Registration number:
Magnaghi UK (Holdings) Limited
(formerly Magnaghi (UK) Limited)
for the Year Ended 31 December 2024
Magnaghi UK (Holdings) Limited
Contents
Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Profit and Loss Account |
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Consolidated Statement of Comprehensive Income |
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Consolidated Balance Sheet |
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Parent Balance Sheet |
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Consolidated Statement of Changes in Equity |
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Parent Statement of Changes in Equity |
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Notes to the Financial Statements |
Magnaghi UK (Holdings) Limited
Company Information
Directors |
Mr G Iannotti Mr A De Benedictis Mr J M J Bailey Dr J Giani Mr P Williment Mrs A Illiano |
Registered office |
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Auditors |
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Magnaghi UK (Holdings) Limited
Strategic Report for the Year Ended 31 December 2024
The directors present their strategic report for the period from 1 January 2024 to 31 December 2024.
Principal activity
The principal activity of the group is the manufacturing, weight reduction through chemical etching, surface treatment (anodising, plating, painting and non-destructive testing) and sub assembly of metal components, primarily for the aerospace and oil and gas industries.
Fair review of the business
Sales were £12.1m for 12 months of trading as at 31 December 2024 (31 December 2023 £9.5m), an increase of 27%.
At the end of the 3rd Quarter the Directors of Stanmar Limited decided to voluntarily liquidate the subsidiary company, and transfer the trade and assets of Stanmar to Magnaghi UK Limited. This was in line with the Italian Head Office wish to streamline the number of companies within the MA Group.
From a trading perspective all profit centres demonstrated good growth in 2024, particularly the Special Process divisions. These divisions were able to capitalise on offload requirements from 3rd party customers as well as the underlying aerospace and military industry rate increases.
The Manufacturing divisions growth of 18.0% has come mainly from MA Napoli intergroup requirements and a significant reduction in supply issues for metal and heat treatments that had reduced sales capability in prior years.
Despite orders being placed in 2023 the intergroup relationship with MA Napoli was not fully developed until late in 2024, due to issues such as new specifications and approval requirements taking time to be implemented, but good deliveries are now being achieved and better returns on investment are anticipated moving forward.
In line with sales increases and underlying general increases in the macro economy, the costs in the business continued to rise, particularly regarding materials, staff, energy and insurance; but the Gross Profit margins on Special Processes continue to be strong and the increased turnover in these areas as a mix of sales resulted in Gross Profit margins increasing to 19.3% as at 31 December 2024 (31 December 2023 15.5%) and the group achieving an operating profit of £56k as at 31 December 2024 (31 December 2023 operating loss £443k).
Interest costs increased during the year due to working capital increasing on the funding of stock and trade debtors as sales increased further in the final quarter; leading to an increase of borrowing on the invoice discounting facility and a new bank loan.
The group was able to utilise prior year tax losses and as such, despite the operating profit, no tax is payable in the accounts.
The above factors resulted in a Loss After Tax at 31 December 2024 of £0.2m (31 December 2023 loss £0.5m).
Magnaghi UK (Holdings) Limited
Strategic Report for the Year Ended 31 December 2024
FY2025:
During the Financial Year FY24, the anticipated sub contract work from MA Group took longer to achieve due to specification and approvals issues. These are now resolved and manufacturing inter group sales are anticipated to increase during FY25.
With increasing orders from third party UK customers for all profit centres, the transferred sales stream from Stanmar and the increased demand from MA Group, where a number of new projects are also being reviewed, Magnaghi UK has budgeted for a 32.5% growth in the business.
Staff recruitment has already begun to aid the capacity increase that will be required to meet Budget demands and further investment in improving efficiency, reducing energy demand, implementing green energy options and improving the site infrastructure is due in 2025.
With the working capital growth and investment costs required, Magnaghi UK will seek to refinance in FY25 with its bank and look to short term Group support outside of this to ensure trading is not impacted.
Principal risks and uncertainties
The management of the business and the execution of the group’s strategy are subject to a number of risks. The Board consider the principal risks and uncertainties, which are constantly monitored, to be:
• The effect of international customer and market pressures on pricing;
• Off load work being taken back in house by 3rd party customers;
• Changes in aircraft design and new technology;
• Market consolidation within the UK;
• Competing products sourced from low cost overseas locations; and
• Continued logistical and regulatory issues in trading with the EU have arisen post-Brexit. Most have been resolved by action taken by the business or by the relevant authorities, but some areas of uncertainty remain.
Approved by the
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Magnaghi UK (Holdings) Limited
Directors' Report for the Year Ended 31 December 2024
The directors present their report and the for the year ended 31 December 2024.
Directors of the group
The directors who held office during the year were as follows:
Financial instruments
Objectives and policies
The group's financial instruments, comprise borrowing, cash and liquid resources, and various other items such as trade debtors, trade creditors, etc. that arise directly from its operations. The main purpose of these financial instruments is to finance the operations of the company. The group is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages these through credit control procedures. The nature of these financial instruments means that they are not subject to price risk.
Price risk, credit risk, liquidity risk and cash flow risk
The group is exposed to liquidity risk through its borrowings and seeks to balance this risk by using a mixture of fixed and variable interest borrowings to provide certainty over debt servicing requirements in conjunction with a tightly controlled cash management process for the purposes of cash row risk.
The group is exposed to foreign currency risk through making overseas sales and purchases which gives a risk in terms of exchange movements. This is a risk that the directors accept and keep under review to ensure the group's exposure is kept to a minimum.
The group’s business environment and risks together with details of the monitoring undertaken by the directors, are dealt with elsewhere in the Strategic Report. The directors believe the company is well placed to manage risks despite the uncertain economic outlook. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Magnaghi UK (Holdings) Limited
Directors' Report for the Year Ended 31 December 2024
Reappointment of auditors
The auditors ML Audit LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Approved by the
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Magnaghi UK (Holdings) Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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 the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Magnaghi UK (Holdings) Limited
Independent Auditor's Report to the Members of Magnaghi UK (Holdings) Limited
Opinion
We have audited the financial statements of Magnaghi UK (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Parent Balance Sheet, Consolidated Statement of Changes in Equity, Parent Statement of Changes in Equity, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2024 and of the group's loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
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 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.
Magnaghi UK (Holdings) Limited
Independent Auditor's Report to the Members of Magnaghi UK (Holdings) Limited
We have nothing to report in this regard.
Opinion on other matter 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 Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and 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 our knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 6, 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.
Auditor 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.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:
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obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the company operates in and how the company is complying with the legal and regulatory framework; |
Magnaghi UK (Holdings) Limited
Independent Auditor's Report to the Members of Magnaghi UK (Holdings) Limited
• |
inquired of management, and those charged with governance, about their own identification and assessment of the risks or irregularities, including known and actual, suspected or alleged instances of fraud; |
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discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud. |
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undertook a review of manual journals processed in the accounting system, applying professional scepticism to ensure they are in line with our expectation that they are not unusual in the normal course of business. |
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity’s operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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.
......................................
For and on behalf of
Statutory Auditor
Winchester House
Deane Gate Avenue
Somerset
TA1 2UH
Magnaghi UK (Holdings) Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2024
Note |
2024 |
2023 |
|
Turnover |
|
|
|
Cost of sales |
(9,763,639) |
(8,049,049) |
|
Gross profit |
|
|
|
Distribution costs |
( |
( |
|
Administrative expenses |
( |
( |
|
Other operating income - exceptional |
- |
|
|
Operating profit/(loss) |
|
( |
|
Interest payable and similar expenses |
( |
( |
|
Loss before tax |
( |
( |
|
Tax on loss |
- |
|
|
Loss for the financial year |
( |
( |
|
Profit/(loss) attributable to: |
|||
Owners of the company |
( |
( |
The above results were derived from continuing operations.
The group has no recognised gains or losses for the year other than the results above.
Magnaghi UK (Holdings) Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2024
2024 |
2023 |
|
Loss for the year |
( |
( |
Total comprehensive income for the year |
( |
( |
Total comprehensive income attributable to: |
||
Owners of the company |
( |
( |
Magnaghi UK (Holdings) Limited
(Registration number: 13687368)
Consolidated Balance Sheet as at 31 December 2024
Note |
2024 |
2023 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net liabilities |
( |
( |
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Profit and loss account |
( |
( |
|
Equity attributable to owners of the company |
( |
( |
|
Total equity |
( |
( |
Approved and authorised by the
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Magnaghi UK (Holdings) Limited
(Registration number: 13687368)
Parent Balance Sheet as at 31 December 2024
Note |
2024 |
2023 |
|
Fixed assets |
|||
Investments |
|
|
|
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Net liabilities |
( |
( |
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Profit and loss account |
( |
( |
|
Total equity |
( |
( |
The company made a loss after tax for the financial year of £588,944 (2023 - loss of £586,217).
Approved and authorised by the
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Magnaghi UK (Holdings) Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2024
Equity attributable to the parent company
Share capital |
Retained earnings |
Total |
Total equity |
|
At 1 January 2024 |
|
( |
( |
( |
Loss for the year |
- |
( |
( |
( |
At 31 December 2024 |
|
( |
( |
( |
Share capital |
Retained earnings |
Total |
Total equity |
|
At 1 January 2023 |
|
( |
( |
( |
Loss for the period |
- |
( |
( |
( |
At 31 December 2023 |
100,000 |
(793,586) |
(693,586) |
(693,586) |
Magnaghi UK (Holdings) Limited
Parent Statement of Changes in Equity for the Year Ended 31 December 2024
Share capital |
Retained earnings |
Total |
|
At 1 January 2024 |
|
( |
( |
Loss for the year |
- |
( |
( |
At 31 December 2024 |
|
( |
( |
Share capital |
Retained earnings |
Period |
|
At 1 January 2023 |
|
( |
( |
Loss for the period |
- |
( |
( |
At 31 December 2023 |
100,000 |
(900,765) |
(800,765) |
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The company was formerly known as Magnaghi (UK) Limited.
The address of its registered office is:
These financial statements were authorised for issue by the
Accounting policies |
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
The financial statements are prepared in sterling, which is the functional currency of the group and company, and rounded to the nearest £.
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Summary of disclosure exemptions
The group meets the definition of a qualifying entity under FRS 102, and has therefore taken advantage of the disclosure exemptions available to it in respect of its financial statements. Exemptions have been taken in relation to financial instruments, related party transactions and the presentation of a statement of cashflows.
Name of parent of group
These financial statements are consolidated in the financial statements of Magnaghi Holding S.p.A.
The financial statements of Magnaghi Holdings S.p.A. may be obtained from Via dei Mille, 1, 80121, Naples Italy.
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2024.
No Profit and Loss Account is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a loss after tax for the financial year of £588,944 (2023 - loss of £586,217).
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Going concern
The directors have prepared forecast information, for the company and its subsidiaries, as the companies in the UK group are managed on a unified basis, for a period of not less than 12 months from the date of approval of these financial statements. The forecasts include planned capital expenditure that the directors believe is required to return the UK group to profitability. Whilst the forecasts show an improving cash position, this is with significant additional funding being provided by the wider group and external finance providers. The group have confirmed their willingness to continue to support the UK companies for the foreseeable future and, on this basis, the directors believe that it is appropriate for these financial statements to be prepared on a going concern basis.
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
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.
In preparing the financial statements, management make estimates concerning the identification of obsolete stock for inclusion in the stock provision. Management have determined that all stock over two years old should be fully provided based upon its utilisation aligning it with the group policy. At 31 December 2024, the stock provisions of £451,367 (2023- £452,650) was recognised.
No other key sources of estimation uncertainty have been identified by management in preparing these financial statements other than those detailed in these accounting policies..
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax returns, rebates and discounts and after eliminating sales within the company.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits can be reliably measured, and it is probable that future economic benefits will flow to the entity. Revenue from the sale of goods is recognised when the risks and rewards of ownership are transferred to the customer. Revenue from services is recognised in the accounting periods in which the services are rendered.
Finance income and costs policy
Interest income and expenses are recognised using the effective interest rate method.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss,
except that a change attributable to an item of income or expense recognised as other comprehensive
income is also recognised directly in other comprehensive income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax
credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets is reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Tangible assets
Tangible assets are stated in the Parent Balance Sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Freehold land and buildings |
2.5% straight line |
Plant and machinery |
5-33% straight line |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress 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. At each reporting date, stocks are assessed for impairment. If stocks are 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.
Trade debtors
Trade debtors are amounts due from customers for goods sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Provisions
Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the parent balance sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Financial instruments
Classification
The recoverable amount of goodwill is derived from measurement of the present value of the future cash flows of the cash-generating units ('CGUs') of which the goodwill is a part. Any impairment loss in respect of a CGU is allocated first to the goodwill attached to that CGU, and then to other assets within that CGU on a pro-rata basis.
Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised. Where a reversal of impairment occurs in respect of a CGU, the reversal is applied first to the assets (other than goodwill) of the CGU on a pro-rata basis and then to any goodwill allocated to that CGU.
For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.
Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Turnover |
The analysis of the group's turnover for the year from continuing operations is as follows:
2024 |
2023 |
|
Sale of goods |
|
|
The analysis of the group's turnover for the year by market is as follows:
2024 |
2023 |
|
UK |
|
|
Europe |
|
|
Rest of world |
|
|
|
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2024 |
2023 |
|
Miscellaneous other operating income |
- |
|
Other gains and losses |
The analysis of the group's other gains and losses for the year is as follows:
2024 |
2023 |
|
Gain on disposal of tangible assets |
- |
|
Operating profit/(loss) |
Arrived at after charging/(crediting):
2024 |
2023 |
|
Depreciation expense |
|
|
Operating lease expense - plant and machinery |
|
|
Profit on disposal of property, plant and equipment |
- |
( |
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Interest payable and similar expenses |
2024 |
2023 |
|
Interest on bank overdrafts and borrowings |
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
Interest expense on other finance liabilities |
|
|
|
|
Exceptional items |
Exceptional income of £163,376 incurred by Stanmar Limited in the period ended 31 December 2023 represents the insurance claim for the loss of stock and the interruption to the operations.
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2024 |
2023 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2024 |
2023 |
|
Production |
|
|
Administration and support |
|
|
|
|
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Directors' remuneration |
The directors' remuneration for the year was as follows:
2024 |
2023 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
365,615 |
400,924 |
During the year the number of directors who were receiving benefits and share incentives was as follows:
2024 |
2023 |
|
Accruing benefits under money purchase pension scheme |
|
|
In respect of the highest paid director:
2024 |
2023 |
|
Remuneration |
|
|
Company contributions to money purchase pension schemes |
|
|
During the year the highest paid director.
Auditors' remuneration |
2024 |
2023 |
|
Audit of these financial statements |
18,590 |
10,250 |
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
27,000 |
33,700 |
|
|
Taxation |
Tax charged/(credited) in the income statement:
2024 |
2023 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
- |
( |
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2023 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2024 |
2023 |
|
Loss before tax |
( |
( |
Corporation tax at standard rate |
( |
( |
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Deferred tax credit from unrecognised temporary difference from a prior period |
( |
- |
Tax increase from effect of capital allowances and depreciation |
- |
|
Deferred tax expense from unrecognised tax loss or credit |
|
|
Deferred tax credit not recognised |
- |
( |
Total tax credit |
- |
( |
Deferred tax
Group
Deferred tax assets and liabilities
There are £2,550,458 of gross unused tax losses (2023 - £2,158,414) for which no deferred tax asset is recognised in the consolidated balance sheet.
Company
Deferred tax assets and liabilities
There are £1,061,208 of gross unused tax losses (2023 - £704,054) for which no deferred tax asset is recognised in the parent balance sheet.
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Tangible assets |
Group
Freehold land and buildings |
Plant and machinery |
Total |
|
Cost or valuation |
|||
At 1 January 2024 |
|
|
|
Additions |
- |
|
|
At 31 December 2024 |
|
|
|
Depreciation |
|||
At 1 January 2024 |
|
|
|
Charge for the year |
|
|
|
At 31 December 2024 |
|
|
|
Carrying amount |
|||
At 31 December 2024 |
|
|
|
At 31 December 2023 |
|
|
|
Included within the net book value of land and buildings above is £1,570,618 (2023 - £1,613,980) in respect of freehold land and buildings.
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
2024 |
2023 |
|
Plant and machinery |
65,100 |
227,120 |
Restriction on title and pledged as security
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Investments |
Company
2024 |
2023 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2024 |
|
Provision |
|
Carrying amount |
|
At 31 December 2024 |
|
At 31 December 2023 |
|
Details of undertakings
Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2024 |
2023 |
|||
Subsidiary undertakings |
||||
|
Eagle Works, London Road, Thrupp, Stroud, GL5 2BA England |
|
|
|
|
Eagle Works, London Road, Thrupp, Stroud, GL5 2BA England |
|
|
|
Subsidiary undertakings
Magnaghi UK Limited (formerly Nu-Pro Limited)
The principal activity of Magnaghi UK Limited (formerly Nu-Pro Limited) is the treatment and coating of metals.
Stanmar Limited
The principal activity of Stanmar Limited was the manufacture of air and spacecraft and related machinery. The company ceased trading on 30 September 2024 and entered into a members voluntary liquidation on 19 December 2024.
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Business combinations |
On
Fair value |
|
Assets and liabilities acquired |
|
Goodwill |
- |
Stocks |
|
Tangible assets |
|
Total identifiable assets |
|
|
Stocks |
Group |
Company |
|||
2024 |
2023 |
2024 |
2023 |
|
Raw materials and consumables |
|
|
- |
- |
Work in progress |
|
|
- |
- |
Finished goods and goods for resale |
|
|
- |
- |
|
|
- |
- |
Group
A stock provision of £451,367 (2023-£452,650) is included within the value of stock.
Amounts included in stocks of £2,116,726 (2023-£1,893,825) have been secured by way of a debenture incorporating a floating charge.
Debtors |
Group |
Company |
|||
Current |
2024 |
2023 |
2024 |
2023 |
Trade debtors |
|
|
- |
- |
Amounts owed by related parties |
- |
- |
|
|
Other debtors |
|
|
- |
- |
Prepayments |
|
|
- |
- |
|
|
|
|
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Details of non-current trade and other debtors
Company
£233,087 (2023 - £389,795) of amounts owed by related parties is classified as non current.
Group
The carrying amount of trade debtors pledged as security for liabilities amounted to £2,831,111 (2023 - £2,033,945).
Held within trade debtors there are amounts owed from related parties of £205,589 (2023 £40,968).
Cash and cash equivalents |
Group |
Company |
|||
2024 |
2023 |
2024 |
2023 |
|
Cash on hand |
|
|
- |
- |
Cash at bank |
|
|
|
|
|
|
|
|
Group
Amounts included in cash and cash equivalents of £110,002 (2023 - £57,185) have been pledged as security by way of a debenture incorporating a floating charge.
Creditors |
Group |
Company |
||||
Note |
2024 |
2023 |
2024 |
2023 |
|
Due within one year |
|||||
Loans and borrowings |
|
|
- |
- |
|
Trade creditors |
|
|
- |
- |
|
Social security and other taxes |
|
|
- |
- |
|
Outstanding defined contribution pension costs |
|
|
- |
- |
|
Other creditors |
|
|
- |
- |
|
Accruals |
|
|
|
|
|
|
|
|
|
||
Due after one year |
|||||
Loans and borrowings |
|
|
- |
- |
|
Other non-current financial liabilities |
|
|
|
|
|
|
|
|
|
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Provisions for liabilities |
Group
Other provisions |
Total |
|
At 1 January 2024 |
|
|
At 31 December 2024 |
|
|
|
A deferred tax asset has not been recognised in the financial statements for the year end 31 December 2024 or for the previous period.
The group's premises are located on what is believed to be contaminated land. Whilst this does not prevent the group from continued trade, should the premises require significant alteration or redevelopment the land would require decontamination. The expected cost of decontamination is £1,141,406 (2023 - £1,141,406).
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £189,633 (2023 - £177,971).
Contributions totalling £41,758 (2023 - £25,412) were payable to the scheme at the end of the year and are included in creditors.
Share capital |
Allotted, called up and fully paid shares
2024 |
2023 |
|||
No. |
£ |
No. |
£ |
|
|
|
100,000 |
|
100,000 |
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and restrictions: |
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Reserves |
Group
Called up share capital
Represents the issued equity share capital of the company
Retained earnings
Represents cumulative profit or losses, net of dividends paid and other adjustments.
Company
Called up share capital
Represents the issued equity share capital of the company
Retained earnings
Represents cumulative profit or losses, net of dividends paid and other adjustments.
Loans and borrowings |
Non-current loans and borrowings
Group |
Company |
|||
2024 |
2023 |
2024 |
2023 |
|
Bank borrowings |
|
- |
- |
- |
Hire purchase contracts |
|
|
- |
- |
|
|
- |
- |
Current loans and borrowings
Group |
Company |
|||
2024 |
2023 |
2024 |
2023 |
|
Bank borrowings |
|
|
- |
- |
Hire purchase contracts |
|
|
- |
- |
Other borrowings |
|
|
- |
- |
|
|
- |
- |
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
Group
Bank borrowings
The existing Barclays bank loan was denominated in sterling with a nominal interest rate of 3.18%, and the final instalment was paid in October 2024. Therefore, the carrying amount at year end is £Nil (2023 - £493,333). This bank loan is secured by a floating charge over the assets of the company and a legal charge over the company's freehold property.The repayment terms of this bank loan are monthly instalments of £9,388 including interest. |
Other borrowings
Other borrowings are secured by a fixed and floating charge over the assets of the company, its parent company and its fellow subsidiary undertaking.
Hire purchase contracts
Hire purchase contract and finance lease liabilities are secured over the assets to which the finance relates.
Obligations under leases and hire purchase contracts |
Group
Finance leases
The total of future minimum lease payments is as follows:
2024 |
2023 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
Operating leases
The total of future minimum lease payments is as follows:
2024 |
2023 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
Magnaghi UK (Holdings) Limited
Notes to the Financial Statements for the Year Ended 31 December 2024
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
The operating lease commitments relate principally to the rent of premises.
Contingent liabilities |
During the period ended 31 December 2022, one of the company's subsidiaries, Stanmar Limited, suffered a loss of stock held by a third party sub-contractor due to a fire at their premises. An insurance claim for loss of stock and the interruption to operations was received during the year ended 31 December 2023. After the balance sheet date Stanmar Limited received notification from the customer regarding compensation for business interruption at a cost of US $5,452,800 (£4,320,352). At the date of approval of these financial statements, this matter was considered to be concluded and no compensation is payable.
Financial guarantee contracts |
Company
The company is party to a financial guarantee contract in relation to the bank borrowings of its subsidiaries, which at the 31 December 2024 amounted to £2,450,023 (31 December 2023 - £1,830,893). Security for this guarantee is by way of a fixed and floating charge over the assets of the group.
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
The financial statements of both the above companies are available upon request from Via dei Mille, 1, 80121, Naples, Italy.