Precision Marketing Group Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 05322235 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2022

FOR

PRECISION MARKETING GROUP LTD

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

5

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Cash Flow Statement

12

Notes to the Cash Flow Statement

13

Notes to the Financial Statements

14

DIRECTORS:

M Caldwell-Nichols BSC

S A Ford

G R Howard

Mrs Y Li

T J Stopher

SECRETARY:

Mrs Y Li

REGISTERED OFFICE:

89 High Street

Hadleigh

Ipswich

Suffolk

IP7 5EA

BUSINESS ADDRESS:

Precision House

Lamdin Road

Bury St Edmunds

Suffolk

IP32 6NU

REGISTERED NUMBER:

05322235 (England and Wales)

AUDITORS:

Walter Wright

Chartered Accountants

Statutory Auditor

89 High Street

Hadleigh

Ipswich

Suffolk

IP7 5EA

The directors present their strategic report for the year ended 31 March 2022.

REVIEW OF BUSINESS AND DEVELOPMENTS DURING THE YEAR

An analysis of our performance is enclosed in the attached financial statements.

Precision Marketing Group Limited (Precision) is a Marketing Services and Technology Solutions provider, unique in its sustainable supply model and its agility to react quickly. As a consequence, Precision is used by clients who range from multinationals & government bodies, to SME's. Precision's services manifest as solutions linking digital and physical across three interlinked business units.

- Precision Marketing Services provides Print and Mailing solutions.

- Precision Connects provides Database Marketing.

- Precision Ecommerce supplies Medicines and Medical Devices to consumers and businesses.

The directors are delighted with the results for a year where the pivot in revenue streams following COVID 19 was facilitated by the actions of the entire workforce of Precision and a stable and committed executive and management team. The ability of Precision to pivot its resources to new income streams ensured profit that for the year has approved double the previous year. Net asset value increased to £4,700,000 and so we are satisfied that the company remains in a strong financial and strategic position in its marketplace.

There was a significant recovery in the market sectors previously affected by COVID 19 in FY21 such as Conferences and Retail and further growth in other sectors notably Utilities and Property and Healthcare. No customer has more than 15% of turnover, one of the many strengths of Precision. Many customers have worked with Precision as their partner, since our incorporation in 2005. Precision continues to enjoy and foster a reputation for environmentally aware production. Precision were delighted to receive Suffolk's Greenest Company Award for the second time.

Development of new products and services continued and delivered a significant bottom line contribution in FY22. Precision committed nearly 10% of turnover to R&D and so ensured we began FY23 with new technological product development that fulfilled the needs of current and new customers.

In this financial year Precision has become a wholly owned subsidiary of Precision Marketing Group Holdings Limited. The group was established alongside the acquisition just after the year end of Precision Creative and Media Limited, a Hampshire based marketing agency with extensive experience in a number of complimentary industry sectors. The acquisition enables a wider service offering to existing clients across both businesses, and enhances the management capabilities and executive team of the wider group.

PRINCIPAL RISKS AND UNCERTAINTIES

As for many businesses, employment of talent holds back our ability to accelerate the growth of Precision.

FINANCIAL KEY PERFORMANCE INDICATORS

2022

2021

Gross profit margin

19.6%

16.1%

Operating profit margin

11.8%

9.5%

Admin expenses as % of turnover

7.1%

9.2%

Interest cover

107.0 times

65.5 times

Return on capital employed

28.4%

17.7%

Current ratio

2.80:1

2.66:1

Average trade debtor days

56 days

57 days

OTHER KEY PERFORMANCE INDICATORS

Staff retention was paramount in our approach to COVID 19 and as at the date of this report, headcount in Precision has increased to cope with the higher sales we therefore now have a stronger workforce.

ON BEHALF OF THE BOARD:

M Caldwell-Nichols BSC - Director

27 September 2022

The directors present their report with the financial statements of the company for the year ended 31 March 2022.

DIVIDENDS

The total distribution of dividends for the year ended 31 March 2022 will be £ 60,000 .

DIRECTOR

M Caldwell-Nichols BSC held office during the whole of the period from 1 April 2021 to the date of this report.

Other changes in directors holding office are as follows:

S A Ford , G R Howard , Mrs Y Li and T J Stopher were appointed as directors after 31 March 2022 but prior to the date of this report.

POLITICAL DONATIONS AND EXPENDITURE

The company did not make any political donations during the year.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, 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 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;

-	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.

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 company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Walter Wright, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M Caldwell-Nichols BSC - Director

27 September 2022

Opinion

We have audited the financial statements of Precision Marketing Group Ltd (the 'company') for the year ended 31 March 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 company's affairs as at 31 March 2022 and of its 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 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 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 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

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and 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 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. 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 Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or 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, or 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; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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.

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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our procedures in relation to fraud included but were not limited to:

- obtained an understanding of the nature of the sector, including the legal and regulatory framework that the company operates in.

- enquiries of management whether they have knowledge of any actual, suspected or alleged fraud;

- gaining an understanding of the internal controls established to mitigate risk related to fraud and management override.

- discussion amongst the engagement team regarding risk of fraud such as opportunities for fraudulent manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates; and

- addressing the risk of fraud through management override of controls by performing journal entry testing.

- challenging accounting estimates to ensure no indication of management bias.

The primary responsibility for the prevention and detection of irregularities including fraud rests with both those charged with governance and management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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.

Kevin Brown ACA MAAT (Senior Statutory Auditor)

for and on behalf of Walter Wright

Chartered Accountants

Statutory Auditor

89 High Street

Hadleigh

Ipswich

Suffolk

IP7 5EA

27 September 2022

TURNOVER

3

12,652,858

8,568,946

Cost of sales

10,177,795

7,188,913

GROSS PROFIT

2,475,063

1,380,033

Distribution costs

119,119

101,703

Administrative expenses

892,352

785,619

1,011,471

887,322

1,463,592

492,711

Other operating income

24,963

323,249

OPERATING PROFIT

5

1,488,555

815,960

Interest receivable and similar income

401

310

1,488,956

816,270

Interest payable and similar expenses

6

13,913

12,466

PROFIT BEFORE TAXATION

1,475,043

803,804

Tax on profit

7

91,760

159,541

PROFIT FOR THE FINANCIAL YEAR

1,383,283

644,263

PROFIT FOR THE YEAR

1,383,283

644,263

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,383,283

644,263

FIXED ASSETS

Intangible assets

9

31,370

45,234

Tangible assets

10

1,260,889

1,329,739

Investments

11

38,407

38,405

1,330,666

1,413,378

CURRENT ASSETS

Stocks

12

73,086

48,058

Debtors

13

4,133,531

2,528,495

Cash at bank and in hand

1,974,161

2,656,108

6,180,778

5,232,661

CREDITORS

Amounts falling due within one year

14

2,204,456

1,964,596

NET CURRENT ASSETS

3,976,322

3,268,065

TOTAL ASSETS LESS CURRENT LIABILITIES

5,306,988

4,681,443

CREDITORS

Amounts falling due after more than one year

15

(484,978

)

(1,177,917

)

PROVISIONS FOR LIABILITIES

19

(58,318

)

(63,117

)

NET ASSETS

4,763,692

3,440,409

CAPITAL AND RESERVES

Called up share capital

20

210,150

210,150

Retained earnings

21

4,553,542

3,230,259

SHAREHOLDERS' FUNDS

4,763,692

3,440,409

The financial statements were approved by the Board of Directors and authorised for issue on 27 September 2022 and were signed on its behalf by:

M Caldwell-Nichols BSC - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2020

210,150

2,615,996

2,826,146

Changes in equity

Dividends

-

(30,000

)

(30,000

)

Total comprehensive income

-

644,263

644,263

Balance at 31 March 2021

210,150

3,230,259

3,440,409

Changes in equity

Dividends

-

(60,000

)

(60,000

)

Total comprehensive income

-

1,383,283

1,383,283

Balance at 31 March 2022

210,150

4,553,542

4,763,692

Cash flows from operating activities

Cash generated from operations

1

969,192

494,076

Interest paid

(11,758

)

(9,791

)

Interest element of hire purchase payments paid

(2,155

)

(2,675

)

Government grants

24,963

321,520

Tax paid

(150,072

)

(21,771

)

Taxation refund

186,659

-

Net cash from operating activities

1,016,829

781,359

Cash flows from investing activities

Purchase of intangible fixed assets

-

(12,500

)

Purchase of tangible fixed assets

(9,775

)

(104,361

)

Purchase of fixed asset investments

(2

)

-

Sale of tangible fixed assets

5,158

10,000

Interest received

401

310

Net cash from investing activities

(4,218

)

(106,551

)

Cash flows from financing activities

New loans in year

-

750,000

Loan repayments in year

(794,872

)

(21,028

)

Capital repayments in year

(30,047

)

(9,808

)

Amount introduced by directors

90,359

-

Amount withdrawn by directors

-

(43,754

)

Loans to group companies

(900,000

)

-

Loans from group companies

2

-

Equity dividends paid

(60,000

)

(30,000

)

Net cash from financing activities

(1,694,558

)

645,410

(Decrease)/increase in cash and cash equivalents

(681,947

)

1,320,218

Cash and cash equivalents at beginning of year

2

2,656,108

1,335,890

Cash and cash equivalents at end of year

2

1,974,161

2,656,108

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2022

2021

£

£

Profit before taxation

1,475,043

803,804

Depreciation charges

89,651

90,041

Profit on disposal of fixed assets

(2,320

)

-

Government grants

(24,963

)

(321,520

)

Finance costs

13,913

12,466

Finance income

(401

)

(310

)

1,550,923

584,481

Increase in stocks

(25,028

)

(7,668

)

Increase in trade and other debtors

(705,036

)

(202,505

)

Increase in trade and other creditors

148,333

119,768

Cash generated from operations

969,192

494,076

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 March 2022

31.3.22

1.4.21

£

£

Cash and cash equivalents

1,974,161

2,656,108

Year ended 31 March 2021

31.3.21

1.4.20

£

£

Cash and cash equivalents

2,656,108

1,335,890

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.4.21

Cash flow

At 31.3.22

£

£

£

Net cash

Cash at bank and in hand

2,656,108

(681,947

)

1,974,161

2,656,108

(681,947

)

1,974,161

Debt

Finance leases

(30,047

)

30,047

-

Debts falling due within 1 year

(56,449

)

11,574

(44,875

)

Debts falling due after 1 year

(1,107,128

)

783,298

(323,830

)

(1,193,624

)

824,919

(368,705

)

Total

1,462,484

142,972

1,605,456

1.	STATUTORY INFORMATION

Precision Marketing Group Ltd 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 Company 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" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Preparation of consolidated financial statements

The financial statements contain information about Precision Marketing Group Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 402 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as both of its subsidiaries are not material for the purpose of giving a true and fair view.

Significant judgements and estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be appropriate and reasonable in the circumstances.

a) Critical judgements in applying the entity's accounting policies

There is no area within the company's accounts where management has been required to apply a critical judgement.

b) Key accounting estimates and assumptions

(i) Useful economic lives of assets

The annual depreciation charge for tangible and intangible assets is sensitive to changes in estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on future investments, economic utilisation and the physical condition of the assets

Turnover

Turnover represents the sales of goods and services, is recognised on dispatch of the goods or provision of the service and excludes value added tax.

Goodwill

Goodwill representing the amounts paid in connection with the acquisition of a number of businesses, is being amortised evenly over the estimated useful life of each business acquired. The estimated useful lives range from 3 to 18 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.

Computer software and domain names is being amortised evenly over its estimated useful life of three years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

2% on cost

Plant and machinery

-

25% on reducing balance

Fixtures and fittings

-

25% on reducing balance

Motor vehicles

-

25% on reducing balance

Computer equipment

-

33% on reducing balance

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost less any provision for impairment.

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 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.

Research and development

Expenditure on research and development is written off in the year in which it is incurred.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

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

Government grants

Government grants are disclosed in other operating income and recognised in the period in which the related expenditure is incurred. Income received in advance of the period in which the relevant expenditure is incurred is carried forward in deferred income.

Going concern

Long term finance requirements are met through bank loans which are subject to periodic review by the bank. The company's day to day working capital requirements are met through cash reserves. The company also has in place an invoice financing facility which is currently not utilised but could be used to meet day to day working capital requirements if required.

The nature of the company's business is such that there can be unpredictable variations in the timing of cash flows. The directors have prepared projected cash flow information covering the next twelve months. On the basis of this cash flow information, the directors consider that the company will continue to operate within the facilities currently agreed and within those that they expect to be agreed over the twelve month period from the date of approval of the accounts.

On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2022

2021

£

£

United Kingdom

11,580,978

8,483,321

Europe

981,255

48,307

Rest of world

90,625

37,318

12,652,858

8,568,946

4.	EMPLOYEES AND DIRECTORS

2022

2021

£

£

Wages and salaries

1,777,540

1,572,343

Social security costs

141,976

123,480

Other pension costs

174,948

117,156

2,094,464

1,812,979