Registered number: 01185121
COMPANY INFORMATION
CONTENTS
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2025
The principal activity of the Company continues to be the provision of contract analytical services, mainly to the pharmaceutical industry.
2024–25 was a year characterised by solid revenue performance but with increasing cost pressures and continued external uncertainty across the pharmaceutical sector, largely as a result of the fluctuating trade policies of the US. Turnover increased modestly year-on-year, driven by sustained demand from both the domestic market and EU (and in particular Irish) customers.
UK inflation and a rise in Employer National Insurance resulted in an increase in cost of sales, which were, in part, mitigated by securing lower rates on energy contracts resuting in lower administrative expenses.
As a result, operating profit remained healthy but was lower than in 2024. Interest income continued to provide a beneficial contribution to pre-tax profit, although less than the previous year as a result of reducing interest rates.
The Company retains a strong balance sheet with robust reserves, positive cash generation, and no reliance on external borrowing. These financial fundamentals place the business in a resilient position to respond to market shifts while continuing to invest in the capability, technology, and training and development of our skilled workforce that support our long-term competitiveness.
Overall turnover increased by just over 2%, with the geographical sales mix broadly consistent with the prior year. Staff numbers remained unchanged. The resulting operating profit was £904,282 (2024: £1,032,034). Additionally, interest income of £138,371 (2024: £203,309), took pre-tax profit to £1,042,653 compared to £1,235,343 in 2024.
The Company has commenced a significant capital investment programme at its Teddington site, focused on expanding laboratory capacity and continuing investment in up to date facilities and equipment. This development will support new analytical capabilities, enhance workflow efficiency, and improve the working environment for our laboratory teams. The Board expects this investment to drive medium-term revenue growth and consolidate the company’s competitive position in the contract analytical services market.
Although the UK has secured its own zero-tariff agreement with the United States for pharmaceutical products, the position for the EU, and Ireland in particular, is different. The potential impact of U.S. tariffs has made Ireland uniquely vulnerable due to a large amount of output being exported to the US. 31% of the company’s business is derived from Ireland.
The Company also continues to face domestic cost challenges:
∙Employer National Insurance threshold being reduced has translated into a material rise in the cost of employment.
∙The impact of inflation and the need to recognise the cost of living on staff, continue to be felt.
∙Resource and skills availability in the scientific labour market remains competitive, and the increase in salary thresholds for visas remains a threat by restricting the talent pool from which the company can recruit.
Operational risk remains a key focus, most notably the potential loss of laboratory facilities due to fire or catastrophic failure. The business continuity plan addresses this risk; however, immediate full-scale recovery is unlikely should such an event occur and therefore this remains the principal operational threat.
The Company is insulated from short-term shocks through a strong liquidity position, allowing it to manage lesser risks without detriment to its ability to continue trading.
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The Company uses a number of measures to monitor the progress and performance of the business. The principal metrics are:
i.the ratio of staff costs to turnover increased to 57% (2024: 55%);
ii.the ratio of overheads to turnover improved to 28% (2024: 30%);
iii.the operating profit margin which decreased to 10% from 12%;
iv.debtor days – 43 (2024: 41);
v.liquidity – measured by the ratio of current assets to current liabilities – 7.8:1 at 30 September 2025 as compared to 5:1 a year earlier; and
vi.cash flow from operating activities £628,662 (2024: £978,868).
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2025
The directors present their report and the financial statements for the year ended 30 September 2025.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent; and
∙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 company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £759,005 (2024: £909,841).
Dividends of £Nil (2024: £70,000) were paid in the year.
The directors who served during the year were:
The Company has chosen in accordance with Section 414c(11) of the Companies Act 2006 (Strategic Report and Director's Report) Regulation 2013 to set out within the Company's Strategic Report the Company's Report Information Required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008. This included information that would have been included in the past in the business review, details of principal risk and uncertainties and future developments.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2025
Under section 487(2) of the Companies Act 2006 Menzies LLP, will be deemed to have been reappointed as auditor 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar,whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BUTTERWORTH LABORATORIES LIMITED
We have audited the financial statements of Butterworth Laboratories Limited (the 'company') for the year ended 30 September 2025, which comprise the Statement of income and retained earnings, the Analysis of Net Debt, the Statement of financial position, the Statement of cash flows and the related notes, 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).
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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.
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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BUTTERWORTH LABORATORIES LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' Report for the financial 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.
In the light of the 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 or the Directors' report.
In preparing the financial statements, the directors are responsible for assessing the 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 company or to cease operations, or have no realistic alternative but to do so.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BUTTERWORTH LABORATORIES LIMITED (CONTINUED)
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud is detailed below:
∙The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant:
−The Companies Act 2006;
−Financial Reporting Standard 102;
−UK employment legislation;
−Industry specific accreditations as required by the company's customers;
−General Data Protection Regulations; and
−UK tax legislation.
∙We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
∙We understood how the company is complying with those legal and regulatory frameworks by, making inquiries to management, those responsible for legal and compliance procedures and the company secretary. We corroborated our inquiries through our review of board minutes.
∙The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
∙We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included;
−Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
−Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
−Challenging assumptions and judgements made by management in its significant accounting estimates; and
−Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
∙As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:
−The application of inappropriate judgements or estimation to manipulate the company's financial position;
−Posting of unusual journals and complex transactions; and
−The use of management override of controls to manipulate results, or to cause the company to enter into transactions not in its best interests.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BUTTERWORTH LABORATORIES LIMITED (CONTINUED)
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 or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, 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.
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.
for and on behalf of
Chartered Accountants
Statutory Auditor
2nd Floor, Origin One
108 High Street
RH10 1BD
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2025
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 24 form part of these financial statements.
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
Butterworth Laboratories Limited is a private company limited by shares and incorporated in England and Wales. The address of the registered office and principal place of business are shown on the company information page.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland, and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).
The following principal accounting policies have been applied:
Functional and presentation currency
The financial statements are presented in sterling, which is the functional currency of the company, rounded to the nearest £.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of income and retained earnings.
The financial statements are presented in sterling, which is the functional currency of the company, rounded to the nearest £.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of income and retained earnings.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of income and retained earnings.
In the application of the company’s accounting policies, which are described in note 2, management is required to make judgements, estimates and assumptions about the carrying amounts 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.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
11.Taxation (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
Share premium account
Profit and loss account
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2025
The company does not have a parent company. TWM Trust Corporation Limited holds a majority shareholding in order to govern the entity on behalf of its ultimate beneficiaries. Accordingly, there is not considered to be an ultimate controlling party.
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