The directors present the strategic report for the year ended 31 December 2024.
Throughout 2024 the Group has made significant progress in building the essentials of a value-added distributor. We specialise in networking and intelligent connectivity technologies for the mid-market. We have focused on existing core and new direct vendors, deepening the integration and professional services we offer to our customers. This increased focus has enabled us to consolidate our portfolio, concentrating on vendors that have developed clear, long-term growth plans. We believe these vendors have market capture and strong growth potential to disrupt the marketplace. We have a clear vendor strategy in place that will deliver compelling solutions to the market and for our rich customer base.
In April 2024, Gerry O’Keeffe joined the group as non-executive Chairman. Gerry has over 30 years of experience building service-led distribution businesses in the technology sector. Following this appointment, a concerted effort has been made to reshape the group's leadership, led by John Hayes-Warren, who joined as CEO in October 2024 with the primary objective of delivering a clear, customer-focused strategy for growth. This has also evolved to enhance our technology expertise, supporting our customers' ability to add value to their clients.
John’s 32 years in the tech sector in leadership and executive roles meant he was immediately able to implement new practices and ways of working that have delivered key benefits to our business. These include
Tightened our stock offering to core vendors where market demand is predictable, with the result that working capital at the start of 2025 has improved by 30%
Partitioned trading accounts into two areas, Key Accounts and Business Development, to improve customer focus and intensity
Improved core supplier relationships at a strategic level to improve engagement and terms, building on the foundation already achieved
Restructured leadership and executive team to drive performance
Exited markets that did not provide value to the core offering of the business, a value-add, intelligent networking and connectivity solutions specialist
This started to provide value at the start of 2025 through the crystallisation of non-core stock. Alongside this new implemented strategy, a restructuring of the business was devised, resulting in £1.6m of efficiencies. The design was not intended to impact the business's sales engine, but rather to build on the operational work achieved in 2024.
This was executed in 2025, along with a new invoice discounting partner, IGF, which committed to a 36-month deal at the end of May 2025. This has enabled the business to realign its cost base, secure funding for 3 years, and move forward with a clear focus and strategy for the business. This will enable the business to return to profitability in Q3 FY25, with a clear growth curve continuing into FY26 and beyond, supported by Chiltern and our IGF facility. We believe our business is well-positioned to thrive in the coming years and that our focused approach will enable us to capture market share from larger competitors, thereby underpinning the business as a going concern.
Future Developments
The Group is focused on executing the plan put into place in Q4 FY24. This will be achieved through organic growth, as well as focusing on white space to offer our other core vendors to our over 1,000 trading customer base. Bringing on vendor specialists, implementation and support services, and pre-sales teams will help us speak technically to end-users and partner with the reseller to find the best, straightforward approach to complex requirements.
The new business team, along with the marketing team, will focus on acquiring new logos and reengaging with customers who have inconsistent trading patterns. This will be supported by expanding the company's market presence and enhancing customer awareness of Intec’s offerings.
The other area of growth will come from adding new complementary vendors to the offering, aligning with market trends. This will increase focus and product range to support growth, without competing against the current established vendors.
Customers and vendors are the forefront of everything Intec does, and being a value-added reseller, we will continue to partner with all resellers.
The Group's board reviews the risks facing the Group weekly and works to mitigate them. Processes are designed to identify, mitigate, and manage risk, and the Executive Board bears ultimate responsibility for risk management. The principal risks facing the business and the key controls in place to mitigate are as follows:
Business performance risk: Business performance risk refers to the likelihood that a group may not perform as expected, either due to internal factors or competitive pressures in its market. This risk is managed through several measures, including ensuring the appropriate management team is in place, budget and business planning, monthly reporting and variance analysis, financial controls, key performance indicators, regular forecasting and sensitivity analysis, product and stock management, and maintaining a stock provision that is not in deficit. OKRs have been introduced to hold all employees accountable for performance and the continued success of the business via quarterly, SMART and achievable goals.
Retention of key functional and technical skills: The Group is committed to an investment programme in both onboarding and subsequent training and evaluation of all its employees, recognising the importance of this critical stakeholder relationship. The long-term growth of the business depends on the group's ability to retain and attract high-quality personnel. This risk is managed through development and training plans, such as management training, which are regularly reviewed and updated to ensure ongoing effectiveness. Specific policies in areas such as training, management development, and performance management support these initiatives.
Business continuity risk: Business continuity risk planning is regarded as of significant importance by managers and directors. A business continuity plan has been developed (and is subject to periodic review) to ensure that supply can be maintained in the event of a significant negative impact on the business.
Health and safety risk: The group is committed to ensuring a safe working environment. The risks arising from inadequate management of health and safety matters include exposing employees and third parties to the risk of injury, potential liability, and/or loss of reputation. The group manages these risks through the strong promotion of a health and safety culture and well-defined health and safety policies. Quality processes are handled via our ISO 9001 accreditation and framework
Financial and business control: Strong financial and business controls are essential to ensure the integrity and reliability of financial and other information on which the group relies for day-to-day operations, external reporting, and long-term planning. The group exercises financial and business control through a combination of qualified and experienced financial teams, performance analysis, budgeting and cash flow forecasting, and clearly defined approval limits. The external auditors provide advice on specific accounting and tax issues as they arise.
Data Protection and Cyber Security: The current IT strategy for Intec involves continuing to focus on cybersecurity by ensuring we have the best tools in place to protect against modern-day threats. Our implementation of employee security awareness training and advanced email impersonation protection during the first half of 2024 has improved our posture. Further improvements have been made to general network management and performance through the replacement of all network switches that are over 5 years old. Additionally, new wireless access points have been installed throughout the site to enhance employee and guest performance on the WiFi.
Regulatory Compliance: The Group is subject to a range of industry-specific regulations, which could expose the group to risks associated with failure to comply with relevant codes of practice, laws, or regulations. Failure to comply could result in fines, the cessation of certain business activities, and/or a public reprimand. This risk is mitigated through close monitoring of regulatory compliance and ongoing training.
The directors have determined that the following financial key performance indicators (KPIs) based on continuing activities are the most effective measure of progress towards achieving the group's objectives:
KPI | 2024 |
| 2023 |
Turnover | £78,476,375 |
| £38,083,540 |
Operating (loss)/profit | (£1,056,334) |
| £2,163,470 |
During the year certain costs were incurred post-acquisition that, whilst directly connected with the group's operations were not recurring in nature. It was therefore deemed necessary to analyse these costs separately on the face of the Statement of Comprehensive Income for the understanding of the financial statements. A breakdown of the costs can be found in Note 4.
In addition to the above results, the group is managed using extensive KPIs at both a business and operational level, with regular reviews held weekly and monthly executive board reviews. The following is a list of the key KPIs in operation:
EBITDA: measured as an operating profit before interest, depreciation, and amortisation.
Sales and Gross Margin per day: This shows a trend of what months are busier and what Gross Margin per day is needed to break even.
Working Capital Days: Keeping Trade Debtors, Creditors and Stock consistent is key to control to ensure AR is collecting debtors, AP is paying suppliers on time & stock is turning efficiently to maintain cash levels.
The board of Eris Topco Limited consider that they have acted in good faith and in a manner likely to promote the success of the group for the benefit of all its members (having regard to the stakeholders and matters set out in s172(1)(a)-(f) of the Companies Act 2006) in the decisions taken during the year ended 31 December 2024. Our primary considerations and decisions are designed to have a long-term, beneficial impact on the group, focusing on delivering high-quality service across all components of the business.
Fundamental to the ultimate success and delivery of this service are our team members. The health, safety, and well-being of our team members is one of our primary considerations in the way we conduct business. We aim to be a responsible employer in our approach to the pay and benefits our team members receive. We believe that part of the key to our success lies in the way we engage with our suppliers and customers. We meet regularly and engage in dialogue with our commercial partners throughout the year. We constantly review certain key areas to prevent involvement in modern slavery, corruption, bribery, and breaches of competition law.
On a wider scale, we consider the impact of the group's operations on the community and environment as our social responsibilities - in particular, how we comply with environmental legislation. At every opportunity, we pursue waste savings and react promptly to local community concerns.
The board is felt to behave responsibly and ensure that management operates in an equally responsible manner. The company operates to high standards of ethics, business conduct, and sound governance, as expected for a business of this nature. In doing so, we will contribute to the delivery of our plans to meet and exceed our expectations, while nurturing our excellent reputation.
The board intends to behave responsibly towards our shareholders, treating them both fairly and equally, so that they may benefit from the success of the business.
Business Ethos
An ongoing priority for the business will be to consolidate its position by providing a seamless total customer experience from the initial sales process through to customer service, support, and satisfaction. We will continue to offer comprehensive training and coaching programs to support further our goal of providing an exceptional customer experience for all our customers.
Engagement with suppliers, customers
We will continue to maintain and strengthen our relationships with manufacturers, customers, and suppliers throughout this challenging and uncertain period. We will adapt to change where necessary and work towards a “new normal” in the month ahead.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The results for the year are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Engagement with our stakeholders
The Board seeks to understand the respective interests of key stakeholder groups so that these may be properly considered in the Board’s decisions. As part of its ongoing engagement with its key stakeholder the directors have undertaken the following activities
Shareholders
Our ultimate shareholder is Chiltern Capital Nominees Limited which is a proactive and supportive investor in small and medium sized businesses. Intec's Board meet and present monthly the Health and Safety, financial and commercial performances and discuss the strategic roadmap alongside acquisitive opportunities. In addition, the Shareholder has a permanent representative on the Executive Board which provides excellent support on both key projects and strategic value creation initiatives.
Employees
Fundamental to the ultimate success and delivery of our service is our team members. The health, safety and mental wellbeing of our workforce is our primary consideration in the way we conduct our business. We aim to be a responsible employer in our approach to the pay and benefits our employees receive.
Vendors
The Company continues to focus heavily on its supply chain and procurement function carrying out quarterly reviews with our key partners to drive continuous improvement and in return we strive to abide by the payment terms agreed with suppliers in full support of the code of Payment Practices Reporting. We constantly review certain key areas of the supply chain to prevent involvement in modern slavery, corruption, infringement, bribery and breaches of competition law.
Customers
Key to our success is how we engage with our customers, and we meet and have regular dialogue with our commercial partners through the year to gain a full understanding of the market and their needs. An ongoing priority of the business to consolidate our position in the market is to provide a total customer experience from the initial sales process through to customer service, support and satisfaction. We continue, with the support of our vendor partners, to invest in comprehensive training and coaching programs to provide a first-class experience for all our customers.
Environment, Sustainability and Communities
On a wider scale we take into account the impact of the company operations on the community and environment as our social responsibilities, in particular how we comply with environmental legislation. At every opportunity we pursue waste savings and react promptly to our local community concerns. We will continue to recognise our Duty of Care towards the environment and place extreme importance on complying with both legal and moral obligations towards the environment and our local community.
The audit business of UHY Hacker Young Manchester LLP was acquired by Cooper Parry Group Limited on 30th September 2024. UHY Hacker Young Manchester LLP has resigned as auditor and Cooper Parry Group Limited has been appointed in its place.
The auditor, , is deemed to be reappointed under section 487(2) of the Companies Act 2006.
As the parent of the group has not consumed more than 40,000 kWh of energy in this reporting period it therefore qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
As mandated under the regulations the parent company has considered its group level energy and carbon reporting requirements. The only company within the group obliged to include information in its own financial statements is Intec Microsystems Ltd.
There has been challenges in the last 2 years resulting in losses being incurred in both FY23 and FY24 by the company's principal trading subsidiary. This has resulted in the wider Eris Group needing to address the group's cost structure and define a clear strategy to provide a modest uplift in sales to return to profitability.
In May 2025 a new funding partner was onboarded with a 36-month deal of the back of the restructure and forecast for the financials and cash flow of the business. The restructure of the business has been finalised in June to remove £1.6m of cost. This coupled with the increase in sales seen in Q3 has helped the group to return to profitability.
As this is still in the early days of recovery the risk remains. However, the headroom is being maintained and the signs are encouraging. The group has considered other options if the growth is not maintained to ensure the business remains profitable.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
We have audited the financial statements of Eris TopCo Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise 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.
The extent to which our procedures are 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.
In identifying and assessing 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 the design of the group's remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
the matters discussed among the audit engagement team regarding how and where fraud might occur in the Financial Statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the Financial Statements. The key laws and regulations we considered in this context included the UK Companies Act, pensions legislation and tax legislation in all relevant jurisdictions where the company operates.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the Financial Statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.
In addition to the above, 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;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non- detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2023 - £0 profit).
Eris TopCo Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office 3rd Floor, 86-90 Paul Street,London, United Kingdom, EC2A 4NE.
The group consists of Eris Topco Limited and all of its subsidiaries.
The comparative reporting period is from the incorporation date of 15 April 2023 to 31 December 2023.
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.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Eris Topco Limited 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.
There has been challenges in the last 2 years resulting in losses being incurred in both FY23 and FY24 by the company's principal trading subsidiary. This has resulted in the wider Eris Group needing to address the group's cost structure and define a clear strategy to provide a modest uplift in sales to return to profitability.
In May 2025 a new funding partner was onboarded with a 36-month deal of the back of the restructure and forecast for the financials and cash flow of the business. The restructure of the business has been finalised in June to remove £1.6m of cost. This coupled with the increase in sales seen in Q3 has helped the group to return to profitability.
As this is still in the early days of recovery the risk remains. However, the headroom is being maintained and the signs are encouraging. The group has considered other options if the growth is not maintained to ensure the business remains profitable.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus 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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
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.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
The group has elected to apply the provisions of Section 11 ‘Basic 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.
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.
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 period. 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.
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.
The group reviews its inventory to assess for potential loss on account of obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in the profit or loss, the group makes judgments 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 anticipated to be less than the cost based on best estimates by the management. The provision for obsolescence of inventory is based on the aged profile of the stock. The provision for obsolete inventory in the current year is £520,026.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The group estimates the useful lives of property, plant and equipment and goodwill based on the period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment and goodwill are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the assets.
The director has not identified any critical judgements or key sources of estimation uncertainty which cause a significant risk of material adjustment to the carrying amount of assets and liabilities in the accounts.
During the period certain costs and adjustments were incurred post-acquisition that, whilst directly connected with the group's operations were not recurring in nature. It was therefore deemed necessary for the understanding of the financial statements to analyse these costs separately.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
The company has an unrecorded deferred tax asset of £642,012 (2023: £435,627) resulting from the availability of carried forward tax losses totalling £2,783,809 (2023: £870,693).
Details of the company's subsidiaries at 31 December 2024 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Other creditors includes an invoice discounting facility totaling £7,839,533 (2023: £7,289,620) which is secured by way of the trade debtors to which they relate.
Deferred consideration is payable based upon certain criteria, both conditional and un-conditional being met in the period up to and including 31 August 2026. These amounts totalling £2,500,000 as at 31 December 2024 are reasonably expected to be paid in relation to the acquisition.
The loan notes are secured by fixed charges held over shares indirectly held within subsidiary companies.
On the 7 July 2023 Eris Midco Limited issued loan stock (secured loan stock 2028) totalling £652,830 comprising of A Loan Stock totalling £499,320 and B Loan Stock totalling £153,510. Both A and B loan stock rank pari passu in all respects and without discrimination or preference.
Both A and B loan stock bear interest at a rate of 12% per annum, and any interest not paid accrues into the principal amounts. Loan stock is scheduled for settlement on the 5th anniversary of issue and are secured by way of a fixed and floating charge over the assets of the Eris Group.
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.
The company was incorporated on the 15 April 2023 with the issue of one Ordinary Share with a nominal value of 0.1p.
On the 7 July 2023 the company issued further shares of varying classifications, with all shares issued fully paid.
679,999 A1 Ordinary Shares were issued with a nominal value per share of 0.1p. The existing Ordinary Share from issue was converted to an A1 Ordinary Share.
45,000 A2 Ordinary Shares were issued with a nominal value per share of 0.1p.
160,000 B Ordinary Shares were issued with a nominal value per share of 0.1p
45,000 B Ordinary Shares were issued with a nominal value per share of 0.1p
70,000 C Ordinary Shares were issued with a nominal value per share of 0.1p
On the 22 September 2024 the company issued 10,000 B Ordinary Shares with a nominal value per share of 0.1p
Each share in issue at the 31 December 2024 has attached to it full rights with respect to voting and dividends on distributions of assets on a liquidation or return of capital. The surplus assets of the company remaining, after payment of its liabilities, shall be distributed to the holder of the respective share types according to Article 5 of the Articles of Association of the Company.
The profit and loss account includes all current retained profits and losses, net of dividends paid.
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: