

The Company's immediate parent company is Butterfly Midco Limited, incorporated in England and Wales, whose registered office is Hermes House 88-89 Blackfriars Rd, South Bank, London SE1 8HA.

 

The ultimate parent company is Butterfly Topco Limited, a company incorporated in England and Wales.

 

The largest and smallest group in which the results of the Company are consolidated was that headed by Butterfly Topco Limited. The consolidated financial statements of Butterfly Topco Limited are available to the public and may be obtained from Hermes House 88-89 Blackfriars Rd, South Bank, London, SE1 9HA.

 

CETP IV Investment S.a.r.l, is the ultimate controlling party at the reporting date.

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