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Registered number: 09927306
WALSTEAD GROUP LIMITED
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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WALSTEAD GROUP LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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WALSTEAD GROUP LIMITED
CONTENTS
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Directors' Responsibilities Statement
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Independent Auditor's Report to the members of Walstead Group Limited
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Consolidated Statement of Profit or Loss
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Consolidated Statement of Other Comprehensive Income
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Consolidated Balance Sheet
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Consolidated Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Consolidated Financial Statements
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Company Statement of Changes in Equity
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Notes to the Company Financial Statements
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Appendix: Alternative Performance Measures
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WALSTEAD GROUP LIMITED
CHAIRMAN'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
Introduction
It was another challenging year for our industry. However, through diligent execution of our strategy, Walstead remains the pre-eminent supplier in the European commercial print market. Additionally, we continued to expand and evolve: we expanded the geographical footprint of Rhapsody, our digital marketing services business, and invested in our instore marketing and co-packing facility in Poland which increased revenue by 43% during the year.
Walstead UK had an excellent year, outperforming our expectations. After €32m of investment in 2022 and 2023, we provide the market-leading manufacturing platform for magazine, newspaper, and catalogue customers.
By contrast, Walstead Iberia had a difficult year due to further declines in the demand for gravure commercial printing. In early 2025 we made the difficult decision to close Eurohueco, our gravure printing operation in Barcelona, and consolidated our Spanish business into Rotocobrhi, our market-leading web offset facility in Madrid.
During 2024 we commenced a plan to combine our Walstead Leykam and Walstead CE divisions to create a single new division, branded as Walstead CE. This initiative is due to be concluded in 2025. The merged business operates from seven manufacturing sites in Austria, Czech Republic, Germany, Poland, and Slovenia. Walstead CE performed satisfactorily in a market that continues to suffer from significant overcapacity, particularly in Germany. Despite, signs of a reduction in capacity in Germany, we believe further rationalisation is required and is likely to take place.
Our team and structure
In response to the changing market, we simplified our operating structure during the year.
As commented above, we combined our businesses in Central Europe to create an extremely strong and versatile platform to serve customers across most of Europe. I am also delighted to see the merged business sharing best practice and innovation, as well as driving much greater efficiency. This represents one of the most significant integration projects we have undertaken, and we expect to see substantial top and bottom-line improvements from 2025 onwards.
Secondly, we brought our UK and Spanish businesses under the leadership of a single CEO and I am pleased to report on excellent progress being made in sharing best practice between the teams.
Finally, these initiatives involved certain changes to the Board: I would like to thank our current and former directors for their judgement and diligence during this exceptionally busy year.
Our strategy and capital allocation
Walstead continues to be a pre-eminent supplier of commercial print. Our geographical reach and substantial printing and binding capabilities – the largest in Europe - demonstrate our commitment to our customers and our industry. Our strategy remains to maintain and grow our market share in commercial web offset printing and to acquire complementary and growing businesses that are market leaders in their individual sectors.
As I noted in my report last year our strategy to expand into the wider graphic industries space will not be a quick one, and I’m proud of the restraint that we have shown. We continue to assess acquisitions that offer growth prospects, can be scaled through selective investment, are well-managed, and generate strong cashflows and we will pursue, and hopefully acquire, the right opportunities.
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WALSTEAD GROUP LIMITED
CHAIRMAN'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
In the meantime, the Group has prioritised its capital towards restructuring the existing manufacturing platform as well as paying down debt. Our external net debt reduced to €51.1 million at the end of 2024 from €65.0 million at the end of 2023 and at this current rate the business is on track to eliminate the remaining debt by the end of 2027.
Our financial performance in 2024
Walstead’s 2024 performance was affected by industry-wide reductions in volume and compounded by ongoing macroeconomic headwinds and uncertainty. Commodity prices remained volatile, with wars, elections, and inflation all being contributing factors.
In the year ended 31 December 2024 Walstead’s gross revenue was €540.7 million (2023: €582.0 million). Net revenue¹ was €370.4 million (2023: €378.1 million). EBITDA (adjusted)¹ was €28.0 million (2023: €34.8 million). Operating loss was €7.7 million (2023: €0.8 million loss) and operating loss (adjusted)¹ was €2.6 million (2023: €3.3 million profit).
Further improving the Group’s cash and liquidity positions remain a primary focus for Walstead’s management. As I noted earlier in my report net debt¹ at 31 December 2024 decreased to €68.3 million (2023: €80.5 million) which comprised €51.1 million of external net debt¹ (2023: €65.0 million) and €17.2 million of shareholder loans (2023: €15.5 million).
At the year-end our external net debt leverage ratio¹ improved to 1.8x (2023: 1.9x).
Net cash inflow from operating activities in the year was €6.5 million (2023: €24.5 million). Net current liabilities at 31 December 2024 were €58.4 million (2023: €57.9 million) of which €10.2 million (2023: €10.2 million) was due under revolving credit and factoring facilities. Further financial details and key performance indicators are provided in the Group Strategic Report.
During 2024 we completed the sale for two vacant freehold properties that generated net proceeds of €22.6 million which were used to reduce our external net bank debt. The Group’s net capital expenditure in the year was substantially reduced to €15.6 million (2023: €25.4 million) and, combined with the property disposals, this contributed to our overall net debt position.
¹ See page 113 for definitions of Alternative Performance Measures
Current trading and developments in 2025
It has been a busy start to 2025: we announced the closure of sites in Barcelona (Spain) and St Pölten (Austria). These are always difficult decisions. However, the Group will continue to take the necessary actions to ensure the long term success of the business by matching supply with demand.
In June 2025 we announced that Walstead’s private equity shareholder, Rutland Partners, indicated that they are looking to realise their investment in the company, which they have held since 2016. We have had an excellent relationship with Rutland over the last nine years. Their intention to sell is not unexpected and will, undoubtedly, create an opportunity for a new investor to support the ongoing growth of Walstead which will continue to consolidate the European commercial print sector.
Trading in the first half of 2025 has been solid and is line with our budget and expectations.
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WALSTEAD GROUP LIMITED
CHAIRMAN'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Our stakeholders
I would like to thank my colleagues. I am truly grateful for the efforts of our teams across the Group.
I would also like to thank our suppliers, banks, finance providers, and equity investors who play an essential role in maintaining the progress of Walstead.
Finally, a big thank you to all our customers who continue to rely on Walstead and choose our services.
NameM Scanlon
Chairman
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present the Group Strategic Report of Walstead Group Limited ("the Company") and its subsidiaries (together "the Group") for the year ended 31 December 2024.
Walstead is the largest commercial web offset printing business in Europe. Founded in 2008, Walstead has completed over 10 acquisitions. It operates three territory-based divisions (Walstead United Kingdom, Walstead Iberia and Walstead Central Europe) which together employ approximately 3,000 staff at print manufacturing sites in the UK, Spain, Austria, Czech Republic, Slovenia, Poland and Germany.
Walstead has over 50 presses processing over 500,000 tonnes of paper annually. The Group specialises in printing high-volume advertising flyers and leaflets for major European retailers; and magazines, catalogues, supplements, brochures and newspaper supplements for publishers and brand owners. The Group also provides digital marketing services through its Rhapsody division which has offices in the UK, Spain, Poland and the USA. Further information on the Group can be found on the following websites:
www.walstead-group.com
www.rhapsodymedia.com
The Group’s strategy is to continue to grow revenue and profits both organically and by acquisition to leverage economies of scale in all aspects of operations, as well as to provide the widest possible geographic coverage to our customers. Due to the Group’s size, we can deliver economies of scale far beyond most competitors and this in turn delivers significant value to our shareholders.
Competition in the sector is fragmented with numerous small operators largely serving local markets. In addition to volume-related economies of scale, the Group is also able to leverage additional benefits through adopting best practices in production, distribution efficiencies through multiple production sites, and efficient routes to market through a co-ordinated sales strategy.
Walstead will continue to look for opportunities in the print supply chain, from pre-media to post-press services, from paper management to logistics, from digital to offset web printing.
The printing industry is evolving rapidly with certain markets being subject to increased competition from the digital media sector and this has resulted in a reduction in market size for certain product categories. Our strategy is to focus on markets where demand is strongest either because competition is weak or where end markets are most robust.
Principal risks and uncertainties
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The Group’s risk management principals are that we only take risks relevant to our strategic goals and that those risks are balanced with proportionate reward. The senior management team identify and control risks through their weekly operational meetings and monthly board meetings. Further detail regarding financial risks can also be seen in note 34.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Principal risks and uncertainties (continued)
The principal risks facing the Group include:
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Failure to respond to competitive pressures in the market could lead to revenues and margins weakening.
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The Group manages this risk by ensuring the quality of its products, by providing added value services to its customers, having fast response times not only in supplying products, but in handling all customer queries and by maintaining strong relationships with customers. The Group’s strategy is to focus on markets with the greatest longevity and where competition is weak.
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Reliance on key suppliers
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Supply disruption could impact customer satisfaction as an inability to print to schedule, leading to loss of revenue.
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The Group has processes in place to manage and monitor exposure to significant counterparties centrally and within the manufacturing sites; where we are exposed regarding specialised products, supplier and customer communication is at the heart of the process to ensure delivery is maintained. For all our key purchases we have relationships with alternative suppliers should there be a failure amongst any of the key suppliers.
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The Group’s business is subject to occupational health and safety rules. Failure to comply with occupational health and safety rules could lead to fines or monetary penalties being levied on the Group as well as injury to staff and employees.
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Health and safety guidelines and training is in place across the group. Regular audits and updates and a review of near-misses is done on a monthly basis.
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Reliance on key employees
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The resignation of key employees and the inability to recruit people with the right expertise and skills could adversely affect the Group’s results.
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Training programmes and succession planning reduce this risk so that we have continuity. Incentive programmes also assist in retaining staff.
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Inability to obtain finance to fund business needs could result in a shortage of cash to enable it to pay its debts as they fall due.
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Financing is obtained from a diversified range of sources and includes both secured and unsecured facilities. The availability of assets to provide security to lenders provides options for the Group to obtain financing at optimal rates.
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Exchange rate movements and interest rate increases
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Movement in exchange rates could impact on profitability or result in a reduction to net assets. Increasing interest rates would increase the debt service requirements.
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Financing is obtained for each territory in its local currency so that assets are matched by its associated funding. A substantial proportion of the Group’s facilities have a fixed rate of interest minimising the impact on debt service if interest rates increase.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Principal risks and uncertainties (continued)
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Another pandemic could result in disruption to our operational sites and / or customers / suppliers.
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The Group has developed policies and procedures to allow safe working in our plants and minimise the risk of spreading disease. Whilst there have been some permanent changes to business practice, additional procedures will be re-instated as needed to minimise the interruption to operations.
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Increase in energy and raw material prices
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Increase in the cost of production may be difficult to pass on to the consumer in the short term and have impact on volumes produced.
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The Group works closely with its customers to manage the cost of production. It ensures that a high-quality service is maintained whilst passing on cost increases through the supply chain where necessary to maintain a viable business. Any impact on production volumes is carefully managed to maintain efficiencies across the group.
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Major information security breach or cyber-attack could result in reputational damage, business interruption and litigation, as well as negative impact on customer relations including loss of confidence. Potential exposure to fines or prosecution (Data Protection Act). Developers could stop supporting ageing IT hardware creating risks to data security.
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The risk of attack is continuous, and we look to minimise the risks with firewalls and up-to-date anti-virus protection systems. Group policies, staff training and data backup routines ensure high levels of protection. Data protection policies and practices are in place and regular updates are performed on IT systems used across the Group.
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Equipment and system obsolescence
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Spare parts for plant and machinery not being readily available could increase maintenance costs and result in production interruptions.
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Engineering spares are held for critical components. Consistency of equipment across the group means many components are interchangeable and allow spares to be transferred between group companies where required. The group also continually review their IT systems and programmes, updating where appropriate to improve efficiencies and to ensure they are supported by external providers.
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Regulatory and legislative reporting changes
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Failure to comply with all regulatory and legislative reporting requirements.
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In conjunction with the internal skills and knowledge within Walstead, the Group work with several partners that specialise in their respective fields and provide management with advice and support to ensure compliance.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Corporate and social responsibility
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Environmental, employee, social, community and human right matters
The Group’s performance depends largely on its managers and staff. The resignation of key employees and the inability to recruit people with the right expertise and skills could adversely affect the Group’s results. To mitigate these risks, the Group operates a training programme for its employees and provides incentives linked to the results that are designed to retain key personnel.
The Group has consistently sought to recruit and retain the best employees in order to provide good customer service, which is the foundation of the business.
The Group recognises the importance of understanding and controlling environmental impacts where possible. We aim to ensure our paper is sourced from sustainable and environmentally managed forests, and production waste materials are effectively recycled. Our printing processes aim to be as efficient as reasonably possible to minimise emission and other environmental impacts.
The Group is committed to working closely, and in a sustainable manner, with our suppliers and business partners. We consider our broader role within the community and look for opportunities where we can play a larger part in those communities.
The Group supports the principals laid out in the Universal Declaration of Human Rights; our major human rights impacts relate to colleagues, contractors, suppliers and our products.
Employee gender diversity
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Directors of subsidiary companies not included in the above
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Total senior managers other than Directors
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Other employees of the Group
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Fair review of the business and key performance indicators (KPIs)
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A summary of the key financial results for the year to 31 December 2024 is set out in the tables below:
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Financial highlights – Statutory measures
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The Group’s Directors use key performance indicators to measure progress in delivering the business model and creating sustainable shareholder returns. Whilst the above financial highlights reflect the results for the Group for 2024 and 2023, the below KPI’s provide alternative performance measures that are used by the Directors to analyse the business.
In the period under review the Group used the following key performance indicators:
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Financial highlights - Alternative performance measures
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EBITDA (adjusted) as a percentage of net revenue
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EBITDA (adjusted) return on capital employed
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External net debt to EBITDA (adjusted)
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Added value per production employee
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* See page 113 for definitions of Alternative Performance Measures
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Fair review of the business and key performance indicators (continued)
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Volumes and revenue reduced year on year. In general the Group has managed this decline well, however a particularly difficult year in Iberia has been the major contributor to a reduction in EBITDA (adjusted)*. As noted in the future developments section that Group has taken steps to mitigate this going forward.
The UK performed well following significant investment in 2022 and 2023. In Central Europe the Group has merged the CE and Leykam divisions, which is expected to strengthen the business in that region.
Gross revenue reduced by 7.1% year on year to €540.7 million (2023: €582.0 million); this was partly due to reductions in the cost of paper, which is largely a pass through cost.
Net revenue* (Gross revenue less paper costs) has reduced by 2.0% on prior year mostly resulting from lower production volumes. Primarily due to carefully managed costs and capacity, Added Value as a percentage of Net Revenue increased in the year to 59.0% up from 56.4% in 2023. Added value per production employee was €85.0k (2023: €79.9k).
The impact of the above results in an increase in Gross Profit to €92.5m (2023: €84.9m).
Other operating income declined €9.5m to €5.8m. This is largely due to a significant reduction in electricity income and this is a key driver of the reduced profitability of the Group.
Whilst the lower volumes have allowed for some cost mitigation, administrative costs have increased. In part this is due to the Groups continued investment, for example in the Rhapsody business unit. The other key driver was an increase in impairment costs particularly relating to the Iberian business.
Profit and loss on disposal of fixed assets returned a profit of €5.8m (2023: loss of €1.3m) as the profits from the disposal of two freehold properties more than offset the losses arising from plant and machinery disposals. EBITDA (adjusted)* has decreased to €28.0 million (2023: €34.8 million). EBITDA (adjusted)* as a percentage of Net revenue* has declined slightly to 7.6% (2023: 9.2%).
Restructuring and other costs were higher by €1.0m, whilst net finance costs decreased by €0.7m.
The overall result is a statutory loss before tax of €16.2 million compared to 2023 loss of €10.0 million.
Cash generation from operating activities was €6.5 million (2023: €24.5 million) with continued good management of working capital. Capital expenditure was well controlled with no major capital projects. The disposal of two freehold properties was the major contributor to proceeds from the disposal of property, plant and equipment increasing to €24.2m from €0.6m in 2023.
External net debt* reduced significantly to €51.1 million compared to €65.0 million in the prior year and the reduction in external debt is a highlight of the 2024 financial performance.
External net debt to EBITDA (adjusted) ratio* decreased to 1.8x (2023: 1.9x) and remains relatively low.
At the year-end cash and cash equivalents were €32.7 million and bank facility headroom was €22.5 million giving the Group a healthy €55.2 million of cash availability (2023: cash balances of €33.4 million and undrawn bank facilities of €33.6 million).
* See page 113 for definitions of Alternative Performance Measures
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Site closures
As noted in the Chairman’s report, in 2025 we announced the closure of sites in Barcelona (Spain) and St Pölten (Austria).
Corporate restructuring
On 30 June 2025, Walstead Holdings Limited (“WHL”), the ultimate parent company of the Walstead Group Limited, acquired 100% of the share capital of Walstead Group Limited from Walstead Finance Limited (“WFL”), its immediate parent company, for a consideration of £16.6 million.
Further details of events after the reporting date are disclosed in note 36.
Non-Financial and Sustainability Statement
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Introduction
Walstead’s climate related financial disclosures for the purposes of section 414CB of the Companies Act 2006 are detailed below.
Governance
Board oversight of climate-related risks and opportunities
The Board of Directors have ultimate oversight of the Groups strategy, including its approach to the effect of climate change on the Group’s business model. The Board considers climate-related issues as part of its decision making, including in relation risk management, annual budgets and business plans.
ESG compliance is a regular discussion item at Board meetings throughout the year and climate change is included in these discussions.
The Group Energy Efficiency team, comprising members from the Board of Directors, Commercial, Procurement and the Group Health, Safety and Environment (“HSE”) team, have been delegated management of climate-related issues by the Board. The Group Energy Efficiency team receives information about climate-related issues through activities such as internal briefings by members of the Executive management team and briefings from external advisors. Feedback from the Group Energy Efficiency team on Walstead’s progress on climate change related matters, including progress against climate-related goals and targets, is provided to the Board of Directors regularly. As part of this oversight the Board reviews specific numerical KPIs as well as qualitive discussions with teams across the business monthly.
The Audit Committee serves as a partner to the Board, diligently monitoring the organisations risk exposure and risk appetites, including in relation to climate-related risks, to ensure they align with established thresholds. Additionally, the Audit Committee provides an oversight function by reviewing the effectiveness of implemented risk management and control systems. The Audit Committee is assisted in its oversight role by the Groups internal audit function, which undertakes both regular and ad hoc reviews of risk management controls and procedures, including in relation to climate-related risks; the results of these reviews are reported to the Audit Committee. The Chair of the Audit Committee reports to the Board on all matters within its duties and responsibilities, including any climate-related matters that were discussed.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Management's role in assessing and managing climate-related risks and opportunities
The Group Energy Efficiency team overseas implementation of the Groups strategy in relation to climate change.
In addition, the Groups Executive management team monitors and assesses climate-related risks through its risk monitoring activities. Further information on how management assesses and manages climate-related risks and opportunities is set out in the ‘Risk management’ disclosures below.
Strategy
Climate-related risks and opportunities over the short, medium and long term
Climate change poses several risks to the printing sector and is a principal risk (as part of overall ESG compliance) for the Group.
The Group has identified several specific climate-related risks and opportunities through a series of stakeholder interviews and desk-based research.
This process resulted in a shortlist of key potential risks and opportunities for Walstead within different category areas, including transition risks associated with the transition to a lower carbon economy and physical risks arising from acute weather events or longer-term chronic changes to the climate.
Climate-related risks and opportunities were considered over the following time horizons: short term (less than two years), medium term (more than two years but less than ten years) and long term (greater than ten years). The definition of each time horizon is broadly aligned to the Group’s medium term climate change targets for 2030. Expert external advice was obtained to allocate each climate change target to an appropriate time horizon.
Further information on the climate-related risks and opportunities potentially arising in the short, medium and long term is set out in the ‘Risks and opportunities’ section below.
Impact of climate related risks and opportunities on Walstead business strategy and financial planning
Consideration of topics relating to climate change is a fundamental aspect of Walstead business model. Through the work completed with sustainability partners Nero Carbon and Envirya, the Group was able to look at further reduction projects.
The climate-related risks and opportunities into business strategy has led to the Group to increase its investment on LED lighting and heat recovery, further lowering gas usage, as well as invest in more efficient chillers and compressors. From the beginning of the financial year the Group began using green electricity in some of its sites and continues to invest in research and to implement new technologies that are expected to lower Walstead’s organisational Scope 1 and 2 emissions footprint.
Climate-related risks input into financial planning processes through the consideration of the potential carbon emissions footprint of existing and proposed operating projects and capital investment projects.
Climate-related factors are expected to have an impact on the financial performance in the short to medium term due to potentially increased operating costs and the potential for increased capital investment but present opportunities in the long term through reduced energy usage and reduced energy costs. There are a range of possible financial impacts arising from the climate related factors and these are monitored on an ongoing basis.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Resilience climate change scenarios
Walstead utilises advanced printing technologies and upholds strict quality standards to ensure consistent, high-quality outputs across our extensive range of printing services. This commitment to excellence extends to our sustainability initiatives, with efforts to reduce waste, minimise energy consumption and use environmentally friendly materials in its processes.
We are closely following the evolving risks and opportunities arising from climate change for Walstead, positioning ourselves to capitalise on the increasing market demand for low carbon products and services.
Risk management
Process for identifying and assessing climate-related risks
The Board of Directors has ultimate responsibility for the identification of emerging and potential risks, including climate-related risks, and associated strategies to manage and mitigate such risks.
The Group has an internal risk register which considers emerging and principal risks related to the business, including climate-related risks, and determines their relative significance by reference to monetary impact, probability, maximum foreseeable loss, trend and mitigating actions. The risk register is updated on a regular basis. and reviewed by the Audit Committee. The Executive committee ultimately reports into the Board for further review and approval of the risk register.
Managing climate-related risks
The Board monitors the Groups risk management and internal control systems on an ongoing basis, supported by the Audit Committee, Executive Committee and Group Energy Efficiency team.
Where a risk is deemed to be sufficiently significant in terms of potential impact or likelihood, appropriate risk mitigation measures are sought, including with the assistance of third-party specialists where relevant.
The Chief Operating Officer has been delegated responsibility for managing specific climate related risks within the business, on a day to day basis.
Further information on the actions taken to manage and mitigate risks relating to climate change is set out in the ‘Risks and opportunities’ section below.
How processes for identifying, assessing and managing climate-related risks are integrated into Walstead's overall risk management
The Groups processes for identifying, assessing, and managing climate-related risks are fully integrated into the Groups overall risk governance framework, further details of which are set out in the ‘Risk management’ section above.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Metrics and targets
Metrics used to assess climate-related risks and opportunities
The Group uses a wide range of climate-related metrics including GHG emissions (Scopes 1, 2 and 3 and emissions intensity), as well as consumption of electricity, natural gas, liquefied petroleum gas (“LPG”) and waste generation.
Walstead is also monitoring various key performance indicators (“KPIs”) to assess and manage climate-related risks and opportunities. These include electricity, natural gas and LPG consumption and turnover intensity ratios. These metrics and targets were selected based on their direct relevance to the Group’s operations and their ability to effectively track policy, market and technological changes.
The Group does not have specific targets or KPIs, however it will strive to introduce best practice in this sector. The Group has chosen to take the exemption to disclose against elements of the UK-CFD; primarily around the resilience of the business model, specific targets identified in relation to climate risk and KPIs in relation to these targets.
Whilst the Group is fully aware of the importance of climate related risk, the potential risks identified above are medium and long term in nature, coupled with a pessimistic scenario outlook. The Directors therefore views the impact upon the Group as very limited in the short to medium term. As a result of this, climate risk does not form a key part of the Group’s risk management process, although this will be continually reviewed as appropriate.
The appropriate Scope 1, 2 and 3 emissions in 2024 and 2023 as well as the methodology used to calculate GHG emissions is set out in the financial statements of the applicable subsidiaries.
Targets
At Walstead our commitment to sustainability encompasses several key focus areas: energy efficiency, waste reduction, carbon footprint monitoring and responsible sourcing.
Energy efficiency
Dedicated to reducing energy consumption across the printing sites. Through the use of advanced technology and energy efficient equipment, the aim is to decrease overall energy usage by implementing improvements such as LED lighting, power factor correction, and energy heating systems.
Waste Reduction
Waste management and recycling are critical to Walstead’s sustainability goals. With an aim to decrease the amount of waste sent to landfill by expanding recycling programs to include metal, aluminium plates, paper, cardboard, and plastic. The goal is to recycle as much waste as possible to minimise environmental footprint.
Carbon Footprint Monitoring
Walstead uses Nero Carbon's product calculator, an online carbon calculator, to monitor and reduce greenhouse gas emissions. This tool helps track our carbon footprint across all three scopes, providing insights to guide their efforts to lower emissions and promote sustainable practices.
Responsible Sourcing
Prioritising the use of environmentally responsible materials, such as Forest Stewardship Council (FSC) and PEFC-certified paper. By sourcing these sustainable materials, it supports responsible forest management and contributes to environmental objectives.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Certification
Walstead is certified to ISO 9001, ISO 14001, and ISO 45001, internationally recognised standards that demonstrates our commitment to quality management, environmental responsibility, and occupational health and safety.
∙ISO 9001: A standard for quality management systems (“QMS”), ensuring processes are efficient, consistent, and customer-focused. It requires a commitment to continuous improvement and customer satisfaction, emphasising a systematic approach to managing quality across all aspects of the Group’s operations.
∙ISO 14001: A standard to set the framework for environmental management systems (“EMS”), providing guidance in reducing environmental impact while complying with legal requirements. This standard helps identify, monitor, and control potential environmental risks and promote sustainability.
∙ISO 45001: An international standard for occupational health and safety management systems. It focuses on creating a safe and healthy workplace by identifying and managing risks, reducing workplace hazards, and fostering employee well-being.
Risks and opportunities
In reviewing the possible risks and opportunities facing Walstead because of climate change a series of interviews were held with a range of stakeholders. This process was established to determine perceptions around climate change and Walstead’s business model.
Through a mix of desk-based research and key stakeholder interviews, a number of shortlists have been developed of key potential risks and opportunities for Walstead, as shown below.
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Increase in climate consciousness amongst customers and investors. Potential loss of finance, trust and brand value if climate-related matters are not addressed. Reduced market demand for emissions intensive products. The use of paper, ink and energy intensive printing processes can be perceived as less environmentally friendly.
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Collaborating with a net-zero committed printer enhances our customers' brand image, showcasing their dedication to environmental responsibility and attracting eco-conscious consumers.
Reducing carbon footprint opens new markets to explore. Changing perception of the business giving opportunity to enhancer reputation through responsible actions.
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Lack of sustainable supply chain. Risk of using environmentally unfriendly suppliers impacting current and future business. Potential loss of finance, trust and brand value if climate related matters are not addressed.
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Build resilience amongst the supply chain.
Comprehensive review of all suppliers to ensure credentials and reduction targets are aligned with the business.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Risks and opportunities (continued)
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Un-sustainable printing practices and failure to future-proof operations
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As regulations and market demand shift towards sustainability it is expected that there will be increased demand for low carbon products and services.
Walstead are investigating a number of eco-friendly processes to ensure our customers are ahead of the curve, avoiding potential future costs or disruptions.
Opportunities include using carbon balanced paper and investigating inks that have lower volatile organic compounds (‘VOCs’).
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Increase in energy usage and costs from use of inefficient technology. Inability to change will inevitably result in higher future energy usage and costs.
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The printing business is energy intensive. The adoption of low-emission energy sources is expected to reduce energy costs and carbon footprint.
Walstead is dedicated to reducing energy consumption across the printing sites. Printing presses aim to be as efficient as reasonably possible to minimise emission and environmental impacts.
Using advanced technology and energy efficient equipment, the aim is to decrease overall energy usage by implementing improvements such as LED lighting, power factor correction, and energy heating systems.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Directors' statement of compliance with duty to promote the success of the Group
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This statement, which forms part of the Group Strategic Report, is intended to show how the Directors have approached and met their responsibilities under Section 172(1) (a) to (f) of the Companies Act 2006 (“Section 172(1)”) during the period under review. As required by Section 172(1), the Directors consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole, having regard to its stakeholders and the matters set out in Section 172(1). In doing this, the Directors must have regard amongst other matters, to;
a) The likely consequences of any decision in the long term;
b) The interests of the Group’s employees;
c) The need to foster the Group’s business relationships with suppliers, customers and others;
d) The impact of the Group’s operations on the community and the environment;
e) The desirability of the Group maintaining a reputation for high standards of business conduct; and
f) The need to act fairly between members of the Group.
The Board receives suitable training and briefings on Directors’ duties and updates in relation to corporate governance developments and stakeholder engagement. New Directors appointed to the Board receive tailored, individual briefings on their duties and obligations as part of their induction.
The following paragraphs, together with the Corporate and Social Responsibilities, as shown in the Group Strategic Report, summarise how the Directors fulfil their duties:
(a) The likely consequences of any decision in the long term;
The Board recognises that decisions taken today will affect the long-term success and sustainability of the Group.
The Board receives regular reports from across the business on performance, financial position, and the implementation of strategy, as well as updates on the market, relationships with customers, suppliers and other external influences. These factors feed into discussions on strategy and setting priorities to ensure that the potential impact of decisions, particularly on the long term, are understood and considered.
The Board understands the potential impacts of the decisions it makes for its stakeholders, the environment and the communities in which the Group operates.
(b) The interests of the Group’s employees;
The Board recognise that the Group’s employees are fundamental to the success of the business and the delivery of its strategic ambitions. The business depends on attracting, retaining, developing and motivating talented employees.
The Board regularly consider and assess the implications of relevant decisions on employees and the wider workforce.
The Group aims to be a fair and responsible employer in its approach to the pay and benefits its employees receive. The Group operates a training programme for its employees and provides incentives linked to the results that are designed to retain key personnel.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The health, safety and well-being of the Group’s employees is of paramount importance to the way the business operates. Each employee is provided with a comprehensive handbook on Safety in the Workplace as part of an induction programme. The Group has established a clearly defined policy of Health and Safety which meets all the requirements set out in the Health and Safety at Work Act 1974 or the relevant standards applicable to the country of operation.
The Board places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group. Employees are encouraged to participate and be involved in matters that affect their interests as employees.
(c) The need to foster the Group’s business relationships with suppliers, customers and others;
The Board recognises the importance of key stakeholders in the long-term success of the Group, reflected in the focus on effective engagement and building mutually beneficial relationships with suppliers, customers and other business partners.
The Group engage regularly with these stakeholders, with interactions led by the day-to-day management team and with Board-level involvement where appropriate. The Board receive feedback on a variety of topics that indicate how these stakeholders have been engaged and uses this to continuously review its approach. The Group utilise multi-year contracts with both customers and suppliers to provide certainty to both parties and enable a longer-term strategic development of these relationships.
The Group acting as an intermediary between stakeholders works with suppliers to develop products that meet the needs of the customers. Similarly, it proactively promotes new, innovative solutions that have been developed and tested by the Group and its suppliers. This creates an environment for continuous improvement providing improved quality, process efficiencies and reducing the environmental footprint of a product, ultimately benefiting all stakeholders.
The Group continually assesses the priorities related to customers, suppliers and those with whom it does business, with the Board engaging with the business and management team on these topics.
(d) The impact of the Group’s operations on the community and the environment;
The Board are committed to driving down energy and carbon impacts and recognise that its business activities interact with the environment in a variety of ways. The Board receive information on relevant topics to help them make decisions.
The Group is committed to working closely, and in a sustainable manner, with key stakeholders. The Group considers its broader role within the community and looks for opportunities where it can play a larger role in these communities.
The Board recognise the importance of understanding and controlling environmental impacts wherever possible. The Group aim to ensure paper is sourced from sustainable and environmentally managed forests, and that production waste materials are effectively recycled. The Group’s printing processes aim to be as efficiency as reasonably possible to minimise emission and other environmental impacts.
More information can be found in the ‘Non-Financial and Sustainability Statement’ section on page 10 - 15.
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WALSTEAD GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
(e) The desirability of the Group maintaining a reputation for high standards of business conduct;
The Board is responsible for setting and monitoring the culture, values and reputation of the Group. Maintaining a reputation for high standards of business conduct is an essential part of this responsibility.
The Board periodically reviews and approves clear frameworks, such as the Group’s Code of Conduct and Integrity Principles, to ensure that high standards are maintained in the business and in the Group’s business relationships. The Code of Conduct sets out the principles of how the Board expect everyone who works with or represents the Group to behave and do business, with the Board leading by example.
The Board of Directors aim to behave responsibly and ensure that management operates the business in a responsible manner, operating within the expected high standards of business conduct and good governance and in doing so contribute to the delivery of the Group’s strategy and plans.
(f) The need to act fairly between members of the Group
After weighing up all relevant factors, the Board consider which course of action best enables delivery of the Group’s strategy and long-term interests, taking into consideration the effect on stakeholders. In doing so, the Board act fairly between the Group’s members but are not required to balance the Group’s interests with those of other stakeholders. This can sometimes mean that certain stakeholder interests may not be fully aligned.
As a result of these activities, the Directors believe they have demonstrated compliance with their legal duty under Section 172(1) (a) to (f) of the Companies Act 2006.
This report was approved by the Board and signed on its behalf by:
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WALSTEAD GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present their report and the audited financial statements for the year ended 31 December 2024.
The Directors who served during the year and up to the date of approval of this report were:
J Camacho Fernandez (resigned 2 July 2024)
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S Gutheil (resigned 30 September 2024)
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N Johnson (resigned 3 September 2024)
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R Marsh (resigned 1 March 2024)
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B G Murray (appointed 3 September 2024)
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I Southerland (appointed 5 August 2024)
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The Directors do not recommend the payment of a dividend following their approval of the 2024 consolidated financial statements and no dividends were paid during the year (2023: €nil).
Neither the Group or Company made any political donations or incurred any political expenditure during the year (2023: €nil).
Forward-looking statements
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Where the financial statements contain forward-looking statements, these are based on current expectations and assumptions and are subject to risk factors and uncertainties which the Directors believe are reasonable. Accordingly, the Group and Company’s actual future results may differ materially from the results expressed or implied in these forward-looking statements. We do not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Engagement with employees
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The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group. The Group encourages employee participation and involvement in matters that affect their interests as employees.
The Group has established a clearly defined policy of Health and Safety which meets all the requirements set out in the Health and Safety at Work Act 1974.
The Group gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Where existing employees become disabled, it is the Group’s policy, wherever practicable, to provide continuing employment under normal terms and conditions and to provide training and career development and promotion to disabled employees wherever appropriate.
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WALSTEAD GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Qualifying third party indemnity provisions
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The Group and Company has made qualifying third-party indemnity provisions for the benefit of its Directors which remain in force at the date of this report.
Greenhouse gas emissions, energy consumption and energy efficiency action
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The Group is committed to driving down our energy and carbon impacts. The Group recognises that its business activities interact with the environment in a variety of ways and its responsibility to help protect the environment. The Group is committed to:
∙Continuous improvement in the environmental impact of its business activities;
∙Complying with relevant legal, customer and other third-party requirements; and
∙Adopting best practices to its activities wherever possible.
Our Streamlined Energy and Carbon Reporting (SECR) disclosure presents our carbon footprint across Scopes 1, 2 and 3 together with an appropriate intensity metric and our total energy usage. The data only includes information relating to Walstead Roche Limited and Walstead Bicester Limited as these are the only UK entities that meet the threshold for SECR reporting.
Operational scopes
Following the UK Government’s Environmental Reporting Guidelines, the Energy and Carbon Disclosure meets the requirements for large unquoted companies:
Scope 1 - Combustion of gasses on premises and combustion of fuels in vehicles.
Scope 2 - Purchased electricity.
Scope 3 - Business travel in rental cars or employee-owned vehicles where the Company is responsible for purchasing the fuel.
Methodology
The services of Nero Carbon LTD (Nero) were employed to assist with the quantification of emissions.
Activity data were identified and entered into Nero's Greenhouse Gas (GHG) Calculator. Nero verified the activity data by auditing submitted evidence files, including utility statements and mileage records.
The methodology of Nero’s GHG Calculator conforms to the Greenhouse Gas Protocol Standards and has been independently verified to ISO14064-1. The 2023 UK Government GHG Conversion Factors for Company Reporting were used to calculate emissions and to convert activity data into a kWh-equivalent
Purchased electricity and the dual reporting approach (location-based and market-based) follows The GHG Protocol Scope 2 Guidance. Market-based emission factors were sourced from the Group's electricity suppliers' Fuel Mix Disclosures for the relevant periods.
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WALSTEAD GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Emissions overview
Absolute emissions in tonnes of carbon dioxide equivalent (tCO2e) is shown below:
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Company Premises - Gaseous fuels, natural gas
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Company Vehicles - Gaseous fuels, LPG, HGVs
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Location-based - Purchased electricity
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Market-based - Purchased electricity*
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Ratio - kgCO2e per £1m of turnover
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* Not included in totals
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WALSTEAD GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Energy overview
Energy consumption used to calculate the above emissions in (kWh) is shown below:
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Company Premises - Gaseous fuels, natural gas
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Company Vehicles - Gaseous fuels, LPG
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Emissions summary
Total energy consumption in the reporting period was 79,008,696kWh, representing a 1% change from the previous year.
The consumption of this energy resulted in emissions of 15,426 tonnes of carbon dioxide equivalent (tCO2e). This was a 1% change compared to the previous year.
The highest emissions in the reporting period resulted from purchased electricity (7,869 tCO2e).
Energy efficiency action
During the year ended 31 December 2023, the Group made major investments in LED lighting, more energy efficient cold-water chillers and compressors. The compressors have also been used for heat recovery within our facilities, further lowering the gas usage. In August 2023 the Group engaged with an ESG consultant to gain a clear understanding of the Group's Carbon Footprint and look at further reduction projects on the businesses journey to net zero, enabling the Group to measure the impact of the investments already made in the future. From 1 January 2025 the UK Group will be using 100% renewable electricity across all sites.
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WALSTEAD GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
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Matters covered in the Group Strategic Report
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In accordance with Section 414c (11) of the Companies Act 2006, the Directors have chosen to include the following items in the Group Strategic Report:
∙Principal activity and business review
∙Principal risks and uncertainties
∙Future developments
Disclosure of information to auditor
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Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the Directors is aware, there is no relevant audit information of which the Group and the Company's auditor is unaware, and
∙the Directors 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 Group and the Company's auditor is aware of that information.
Post balance sheet events
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Fire damage
In May 2025 there was a fire on one of the presses at the Group’s print site in Bicester, UK. The Group has taken the appropriate steps to mitigate the impact of this and continues to serve customers by utilising other presses on the site, and in the Group. There is comprehensive insurance in place. As this occurred after the reporting period, it is considered a non-adjusting event, and no adjustments have been made to the 2024 financial statements.
Site closures
The Group entered into consultations with employee representatives at sites in Barcelona (Spain) in January 2025 and St. Pölten (Austria) in March 2025. These sites are expected to close in 2025. The loss after tax for both sites for the year ended 31 December 2024 was €11.4m and €3.3m respectively.
The closure of the sites is the result of fundamental changes in the printing industry in Europe in recent years, including demand changes and increasing costs.
Corporate restructuring
On 30 June 2025, Walstead Holdings Limited (“WHL”), the ultimate parent company of the Walstead Group Limited, acquired 100% of the share capital of Walstead Group Limited from Walstead Finance Limited (“WFL”), its immediate parent company, for a consideration of £20.1 million.
This transaction represented an intra-group transfer of shares and did not result in any change to the ultimate control, or to the consolidated net assets or results, of Walstead Group Limited.
As the transaction occurred after the reporting date, it is classified as a non-adjusting event under IAS 10. Accordingly, no adjustments have been made to these financial statements.
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WALSTEAD GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Ultimate controlling party
In June 2025 the Group announced that the private equity shareholder in Walstead Holdings Limited, the Company’s ultimate holding company, has indicated that they are looking to realise their investment in the Walstead business. At this stage in the process the particular buyer has not yet been identified and no adjustments have been made to the 2024 financial statements relating to this.
This report was approved by the Board and signed on its behalf by:
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WALSTEAD GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors are responsible for preparing the Group Strategic Report, Directors' Report and the consolidated financial statements, in accordance with applicable law.
Company law requires the Directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK and the Parent Company financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102.
Under company law the Directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing each of the consolidated and Parent Company financial statements, the Directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and estimates that are reasonable and prudent;
∙for the consolidated financial statements, state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;
∙for the Parent Company financial statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
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WALSTEAD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALSTEAD GROUP LIMITED
Opinion
We have audited the financial statements of Walstead Group Limited (“the Company”) for the year ended 31 December 2024 which comprise the Consolidated Statement of Profit or Loss, Consolidated Statement of Other Comprehensive Income, Consolidated and Company Balance Sheet, Consolidated and Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and related notes, including the accounting policies in note 4.
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 31 December 2024 and of the Group’s loss for the year then ended;
∙the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
∙the parent Company financial statements have been properly prepared in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; and;
∙the financial statements 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 are described below. We have fulfilled our ethical responsibilities under, and are independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.
Going concern
The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Company or to cease their operations, and as they have concluded that the Group and the Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).
In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Group’s business model and analysed how those risks might affect the Group and Company’s financial resources or ability to continue operations over the going concern period.
Our conclusions based on this work:
∙we consider that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
∙we have not identified, and concur with the Directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group or the Company's ability to continue as a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Company will continue in operation.
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WALSTEAD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALSTEAD GROUP LIMITED
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
∙Enquiring of Directors as to the Group’s high-level policies and procedures to prevent and detect fraud and the Group’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
∙Reading Board minutes.
∙Considering remuneration incentive schemes and performance targets for management.
∙Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This included communication from the Group audit team to full scope component audit teams of relevant fraud risks identified at the Group level and request to full scope component audit teams to report to the Group audit team any instances of fraud that could give rise to a material misstatement at the Group level.
As required by auditing standards, and taking into account possible pressures to meet profit we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition at cut-off, in particular the risk that revenue is recorded in the wrong period and the risk that Group and component management may be in a position to make inappropriate accounting entries.
We did not identify any additional fraud risks.
In determining the audit procedures we took into account the results of our evaluation and testing of the operating effectiveness of the Group-wide fraud risk management controls.
We performed procedures including:
•Identifying journal entries and other adjustments to test for all full scope components based on risk criteria and comparing the identified entries to supporting documentation. These included those posted to unusual accounts.
• For a sample of sales invoices raised close to year end, assessing whether the revenue has been recognised in the correct period through inspection of relevant supporting documentation and the underlying contractual terms.
• Assessing whether the judgments made in making accounting estimates are indicative of a potential bias.
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the Directors (as required by auditing standards) and discussed with the directors the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations throughout our team and remained alert to any indications of noncompliance.
The potential effect of these laws and regulations on the financial statements varies considerably.
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WALSTEAD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALSTEAD GROUP LIMITED
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, data protection laws, anti-bribery, employment law, recognising the nature of the Group’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
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 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 fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Other information
The Directors are responsible for other information which comprises the Group Strategic Report, the Chairman’s Statement and the Directors’ Report. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work:
∙we have not identified material misstatements in the other information;
∙in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
∙in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Matters on which we are required to report by exception
Under the Companies Act 2006, we are required 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.
We have nothing to report in these respects.
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WALSTEAD GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WALSTEAD GROUP LIMITED
Directors’ responsibilities
As explained more fully in their statement set out on page 25, the Directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and 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 they 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
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 our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
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.
Michael Scrivener (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
20 Station Road
Cambridge
CB1 2JD
Date: 30 September 2025
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WALSTEAD GROUP LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Profit/(loss) on disposal of fixed assets
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Amortisation and impairment
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Profit/(loss) on disposal of fixed assets
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Operating profit (adjusted)*
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Restructuring and other costs
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Loss for the year from continuing operations
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*See page 113 for the definition of alternative performance measures.
The notes on pages 37 to 100 form part of these financial statements.
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WALSTEAD GROUP LIMITED
STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Loss for the year from continuing operations
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Other comprehensive income:
Items that will not be reclassified to profit or loss:
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Actuarial loss on severance provision
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Items that will or may be reclassified to profit or loss:
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Exchange (losses)/gains arising on translation on foreign operations
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Other comprehensive income for the year
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Total comprehensive income
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The notes on 37 to 100 form part of these financial statements.
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WALSTEAD GROUP LIMITED
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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WALSTEAD GROUP LIMITED
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2024
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Equity attributable to the owners of the parent
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The financial statements were approved and authorised for issue by the Board of Directors and were signed on its behalf by:
B G Murray
Director
Date: 30 September 2025
The notes on pages 37 to 100 form part of these financial statements.
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WALSTEAD GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 DECEMBER 2024
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Comprehensive income for the year
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Other comprehensive income
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Total comprehensive income for the year
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Comprehensive income for the year
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Other comprehensive income
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Total comprehensive income for the year
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The notes on pages 37 to 100 form part of these financial statements.
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WALSTEAD GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Cash flows from operating activities
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Depreciation of property, plant and equipment
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Impairment of property, plant and equipment
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Amortisation of intangible fixed assets
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Impairment losses on intangible assets
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Impairment/(reversal) of bad debts on trade receivables
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Negative goodwill acquired through business combinations
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(Profit)/loss on disposal of property, plant and equipment
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Net exchange losses on foreign currency borrowings
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Movements in working capital:
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Decrease in trade and other receivables
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Decrease in trade and other payables
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Decrease in provisions and employee benefits
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Cash generated from operations
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Net cash generated from operating activities
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Cash flows from investing activities
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Acquisition of subsidiary, net of cash acquired
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Purchases of property, plant and equipment
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Proceeds from disposal of property, plant and equipment
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Purchase of intangible assets
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Net cash generated from/(used in) investing activities
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WALSTEAD GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Cash flows from financing activities
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Net drawdown of revolving credit and invoice factoring
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Repayment of loans from related parties
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Payment of lease liabilities
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Net cash used in financing activities
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Net decrease in cash and cash equivalents
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Cash and cash equivalents at the beginning of year
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Exchange gains on cash and cash equivalents
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Cash and cash equivalents at the end of the year
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The notes on 37 to 100 form part of these financial statements.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Walstead Group Limited ("the Company") is a private company limited by shares incorporated and domiciled in the United Kingdom. The Company's registered office is 18 Westside Centre, London Road, Colchester, Essex, CO3 8PH. These consolidated financial statements comprise the Company and its subsidiaries (collectively "the Group" and individually "Group companies").
The principal activities of the Group and Company, and the nature of the Group's operations are set out in the Group Strategic Report on pages 4 to 18.
The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). The Company's individual financial statements were prepared in accordance with Financial Reporting Standard 102 and the Companies Act 2006.
Details of the Group's accounting policies, including changes during the year, are included in note 4.
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the consolidated financial statements and their effects are disclosed in note 5.
The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.
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Trade and other creditors
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Loans from related parties
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Basis of preparation (continued)
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2.2 Changes in accounting policies
i) New and amended standards adopted by the Group
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The Group has applied the following standards and amendments for the first time for their annual reporting period commencing 1 January 2024:
• IFRS 16: Leases - The amendment requires a seller-lessee to apply the subsequent measurement requirements for lease liabilities unrelated to a sale and leaseback transaction to lease liabilities arising from a leaseback in a way that it recognises no amount of the gain or loss related to the right of use that it retains;
• IAS 1: Presentation of Financial Statements - Under previous IAS 1 requirements, the Group would classify a liability as current when they do not have an unconditional right to defer settlement for at least 12 months after the reporting date. The amendment has removed the requirement for a right to be unconditional and instead now requires that a right to defer settlement must exist at the reporting date and have substance;
• IFRS 7; Financial Instruments - The amendments introduce a new disclosure objective for a Group to provide information about its supplier finance arrangements that would enable users (investors) to assess the effects of these arrangements on the Group’s liabilities and cash flows, and the Company’s exposure to liquidity risk.
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
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UK-adopted IFRS standards not yet applied
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The following new standards, interpretations and amendments, which are not yet effective and have not been adopted early in these financial statements, will or may have an effect on the Group's future financial statements:
• Amendments to IAS 21: Foreign Exchange - Under the amendments, the Company will need to provide new disclosures to help users assess the impact of using an estimated exchange rate on the financial statements. These disclosures might include:
- the nature and financial impacts of the currency not being exchangeable;
- the spot exchange rate used;
- the estimation process; and
- risks to the Company because the currency is not exchangeable.
These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.
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Functional and presentation currency
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Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency").
These consolidated financial statements are presented in Euro ("€"), which is the Group's functional currency. All amounts have been rounded to the nearest thousand ("€'000"), unless otherwise indicated.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
∙has power over the investee;
∙is exposed, or has rights, to variable returns from its involvement with the investee; and
∙has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:
∙the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
∙potential voting rights held by the Company, other vote holders or other parties;
∙rights arising from other contractual arrangements; and
∙any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at this time that decisions need to be made, including voting patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the Consolidated Statement of Profit or Loss and Other Comprehensive Income from the date the Company gains control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Basis of consolidation (continued)
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Changes in the Group's ownership interests in existing subsidiaries
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Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and its calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent account under IAS 39, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
Notwithstanding net current liabilities of €58.4m as at 31 December 2024 and a loss after tax for the year of €18.8m, the financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons:
The Group and Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Group Strategic Report. Principal risks are detailed on pages 4 to 6. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the financial statements.
The Directors have prepared cash flow forecasts and performed a going concern assessment for at least 12 months from the date of approval of these financial statements (the going concern period), which indicates that in the base case scenario the Group will have sufficient availability to finance to meet its liabilities as they fall due during the going concern assessment period.
The Directors have also prepared severe yet plausible downside scenarios, which take account of potential but plausible declines in trading performance driven by inflation and loss in customer demand.
In particular, these scenarios include modelling reductions in revenue or an increase in the price of raw materials. Results from these models noted that there was sufficient funds to meet Group’s liabilities as they fall due during the going concern assessment period.
In addition to operating cash flows, the Group meets day to day financing and working capital needs through external facilities and shareholder loan notes. The factoring facility held across the Group is subject to a net equity covenant. The Directors note that at no point in the modelling (i.e. either in the base case or severe but plausible case) the covenants are expected to breach.
The Directors are confident that the Group and Company will have sufficient working capital to continue to meet its liabilities for at least 12 months from the date of approval of these financial statements.
As noted in the Chairman’s Report the Company’s private equity shareholder, Rutland Partners, has indicated that they are looking to realise their investment in the Walstead business. At this stage in the process the particular buyer has not yet been identified. However any sale is expected to be realised by the Company’s immediate parent, Walstead Holdings Limited, selling its investment in the Company. Therefore it is possible that a change of ownership may occur during the going concern period. While it is not possible to predict precisely what would happen to the Company in the event of a change in ownership, having considered factors such as the Group’s market leading position and its integrated operations, the Directors are confident that the going concern basis remains appropriate as the date of approving the financial statements.
Consequently, the Directors have prepared these financial statements on a going concern basis.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:
∙deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 respectively;
∙liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 at the acquisition date; and
∙assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another IFRS.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is remeasured at subsequent reporting dates in accordance with IAS 39, or IAS 37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Business combinations (continued)
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When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date.
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
∙exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
∙exchange differences on transactions entered into in order to hedge certain foreign currency risks; and
∙exchange differences on monetary items receivable from or payable to foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.
For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into Euros using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Foreign currency (continued)
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In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.
Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.
The Group’s finance income and finance costs include:
∙interest income;
∙interest expense;
∙the net gain or loss on financial assets at fair value through profit or loss;
∙the foreign currency gain or loss on financial assets and financial liabilities;
Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Foreign currency gains and losses are reported on a net basis.
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Revenue from contracts with customers
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Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a customer.
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Revenue from contracts with customers (continued)
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Contracts are entered into with customers for the provision of printed goods. The contract stipulates rates applicable to each product and invoices are raised in accordance with a matrix or pricing structure stipulated within the contract. Contracts can be agreed for specific jobs or may be for longer periods spanning the year end. Where a contract does not cover a specific job, orders are raised under the contract for specific products. These are produced on separate print runs making them easily identifiable. In certain circumstances, contracts may allow for a rebate if volume or revenue targets are met within a set period. Rebates are accrued against revenue based on achievement against targets within the financial year. Revenue from printed materials includes sales of waste paper.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties.
Revenue is recognised when control of the products has transferred, that is either when the products have been delivered to the customer or the customer collects the goods as defined within the contract, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled performance obligations as defined by IFRS 15 that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location or loaded for delivery in the case of an ex-works contract, the risks of obsolescence and loss have been transferred to the customer and either the customer has accepted the products in accordance with sales contract, the acceptance provisions have been lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.
A receivable is recognised at the point the control of the products has transferred, since this is the point in time that the consideration is unconditional because only the passage of time is required before payment is due.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Revenue from contracts with customers (continued)
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(ii) Rendering of services
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Contracts are entered into with customers for the provision of reprographic services.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected on behalf of third parties. Revenue is recognised over time as the contracts progress and the services are performed.
For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided because the customer receives and uses the benefits simultaneously.
Where contracts include multiple performance obligations, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. Where these are not directly observable, they are estimated based on expected cost plus margin. For service contracts including a goods element, revenue for the separate good is recognised at a point in time when the good is delivered, the legal title has passed and the customer has accepted the good.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management. In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered by the Group exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.
Other operating income predominantly relates to the sale from generation of electricity sold to the national grid. Income is recognised at the fair value of the consideration received or receivable and represents amounts receivable for goods provided in the normal course of business, net of discounts, VAT and other sales-related taxes. Electricity income is recognised over time as energy is supplied to the grid.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable.
The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.
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Restructuring and other costs
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The Group presents restructuring and other costs (note 9) to provide additional useful information on the operational performance of the Group.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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(i) Retirement benefit costs and termination benefits
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Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
∙service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
∙net interest expense or income; and
∙remeasurement.
The Group presents the first two components of defined benefit costs in profit or loss in the line item 'Cost of sales' or 'Administrative expenses' . Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognised in the consolidated statement of financial position represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Employee benefits (continued)
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(ii) Short-term and other long-term employee benefits
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A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date.
Bonus plans
The Group recognises a liability and an expense for bonuses based on metrics that take into account key performance indicators, including profits after certain adjustments.
The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
The Group has share-based transactions in respect of certain shares issued to employees of the Group by the ultimate parent company of the Group (Walstead Holdings Limited).
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant date. The fair value is calculated using the Black-Scholes option pricing model and further details regarding the determination of the fair value of the transactions are set out in note 27.
The fair value determined at the grant date of the equity-settled share-based payments is expensed over the vesting period, with a corresponding increase in equity.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the Consolidated Profit and Loss Account because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
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(iii) Current and deferred tax for the year
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Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Property, plant and equipment
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Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.
Land is not depreciated. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business (see note 4.3) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Negative goodwill arising on acquisition is fully recognised within restructuring and other costs in the year of acquisition.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Intangible assets acquired in a business combination
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Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
Capitalised development expenditure isn't amortised until development is complete.
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Impairment of non-financial assets
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Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. These impairment tests are based on the going concern forecasts; extended to the required 4 year period and adjusted to only reflect conditions that existed at at the 31 December 2024. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units ('CGUs'). Goodwill is allocated on initial recognition to each of the Group's CGUs that are expected to benefit from a business combination that gives rise to the goodwill.
Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed.
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Non-current assets held for sale
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Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
∙fixed lease payments (including in-substance fixed payments), less any lease incentives;
∙the amount expected to be payable by the lessee under residual value guarantees;
∙the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
∙payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is included in the 'Loans and borrowings' line in the Consolidated Balance Sheet.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
∙the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised discount rate.
∙the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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The Group as a lessee (continued)
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The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are included in the 'Property, Plant and Equipment' line in the Consolidated Balance Sheet.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 4.13.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has used this practical expedient.
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first in, first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
Cost of work in progress includes an appropriate proportion of overhead expenditure based on normal operating capacity. Impairment losses are recognised where inventories become obsolete or damaged with items written down to net realisable value. Previously recognised impairment losses are reversed if the reasons for the impairment no longer apply.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
Classification as trade receivables
Trade receivables are amounts due from customers for goods sold and services provided in the ordinary course of business. They are generally due for settlement within 30 days and are therefore all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional. The Group holds the trade receivables with the objective of collecting contractual cash flows, and so it measures them subsequently at amortised cost using the effective interest method.
Transferred receivables
The carrying amount of the trade receivables include receivables which are subject to a factoring arrangement. Under this arrangement, the Group has transferred the relevant receivables to the factor in exchange for cash and is prevented from selling or pledging the receivables. However, in some cases the Group has retained late payment and credit risk. The Group therefore continues to recognise these transferred assets to the extent the risk has not been transferred in the Consolidated Balance Sheet. Amount repayable under the factoring agreement is presented as secured borrowing. The Group considers that the ‘held to collect’ business model remains appropriate for these receivables, and hence it continues measuring them at amortised cost.
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Financial assets (continued)
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Classification of financial assets
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Debt instruments that meet the following conditions are subsequently measured at amortised cost:
∙the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
∙the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (FVOCI):
∙the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and
∙the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
By default, all other financial assets are subsequently measured at fair value through profit or loss (FVTPL).
Despite the aforegoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset:
∙the Group may irrevocably elect to present subsequent changes in fair value of an equity instrument in other comprehensive income if certain criteria are met; and
∙the Group may irrevocably designate a debt investment that meets the amortised cost or FVOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Financial assets (continued)
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Amortised cost and effective interest method
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The effective interest method is a method for calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period.
For financial instruments other than purchased or originated credit-impaired financial assets, the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased and originated credit-impaired financial assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition.
The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. On the other hand, the gross carrying amount of a financial asset is the amortised costs of a financial asset before adjusting for any loss allowance.
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVOCI. For financial instruments other than purchased or originated credit-impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired. For financial assets that have subsequently become credit-impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognised by the applying the effective interest rate to the gross carrying amount of the financial asset.
For purchased and originated credit-impaired financial assets, the Group recognises interest income by applying the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition. The calculation does not revert to the gross basis even if the credit risk of the financial asset subsequently improves so that the financial asset is no longer credit-impaired.
Interest income is recognised in profit or loss and is included in the 'finance income' line item.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Financial assets (continued)
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Impairment of financial assets
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The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised costs or at FVOCI, lease receivables, amounts due from customers under contracts, as well as on loan commitments and financial guarantee contracts. No impairment loss is recognised for investments in equity instruments. The amount of expected credit losses ("ECL") is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.
The Group always recognises lifetime ECL for trade receivables, amounts due from customers under contracts and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12 months ECL. The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12 months ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
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Financial liabilities and equity instruments
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(i) Classification as debt or equity
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Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
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Financial liabilities and equity instruments (continued)
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(iii) Financial liabilities
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All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Group, and commitments issued by the Group to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'finance income' or 'finance expense' line item, for gains and losses respectively, in profit or loss for financial liabilities that are not part of a designated hedging relationship.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period.
For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not part of a designated hedging relationship.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
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Derivatives and hedging activities
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Derivative financial instruments are recognised at fair value. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged.
There are no open derivative positions in the current or preceding financial year so the Group has not applied hedge accounting under IFRS 9.
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Cash and cash equivalents
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Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
Bank overdrafts are shown within borrowings in current liabilities in the Consolidated Balance Sheet.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent that there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the Consolidated Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial time to be prepared for use, are capitalised as part of the cost of that asset. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
4.Accounting policies (continued)
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Restructuring provision
A restructuring provision is recognised when the Group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Loss making contract provision
Present obligations arising under loss making contracts are recognised and measured as provisions. Loss making contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
Employee and loyalty bonus provision
Both of these provisions relate to a legal requirement for Austrian and Slovenian employees to accrue specific costs; the provisions are calculated by an actuary.
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Accounting estimates and judgements
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The Group and Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that carry a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are as follows:
∙Impairment of intangible assets (Note 15)
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The following is an analysis of the Group's revenue for the year from continuing operations:
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Analysis of revenue by country of destination:
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Timing of revenue recognition:
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Goods and services transferred at a point in time
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Included in revenues arising from commercial printing are revenues of approximately €23.1 million (2023: €33.8 million) which arose from sales to the Group’s largest customer. No single customer contributed 10% or more to the Group's revenue during the year ended 31 December 2024 or during the year ended 31 December 2023.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Government grants receivable
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The operating loss is stated after charging/(crediting):
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Net foreign exchange gains
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Depreciation of property, plant and equipment
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Amortisation of intangible assets
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Impairment of property, plant and equipment
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Loss/(profit) on disposal of property, plant and equipment
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Impairment/(reversal) of bad debts on trade receivables
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Restructuring and other costs
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In the analysis of the Group’s operating results, information is presented to provide readers with additional performance indicators that are prepared on a non-statutory basis. This presentation is regularly reviewed by management to identify items that are considered to be one-off or do not reflect an operational cost of the business and should be adjusted in order to reflect an understanding of the Group’s performance and long-term trends.
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Restructuring costs (including redundancies and acquisition costs)
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Negative goodwill recognised on acquisition
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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During the year, the Group obtained the following services from the Company's auditor and its associates:
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Fees payable to the Company's auditor and its associates for the audit of the consolidated and parent Company's financial statements
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Fees payable to the Company's auditor and its associates in respect of:
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Audit of the financial statements of the Company’s subsidiaries
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Taxation compliance services
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Employee benefit expenses
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Employee benefit expenses (including Directors) comprise:
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The monthly average number of persons, including the Directors, employed by the Group during the year was as follows:
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Recognised in profit or loss
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Interest on lease liabilities
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Interest on loans from related parties
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Net interest expense on defined benefit obligation
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Net exchange losses on foreign currency borrowings
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13.1 Income tax recognised in profit or loss
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Current tax on profits for the year
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Adjustments in respect of prior years
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Origination and reversal of timing differences
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Adjustments in respect of prior years
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
13.Tax expense (continued)
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13.1 Income tax recognised in profit or loss (continued)
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
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Tax using the Company's domestic tax rate of 25% (2023: 23.5%)
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Expenses not deductible for tax purposes
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Capital allowances for the year in excess of depreciation
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Changes relating to tax losses
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Different rate taxes on overseas earnings
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Adjustments to tax charge in respect of prior periods
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Post year end expenses allowable in determining taxable profit
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Movement in unrecognised deferred tax
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Changes in provisions leading to an increase in the tax charge
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Movement in Special Economic Zone asset
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Changes in tax rates and factors affecting the future tax charges
There are no currently known factors that will affect future tax charges.
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WALSTEAD GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
13.Tax expense (continued)
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13.2 Deferred tax balances
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The following is the analysis of deferred tax assets/(liabilities) presented in the Consolidated Balance Sheet:
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