Company registration number 00524279 (England and Wales)
PURPLE SURGICAL UK LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
PAGES FOR FILING WITH REGISTRAR
PURPLE SURGICAL UK LIMITED
CONTENTS
Page
Statement of financial position
1
Notes to the financial statements
2 - 9
PURPLE SURGICAL UK LIMITED
STATEMENT OF FINANCIAL POSITION
- 1 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
4
371,354
516,736
Current assets
Stocks
44,002
39,683
Debtors
5
17,070,220
30,606,226
Cash at bank and in hand
176,872
201,552
17,291,094
30,847,461
Creditors: amounts falling due within one year
6
(8,672,538)
(22,045,915)
Net current assets
8,618,556
8,801,546
Total assets less current liabilities
8,989,910
9,318,282
Creditors: amounts falling due after more than one year
7
(3,905,472)
(3,000,000)
Net assets
5,084,438
6,318,282
Capital and reserves
Called up share capital
700
700
Other reserves
15,207
15,207
Profit and loss reserves
5,068,531
6,302,375
Total equity
5,084,438
6,318,282
The directors of the company have elected not to include a copy of the income statement within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 17 March 2025 and are signed on its behalf by:
R Sharpe
Director
Company registration number 00524279 (England and Wales)
PURPLE SURGICAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
1
Accounting policies
Company information
Purple Surgical UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2 Chestnut House, Farm Close, Shenley, Herts, WD7 9AD.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
This 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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Purple Surgical Holdings Limited. These consolidated financial statements are available from its registered office, 2 Chestnut House, Farm Close, Shenley, Hertfordshire, United Kingdom, WD7 9AD.
1.2
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.
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.
1.3
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.
PURPLE SURGICAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 3 -
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:
Leasehold improvements
Over a period of 20 years
Fixtures and fittings
15% reducing balance
Computer equipment
33% on cost
Motor vehicles
33% reducing balance
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.
1.4
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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.
1.5
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.
1.6
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.
1.7
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 statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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.
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.
PURPLE SURGICAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 4 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
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.
1.8
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.
1.9
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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, 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 when the company has 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.
PURPLE SURGICAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 5 -
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent 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.
PURPLE SURGICAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 6 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock
Stock is valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete inventories. Calculation of these estimates requires judgements to be made, which include forecasting consumer demand and the economic environment. This is reviewed by the management on a regular basis. The stock provision at the year end was £Nil (2023: £Nil).
Bad debt and litigation provisions
During the prior year the company entered into litigation in connection with the supply of PPE and advance payments made to suppliers where the supplier was unable to fulfil their obligations or return the advanced payments. The directors are in regular contact with the appointed lawyers. Following professional advice, the provision has been estimated by the directors' based upon expectations of the outcomes of the on-going litigation. Until the litigation is finalised and settled, the provision will remain uncertain.
At 30 June 2024 there are total provisions in respect of the above of £33,354,868 (2023: £34,324,608) included in the balance sheet relating to on-going litigation.
The review of the provisions in respect of advance payments, a release of £875,454 (2023: £783,826) has been recognised in the profit and loss account within Exceptional costs - bad debt and litigation provision.
Recoverability of intercompany debt
At the year end the directors have reviewed amounts owing to the company by fellow group companies for possible bad debt provisions. As a result of this review, the directors have provided for the debt based on the net liabilities and forecasts of the fellow group companies.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Total
22
21
PURPLE SURGICAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 7 -
4
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 July 2023
795,580
1,182,995
1,978,575
Additions
18,821
18,821
Disposals
(155,083)
(155,083)
At 30 June 2024
795,580
1,046,733
1,842,313
Depreciation and impairment
At 1 July 2023
531,052
930,787
1,461,839
Depreciation charged in the year
36,802
60,624
97,426
Eliminated in respect of disposals
(88,306)
(88,306)
At 30 June 2024
567,854
903,105
1,470,959
Carrying amount
At 30 June 2024
227,726
143,628
371,354
At 30 June 2023
264,528
252,208
516,736
5
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,250,016
2,974,621
Corporation tax recoverable
290,327
1,316,736
Amounts owed by group undertakings
15,285,472
25,098,511
Other debtors
244,405
1,216,358
17,070,220
30,606,226
Included within other debtors are advance payments made to suppliers of £33,518,465 (2023: £35,447,330) shown net of a provision of £33,354,868 (2023: £34,324,608). Also see notes 2 and 9.
6
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
143,950
118,794
Amounts owed to group undertakings
7,218,805
12,807,660
Taxation and social security
132,946
164,769
Other creditors
1,176,837
8,954,692
8,672,538
22,045,915
PURPLE SURGICAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 8 -
7
Creditors: amounts falling due after more than one year
2024
2023
£
£
Bank loans and overdrafts
257,472
Other creditors
3,648,000
3,000,000
3,905,472
3,000,000
The bank loan is secured by a fixed and floating charge over the assets of the company.
8
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Emphasis of matter – Provisions and events after the reporting period
We draw attention to notes 2, 5 and 9 of the financial statements, which describe judgments and estimates made by the directors regarding provisions for litigations affecting the company during the year and after the year end.
Debtors are stated after a provision related to amounts advanced to suppliers that have not been recovered. During the year a credit in relation to the provision was recognised in the profit and loss account within Exceptional costs – Bad debt and litigation provision.
At the time of approval of these financial statements the litigation to pursue the recoveries described above and in notes 2, 5 and 9 of the financial statements is on-going and therefore is inherently uncertain. The directors have based their estimates on the continued professional advice received from the company’s lawyers. If the outcome of the litigations differs from the directors’ expectations then the estimates made may not prove to be accurate and could result in material updates to the provisions. Our opinion is not modified in this respect.
Senior Statutory Auditor:
Paul Faber FCA
Statutory Auditor:
Landau Morley LLP
Date of audit report:
17 March 2025
9
Events after the reporting date
Subsequent to the year end, an amount of $129,023 has been received in respect of the advance payment
made to suppliers during the Covid-19 pandemic as referred to in notes 2 and 5. The provision in respect of
advanced payments to suppliers has been adjusted to reflect this recovery.
PURPLE SURGICAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 9 -
10
Related party transactions
At the balance sheet date £7,218,806 (2023: owed by £6,014,715) was owed to Purple Surgical International.
Net loans were advanced to Purple Surgical Manufacturing Limited, a fellow subsidiary undertaking, during the year. The balance owed to the company at 30 June 2024 amounted to £ 21,717,619 (2023: £19,949,909). At 30 June 2024, a provision of £10,442,024 (2023: £8,204,058) was included for the amounts due to the company from Purple Surgical Manufacturing Limited.
Included in the profit and loss account are warehouse charges of £280,000 (2023: £280,000) payable to Purple Surgical Manufacturing Limited.
During the year, purchases from Purple Surgical Manufacturing Limited amounted to £5,543,433 (2023: £5,190,249).
11
Parent company
The parent company of the smallest group for which consolidated financial statements are drawn up and of which Purple Surgical UK Limited is a member is Purple Surgical Holdings Limited. Purple Surgical Holdings Limited is a company incorporated in England, whose registered office is 2 Chestnut House, Farm Close, Shenley, Hertfordshire, United Kingdom, WD7 9AD.
The immediate parent company is Chartuseful Limited, a company incorporated in England, whose registered office is 2 Chestnut House, Farm Close, Shenley, Hertfordshire, United Kingdom, WD7 9AD.
The ultimate controlling party throughout the current and previous year was R Sharpe.
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