The directors present the strategic report for the year ended 31 December 2024.
The Group is an ecommerce retailer — the Group purchases inventory and uses proprietary technology to help manufacturers and brands manage and grow their online commerce around the world — including competitive analysis, advertising and market technology, creative design, logistics and fulfilment, and growth services.
The Group contracts with consumer product companies to market, sell and distribute products via domestic and international online platforms using the Group’s proprietary technology and team of experts. Manufacturers and brands that contract with the Group operate in various industries including health and wellness, consumer electronics, clothing, and pet products.
Pattern operates in a dynamic and competitive European market, and its performance is subject to several principal risks and uncertainties. Macroeconomic volatility, including inflationary pressures, fluctuating exchange rates, and shifts in consumer spending, may impact both demand and margins. The continued geopolitical uncertainty in Europe, particularly around regulatory divergence and cross-border trade friction, presents operational and compliance challenges. Supply chain disruption, whether from global events or regional logistics constraints, remains a risk to service levels. The business continues to monitor these risks closely and implement mitigating strategies, including diversified supplier networks, brand partners, and marketplaces to avoid undue concentration of risk. The Group continue to monitor geopolitical risks for further developments.
The Group also face risk from disruption to brand partnerships for any number of reasons. To mitigate against the effects of loss of any single brand partner, the Group include protective contractual provisions in each agreement to mitigate credit and inventory risk. The Group also continually strive to partner with brands across a range of industries so as not to be unduly exposed to shocks to individual industries.
Liquidity risk
The Group has sufficient funds to meet its working capital needs and also to explore investment opportunities and as such is not significantly exposed to liquidity risk..
Interest rate risk
The majority of the Group's statement of financial position is not sensitive to interest rate risk.
Foreign currency risk
The Group is exposed to Currency risk due to its operations in its geographical locations, however, the impact of this is minimised through treasury management as well as the assets and liabilities held across the respective foreign currencies.
Credit risk
The Group uses well known highly rated banks for its cash deposits. Also, the Group evaluates each client's credibility before entering into agreements with them and mainly deals with creditable clients. Overall, the Group continually assesses recovery of trade receivables and makes a provision where necessary and where there is a sufficient doubt of recovery. All intercompany loans are recoverable.
The Group remains focused on its ecommerce services and technology to help manufacturers and brands grow their online commerce.
The group’s key performance indicators (KPI’s) are turnover, gross profit, gross profit margin and operating profit margin before exceptional items. The directors monitor the KPI’s on a regular basis to assess the group’s ongoing financial performance.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The auditor Moore Kingston Smith LLP is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The financial statements are prepared on a going concern basis, which assume Pattern Trading Limited and its subsidiaries, the group and parent company will continue in operational existence for the foreseeable future.
As at 31 December 2024 the group had net assets of £7,118,460 (2023: net liabilities of £6,151,380), net current assets of £6,833,411 (2023: net current liabilities of £6,488,821), cash of £6,433,151 (2023: £4,355,971) and made a loss of £2,713,484 (2023: 1,416,648) for the year.
Pattern Trading Limited and its subsidiaries are financed through loans made by its ultimate parent company, Pattern Group Inc, and its fellow group subsidiaries, which amounted to £2,883,304 as at 31 December 2024. The ultimate parent company has confirmed that the wider group will not seek repayment of the amounts owed to it by Pattern Trading Limited and its subsidiaries until such time as they are able to repay them without compromising their ability to continue to trade and to meet their liabilities as they fall due. In addition the ultimate parent company has provided a letter of support to confirm they will provide continued financial support to the group and parent company, as required, for a minimum of 12 months from the date of approval of the audit report.
Based on the above and the on-going projected trading performance of Pattern Group Inc, the directors believe that the group and company will be able to continue in business and meet its liabilities as they fall due for a period of at least 12 months from the date of approval of the financial statements. Therefore the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
We have audited the financial statements of Pattern Trading Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Group Profit And Loss Account, the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for 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 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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our 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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of noncompliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.
As permitted by s408 Companies Act 2006, the company has not presented its own loss account and related notes. The company’s loss for the year was £2,336,375 (2023: 1,342,527).
Pattern Trading Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 76 Wardour Street, London, England, W1F 0UR.
The group consists of Pattern Trading Ltd and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
The consolidated group financial statements consist of the financial statements of the parent company Pattern Trading Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The financial statements are prepared on a going concern basis, which assume Pattern Trading Limited and its subsidiaries, the group and parent company will continue in operational existence for the foreseeable future.
As at 31 December 2024 the group had net assets of £7,118,460 (2023: net liabilities of £6,151,380), net current assets of £6,833,411 (2023: net current liabilities of £6,488,821), cash of £6,433,151 (2023: £4,355,971) and made a loss of £2,713,484 (2023: £1,416,648) for the year.
Pattern Trading Limited and its subsidiaries are financed through loans made by its ultimate parent company, Pattern Group Inc, and its fellow group subsidiaries, which amounted to £2,883,304 as at 31 December 2024. The ultimate parent company has confirmed that the wider group will not seek repayment of the amounts owed to it by Pattern Trading Limited and its subsidiaries until such time as they are able to repay them without compromising their ability to continue to trade and to meet their liabilities as they fall due. In addition the ultimate parent company has provided a letter of support to confirm they will provide continued financial support to the group and parent company, as required, for a minimum of 12 months from the date of approval of the audit report.
Based on the above and the on-going projected trading performance of Pattern Group Inc, the directors believe that the group and company will be able to continue in business and meet its liabilities as they fall due for a period of at least 12 months from the date of approval of the financial statements. Therefore the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
There is a degree of judgement exercised at each period end in respect of contracts that extend beyond the year end, where recognition of income and related external expenditure is based on key milestones.
The annual depreciation charge in respect of tangible fixed assets are based on the directors' best estimate of the useful economic lives and residual values of each class. The useful economic lives and residual values of each asset class are reassessed annually.
Annual impairment reviews are performed on each class of asset to ensure that the carrying values are appropriate.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
Retirement benefits were not accruing for any of the directors under defined contribution schemes (2023 - 1).
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The additions relate to a capital contribution made by the company to its subsidiaries Practicology Pty Limited and Pattern Australia Limited during the year. See note 19 for further details.
Details of the company's subsidiaries at 31 December 2024 are as follows:
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Contributions amounting to £66,071 (2023 - £27,286) were payable at the year end.
All classes of shares rank pari passu except that provisions allow for variable dividends to be paid and the order to payment of capital on winding up is Ordinary shares, then Ordinary A shares, then Ordinary B Shares, then Ordinary C shares.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
On 31 December 2024, Pattern Trading Limited assumed the outstanding balances owed by its subsidiaries, Practicology Pty Limited and Pattern Australia Limited, to Pattern Inc, the ultimate parent company. This amounted to £2,141,486 and was treated as a capital contribution. Consequently, Pattern Trading Limited’s investment in its subsidiaries increased by the same amount.
Following this, Pattern Inc agreed to forgive and irrevocably waive £16,028,906 owed to it by Pattern Trading Limited. In exchange, Pattern Trading Limited issued 64,115,624 Ordinary shares of £0.25 each. In accordance with FRS 102, the forgiven debt was recorded within equity under “Shares to be issued” reflecting the future issuance of shares in settlement of the debt. These shares have since been fully utilised and issued after the balance sheet date.
At the balance sheet date, the amounts due to fellow group companies from the group were £2,883,304 (2023: £19,236,906).
At the balance sheet date, the amounts due from fellow group companies from the group were £1,208,259 (2023: £5,356,168). During the year, the group received management fees amounting to £6,504,095 (2023: £64,668) and management fee charges of £1,757,549 (2023: £639,414) were recognised with other companies within the group.
At the balance sheet date, the amounts due to fellow group companies from the company were £157,834 (2023: £16,199,330).
At the balance sheet date, the amounts due from fellow group companies to the company were £974,204 (2023: £5,970,999). During the year, the company received management fees amounting to £3,339,497 (2023: £nil) and management fee charges of £1,170,076 (2023: £314,172) were recognised with other companies within the group.
During the year the group went through a debt to equity conversion, see note 19 for further details.