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Company registration number: 15095216







ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
31 AUGUST 2024


PROPAK GROUP HOLDINGS LIMITED






































img690e.png                        

 


PROPAK GROUP HOLDINGS LIMITED
 


 
COMPANY INFORMATION


Directors
L. Bennett 
M. Bennett 




Registered number
15095216



Registered office
Unit 1 Gunnels Wood Park

Stevenage

Hertfordshire

SG1 2BH




Independent auditors
Menzies LLP
Chartered Accountants & Statutory Auditor

Ashcombe House

5 The Crescent

Leatherhead

Surrey

KT22 8DY




Bankers
HSBC BANK plc
Town Centre

Danestrete

Stevenage

Hertfordshire

SG1 1BY





 


PROPAK GROUP HOLDINGS LIMITED
 



CONTENTS



Page
Group Strategic Report
1 - 3
Directors' Report
4 - 5
Independent Auditors' Report
6 - 9
Consolidated Statement of Comprehensive Income
10
Consolidated Statement of Financial Position
11
Company Statement of Financial Position
12
Consolidated Statement of Changes in Equity
13
Company Statement of Changes in Equity
14
Consolidated Statement of Cash Flows
15
Consolidated Analysis of Net Debt
16
Notes to the Financial Statements
17 - 32


 


PROPAK GROUP HOLDINGS LIMITED
 


 
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 AUGUST 2024

Introduction
 
The directors present their strategic report for the year ended 31st August 2024.

Business review
 
The company was incorporated on 23 August 2023 and acquired the subsidairy company on 31 October 2023. The directors are pleased to report that 2024 has been a profitable year, despite the difficult trading conditions. The challenges in 2024 included ongoing geo-political instability, changes in government in the UK, global elections and pressures in the labour market. Despite these challenges, the directors believe that there will be more opportunity for their highly skilled services, not least given the increase in defence sector spending in the UK, Europe and beyond.
Group turnover for the year amounted to £9.3m, gross profit margin was 33.9% and EBITDA was 20.9% in the current year.
In the light of the challenges faced by the group, the directors have taken a number of measures to monitor and mitigate the ongoing risks presented by rising factory costs and material supply chain disruption.
In order to mitigate these risks, cost mitigation measures have been introduced, which include a reduction in overheads and third-party expenditure where practicable. In addition, investment in staff training and production efficiencies have been implemented which have resulted in a positive impact in gross profit margins achieved in the year.
Given the nature of the group activities and the proven resilience of the business, the directors believe that these short term challenges can be managed. The group has a strong balance sheet together with significant cash reserves to ensure that the business continues to operate for the longer term.
The directors continue to work closely with suppliers to ensure ongoing costs are managed and the company has continuous supply in order to meet delivery timetables despite ongoing geo-political challenges that have contributed to supply chain disruption.
The group liquidity ratio was 1.75 at the end of 2024 following the restructuring of the group as part of the Bennett family succession planning, seeing the ownership of the group pass down a generation.
The directors remain committed to an ongoing programme of capital expenditure to ensure that Propak remains at the forefront of production technology. During the year, machinery and equipment was reviewed and adapted to aid improving efficiencies of the business, as well as aid in the penetration of new markets. In addition, the directors have invested in their state-of-the-art premises based in Hertfordshire to ensure that the group remains an attractive and fulfilling working environment for their highly skilled workforce. This overall review has meant that Propak continues to be the destination of choice for their customer base and facilitates winning new business.
The group is also committed to Quality Assurance and has an active Lean Six Sigma policy. In addition, the group is accredited with AS 9100 and Bronze standard in Supply Chain 21 (SC21), being one of the first sheet metal companies in the UK to achieve this recognition since the inception of the SC21 process. The group are also Rolls Royce and BAE approved. This adds breadth to the customer offer and opens up potential new sources of income, including the aero space industry.
The group continues to invest on enhancements to mitigate cyber security risks. The investments included maintaining their Cyber Essentials Plus status and DART Process (MOD) together with continuous upgrade of computer servers, firewalls and anti-virus software whilst maintaining the standalone firewalls on machinery. These enhanced security measures have been continually maintained throughout the current year in order to comply with International Aerospace Supply Chain requirements, which has been developed in conjunction with BAE Systems, Northrop Grumman and Rolls Royce.
In addition to the above accreditations, the group holds BAE and MBDA approval for plating and painting processes undertaken at the group's state of the art facilities. The company is also JOSCAR approved in connection with government procurement requirements.

Page 1

 


PROPAK GROUP HOLDINGS LIMITED
 



GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024

Principal risks and uncertainties
 
Business risks
The group operates in the market of precision sheet metal solutions, in which there are risks of competition from within the UK and of overseas supply. The group mitigates these risks and differentiates itself by focusing on innovative design, technical expertise, customer service and continual investment in state of the art facilities along with the directors belief that the staff of all ages and skills are exemplary.
Financial risks
The group's principal financial instruments comprise bank balances, other debtors and other creditors. The main purpose of these instruments is to finance the group's operations. The nature of the financial instruments used by the group is such that their market value does not fluctuate as a result of changes in market prices. The group's approach to managing other risks applicable to the financial instruments concerned is included within the directors' report.
The group also faces wage pressure given the highly skilled workforce combined with inflationary pressures in the UK
economy. The directors regularly review salary levels to ensure that they remain competitive to attract and retain talent. In addition, rising costs are reviewed in conjunction with investments in technology to drive efficiencies and an overall review of the pricing structure for the group’s services.
The group also has a robust cash management strategy to ensure that any such risks arising can be managed from existing reserves.

Future Developments
 
So far, the new financial year continues to bring significant uncertainty given the ongoing geo-political instability, global inflation and the impact of higher costs as a result of the new UK government’s approach to employment related taxes. This global economic turbulence does not look to be ending in the short term. Looking at macro-economic trends, this has already seen volatility in foreign currency rates and pressures on global interest rates. Given the underlying UK inflationary pressures, it seems likely that interest rates may remain higher for longer and wage pressures not disappearing in the short term. This trend is also expected to lead to challenges to liquidity in the coming months as suppliers and customers will face their own cash flow issues. There are a number of elections in Europe scheduled for 2025 and the new government administration in the USA has been suggesting trade tariffs and sanctions levied on its global supply partners. This uncertainty combined with the low consumer confidence in the UK following the elections in 2024 points to continued slow economic growth in the short term. The UK government has pledged commitment to large infrastructure projects and defence spending is likely to also increase. These defence spending increases are also likely to be seen in North America and Europe which brings opportunity to Propak given the skillset and customer base.
Inflation continues to be a key risk following supply chain disruption caused geo-political events and supply chain liquidity issues. The business faces material price volatility together with ongoing pressures on labour costs. Labour costs are also being driven upwards following short supply in the market as well as ongoing cost of living pressure fuelled by inflation and sustained higher interest rates.
The directors assert that they have a strong balance sheet that is robust enough to with stand volatility. The group has substantial cash balances, net assets and is historically profitable. In addition, the directors also feel the ongoing risk mitigation strategies will be adequate in dealing with any new risks that may manifest in the coming years. The group has also continued to enhance procurement strategies in order to manage short term material price volatility and the risk of stock outs.
The directors are committed to further investments in the business in the coming year and plan to invest in new plant and machinery. The planned investments include upgrading the motor fleet together with state-of-the-art production technology as required. The directors also recognise the ongoing importance of cyber security as this remains critical element of their business. The directors plan further enhancements in Cyber security and DART processes in the next twelve months, ensuring continued data integrity and security throughout the business.

Page 2

 


PROPAK GROUP HOLDINGS LIMITED
 



GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024

Other key performance indicators
 
The group's key performance indicators are turnover, gross margin, EBITDA and future order book, which as at the turn of the year was very healthy.


This report was approved by the board and signed on its behalf.





................................................
M. Bennett
Director

Date: 26 March 2025

Page 3

 


PROPAK GROUP HOLDINGS LIMITED
 


 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 AUGUST 2024

The directors present their report and the financial statements for the Period ended 31 August 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the Period, after taxation, amounted to £1,590,813.

Directors

The directors who served during the Period were:

L. Bennett (appointed 24 August 2023)
M. Bennett (appointed 24 August 2023)

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Page 4

 


PROPAK GROUP HOLDINGS LIMITED
 


 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 AUGUST 2024


Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditorsMenzies LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





................................................
M. Bennett
Director

Date: 26 March 2025

Page 5

 


PROPAK GROUP HOLDINGS LIMITED
 

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROPAK GROUP HOLDINGS LIMITED

Opinion


We have audited the financial statements of Propak Group Holdings Limited (the 'parent Company') and its subsidiaries (the 'Group') for the Period ended 31 August 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 August 2024 and of the Group's profit for the Period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


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


Conclusions relating to going concern


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


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


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


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 6

 


PROPAK GROUP HOLDINGS LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROPAK GROUP HOLDINGS LIMITED (CONTINUED)

Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group Strategic Report and the Directors' Report for the financial Period for which the financial statements are prepared is consistent with the financial statements; and
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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 Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 7

 


PROPAK GROUP HOLDINGS LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROPAK GROUP HOLDINGS LIMITED (CONTINUED)

Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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 Group financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

• The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.
 
• We understood how the Company is complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures. We assessed the extent of compliance with these legal and compliance procedures as part of our procedures on the related financial statement items.
 
• The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognize non-compliance with laws and regulations. The assessment did not identify any issues in this area.
 
• We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. We identified the risk of override of controls as the area where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed by the engagement team included:
 
• Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
• Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
• Challenging assumptions and judgments made by management in its significant accounting estimates; and
• Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
 
The assessment did not identify any issues in these areas.
 
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-complance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Page 8

 


PROPAK GROUP HOLDINGS LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PROPAK GROUP HOLDINGS LIMITED (CONTINUED)

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 2006Our 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 Auditors' 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.





Andrew Hookway FCA (Senior Statutory Auditor)
for and on behalf of
Menzies LLP
Chartered Accountants
Statutory Auditor
Ashcombe House
5 The Crescent
Leatherhead
Surrey
KT22 8DY

26 March 2025
Page 9

 


PROPAK GROUP HOLDINGS LIMITED
 


 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 AUGUST 2024

Period ended
31 August
2024
Note
£

  

Turnover
 4 
9,257,063

Cost of sales
  
(6,120,543)

Gross profit
  
3,136,520

Administrative expenses
  
(1,109,211)

Operating profit
  
2,027,309

Interest receivable and similar income
 8 
38,614

Profit before taxation
  
2,065,923

Tax on profit
 9 
(475,110)

Profit for the financial Period
  
1,590,813

  

Total comprehensive income for the Period
  
1,590,813

Profit for the Period attributable to:
  

Owners of the parent Company
  
1,590,813

  
1,590,813

Total comprehensive income for the Period attributable to:
  

Owners of the parent Company
  
1,590,813

  
1,590,813

The notes on pages 17 to 32 form part of these financial statements.

Page 10

 


PROPAK GROUP HOLDINGS LIMITED
REGISTERED NUMBER:15095216



CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2024

2024
Note
£

Fixed assets
  

Intangible assets
 10 
(1,568,650)

Tangible assets
 11 
1,487,259

  
(81,391)

Current assets
  

Stocks
 13 
921,123

Debtors: amounts falling due within one year
 14 
2,912,969

Cash at bank and in hand
  
2,108,694

  
5,942,786

Creditors: amounts falling due within one year
 15 
(2,862,106)

Net current assets
  
 
 
3,080,680

Total assets less current liabilities
  
2,999,289

Provisions for liabilities
  

Deferred taxation
 16 
(208,376)

Other provisions
 17 
(1,200,000)

  
 
 
(1,408,376)

Net assets excluding pension asset
  
1,590,913

Net assets
  
1,590,913


Capital and reserves
  

Called up share capital 
 18 
100

Profit and loss account
 19 
1,590,813

Equity attributable to owners of the parent Company
  
1,590,913

  
1,590,913


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




................................................
M. Bennett
Director

Date: 26 March 2025

The notes on pages 17 to 32 form part of these financial statements.

Page 11

 


PROPAK GROUP HOLDINGS LIMITED
REGISTERED NUMBER:15095216



COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2024

2024
Note
£

Fixed assets
  

Investments
 12 
6,288,071

  
6,288,071

Current assets
  

Debtors: amounts falling due within one year
 14 
100

  
100

Creditors: amounts falling due within one year
 15 
(1,038,071)

Net current (liabilities)/assets
  
 
 
(1,037,971)

Total assets less current liabilities
  
5,250,100

  

  

Net assets excluding pension asset
  
5,250,100

Net assets
  
5,250,100


Capital and reserves
  

Called up share capital 
 18 
100

Profit and loss account
 19 
5,250,000

  
5,250,100


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


................................................
M. Bennett
Director

Date: 26 March 2025

The notes on pages 17 to 32 form part of these financial statements.

Page 12

 


PROPAK GROUP HOLDINGS LIMITED
 



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 AUGUST 2024


Called up share capital
Profit and loss account
Equity attributable to owners of parent Company
Total equity

£
£
£
£


Comprehensive income for the Period

Profit for the Period
-
1,590,813
1,590,813
1,590,813
Total comprehensive income for the Period
-
1,590,813
1,590,813
1,590,813


Contributions by and distributions to owners

Shares issued during the Period
100
-
100
100


Total transactions with owners
100
-
100
100


At 31 August 2024
100
1,590,813
1,590,913
1,590,913

The notes on pages 17 to 32 form part of these financial statements.

Page 13

 


PROPAK GROUP HOLDINGS LIMITED
 



COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 AUGUST 2024


Called up share capital
Profit and loss account
Total equity

£
£
£


Comprehensive income for the period

Profit for the Period
-
5,250,000
5,250,000
Total comprehensive income for the Period
-
5,250,000
5,250,000


Contributions by and distributions to owners

Shares issued during the Period
100
-
100


Total transactions with owners
100
-
100


At 31 August 2024
100
5,250,000
5,250,100

The notes on pages 17 to 32 form part of these financial statements.

Page 14

 


PROPAK GROUP HOLDINGS LIMITED
 



CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 AUGUST 2024

2024
£

Cash flows from operating activities

Profit for the financial Period
1,590,813

Adjustments for:

Amortisation of intangible assets
(142,605)

Depreciation of tangible assets
271,890

Interest received
(38,614)

Taxation charge
622,439

(Increase)/decrease in stocks
(921,123)

(Increase)/decrease in debtors
(2,912,969)

Increase in creditors
2,188,426

Increase in provisions
1,459,617

Net cash generated from operating activities

2,117,874


Cash flows from investing activities

Purchase of tangible fixed assets
(1,759,149)

Gain on acquisition of subsidiary
1,711,255

Interest received
38,614

Net cash from investing activities

(9,280)

Cash flows from financing activities

Issue of ordinary shares
100

Net cash used in financing activities
100

Net increase in cash and cash equivalents
2,108,694

Cash and cash equivalents at the end of Period
2,108,694


Cash and cash equivalents at the end of Period comprise:

Cash at bank and in hand
2,108,694

2,108,694


The notes on pages 17 to 32 form part of these financial statements.

Page 15

 


PROPAK GROUP HOLDINGS LIMITED
 



CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 AUGUST 2024



Cash flows
At 31 August 2024
£

£

Cash at bank and in hand

2,108,694

2,108,694


2,108,694
2,108,694

The notes on pages 17 to 32 form part of these financial statements.

Page 16

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

1.


General information

Propak Group Holdings Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.
The presentation currency of the financial statements is the Pound Sterling (£).

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

  
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.4

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 17

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

2.Accounting policies (continued)

 
2.5

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.6

Current and deferred taxation

The tax expense for the Period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.


  
2.7

Intangible assets

Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.

 
2.8

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 18

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

2.Accounting policies (continued)


2.8
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
over the life of the lease
Plant and machinery
-
15%
Motor vehicles
-
25%
Fixtures and fittings
-
20%
Computer equipment
-
25%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.9

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each reporting date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.10

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.11

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.12

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 19

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

2.Accounting policies (continued)

 
2.13

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.14

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.15

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Basic financial assets

Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Key source of estimation uncertainty - Dilapidation provision
A key area of judgement is in relation to provisions for dilapidations. Management have considered the potential costs of refurbishment and its likelihood of occurring. The directors use surveyors to estimate the cost of said refurbishment and a provision is included based thereon.
Key source of estimation uncertainty - Work in progress
The valuation of work in progress is based on the cost of the material and labour plus attributable overheads based on the normal level of activity. The directors estimate the stage of completion of work in order to assess the valuation at the year end.

Page 20

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

4.


Turnover

The whole of the turnover is attributable to the principal activity of the group.

Analysis of turnover by country of destination:

Period ended
31 August
2024
£

United Kingdom
9,203,823

Rest of Europe
49,321

Rest of the world
3,919

9,257,063



5.


Auditors' remuneration

During the Period, the Group obtained the following services from the Company's auditors:


Period ended
31 August
2024
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
21,425

Fees payable to the Company's auditors in respect of:

Preparation of financial statements
3,575

Taxation compliance services
4,250

Page 21

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

6.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
2024
£


Wages and salaries
3,076,480

Social security costs
327,371

Cost of defined contribution scheme
127,119

3,530,970


The average monthly number of employees, including the directors, during the Period was as follows:



Group
Company
     Period ended
       31 August
     Period ended
       31 August
        2024
        2024
            No.
            No.







Directors and administration
17
2



Production and sales
79
-

96
2


7.


Directors' remuneration

Period ended
31 August
2024
£

Directors' emoluments
481,359

481,359


During the period retirement benefits were accruing to no directors in respect of defined contribution pension schemes.

The highest paid director received remuneration of £325,525.

Page 22

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

8.


Interest receivable

Period ended
31 August
2024
£


Other interest receivable
38,614

38,614


9.


Taxation


Period ended
31 August
2024
£

Corporation tax


Current tax on profits for the year
526,351


526,351


Total current tax
526,351

Deferred tax


Origination and reversal of timing differences
(51,241)

Total deferred tax
(51,241)


Tax on profit
475,110
Page 23

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024
 
9.Taxation (continued)


Factors affecting tax charge for the period

The tax assessed for the Period is lower than the standard rate of corporation tax in the UK of 25%. The differences are explained below:

Period ended
31 August
2024
£


Profit on ordinary activities before tax
1,590,813


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25%
397,703

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
84,879

Depreciation for Period in excess of capital allowances
43,769

Other timing differences leading to an increase (decrease) in taxation
(51,241)

Total tax charge for the Period
475,110


10.


Intangible assets

Group and Company




Negative Goodwill

£



Cost


On acquisition of subsidiaries
(1,711,255)



At 31 August 2024

(1,711,255)



Amortisation


Impairment charge
(142,605)



At 31 August 2024

(142,605)



Net book value



At 31 August 2024
(1,568,650)



Page 24

PROPAK GROUP HOLDINGS LIMITED
  
 
NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 2024



11.


Tangible fixed assets


Group







Long-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£
£



Cost or valuation


Additions
354,500
5,860
92,046
2,225
48,750
503,381


Acquisition of subsidiary
-
919,164
324,454
-
12,150
1,255,768



At 31 August 2024

354,500
925,024
416,500
2,225
60,900
1,759,149



Depreciation


Charge for the Period on owned assets
-
154,371
105,070
702
11,747
271,890



At 31 August 2024

-
154,371
105,070
702
11,747
271,890



Net book value



At 31 August 2024
354,500
770,653
311,430
1,523
49,153
1,487,259




The net book value of land and buildings may be further analysed as follows:


2024
£

Long leasehold
354,500

354,500


Page 25
 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

12.


Fixed asset investments

Company





Investments in subsidiary company

£



Cost or valuation


Additions
6,288,071



At 31 August 2024
6,288,071





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Propak Sheet Metal Limited
Unit 1 Gunnels Wood Park, Gunnels Wood Road, Stevenage, Hertfordshire, SG1 2BH
Ordinary A
100%

The aggregate of the share capital and reserves as at 31 August 2024 and the profit or loss for the Period ended on that date for the subsidiary undertaking were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)

Propak Sheet Metal Limited
4,197,534
1,821,197


13.


Stocks

Group
2024
£

Raw materials and consumables
129,016

Work in progress
274,674

Finished goods
517,433

921,123


The difference between purchase price or production cost of stocks and their replacement cost is not material.

Page 26

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

14.


Debtors

Group
Company
2024
2024
£
£


Trade debtors
1,861,823
-

Amounts owed by connected companies
520,420
-

Other debtors
800
100

Prepayments and accrued income
529,926
-

2,912,969
100



15.


Creditors: Amounts falling due within one year

Group
Company
2024
2024
£
£

Trade creditors
431,848
-

Amounts owed to group undertakings
-
38,071

Corporation tax
673,680
-

Other taxation and social security
595,780
-

Other creditors
1,002,031
1,000,000

Accruals and deferred income
158,767
-

2,862,106
1,038,071


Page 27

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

16.


Deferred taxation


Group



2024


£






Charged to profit or loss
51,241


Arising on business combinations
(259,617)



At end of year
(208,376)







The deferred taxation balance is made up as follows:

Group
2024
£

Accelerated capital allowances
(208,376)

(208,376)


17.


Provisions


Group



Dilapidation provision

£





Arising on business combinations
845,500


Other movements
354,500



At 31 August 2024
1,200,000

Page 28

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

18.


Share capital

2024
£
Authorised, allotted, called up and fully paid


51 Ordinary A Shares shares of £1.00 each
51
49 Ordinary B Shares shares of £1.00 each
49

100


During the period, 100 shares were issued including 51 Ordinary A shares and 49 Ordinary B shares for a nominal value of £1.00 each. Total consideration received was £100.


19.


Reserves

Profit and loss account

This reserve records retained earnings and accumulated losses.

Page 29

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

20.
 

Business combinations

On 31 October 2023, the company completed the acquisition of Propak Sheet Metal Limited, an incorporated company in England and Wales operating in the precision metal manufacturing industry, for a total consideration of £6,500,000.
The acquisition was accounted for using the acquisition method in accordance with FRS 102 Section 19 - Business Combinations and Goodwill.

Acquisition of Propak Sheet Metal Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Fair value
£

Fixed Assets

Tangible
1,255,768

1,255,768

Current Assets

Stocks
1,069,121

Debtors
3,276,359

Cash at bank and in hand
5,359,531

Total Assets
10,960,779

Creditors

Due within one year
(1,856,336)

Provisions for liabilities
(845,500)

Deferred taxation
(259,617)

Total Identifiable net assets
7,999,326


Goodwill
(1,711,255)

Total purchase consideration
6,288,071

Consideration

£


Cash
4,288,071

Deferred consideration
2,000,000

Total purchase consideration
6,288,071

Page 30

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

20.Business combinations (continued)

Cash outflow on acquisition

£


Purchase consideration settled in cash, as above
4,288,071

4,288,071

Less: Cash and cash equivalents acquired
(5,359,531)

Net cash outflow on acquisition
(1,071,460)

Negative goodwill arising on acquisition is attributable to the excess of the acquirer's interest in the net amount of the identifiable assets and liabilities over the cost of the business combination.

The results of Propak Sheet Metal Limited since acquisition are as follows:

Current period since acquisition
£

Profit for the period since acquisition
1,448,208


21.


Contingent liabilities

The parent company and the subsidiary company have granted a fixed and floating charge over their assets in favour of HSBC Bank PLC as security. The charge covers all present and future assets of the company, including but not limited to land, buildings, inventory and trade receivables. As of the reporting date, the exact amount secured under this arrangement is not determinable. Management continues to assess the impact of this charge on the group’s financial position.


22.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £141,661. There were no contributions payable to the fund at the reporting date.

Page 31

 


PROPAK GROUP HOLDINGS LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 AUGUST 2024

23.


Commitments under operating leases

At 31 August 2024 the Group had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
2024
£

Not later than 1 year
506,247

Later than 1 year and not later than 5 years
2,024,988

Later than 5 years
590,622

3,121,857

24.


Related party transactions

L. Bennett, the ultimate controlling party is a director of Propak Architectural Glazing Limited, a company registered
in England and Wales. During the year the group made sales totalling £1,766,112 to Propak Architectural Glazing Limited. At the balance sheet date, the group was owed £520,420 from Propak Architectural Glazing Limited.

 
Page 32