The director presents the strategic report for the year ended 30 April 2024.
This report is provided as a comprehensive report on the group's business strategy. The objectives of this report are to provide shareholders and other users of these statements:
the appropriate level of background context for these financial statements;
analysis of the company's past performance; and
insight into the company's main objectives and strategies, the principal risks it faces, and how they might affect future prospects.
The group's objective was to provide Supply Chain solutions to global brands helping them sell more of their products and services, faster and more cost effectively in more territories than any other competitor.
Brandpath Group had a successful year, posting a profit before tax and growing operating profit by 11%. The group also expanded its global footprint by opening a new facility in the APAC region. Brandpath delivered a healthy EBITDA profit and continued to invest throughout the year in line with its long-term strategy for growth.
On 22nd November 2024, DHL Supply Chain International Holdings B.V. acquired a controlling interest in the Brandpath Group.
In regular monitoring of financial reporting, the directors assess the group’s development against both prior year and forecast. The forecasts are prepared annually and reviewed regularly for continuing appropriateness given strategic developments in the group’s business. Key financial performance measures include revenue, gross profit and profitability.
During the year the group generated:
Turnover: £12,161,001 (2023 - £14,650,943)
Gross profit: £3,235,201 (2023 - £3,402,698)
EBITDA: £950,897 (2023 - £872,694)
Continuing to expand its international footprint provides the group with even more growth opportunities in the coming years and its strategically important for Brandpath's long-term potential.
The directors consider that the below are the principal risks that could potentially materially impair the group’s future operations and profitability:
Financial instruments
The group uses various financial instruments including cash, equity investments, and various items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is manage the financing of the group's operations.
The existence of these financial instruments exposes the group to a number of financial risks, which are described in more detail below.
The main risks arising from the group's financial instruments are liquidity risk and credit risk. The directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years.
Liquidity risk
The group seeks to manage liquidity risk by undertaking prudent cashflow forecasting, ensuring that adequate facilities are in place and maintained, and generating positive cashflows in order to meet foreseeable needs and to invest cash assets safely and profitably.
Credit risk
The group's principal financial assets are cash, trade debtors, and amounts due from group undertakings. The principal credit risk arises from its trade debtors. The directors closely monitor the wider groups operations to mitigate any credit risk.
The group's performance relies on the selection, development and retention of highly talented employees. Wherever possible the company attempts to promote from within in order to develop staff and create opportunities for career development.
Maintaining the quality when hiring is ensured through utilising the group's own tools and skills in the selection and assessment process. The group maintains a preferred supplier list of agencies that can be utilised to cover peaks in workload. These are carefully selected and their outputs closely monitored to ensure there is no variation in standards.
Recruitment policies are designed to ensure equal opportunity of employment regardless of age, race or sex. Appropriate consideration is given to disabled applicants in offering employment.
Good relations are maintained with employees by regular meetings within their operational teams compatible with the teams' particular circumstances. Senior management are kept informed through regular monthly or more frequent meetings as required.
On behalf of the board
The director presents his annual report and financial statements for the year ended 30 April 2024.
The results for the year are set out on page 8.
Going concern
The Directors have assessed the liquidity requirements for the Company for at least the next 12 months from the date of approval of these financial statements. In addition to this, the Directors have received assurance of continued financial support from an appropriate related party for at least 12 months from the date of approving these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the annual financial statements.
Further details are given in note 2.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
In accordance with the company's articles, a resolution proposing that CLA Evelyn Partners Limited be reappointed as auditor of the group will be put at a General Meeting.
We have audited the financial statements of Brandpath Group Limited, (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 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 director 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 director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
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 or the director's 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.
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is responsible for assessing 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 director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
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 from our commercial knowledge and experience of the sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances 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 enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
understanding the design of the company’s remuneration policies
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £521,246 (2023 - £161,691 loss).
Brandpath Group Limited, (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Solstice House, 251 MidSummer Boulevard, Milton Keynes, MK9 1EA.
The group consists of Brandpath Group Limited, and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Brandpath Group Limited, together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 30 April 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
At the time of approving the financial statements, the director has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
The Directors have assessed the liquidity requirements for the Company for at least the next 12 months from the date of approval of these financial statements. In addition to this, the Directors have received assurance of continued financial support from an appropriate related party for at least 12 months from the date of approving these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the annual financial statements.
Turnover is measured at the fair value of the consideration received or receivable for the rendering of services in the normal course of business, and is shown net of discounts and VAT. Revenue is recognised when the service is provided.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
The company has elected to apply the provisions of Section 11 ”Basic financial Instruments” to all of its financial instruments.
Financial instruments are recognised in the company’s balance sheet when the company becomes party to the contractual provisions of the instrument.
Short term debtors are measured at transaction price less any provision for impairment. Loans receivable are measured initially at fair value, net of transaction costs and are subsequently carried at amortised costs using the effective interest method, less any provision for impairment.
Short term creditors are measured at transaction price. Other financial liabilities, including bank loans and other loans, are measured initially at fair value, net of transaction costs and are subsequently carried at amortised costs using the effective interest method.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
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 Directors have assessed the liquidity needs of the Company and judged the financial statements are to be prepared on a going concern basis. They have considered the level of losses incurred and the future profitability of the trading Companies within the Group.
The directors have assessed the future profitability of the company and have recognised a deferred tax asset in respect of tax losses on the basis that this will be recoverable.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Trade debtors are assessed at the year end for recoverability based on historical performance and known issues with customers at the year end. At the year end the company was due an amount from A1 Communications Limited, a company which has entered administration, of £522,016. When assessing the recoverability of the amount due, management have considered the anticipated recovery from the administrators as well as the expected recoverability from assets Brandpath UK Limited hold in their warehouse and which a lien can be exercised on. Management expects that, through these two routes, the majority, if not all, of the receivable will be recovered. However, given the uncertain outcome of the administration and the sale of assets which the company can exercise a lien, this is considered to be a significant estimate to the company.
During 2022 the warehouse was relocated resulting in a large amount of removal costs throughout 2022 and 2023.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
An increase in the UK corporation tax rate from 19% to 25% (effective from 1 April 2023) was substantially enacted on 24 May 2021. This will increase the Company's future tax charge accordingly and increase the deferred tax balance, although the extent of this effect cannot be quantified exactly.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 30 April 2024 are as follows:
Included in bank loans and finance facilities is £387,796 (2023 - £810,942) which relates to an invoice financing facility provided by HSBC Invoice Finance (UK) Limited. Amounts are secured against the trade debtors of the subsidiary. The loan was repaid in full in November 2024.
Included within bank loans is £2,563,653 (2023 - £2,480,320) which relates to a loan taken out in April 2023, the loan includes term and revolving facilities. Term A is repayable on 10 May 2025 and term B on 17 April 2024 . Interest is charged at a rate of 3.50% over the Bank of England Base Rate per annum. The loan was repaid in full in November 2024.
Included in obligations under finance leases is £63,319 (2023 - £74,113) in relation to hire purchase obligations. The amounts are secured against the assets to which they relate.
Amounts owed to group undertakings are interest free and repayable on demand.
Included within bank loans is £1,623,360 (2023 - £4,103,680) which relates to a loan taken out in April 2023, the loan includes term and revolving facilities. Term A is repayable on 10 May 2025 and term B on 17 April 2024. Interest is charged at a rate of 3.50% over the Bank of England Base Rate per annum. The loan was repaid early, in full, in November 2024.
Included in obligations under finance leases is £nil (2023 - £75,537) in relation to hire purchase obligations. The amounts are secured against the assets to which they relate.
The bank loans are secured by a group guarantee from immediate group companies Brandpath UK Limited and Brandpath Group Limited. This is in the form of a debenture comprising of fixed and floating charges over all assets. The bank loans are also secured by a guarantee from a related party for all liabilities limited to £5,000,000. The loans were repaid, in full, in November 2024.
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset set out above is not expected to reverse within 12 months and relates to accelerated capital allowances and tax losses carried forward that are expected to mature within the same period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Comprises translation differences arising from the translation of financial statements of the Group's foreign entities into Sterling (£).
The capital contribution account arose on the gain on acquisition of a subsidiary as part of a reorganisation of the wider group. This reserve is not distributable.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The operating lease represents a lease of leasehold property to a third party. The lease is negotiated over a term of 5 years and rentals are fixed for 5 years. Brandpath UK Limited are party to this agreement as a lessee to an ultimate lessor.
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Directors who have authority and responsibility for planning, directing and controlling the activities of the group are considered to be key management personnel. Payments to third parties for directors' contracts for services are disclosed in note 8. Directors are also remunerated by related parties of the group.
Brandpath Group Limited and Brandpath UK Limited and other members of the group have entered into a cross guarantee in favour of HSBC pursuant to which they will each guarantee obligations and liabilities of Brandpath Group Limited under the loan facility, among other things. This guarantee was satisfied in November 2024 when the related liabilities were repaid.