REGISTERED NUMBER: 11321427 (England and Wales) |
JZ Consumer Brands Limited |
Group Strategic Report, |
Directors' Report and |
Consolidated Financial Statements |
for the Year Ended 31 March 2023 |
REGISTERED NUMBER: 11321427 (England and Wales) |
JZ Consumer Brands Limited |
Group Strategic Report, |
Directors' Report and |
Consolidated Financial Statements |
for the Year Ended 31 March 2023 |
JZ Consumer Brands Limited (Registered number: 11321427) |
Contents of the Consolidated Financial Statements |
for the year ended 31 March 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Directors' Report | 4 |
Independent Auditors' Report | 5 |
Consolidated Statement of Comprehensive Income | 8 |
Consolidated Balance Sheet | 9 |
Company Balance Sheet | 10 |
Consolidated Statement of Changes in Equity | 11 |
Company Statement of Changes in Equity | 12 |
Consolidated Cash Flow Statement | 13 |
Notes to the Consolidated Financial Statements | 14 |
JZ Consumer Brands Limited |
Company Information |
for the year ended 31 March 2023 |
Directors: |
Registered office: |
Registered number: |
Auditors: |
Chartered Accountants and Statutory Auditor |
178 Buckingham Avenue |
Slough |
Berkshire |
SL1 4RD |
JZ Consumer Brands Limited (Registered number: 11321427) |
Group Strategic Report |
for the year ended 31 March 2023 |
The directors present their strategic report for the Company and Group for the year ended 31 March 2023. |
Principal activity and business review |
The principal activity of the Company during the year was that of an investment holding company. |
Key performance indicators and business highlights |
The Directors use a number of key performance indicators to monitor the Group's performance throughout the year. Primarily these are straightforward financial indicators such as sales and profit growth, alongside margins, contribution and EBITDA analysis. The Group also monitors its cash flow projections and working capital balances to provide appropriate focus on balance sheet performance. |
The results for the year and financial position of the Group is as shown in the accompanying financial statements. The key KPIs for the year are as follows: |
Net Sales: £33.6 million (up £1.9m (6%) versus prior year). |
Profit after tax: £1.6 million (up £1.9m (552%) versus prior year). |
Management measures business performance by looking at sales revenue and Operating EBITDA (earnings before interest, tax, depreciation and amortisation), this measure excludes non-recurring items classed as exceptional within the business's internal reporting. During the year, net sales grew by 6%, and Operating EBITDA by 32%. Whilst margins were initially squeezed by increased product and supply costs, Operating EBITDA growth was further supported by selective price increases to the trade and with strong cost management. Brand marketing and trade support was maintained at levels appropriate to the brand's requirements, whilst overheads were down on the prior year as the group managed resources appropriately allowing for a small reduction in total headcount. The 32% growth in the business's internal profit measurement, was before considering then impact of what the Group classifies as one-off exceptional costs. During the year, these costs included some personnel restructuring and final write-downs of stock rendered obsolete by regulatory changes impacting product ingredients. The statutory operating profit which includes these impacts, still reports growth of 462%, as the prior year also had some costs impacting operating profit that were excluded from the internally reported Operating EBITDA. |
Future developments |
Management are confident of continuing the strong performance and growth trend from the year just gone, and have budgeted for significant sales and profit growth. Price increases on a number of the Group's brands will drive revenue growth, mitigating some of the cost challenges in the supply chain, and reversing the adverse margin impacts in 2022/23. Further profitability improvements are projected from product re-sourcing plans. Continuing new product innovation and range launches in both the UK and export markets are a further driver of sales, margin and profit growth). |
Overall, the Directors believe that the Group is well positioned to continue to exploit growth opportunities across its brands both in the UK and export markets, and are confident of further strong revenue and profit growth in the upcoming year. The Group also continues to actively explore potential brand portfolio extensions to utilise the underlying strength of the platform that has been built over the last few years. |
Business strategy and policies |
The Group's strategy is to develop and grow its personal care brands. A key feature of the Group's strategy has been establishing and successfully managing long term mutually beneficial commercial relationships with its customers, suppliers and principal brand owners. The Group's systems are designed to discharge its financial and other regulatory obligations to stakeholders in a timely and efficient manner, whilst also ensuring the highest level of service to our customers. The Group continuously evaluates its operations and invests in people, systems and equipment in order to improve and maintain its operational capabilities. Furthermore, the Group continuously analyses the environment it operates in and takes necessary steps to ensure that insurable risks are adequately insured. The Group takes its environmental and social responsibilities seriously and actively looks for more environmentally friendly products and packaging. The Directors of the Group value providing a safe working environment to its staff and have implemented comprehensive health and safety at work procedures, with an increased focus on staff mental well-being. |
Business risk management and mitigation |
The Group, through its management team, will periodically review the risks facing the business and ensure that plans are in place to mitigate those risks. |
JZ Consumer Brands Limited (Registered number: 11321427) |
Group Strategic Report |
for the year ended 31 March 2023 |
The Group owns personal care brands that have been available in the UK market place for decades and in certain instances for over a century. The Group believes that these brands have a loyal consumer base, however as noted above, the Group has a process for new product development and re-launches to ensure that the Group's products continuously meet changing customer needs. |
In a changing regulatory environment, the Group regularly engages external consultants with expert knowledge in technical matters related to personal care products. In addition, the Group is an active member of the Cosmetics Toiletry and Perfumery Association (CTPA). |
Principal risks and uncertainties |
The high inflationary environment and the squeeze on consumers relative wealth is a risk in the current market, across the economy as well as within the health and beauty category. However, whilst consumers in some cases are cutting back discretionary spends, the Group has found in the past, that personal care categories are less impacted than other consumer goods categories by consumer caution. In addition, the Group's broad presence across the retail categories including a strong presence in the discount channels, further mitigates risks in this area. |
The health and personal care market overall remains highly competitive. However, the Directors continually monitor the market, and its risks and challenges, and the Directors maintain a focus on having a balanced portfolio of brands, customers and markets, and a supply of innovative new and updated products, to ensure the Group is not adversely impacted by the inherent risks above. |
Supply side cost inflation has been a challenge, and is expected to continue to be so in the medium term. However, the Group continues to manage the cost pressures it faces, working closely with its select group of partner suppliers to mitigate costs where possible. |
On behalf of the board: |
JZ Consumer Brands Limited (Registered number: 11321427) |
Directors' Report |
for the year ended 31 March 2023 |
The directors present their report with the financial statements of the Company and the Group for the year ended 31 March 2023. |
Dividends |
The total distribution of preference share dividends for the year ended 31 March 2023 will be £1,889,568. |
Directors |
The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report. |
Donations |
During the year the Group made charitable contributions of £7,210 (2022: £6,105). This was made up primarily of a donation to the CTPA's charitable arm Look Good Feel Better for £5,900. The Group made no political donations during the year. |
Statement of directors' responsibilities |
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
Statement as to disclosure of information to auditors |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director 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 group's auditors are aware of that information. |
On behalf of the board: |
Independent Auditors' Report to the Members of |
JZ Consumer Brands Limited |
Opinion |
We have audited the financial statements of JZ Consumer Brands Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2023 and of the group's profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Directors' Report, but does not include the financial statements and our Auditors' Report thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the 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. |
Independent Auditors' Report to the Members of |
JZ Consumer Brands Limited |
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 where 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 Statement of Directors' Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the 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. |
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 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. |
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We discussed with the directors the policies and procedures in place regarding compliance with laws and regulations. We discussed amongst the audit team the identified laws and regulations, and remained alert to any indications of non-compliance. |
During the audit we focussed on laws and regulations which could reasonably be expected to give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. |
Our procedures in relation to fraud, included but were not limited to: inquires of management whether they have any knowledge of any actual, suspected or alleged fraud, and discussions amongst the audit team regarding risk of fraud such as opportunities for fraudulent manipulation of financial statements. We determined that the principal risks related to posting manual journal entries to manipulate financial performance and management bias through judgements in accounting estimates and challenged the assumptions and judgements made by management in its significant accounting estimates. We also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. Our tests included agreeing the financial statement disclosures to underlying supporting documentation. |
Independent Auditors' Report to the Members of |
JZ Consumer Brands Limited |
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. |
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 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 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. |
for and on behalf of |
Chartered Accountants and Statutory Auditor |
178 Buckingham Avenue |
Slough |
Berkshire |
SL1 4RD |
JZ Consumer Brands Limited (Registered number: 11321427) |
Consolidated |
Statement of Comprehensive |
Income |
for the year ended 31 March 2023 |
2023 | 2022 |
Notes | £ | £ |
Turnover | 3 | 33,624,984 | 31,600,784 |
Cost of sales | (21,628,217 | ) | (20,636,205 | ) |
Gross profit | 11,996,767 | 10,964,579 |
Distribution costs | (3,548,731 | ) | (4,245,234 | ) |
Administrative expenses | (5,642,921 | ) | (6,220,657 | ) |
Operating profit | 2,805,115 | 498,688 |
Interest payable and similar expenses | 6 | (580,599 | ) | (673,308 | ) |
Profit/(loss) before taxation | 7 | 2,224,516 | (174,620 | ) |
Tax on profit/(loss) | 9 | (632,253 | ) | (177,287 | ) |
Profit/(loss) for the financial year | ( |
) |
Other comprehensive income | - | - |
Total comprehensive income for the year | 1,592,263 | (351,907 | ) |
Profit/(loss) attributable to: |
Owners of the parent | 1,592,263 | (351,907 | ) |
Total comprehensive income attributable to: |
Owners of the parent | 1,592,263 | (351,907 | ) |
JZ Consumer Brands Limited (Registered number: 11321427) |
Consolidated Balance Sheet |
31 March 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
Fixed assets |
Intangible assets | 12 | 21,509,558 | 23,080,246 |
Tangible assets | 13 | 298,350 | 312,068 |
Investments | 14 | - | - |
21,807,908 | 23,392,314 |
Current assets |
Stocks | 15 | 9,169,929 | 6,573,131 |
Debtors | 16 | 8,213,963 | 6,913,702 |
Cash at bank | 40,118 | 2,990,270 |
17,424,010 | 16,477,103 |
Creditors |
Amounts falling due within one year | 17 | 13,182,921 | 11,253,089 |
Net current assets | 4,241,089 | 5,224,014 |
Total assets less current liabilities | 26,048,997 | 28,616,328 |
Creditors |
Amounts falling due after more than one year |
18 |
- |
(4,161,410 |
) |
Provisions for liabilities | 21 | (24,761 | ) | (22,945 | ) |
Net assets | 26,024,236 | 24,431,973 |
Capital and reserves |
Called up share capital | 22 | 25,529,168 | 23,639,600 |
Share premium | 23 | 1,980,001 | 1,980,001 |
Retained earnings | 23 | (1,484,933 | ) | (1,187,628 | ) |
26,024,236 | 24,431,973 |
The financial statements were approved by the Board of Directors and authorised for issue on 11 October 2023 and were signed on its behalf by: |
B D Hammersley - Director |
JZ Consumer Brands Limited (Registered number: 11321427) |
Company Balance Sheet |
31 March 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
Fixed assets |
Intangible assets | 12 |
Tangible assets | 13 |
Investments | 14 |
Current assets |
Debtors | 16 |
Cash at bank |
Creditors |
Amounts falling due within one year | 17 |
Net current liabilities | ( |
) | ( |
) |
Total assets less current liabilities |
Creditors |
Amounts falling due after more than one year |
18 |
Net assets |
Capital and reserves |
Called up share capital | 22 |
Share premium | 23 |
Retained earnings | 23 |
Company's profit for the financial year | 2,111,023 | 1,951,744 |
The financial statements were approved by the Board of Directors and authorised for issue on |
JZ Consumer Brands Limited (Registered number: 11321427) |
Consolidated Statement of Changes in Equity |
for the year ended 31 March 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 April 2021 | 21,890,000 | 913,879 | 1,980,001 | 24,783,880 |
Changes in equity |
Issue of share capital | 1,749,600 | - | - | 1,749,600 |
Dividends | - | (1,749,600 | ) | - | (1,749,600 | ) |
Total comprehensive income | - | (351,907 | ) | - | (351,907 | ) |
Balance at 31 March 2022 | 23,639,600 | (1,187,628 | ) | 1,980,001 | 24,431,973 |
Changes in equity |
Issue of share capital | 1,889,568 | - | - | 1,889,568 |
Dividends | - | (1,889,568 | ) | - | (1,889,568 | ) |
Total comprehensive income | - | 1,592,263 | - | 1,592,263 |
Balance at 31 March 2023 | 25,529,168 | (1,484,933 | ) | 1,980,001 | 26,024,236 |
JZ Consumer Brands Limited (Registered number: 11321427) |
Company Statement of Changes in Equity |
for the year ended 31 March 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 April 2021 | ( |
) |
Changes in equity |
Issue of share capital | - |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | - |
Balance at 31 March 2022 |
Changes in equity |
Issue of share capital | - |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | - |
Balance at 31 March 2023 |
JZ Consumer Brands Limited (Registered number: 11321427) |
Consolidated Cash Flow Statement |
for the year ended 31 March 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 27 | 2,231,343 | 3,516,493 |
Interest paid | (580,599 | ) | (673,308 | ) |
Tax paid | (397,538 | ) | (398,719 | ) |
Net cash from operating activities | 1,253,206 | 2,444,466 |
Cash flows from investing activities |
Purchase of tangible fixed assets | (68,537 | ) | (306,405 | ) |
Net cash from investing activities | (68,537 | ) | (306,405 | ) |
Cash flows from financing activities |
Loan repayments in year | (4,134,821 | ) | (1,924,222 | ) |
Net cash from financing activities | (4,134,821 | ) | (1,924,222 | ) |
(Decrease)/increase in cash and cash equivalents | (2,950,152 | ) | 213,839 |
Cash and cash equivalents at beginning of year |
28 |
2,990,270 |
2,776,431 |
Cash and cash equivalents at end of year | 28 | 40,118 | 2,990,270 |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements |
for the year ended 31 March 2023 |
1. | Statutory information |
JZ Consumer Brands Limited is a |
2. | Accounting policies |
Basis of preparing the financial statements |
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound. |
Going concern |
The financial statements have been prepared on a going concern basis. In making their assessment the directors have reviewed and considered relevant information, including the annual budget, and latest profit and loss forecast and corresponding future cash flow and liquidity projections. These projections have taken due consideration of the potential consumer good market challenges around rising costs, and the impact of cost of living increases on consumers' demand. The business has plans to mitigate these potential challenges. Furthermore, the Group has a strong balance sheet and sufficient available funding in place to manage its requirements going forward. Based on these assessments and actions, the directors have concluded that they can continue to adopt a going concern basis in preparing the annual reports and accounts. |
Basis of consolidation |
The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to 31 March 2023. A subsidiary is an entity that is controlled by the parent. The subsidiary undertakings are included in the consolidated profit and loss account from the date that control commences until the date that control ceases. Control is established when the Company has power to govern the operating and financial policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. |
The Company has no associate companies, joint venture arrangements nor any special purpose entities. |
Under section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own profit and loss account. |
In the parent financial statements, investments in subsidiaries are carried at cost less impairment. |
Significant judgements and estimates |
In the application of the Group's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
The key sources of estimation uncertainty that have significant effect on the amounts recognised in the financial statements are described below: |
Impairment of intangible assets |
Determining whether trademarks are impaired requires an estimation of the recoverable amount. The recoverable amount calculation requires the entity to estimate future cashflows expected to arise from the trademark and a suitable discount rate in order to calculate present value. The carrying amount of trademarks at the balance sheet date was £4,402,007 and no impairment loss has been recognised. |
Recoverability of debtors |
Determining whether debtors are recoverable requires a review of the outstanding amounts, and making a judgement on the recoverability of those amounts. The business makes a provision for any amounts that it judges to be at risk of non-recoverability. |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
2. | Accounting policies - continued |
Turnover |
Turnover is measured at fair value of the consideration received or receivable and represents amounts receivable for goods supplied, stated net of trade discounts and of Value Added Tax. |
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on delivery of the goods, the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and costs incurred in respect of the transactions can be measured reliably. |
Goodwill |
Goodwill arising in business combination is recognised as an asset at the date the control is acquired. Goodwill is measured as the excess of the sum of the consideration transferred over net of the acquisition-date amounts of identifiable assets acquired and the liabilities assumed. |
Goodwill is amortised on a straight line basis over 20 years. |
Intangible assets |
Intangible assets comprise of trademarks. Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets acquired as part of a business combination are recorded at the fair value at the acquisition date. Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows: |
Trademarks | - | Straight line over 10 to 20 years |
Tangible fixed assets |
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Depreciation is calculated to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows: |
Leasehold improvements | - | Straight line over 10 years |
Plant and equipment | - | Straight line over 3 to 10 years |
Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. |
Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost. |
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 Consolidated Statement of Comprehensive Income, 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. |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
2. | Accounting policies - continued |
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. |
Foreign currencies |
Transactions in foreign currencies are recorded in the functional currency by being translated into sterling at the rate of exchange ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any exchange differences being taken to the Statement of Comprehensive Income. |
Operating leases |
Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term. |
Pension costs and other post-retirement benefits |
The Group operates a defined contribution pension scheme. Contributions payable to the Group's pension |
scheme are charged to profit or loss in the period to which they relate. |
Financial instruments |
The Group has elected to apply the provisions of Section 11 'Basis Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments. Financial assets and financial liabilities are recognised in the balance sheet when the Group becomes a party to the contractual provisions of the instrument. |
Trade and other debtors and creditors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the will Group not be able to collect all amounts due. |
Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank which are an integral part of the Group's cash management. |
Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. |
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs. |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
3. | Turnover |
The turnover and profit (2022 - loss) before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom | 28,740,320 | 26,662,154 |
Europe | 3,256,121 | 2,976,326 |
Asia | 733,495 | 671,606 |
Africa | 169,952 | 349,153 |
Australia and New Zealand | 546,138 | 742,751 |
North and South America | 178,958 | 198,794 |
33,624,984 | 31,600,784 |
4. | Employees and directors |
2023 | 2022 |
£ | £ |
Wages and salaries | 2,939,234 | 3,157,567 |
Social security costs | 347,081 | 345,285 |
Other pension costs | 169,472 | 152,057 |
3,455,787 | 3,654,909 |
The average number of employees during the year was as follows: |
2023 | 2022 |
Administrative staff | 41 | 43 |
Management staff | 6 | 6 |
The average number of employees by undertakings that were proportionately consolidated during the year was 47 (2022 - 49 ) . |
5. | Directors' emoluments |
2023 | 2022 |
£ | £ |
Directors' remuneration | 461,450 | 461,104 |
Directors' pension contributions to money purchase schemes | 28,565 | 28,669 |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc | 176,967 | 176,861 |
Pension contributions to money purchase schemes | 11,200 | 11,200 |
The number of directors who accrued benefits under company pension plans was 3 (2022 - 3). |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
6. | Interest payable and similar expenses |
2023 | 2022 |
£ | £ |
Bank loan interest | 580,599 | 675,517 |
Other interest payable | - | (2,209 | ) |
580,599 | 673,308 |
7. | Profit/(loss) before taxation |
Operating profit is stated after charging: |
2023 | 2022 |
£ | £ |
Amortisation of intangible assets | 1,570,688 | 1,570,688 |
Depreciation of tangible assets | 82,255 | 107,660 |
Foreign exchange differences | 12,141 | 460 |
Operating lease rentals | 164,338 | 222,326 |
Auditors' remuneration | 39,450 | 36,750 |
Amortisation of intangible assets is included in administration expenses. The operating profit is fully attributed to the Group, as the Company has no such charges which require disclosure. |
8. | Auditors' remuneration |
2023 | 2022 |
£ | £ |
Fees payable to the Company's auditors for audit services of the Group | 36,000 | 33,000 |
Fees payable for non-audit services of the Group | 3,450 | 3,750 |
39,450 | 36,750 |
9. | Taxation |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | 645,539 | 177,801 |
Prior year tax (over)/under |
provision | (15,102 | ) | (8,552 | ) |
Total current tax | 630,437 | 169,249 |
Deferred tax | 1,816 | 8,038 |
Tax on profit/(loss) | 632,253 | 177,287 |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
9. | Taxation - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit/(loss) before tax | 2,224,516 | (174,620 | ) |
Profit/(loss) multiplied by the standard rate of corporation tax in the UK of 19 % (2022 - 19 %) |
422,658 |
(33,178 |
) |
Effects of: |
Expenses not deductible for tax purposes | 224,692 | 213,600 |
Capital allowances in excess of depreciation | (1,343 | ) | - |
Adjustments to tax charge in respect of previous periods | (15,102 | ) | (8,552 | ) |
Timing differences | 1,348 | 5,417 |
Total tax charge | 632,253 | 177,287 |
10. | Individual statement of comprehensive income |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
11. | Dividends |
On 31 August 2022 a dividend of £1,889,568 was declared on the £1 Preference shares and capitalised as additional preference share capital in the year. |
12. | Intangible fixed assets |
Group |
Goodwill | Trademarks | Totals |
£ | £ | £ |
Cost |
At 1 April 2022 |
and 31 March 2023 | 22,193,579 | 13,958,903 | 36,152,482 |
Amortisation |
At 1 April 2022 | 3,976,349 | 9,095,887 | 13,072,236 |
Amortisation for year | 1,109,679 | 461,009 | 1,570,688 |
At 31 March 2023 | 5,086,028 | 9,556,896 | 14,642,924 |
Net book value |
At 31 March 2023 | 17,107,551 | 4,402,007 | 21,509,558 |
At 31 March 2022 | 18,217,230 | 4,863,016 | 23,080,246 |
The Soft & Gentle brand, which was purchased in 2012 is considered material to the Group. The carrying amount as at March 2023 was £4,226,036 (2022: £4,659,000) and the brand has an estimated remaining useful life of 10 years. |
Amortisation cost for the year for all brands/trademarks are included within administrative expenses. |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
13. | Tangible fixed assets |
Group |
Long | Plant and |
leasehold | machinery | Totals |
£ | £ | £ |
Cost |
At 1 April 2022 | 231,304 | 690,006 | 921,310 |
Additions | 3,530 | 65,007 | 68,537 |
At 31 March 2023 | 234,834 | 755,013 | 989,847 |
Depreciation |
At 1 April 2022 | 12,167 | 597,075 | 609,242 |
Charge for year | 23,356 | 58,899 | 82,255 |
At 31 March 2023 | 35,523 | 655,974 | 691,497 |
Net book value |
At 31 March 2023 | 199,311 | 99,039 | 298,350 |
At 31 March 2022 | 219,137 | 92,931 | 312,068 |
14. | Fixed asset investments |
Group |
Shares in |
group |
undertakings |
£ |
Cost |
Disposals | 3,617 |
Impairments | (3,617 | ) |
At 31 March 2023 | - |
Net book value |
At 31 March 2023 | - |
Company |
Shares in |
group |
undertakings |
£ |
Cost |
At 1 April 2022 |
and 31 March 2023 |
Net book value |
At 31 March 2023 |
At 31 March 2022 |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
14. | Fixed asset investments - continued |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiary |
Karium Ltd |
Registered office: The Capitol Building, Oldbury, Bracknell, RG12 8FZ. |
Nature of business: |
% |
Class of shares: | holding |
Ordinary | 100.00 |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves | 16,432,775 | 15,841,856 |
Profit for the year | 3,090,919 | 1,306,028 |
The principal activity of Karium Ltd is the marketing and distribution of personal care products. |
15. | Stocks |
Group |
2023 | 2022 |
£ | £ |
Stocks on hand | 9,169,929 | 6,573,131 |
16. | Debtors: amounts falling due within one year |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade debtors | 7,980,679 | 6,665,791 |
Other debtors | - | 583 |
Prepayments and accrued income | 233,284 | 247,328 |
8,213,963 | 6,913,702 |
17. | Creditors: amounts falling due within one year |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade creditors | 6,248,916 | 5,325,681 |
Amounts owed to group undertakings | 50,000 | - |
Tax | 288,054 | 55,155 |
Social security and other taxes | 390,861 | 125,613 |
Other creditors | 23,442 | 35,977 |
Bank loan | 3,020,713 | 2,994,124 | - | 1,302,000 |
Accruals and deferred income | 3,160,935 | 2,716,539 |
13,182,921 | 11,253,089 |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
18. | Creditors: amounts falling due after more than one year |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loan | - | 4,161,410 |
19. | Leasing agreements |
Minimum lease payments fall due as follows: |
Group |
Non-cancellable |
operating leases |
2023 | 2022 |
£ | £ |
Within one year | 150,000 | 37,500 |
Between one and five years | 600,000 | 600,000 |
In more than five years | 525,000 | 675,000 |
1,275,000 | 1,312,500 |
The Group has entered into a 10 year lease agreement which has an option to break with no costs at the end of year 5. Lease payments shown above are on the basis that the break option is not exercised. Lease commitments totalling £525,000 would not stand in the event the company chooses to exercise its option. |
20. | Secured debts |
The Company, along with its subsidiary undertaking Karium Ltd, has entered into a bank financing arrangement with PNC Bank. The Company previously had a term loan as part of the facilities provided by PNC, with interest paid monthly at rates of up to 6.5% over base rate. However, this loan was repaid in full during the course of the current year. |
21. | Provisions for liabilities |
Group |
2023 | 2022 |
£ | £ |
Deferred tax | 24,761 | 22,945 |
Group |
Deferred tax |
£ |
Balance at 1 April 2022 | 22,945 |
Movement during the year | 1,816 |
Balance at 31 March 2023 | 24,761 |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
22. | Called up share capital |
Allotted, issued and fully paid: |
Class: | Nominal value | No. of shares | 2023 | 2022 |
£ | £ | £ |
Ordinary A | 0.01 | 1,899,995 | 19,000 | 19,000 |
Ordinary B | 0.01 | 100,006 | 1,000 | 1,000 |
Ordinary C | 0.01 | 84 | 1 | 1 |
Preference | 1.00 | 25,509,168 | 25,509,168 | 23,619,600 |
25,529,169 | 23,639,601 |
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company's residual assets. There are different classes of ordinary shares which have different entitlements on the Company's assets at the point of sale. |
The preference shares are non-voting and non-redeemable. During the year £1,889,568 of amounts owed to preference shareholders were capitalised by the issue of additional preference shares at par. |
23. | Reserves |
Group |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 April 2022 | (1,187,628 | ) | 1,980,001 | 792,373 |
Profit for the year | 1,592,263 | 1,592,263 |
Dividends | (1,889,568 | ) | (1,889,568 | ) |
At 31 March 2023 | (1,484,933 | ) | 1,980,001 | 495,068 |
Company |
Retained | Share |
earnings | premium | Totals |
£ | £ | £ |
At 1 April 2022 | 2,001,524 |
Profit for the year |
Dividends | ( |
) | ( |
) |
At 31 March 2023 | 2,222,979 |
The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses. |
The profit and loss reserve includes all historical retained profits and losses of the group. |
24. | Pension commitments |
The amount recognised in the group profit or loss as an expense in relation to defined contribution plans was £169,472 (2022: £176,874). |
25. | Related party disclosures |
The Company pays management fees to another entity in the global JZI Group. Fees of £193,903 (2022: £200,000) were accrued during the year and a balance of £50,000 (2022: £nil) was owing at the balance sheet date. |
There are no other related party transactions that require disclosure under FRS 102. |
JZ Consumer Brands Limited (Registered number: 11321427) |
Notes to the Consolidated Financial Statements - continued |
for the year ended 31 March 2023 |
26. | Ultimate controlling party |
The immediate parent company and ultimate controlling party is JZI Fund III L.P., an investment fund controlled by JZI Advisors Inc, a company incorporated in the United States of America. Financial statements are not available for this entity. |
The Company has taken advantage of the exemptions available under FRS102, section 33.1A, not to disclose transactions between wholly-owned members of the group. |
27. | Reconciliation of profit/(loss) before taxation to cash generated from operations |
2023 | 2022 |
£ | £ |
Profit/(loss) before taxation | 2,224,516 | (174,620 | ) |
Depreciation charges | 82,255 | 107,659 |
Loss on disposal of fixed assets | - | 1,043 |
Amortisation of intangible assets | 1,570,688 | 1,570,688 |
Finance costs | 580,599 | 673,308 |
4,458,058 | 2,178,078 |
(Increase)/decrease in stocks | (2,596,798 | ) | 1,551,905 |
Increase in trade and other debtors | (1,300,261 | ) | (1,330,168 | ) |
Increase in trade and other creditors | 1,670,344 | 1,116,678 |
Cash generated from operations | 2,231,343 | 3,516,493 |
28. | 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 2023 |
31/3/23 | 1/4/22 |
£ | £ |
Cash and cash equivalents | 40,118 | 2,990,270 |
Year ended 31 March 2022 |
31/3/22 | 1/4/21 |
£ | £ |
Cash and cash equivalents | 2,990,270 | 2,776,431 |
29. | Analysis of changes in net funds |
At 1/4/22 | Cash flow | At 31/3/23 |
£ | £ | £ |
Net cash |
Cash at bank | 2,990,270 | (2,950,152 | ) | 40,118 |
2,990,270 | (2,950,152 | ) | 40,118 |
Total | 2,990,270 | (2,950,152 | ) | 40,118 |