The directors present the strategic report for the year ended 29 December 2024.

The Company is a manufacturer of bespoke and generic point of sale and dispense products primarily for the UK drinks industry.

The policy of risk acceptance and risk management is addressed through an annual Board review process with approval and ongoing review. Compliance with regulation, legal and ethical standards is a high priority and the directors take an important oversight role in this regard.

The main risks to the business have been identified as a significant reliance on sales volume from a few key customers, as changing customer service requirements from the current customer base and global competitors from low-cost environments. The business continues to manage these risks by diversifying not only products on offer but also the customer base whilst maintaining high quality standards to our existing customers, evolving our customer service solutions and efficiently managing our cost base and procurement process to ensure we remain competitive. We have continued to invest in the business through staff recruitment, training , IT and refining our quality control systems and processes as part of the process of managing these risks.

As part of the Group's supply chain strategy to establish centres of manufacturing excellence across its operations, the Company decided to close its production facility in Sevenoaks and transfer the manufacture of MF beer coolers to the Celli Italia manufacturing hub in San Giovanni Marignano. This strategic initiative is expected to deliver lower unit costs through increased economies of scale, more streamlined production processes, enhanced product quality, and improved capabilities in product design, modernisation, development and industrialisation.

Currency fluctuations and changes in commodity prices are also risks that we continue to actively manage.

The results of the company for the year show a loss on ordinary activities before tax and exceptional items of £2.3m (2023 - loss £0.9m).

The underlying business performed in line with management's expectations and the approved budget for the year, delivering a satisfactory operational performance. The reported net loss for the period was significantly influenced by a number of one-off, non-cash accounting adjustments arising from the strategic decision by the Group to waive certain intercompany creditor balances and loans owed by the Company to its parent undertaking, Celli International. These adjustments have strengthened the Company's balance sheet and capital position but do not reflect the underlying trading performance of the business. Excluding the impact of these exceptional accounting items, the Directors are satisfied that the Company's performance for the year was in line with expectations.

Revenue in 2024 declined as the hospitality sector continued to face challenges, resulting in a slowdown in refurbishment and installation programmes among major pub operators, including regional and international breweries. Rising input costs, combined with increased competition from manufacturers operating in countries with lower labour and production costs, limited the company's ability to implement price increases and consequently reduced profit margins.

The industry remains highly competitive, with key brand owners and major breweries continuing to invest in innovation across product design, manufacturing processes, materials, and production methods. Customer requirements are evolving in response to environmental considerations, and the company is addressing these changes through the development of remanufacturing solutions, energy-efficient technologies and the increased use of recyclable materials.

Rising utility, labour, and material costs have affected businesses across all sectors, with manufacturing and hospitality among the most significantly impacted. During the year, Celli Group (UK) Limited experienced a notable increase in its cost of goods, particularly in the latter part of the financial year.

Demand for the company's products remained strong throughout the year. However, increasing operating costs continued to place pressure on businesses across the economy, particularly within the retail and hospitality sectors.

The company maintains a diverse pipeline of projects at both development and implementation stages, including enhancements to existing product ranges and the introduction of new products designed to meet the requirements of both existing and new customers.

On behalf of the board

The directors present their annual report and financial statements for the year ended 29 December 2024.

The principal activity of the company continued to that of a manufacturer of bespoke and generic point of sale

and dispense products primarily for the UK drinks industry.

The results for the year are set out on page 11.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

There have been no significant events affecting the company since the balance sheet date.

In 2023, the Celli Group launched a supply chain strategy focused on consolidating manufacturing operations and establishing centres of excellence for specific production activities.

As part of this strategy, the Company decided to transfer its remanufacturing, injection moulding, printing and Research and Development activities from its Wetherby and Biggleswade sites to its facility in Thirsk.

This decision supports the creation of an integrated manufacturing site capable of managing end-to-end processes, from design, component production through to final assembly. The new operating model is expected to reduce production lead times and costs while improving operational efficiency through economies of scale, enhanced internal process expertise, greater opportunities for continuous improvement, procurement synergies, more dynamic inventory management and optimisation of capital employed.

The Company will also establish a dedicated remanufacturing centre equipped with state-of-the-art testing equipment and supported by specialist teams. The facility will provide remanufacturing services across a range of product categories, enhancing product quality, operational efficiency and technical expertise within the Group.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

In assessing the appropriateness of the going concern basis of accounting, the Directors have considered the impact of ongoing global geopolitical uncertainty, which continues to contribute to increased input and energy costs. The Directors have reviewed the forecast performance of the Company, including anticipated demand for its existing product portfolio. Consideration has also been given to the Company's available financial resources and the continued commitment of the wider Celli Group to its operations in the United Kingdom. Accordingly, the financial statements have been prepared on a going concern basis.

The manufacturing and hospitality sectors continue to face challenges arising from increased material and utility costs, higher labour expenses and constrained consumer spending. In addition, the influence of procurement groups acting on behalf of major brands continues to place pressure on suppliers to deliver ongoing product innovation while operating within tighter margin expectations.

The Directors have prepared cash flow forecasts covering a period of at least 12 months from the date of approval of these financial statements. Given the continued uncertainty affecting the hospitality sector, particular focus has been placed on the Company's budgeting process, with all key assumptions subject to rigorous review and challenge. The Directors are satisfied that the resulting budgets are robust and that realistic targets have been established across all revenue streams.

Having considered these factors collectively, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements. In reaching this conclusion, the Directors have exercised judgement in relation to the level of forecast sales expected to be generated during the going concern assessment period.

Should the budgeted revenue levels assumed within the severe but plausible downside scenario not be achieved, the Company will implement cost reduction actions, specifically fixed costs, and it may require additional funding during the going concern period. Celli S.p.A. has indicated its intention to provide such financial support as may be required by the Company throughout the forecast period.

As with any company that relies on financial support from other group entities, the Directors acknowledge that there can be no absolute certainty that such support will continue. However, at the date of approval of these financial statements, the Directors have no reason to believe that such support will not be available.

The Directors further acknowledge that the ability of Celli S.p.A. to provide this support is dependent upon the wider Celli Group achieving its forecast performance, which is subject to similar judgements regarding conditions within the global hospitality industry.

Notwithstanding the uncertainties affecting the sector, the Directors remain confident in the Company's budgeting and forecasting processes, which have been developed and refined through ongoing engagement with key customers and stakeholders.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

The directors are responsible 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 company and of the profit or loss of the company for that period.

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

• select suitable accounting policies 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 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.

Qualified opinion on financial statements

We have audited the financial statements of Celli Group (UK) Limited (the 'company') for the year ended 29 December 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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).

In our opinion, except for the effects of the matters described in the basis for qualified opinion paragraph, the financial statements:

• give a true and fair view of the state of the company's affairs as at 29 December 2024 and of its 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 qualified opinion

Exceptional items

During the preparation of the 2023 financial statements, a number of errors were identified in the company's balance sheet, some of which date back to the previous 4 financial periods. Management have corrected these errors through the profit and loss account in the prior year, as described in note 4, rather than restating previous years financial statements. The corrections have a material impact on creditors, stocks and intercompany balances.

Consequently as a result of the reported matters above, we were unable to determine whether the reported opening equity as at 1 January 2023 was materially correct. A change in the treatment of exceptional items in 2023 would impact the profit and loss account for the years ended 31 December 2020 to 2023.

Intercompany balances

We were unable to obtain sufficient appropriate audit evidence regarding the recoverability of intercompany debtors amounting to £1,661,863 (2023: £3,227,119). The entity has not provided adequate documentation to support the recoverability of these balances, and we were unable to perform alternative procedures to obtain sufficient audit evidence.

Consequently, we were unable to determine whether any adjustments might be necessary to these balances or to the related impairment provisions, if any.

Goodwill valuation

We were unable to obtain sufficient appropriate audit evidence regarding the carrying amount of goodwill amounting to £1,531,850 (2023: £2,228,605), due to limitations in the availability of supporting documentation and management’s impairment assessment.

Consequently, we were unable to determine whether any adjustments were necessary to the carrying amount of goodwill or related disclosures.

Other matters – prior year audit opinion

The financial statements of the Company for the year ended 31 December 2023 were audited by us and our opinion on those financial statements was qualified in respect of the following:

Intercompany loans

We were unable to obtain sufficient appropriate audit evidence regarding the classification and maturity of an intercompany loan creditor amounting to £4,047,701, specifically, the terms of the loan, including its repayment profile and whether it should be classified as current or non-current.

In the current year, this intercompany loan has been written off by the parent company. As a result, the balance no longer exists at 31 December 2024.

Stock provision

We were unable to obtain sufficient appropriate audit evidence regarding the adequacy of the stock provision as at 31 December 2023. The company had not provided sufficient documentation or analysis to support the valuation and provisioning of inventory. As a result, we were unable to determine whether any adjustments might have been necessary to inventory, cost of sales, or related disclosures in the financial statements.

In the current year, the directors have undertaken a reassessment of the provision for inventory and have provided supporting documentation and analysis. Based on the audit evidence obtained, we are satisfied that the carrying value of inventory as at 31 December 2024 is not materially misstated. Accordingly, the matter giving rise to the qualification in the prior year has been resolved.

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

Material uncertainty related to going concern

The company incurred a net loss of £10,317,665 (excluding exceptional items £2,258,933) during the year ended 31 December 2024. As of that date, the company had negative profit and loss reserves of £9,334,552 which were offset against the capital contribution reserve to show positive reserves of £6,269,606. As stated in note 1.2, these events or conditions, along with other matters as set forth in note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

As described in the basis for qualified opinion section of our report, we were unable to obtain sufficient appropriate audit evidence regarding the opening reserves for 2023, the recoverability of intercompany balances and the valuation of goodwill.

As a result, we have concluded that where the other information refers to opening balances, intercompany balances or goodwill valuation, it may also be materially misstated for the same reasons.

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matters described in the basis for qualified opinion section of our report, 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.

In respect solely of the limitation on our work relating to exceptional items, comparatives and intercompany recoverability, goodwill valuation and year end stock provision, described above:

• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and

• we were unable to determine whether adequate accounting records had been maintained.

Except for the matters described in the basis for qualified opinion section of our report, 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.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made.

As explained more fully in the directors' responsibilities statement, 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 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.

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.

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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

• Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud; 

• Reviewing minutes of meetings of those charged with governance;

• Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection; 

• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

• Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias. 

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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

Celli Group (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Thirsk Industrial Park, York Road, Thirsk, YO7 3BX.

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 £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

This 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:

• 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 financial statements of the company are consolidated in the financial statements of Celli S.p.a. These consolidated financial statements are available from its registered office, Casino Albini, 605, 47842 San Giovanni in Marignano (RN), Italy.

In assessing the appropriateness of the going concern basis of accounting, the Directors have considered the impact of ongoing global geopolitical uncertainty, which continues to contribute to increased input and energy costs. The Directors have reviewed the forecast performance of the Company, including anticipated demand for its existing product portfolio. Consideration has also been given to the Company's available financial resources and the continued commitment of the wider Celli Group to its operations in the United Kingdom. Accordingly, the financial statements have been prepared on a going concern basis.true

The manufacturing and hospitality sectors continue to face challenges arising from increased material and utility costs, higher labour expenses and constrained consumer spending. In addition, the influence of procurement groups acting on behalf of major brands continues to place pressure on suppliers to deliver ongoing product innovation while operating within tighter margin expectations.

The Directors have prepared cash flow forecasts covering a period of at least 12 months from the date of approval of these financial statements. Given the continued uncertainty affecting the hospitality sector, particular focus has been placed on the Company's budgeting process, with all key assumptions subject to rigorous review and challenge. The Directors are satisfied that the resulting budgets are robust and that realistic targets have been established across all revenue streams.

Having considered these factors collectively, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements. In reaching this conclusion, the Directors have exercised judgement in relation to the level of forecast sales expected to be generated during the going concern assessment period.

Should the budgeted revenue levels assumed within the severe but plausible downside scenario not be achieved, the Company will implement cost reduction actions, specifically fixed costs, and it may require additional funding during the going concern period. Celli S.p.A. has indicated its intention to provide such financial support as may be required by the Company throughout the forecast period.

As with any company that relies on financial support from other group entities, the Directors acknowledge that there can be no absolute certainty that such support will continue. However, at the date of approval of these financial statements, the Directors have no reason to believe that such support will not be available.

The Directors further acknowledge that the ability of Celli S.p.A. to provide this support is dependent upon the wider Celli Group achieving its forecast performance, which is subject to similar judgements regarding conditions within the global hospitality industry.

Notwithstanding the uncertainties affecting the sector, the Directors remain confident in the Company's budgeting and forecasting processes, which have been developed and refined through ongoing engagement with key customers and stakeholders.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

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.

Goodwill represents the excess of the cost of acquisition of businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

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 credited or charged to profit or loss.

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company 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 instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, 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 company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

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.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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 leases asset are consumed.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Exceptional items

Exceptional items are income or expenses that are material by size or nature and are non‑recurring, such that separate disclosure is necessary to explain the financial performance of the entity for the period.

Exceptional items are included within the relevant expense or income headings in the statement of profit or loss. Where appropriate, they are separately disclosed either on the face of the statement of profit or loss or in the notes to the financial statements to aid the understanding of users.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The directors have considered and concluded there were no key sources of estimation uncertainty or judgements in applying the accounting policies.

Goods Received Not Invoiced

During 2024, the Company undertook a detailed review of historical creditor and debtor balances with the assistance of external advisers. As a result of this review, it was identified that certain provisions established in prior years were no longer required, as the related invoices had subsequently been recorded without being matched against those provisions. Consequently, the Company released a number of these surplus provisions, resulting in a net credit recognised as an exceptional item within the year.

Stock Quantity Provision

For previous years, the Company carried out a comprehensive review of its inventory holdings and stock valuation methodology. Following this assessment, an additional provision was recognised to reflect identified stock quantity variances and to ensure that inventory was stated appropriately in accordance with the Company's accounting policies and the principle of prudent valuation.

Intercompany Debtors and Creditors Write-offs and Loan Write-offs

During 2024, the Celli Group, with the agreement of its shareholders, undertook a restructuring of intercompany balances across a number of Group entities. As part of this exercise, certain intercompany debtor and creditor balances involving the Company were reviewed and written off where considered appropriate. In addition, loans advanced in previous years were formally waived as part of the wider Group debt restructuring programme.

The Company's parent undertaking, Celli International, formally waived intercompany balances amounting to £15.5 million. In accordance with applicable accounting standards, this waiver has been treated as a capital contribution from the parent undertaking and recognised directly within reserves.

As the transaction represents a contribution from the Company's shareholder, it has not been recognised within the Statement of Comprehensive Income. This is a non-cash accounting adjustment and has no impact on the Company's trading activities, cash flows or underlying operational performance. The Directors are pleased to report that the Company's underlying performance during 2024 remained satisfactory and in line with expectations.

Legal and Professional Costs and Redundancy Costs

During 2024, the Company decided to cease manufacturing operations at its Sevenoaks MF production facility and transfer production activities to another Group manufacturing location. As a consequence, a redundancy programme was implemented affecting employees at the site, many of whom had more than 20 years of service with the Company. The process required specialist legal and professional support to ensure compliance with employment and regulatory requirements.

The closure of the Sevenoaks facility also involved matters relating to the termination of the property lease and the assessment of potential dilapidation obligations. Specialist dilapidation surveyors and other professional advisers were engaged to support the Company throughout this process. The associated costs have been recognised as exceptional items within the year.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 2).

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

The company has disposed of its investment in its subsidiary, following the commencement of strike‑off proceedings.

Details of the company's subsidiaries during the year to 29 December 2024 are as follows:

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

The invoice factoring facility is secured against customer invoices under the terms of the factoring guarantee.

Amounts owed to group undertakings have been written off in the year as described in the exceptional items note and capital contribution reserve.

In 2024, loans advanced in previous years were formally waived as part of the wider Group debt restructuring programme. The resulting impact has been recognised as a capital contribution reserve and an exceptional item within the financial statements.

The dilapidation provision relates to the closure of sites as part of the Group's supply chain strategy. Claims submitted by the landlords and their appointed agents are currently under review and subject to ongoing negotiation, with support from specialist dilapidation surveyors engaged by the Company.

The provision recognised in these financial statements represents the Directors' best estimate of the Company's expected liability at the date of approval of the accounts, based on the information available and professional advice received. Any future adjustments arising from the outcome of the negotiations will be recognised in the period in which they become known.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

The company has taken advantage of the exemption under FRS102 not to disclose related party transactions as the company is included in the group consolidation.

The immediate parent company is Celli International Limited, a company incorporated in England and Wales.

The ultimate parent company, which is both the smallest and largest company into which the company results are consolidated into, was Celli S.p.a, a company incorporated in Italy.