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Registered number: 00761199









Packaging Automation Limited









Annual report and financial statements

For the Year Ended 30 September 2024

 
Packaging Automation Limited
 
 
Company Information


Directors
N Ashton 
S Ashton 
F J Cooke 
W G Holden 
C A Royle 
D Schumacker 




Company secretary
C A Royle



Registered number
00761199



Registered office
Unit 1, Montgomery Close
Parkgate Industrial Park

Knutsford

WA16 8XW




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

3 Stockport Exchange

Stockport

Cheshire

SK1 3GG




Bankers
Barclays Bank Plc
1st Floor

3 Hardman Street

Spinningfields

Manchester

M3 3HF





 
Packaging Automation Limited
 

Contents



Page
Strategic report
 
1 - 2
Directors' report
 
3 - 4
Independent auditors' report
 
5 - 8
Statement of comprehensive income
 
9
Balance sheet
 
10
Statement of changes in equity
 
11
Statement of cash flows
 
12
Analysis of net debt
 
13
Notes to the financial statements
 
14 - 31


 
Packaging Automation Limited
 
 
Strategic Report
For the Year Ended 30 September 2024

Introduction
 
The company's principal activity is the design and manufacture of packaging machinery and weighing equipment for sale and hire within a wide range of sectors in the UK and overseas.
Packaging Automation Limited is a leading innovator in the tray sealing, pot filling and weighing markets with significant annual investment in research & development. Through innovation and new product development the company continues to increase market share in its UK and export markets. The innovative products supplied by Packaging Automation Limited provide customers with the very latest technology to facilitate efficiency gains and reduce their environmental impact. 

Business review
 
The results for the year ending 30 September 2024 show a pre-tax profit of £174,101 (2023: loss £533,858) on a turnover of £11,143,038 (2023: £11,158,769).
After a challenging start to the year, the business achieved overall growth in net profit on unchanged turnover. After restructuring and reducing headcount in the previous financial year, operational efficiency gains were realised during the reporting period leading to improved profitability.
The business invested in the aftermarket team to maintain its commitment to customer service and aftersales support.  This positions the company as a market leader in customer support and preventative maintenance.     

Principal risks and uncertainties
 
There are a variety of business risks which can affect the company of the size and complexity of Packaging Automation Limited, including cost pressures and severe competition.
The company's operations expose it to a number of financial risks, which include the effects of credit risk, this is managed through strict credit control procedures. The credit and hire terms employed, limit exposure to credit risk ensuring a significant percentage of cash is collected in advance of delivery of goods. Trade debtors are reviewed on a regular basis, with a very low level of bad debt experienced by the company. The company does not actively use financial instruments as part of its financial risk management.  The company will continue to focus on new global opportunities to spread economic risk and limit exposure to any one country and economic conditions. 

Financial performance is continually monitored through a wide range of KPIs including but not limited to turnover, gross profit and cash. KPIs are also used across the business to monitor and improve customer service including quality, delivery performance, speed of customer sign off post machinery installation and service satisfaction scores.


2023-24
2022-23
2021-22
Operating profit
153.5%
(4.1)%
(1.45)%
Increase / (decrease) in turnover
(0.0)%
(18)%
13.1%
Stock days
114
139
143


Page 1

 
Packaging Automation Limited
 

Strategic Report (continued)
For the Year Ended 30 September 2024

Research and development
 
Packaging Automation Limited is a leading innovator in the tray sealing, pot filling and weighing market with significant annual investment in research and development. The company continues to invest in creating and protecting intellectual property to maintain its competitive advantage. 
During 2024 there was further expansion of the core tray sealing machinery range to broaden the offering to the market and to continue to offer capability to handle board packaging at all speeds with significant benefits to customers choosing this format of packaging over plastic alternatives.
Research and development will continue to ensure the company’s machinery can accommodate all new sustainable packaging formats by using the latest technology. The business continually evolves machine designs to support shelf-life extension of packaged products, to reduce food waste, and to offer improved overall operating energy savings.   


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



C A Royle
Director

Date: 23 May 2025

Page 2

 
Packaging Automation Limited
 
 
 
Directors' Report
For the Year Ended 30 September 2024

The directors present their report and the financial statements for the year ended 30 September 2024.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 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 of the profit or loss of the Company for that period.

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


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

make judgements and accounting estimates that are reasonable and prudent;

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

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

Results and dividends

The profit for the year, after taxation, amounted to £97,942 (2023 -loss £237,930).

The directors do not recommend payment of a final dividend. 

Directors

The directors who served during the year were:

N Ashton 
S Ashton 
F J Cooke 
W G Holden 
C A Royle 
D Schumacker 

Future developments

The directors believe the company is well placed for future growth in the UK and overseas from sales of a new range of tray sealing machinery that has been designed to handle at speed a wide range of non-plastic packaging formats.
Furthermore, to ensure continued alignment with market requirements, the business will evolve machine designs to support shelf-life extension of packaged products, to reduce food waste, and to offer improved overall operating energy savings.

Page 3

 
Packaging Automation Limited
 
 
 
Directors' Report (continued)
For the Year Ended 30 September 2024

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'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's auditors are aware of that information.

Post balance sheet events

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

Auditors

The auditorsHurst Accountants Limitedwill 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.
 





C A Royle
Director

Date: 23 May 2025

Page 4

 
Packaging Automation Limited
 
 
 
Independent auditors' report to the members of Packaging Automation Limited
 

Opinion


We have audited the financial statements of Packaging Automation Limited (the 'Company') for the year ended 30 September 2024, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, the 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 Company's affairs as at 30 September 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


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 Company 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 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 5

 
Packaging Automation Limited
 
 
 
Independent auditors' report to the members of Packaging Automation 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 Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

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


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


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
Packaging Automation Limited
 
 
 
Independent auditors' report to the members of Packaging Automation 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 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:

Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
 
The nature of the industry and sector, control environment and business performance including key drivers for directors' remuneration and bonus levels;
Enquiring of management, including obtaining and reviewing supporting documentation, concerning the Company's policies and procedures relating to:
°Identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
°Detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected, or alleged fraud;
°The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
Discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud;
Obtaining and understanding of the legal frameworks that the Company operates in, focusing on those laws and regulations that had a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or that had a fundamental effect on the operations of the Company, including General Data Protection Regulation and Anti-Bribery and Corruption Policy.
Revenue recognition gives rise to a risk of material misstatement due to fraud. Revenue may be recognised in the wrong period.
 
Audit response to risks identified
Our procedures to respond to risks identified included the following:
 
Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud;
Evaluation of management's controls designed to prevent and deter irregularities;
Enquiring of management about any actual or potential litigation and claims;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material missstatement due to fraud;
Reading minutes of meetings of those charged with governance;
Testing a sample of customer orders throughout the year and at the year end, ensuring the revenue had been recognised in line with the United Kingdom's Generally Accepted Accounting Practice.
 
Page 7

 
Packaging Automation Limited
 
 
 
Independent auditors' report to the members of Packaging Automation Limited (continued)


We have also considered the risks noted above in addressing the risk of fraud through management override of controls:
 
Testing the appropriateness of journal entries and other adjustments; we have used data analytics software to run tests designed to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error;
Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
Evaluation of the business rationale of any significant transactions that are unusual or outside the normal course of business.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk 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.


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.





Anthony Woodings (Senior statutory auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants
Statutory Auditors
3 Stockport Exchange
Stockport
Cheshire
SK1 3GG

23 May 2025
Page 8

 
Packaging Automation Limited
 
 
Statement of Comprehensive Income
For the Year Ended 30 September 2024

2024
2023
Note
£
£

  

Turnover
 4 
11,143,038
11,158,769

Cost of sales
  
(7,245,706)
(7,854,476)

Gross profit
  
3,897,332
3,304,293

Administrative expenses
  
(3,649,746)
(3,767,116)

Operating profit/(loss)
 5 
247,586
(462,823)

Interest receivable and similar income
 9 
12,692
3,703

Interest payable and similar expenses
 10 
(86,177)
(74,738)

Profit/(loss) before tax
  
174,101
(533,858)

Tax on profit/(loss)
 11 
(76,159)
295,928

Profit/(loss) for the financial year
  
97,942
(237,930)

There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2024 (2023:£NIL).

The notes on pages 14 to 31 form part of these financial statements.



Page 9

 
Packaging Automation Limited
Registered number: 00761199

Balance Sheet
As at 30 September 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 13 
2,885,289
3,402,203

Current assets
  

Stocks
 14 
1,438,437
1,796,853

Debtors: amounts falling due after more than one year
 15 
-
3,946

Debtors: amounts falling due within one year
 15 
1,663,382
1,171,585

Cash at bank and in hand
 16 
797,441
771,689

  
3,899,260
3,744,073

Creditors: amounts falling due within one year
 17 
(3,777,312)
(2,685,300)

Net current assets
  
 
 
121,948
 
 
1,058,773

Total assets less current liabilities
  
3,007,237
4,460,976

Creditors: amounts falling due after more than one year
 18 
(531,892)
(1,935,845)

Provisions for liabilities
  

Deferred tax
 22 
(274,155)
(197,996)

  
 
 
(274,155)
 
 
(197,996)

Net assets
  
2,201,190
2,327,135


Capital and reserves
  

Called up share capital 
 23 
57,000
57,000

Capital redemption reserve
 24 
43,000
43,000

Profit and loss account
 24 
2,101,190
2,227,135

  
2,201,190
2,327,135


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




C A Royle
Director
Date: 23 May 2025

The notes on pages 14 to 31 form part of these financial statements.

Page 10

 
Packaging Automation Limited
 

Statement of Changes in Equity
For the Year Ended 30 September 2024


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£

At 1 October 2023
57,000
43,000
2,227,135
2,327,135


Comprehensive income for the year

Profit for the year
-
-
97,942
97,942


Other comprehensive income for the year
-
-
-
-


Total comprehensive income for the year
-
-
97,942
97,942

Dividends: Equity capital
-
-
(223,887)
(223,887)


Total transactions with owners
-
-
(223,887)
(223,887)


At 30 September 2024
57,000
43,000
2,101,190
2,201,190


The notes on pages 14 to 31 form part of these financial statements.


Statement of Changes in Equity
For the Year Ended 30 September 2023


Called up share capital
Capital redemption reserve
Profit and loss account
Total equity

£
£
£
£

At 1 October 2022
57,000
43,000
2,725,065
2,825,065


Comprehensive income for the year

Loss for the year
-
-
(237,930)
(237,930)


Other comprehensive income for the year
-
-
-
-


Total comprehensive income for the year
-
-
(237,930)
(237,930)

Dividends: Equity capital
-
-
(260,000)
(260,000)


Total transactions with owners
-
-
(260,000)
(260,000)


At 30 September 2023
57,000
43,000
2,227,135
2,327,135


The notes on pages 14 to 31 form part of these financial statements.

Page 11

 
Packaging Automation Limited
 

Statement of Cash Flows
For the Year Ended 30 September 2024

2024
2023
£
£

Cash flows from operating activities

Profit/(loss) for the financial year
97,942
(237,930)

Adjustments for:

Depreciation of tangible assets
481,647
521,081

Profit on disposal of tangible assets
(587,903)
(574,809)

Interest paid
86,177
74,738

Interest received
(12,692)
(3,703)

Taxation charge
76,159
(295,928)

Decrease in stocks
358,416
658,977

(Increase)/decrease in debtors
(487,851)
914,966

Increase/(decrease) in creditors
81,617
(715,183)

Net cash generated from operating activities

93,512
342,209


Cash flows from investing activities

Purchase of tangible fixed assets
(261,852)
(885,717)

Sale of tangible fixed assets
885,022
859,950

Interest received
12,692
3,703

HP interest paid
(12,208)
(22,718)

Net cash from investing activities

623,654
(44,782)

Cash flows from financing activities

New secured loans
-
500,000

Repayment of loans
(279,450)
(196,343)

Repayment of finance leases
(113,899)
(107,558)

Dividends paid
(223,887)
(260,000)

Interest paid
(73,969)
(52,020)

New finance leases
-
515,733

Net cash used in financing activities
(691,205)
399,812

Net increase in cash and cash equivalents
25,961
697,239

Cash and cash equivalents at beginning of year
771,480
74,241

Cash and cash equivalents at the end of year
797,441
771,480


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
797,441
771,689

Bank overdrafts
-
(209)

797,441
771,480



Page 12

 
Packaging Automation Limited
 

Analysis of Net Debt (continued)
For the Year Ended 30 September 2024

Analysis of Net Debt
For the Year Ended 30 September 2024




At 1 October 2023
Cash flows
At 30 September 2024
£

£

£

Cash at bank and in hand

771,689

25,752

797,441

Bank overdrafts

(209)

209

-

Debt due after 1 year

(1,607,524)

1,292,158

(315,366)

Debt due within 1 year

(271,820)

(1,012,708)

(1,284,528)

Finance leases

(434,886)

113,899

(320,987)


(1,542,750)
419,310
(1,123,440)

The notes on pages 14 to 31 form part of these financial statements.

Page 13

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

1.


General information

Packaging Automation Limited is a private company limited by members capital incorporated in England, registered number 00761199.  The address of the registered office and principal place of business is Unit 1, Montgomery Close, Parkgate Industrial Park, Knutsford, Cheshire, WA16 8XW.
The nature of the company's operation and its principal activity is the design and manufacture of packaging machinery for sale and hire within a wide range of sectors in the UK and overseas.

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 management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

The financial statements have been prepared on a going concern basis, which assumes that the company will continue its operations for the foreseeable future. The directors have assessed the company’s ability to continue as a going concern and have considered the following factors:
Financial Position: The company has reviewed its financial position, including liquidity, solvency, and working capital. Based on available information, there are no indications of imminent financial distress.
Cash Flow Forecasts: The directors have prepared cash flow forecasts covering a period of at least 12 months from the reporting date. These forecasts consider expected revenues, expenses, and financing arrangements. The company expects to meet its obligations during this period.
Material Uncertainties: The directors have considered any material uncertainties that may impact the company’s ability to continue as a going concern. These include risks related to economic conditions, industry-specific challenges, and regulatory changes.
Mitigating Actions: The company has implemented measures to mitigate risks, including a restructuring of the business in May 2023 which resulted in a reduced headcount to capitalise on investment in new plant and machinery and software which has provided efficiency improvements.
Based on the above assessment, the directors believe that the going concern basis is appropriate. 

Page 14

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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 Company has transferred the significant risks and rewards of ownership to the buyer;
the Company 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 Company 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.

Revenue from sale of machines is recognised on delivery of the machines. Revenue includes sales made under finance leases, which are included at normal selling value. 
Finance lease interest charged on the sales made under finance leases is recognised over the period of the lease so as to produce a constant rate of return. Debtors under finance leases represent outstanding amounts due under these arrangements less finance charges allocated to future periods. 
Revenue from rental of hire machines under operating leases is recognised on a straight line basis over the period of the lease. Assets held by the company for leasing under operating leases are capitalised as tangible fixed assets. 

 
2.4

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 15

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

2.Accounting policies (continued)


2.4
Tangible fixed assets (continued)

Land is not depreciated. Depreciation on other assets 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:

Freehold property
-
2%
Straight line
Short-term leasehold property
-
7%
Straight line
Plant and machinery
-
10%
Straight line
Motor vehicles
-
25%
Straight line
Fixtures and fittings
-
10%
Straight line
Computer equipment
-
20%
Straight line
Hire machines
-
20%
Straight line

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.

 
2.5

Research and development costs

Research and development expenditure is written off in the year in which it is incurred. 

 
2.6

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 weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet 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.

 
2.7

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. Long term debtors are measured at transaction price, less any impairment. 

 
2.8

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

Page 16

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

2.Accounting policies (continued)

 
2.9

Financial instruments

The company only enters into basic financial instrument transactions that result in the recongition of financial assets and liabilities like trade and other detbros and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are
measured, initially and subsequently, at the undisclosed amount of the cash or other consideration expected to
be paid or received.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for
objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is
recognised in the Statement of Income and Retained Earnings.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an
assets's carying amount and the present value of estimated cash flows.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference
between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of
the amount that the Company would receive for the asset if it were to be sold at the reporting date.

 
2.10

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.

 
2.11

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'administrative expenses'.

Page 17

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

2.Accounting policies (continued)

 
2.12

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.13

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

 
2.14

Operating leases: the Company as lessor

Rental income from operating leases is credited to profit or loss on a straight-line basis over the lease term.

Amounts paid and payable as an incentive to sign an operating lease are recognised as a reduction to income over the lease term on a straight-line basis, unless another systematic basis is representative of the time pattern over which the lessor's benefit from the leased asset is diminished.

 
2.15

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.16

Leased assets: the Company as lessor

Where assets leased to a third party give rights approximating to ownership (finance lease), the lessor recognises as a receivable an amount equal to the net investment in the lease i.e. the minimum lease payments receivable under the lease discounted at the interest rate implicit in the lease. This receivable is reduced as the lessee makes capital payments over the term of the lease.

A finance lease gives rise to two types of income: profit or loss equivalent to the profit or loss resulting from outright sale of the asset being leased, at normal selling prices, reflecting any applicable discounts, and finance income over the lease term.

 
2.17

Leased assets: the Company as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Page 18

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

2.Accounting policies (continued)

 
2.18

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company 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 Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.19

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which is accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

 
2.20

Interest income

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

 
2.21

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.22

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.

Page 19

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

2.Accounting policies (continued)

 
2.23

Current and deferred taxation

The tax expense for the year 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 balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet 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 balance sheet date.

Page 20

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include:
Leased assets
Judgement is required in the classification of a lease at inception and after any material amendment to assess whether  substantially all the significant risks and rewards of ownership accrue to the lessor or the lessee. 
Provision for impairment loss on trade debtors
The management of the company exercises significant judgement in providing for impairment loss on trade debtors. The value of trade debtors at the year end totalled £1,299,879 (2023: £826,606). 
Provision for obsolete and slow moving stocks
The company reviews its stocks to assess loss on account of obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in the profit or loss, the company makes judgements as to whether there is any observable data indicating that there is any future saleability of the product and the estimated net realisable value for such product. Accordingly, provision for impairment is made where the net realisable value is less than the cost based on best estimates by the management. The provision for obsolescence of stock is based on the ageing and historical sales pattern. The value of stock at the year end totalled £1,438,437 (2023: £1,796,853). 
Other estimates and judgements
Management of the company also exercises significant judgement in estimating the useful life of tangible fixed assets. The net book value of tangible fixed assets at the year end totalled £2,885,289 (
2023: £3,402,203). 
Should these estimates vary, the profit or loss and balance sheet of the following years could be impacted.


4.


Turnover

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

Analysis of turnover by country of destination:


2024
2023
£
£


United Kingdom
7,012,962
6,194,740

Rest of Europe
3,288,109
3,704,976

Rest of World
841,967
1,259,053

11,143,038
11,158,769

Page 21

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

5.


Operating profit/(loss)

The operating profit/(loss) is stated after charging:

2024
2023
£
£

Research & development charged as an expense
26,010
40,776

Exchange differences
(4,672)
4,858

Other operating lease rentals
31,200
220,277

Depreciation of tangible fixed assets
481,647
525,515

Profit on sale of assets
(587,903)
(597,901)

Rentals receivable during the year under finance leases amounted to £15,784 (2023: £37,448).
Profits and losses on the disposal of fixed assets are considered to be part of the normal activities of the company, and as such profits and losses are included in the operating results of the company.


6.


Auditors' remuneration

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


2024
2023
£
£

Statutory audit
13,640
13,200

Preparation of statutory accounts
6,200
6,000

Preparation of corporation tax computation

4,960
4,800

24,800
24,000

7.


Employees

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


        2024
        2023
            No.
            No.







Direct labour
85
106



Administration
16
20

101
126

Page 22

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

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

2024
2023
£
£



Wages and salaries
4,049,832
4,733,794

Social security costs
324,247
450,224

Cost of defined contribution scheme
145,200
146,672

4,519,279
5,330,690


8.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
451,415
457,111

Company contributions to defined contribution pension schemes
3,940
3,940

455,355
461,051


During the year retirement benefits were accruing to 1 director (2023 -1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £180,240 (2023 - £158,027).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2023 -£NIL).

There are no other key management personnel. 


9.


Interest receivable

2024
2023
£
£


Other interest receivable
12,692
3,703

Page 23

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

10.


Interest payable and similar expenses

2024
2023
£
£


Bank interest payable
73,969
52,020

Finance leases and hire purchase contracts
12,208
22,718

86,177
74,738


11.


Taxation


2024
2023
£
£

Deferred tax


Origination and reversal of timing differences
76,159
(295,928)


Taxation on profit/(loss) on ordinary activities
76,159
(295,928)

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 -lower than) the standard rate of corporation tax in the UK of 25% (2023 -25%). The differences are explained below:

2024
2023
£
£


Profit/(loss) on ordinary activities before tax
174,101
(533,858)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 -25%)
43,525
(133,464)

Effects of:


Expenses not deductible for tax purposes
3,722
(6,010)

Super-deduction pool adjustment
-
(15,995)

Ineligible depreciation
28,912
(28,912)

Losses utilised
-
235,154

Tax losses carried forward utilised in deferred tax
-
(346,701)

Total tax charge for the year
76,159
(295,928)


Factors that may affect future tax charges

There are tax losses carried forward of £684,214 available to offset future trading taxable profits.

Page 24

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

12.


Dividends

2024
2023
£
£


Ordinary shares
223,887
260,000


13.


Tangible fixed assets





Freehold property
Short-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings

£
£
£
£
£



Cost or valuation


At 1 October 2023
2,242,881
155,528
2,413,782
184,620
605,370


Additions
-
-
-
-
-


Disposals
-
-
-
-
-



At 30 September 2024

2,242,881
155,528
2,413,782
184,620
605,370



Depreciation


At 1 October 2023
770,461
155,528
1,584,227
70,049
537,043


Charge for the year
38,854
-
110,088
27,913
15,003


Disposals
-
-
-
-
-



At 30 September 2024

809,315
155,528
1,694,315
97,962
552,046



Net book value



At 30 September 2024
1,433,566
-
719,467
86,658
53,324



At 30 September 2023
1,472,420
-
829,555
114,571
68,327
Page 25

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

           13.Tangible fixed assets (continued)


Computer equipment
Hire machines
Total

£
£
£



Cost or valuation


At 1 October 2023
855,702
2,350,498
8,808,381


Additions
1,394
260,458
261,852


Disposals
-
(898,716)
(898,716)



At 30 September 2024

857,096
1,712,240
8,171,517



Depreciation


At 1 October 2023
696,675
1,592,195
5,406,178


Charge for the year
46,259
243,530
481,647


Disposals
-
(601,597)
(601,597)



At 30 September 2024

742,934
1,234,128
5,286,228



Net book value



At 30 September 2024
114,162
478,112
2,885,289



At 30 September 2023
159,027
758,303
3,402,203

Included in land and buildings is freehold land at cost £171,573 (2023: £171,573) which is not depreciated.

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2024
2023
£
£


Plant and machinery
184,450
264,333

Motor vehicles
84,366
92,035

Computer
-
5,674

268,816
362,042

Page 26

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

14.


Stocks

2024
2023
£
£

Raw materials and consumables
985,255
1,203,570

Work in progress (goods to be sold)
453,182
593,283

1,438,437
1,796,853


An impairment loss of £25,543 (2023 - £9,939)was recognised in profit and loss due to slow-moving and obsolete stock.


15.


Debtors

2024
2023
£
£

Due after more than one year

Trade debtors
-
3,946


2024
2023
£
£

Due within one year

Trade debtors
1,299,879
826,606

Other debtors
149,993
157,458

Prepayments and accrued income
213,510
187,521

1,663,382
1,171,585


An impairment loss of £253 (2023: £27,936) was recognised in profit and loss against trade debtors.
Trade debtors includes £3,946 (
2023: £15,784) receivable under sales under finance leases within one year and £nil (2023: £3,946) due after more than one year.


16.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
797,441
771,689

Less: bank overdrafts
-
(209)

797,441
771,480


Page 27

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

17.


Creditors: Amounts falling due within one year

2024
2023
£
£

Bank overdrafts
-
209

Bank loans
1,284,528
271,820

Trade creditors
1,168,345
1,130,322

Other taxation and social security
228,012
433,545

Obligations under finance lease and hire purchase contracts
104,461
106,565

Other creditors
551,301
406,504

Accruals and deferred income
440,665
336,335

3,777,312
2,685,300


On 7 February 2020 a bank loan totalling £1,500,000 was taken out and is secured by a debenture and charge over the commercial freehold property.  The related interest rate is 2.94% until February 2025.  The loan is repaid on a monthly basis.
On 24 April 2020 a bank loan totalling £500,000 was taken out under the Coronavirus Business Interruption Loan Scheme.  The related interest rate is 2.09% over base rate.  The loan is repaid on a monthly basis.
On 23 July 2023 a bank loan totalling £500,000 was taken out under the Recovery Loan Scheme and is secured by a debenture and charge over the commercial freehold property. The related interest rate is 7%. The loan is repaid on a monthly basis.
Finance leases and hire purchase liabilities are secured on the assets to which they relate.


18.


Creditors: Amounts falling due after more than one year

2024
2023
£
£

Bank loans
315,366
1,607,524

Net obligations under finance leases and hire purchase contracts
216,526
328,321

531,892
1,935,845


On 7 February 2020 a bank loan totalling £1,500,000 was taken out and is secured by a debenture and charge over the commercial freehold property.  The related interest rate is 2.94% until February 2025.  The loan is repaid on a monthly basis.
On 24 April 2020 a bank loan totalling £500,000 was taken out under the Coronavirus Business Interruption Loan Scheme.  The related interest rate is 2.09% over base rate.  The loan is repaid on a monthly basis.
On 23 July 2023 a bank loan totalling £500,000 was taken out under the Recovery Loan Scheme and is secured by a debenture and charge over the commercial freehold property. The related interest rate is 7%. The loan is repaid on a monthly basis.
Finance leases and hire purchase liabilities are secured on the assets to which they relate.

Page 28

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

19.


Loans


Analysis of the maturity of loans is given below:


2024
2023
£
£

Amounts falling due within one year

Bank loans
1,284,528
271,820

Amounts falling due 1-2 years

Bank loans
315,366
1,197,487

Amounts falling due 2-5 years

Bank loans
-
410,037

1,599,894
1,879,344


On 31 January 2025, a bank loan facility totalling £1,096,473 was renewed for another 5 years.


20.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2024
2023
£
£


Within one year
104,461
106,564

Between 1-5 years
216,526
328,321

320,987
434,885


21.


Finance lease receivables

At the balance sheet date, the Company had contracted with customers for the following future minimum lease rentals receivable under finance leases:


2024
2023
£
£


Within one year
3,946
15,784

Between 1 and 5 years
-
3,946

After 5 years
-
-

3,946
19,730

The Company did not enter into any new finance lease agreements in the year (2023: £40,261).

Page 29

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

22.


Deferred taxation




2024
2023


£

£






At beginning of year
(197,996)
(493,924)


Credited/(charged) to profit or loss
(76,159)
295,928



At end of year
(274,155)
(197,996)

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Accelerated capital allowances
(451,308)
(551,489)

Other timing differences
177,153
353,493

(274,155)
(197,996)


23.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



57,000 (2023 -57,000) Ordinary shares of £1.00 each
57,000
57,000



24.


Reserves

Capital redemption reserve

The capital redemption reserve records the nominal value of shares repurchased by the company. 

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses. 


25.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £145,200 (2023: £146,672). Contributions totalling £24,399 (2023: £27,167) were payable to the fund at the balance sheet date.

Page 30

 
Packaging Automation Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 30 September 2024

26.


Commitments under operating leases

At 30 September 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£



Not later than 1 year
113,103
158,762

Later than 1 year and not later than 5 years
62,313
136,975

175,416
295,737


27.


Commitments under operating leases - lessor

At the balance sheet date, the Company had contracted with customers for the following future minimum lease rentals receivable under non-cancellable operating leases:


2024
2023
£
£



Not later than 1 year
33,811
62,265

Later than 1 year and not later than 5 years
-
-

33,811
62,265

The nature of all of the operating leases were in relation to machinery.


28.


Related party transactions

During the year, the company made purchases of £69,867 (2023: £98,392) from a company in which the sole director is a close family member of a director. At the year end £19,463 (2023: £11,581) was due to that company and is included in trade creditors. 
Dividends were paid to directors totalling £223,887 (
2023: £260,000). 


29.


Controlling party

The company is controlled by  C A Royle.  

 
Page 31