Practical Publishing Int Hold Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 06635653 (England and Wales)

PRACTICAL PUBLISHING INTERNATIONAL

HOLDINGS LIMITED

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 29 FEBRUARY 2020

Page

Company Information

1

Report of the Directors

2

Report of the Independent Auditors

4

Consolidated Income Statement

7

Consolidated Balance Sheet

8

Company Balance Sheet

9

Notes to the Consolidated Financial Statements

10

DIRECTORS:

R B Wilkinson

D Bowler

D A Cusick

C C Dunbar

REGISTERED OFFICE:

Clarke Nicklin House

Brooks Drive

Cheadle Royal Business Park

Cheadle

Cheshire

SK8 3TD

REGISTERED NUMBER:

06635653 (England and Wales)

AUDITORS:

Clarke Nicklin LLP

Chartered Accountants and

Statutory Auditors

Clarke Nicklin House

Brooks Drive

Cheadle Royal Business Park

Cheadle

Cheshire

SK8 3TD

The directors present their report with the financial statements of the company and the group for the year ended 29 February 2020.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of media publishing and software development.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 March 2019 to the date of this report.

R B Wilkinson

D Bowler

D A Cusick

C C Dunbar

CHAIRMAN'S STATEMENT

We have continued to focus on our core strategy of being a specialist content hub for the worldwide women's craft market, providing quality information, ideas and products our consumers need to be successful at their hobby, whenever they want it and wherever they are.

Significant investment has been made in transitioning the business to digital first content with our Craftworld online community; good progress has been made in growing private label craft brands for our ecommerce business CraftStash and our long experience in providing first class content and innovative promotions for our market leading magazines published under the Practical brand continues to be a winning formula.

Group-wide turnover grew both in the UK and overseas as we balanced resources required to increase our online activity with the maturity of our print publishing business. Overall turnover is up YOY by 9% to £12.2m with e-commerce revenues up 50%, repeat revenues are up 30%, and print publishing revenue in slight decline but still at £7.6m.

The Covid pandemic did cause some disruption to parts of our business in the final two months of the 19/20 fiscal year to February 2020. Logistical problems caused delays of magazine product to retail markets outside of the UK and increased e-commerce overseas shipping costs combined to depress profit in the final quarter.

The final year results also includes some significant one-off costs related to developments within the business and not directly related to the pandemic..

Looking ahead to fiscal 20/21, I am pleased to report at the time of writing that the company successfully navigated its way through the pandemic. This is in large part due to the diversified product mix we now have and actions taken by the executive directors in managing the challenges faced and maximising the opportunities which opened up in online growth plus the significant effort, dedication and resilience of all our staff and suppliers.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Report of the Directors 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 the group 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;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Clarke Nicklin LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

D Bowler - Director

26 February 2021

Opinion

We have audited the financial statements of Practical Publishing International Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 29 February 2020 which comprise the Consolidated Income Statement, Consolidated Balance Sheet, Company Balance Sheet and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 29 February 2020 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Report of the Directors has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors.

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

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit; or

-	the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Group Strategic Report or in preparing the Report of the Directors.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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 for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Andrew Baggott (Senior Statutory Auditor)

for and on behalf of Clarke Nicklin LLP

Chartered Accountants and

Statutory Auditors

Clarke Nicklin House

Brooks Drive

Cheadle Royal Business Park

Cheadle

Cheshire

SK8 3TD

26 February 2021

TURNOVER

12,259,237

11,139,389

Cost of sales

9,127,340

7,951,121

GROSS PROFIT

3,131,897

3,188,268

Administrative expenses

3,033,719

2,792,163

OPERATING PROFIT

4

98,178

396,105

Interest receivable and similar income

17

20

98,195

396,125

Interest payable and similar expenses

3,770

5,646

PROFIT BEFORE TAXATION

94,425

390,479

Tax on profit

5,536

73,382

PROFIT FOR THE FINANCIAL YEAR

88,889

317,097

Profit attributable to:

Owners of the parent

88,889

317,097

FIXED ASSETS

Intangible assets

6

1,060,462

735,660

Tangible assets

7

104,781

139,404

Investments

8

-

-

1,165,243

875,064

CURRENT ASSETS

Stocks

1,010,322

599,264

Debtors

9

1,617,236

1,613,593

Cash at bank and in hand

391,068

407,986

3,018,626

2,620,843

CREDITORS

Amounts falling due within one year

10

2,836,644

2,302,707

NET CURRENT ASSETS

181,982

318,136

TOTAL ASSETS LESS CURRENT LIABILITIES

1,347,225

1,193,200

CREDITORS

Amounts falling due after more than one year

11

(37,132

)

(69,419

)

PROVISIONS FOR LIABILITIES

14

(87,586

)

(14,799

)

NET ASSETS

1,222,507

1,108,982

CAPITAL AND RESERVES

Called up share capital

15

119

119

Retained earnings

16

1,222,388

1,108,863

SHAREHOLDERS' FUNDS

1,222,507

1,108,982

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 26 February 2021 and were signed on its behalf by:

D Bowler - Director

FIXED ASSETS

Intangible assets

6

156,846

62,421

Tangible assets

7

-

-

Investments

8

588,788

588,788

745,634

651,209

CURRENT ASSETS

Debtors

9

36,441

36,441

CREDITORS

Amounts falling due within one year

10

763,277

657,730

NET CURRENT LIABILITIES

(726,836

)

(621,289

)

TOTAL ASSETS LESS CURRENT LIABILITIES

18,798

29,920

CAPITAL AND RESERVES

Called up share capital

15

119

119

Retained earnings

18,679

29,801

SHAREHOLDERS' FUNDS

18,798

29,920

Company's (loss)/profit for the financial year

(11,122

)

159,186

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 26 February 2021 and were signed on its behalf by:

D Bowler - Director

1.	STATUTORY INFORMATION

Practical Publishing International Holdings Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

The directors have reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have reached this conclusion giving due consideration to the projected future performance of the company and any potential risk that might impact the company's ability to meet its required solvency levels. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Basis of consolidation

The consolidated profit and loss account and balance sheet include the financial statements of the company and its subsidiary undertakings made up to 28 February 2019. The results of the subsidiaries sold or acquired are included in the consolidated profit and loss account up to, or from, the date control passes. Intra-group sales and profits are eliminated fully on consolidation.

On the acquisition of a subsidiary, all the subsidiary's assets and liabilities that exist at the date of acquisition are recorded at their fair values reflecting the condition at that date. All changes to those assets and liabilities, and the resulting gains and losses, that arise after the group has gained control of the subsidiary are charged to the post acquisition profit and loss account.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2019, is being amortised evenly over its estimated useful life of ten years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Patents and licences are being amortised evenly over their estimated useful life of ten years.

Development costs are being amortised evenly over their estimated useful life of five years.

Computer software is being amortised evenly over its estimated useful life of five years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to property

-

20% on cost

Fixtures and fittings

-

25% on reducing balance and 20% on cost

Motor vehicles

-

25% on reducing balance

Computer equipment

-

20% on cost

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 94 (2019 - 93 ) .

4.	OPERATING PROFIT

The operating profit is stated after charging:

2020

2019

£

£

Depreciation - owned assets

43,626

33,072

Goodwill amortisation

64,915

64,915

Patents and licences amortisation

18,197

6,936

Development costs amortisation

8,763

5,599

Computer software amortisation

15,309

8,083

Operating lease expenses

153,608

49,907

Bad debt provision

9,886

6,000

5.	INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

6.	INTANGIBLE FIXED ASSETS

Group

Patents

and

Development

Computer

Goodwill

licences

costs

software

Totals

£

£

£

£

£

COST

At 1 March 2019

649,146

569,357

28,575

102,465

1,349,543

Additions

-

112,622

16,695

308,347

437,664

Disposals

-

-

-

(15,102

)

(15,102

)

At 29 February 2020

649,146

681,979

45,270

395,710

1,772,105

AMORTISATION

At 1 March 2019

64,915

506,936

5,599

36,433

613,883

Amortisation for year

64,915

18,197

8,763

15,309

107,184

Eliminated on disposal

-

-

-

(9,424

)

(9,424

)

At 29 February 2020

129,830

525,133

14,362

42,318

711,643

NET BOOK VALUE

At 29 February 2020

519,316

156,846

30,908

353,392

1,060,462

At 28 February 2019

584,231

62,421

22,976

66,032

735,660

Website costs included within Computer Software of £298,213 are not yet subject to amortisation as the website had not launched by the balance sheet date.

Company

Patents

and

licences

£

COST

At 1 March 2019

569,357

Additions

112,622

At 29 February 2020

681,979

AMORTISATION

At 1 March 2019

506,936

Amortisation for year

18,197

At 29 February 2020

525,133

NET BOOK VALUE

At 29 February 2020

156,846

At 28 February 2019

62,421

7.	TANGIBLE FIXED ASSETS

Group

Improvements

Fixtures

to

and

Motor

Computer

property

fittings

vehicles

equipment

Totals

£

£

£

£

£

COST

At 1 March 2019

9,326

73,976

84,336

169,338

336,976

Additions

26,575

3,674

-

28,470

58,719

Disposals

(2,261

)

(6,355

)

(84,336

)

-

(92,952

)

At 29 February 2020

33,640

71,295

-

197,808

302,743

DEPRECIATION

At 1 March 2019

6,045

45,050

39,148

107,329

197,572

Charge for year

6,127

9,847

-

27,652

43,626

Eliminated on disposal

(1,045

)

(3,043

)

(39,148

)

-

(43,236

)

At 29 February 2020

11,127

51,854

-

134,981

197,962

NET BOOK VALUE

At 29 February 2020

22,513

19,441

-

62,827

104,781

At 28 February 2019

3,281

28,926

45,188

62,009

139,404

8.	FIXED ASSET INVESTMENTS

Company

Shares in

group

undertaking

£

COST

At 1 March 2019

and 29 February 2020

588,788

NET BOOK VALUE

At 29 February 2020

588,788

At 28 February 2019

588,788

The group or the company's investments at the Balance Sheet date in the share capital of companies include the following:

Subsidiaries

Practical Publishing International Limited

Registered office: Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD

Nature of business: Media publishing and software development

%

Class of shares:

holding

Ordinary

100.00

Magnesium Media Limited

Registered office: Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD

Nature of business: Media publishing and software development

%

Class of shares:

holding

Ordinary

100.00

Practical Pattern Designs Limited

Registered office: Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD

Nature of business: Publishing activities

%

Class of shares:

holding

Ordinary

100.00

Craft Stash Limited

Registered office: Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD

Nature of business: Online sale of craft products

%

Class of shares:

holding

Ordinary

100.00

Practical Publishing Int. Pty Ltd

Registered office: GPO Box 1457, Brisbane, Queensland 4001, Australia

Nature of business: Media Publishing & Software Development

%

Class of shares:

holding

Ordinary

100.00

Practical Publishing Australia Pty Ltd

Registered office: GPO Box 1457, Brisbane, Queensland 4001, Australia

Nature of business: Media Publishing & Software Development

%

Class of shares:

holding

Ordinary

100.00

9.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2020

2019

2020

2019

£

£

£

£

Trade debtors

229,572

202,820

-

-

Amounts owed by group undertakings

-

-

23,962

23,962

Other debtors

326,812

537,472

-

-

Corporation tax

79,730

12,479

12,479

12,479

Prepayments and accrued income

981,122

860,822

-

-

1,617,236

1,613,593

36,441

36,441

Trade debtors includes provison for bad debts of £21,658 (2019: nil).

10.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

2020

2019

2020

2019

£

£

£

£

Bank loans and overdrafts

35,360

36,806

-

-

Hire purchase contracts (see note 12)

-

16,586

-

-

Trade creditors

1,493,413

896,600

-

-

Net wages

160,147

140,810

10,906

9,665

Amounts owed to group undertakings

-

-

114,571

12,791

Corporation tax

-

72,969

-

-

Social security and other taxes

104,779

96,296

16,687

14,030

VAT

14,985

15,337

-

-

Other creditors

444,715

430,785

399,211

399,342

Directors' current accounts

221,902

221,902

221,902

221,902

Accruals and deferred income

361,343

374,616

-

-

2,836,644

2,302,707

763,277

657,730