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Neon (Holdings) Limited

Annual Report and Consolidated Financial Statements
Year Ended 30 April 2023

Registration number: 08578012

 

Neon (Holdings) Limited

Contents

Company Information

1

Strategic Report

2

Director's Report

3

Statement of Director's Responsibilities

4

Independent Auditor's Report

5 to 8

Consolidated Profit and Loss Account

9

Consolidated Statement of Comprehensive Income

10

Consolidated Balance Sheet

11

Balance Sheet

12

Consolidated Statement of Changes in Equity

13 to 14

Consolidated Statement of Cash Flows

15

Notes to the Financial Statements

16 to 32

 

Neon (Holdings) Limited

Company Information

Director

Mr R N Long

Registered office

c/o Francis Clark LLP
Melville Building East
Unit 18, 23 Royal William Yard
Plymouth
Devon
PL1 3GW

Auditors

PKF Francis Clark
Statutory Auditor
Melville Building East
Unit 18, 23 Royal William Yard
Plymouth
Devon
PL1 3GW

 

Neon (Holdings) Limited

Strategic Report

Year Ended 30 April 2023

The director presents his strategic report for the year ended 30 April 2023.

Principal activity

The principal activity of the company is a holding company. The principal activity of the group is that of a furniture retailer.

Fair review of the business

The 2022/23 year has been another profitable year for the group, with similar levels of trade to the prior year. Sales have slighly decreased from £9,883k to £9,568k which is a 3.2% decrease. This decrease is largerly due to a reduction in sales from the online store, as store sales have recovered since the post pandemic due to customers now being able to come and view products in person before commiting to a purchase. Cost of sales have also decreased slightly from £5,765k to £5,688k which is a 1.3% decrease.

This has resulted in a slight drop in gross profit margin 41.66% to 40.56%. However profit increasesd from £391k to £393k due to a reduction in admin costs. Overall, this is a strong result for the group given the cost of living crisis and continued economic uncertainty.

Principal risks and uncertainties

In the opinion of the Directors the principal risks faced by the group in the forthcoming year come from the uncertainty in UK economy going into 2023. There is a risk that hardship will mean lower demand for products. However we continue to source quality products at competitive prices and understand that choice and availability can sway the customers decision. We recognise that business on the high street will continue to be challenging for the foreseeable future and we have invested further in our website where overhead costs are lower, and profit margins are higher. We need to listen to customer feedback and work to provide our customers with what they want in terms of both product and service.

Approved and authorised by the director on 13 November 2023
 

.........................................
Mr R N Long
Director

 

Neon (Holdings) Limited

Director's Report

Year Ended 30 April 2023

The director presents his report and the for the year ended 30 April 2023.

Director of the group

The director who held office during the year was as follows:

Mr R N Long

Financial risk management objectives and policies

Trading activities expose the company to a number of financial risks. These risks include cash flow
risk and overall liquidity risk. The company seeks to manage and mitigate these risks by adopting a
policy of daily monitoring of the bank balance. Management also remain hands-on, reviewing cash
flows, pre-empting future cash movements and planning accordingly. The director maintains regular
contact with the company's bank and keeps them informed of business levels and results, in order to
safeguard the bank's continuing support.

Disclosure of information to the auditor

The director has taken 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 company's auditor is aware of that information. The director confirms that there is no relevant information that he knows of and of which he knows the auditor is unaware.

Approved and authorised by the director on 13 November 2023
 

.........................................
Mr R N Long
Director

 

Neon (Holdings) Limited

Statement of Director's Responsibilities

The director acknowledges his responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

select suitable accounting policies and 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; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Neon (Holdings) Limited

Independent Auditor's Report to the Members of Neon (Holdings) Limited

Opinion

We have audited the financial statements of Neon (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows, 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 the parent company's affairs as at 30 April 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 auditor 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 director's 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 and parent company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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.

 

Neon (Holdings) Limited

Independent Auditor's Report to the Members of Neon (Holdings) Limited

Other information

The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinion on other matter 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 Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Director's Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Director's 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:

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

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

we have not received all the information and explanations we require for our audit.

Responsibilities of the director

As explained more fully in the Statement of Director's Responsibilities set out on page 4, the director is 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 director determines 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 director is 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 director either intends to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

 

Neon (Holdings) Limited

Independent Auditor's Report to the Members of Neon (Holdings) Limited

Auditor’s 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 auditor’s 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:

Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to acts by the company which were contrary to applicable laws and regulations, including fraud.

We considered those laws and regulations that have a direct impact on the preparation of the financial statements, including, but not limited to the reporting framework (FRS 102 and Companies Act 2006) and the relevant tax compliance regulations in the UK. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to fraudulent financial reporting.

Audit procedures performed by the engagement team include, but were not limited to, discussion and inquiries with management of compliance with laws and regulations, review of board minutes and review of correspondence and contracts with third parties. We also addressed the risk of management override of internal controls, including testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.

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. This risk increases the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements as we are less likely to be come aware of instances of non-compliance. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment, collusion, omission or misrepresentation.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

 

Neon (Holdings) Limited

Independent Auditor's Report to the Members of Neon (Holdings) Limited

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 auditor’s 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.

......................................
Duncan Leslie (Senior Statutory Auditor)
PKF Francis Clark, Statutory Auditor

Melville Building East
Unit 18, 23 Royal William Yard
Plymouth
Devon
PL1 3GW

17 November 2023

 

Neon (Holdings) Limited

Consolidated Profit and Loss Account

Year Ended 30 April 2023

Note

2023
 £

2022
 £

Turnover

3

9,568,015

9,882,643

Cost of sales

 

(5,687,635)

(5,765,331)

Gross profit

 

3,880,380

4,117,312

Administrative expenses

 

(3,289,718)

(3,492,628)

Other operating income

4

-

20,045

Operating profit

5

590,662

644,729

Other interest receivable and similar income

9

4,004

7,967

Interest payable and similar charges

10

(68,951)

(78,459)

Profit before tax

 

525,715

574,237

Taxation

11

(133,177)

(182,861)

Profit for the financial year

 

392,538

391,376

Profit/(loss) attributable to:

 

Owners of the company

 

392,538

391,376

 

Neon (Holdings) Limited

Consolidated Statement of Comprehensive Income

Year Ended 30 April 2023

2023
£

2022
£

Profit for the year

392,538

391,376

Revaluation of property

-

506,750

Deferred tax on revaluation of property

14,882

(70,349)

14,882

436,401

Total comprehensive income for the year

407,420

827,777

Total comprehensive income attributable to:

Owners of the company

407,420

827,777

 

Neon (Holdings) Limited

Consolidated Balance Sheet

30 April 2023

Note

2023
£

2022
£

Fixed assets

 

Intangible assets

12

385,503

481,880

Tangible assets

13

4,632,052

4,753,259

Investment property

14

800,000

800,000

 

5,817,555

6,035,139

Current assets

 

Stocks

16

1,264,665

1,269,744

Debtors

17

639,531

732,546

Cash and short-term deposits

 

615,097

1,137,641

 

2,519,293

3,139,931

Creditors: Amounts falling due within one year

19

(2,028,140)

(2,645,849)

Net current assets

 

491,153

494,082

Total assets less current liabilities

 

6,308,708

6,529,221

Creditors: Amounts falling due after more than one year

19

(1,909,607)

(2,242,170)

Provisions for liabilities

23

(508,326)

(534,696)

Net assets

 

3,890,775

3,752,355

Capital and reserves

 

Called up share capital

25

104

104

Share premium reserve

539,998

539,998

Fair value reserve

1,705,336

1,708,221

Other reserves

(1,260,500)

(1,195,500)

Profit and loss account

2,905,837

2,699,532

Equity attributable to owners of the company

 

3,890,775

3,752,355

Total equity

 

3,890,775

3,752,355

Approved and authorised by the director on 13 November 2023
 

.........................................
Mr R N Long
Director

Company Registration Number: 08578012

 

Neon (Holdings) Limited

Balance Sheet

30 April 2023

Note

2023
£

2022
£

Fixed assets

 

Investments

15

3,000,198

3,000,198

Current assets

 

Debtors

17

536,526

536,526

Cash at bank and in hand

 

4

4

 

536,530

536,530

Creditors: Amounts falling due within one year

19

(940,784)

(966,662)

Net current liabilities

 

(404,254)

(430,132)

Total assets less current liabilities

 

2,595,944

2,570,066

Creditors: Amounts falling due after more than one year

19

(1,437,096)

(1,475,696)

Net assets

 

1,158,848

1,094,370

Capital and reserves

 

Called up share capital

25

104

104

Share premium reserve

539,998

539,998

Capital redemption reserve

585,400

520,400

Profit and loss account

33,346

33,868

Shareholders' funds

 

1,158,848

1,094,370

The company made a profit after tax for the financial year of £268,478 (2022 - profit of £237,858).

Approved and authorised by the director on 13 November 2023
 

.........................................
Mr R N Long
Director

Company Registration Number: 08578012

 

Neon (Holdings) Limited

Consolidated Statement of Changes in Equity

Year Ended 30 April 2023

Share capital
£

Share premium
£

Fair value reserve
£

Merger reserve
£

Profit and loss account
£

Total
£

At 1 May 2022

104

539,998

1,708,221

(1,195,500)

2,699,532

3,752,355

Profit for the year

-

-

-

-

392,538

392,538

Other comprehensive income

-

-

14,882

-

-

14,882

Total comprehensive income

-

-

14,882

-

392,538

407,420

Dividends

-

-

-

-

(204,000)

(204,000)

Transfers

-

-

(17,767)

-

17,767

-

Merger reserve movement

-

-

-

(65,000)

-

(65,000)

At 30 April 2023

104

539,998

1,705,336

(1,260,500)

2,905,837

3,890,775

 

Neon (Holdings) Limited

Consolidated Statement of Changes in Equity

Year Ended 30 April 2023

Share capital
£

Share premium
£

Fair value reserve
£

Merger reserve
£

Profit and loss account
£

Total
£

At 1 May 2021

104

539,998

1,332,380

(1,133,500)

2,397,596

3,136,578

Profit for the year

-

-

-

-

391,376

391,376

Other comprehensive income

-

-

436,401

-

-

436,401

Total comprehensive income

-

-

436,401

-

391,376

827,777

Dividends

-

-

-

-

(150,000)

(150,000)

Transfers

-

-

(60,560)

-

60,560

-

Merger reserve movement

-

-

-

(62,000)

-

(62,000)

At 30 April 2022

104

539,998

1,708,221

(1,195,500)

2,699,532

3,752,355

 

Neon (Holdings) Limited

Consolidated Statement of Cash Flows

Year Ended 30 April 2023

Note

2023
 £

2022
 £

Cash flows from operating activities

Profit for the year

 

392,538

391,376

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

219,664

225,441

Finance income

9

(4,004)

(7,967)

Finance costs

10

68,951

78,459

Income tax expense

11

133,177

182,861

 

810,326

870,170

Working capital adjustments

 

Decrease/(increase) in stocks

16

5,079

(97,855)

Decrease/(increase) in trade debtors

17

94,728

(212,392)

(Decrease)/increase in trade creditors

19

(633,997)

127,543

Cash (used)/generated from operations

 

276,136

687,466

Income taxes paid

11

(151,561)

(141,365)

Net cash flow from operating activities

 

124,575

546,101

Cash flows from investing activities

 

Interest received

4,004

7,967

Acquisitions of tangible assets

(2,080)

(6,403)

Net cash flows from investing activities

 

1,924

1,564

Cash flows from financing activities

 

Interest paid

10

(46,007)

(53,189)

Repayment of bank borrowing

 

(297,484)

(278,159)

Redemption of shares classified as liabilities

 

(65,000)

(62,000)

Payments to finance lease creditors

 

(47,792)

(48,884)

Interest on preference shares

 

(522)

(542)

Dividends paid

(204,000)

(150,000)

Net cash flows from financing activities

 

(660,805)

(592,774)

Net decrease in cash and cash equivalents

 

(534,306)

(45,109)

Cash and cash equivalents at 1 May

 

1,137,641

1,182,750

Cash and cash equivalents at 30 April

18

603,335

1,137,641

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
c/o Francis Clark LLP
Melville Building East
Unit 18, 23 Royal William Yard
Plymouth
Devon
PL1 3GW

The principal place of business is:
Unit 1 Cardrew Way
Cardrew Industrial Estate
Redruth
Cornwall
TR15 1SH

These financial statements were authorised for issue by the director on 13 November 2023.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Summary of disclosure exemptions

FRS102 grants a qualifying entity exemptions from the full requirements of FRS102. The following exemptions have been taken in these financial statements as the company is deemed to be a qualifying entity:

The company has taken advantage of the exemption, under FRS 102 paragraph 1.12(b), from preparing a Statement of Cash Flows on the basis that it is a qualifying entity and its cash flows are included in the consolidated financial statements of the group. The company has also taken advantage of the exemption of the disclosures required by Section 11: Basic financial instruments and Section 12: Other financial instruments on the basis that the equivalent disclosures are included in the consolidated financial statements of the group in which the the company is consolidated. The company is also taking exemption from disclosure of key management personnel compensation and exemption from disclosure of related party transactions entered into between the company and other wholly owned members of the Neon (Holdings) Limited group.

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 April 2023.

As a consolidated profit and loss account is published, a separate profit and loss account for the parent company is omitted from the group financial statements by virtue of section 408 of the Companies Act 2006.

Subsidiary undertakings are included under the merger accounting method. Under this method no goodwill arises from the group reorganisation. The goodwill seen on the consolidated balance sheet relates to goodwill included on the balance sheet of a subsidiary company.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the company.

The group recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the group's activities.

Tax

Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised on all timing differences at the balance sheet date unless indicated below. Timing differences are differences between taxable profits and the results as stated in the consolidated profit and loss account and other comprehensive income. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.

Tangible assets

Tangible assets, except freehold land and buildings are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Freehold land and buildings are stated in the balance sheet at valuation. An amount equal to the excess of the annual depreciation charge on revalued assets over the notional historical cost depreciation charge on those assets is transferred annually from the revaluation reserve to the profit and loss reserve.

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold Property

2% straight line

Leasehold Property

10% straight line

Fixtures and Fittings

15% reducing balance

Computer Equipment

25% reducing balance

Motor vehicles

25% reducing balance

Office equipment

25% reducing balance

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by external valuers. The valuers use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss.

Goodwill

Goodwill was capitalised upon incorporation in 2007 and is being amortised over its useful life, which
has been estimated to be 20 years.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

5% straight line

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Financial instruments

Classification
The company holds the following financial instruments:

• Short term trade and other debtors and creditors;
• Bank loans; and
• Cash and bank balances.

All financial instruments are classified as basic.

 Recognition and measurement
The company has chosen to apply the recognition and measurement principles in FRS102.

Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument and derecognised when in the case of assets, the contractual rights to cash flows from the assets expire or substantially all the risks and rewards of ownership are transferred to another party, or in the case of liabilities, when the company’s obligations are discharged, expire or are cancelled.

Such instruments are initially measured at transaction price, including transaction costs, and are subsequently carried at the undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments.

 

3

Turnover

The analysis of the group's Turnover for the year from continuing operations is as follows:

2023
£

2022
£

Sale of goods

9,566,525

9,882,643

Other revenue

1,490

-

9,568,015

9,882,643

The analysis of the group's turnover for the year by market is as follows:

2023
£

2022
£

UK

9,568,015

9,882,643

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

2023
£

2022
£

CJRS income

-

15,767

Other COVID grants

-

4,278

-

20,045

5

Operating profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

123,287

129,064

Amortisation expense

96,377

96,377

Operating lease expense - property

221,530

205,037

6

Staff costs

The aggregate payroll costs (including director's remuneration) were as follows:

2023
£

2022
£

Wages and salaries

1,543,070

1,620,730

Social security costs

141,821

143,318

Pension costs, defined contribution scheme

26,694

32,367

1,711,585

1,796,415

The average number of persons employed by the group (including the director) during the year, analysed by category was as follows:

2023
No.

2022
No.

Administration and support

62

67

62

67

7

Director's remuneration

The director's remuneration for the year was as follows:

2023
£

2022
£

Remuneration

10,000

10,000

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

8

Auditor's remuneration

2023
£

2022
£

Audit of these financial statements

1,650

1,500

Audit of the financial statements of subsidiaries of the company

12,650

11,500

14,300

13,000


 

9

Other interest receivable and similar income

2023
£

2022
£

Other finance income

4,004

7,967

10

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

42,415

48,086

Interest on preference shares

522

542

Interest on obligations under finance leases and hire purchase contracts

3,592

5,106

Interest expense on other finance liabilities

22,422

24,725

68,951

78,459

11

Taxation

Tax charged/(credited) in the profit and loss account

2023
 £

2022
 £

Current taxation

UK corporation tax

144,665

151,607

Deferred taxation

Arising from origination and reversal of timing differences

(11,488)

31,254

Tax expense in the income statement

133,177

182,861

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - higher than the standard rate of corporation tax in the UK) of 19.49% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

525,715

574,237

Corporation tax at standard rate

102,462

109,105

Effect of expense not deductible in determining taxable profit (tax loss)

34,012

34,270

UK deferred tax (credit)/expense relating to changes in tax rates or laws

(3,770)

39,486

Tax increase from other short-term timing differences

473

-

Total tax charge

133,177

182,861

Deferred tax

Group

Deferred tax assets and liabilities

2023

Liability
£

Origination and reversal of timing differences

73,606

Deferred tax on revalued property

434,720

508,326

2022

Liability
£

Origination and reversal of timing differences

85,094

Deferred tax on revalued property

449,602

534,696

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

12

Intangible assets

Group

Goodwill
 £

Cost or valuation

At 1 May 2022

1,927,535

At 30 April 2023

1,927,535

Amortisation

At 1 May 2022

1,445,655

Amortisation charge

96,377

At 30 April 2023

1,542,032

Carrying amount

At 30 April 2023

385,503

At 30 April 2022

481,880

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

13

Tangible assets

Group

           

Freehold land and buildings
£

Leasehold improvements
 £

Furniture, fittings and equipment
 £

Motor vehicles
 £

Total
£

Cost or valuation

At 1 May 2022

4,544,979

339,894

355,614

188,930

5,429,417

Additions

-

-

2,080

-

2,080

At 30 April 2023

4,544,979

339,894

357,694

188,930

5,431,497

Depreciation

At 1 May 2022

125,700

251,440

177,635

121,383

676,158

Charge for the year

59,529

26,457

20,412

16,889

123,287

At 30 April 2023

185,229

277,897

198,047

138,272

799,445

Carrying amount

At 30 April 2023

4,359,750

61,997

159,647

50,658

4,632,052

At 30 April 2022

4,419,279

88,454

177,979

67,547

4,753,259

Included within the net book value of land and buildings above is £4,359,750 (2022 - £4,419,279) in respect of freehold land and buildings and £61,997 (2022 - £88,454) in respect of short leasehold land and buildings.
 

Revaluation

The fair value of the Freehold land & buildings was revalued on various dates. These include Directors' valuations and valuations completed by an independent valuer. The basis used for the valuations was market value.

Had this class of asset been measured on a historical cost basis, the carrying amount would have been £2,491,986 (2022 - £2,516,518).
 

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

 

2023
£

2022
£

Motor vehicles

45,656

66,334

     

Restriction on title and pledged as security

Freehold land and buildings with a carrying amount of £4,359,750 (2022 - £4,419,279) has been pledged as security for the bank loans held by the group.

14

Investment properties

Group

2023
£

At 1 May

800,000

At 30 April

800,000

The valuation is based on a director's valuation. There has been no valuation of investment property by an independent valuer in the year.

15

Investments

Company

2023
£

2022
£

Investments in subsidiaries

3,000,198

3,000,198

Subsidiaries

£

Cost or valuation

At 1 May 2022

3,000,198

Provision

Carrying amount

At 30 April 2023

3,000,198

At 30 April 2022

3,000,198

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Neon Property Ltd

C/O Francis Clark LLP
North Quay House
Sutton Harbour
Plymouth
Devon
PL4 0RA

United Kingdom

Ordinary

100%

100%

Furniture World Ltd

Unit 1 Cardrew Way
Cardrew Industrial Estate
Redruth
Cornwall
TR15 1SH

United Kingdom

Ordinary

100%

100%

Oak City Ltd

C/O Francis Clark LLP
North Quay House
Sutton Harbour
Plymouth
Devon
PL4 0RA

Ordinary A

50%

50%

The principal activity of Neon Property Ltd is that of a property holding company.

The principal activity of Furniture World Ltd is that of a furniture retailer.

The principal activity of Oak City Ltd is that of a dormant company.

16

Stocks

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Other inventories

1,264,665

1,269,744

-

-

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

17

Debtors

   

Group

Company

Note

2023
£

2022
£

2023
£

2022
£

Trade debtors

 

184,009

212,491

-

-

Amounts due from group undertakings

26

-

-

536,526

536,526

Other debtors

 

287,371

227,123

-

-

Prepayments

 

165,931

290,189

-

-

Accrued income

 

2,220

2,743

-

-

 

639,531

732,546

536,526

536,526

18

Cash and cash equivalents

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Cash on hand

1,314

1,314

4

4

Cash at bank

284,176

1,136,327

-

-

Short-term deposits

329,607

-

-

-

615,097

1,137,641

4

4

Bank overdrafts

(11,762)

-

-

-

Cash and cash equivalents in statement of cash flows

603,335

1,137,641

4

4

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

19

Creditors

   

Group

Company

Note

2023
£

2022
£

2023
£

2022
£

Due within one year

 

Loans and borrowings

20

381,015

359,544

302,503

328,903

Trade creditors

 

663,032

896,524

-

-

Amounts due to group undertakings

26

-

-

633,280

632,758

Corporation tax

 

146,583

153,479

-

-

Social security and other taxes

 

234,002

209,194

-

-

Other creditors

 

528,922

901,036

5,001

5,001

Accrued expenses

 

74,586

126,072

-

-

 

2,028,140

2,645,849

940,784

966,662

Due after one year

 

Loans and borrowings

20

1,909,607

2,242,170

1,437,096

1,475,696

20

Loans and borrowings

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Non-current loans and borrowings

Bank borrowings

1,887,399

2,194,953

-

-

HP and finance lease liabilities

22,208

47,217

-

-

Redeemable preference shares

-

-

836,157

874,757

Non-redeemable preference shares

-

-

600,939

600,939

1,909,607

2,242,170

1,437,096

1,475,696

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Current loans and borrowings

Bank borrowings

349,350

339,280

-

-

Bank overdrafts

11,762

-

-

-

Hire purchase contracts

19,903

20,264

-

-

Finance lease liabilities

-

-

-

-

Redeemable preference shares

-

-

302,503

328,903

381,015

359,544

302,503

328,903

Group

The Natwest loans are denominated in £ with nominal interest rates ranging from 2.75% - 3.21%. The final instalment is due on 31 January 2031. The carrying amount at year end is £226,977 (2022 - £250,098).

The Barclays loans are denominated in £ with nominal interest rates ranging from 2% - 2.76%. The final instalments are due on 1 April 2025 and 7 June 2026. The carrying amount at year end is £2,009,772 (2022 - £2,284,134).

The bank loans are secured by charges over the freehold properties owned by the group, directors guarantees and cross guarantees between group companies.

Other bank borrowings are secured by the directors' personal guarantee.

The finance lease liabilities are secured on the assets to which they relate.

The bank borrowings are due as below -

Amount due

£

Within 1 year

349,350

Within 1 - 5 years

1,797,088

After 5 years

90,311

2,236,749

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

21

Analysis of changes in net debt

1 May 2022

Cash flow

Other non-cash changes

30 April 2023

£

£

£

£

Cash at bank and in hand

1,137,641

(522,544)

-

615,097

Overdraft

-

(11,762)

-

(11,762)

1,137,641

(534,306)

-

603,335

DEBT:

Debts due within one year

(339,280)

297,484

(307,554)

(349,350)

Debts due after more than one year

(2,194,953)

-

307,554

(1,887,399)

Finance leases and hire purchase

(67,481)

25,370

-

(42,111)

NET DEBT

(2,601,714)

322,854

-

(2,278,860)

(1,464,073)

(211,452)

-

(1,675,525)

22

Obligations under leases and hire purchase contracts

Group

Finance leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

19,903

25,370

Later than one year and not later than five years

22,208

42,111

42,111

67,481

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

210,353

214,764

Later than one year and not later than five years

381,301

591,654

591,654

806,418

The amount of non-cancellable operating lease payments recognised as an expense during the year was £221,530 (2022 - £205,037).

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

23

Provisions for liabilities

Group

Deferred tax
£

At 1 May 2022

534,696

Increase (decrease) in existing provisions

(26,370)

At 30 April 2023

508,326

24

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £26,694 (2022 - £32,367).

25

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary A shares of £1 each

4

4

4

4

Ordinary B shares of £1 each

12

12

12

12

Ordinary C shares of £1 each

88

88

88

88

Redeemable preference shares of £1 each

1,138,660

1,138,660

1,203,660

1,203,660

Non-redeemable preference shares of £1 each

600,939

600,939

600,939

600,939

 

1,739,703

1,739,703

1,804,703

1,804,703

 

Neon (Holdings) Limited

Notes to the Financial Statements

Year Ended 30 April 2023

26

Related party transactions

Group

Transactions with the director

2023

At 1 May 2022
£

Advances to director
£

Repayments by director
£

At 30 April 2023
£

Mr R N Long

Director's loan account

(186,111)

(288,602)

309,215

(165,498)

         
       

 

2022

At 1 May 2021
£

Advances to director
£

Repayments by director
£

At 30 April 2022
£

Mr R N Long

Director's loan account

(143,208)

(756,385)

713,482

(186,111)