Registered number:
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
COMPANY INFORMATION
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PHO 2012 LIMITED
CONTENTS
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PHO 2012 LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 19 FEBRUARY 2023
The Directors present their report and the financial statements for the 52 week period ended 19 Feb 2023. Overall, despite the on-set of several economic headwinds, the company has performed well in the period,
with continued expansion.
The trading results and balance sheet and other financial statements are shown on pages 12 to 20.
There have been a number of challenges for the hospitality sector in the year, principally fluctuations in supply chain pricing and utilities as a result of the ongoing conflict in Ukraine, which the industry has had to absorb. The Company has experienced a continued trend in delivery sales as noted in the years following the COVID pandemic. For comparative purposes, the Directors note that the prior year results were helped by the UK Government’s COVID related reliefs including the reduced VAT rate, business rates concessions and various COVID grants. These concessions and reliefs came to an end in April 2022 and therefore had an immaterial impact on the 2023 results. Turnover increased 33.4% to £58.3m (2022: £43.7m) with a gross margin of 78.3% (2022: 81.4%). Profit before tax is £19k (2022: £3.6m). Trading EBITDA (earnings before interest, tax, depreciation, pre-opening costs, exceptional costs and Management charges) of £5.8m being 9.0% of Turnover (2022: £8.1m which included a number of one-off events though Covid including VAT relief). Restaurant EBITDA £10.4m for the year (2022: £10.8m). Recent performance has buoyed Director’s confidence in the recovery of the market and along with funding introduced in the wider group in 2021, the Group has continued its expansion with five new restaurants located in Cheltenham, Plymouth, York, Bournemouth and Canary Wharf. At the end of FY23, the Group had a total of 37 restaurants and five dark kitchens. Post year end, additional funding has been successfully secured allowing for continued expansion through the next several years. Recent post year end activity includes new site openings at London Bridge and Milton Keynes. The Directors decided not to renew the lease for the Group's first site in Clerkenwell, London, having operated the site since 2005. In addition, the dark kitchen business has been rationalised from five sites to four sites, to optimise the profitability of the remaining units by reducing cannibalisation.
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PHO 2012 LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 19 FEBRUARY 2023
Inflation,Cost of living and economic confidence
High levels of inflation and rising ‘mortgage affecting’ interest rates has created the current coined phrase ‘the cost of living crisis’. This has continued throughout FY23 into FY24. It is clear that this has had a negative impact on disposable income, however the directors feel that the core proposition of fresh, healthy food and value for money, will position the Group to remain resilient in terms of sales growth. Menu pricing is regularly benchmarked against competitors and the Directors believe that Pho remains competitively priced and well placed to secure repeat custom, despite the threat of waning consumer confidence. Steps have also been taken to invest in sales and marketing nation-wide, as well as training and development to ensure that the customer experience continues to exceed expectations for an increasingly discerning customer base. The Directors are aware that opening new sites in the current economic environment carries additional risk, and they have undertaken enhanced due diligence on new locations prior to opening. In addition, the Directors have sensitised forecasts in the event that new openings take slightly longer than normal to establish the desired level of trade. Supply Chain and input costs Like most businesses in our sector, input prices remain volatile and margins are under pressure. The Group has introduced a new procurement system to allow live tracking of key input costs for greater visibility and control. The Directors are continually reviewing the cost base for any further opportunities to protect margins. Recruitment Attraction and retention of staff is a key risk in a highly competitive market. The company continues to invest in employee wellbeing mental health and development, as well conducting regular benchmarking to ensure the remuneration offered remains competitive within the marketplace. Labour Costs In line with all hospitality companies which operate in our marketplace labour remains a key cost to the Group. the company regularly reviews budgeted labour costs on a site by site and day by day basis to ensure that the Group gains maximum efficiency for all hours worked.
The Directors receive a wide range of management information to monitor the performance of the business.
They receive total sales for the previous week, detailing food and beverage costs, giving the gross profit margins, together with other performance indicators including labour costs, like for like sales, average spend and number of covers. This is then expanded upon for the period end figures to include operating profit and EBITDA, providing a full set of key performance indicators. Key indicators are reported as follows: Total Sales £58.3m (2022: £43.6m), Food Costs £10.98m (2022: £7.08m), Beverage Costs £1.70m (2022: £1.05m), Gross Profit Margin 78.3% (2022: 81.4%), Labour Costs £21.53m, (2022: £16.02m), Like for Like sales 11.9% (2022: +21.5%), Operating Profit £1.5m (2022: £5.1m), Trading EBITDA £5.8.m (2022: £8.1m), average spend £15.43 (2022: £15.98) and number of covers 3,854,904 (2022: 2,791,088). The Group has seen an increase in sales post year end in Q1 of FY24 in our like for like sales which is in addition to the new sites which have opened.
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PHO 2012 LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 19 FEBRUARY 2023
The Group continues with its expansion plans with an extensive pipeline of new site opportunities being
progressed following on from the additional funding that has been secured post year end.
Employees
Pho is an equal opportunities employer. The Group is committed to providing equal opportunities throughout the employment across all staff members, including recruitment training and promotion regardless of age, gender, marital status sexual orientation, race, national or ethnic origin, religious orientation or beliefs or disability. All team members and applicants are treated equally, and the Group would take all reasonable adjustments to accommodate disabled workers or applicants. Pho is committed to eliminating discrimination and encouraging diversity amongst the entire workforce. We strive to ensure that each employee feels respected and is valued based upon their skills, performance and commitment. Every employee of Pho has the duty to observe and apply the company policy at all times, any violation of the policy would be treated as a serious offence and could result in disciplinary action and/or dismissal. Diversity has been increased in senior executive positions and is now 40% female with the Head of People and Marketing Director both now attending the board meetings. Engagement with employees The Directors of the Group engage directly with our people through regular site visits and meetings taking place within the restaurants. The Group also encourages open dialogue though regular appraisals and internal communication tools including a mobile phone application that enables fast and convenient communication with all employees regarding news updates, staff training opportunities and personal welfare matters. Employees at all levels are encouraged to participate in communication. We run annual employee engagement surveys, alongside more ad hoc ‘pulse’ style surveys through our employee communication app.
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PHO 2012 LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 19 FEBRUARY 2023
All decisions made by the management of the Group seek to enhance the long-term reputation of the business and the brand to drive benefits to each stakeholder. By engaging openly and transparently with all stakeholders we can ensure we have comprehensively considered all the beneficiaries of the work we undertake both now and in the future.
The Directors are aware of their duty under section 172 of the Companies Act 2006, to act in a way which they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole and in doing so, have regard (amongst other matters) to: - • The likely consequences of any decision in the long term: • The interest of the company’s employees; • The need to foster the company’s business relationships with suppliers, customers and others; • The impact of the company’s operations on the community and the environment; • The desirability of the company maintaining a reputation for high standards of business conduct; and • The need to act fairly as between members. Long term impact • The Directors hold regular meetings with key stakeholders of the business to provide updates on key KPI’s and additional detailed narrative supporting the company position. Employees • All of our employees throughout the business are key to our success, and we need to reward protect and listen at all levels. In an effort to drive enhanced employee wellbeing we have introduced a number of health focused benefits, including discounted gym memberships, an employee assistance program and a private GP helpline which is available to all employees from the first day of employment. • We also engage with all team members through regular appraisals and news updates communicated though the employee app. Customers • We continuously look for ways to improve our offering, service, and overall brand experience so we look to engage with our guests through the use of onsite tablets as well as encouraging our guests to leave Google reviews. There is also a post visit email set up in the event a guest has not given us real time feedback in our sites. • We respond to customer feedback through multiple channels and see an increase in enquiries and feedback now coming through social channels. • The Group actively seeks to adapt to the needs of its customers through regular review and development of its menu. • The Group actively seeks to adapt to the needs of its customers through regular review and development of its menu. Suppliers • The Group values the freshness and quality of restaurant supplies in contributing to maintaining the high quality output expected form the customer base and, as such, recognise that building long term relationships with our suppliers is mutually beneficial for our shared success. We hold long term relationships with key suppliers allowing for focus on quality, consistency and price stability. Community & Environment • Careful considerations are made on each restaurant location and recruitment is focused on hiring from the local community allowing for reduced travel environmental impact and increased ties within the communities we are located within. • There is a continued strong focus on environmental operating procedures including being mindful of energy usage and reduction in waste products. • We are signed up in every location to Chop Value - an organization that takes our used chopsticks and recycles
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PHO 2012 LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 19 FEBRUARY 2023
them into office furniture and other items. After just over a month we have recycled over a ton of chopsticks.
• We continue to support each site with local community initiatives including prizes for raffles for schools, local charity donations and sponsoring grassroot sports teams. • In all our locations we have set up the process and pay for oil to be recycled (and turned into energy). Business conduct • Customer feedback is continually reviewed and this has been implemented into restaurant PDQ machines for customer ease. Management have active engagement with customers on comments provided to ensure high standards are maintained. Acting fairly between stakeholders • Regular and relevant stakeholder engagement for each stakeholder group Corporate social responsibly In 2021 we began supporting Christina Noble Children's Foundation, which is a British charity operating in Vietnam, working to help under-privileged children - providing health, education and other wellbeing services to families. This work is ongoing and we are proud to be a partner with this charity. In the period to 19 February 2023 we have raised £35k and continue to look for additional ways to invest our time by way of support. As a Group we’ve always celebrated and supported our internal LGBTQ+ community to promote diversity in our business. We support activities and events surrounding PRIDE each year, and in 2019 we introduced a national, year-round support plan whereby we donate a proportion of every “Pride Punch” cocktail sold directly to national PRIDE organisations. We continue to explore ways to reduce Pho’s environmental footprint and have reduce the amount of single use plastic in our takeaway and Delivery packaging. In 2022 we made the change and now offer chopsticks opt-out and metal cutlery for purchase instead of plastic cutlery for Delivery and Takeaway. This continues to be a focus of the management group who are actively seeking ways to further reduce the use of single use plastics. Our new partnership with Chop Value is illustrative of our intent to continue to find ways to make small changes that drive a big difference, and the Pho Group consistently strives to be the best in class in terms of sustainability policies within the restaurant sector. Greenhouse Gas emissions and energy consumption The total consumption (kWh) figures for energy supplies reportable by the Pho Group are as follows: Utility and Scope 2022/23 Consumption (kWh) 2021/22 Consumption (kWh) Grid-Supplied Electricity (Scope 2) 4,945,973 3,928,253 Gaseous and other fuels (Scope 1) 3,429,730 2,749,191 Total 8,375,703 6,677,444 The total emission (tCO2e) figures for energy supplies reportable by the Pho Group are as follows. Utility and Scope 2022/23 Consumption (tCO2e) 2021/22 Consumption (tCO2e) Grid-Supplied Electricity (Scope 2) 956.45 834.09 Gaseous and other fuels (Scope 1) 626.06 503.54 Total 1,582.52 1,337.63 An intensity metric of kWh per ft2 has been applied for the annual total consumption / emissions of the Pho Group. Intensity ratio: kWh / ft2 0.01
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PHO 2012 LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 19 FEBRUARY 2023
Measures taken to improve energy efficiency As a company we remain committed for continual improvements in our operational energy efficiency. As such, a register of energy efficiency measures available to us has been compiled and constantly updated with new measure as a when appropriate. Current measures that are presently carried out is ensuring all new kitchen extraction systems are set up to run on inverters resulting in improved efficiency in adjusting the air flow within the system. With new sites we ensure pot washing machines are BREEAM compliant, and the commercial taps are WRAS approved to reduce water usage. Customer toilets are also dual flush to reduce the water consumption of restaurants. On all new restaurants we install full LED lighting throughout. As part of ongoing maintenance, we are continually replacing new lighting with upgraded LED bulbs and typically we would update a whole lighting circuit once older circuits have reached the end of life. When signs are repaired the old technology lamps are replaced with LED. We replace any refrigeration seals on our fridges / walk-in units when they become worn – to ensure we maintain the correct temperatures and minimise energy use within the equipment, our cleaners are also aware of the importance of continually cleaning the fridge condensers ensuring maximum efficiency is maintained.
This report was approved by the board on 31 July 2023 and signed on its behalf.
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PHO 2012 LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 19 FEBRUARY 2023
The directors present their report and the financial statements for the year ended 19 February 2023.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙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 Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £27,716 (2022 - £2,556,411).
The directors who served during the year were:
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PHO 2012 LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 19 FEBRUARY 2023
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.
The auditors, Haysmacintyre LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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PHO 2012 LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PHO 2012 LIMITED
We have audited the financial statements of Pho 2012 Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 19 February 2023, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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PHO 2012 LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PHO 2012 LIMITED (CONTINUED)
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 Report. 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. 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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PHO 2012 LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PHO 2012 LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to regulatory requirements for the company and trade regulations and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax. 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 management bias in accounting estimates. Audit procedures performed by the engagement team included: - Inspecting correspondence with regulators and tax authorities - Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud; - Evaluating management’s controls designed to prevent and detect irregularities; - Identifying and testing accounting journal entries, in particular those journal entries which exhibited the characteristics we had identified as possible indicators of irregularities; and - Challenging assumptions and judgements made by management in their critical accounting estimates
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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PHO 2012 LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PHO 2012 LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditors
10 Queen Street Place
EC4R 1AG
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PHO 2012 LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
REGISTERED NUMBER: 07915150
CONSOLIDATED BALANCE SHEET
AS AT 19 FEBRUARY 2023
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PHO 2012 LIMITED
REGISTERED NUMBER: 07915150
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 19 FEBRUARY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 22 to 43 form part of these financial statements.
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PHO 2012 LIMITED
REGISTERED NUMBER: 07915150
COMPANY BALANCE SHEET
AS AT 19 FEBRUARY 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 22 to 43 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 19 FEBRUARY 2023
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
Pho 2012 Limited is a company registed in the UK (07915150) at 15 Clerkenwell Green, London, EC1R 0DP. No trading occurs through this entity all of which takes place through its direct subsidiary Pho Trading Limited, also registered in the UK (05329479) at 15 Clerkenwell Green, London, EC1R 0DP.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the Group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102.
The cash flow forecast for the next 12 months for the Group is regularly updated and reviewed by the Directors and is sensitised to account for differing scenarios.
The Group has successfully secured new investment in April 2023. This has provided the Group with new and extended financing facilities which will be in place until August 2028. On all cash flow scenarios, the Directors believe there is sufficient resources in the group for the next 12 months to comply with all covenants relating to minimum cash balance, debt leverage, debt service cover and cash headroom covenants. For these reasons, the Directors continue to adopt the going concern basis in preparing the financial statements.
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
2.Accounting policies (continued)
The revenue based grants received were in relation to the Coronavirus Job Retention Scheme (CJRS) and they have been recognised as Other Income in the Statement of Comprehensive Income.
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
2.Accounting policies (continued)
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
2.Accounting policies (continued)
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and assumptions are based on historical experience and other factors that are considered to be relevant. These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Goodwill The useful economic life of the goodwill is based on management's judgement and experience. When management identifies that actual useful economic lives differ materially from the estimate used to calculate amortisation, that charge is adjusted prospectively. The annual impairment assessment in respect of goodwill requires estimates of the value in use of cash generating units to which goodwill has been allocated. As a result, estimates of future cashflows are required which cannot be known with certainty. Past performance is often use as a guide in estimating future performance. Useful lives of property, plant and equipment Property, plant and equipment are depreciated over their useful lives. Useful lives are based on management's best estimates of the period that the assets generate revenue, which are periodcially reviewed for continued appropriateness. Impairment of tangible fixed assets In carrying out an impairment review, it has been necessary to make estimates and judgements regarding the future performance and cashflows generated by individual trading units which cannot be known with certainty. Past performance is often use as a guide in estimating future performance. Where the circumstances surrounding a particular trading unit have changed then forecasting future trading performance becomes increasingly judgemental. As a result, the actual impairment required may differ to the charge made in the financial statements. When assessing the recoverable amount of the tangible fixed assets, the net book value of the assets at the impairment date is used as a guide, taking into account factors which may signficantly affect the sale or use value. Intercompany debtor recoverbaility The recoverability of these debts has been assessed based on the underlying value of the other entities within the Group. The debt is considered recoverable on the basis the value of the assets exceeds the liabilities and therefore they would have sufficient reserves to clear the debt on the sale of assets.
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
There were no factors that may affect future tax charges.
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
11.Taxation (continued)
In March 2021, it was announced that the UK corporation tax rate would increase to 25% in April 2023. This announcement constitutes a substantive enactment and therefore deferred taxes at the balance sheet date are measured at the expected tax rate of 25%.
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
Subsidiary undertakings (continued)
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
The amounts owed to group undertakings are repayable in full in August 2031 and are subject to interest at 10%.
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
Share premium account
Merger Reserve
Profit and loss account
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PHO 2012 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 19 FEBRUARY 2023
The Group operates a defined contributions pension scheme for all employees within the company. The assets of the scheme are held separately from those of the Group in an independently administered fund. Contributions totalling £130,105 (2022:£88,865) payable to the fund at the reporting date.
The Company is a subsidiary undertaking of Cilantro Bidco Limited. The ultimate controlling party is Cilantro Holding Limited.
The smallest and largest group in which the results of the Company are consolidated is headed by Cilantro Holding Limited, incorporated in England and Wales. The consolidated financial statements are available to the public and may be obtained from 39 Sloane Street, London, SW1X 9LP. In the opinion of the directors there is no ultimate controlling party.
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