4.06 [business unit]: the 2024 commentary repeats the 2025 trading margin ([n]%, up [n]bps) instead of [n]%, up [n]bps
UK Company A · a UK-listed medical technology group · Presentation point
In brief
The 2024 performance paragraph for [business unit] says trading profit was up [n]% in 2024 "with a [n]bps increase in trading profit margin to [n]%". Those are the 2025 figures. The table on the same page and the segment note give 2024 segment trading profit of [amount] on revenue of [amount], a margin of [n]%, and the Annual Report 2024 said the margin rose [n]bps to [n]%.
The evidence, as filed
Further pages withheld to protect the company’s identity (two): Annual Report 2025, page 50; Annual Report 2024, page 48. Their wording or layout could lead back to the company even with names and figures masked; the evidence list below records what each page shows.
Names, figures, dates, logos and any wording that could be searched back to the company are boxed out in grey; the point is highlighted in yellow.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows 2024 paragraph: trading profit up [n]% in 2024, with a [n]bps increase in trading profit margin to [n]%. | What the rule requires 2024 paragraph: trading profit up [n]% in 2024, with a [n]bps increase in trading profit margin to [n]% (as published in the Annual Report 2024). |
The rule
Companies Act 2006 s.414C(3)(a)
Version relied on: Companies Act 2006, revised text on legislation.gov.uk as in force for the financial year reviewed
The review required is a balanced and comprehensive analysis of— (a) the development and performance of the company's business during the financial year
Why it applies here: the 2024 sentence was carried over from the 2025 sentence when the page was drafted; the [n]% growth figure is right but the margin level and its change are the 2025 figures.
Why it matters
A reader comparing the two years on this page is told that the 2024 margin step-up was as large as 2025's and that margin was already [n]% in 2024, which understates the 2025 improvement the table shows.
Exposure
A narrative slip in the comparative commentary; corrected by accurate wording in the next report.
Our workings
page 50 carries two sentences on [business unit] trading profit. The 2025 one reads up [n]% with a [n]bps increase in margin to [n]%; the 2024 one reads up [n]% with a [n]bps increase in margin to [n]%. The Performance table on the same page gives segment trading profit of [amount] (2025), [amount] (2024) and [amount] (2023) and segment revenue of [amounts]; the segment note (pages 219-220) gives the same figures. The Annual Report 2024 described 2024 as up [n]% with a [n]bps increase in trading profit margin to [n]%.
2024 margin is [n] / [n] = [n]%, and the 2024 change is [n] points ([n]bps); 2025 margin is [n] / [n] = [n]%.
The 2024 margin improvement is overstated by [n]bps and the 2024 margin level by [n]bps. The [business unit] and [business unit] pages give different 2024 margin sentences, so the slip is confined to this business.
| Measure | Computation | Result |
|---|---|---|
| 2024 segment trading margin | [n] / [n] = [n]% | [n]% |
| 2024 change in margin | [n]% - [n]% ([n] / [n]) = [n] points | [n]bps |
| 2025 segment trading margin (the figure repeated) | [n] / [n] = [n]% | [n]% |
Management’s best defence, and our reply
The company would say the sentence is prior-year commentary, that the Performance table directly below gives the correct 2024 revenue and trading profit, and that the 2024 figures were reported correctly in the Annual Report 2024, so no reader is misled about the audited numbers. It would add that trading profit margin is a non-IFRS measure explained on pages 285-292. The answer: the sentence states a specific margin and change that the same page's table and the audited segment note contradict, and the strategic report must give a balanced analysis; a reader is not expected to recompute a ratio to find the stated one wrong. The defence goes to severity (LOW), not to whether the sentence is accurate.
The fix
- Annual Report 2026 (and any reprint): "[business unit] trading profit was up [n]% in 2024, with a [n]bps increase in trading profit margin to [n]%."
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | the 2024 performance sentence gives a [n]bps increase to [n]% | Document | Annual Report 2025, page 50 |
| 2 | the 2025 sentence on the same page uses the same [n]bps and [n]% wording | Document | Annual Report 2025, page 50 |
| 3 | segment revenue 2025, 2024 and 2023 in the Performance table | Document | Annual Report 2025, page 50 |
| 4 | segment trading profit 2025, 2024 and 2023 in the Performance table | Document | Annual Report 2025, page 50 |
| 5 | the segment note gives the same segment profit | Document | Annual Report 2025, page 220 |
| 6 | the Annual Report 2024 as published: margin up [n]bps to [n]% | Document | Annual Report 2024, page 48 |
Prepared by Pramanex from the company’s published annual reports, without the company’s involvement, to show how an annual report review reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other assurance engagement, and not legal advice. A regulator-style question is a question, not a conclusion.
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