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Registered number: 01135547









Alan Howard (Stockport) Limited









Annual Report and Financial Statements

For the year ended 28 February 2023

 
Alan Howard (Stockport) Limited
 
 
Company Information


Directors
Mr H Littler 
Mr J M Littler 
Mr A J Littler 




Registered number
01135547



Registered office
Section 12
Woodbank Industrial Estate

Turncroft Lane

Stockport

Cheshire

SK1 4AR




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

Lancashire Gate

21 Tiviot Dale

Stockport

Cheshire

SK1 1TD





 
Alan Howard (Stockport) Limited
 

Contents



Page
Strategic Report
 
1
Directors' Report
 
2 - 5
Independent Auditors' Report
 
6 - 8
Statement of Comprehensive Income
 
9
Balance Sheet
 
10
Statement of Changes in Equity
 
11
Statement of Cash Flows
 
12
Analysis of Net Debt
 
13
Notes to the Financial Statements
 
14 - 31


 
Alan Howard (Stockport) Limited
 
 
Strategic Report
For the year ended 28 February 2023

Introduction
 
The directors present the strategic report for the year ended 28 February 2023.

Business review
 
The principal activity of the group is as a manufacturer and wholesaler of hairdressing and beauty supplies and equipment. Despite difficulties causing delays during the pandemic, the group has continued its ongoing development and investment in its own brand products and expansion in sales of exclusive professional salon brands. 
Turnover has reduced by 3.5% during the year due to changes in the industry following the Covid-19 outbreak. Management are satisfied with this result.
The directors are satisfied with the results achieved given the challenging market conditions since the lockdowns, and the general economic climate which prevailed during the year. The results for the year and the financial position at the end of the accounting period were considered satisfactory by the directors.

Principal risks and uncertainties
 
The marketplace in which the company operates is highly competitive and creates continuing risk for them. The company manages this risk by providing added value to its customers by stocking premium and family brands and maintaining strong ongoing relationships with its customers and suppliers.
The industry continues to be at risk following factors arising from a combination of Brexit and the global pandemic. This has led to continuing shortages and supply chain issues. The company manages this risk by procuring stock from multiple suppliers and holding high levels of our family branded stock.

Financial key performance indicators
 
The company's key financial performance indicators during the year were as follows:



Unit
2023
2022






Gross Profit Percentage
%
48
47

Time taken to pay suppliers
Days
62
59

Non-financial key performance indicators
 
The directors consider the group's key non-financial performance indicators are the maintenance of its portfolio of cash and carries to a high standard and the achievement of enhanced customer satisfaction. The company is committed to providing a first-class service to its customers and during this year has continued with its programme for customer service excellence, with continued training being offered to all employees.


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




Mr A J Littler
Director

Date: 13 September 2023

Page 1

 
Alan Howard (Stockport) Limited
 
 
 
Directors' Report
For the year ended 28 February 2023

The directors present their report and the financial statements for the year ended 28 February 2023.

Directors' responsibilities statement

The directors are responsible for preparing the 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 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 of the profit or loss of the company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK 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 transactions and disclose with reasonable accuracy at any time the financial position of the company 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £1,806,686 (2022 - £3,107,712).

Dividends totalling £524,000 (2022 - £524,000) were paid on the ordinary shares entitled to dividends in the year.
The directors declared dividends totalling £236,000 (
2022 - £86,000) post year end in relation to the year ended 28 February 2023.

Directors

The directors who served during the year were:

Mr H Littler 
Mr J M Littler 
Mr A J Littler 

Page 2

 
Alan Howard (Stockport) Limited
 
 
 
Directors' Report (continued)
For the year ended 28 February 2023

Future developments

The company continues with a cash for growth strategy, which focuses on increasing gross margins and reducing debt. This will place the company in a strong position to exploit future trading opportunities. Since the year end the company has stabilised the sales teams which included merging territories, taking on new exclusive brands and the introduction of additional higher margin family brands. The company is continually looking at new opportunities to expand and improve.
The company continues to follow the "Traction" process that was introduced during the year to 28 February 2023 and this helps to enforce the Company values of P U L S E:

Financial instruments

The company holds or issues financial instruments in order to finance its operations, manage its exposure to interest rate risks and for trading purposes.
Price risk, credit risk, liquidity risk and cash flow risk
The company manages these risks on a day to day basis and considers that its policies of dealing with the stated risks meets its objective of managing exposure thereto.
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Investments
All investments are recorded at cost.
Trade and other debtors
Trade and other debtors are recognised and carried forward at invoice amounts less provisions for any doubtful debts. Bad debts are written off when identified.
Interest bearing loans and borrowings
All loans and borrowings are recognised at cost, which is the fair value of the consideration received, net of issue costs associated with the borrowing.

Engagement with employees

The company places considerable value on the involvement of its employees and has continued its existing practice of keeping them informed on matters affecting them as employees and on various matters affecting the performance of the company. In particular the company will involve employees in developing a strong health and safety culture by creating opportunities for them to easily communicate concerns and ideas about how to improve the company's performance in this area. All teams are now involved in weekly strategic and analytical meetings.

Disabled employees

Disabled persons are employed by the company when they appear to be suited to a particular vacancy. Where an existing employee becomes disabled every effort is made to continue to provide suitable employment, either in the same or in an alternative position.

Page 3

 
Alan Howard (Stockport) Limited
 
 
 
Directors' Report (continued)
For the year ended 28 February 2023

Greenhouse gas emissions, energy consumption and energy efficiency action

The company's greenhouse gas emissions and energy consumption are as follows: 


2023
2022

Emissions resulting from activities for which the company is responsible involving the combustion of gas or consumption of fuel for the purposes of transport (in tonnes of CO2 equivalent)
740
628

Emissions resulting from the purchase of the electricity by the company for its own use, including the purposes of transport (in tonnes of CO2 equivalent)
145
153

Energy consumed from activities for which the company is responsible involving the combustion of gas, or the consumption of fuel for the purposes of transport, and the annual quantity of energy consumed resulting from the purchase of electricity by the company for its own use, including for the purposes of transport, in kWh
2,029,063
2,007,999

In calculating the company’s energy consumption, the director has followed the UK Government GHG Conversion Factors for Company Reporting. Figures are based upon metering information and quantities purchased during the period. All figures relate to the UK for the period 1 March 2022 to 28 February 2023.

The company has the following energy efficiency initiatives:
 

Intensity Measurement - We have chosen the metric of CO2 equivalent (kg) relative to turnover (£'000) as the most appropriate way to track energy efficiency. For the year ended 28 February 2023 this was 27.29 (2022 -23.06) .

Directors’ statement of compliance with duty to promote the success of the company

This section describes how the directors have had regard to the matters set out in section 172(1)(a) to (f) Companies Act 2006 in exercising their duty, in good faith, to promote the success of the company for the benefit of its members as a whole.
The Board is mindful that its strategic decisions can have long term implications for the business and its stakeholders, and these implications are carefully assessed. 
Employees are kept informed of performance and strategy through regular presentations and updates from senior management.
The Board seeks to balance the benefits of maintaining strong partnering relationships with key suppliers alongside the need to obtain value for money for our members and the desired quality and service levels for our customers. 
The company places great importance in maintaining positive relationships with all suppliers for the interest of stable stock control. The company also places great importance in complying to supplier credit terms. The company holds a significant level of stock and therefore there is a low risk of supply chain disruption affecting the company’s ability to trade.
The Board will nurture our employees, and our customers to ensure we are everyone's number one choice to work with.
The Board will consider the community and the environment when making decisions regarding products, suppliers, logistics and utilities.
The Board will maintain a high standard of business conduct and will do this with integrity to protect our customers and our future business working with partners who share our integrity.

Page 4

 
Alan Howard (Stockport) Limited
 
 
 
Directors' Report (continued)
For the year ended 28 February 2023

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'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's auditors are aware of that information.

Post balance sheet events

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

Auditors

The auditorsHurst Accountants Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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




Mr A J Littler
Director

Date: 13 September 2023

Page 5

 
Alan Howard (Stockport) Limited
 
 
 
Independent Auditors' Report to the Members of Alan Howard (Stockport) Limited
 

Opinion


We have audited the financial statements of Alan Howard (Stockport) Limited (the 'company') for the year ended 28 February 2023, which comprise the statement of comprehensive income, the balance sheet, the statement of cash flows, the 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 company's affairs as at 28 February 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

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 company 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.

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 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 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.

Page 6

 
Alan Howard (Stockport) Limited
 
 
 
Independent Auditors' Report to the Members of Alan Howard (Stockport) Limited (continued)


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 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 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 company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 2, 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 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 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:

Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:

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.

Page 7

 
Alan Howard (Stockport) Limited
 
 
 
Independent Auditors' Report to the Members of Alan Howard (Stockport) Limited (continued)


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.




Chris Stewardson (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants
Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
Cheshire
SK1 1TD

13 September 2023
Page 8

 
Alan Howard (Stockport) Limited
 
 
Statement of Comprehensive Income
For the year ended 28 February 2023

2023
2022
Note
£
£

  

Turnover
 4 
32,587,683
33,751,619

Cost of sales
  
(16,959,196)
(17,885,121)

Gross profit
  
15,628,487
15,866,498

Distribution costs
  
(313,181)
(369,431)

Administrative expenses
  
(13,096,623)
(12,629,664)

Other operating income
 5 
73,644
1,114,656

Operating profit
 6 
2,292,327
3,982,059

Interest receivable and similar income
 10 
7,138
3,935

Interest payable and similar expenses
 11 
(38,516)
(62,551)

Profit before tax
  
2,260,949
3,923,443

Tax on profit
 12 
(454,263)
(815,731)

Profit for the financial year
  
1,806,686
3,107,712

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 14 to 31 form part of these financial statements.

Page 9

 
Alan Howard (Stockport) Limited
Registered number: 01135547

Balance Sheet
As at 28 February 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 15 
4,928,409
5,774,531

Investments
 16 
4,213
4,213

  
4,932,622
5,778,744

Current assets
  

Stocks
 17 
11,734,718
9,530,897

Debtors: amounts falling due within one year
 18 
1,466,900
1,274,004

Cash at bank and in hand
 19 
3,211,281
3,874,536

  
16,412,899
14,679,437

Creditors: amounts falling due within one year
 20 
(4,590,389)
(4,971,815)

Net current assets
  
 
 
11,822,510
 
 
9,707,622

Total assets less current liabilities
  
16,755,132
15,486,366

Creditors: amounts falling due after more than one year
 21 
(785,403)
(935,544)

Provisions for liabilities
  

Deferred tax
  
(462,624)
(326,403)

Net assets
  
15,507,105
14,224,419


Capital and reserves
  

Called up share capital 
 25 
1,784
1,811

Capital redemption reserve
 26 
216
189

Other reserves
 26 
(200,000)
(300,000)

Profit and loss account
 26 
15,705,105
14,522,419

  
15,507,105
14,224,419


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 



Mr A J Littler
Director

Date: 13 September 2023

The notes on pages 14 to 31 form part of these financial statements.

Page 10

 
Alan Howard (Stockport) Limited
 

Statement of Changes in Equity
For the year ended 28 February 2023


Called up share capital
Capital redemption reserve
Other reserves
Profit and loss account
Total equity

£
£
£
£
£


At 1 March 2021
1,838
162
(400,000)
12,038,707
11,640,707


Comprehensive income for the year

Profit for the year
-
-
-
3,107,712
3,107,712
Total comprehensive income for the year
-
-
-
3,107,712
3,107,712


Contributions by and distributions to owners

Dividends: Equity capital
-
-
-
(524,000)
(524,000)

Purchase of own shares
-
27
-
(100,000)
(99,973)

Shares cancelled during the year
(27)
-
-
-
(27)

Other movement
-
-
100,000
-
100,000


Total transactions with owners
(27)
27
100,000
(624,000)
(524,000)



At 1 March 2022
1,811
189
(300,000)
14,522,419
14,224,419


Comprehensive income for the year

Profit for the year
-
-
-
1,806,686
1,806,686
Total comprehensive income for the year
-
-
-
1,806,686
1,806,686


Contributions by and distributions to owners

Dividends: Equity capital
-
-
-
(524,000)
(524,000)

Purchase of own shares
-
27
-
(100,000)
(99,973)

Shares cancelled during the year
(27)
-
-
-
(27)

Other movement
-
-
100,000
-
100,000


Total transactions with owners
(27)
27
100,000
(624,000)
(524,000)


At 28 February 2023
1,784
216
(200,000)
15,705,105
15,507,105


The notes on pages 14 to 31 form part of these financial statements.

Page 11

 
Alan Howard (Stockport) Limited
 

Statement of Cash Flows
For the year ended 28 February 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,806,686
3,107,712

Adjustments for:

Amortisation of intangible assets
-
160,578

Depreciation of tangible assets
473,889
463,541

Loss on disposal of tangible assets
(629,543)
164,204

Interest paid
38,516
62,551

Interest received
(7,138)
(3,935)

Taxation charge
454,263
815,731

(Increase)/decrease in stocks
(2,203,821)
44,933

(Increase) in debtors
(192,896)
(535,144)

(Decrease)/increase in creditors
(198,425)
731,637

Corporation tax (paid)
(493,550)
(795,000)

Net cash generated from operating activities

(952,019)
4,216,808


Cash flows from investing activities

Purchase of tangible fixed assets
(406,576)
(297,664)

Sale of tangible fixed assets
1,408,352
-

Interest received
7,138
3,935

HP interest paid
(8,281)
(2,635)

Net cash from investing activities

1,000,633
(296,364)

Cash flows from financing activities

Repayment of loans
(44,371)
(1,619,252)

Repayment of/new finance leases
(13,263)
117,282

Dividends paid
(524,000)
(524,000)

Interest paid
(30,235)
(59,916)

Purchase of own shares
(100,000)
(100,000)

Net cash used in financing activities
(711,869)
(2,185,886)

Net (decrease)/increase in cash and cash equivalents
(663,255)
1,734,558

Cash and cash equivalents at beginning of year
3,874,536
2,139,978

Cash and cash equivalents at the end of year
3,211,281
3,874,536


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
3,211,281
3,874,536


Page 12

 
Alan Howard (Stockport) Limited
 

Analysis of Net Debt
For the year ended 28 February 2023





At 1 March 2022
Cash flows
Repayment of finance leases
At 28 February 2023
£

£

£

£

Cash at bank and in hand

3,874,536

(663,255)

-

3,211,281

Debt due after 1 year

(631,525)

46,014

-

(585,511)

Debt due within 1 year

(387,866)

(11,180)

-

(399,046)

Finance leases

(117,282)

-

13,263

(104,019)


2,737,863
(628,421)
13,263
2,122,705

The notes on pages 14 to 31 form part of these financial statements.

Page 13

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

1.


General information

Alan Howard (Stockport) Limited is a private company limited by share capital incorporated in England, registered number 01135547. The address of the registered office and principal place of business is Section 12, Woodbank Industrial Estate, Turncroft Lane, Stockport, Cheshire, SK1 4AR.
The nature of the company's operation and its principle activity is that of a manufacturer and wholesaler of hairdressing and beauty supplies and equipment.

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 management to exercise judgement in applying the company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Exemption from preparing consolidated financial statements

The company  is exempt from the requirement to prepare consolidated financial statements as all of its subsidiaries are required to be excluded from consolidation by section 402 of the Companies Act 2006. 

 
2.3

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. 

Page 14

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the company has transferred the significant risks and rewards of ownership to the buyer;
the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.5

Operating leases: the company as lessee

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

 
2.6

Leased assets: the company 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.

 
2.7

Government grants

Grants of a revenue nature are recognised in the statement of comprehensive income in the same period as the related expenditure.

 
2.8

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company 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 balance sheet. The assets of the plan are held separately from the company in independently administered funds.

Page 15

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

2.Accounting policies (continued)

 
2.9

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 balance sheet date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet 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; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

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 balance sheet date.

 
2.10

Intangible assets

Goodwill
Goodwill represents the difference between amounts paid on the acquisition of business fair value of its identifiable assets and liabilities at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the profit and loss account over its useful economic life.

Page 16

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

2.Accounting policies (continued)

 
2.11

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.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Freehold property
-
4% reducing balance
Long-term leasehold property
-
4% reducing balance
Motor vehicles
-
25% reducing balance
Fixtures and fittings
-
15% - 33% reducing balance & 20% straight line
Leasehold improvements
-
5% straight line

The asset's residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if their 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 within administrative expenses in the statement of comprehensive income. 

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.13

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. 
At each balance sheet 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.

Page 17

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

2.Accounting policies (continued)

 
2.14

Financial instruments

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

The company 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 company's balance sheet when the company 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 company'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

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
Page 18

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

2.Accounting policies (continued)


2.14
Financial instruments (continued)

the company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans 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 company 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 company 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 company's contractual obligations expire or are discharged or cancelled.

Page 19

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Provision for impairment loss on trade debtors
The management of the company exercises judgement in providing for impairment loss on trade debtors. The value of trade debtors at the year end totalled £676,210 (2022: £634,641). An impairment reversal of £2,850 (2022: reversal of £2,186) was charged to the statement of comprehensive income during the year.
Provision for obsolete and slow moving stocks
Management review stock to assess loss on account of obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in profit or loss, management make judgements as to whether there is any observable data indicating that there is any future saleability of the product and the estimated net realisable value for such product. Accordingly, provision for impairment is made where the net realisable value is less than the cost based on best estimates by management. The provision for obsolescence of stock is based on the ageing, historical sales pattern and future expected sales of specific products. The value of stock at the year end totalled £11,734,718 (2022: £9,530,830). Stock provisions at the year end totalled £895,339 (2022: £1,376,526).
Useful life of tangible fixed assets
Management of the company also exercise judgement in estimating the useful life of tangible fixed assets. The net book value of tangible fixed assets at the year end totalled £4,928,409 (2022: £5,774,531). The depreciation rates are shown in note 2.11 above.
Should these estimates vary, the profit or loss and balance sheet of the following years could be impacted.


4.


Turnover

The whole of the turnover is attributable to the principle activity of the company.

All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£

Other operating income
47,706
276,877

Net rents receivable
25,938
26,500

Government grants receivable
-
811,279

73,644
1,114,656


Page 20

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Amortisation of intangible fixed assets
-
160,578

Depreciation of tangible fixed assets
473,889
463,541

Exchange differences
13,228
1,246

Operating lease rentals - land and buildings
732,808
640,942

Other operating lease rentals
477,714
419,138

(Profit) / Loss on sale of tangible fixed assets
(629,627)
164,204


7.


Auditors' remuneration

During the year, the company obtained the following services from the company's auditors and their associates:


2023
2022
£
£

Fees payable to the company's auditors and their associates for the audit of the company's financial statements
23,195
21,730

Fees payable to the company's auditors and their associates in respect of:

Other service relating to taxation
1,280
800

All other services
1,850
2,500

Digital services
31,816
-

Page 21

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

8.


Employees

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


2023
2022
£
£

Wages and salaries
7,674,683
7,332,142

Social security costs
774,137
690,380

Cost of defined contribution scheme
361,830
281,634

8,810,650
8,304,156


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


        2023
        2022
            No.
            No.







Administration and support
64
61



Sales
256
259

320
320


9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
62,672
57,663



10.


Interest receivable

2023
2022
£
£


Other interest receivable
7,138
3,935


11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
30,235
57,074

Hire purchase interest payable
8,281
2,635

Other interest payable
-
2,842

38,516
62,551

Page 22

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

12.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
318,042
828,269


Total current tax
318,042
828,269

Deferred tax


Origination and reversal of timing differences
136,221
(12,538)


Taxation on profit on ordinary activities
454,263
815,731

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 -19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
2,260,949
3,923,443


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 -19%)
429,580
745,454

Effects of:


Non-tax deductible amortisation of goodwill and impairment
-
30,510

Expenses not deductible for tax purposes
6,149
4,656

Capital allowances for year in excess of depreciation
-
47,626

Short term timing difference leading to an increase (decrease) in taxation
-
(12,515)

Other differences leading to an increase (decrease) in the tax charge
18,534
-

Total tax charge for the year
454,263
815,731


Factors that may affect future tax charges

Corporation tax main rates are due to increase to 25% in the tax year commencing 1st April 2023 for companies
whose profits exceed £250,000. A tapered rate will be introduced for profits above £50,000 up to the £250,000
limit

Page 23

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

13.


Dividends

2023
2022
£
£


Ordinary B shares
50,000
50,000


Ordinary C shares
195,000
195,000


Ordinary D shares
229,000
229,000


Ordinary E shares
50,000
50,000

524,000
524,000


14.


Intangible assets




Goodwill

£



Cost


At 1 March 2022
1,954,637



At 28 February 2023

1,954,637



Amortisation


At 1 March 2022
1,954,637



At 28 February 2023

1,954,637



Net book value



At 28 February 2023
-



At 28 February 2022
-

Amortisation is included within administrative expenses in the statement of comprehensive income. No impairment losses were recognised in the year.



Page 24

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

15.


Tangible fixed assets





Freehold property
Long-term leasehold property
Leasehold improve  ments
Motor vehicles
Fixtures and fittings
Total

£
£
£
£
£
£



Cost or valuation


At 1 March 2022
4,028,223
203,100
2,337,109
185,190
3,356,609
10,110,231


Additions
19,510
-
19,886
54,071
313,109
406,576


Disposals
(1,072,823)
-
-
(28,137)
(130,662)
(1,231,622)



At 28 February 2023

2,974,910
203,100
2,356,995
211,124
3,539,056
9,285,185



Depreciation


At 1 March 2022
920,520
56,780
960,189
59,924
2,338,287
4,335,700


Charge for the year on owned assets
110,810
-
107,927
34,561
220,591
473,889


Disposals
(303,713)
-
-
(25,609)
(123,491)
(452,813)



At 28 February 2023

727,617
56,780
1,068,116
68,876
2,435,387
4,356,776



Net book value



At 28 February 2023
2,247,293
146,320
1,288,879
142,248
1,103,669
4,928,409



At 28 February 2022
3,107,703
146,320
1,376,920
125,266
1,018,322
5,774,531

The freehold and long leasehold land and buildings are pledged as security against the Company's bank loan.

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


2023
2022
£
£



Motor vehicles
82,522
110,030

Page 25

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

16.


Fixed asset investments




                              Investment
                            in subsidiary
                     companies
                          £
Cost or valuation
At 1 March 2022                    4,213
                                                                                                                                                             
                   
At 28 February 2023                                       4,213

Subsidiary undertakings


The following were subsidiary undertakings of the company:

Name

Principal activity

Class of shares

Holding

McCoey & Co. Limited
Dormant
Ordinary
100%
E.W.D. (Hair & Beauty Supplies) Limited
Dormant
Ordinary
100%
Salon Centre Limited
Dormant
Ordinary
100%
Xpertise Exclusive Salon Services Limited
Dormant
Ordinary
100%

McCoey & Co. Limited is a company incorporated in Northern Ireland. The registered office address is 2 Balmoral Road, Belfast, BT12 6QA.
All the other subsidiaries are companies incorporated in England. The registered office addresses are the same as the company.


17.


Stocks

2023
2022
£
£

Finished goods and goods for resale
11,734,718
9,530,897


An impairment gain of £481,187 (2022 loss - £48,956) was recognised in cost of sales against stock during the year due to slow-moving and obsolete stock.

Page 26

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

18.


Debtors

2023
2022
£
£


Trade debtors
676,210
634,641

Other debtors
198,748
120,789

Prepayments and accrued income
591,942
518,574

1,466,900
1,274,004


An impairment reversal of £2,850 (2021: £2,186) was recognised in administrative expenses against trade debtors during the year.


19.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
3,211,281
3,874,536



20.


Creditors: Amounts falling due within one year

2023
2022
£
£

Bank loans
40,574
51,680

Trade creditors
2,891,238
2,907,546

Corporation tax
60,347
235,855

Other taxation and social security
237,964
370,683

Obligations under finance lease and hire purchase contracts
16,876
13,263

Other creditors
595,638
648,464

Accruals and deferred income
747,752
744,324

4,590,389
4,971,815


Secured loans
Bank loans are secured by mortgages over the freehold and long leasehold land & buildings and a mortgage debenture.
Obligations under hire purchase contracts
Obligations under hire purchase contracts are secured against the assets to which they relate.

Page 27

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

21.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Bank loans
598,260
631,525

Net obligations under finance leases and hire purchase contracts
87,143
104,019

Other creditors
100,000
200,000

785,403
935,544


Secured loans
Bank loans are secured by mortgages over the freehold and long leasehold land & buildings and a mortgage debenture.
Purchase of own shares
Other creditors include £200,000 (2022: £300,000) of which £100,000 (2022: £200,000) is due after more than one year in respect of a contractual agreement for the company to repurchase its own shares over a 9 year period (See notes 25 and 26 for further details)
Obligations under hire purchase contracts
Obligations under hire purchase contracts are secured against the assets to which they relate.


22.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£
£

Amounts falling due within one year

Bank loans
40,574
51,680

Amounts falling due 1-2 years

Bank loans
43,507
53,498

Amounts falling due 2-5 years

Bank loans
150,316
170,457

Amounts falling due after more than 5 years

Bank loans
404,437
407,570

638,834
683,205


The bank loan is repayable over 15 years. Interest of 2.5% over base rate is payable.

Page 28

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

23.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

2023
2022
£
£


Within one year
16,876
13,263

Between 1-5 years
87,143
104,019

104,019
117,282


24.


Deferred taxation




2023
2022


£

£






At beginning of year
(326,403)
(338,941)


Charged to profit or loss
(136,221)
12,538



At end of year
(462,624)
(326,403)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(462,624)
(326,403)


25.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



62 (2022 - 89) A Ordinary shares of £1.00 each
62
89
984 (2022 - 984) B Ordinary shares of £1.00 each
984
984
200 (2022 - 200) C Ordinary shares of £1.00 each
200
200
200 (2022 - 200) D Ordinary shares of £1.00 each
200
200
338 (2022 - 338) E Ordinary shares of £1.00 each
338
338

1,784

1,811

Page 29

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

25.Share capital (continued)

In 2015 the company contracted to repurchase 278 ordinary shares over a 9 year period for a total consideration of £1,000,000. 27 shares were repurchased on 9 July 2015 and 251 were re-designated as A non-participating ordinary shares. On the first to the eighth anniversary of the agreement the company will repurchase 27 shares and on the ninth anniversary will repurchase the remaining 35 shares.
A written resolution was made with regards to share classification.
Following re-classification, the A ordinary shares have no right to receive notice or to attend and vote at a general meeting, no right to dividends and the shares do not rank pari passu with the B ordinary shares, C ordinary shares, D ordinary shares or E ordinary shares.
Following re-classification, the B ordinary shares, C ordinary shares, D ordinary shares and E ordinary shares rank pari passu in all respects with regard to (1) participation on a return of capital and (2) voting where each share entitles the holder thereof to receive notice of, attend and vote at general meetings and to vote on any resolution proposed to the shareholders in writing. These shares are also entitled to a dividend as declared by the directors from time to time, save that any such dividend declared can be declared and paid across any one or more of the B ordinary shares, C ordinary shares, D ordinary shares and E ordinary shares to the exclusion of the others. Any dividend declared on a particular class of share shall be paid pro-rata across all shares of that class in issue.



26.


Reserves

Capital redemption reserve

The capital redemption reserve records the nominal value of shares repurchased by the company.

Other reserves

Other reserves totalling £200,000 (2022: £300,000) relate to a liability in respect of a contractual obligation for the company to repurchase its own shares over a 9 years period (see note 25 for further details). In accordance with section 691 of the Companies Act 2006 these amounts will be recognised in the profit and loss account when paid.

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses.
Included within retained earnings are non-distributable reserves of £277,554 
(2022: £475,173) in respect of revaluations of land and buildings, net of depreciation recognised in the profit and loss account in excess of depreciation applicable under the historical cost convention.


27.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £361,830 (2022: £281,634). Amounts totalling £12,265 (2022: £11,559) were payable to the fund at the balance sheet date.

Page 30

 
Alan Howard (Stockport) Limited
 
 
 
Notes to the Financial Statements
For the year ended 28 February 2023

28.


Commitments under operating leases

At 28 February 2023 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£



Not later than 1 year
692,552
616,931

Later than 1 year and not later than 5 years
2,483,332
2,197,248

Later than 5 years
5,406,900
3,733,518

8,582,784
6,547,697

2023
2022

£
£



Not later than 1 year
207,417
170,808

Later than 1 year and not later than 5 years
360,751
72,688


29.


Related party transactions

During the year the following transactions occurred with related parties:
Rent paid in respect of properties used the by company to carry out trade to a pension scheme controlled by a director totalled £535,320 
(2022: £534,810).
All transactions took part on an arm length basis.
At the year end, there were directors loan creditors totalling £345,723 
(2022: £336,186).
No interest has been charged to the company during either period. The loans are repayable on demand.
During the year, sales totalling £48,537 
(2022: £329,488) and purchases totalling £1,783,033 (2022: £1,512,606) were made to two companies with common directors. Amounts owed to these companies at the year end totalled £330,495 (2022: £223,286).
During the year dividends were paid to directors and close relatives totalling £524,000 
(2022: £524,000).


30.


Controlling party

There is no ultimate controlling party.

 
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