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REGISTERED NUMBER: 07264379 (England and Wales)












GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2024

FOR

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 January 2024










Page

Company Information 1

Group Strategic Report 2

Report of the Directors 3

Report of the Independent Auditors 5

Consolidated Statement of Comprehensive Income 8

Consolidated Balance Sheet 9

Company Balance Sheet 10

Consolidated Statement of Changes in Equity 11

Company Statement of Changes in Equity 12

Consolidated Cash Flow Statement 13

Notes to the Consolidated Cash Flow Statement 14

Notes to the Consolidated Financial Statements 15


ARCHIPELAGO LEARNING HOLDINGS UK LIMITED

COMPANY INFORMATION
for the year ended 31 January 2024







DIRECTORS: J A Candee
P Alphonse
R A Hamwee
M Lavelle
R Vig
J Jackson
A S Duncan
M E Trimarchi





REGISTERED OFFICE: Pera Business Park
Nottingham Road
Melton Mowbray
LE13 0PB





REGISTERED NUMBER: 07264379 (England and Wales)





AUDITORS: Magma Audit LLP (part of the Dains Group)
Chartered Accountants
Statutory Auditor
Unit 2, Charnwood Edge Business Park
Syston Road
Leicestershire
LE7 4UZ

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

GROUP STRATEGIC REPORT
for the year ended 31 January 2024


The directors present their strategic report of the company and the group for the year ended 31 January 2024.

REVIEW OF BUSINESS
Our key financial indicators are Invoiced Sales, Revenue, and EBITDA. The business has a slight seasonal pattern, Our key financial indicators are Invoiced Sales, Revenue, and EBITDA. The business has a slight seasonal pattern, with Q1 and Q3 being strong, linked to the budget year for most UK schools and the start of the new academic year respectively, and the remaining quarters being of broadly similar size. Our product is sold on a subscription basis, with some multi-year subscriptions. We rely significantly on our ability to achieve renewals of subscriptions, as well as sales to new customers.

In the year, we had a 6.1% increase in overall revenue in the business. UK revenue fell 70.8% compared to prior year, as our main focus was on multi-year deals and continuing to grow the international revenue, which increased by 46.2%. Cost of Sale increased £928k on the prior year which is primarily royalties paid to Edmentum. Administrative expenses were up significantly compared with the prior year by £2,376k due to largely to exchange fluctuations and employee costs. We continue to invest in product development, adding content to provide greater UK and US curriculum coverage for subject offerings in addition to providing international sales support to grow US offerings globally.

Other operating income decreased 20.5% primarily due to exchange fluctuations. This income mainly comprises royalties receivable from sales in the USA by Edmentum of our own product and products to which we have contributed content. We continue to develop a significant amount of new content and new features for existing platforms.

As a result of the movements mentioned above, operating loss showed a loss of £4,068k.

Interest receivable and similar income has increased due to the AFR rate increase in the US on Loans and Edmentum trading balances.

We continue to finance our business primarily through cash flow from operations and through support of Edmentum.

Looking ahead, in addition to the opportunities for growth that exist for our product in international markets, we anticipate growth opportunities arising from the sales of other Edmentum products in international markets and have started to reconfigure go-to-market in the UK. We also anticipate continuing growth in royalties receivable on sales made in the USA by Edmentum of relevant products.

PRINCIPAL RISKS AND UNCERTAINTIES
Our principle risk is the exchange rate fluctuation against the US Dollar. The weakening of sterling against the dollar impacts loan balances and royalties receivable.


INTEREST RATE RISK
The company reviews its exposure to interest rates regularly and considers the benefit (or otherwise) of hedging against adverse interest rate movements as part of these reviews.

FOREIGN CURRENCY RISK
Foreign currency exposure resulting from group loans, trade with customers and suppliers abroad is mitigated by a hedging policy adopted by the company.

CREDIT RISK
Managing cashflow and credit risk is a priority of the company. All customers are subject to credit checks to reduce exposure to bad debts and to maintain cashflow to support the working capital required for the operations within the business.

ON BEHALF OF THE BOARD:





M E Trimarchi - Director


29 October 2024

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

REPORT OF THE DIRECTORS
for the year ended 31 January 2024


The directors present their report with the financial statements of the company and the group for the year ended 31 January 2024.

PRINCIPAL ACTIVITY
The group continues to be a leading provider of educational content and provides online educational software targeted at children aged 3 - 12 years. The product covers English, Maths and Science.

DIVIDENDS
No dividends will be distributed for the year ended 31 January 2024.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 February 2023 to the date of this report.

J A Candee
P Alphonse
R A Hamwee
M Lavelle
R Vig
J Jackson

Other changes in directors holding office are as follows:

F W Jalufka - resigned 1 January 2024
A S Duncan - appointed 3 April 2023
M E Trimarchi - appointed 23 August 2023

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

REPORT OF THE DIRECTORS
for the year ended 31 January 2024


AUDITORS
The auditors, Magma Audit LLP (part of the Dains Group), will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





M E Trimarchi - Director


29 October 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ARCHIPELAGO LEARNING HOLDINGS UK LIMITED


Opinion
We have audited the financial statements of Archipelago Learning Holdings UK Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 January 2024 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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).
_
In our opinion the financial statements:
-give a true and fair view of the state of the group's and of the parent company affairs as at 31 January 2024 and of the group's loss for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ARCHIPELAGO LEARNING HOLDINGS UK LIMITED


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

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

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company and industry, we identified the principal risks of non-compliance with laws and regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006 and tax legislation. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries and management bias in accounting estimates. Audit procedures performed included:

- Enquire with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
- Challenging assumptions made by management in their significant accounting estimates, in particular in relation to recognising revenue, debtor provisions and accruals;
- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations, journal entries crediting cash and journal entries with specific defined descriptions.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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 or intentional misrepresentations, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
ARCHIPELAGO LEARNING HOLDINGS UK LIMITED


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 a Report of the Auditors 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.




Luke Turner FCA FCCA (Senior Statutory Auditor)
for and on behalf of Magma Audit LLP (part of the Dains Group)
Chartered Accountants
Statutory Auditor
Unit 2, Charnwood Edge Business Park
Syston Road
Leicestershire
LE7 4UZ

29 October 2024

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

CONSOLIDATED
STATEMENT OF COMPREHENSIVE
INCOME
for the year ended 31 January 2024

2024 2023
Notes £    £   

TURNOVER 4 2,955,405 2,785,299

Cost of sales (1,364,226 ) (436,161 )
GROSS PROFIT 1,591,179 2,349,138

Administrative expenses (6,980,302 ) (4,604,772 )
(5,389,123 ) (2,255,634 )

Other operating income 5 1,320,954 1,660,999
OPERATING LOSS 7 (4,068,169 ) (594,635 )

Interest receivable and similar income 9 540,075 206,335
(3,528,094 ) (388,300 )

Interest payable and similar expenses 10 (343,837 ) (316,636 )
LOSS BEFORE TAXATION (3,871,931 ) (704,936 )

Tax on loss 11 1,906 (59,623 )
LOSS FOR THE FINANCIAL YEAR (3,870,025 ) (764,559 )

OTHER COMPREHENSIVE INCOME
Currency translation differences 428,961 (969,853 )
Income tax relating to other comprehensive
income

-

-
OTHER COMPREHENSIVE INCOME FOR
THE YEAR, NET OF INCOME TAX

428,961

(969,853

)
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR

(3,441,064

)

(1,734,412

)

Loss attributable to:
Owners of the parent (3,870,025 ) (764,559 )

Total comprehensive income attributable to:
Owners of the parent (3,441,064 ) (1,734,412 )

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

CONSOLIDATED BALANCE SHEET
31 January 2024

2024 2023
Notes £    £   
FIXED ASSETS
Intangible assets 14 4,988,149 5,751,391
Tangible assets 15 48,877 82,309
Investments 16 - -
5,037,026 5,833,700

CURRENT ASSETS
Debtors 17 15,522,785 14,643,230
Cash at bank and in hand 381,183 311,059
15,903,968 14,954,289
CREDITORS
Amounts falling due within one year 18 (18,962,113 ) (14,926,299 )
NET CURRENT (LIABILITIES)/ASSETS (3,058,145 ) 27,990
TOTAL ASSETS LESS CURRENT
LIABILITIES

1,978,881

5,861,690

CREDITORS
Amounts falling due after more than one
year

19

(1,896,299

)

(2,338,044

)

PROVISIONS FOR LIABILITIES 22 (16,700 ) (16,700 )
NET ASSETS 65,882 3,506,946

CAPITAL AND RESERVES
Called up share capital 23 180 180
Share premium 46,875,911 46,875,911
Retained earnings (46,810,209 ) (43,369,145 )
SHAREHOLDERS' FUNDS 65,882 3,506,946

The financial statements were approved by the Board of Directors and authorised for issue on 29 October 2024 and were signed on its behalf by:





M E Trimarchi - Director


ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

COMPANY BALANCE SHEET
31 January 2024

2024 2023
Notes £    £   
FIXED ASSETS
Intangible assets 14 - -
Tangible assets 15 - -
Investments 16 15,709,991 15,709,991
15,709,991 15,709,991

CREDITORS
Amounts falling due within one year 18 (17,772,647 ) (17,650,440 )
NET CURRENT LIABILITIES (17,772,647 ) (17,650,440 )
TOTAL ASSETS LESS CURRENT
LIABILITIES

(2,062,656

)

(1,940,449

)

CAPITAL AND RESERVES
Called up share capital 23 180 180
Share premium 46,875,911 46,875,911
Retained earnings (48,938,747 ) (48,816,540 )
SHAREHOLDERS' FUNDS (2,062,656 ) (1,940,449 )

Company's loss for the financial year (329,158 ) (429,739 )

The financial statements were approved by the Board of Directors and authorised for issue on 29 October 2024 and were signed on its behalf by:





M E Trimarchi - Director


ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 January 2024

Called up
share Retained Share Total
capital earnings premium equity
£    £    £    £   
Balance at 1 February 2022 180 (41,634,733 ) 46,875,911 5,241,358

Changes in equity
Total comprehensive income - (1,734,412 ) - (1,734,412 )
Balance at 31 January 2023 180 (43,369,145 ) 46,875,911 3,506,946

Changes in equity
Total comprehensive income - (3,441,064 ) - (3,441,064 )
Balance at 31 January 2024 180 (46,810,209 ) 46,875,911 65,882

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 January 2024

Called up
share Retained Share Total
capital earnings premium equity
£    £    £    £   
Balance at 1 February 2022 180 (47,163,034 ) 46,875,911 (286,943 )

Changes in equity
Total comprehensive income - (1,653,506 ) - (1,653,506 )
Balance at 31 January 2023 180 (48,816,540 ) 46,875,911 (1,940,449 )

Changes in equity
Total comprehensive income - (122,207 ) - (122,207 )
Balance at 31 January 2024 180 (48,938,747 ) 46,875,911 (2,062,656 )

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 January 2024

2024 2023
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 (853,734 ) 2,967,217
Interest paid (343,837 ) (316,636 )
Tax paid (86,024 ) (291,644 )
Net cash from operating activities (1,283,595 ) 2,358,937

Cash flows from investing activities
Purchase of tangible fixed assets (13,955 ) (66,551 )
Sale of tangible fixed assets 376 1,150
Interest received 540,075 206,335
Net cash from investing activities 526,496 140,934

(Decrease)/increase in cash and cash equivalents (757,099 ) 2,499,871
Cash and cash equivalents at beginning
of year

2

311,059

195,697
Effect of foreign exchange rate changes 827,223 (2,384,509 )
Cash and cash equivalents at end of year 2 381,183 311,059

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 January 2024


1. RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2024 2023
£    £   
Loss before taxation (3,871,931 ) (704,936 )
Depreciation charges 46,880 48,190
Loss/(profit) on disposal of fixed assets 131 (1,150 )
Foreign exchange gains/(losses) (398,262 ) 1,414,657
Amortisation charges 763,242 764,909
Finance costs 343,837 316,636
Finance income (540,075 ) (206,335 )
(3,656,178 ) 1,631,971
Increase in trade and other debtors (895,981 ) (735,576 )
Increase in trade and other creditors 3,698,425 2,070,822
Cash generated from operations (853,734 ) 2,967,217

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 January 2024
31/1/24 1/2/23
£    £   
Cash and cash equivalents 381,183 311,059
Year ended 31 January 2023
31/1/23 1/2/22
£    £   
Cash and cash equivalents 311,059 195,697


3. ANALYSIS OF CHANGES IN NET DEBT

At 1/2/23 Cash flow At 31/1/24
£    £    £   
Net cash
Cash at bank and in hand 311,059 70,124 381,183
311,059 70,124 381,183
Debt
Debts falling due within 1 year (12,223,967 ) (17,851 ) (12,241,818 )
(12,223,967 ) (17,851 ) (12,241,818 )
Total (11,912,908 ) 52,273 (11,860,635 )

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 January 2024


1. STATUTORY INFORMATION

Archipelago Learning Holdings UK Limited is a group, registered in England and Wales. Its registered office address and the registered number can be found on the company information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost 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 company's functional currency is US Dollars. The financial statements are presented in pound sterling due to the company being a UK company and owning a trading UK subsidiary. Amounts are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

Basis of consolidation
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

The consolidated financial statements incorporate those of Archipelago Learning Holdings UK Ltd and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using
the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 January 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Educationcity Limited has been included in the group financial statements using the purchase method of accounting. Accordingly, the group profit and loss account and statement of cash flows include the results and cash flows of Educationcity Limited.

Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group 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.

The validity of this assumption relies on the continued support of the US group companies. The group owed US group companies a total of £14,987,499 at 31 January 2024.

The UK group was owed £11,934,504 at 31 January 2024 and is deemed to be recoverable.

The directors have prepared forecasts that reflect the current trading expectations and these show that the UK group will be able to satisfy its financial commitments with ongoing support from the US group companies.

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


2. ACCOUNTING POLICIES - continued

Related party exemption
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Turnover
Turnover in the financial statements is recognised on the accruals basis and represents amounts receivable for goods and services net of VAT and discounts. The company's income comprises the sales of licenses for a period of 12 months and in some cases longer, invoiced at inception of the agreement. Income relating to the future periods is deferred based on the length of the license and released into the period to which it relates, usually on a monthly basis.

Other operating income includes royalties receivable. This relates to royalties received, or receivable, from fellow group companies selling the company's software.

Deferred income is disclosed separately in creditors in the financial statements.

Goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 20 years.

Goodwill is assessed for impairment when there are indicators of impairment and any impairment is charged to the profit and loss account. No reversals of impairment are recognised.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of three years.

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:

Land and buildings leasehold Over the term of the lease
Fixtures, fittings & equipment25% & 33% 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.

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.

Debtors
Basic financial assets, including trade and other debtors, are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment.


ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


2. ACCOUNTING POLICIES - continued
Cash and cash equivalents
Cash and cash equivalents are represented by cash in hand, deposits held at call with financial institutions, and other short-term highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

Creditors
Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related parties, 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. Such instruments are subsequently carried at amortised cost using the effective interest method, less any impairment.

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 group’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 taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.

Research and development
Research and development expenditure is written off to the profit and loss account in the year in which it is
incurred.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

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

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

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.

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the group’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.

Useful economic lives of tangible fixed assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. For the carrying amount of the property plant and equipment, and the tangible assets see accounting policy for the useful economic lives for each class of assets.

4. TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the group.

An analysis of turnover by geographical market is given below:

2024 2023
£    £   
United Kingdom 278,751 954,891
Europe 29,192 70,547
Rest of the World 2,647,462 1,759,861
2,955,405 2,785,299

5. OTHER OPERATING INCOME
2024 2023
£    £   
Royalties receivable 1,320,954 1,607,751
Sundry receipts - 53,248
1,320,954 1,660,999

6. EMPLOYEES AND DIRECTORS
2024 2023
£    £   
Wages and salaries 3,991,206 3,393,620
Social security costs 393,793 376,571
Other pension costs 174,016 141,836
4,559,015 3,912,027

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


6. EMPLOYEES AND DIRECTORS - continued

The average number of employees during the year was as follows:
2024 2023

Directors 8 7
Sales 25 31
Content 33 28
Other 16 16
82 82

2024 2023
£    £   
Directors' remuneration - -

7. OPERATING LOSS

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

2024 2023
£ £

Hire of plant and machinery 9,391 8,761
Other operating leases 107,733 94,511
Depreciation - owned assets 46,880 48,190
(Profit)/loss on disposal of fixed assets 131 (1,150 )
Goodwill amortisation 758,242 758,242
Computer software amortisation 5,000 6,667
Foreign exchange differences 398,262 (1,160,743 )
Royalties payable 1,364,226 436,161

8. AUDITORS' REMUNERATION

2024 2023
£ £
Fees payable to the company's auditors for the audit of the group's 14,775 13,750
financial statements

9. INTEREST RECEIVABLE AND SIMILAR INCOME
2024 2023
£    £   
Bank interest received 5,436 393
Interest received from group 534,639 205,942
540,075 206,335

10. INTEREST PAYABLE AND SIMILAR EXPENSES
2024 2023
£    £   
Interest payable 343,837 316,636

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


11. TAXATION

Analysis of the tax (credit)/charge
The tax (credit)/charge on the loss for the year was as follows:
2024 2023
£    £   
Current tax:
UK corporation tax - 49,823
Adjustment to prior years (1,906 ) -
Total current tax (1,906 ) 49,823

Deferred tax - 9,800
Tax on loss (1,906 ) 59,623

Reconciliation of total tax (credit)/charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2024 2023
£    £   
Loss before tax (3,871,931 ) (704,936 )
Loss multiplied by the standard rate of corporation tax in the UK of 19 %
(2023 - 19 %)

(735,667

)

(133,938

)

Effects of:
Expenses not deductible for tax purposes 189 527
Capital allowances in excess of depreciation - (8,461 )
Depreciation in excess of capital allowances 5,704 -
Deferred tax charge - 9,800
Other tax adjustments 40,774 48,327
Provision adjustment (9,687 ) (479 )
Profit on disposal 25 (219 )
Amortisation on assets not qualifying for tax allowances 187,198 144,066
Losses carried forward 509,558 -
Total tax (credit)/charge (1,906 ) 59,623

Tax effects relating to effects of other comprehensive income

2024
Gross Tax Net
£    £    £   
Currency translation differences 428,961 - 428,961

2023
Gross Tax Net
£    £    £   
Currency translation differences (969,853 ) - (969,853 )

The group has trading deficits of approximately £2,500,000 (2023: £NIL) and non-trade loan relationship deficits of £375,000 (2023: £48,000) to be carried forward to future years.

12. INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.


ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


13. RETIREMENT BENEFIT SCHEMES

Defined contribution schemes
2024 2023
£    £   
Charge to profit or loss in respect of defined contribution schemes 174,016 141,836

14. INTANGIBLE FIXED ASSETS

Group
Computer
Goodwill software Totals
£    £    £   
COST
At 1 February 2023
and 31 January 2024 15,164,837 20,000 15,184,837
AMORTISATION
At 1 February 2023 9,418,446 15,000 9,433,446
Amortisation for year 758,242 5,000 763,242
At 31 January 2024 10,176,688 20,000 10,196,688
NET BOOK VALUE
At 31 January 2024 4,988,149 - 4,988,149
At 31 January 2023 5,746,391 5,000 5,751,391

15. TANGIBLE FIXED ASSETS

Group
Land & Fixtures,
buildings fittings
leasehold & equipment Totals
£    £    £   
COST
At 1 February 2023 62,669 750,638 813,307
Additions - 13,955 13,955
Disposals (62,669 ) (593,715 ) (656,384 )
At 31 January 2024 - 170,878 170,878
DEPRECIATION
At 1 February 2023 62,669 668,329 730,998
Charge for year - 46,880 46,880
Eliminated on disposal (62,669 ) (593,208 ) (655,877 )
At 31 January 2024 - 122,001 122,001
NET BOOK VALUE
At 31 January 2024 - 48,877 48,877
At 31 January 2023 - 82,309 82,309

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


16. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
At 1 February 2023
and 31 January 2024 15,709,991
NET BOOK VALUE
At 31 January 2024 15,709,991
At 31 January 2023 15,709,991

The group or the company's investments at the Balance Sheet date in the share capital of companies include the following:

Subsidiary

Educationcity Limited
Registered office: Pera Business Park, Nottingham Road, Melton Mowbray, LE13 0PB
Nature of business: Provider of educational content
%
Class of shares: holding
Ordinary 100.00
2024 2023
£    £   
Aggregate capital and reserves 12,850,380 15,410,995
(Loss)/profit for the year (2,560,615 ) 677,336


17. DEBTORS

Group
2024 2023
£    £   
Amounts falling due within one year:
Trade debtors 3,126,580 1,714,119
Amounts owed by group undertakings 11,934,507 11,716,052
Other debtors 953 748
Corporation tax 118,828 30,898
VAT 8,299 -
Prepayments 120,190 141,732
15,309,357 13,603,549

Amounts falling due after more than one year:
Trade debtors 213,428 1,039,681

Aggregate amounts 15,522,785 14,643,230

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


18. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
2024 2023 2024 2023
£    £    £    £   
Other loans (see note 20) 12,241,818 12,223,967 17,765,447 17,643,240
Trade creditors 66,009 100,720 - -
Amounts owed to group undertakings 2,754,683 41,569 - -
Social security and other taxes 112,778 97,934 - -
VAT - 15,500 - -
Other creditors 4,244 8,831 - -
Deferred income 3,342,282 2,236,924 - -
Accrued expenses 440,299 200,854 7,200 7,200
18,962,113 14,926,299 17,772,647 17,650,440

19. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group
2024 2023
£    £   
Deferred income 1,896,299 2,338,044

20. LOANS

An analysis of the maturity of loans is given below:

Group Company
2024 2023 2024 2023
£    £    £    £   
Amounts falling due within one year or on demand:
Other loans 12,241,818 12,223,967 17,765,447 17,643,240

Included in the balance above is a loan from Archipelago International Holdings Inc. This is an intercompany loan with interest charged at the short term AFR rate compounded on a semi annual basis and is repayable on demand.

21. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Operating lease payments represent values payable by the group for certain of it properties, and vehicles. Leases are negotiated for various period between 2-3 years.

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:

2024 2023
£ £
Within one year - 92,000
Between one and five years - 15,333
- 107,333

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


22. PROVISIONS FOR LIABILITIES

Group
2024 2023
£    £   
Deferred tax 16,700 16,700

Group
Deferred
tax
£   
Balance at 1 February 2023 16,700
Balance at 31 January 2024 16,700

23. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2024 2023
value: £    £   
180 Ordinary 1 180 180

The Ordinary shares have full rights in the company with respect to voting, dividends and distributions.

24. RELATED PARTY DISCLOSURES


Transactions during the
year
Amounts due from/(to) at
year end
current year prior year current year prior year

Educationcity Inc.
Amounts due from them included in group
debtors


139,493

143,359

Archipelago Learning Inc.
Interest received 209,584 77,579
Amounts due from them included in group
debtors


4,566,458

4,477,086
Amounts due to them included in group creditors (2,754,682 ) (41,569 )

Edmentum Inc.
Royalties received 1,320,954 1,607,751
Royalties paid 1,344,890 416,934
Interest received 325,055 120,321
Amounts due from them included in group
debtors


7,082,352

6,949,405

Project Porsche Holdings Corporation
Amounts due from them included in group
debtors


146,201

146,201

Archipelago International Holdings
Loan payable included within other loans (12,241,817 ) (12,223,967 )
Interest paid 343,837 429,738


The amounts owed by group companies are charged interest at the market rate. No guarantees have been given or received.

During the year, a total of key management personnel compensation of £ 297,894 (2023 - £ 337,954 ) was paid.

ARCHIPELAGO LEARNING HOLDINGS UK LIMITED (REGISTERED NUMBER: 07264379)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
for the year ended 31 January 2024


25. ULTIMATE CONTROLLING PARTY

The immediate parent undertaking is Archipelago International Holdings, Inc. a company incorporated in the United States of America.

The ultimate parent undertaking at 31 January 2024 was Vistria Edmentum Holdings LLC a company incorporated in the United States of America.