Company registration number 01742433 (England and Wales)
HTC GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
HTC GROUP LIMITED
COMPANY INFORMATION
Directors
D C O'Brien
M Chohan
O E Cooper
Company number
01742433
Registered office
Fairoak 43
Fairoak Lane
Whitehouse Industrial Estate
Runcorn
WA7 3DU
Auditor
Myers Clark
Egale 1
80 St Albans Road
Watford
Hertfordshire
WD17 1DL
Business address
Fairoak 43
Fairoak Lane
Whitehouse Industrial Estate
Runcorn
WA7 3DU
HTC GROUP LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 24
HTC GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -
The directors present the strategic report for the year ended 31 May 2024.
Principal activities
The principal activity of the company is the supply of vitamins, minerals, and supplements.
Fair Review of the Business
The company achieved record revenue in FY24, driven by consistent growth across all core sales channels. Private Label channel growth remains the primary contributor, supported by expansion in Key Account businesses through innovation and the introduction of new formats. A continued focus on quality, service, innovation, and cost has ensured a robust and well-rounded offering for all customers.
Despite challenging trading conditions during the year, the company navigated significant disruptions. Freight rates returned to peak levels in the final quarter of FY24, exacerbated by the Houthi attacks in the Suez Canal, which diverted shipping routes around the southern tip of Africa, increasing transit times and costs. However, foreign exchange rates and raw material costs stabilized compared to FY23, providing some relief.
The company undertook a strategic decision to write off £724k of stock nearing expiry. This exceptional one-off cost was attributable to over-procurement during the pandemic. The decision also aligns with the company's strategy to phase out certain formats. Additionally, the company initiated a restructure of staff roles to align with its evolving business strategy and operational needs, ensuring the workforce is optimally positioned to support future growth. This proactive financial and organisational investment positions the company to deliver enhanced revenue and profit growth in FY25, supported by improved stock management, expiry dates, and an efficient workforce structure.
Total revenue increased by £7.9m to £32.9m in FY24 (FY23: £25.0m), representing a 31.4% year-on-year growth. Health sales grew by 44.1% to £29.4m (FY23: £20.7m). Operating profit rose by £1.5m to £2.4m (FY23: £0.9m), with an adjusted operating profit of £3.1m before accounting for the stock write-off.
The company remains well-positioned for future success. As it enters FY25, the planned relocation to a consolidated site—housing the warehouse, office, and a new manufacturing facility—marks a significant milestone in the company's transformation. These strategic developments are already yielding improved financial performance, and the directors are confident in the company’s ability to deliver sustained growth and profitability.
The directors look forward to continued success and strong trading performance in the coming years.
Principal Risks and Uncertainties
The company’s operations and financial performance are exposed to a variety of financial risk including foreign exchange risk and credit risk. The company has in place a risk management programme that seeks to manage the financial exposures of the company through various FX hedging techniques, and credit insurance policies.
Development and Performance
Following the transformation in FY22, which included the establishment of European operations and the implementation of new IT systems, the company has strengthened its foundation to achieve significant sales and profit growth in the coming years.
The lifting of COVID restrictions at the end of FY23 enabled the resumption of key business travel in FY24. These trips were instrumental in reinforcing the company’s presence in European markets and enhancing its supply chain. Engagements with key strategic manufacturing partners facilitated the renewal of long-term supply agreements, which are set to commence in FY25. These agreements secure the company’s exclusive and distinctive position in its core markets, ensuring long-term stability and competitive advantage.
The directors remain confident that the company offers a compelling proposition and is well-positioned to capitalise on the expanding health and wellness market both domestically and internationally.
HTC GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
Key Performance Indicators
The directors consider that the key financial performance indicators are those that communicate the financial performance and strength of the company, these being EBITDA, turnover, gross profit, operating profit, and profit before taxation.
The adjusted EBITDA is presented below:
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Exceptional stock write off | | |
Foreign currency forward contract movement | | |
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Promoting the success of the company
The directors are confident that the company’s product and service proposition is highly competitive, as well as differentiated from its competitors, which will provide the company with a good foundation for financial success. FY25 is expected to see the company deliver another record revenue year and forthcoming years are expected to continue this growth momentum.
O E Cooper
Director
26 February 2025
HTC GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 May 2024.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £38,171. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
D C O'Brien
M Chohan
O E Cooper
Auditor
The auditor, Myers Clark, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report 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 of the profit or loss of the company 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 transactions and disclose with reasonable accuracy at any time the financial position of the company 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
HTC GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
On behalf of the board
O E Cooper
Director
26 February 2025
HTC GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HTC GROUP LIMITED
- 5 -
Opinion
We have audited the financial statements of HTC Group Limited (the 'company') for the year ended 31 May 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 May 2024 and of its 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.
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 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 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 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.
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 our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HTC GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HTC GROUP LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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, 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 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 company or to cease operations, or have no realistic alternative but to do so.
Auditor's 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 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.
HTC GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HTC GROUP LIMITED (CONTINUED)
- 7 -
Identifying and assessing potential risks related to irregularities
In identified and assessing risks of material misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, we considered the following;
The nature of the industry and sector, control environment and business performance including the design of the remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
any matters we identified having obtained and review the company’s documentation of their policies and procedures relating to;
identifying, evaluating and complying with laws and regulation and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These included the Employment law and the Health and Safety Act.
Audit response to risks identified
As a result of performing the above, we identified the management override of controls as a key audit matter related to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in response to that key audit matter.
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
HTC GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HTC GROUP LIMITED (CONTINUED)
- 8 -
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.
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.
Ian Meaburn
Senior Statutory Auditor
For and on behalf of Myers Clark
26 February 2025
Chartered Accountants
Statutory Auditor
Egale 1
80 St Albans Road
Watford
Hertfordshire
WD17 1DL
HTC GROUP LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
2024
2023
Notes
£
£
Turnover
2
32,902,587
25,032,701
Cost of sales
(27,289,958)
(21,825,017)
Gross profit
5,612,629
3,207,684
Distribution costs
(496,422)
(182,312)
Administrative expenses
(2,696,541)
(2,147,573)
Operating profit
3
2,419,666
877,799
Interest payable and similar expenses
7
(108,777)
(83,246)
Fair value gains and losses on foreign exchange contracts
90,392
(490,769)
Profit before taxation
2,401,281
303,784
Tax on profit
8
(522,991)
122,353
Profit for the financial year
1,878,290
426,137
The profit and loss account has been prepared on the basis that all operations are continuing operations.
HTC GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 10 -
2024
2023
£
£
Profit for the year
1,878,290
426,137
Other comprehensive income
-
-
Total comprehensive income for the year
1,878,290
426,137
HTC GROUP LIMITED
BALANCE SHEET
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
338,968
280,835
Investments
1
1
338,969
280,836
Current assets
Stocks
13
5,975,450
6,522,630
Debtors
14
10,006,133
7,269,546
Cash at bank and in hand
1,242,718
1,474,812
17,224,301
15,266,988
Creditors: amounts falling due within one year
15
(10,520,757)
(10,360,130)
Net current assets
6,703,544
4,906,858
Total assets less current liabilities
7,042,513
5,187,694
Provisions for liabilities
Deferred tax liability
17
84,200
69,500
(84,200)
(69,500)
Net assets
6,958,313
5,118,194
Capital and reserves
Called up share capital
19
105,408
105,408
Share premium account
49,349
49,349
Capital redemption reserve
108,222
108,222
Distributable profit and loss reserves
6,695,334
4,855,215
Total equity
6,958,313
5,118,194
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 26 February 2025 and are signed on its behalf by:
O E Cooper
Director
Company registration number 01742433 (England and Wales)
HTC GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 June 2022
105,408
49,349
108,222
4,548,593
4,811,572
Year ended 31 May 2023:
Profit and total comprehensive income
-
-
-
426,137
426,137
Dividends
9
-
-
-
(119,515)
(119,515)
Balance at 31 May 2023
105,408
49,349
108,222
4,855,215
5,118,194
Year ended 31 May 2024:
Profit and total comprehensive income
-
-
-
1,878,290
1,878,290
Dividends
9
-
-
-
(38,171)
(38,171)
Balance at 31 May 2024
105,408
49,349
108,222
6,695,334
6,958,313
HTC GROUP LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
23
(61,207)
1,066,040
Interest paid
(108,777)
(83,246)
Income taxes refunded/(paid)
91,680
(99,612)
Net cash (outflow)/inflow from operating activities
(78,304)
883,182
Investing activities
Purchase of tangible fixed assets
(115,619)
(67,214)
Net cash used in investing activities
(115,619)
(67,214)
Financing activities
Dividends paid
(38,171)
(119,515)
Net cash used in financing activities
(38,171)
(119,515)
Net (decrease)/increase in cash and cash equivalents
(232,094)
696,453
Cash and cash equivalents at beginning of year
1,474,812
778,359
Cash and cash equivalents at end of year
1,242,718
1,474,812
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 14 -
1
Accounting policies
Company information
HTC Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is Fairoak 43, Fairoak Lane, Whitehouse Industrial Estate, Runcorn, WA7 3DU.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The 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.
1.2
Going concern
Atruet 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.
1.3
Turnover
Turnover represents amounts receivable for goods net of VAT and trade discounts. Turnover from the sale of goods is recognised as the goods are delivered to the customer.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
Straight line over 3, 5 or 10 years
Computer equipment
Straight line over 2 or 3 years
Motor vehicles
Straight line over 5 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 15 -
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 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.
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 measured 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.
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 or 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.
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 16 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 17 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.12
Retirement benefits
The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.13
Leases
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 leases asset are consumed.
1.14
Foreign exchange
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.
2
Turnover
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Electronics
3,518,511
5,393,421
Supplements
29,384,076
19,639,280
32,902,587
25,032,701
2024
2023
£
£
Turnover analysed by geographical market
Europe
32,879,026
24,989,723
Rest of the world
23,561
42,978
32,902,587
25,032,701
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 18 -
3
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
294,220
(41,080)
Fees payable to the company's auditor for the audit of the company's financial statements
19,583
20,000
Depreciation of owned tangible fixed assets
57,486
42,759
Operating lease charges
63,139
73,520
4
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
19,583
20,000
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Logistics
4
3
Other
28
24
Total
32
27
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,269,233
1,220,801
Social security costs
134,355
116,729
Pension costs
42,512
43,075
1,446,100
1,380,605
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
130,856
188,783
Company pension contributions to defined contribution schemes
5,040
7,278
135,896
196,061
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
6
Directors' remuneration
(Continued)
- 19 -
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 2).
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
108,777
83,246
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
488,034
Adjustments in respect of prior periods
20,257
(143,753)
Total current tax
508,291
(143,753)
Deferred tax
Origination and reversal of timing differences
14,700
21,400
Total tax charge/(credit)
522,991
(122,353)
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
2,401,281
303,784
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
600,320
57,719
Tax effect of expenses that are not deductible in determining taxable profit
33,242
(7,998)
Tax effect of utilisation of tax losses not previously recognised
(102,497)
Group relief
(28,377)
(44,023)
Permanent capital allowances in excess of depreciation
(14,654)
(5,698)
Under/(over) provided in prior years
20,257
(143,753)
Deferred tax
14,700
21,400
Taxation charge/(credit) for the year
522,991
(122,353)
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 20 -
9
Dividends
2024
2023
£
£
Interim paid
38,171
119,515
10
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
Cost
At 1 June 2023
151,198
249,618
47,418
448,234
Additions
4,400
30,151
81,068
115,619
At 31 May 2024
155,598
279,769
128,486
563,853
Depreciation and impairment
At 1 June 2023
79,088
88,311
167,399
Depreciation charged in the year
15,225
24,977
17,284
57,486
At 31 May 2024
94,313
113,288
17,284
224,885
Carrying amount
At 31 May 2024
61,285
166,481
111,202
338,968
At 31 May 2023
72,110
161,307
47,418
280,835
11
Subsidiaries
Details of the company's subsidiaries at 31 May 2024 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
HTC (Far East) Limited
England
Dormant Company
Ordinary
100.00
HTC Health Limited
England
Dormant Company
Ordinary
100.00
12
Financial instruments
2024
2023
£
£
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
211,494
301,886
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 21 -
13
Stocks
2024
2023
£
£
Finished goods and goods for resale
5,975,450
6,522,630
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
8,009,237
5,900,447
Corporation tax recoverable
111,946
Other debtors
1,700,006
1,037,703
Prepayments and accrued income
296,890
219,450
10,006,133
7,269,546
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Other borrowings
16
3,500,000
3,500,000
Trade creditors
4,705,132
3,988,823
Corporation tax
488,025
Other taxation and social security
725,911
864,401
Derivative financial instruments
211,494
301,886
Other creditors
9,922
1,120,682
Accruals and deferred income
880,273
584,338
10,520,757
10,360,130
16
Loans and overdrafts
2024
2023
£
£
Other loans
3,500,000
3,500,000
Payable within one year
3,500,000
3,500,000
The company has a loan with a related company, with a balance of £3,500,000 at the year end (2023 - £3,500,000). The loan has no fixed repayment date. There is interest of 2% charged on the loan.
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
84,200
69,500
2024
Movements in the year:
£
Liability at 1 June 2023
69,500
Charge to profit or loss
14,700
Liability at 31 May 2024
84,200
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
42,512
43,075
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share capital of £1 each
105,408
105,408
105,408
105,408
The holders of the Ordinary shares are entitled to one vote per share.
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 23 -
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
326,448
17,147
Between two and five years
1,292,340
40,350
In over five years
1,615,425
3,234,213
57,497
21
Related party transactions
During the year, HTC Group Ltd made provision for donations of £136,128 (2023 - £80,455) to a charity under the same control as the company.
During the year, HTC Group Ltd made sales of £1,207,778 (2023 - £369,064) to a company under the same control. At the year-end there was an outstanding balance owed from this company to HTC Group Ltd of £1,476,486 (2023 - £625,276).
22
Ultimate controlling party
The parent company is MCI Health Investments Limited, a company incorporated and registered in England and Wales. This company prepares group financial statements and copies can be obtained from Eden Point Building B 3rd Floor, Three Acres Lane, Cheadle Hulme, Cheshire, United Kingdom, SK8 6RL.
The ultimate controlling company is MCI Limited, a company incorporated and registered in Isle of Man.
The ultimate controlling party is Mohsin Chohan.
23
Cash (absorbed by)/generated from operations
2024
2023
£
£
Profit for the year after tax
1,878,290
426,137
Adjustments for:
Taxation charged/(credited)
522,991
(122,353)
Finance costs
108,777
83,246
Fair value (gain)/loss on foreign exchange contracts
(90,392)
490,769
Depreciation and impairment of tangible fixed assets
57,486
42,759
Movements in working capital:
Decrease in stocks
547,180
1,692,786
Increase in debtors
(2,848,533)
(2,814,051)
(Decrease)/increase in creditors
(237,006)
1,266,747
Cash (absorbed by)/generated from operations
(61,207)
1,066,040
HTC GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 24 -
24
Analysis of changes in net debt
1 June 2023
Cash flows
31 May 2024
£
£
£
Cash at bank and in hand
1,474,812
(232,094)
1,242,718
Borrowings excluding overdrafts
(3,500,000)
-
(3,500,000)
(2,025,188)
(232,094)
(2,257,282)
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