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Project Rainbow Topco Limited

Registered number: 12970454
Annual report and consolidated
financial statements
For the year ended 30 September 2024

 
PROJECT RAINBOW TOPCO LIMITED
 
 
COMPANY INFORMATION


Directors
A D Ball 
J S Hammond 
C Marchant 
M J Wasley (appointed 11 November 2024)
G A Favell 




Registered number
12970454



Registered office
The Hamlet
Hornbeam Park

Harrogate

North Yorkshire

HG2 8RE




Independent auditor
Forvis Mazars LLP
Chartered Accountants & Statutory Auditor

5th Floor

3 Wellington Place

Leeds

LS1 4AP





 
PROJECT RAINBOW TOPCO LIMITED
 

CONTENTS



Page
Group Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditor's Report
 
5 - 8
Consolidated Statement of Comprehensive Income
 
9
Consolidated Statement of Financial Position
 
10
Company Statement of Financial Position
 
11
Consolidated Statement of Changes in Equity
 
12
Company Statement of Changes in Equity
 
13
Consolidated Statement of Cash Flows
 
14 - 15
Notes to the Financial Statements
 
16 - 36


 
PROJECT RAINBOW TOPCO LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024

Introduction
 
The directors present their Strategic Report for Project Rainbow Topco Limited ("the Company) and its subsidiaries ("the Group") for the year ended 30 September 2024.

Business review
 
The Company is the holding company of the Group.
The principal activity of the Group is the supply of decorative lighting.
The Company has no income streams. 
Group revenue for the year was £25.6m, down from £27.1m in the prior period. Gross profit increased to £5.5m from £3.0m. This resulted in an EBITDA for the year, before exceptional costs and currency exchange differences, of £0.5m (2023: loss of £1.8m).
The Group has reviewed its strategy and taken a number of actions to return the business to profitability. The business has realigned its marketing strategy to drive longer term growth, and is broadening its product range to appeal to a wider range of customers. Having closed the loss-making US website during the prior year, investment has been redirected to more profitable markets in the UK and EU.
Cash generation was a key focus for the business during the period, which was achieved through a material reduction in stock balances and the negotiation of more favourable payment terms with key suppliers.
Despite consumer-led market conditions remaining tough, the strategic actions taken are having a significant positive impact.
Exceptional costs of £1.2m in the year related to restructuring costs, one-off legal and advisory fees and costs associated with warehouse transfers (2023: £1.4m).

Future developments

The business will continue to roll out the strategy outlined above, which the directors believe will position the business well for future growth.
In addition, during the year the Group completed a restructure of its balance sheet which significantly reduced the principal amount of the Group’s loan notes and moved the Group from a net liabilities position to a net assets position. This is explained further in note 20. 

- 1 -

 
PROJECT RAINBOW TOPCO LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024

Principal risks and uncertainties
 
The directors meet regularly and review the principal risks facing the Group. Compliance with regulation, legal and ethical standards along with a clear vision is a high priority for management.
The Group imports the majority of products from third party overseas suppliers and is therefore subject to the risk of production and shipping delays. The business manages this through its close longstanding relationships with suppliers, placement of orders early, close management of stock in transit and ongoing review of supplier margins.
Key market risks relate to economic slowdown and aggressive pricing from competitors. To protect against these risks the Group has diversified its business across a number of geographical markets to partly insulate the Group from economic conditions specific to any particular market.
The Group trades in a number of currencies and there is a financial risk associated with the volatility of foreign exchange rates. This risk is partially hedged by entering into forward contracts.
Due to the long lead times on stock purchases, the Group is subject to cash flow risk between making the stock purchases, and making the sale. This is impacted further by the seasonal nature of the business, whereby the majority of the annual sales fall between the months of October to December. The working capital requirement is managed through extended payment terms with suppliers and through a £2.0m revolving credit facility.

Financial key performance indicators
 
The Board monitors the progress of the Group with reference to the following key performance indicators:
 

2024
2023
Turnover 
£25.6m
£27.1m
EBITDA  
(£1.2m)
(£4.0m)
EBITDA before exceptional costs and currency exchange differences
£0.5m
(£1.8m)




This report was approved by the board on 23 September 2025 and signed on its behalf.



G A Favell
Director

- 2 -

 
PROJECT RAINBOW TOPCO 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 Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

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


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

make judgments and accounting estimates that are reasonable and prudent;

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

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

Results and dividends

The loss for the year, after taxation, amounted to £6,102,297 (2023 - loss £8,642,292).

No dividends were declared during the period (2024 - £Nil). 

Directors

The directors who served during the year were:

A D Ball 
J S Hammond 
C Marchant 
R G Marshall (appointed 22 April 2024, resigned 17 January 2025)
G A Favell 
M J Wasley (appointed 11 November 2024)

- 3 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024

Going concern

In the opinion of the directors the Group has sufficient financial resources together with clearly defined performance objectives. It has the strong support of its bankers and shareholders in working towards its financial objectives. The directors believe that the Company is well placed to manage its business risks successfully.
The Company has the financial support of the loan note providers and shareholders who have confirmed their intention to continue to support the Company.
The directors have a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual report and financial statements.

Post balance sheet events

After the year end, the Group agreed amendments to the covenants and repayment dates of one of its bank loans. An amount of £275,000 will be repayable in four installments beginning on the 31 December 2025.
After the year end, the Company was also granted access to an additional £2m revolving credit facility for use up to December 2025.
 
Disclosure of information to auditor

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

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

Auditor

The auditor, Forvis Mazars LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 23 September 2025 and signed on its behalf.
 





G A Favell
Director

- 4 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PROJECT RAINBOW TOPCO LIMITED
 

Opinion

We have audited the financial statements of Project Rainbow Topco Limited (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the period ended 30 September 2024 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statement of Financial Position, the Consolidated and Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies.  
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 30 September 2024 and of the Group’s loss for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's 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 the Parent Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. 
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.  Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
- 5 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PROJECT RAINBOW TOPCO LIMITED
 

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.

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

- 6 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PROJECT RAINBOW TOPCO LIMITED
 

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 Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. 
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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. 
Based on our understanding of the Group and the Parent Company and their industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the Group and the Parent Company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the the Group and the Parent Company which were contrary to applicable laws and regulations, including fraud.  

- 7 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PROJECT RAINBOW TOPCO LIMITED
 

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, and the Companies Act 2006. 
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition (which we pinpointed to the cut off of revenue) and significant one-off or unusual transactions. 

Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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 auditor’s report.

Use of the audit report

This report is made solely to the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body for our audit work, for this report, or for the opinions we have formed.




Ashley Barraclough (Senior Statutory Auditor)

  
for and on behalf of

Forvis Mazars LLP
Chartered Accountants and Statutory Auditor 
5th Floor
3 Wellington Place
Leeds
LS1 4AP


23 September 2025
- 8 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2024
2023
Note
£
£

  

Turnover
 4 
25,562,955
27,106,194

Cost of sales
  
(20,052,731)
(24,031,633)

Gross profit
  
5,510,224
3,074,561

Administrative expenses
  
(7,607,294)
(7,775,029)

Exceptional administrative expenses
 8 
(1,189,559)
(1,357,574)

Operating loss
 9 
(3,286,629)
(6,058,042)

Interest receivable and similar income
 10 
29,777
1,298

Interest payable and similar expenses
 11 
(2,734,399)
(3,196,266)

Loss before taxation
  
(5,991,251)
(9,253,010)

Tax on loss
 12 
(111,046)
610,718

Loss for the financial year
  
(6,102,297)
(8,642,292)

  

Other comprehensive income for the year
  

Currency translation differences
  
99,965
194,758

Total comprehensive income for the year
  
(6,002,332)
(8,447,534)

  

The notes on pages 16 to 36 form part of these financial statements.

- 9 -

 
PROJECT RAINBOW TOPCO LIMITED
REGISTERED NUMBER: 12970454

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024

2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 13 
12,386,160
14,305,703

Tangible assets
 14 
113,020
82,591

  
12,499,180
14,388,294

Current assets
  

Stocks
 16 
7,786,911
8,535,874

Debtors: amounts falling due within one year
 17 
2,065,243
1,607,936

Cash at bank and in hand
 18 
983,503
538,485

  
10,835,657
10,682,295

Creditors: amounts falling due within one year
 19 
(9,905,754)
(7,638,658)

Net current assets
  
 
 
929,903
 
 
3,043,637

Total assets less current liabilities
  
13,429,083
17,431,931

Creditors: amounts falling due after more than one year
 20 
(9,018,378)
(31,059,201)

Net assets/(liabilities)
  
4,410,705
(13,627,270)


Capital and reserves
  

Called up share capital 
 23 
1,107
979

Share premium account
 24 
18,118,075
479,923

Foreign exchange reserve
 24 
3,936
(96,029)

Profit and loss account
 24 
(13,712,413)
(14,012,143)

  
4,410,705
(13,627,270)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 23 September 2025.




G A Favell
Director

The notes on pages 16 to 36 form part of these financial statements.

- 10 -

 
PROJECT RAINBOW TOPCO LIMITED
REGISTERED NUMBER: 12970454

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024

2024
2023
Note
£
£

Fixed assets
  

Investments
 15 
1
1

  
1
1

Current assets
  

Debtors: amounts falling due within one year
 17 
1,459,940
1,396,459

  
1,459,940
1,396,459

Creditors: amounts falling due within one year
 19 
(749,770)
(460,813)

Net current assets
  
 
 
710,170
 
 
935,646

Total assets less current liabilities
  
710,171
935,647

  

  

Net assets
  
710,171
935,647


Capital and reserves
  

Called up share capital 
 23 
1,107
979

Share premium account
 24 
18,118,075
479,923

Profit and loss account
 24 
(17,409,011)
454,745

  
710,171
935,647


The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. 
The profit after tax of the Company for the year was loss of £17,863,756 (2023: loss of £79,438).
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 23 September 2025.


G A Favell
Director

The notes on pages 16 to 36 form part of these financial statements.

- 11 -

 
PROJECT RAINBOW TOPCO LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024


Called up share capital
Share premium account
Foreign exchange reserve
Profit and loss account
Total equity

£
£
£
£
£


At 1 October 2022
975
469,127
(290,787)
(5,189,309)
(5,009,994)


Comprehensive income for the year

Loss for the year
-
-
-
(8,642,292)
(8,642,292)

Currency translation differences
-
-
194,758
-
194,758
Total comprehensive income for the year
-
-
194,758
(8,642,292)
(8,447,534)


Contributions by and distributions to owners

Share buy back
4
10,796
-
(180,542)
(169,742)


Total transactions with owners
4
10,796
-
(180,542)
(169,742)



At 1 October 2023
979
479,923
(96,029)
(14,012,143)
(13,627,270)


Comprehensive income for the year

Loss for the year
-
-
-
(6,102,297)
(6,102,297)

Currency translation differences
-
-
99,965
-
99,965
Total comprehensive income for the year
-
-
99,965
(6,102,297)
(6,002,332)


Contributions by and distributions to owners

Shares issued during the year
128
12,712
-
-
12,840

Loan note restructure
-
17,625,440
-
-
17,625,440

Capital contribution
-
-
-
6,402,027
6,402,027


Total transactions with owners
128
17,638,152
-
6,402,027
24,040,307


At 30 September 2024
1,107
18,118,075
3,936
(13,712,413)
4,410,705


The notes on pages 16 to 36 form part of these financial statements.

- 12 -

 
PROJECT RAINBOW TOPCO LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 October 2022
975
469,127
714,725
1,184,827


Comprehensive income for the year

Loss for the year
-
-
(79,438)
(79,438)


Contributions by and distributions to owners

Share buy back
4
10,796
(180,542)
(169,742)


Total transactions with owners
4
10,796
(180,542)
(169,742)



At 1 October 2023
979
479,923
454,745
935,647


Comprehensive income for the year

Loss for the year
-
-
(17,863,756)
(17,863,756)


Contributions by and distributions to owners

Shares issued during the year
128
12,712
-
12,840

Loan note restructure
-
17,625,440
-
17,625,440


Total transactions with owners
128
17,638,152
-
17,638,280


At 30 September 2024
1,107
18,118,075
(17,409,011)
710,171


The notes on pages 16 to 36 form part of these financial statements.

- 13 -

 
PROJECT RAINBOW TOPCO LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2024
2023
£
£

Cash flows from operating activities

Loss for the financial year
(6,102,297)
(8,642,292)

Adjustments for:

Amortisation of intangible assets
2,066,992
2,040,733

Depreciation of tangible assets
46,975
54,096

(Profit)/Loss on disposal of tangible assets
(302)
1,561

Interest paid
2,734,399
3,196,266

Interest received
(29,777)
(1,298)

Taxation charge
111,046
(610,718)

Decrease in stocks
748,963
5,267,793

(Increase)/decrease in debtors
(479,406)
2,326,403

Increase/(decrease) in creditors
2,155,860
(741,704)

Corporation tax received/(paid)
258,537
(130,921)

Movement on foreign exchange
99,965
-

Net cash generated from operating activities

1,610,955
2,759,919


Cash flows from investing activities

Purchase of intangible fixed assets
(147,449)
(147,848)

Purchase of tangible fixed assets
(77,602)
(11,809)

Sale of tangible fixed assets
500
(298)

Interest received
29,777
1,298

Net cash from investing activities

(194,774)
(158,657)
- 14 -

 
PROJECT RAINBOW TOPCO LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024


2024
2023

£
£



Cash flows from financing activities

Issue of ordinary shares
12,840
-

Repayment of loans
(600,000)
(4,813,584)

Other new loans
-
2,750,000

Interest paid
(384,003)
(498,216)

Net cash used in financing activities
(971,163)
(2,561,800)

Net increase in cash and cash equivalents
445,018
39,462

Cash and cash equivalents at beginning of year
538,485
499,023

Cash and cash equivalents at the end of year
983,503
538,485


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
983,503
538,485

983,503
538,485


The notes on pages 16 to 36 form part of these financial statements.

- 15 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

1.


General information

Project Rainbow Topco Limited ("the Company") is a private company, limited by shares, incorporated in the United Kingdom. The address of its registered office and principal place of business is:
The Hamlet
Hornbeam Park
Harrogate
North Yorkshire
HG2 8RE
The principal activity of the company is that of a holding company. The principal activity of the Group is that of the supply of decorative lighting.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

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

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

The following principal accounting policies have been applied:

  
2.2

Basis of consolidation

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

- 16 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

  
2.3

Going concern

In the opinion of the directors the Group has sufficient financial resources together with clearly defined performance objectives. It has the strong support of its bankers and shareholders in working towards its financial objectives.  The directors believe that the Company is well placed to manage its business risks successfully.
The Company has the financial support of the loan note providers and shareholders who have confirmed their intention to continue to support the Company.
The directors have a reasonable expectation that the Group and Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual report and financial statements.

 
2.4

Revenue

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

Sale of goods

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

- 17 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.5

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.6

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

 
2.7

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.

 
2.8

Borrowing costs

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

 
2.9

Pensions

Defined contribution pension plan

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

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

- 18 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.10

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 reporting date in the countries where the Company and the Group operate and generate income.

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

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


- 19 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.11

Foreign currency translation

Functional and presentation currency

The Group'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 Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

- 20 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.12

Intangible assets

Goodwill

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

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.13

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.

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

Depreciation is provided on the following basis:

Fixtures & fittings
-
10-33% straight line
Office equipment
-
14-33% 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.

 
2.14

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

- 21 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

  
2.15

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

 
2.16

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.

 
2.17

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 Consolidated 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 Group's cash management.

 
2.18

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.

 
2.19

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.

- 22 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

2.Accounting policies (continued)

 
2.20

Financial instruments


The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares. 
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan. 
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 Consolidated Statement of Comprehensive Income. 
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. 
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 Group would receive for the asset if it were to be sold at the reporting date. 
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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. 

 
2.21

Interest income

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

- 23 -

 
PROJECT RAINBOW TOPCO 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

The critical judgements that the directors have made in the process of applying the Group's accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability and where applicable, the ability of the asset to be operated as planned. There have been no indicators of impairment identified during the current financial period.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(i) Stock provisions
Management apply judgement when determining an appropriate stock provision on a stock item by stock item basis. In assessing whether a provision is necessary, the directors have considered both external and internal sources of information such as sales data, market trends and the prevalence of similar products in the market.
(ii) Returns provisions
Management apply judgement when determining an appropriate returns provision on a historical returns basis. In assessing whether a provision is necessary, the directors have considered both external and internal sources of information such as sales data, market trends and the historic rate of returns of sales.


4.


Turnover

The whole of the turnover is attributable to supply of decorative lighting.

Analysis of turnover by country of destination:

2024
2023
£
£

United Kingdom
13,944,832
8,166,376

Rest of Europe
9,402,709
10,264,644

Rest of the world
2,215,414
8,675,174

25,562,955
27,106,194


- 24 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

5.


Auditor's remuneration

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


2024
2023
£
£

Fees payable to the Company's auditor for the audit of the consolidated and parent Company's financial statements
62,500
57,500


6.


Employees

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


Group
Group
2024
2023
£
£


Wages and salaries
2,414,698
2,272,404

Social security costs
267,870
245,686

Cost of defined contribution scheme
92,535
102,870

2,775,103
2,620,960


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


        2024
        2023
            No.
            No.







Administration
16
14



Sales
17
21



Marketing
16
15

49
50

The Company has no employees other than the directors, who did not receive any remuneration (2023 - £NIL)
- 25 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

7.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
676,000
496,113

Group contributions to defined contribution pension schemes
11,696
9,613

Amounts paid to third parties in respect of directors' services
75,000
75,000

762,696
580,726


During the year retirement benefits were accruing to 3 directors (2023 - 3) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £367,500 (2023 - £191,750).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2023 - £5,000).


8.


Exceptional items

2024
2023
£
£


Warehouse transfer
495,954
530,328

Legal and advisory fees
401,185
248,279

Restructuring costs
44,598
552,696

Other
247,822
26,271

1,189,559
1,357,574

Warehouse transfer costs relate to the one-off transfer of excess US stock to other territories.
Legal and advisory fees relate to settlement agreements, exceptional consultancy costs, loan note funding and related amendments to the group’s banking arrangements, together with shareholder management fees.
Restructuring costs relate to a staff restructure and costs associated with it.
Other costs relate to a review of the business' strategy.

- 26 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

9.


Operating loss

The operating loss is stated after charging:

2024
2023
£
£

Research & development charged as an expense
11,120
46,583

Exchange differences
434,835
819,209

Depreciation
46,975
54,096

Amortisation
2,066,992
2,040,733


10.


Interest receivable

2024
2023
£
£


Other interest receivable
29,777
1,298


11.


Interest payable and similar expenses

2024
2023
£
£


Bank interest payable
717,634
658,811

Loan interest payable
2,016,765
2,537,455

2,734,399
3,196,266

- 27 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

12.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
87,646
-

Adjustments in respect of previous periods
1,311
(320,718)


Total current tax
88,957
(320,718)

Deferred tax


Origination and reversal of timing differences
49,844
(285,108)

Adjustments in respect of previous periods
(27,755)
(4,892)

Total deferred tax
22,089
(290,000)


Taxation on profit/(loss) on ordinary activities
111,046
(610,718)

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of25% (2023 - 22.01%). The differences are explained below:

2024
2023
£
£


Loss on ordinary activities before tax
(5,991,251)
(9,253,010)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 22.01%)
(1,497,813)
(2,036,588)

Effects of:


Expenses not deductible for tax purposes
1,327,056
1,164,021

Capital allowances for year in excess of depreciation
539
(379)

Adjustments to tax charge in respect of prior periods
-
(320,718)

Remeasurement of deferred tax for changes in tax rates
-
(67,492)

Adjustment to tax charge in respect of prior periods - deferred tax
(27,755)
(4,892)

Losses carried back
-
389,873

Deferred tax not recognised
350,727
278,871

Other permanent differences
-
341

Other differences leading to a decrease in the tax charge
(41,708)
(13,755)

Total tax charge for the year
111,046
(610,718)

- 28 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
 
12.Taxation (continued)


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


13.


Intangible assets

Group 





Development expenditure
Computer software
Goodwill
Total

£
£
£
£



Cost


At 1 October 2023
29,300
278,563
19,902,829
20,210,692


Additions
67,910
79,539
-
147,449



At 30 September 2024

97,210
358,102
19,902,829
20,358,141



Amortisation


At 1 October 2023
14,780
85,217
5,804,992
5,904,989


Charge for the year 
15,230
61,479
1,990,283
2,066,992



At 30 September 2024

30,010
146,696
7,795,275
7,971,981



Net book value



At 30 September 2024
67,200
211,406
12,107,554
12,386,160



At 30 September 2023
14,520
193,346
14,097,837
14,305,703



- 29 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

14.


Tangible fixed assets

Group






Fixtures & fittings
Office equipment
Total

£
£
£



Cost 


At 1 October 2023
113,553
127,040
240,593


Additions
69,343
8,259
77,602


Disposals
-
(4,606)
(4,606)



At 30 September 2024

182,896
130,693
313,589



Depreciation


At 1 October 2023
56,712
101,290
158,002


Charge for the year
26,627
20,348
46,975


Disposals
-
(4,408)
(4,408)



At 30 September 2024

83,339
117,230
200,569



Net book value



At 30 September 2024
99,557
13,463
113,020



At 30 September 2023
56,841
25,750
82,591

- 30 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

15.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost


At 1 October 2023
1


Additions
17,625,440



At 30 September 2024
17,625,441



Impairment


Charge for the period
17,625,440



At 30 September 2024

17,625,440



Net book value



At 30 September 2024
1


Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Project Rainbow Bidco Limited
The Hamlet, Hornbeam Park, Harrogate, HG2 8RE
Ordinary
100%
Lights4Fun Limited*
The Hamlet, Hornbeam Park, Harrogate, HG2 8RE
Ordinary
100%
Lights4Fun Inc*
Renaissance Center, 405 North King Street, Suite 500, Wilmington DE19801, United States of America
Ordinary
100%
Lights4Fun Gmbh*
Emil-von-Behring-Straße 11, 54329 Konz, Germany
Ordinary
100%

*Indirect subsidiaries held by Project Rainbow Topco Limited.

- 31 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

16.


Stocks

Group
Group
2024
2023
£
£

Finished goods and goods for resale
7,786,911
8,535,874



17.


Debtors

Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£


Trade debtors
518,266
370,123
-
-

Amounts owed by group undertakings
-
-
1,418,131
1,356,942

Other debtors
1,114,456
716,397
39,517
39,517

Prepayments and accrued income
189,636
256,442
2,292
-

Deferred taxation
242,885
264,974
-
-

2,065,243
1,607,936
1,459,940
1,396,459


Amounts owed by group undertakings are interest free and repayable on demand.


18.


Cash and cash equivalents

Group
Group
2024
2023
£
£

Cash at bank and in hand
983,503
538,485


- 32 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

19.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2024
2023
2024
2023
£
£
£
£

Bank loans
2,615,187
2,635,868
-
-

Trade creditors
3,693,945
2,440,502
8,400
-

Amounts owed to group undertakings
-
-
730,747
455,312

Corporation tax
370,110
22,616
-
-

Other taxation and social security
317,574
272,775
-
-

Other creditors
607,704
144,961
-
-

Accruals and deferred income
2,301,234
2,121,936
10,623
5,501

9,905,754
7,638,658
749,770
460,813


Amounts owed to group undertakings are interest free and repayable on demand.
The bank loans are secured by a debenture creating a fixed and floating charge over the assets of the Group.


20.


Creditors: Amounts falling due after more than one year

Group
Group
2024
2023
£
£

Bank loans
2,936,830
3,373,958

Loan notes
6,081,548
27,685,243

9,018,378
31,059,201


The bank loans are secured by a debenture creating a fixed and floating charge over the assets of the Group.
Loan notes fall due on 10 November 2025 and 20 November 2026. The interest rates are at LIBOR + 4% and LIBOR + 4.5%.
On 21 February 2023 the Group secured a further £1,200,000 5 years fixed rate secured 10% loan notes. The 10% loan notes are secured by a fixed and floating charge over the assets of the Company and fall due on 31 March 2027.
During the year, the Group completed an exercise to restructure its balance sheet as follows:
The Group was released from the obligation to pay £6,402,027 of accrued unpaid interest charges owed to the loan note holders, resulting in a capital contribution of an equivalent amount. 
The Group capitalised £17,625,440 of loan notes in exchange for the issue of 100 Ordinary D shares in Project Rainbow Topco Limited, with a nominal value of £0.001 per share at par.

- 33 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

21.


Loans


Analysis of the maturity of loans is given below:


Group
Group
2024
2023
£
£

Amounts falling due within one year

Bank loans
2,615,187
2,635,868

Amounts falling due 1-2 years

Bank loans
-
535,671

Amounts falling due 2-5 years

Bank loans
2,936,830
2,838,287

Other loans
6,081,548
-

Amounts falling due after more than 5 years

Other loans
-
27,685,243

11,633,565
33,695,069



22.


Deferred taxation


Group



2024
2023


£

£






At beginning of year
264,974
(25,026)


Charged to profit or loss
(22,089)
290,000



At end of year
242,885
264,974








Group
Group
2024
2023
£
£

Fixed asset timing differences
(8,053)
(16,402)

Short-term timing differences
5,470
5,229

Losses and other deductions
245,468
276,147

242,885
264,974

- 34 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024

23.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



1,107,000 (2023 - 979,000) Ordinary shares of £0.001 each
1,107
979


The shares have full voting rights, rights to dividends and rights to participate in a distribution. The shares are not redeemable.
On 5 June 2024, the Company issued 50,000 C4 Ordinary shares of £0.001 and 78,397 C3 Ordinary shares of £0.001 for a total consideration of £12,840 (being nominal value of £128 and premium of £12,712). 
Included within shares issued are 92,724 C2 Ordinary shares of £0.001 and 14,800 D Ordinary shares of £0.001 which the Company holds as treasury shares.


24.


Reserves

Share premium account

The share premium account includes the premium on issue of equity shares, net of issue costs.

Foreign exchange reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign subsidiaries.

Profit and loss account

The profit & loss account includes all current and prior year retained profits and losses and capital contributions made by the Company.
During the year, the Group was released from the obligation to pay £6,402,027 of accrued unpaid interest charges owed to the loan note holders, resulting in a capital contribution of an equivalent amount. 

- 35 -

 
PROJECT RAINBOW TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
25.


Analysis of net debt







At 1 October 2023
Cash flows
Repayment of loans
Interest of loans
Other non-cash changes
At 30 September 2024
£

£

£

£

£

£

Cash at bank and in hand

538,485

445,018

-

-

-

983,503

Bank loan due more than 1 year

(3,373,958)

554,762

600,000

(717,634)

-

(2,936,830)

Loan note due more than 1 year

(27,685,243)

(407,007)

-

(2,016,765)

24,027,467

(6,081,548)

Bank loan due within 1 year

(2,635,868)

20,681

-

-

-

(2,615,187)


(33,156,584)
613,454
600,000
(2,734,399)
24,027,467
(10,650,062)


26.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £92,535 (2023: £102,870). Contributions totalling £15,098 (2023: £13,909) were payable to the fund at the Statement of Financial Position date and are included in other creditors.


27.


Related party transactions

The Group has taken advantage of the exemption permitted by Section 33 Related Party Disclosures of FRS 102 not to provide disclosures of transactions entered into with wholly-owned members of the Group.


28.


Post balance sheet events

After the year end, the Group agreed amendments to the covenants and repayment dates of one of its bank loans. An amount of £275,000 will be repayable in four installments beginning on the 31 December 2025.
After the year end, the Company was also granted access to an additional £2m revolving credit facility for use up to December 2025.


29.


Controlling party

The ultimate controlling party is NorthEdge Capital Fund II LLP.

- 36 -