The directors present the strategic report for the year ended 31 December 2025.
MatOrtho is an orthopaedic medical device company specialising in the design, development, manufacture and commercialisation of innovative implant systems and associated instrumentation. The Group's principal products focus on hip and knee reconstruction and are marketed through a combination of direct sales operations and distributor partnerships across the United Kingdom, Australia and selected international markets.
Group structure
MatOrtho Limited forms part of the MatOrtho Group Holdings Limited group of companies. During the year, the Group continued to operate through its wholly owned subsidiaries in Australia, Belgium and Ireland, supporting its international sales and market development activities.
Business Review
Overview
2025 was a transformational year for MatOrtho, characterised by strong revenue growth, substantially improved profitability and significant regulatory milestones that position the Group for future expansion.
Revenue increased by 25% to £15.1 million (2024: £12.1 million), reflecting strong demand across all major territories and continued execution of the Group's growth strategy. Gross profit increased by 36% to £8.6 million (2024: £6.3 million), with gross margin improving to 56.6% from 51.9% in the prior year.
The operating loss reduced significantly to £0.9 million (2024: £2.5 million loss), demonstrating the operational leverage within the business as revenue growth continues to outpace increases in operating expenditure, thanks to our strategic reallocation of resources to enhance our commercial execution, surgeon education and regulatory approvals. Loss before taxation reduced to £1.5 million (2024: £3.0 million).
Commercial Performance
Australia was the strongest-performing established market, with revenue increasing to £5.6 million from £4.4 million in 2024. The transition to a direct sales model continued to generate benefits through improved market access, the commercial launch of ReCerf and enhanced customer engagement.
The Rest of World region delivered exceptional growth, increasing revenue to £3.9 million from £2.0 million in the previous year. Growth was driven by increasing activity across existing and new distributor markets, primarily in Europe, and expanding adoption of MatOrtho's implant portfolio.
UK revenues remained resilient at £5.7 million despite ongoing pressures within the NHS and wider healthcare environment. The Board remains encouraged by continued surgeon adoption and the strength of the Company's reputation within specialist orthopaedic reconstruction markets.
Innovation and Regulatory Progress
The Group continued to invest in product innovation and clinical development throughout the year.
A major milestone was achieved through the receipt of EU MDR approval for ReCerf in June 2025, following Australian TGA approval obtained in November 2024 and Prostheses List inclusion in Australia from March 2025 and improved in July 2025. These approvals establish a strong platform for international commercial expansion and represent years of investment in research, development and regulatory activities.
Development activities also continued across the broader product portfolio, including the SAIPH Revision Knee system and improved surgical instrumentation intended to enhance procedural efficiency and clinical outcomes.
The Board believes that MatOrtho is uniquely positioned within the hip resurfacing market, particularly following the withdrawal of competing resurfacing systems, and remains focused on supporting surgeons and patients through innovative implant technologies.
Trading Update
The strong momentum achieved during 2025 has continued into 2026.
For the six months ended 30 June 2026, Group revenue reached approximately £9.6 million, representing growth of around 47% compared with the corresponding period in 2025 and materially ahead of management's original budget. The Group delivered positive Operating Profit of approximately £0.4 million during the first half of 2026 (first half of 2025: £0.8 million operating losses) and a profit before taxation of £0.1 million (first half of 2025: £1 million in losses before taxation), reflecting continuing improvements in scale, product mix and operational efficiency.
The Board expects the commercial launch of ReCerf, together with planned introduction of the SAIPH Revision Knee system and expansion into additional geographic markets, to continue supporting strong growth in future periods.
Key performance indicators
KPI | 2025 | 2024 | Movement |
Revenue (£m) | 15.1 | 12.1 | +25% |
Gross Profit (£m) | 8.6 | 6.3 | +36% |
Gross Margin (%) | 56.6% | 51.9% | +4.7 percentage points |
Operating Loss (£m) | (0.9) | (2.5) | 65% improvement |
Loss Before Tax (£m) | (1.5) | (3.0) | 49% improvement |
Average Employees | 75 | 71 | +6% |
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The Directors have undertaken a comprehensive assessment of the Group's ability to continue as a going concern and remain satisfied that the preparation of the financial statements on the going concern basis is appropriate.
During 2025, the Group delivered strong trading performance, increasing revenue by 25% to £15.1 million whilst significantly reducing its operating loss from £2.5 million to £0.9 million. Gross profit increased by 36% to £8.6 million and the business achieved EBITDA breakeven for the full year, with positive EBITDA delivered during the second half of 2025.
The positive momentum has continued into 2026. Revenue for the six months ended 30 June 2026 reached approximately £9.6 million, representing growth of approximately 47% compared with the corresponding period in 2025 and exceeding management's original budget expectations. Trading performance resulted in positive Operating Profit of approximately £0.4 million during the first half of 2026. Management currently expects full-year revenue to approach £20 million and Operating Profit to exceed £0.9 million (2025: £0.9 million loss) despite incremental investments to support current growth strategies.
The Group has also strengthened its financial position through the successful refinancing of its banking facilities. In June 2026, the Group entered into a new financing agreement with Virgin Money comprising a £6.0 million loan facility, available in two tranches, together with a £1.0 million revolving credit facility. The new arrangement provides improved commercial terms, a period of interest-only repayments and more flexible covenant structures, supporting the Group's growth plans and providing additional liquidity.
The Directors have reviewed detailed forecasts and cash flow projections covering at least twelve months from the date of approval of the financial statements. These forecasts incorporate the continued commercialisation of ReCerf, anticipated launch of the SAIPH Revision Knee system, geographic expansion initiatives and planned operational efficiency improvements. The forecasts demonstrate that the Group is expected to maintain adequate liquidity and comply with its financing arrangements throughout the assessment period.
Accordingly, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable future and therefore continue to adopt the going concern basis in preparing the financial statements.
Following the year end, the Group continued to expand the commercial rollout of ReCerf across approved territories and further strengthen its organisational capabilities to support future growth.
The Group also successfully refinanced and extended its external banking facilities during June 2026, providing additional liquidity and funding capacity to support future growth initiatives.
In addition, a waiver relating to covenant breaches existing at the balance sheet date was obtained from the Group's lender subsequent to year end. This confirmed that repayment would not be demanded as a consequence of those breaches and that existing lending arrangements would continue.
Regulatory and Product Approval Risk
The Group operates in a highly regulated sector where product approvals and ongoing regulatory compliance are critical to commercial success. Delays in obtaining approvals or maintaining compliance could affect future revenue growth. The Group maintains significant regulatory, quality and clinical expertise and works proactively with regulatory bodies to mitigate these risks.
Commercialisation and Market Adoption Risk
Future growth depends upon successful adoption of the Group's products, particularly ReCerf and the SAIPH Revision Knee system. The Group continues to invest in surgeon education, clinical evidence generation, market development activities and commercial resources to support sustained market penetration.
Liquidity and Funding Risk
As a growth-focused medical technology business, the Group continues to require adequate access to funding to support investment in inventory, research and development, regulatory programmes and international expansion. Liquidity is closely monitored through detailed forecasting processes and regular Board review.
Foreign Exchange Risk
The Group derives a substantial proportion of revenue and, increasingly, material costs outside the United Kingdom. The Group is therefore exposed to exchange rate fluctuations. Currency risks are actively monitored and managed through established treasury policies and hedging arrangements where appropriate.
Supply Chain and Operational Risk
The manufacture and supply of orthopaedic implants depend upon specialist suppliers and materials. The Group mitigates supply chain risk through supplier diversification, strategic procurement activities and inventory management disciplines. Ongoing continuous improvement initiatives are also intended to improve efficiency, capacity and cost competitiveness.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2025.
The results for the year are set out on page 12.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Moore Kingston Smith, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the group and parent company 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 parent company, and of the profit or loss of the group 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;
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent 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 parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent 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 parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of Matortho Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the Group Profit and Loss Account, the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company 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).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
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. 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent 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, 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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of noncompliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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 by, for example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by section 408 of the Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,630,762 (2024 - £2,907,670 loss).
Matortho Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 19/20 Mole Business Park, Randalls Road, Leatherhead, Surrey, KT22 7BA.
The group consists of Matortho Limited and all of its subsidiaries which are detailed in Note 14.
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.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
The consolidated group financial statements consist of the financial statements of the parent company Matortho Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The group made a loss for the year of £1.4m (2024: £2.9m) and had a net current liabilities position of £7.8m (2024: £3.5m) and net liabilities position of £8.9m (2024: £7.5m) at the balance sheet date. However, the group had a cash balance of £1.4m (2024: £1.3m).
Turnover for 2025 grew strongly from £12.1m in 2024 to £15.1m in 2025, an increase of 25%. The directors are forecasting growth in future years, especially from the ReCerf product, now that it has received regulatory approval in the EU (including the UK) and Australia.
The company made a loss for the year of £1.6m (2024: £2.9m) and, at the balance sheet date, had net current liabilities of £8.9m (2024: £4.4m) and net liabilities of £10.0m (2024: £8.3m). Notwithstanding the deficit on net liabilities, the company has the ongoing support of its ultimate parent undertaking, MatOrtho Group Holdings Limited.
The directors have produced projections for MatOrtho Group Holdings Limited and its subsidiaries, including MatOrtho Limited, which show future balance sheet, cash flow and results to 30 September 2027. These projections indicate that the group and the individual companies will continue to be able to meet their financial liabilities as they fall due. During the year and subsequently, the group has strengthened its financial position through:
The successful refinancing of its existing term loan facility from Virgin Money which now comprises a £4m Tranche A Facility which was drawn down in June 2026, a £1m Revolver facility which can be drawn down when required and a further £2m Tranche B Facility which can be drawn down from March 2027 providing that Last Twelve Months (LTM) revenues are at least £17m at the time of the drawdown. The directors have a reasonable expectation that the company will be able to meet these conditions based on the current run rate of revenue. This new arrangement provides improved commercial terms, a period of interest-only repayments and more flexible covenant structures, supporting the group's growth plans and providing additional liquidity.
The MatOrtho Group Holdings Limited Group, which includes the company and its subsidiaries, has issued loan notes amounting to £18.6m (including interest accrued to the balance sheet date). All loan notes have been renegotiated to mature in 2029.
The directors have also received written assurances from the group's ultimate parent undertaking, MatOrtho Group Holdings Limited, confirming that it will continue supporting the company for a period of at least 12 months from the date of approval of these financial statements. These assurances include confirmation that MatOrtho Holdings Limited that it will not demand repayment of the £10,211,158 intercompany balance for the same period unless cash flow allows.
As a result, the directors have a reasonable expectation that the group will have adequate resources to continue in operational existence for at least 12 months from the date of approval of the financial statements. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
There is an additional fixed asset category being assets in the course of construction. these are fixed asset instruments which are manufactured by the entity and the completion spans the year end. They are assets not in use at the year end and thus are not depreciated. When the assets are completed they are transferred into Plant and Machinery and depreciated in accordance with the basis noted above.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less 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 group. 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 group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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 group 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 group 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 group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
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 group’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 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.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
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 transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
In the application of the group’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 following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The annual depreciation and amortisation charges in respect of tangible and intangible assets are based on the directors' best estimate of useful economic lives and residual values of each asset class. The useful economic lives and residual values of each asset class are reassessed annually. Annual impairment reviews are performed on each class of asset to ensure that the carrying values are appropriate.
The group makes an estimate of the value of obsolete and slow moving stock lines based on the ageing of stock in hand. Provision is made where the estimated selling price is less than the original cost.
The group makes an estimate of the recoverable value of trade debtors. When assessing impairment of trade debtors, the directors consider factors including the ageing profile of debtors and historical experience. Provision is made when there is significant uncertainty over the timing or likelihood of the recovery of debts.
The group makes an estimate of the value of works required at the end of the lease term for leasehold properties, dependent on the terms of the lease, to return the leasehold property to the state it was at the commencement of the term.
The average monthly number of persons (including directors) employed by the group and 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 5 (2024 - 5).
The actual credit 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 a deferred tax balance of £nil, being a liability of £997k in respect of accelerated capital allowances offset by tax losses carried forward of £997k. There are tax losses carried forward of £11,159,969 (2024: £8,719,668).
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Assets under construction are not depreciated as they have yet to be brought into use. Balances in the depreciation section of Assets under construction relate to impairments.
Details of the company's subsidiaries at 31 December 2025 are as follows:
The finance leases are secured over the assets that they relate to.
Included within creditors due within one year is a bank loan of £3,907,692 (2024: £192,308). At 31 December 2025, the Company was in breach of a financial covenant attached to the loan facility. The covenant breach arose because aggregate cash balances held in non-Obligor accounts exceeded the permitted threshold at the year end, primarily as a result of significant customer receipts received into those accounts shortly before 31 December 2025.
As a consequence of the covenant breach, the lender had the contractual right to demand repayment of the loan at the balance sheet date. Accordingly, the outstanding balance of the loan has been classified as falling due within one year in these financial statements.
On 6 January 2026, the lender provided a waiver in respect of the covenant breach and confirmed that it would not require repayment of the loan as a result of the breach. As the waiver was obtained after the balance sheet date, it does not affect the classification of the loan at 31 December 2025. Had the waiver been received before the balance sheet date, £2,611,999 would have been classified as falling due after more than one year and £1,295,693 as falling due within one year in accordance with the contractual repayment profile of the facility.
Since the balance sheet date and as described in Note 24, the Group completed the refinancing of its banking facilities which invluded the removal of the specific covenant that was breached at year end.
Included within other borrowings are 3,430,596 (2024: 3,430,596) cumulative redeemable preference shares of £1 each issued at par. The holders of these shares are entitled to a non-discretionary dividend of 8% per annum of the issued price.
The finance leases are secured over the assets that they relate to.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The company has given a guarantee in favour of Connection Capital LLP for loan notes issued by the company's parent undertaking, Matortho Holdings Limited. The amount outstanding at the balance sheet date was £18,559,876 (2024: £16,756,616).
At the balance sheet date, the company was in breach of certain financial covenants relating to its bank borrowing of £3,907,692 and, as a result, the loan was classified as due within one year.
On 6 January 2026, subsequent to the year end, the lender formally waived the covenant breach and confirmed that it would not demand repayment of the loan as a consequence of the breach.
The waiver was obtained after the balance sheet date and therefore does not affect the classification of the borrowing in these financial statements.
Furthermore, in June 2026 the Group successfully completed the refinancing of its banking facilities with Virgin Money, increasing the term loan facility to £6 million, split in two tranches of £4 million and £2 million, as well as a £1 million revolving credit facility. The new facility includes a twelve-month interest-only period for each loan tranche and improved terms, including the removal of the specific covenant breached at the year end.
As permitted by FRS 102 Section 33 "Related Party Disclosures", the financial statements do not disclose transactions entered into between two or more members of the group, under the provision that any subsidiary which is a party to such transactions is wholly owned by such member.
Amounts totalling £30,631 (2024: £30,854) were invoiced to the Company in respect of advisory services provided by Route2 Advisors Ltd, a company controlled by Mr Cartmell. Mr Cartmell is a director of MatOrtho Group Holdings Limited, the ultimate parent undertaking of MatOrtho Limited. Amounts payable at the year end totalled £7,570 (2024: £7,722).
The company's immediate parent undertaking is Matortho Holdings Limited, a company registered in England & Wales. The company's ultimate parent undertaking is Matortho Group Holdings Limited, a company registered in England & Wales. There is no controlling party.