Company registration number 13679256 (England and Wales)
INSPIRIT PADDINGTON TOPCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
INSPIRIT PADDINGTON TOPCO LIMITED
COMPANY INFORMATION
Directors
Mr W Stamp
Mr. A Farrant
Company number
13679256
Registered office
2 Babmaes Street
London
SW1Y 6HD
Auditor
Azets Audit Services
Fleet House
New Road
Lancaster
United Kingdom
LA1 1EZ
INSPIRIT PADDINGTON TOPCO LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 7
Independent auditor's report
8 - 10
Group statement of comprehensive income
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 35
INSPIRIT PADDINGTON TOPCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

 

Inspirit Paddington Topco is the parent company of a group within which Pelta Medical Papers Ltd is the main trading company and therefore asseses its performance based on the results and performance of Pelta Medical Papers Ltd which was acquired on 31 October 2021. Whilst the comparative period in these accounts covers the 14.5 month period ended 31 December 2022 the strategic report below has used Pelta Medical Papers comparative performance indicators for the period from 1 January 2022 to 31 December 2022. This is to ensure figures are comparable.

Principal activity and review of the business

Pelta Medical Papers Ltd is a manufacturer of sterile barrier papers used for the packaging of both re-usable and single-use medical devices. Production is carried out at the specialised paper mill situated in Milnthorpe, UK, and products are sold globally to customers in 48 countries (2022: 48). Surplus capacity is used to manufacture grease resistant paper for quick service restaurants.

During 2023, the business continued the implementation of a focused business strategy towards the medical packaging market, which resulted in the Sales mix of medical versus non-medical grade paper growing by 3% to 66% of total volume.

The strategy will see Pelta Medical Papers Ltd transform into a focused partner to the medical packaging industry; with continued investment to upgrade the manufacturing facility to medical standards and to add enhanced quality capability; through development and expansion of the medical products portfolio; and achieve an industry leading position in the business’ Environmental, Social, Governance (ESG) position.

Overview

The company’s key financial and other performance indicators during the year were as follows;

            

2023

2022

% Change

Total Revenue (£’000)        

45,421

58,108

-21.8%

Trading EBITDA     (£’000)    

-2,598

1,263

-305.7%

Trading EBITDA     margin    

-5.7%

2.2%

-7.4 points

Sales Tonnes

24,932

35,518

-29.8%

Production Tonnes

24,895

34,196

-27.2%

 

INSPIRIT PADDINGTON TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

Following on from the challenges of the European energy cost crisis, the business entered into a hedged position at the end of 2022 to protect it from volatile swings in the wholesale market through 2023. As a result, the business was unable to access favourable market rates in 2023 as prices fell. Energy costs remained a significant proportion of variable costs in 2023 and despite an overall reduction in total cost (£14,421k in prior year, down 14.5% to £12,327 in 2023), the cost per tonne increased 18.5% to £493/t (from £416/t in prior year). The difference between the price of forward bought energy versus open market prices in 2023 was £3,995k, which would have resulted in a positive Trading EBITDA of £1,632k.

A further challenge to the business was global de-stocking, which saw a dramatic fall in demand from Q2 through Q4 in all subsegments. Both sales and production tonnes saw significant reductions year on year, with revenue falling 21.8% to £45,421k from prior year (£58,108k).

Despite the market backdrop during 2023 the business made good progress with the implementation of various strategic initiatives. With the enriched medical Sales mix resulting in an overall improvement in average selling price (ASP) from prior year to partly offset the energy cost hedge; and achievement of Ecovadis Silver ESG certification.

Innovation and business development remained firmly in focus as a new high-added value product was launched to address an opportunity identified in North America, and the continued market interest in usage of high-end reinforced medical papers created a strong pipeline of projects that are now in validation phase.

During 2023 a strategic reorganisation of the Management Board team was undertaken to accelerate the business transformation and growth in the target markets.

Given the positive trading performance once adjustment is made for the hedged energy position, which is a realised position from Q2 2024 onwards; and also following a recovery in market demand, with January and February 2024 sales circa 25% up on the latter months of 2023.

Investments and capital employed

Net fixed asset additions in 2023 amounted to £1,101k (2022: £1,644k). Major projects totalled £1,048k, with major investments in upgrading the mill to bring it inline with medical production requirements. Minor projects totalled £53k.

Depreciation charged in the year was £778k (2022: £860k) and capital employed (total assets less current liabilities) as at 31st December 2023 totalled £8.6m (2022: £12.4m).

INSPIRIT PADDINGTON TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Significant risks and uncertainties

Pelta Medical Papers Ltd is affected by the general economic climate, changes in exchange rates and other factors that are more specific to the company. Pelta Medical Papers Ltd endeavours to minimise risk through preventive measures. Wherever possible, risk is hedged or insured against. The following describes the factors that are significant in assessing Pelta Medical Papers Ltd’s operating risk and financial risk.

Operating risks

Description of Risks

Risk Management

Variations in market prices and volumes

for products

The customer base is subject to change. Customer agreements are made with consideration and respect of pricing, volumes, payment, stock terms and conditions. These are typically re-negotiated regularly on a three-six month basis. Major customers are incentivised through

retrospective bonus agreements.

Customer dependence and credit risk

 

Customers range from being large international, listed packaging groups through to privately-owned SMEs. Typically carrying out conversion of paper into bags and wrappings. Customer agreements and relations go back many years. Credit terms vary with market and product and credit is insured and managed by the Finance Team.

Fibre price risk

 

Pulp supply agreements are negotiated and secured with suppliers through a pooled purchasing association.

Energy price risk

 

A purchasing strategy is in place to mitigate the risk of market price increases by arranging forward contracts.

Environmental impact

Permits are obtained from The Environment Agency to regulate and minimise environmental impact. Key staff are trained in environmental issues to ensure the impact is managed.

Seasonal variations

 

Pelta Medical Paper Ltd is relatively unaffected by seasonality. Orders remain constant throughout the year, with the only impact being a 2 week shutdown of production in Summer, and reduced sales volumes prior to Christmas.

Financial risks

Description of Risks

Risk Management

Currency risk - transaction exposure

All currency transactions are made at spot rate. Where possible we ensure that receipts in currency are utilised to pay suppliers in the same currency. Currency exposure is restricted by trading in Euros, GBPs and US Dollars.

INSPIRIT PADDINGTON TOPCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Directors duties

The Directors of the Company must act in accordance with a set of personal duties. These duties are detailed in s172 of the UK Companies Act 2006 summarised as follows:

 

A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

 

 

In particular Pelta Medical Papers Ltd's Directors ensure:

 

Future developments

In November 2024, the company acquired the share capital of a European paper mill.

 

Post year end, in December 2024, Pelta Medical Papers Ltd entered administration.

On behalf of the board

Mr. A Farrant
Director
12 March 2025
INSPIRIT PADDINGTON TOPCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company is a holding company. The principal activity of the group is a manufacturer of sterile barrier papers used for the packaging of both re-usable and single-use medical devices.

Results and dividends

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr W Stamp
Mr. A Farrant
Research and development

Pelta Medical Papers Ltd carries out research and development in existing and new products and processes. The costs of such activities are charged directly to the profit and loss account, along with the relevant 'RDEC'.

Employee involvement

The group continues to open channels for communication and consultation with all employees and their representatives on a variety of matters. Information is widely available as to the local performance on the external internet.

Business relationships

It is the group’s policy to agree terms of payment with suppliers before the onset of trade with the supplier. Once agreed it is the company’s policy to abide by those terms. Where no terms exist the company will apply its default terms unless the supplier is classed as a local supplier in which case the supplier will be paid promptly.

Future developments

The group and company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.

Auditor

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

This Streamlined Energy and Carbon Reporting (SECR) Report encompasses information in relation to energy usage and associated carbon emissions for the period from 1 January 2023 to 31 December 2023.

2023
2022
Energy consumption
GWh
GWh
Aggregate of energy consumption in the year
102
158
INSPIRIT PADDINGTON TOPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 emissions
Direct from fossil fuel combustion
14,909.00
23,022.00
Transport related (company vehicles)
102.00
156.00
15,011.00
23,178.00
Scope 2 emissions
Purchased electricity
4,379.00
6,293.00
Total gross emissions
19,390.00
29,471.00
Intensity ratio
Tonnes CO2e per net tonnes paper
0.78
0.73
Quantification and reporting methodology

The methodology is taken from HM Government’s Environmental Reporting Guidelines, March 2019. Emission factors are taken from the UK Government GHG Conversion Factors for Company Reporting 2023 factors, version 1.1. In addition to these, methodologies used to derive emissions in accordance with compliance to the UK Emissions Trading Scheme and Climate Change Agreement are utilised.

Intensity measurement

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per net tonnes of paper, the recommended ratio for the sector.

Measures taken to improve energy efficiency

During 2023, the Group has installed an advanced energy monitoring system on aspects of the power and gas distribution network. The information from this is being considered via a strategic program looking at further improving energy efficiency and considering decarbonisation strategy. In addition to this, the Group has undertaken an independent energy audit, and set a near-term science-based carbon reduction target via the Science Based Targets initiative (SBTi).

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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

INSPIRIT PADDINGTON TOPCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
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 auditor of the company 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 auditor of the company is aware of that information.

Going concern

The Directors have prepared the accounts using the going concern assumption, more details of which are set out in Note 1.5 to the financial statements.

On behalf of the board
Mr. A Farrant
Director
12 March 2025
INSPIRIT PADDINGTON TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INSPIRIT PADDINGTON TOPCO LIMITED
- 8 -
Opinion

We have audited the financial statements of Inspirit Paddington Topco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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:

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.

Emphasis of matter

We draw attention to note 29 of the financial statements, which discloses that the main trading subsidiary Pelta Medical Papers Limited entered administration in December 2024 and the acquisition of a new subsidiary. Our opinion is not modified in this respect.

Material uncertainty related to going concern

We draw attention to note 1.5 in the financial statements, which indicates uncertainty over funding and future cash flows of the company. As stated in note 1.5, these events and conditions indicate that a level of uncertainty exists that may cast doubt on the company’s ability to continue as a going concern.

 

Our opinion is not modified in respect of this matter.

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

INSPIRIT PADDINGTON TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INSPIRIT PADDINGTON TOPCO LIMITED
- 9 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report 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:

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 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 parent 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.

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.

INSPIRIT PADDINGTON TOPCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INSPIRIT PADDINGTON TOPCO LIMITED
- 10 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

Susanna Cassey (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
12 March 2025
Chartered Accountants
Statutory Auditor
Fleet House
New Road
Lancaster
United Kingdom
LA1 1EZ
INSPIRIT PADDINGTON TOPCO LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Year
period
ended
ended
31 December
31 December
2023
2022
Notes
£
£
Turnover
3
45,421,461
64,708,451
Cost of sales
(40,716,708)
(56,203,958)
Gross profit
4,704,753
8,504,493
Distribution costs
(1,728,553)
(3,355,220)
Administrative expenses
(7,825,415)
(7,185,506)
Other operating income
541,684
512,063
Exceptional expense
4
(554,289)
(1,062,960)
Release of negative goodwill
5
133,507
4,688,551
Operating (loss)/profit
6
(4,728,313)
2,101,421
Interest receivable and similar income
9
2,353
3,959
Interest payable and similar expenses
10
(334,401)
(310,946)
Other gains/(losses)
11
118,828
903,870
(Loss)/profit before taxation
(4,941,533)
2,698,304
Tax on (loss)/profit
12
(5,831)
265,722
(Loss)/profit for the financial year
(4,947,364)
2,964,026
(Loss)/profit for the financial year is attributable to:
- Owners of the parent company
(4,023,609)
3,280,674
- Non-controlling interests
(923,755)
(316,648)
(4,947,364)
2,964,026
Total comprehensive income for the year is attributable to:
- Owners of the parent company
(4,023,609)
3,280,674
- Non-controlling interests
(923,755)
(316,648)
(4,947,364)
2,964,026
INSPIRIT PADDINGTON TOPCO LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Negative goodwill
14
(1,378,168)
(1,511,675)
Other intangible assets
14
656,568
428,659
Total intangible assets
(721,600)
(1,083,016)
Tangible assets
13
4,419,383
4,037,959
3,697,783
2,954,943
Current assets
Stocks
18
6,982,967
7,649,592
Debtors
19
8,294,658
14,642,299
Investments
20
-
0
424,149
Cash at bank and in hand
179,823
2,358,149
15,457,448
25,074,189
Creditors: amounts falling due within one year
21
(14,996,700)
(18,967,439)
Net current assets
460,748
6,106,750
Total assets less current liabilities
4,158,531
9,061,693
Creditors: amounts falling due after more than one year
22
(4,282,715)
(4,238,513)
Net (liabilities)/assets
(124,184)
4,823,180
Capital and reserves
Called up share capital
25
1
1
Profit and loss reserves
(742,935)
3,280,674
Equity attributable to owners of the parent company
(742,934)
3,280,675
Non-controlling interests
618,750
1,542,505
(124,184)
4,823,180
The financial statements were approved by the board of directors and authorised for issue on 12 March 2025 and are signed on its behalf by:
12 March 2025
Mr. A Farrant
Director
Company registration number 13679256 (England and Wales)
INSPIRIT PADDINGTON TOPCO LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
15
1,924,450
1,749,573
Current assets
-
-
Creditors: amounts falling due within one year
21
(9,825)
(800)
Net current liabilities
(9,825)
(800)
Total assets less current liabilities
1,914,625
1,748,773
Creditors: amounts falling due after more than one year
22
(1,923,649)
(1,748,772)
Net (liabilities)/assets
(9,024)
1
Capital and reserves
Called up share capital
25
1
1
Profit and loss reserves
(9,025)
-
Total equity
(9,024)
1

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 £9,025 (2022 - £0 profit).

The financial statements were approved by the board of directors and authorised for issue on 12 March 2025 and are signed on its behalf by:
12 March 2025
Mr. A Farrant
Director
Company registration number 13679256 (England and Wales)
INSPIRIT PADDINGTON TOPCO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
Balance at 14 October 2021
-
0
-
0
-
-
-
Period ended 31 December 2022:
Profit and total comprehensive income
-
3,280,674
3,280,674
(316,648)
2,964,026
Issue of share capital
25
1
-
1
-
1
Acquisition of subsidiary
-
-
-
1,859,153
1,859,153
Balance at 31 December 2022
1
3,280,674
3,280,675
1,542,505
4,823,180
Year ended 31 December 2023:
Loss and total comprehensive income
-
(4,023,609)
(4,023,609)
(923,755)
(4,947,364)
Balance at 31 December 2023
1
(742,935)
(742,934)
618,750
(124,184)
INSPIRIT PADDINGTON TOPCO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 14 October 2021
-
0
-
0
-
Period ended 31 December 2022:
Profit and total comprehensive income for the period
-
-
-
0
Issue of share capital
25
1
-
1
Balance at 31 December 2022
1
-
0
1
Year ended 31 December 2023:
Profit and total comprehensive income
-
(9,025)
(9,025)
Balance at 31 December 2023
1
(9,025)
(9,024)
INSPIRIT PADDINGTON TOPCO LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
30
(1,607,192)
1,384,557
Interest paid
(134,673)
(310,946)
Income taxes refunded
80,578
56,743
Net cash (outflow)/inflow from operating activities
(1,661,287)
1,130,354
Investing activities
Purchase of business
-
(1,996,511)
Purchase of intangible assets
(216,918)
(439,650)
Purchase of tangible fixed assets
(1,121,668)
(1,404,422)
Proceeds from disposal of tangible fixed assets
431,794
12,800
Cash generated from investment in futures
542,977
219,721
Interest received
2,353
3,959
Net cash used in investing activities
(361,462)
(3,604,103)
Financing activities
Proceeds from issue of shares
-
1
Proceeds from borrowings
1,400,000
1,748,772
Repayment of borrowings
(10,230)
-
Proceeds from new bank loans
-
2,000,000
Repayment of bank loans
(345,347)
(376,875)
Repayment of vendor loan notes
(1,200,000)
(40,000)
Issue of vendor loan notes
-
1,500,000
Net cash (used in)/generated from financing activities
(155,577)
4,831,898
Net (decrease)/increase in cash and cash equivalents
(2,178,326)
2,358,149
Cash and cash equivalents at beginning of year
2,358,149
-
0
Cash and cash equivalents at end of year
179,823
2,358,149
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
1
Accounting policies
Company information

Inspirit Paddington Topco Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 2 Babmaes Street, London, England, SW1Y 6HD.

The group consists of Inspirit Paddington Topco Limited and all of its subsidiaries.

 

1.1
Reporting period

The comparative period covers from incorporation on 15 October 2021 to 31 December 2022. Therefore, the comparative amounts are not entirely comparable.

1.2
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 modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

 

The company has taken advantage of the exemption in FRS 102 33.1A Related Party Disclosures from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements in which this company is included are prepared by the ultimate parent company and are publicly available.

INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
1.3
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Inspirit Paddington Topco Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. 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.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

1.5
Going concern

The Directors have prepared detailed cash flow forecasts to satisfy themselves that the group and the company will be able to operate for the foreseeable future and therefore it is reasonable to adopt the going concern basis of preparation in the financial statements.

 

In common with many businesses post-acquisition, the Group is dependent upon additional funding being obtained and the delivery of performance improvement initiatives before the end of the going concern period. Although discussions with a financing party are well advanced and there are no reasons to suggest this will not be forthcoming, financing has currently not yet been secured. Whilst discussions in relation to funding are well advanced, the short term cash flow forecasts show the group is reliant on funding and ongoing trading receipts being received on a prompt basis. The Group expects to return to a cash generative position following receipt of funding and execution of performance improvement initiatives, however, as with all performance improvement plans until it is delivered the success is uncertain.  These factors detailed indicate the existence of an uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include adjustments that would result if the Group was unable to continue as a going concern.

1.6
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -

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.

 

Other income consists of supplier rebates and sales of other materials which are not related to the principal activities of the company.

1.7
Intangible fixed assets - goodwill

Negative goodwill represents the excess of the fair value of net assets acquired over the cost of acquisition of a business. The negative goodwill has been pro rataed between the non-monetary assets acquired and recognised in the periods in which the non-monetary assets are recovered. For the stock element of negative goodwill this has been deemed to be the point of stock being sold or fully provided for. For the fixed asset element of negative goodwill this has been deemed to be in line with the depreciation on the underlying assets.

1.8
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised in administrative expenses so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
5%
1.9
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:

Freehold land and buildings
5 - 20 years straight line
Plant and equipment
3 - 25 years straight line

Freehold land is not depreciated.

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 profit and loss account.

1.10
Fixed asset investments

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.

INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.12
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is based on the first-in first-out principle and includes expenditure incurred in acquiring the stocks, production or conversion costs and other costs in bringing them to their existing location and condition. In the case of manufactured stocks and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

1.13
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.

1.14
Financial instruments

The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
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.

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 group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

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.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

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

INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
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 group's contractual obligations expire or are discharged or cancelled.

1.15
Equity instruments

Equity instruments issued by the group 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 group.

1.16
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 or immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in or 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.

1.17
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
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.

 

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 profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.18
Employee benefits

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.

1.19
Retirement benefits

A defined contribution plan is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees.

1.20
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 leased asset are consumed.

1.21
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.

1.22

Research and development

Expenditure on research and development activities is recognised in the profit and loss account as an expense as incurred.

1.23

Provisions

A provision is recognised in the balance sheet when the Company has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the amount required to settle the obligation at the reporting date.

INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent 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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Useful economic lives of tangible fixed assets

The useful life and depreciation rate of tangible fixed assets is reviewed annually and amended when necessary.

Fair value of vendor loan

On completion of the acquisition of Pelta Medical Papers Ltd the group received a vendor loan of £1.5m. Repayments due on this loan were contingent on the trading performance of the subsidiary, the loan has therefore been classified as a non-basic financial liability held at fair value through profit and loss.

 

On 8 February 2023 it was agreed that the vendor loan would be settled for £1.2m. As a result of the loan being settled with a third party within close proximity of the period end it was deemed appropriate to use this as the period end fair value for the period ended 31 December 2022. The resulting gain of £260k was recognised in the profit and loss account in the period ended 31 December 2022.

 

As this loan has now been fully repaid there is no balance as at 31 December 2023.

Negative goodwill

Negative goodwill represents the excess of the fair value of net assets acquired over the cost of acquisition of a business. The negative goodwill has been pro rataed between the non-monetary assets acquired and recognised in the periods in which the non-monetary assets are recovered. For the stock element of negative goodwill this has been deemed to be the point of stock being sold or fully provided for. For the fixed asset element of negative goodwill this has been deemed to be in line with the depreciation on the underlying assets.

 

As at the year end the negative goodwill balance was £1,378,168 (2022: £1,511,675). During the financial year the amount of negative goodwill released to the profit and loss account was £133,507 (2022: 4,688,551)

INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
12,014,680
19,381,905
Europe
23,036,965
31,317,956
Rest of the World
10,369,816
14,008,590
45,421,461
64,708,451
2023
2022
£
£
Other revenue
Interest income
2,353
3,959
Supplier rebates
250,000
264,855
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional Expense
554,289
1,062,960
554,289
1,062,960

Exceptional Expense

 

During the period ended 31 December 2023 the group underwent restructuring. The exceptional expenses in this year are for costs relating to the restructuring.

 

During the period ended 31 December 2022 the group acquired Pelta Medical Papers Ltd. The exceptional expense in this year relates to the costs associated with the acquisition and costs associated with rebranding and transition post acquisition.

 

5
Release of negative goodwill
2023
2022
£
£
Release of negative goodwill in relation to stock
-
4,493,422
Release of negative goodwill in relation to fixed assets
133,507
195,129
133,507
4,688,551
Negative goodwill was created as a result of the acquisition of Pelta Medical Papers Ltd on 31 October 2021. It has been deemed appropriate to pro rata the negative goodwill to the monetary assets acquired as part of the acquisition. The negative goodwill relating to stock has been released to the profit and loss as the stock is sold or provided for. The negative goodwill relating to fixed assets has been released in line with depreciation on the relevant assets.
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
6
Operating (loss)/profit
2023
2022
£
£
Operating (loss)/profit for the year is stated after charging/(crediting):
Exchange losses
229,725
5,525
Depreciation of owned tangible fixed assets
503,950
518,467
Profit on disposal of tangible fixed assets
(195,500)
(12,800)
Amortisation of intangible assets
(10,991)
10,991
Operating lease charges
212,087
140,593
7
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
6,000
10,000
Audit of the financial statements of the company's subsidiaries
30,615
31,700
36,615
41,700
For other services
Taxation compliance services
4,250
3,950
Other taxation services
8,000
9,761
All other non-audit services
5,000
2,625
17,250
16,336
8
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
29
25
-
-
27
27
-
-
104
93
-
-
Total
160
145
-
0
-
0
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Employees
(Continued)
- 27 -

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
7,607,300
6,773,415
-
0
-
0
Social security costs
793,643
881,219
-
-
Pension costs
397,934
383,373
-
0
-
0
8,798,877
8,038,007
-
0
-
0
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
2,116
3,959
Other interest income
237
-
Total income
2,353
3,959
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
144,903
128,174
Interest payable to group undertakings
12,557
-
0
Other interest on financial liabilities
176,941
182,772
Total finance costs
334,401
310,946
11
Other gains/(losses)
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Gain on financial assets held at fair value through profit or loss
118,828
643,870
Gain on financial liabilities held at fair value through profit or loss
-
260,000
118,828
903,870
12
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
5,831
(265,722)
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Taxation
(Continued)
- 28 -

The actual charge/(credit) for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(4,941,533)
2,698,304
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(1,162,249)
512,678
Tax effect of expenses that are not deductible in determining taxable profit
125,483
6,551
Tax effect of income not taxable in determining taxable profit
-
0
(49,400)
Unutilised tax losses carried forward
-
0
27,374
Change in unrecognised deferred tax assets
1,126,067
131,840
Depreciation on assets not qualifying for tax allowances
(52,102)
10,193
Research and development tax credit
5,275
11,368
Other permanent differences
(1,951)
41,615
Negative goodwill released to profit and loss not taxable
(31,401)
(890,825)
Effect of super deduction
(3,291)
(67,116)
Taxation charge/(credit)
5,831
(265,722)
13
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Total
£
£
£
Cost
At 1 January 2023
2,100,673
2,334,692
4,435,365
Additions
118,486
1,003,182
1,121,668
Disposals
-
0
(236,294)
(236,294)
At 31 December 2023
2,219,159
3,101,580
5,320,739
Depreciation and impairment
At 1 January 2023
153,138
244,268
397,406
Depreciation charged in the year
120,539
383,411
503,950
At 31 December 2023
273,677
627,679
901,356
Carrying amount
At 31 December 2023
1,945,482
2,473,901
4,419,383
At 31 December 2022
1,947,535
2,090,424
4,037,959
The company had no tangible fixed assets at 31 December 2023 or 31 December 2022.
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
14
Intangible fixed assets
Group
Negative goodwill
Software
Total
£
£
£
Cost
At 1 January 2023
(1,511,675)
439,650
(1,072,025)
Additions - internally developed
-
0
216,918
216,918
Release of negative goodwill
133,507
-
0
-
0
At 31 December 2023
(1,378,168)
656,568
(721,600)
Amortisation and impairment
At 1 January 2023
-
0
10,991
10,991
Amortisation charged for the year
-
0
(10,991)
(10,991)
At 31 December 2023
-
0
-
0
-
0
Carrying amount
At 31 December 2023
(1,378,168)
656,568
(721,600)
At 31 December 2022
(1,511,675)
428,659
(1,083,016)
The company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
15
Fixed asset investments
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Investments in subsidiaries
16
-
0
-
0
800
800
Loans to subsidiaries
16
-
0
-
0
1,923,650
1,748,773
-
0
-
0
1,924,450
1,749,573
Movements in fixed asset investments
Company
Shares in subsidiaries
Loans to subsidiaries
Total
£
£
£
Cost or valuation
At 1 January 2023
800
1,748,773
1,749,573
Additions
-
174,877
174,877
At 31 December 2023
800
1,923,650
1,924,450
Carrying amount
At 31 December 2023
800
1,923,650
1,924,450
At 31 December 2022
800
1,748,773
1,749,573
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
16
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Pelta Trading (Shanghai) Co. Ltd
China
Ordinary
-
100.00
Pelta Medical Papers Germany GmbH
Germany
Ordinary
-
100.00
Pelta Medical Papers Ltd
UK
Ordinary
-
100.00
Inspirit Paddington Bidco Limited
UK
Ordinary
81.63
-
17
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
-
424,149
-
-
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
-
1,200,000
-
-

Financial assets

 

Financial assets held as at the prior year end are stated net of pulp futures totalling £96,654 with the remaining balance relating to the value held in a margin account in relation to these futures. The financial assets are valued at the latest market value for the futures as at the year end per StoneX Financial Ltd. During the year fair value gains of £118,828 (2022: £643,870) were recognised in relation to these assets. All pulp futures are due to settle within one year.

 

Financial liabilities

 

On completion of the acquisition of Pelta Medical Papers Ltd a vendor loan was received for £1.5m. Repayments due on this loan were however contingent on trading performance of the subsidiary and the loan has therefore been classified as non-basic financial liability which is therefore held at fair value through profit and loss.

 

On 8 February it was agreed that the vendor loan would be settled for £1.2m. As a result of this being settled with a third party for £1.2m within close proximity to the year end it was deemed appropriate to use this as the year end fair value. This resulted in a £260k gain in the profit and loss in the year ended 31 December 2022.

18
Stocks
Group
Company
2023
2022
2023
2022
£
£
£
£
Raw materials and consumables
2,174,089
2,409,612
-
-
Finished goods and goods for resale
4,808,878
5,239,980
-
0
-
0
6,982,967
7,649,592
-
-
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
19
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
6,702,069
12,109,039
-
0
-
0
Corporation tax recoverable
72,920
154,292
-
0
-
0
Other debtors
370,534
784,209
-
0
-
0
Prepayments and accrued income
1,149,135
1,594,759
-
0
-
0
8,294,658
14,642,299
-
-
20
Current asset investments
Group
Company
2023
2022
2023
2022
£
£
£
£
Unlisted investments
-
424,149
-
-
21
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans
23
333,333
333,384
-
0
-
0
Trade creditors
5,221,995
5,750,282
-
0
-
0
Corporation tax payable
9,657
4,620
-
0
-
0
Other taxation and social security
761,798
305,637
-
-
Other creditors
5,646,210
4,379,845
800
800
Accruals and deferred income
3,023,707
8,193,671
9,025
-
0
14,996,700
18,967,439
9,825
800

Other creditors totalling £5,626,618 (2022: £4,415,675) are secured by a fixed and floating charge over all assets of Pelta Medical Papers Ltd.

22
Creditors: amounts falling due after more than one year
Group
Company
2023
2022
2023
2022
Notes
£
£
£
£
Bank loans and overdrafts
23
944,445
1,289,741
-
0
-
0
Other borrowings
23
3,338,270
1,748,772
1,923,649
1,748,772
Derivative financial instruments
-
0
1,200,000
-
0
-
0
4,282,715
4,238,513
1,923,649
1,748,772
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
23
Loans and overdrafts
Group
Company
2023
2022
2023
2022
£
£
£
£
Bank loans
1,277,778
1,623,125
-
0
-
0
Loans from group undertakings
1,212,557
-
0
-
0
-
0
Other loans
2,125,713
1,748,772
1,923,649
1,748,772
4,616,048
3,371,897
1,923,649
1,748,772
Payable within one year
333,333
333,384
-
0
-
0
Payable after one year
4,282,715
3,038,513
1,923,649
1,748,772

Bank loans are repayable in 46 equal quarterly instalments of £27,778. Interest on bank loans is charged monthly at an interest rate of 5.15% plus the Bank of England base rate.

 

Bank loans are secured by way of a fixed and floating charge over all assets of Pelta Medical Papers Ltd and Inspirit Paddington Bidco Limited.

Other loans totalling £1,923,649 relate to preference shares. These accrue interest at a rate of 10% per annum. These are redeemable on demand at the discretion of the group. As a result they have been classified as due in more than one year as this is the intention of the group.

 

The loans from group undertakings and other loans totalling £202,064 are repayable in full on 1 November 2025. Interest on these loans accrues annually at a rate of 10%.

24
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
397,934
383,373

Employer pension contributions owing at the year end were £31,544 (2022: £27,867).

 

Employees of the company are, where appropriate, included in the Pelta Medical Papers Ltd company Pension Scheme which is of a defined contribution type. The assets of the scheme are held in trustee administered funds.

 

25
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share of £1 each
1
1
1
1
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
26
Operating lease commitments
Lessee

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:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
252,249
516,720
-
-
Between two and five years
562,565
1,527,510
-
-
In over five years
-
1,464
-
-
814,814
2,045,694
-
-
27
Capital commitments

Amounts contracted for but not provided in the financial statements:

Group
Company
2023
2022
2023
2022
£
£
£
£
Acquisition of tangible fixed assets
-
189,085
-
-
28
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2023
2022
£
£
Aggregate compensation
237,309
417,438
Transactions with related parties

During the year the group entered into the following transactions with related parties:

Management charge payable
Interest payable
2023
2022
2023
2022
£
£
£
£
Group
Entities with control, joint control or significant influence over the company
200,808
233,333
187,434
182,772
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
28
Related party transactions
(Continued)
- 34 -
Company
Entities with control, joint control or significant influence over the company
-
-
174,877
182,772

The following amounts were outstanding at the reporting end date:

Amounts due to related parties
2023
2022
£
£
Group
Entities with control, joint control or significant influence over the group
3,338,270
1,748,772
Company
Entities with control, joint control or significant influence over the company
1,923,649
1,748,772
29
Events after the reporting date

Subsequent to the year end 112 shares were issued in Inspirit Paddington Bidco which has reduced the shareholding that Inspirit Paddington Topco owns in Pelta Medical Papers Ltd to 73.26%. Furthermore, the group has taken an additional loan of £1m.

 

In November 2024, the company acquired the share capital of a European paper mill.

 

Pelta Medical Papers Ltd entered administration in December 2024.

30
Cash (absorbed by)/generated from group operations
2023
2022
£
£
(Loss)/profit for the year after tax
(4,947,364)
2,964,026
Adjustments for:
Taxation charged/(credited)
5,831
(265,722)
Finance costs
334,401
310,946
Investment income
(2,353)
(3,959)
Release of negative goodwill
(133,507)
(4,688,551)
Gain on disposal of tangible fixed assets
(195,500)
(12,800)
Amortisation and impairment of intangible assets
(10,991)
10,991
Depreciation and impairment of tangible fixed assets
503,950
518,467
Other gains and losses
(118,828)
(903,870)
Movements in working capital:
Decrease in stocks
666,625
648,537
Decrease in debtors
6,266,269
6,135,855
Decrease in creditors
(3,975,725)
(3,329,363)
Cash (absorbed by)/generated from operations
(1,607,192)
1,384,557
INSPIRIT PADDINGTON TOPCO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
31
Analysis of changes in net debt - group
1 January 2023
Cash flows
Market value movements
31 December 2023
£
£
£
£
Cash at bank and in hand
2,358,149
(2,178,326)
-
179,823
Borrowings excluding overdrafts
(3,371,897)
(1,443,879)
199,728
(4,616,048)
(1,013,748)
(3,622,205)
199,728
(4,436,225)
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