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Registered number: 12712449










HOBS GROUP LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2022

 
HOBS GROUP LIMITED
 
 
COMPANY INFORMATION


Directors
S. D. Austin 
J. J. Duckenfield 
C. G. Horwood 
J. Williams (appointed 16 March 2023)




Registered number
12712449



Registered office
Lower Ground Floor
3 Temple Lane

Liverpool

L2 5BA




Independent auditors
Langtons Professional Services Limited
Chartered Accountants & Statutory Auditors

The Plaza

100 Old Hall Street

Liverpool

L3 9QJ





 
HOBS GROUP LIMITED
 

CONTENTS



Page
Group strategic report
1 - 4
Directors' report
5 - 7
Independent auditors' report
8 - 11
Consolidated statement of comprehensive income
12
Consolidated statement of financial position
13 - 14
Company statement of financial position
15 - 16
Consolidated statement of changes in equity
17
Company statement of changes in equity
18
Consolidated statement of cash flows
19 - 20
Consolidated analysis of net debt
21
Notes to the financial statements
22 - 43


 
HOBS GROUP LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022

Introduction
 
The directors present the strategic report for the period ended 31 October 2022.

Group overview
 
Hobs Group Limited (‘Hobs’) provides a fully integrated print and document management service to support customers in designing, producing, sharing, storing and retrieving their documents and data.
Hobs has been a leading name in its sector for the last 52 years and over time has developed deep and loyal relationships with its customers. From supporting some of the UK’s largest companies in the full range of document management services, Hobs has become an invaluable and seamless extension of its clients’ businesses.
Throughout its history, Hobs has focused on providing the highest level of service, on-time, every time. This consistency of service has ensured a high level of customer loyalty in the Company’s key market sectors, with the customers of Hobs finding the services exceptional value for money.
Hobs currently operates from two trading divisions:
• 
Hobs Reprographics - a national chain of 20 business centres providing customers with a 24/7 service for all copying, scanning and bespoke reprographics needs.
• 
Hobs 3D - provides in the areas of 3D printing, model making and prototyping as well as the very latest in 3D visualisation with proprietary VR solutions. Operating from its site in the London Olympic Park, Hobs has invested significantly in this division to enable it to meet anticipated demand in the growing market.

Our history
 
The Company was established in Liverpool over 52 years ago and initially focused on providing construction drawing printing services to companies in the Architecture, Engineering and Construction (‘AEC’) sector. Whilst the AEC sector remains Hobs’ largest sector its current multi-layered, technology-driven service solution has evolved significantly from the company’s original offering.  The company was proud to be awarded a Royal Warrant in 2003.

Page 1

 
HOBS GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022

Business review
 
With Covid lockdowns eventually finishing in early 2022, the Group was able to significantly increase its revenues, resulting in a £2.6m (22.6%) year-on-year increase in Group sales to £14.3m for the year. This was reflected in all operating regions of the business.
Although the accounts show a £0.08m increase in the operating loss from 2021, once the additional £0.9m of government covid support that the Group received in 2021 is removed, operating losses were reduced by c£0.9m year-on-year, on a like-for-like basis.
The above results are reflective of both trading divisions in terms of revenue and profit growth into the second half of 2022 and beyond. Hobs 3D still requires the support of Hobs Group whilst it makes the transition from loss-making to profit-making.
Working capital has been managed very tightly during the year and into 2023, resulting in a ratio of current assets to current liabilities for the Group of 0.87 at October 2022, down from 1.24 at October 2021. The final covid-related debt was repaid to HMRC in October 2022. As at 31st October 2022 the Group had cash reserves of £0.3m. The above are considered to be KPI's of the Group.
Having emerged successfully from the pandemic, there is still a requirement to closely manage cash and working capital while the business invests for a more profitable and stable future but, given the varied nature of industries we sell to, and with continued focus on credit risk and cost control, the Board is confident of the going concern status of the Group, and therefore have prepared the financial statements on a going concern basis.
The directors monitor performance through the production of a 3-year business plan, supported by the production of detailed annual budgets and forecasts that cover all trading divisions in the Group and the comparison of actual performance against these budgets.
The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in this report.
The directors would like to go on record to express their sincere thanks to all staff within the group for their continued support through what has been a very difficult period over the last three years.

Page 2

 
HOBS GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022

Quality management and health & safety
 
ISO 9001
The business is now fully accredited under ISO9001 and has its own Quality Management System to ensure continued compliance with the standard.
Health & Safety
The business has also implemented its own Health & Safety Management System with a dedicated director responsible for this area.
Corporate social responsibility
Environment
Hobs has always been conscious of the impact we have on the local community, the environment and our sustainability.
We are committed to reducing our impact on the environment. The business is fully accredited under ISO14001, and this forms part of the Quality Management System mentioned above.
Through our network of suppliers, we continue to use FSC paper as standard, and for bespoke jobs wherever possible.  We print onto various recycled papers and we use various inks including vegetable-based inks that have a low impact on the environment. We continually review our production processes to minimise levels of waste, reuse or recycle materials and product whenever possible, and only dispose of waste via licensed waste contractors.
During the year Hobs partnered with Print Releaf, whereby Hobs customers can offset their carbon footprint by measuring, offsetting, and verifying the successful reforestation of their paper consumption.
Charities
As a business, Hobs sponsors a number of charity fundraising events each year, either from individual branches or from Head Office. In May 2023 a team from Hobs completed the Three Peaks Challenge to climb Ben Nevis, Scafell Pike, and Snowdon in 24 hours, which raised in excess of £6,000 for Alzheimers UK.

Page 3

 
HOBS GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022

Monitoring and managing risk
 
The principal risks and uncertainty facing the Group's business are as follows:
• The impact of the wider economy and specifically the AEC sector. In the short-term the steep rise in interest rates poses a threat to the property market and therefore to the number of new housebuilding and infrastructure projects.
• Price risk is now a reality with inflation proving difficult to bring under control in the UK. The directors took the decision in April 2022 to implement a price increase to Hobs customers having absorbed all supplier price increases for the previous two years. A further price increase was implemented in April 2023.
• Technology – The emergence of 3D Printing and associated services are having a significant impact on the AEC sector’s pre-construction processes. Consequently, Hobs Group has invested large sums in this new technology to secure its market share in the sector, and also to take advantage of new sectors opening up in the 3D field. The directors intend to ensure that Hobs Group remains at the forefront of this market by continuing its investment in new technology.
• Competition – Hobs Group is now the largest independent national supplier of printing and reprographics services. However, the directors are aware of market competition at both national and local level, and constantly strive to capture new business as well as retain existing customers by close scrutiny of management information data and the setting of targeted sales incentives.
• Cyber and Internet Security – As businesses become more reliant on technology the risks increase.  This year saw us invest in various steps to make our business more resilient. 
• GDPR – the regulation effective in May 2018 further crystallises the risk in information security. The company obtained ISO27001 accreditation in 2021.
The directors carry out a regular review of the risk environment in which the company operates. The board believes that the company has adequate procedures and processes in place to ensure these risks are monitored and managed appropriately.


This report was approved by the board on 27 October 2023 and signed on its behalf.







C. G. Horwood
Director

Page 4

 
HOBS GROUP LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2022

The directors present their report and the financial statements for the year ended 31 October 2022.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 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'. 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 for the Group's financial statements and then apply them consistently;

make judgments 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The principal activity of the company is that of a holding company.

Results and dividends

The loss for the year, after taxation, amounted to £2,103,390 (2021 - loss £1,163,493).

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who served during the year were:

S. D. Austin 
P. M. Bertram (resigned 30 September 2023)
R. P. M. Davenport (resigned 16 March 2023)
J. J. Duckenfield 
C. G. Horwood 

Page 5

 
HOBS GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022

Future developments

As mentioned in the Strategic Report above, the company is now experiencing a post-Covid recovery, although it is gradual one, and caution is still observed due to the head-winds of inflation and supply chain issues currently being experienced in the wider economy. The business forecasts have been prepared on this basis, and the directors continue to constantly monitor trading levels.
The company continues to work through to its plan of developing a model that provides new and developed sales channels of creative, print, managed services and consultancy.  Further investment and time have gone into developing a nationwide offering in our Digital business where enhancement provides added value to the clients in bringing additional and chargeable special enhancements to their print or digital files.  We also push on in our development of our hub-and-spoke model which now incorporates a Visual Communications element. This will provide the business with both increased productivity and capacity to challenge this growth sector in print.
Our commitment to the environment continues to be the focus of the leadership team that has deployed the already successful Print Releaf world reforestation scheme, which has seen Hobs be responsible for planting of 7,000 trees in our efforts to assist our clients in their carbon offset.
Further development will go into our online offerings bringing Web2Print functionality to the front end of our website, offering quick and real-time quoting and further choices to those who wish to procure on the web.  The next year will also see Hobs grow its market share in managing digital post rooms alongside internal print rooms, providing market leading solutions that are scalable to our clients in this area, and which has already provided value within our strategy.
3D continues to recover from the downturn of the past three years with growth in 3D Printing and model making both from the property sector and from a new art sector. Visualisation is also benefitting from the property sector in use of interactive touchscreens within sales and marketing suites. Further growth in visualisation is expected in the next year. 

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Auditors

The auditorsLangtons Professional Services Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

Page 6

 
HOBS GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022

This report was approved by the board on 27 October 2023 and signed on its behalf.
 







C. G. Horwood
Director

Page 7

 
HOBS GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOBS GROUP LIMITED
 

Opinion

We have audited the financial statements of Hobs Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 October 2022, which comprise the Consolidated statement of comprehensive income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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's affairs as at 31 October 2022 and of the Group's loss 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 United Kingdom, including the Financial Reporting Council'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.

Material uncertainty related to going concern

We draw attention to note 2.3 in the financial statements, which indicates that should the current difficult trading circumstances continue, there are scenarios where the current sales projections may not be achieved. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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. Our evaluation of the directors' assessment of the Group's ability to continue to adopt the going concern basis of accounting included a detailed review of current trading results and projections prepared by the directors.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Page 8

 
HOBS GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOBS GROUP LIMITED (CONTINUED)


Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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. 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 course of 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.

Opinion 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 Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group strategic report and the Directors' report 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.

We have nothing to report in respect of the following matters in relation to which 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.

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement set out on page 5, 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 is 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.

Page 9

 
HOBS GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOBS GROUP LIMITED (CONTINUED)


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 an Auditors' report 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 Group financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The objectives of our audit, in respect to fraud, are:
• to identify and assess the risks of material misstatement of the financial statements due to fraud;
• to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and
• to respond appropriately to fraud or suspected fraud identified during the audit.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
Our approach was as follows:
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to the reporting framework (FRS 102 and the Companies Act 2006), the relevant tax compliance regulations in the UK and the EU General Data Protection Regulation (GDPR).
• We understood how the Company is complying with those frameworks by making enquiries of management. Through consideration of the results of our audit procedures we were able to either corroborate or provide contrary evidence which was then followed up.
• Based on our understanding we designed our audit procedures to identify non-compliance with laws and regulations. Our procedures involved:
enquiries of management; and
journal entry testing, with a focus on manual consolidation journals and journals indicating large or unusual transactions based on our understanding of the business.
• We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by meeting with management to understand where it considered there was susceptibility to fraud. We also considered performance targets and their propensity to influence efforts made by management to manage revenue and earnings. Where the risk was considered to be higher, including areas impacting key performance indicators or management remuneration, we performed audit procedures to address each identified fraud risk or other risk of material misstatement. These procedures included those on revenue recognition detailed above, the assessment of items identified by management as non-recurring and testing manual journals and were designed to provide reasonable assurance that the financial statements were free from material fraud or error.
 
Page 10

 
HOBS GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HOBS GROUP LIMITED (CONTINUED)



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 Auditors' report.

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 2006Our 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 an Auditors' report 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 McCall (Senior statutory auditor)
  
for and on behalf of
Langtons Professional Services Limited
 
Chartered Accountants
Statutory Auditors
  
The Plaza
100 Old Hall Street
Liverpool
L3 9QJ

27 October 2023
Page 11

 
HOBS GROUP LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2022

2022
2021
Note
£
£

  

Turnover
 4 
14,272,616
11,640,066

Cost of sales
  
(4,583,819)
(3,380,783)

Gross profit
  
9,688,797
8,259,283

Administrative expenses
  
(10,838,764)
(10,146,841)

Other operating income
 5 
173,469
996,029

Operating loss
 6 
(976,498)
(891,529)

Amounts written off investments
  
-
(72,026)

Interest receivable and similar income
 10 
-
1,109

Interest payable and similar expenses
 11 
(176,744)
(136,299)

Loss before taxation
  
(1,153,242)
(1,098,745)

Tax on loss
 12 
(950,148)
(64,748)

Loss for the financial year
  
(2,103,390)
(1,163,493)

(Loss) for the year attributable to:
  

Owners of the parent Company
  
(2,103,390)
(1,163,493)

  
(2,103,390)
(1,163,493)

Total comprehensive income for the year attributable to:
  

Owners of the parent Company
  
(2,103,390)
(1,163,493)

  
(2,103,390)
(1,163,493)

There were no recognised gains and losses for 2022 or 2021 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for 2022 (2021:£NIL).

The notes on pages 22 to 43 form part of these financial statements.

Page 12

 
HOBS GROUP LIMITED
REGISTERED NUMBER: 12712449

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 OCTOBER 2022

2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 13 
43,029
60,102

Tangible assets
 14 
1,068,031
1,385,612

  
1,111,060
1,445,714

Current assets
  

Stocks
 16 
496,359
591,218

Debtors: amounts falling due after more than one year
 17 
-
950,148

Debtors: amounts falling due within one year
 17 
2,710,666
2,686,577

Cash at bank and in hand
 18 
305,816
748,041

  
3,512,841
4,975,984

Creditors: amounts falling due within one year
 19 
(4,031,251)
(3,996,356)

Net current (liabilities)/assets
  
 
 
(518,410)
 
 
979,628

Total assets less current liabilities
  
592,650
2,425,342

Creditors: amounts falling due after more than one year
 20 
(1,732,123)
(1,755,422)

Provisions for liabilities
  

Other provisions
 24 
(759,383)
(465,386)

  
 
 
(759,383)
 
 
(465,386)

Net (liabilities)/assets
  
(1,898,856)
204,534


Capital and reserves
  

Called up share capital 
 25 
12,313
12,313

Share premium account
 26 
2,490,000
2,490,000

Profit and loss account
 26 
(4,401,169)
(2,297,779)

Equity attributable to owners of the parent Company
  
(1,898,856)
204,534


Page 13

 
HOBS GROUP LIMITED
REGISTERED NUMBER: 12712449
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 OCTOBER 2022

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 27 October 2023.






S. D. Austin
Director

The notes on pages 22 to 43 form part of these financial statements.

Page 14

 
HOBS GROUP LIMITED
REGISTERED NUMBER: 12712449

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 OCTOBER 2022

2022
2021
Note
£
£

Fixed assets
  

Investments
 15 
1,356,139
2,251,139

  
1,356,139
2,251,139

Current assets
  

Debtors: amounts falling due after more than one year
 17 
-
6,249

Debtors: amounts falling due within one year
 17 
13,120
-

  
13,120
6,249

Creditors: amounts falling due within one year
 19 
(866,665)
(550,248)

Net current liabilities
  
 
 
(853,545)
 
 
(543,999)

Total assets less current liabilities
  
502,594
1,707,140

  

Creditors: amounts falling due after more than one year
 20 
(1,500,000)
(1,500,000)

  

Net (liabilities)/assets
  
(997,406)
207,140


Capital and reserves
  

Called up share capital 
 25 
12,313
12,313

Share premium account
 26 
2,490,000
2,490,000

Profit and loss account brought forward
  
(2,295,173)
(26,638)

Loss for the year
  
(1,204,546)
(2,268,535)

Profit and loss account carried forward
  
(3,499,719)
(2,295,173)

  
(997,406)
207,140


Page 15

 
HOBS GROUP LIMITED
REGISTERED NUMBER: 12712449
    
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 OCTOBER 2022

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 27 October 2023.






S. D. Austin
Director

The notes on pages 22 to 43 form part of these financial statements.

Page 16

 
HOBS GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 November 2020
10,000
2,490,000
(1,134,286)
1,365,714


Comprehensive income for the year

Loss for the year
-
-
(1,163,493)
(1,163,493)
Total comprehensive income for the year
-
-
(1,163,493)
(1,163,493)


Contributions by and distributions to owners

Shares issued during the year
2,313
-
-
2,313


Total transactions with owners
2,313
-
-
2,313



At 1 November 2021
12,313
2,490,000
(2,297,779)
204,534


Comprehensive income for the year

Loss for the year
-
-
(2,103,390)
(2,103,390)
Total comprehensive income for the year
-
-
(2,103,390)
(2,103,390)


Total transactions with owners
-
-
-
-


At 31 October 2022
12,313
2,490,000
(4,401,169)
(1,898,856)


The notes on pages 22 to 43 form part of these financial statements.

Page 17

 
HOBS GROUP LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 November 2020
10,000
2,490,000
(26,638)
2,473,362


Comprehensive income for the year

Loss for the year
-
-
(2,268,535)
(2,268,535)
Total comprehensive income for the year
-
-
(2,268,535)
(2,268,535)


Contributions by and distributions to owners

Shares issued during the year
2,313
-
-
2,313


Total transactions with owners
2,313
-
-
2,313



At 1 November 2021
12,313
2,490,000
(2,295,173)
207,140


Comprehensive income for the year

Loss for the year
-
-
(1,204,546)
(1,204,546)
Total comprehensive income for the year
-
-
(1,204,546)
(1,204,546)


Total transactions with owners
-
-
-
-


At 31 October 2022
12,313
2,490,000
(3,499,719)
(997,406)


The notes on pages 22 to 43 form part of these financial statements.

Page 18

 
HOBS GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2022

2022
2021
£
£

Cash flows from operating activities

Loss for the financial year
(2,103,390)
(1,163,493)

Adjustments for:

Amortisation of intangible assets
52,378
161,976

Depreciation of tangible assets
649,248
827,774

Profit on disposal of tangible assets
(125,347)
(177,435)

Government grants
(151,371)
-

Interest paid
176,744
136,299

Interest received
-
(1,109)

Taxation charge
950,148
-

Decrease in stocks
94,859
200,953

(Increase)/decrease in debtors
(24,090)
819,297

(Decrease) in creditors
(208,739)
(1,653,938)

Increase/(decrease) in provisions
293,997
(120,907)

Loss on disposal of unlisted investments
-
72,026

Net cash generated from operating activities

(395,563)
(898,557)


Cash flows from investing activities

Purchase of intangible fixed assets
(35,305)
(18,016)

Purchase of tangible fixed assets
(226,903)
(123,151)

Sale of tangible fixed assets
162,863
273,447

Sale of unlisted and other investments
-
623,278

Government grants received
151,371
-

Interest received
-
1,109

HP interest paid
(20,684)
(9,025)

Net cash from investing activities

31,342
747,642

Cash flows from financing activities

Issue of ordinary shares
-
2,313

New secured loans
201,332
-

Repayment of loans
-
(158,006)

Repayment of/new finance leases
(123,276)
(22,606)

Non-controlling interest dividends paid
-
(1)

Interest paid
(156,060)
(127,274)

Net cash used in financing activities
(78,004)
(305,574)

Net (decrease) in cash and cash equivalents
(442,225)
(456,489)
Page 19

 
HOBS GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022


2022
2021

£
£


Cash and cash equivalents at beginning of year
748,041
1,204,530

Cash and cash equivalents at the end of year
305,816
748,041


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
305,816
748,041

305,816
748,041


The notes on pages 22 to 43 form part of these financial statements.

Page 20

 
HOBS GROUP LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 OCTOBER 2022





At 1 November 2021
Cash flows
New finance leases
At 31 October 2022
£

£

£

£

Cash at bank and in hand

748,041

(442,225)

-

305,816

Debt due after 1 year

(1,500,000)

-

-

(1,500,000)

Debt due within 1 year

(520,444)

(201,332)

-

(721,776)

Finance leases

(366,664)

123,276

(142,280)

(385,668)


(1,639,067)
(520,281)
(142,280)
(2,301,628)

The notes on pages 22 to 43 form part of these financial statements.

Page 21

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

1.


General information

Hobs Group Limited ("the company") is a private limited company domiciled and incorporated in England and Wales. The registered office is Lower Ground Floor, 3 Temple Lane, Liverpool, L2 5BA.
The group consists of Hobs Group Limited and all of its subsidiaries.
The company's and the group's principal activities and nature of its operations are disclosed in the Directors' Report.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The following principal accounting policies have been applied:

  
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 22

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

2.Accounting policies (continued)

 
2.3

Going concern

The financial statements have been prepared on the going-concern basis which assumes that the group will be able to continue to trade for at least 12 months from the date these accounts are signed. In assessing the future viability of the business, the directors have reviewed the forecasts for the period up to October 2023 and the projections for the following two years to October 2025.
Following the covid pandemic and its associated lockdowns the group has significantly grown its turnover in 2022, and the directors continue to reduce costs wherever possible, particularly in the group’s lease estate when the opportunity arises.
The group’s plans for the next 3 years will help further grow revenue without requiring a commensurate increase in costs, which it is anticipated will move the group back into a profit-making position.
The Group projections incorporate significant cost saving measures which are currently being implemented and include potential payments to be made under an onerous lease contract as noted in note 24. The projections provide for sufficient liquidity for the Group to continue as a going concern, and the directors have already started to execute plans to increase revenue in several areas of the business which should provide a significant proportion of the additional revenue forecast in the forthcoming 12-18 months. However the directors recognise that, should the current difficult trading circumstances continue, particularly in London, there are scenarios where the current sales projections may not be achieved. Under these circumstances there would be a material uncertainty as to the ability of the business to continue to operate as a going concern.
It should be noted that it has been agreed with the group’s loan note holders that any redemptions due before October 2025 will now be deferred until 2026 to allow the group to rebuild its cash reserves.

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Page 23

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

2.Accounting policies (continued)

  
2.5

Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Turnover is recognised in relation to separately identifiable components of a single transaction when necessary to reflect the substance of the arrangement and in relation to two or more linked transactions when necessary to understand the commercial effect.
Revenue from the sale of goods and licences is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from provision of services is recognised straight line over the period to which the contract relates.

 
2.6

Operating leases: the Group as lessee

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

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Temporary rent concessions occurring as a direct consequence of the COVID-19 pandemic have been recognised on a systematic basis over the periods that the change in lease payments is intended to compensate. This is conditional on:

the change in lease payments resulting in revised consideration for the lease that is less than the consideration for the lease immediately preceding the change;
any reduction in lease payments affecting only payments originally due on or before 30 June 2022;
there being no significant change to other terms and conditions of the lease.

 
2.7

Leased assets: the Group as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Page 24

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

2.Accounting policies (continued)

 
2.8

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.

 
2.9

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.10

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.11

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.12

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

Page 25

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

2.Accounting policies (continued)

 
2.13

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.14

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Software
-
3 to 5 years

 
2.15

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 26

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

2.Accounting policies (continued)


2.15
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Leasehold property
-
4%
straight line
Leasehold improvements
-
20%
straight line
Plant and machinery
-
25%
straight line
Motor vehicles
-
25%
straight line
Fixtures and fittings
-
25%
straight line
IT equipment
-
33%
straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.16

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in the Consolidated statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

 
2.17

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.18

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Page 27

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

2.Accounting policies (continued)

 
2.19

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.20

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.21

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.

 
2.22

Onerous leases

Where the unavoidable costs of a lease exceed the economic benefit expected to be received from it, a provision is made for the present value of the obligations under the lease.

Page 28

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

2.Accounting policies (continued)

 
2.23

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Group's Statement of financial position when the Group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Page 29

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

2.Accounting policies (continued)


2.23
Financial instruments (continued)

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.

Page 30

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Categorisation of leases
In categorising leases as finance leases or operating leases, management makes judgements as to whether significant risks or rewards of ownership have transferred to the group as a lessee.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Valuation of intangible assets
The recoverable amount of goodwill and other intangible assets is based on value in use which requires estimates in respect of the allocation of goodwill to cash generating units, the future cash flows and an appropriate discount rate. The key inputs to the value in use calculations are the discount rate and the future earnings growth; a change in these assumptions could impact on the level of goodwill recognised.
Useful life of fixed assets
In making decisions regarding the depreciation of fixed assets, management must estimate the useful life of said assets to the business. A change in the estimate would result in a change in the depreciation charged to profit or loss each year.
Provisions
Management must estimate at each reporting date the impact of dilapidations resulting from the occupation of leased properties.

Page 31

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

4.


Turnover

The whole of the turnover is attributable to the principal activities of the group.

Analysis of turnover by country of destination:

2022
2021
£
£

United Kingdom
14,168,824
11,534,055

Rest of Europe
103,792
106,011

14,272,616
11,640,066



5.


Other operating income

2022
2021
£
£

Other operating income
22,098
-

Government grants receivable
151,371
937,403

Fees receivable
-
58,626

173,469
996,029



6.


Operating loss

The operating loss is stated after charging:

2022
2021
£
£

Exchange differences
6,687
478

Other operating lease rentals
1,349,672
1,113,723

Provision for onerous lease contract
373,341
-

The onerous lease provision is subject to a dispute with the landlord. The amount represents the full cost of rent, service charges and utilities, however the directors believe there is a substantial counter claim to be made and therefore intend to vigorously defend the company against any action.

Page 32

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

7.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2022
2021
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
29,350
27,950

Fees payable to the Company's auditors for taxation compliance services

Taxation compliance services
5,225
5,800

All non-audit services not included above
2,675
-


8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£


Wages and salaries
5,992,302
5,686,508
283,498
52,500

Social security costs
592,012
590,807
35,592
6,035

Cost of defined contribution scheme
154,261
169,215
20,204
-

6,738,575
6,446,530
339,294
58,535


The average monthly number of employees, including the directors, during the year was as follows:



Group
Group
Company
Company
        2022
        2021
        2022
        2021
            No.
            No.
            No.
            No.









Management
10
8
1
1



Staff
146
154
-
-

156
162
1
1

Page 33

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

9.


Directors' remuneration

2022
2021
£
£

Directors' emoluments
508,848
485,549

Group contributions to defined contribution pension schemes
29,649
8,211

538,497
493,760


During the year retirement benefits were accruing to 4 directors (2021 - 4) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £140,666 (2021 - £138,865).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £11,372 (2021 - £12,005).


10.


Interest receivable

2022
2021
£
£


Other interest receivable
-
1,109

-
1,109


11.


Interest payable and similar expenses

2022
2021
£
£


Loan note interest payable
80,000
80,000

Finance leases and hire purchase contracts
20,684
9,025

Other interest payable
76,060
47,274

176,744
136,299

Page 34

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

12.


Taxation


2022
2021
£
£


Foreign tax


Foreign tax on income for the year
-
64,748

-
64,748

Total current tax
-
64,748

Deferred tax


Origination and reversal of timing differences
882,378
-

Changes to tax rates
67,770
-

Total deferred tax
950,148
-


Taxation on profit on ordinary activities
950,148
64,748

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2021 - higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
£
£


Loss on ordinary activities before tax
(1,153,242)
(1,098,744)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
(219,116)
(208,761)

Effects of:


Tax deductible amortisation of goodwill
(16,328)
(16,328)

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
5,698
6,470

Capital allowances for year in excess of depreciation
9,427
126

Other timing differences leading to an increase (decrease) in taxation
553
-

Remeasurement of deferred tax for changes in tax rates
67,770
(339,958)

Deferred tax not recognised
1,092,151
544,748

Foreign tax credits
-
64,748

Other differences leading to an increase (decrease) in the tax charge
9,993
13,703

Total tax charge for the year
950,148
64,748

Page 35

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
 
12.Taxation (continued)


Factors that may affect future tax charges

Tax losses amounting to £6,002,133 are carried forward and are available to reduce the tax liabilities arising from future trading profits.


13.


Intangible assets

Group and Company





Computer software
Negative goodwill
Total

£
£
£



Cost


At 1 November 2021
1,382,308
(2,179)
1,380,129


Additions
35,305
-
35,305


Disposals
(2,435)
-
(2,435)



At 31 October 2022

1,415,178
(2,179)
1,412,999



Amortisation


At 1 November 2021
1,322,206
(2,179)
1,320,027


Charge for the year on owned assets
52,378
-
52,378


On disposals
(2,435)
-
(2,435)



At 31 October 2022

1,372,149
(2,179)
1,369,970



Net book value



At 31 October 2022
43,029
-
43,029



At 31 October 2021
60,102
-
60,102



Page 36

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

14.


Tangible fixed assets

Group






Leasehold property
Leasehold improve-  ments
Plant and machinery
Motor vehicles
Fixtures, fittings  and IT equipment
Total

£
£
£
£
£
£



Cost or valuation


At 1 November 2021
247,728
1,751,788
7,573,673
111,299
554,046
10,238,534


Additions
-
84,135
284,040
-
1,008
369,183


Disposals
-
(4,631)
(627,931)
(29,375)
(6,798)
(668,735)



At 31 October 2022

247,728
1,831,292
7,229,782
81,924
548,256
9,938,982



Depreciation


At 1 November 2021
89,181
1,442,460
6,721,803
105,532
493,946
8,852,922


Charge for the year on owned assets
9,909
154,960
318,164
5,060
35,146
523,239


Charge for the year on financed assets
-
-
126,009
-
-
126,009


Disposals
-
(3,762)
(591,682)
(29,375)
(6,400)
(631,219)



At 31 October 2022

99,090
1,593,658
6,574,294
81,217
522,692
8,870,951



Net book value



At 31 October 2022
148,638
237,634
655,488
707
25,564
1,068,031



At 31 October 2021
158,547
309,328
851,870
5,767
60,100
1,385,612

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2022
2021
£
£



Plant and machinery
411,099
389,106

411,099
389,106

Page 37

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

15.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 November 2021
4,381,139



At 31 October 2022

4,381,139



Impairment


At 1 November 2021
2,130,000


Charge for the period
895,000



At 31 October 2022

3,025,000


Direct subsidiary undertakings


The following were direct subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Hobs Reprographics Limited
Lower Ground Floor, 3 Temple Lane, Liverpool, L2 5BA
Ordinary
100%
Hobs 3D Limited
Lower Ground Floor, 3 Temple Lane, Liverpool, L2 5BA
Ordinary
100%


Indirect subsidiary undertaking


The following was an indirect subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Hobs Studio Limited
Lower Ground Floor, 3 Temple Lane, Liverpool, L2 5BA
Ordinary
100%

Page 38

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

16.


Stocks

Group
Group
2022
2021
£
£

Raw materials and consumables
496,359
591,218

496,359
591,218


The difference between purchase price or production cost of stocks and their replacement cost is not material.


17.


Debtors

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Due after more than one year

Deferred tax asset
-
950,148
-
6,249

-
950,148
-
6,249


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Due within one year

Trade debtors
1,949,091
1,746,572
-
-

Other debtors
122,350
286,310
-
-

Prepayments and accrued income
639,225
653,695
13,120
-

2,710,666
2,686,577
13,120
-



18.


Cash and cash equivalents

Group
Group
2022
2021
£
£

Cash at bank and in hand
305,816
748,041

305,816
748,041


Page 39

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

19.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Bank loans
721,776
520,444
-
-

Trade creditors
1,253,941
946,834
-
-

Amounts owed to group undertakings
-
-
840,870
543,581

Other taxation and social security
649,819
1,202,307
-
-

Obligations under finance lease and hire purchase contracts
153,545
111,242
-
-

Other creditors
25,500
28,069
-
-

Accruals and deferred income
1,226,670
1,187,460
25,795
6,667

4,031,251
3,996,356
866,665
550,248


Bank loans are secured on the book debts of the company.
Obligations under finance lease and hire purchase contracts are secured on the assets concerned.


20.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Debentures loans
1,500,000
1,500,000
1,500,000
1,500,000

Obligations under finance leases and hire purchase contracts
232,123
255,422
-
-

1,732,123
1,755,422
1,500,000
1,500,000


Obligations under finance lease and hire purchase contracts are secured on the assets concerned.


21.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
Group
2022
2021
£
£

Within one year
175,194
126,621

Between 1-5 years
244,656
270,152

419,850
396,773

Page 40

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

22.


Financial instruments

Group
Group
2022
2021
£
£

Financial assets

Financial assets measured at fair value through profit or loss
305,816
748,041




Financial assets measured at fair value through profit or loss comprise cash at bank and in hand.


23.


Deferred taxation


Group



2022


£






At beginning of year
950,148


Charged to profit or loss
(950,148)



At end of year
-

Company


2022


£






At beginning of year
6,249


Charged to profit or loss
(6,249)



At end of year
-
Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Accelerated capital allowances
-
221,905
-
-

Tax losses carried forward
-
725,110
-
6,249

Short term timing differences
-
3,133
-
-

-
950,148
-
6,249

A deferred tax asset amounting to £1,688,937, mainly in relation to tax losses carried forward, has not been provided for.

Page 41

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

24.


Provisions


Group



Dilapidat-  ions
Onerous lease
Total

£
£
£





At 1 November 2021
465,386
-
465,386


Additional provisions in the year
69,209
373,341
442,550


Utilised in year
(148,553)
-
(148,553)



At 31 October 2022
386,042
373,341
759,383

Dilapidations relate to the amounts provided for the expected remedial work required when vacating leased properties in the future.
The onerous lease provision is subject to a dispute with the landlord. The amount represents the full cost of rent, service charges and utilities, however the directors believe there is a substantial counter claim to be made and therefore intend to vigorously defend the company against any action.


25.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



400,000 (2021 - 400,000) A Ordinary shares of £0.01 each
4,000
4,000
600,000 (2021 - 600,000) B Ordinary shares of £0.01 each
6,000
6,000
231,300 (2021 - 231,300) D Ordinary shares of £0.01 each
2,313
2,313

12,313

12,313



26.


Reserves

Share premium account

Consideration received for share issued above their nominal value net of transaction costs.

Profit and loss account

Cumulative profit and loss net of distribution to owners.

Page 42

 
HOBS GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022

27.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group  in an independently administered fund. The pension cost charge represents contributions payable by the Group  to the fund. Contributions totalling £24,097 (2021 - £27,686) were payable to the fund at the reporting date and are included in creditors.


28.


Commitments under operating leases

At 31 October 2022 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2022
2021
£
£

Not later than 1 year
1,093,175
1,079,489

Later than 1 year and not later than 5 years
2,813,545
2,631,657

Later than 5 years
98,846
393,972

4,005,566
4,105,118

The above commitments do not include potential future minimum lease payments in respect of an onerous lease as described in note 24. The potential commitment would be £113,333 not later than 1 year and £162,917 later than 1 year and not later than 5 years.


29.Other financial commitments

The Company is party to a cross guarantee relating to amounts owed to HSBC UK Bank PLC. The amount outstanding at the year end was £690,835 (2021 - £520,444).


30.


Related party transactions

Of the 3% loan notes, £224,796 are held by shareholder-directors, £716,147 are held by shareholder and £59,157 are held by external parties.
Of the 10% loan notes, £112,348 are held by shareholder-directors, £358,073 are held by shareholders and £29,579 are held by external parties.
The interest charged in the period for all loan notes amounted to £80,000 (2021 - £80,000). Of this, £6,667 (2021 - £6,667) was outstanding at the period end.


31.


Controlling party

There is considered to be no controlling party as no one shareholder holds in excess of 50% of the issued share capital.

 
Page 43