REGISTERED NUMBER: 13487288 (England and Wales) |
Surepharm Topco Limited |
Group Strategic Report, |
Report of the Directors and |
Consolidated Financial Statements |
for the Year Ended 31 October 2023 |
REGISTERED NUMBER: 13487288 (England and Wales) |
Surepharm Topco Limited |
Group Strategic Report, |
Report of the Directors and |
Consolidated Financial Statements |
for the Year Ended 31 October 2023 |
Surepharm Topco Limited (Registered number: 13487288) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 October 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Consolidated Income Statement | 9 |
Consolidated Other Comprehensive Income | 10 |
Consolidated Balance Sheet | 11 |
Company Balance Sheet | 12 |
Consolidated Statement of Changes in Equity | 13 |
Company Statement of Changes in Equity | 14 |
Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Cash Flow Statement | 16 |
Notes to the Consolidated Financial Statements | 18 |
Surepharm Topco Limited |
Company Information |
for the Year Ended 31 October 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants and Statutory Auditors |
Sterling House |
97 Lichfield Street |
Tamworth |
Staffordshire |
B79 7QF |
Surepharm Topco Limited (Registered number: 13487288) |
Group Strategic Report |
for the Year Ended 31 October 2023 |
The directors present their strategic report of the company and the group for the year ended 31 October 2023. |
REVIEW OF BUSINESS |
Fair review of the business |
Group sales were c. £11.9 million for the period derived from its wholly owned trading entity Surepharm Services Limited. Trading in the year was adversely impacted due to a small number of customer rationalisation activities given changes in end-market demands. Cash inflows from operating activities are reported at approximately £2.5 million but these include one-off receipts associated with the acquisition of the group's subsidiaries. Excluding these one-off costs, group net cash outflow for the period was approximately £1.2 million. |
Principal risks and uncertainties |
The market outlook for the year to 31 October 2024 remains challenging but positive. Revenue is expected to increase, and with it investment in future growth increasing the cost base. Continuing inflationary pressures along with market price constraints still put pressure on margins but we are investing in strategic areas to maximise profit. |
The group is actively managing these issues and it will continue its strategy to broaden its customer offering, including with new dosage formats and expanded geographical reach across formulation and development, regulatory support analysis, and manufacture and packaging with the introduction of new products and customers being actively pursued on this basis. The Directors are confident that these initiatives are starting to offset the near-term challenges and therefore the outlook for the group remains positive |
ON BEHALF OF THE BOARD: |
Surepharm Topco Limited (Registered number: 13487288) |
Report of the Directors |
for the Year Ended 31 October 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 October 2023. |
DIVIDENDS |
No dividends will be distributed for the period ended 31 October 2023 in relation to the various classes of Ordinary shares. |
In relation to the preference shares, the following preference coupons have been declared: |
£ |
A Preference | 83,914 |
A1 Preference | (11,646 | ) |
B Preference | 68,667 |
140,667 |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 November 2022 to the date of this report. |
Other changes in directors holding office are as follows: |
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 ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
Surepharm Topco Limited (Registered number: 13487288) |
Report of the Directors |
for the Year Ended 31 October 2023 |
AUDITORS |
The auditors, Haines Watts Tamworth Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Surepharm Topco Limited |
Opinion |
We have audited the financial statements of Surepharm Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2023 which comprise the Consolidated Income Statement, Consolidated Other 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 October 2023 and of the group's loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion |
Emphasis of matter |
We draw attention to Note 2 of the financial statements which, in the light of the group's balance sheet position, outlines the directors' opinion around the continued adoption of the going concern basis for preparation of the group's financial statements. |
Our opinion is not modified in respect of this matter. |
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. |
Report of the Independent Auditors to the Members of |
Surepharm Topco Limited |
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. |
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. |
Report of the Independent Auditors to the Members of |
Surepharm Topco Limited |
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: |
Identifying and assessing potential risks related to irregularities |
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: |
- results of our enquiries of management about their own identification and assessment of the risks and irregularities |
- any matters we identified having obtained an understanding of the company policies and procedures relating to |
- identifying, evaluating and complying with laws and regulations and whether they are aware of any instances of |
non-compliance |
- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or |
alleged fraud |
- the internal controls set up to mitigate risks of fraud or non-compliance with laws and regulations |
- the matters discussed among the audit engagement team regarding how and where fraud might occur in the |
financial statements and any potential indicators of fraud. |
- obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those |
laws and regulations that had a direct effect on the financial statements, including UK Companies Act 2006, |
pensions and tax legislation |
- provisions of other laws and regulations that do not have a direct effect on the financial statements but |
compliance with which may be fundamental to the company's ability to operation or to avoid material penalty. |
As a result of performing the above, we did not identify any key audit matters related to the potential risk of fraud or non-compliance with laws and regulations. |
Audit response to risks identified |
Our procedures to respond to risks identified included the following: |
- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with |
provisions of relevant laws and regulations described as having a direct effect on the financial statements |
- enquiring of management concerning actual and potential legal action and claims |
carrying out analytical procedure to identify any unusual or unexpected relationships that may indicate risks of |
material misstatement due to fraud |
- reading minutes of meetings of those charged with governance -in addressing the risk of fraud through |
management override of controls, testing the appropriateness of journal entries and other adjustments; assessing |
whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating |
the business rationale of any significant transactions that are unusual or outside the normal course of business. |
- considering performance targets and their influence on efforts made by management to manage earnings |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. |
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 |
Surepharm Topco 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. |
for and on behalf of |
Chartered Accountants and Statutory Auditors |
Sterling House |
97 Lichfield Street |
Tamworth |
Staffordshire |
B79 7QF |
Surepharm Topco Limited (Registered number: 13487288) |
Consolidated Income Statement |
for the Year Ended 31 October 2023 |
Year Ended | Period |
31.10.23 | 1.7.21 to 31.10.22 |
Notes | £ | £ | £ | £ |
TURNOVER | 11,925,430 | 10,871,198 |
Cost of sales | 7,338,224 | 7,267,081 |
GROSS PROFIT | 4,587,206 | 3,604,117 |
Distribution costs | 202,509 | 137,448 |
Administrative expenses | 6,353,500 | 4,855,553 |
6,556,009 | 4,993,001 |
OPERATING LOSS | 4 | (1,968,803 | ) | (1,388,884 | ) |
Interest receivable and similar income | 45,317 | 5,371 |
(1,923,486 | ) | (1,383,513 | ) |
Interest payable and similar expenses | 5 | 1,443,699 | 901,410 |
LOSS BEFORE TAXATION | (3,367,185 | ) | (2,284,923 | ) |
Tax on loss | 6 | (330,034 | ) | 14,992 |
LOSS FOR THE FINANCIAL YEAR | ( |
) | ( |
) |
Loss attributable to: |
Owners of the parent | (3,037,151 | ) | (2,299,915 | ) |
Surepharm Topco Limited (Registered number: 13487288) |
Consolidated Other Comprehensive Income |
for the Year Ended 31 October 2023 |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
Notes | £ | £ |
LOSS FOR THE YEAR | (3,037,151 | ) | (2,299,915 | ) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(3,037,151 |
) |
(2,299,915 |
) |
Total comprehensive income attributable to: |
Owners of the parent | (3,037,151 | ) | (2,299,915 | ) |
Surepharm Topco Limited (Registered number: 13487288) |
Consolidated Balance Sheet |
31 October 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 | 4,103,924 | 4,599,052 |
Tangible assets | 10 | 1,372,772 | 1,408,625 |
Investments | 11 | - | - |
5,476,696 | 6,007,677 |
CURRENT ASSETS |
Stocks | 12 | 1,826,311 | 1,719,959 |
Debtors | 13 | 3,290,750 | 6,961,098 |
Cash at bank and in hand | 1,806,875 | 1,444,985 |
6,923,936 | 10,126,042 |
CREDITORS |
Amounts falling due within one year | 14 | 4,416,876 | 3,219,513 |
NET CURRENT ASSETS | 2,507,060 | 6,906,529 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
7,983,756 |
12,914,206 |
CREDITORS |
Amounts falling due after more than one year | 15 | (13,236,360 | ) | (14,752,721 | ) |
PROVISIONS FOR LIABILITIES | 19 | - | (236,072 | ) |
NET LIABILITIES | (5,252,604 | ) | (2,074,587 | ) |
CAPITAL AND RESERVES |
Called up share capital | 20 | 10,038 | 9,969 |
Share premium | 21 | 499,400 | 499,400 |
Retained earnings | 21 | (5,762,042 | ) | (2,583,956 | ) |
SHAREHOLDERS' FUNDS | (5,252,604 | ) | (2,074,587 | ) |
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: |
J E Kirk - Director |
Surepharm Topco Limited (Registered number: 13487288) |
Company Balance Sheet |
31 October 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 9 |
Tangible assets | 10 |
Investments | 11 |
CURRENT ASSETS |
Debtors | 13 |
CREDITORS |
Amounts falling due within one year | 14 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 15 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Share premium | 21 |
Retained earnings | 21 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS |
Company's loss for the financial year | (52,959 | ) | (30,625 | ) |
The financial statements were approved by the Board of Directors and authorised for issue on |
Surepharm Topco Limited (Registered number: 13487288) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 October 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Changes in equity |
Issue of share capital | 9,969 | - | 499,400 | 509,369 |
Dividends & preference coupon | - | (284,041 | ) | - | (284,041 | ) |
Total comprehensive income | - | (2,299,915 | ) | - | (2,299,915 | ) |
Balance at 31 October 2022 | 9,969 | (2,583,956 | ) | 499,400 | (2,074,587 | ) |
Changes in equity |
Issue of share capital | 69 | - | - | 69 |
Dividends & preference coupon | - | (140,935 | ) | - | (140,935 | ) |
Total comprehensive income | - | (3,037,151 | ) | - | (3,037,151 | ) |
Balance at 31 October 2023 | 10,038 | (5,762,042 | ) | 499,400 | (5,252,604 | ) |
Surepharm Topco Limited (Registered number: 13487288) |
Company Statement of Changes in Equity |
for the Year Ended 31 October 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Changes in equity |
Issue of share capital | - |
Dividends & preference coupon | - | ( |
) | - | ( |
) |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 October 2022 | ( |
) |
Changes in equity |
Issue of share capital | - |
Dividends & preference coupon | - | ( |
) | - | ( |
) |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 October 2023 | ( |
) |
Surepharm Topco Limited (Registered number: 13487288) |
Consolidated Cash Flow Statement |
for the Year Ended 31 October 2023 |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 3,762,686 | (5,682,957 | ) |
Interest paid | (1,438,933 | ) | (895,678 | ) |
Interest element of hire purchase payments paid |
(4,766 |
) |
(5,732 |
) |
Tax paid | 138,703 | (299,703 | ) |
Net cash from operating activities | 2,457,690 | (6,884,070 | ) |
Cash flows from investing activities |
Purchase of intangible fixed assets | (2,505 | ) | (4,971,948 | ) |
Purchase of tangible fixed assets | (239,469 | ) | (1,810,793 | ) |
Interest received | 45,317 | 5,371 |
Net cash from investing activities | (196,657 | ) | (6,777,370 | ) |
Cash flows from financing activities |
New loans in year | 500,000 | 14,881,097 |
Loan repayments in year | (2,218,561 | ) | - |
Capital repayments in year | (22,929 | ) | - |
Ordinary share issue | 69 | 1,040 |
Preference share issue | - | 508,329 |
Preference share coupon | (157,722 | ) | (284,041 | ) |
Net cash from financing activities | (1,899,143 | ) | 15,106,425 |
Increase in cash and cash equivalents | 361,890 | 1,444,985 |
Cash and cash equivalents at beginning of year |
2 |
1,444,985 |
- |
Cash and cash equivalents at end of year | 2 | 1,806,875 | 1,444,985 |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 31 October 2023 |
1. | RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
£ | £ |
Loss before taxation | (3,367,185 | ) | (2,284,923 | ) |
Depreciation charges | 930,677 | 775,066 |
Finance costs | 1,443,699 | 901,410 |
Finance income | (45,317 | ) | (5,371 | ) |
(1,038,126 | ) | (613,818 | ) |
Increase in stocks | (106,352 | ) | (1,719,959 | ) |
Decrease/(increase) in trade and other debtors | 3,642,394 | (6,440,317 | ) |
Increase in trade and other creditors | 1,264,770 | 3,091,137 |
Cash generated from operations | 3,762,686 | (5,682,957 | ) |
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 October 2023 |
31.10.23 | 1.11.22 |
£ | £ |
Cash and cash equivalents | 1,806,875 | 1,444,985 |
Period ended 31 October 2022 |
31.10.22 | 1.7.21 |
£ | £ |
Cash and cash equivalents | 1,444,985 | - |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 31 October 2023 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
Other |
non-cash |
At 1.11.22 | Cash flow | changes | At 31.10.23 |
£ | £ | £ | £ |
Net cash |
Cash at bank |
and in hand | 1,444,985 | 361,890 | 1,806,875 |
1,444,985 | 361,890 | 1,806,875 |
Debt |
Finance leases | - | 22,929 | - | (134,793 | ) |
Debts falling due |
within 1 year | (412,417 | ) | (28,797 | ) | - | (441,214 | ) |
Debts falling due |
after 1 year | (14,468,680 | ) | 1,747,358 | - | (12,721,322 | ) |
(14,881,097 | ) | 1,741,490 | - | (13,297,329 | ) |
Total | (13,436,112 | ) | 2,103,380 | - | (11,490,454 | ) |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 October 2023 |
1. | STATUTORY INFORMATION |
Surepharm Topco Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Going concern |
The group had a challenging year and reports a pre tax loss of £3.4m (£2.3 million excluding interest on shareholder debt) together with a consolidated balance sheet position showing negative shareholder's funds of £5.3m, (positive £5.7m excluding shareholder debt). |
The group is actively managing these issues and it will continue its strategy to broaden its customer offering, including with new dosage formats and expanded geographical reach across formulation and development, regulatory support analysis, and manufacture and packaging with the introduction of new products and customers being actively pursued on this basis. The Directors are confident that these initiatives are starting to offset the near-term challenges and therefore the outlook for the group remains positive in the medium-term. |
The group refinanced during the summer of 2024 and has also obtained additional loan and equity capital from the shareholders, including in October 2024. The Directors believe this capital will provide sufficient headroom for the group to continue to trade as a going concern at least for the next 12 months. The recent capital injection also demonstrates the ongoing support of the shareholders, providing further confidence in the group's ability to trade as a going concern. |
The directors therefore continue to adopt the going concern basis in preparing the financial statements which assumes the group will continue to operate for the foreseeable future. The financial statements do not include any adjustments that would result from this basis of preparation being inappropriate. Should the going concern basis cease to be appropriate, adjustments might be required to write down assets to recoverable amounts, reclassify fixed assets and long-term liabilities as current and recognise additional liabilities. |
Basis of consolidation |
Companies are only brought into the consolidated, group, accounts from the point at which they are acquired. Any pre-acquisition trading, profits and reserves are excluded from the consolidation. Note 11 provides further information regarding the investment timings and group companies. |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
Significant judgements and estimates |
The group makes estimates and assumptions concerning the future. Management are also required to |
exercise judgment in the process of applying the group's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of |
future events that are believed to be reasonable under the circumstances. |
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying |
amounts of assets and liabilities within the next financial year are addressed below: |
In preparing these financial statements, the directors have made the following judgments: |
- A provision is recognised when the company has a present legal or constructive obligation as a result of a |
past event for which it is probable that an outflow of resources will be required to settle the obligation and the |
amount can be reliably estimated. If the effect is material, provisions are determined by discounting the |
expected future cash flow at a rate that reflects the time value of money and the risks specific to the liability; |
- Whether a present obligation is probable or not requires judgment. The nature and type of risks for these |
provisions differ and management’s judgment is applied regarding the nature and extent of obligations in |
deciding if an outflow of resources is probable or not; |
- Sales ledger debt provisions. Management review debts on a case by case basis to highlight deviation from |
terms and therefore possible provision requirement; |
- Slow moving/obsolete stock provisions. Management review stock reports on a regular basis and provision is made on any items considered to not be in a saleable condition or, similarly, obsolete; |
- Depreciation and residual values. The Directors have reviewed the asset lives and associated residual values of all fixed asset classes, and in particular, the useful economic life and residual fixtures and fittings, and have concluded that asset lives are appropriate. The actual lives of the assets are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Goodwill |
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates. |
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. |
Tangible fixed assets |
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life: |
Short leasehold | over term of the lease |
Plant and machinery | 15% straight line |
Punches and dies (plant and machinery) | 33% straight line |
Fixtures and fittings | 15% reducing balance |
Computer equipment | 25% straight line |
Motor vehicle | 33% straight line |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition. |
Financial instruments |
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
Debtors |
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are |
measured initially at fair value, net of transaction costs, and are measured subsequently at |
amortised cost using the effective interest method, less any impairment. |
Creditors |
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank |
loans, are measured initially at fair value, net of transaction costs, and are measured subsequently |
at amortised cost using the effective interest method. |
Cash and cash equivalents |
Cash is represented by cash in hand and deposits with financial institutions repayable without |
penalty on notice of not more than 24 hours. Cash equivalents are 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. |
Preference shares |
Preference shares are treated as share capital in the financial statements. The instrument is recognised at the transaction price, including any related costs. Subsequent measurement is at amortised cost using the effective interest method. |
The interest expense on the liability element will be calculated using the effective interest method and charged to profit or loss each year. Any unpaid amounts will sit within liabilities. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
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. |
Hire purchase and leasing commitments |
Rentals paid 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. |
3. | EMPLOYEES AND DIRECTORS |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
£ | £ |
Wages and salaries | 4,277,386 | 3,377,199 |
Social security costs | 415,613 | 313,386 |
Other pension costs | 164,777 | 138,056 |
4,857,776 | 3,828,641 |
The average number of employees during the year was as follows: |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
All staff |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
£ | £ |
Directors' remuneration | 284,400 | 168,976 |
Information regarding the highest paid director for the year ended 31 October 2023 is as follows: |
Year Ended |
31.10.23 |
£ |
Emoluments etc | 162,000 |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
4. | OPERATING LOSS |
The operating loss is stated after charging: |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
£ | £ |
Hire of plant and machinery | 43,212 | 43,534 |
Depreciation - owned assets | 433,044 | 402,168 |
Goodwill amortisation | 497,633 | 372,896 |
Auditors' remuneration | 16,620 | 20,000 |
Foreign exchange differences | 27,753 | 17,252 |
5. | INTEREST PAYABLE AND SIMILAR EXPENSES |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
£ | £ |
Bank interest | - | 4,846 |
Bank loan interest | - | 31,313 |
Senior debt interest | 307,782 | 270,512 |
Loan | 1,131,151 | 589,007 |
Hire purchase | 4,766 | 5,732 |
1,443,699 | 901,410 |
6. | TAXATION |
Analysis of the tax (credit)/charge |
The tax (credit)/charge on the loss for the year was as follows: |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
£ | £ |
Current tax: |
Prior year tax adjustment | - | 18,920 |
Deferred tax | (330,034 | ) | (3,928 | ) |
Tax on loss | (330,034 | ) | 14,992 |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
6. | TAXATION - continued |
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: |
Period |
1.7.21 |
Year Ended | to |
31.10.23 | 31.10.22 |
£ | £ |
Loss before tax | (3,367,185 | ) | (2,284,923 | ) |
Loss multiplied by the standard rate of corporation tax in the UK of 25 % (2022 - 19 %) |
(841,796 |
) |
(434,135 |
) |
Effects of: |
Capital allowances in excess of depreciation | - | (8,883 | ) |
Depreciation in excess of capital allowances | 101,912 | - |
Losses c/fwd | 395,176 | 312,059 |
Deferred tax movement | 14,674 | (3,928 | ) |
Pre-acquisition and FV | - | 149,879 |
Total tax (credit)/charge | (330,034 | ) | 14,992 |
7. | INDIVIDUAL INCOME STATEMENT |
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. |
8. | DIVIDENDS & PREFERENCE COUPON |
No dividends have been declared in relation to the various classes of Ordinary shares. |
In relation to the preference shares, the following preference coupons have been declared: |
£ |
A Preference | 83,914 |
A1 Preference | (11,646 | ) |
B Preference | 68,667 |
140,667 |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
9. | INTANGIBLE FIXED ASSETS |
Group |
Goodwill |
£ |
COST |
At 1 November 2022 | 4,971,948 |
Additions | 2,505 |
At 31 October 2023 | 4,974,453 |
AMORTISATION |
At 1 November 2022 | 372,896 |
Amortisation for year | 497,633 |
At 31 October 2023 | 870,529 |
NET BOOK VALUE |
At 31 October 2023 | 4,103,924 |
At 31 October 2022 | 4,599,052 |
10. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
Short | Plant and | and | Motor |
leasehold | machinery | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 November 2022 | 5 | 1,325,660 | 484,069 | 1,059 | 1,810,793 |
Additions | - | 293,248 | 103,943 | - | 397,191 |
At 31 October 2023 | 5 | 1,618,908 | 588,012 | 1,059 | 2,207,984 |
DEPRECIATION |
At 1 November 2022 | 2 | 319,485 | 81,622 | 1,059 | 402,168 |
Charge for year | 3 | 303,513 | 129,528 | - | 433,044 |
At 31 October 2023 | 5 | 622,998 | 211,150 | 1,059 | 835,212 |
NET BOOK VALUE |
At 31 October 2023 | - | 995,910 | 376,862 | - | 1,372,772 |
At 31 October 2022 | 3 | 1,006,175 | 402,447 | - | 1,408,625 |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
11. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 November 2022 |
and 31 October 2023 |
NET BOOK VALUE |
At 31 October 2023 |
At 31 October 2022 |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiary |
Registered office: United Kingdom |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves | ( |
) | ( |
) |
Loss for the year/period | ( |
) | ( |
) |
Details of the company's subsidiaries at 31 October 2022 are as follows: |
Name of undertaking |
Registered office |
Nature of business |
Class of shares held |
% held direct |
% held indirect |
Surepharm Midco Limited | UK | Intermediate holding company | Ordinary | 100.00 |
Surepharm Bidco Limited | UK | Intermediate holding company | Ordinary | 100.00 |
Centaur Healthcare Limited | UK | Intermediate holding company | Ordinary | 100.00 |
Surepharm Services Limited |
UK |
Manufacturing of healthcare products |
Ordinary |
100.00 |
Registered office addresses: |
Unit 2b Bretby Business Park, Bretby, Burton-On-Trent, Staffordshire, DE15 0YZ |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
12. | STOCKS |
Group |
2023 | 2022 |
£ | £ |
Stocks | 1,498,048 | 1,489,988 |
Work-in-progress | 328,263 | 229,971 |
1,826,311 | 1,719,959 |
13. | DEBTORS |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Amounts falling due within one year: |
Trade debtors | 2,703,666 | 2,820,690 |
Amounts owed by group undertakings | - | - |
Other debtors | 20,256 | 3,650,010 |
Tax | - | 138,703 |
VAT | - | - |
Deferred tax asset | 93,962 | - | - | - |
Prepayments | 363,550 | 202,628 |
3,181,434 | 6,812,031 |
Amounts falling due after more than one year: |
Other debtors | 109,316 | 149,067 |
Aggregate amounts | 3,290,750 | 6,961,098 |
Deferred tax asset |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Deferred tax | 93,962 | - | - | - |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Other loans (see note 16) | 441,214 | 412,417 |
Hire purchase contracts (see note 17) | 44,731 | - |
Trade creditors | 1,850,016 | 1,441,841 |
Amounts owed to group undertakings | - | - |
Social security and other taxes | 112,541 | 104,647 |
VAT | 396,828 | 144,077 | - | - |
Other creditors | 1,059,466 | 502,006 |
Wages control | 46,957 | 23,658 | - | - |
Accruals and deferred income | 465,123 | 590,867 |
4,416,876 | 3,219,513 |
15. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Other loans (see note 16) | 12,721,322 | 14,468,680 |
Hire purchase contracts (see note 17) | 90,062 | - |
Other creditors | 424,976 | 284,041 | 424,976 | 284,041 |
13,236,360 | 14,752,721 |
16. | LOANS |
An analysis of the maturity of loans is given below: |
Group |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on | demand: |
Other loans | 441,214 | 412,417 |
Amounts falling due between one and two | years: |
Other loans - 1-2 years | 472,021 | 441,214 |
Amounts falling due between two and five | years: |
Other loans - 2-5 years | 12,249,301 | 14,027,466 |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
17. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Gross obligations repayable: |
Within one year | 51,205 | - |
Between one and five years | 103,456 | - |
154,661 | - |
Finance charges repayable: |
Within one year | 6,474 | - |
Between one and five years | 13,394 | - |
19,868 | - |
Net obligations repayable: |
Within one year | 44,731 | - |
Between one and five years | 90,062 | - |
134,793 | - |
18. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group |
2023 | 2022 |
£ | £ |
Other loans | 13,162,536 | 14,881,097 |
Hire purchase contracts | 134,793 | - |
13,297,329 | 14,881,097 |
Loans are part of a group financial arrangement over which there are composite guarantees and debentures. This includes charges over the assets of the group, both current and future. |
Of this debt, the majority (£10,571,324; 2022 - £8,979,925) is due to shareholders, as opposed to external finance providers. |
Hire purchase liabilities are secured by way of a charge over the assets to which they relate. |
19. | PROVISIONS FOR LIABILITIES |
Group |
2023 | 2022 |
£ | £ |
Deferred tax | - | 236,072 |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
19. | PROVISIONS FOR LIABILITIES - continued |
Group |
Deferred |
tax |
£ |
Balance at 1 November 2022 | 236,072 |
Credit to Income Statement during year | (330,034 | ) |
Balance at 31 October 2023 | (93,962 | ) |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal value: | £ |
431,083 | A Ordinary | £0.001 | 431 |
408,917 | A1 Ordinary | £0.001 | 409 |
89,680 | A2 Ordinary | £0.001 | 90 |
110,000 | B Ordinary | £0.001 | 110 |
68,750 | C Ordinary | £0.001 | 69 |
4,325,803 | A Preference | £0.001 | 4,326 |
4,103,358 | A1 Preference | £0.001 | 4,103 |
499,900 | B Preference | £0.001 | 500 |
10,038 |
The various classes of ordinary shares retain full voting and distribution rights. |
The various classes of preference shares do not carry any voting rights but do have distribution rights attached. |
The 68,750 C Ordinary shares were issued at par value on 28 September 2023. |
Full details of the rights for each class of share are set out in the company's Articles of Association. |
21. | RESERVES |
Group |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 November 2022 | (2,583,956 | ) | 499,400 | (2,084,556 | ) |
Deficit for the year | (3,037,151 | ) | (3,037,151 | ) |
Dividends & preference coupon | (140,935 | ) | (140,935 | ) |
At 31 October 2023 | (5,762,042 | ) | 499,400 | (5,262,642 | ) |
Surepharm Topco Limited (Registered number: 13487288) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 October 2023 |
21. | RESERVES - continued |
Company |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 November 2022 | ( |
) | 184,734 |
Deficit for the year | ( |
) | ( |
) |
Dividends & preference coupon | ( |
) | ( |
) |
At 31 October 2023 | ( |
) | (9,160 | ) |
22. | ULTIMATE CONTROLLING PARTY |
There is no single controlling party. |