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REGISTERED NUMBER: 08962843 (England and Wales)














Group Strategic Report,

Report of the Directors and

Consolidated Financial Statements

for the Year Ended 31 May 2024

for

RAZORBLUE GROUP LTD

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)






Contents of the Consolidated Financial Statements
for the Year Ended 31 May 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 9

Consolidated Balance Sheet 10

Company Balance Sheet 11

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


RAZORBLUE GROUP LTD

Company Information
for the Year Ended 31 May 2024







Directors: D J Kitchen
R V Kitchen
S P Coultas





Secretary: V Bauer





Registered office: Admiralty House
Fudan Way
Thornaby
Stockton-on-Tees
TS17 6EN





Registered number: 08962843 (England and Wales)





Auditors: Armstrong Watson Audit Limited
1 Strawberry Lane
Newcastle Upon Tyne
NE1 4BX

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Group Strategic Report
for the Year Ended 31 May 2024

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

The principal activity of the group in the year under review is the provision of IT Managed Services, Cloud, Connectivity, Business Applications and Cyber Security solutions.

Review of business
Despite a challenging economic environment, the group has recorded underlying revenue growth of 19% to £18 million in the year ended 31 May 2024.

Annualised Recurring Revenue (ARR) remained robust at 71% achieved through continued new client wins, strong client retention aided by the group's client centric approach.

Gross profit margin has increased to £5 million in the year ended 31 May 2024, from £4 million in the year ended 31 May 2023.

The group is pleased to report that adjusted EBITDA grew 42% to £1 million. This follows a period of continued inflationary cost headwinds and investment in numerous strategic initiatives including proprietary platforms, strategic infrastructure, cyber security, and security operations centre (SOC) whilst also making several key strategic appointments across the commercial, compliance, legal and people departments to facilitate further future growth.

A summary of the group's financial performance and position for the current and previous financial year is as follows:

Financial performance 2024 2023
Turnover (£'000) 17,705 14,964
Gross profit (£'000) 5,007 4,034
EBITDA 1,001 705*
*2023 result adjusted for exceptional items

Financial position 2024 2023
Cash at bank (£'000) 1,804 1,431
Net assets (£'000) 1,577 1,281

Principal risks and uncertainties
The group has an established and structured approach to risk management, overseen by the board. The following risks could have a material impact on the company's performance:
UK Economic Climate - demand for the group's services will fluctuate depending on market stability. The group's exposure to risk is mitigated by the critical nature of the services it provides, and the recurring nature of its contracts.
Skill Shortage - the group's financial performance has already been affected by the increasing cost of skills due to the global shortage, whilst the group has put in place measures to train its own skilled professionals, the risk is likely to continue to exist for several years to come.
Credit Risk - the group manages its credit risk carefully using credit reference agencies and diversification of clients and industry sectors; however, this is likely to remain a risk during a period of economic uncertainty.

Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

On behalf of the board:





D J Kitchen - Director


22 January 2025

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Report of the Directors
for the Year Ended 31 May 2024

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

Principal activity
The principal activity of the group in the year under review is the provision of IT Managed Services, Cloud, Connectivity, Business Applications and Cyber Security solutions.

Dividends
The total distribution of dividends for the year ended 31 May 2024 will be £300,000.

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

D J Kitchen
R V Kitchen
S P Coultas

Other changes in directors holding office are as follows:

A Timothy - resigned 1 April 2024
D Raper - resigned 31 July 2023
N Warren - appointed 31 July 2023 - resigned 25 December 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.

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Report of the Directors
for the Year Ended 31 May 2024


Auditors
The auditors, Armstrong Watson Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:





D J Kitchen - Director


22 January 2025

Report of the Independent Auditors to the Members of
Razorblue Group Ltd

Opinion
We have audited the financial statements of Razorblue Group Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2024 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated Statement of Cash Flows, the Consolidated and Company Statement of Changes of Equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the group's and of the parent company affairs as at 31 May 2024 and of the group's profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor 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 and 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 other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of 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
Razorblue Group Ltd


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 their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept 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 directors' responsibilities statement [set out on page 3], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group 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
Razorblue Group Ltd


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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
- the engagement partner ensured that the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
- we identified the laws and regulations applicable to the company through discussions with directors and other
management and review of appropriate industry knowledge;
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of
management; and
- identified laws and regulations were communicated within the audit team regularly and the team remained alert to
instance of non-compliance throughout the audit.

We assessed the susceptibility of the Company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by;
- making enquires of management as to where they considered there was susceptibility to fraud, their knowledge of
actual, suspected and alleged fraud; and
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we;
- performed analytical procedures as a risk assessment tool to identify any unusual or unexpected relationships;
- tested journal entries to identify unusual transactions;
- tested the designed and implementation of key controls over deferred income on a sample basis;
- reviewed the application of accounting policies with focus on those with heightened estimation uncertainty;
- review goodwill and valuation of investments.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures to which included, but were not limited to;
- agreeing financial statement disclosures to underlying supporting documentation, and;
- enquiring of management as to actual and potential litigation claims.

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
Razorblue Group Ltd


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.




Simon Turner (Senior Statutory Auditor)
for and on behalf of Armstrong Watson Audit Limited
1 Strawberry Lane
Newcastle Upon Tyne
NE1 4BX

22 January 2025

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Consolidated
Statement of Comprehensive
Income
for the Year Ended 31 May 2024

31/5/24 31/5/23
Notes £    £   

Turnover 17,704,999 14,963,978

Cost of sales 12,697,677 10,929,592
Gross profit 5,007,322 4,034,386

Administrative expenses 4,599,304 3,748,385
408,018 286,001

Other operating income 15,735 4,699
Gain/loss on revaluation of intangible assets (22,093 ) (33,943 )
Operating profit 4 401,660 256,757

Interest receivable and similar income 7,175 10,529
408,835 267,286

Interest payable and similar expenses 5 132,667 117,011
Profit before taxation 276,168 150,275

Tax on profit 6 (127,526 ) (5,642 )
Profit for the financial year 403,694 155,917

Other comprehensive income
Revaluation of intangible assets 16,570 25,457
Transfer to revaluation reserve (16,570 ) (25,457 )
Income tax relating to components of other
comprehensive income

-

-
Other comprehensive income for the year,
net of income tax

-

-
Total comprehensive income for the year 403,694 155,917

Profit attributable to:
Owners of the parent 403,694 155,917

Total comprehensive income attributable to:
Owners of the parent 403,728 155,917
Non-controlling interests (34 ) -
403,694 155,917

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Consolidated Balance Sheet
31 May 2024

31/5/24 31/5/23
Notes £    £    £    £   
Fixed assets
Intangible assets 9 1,090,097 1,075,774
Tangible assets 10 1,554,030 1,263,195
Investments 11 - -
2,644,127 2,338,969

Current assets
Stocks 12 32,705 50,481
Debtors 13 2,647,249 2,484,911
Cash at bank and in hand 1,803,864 1,430,557
4,483,818 3,965,949
Creditors
Amounts falling due within one year 14 4,496,906 3,565,040
Net current (liabilities)/assets (13,088 ) 400,909
Total assets less current liabilities 2,631,039 2,739,878

Creditors
Amounts falling due after more than one
year

15

(925,729

)

(1,187,857

)

Provisions for liabilities 19 (128,231 ) (271,398 )
Net assets 1,577,079 1,280,623

Capital and reserves
Called up share capital 20 1,170 1,110
Share premium 21 223,976 31,240
Revaluation reserve 21 68,271 84,841
Retained earnings 21 1,283,662 1,163,398
Shareholders' funds 1,577,079 1,280,589

Non-controlling interests - 34
Total equity 1,577,079 1,280,623

The financial statements were approved by the Board of Directors and authorised for issue on 22 January 2025 and were signed on its behalf by:





D J Kitchen - Director


RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Company Balance Sheet
31 May 2024

31/5/24 31/5/23
Notes £    £    £    £   
Fixed assets
Intangible assets 9 28,940 29,141
Tangible assets 10 336,553 379,352
Investments 11 1,896,863 1,738,083
2,262,356 2,146,576

Current assets
Stocks 12 - 699
Debtors 13 1,175,965 835,244
Cash at bank and in hand 335,805 172,913
1,511,770 1,008,856
Creditors
Amounts falling due within one year 14 2,108,822 1,224,750
Net current liabilities (597,052 ) (215,894 )
Total assets less current liabilities 1,665,304 1,930,682

Creditors
Amounts falling due after more than one
year

15

925,729

1,187,857
Net assets 739,575 742,825

Capital and reserves
Called up share capital 20 1,170 1,110
Share premium 21 223,976 31,240
Retained earnings 21 514,429 710,475
Shareholders' funds 739,575 742,825

Company's profit for the financial year 103,954 298,845

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Company Balance Sheet - continued
31 May 2024


The financial statements were approved by the Board of Directors and authorised for issue on 22 January 2025 and were signed on its behalf by:





D J Kitchen - Director


RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Consolidated Statement of Changes in Equity
for the Year Ended 31 May 2024

Called up
share Retained Share
capital earnings premium
£    £    £   
Balance at 1 June 2022 1,110 1,121,380 31,240

Changes in equity
Dividends - (139,356 ) -
Total comprehensive income - 181,374 -
Balance at 31 May 2023 1,110 1,163,398 31,240

Changes in equity
Issue of share capital 60 - 192,736
Dividends - (300,000 ) -
Total comprehensive income - 420,264 -
Balance at 31 May 2024 1,170 1,283,662 223,976
Revaluation Non-controlling Total
reserve Total interests equity
£    £    £    £   
Balance at 1 June 2022 110,298 1,264,028 34 1,264,062

Changes in equity
Dividends - (139,356 ) - (139,356 )
Total comprehensive income (25,457 ) 155,917 - 155,917
Balance at 31 May 2023 84,841 1,280,589 34 1,280,623

Changes in equity
Issue of share capital - 192,796 - 192,796
Dividends - (300,000 ) - (300,000 )
Total comprehensive income (16,570 ) 403,694 (34 ) 403,660
Balance at 31 May 2024 68,271 1,577,079 - 1,577,079

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Company Statement of Changes in Equity
for the Year Ended 31 May 2024

Called up
share Retained Share Total
capital earnings premium equity
£    £    £    £   
Balance at 1 June 2022 1,110 550,986 31,240 583,336

Changes in equity
Dividends - (139,356 ) - (139,356 )
Total comprehensive income - 298,845 - 298,845
Balance at 31 May 2023 1,110 710,475 31,240 742,825

Changes in equity
Issue of share capital 60 - 192,736 192,796
Dividends - (300,000 ) - (300,000 )
Total comprehensive income - 103,954 - 103,954
Balance at 31 May 2024 1,170 514,429 223,976 739,575

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Consolidated Cash Flow Statement
for the Year Ended 31 May 2024

31/5/24 31/5/23
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 1,681,951 820,565
Interest paid (121,303 ) (117,011 )
Interest element of hire purchase and finance
lease rental payments paid

(11,364

)

-
Tax paid - 56,311
Net cash from operating activities 1,549,284 759,865

Cash flows from investing activities
Purchase of intangible fixed assets (15,384 ) (27,638 )
Purchase of tangible fixed assets (635,058 ) (518,536 )
Sale of tangible fixed assets 9,695 41,816
Interest received 7,175 10,529
Net cash from investing activities (633,572 ) (493,829 )

Cash flows from financing activities
Loan repayments in year (246,600 ) (246,600 )
Capital repayments in year (29,700 ) (42,085 )
Amount withdrawn by directors (121 ) 121
Share issue 34,016 -
Equity dividends paid (300,000 ) (139,356 )
Net cash from financing activities (542,405 ) (427,920 )

Increase/(decrease) in cash and cash equivalents 373,307 (161,884 )
Cash and cash equivalents at beginning of
year

2

1,430,557

1,592,441

Cash and cash equivalents at end of year 2 1,803,864 1,430,557

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Cash Flow Statement
for the Year Ended 31 May 2024

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

31/5/24 31/5/23
£    £   
Profit before taxation 276,168 150,275
Depreciation charges 500,216 430,547
Loss on disposal of fixed assets 1,599 17,944
Loss on revaluation of fixed assets 22,093 -
Finance costs 132,667 117,011
Finance income (7,175 ) (10,529 )
925,568 705,248
Decrease/(increase) in stocks 17,776 (36,261 )
Increase in trade and other debtors (177,980 ) (363,731 )
Increase in trade and other creditors 916,587 515,309
Cash generated from operations 1,681,951 820,565

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 May 2024
31/5/24 1/6/23
£    £   
Cash and cash equivalents 1,803,864 1,430,557
Year ended 31 May 2023
31/5/23 1/6/22
£    £   
Cash and cash equivalents 1,430,557 1,592,441


RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Cash Flow Statement
for the Year Ended 31 May 2024

3. ANALYSIS OF CHANGES IN NET (DEBT)/FUNDS

Other
non-cash
At 1/6/23 Cash flow changes At 31/5/24
£    £    £    £   
Net cash
Cash at bank
and in hand 1,430,557 373,307 1,803,864
1,430,557 373,307 1,803,864
Debt
Hire purchase and
finance leases (63,783 ) 29,700 (29,572 ) (63,655 )
Debts falling due
within 1 year (246,600 ) - - (246,600 )
Debts falling due
after 1 year (1,151,300 ) 246,600 - (904,700 )
(1,461,683 ) 276,300 (29,572 ) (1,214,955 )
Total (31,126 ) 649,607 (29,572 ) 588,909

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements
for the Year Ended 31 May 2024

1. STATUTORY INFORMATION

Razorblue Group Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


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 as modified by the revaluation of certain assets.

The financial statements have been prepared under the going concern basis of accounting.

Critical accounting judgements and key sources of estimation uncertainty
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent form 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.

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

The policies adopted for the recognition of turnover are as follows:

Sale of goods
Turnover from the sale of goods is recognised when significant risks and rewards of ownership of the goods have transferred to the buyer, the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. This is usually on dispatch of the goods.

Rendering of services
When the outcome of a transaction can be estimated reliably, turnover from rending of services is recognised by reference to the period for which the services relate at the balance sheet date.

Goodwill
Goodwill, being the amount paid in connection with the acquisition of a business in 2019, 2021 and 2024, is being amortised evenly over its estimated useful life of 10 years.

Goodwill is recognised on the cost basis less amortisation. Cost is determined as the difference between the total consideration in the purchase of the businesses less the assets acquired.

Intangible assets
Amortisation is provided at the following annual rate in order to write off the asset over its estimated useful life.

Patents and licences - 25% on reducing balance

IP addresses are held on a valuation basis and impairment reviews are undertaken annually.

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

2. ACCOUNTING POLICIES - continued

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 - 20% on cost
Plant and machinery - 25% on reducing balance and 10% on reducing balance
Fixtures and fittings - 33% on cost, 25% on reducing balance, 20% on cost, 15% on reducing balance, 15% on cost and 10% on reducing balance
Motor vehicles - 20% on cost and not provided
Computer equipment - 33% on cost, 33% on reducing balance, 25% on reducing balance and 10% on reducing balance

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is determined using the first in first out method.

Financial instruments
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measure at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities, including loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financial transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

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

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

Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit and loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

2. ACCOUNTING POLICIES - continued

Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, 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.

Research and development
Expenditure on research and development in repect of development and improvement of company assets is capitalised in line with the company's fixed asset policy.

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.

Merger accounting
Merger accounting was used in the consolidation of the financial statements. Merger accounting principles for these combinations did not give rise to a merger reserve in the consolidated statement of financial position, as the nominal value of new shares issued by the Parent Company for the acquisition of the shares of the subsidiary was equal to the subsidiaries' own share capital.

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

3. EMPLOYEES AND DIRECTORS
31/5/24 31/5/23
£    £   
Wages and salaries 5,739,433 4,814,811
Social security costs 571,403 486,926
Other pension costs 158,707 115,698
6,469,543 5,417,435

The average number of employees during the year was as follows:
31/5/24 31/5/23

Employees 163 179

31/5/24 31/5/23
£    £   
Directors' remuneration 139,972 106,105
Directors' pension contributions to money purchase schemes 19,482 17,397

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 4 4

4. OPERATING PROFIT

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

31/5/24 31/5/23
£    £   
Lease of equipment 18,263 2,819
Depreciation - owned assets 362,501 293,365
Loss on disposal of fixed assets 1,599 17,944
Goodwill amortisation 124,292 122,969
Patents and licences amortisation 13,422 14,213
Foreign exchange differences (416 ) -

5. INTEREST PAYABLE AND SIMILAR EXPENSES
31/5/24 31/5/23
£    £   
Loan 121,212 117,011
Interest payable 91 -
Hire purchase 11,364 -
132,667 117,011

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

6. TAXATION

Analysis of the tax credit
The tax credit on the profit for the year was as follows:
31/5/24 31/5/23
£    £   
Current tax:
UK corporation tax 56,311 (56,311 )
Underprovision of tax (40,670 ) -
Total current tax 15,641 (56,311 )

Deferred tax (143,167 ) 50,669
Tax on profit (127,526 ) (5,642 )

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

31/5/24 31/5/23
£    £   
Profit before tax 276,168 150,275
Profit multiplied by the standard rate of corporation tax in the UK of 25 %
(2023 - 19 %)

69,042

28,552

Effects of:
Expenses not deductible for tax purposes 6,970 7,839
Capital allowances in excess of depreciation (43,597 ) (39,280 )
Utilisation of tax losses (35,269 ) (20,340 )
Adjustments to tax charge in respect of previous periods 56,311 -
Unused tax losses 2,854 23,229
Accelerated capital allowances 168,829 59,155
Deferred tax in respect of revaluation of intangibles (5,523 ) (8,486 )
Deferred tax in respect of tax losses carried forward (306,473 ) -
Refund due in respect of research and development credit (40,670 ) (56,311 )
Total tax credit (127,526 ) (5,642 )

Tax effects relating to effects of other comprehensive income

31/5/24
Gross Tax Net
£    £    £   
Revaluation of intangible assets 16,570 - 16,570
Transfer to revaluation reserve (16,570 ) - (16,570 )
- - -


RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

6. TAXATION - continued
31/5/23
Gross Tax Net
£    £    £   
Revaluation of intangible assets 25,457 - 25,457
Transfer to revaluation reserve (25,457 ) - (25,457 )
- - -

7. INDIVIDUAL STATEMENT OF COMPREHENSIVE INCOME

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


8. DIVIDENDS
31/5/24 31/5/23
£    £   
Ordinary shares of £0.0001 each
Paid during the year 40,000 39,924
Ordinary A share of £1
Paid during the year 260,000 99,432
300,000 139,356

9. INTANGIBLE FIXED ASSETS

Group
Patents
and
Goodwill licences Totals
£    £    £   
COST OR VALUATION
At 1 June 2023 1,229,689 210,217 1,439,906
Additions 158,746 15,384 174,130
Revaluations - (22,093 ) (22,093 )
At 31 May 2024 1,388,435 203,508 1,591,943
AMORTISATION
At 1 June 2023 336,298 27,834 364,132
Amortisation for year 124,292 13,422 137,714
At 31 May 2024 460,590 41,256 501,846
NET BOOK VALUE
At 31 May 2024 927,845 162,252 1,090,097
At 31 May 2023 893,391 182,383 1,075,774

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

9. INTANGIBLE FIXED ASSETS - continued

Group

Cost or valuation at 31 May 2024 is represented by:

Patents
and
Goodwill licences Totals
£    £    £   
Valuation in 2018 - 19,509 19,509
Valuation in 2019 - 21,440 21,440
Valuation in 2020 - 10,905 10,905
Valuation in 2021 - 45,673 45,673
Valuation in 2022 - 47,967 47,967
Valuation in 2023 - (33,943 ) (33,943 )
Valuation in 2024 - (22,093 ) (22,093 )
Cost 1,388,435 114,050 1,502,485
1,388,435 203,508 1,591,943

Company
Patents
and
licences
£   
COST
At 1 June 2023 36,885
Additions 7,372
At 31 May 2024 44,257
AMORTISATION
At 1 June 2023 7,744
Amortisation for year 7,573
At 31 May 2024 15,317
NET BOOK VALUE
At 31 May 2024 28,940
At 31 May 2023 29,141

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

10. TANGIBLE FIXED ASSETS

Group
Fixtures
Short Plant and and
leasehold machinery fittings
£    £    £   
COST
At 1 June 2023 185,849 1,834 285,226
Additions - - 44,298
Disposals - - -
At 31 May 2024 185,849 1,834 329,524
DEPRECIATION
At 1 June 2023 105,590 3,811 94,385
Charge for year 37,170 124 57,544
Eliminated on disposal - - -
At 31 May 2024 142,760 3,935 151,929
NET BOOK VALUE
At 31 May 2024 43,089 (2,101 ) 177,595
At 31 May 2023 80,259 (1,977 ) 190,841

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 1 June 2023 20,125 1,764,098 2,257,132
Additions - 620,332 664,630
Disposals (20,125 ) - (20,125 )
At 31 May 2024 - 2,384,430 2,901,637
DEPRECIATION
At 1 June 2023 5,887 784,264 993,937
Charge for year 2,944 264,719 362,501
Eliminated on disposal (8,831 ) - (8,831 )
At 31 May 2024 - 1,048,983 1,347,607
NET BOOK VALUE
At 31 May 2024 - 1,335,447 1,554,030
At 31 May 2023 14,238 979,834 1,263,195

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

10. TANGIBLE FIXED ASSETS - continued

Company
Fixtures
Short and Motor Computer
leasehold fittings vehicles equipment Totals
£    £    £    £    £   
COST
At 1 June 2023 185,849 280,448 19,625 148,103 634,025
Additions - 44,298 - 53,341 97,639
Disposals - - (19,625 ) - (19,625 )
At 31 May 2024 185,849 324,746 - 201,444 712,039
DEPRECIATION
At 1 June 2023 105,590 91,389 5,887 51,807 254,673
Charge for year 37,170 56,955 2,944 32,575 129,644
Eliminated on disposal - - (8,831 ) - (8,831 )
At 31 May 2024 142,760 148,344 - 84,382 375,486
NET BOOK VALUE
At 31 May 2024 43,089 176,402 - 117,062 336,553
At 31 May 2023 80,259 189,059 13,738 96,296 379,352

11. FIXED ASSET INVESTMENTS

Company
Unlisted
investments
£   
COST
At 1 June 2023 1,738,083
Additions 158,780
At 31 May 2024 1,896,863
NET BOOK VALUE
At 31 May 2024 1,896,863
At 31 May 2023 1,738,083

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

11. FIXED ASSET INVESTMENTS - continued

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

Subsidiaries

Razorblue Ltd
Registered office: Admiralty House, Fudan Way, Thornaby, Stockton-on-Tees, England, TS17 6EN
Nature of business: Computer technology development.
%
Class of shares: holding
Ordinary 100.00
31/5/24 31/5/23
£    £   
Aggregate capital and reserves 1,138,276 976,601
Profit for the year 766,211 457,200

Razorblue Software Solutions Ltd
Registered office: Admiralty House, Fudan Way, Thornaby, Stockton-on-Tees, England, TS17 6EN
Nature of business: Software development.
%
Class of shares: holding
Ordinary 100.00
31/5/24 31/5/23
£    £   
Aggregate capital and reserves 425,446 161,437
Profit for the year 264,009 6,183

In the year the company increased it holding in the subsidiary from 66% to 100%.

In the year the subsidiary has taken the exemption from audit under S479 relating to a parent guarantee.

Razorblue IT (NW) Ltd
Registered office: Admiralty House, Fudan Way, Thornaby, Stockton-on-Tees, England, TS17 6EN
Nature of business: Computer facilities management
%
Class of shares: holding
Ordinary 100.00
31/5/24 31/5/23
£    £   
Aggregate capital and reserves 137,530 137,530

In the year the subsidiary has taken the exemption from audit under S479 relating to a parent guarantee.

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

11. FIXED ASSET INVESTMENTS - continued

Razorblue IT (Scotland) Ltd
Registered office: Kingspark House, Laurelhill Business Park, Stirling, Scotland, FK7 9NS
Nature of business: information technology services
%
Class of shares: holding
Ordinary 100.00
31/5/24 31/5/23
£    £   
Aggregate capital and reserves 171,606 171,606
Profit for the year - 121,194

In the year the subsidiary has taken the exemption from audit under S479 relating to a parent guarantee.


12. STOCKS

Group Company
31/5/24 31/5/23 31/5/24 31/5/23
£    £    £    £   
Stocks 32,705 50,481 - 699

Stock at the year-end relates to consumables used in the course of the business.

13. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
31/5/24 31/5/23 31/5/24 31/5/23
£    £    £    £   
Trade debtors 1,771,323 1,614,487 38,619 454,287
Amounts owed by group undertakings - - 739,408 149,032
Amounts owed by associates 136,022 173,180 144,022 173,180
Other debtors 202,883 339,520 30,343 -
Tax 44,325 - - -
VAT - - - 32,980
Deferred tax asset - - 80,463 -
Prepayments 492,696 357,724 143,110 25,765
2,647,249 2,484,911 1,175,965 835,244

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
31/5/24 31/5/23 31/5/24 31/5/23
£    £    £    £   
Bank loans and overdrafts (see note 16) 246,600 246,600 246,600 246,600
Hire purchase contracts and finance leases (see note 17)
42,626

27,226

42,626

27,226
Trade creditors 1,623,227 1,040,737 87,316 33,955
Amounts owed to group undertakings - - 1,477,117 686,312
Social security and other taxes 146,683 127,929 39,603 35,235
VAT 327,602 304,514 26,064 -
Other creditors 62,524 59,705 40,920 42,006
Directors' current accounts - 121 - -
Accrued expenses 2,047,644 1,758,208 148,576 153,416
4,496,906 3,565,040 2,108,822 1,224,750

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

Group Company
31/5/24 31/5/23 31/5/24 31/5/23
£    £    £    £   
Bank loans (see note 16) 904,700 1,151,300 904,700 1,151,300
Hire purchase contracts and finance leases (see note 17)
21,029

36,557

21,029

36,557
925,729 1,187,857 925,729 1,187,857

16. LOANS

An analysis of the maturity of loans is given below:

Group Company
31/5/24 31/5/23 31/5/24 31/5/23
£    £    £    £   
Amounts falling due within one year or on demand:
Bank loans 246,600 246,600 246,600 246,600
Amounts falling due between one and two years:
Bank loans - 1-2 years 246,600 246,600 246,600 246,600
Amounts falling due between two and five years:
Bank loans - 2-5 years 41,100 287,700 41,100 287,700
Amounts falling due in more than five years:
Repayable by instalments
Bank loans 617,000 617,000 617,000 617,000

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

17. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Hire purchase contracts Finance leases
31/5/24 31/5/23 31/5/24 31/5/23
£    £    £    £   
Net obligations repayable:
Within one year 8,544 - 34,082 27,226
Between one and five years 21,029 - - 36,557
29,573 - 34,082 63,783

Company
Hire purchase contracts Finance leases
31/5/24 31/5/23 31/5/24 31/5/23
£    £    £    £   
Net obligations repayable:
Within one year 8,544 - 34,082 27,226
Between one and five years 21,029 - - 36,557
29,573 - 34,082 63,783

18. SECURED DEBTS

The following secured debts are included within creditors:

Group
31/5/24 31/5/23
£    £   
Bank loans 1,151,300 1,397,900
Hire purchase contracts and finance leases 63,655 63,783
1,214,955 1,461,683

Bank facilities are secured by a floating and a fixed charge which covers all property or undertakings of the group.

The hire purchase contracts are secured on the assets to which they relate.

19. PROVISIONS FOR LIABILITIES

Group
31/5/24 31/5/23
£    £   
Deferred tax 128,231 271,398

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

19. PROVISIONS FOR LIABILITIES - continued

Group
Deferred
tax
£   
Balance at 1 June 2023 271,398
Accelerated capital allowances 168,829
Revaluation of intangibles (5,523 )
Unutilised tax losses (306,473 )
Balance at 31 May 2024 128,231

Company
Deferred
tax
£   
Accelerated capital allowances 80,601
Unutilised tax losses (161,064 )
Balance at 31 May 2024 (80,463 )

The expected reversal of deferred tax liabilities in 2025 for the group is £74,585. This relates to the reversal of existing timing differences on tangible fixed assets.

20. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31/5/24 31/5/23
value: £    £   
11,690,000 Ordinary £0.0001 1,169 1,109
1 Ordinary A £1 1 1
1,170 1,110

21. RESERVES

Group
Retained Share Revaluation
earnings premium reserve Totals
£    £    £    £   

At 1 June 2023 1,163,398 31,240 84,841 1,279,479
Profit for the year 403,694 403,694
Dividends (300,000 ) (300,000 )
Cash share issue - 192,736 - 192,736
Transfer 16,570 - (16,570 ) -
At 31 May 2024 1,283,662 223,976 68,271 1,575,909

RAZORBLUE GROUP LTD (REGISTERED NUMBER: 08962843)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 May 2024

21. RESERVES - continued

Company
Retained Share
earnings premium Totals
£    £    £   

At 1 June 2023 710,475 31,240 741,715
Profit for the year 103,954 103,954
Dividends (300,000 ) (300,000 )
Cash share issue - 192,736 192,736
At 31 May 2024 514,429 223,976 738,405



22. RELATED PARTY DISCLOSURES

Entities over which the entity has control, joint control or significant influence
31/5/24 31/5/23
£    £   
Movement on associated balances 70,842 (104,583 )

23. ULTIMATE CONTROLLING PARTY

The ultimate controlling party is D J Kitchen.

24. PENSION COMMITMENT

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £94,457 (2023 - £77,597) . The total charge for the group as a whole was £316,806 (2023 - £249,691). Contributions totalling £Nil (2023 - £Nil) were payable to the fund at the reporting date and are included in creditors.