Precision Marketing Group Ltd - Limited company accounts 17.3

REGISTERED NUMBER: 05322235 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2017

FOR

PRECISION MARKETING GROUP LTD

PREVIOUSLY KNOWN AS

PRECISION MG LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

5

Income Statement

7

Other Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

13

DIRECTOR:

M Caldwell-Nichols BSC

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 director presents his strategic report for the year ended 31 March 2017.

REVIEW OF BUSINESS AND DEVELOPMENTS DURING THE YEAR

An analysis of our performance is enclosed in the attached financial statements. The director is satisfied with

the results for the year. With a net asset value increasing and in excess of £1,400,000 we are satisfied that

the company remains in a strong financial position. Precision is a unique business with its range of digital

marketing and direct marketing services. Precision enjoys a reputation for environmentally aware production.

It has five distinct revenue streams:

- Marketing Services of Direct Mail Print, Collation and Postal Services.

- Ecommerce fulfilment of Medicines and Medical Devices.

- Learning management Systems.

- Web to Print.

- Database Marketing Projects and Solutions.

PRINCIPAL RISKS AND UNCERTAINTIES

As with all businesses in the marketing sector our workload can fluctuate as a result of factors outside of our

control. To minimise this risk we have a broad spread of clients in many difference business sectors, both

public and private. Precision is a unique business with its range of digital marketing and direct marketing

services.

The business faces the normal business risks and uncertainties that apply to similar businesses. One of the

key risks facing the business is the solvency of our customers and we continue to apply our risk management

approach to ensure this risk to the business is minimised. Development of new products and services

produced and increased profit and we remain on plan to deliver further profit growth in FY 18 and beyond.

FINANCIAL KEY PERFORMANCE INDICATORS

2017

2016

Gross profit margin

13.8%

15.0%

Operating profit margin

1.0%

0.9%

Admin expenses as % of turnover

11.7%

13.4%

Interest cover

1.6 times

1.1 times

Return on capital employed

5.0%

4.2%

Current ratio

1.12:1

0.98:1

Average trade debtor days

69 days

79 days

OTHER KEY PERFORMANCE INDICATORS

Staff retention continues to be a priority with 25% of staff having over 10 year's service. Strengthening the

senior management team took place in the year.

ON BEHALF OF THE BOARD:

M Caldwell-Nichols BSC - Director

6 December 2017

The director presents his report with the financial statements of the company for the year ended 31 March 2017.

CHANGE OF NAME

The company passed a special resolution on 26 October 2017 changing its name from Precision MG Limited to Precision Marketing Group Ltd.

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2017.

DIRECTOR

M Caldwell-Nichols BSC held office during the whole of the period from 1 April 2016 to the date of this report.

POLITICAL DONATIONS AND EXPENDITURE

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

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial

statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the

director has 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 director must not approve the financial statements unless he is 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 director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is

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 director is 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 he 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 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

6 December 2017

We have audited the financial statements of Precision Marketing Group Ltd for the year ended

31 March 2017 on pages seven to twenty five. The financial reporting framework that has been applied in

their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally

Accepted Accounting Practice), including Financial Reporting Standard 102 'The Financial Reporting

Standard applicable in the UK and Republic of Ireland'.

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.

Respective responsibilities of director and auditors

As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient

to give reasonable assurance that the financial statements are free from material misstatement, whether

caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to

the company's circumstances and have been consistently applied and adequately disclosed; the

reasonableness of significant accounting estimates made by the director; and the overall presentation of the

financial statements. In addition, we read all the financial and non-financial information in the Strategic Report

and the Report of the Director to identify material inconsistencies with the audited financial statements and to

identify any information that is apparently materially incorrect based on, or materially inconsistent with, the

knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material

misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2017 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.

Opinion on other matter 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 Report of the Director for the financial year for which the financial statements are prepared is

consistent with the financial statements, and has been prepared in accordance with applicable legal

requirements. In the light of the knowledge and understanding of the company and its environment, we have

not identified any material misstatements in the Strategic Report or the Report of the Director.

Matters on which we are required to report by exception

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 director's remuneration specified by law are not made; or

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

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

6 December 2017

TURNOVER

3

10,206,034

9,524,847

Cost of sales

8,792,969

8,091,686

GROSS PROFIT

1,413,065

1,433,161

Distribution costs

179,942

164,136

Administrative expenses

1,195,203

1,277,963

1,375,145

1,442,099

37,920

(8,938

)

Other operating income

73,492

91,526

OPERATING PROFIT

5

111,412

82,588

Interest receivable and similar income

170

-

111,582

82,588

Interest payable and similar expenses

6

68,191

75,976

PROFIT BEFORE TAXATION

43,391

6,612

Tax on profit

7

(69,618

)

(86,153

)

PROFIT FOR THE FINANCIAL YEAR

113,009

92,765

PROFIT FOR THE YEAR

113,009

92,765

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

113,009

92,765

FIXED ASSETS

Intangible assets

9

190,589

189,165

Tangible assets

10

1,803,210

1,881,324

Investments

11

38,205

38,205

2,032,004

2,108,694

CURRENT ASSETS

Stocks

12

66,818

67,144

Debtors

13

2,547,677

2,388,382

Cash at bank and in hand

191,153

176,368

2,805,648

2,631,894

CREDITORS

Amounts falling due within one year

14

2,503,048

2,676,729

NET CURRENT ASSETS/(LIABILITIES)

302,600

(44,835

)

TOTAL ASSETS LESS CURRENT LIABILITIES

2,334,604

2,063,859

CREDITORS

Amounts falling due after more than one year

15

(794,687

)

(643,578

)

PROVISIONS FOR LIABILITIES

19

(95,297

)

(88,670

)

NET ASSETS

1,444,620

1,331,611

CAPITAL AND RESERVES

Called up share capital

20

210,150

210,150

Retained earnings

21

1,234,470

1,121,461

SHAREHOLDERS' FUNDS

1,444,620

1,331,611

The financial statements were approved by the director on 6 December 2017 and were signed by:

M Caldwell-Nichols BSC - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2015

210,150

1,088,696

1,298,846

Changes in equity

Dividends

-

(60,000

)

(60,000

)

Total comprehensive income

-

92,765

92,765

Balance at 31 March 2016

210,150

1,121,461

1,331,611

Changes in equity

Total comprehensive income

-

113,009

113,009

Balance at 31 March 2017

210,150

1,234,470

1,444,620

Cash flows from operating activities

Cash generated from operations

1

307,146

301,923

Interest paid

(47,094

)

(53,914

)

Interest element of hire purchase payments paid

(21,097

)

(22,062

)

Taxation refund

118,347

-

Net cash from operating activities

357,302

225,947

Cash flows from investing activities

Purchase of intangible fixed assets

(76,225

)

(32,924

)

Purchase of tangible fixed assets

(76,039

)

(82,348

)

Sale of tangible fixed assets

16,110

-

Interest received

170

-

Net cash from investing activities

(135,984

)

(115,272

)

Cash flows from financing activities

Loan repayments in year

(41,796

)

(39,218

)

Capital repayments in year

(175,287

)

(160,929

)

Amount introduced by directors

16,160

60,000

Amount withdrawn by directors

(5,610

)

(28,572

)

Equity dividends paid

-

(60,000

)

Net cash from financing activities

(206,533

)

(228,719

)

Increase/(decrease) in cash and cash equivalents

14,785

(118,044

)

Cash and cash equivalents at beginning of year

2

176,368

294,412

Cash and cash equivalents at end of year

2

191,153

176,368

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

2017

2016

£

£

Profit before taxation

43,391

6,612

Depreciation charges

291,422

353,820

Profit on disposal of fixed assets

(678

)

-

Finance costs

68,191

75,976

Finance income

(170

)

-

402,156

436,408

Decrease/(increase) in stocks

326

(38,901

)

Increase in trade and other debtors

(201,397

)

(20,951

)

Increase/(decrease) in trade and other creditors

106,061

(74,633

)

Cash generated from operations

307,146

301,923

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 2017

31.3.17

1.4.16

£

£

Cash and cash equivalents

191,153

176,368

Year ended 31 March 2016

31.3.16

1.4.15

£

£

Cash and cash equivalents

176,368

294,412

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 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 an invoice financing

facility which is repayable on demand at periodic review points and financing provided by the

controlling shareholder.

The nature of the company's business is such that there can be unpredictable variations in the timing

of cash flows. The director has prepared projected cash flow information covering the next twelve

months. On the basis of this cash flow information, the director considers that the group 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 director considers 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:

2017

2016

£

£

United Kingdom

10,206,034

9,524,847

10,206,034

9,524,847

4.	EMPLOYEES AND DIRECTORS

2017

2016

£

£

Wages and salaries

2,188,881

2,061,042

Social security costs

151,385

127,732

Other pension costs

152,253

25,433

2,492,519

2,214,207