Year Ended
Registration number:
Arada Holdings Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Profit and Loss Account |
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Consolidated Balance Sheet |
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Balance Sheet |
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Consolidated Statement of Changes in Equity |
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Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Notes to the Financial Statements |
Arada Holdings Limited
Company Information
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Directors |
Mr M C Brettell Mr J M Butterworth |
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Registered office |
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Auditors |
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Arada Holdings Limited
Strategic Report
Year Ended 30 April 2025
The directors present their strategic report for the year ended 30 April 2025.
Principal activity
The principal activity of the group is that of a holding company. The principal activity of the group is the design, development and manufacture of wood and multi-fuel stoves, and the supply of spare parts and accessories.
Fair review of the business
2025 was another challenging year for the business. Demand for the group’s products continued to decrease, being reflective of the conditions in the marketplace generally, resulting in a decrease in turnover from £4,750k in 2024 to £3,684k in 2025.
Gross profit margin also decreased from 28.4% in 2024 to 20.2%, as the group faced inflationary cost pressures combined with reduced cost efficiencies arising from a decrease in output (driven by the decrease in demand).
Distribution costs and administrative expenses decreased from £1,619k in 2024 to £903k in 2025.The majority of this decrease related to the profit on disposal of its distribution centre, realising proceeds of £1,200k and a profit of £615k, along with general costs reductions relating to the distribution centre.
The directors report a closing cash at bank position of £257k and a decrease in net assets from £1,884k in 2024 to £1,609k in 2025.
The key performance indicators of the business are turnover, gross margin and operating profit, which are detailed in the Consolidated Profit and Loss Account on page 11. No further KPI analysis is considered necessary for an understanding of the development, performance and position of the group.
Arada Holdings Limited
Strategic Report
Year Ended 30 April 2025
Principal risks and uncertainties
The main risks and uncertainties facing the group come from increased materials, services and wages costs, and general market conditions and competition. The continued incorrect and negative media portrayal of stoves being the main contributing factor of poor air quality is ever present.
In the current economic climate an increase in the manufacturing costs and complexity of importing materials and components purchased from overseas sources is noticed. The group has addressed these risks by continuing to source as many components and materials from the UK and increasing stock levels of any key imported raw materials.
The group manages the risk of general competition through building on its brand and reputation for service and quality and by continuing to invest in a program of research and development in order to improve and diversify its range of products.
The negative press is an issue which is consistently addressed industry wide. Ecodesign standards requiring significantly cleaner burning stoves came in to force on 1 January 2022 and therefore, all Arada products meet these requirements.
Approved by the
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Arada Holdings Limited
Directors' Report
Year Ended 30 April 2025
The directors present their report and the for the year ended 30 April 2025.
Directors of the group
The directors who held office during the year were as follows:
Financial instruments
Objectives and policies
Financial risk
The group's principal financial instruments comprise bank balances, trade creditors, trade debtors, bank and other borrowings, hire purchase liabilities and a receivables finance facility.
The group's approach to managing risks applicable to the financial instruments concerned is shown below.
Price risk
The group is exposed to price movements in the market place, and especially in respect of steel and other commodities. Management continually monitor price movements and trends and factor these into buying decisions and the pricing of goods to reduce price risk as much as possible.
Credit risk
Trade debtors are managed in respect of credit risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The company has no significant concentration of credit risk, with exposure spread over a number of counterparties.
Liquidity risk
In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of the receivables finance facility.
The group is a lessee in respect of hire purchase assets. The group manages the liquidity risk by ensuring that there are sufficient funds to meet the payments due under the agreements as they fall due.
Trade creditors are managed by ensuring that sufficient funds are available to meet amounts due.
Interest rate risk
The group has outstanding debt finance in the form of bank borrowings and other loans, which both carry a variable rate of interest. The group is therefore exposed to increases in the Bank of England base rate, which has been volatile over the past twelve months. The group manages this risk by focusing on the early redemption of borrowings carrying the highest interest rate and by maximising the return on positive cash balances.
Arada Holdings Limited
Directors' Report
Year Ended 30 April 2025
Research and development
The group undertakes a continuous programme of research and development with a view to the update and improvement of its products in order to retain its position in the market place. The directors consider that this is essential in order to provide growth for the group. During the year the group incurred costs of £118,749 (2024: £149,383), including relevant employee salaries, on research and development.
Future developments
The group continues its program of investment in new products, manufacturing quality, production processes and efficiencies. The change of product design to meet legislation necessitates the ongoing improvements and development of the manufacturing facilities.
The directors remain optimistic about future performance, and consider the group is well placed to meet future legislation and market demands.
Going concern
Trading conditions within the industry have remained challenging. However, the directors have continued to take action to restructure the trading subsidiary and have significantly reduced the group’s fixed cost base. In addition, as noted above, the directors have successfully secured a two‑year extension to the group’s bank mortgage facility.
Recognising the continuing trading challenges and the limited level of cash reserves within the group, the directors continue to closely monitor cash flow through the regular preparation and review of detailed cash flow forecasts. The directors have prepared financial and cash flow forecasts covering the period to 30 April 2028. In the opinion of the directors, these forecasts have been prepared on a prudent and conservative basis and demonstrate that the group has sufficient headroom, based on existing facilities and other agreed funding available to the company, to enable it to continue to operate and meet its liabilities as they fall due.
While acknowledging that there can be no certainty that the forecasts will be achieved, the directors, having made appropriate enquiries and having considered the impact of the current uncertain economic environment, are satisfied that the company has adequate resources to continue in operational existence for the foreseeable future.
Accordingly, the directors consider it appropriate to prepare these financial statements on the going concern basis.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved by the
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Arada Holdings Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Arada Holdings Limited
Independent Auditor's Report to the Members of Arada Holdings Limited
Opinion
We have audited the financial statements of Arada Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2025, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the parent company's affairs as at 30 April 2025 and of the group's loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group and parent company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Arada Holdings Limited
Independent Auditor's Report to the Members of Arada Holdings Limited
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Arada Holdings Limited
Independent Auditor's Report to the Members of Arada Holdings Limited
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
As part of our audit planning we obtained an understanding of the legal and regulatory framework that is applicable to the group. We gained an understanding of the group and the industry in which the group operates as part of this assessment to identify the key laws and regulations affecting the group. The key regulations we identified were health and safety regulations and production regulations, specifically (EU) No. 305/2011. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and relevant tax legislation.
We discussed with management how the compliance with these laws and regulations is monitored and obtained copies of the key policies and procedures in place. We also identified the individuals who have responsibility for ensuring that the group complies with laws and regulations and deals with reporting any issues if they arise. As part of our planning procedures, we assessed the risk of any non compliance with laws and regulations on the group’s ability to continue trading and the risk of material misstatement to the accounts.
We also evaluated managements' incentives and opportunities for fraudulent manipulation of the financial statements.The key incentive identified is to meet targets set by the group and we determined that the principal risks were related to overstatement of profit either through overstating revenue, understating expenditure, or management bias in accounting estimates. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
Based on this understanding we designed our audit procedures to identify irregularities. Our procedures involved the following:
• Enquiries of those charged with governance, regarding their knowledge of any non-compliance or potential non-compliance with laws and regulations that could affect the financial statements;
• Review of any health and safety incidents which have been reported under The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (“RIDDOR”) during the year;
• Review of a sample of external product testing reports to ensure compliance with (EU) No. 305/2011;
Arada Holdings Limited
Independent Auditor's Report to the Members of Arada Holdings Limited
• Testing the recognition of revenue and costs, particularly around the year end date;
• Challenging assumptions and judgements made by management in its significant accounting estimates;
• Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business; and
• Reviewing draft tax computations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements. This risk increases the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements as we are less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of 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.
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Centenary House
Peninsula Park
Rydon Lane
EX2 7XE
Arada Holdings Limited
Consolidated Profit and Loss Account
Year Ended 30 April 2025
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Note |
2025 |
2024 |
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Turnover |
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|
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Cost of sales |
( |
( |
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|
Gross profit |
|
|
|
|
Distribution costs |
( |
( |
|
|
Administrative expenses |
|||
|
Administrative expenses (excluding exceptional items) |
(529,769) |
(1,170,965) |
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|
Exceptional administrative expenses |
(85,960) |
(59,832) |
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|
Administrative expenses (including exceptional items) |
( |
( |
|
|
Operating loss |
( |
( |
|
|
Other interest receivable and similar income |
|
|
|
|
Interest payable and similar expenses |
( |
( |
|
|
(247,778) |
(192,954) |
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Loss before tax |
( |
( |
|
|
Tax on loss |
|
|
|
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Loss for the financial year |
( |
( |
|
|
Profit/(loss) attributable to: |
|||
|
Owners of the company |
( |
( |
The group has no recognised gains or losses for the year other than the results above.
Arada Holdings Limited
Consolidated Balance Sheet
30 April 2025
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Note |
2025 |
2024 |
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|
Fixed assets |
|||
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Intangible assets |
|
( |
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|
Tangible assets |
|
|
|
|
|
|
||
|
Current assets |
|||
|
Stocks |
|
|
|
|
Debtors |
|
|
|
|
Cash at bank and in hand |
|
|
|
|
|
|
||
|
Creditors: Amounts falling due within one year |
( |
( |
|
|
Net current (liabilities)/assets |
( |
|
|
|
Total assets less current liabilities |
|
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
|
Provisions for liabilities |
( |
( |
|
|
Net assets |
|
|
|
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Capital and reserves |
|||
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Called up share capital |
200 |
200 |
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Merger reserve |
599,980 |
599,980 |
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Profit and loss account |
1,008,492 |
1,283,812 |
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Equity attributable to owners of the company |
1,608,672 |
1,883,992 |
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Total equity |
1,608,672 |
1,883,992 |
Approved and authorised by the
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Company Registration Number: 12198663
Arada Holdings Limited
Balance Sheet
30 April 2025
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Note |
2025 |
2024 |
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Fixed assets |
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Investments |
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Current assets |
|||
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Cash at bank and in hand |
|
|
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Creditors: Amounts falling due within one year |
( |
( |
|
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Net current liabilities |
( |
( |
|
|
Total assets less current liabilities |
|
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
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Net assets |
|
|
|
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Capital and reserves |
|||
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Called up share capital |
200 |
200 |
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Merger reserve |
599,980 |
599,980 |
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Profit and loss account |
648,094 |
3,155,827 |
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Total equity |
1,248,274 |
3,756,007 |
The company has taken the exemption in section 408 of the Companies Act 2006 and has not presented its individual profit and loss account. The company made a loss after tax for the financial year of £2,507,733 (2024 - profit of £687,104).
Approved and authorised by the
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Company Registration Number: 12198663
Arada Holdings Limited
Consolidated Statement of Changes in Equity
Year Ended 30 April 2025
|
Share capital |
Merger reserve |
Profit and loss account |
Total |
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At 1 May 2024 |
|
|
|
|
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Loss for the year |
- |
- |
( |
( |
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Total comprehensive income |
- |
- |
( |
( |
|
At 30 April 2025 |
|
|
|
|
|
Share capital |
Merger reserves |
Profit and loss account |
Total |
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At 1 May 2023 |
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|
|
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Loss for the period |
- |
- |
( |
( |
|
Total comprehensive income |
- |
- |
( |
( |
|
At 30 April 2024 |
|
|
|
|
Arada Holdings Limited
Statement of Changes in Equity
Year Ended 30 April 2025
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Share capital |
Other reserves |
Profit and loss account |
Total |
|
|
At 1 May 2024 |
|
|
|
|
|
Loss for the year |
- |
- |
( |
( |
|
At 30 April 2025 |
|
|
|
|
|
Share capital |
Other reserves |
Profit and loss account |
Total |
|
|
At 1 May 2023 |
|
|
|
|
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Profit for the period |
- |
- |
|
|
|
Total comprehensive income |
- |
- |
|
|
|
At 30 April 2024 |
|
|
|
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Arada Holdings Limited
Consolidated Statement of Cash Flows
Year Ended 30 April 2025
|
Note |
2025 |
2024 |
|
|
Cash flows from operating activities |
|||
|
Loss for the year |
( |
( |
|
|
Adjustments to cash flows from non-cash items |
|||
|
Depreciation and amortisation |
|
|
|
|
Profit on disposal of tangible assets |
( |
( |
|
|
Finance income |
( |
( |
|
|
Finance costs |
|
|
|
|
Corporation tax expense |
( |
( |
|
|
( |
( |
||
|
Working capital adjustments |
|||
|
Decrease/(increase) in stocks |
|
( |
|
|
Decrease in trade debtors |
|
|
|
|
Decrease in trade creditors |
( |
( |
|
|
Decrease in provisions |
- |
( |
|
|
Cash generated from operations |
( |
( |
|
|
Corporation tax received/(paid) |
|
( |
|
|
Net cash flow from operating activities |
( |
( |
|
|
Cash flows from investing activities |
|||
|
Interest received |
|
|
|
|
Acquisitions of tangible assets |
( |
( |
|
|
Proceeds from sale of tangible assets |
|
|
|
|
Acquisition of intangible assets |
- |
( |
|
|
Net cash flows from investing activities |
|
( |
|
|
Cash flows from financing activities |
|||
|
Interest paid |
( |
( |
|
|
Repayment of bank borrowing |
( |
( |
|
|
Repayment of other borrowing |
( |
( |
|
|
Payments to finance lease creditors |
( |
|
|
|
Net cash flows from financing activities |
( |
( |
|
|
Net increase/(decrease) in cash and cash equivalents |
|
( |
|
|
Cash and cash equivalents at 1 May |
|
|
|
|
Cash and cash equivalents at 30 April |
257,422 |
192,558 |
|
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below.
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. There are no material departures from FRS 102.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
The functional currency of the group is considered to be pounds sterling because it is the currency of the primary economic environment in which the group operates.
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
Going concern
As at 30 April 2025, the group had net current liabilities of £183,647 and net assets of £1,608,672. The net current liability position is a result of the entire mortgage being presented as being due within one year, as a result of the expiry date being November 2025, but the directors are pleased to report that since the balance sheet date, a two-year extension on the mortgage has been agreed with the bank. If the balance sheet classification had followed the scheduled repayment profile, then the group would have reported net current assets of £895,374.
Since the balance sheet date, trading conditions within the industry have remained challenging. However, the directors have continued to take action to restructure the trading subsidiary and have significantly reduced the group’s fixed cost base. In addition, as noted above, the directors have successfully secured a two‑year extension to the group’s bank mortgage facility.
Recognising the continuing trading challenges and the limited level of cash reserves within the group, the directors continue to closely monitor cash flow through the regular preparation and review of detailed cash flow forecasts. The directors have prepared financial and cash flow forecasts covering the period to 30 April 2028. In the opinion of the directors, these forecasts have been prepared on a prudent and conservative basis and demonstrate that the group has sufficient headroom, based on existing facilities and other agreed funding available to the group, to enable it to continue to operate and meet its liabilities as they fall due.
While acknowledging that there can be no certainty that the forecasts will be achieved, the directors, having made appropriate enquiries and having considered the impact of the current uncertain economic environment, are satisfied that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors consider it appropriate to prepare these financial statements on the going concern basis.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertaking drawn up to 30 April 2025.
As a consolidated profit and loss account is published, a separate profit and loss account for the parent company is omitted from the group financial statements by virtue of section 408 of the Companies Act 2006.
Summary of disclosure exemptions
FRS 102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions, which have been complied with.
i. from preparing a statement of cash flows, on the basis that it is qualifying entity and the consolidated statement of cash flows, included within these financial statements, includes the company’s cash flows; and
ii. certain financial instrument disclosures.
The company has taken advantage of the exemption in FRS 102 from disclosing transactions with group companies.
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
Key sources of estimation uncertainty
In the application of the group's accounting policies management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The key judgement that has a significant impact on the financial statements is in respect of going concern, as noted above.
The key sources of estimate uncertainty that have a significant effect on the amounts recognised in the financial statements are described below.
Stock valuation - as detailed in the stock accounting policy below, stock is stated at the lower of cost and net realisable value. As an estimate of cost for finished goods and work in progress (note 13) the company uses a standard costing model which includes materials, direct labour and manufacturing overheads. Estimates and assumptions are required as part of determining the standard costs. The method and valuation (including estimates and assumptions) used have been applied on a consistent basis, year on year. The carrying amount is £1,102,766 (2024 - £2,039,948).
Impairment of investments in subsidiaries: The company reviews the carrying value of its investments in subsidiaries for impairment at each reporting date. Estimating the recoverable amount requires management to make assumptions about future performance, cash flows, and discount rates, as well as property valuations. Changes in these assumptions could have a significant impact on the carrying value of the investments. The carrying amount is £3,400,000 (2024 - £6,146,487).
Revenue recognition
Turnover comprises the fair value of consideration receivable, excluding Value Added Tax and trade discounts, in the ordinary course of business for goods and services provided. Turnover is recognised on the despatch of goods to the customer.
Tangible assets
Tangible assets are stated in the balance sheet at fair value or cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
|
Asset class |
Depreciation method and rate |
|
Freehold property (included within Land and buildings) |
3%-5% on cost |
|
Freehold land |
not depreciated |
|
Plant and machinery |
15% on reducing balance and at 10%-50% on cost |
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Motor vehicles |
33% on cost |
Negative goodwill
Negative goodwill arising as a result of the net amount of identifiable assets, liabilities and contingent liabilities exceeding the cost of the business combination, is classified as an asset on the Balance Sheet and is released to the profit and loss account over the periods expected to be benefited. The group’s negative goodwill arose on a business combination which took place in the period ended 30 April 2020 and is being amortised on a straight line basis over five years.
Intangible assets
Intangible assets are stated in the balance sheet at cost, less any subsequent accumulated amortisation.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
|
Asset class |
Amortisation method and rate |
|
Software licenses |
straight line over the period of the license |
Investments
Investments in subsidiary undertakings are held at cost less any impairment.
Research and development
Research and development expenditure is written off in the year in which it is incurred.
Stocks
Stocks are stated at the lower of cost and net realisable value. Cost includes materials, direct labour and an attributable proportion of manufacturing overheads based on normal levels of activity. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow-moving or defective items where appropriate.
Work in progress is valued on the basis of direct costs plus attributable overheads based on normal level of activity. Provision is made as appropriate if net realisable value is considered less than cost.
Tax
Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred income tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future, or a right to pay less tax in the future have occurred at the balance sheet date.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
Provisions
Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
Hire purchase and leasing
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.
Assets held under hire purchase agreements, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible fixed assets and are depreciated over their useful lives. The capital elements of future hire purchase obligations are recorded as liabilities, while the interest elements are charged to the profit and loss account over the period of the hire purchase agreement to produce a constant rate of charge on the balance of capital repayments outstanding.
Defined contribution pension obligation
The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account.
Financial instruments
The group holds the following financial instruments:
• Short term trade and other debtors and creditors;
• Hire purchase agreements;
• Bank loans and other borrowings; and
• Cash and bank balances.
All financial instruments of the group are considered to be basic financial instruments.
With the exception of bank loans and hire purchase agreements, such basic instruments are initially measured at transaction price, including transaction costs. Those instruments considered current are subsequently carried at the undiscounted amount of cash or other consideration expected to be paid or received, after taking account of impairment adjustments.
Bank loans and hire purchase agreements measured at amortised cost using the effective interest rate method.
|
Turnover |
No geographical analysis of turnover is provided. In the opinion of the directors, disclosure of this information would be prejudicial to the interests of the group.
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Operating loss |
Arrived at after charging/(crediting)
|
2025 |
2024 |
|
|
Depreciation expense |
|
|
|
Amortisation expense/(credit) |
( |
( |
|
Research and development cost, excluding salaries |
|
|
|
Foreign exchange losses |
|
- |
|
Profit on disposal of property, plant and equipment |
( |
( |
|
Exceptional administrative expenses |
85,960 |
59,832 |
Exceptional costs related to redundancy costs incurred in relation to the restructure that commenced towards the end of financial year.
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2025 |
2024 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
|
2025 |
2024 |
|
|
Production |
|
|
|
Administration and support |
|
|
|
Research and development |
|
|
|
Sales |
|
|
|
Distribution |
|
|
|
|
|
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2025 |
2024 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
135,559 |
132,551 |
The directors are considered to be the key management personnel.
During the year the number of directors who were receiving benefits and share incentives was as follows:
|
2025 |
2024 |
|
|
Accruing benefits under defined benefit pension scheme |
|
|
|
Auditor's remuneration |
|
2025 |
2024 |
|
|
Audit of these financial statements |
4,200 |
3,900 |
|
Interest payable and similar expenses |
|
2025 |
2024 |
|
|
Interest on bank overdrafts and borrowings |
|
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
|
Interest expense on other finance liabilities |
|
|
|
|
|
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Taxation |
Tax charged/(credited) in the consolidated profit and loss account
|
2025 |
2024 |
|
|
Current taxation |
||
|
UK corporation tax |
|
( |
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
( |
|
|
Tax receipt in the income statement |
( |
( |
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2024 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2025 |
2024 |
|
|
Loss before tax |
( |
( |
|
Corporation tax at standard rate |
( |
( |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
|
Effect of losses carried back |
- |
|
|
Decrease in tax charge in respect of a prior period |
- |
( |
|
Losses not provided for |
|
|
|
Deferred tax (credit)/expense from unrecognised temporary difference from a prior period |
( |
|
|
Tax decrease from effect of capital allowances and depreciation |
( |
( |
|
Tax decrease from other short-term timing differences |
- |
( |
|
Other permanent differences |
|
|
|
Total tax credit |
( |
( |
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
Deferred tax
Group
Deferred tax assets and liabilities
|
2025 |
Asset |
Liability |
|
Difference between accumulated depreciation and amortisation |
- |
|
|
Other timing differences |
|
- |
|
|
|
|
2024 |
Asset |
Liability |
|
Difference between accumulated depreciation and amortisation |
- |
|
|
Other timing differences |
|
- |
|
|
|
|
Intangible assets |
Group
|
Negative goodwill |
Trademarks, patents and licenses |
Total |
|
|
Cost or valuation |
|||
|
At 1 May 2024 |
( |
|
( |
|
At 30 April 2025 |
( |
|
( |
|
Amortisation |
|||
|
At 1 May 2024 |
( |
|
( |
|
Amortisation charge/(credit) |
( |
|
( |
|
At 30 April 2025 |
( |
|
( |
|
Carrying amount |
|||
|
At 30 April 2025 |
- |
|
|
|
At 30 April 2024 |
( |
|
( |
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Tangible assets |
Group
|
Land and buildings |
Motor vehicles |
Plant and machinery |
Total |
|
|
Cost or valuation |
||||
|
At 1 May 2024 |
|
|
|
|
|
Additions |
- |
- |
|
|
|
Disposals |
( |
- |
( |
( |
|
At 30 April 2025 |
|
|
|
|
|
Depreciation |
||||
|
At 1 May 2024 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
Eliminated on disposal |
( |
- |
( |
( |
|
At 30 April 2025 |
|
|
|
|
|
Carrying amount |
||||
|
At 30 April 2025 |
|
|
|
|
|
At 30 April 2024 |
|
|
|
|
Included within the net book value of land and buildings is £340,000 (2024: £600,000) which relates to freehold land that is not depreciated.
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
|
2025 |
2024 |
|
|
Plant & Machinery |
363,806 |
421,806 |
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Investments |
Company
|
2025 |
2024 |
|
|
Investments in subsidiaries |
|
|
|
Subsidiaries |
£ |
|
Cost or valuation |
|
|
At 1 May 2024 |
|
|
Revaluation |
( |
|
At 30 April 2025 |
|
|
Provision |
|
|
Carrying amount |
|
|
At 30 April 2025 |
|
|
At 30 April 2024 |
|
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
|
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
|
2025 |
2024 |
|||
|
Subsidiary undertakings |
||||
|
|
The Fireworks
|
|
|
|
|
Subsidiary undertakings |
|
Arada Limited The principal activity of Arada Limited is |
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Stocks |
|
Group |
Company |
|||
|
2025 |
2024 |
2025 |
2024 |
|
|
Raw materials and consumables |
|
|
- |
- |
|
Work in progress |
|
|
- |
- |
|
Finished goods and goods for resale |
|
|
- |
- |
|
|
|
- |
- |
|
|
Debtors |
|
Group |
Company |
|||
|
2025 |
2024 |
2025 |
2024 |
|
|
Trade debtors |
|
|
- |
- |
|
Other debtors |
|
|
- |
- |
|
Prepayments |
|
|
- |
- |
|
Corporation tax asset |
- |
|
- |
- |
|
|
|
- |
- |
|
|
Cash and cash equivalents |
|
Group |
Company |
|||
|
2025 |
2024 |
2025 |
2024 |
|
|
Cash on hand |
|
|
- |
- |
|
Cash at bank |
|
|
|
|
|
|
|
|
|
|
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Net debt reconciliation |
Group
|
At 1 May 2024 |
Cash flow |
At 30 April 2025 |
|
|
£ |
£ |
£ |
|
|
Cash at bank and on hand |
192,558 |
64,864 |
257,422 |
|
Cash and cash equivalents |
192,558 |
64,864 |
257,422 |
|
Director's loans |
(44,498) |
- |
(44,498) |
|
HP and finance lease obligations |
(369,251) |
86,515 |
(282,736) |
|
Bank borrowings |
(1,749,018) |
536,592 |
(1,212,426) |
|
Other borrowings |
(350,000) |
150,000 |
(200,000) |
|
Net debt |
(2,320,209) |
837,971 |
(1,482,238) |
|
Creditors |
|
Group |
Company |
||||
|
Note |
2025 |
2024 |
2025 |
2024 |
|
|
Due within one year |
|||||
|
Loans and borrowings |
|
|
|
|
|
|
Trade creditors |
|
|
- |
- |
|
|
Amounts due to group undertakings |
- |
- |
|
|
|
|
Social security and other taxes |
|
|
- |
- |
|
|
Other creditors |
|
|
|
|
|
|
Accrued expenses |
|
|
|
|
|
|
|
|
|
|
||
|
Due after one year |
|||||
|
Loans and borrowings |
|
|
|
|
|
|
Loans and borrowings |
|
Group |
Company |
|||
|
2025 |
2024 |
2025 |
2024 |
|
|
Non-current loans and borrowings |
||||
|
Bank borrowings |
|
|
- |
|
|
Other borrowings |
|
|
|
|
|
HP and finance lease liabilities |
189,808 |
282,736 |
- |
- |
|
|
|
|
|
|
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
Current loans and borrowings
|
Group |
Company |
|||
|
2025 |
2024 |
2025 |
2024 |
|
|
Bank borrowings |
|
|
|
|
|
Hire purchase contracts |
|
|
- |
- |
|
Other borrowings |
|
|
|
|
|
|
|
|
|
|
Group
Bank borrowings
Group bank borrowings comprise a mortgage with National Westminster plc.
The National Westminster plc mortgage is denominated in pounds sterling with a nominal interest rate of 2.27% per annum above the Bank of England base rate. The loan is repayable by instalments, with the final instalment being due in November 2025. Since the balance sheet date, the directors have been successful in securing a two year extension on the mortgage.
Bank borrowings are secured by a debenture over all the assets of the group and a legal charge over the freehold land and buildings held by the group.
In the prior year the group held a facility with Leumi ABL Limited comprising of a receivables finance agreement.
Other borrowings
Other borrowing comprise 4.25% secured loan notes. The loan notes which are repayable by fixed instalments by 31 October 2028.
Other borrowings are secured by way of a legal charge over the freehold land and buildings held by the group.
HP and finance lease liabilities
Net obligations under HP and finance leases are secured by fixed charges on the assets concerned.
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
Company
Bank borrowings
Company bank borrowings comprise a mortgage with National Westminster plc. The mortgage is denominated in pounds sterling with a nominal interest rate of 2.27% per annum above the Bank of England base rate. The loan is repayable by instalments, with the final instalment being due on 26 November 2025.
Bank borrowings are secured by a legal charge over the freehold land and buildings held by Arada Limited.
Other Borrowings
Other borrowing comprise 4.25% secured loan notes. The loan notes which are repayable by fixed instalments by 31 October 2028.
Other borrowings are secured by way of a legal charge over the freehold land and buildings held by Arada Limited.
|
Obligations under leases and hire purchase contracts |
Group
Finance leases
The total of future minimum lease payments is as follows:
|
2025 |
2024 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
Operating leases
The total of future minimum lease payments is as follows:
|
2025 |
2024 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Provisions for liabilities |
Group
|
Deferred tax |
Other provisions |
Total |
|
|
At 1 May 2024 |
|
|
|
|
Increase (decrease) in existing provisions |
( |
- |
( |
|
At 30 April 2025 |
|
|
|
|
|
|||
|
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
|
Share capital |
Allotted, called up and fully paid shares
|
2024 |
2023 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
180.00 |
|
180.00 |
|
|
|
20.00 |
|
20.00 |
|
|
|
|
|
|
Rights, preferences and restrictions
|
The ordinary A and B shares rank pari passu in all respects, with the exception that the B shares carry a prior right to capital.
|
|
Commitments |
Group and Company
Other financial commitments
The total amount of other financial commitments not provided in the financial statements was £
Arada Holdings Limited
Notes to the Financial Statements
Year Ended 30 April 2025
|
Related party transactions |
Group and Company