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REGISTERED NUMBER: 14926558 (England and Wales)





















RED ARCH HOLDINGS LIMITED

GROUP STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024






RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024










Page

Company Information 1

Group Strategic Report 2 to 4

Report of the Directors 5 to 6

Report of the Independent Auditors 7 to 10

Consolidated Statement of Comprehensive Income 11

Consolidated Balance Sheet 12

Company Balance Sheet 13

Consolidated Statement of Changes in Equity 14

Company Statement of Changes in Equity 15

Consolidated Cash Flow Statement 16

Notes to the Consolidated Cash Flow Statement 17 to 18

Notes to the Consolidated Financial Statements 19 to 31


RED ARCH HOLDINGS LIMITED

COMPANY INFORMATION
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024







DIRECTORS: Dr M Gore
S A Fletcher
Ms S J Berry





REGISTERED OFFICE: March House
Long March Industrial Estate
Daventry
Northamptonshire
NN11 4NR





REGISTERED NUMBER: 14926558 (England and Wales)





AUDITORS: Phipps Henson McAllister
Chartered Accountants
and Statutory Auditors
22-24 Harborough Road
Kingsthorpe
Northampton
NN2 7AZ

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

GROUP STRATEGIC REPORT
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


The directors present their strategic report of the company and the group for the period 9 June 2023 to 31 July 2024.

Red Arch Holdings Limited (RAH) was incorporated in June 2023 to facilitate the management buyout of Red Arch Manufacturing Limited (RAM). This restructuring allowed for the seamless retirement of key former shareholders. RAH now owns 100% of RAM's shares.

The acquisition was funded through a combination of loan notes and a share-for-share exchange, with contingent consideration payable based on future performance.

The handover process ensured continuity, with RAH leveraging RAM's established customer base and operational expertise, setting a strong foundation for future growth.

We aim to present a balances and comprehensive review of the development and performance of our business during the year and its position at the year end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

REVIEW OF BUSINESS
The Group's overall performance for the year has been highly encouraging. Turnover in RAM increased by 37%, from £9M to £12.4M, while operating profit rose by 58%, from £0.91M to £1.44M. The balance sheet also saw a marked improvement reflecting the profitability. No dividends were paid for the period. The directors remain confident in the Group's ability to sustain profitability and drive further growth in the coming years.

The financial year 2023/24 saw robust growth, fuelled by a rebound in the global economy and a resurgence in demand for new vehicles after a prolonged period of contraction and component shortages.

RAM continued its strategic pivot away from its reliance on Original Equipment (OE) accessory components-primarily for BMW, MINI, and Rolls-Royce (RR)-towards supplying lineside exhaust systems for Lotus Cars and Jaguar Land Rover (JLR). This transition marked a significant milestone, as 2023/24 was the first full year of volume manufacturing for both Lotus and JLR. Supply to Lotus reached peak volumes for nearly the entire year, while JLR's production stabilised at approximately 50% of the forecasted rate.

A major achievement during the year was the realisation of RAM's long-term strategic goal of diversifying its customer base. The company's three primary customers now each account for approximately 30% of overall turnover. This balanced distribution across the automotive sector and geographic split enhances business stability, reduces dependency on any single client, and improves the accuracy of future forecasting.

The shift towards a smaller range of higher-volume products has allowed RAM to focus on manufacturing efficiency, resulting in a more cost-effective product offering without compromising on quality or margins. Despite ongoing cost pressures and rising labour expenses, the company has successfully streamlined processes, enabling it to continue delivering value to customers while maintaining profitability.


RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

GROUP STRATEGIC REPORT
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024

PRINCIPAL RISKS AND UNCERTAINTIES
The principal financial risks faced by the company and their objectives and policies in relation to those risks are as follows:

Cash flow risk
The company closely monitor and manage cash flow. Cash flow forecasts are prepared with the objective of alerting the directors to potential future risks. It is the company's policy to ensure that forecast funding requirements can be met from available facilities.

Credit risk
Credit risk is the financial exposure generated by the potential default of third parties in fulfilling their obligations. Credit risk arises for the company if it is unable to recover sums due from customers. Setting maximum levels of credit tolerance for more significant customers and regularly reviewing these levels mitigate this.

KEY PERFORMANCE INDICATORS
We consider our key performance indicators are those that communicate the financial performance and strength of the Group, these being turnover, profits and return on net assets.

The overall results continue to improve and remain encouraging.

Turnover has increased by 37% to £12.4m.

Operating profit for the year was £1.39m.

Return on net assets for the year was 31.3%. Return on net assets is calculated as profit on ordinary activities for the year before taxation as a percentage of net assets.

These KPIs demonstrate significant growth and improvement in the Group's financial health. The increase in turnover and profit, along with a healthy return on net assets, are all very encouraging.


RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

GROUP STRATEGIC REPORT
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024

FUTURE DEVELOPMENTS
Despite global government initiatives to curb or halt internal combustion engine (ICE) vehicle production by 2030 or 2035, RA remains optimistic about its prospects. The company anticipates stable forecasts and demand for its current product portfolio well into 2030 and has a robust developed five-year business plan leveraging current core competencies.

RA is also strategically exploring opportunities to expand its customer base, prioritising higher-margin, potentially lower-volume projects to enhance profitability.

Demand for exhausts and related products remains strong, albeit with expectations of lower volumes compared to previous years. The small to medium series supply chain continues to demonstrate resilience. Similarly, demand for heatshield and bracket components remains robust, reinforcing RA's confidence in its product offerings.

In light of the automotive industry's uncertain trajectory regarding vehicle powertrains, RA is committed to working closely with its current customers to support their transitions to new propulsion technologies. This collaborative approach will allow RA to adapt to evolving market demands and remain a trusted partner, regardless of the direction customers pursue.

Furthermore, RA aims to diversify its business portfolio by increasing the share of non-ICE-related products by 10% year-on-year, ensuring long-term sustainability and reduced dependency on internal combustion-driven products. By staying agile, innovative, and customer-focused, RA is well-positioned to navigate the challenges of this transitional period in the automotive industry.

ON BEHALF OF THE BOARD:





Dr M Gore - Director


21 January 2025

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

REPORT OF THE DIRECTORS
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


The directors present their report with the financial statements of the company and the group for the period 9 June 2023 to 31 July 2024.

INCORPORATION
The group was incorporated on 9 June 2023 .

PRINCIPAL ACTIVITY
The principal activity of the group in the period under review was that of manufacturing in the motor industry.

DIVIDENDS
No dividends will be distributed for the period ended 31 July 2024.

DIRECTORS
The directors who have held office during the period from 9 June 2023 to the date of this report are as follows:

Dr M Gore - appointed 9 June 2023
Ms S J Berry - appointed 9 June 2023 - resigned 21 July 2023
S A Fletcher - appointed 9 June 2023

Ms S J Berry was appointed as a director after 31 July 2024 but prior to the date of this report.

All the directors who are eligible offer themselves for election at the forthcoming first Annual General Meeting.

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.

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

REPORT OF THE DIRECTORS
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


AUDITORS
The auditors, Phipps Henson McAllister, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





Dr M Gore - Director


21 January 2025

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
RED ARCH HOLDINGS LIMITED


Opinion
We have audited the financial statements of Red Arch Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 July 2024 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

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

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

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

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

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

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

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

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

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
RED ARCH HOLDINGS 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 five, 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
RED ARCH HOLDINGS 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:

- We obtained an understanding of the legal and regulatory frameworks applicable to the group and the sector in which they operate. We determined that the following laws and regulations were most significant: the Companies Act 2006, and UK corporate taxation laws.
- We obtained an understanding of how the Group is complying with those legal and regulatory frameworks by making inquiries to the management. We corroborated our inquiries through our review of board minutes and other papers.
- We assessed the susceptibility of the Group's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
- identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
- understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
- challenging assumptions and judgments made by management in its significant accounting estimates;
- identifying and testing journal entries, in particular any journal entries posted with unusual account combinations; and
- assessing the extent of compliance with the relevant laws and regulations.

These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from an error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it.

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
RED ARCH HOLDINGS 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.




Stuart Armstrong FCCA (Senior Statutory Auditor)
for and on behalf of Phipps Henson McAllister
Chartered Accountants
and Statutory Auditors
22-24 Harborough Road
Kingsthorpe
Northampton
NN2 7AZ

21 January 2025

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

CONSOLIDATED
STATEMENT OF COMPREHENSIVE
INCOME
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024

Notes £   

TURNOVER 4 12,392,445

Cost of sales 8,943,627
GROSS PROFIT 3,448,818

Administrative expenses 2,054,632
OPERATING PROFIT 6 1,394,186


Interest payable and similar expenses 7 22,860
PROFIT BEFORE TAXATION 1,371,326

Tax on profit 8 326,709
PROFIT FOR THE FINANCIAL PERIOD 1,044,617

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

CONSOLIDATED BALANCE SHEET
31 JULY 2024

Notes £    £   
FIXED ASSETS
Intangible assets 10 418,059
Tangible assets 11 1,031,575
Investments 12 -
1,449,634

CURRENT ASSETS
Stocks 13 2,029,618
Debtors 14 2,015,428
Cash at bank 1,503,777
5,548,823
CREDITORS
Amounts falling due within one year 15 4,078,575
NET CURRENT ASSETS 1,470,248
TOTAL ASSETS LESS CURRENT LIABILITIES 2,919,882

CREDITORS
Amounts falling due after more than one
year

16

(1,652,568

)

PROVISIONS FOR LIABILITIES 20 (222,686 )
NET ASSETS 1,044,628

CAPITAL AND RESERVES
Called up share capital 21 11
Retained earnings 22 1,044,617
SHAREHOLDERS' FUNDS 1,044,628

The financial statements were approved by the Board of Directors and authorised for issue on 21 January 2025 and were signed on its behalf by:





Dr M Gore - Director


RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

COMPANY BALANCE SHEET
31 JULY 2024

Notes £    £   
FIXED ASSETS
Intangible assets 10 -
Tangible assets 11 -
Investments 12 3,591,070
3,591,070

CURRENT ASSETS
Debtors 14 8

CREDITORS
Amounts falling due within one year 15 2,040,976
NET CURRENT LIABILITIES (2,040,968 )
TOTAL ASSETS LESS CURRENT LIABILITIES 1,550,102

CREDITORS
Amounts falling due after more than one
year

16

1,550,000
NET ASSETS 102

CAPITAL AND RESERVES
Called up share capital 21 11
Retained earnings 91
SHAREHOLDERS' FUNDS 102

Company's profit for the financial year 91

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 21 January 2025 and were signed on its behalf by:





Dr M Gore - Director


RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024

Called up
share Retained Total
capital earnings equity
£    £    £   

Changes in equity
Issue of share capital 11 - 11
Total comprehensive income - 1,044,617 1,044,617
Balance at 31 July 2024 11 1,044,617 1,044,628

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024

Called up
share Retained Total
capital earnings equity
£    £    £   

Changes in equity
Issue of share capital 11 - 11
Total comprehensive income - 91 91
Balance at 31 July 2024 11 91 102

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024

Notes £   
Cash flows from operating activities
Cash generated from operations 1 2,388,410
Interest paid (22,860 )
Net cash from operating activities 2,365,550

Cash flows from investing activities
Purchase of tangible fixed assets (146,622 )
Acquisition of subsidiary (3,591,070 )
Cash on acquisition of subsidiary 355,136
Net cash from investing activities (3,382,556 )

Cash flows from financing activities
New loans in year 3,550,000
Loan repayments in year (90,000 )
Repayment of loan notes (1,000,000 )
Amount introduced by directors 43,822
Share issue 8
Interest 16,953
Net cash from financing activities 2,520,783

Increase in cash and cash equivalents 1,503,777
Cash and cash equivalents at beginning of
period

2

-

Cash and cash equivalents at end of period 2 1,503,777

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


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

£   
Profit before taxation 1,371,326
Depreciation charges 132,388
Amortisation charges 46,451
Movement in AROC 260,574
Finance costs 22,860
1,833,599
Increase in stocks (733,059 )
Decrease in trade and other debtors 1,456,400
Decrease in trade and other creditors (168,530 )
Cash generated from operations 2,388,410

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:

Period ended 31 July 2024
31/7/24 9/6/23
£    £   
Cash and cash equivalents 1,503,777 -


3. ANALYSIS OF CHANGES IN NET DEBT

At 9/6/23 Cash flow At 31/7/24
£    £    £   
Net cash
Cash at bank - 1,503,777 1,503,777
- 1,503,777 1,503,777
Debt
Debts falling due within 1 year - (1,094,383 ) (1,094,383 )
Debts falling due after 1 year - (1,652,568 ) (1,652,568 )
- (2,746,951 ) (2,746,951 )
Total - (1,243,174 ) (1,243,174 )

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


4. ACQUISITION OF BUSINESS

On 1 August 2023, Red Arch Holdings Limited acquired the subsidiary Red Arch Manufacturing Limited. Net assets acquired of £3,126,560 included cash at bank of £355,136. Movements in the consolidated cash flow statement are adjusted for other assets and liabilities acquired.

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


1. STATUTORY INFORMATION

Red Arch Holdings Limited 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.

The directors have reviewed the future liquidity requirements for the company and are confident that there is sufficient flexibility such that it continues to be appropriate to prepare the financial statements on a going concern basis.

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
Goodwill, being the amount paid in connection with the acquisition of a business in 0, is being amortised evenly over its estimated useful life of nil years.

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.
Plant and machinery - 10% on reducing balance and Straight line over 7 years
Fixtures and fittings - 20% on reducing balance
Motor vehicles - 25% on reducing balance
Computer equipment - Straight line over 3 years

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.


RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


2. ACCOUNTING POLICIES - continued
Taxation
Taxation for the period 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 period 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.

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.

Debtors and creditors
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administrative expenses.

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

To be able to prepare financial statements in accordance with FRS102, the Directors must make certain estimates and judgements that have an impact on the policies and the amounts reported in the annual accounts. The estimates and judgement are based on historical experiences and other factors including expectations of future events that are believed to be reasonable at the time such estimates and judgements are made. Actual experience may vary from these estimates.

The estimates and assumptions which have the most significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are discussed below:

Tangible Assets
The Directors determine the estimated useful lives, residual values and related depreciation charges for its property, plant and equipment with reference to the estimated periods that the company intends to derive future economic benefits from the use of these assets. Management will revise the depreciation charge where useful lives or residual values are materially different from those previously estimated. Actual economic lives may differ from estimated useful lives and actual residual values may differ from estimated residual values. Periodic review could result in a change in depreciable lives and residual values and therefore depreciation expenses in the future periods.

Inventory Provisions
The Directors writes down inventories to net realisable value based on an estimate of the realisability of inventories.Write downs on inventories are recorded where events or changes in circumstances indicate that the current carrying values may not realised. The write down will be recognised in the income statements in the year the change in estimate occurs.

Warranty Provisions
Under the terms of supply to certain customers, warranties are provided against defective products. The Directors review the level of warranty claims in order to arrive at the best estimate of potential future economic costs.

4. TURNOVER

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

An analysis of turnover by geographical market is given below:

£   
United Kingdom 9,259,367
Europe 3,133,079
12,392,446

**TURNOVER ENTERED ON CLIENT SCREEN - CURRENT YEAR 12,392,446
**DOES NOT AGREE TO TURNOVER PER TRIAL BALANCE 12,392,445

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


5. EMPLOYEES AND DIRECTORS
£   
Wages and salaries 1,995,939
Social security costs 174,665
Other pension costs 75,563
2,246,167

The average number of employees during the period was as follows:

Management 11
Admin 5
Engineering 9
Production 38
63

The average number of employees by undertakings that were proportionately consolidated during the period was 63 .

£   
Directors' remuneration 132,030
Directors' pension contributions to money purchase schemes 6,461

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

Money purchase schemes 2

6. OPERATING PROFIT

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

£   
Hire of plant and machinery 25,521
Depreciation - owned assets 132,387
Goodwill amortisation 46,451
Auditors' remuneration 14,952
Foreign exchange differences (4,550 )

7. INTEREST PAYABLE AND SIMILAR EXPENSES
£   
Bank loan interest 20,841
Loan 2,019
22,860

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


8. TAXATION

Analysis of the tax charge
The tax charge on the profit for the period was as follows:
£   
Current tax:
UK corporation tax 244,978
Adjustment re prior years 70,444
Total current tax 315,422

Deferred tax 11,287
Tax on profit 326,709

UK corporation tax has been charged at 25 % .

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

£   
Profit before tax 1,371,327
Profit multiplied by the standard rate of corporation tax in the UK of 25 % 342,832

Effects of:
Expenses not deductible for tax purposes 11,670
Capital allowances in excess of depreciation (11,298 )
Utilisation of tax losses (98,226 )
Adjustments to tax charge in respect of previous periods 70,444
Deferred taxation 11,287
Total tax charge 326,709

** PROFIT BEFORE TAX FOR CURRENT YEAR ON CLIENT SCREEN OF 1,371,327
DOES NOT AGREE TO AMOUNT ON STATEMENT OF COMPREHENSIVE INCOME OF 1,371,326

9. 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.


RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


10. INTANGIBLE FIXED ASSETS

Group
Goodwill
£   
COST
Additions 464,510
At 31 July 2024 464,510
AMORTISATION
Amortisation for period 46,451
At 31 July 2024 46,451
NET BOOK VALUE
At 31 July 2024 418,059

11. TANGIBLE FIXED ASSETS

Group
Improvements Fixtures
to Plant and and
property machinery fittings
£    £    £   
COST
At 9 June 2023 24,371 1,678,971 270,127
Additions 6,070 109,407 -
At 31 July 2024 30,441 1,788,378 270,127
DEPRECIATION
At 9 June 2023 12,185 740,365 210,275
Charge for period 5,399 111,015 11,970
At 31 July 2024 17,584 851,380 222,245
NET BOOK VALUE
At 31 July 2024 12,857 936,998 47,882
At 8 June 2023 12,186 938,606 59,852

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


11. TANGIBLE FIXED ASSETS - continued

Group

Motor Computer
vehicles equipment Totals
£    £    £   
COST
At 9 June 2023 24,645 66,564 2,064,678
Additions 11,875 19,270 146,622
At 31 July 2024 36,520 85,834 2,211,300
DEPRECIATION
At 9 June 2023 20,121 64,392 1,047,338
Charge for period 3,357 646 132,387
At 31 July 2024 23,478 65,038 1,179,725
NET BOOK VALUE
At 31 July 2024 13,042 20,796 1,031,575
At 8 June 2023 4,524 2,172 1,017,340

12. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
Additions 3,591,070
At 31 July 2024 3,591,070
NET BOOK VALUE
At 31 July 2024 3,591,070

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


12. 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:

Subsidiary

Red Arch Manufacturing Limited
Registered office: March House, Long March Industrial Estate, Daventry, Northamptonshire NN11 4NR
Nature of business: Manufacture of automotive components
%
Class of shares: holding
Ordinary 100.00
2024
£   
Aggregate capital and reserves 4,217,537
Profit for the period 1,090,977


On 1 August 2023 the company acquired 100% of the share capital of Red Arch Manufacturing Limited as part of a management buy-out of certain shareholders.This acquisition was funded by loan notes and a share for share exchange. Net assets acquired were £3,126,560.

13. STOCKS


Group
£   
Raw materials 1,628,348
Work-in-progress 288,278
Finished goods 112,992
2,029,618

14. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR


Group Company
£    £   
Trade debtors 1,648,064 -
Amounts recoverable on contract 30,753 -
Other debtors 20,251 8
Prepayments and accrued income 316,360 -
2,015,428 8

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


15. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR


Group Company
£    £   
Bank loans and overdrafts (see note 17) 94,383 -
Other loans (see note 17) 1,000,000 1,000,000
Trade creditors 2,125,385 -
Amounts owed to group undertakings - 997,154
Corporation tax 244,978 -
Social security and other taxes 47,341 -
VAT 193,482 -
Other creditors 13,078 -
Directors' current accounts 43,822 43,822
Accruals and deferred income 316,106 -
4,078,575 2,040,976

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


Group Company
£    £   
Bank loans (see note 17) 102,568 -
Other loans (see note 17) 1,550,000 1,550,000
1,652,568 1,550,000

17. LOANS

An analysis of the maturity of loans is given below:


Group Company
£    £   
Amounts falling due within one year or on demand:
Bank loans 94,383 -
Other loans 1,000,000 1,000,000
1,094,383 1,000,000
Amounts falling due between one and two years:
Bank loans - 1-2 years 102,568 -
Other loans - 1-2 years 1,550,000 1,550,000
1,652,568 1,550,000

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


18. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Non- cancellable operating leases
£   
Within one year 161,849
Between one and five years 23,590
185,439

19. SECURED DEBTS

The following secured debts are included within creditors:


Group
£   
Bank loans 196,951
Loan notes 1,800,000
1,996,951

Bank loans are secured by way of fixed and floating charges over the assets of the company.

Certain loan notes (included in Other loans) are secured by way of a debenture in favour of M Theaker.

20. PROVISIONS FOR LIABILITIES


Group
£   
Deferred tax 222,686

Group
Deferred
tax
£   
On acquisition of subsidiary 211,399
Provided during year 11,287
Balance at 31 July 2024 222,686

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


21. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

The following shares were allotted and fully paid for cash at par during the period:
900 Ordinary A shares of .01 each
50 Ordinary B shares of .01 each
50 Ordinary C shares of .01 each

22. RESERVES

Group
Retained
earnings
£   

Profit for the period 1,044,617
At 31 July 2024 1,044,617


23. ULTIMATE CONTROLLING PARTY

The ultimate controlling party is Dr M Gore by virtue of his majority shareholding.

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


24. BUSINESS COMBINATION

On 1 August 2023 the Group acquired the entire share capital of Red Arch Manufacturing Limited, a component manufacturer in the automotive supply chain. The acquisition was accounted for using the purchase method.

Recognised amounts of identifiable assets acquired and liabilities assumed
Book value Fair value
£ £
Tangible fixed assets 1,017,340 1,017,340

Current assets
Stock 1,296,559 1,296,559
Debtors 3,802,846 3,802,846
Cash at bank 355,136 355,136
Total assets 6,471,881 6,471,881
Creditors
Borrowings 270,000 270,000
Trade creditors 2,396,401 2,396,401
Other creditors 254,219 254,219
Accruals 213,302 213,302
Deferred taxes 211,399 211,399
Total identifiable net assets 3,126,560 3,126,560
Goodwill 464,510
Total purchase consideration 3,591,070

Consideration
£
Consideration paid (loan notes due in less than one year) 1,000,000
Consideration paid (loan notes due in more than one year) 1,000,000
Contingent consideration (due in more than one year) 1,550,000
Costs of business combination 41,070
Total purchase consideration 3,591,070

Goodwill on acquisition is attributable to know how and customer relationships. The useful life is estimated as 10 years. There were no separately identifiable intangible assets.

The purchase agreement included an additional consideration payable if the three year aggregate turnover for 1 August 2023 to 31 July 2026 exceeds £34m. The recognised contingent consideration liability of £1,550,000 represents the best estimate of the amount that will be payable.

RED ARCH HOLDINGS LIMITED (REGISTERED NUMBER: 14926558)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued
FOR THE PERIOD 9 JUNE 2023 TO 31 JULY 2024


The results of Red Arch Manufacturing Limited since acquisition are as follows:


Current
period since
acquisition
£
Turnover 12,392,441
Profit before tax for the period since acquisition 1,417,681