The Directors present their Strategic Report for the year ended 30 March 2025. This Strategic Report has been prepared for Cygnet Group Limited and its subsidiary undertakings (together, ‘the Group’) as a whole and, therefore, gives greater emphasis to those matters which are significant in the context of the Group.
The Board monitors the progress of the Group strategy and the individual strategic elements by reference to certain financial and non-financial key performance indicators. The key performance indicators used by the Board are:
| 2025 | 2024 | Change | % Change |
Turnover (£m) | 16.5 | 17.5 | (1) | (5.7%) |
Gross profit (£m) | 5.3 | 5.0 | 0.3 | 6% |
Gross profit margin (%) | 32.1% | 28.6% | 3.5% | 12.2% |
R&D Expenditure (£m) | (0.1) | (0.1) | - | - |
Operating profit (£m) | 1.7 | 0.7 | 1.6 | 228% |
Net assets (£m) | 7.5 | 6.3 | 1.2 | 19% |
Cash in hand (£m) | 12.1 | 4.6 | 7.5 | 163% |
The Group remains exposed to macro market risk resulting from instability in the credit markets. A significant number of the Group’s contracts are denominated in US Dollars or Euros. The Group actively tries to avoid reliance on any one customer, geographical area or market sector.
The Group is committed to research and development, recognising that commitment to innovation is essential to maintain its position at the forefront of its markets. The Group mitigates the risk of an individual or combination of projects having an adverse impact on the Group's profit or cash flows by ensuring a suitable mix is maintained between contracts with low, medium and high technical readiness levels.
The Group is exposed to liquidity risk as the profile of receipts under long-term contracts may not be timed to coincide with corresponding outflows. In order to mitigate liquidity risk, the Group ensures that its subsidiaries have a mixture of long-term and short-term debt facilities.
The Group is exposed to credit risk on the carrying value of its assets, principally receivables. The Directors believe that as the counter parties are mainly major corporations, the credit risk is minimal. Controls around customer credit are being tightened, however the Directors believe there is no significant change in the ability of core customers to meet their obligations in this matter.
The Group recognises its obligations relating to health and safety and the risk to its reputation of any incident affecting the health and safety of its customers or employees. The Directors are mindful of their responsibilities to ensure a safe environment in all Group companies. The Group regularly monitors the health and safety procedures of each subsidiary company to ensure that a safe environment is maintained in the Group’s operations.
The Group continues to invest in robust IT systems and adopted a more flexible approach to working practices than previously, with remote working being offered across the business where possible and flexible hours to support a healthy work life balance.
The Group believes it is well placed to respond to current global markets and to continue to build on the progress made in the financial year.
Markets, People and Infrastructure
The primary business focus of the Group is on delivering process machinery, automation and turnkey plant solutions for the processing of technical fibres. Through its subsidiary, Cygnet Texkimp, the Group targets global technical fibre markets. Carbon fibre remains the largest technical fibre growth area and this is expected to continue for the foreseeable future
Driven by a global need, and often regulatory requirement, to reduce emissions and to improve fuel efficiency, the ‘light weighting’ agenda continues to gather momentum and brings with it a number of challenges and opportunities that Cygnet Texkimp is well-positioned to meet. Light weighting is widening the use of technical fibres and advanced materials in the aerospace, automotive, wind, industrial, defence and space industries; these provide significant opportunities for growth into new sectors not currently served by Cygnet Texkimp. The demand for innovative solutions in the handling of these fibres and materials in these different sectors also gives scope for the spread of risk. This has formed a significant part of Cygnet Texkimp’s strategy for the future.
Cygnet Texkimp is once again demonstrating how it’s performance becomes counter cyclical in times of increasing global uncertainty and unrest. This trend is driven primarily by countries wanting to rely less on others and be able to manufacture more key materials for themselves, and also that technical fibres play a key role in providing equipment used in times of uncertainty.
The Groups’ other main trading subsidiary, SECC applies its innovative, patented connector technology primarily for well interventions in the subsea oil and gas markets. Its connector technology provides a proven, trusted solution which enables operators to address important operational challenges.
Over the last few years, the fluctuating oil price has heavily influenced the oil production strategies adopted by SECC’s customers. The industry has adapted to this variability by focusing investment on longer term well efficiency targets. SECC provides an enabling technology that provides one of the most cost-effective ways of maximising the extraction of existing oil reserves and production rather than the development of new fields and assets.
SECC continues to focus strongly on new product development and the development of its intellectual property. It continues to investigate how its connector technology can be used in other markets, particularly alternative energy sources and renewables.
The Group has benefitted a number of factors, most notably both operating businesses having clear growth plans, stable Boards and senior management teams with the proven ability to deliver the plans, a strong financial base from which to operate and growing demand in all product areas, which having a manufacturing base of sub-contract partners, means the Group can fully exploit.
The Group continues to monitor the performance of Cygnet Texkimp and SECC to assess their individual performance, their operational structure and ensure efficiency throughout the Group. Overheads are continually monitored and adapted, whilst maintaining service levels and R&D, and we continue to support investment in their sales and technical teams.
The Group has continued to encourage investment by Cygnet Texkimp and SECC in its staff and general infrastructure, including IT and IP. As a Group, we have undertaken collaborative R&D projects utilising both the Innovate UK and European grant funding platforms, to accelerate our internal R&D and build key relationship with some of the biggest brands in the sectors that we operate.
Future Developments
As a Group, we continue to invest heavily in R&D projects that are focused on future technologies, supporting UK and global aspirations for greener processes and outputs that will be used to improve the green credentials of the end users.
We are developing our capabilities to offer innovative recycling processes for carbon fibre and cryogenic solutions for the transmission of carbon neutral energy.
The Group intends to continue capitalising on its restructured cost base, enhanced information systems, product innovation and changing global market conditions.
Strategic plans are being continually reviewed, cascaded and adapted with a clear view of the main drivers of growth and profitability and this robust review process is highlighting the high level of potential growth in the global market for our products.
Research and development remain at the forefront of what we do. Our focus on expanding our product portfolio through innovation underpins our future strategy for growth and profitability.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2025.
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £279,923. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The Group undertakes research and development expenditure and, in the opinion of the Directors, continued investment in this area is essential for the maintenance of the Group’s market position and for future growth.
Champion Allwoods Limited were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
We have audited the financial statements of Cygnet Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2025 which comprise the group statement of comprehensive income, the group and company balance sheets , the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
- We enquired of management the systems and controls the group and parent company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. Management did not inform us of any known, suspected or alleged fraud.
- We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006, tax legislation and compliance with health and safety laws.
- We considered the incentives and opportunities that exist in the group and parent company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetrated, and tailored our risk assessment accordingly.
- Using our knowledge of the company, together with the discussions held with management at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
- Identifying and testing journal entries in overall accounting records, in particular those that were significant and unusual.
- Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
- Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to doubtful debt provisions and depreciation methods.
- Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
- Documenting and verifying all significant related party balances and transactions.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £392,809 (2024 - £454,000 profit).
Cygnet Group Limited ('the Company') is a private company limited by shares and is registered, domiciled and incorporated in England.
The address of the Company's registered office and principal place of business is included on the Company Information page.
The Group consists of Cygnet Group Limited and all of its subsidiaries.
The Group's and the Company's principal activities are included in the Strategic Report.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £000's.
The financial statements have been prepared under the historical cost convention, modified to include investment property at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Cygnet Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover arises from the sales of goods and services. It is stated at the fair value of the consideration receivable, net of value added tax, rebates and discounts. Turnover from the sale of goods and services is recognised when the significant risks and benefits if ownership of the product have transferred to the buyer or the service has been discharged, which may be upon shipment, completion of the product or the product being ready for delivery, based on specific contract terms.
Contract turnover reflects the contract activity during the period and is measured at the fair value of consideration received or receivable.
Long-term contracts
Long-term contracts are assessed on a contract-by-contract basis and are reflected in the profit and loss account by recording turnover and related costs as contract activity progresses. Turnover is ascertained in a manner appropriate to the stage of completion of the contract, and credit is taken for profit earned to date when the outcome of the contract can be assessed with reasonable certainty. The amount by which turnover exceeds payments on account is classified as "amounts recoverable on contracts" and included in debtors, to the extent that payments on account exceed relevant turnover and long-term contract balances, the excess is included as a creditor. The amount of long-term contracts, at cost net of amount transferred to cost of sales, less provision for payments on account not matched with turnover, is included within debtors.
When it is probable that total contract costs will exceed total contract turnover, the expected loss is recognised as an expense immediately.
When the outcome of a contract cannot be estimated reliably, contract turnover is recognised only to the extent of contract costs that are recoverable and the contract costs are expensed as incurred.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
Research and development
The group capitalises development expenditure as an intangible assets when it is able to demonstrate all of the following:
The technical feasibility of completing the development so the intangible asset will be available for use or sale.
Its intention to complete the development and to use or sell the intangible asset.
Its ability to use or sell the intangible asset.
How the intangible asset will generate probable future economic benefits.
The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
Its ability to measure reliably the expenditure attributable to the intangible asset during its development.
Capitalised development expenditure is initially recognised at cost and subsequently measure at cost less accumulated amortisation and accumulated impairment losses.
Capitalised development expenditure is amortised on a straight line basis over its useful life, which is between 3 and 5 years. The Directors consider these useful lives to be appropriate because that is the period over which economic benefit is anticipated. Amortisation of these assets, on the same basis as other assets, commences when the assets are ready for their intended use.
All research and development expenditure that does not meet the above conditions is expenses as incurred.
Amortisation in respect of development costs recognised in profit and loss for the year is recognised with administrative expenses.
On disposal, the difference between the net disposal proceeds and the carrying amount of the intangible asset is recognised in profit or loss.
Software
Software is capitalised at cost and amortised to profit and loss on a straight line basis over its useful life, at the rate of 33% per annum.
Amortisation in respect of intangible fixed assets recognised in profit and loss for the year is recognised within administrative expenses.
Patents
Patent costs are capitalised at cost and amortised to profit and loss on a straight line basis over its useful life, at the rate of 5% per annum.
Amortisation in respect of intangible fixed assets recognised in profit and loss for the year is recognised within administrative expenses.
Assets under construction
Assets in the course of construction for production, supply or administrative purposes, or for purposes not yet determined, are carried at costs, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the company's accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the separate accounts of the Company, interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
Interests in subsidiaries are assessed for impairment at each reporting date.
An assessment is made at each reporting date of whether there are indications that a fixed asset may be impaired or that an impairment loss previously recognised has fully or partially reversed. If such indications exist, the Company estimates the recoverable amount of the asset or, for goodwill, the recoverable amount of the cash-generating unit to which the goodwill belongs.
Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of fair value less costs to sell and value-in-use, are recognised as impairment losses. Impairments of revalued assets are treated as a revaluation loss. All other impairment losses are recognised in profit or loss.
Any impairment loss recognised for goodwill is not reversed. For fixed asset other than goodwill, recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Reversals of impairment losses are recognised in profit or loss or, for revalued assets, as a revaluation gain. On reversal of an impairment loss, the depreciation or amortisation is adjusted to allocate the asset's revised carrying amount (less any residual value) over its remaining useful life.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial assets and liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument and are offset only when the Group currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Trade, Group and other debtors
Trade, Group and other debtors, which are receivable within one year and which do not constitute a financing transaction are initially measured at the transaction price. Trade debtors are subsequently measured at amortised cost, being the transaction price less any amounts settled and any impairment losses.
A provision for impairment of trade debtors is established when there is objective evidence that the amounts due will not be collected according to the original terms of the contract. Impairment losses are recognised in profit or loss for the excess of the carrying value of the trade debtor over the present value of the future cash flows discounted using the original effective interest rate. Subsequent reversals of an impairment loss that objectively relate to an event occurring after the impairment loss was recognised, are recognised immediately in profit or loss.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
A financial asset is derecognised only when the contractual rights to cash flows expire or are settled, or substantially all the risks and rewards of ownership are transferred to another party, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Trade, Group and other creditors
Trade, Group and other creditors payable within one year that do not constitute a financing transaction are initially measured at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled.
Where the arrangement with a creditor constitutes a financing transaction, the creditor is initially measured at the present value of the future payments discounted at a market rate of interest for a similar instrument and subsequently measured at amortised cost.
Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to fair value, at each reporting date. Fair value gains and losses are recognised in profit or loss.
Borrowings
Borrowings are initially recognised at the transaction price, including transaction costs, and subsequently measured at amortised cost using the effective interest method. Interest expense is recognised on the basis of the effective interest method and its included in the interest payable and other similar charges.
Equity instruments
Financial instruments classified as equity instruments are recorded at the fair value of the cash or other resources received or receivable, net of direct costs of issuing the equity instruments.
Own shares
The fair value for consideration given for shares repurchased by the Group is deducted from equity.
A financial liability (or part thereof) is derecognised when the obligation specified in the contract is discharged, cancelled or expires.
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax is based on taxable profit for the year. Taxable profit differs from total comprehensive income because it excludes items of income or expense that are taxable or deductible in other periods. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based on tax rates that have been enacted or substantively enacted by the reporting date. Deferred income is not discounted.
Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements.
Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.
Current and deferred tax is charged or credited in profit or loss, except when it relates to items charged or credited to equity, when the tax follows the transaction or event it relates to and is also charged or credited to equity. Current tax assets and current tax liabilities and deferred tax assets and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Income from government grants is presented within other operating income at the fair value of the asset received or receivable.
The Group recognises grant income when the grant's performance-related conditions are met. A grant that does not impose specified future performance-related conditions on the recipient is recognised in income when the grant proceeds are receivable. A grant that imposes specified future performance conditions on the recipient is recognised in income only when the performance-related conditions are met. Grants received before the revenue recognition criteria are satisfied are recognised as a liability
Transactions in currencies other than the functional currency (foreign currencies) are initially recorded at the exchange rate prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction or, if the asset or liability is measured at fair value, the rate when that fair value was determined.
All transaction differences are taken to profit or loss.
Assets and liabilities of overseas subsidiaries (including goodwill and fair value adjustments in relation to overseas subsidiaries) are translated into the Group's presentation currency at the rate ruling at the reporting date. Income and expenses of overseas subsidiaries are translated at the average rate for the year as the Directors consider this to be a reasonable approximation to the rate at the date of the transaction. Translation differences are recognised in other comprehensive income and accumulated in equity.
Non-controlling interests
Non-controlling interests are held in three principal subsidiaries, Cygnet Texkimp Limited, Self Energising Coupling Company Limited and SECC Oil and Gas Limited. As the operating performance of these entities results in positive retained reserves, the Group will account for non-controlling interests.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Stage of completion
In order to assess the recognition of turnover and profits generated on contracts, management consider the stage of completion of the contracts ongoing at the year-end by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of expected total costs. This assessment includes an estimate of expected costs to complete, which includes an element of judgement as projects can change and result in either additional or less costs depending on the outcome of the work performed. Additionally, the technical risk of the project is taken into consideration with projects categorised as red (high technical risk) , amber (medium technical risk and green (low technical risk). Revenue and profit recognition occur earlier on green projects, with revenue and profit recognition being deferred to later stages of the project to some extent for amber projects and to a greater extent for red projects, as higher risk projects often result in additional costs towards the end of the project.
Stock provision
In order to assess the carrying value of stock and, therefore, the resulting stock provision, management review the historical level stock provision levels (which are based on the ageing of the stock), levels of stock write-offs over the past 3 years and the general recoverability of stock. These combined, provide a basis for the stock provision estimate. Stock is also reviewed by management on a line-by-line basis to determine whether any additional provisions, which would sit outside of the policy detailed, are required. Any outliers would be provided for specifically irrespective of its age.
Warranty
When turnover is recognised for long-term contracts, a provision is made for the estimated cost of the warranty obligation. The provision is measured based on the probability weighting of all possible outcomes and is included within provisions.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
For the Group, at 31 March 2025, pension contributions are accruing for three directors under a defined contribution scheme (31 March 2024: three). At 31 March 2025, no retirement benefits accrued in the company for directors (31 March 2024: none).
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Amortisation in respect of development costs recognised in profit or loss for the year is recognised within administrative expenses.
The investment property is a single storey main office with warehouse extension, separate small office and car parking. The property is leased by a charity on an ongoing basis with an annual rent rate of £1. The valuation was determined by the Directors based on recent offers made to the Group for the purchase of the property.
During the year, a reversal of earlier stock write-downs of £20,000 (2024: £41,000) was recognised within cost of sales.
Trade debtors are stated net of a provision of £nil (2024: £6,837).
Amounts owed by Group undertakings are unsecured and repayable on demand. No interest is charged on trading balances. Interest is charged at 8.25% (2024: 8.25%) on short-term loans.
Amounts owed to Group undertakings are unsecured and repayable on demand. No interest is charged on trading balances. Interest is charged at 8.25% (2024: 8.25%) on short-term loans.
A provision of £114,000 (2024: £96,000) has been recognised for estimated warranty claims on goods sold during the last two years.
The warranty provision represents the Company's liability in respect of warranties granted on projects. The amount provided represents management's best estimate of the future cash outflows in respect of those products still within the warranty period at the year end.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
The Group operates a defined contribution pension scheme for all qualifying employees in the United Kingdom. The assets of the scheme are held separately from those of the Company in an independently administered fund. The contribution payable by the Group charged to profit or loss amounted to £221,000 (2024: £212,000). Contributions totalling £41,477 (2024: £36,963) were payable to the fund at the year end and are included in creditors.
At 31 March 2025, the Group had access to a facility of £1,450,000 (2024: £2,600,000) of which £514,552 (2024: £214,745) was committed by way of bank guarantees at the balance sheet date.
The company has a cross guarantee and debenture agreement in place relating to any monies owing to Barclays PLC by other group undertakings.
Contingent Liabilities
In 2019 the company entered into a guarantor arrangement in respect of a property lease assigned to a former subsidiary for a period of 8 years from that date. In the event of default by the lessee, Cygnet Group Limited could be required to pay any outstanding rentals, which amount to around £100,000 per annum. The agreement has two years left to run and the directors believe the likelihood of this to be extremely remote and therefore no provision is made in these accounts.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The company had no operating lease commitments (2024: none).
One of the directors is a beneficiary of the Premier Trust pension scheme. Rent of £109,109 (2024: £103,500) was paid to the Premier Trust pension scheme during the period.
During the financial year the Group declared dividends to the directors of £190,923 (2024: £323,000). At 31 March 2025 the outstanding balance on dividends was £Nil (2024: £Nil).
Company
The Company is exempt from disclosing transactions with its 100% subsidiaries. However, it is required to disclose those transactions which are material either to itself or to those related parties which are not 100% subsidiaries.
During the year ended 31 March 2025, expenses charged to Group companies were £202,200 (2024: £163,500), interest charged by Group companies was £3,000 (2024: £4,000) and expenses charged by Group companies were £28,000 (2024: £37,000).
As at the 31 March 2025, the amounts owed by Group companies were £14,000 (2024: £Nil) and the amounts owed to Group companies were £nil (2024: £52,556).