Arcturus Publishing Limited

The principal activity of the company during the year was the provision of book publishing services. Turnover increased to £14,471,095 in 2021/22 from £11,927,455 in 2020/21 as a result of Covid-19 pandemic ending. With effective control of costs and improvements in margins EBITDA rose from £1,078,468 to £1,295,092. Trade sales in the UK and US and rights sales globally performed particularly strongly. Our cashflow is robust and the company is well-positioned to grow future turnover and profitability. Key financial indicators: 2022 2021 £ £ Turnover 14,471,095 11,927,455 Gross Profit 4,448,176 3,734,836 Profit before taxation 1,244,834 1,020,952 Earnings before interest tax depreciation and amortisation 1,295,092 1,078,468 Net assets 3,294,057 3,561,263 Future developments The range of our publishings continues to expand and we are strongly positioned to build on this performance through 2022/2023 and beyond. Financial risk management objectives and policies As with any organisation, there are varying degrees of inherent and residual business risks associated with its business activities. At Arcturus this is managed by way of a risk management programme. This allows the directors to have an informed knowledge of the level of exposure at any given time and the way those risks are managed in order to mitigate the likely impact on the company's financial assets and liabilities. By implementing various levels of internal control within our organisation, our inherent risks can be reduced to an acceptable level. Our management programme involves identifying and assessing risks and then responding to them promptly. This enables the directors to monitor and manage them effectively. Any residual risk will be evaluated and monitored in accordance with the level of the amount of risk that is judged to be tolerable and justifiable within our organisation. One of the keys of mitigating risks is to ensure internal controls are sound and well founded and the directors regularly review company policies, procedures, detailed management accounts, cash flows projection, budget and forecast with the emphasis on reviewing liquidity, ratios analysis on debtors, creditors, stock levels, price and volume variances. Credit risk The company's customers are spread all over the world. The directors have taken up credit insurance in order to reduce the impact of a customer's failure. Any customers that fall outside our credit insurance policy will only be accepted or rejected after the directors have carried out an internal risk assessment. In all cases, our exposures tend to be restricted to a level that is acceptable to the directors and in accordance with our risk exposure policy. Insurable risk The company has taken up worldwide insurance policies in order to ensure that the company is covered in the event of potential employers/public and products dispute, fraud, marine, stocks damage/loss in warehouse and in transit. Furthermore professional indemnity, group travel, directors and officers' indemnity and business interruption covers have also been secured by the company. Foreign exchange As a company that trades internationally, the directors are aware of the potential impact on currency fluctuation. Between 40% and 60% of our sales are receipted in US dollars. In order to hedge against currency fluctuation, a good majority of our supplies are secured in US dollars. In this way, financial risk is kept to a minimum. The directors also have the option to buy forward on certain projects if further risk exposures are to be kept to a minimum. Employment risk The directors have employed an external business employment advisor to provide advice on employment, health and safety issues. Information technology & communication The company relies heavily on information technology. Our priority is to ensure the operation of our business is not unduly interrupted either due to a lack of support or maintenance. The directors ensure that first tier providers are secured on a long term contract in order to ensure we have a continuous service support throughout our operation. Working capital and banking facility The company invests quite heavily in the creation of book titles year on year. Most of the newly created titles tend to have a gestation period of between 6 and 18 months before publication. In order to ensure our budgets are met, our working capital must be able to support such investments. As such, the directors have secured a line of open credit facility with our bank should the need arise. Borrowings Our policy on any material capital expenditure is through short term borrowing in the form of bank loans or hire purchase. Our exposure to interest rate tends to be based on a fixed rate for the duration of the borrowings. In this way, our exposure to interest rate fluctuation is kept to a minimum. Other risk assessment The directors have continued the analysis into the potential business impact of COVID-19 on costs and revenues and how these might also be managed and mitigated and are comfortable that any potential impact is controlled and will not affect the going concern of the company. The directors have also considered the impact of the events in Ukraine with particular reference to how these may disrupt their business model, strategy and operations. It is clear that there is a worldwide impact on the cost of of particular goods, to include fuel, which in turn has increased the base costs of consumables in the business. The directors have considered the effect and believe that this will not impact the ability to trade or going concern.